Mackenzie Realty Capital Inc.

09/28/2026 | Press release | Distributed by Public on 09/28/2026 15:23

Annual Report for Fiscal Year Ending June 30, 2026 (Form 10-K)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Statements by MacKenzie Realty Capital, Inc., together with its subsidiaries as discussed in Note 1 of the financial statements included in this report (collectively, the "Company," "we," or "us") contained herein, other than historical facts, may constitute "forward-looking statements." These statements may relate to, among other things, future events or our future performance or financial condition. In some cases, stockholders can identify forward-looking statements by terminology such as "may," "might," "believe," "will," "provided," "anticipate," "future," "could," "growth," "plan," "intend," "expect," "should," "would," "if," "seek," "possible," "potential," "likely" or the negative of such terms or comparable terminology. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any anticipated results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. An economic downturn could impair our ability to continue to operate, which could lead to the loss of some or all of our investments, a contraction of available credit and/or an inability to access the equity markets could impair our lending and investment activities, and interest rate volatility could adversely affect our results, particularly if we elect to use leverage as a part of our investment strategy.

Further, we may experience fluctuations in our operating results due to a number of factors, including the effect of the return on our equity investments, the interest rates payable on our debt investments, the default rates on such investments, the level of our expenses, variations in and the timing of the recognition of realized and unrealized gains or losses, the degree to which we encounter competition in our markets and general economic conditions. As a result of these factors, results for any period should not be relied upon as being indicative of performance in future periods.

For a discussion of additional factors that could cause our actual results to differ from forward-looking statements contained herein, please see the discussion under the heading "Risk Factors" above in Item 1A of this report.

Overview

Historically, we were an externally managed non-diversified closed-end management investment company that elected to be treated as a BDC under the Investment Company Act of 1940 (the "1940 Act"), but we withdrew our election to be treated as a BDC on December 31, 2020. Our objective remains to generate both current income and capital appreciation through real estate-related investments. We have elected to be treated as a REIT under the Code and, as a REIT, we are not subject to federal income taxes on amounts that we distribute to the stockholders, provided that, on an annual basis, we generally distribute at least 90% of our REIT taxable income (determined without regard to the dividends paid deduction and excluding any net capital gain) to the stockholders and meet certain other conditions. To the extent that we satisfy the annual distribution requirement but distribute less than 100% of our REIT taxable income, we will be subject to U.S. federal corporate income tax on our undistributed REIT taxable income. In addition, we will be subject to a 4% nondeductible excise tax if the actual amount that we pay to our stockholders in a calendar year is less than a minimum amount specified under U.S. federal tax laws. Our wholly owned subsidiary, MacKenzie NY Real Estate 2 Corp. ("MacKenzie NY 2"), is subject to corporate federal and state income tax on its taxable income at regular statutory rates.

We are managed by the Advisers, and MacKenzie provides the non-investment management services and administrative services necessary for us to operate.

Investment Plan

We generally seek to invest in real estate assets. We intend to invest at least 80% of our total assets in equity or debt in real estate assets. We can invest up to 20% of our total assets in investment securities of real estate companies. A real estate company is one that (i) derives at least 50% of its revenue from the ownership, construction, financing, management or sale of commercial, industrial or residential real estate and land; or (ii) has at least 50% of its assets invested in such real estate. We will not invest in general partnerships, joint ventures, or other entities that do not afford limited liability to their security holders. However, limited liability entities in which we invest may hold interests in general partnerships, joint ventures, or other non-limited liability entities. When purchasing securities, we generally favor purchasing securities issued by entities that have (i) completed the initial offering of their securities, (ii) operated for a period of at least two years, and typically more than five years, from the completion of their initial offering, and (iii) fully invested their capital in real properties or other real estate related investments.

Our investment objective is to generate current income and capital appreciation through the acquisition of real estate assets and debt and equity real estate-related investments. Our independent directors review our investment policies periodically, at least annually, to confirm that our policies are in the best interests of our stockholders. Each such determination and the basis thereof are contained in the minutes of our Board of Directors meetings.

We seek to accomplish our objective by rigorously analyzing the value of and risks associated with potential acquisitions, and, for up to 20% of our total assets, by acquiring real estate securities at significant discounts to their net asset value.

We intend to expand our investment strategy to include acquisition of distressed real properties. Like our other investments, we would expect to hold distressed properties and infuse funds as necessary to extract unrealized value.

We will engage in various investment strategies to achieve our overall investment objectives. The strategy we select depends upon, among other things, market opportunities, the skills and experience of the Advisers' investment team and our overall portfolio composition. We generally seek to acquire assets that produce ongoing distributable income for investors, yet with a primary focus on purchasing such assets at a discount from what the Advisers estimate to be the actual or potential value of the real estate.

We intend to continue our historical activities related to launching tender offers to purchase shares of non-traded REITs in order to boost our short-term cash flow and to support our distributions, subject to the constraint that such securities will not exceed 20% of our portfolio. We believe this niche strategy will allow us to pay distributions that are supported by cash flow rather than paying back investors' capital, although there can be no assurance that some portion of any distribution is not a return of capital.

Rental, Reimbursement and Other Property Income

We generate rental revenue by leasing office space and apartment units to a building's tenants. These tenant leases fall under the scope of Accounting Standards Codification ("ASC") Topic 842 and are classified as operating leases. Revenues from such leases are recognized on a straight-line basis over the terms of the lease agreements.

Investment Income

We generate revenues in the form of operating income, capital gains and dividends on dividend-paying equity securities or other equity interests that we acquire, in addition to interest on any debt investments that we hold. Further, we may generate revenue in the form of commitment, origination, structuring or diligence fees, monitoring fees, fees for providing managerial assistance and possibly consulting fees and performance-based fees. Any such fees are generated in connection with our investments and recognized as earned.

Expenses

Our primary operating expenses include the payment of: (i) advisory fees to our Advisers; (ii) our allocable portion of overhead and other expenses incurred by MacKenzie in performing its obligations under the Administration Agreement; and (iii) other real estate properties operating expenses, including interest expenses on debt obtained to finance our property acquisitions, as detailed below. Our investment advisory fees compensate our Investment Adviser and Real Estate Adviser for their work in identifying, evaluating, negotiating, closing, monitoring and servicing our investments. Our expenses must be billed to and paid by us, except that MacKenzie may be reimbursed for actual cost of goods and services used by us and certain necessary administrative expenses. We will bear all other expenses of our operations and transactions, including:


•
the cost of operating and maintaining real estate properties;

•
the cost of calculating our net asset value, including the cost of any third-party valuation services;

•
the cost of effecting sales and repurchases of our shares and other securities;

•
interest payable on debt, if any, to finance our investments;

•
fees payable to third parties relating to, or associated with, making investments, including fees and expenses associated with performing due diligence reviews of prospective investments and third-party advisory fees;

•
transfer agent and safekeeping fees;

•
fees and expenses associated with marketing efforts;

•
federal and state registration fees, any stock exchange listing fees in the future;

•
federal, state and local taxes;

•
independent directors' fees and expenses;

•
brokerage commissions;

•
fidelity bond, directors and officers errors and omissions liability insurance, and other insurance premiums;

•
direct costs and expenses of administration and sub-administration, including printing, mailing, long distance telephone and staff;

•
fees and expenses associated with independent audits and outside legal costs;

•
costs associated with our reporting and compliance obligations under the Exchange Act and applicable federal and state securities laws; and

•
all other expenses incurred by either MacKenzie or us in connection with administering our business, including payments under the Administration Agreement that are based upon our allocable portion of overhead and other expenses incurred by MacKenzie in performing its obligations under the Administration Agreement, including rent, the fees and expenses associated with performing compliance functions, and our allocable portion of the costs of compensation and related expenses of our chief compliance officer and our chief financial officer and any administrative support staff.

Portfolio Investment Composition

As of June 30, 2026, we owned interests in various real estate limited partnerships and REITs. In addition, we held investments in entities that own real estate where we have sufficient control for the investments to be considered non-securities for purposes of the Investment Company Act of 1940, but not enough control to require consolidation of their financial statements with ours. These investments are reported as "Equity method investments, at fair value." The following table summarizes the composition of our investments at fair value as of June 30, 2026 and 2025:

Fair Value
Investments, at fair value
June 30, 2026
June 30, 2025
Highlands REIT, Inc.
$
9,916
$
37,403
Moody National REIT II, Inc.
-
2,963
National Healthcare Properties, Inc.
203,510
740,894
SmartStop Self Storage REIT, Inc. - Class A
-
29,154
Starwood Real Estate Income Trust, Inc. - Class I
72,736
-
Starwood Real Estate Income Trust, Inc. - Class S
2,247,873
939,114
Strategic Storage Trust VI, Inc. Class P
16,111
-
Total
$
2,550,146
$
1,749,528

Fair Value
Equity method investments, at fair value
June 30, 2026
June 30, 2025
Lakemont Partners, LLC
740,260
711,740
Martin Plaza Associates, LP
405,080
531,544
Westside Professional Center I, LP
1,201,807
882,167
Total
$
2,347,147
$
2,125,451
Properties

In addition to our investment securities, we currently own and manage nine commercial real estate properties: Satellite Place Office Building located in Duluth, GA, 1300 Main Office Building, First & Main Office Building and Main Street West Office Building located in Napa, CA, Woodland Corporate Center located in Woodland, CA, 220 Campus Lane Office Building, Green Valley Medical Center and Green Valley Executive Center located in Fairfield, CA and One Harbor Center located in Suisun, CA and five residential apartments: Aurora at Green Valley located in Fairfield, CA, Commodore Apartments and The Park View Apartments, located in Oakland, CA, Hollywood Apartments located in Los Angeles, CA, and the Shoreline Apartments located in Concord, CA.

