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

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

Certain statements in this "Management's Discussion and Analysis of Financial Condition and Results of Operations" and elsewhere in this Quarterly Report on Form 10-Q constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Words such as "may," "could," "should," "expect," "intend," "plan," "goal," "seek," "anticipate," "believe," "estimate," "predict," "variables," "potential," "continue," "expand," "maintain," "create," "strategies," "likely," "will," "would" and variations of these terms and similar expressions, or the negative of these terms or similar expressions, are intended to identify forward-looking statements.

These forward-looking statements are not historical facts but reflect the intent, belief or current expectations of the management of IPC Alternative Real Estate Income Trust, Inc. (which we refer to herein as the "Company," "we," "our" or "us") based on their knowledge and understanding of the business and industry, the economy and other future conditions. These statements are not guarantees of future performance, and we caution stockholders not to place undue reliance on forward-looking statements. Actual results may differ materially from those expressed or forecasted in the forward-looking statements due to a variety of risks, uncertainties and other factors, including but not limited to the factors listed and described under "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2024, as filed with the Securities and Exchange Commission (the "SEC") on March 19, 2025, and elsewhere in this Quarterly Report on Form 10-Q.

Forward-looking statements in this Quarterly Report on Form 10-Q reflect our management's view only as of the date of this Quarterly Report, and may ultimately prove to be incorrect or false. We undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results except as required by applicable law. We intend for these forward-looking statements to be covered by the applicable safe harbor provisions created by Section 27A of the Securities Act and Section 21E of the Exchange Act.

We routinely post important information about us and our business, including financial and other information for investors, on our website. We encourage investors to visit our website at ipcaltreit.com from time to time, as information is updated and new information is posted.

Overview

We are a Maryland corporation that intends to invest in a diversified portfolio of stabilized, income-generating commercial real estate across alternative property types, with a non-exclusive focus on self-storage facilities, student housing properties and healthcare-related properties. Healthcare-related assets may include medical outpatient buildings, ambulatory surgery centers, senior living communities and life science and laboratory facilities. We may also invest in value-add or other development projects in these asset classes, potentially through a variety of ownership structures including but not limited to direct ownership, joint ventures, co-investment opportunities, preferred equity positions and others. We were originally formed on June 17, 2021, as a Delaware limited liability company named "Inland Private Capital Alternative Assets Fund, LLC." We converted to a Maryland corporation on June 12, 2023 and elected to be taxed as a real estate investment trust ("REIT") for U.S. federal income tax purposes commencing with our taxable year ended December 31, 2024. Until that time, we were subject to taxation at regular corporate rates under the Internal Revenue Code of 1986, as amended. We are the sole general partner of IPC Alternative Real Estate Operating Partnership, LP (formerly known as IPC Alternative Assets Operating Partnership, LP) (the "Operating Partnership").

On September 28, 2023, the SEC declared our Registration Statement on Form S-11 (File No. 333-272750) for our public offering of common stock effective. We have registered a public offering of up to $1.25 billion in shares of common stock, consisting of up to $1.0 billion in shares in our primary offering and up to $250 million shares pursuant to our distribution reinvestment plan (the "Public Offering"). We are offering to sell any combination of four classes of shares of our common stock, Class T shares, Class S shares, Class D shares and Class I shares, with a dollar value up to the maximum offering amount. The share classes have different upfront selling commissions and dealer manager fees, and different ongoing distribution fees. The purchase price per share for each class of common stock will vary and will generally equal our prior month's net asset value ("NAV") per share, as determined monthly, plus applicable upfront selling commissions and dealer manager fees.

As of December 1, 2023, we had satisfied the minimum offering requirement in all states, except the State of Pennsylvania, and authorized the release of proceeds from escrow. Subscriptions from Pennsylvania residents will not be released from escrow until (i) we have received, prior to the termination of our primary offering, purchase orders from all sources for at least $62.5 million (including subscription orders by residents of other jurisdictions and by The Inland Real Estate Group of Companies, Inc. (together with its subsidiaries and affiliates, "Inland"), its affiliates and our directors and officers) of shares of our common stock in any combination of purchases of Class T shares, Class S shares, Class D shares and Class I shares and/or (ii) we obtain, prior to the termination of our primary offering, $62.5 million in assets (including by consolidating the Operating Partnership in our financial statements under accounting principles generally accepted in the United States of America ("GAAP")).