Aurora at Green Valley is owned through our subsidiary MRC Aurora. 1300 Main Office Building, First & Main Office Building, Main Street West Office Building, Woodland Corporate Center, Hollywood Apartments, Shoreline Apartments and Green Valley Medical Center are owned through our subsidiary, the Operating Partnership; Commodore Apartments is owned through our subsidiary, Madison; The Park View Apartments is owned through our subsidiary, PVT and Satellite Place Office Building are owned through our subsidiary, MacKenzie Satellite. In October 2025, we listed Woodland Corporate Center Two for sale, and in September 2026, we entered into a purchase and sale agreement with a third party to sell the property. The sale is subject to customary closing conditions.
We own our properties through our subsidiaries, which are listed in the table below.

Property:
Property Owners
Commodore Apartments
Madison-PVT Partners LLC
The Park View Apartments
PVT-Madison Partners LLC
Hollywood Apartments
PT Hillview GP, LLC
Shoreline Apartments
MacKenzie-BAA IG Shoreline LLC
Aurora at Green Valley
MRC Aurora, LLC
Satellite Place Office Building
MacKenzie Satellite Place Corp.
First & Main Office Building
First & Main, LP
1300 Main Office Building
1300 Main, LP
Woodland Corporate Center
Woodland Corporate Center Two, LP
Main Street West Office Building
Main Street West, LP
220 Campus Lane Office Building
220 Campus Lane, LLC
Green Valley Executive Center
GV Executive Center, LLC
One Harbor Center
One Harbor Center, LP
Green Valley Medical Center
Green Valley Medical Center, LP

We use occupancy rate as a key performance indicator to evaluate the performance of our real estate properties. Average occupancy rates on our commercial and residential properties are 65% and 90%, respectively, as of the measurement date. We believe occupancy rate provides investors with a useful measure of the revenue-generating capacity of our portfolio. Management uses occupancy rate to monitor leasing progress, identify re-leasing risk, and compare portfolio performance across periods.

In connection with the formation of MAC, MAC OP was established as the operating partnership through which substantially all of MAC's business is conducted. The contributed properties and development project are held through subsidiaries of MAC OP, which directly or indirectly owns and operates a portfolio of five residential properties and one development project. MAC owns all of the limited partnership units of MAC OP except for one unit owned by the Operating Partnership and is the sole general partner of MAC OP.

Commercial Properties:

The following commercial properties are owned through subsidiaries of the Operating Partnership:

1300 Main Office Building

1300 Main Office Building contains 20,145 square feet, of which approximately 13,900 square feet is office space and the remainder is designated as retail space. As of June 30, 2026, the property is 70% occupied by 6 tenants. The following table shows the largest tenants and square footage occupied:

Largest Tenants
Business
Square Ft.
Occupied
Annual Base Rent
Lease
Expiration
Renewal
options
Wilson Daniels
Wine Wholesaler
6,712
$
382,544
06/15/2031
1, 5 years
Bao Ling Li
Restaurant
3,212
$
179,340
11/30/2030
No
Catered With Class
Restaurant
2,409
$
106,962
03/02/2031
1, 3 years
Edward Jones
Financial Services
1,059
$
72,116
04/30/2029
1, 5 years

The following information pertains to lease expirations at 1300 Main Office Building:

Year
Number of Leases Expiring
Total Area
Annual Base Rent
Percentage of Gross Rent
2028
1
225
$
6,156
1
%
2029
1
1,059
$
72,116
9
%
2030
1
3,212
$
179,340
23
%
Thereafter
3
9,704
$
526,102
67
%

First & Main Office Building

First & Main Office Building contains 27,398 square feet, of which approximately 19,000 square feet is office space and the remainder is designated as retail space. As of June 30, 2026, the property is 87% occupied by 8 tenants. The following table shows the largest tenants and square footage occupied:

Largest Tenants
Business
Square Ft.
Occupied
Annual Base Rent
Lease
Expiration
Renewal
options
GVM Law
Legal Services
9,470
$
526,303
09/20/2036
2, 5 years
Brotlemarkle
Accounting Services
4,366
$
256,769
07/31/2030
2, 5 years
Napa Palisades
Restaurant
3,462
$
204,166
08/31/2040
No
Phoenix Ultra Lounge
Restaurant
2,220
$
130,320
09/30/2037
No

The following information pertains to lease expirations at First & Main Office Building:

Year
Number of Leases Expiring
Total Area
Annual Base Rent
Percentage of Gross Rent
2027
1
1,135
$
77,070
6
%
2029
1
1,307
$
74,292
5
%
Thereafter
6
21,505
$
1,229,611
89
%

Main Street West Office Building

Main Street West Office Building contains 38,135 square feet, of which approximately 32,600 square feet is office space and the remainder is designated as retail space. As of June 30, 2026, the property is 97% occupied by 9 tenants. AUL Corporation elected to terminate its lease as of February 3, 2025. The following table shows the largest tenants and square footage occupied:

Largest Tenants
Business
Square Ft.
Occupied
Annual Base Rent
Lease
Expiration
Renewal
options
Napa County
District Attorney Offices
13,806
$
1,137,882
12/31/2027
No
State of California
Health Care
4,697
$
263,184
10/31/2028
No
Strategies To
Empower People
Health Care
4,875
$
231,831
01/28/2028
No
Descor Inc.
Construction
4,066
$
216,000
12/29/2030
No

The following information pertains to lease expirations at Main Street West Office Building:

Year
Number of Leases Expiring
Total Area
Annual Base Rent
Percentage of Gross Rent
2026
2
2,940
$
122,000
5
%
2027
2
15,941
$
1,266,854
54
%
2028
2
9,572
$
495,014
21
%
Thereafter
3
8,725
$
482,268
20
%

Satellite Place Office Building

Satellite Place Office Building contains 134,785 square feet, all of which is office space. As of June 30, 2026, the property is approximately 33% occupied by 5 tenants. The following table shows the largest tenants and square footage occupied:

Largest Tenants
Business
Square Ft.
Occupied
Annual Base Rent
Lease
Expiration
Renewal
options
Codoxo
Healthcare Software
13,956
$
304,598
06/30/2030
No
Polytron
Title Services
10,737
$
223,791
04/30/2031
2, 5 years
Ampirical
Engineering Consulting
9,790
$
213,814
09/30/2030
2, 5 years
OS National LLC
Title Services
6,188
$
125,479
11/30/2028
1, 3 years

The following information pertains to lease expirations at Satellite Place Office Building:

Year
Number of Leases Expiring
Total Area
Annual Base Rent
Percentage of Gross Rent
2028
1
6,188
$
125,479
13
%
2029
1
4,383
$
100,842
10
%
2030
2
23,746
$
518,411
54
%
Thereafter
1
10,737
$
223,791
23
%

Woodland Corporate Center

Woodland Corporate Center contains 37,034 square feet, of which 7,797 square feet are laboratories and the rest is office space. All of the laboratory space is occupied by Agtech Innovation. Beginning October 2025, the property has been marketed for sale. Accordingly, Woodland Corporate Center is classified as an asset held for sale as of June 30, 2026. During the year ended June 30, 2026, we recorded an impairment loss on assets held for sale of $1,687,783 on Woodland Corporate Center which was our only asset held for sale. The impairment was primarily attributable to the estimated fair value of the property being below its carrying value. In determining the estimated fair value as of June 30, 2026, we considered a third-party appraisal of the property and the purchase price being negotiated with a prospective third-party buyer. Based on our assessment of the anticipated sale, we used the negotiated purchase price in our June 30, 2026 impairment analysis. In September 2026, the Company entered into a purchase and sale agreement with a third party to sell Woodland Corporate Center, subject to customary closing conditions.

As of June 30, 2026, the property is 100% occupied by 14 tenants. The following table shows the largest tenants and square footage occupied:

Largest Tenants
Business
Square Ft.
Occupied
Annual Base Rent
Lease
Expiration
Renewal
options
Agtech Innovation
Research and Development
12,940
$
342,951
04/09/2031
08/31/2032
12/21/2032
No
Children's Home
Society
Non-Profit Education
4,042
$
155,461
10/31/2028
No
Burger Rehab
Physical Therapy
4,013
$
127,437
09/22/2028
No
SunFoods, LLC
Foods
3,388
$
126,315
05/31/2031
No

The following information pertains to lease expirations at Woodland Corporate Center:

Year
Number of Leases Expiring
Total Area
Annual Base Rent
Percentage of Gross Rent
2026
1
1,433
$
46,068
4
%
2027
2
2,160
$
87,426
7
%
2028
5
10,826
$
383,818
31
%
Thereafter
6
22,615
$
707,364
58
%

Green Valley Executive Center

Green Valley Executive Center contains 46,101 square feet, of which approximately 41,600 square feet is office space and the remainder is designated as retail space. As of June 30, 2026, the property is 94% occupied by 15 tenants. The following table shows the largest tenants and square footage occupied:

Largest Tenants
Business
Square Ft.
Occupied
Annual Base Rent
Lease
Expiration
Renewal
options
Community
Housing
Opportunities
Real Estate
8,510
$
352,596
08/31/2026
08/31/2029
1, 1 year
Larsen & Toubro
Limited, Inc.
Multinational Conglomerate
5,130
$
285,324
02/13/2028
No
Arkshire Financial,
LLC
Insurance
5,408
$
240,336
02/28/2029
No
Sticky Rice
Restaurant
4,388
$
193,017
08/17/2034
No