On August 28, 2025, we commenced a private offering of up to $500 million of our Class I shares, Class X-1 shares and Class X-2 shares of common stock to "accredited investors" as defined in Regulation D promulgated under the Securities Act (the "Private Offering"). The purchase price per share for each class of common stock in the Private Offering will vary and will generally be the prior month's NAV per share for such class. No upfront selling commissions, dealer manager fees or ongoing distribution fees will be paid with respect to purchases of Class I shares, Class X-1 shares and Class X-2 shares sold in the Private Offering. The Private Offering is being conducted pursuant to Rule 506(c) of Regulation D and other applicable exemptions. Class I shares, Class X-1 shares and Class X-2 shares in the Private Offering are only available through distribution participants selected by Inland Securities Corporation (the "Dealer Manager") as being eligible based on the amount of offering proceeds anticipated to be raised through such distribution participants, as well as other factors, in the Dealer Manager's discretion. Distribution participants that are initially eligible only to sell Class I or Class X-1 shares in the Private Offering, may become eligible to sell Class X-1 and/or Class X-2 shares in the Private Offering if the gross proceeds in the Private Offering raised by such distribution participants reach the target specified by the Dealer Manager. We may also offer investors who have purchased Class I shares in the Public Offering and have held such shares for at least one year the option to exchange such shares for Class X-1 or Class X-2 shares at an exchange rate based on the NAV per share of each class involved in the exchange as of the exchange date if such investor's financial intermediary has reached the requisite gross proceeds raised threshold in the Private Offering as specified by the Dealer Manager. All Class I shares sold in the Private Offering will be exchanged for Class X-1 or Class X-2 shares at an exchange rate based on the NAV per share of each class involved in the exchange as of the exchange date regardless of hold period if the gross proceeds in the Private Offering raised by the applicable distribution participant reach the target specified by the Dealer Manager. Similarly, Class X-1 shares sold in the Private Offering will be exchanged for Class X-2 shares at an exchange rate based on the NAV per share of each class as of the exchange date if the gross proceeds in the Private Offering raised by the applicable distribution participant reach the target specified by the Dealer Manager.

Other than our investment in the Operating Partnership as described below, we had neither engaged in any operations nor generated any revenues through September 30, 2025. Our entire activity from inception through September 30, 2025 primarily consists of investment in the Operating Partnership, allocation of income (loss) and receipt of distributions from the Operating Partnership and distributions paid to our common stockholders. When we receive proceeds from the sale of shares of our common stock in the Public Offering and the Private Offering (collectively, the "Offerings"), we contribute such proceeds to the Operating Partnership and receive Operating Partnership units ("OP Units") that correspond to the classes of our shares sold. As of September 30, 2025, we hold 145,632 Class T OP Units, 23,912 Class D OP Units and 297,814 Class I OP Units, representing a total 7.8% interest in the Operating Partnership. We account for the units acquired in the Operating Partnership as an equity method investment during any period our investment in the Operating Partnership is not considered significant to the Operating Partnership and will consolidate the Operating Partnership at such time our investment in the Operating Partnership is considered significant to the Operating Partnership (based on GAAP), and thereafter present the results of operations on a consolidated basis. We expect to invest our capital and all our proceeds from the Offerings in the Operating Partnership and hold no other assets other than OP Units. We therefore expect to eventually consolidate the Operating Partnership, and we have included financial statements of the Operating Partnership in Part II Item 5 in this Quarterly Report on Form 10-Q, as we believe a discussion of the performance and results of operations of the Operating Partnership would be meaningful to investors as our cash flows and operating results are driven by the Operating Partnership, and subsequent invested capital will be significant to the Company.

The Operating Partnership

The Operating Partnership was originally formed on June 21, 2021 as a Delaware limited partnership. As of September 30, 2025 and December 31, 2024, the Operating Partnership had total assets of $436.3 million and $453.0 million, respectively. As of both September 30, 2025 and December 31, 2024, the Operating Partnership owned 30 medical outpatient properties totaling 746,601 square feet, four self-storage properties totaling 250,755 square feet and one student housing property with 406 student housing beds. The properties owned as of September 30, 2025 and December 31, 2024 are located in 12 states. A majority of the Operating Partnership's medical outpatient properties are single-tenant medical outpatient properties. For the nine months ended September 30, 2025, medical outpatient properties, self-storage properties and the student housing property represented 72.6%, 11.0% and 16.4%, respectively, of the Operating Partnership's total revenues. For the year ended December 31, 2024, medical outpatient properties, self-storage properties and the student housing property represented 76.9%, 8.0% and 15.1%, respectively, of the Operating Partnership's total revenues. As of September 30, 2025, medical outpatient properties, self-storage properties and the student housing property were 97.7%, 82.5% and 87.9% leased, respectively. As of December 31, 2024, medical outpatient properties, self-storage properties and the student housing property were 100%, 81.2% and 99% leased, respectively. The Operating Partnership has no employees.