The following information pertains to lease expirations at Green Valley Executive Center:

Year
Number of Leases Expiring
Total Area
Annual Base Rent
Percentage of Gross Rent
2026
2
5,687
$
241,776
12
%
2027
2
2,131
$
109,668
5
%
2028
2
6,975
$
375,168
19
%
Thereafter
10
28,608
$
1,266,222
64
%

One Harbor Center

One Harbor Center contains 49,573 square feet, all of which is office space. As of June 30, 2026, the property is 76% occupied by 11 tenants. The following table shows the largest tenants and square footage occupied:

Largest Tenants
Business
Square Ft.
Occupied
Annual Base Rent
Lease
Expiration
Renewal
options
Shimmick
Construction
Company, Inc.
Construction
10,221
$
351,984
05/15/2027
No
Equiventure
Health Care
6,446
$
238,008
11/16/2033
4, 5 years
Wiseman Company
Mgt.
Real Estate
4,883
$
178,332
06/01/2028
No
Connections for Life
Healthcare
3,443
$
109,235
03/29/2036
No

The following information pertains to lease expirations at One Harbor Center:

Year
Number of Leases Expiring
Total Area
Annual Base Rent
Percentage of Gross Rent
2026
2
4,765
$
173,292
13
%
2027
1
10,221
$
351,984
25
%
2028
3
9,441
$
363,840
26
%
Thereafter
5
13,450
$
498,385
36
%

Green Valley Medical Center

Green Valley Medical Center contains 31,590 square feet, of which approximately 20,100 square feet is office space, approximately 8,300 square feet is health care space, and the remainder is designated as retail space. As of June 30, 2026, the property is 87% occupied by 12 tenants. The following table shows the largest tenants and square footage occupied:


Largest Tenants
Business
Square Ft. Occupied
Annual Base Rent
Lease
Expiration
Renewal
options
Cal OES
State Emergency Services
7,605
$
301,721
08/31/2031
No
California Forever
Real Estate
3,341
$
217,216
09/17/2029
No
Jethro Nicolas et al
Health Care
3,409
$
147,288
04/14/2035
No
Green Valley Oral
Surgery
Health Care
2,179
$
104,874
05/07/2029
2, 10 years

The following information pertains to lease expirations at Green Valley Medical Center:

Year
Number of Leases Expiring
Total Area
Annual Base Rent
Percentage of Gross Rent
2026
1
1,332
$
69,490
6
%
2027
2
2,624
$
103,620
8
%
2028
1
2,179
$
104,874
9
%
Thereafter
8
21,420
$
938,211
77
%

220 Campus Lane Office Building

220 Campus Lane Office Building was purchased in September 2023. The property was vacant at the time of acquisition. Following the acquisition, we renovated the building and commenced leasing activities. As of June 30, 2026, the building was approximately 26% leased, with four tenants occupying an aggregate of 11,246 square feet. The annualized base rent from these tenants totals approximately $363,648.

Residential Properties:

Effective January 1, 2026, the Company contributed all of its multi-family residential properties, consisting of Commodore Apartments, The Park View Apartments, Hollywood Apartments, Shoreline Apartments and Aurora at Green Valley, as well as the Blue Ridge development project, to MAC. The contributed properties and development project are held through subsidiaries of MAC OP, through which substantially all of MAC's business is conducted. MAC owns all of the limited partnership units and is the sole general partner of MAC OP.

Commodore Apartments

Commodore Apartments is a mid-rise apartment building built in 1912 and has 48 units. As of June 30, 2026, Commodore Apartments is approximately 89.6% occupied.

The Park View Apartments

The Park View Apartments is also a mid-rise apartment building built in 1929 and has 39 units. As of June 30, 2026, The Park View Apartments is approximately 89.7% occupied.

Hollywood Apartments

Hollywood Apartments, located in Los Angeles, CA, is a mid-rise apartment building built in 1917 and has 54 units. The property contains approximately 38,000 square feet of net rentable apartment area and 8,610 square feet of retail space. All of the retail space is currently occupied by restaurants and nightclubs. As of June 30, 2026, the apartment units are 88.9% occupied.

Shoreline Apartments

Shoreline Apartments is a mid-rise apartment building built in 1968 and renovated in 2015 which has 84 units. As of June 30, 2026, Shoreline Apartments building is approximately 89.3% occupied.

Aurora at Green Valley

Aurora at Green Valley is a newly constructed multi-family residential community consisting of 72 units across three buildings, along with a clubhouse. The project was financed through $10 million of preferred equity capital (including $7.23 million from outside investors) and a $17.15 million construction loan from Valley Strong Credit Union. The clubhouse opened in mid-June 2025 for pre-leasing activity. Construction of the residential buildings was completed in phases. The first residential building was completed in July 2025, with leasing commencing in August 2025. The remaining two buildings were completed in August and September 2025, with leasing commencing shortly thereafter. As of June 30, 2026, the property was approximately 93.1% occupied. As of the date of this report, the property is 100% leased.

The following table provides information regarding each of the residential properties as of June 30, 2026:

Property Name
Sector
Location
Square
Feet
Units
Percentage
Leased
Annual
Base Rent
Monthly Base Rent/Occupied
Unit
The Park View
Apartments
Multi-Family
Residential
Oakland, CA
31,020
39
89.7
%
$
1,023,703
$
2,433
Commodore
Apartments
Multi-Family
Residential
Oakland, CA

26,635
48
89.6
%
$
832,239
$
1,613
Hollywood
Apartments
Multi-Family
Residential
Los Angeles,
CA

37,971
54
88.9
%
$
1,227,641
$
2,131
Hollywood
Apartments
(Retail Space)


Retail

Los Angeles,
CA


8,610
1
100
%
$
353,657
$
29,471
Shoreline
Apartments
Multi-Family
Residential
Concord, CA

68,350
84
89.3
%
$
1,901,495
$
2,113
Aurora at Green
Valley
Multi-Family
Residential
Fairfield, CA

54,936
72
93.1
%
$
2,014,572
$
2,506

Campus Lane Land Development (known as Blue Ridge)

In addition to our commercial and residential real estate properties, we own a vacant parcel adjacent to the 220 Campus Lane Office Building in Fairfield, California (the "Campus Lane Land"). This parcel of land was acquired with the objective of developing a multi-family residential community and is owned by the MAC OP through its subsidiary, Campus Lane Residential, LLC ("Campus Lane Residential").

This project, known as Blue Ridge, is expected to consist of 84 luxury multi-family units in Solano County, one of the fastest-growing counties in California. The entitlement process for the vacant land is on-going. Our goal is to commence construction in fall 2027; however, this is subject to the city's approval of our development application submitted in April 2024 and to securing the necessary financial resources. The Company is currently evaluating potential development and financing structures for the project, including discussions with a third-party developer pursuant to which the Company may contribute the land and the third party may arrange construction financing and development capital for the project.

We currently do not have plans for any other major renovation or development of any properties except for Blue Ridge, as discussed above. Each property is being held for income generation and potential value appreciation through increased occupancy and/or rental rates. We maintain property and liability insurance policies on all properties, which we believe are adequate and in line with industry standards.

Material Changes in Financial Condition

Real estate assets

During the year ended June 30, 2026, total real estate assets, net decreased by $11.84 million. The decrease was attributable to the reclassification of $11.71 million of net real estate assets related to Woodland Corporate Center Two to assets held for sale as of June 30, 2026, and to $9.27 million of additional depreciation and amortization. These decreases were partially offset by $9.14 million of real estate additions, including $6.39 million related to the capitalization of additional construction costs at Aurora at Green Valley.

Mortgage notes payable, net

During the year ended June 30, 2026, the Company borrowed an additional $10.55 million on the MRC Aurora construction loan from Valley Strong Credit Union, primarily to fund building expenditures associated with the completion of Aurora at Green Valley. During the year ended June 30, 2026, the Company also entered into a $12.24 million loan agreement with Meriwest Credit Union on April 6, 2026 to refinance its $10.37 million prior loan with Exchange Bank, which is secured by the First & Main Office Building.

Current Market and Economic Conditions

The markets in which our properties operate are highly competitive, and each property faces unique competitive challenges based upon local economic, political, and legal factors. Our West Coast multi-family residential properties are generally restricted from raising rents significantly by local rent control laws. Rent control can result in average rents that are significantly below market, and this provides some buffer against declining rents in a recession. However, in order to encourage development, rent control usually does not apply to newer properties. Since older properties may be unable to raise rents as needed, they may be unable to make improvements that could allow them to compete with newer properties.

Our consolidated office properties, 1300 Main Office Building, First & Main Office Building, Main Street West Office Building, One Harbor Center, Satellite Place Office Building, Woodland Corporate Center, 220 Campus Lane Office Building and Green Valley Executive Center are all Class A suburban office properties and are located in Napa, Woodland, Suisun City and Fairfield, California and Duluth, Georgia. Available office space is plentiful in each market in which our office properties are located, which magnifies the competitive challenges that we face in these markets.

The broader economy has been experiencing increased levels of inflation, higher interest rates and tightening monetary and fiscal policies. While the Federal Reserve began reducing the federal funds rate in the fourth quarter of 2024 and continued reducing the rate during 2025, interest rates remain elevated compared to recent historical levels, which continues to impact real estate valuations and financing costs. We currently have fixed and variable interest rates for our loans. The rise in overall interest rates caused an increase in our variable-rate borrowing costs resulting in an increase in interest expense. The cumulative effect of the prior rate increases may adversely impact real estate asset values. In addition, a prolonged period of high and persistent inflation has increased our operating costs and could result in further increases. The current market and economic conditions could have a material impact on our business, cash flow and results of operations. It could also impact our ability to find suitable acquisitions, sell properties, and raise equity and debt capital.

Results of Operations:

Commercial Properties

The commercial properties owned by us during the Fiscal Years Ended June 30, 2026 ("Fiscal 2026") and June 30, 2025 ("Fiscal 2025") are as follows:

Fiscal 2026
Fiscal 2025

Satellite Place Office Building
Satellite Place Office Building
First & Main Office Building
First & Main Office Building
1300 Main Office Building
1300 Main Office Building
Main Street West Office Building
Main Street West Office Building
Woodland Corporate Center
Woodland Corporate Center
220 Campus Lane Office Building
220 Campus Lane Office Building
Green Valley Executive Center
Green Valley Executive Center
One Harbor Center
One Harbor Center
Green Valley Medical Center
Green Valley Medical Center

Rental, reimbursements and other property income:

During the year ended June 30, 2026, we generated $13.07 million in rental and reimbursements revenues from our nine commercial properties, compared to $16.17 million during the year ended June 30, 2025. The $3.10 million decrease was primarily attributable to a $3.59 million decrease in rental and other property income at our Satellite Place Office Building, primarily due to approximately $3.0 million of lease termination income recognized in the 2025 period related to the early termination of a tenant's lease in December 2024. The decrease at Satellite Place was partially offset by a $0.23 million increase in rental income at our Main Street West Office Building, as most of the space vacated following an early lease termination in February 2025 was re-leased to Napa County effective January 1, 2026.

Expenses:

Property operating and maintenance expenses:

Operating and maintenance expenses mainly consist of real estate taxes, utilities, repair and maintenance, cleaning, landscape, security, property management fees, insurance, and various other administrative expenses incurred in the operation of our commercial real estate assets. During the year ended June 30, 2026, we incurred operating and maintenance expenses of $4.90 million in the operation of our nine commercial properties, compared to $4.65 million during the year ended June 30, 2025. The increase in the operating expenses was mainly due to higher utilities costs and real estate taxes.

Depreciation and amortization:

During the year ended June 30, 2026, we recorded depreciation and amortization of $6.09 million attributable to the depreciation and amortization of real estate and intangible assets of our nine commercial properties, compared to $9.24 million during the year ended June 30, 2025. The decrease in total depreciation and amortization of $3.15 million was mainly due to the impairment of assets related to our Main Street West Office Building and the write-off of tenant improvements, leasehold improvements, lease commissions, and in-place lease related to our Satellite Place Office Building due to an early lease termination of its anchor tenant in December 2024. The decrease was also due to the classification of the Woodland Corporate Center Two building as held for sale in October 2025, upon which depreciation and amortization ceased.

Interest expense:

During the year ended June 30, 2026, we recorded $4.84 million of interest expense related to mortgage notes payable associated with the Company's nine commercial properties, compared to $5.02 million during the year ended June 30, 2025.

The decrease of $0.19 million was primarily due to lower interest expense resulting from the Main Street West loan refinancing in May 2025. The decrease was partially offset by higher interest expense resulting from the First & Main loan paying higher interest rates between the old loan's maturity and the new refinancing in April 2026.

Other operating expenses:

Other operating expenses include professional fees, printing and mailing, and other general and administrative expenses. During the year ended June 30, 2026, we recorded $0.60 million of other operating expenses associated with the Company's nine commercial properties, compared to $0.89 million during the year ended June 30, 2025. The decrease in other operating expenses was mainly due to lower legal and professional fees at our Main Street West Office Building. During the year ended June 30, 2025, Main Street West incurred additional legal and professional fees while the property was under a court-appointed receiver.

Residential Properties

The residential properties owned by us during Fiscal 2026 and 2025 are as follows:

Fiscal 2026
Fiscal 2025
Commodore Apartments
Commodore Apartments
The Park View Apartments
The Park View Apartments
Hollywood Apartments
Hollywood Apartments
Shoreline Apartments
Shoreline Apartments
Aurora at Green Valley

Rental, reimbursements and other property income:

During the year ended June 30, 2026, we generated $6.94 million in rental and reimbursements revenues from our five residential properties, compared to $5.89 million from our four residential properties during the year ended June 30, 2025. The increase in rental revenues was mainly due to the completion of the Aurora at Green Valley in July 2025 and the commencement of leasing in August 2025.

Expenses:

Property operating and maintenance expenses:

Operating and maintenance expenses mainly consist of real estate taxes, utilities, repair and maintenance, cleaning, landscape, security, property management fees, insurance, and various other administrative expenses incurred in the operation of our residential real estate assets. During the year ended June 30, 2026, we incurred operating and maintenance expenses of $3.18 million in the operation of our five residential properties, compared to $2.73 million in the operation of our four residential properties during the year ended June 30, 2025. The increase in the operating expenses was mainly due to the completion of Aurora at Green Valley in July 2025 and the commencement of leasing in August 2025. Aurora at Green Valley consists of three residential buildings and a clubhouse, resulting in additional operating costs during the 2026 period.

Depreciation and amortization:

During the year ended June 30, 2026, we recorded depreciation and amortization of $3.05 million attributable to the depreciation and amortization of real estate and intangible assets of our five residential properties, compared to $2.19 million on our four residential properties during the year ended June 30, 2025. The increase in total depreciation and amortization of $0.86 million was mainly due to the completion of Aurora at Green Valley in July 2025 and the commencement of leasing in August 2025, which resulted in additional depreciation and amortization during the 2026 period.

Interest expense:

During the year ended June 30, 2026, we recorded $3.36 million related to mortgage notes payable associated with the Company's five residential properties and debt on the Campus Lane Land, compared to $3.12 million related to the Company's four residential properties and debt on the Campus Lane Land during the year ended June 30, 2025. During the year ended June 30, 2026, $0.19 million of interest incurred on the Aurora construction loan and the Blue Ridge loan was capitalized. During the year ended June 30, 2025, $0.14 million of interest incurred on the Aurora construction loan and the Blue Ridge loan was capitalized.

The $0.25 million increase was primarily due to $1.26 million of interest expense and loan fee amortization related to the Aurora at Green Valley construction loan following the completion of construction in July 2025. Prior to the completion of Aurora at Green Valley, interest expense on the construction loan was capitalized. The increase was partially offset by lower interest expense resulting from the refinancing of Hollywood Apartments in March 2025.

Other operating expenses:

Other operating expenses include professional fees, printing and mailing, and other general and administrative expenses. During the year ended June 30, 2026, we recorded $0.61 million of other operating expenses associated with the Company's five residential properties, compared to $0.71 million during the year ended June 30, 2025. The decrease in other operating expenses was mainly due to the decrease in tenant settlement and bad debt expenses at our Hollywood Apartments. The decrease was partially offset by the other operating expenses associated with the completion of Aurora at Green Valley in July 2025.

Corporate and Other

The corporate and other operations during Fiscal 2026 and 2025 are as follows:

Investment income:

Investment income is made up of dividends, distributions from operations, distributions from sales/capital transactions, interest, and other investment income. Total investment income during the years ended June 30, 2026, and 2025, were $0.25 million and $0.07 million, respectively. The increase was mainly due to higher dividend and distribution income from our non-traded REIT investments.

Unallocated corporate expenses:

Unallocated corporate expenses include corporate overhead expenses that are not directly attributable to one of our business segments and include asset management and incentive management fees, administrative costs and transfer agent reimbursements, and other corporate operating expenses.

Our asset management and incentive management fees are based on the advisory agreements that were effective January 1, 2021, and subsequently amended effective January 1, 2026.

Asset management fee:

Base management fees under the amended Advisory Management Agreement effective January 1, 2026, and asset management fees under the Advisory Management Agreement prior to such amendment, for the years ended June 30, 2026 and 2025 were $3.39 million and $3.45 million, respectively. The decrease was primarily due to the lower base management fee rate under the amended Advisory Management Agreement, effective January 1, 2026. The amended agreement provides for a base management fee of 1.25% per annum of gross assets under management, excluding depreciation and amortization, compared to the prior agreement, which provided for a fee based on invested capital at 3.00% of the first $20 million, 2.00% of the next $80 million, and 1.50% of amounts over $100 million.

Incentive or bonus management fee:

Under the Advisory Management Agreement effective January 1, 2021, we were previously subject to an incentive management fee equal to 15% of all distributions once shareholders had received cumulative distributions equal to 6% from the effective date of the agreement. Effective January 1, 2026, the amended Advisory Management Agreement replaced the incentive management fee, as well as the acquisition, financing and disposition fees, with a bonus management fee equal to 5% of adjusted funds from operations each quarter. During the year ended June 30, 2026, we incurred bonus management fees of $0.03 million for the quarter ended March 31, 2026 under the amended Advisory Management Agreement. We did not incur any incentive or bonus management fees during the year ended June 30, 2025. The slight increase was primarily due to the bonus management fee earned based on adjusted funds from operations under the amended Advisory Management Agreement.