The Operating Partnership acquired its 30 medical outpatient properties on September 2, 2021 through a "roll-up" transaction with eight separate programs sponsored by an affiliate of the Company's sponsor. In exchange for the properties, the Operating Partnership issued OP Units to the Delaware statutory trusts that owned the properties, which were subsequently distributed to the investors in those trusts. The Operating Partnership acquired its sole student housing property, City Lofts on Laclede Student Housing ("University Lofts") in St. Louis, MO, on December 1, 2022, for a purchase price of $39.1 million, including the assumed Parkway UL Mortgage Loan (as defined below) of $22 million, which was the original principal amount of the loan, in connection with the acquisition.

On April 5, 2024, the Operating Partnership acquired four self-storage properties (the "Storage Properties") from an affiliate of the Company, for a total purchase price of $43.8 million, including $17.6 million of assumed loans and corresponding swaps with First Merchants Bank. The Storage Properties are comprised of 2,275 storage units, including 1,810 climate-controlled units. The Storage Properties are encumbered by a loan in the aggregate principal amount of $28 million.

The Company, the Operating Partnership and our advisor, IPC Alternative Real Estate Advisor, LLC (the "Advisor") are parties to an amended and restated advisory agreement (as may be amended or restated from time to time, the "Advisory Agreement"), which has been effective since August 28, 2025. Pursuant to the Advisory Agreement, the Advisor is responsible for sourcing, evaluating and monitoring the Company's and the Operating Partnership's investment opportunities and making decisions related to the acquisition, management, financing and disposition of the Company's and Operating Partnership's assets, in accordance with the Company's investment objectives, guidelines, policies and limitations, subject to oversight by the Company's board of directors. The Advisory Agreement provides that the Operating Partnership or the Company will pay the Advisor a management fee equal to (i) 1.25% of aggregate NAV of the Operating Partnership attributable to outstanding Class T OP Units, Class S OP Units, Class D OP Units and Class I OP Units of the Operating Partnership, (ii) 1.00% of the aggregate NAV of the Operating Partnership attributable to outstanding Class X-1 OP Units, (iii) 0.75% of the aggregate NAV of the Operating Partnership attributable to outstanding Class X-2 OP Units and (iv) 0.50% of the aggregate NAV of the Operating Partnership attributable to outstanding Class A OP Units, in each case per annum payable monthly in arrears. The management fee may be paid, at the Advisor's election, in cash, Class I shares of the Company or Class I OP Units of the Operating Partnership.

The Operating Partnership is governed by the Fourth Amended and Restated Limited Partnership Agreement of the Operating Partnership, dated August 28, 2025 (as may be amended or restated from time to time, the "Amended and Restated Limited Partnership Agreement"). On August 24, 2023, IPC REIT Special Limited Partner, LP (the "Special Limited Partner"), an affiliate, was admitted as a limited partner of the Operating Partnership and the Special Limited Partner contributed $10,000 for a performance participation interest in the Operating Partnership. The Special Limited Partner's performance participation interest in the Operating Partnership entitles it to receive an allocation of "Total Return," "Class X-1 Total Return" and "Class A Total Return."

"Total Return" is defined as distributions paid or accrued on OP Units (excluding Class X-1 OP Units, Class X-2 OP Units and Class A OP Units) plus the change in the NAV of such OP Units (excluding Class X-1 OP Units, Class X-2 OP Units and Class A OP Units), adjusted for subscriptions and repurchases. Under the Amended and Restated Limited Partnership Agreement, the annual Total Return will be allocated solely to the Special Limited Partner only after the Class T OP Unit, Class S OP Unit, Class D OP Unit and Class I OP Unit holders have received a total return of 5% (after recouping any loss carryforward amount) and such allocation will continue until the allocation between the Special Limited Partner and all other such OP Unit holders is equal to 12.5% and 87.5%, respectively. Thereafter, the Special Limited Partner will receive an allocation of 12.5% of the annual Total Return.

"Class X-1 Total Return" is defined as distributions paid or accrued on Class X-1 OP Units plus the change in NAV of such Class X-1 OP Units, adjusted for subscriptions and repurchases. Under the Amended and Restated Limited Partnership Agreement, the annual Class X-1 Total Return will be allocated solely to the Special Limited Partner only after the Class X-1 OP Unit holders have received a total return of 5% (after recouping any loss carryforward amount) and such allocation will continue until the allocation between the Special Limited Partner and all other such Class X-1 OP Unit holders is equal to 10.0% and 90.0%, respectively. Thereafter, the Special Limited Partner will receive an allocation of 10.0% of the annual Class X-1 Total Return.

"Class A Total Return" is defined as distributions paid or accrued on Class A OP Units plus the change in the NAV of such Class A OP Units, adjusted for subscriptions and repurchases. Under the Amended and Restated Limited Partnership Agreement, the annual Class A Total Return will be allocated solely to the Special Limited Partner only after the Class A OP Unit holders have received a total return of 5% (after recouping any loss carryforward amount) and such allocation will continue until the allocation between the Special Limited Partner and all other such Class A OP Unit holders is equal to 12.5% and 87.5%, respectively. Thereafter, the Special Limited Partner will receive an allocation of 12.5% of the annual Class A Total Return.