Administrative cost and transfer agent reimbursements:

Costs reimbursed to MacKenzie for the year ended June 30, 2026 were $0.88 million as compared to $0.67 million for the year ended June 30, 2025. The increase was due to an increase in the allocable portion of overhead and other expenses incurred by MacKenzie in comparison to June 30, 2025, as a result of the increase in the number of real estate assets owned by us since June 30, 2025.

During the year ended June 30, 2026, no transfer agent cost reimbursements were paid to MacKenzie. During the year ended June 30, 2025, there were $0.01 million transfer agent cost reimbursements paid to MacKenzie.

Interest expense:

During the year ended June 30, 2026, we recorded $1.72 million of interest expense related to the Company's line of credit agreement and note purchase agreement, compared to $0.38 million during the year ended June 30, 2025.

The increase was attributable to additional borrowings by the Parent Company under the line of credit with PRES and promissory notes issued to Streeterville Capital, LLC.

Other operating expenses:

Other operating expenses include professional fees, directors' fees, printing and mailing expense, and other general and administrative expenses. Other operating expenses for the years ended June 30, 2026 and 2025, were $1.29 million and $2.95 million, respectively. The decrease in other operating expenses was mainly due to the decrease in legal, professional and consulting fees since June 30, 2025.

Net realized gain on sale of investments:

During the year ended June 30, 2026, we recorded a net realized gain of $0.02 million as compared to $0.13 million net realized gain during the year ended June 30, 2025. Total net realized gain for the year ended June 30, 2026, was realized from the sale of four publicly traded REIT securities and five non-traded REIT securities. Total net realized gain for the year ended June 30, 2025, was realized from the sale of three non-traded REIT securities and one limited partnership interest.

Net unrealized gain (loss) on investments:

During the year ended June 30, 2026, we recorded a net unrealized gain of $1.21 million, which was net of $1.33 million of unrealized loss reclassification adjustment. The reclassification adjustments are the accumulated unrealized gains or losses as of the end of the prior period that are realized during the current period. Accordingly, the net unrealized losses excluding the reclassification adjustment for the year ended June 30, 2026, were $0.12 million, which resulted from fair value depreciation of $0.54 million from non-traded REIT securities and fair value appreciations of $0.39 million from general partnership interests and $0.03 million from limited partnership interests.

During the year ended June 30, 2025, we recorded a net unrealized loss of $0.72 million, which was net of $0.17 million of unrealized gain reclassification adjustment. The reclassification adjustments are the accumulated unrealized gains or losses as of the end of the prior period that are realized during the current period. Accordingly, the net unrealized losses excluding the reclassification adjustment for the year ended June 30, 2025, were $0.55 million, which resulted from fair value depreciations of $0.69 million from general partnership interests, $0.08 million from limited partnership interests and fair value appreciations of $0.22 million from non-traded REIT securities.

Income tax provision (benefit):

The Parent Company has elected to be treated as a REIT for tax purposes under the Code and, as a REIT, is not subject to federal income taxes on amounts that it distributes to the stockholders, provided that, on an annual basis, it generally distributes at least 90% of its REIT taxable income (determined without regard to the dividends paid deduction and excluding any net capital gain) to the stockholders and meets certain other conditions. To the extent it satisfies the annual distribution requirement but distributes less than 100% of its REIT taxable income, it will be subject to U.S. federal corporate income tax on its undistributed taxable income. In addition, it will be subject to a 4% nondeductible excise tax if the actual amount that it pays to its stockholders in a calendar year is less than a minimum amount specified under U.S. federal tax laws.

The Parent Company satisfied the annual dividend payment and other REIT requirements for the tax year ended December 31, 2025. Therefore, it did not incur any tax expense or excise tax on its income from operations during the quarterly periods within the tax year 2025. Although the Board of Directors suspended the Company's regular quarterly common stock dividend effective May 19, 2025, based on the Company's current estimates, any REIT taxable income for the tax year 2026, if any, is expected to be fully covered by the dividends-paid deduction, including dividends paid on its preferred stock. Accordingly, the Parent Company did not record any provision for federal income taxes during the fiscal periods within the tax year 2026.

MacKenzie NY 2 is subject to corporate federal and state income tax on its taxable income at regular statutory rates. As of June 30, 2026, it did not have any taxable income for tax years 2025 and 2026. Therefore, we did not record any tax provisions during any fiscal periods within the tax years 2025 and 2026. MacKenzie Satellite, MRC QRS and MAC are qualified REIT subsidiaries of the Parent Company. Therefore, they do not file a separate tax return.

The Operating Partnership is a limited partnership. 220 Campus Lane, GVEC and Innovate Napa are limited liability companies. First & Main, 1300 Main, Woodland Corporate Center Two, Main Street West, One Harbor Center, LP and Green Valley Medical Center, LP are limited partnerships. Accordingly, all income tax liabilities of these entities ultimately flow through to the Company, with the exception of minority membership interests. Therefore, no income tax provisions are recorded for these entities.

MAC OP is a limited partnership. Hollywood Hillview, MacKenzie Shoreline, Madison, PVT, Campus Lane Residential and MRC Aurora are limited liability companies. Accordingly, all income tax liabilities of these entities ultimately flow through to the Company, with the exception of minority membership interests. Therefore, no income tax provisions are recorded for these entities.

Non-GAAP Financial Measures

The Company believes that Funds from Operations ("FFO"), as defined by the National Association of Real Estate Investment Trusts ("NAREIT"), and Adjusted Funds from Operations ("AFFO") are meaningful supplemental non-GAAP measures of operating performance. Management believes these measures provide investors with additional information that is useful in evaluating the operating performance of the Company's real estate portfolio, facilitate comparisons of operating performance between reporting periods and with other REITs, and assist in evaluating the Company's ability to generate cash from its core operating activities.

Historical cost accounting under GAAP requires real estate assets, other than land, to be depreciated over their estimated useful lives. Because real estate values have historically fluctuated based on market conditions and other factors, management believes that presentations of operating results that include historical cost depreciation may be less informative in evaluating the operating performance of a REIT.

Consistent with the current definition established by NAREIT, FFO is defined as net income (loss), computed in accordance with GAAP, excluding gains or losses from sales of depreciable real estate and impairment write-downs of depreciable real estate, plus depreciation and amortization related to real estate assets.

The Company defines AFFO as FFO adjusted to exclude items that management believes are not representative of the Company's ongoing operating performance. These adjustments include the effects of straight-line rental revenue, amortization of above-market and below-market lease intangibles, amortization of deferred financing costs, debt mark-to-market adjustments, unrealized gain (loss) on investments at fair value, and other non-cash or non-recurring items, such as consulting and marketing fees and stock issued as part of our listing efforts, when applicable. The consulting and marketing fees and stock issuances presented as adjustments in the AFFO reconciliation below were incurred in connection with the completed listing of our common stock on the Nasdaq Capital Market. Because that listing is a one-time event that has occurred, we do not expect these listing-related consulting and marketing fees or share issuances to recur in future periods.

Management uses FFO and AFFO, together with GAAP financial measures, to evaluate period-over-period operating performance, assess the operating performance of the Company's real estate portfolio, evaluate trends in the Company's business, and make operating and capital allocation decisions. In addition, under the Advisory Management Agreement, as amended effective January 1, 2026, AFFO is used in determining the quarterly bonus management fee payable to the Company's Real Estate Adviser. Management prepares the quarterly FFO and AFFO calculations and the related bonus management fee calculation, which are reviewed and approved by the Company's Board of Directors.

FFO and AFFO are supplemental measures of operating performance and should not be considered alternatives to net income (loss), cash flows from operating activities, or any other measure of financial performance or liquidity determined in accordance with GAAP. These measures do not represent cash generated from operating activities and do not reflect changes in working capital, capital expenditures, principal payments on debt, leasing costs, tenant improvements, or other cash requirements necessary to operate the Company's business.

AFFO is not a measure defined by GAAP or NAREIT, and there is no standardized method of calculating AFFO. Accordingly, the Company's computation of AFFO may not be comparable to similarly titled measures reported by other REITs. In addition, FFO may not be comparable to FFO reported by other REITs that do not define FFO in accordance with the current NAREIT definition or that interpret the current NAREIT definition differently than the Company.

The calculation of AFFO requires management to use judgment in the application of accounting policies, including making estimates and assumptions regarding, among other things: (i) the fair value of investments and the resulting unrealized gain (loss) on investments at fair value recognized for the period; (ii) straight-line rent adjustments; (iii) the identification, valuation, and estimated useful lives of above-market and below-market lease intangibles and the related amortization; (iv) the amortization of loan fees and debt mark-to-market, and the fair value estimates that underlie such amounts; and (v) the identification and classification of items that management considers non-cash or non-recurring, including consulting and marketing fees and stock issued as part of the Company's listing efforts. Management's determination of whether a particular item is "non-recurring" is itself a judgment, and items previously classified as non-recurring may recur in future periods. Actual results could differ from these estimates, and changes in the underlying judgments or assumptions could result in a materially different calculation of AFFO. Because AFFO is used to determine the quarterly bonus management fee payable to our Real Estate Adviser under the Advisory Management Agreement, changes in management's judgments or assumptions in calculating AFFO may also affect the amount of that fee.

The following table reconciles net income (loss), the most directly comparable GAAP financial measure, to FFO and AFFO for the years ended June 30, 2026 and 2025:

Year Ended June 30,
2026
2025
Net income (loss)
$
(14,127,610
)
$
(23,970,277
)
FFO Adjustments:
Real estate depreciation and amortization
9,141,627
11,432,557
Impairment of assets held for sale
1,687,783
-
Impairment of depreciable real estate
-
9,500,167
FFO
(3,298,200
)
(3,037,553
)
AFFO Adjustments:
Unrealized (gain) loss on investments at fair value
(1,212,101
)
715,504
Straight-line rent adjustment
(205,958
)
(154,952
)
Amortization of above-market and below-market lease intangibles
(161,645
)
(544,103
)
Amortization of loan fees and debt mark-to-market
1,367,580
1,377,272
Other adjustments (non-recurring and non-cash transactions):
Stock issued for advisory services(1)
-
465,500
Stock issued for marketing amortization(2)
37,363
162,637
One-time consulting fees(3)
-
225,000
One-time marketing fees(4)
-
225,000
AFFO
$
(3,472,961
)
$
(565,695
)

(1) This represents the issuance of 13,300 shares of common stock to Maxim's affiliate in a private placement, representing approximately 1% of the Company's outstanding stock. On August 26, 2024, the Company entered into a letter agreement with Maxim to provide general financial advisory and investment banking services to the Company in connection with, among other things, strategic planning, uplisting to a U.S. exchange (Nasdaq, New York Stock Exchange), and potential rights offering, equity issuance or other mechanisms to enhance corporate and shareholder value.
(2) This represents the amortization of prepaid marketing expenses in relation to the common stock issued to Outside The Box Capital Inc. ("OTB Capital") in a private placement. On January 30, 2025, the Company entered into a letter agreement with OTB Capital to provide marketing and distribution services to communicate information about the Company.
(3) This represents consulting fees to IR Agency in connection with the completed listing of our common stock on the Nasdaq Capital Market.
(4) This represents consulting fees to Interactive Offers, LLC in connection with the completed listing of our common stock on the Nasdaq Capital Market.

FFO losses increased from $3.04 million for the year ended June 30, 2025 to $3.30 million for the year ended June 30, 2026, primarily driven by lower rental, reimbursements and other property income, due to the early lease termination by a tenant at the Satellite Place Office Building; higher interest expense, mainly due to additional borrowings from PRES and promissory notes issued to Streeterville Capital, LLC; and higher property operating and maintenance expenses due to the completion of Aurora at Green Valley. These factors were partially offset by lower general and administrative expenses, lower professional fees and improved results from investments at fair value.

AFFO loss increased from $0.57 million for the year ended June 30, 2025 to $3.47 million for the year ended June 30, 2026, primarily due to the factors affecting FFO, a $1.93 million unfavorable change in the adjustment for unrealized gains and losses on investments at fair value, and a $1.04 million decrease in other AFFO adjustments, primarily due to lower stock issued for advisory and marketing services and lower listing-related consulting and marketing fees. These factors were partially offset by changes in other AFFO adjustments.

Liquidity and Capital Resources

Capital Resources:

We offered to sell up to 5 million shares of common stock in our first public offering and up to 15 million shares of common stock in each of our second and third public offerings. We have raised total gross proceeds of $119.10 million from the issuance of common stock under the public offerings, consisting of $42.46 million from our first public offering, which concluded in October 2016, $67.99 million from the second public offering, which concluded in October 2019, and $8.65 million from our third public offering, which concluded in October 2020. In addition, we have raised $15.56 million from the issuance of shares of common stock under the common stock DRIP as of June 30, 2026. Out of the total proceeds from DRIPs, we have utilized a total of $14.28 million to repurchase shares of common stock under the share repurchase program. We have raised $19.90 million through the sale of our Series A preferred stock, $3.72 million through the sale of our Series B preferred stock and $1.37 million through the sale of our Series C preferred stock pursuant to a Regulation A offering as of June 30, 2026. In addition, we have raised $0.67 million from the issuance of shares of Series A, Series B and Series C preferred stock under the preferred stock DRIP. In January 2025, the Offering Circular was qualified by the SEC for the sale of 1,286,638.62 shares of Series A and 1,267,216.17 shares of Series B preferred stock. The Offering Circular was amended in October 2025 to offer up to 645,545.52 shares of Series A Preferred Stock, 1,161,981.94 shares of Series B Preferred Stock, and 1,159,219.11 shares of Series C Preferred Stock. Of these amounts, 150,000 shares of each series are reserved for the preferred stock DRIP. On January 15, 2025, our shelf registration statement on Form S-3 for the sale of up to $75 million in common stock, preferred stock, warrants, and units was declared effective by the SEC, and we entered into an equity distribution agreement with Maxim to issue and sell our common stock for an aggregate gross sales price of up to $20 million pursuant to the at-the-market offering described in the ATM Prospectus, subject to maintaining compliance with General Instruction I.B.6 of Form S-3. As of June 30, 2026, under the ATM Offering, we had sold 111,716.60 shares of common stock for gross proceeds of approximately $1.80 million. In addition, on February 28, 2025, the Company offered and sold 153,403.40 shares of the Company's common stock, pre-funded warrants to purchase up to 129,226.50 shares of common stock, and warrants to purchase up to an aggregate of 423,944.85 shares of common stock. The gross proceeds to the Company from this transaction were approximately $4.83 million, before deducting the placement agent's fees and other offering expenses payable by the Company. In July and August 2025, 129,226.50 shares of common stock were issued upon exercise of all of the pre-funded warrants. All share amounts are presented after giving effect to the Reverse Stock Split.

We plan to fund future investments with the net proceeds raised from our preferred equity offering and any future offerings of securities and cash flows from operations, as well as interest earned from the temporary investment of cash in U.S. government securities and other high-quality debt investments that mature in one year or less. However, we have not raised as much from our preferred equity offering in the past fiscal year as we did in previous years, at least in part due to rising interest rates making the preferred return less attractive. Thus, there is no guarantee that we can raise sufficient funds to meet our goals in terms of growth, strategic or necessary loan rebalancing, and additional investments. We also may fund a portion of our investments through borrowings from banks and issuances of senior securities. We also may borrow money within the underlying companies in which we have majority ownership.

We intend to utilize leverage to enhance the total returns of our portfolio. Historically, we were only able to access leverage at attractive costs through a credit facility, but the termination of our BDC status effective December 31, 2020 provided us with greater flexibility in choosing among different alternatives for raising capital through debt, equity participation features (such as warrants and convertible notes) and/or additional classes of stock (such as preferred) in order to facilitate capital formation.

Our aggregate borrowings (if any), secured and unsecured, are expected to be reasonable in relation to our net assets and will be reviewed by the Board of Directors at least quarterly.

We used the funds raised from our public offerings to invest in portfolio companies and to pay operating expenses.

We finished the year ended June 30, 2026, with cash and cash equivalents, and restricted cash of approximately $3.81 million. Our principal demands for cash are to fund operating and administrative expenses, debt service obligations, and dividends on our common and Series A, B and C preferred stock. In addition, we may also use cash to purchase additional properties. We expect to fund our material cash requirements over the next year through a combination of cash on hand, net cash provided by our property operations, new capital raised from our Series A, B and C preferred stock, and new borrowings at the underlying companies.

Cash Flows:

Fiscal 2026:

For the year ended June 30, 2026, we experienced a net decrease in cash of $0.31 million. During this year, we used net cash of $3.31 million in our operating activities and $9.14 million in our investing activities and generated net cash of $12.14 million in our financing activities.

The net cash outflow of $3.31 million from operating activities resulted from $22.67 million used in operating expenses, offset by cash inflows of $19.11 million of rental revenues and $0.25 million of investment income.

The net cash outflow of $9.14 million from investing activities resulted primarily from $9.15 million of investments in real estate assets through our subsidiaries, including $6.39 million of construction costs related to Aurora at Green Valley and approximately $2.76 million of tenant improvements and other capitalized costs related to our other properties. The Company also used $3.70 million for purchases of equity investments, partially offset by $3.71 million of proceeds from the sale of investments.

The net cash inflow of $12.14 million from financing activities resulted from $22.80 million of additional mortgage borrowings, $3.63 million of additional notes payable, $1.37 million of issuance of Series C preferred stock, $1.15 million from issuance of Series A preferred stock, $0.41 million proceeds from borrowings under the affiliated party line of credit, $0.33 million from issuance of Series B preferred stock and $0.32 million from issuance of common stock, offset by cash outflows of $11.66 million payments on existing mortgage notes payables, $2.05 million payment on existing notes, $1.53 million capital distributions to non-controlling interests holders, $0.94 million payment of dividends to Series A preferred stockholders, $0.92 million payment of financing fees, $0.38 million payment of selling commissions and fees, $0.27 million repayment of finance lease liabilities, $0.06 million payment of dividends to Series B preferred stockholders, $0.05 million payment of dividends to Series C preferred stockholders and $0.01 million change in capital pending acceptance.

Fiscal 2025:

For the year ended June 30, 2025, we experienced a net decrease in cash of $8.96 million. During this year, we used net cash of $1.69 million in our operating activities, used net cash of $19.12 million in our investing activities and generated net cash of $11.85 million in our financing activities.

The net cash outflow of $1.69 million from operating activities resulted from $22.29 million used in operating expenses, offset by cash inflows of $20.52 million of rental revenues and $0.08 million of investment income.

The net cash outflow of $19.12 million from investing activities resulted from $18.90 million of real estate acquisitions through our subsidiaries, and $1.18 million purchases of equity investments, offset by cash inflow of $0.96 million from sale of investments.

The net cash inflow of $11.85 million from financing activities resulted from $48.47 million of additional mortgage borrowings, $9.59 million proceeds from borrowings under the affiliated party line of credit, $5.57 million of capital contributions by non-controlling interests holders, $3.79 million of issuance of common stock, $1.94 million of issuance of pre-funded warrants, $1.65 million of issuance of Series B preferred stock, $1.12 million of additional notes payable, $0.38 million of issuance of Series A common stock warrants, $0.23 million of issuance of Series A preferred stock and $0.22 million of issuance of Series B common stock warrants, offset by cash outflow of $48.89 million payments on existing mortgage notes payables, $4.80 million payment of dividends to common stockholders, $2.32 million payment of financing fees, $1.88 million payment of selling commissions and fees, $1.49 million capital distributions to non-controlling interests holders, $0.95 million payment of dividends to Series A preferred stockholders, $0.28 million change in capital pending acceptance, $0.23 million repayment of finance lease liabilities, $0.22 million payment on existing notes, $0.04 million payment of dividends to Series B preferred stockholders and $0.01 million redemption of Series A preferred stock.

Material Cash Obligations

We have entered into two contracts under which we have material future commitments: (i) the Advisory Management Agreement and the Amended and Restated Investment Advisory Agreement, under which the Advisers serve as our advisers, and (ii) the Administration Agreement, under which MacKenzie furnishes us with certain non-investment management services and administrative services necessary to conduct our day-to-day operations. Each of these agreements is terminable by either party upon proper notice. Payments under the Advisory Management Agreement, as amended effective January 1, 2026, will be (i) a base management fee equal to 1.25% per annum of gross assets under management (excluding depreciation and amortization), paid monthly, and (ii) a bonus management fee equal to 5% of adjusted funds from operations each quarter. The bonus management fee replaces any incentive fee, acquisition fee, financing fee, or disposition fee that was payable under the prior agreement. Payments under the Administration Agreement will occur on an ongoing basis as expenses are incurred on our behalf by MacKenzie. However, if MacKenzie withdraws as our administrator, it will be liable for any expenses we incur as a result of such withdrawal. For additional information concerning the terms of these agreements and related fees paid, see Note 8 in the consolidated financial statements included in this report.

Our material cash requirements over the next year and thereafter also include:

• Scheduled principal and interest payments on our mortgage notes payable, line of credit and notes payable. As of June 30, 2026, our mortgage notes payable had an aggregate outstanding principal balance of approximately $134.21 million, with scheduled maturities in fiscal years 2027 through 2033. Our line of credit with PRES (as extended, maturing December 31, 2027) had an aggregate outstanding principal balance of $10 million while notes payable, net had an aggregate outstanding principal balance of approximately $3.86 million, including $2.94 million outstanding under the Streeterville Capital, LLC secured promissory notes maturing on various dates through July 2027 and September 2027, in each case as described in Note 10 to the consolidated financial statements. See Note 10 for a discussion of the material terms, guarantees and required principal payments of our indebtedness.

• Dividends declared on our Series A, Series B and Series C preferred stock, which are payable pro-rata at the rate of $0.125, $0.0625 (in cash) and $0.1875 per share per month for the Series A, Series B and Series C preferred stock, respectively, subject to the discretion of our Board of Directors. See Note 14 for a discussion of preferred stock dividends declared during fiscal 2026. The Company suspended the regular quarterly dividend on its common stock effective May 19, 2025, and the common stock dividend remains suspended.

• Operating expenses incurred in the ordinary course of business, including property operating and maintenance expenses, real estate taxes, insurance, professional fees, director fees and other general and administrative expenses.

We expect to fund these material cash requirements through a combination of cash on hand, net cash provided by our property operations, borrowings under the line of credit with PRES, secured promissory notes and other borrowings at the Company and its subsidiaries, mortgage refinancings, sales or contributions of properties, and net proceeds from the Regulation A preferred stock offering under the Offering Circular and from the sale of common stock under the ATM Offering.

Borrowings

On January 22, 2025, we entered into a revolving line of credit agreement with PRES, an affiliate of the Adviser, of up to $10,000,000. Interest will accrue on any unpaid principal balance on the note at a fixed annual interest rate of 10%. In addition, an origination fee of 2% will be charged on each advance and the sum will be added to the principal balance. The original maturity date of the loan was June 1, 2026. On September 24, 2025, the maturity date was extended to December 31, 2027. The loan requires monthly interest beginning on March 1, 2025, with the remaining principal balance due at maturity. As of June 30, 2026, the Company has borrowed $10 million in entirety, which includes $196,078 of loan origination fees, under the line of credit.

We use the proceeds from this credit facility on a short-term basis to bridge the gap between our asset acquisition expenditures and debt refinancings. We are subject to various customary covenants and restrictions on our operations, such as covenants that may (i) require us to maintain certain financial ratios, including asset coverage, debt to equity and interest coverage, and a minimum net worth, and/or (ii) restrict our ability to incur liens or additional debt, merge, sell assets, make certain investments and/or distributions or engage in transactions with affiliates. We also borrow money within the underlying companies in which we have majority ownership.
As of June 30, 2026, the Company was not in compliance with the required debt service coverage ratio under the MacKenzie Satellite Mortgage Notes Payable. As a result of the covenant violation, the remaining unpaid principal balance of approximately $5.8 million is presented in the fiscal year ending June 30, 2027 maturity category in the table below. See Note 10, Debt, for additional information.

The table below presents the total loans outstanding at the underlying companies as of June 30, 2026 and the fiscal years those loans mature:

Fiscal Year Ending June 30, :
Principal
2027
$
26,859,993
2028
33,497,988
2029
4,726,550
2030
27,435,197
2031
26,508,005
Thereafter
29,441,453
Total
$
148,469,186

Critical Accounting Policies and Estimates

Below is a discussion of the accounting policies and estimates that management considers critical in that they involve significant management judgments and assumptions, require estimates about matters that are inherently uncertain and because they are important for understanding and evaluating our reported financial results. These judgments affect the 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. In addition to the discussion below, our critical accounting policies are discussed in Note 2 of our consolidated financial statements, which are part of this annual report beginning on page F-1.

Real Estate Purchase Price Allocations

In accordance with the guidance for business combinations, upon the acquisition of real estate properties, we evaluate whether the transaction is a business combination or an asset acquisition. If the transaction does not meet the definition of a business combination, we record the assets acquired, the liabilities assumed, and any non-controlling interest as of the acquisition date, measured at their relative fair values. Acquisition-related costs are capitalized in the period incurred and are added to the components of the real estate assets acquired. We assess the acquisition-date fair values of all tangible assets, identifiable intangible assets, and assumed liabilities using methods similar to those used by independent appraisers (e.g., discounted cash flow analysis) and that utilize appropriate discount and/or capitalization rates and available market information. Estimates of future cash flows are based on several factors including historical operating results, known and anticipated trends, and market and economic conditions. The fair value of tangible assets of an acquired property considers the value of the property as if it was vacant. Intangible assets include the value of in-place leases, which represents the estimated fair value of the net cash flows of leases in place at the time of acquisition, as compared to the net cash flows that would have occurred had the property been vacant at the time of acquisition and subject to lease-up. We amortize the value of in-place leases to expense over the remaining non-cancelable term of the respective leases, which is on average five years. Estimates of the fair values of the tangible assets, identifiable intangibles and assumed liabilities require us to make significant assumptions to estimate market lease rates, property operating expenses, carrying costs during lease-up periods, discount rates, market absorption periods, prevailing interest rates, and the number of years the property will be held for investment. The use of inappropriate assumptions could result in an incorrect valuation of acquired tangible assets, identifiable intangible assets, and assumed liabilities, which could impact the amount of our net income (loss). Differences in the amount attributed to the fair value estimate of the various assets acquired can be significant based upon the assumptions made in calculating these estimates.

Fair Value Measurements

GAAP establishes a hierarchical disclosure framework which prioritizes and ranks the level of market price observables used in measuring investments at fair value. Market price is impacted by a number of factors, including the type of investment and the characteristics specific to the investment. Investments with readily available actively quoted prices or for which fair value can be measured from actively quoted prices generally will have a higher degree of market price observables and a lesser degree of judgment used in measuring fair value.

Investments measured and reported at fair value are classified and disclosed in one of the following categories:

Level I - Quoted prices are available in active markets for identical investments as of the reporting date. The type of investments included in Level I are publicly traded equity securities. We do not adjust the quoted price for these investments even in situations where we hold a large position and a sale could reasonably impact the quoted price.

Level II - Price inputs are quoted prices for similar financial instruments in active markets; quoted prices for identical or similar financial instruments in markets that are not active; and model-derived valuations in which all significant inputs or significant value-drivers are observable in active markets. Investments which are generally included in this category are publicly traded equity securities with restrictions.

Level III - Pricing inputs are unobservable and include situations where there is little, if any, market activity for the investment. Fair values for these investments are estimated by management using valuation methodologies that consider a range of factors, including but not limited to the price at which the investment was acquired, the nature of the investment, local market conditions, trading values on public exchanges for comparable securities, current and projected operating performance, financial condition, and financing transactions subsequent to the acquisition of the investment. The inputs into the determination of fair value require significant judgment by management. Due to the inherent uncertainty of these estimates, these values may differ materially from the values that would have been used had an active market for these investments existed.

In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, an investment's level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. Management's assessment of the significance of a particular input to the fair value measurement, in its entirety, requires judgment and considers factors specific to the investment.

Valuation of Investments

Our consolidated financial statements include investments that are measured at their estimated fair values in accordance with GAAP. Our valuation procedures are summarized below:

Securities for which market quotations are readily available on an exchange will be valued at such price as of the closing price on the day closest to the valuation date. Where a security is traded but in limited volume, we may instead utilize the weighted average closing price of the security over the prior 10 trading days. We may value securities that do not trade on a national exchange by using published secondary market trading information. When doing so, we first confirm that GAAP recognizes the trading price as the fair value of the security.

Securities for which reliable market data is not readily available or for which the pricing source does not provide a valuation or methodology or provides a valuation or methodology that, in the judgment of the Investment Adviser or Board of Directors, does not represent fair value, are valued as follows: (i) each portfolio company or investment is initially valued by the investment professionals responsible for the portfolio investment; (ii) preliminary valuation conclusions are documented and discussed with our senior management; and (iii) the Board of Directors will discuss valuations and determine the fair value of each investment in our portfolio in good faith based on the input of the Investment Adviser and, where appropriate and necessary, the respective third-party valuation firms. The recommendation of fair value will generally be based on the following factors, as relevant:


•
the nature and realizable value of any collateral;

•
the portfolio company's ability to make payments;

•
the portfolio company's earnings and discounted cash flow;

•
the markets in which the issuer does business; and

•
comparisons to publicly traded securities.

Securities for which market data is not readily available or for which a pricing source is not sufficient may include the following:


•
private placements and restricted securities that do not have an active trading market;

•
securities whose trading has been suspended or for which market quotes are no longer available;

•
debt securities that have recently gone into default and for which there is no current market;

•
securities whose prices are stale;

•
securities affected by significant events; and

•
securities that the Investment Adviser believes were priced incorrectly.

Valuation of Real Property

Valuation of real property used to evaluate impairment of real property held for use, held for sale, or to determine the fair value of certain real properties held by equity method investments accounted for using the fair value method, involve subjective judgments and estimates. To determine the valuation of the real estate properties, management utilizes the income approach, either the discounted cash flow or direct capitalization valuation model. Determining fair value requires management to make estimates of future cash flows, which are based on a number of inputs and assumptions, including property operations, terminal capitalization rates, and discount rates. We estimate future leasing activities and associated costs, generally over a ten-year period, to determine the fair value of the property. Once the fair value is determined, we determine whether any impairment is required and document our conclusion. As part of their review of our quarterly and annual reports, the Board of Directors reviews the valuations and impairment determinations. In addition, we may obtain a third-party appraisal on directly owned properties.

The inputs used in the valuation of real property are unobservable and accordingly, the notes to our consolidated financial statements describe the uncertainty with respect to the possible effect of such valuations, and any changes in such valuations, on our consolidated financial statements.

Below is a discussion of additional accounting policies and estimates. While management determined these to be not critical, they are still considered to be significant and relevant for understanding and evaluating our reported financial results.

Use of Estimates

The preparation of consolidated financial statements requires management to make estimates and assumptions that affect reported asset values, liabilities, revenues, expenses and unrealized gains (losses) on investments during the reporting period. Material estimates are susceptible to change, and actual results could differ from those estimates.

Revenue Recognition

Rental revenue, net of concessions, which is derived primarily from lease contracts and includes rents that each tenant pays in accordance with the terms of each lease agreement, is recognized on a straight-line basis over the term of the lease, when collectability is determined to be probable.

Minimum rent, including rental abatements, lease incentives, and contractual fixed increases attributable to operating leases are recognized on a straight-line basis over the term of the related leases when collectability is probable. Amounts expected to be received in later years are recorded as deferred rent receivable. If the lease provides for tenant improvements, we determine whether the tenant improvements, for accounting purposes, are owned by the tenant or us. When we are the owner of the tenant improvements, the tenant is not considered to have taken physical possession or have control of the physical use of the leased asset until the tenant improvements are substantially completed. When the tenant is the owner of the tenant improvements, any tenant improvement allowance (including amounts that can be taken in the form of cash or a credit against the tenant's rent) that is funded is treated as a lease incentive and amortized as a reduction of rental revenue over the lease term.

Tenant improvement ownership is determined based on various factors including, but not limited to:


•
whether the lease stipulates how a tenant improvement allowance may be spent;

•
whether the lessee or lessor supervises the construction and bears the risk of cost overruns;

•
whether the amount of a tenant improvement allowance is in excess of market rates;

•
whether the tenant or landlord retains legal title to the improvements at the end of the lease term;

•
whether the tenant improvements are unique to the tenant or general purpose in nature; and

•
whether the tenant improvements are expected to have any residual value at the end of the lease.

In accordance with ASC Topic 842, we determine whether collectability of lease payments in an operating lease is probable. If we determine the lease payments are not probable of collection, we fully reserve for rent and reimbursement receivables, including deferred rent receivable, and recognize rental income on a cash basis.

Distributions received from investments are evaluated by management and recorded as dividend income or a return of capital (reduction of investment) on the ex-dividend date. Operational dividends or distributions received from portfolio investments are recorded as investment income. Distributions resulting from the sale or refinance of an investee's underlying assets are compared to the estimated value of the remaining assets and are recorded as a return of capital or as investment income as appropriate.

Realized gains or losses on investments are recognized in the period of disposal, distribution, or exchange and are measured by the difference between the proceeds from the sale or distribution and the cost of the investment. Investments are disposed of on a first-in, first-out basis. Net change in unrealized gain (loss) reflects the net change in portfolio investment values during the reporting period, including the reversal of previously recorded unrealized gains or losses.

Variable Interest Entities

We evaluate the need to consolidate other entities in when we have invested in their securities in accordance with ASC Topic 810, Consolidation. In determining whether we have a controlling interest in a variable interest entity that requires us to consolidate the accounts of that entity, management considers factors such as ownership interest, authority to make decisions and contractual and substantive participating rights of the partners/members, as well as whether the entity is a variable interest entity for which we are the primary beneficiary.

Real Estate Assets, Capital Additions, Depreciation and Amortization

We capitalize costs, including certain indirect costs, incurred for capital additions, including redevelopment, development, and construction projects. We also allocate certain department costs, including payroll, at the corporate levels as "indirect costs" of capital additions, if such costs clearly relate to capital additions. We also capitalize interest, property taxes, and insurance during periods in which redevelopment, development, and construction projects are in progress. Cost capitalization begins once the development or construction activity commences and ceases when the asset is ready for its intended use. Repair and maintenance and tenant turnover costs are expensed as incurred. Repair and maintenance and tenant turnover costs include all costs that do not extend the useful life of the real estate asset. Depreciation and amortization expense are computed on the straight-line method over the asset's estimated useful life. We consider the period of future benefit of an asset to determine its appropriate useful life and anticipate the estimated useful lives of assets by class to be generally as follows:

Buildings 16 - 45 years


Building improvements 1 - 15 years


Land improvements
 		5 - 15 years


Furniture, fixtures and equipment 3 - 11 years
In-place leases 1 - 10 years

Impairment of Real Estate Assets

We continually monitor events and changes in circumstances that could indicate that the carrying value of our real estate and related intangible assets may not be recoverable. When indicators of potential impairment emerge, we assess whether we will recover the carrying value of the asset through its undiscounted future cash flows and its eventual disposition. Based on this assessment, if we do not believe that we will recover the carrying value of the real estate and related intangible assets, we will record an impairment loss to the extent that the carrying value exceeds the estimated fair value of the real estate and related intangible assets.

During the year ended June 30, 2026, we recorded an impairment loss on assets held for sale of $1,687,783, which is discussed in Note 5. During the year ended June 30, 2025, due to an early lease termination by the anchor tenant at our Main Street West Office Building, we recognized an accumulated impairment loss of $9,500,167. We utilized a third-party appraisal to estimate the fair value of the property and determine the impairment amount. We consider these inputs as Level III measurements within the fair value hierarchy.

Assets and Liabilities Held for Sale
We classify long-lived assets to be sold as held for sale in the period in which all of the following criteria are met:


•
Management, having the authority to approve the action, commits to a plan to sell the asset (disposal group);

•
The asset (disposal group) is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets (disposal groups);

•
An active program to locate a buyer and other actions required to complete the plan to sell the asset (disposal group) have been initiated;

•
The sale of the asset (disposal group) is probable, and transfer of the asset (disposal group) is expected to qualify for recognition as a completed sale within one year, except if events or circumstances beyond our control extend the period of time required to sell the asset or disposal group beyond one year;

•
The asset (disposal group) is being actively marketed for sale at a price that is reasonable in relation to its current fair value. The price at which a long-lived asset (disposal group) is being marketed is indicative of whether the entity currently has the intent and ability to sell the asset (disposal group). A market price that is reasonable in relation to fair value indicates that the asset (disposal group) is available for immediate sale, whereas a market price in excess of fair value indicates that the asset (disposal group) is not available for immediate sale; and

•
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.
On the day that these criteria are met, we suspend depreciation on the investment properties held for sale, including depreciation for tenant improvements and additions, as well as on the amortization of acquired in-place leases. Assets and liabilities of the disposal group are presented separately on the consolidated balance sheets and measured at the lower of carrying value or fair value less costs to sell. Prior year balances have been reclassified as assets and liabilities held for sale for comparative purposes on the consolidated balance sheet as of June 30, 2025. Woodland Corporate Center Two was listed for sale as discussed in Note 5.

Mackenzie Realty Capital Inc. published this content on September 28, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on September 28, 2026 at 21:24 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]