No performance participation allocation is made with respect to Class X-2 OP Units.

The Operating Partnership is primarily focused on investing in a diversified portfolio of stabilized, income-generating commercial real estate across alternative property types, with a non-exclusive focus on self-storage facilities, student housing properties and healthcare-related properties. Healthcare-related assets may include medical outpatient buildings, ambulatory surgery centers, senior living communities and life science and laboratory facilities. The Operating Partnership may also invest in value-add or other development projects in these asset classes, potentially through a variety of ownership structures including but not limited to direct ownership, joint ventures, co-investment opportunities, preferred equity positions and others. In the initial stages of our capital raise pursuant to the

Offerings, a primary source of proposed real estate investments will consist of DST or other private investment programs sponsored by IPC, an affiliate of our sponsor. These investments are expected to take the form of a transaction structured as a tax-deferred contribution of the property owned by the DST or other IPC-sponsored investment program to the Operating Partnership in exchange for OP Units under Section 721 of the Code. In particular, on June 27, 2024, IPC launched a program (the "DST Program") through which it expects to sponsor a series of private placements exempt from registration pursuant to Rule 506(b) of Regulation D under the Securities Act of beneficial interests in specific DSTs owning one or more real properties. In connection with the DST Program, the Operating Partnership will receive a fair market value purchase option with respect to each DST, giving the Operating Partnership the option, but not the obligation, exercisable in the Operating Partnership's sole and absolute discretion, to require DST investors to exchange their DST interests for Class T OP Units, Class S OP Units, Class D OP Units, Class I OP Units, or, in limited circumstances at the discretion of the Operating Partnership, cash, which option may be exercised during the three, three-month periods that begin on the 24-month, 36-month and 48-month anniversary of the final closing of the sale of DST interests pursuant to each private placement.

The following discussion and analysis is based on the consolidated financial statements for the three and nine months ended September 30, 2025 and 2024 and as of September 30, 2025 and December 31, 2024 for the Operating Partnership. Our stockholders should read the following discussion and analysis along with the consolidated financial statements of the Operating Partnership and the related notes thereto included in Part II Item 5 in this Quarterly Report on Form 10-Q.

The Operating Partnership operates in three reportable segments: Healthcare, Self-Storage and Education. The Operating Partnership assesses performance and makes operational decisions based on the performance of each segment individually.

Select Property Information (all dollar amounts in thousands, except per square foot amounts)

Overview of Operating Partnership's Portfolio

As of September 30, 2025, the Operating Partnership's real property portfolio consisted of 35 properties totaling approximately 746,601 square feet of medical outpatient properties, 250,755 square feet of self-storage properties and one student housing property with 406 student housing beds. These properties are located in 17 markets throughout the U.S.

The following table summarizes certain operating metrics of the Operating Partnership's portfolio by segment and by market as of September 30, 2025:

As of September 30, 2025, all of the properties listed in the table were owned in fee simple, with the exception of the following:

Average Effective Annual Base Rents

The following table provides a summary of the average effective annual base rents across the Operating Partnership's portfolio as of September 30, 2025:

Lease Terms

Medical outpatient lease terms typically range from 5 to 15 years, and often include renewal options. Most of the Operating Partnership's medical outpatient leases include fixed rental increases or Consumer Price Index-based rental increases and are not based on the income or profits of any person. The majority of the Operating Partnership's self-storage leases and student housing residential leases expire within 12 months.

Lease Expirations

As of September 30, 2025, the weighted-average remaining term of the Operating Partnership's total leased healthcare portfolio was approximately 6.5 years based on annualized base rent and 6.5 years based on leased square footage, excluding renewal options. The following table summarizes the lease expirations at the Operating Partnership's medical outpatient properties for leases in place as of September 30, 2025, without giving effect to the exercise of renewal or termination rights, if any. The table excludes ground leases described above as well as the self-storage and student housing properties, as substantially all leases at such properties expire within 12 months.

Tenant Diversification

The Operating Partnership believes that the tenants that occupy the Operating Partnership's real estate portfolio are generally well-diversified. As of September 30, 2025, there were three tenants that represented more than 10.0% of the Operating Partnership's

healthcare portfolio's total annualized base rent or more than 10.0% of the Operating Partnership's healthcare portfolio's total leased square feet.

The following table reflects the Operating Partnership's ten largest healthcare tenants, based on annualized base rent, as of September 30, 2025.

(1) Tenant has been on cash basis since September 30, 2022.

Liquidity and Capital Resources - Operating Partnership

General

The Operating Partnership's primary uses and sources of cash are as follows:

As of September 30, 2025, the Operating Partnership was not actively marketing for sale any properties.

As of September 30, 2025 and December 31, 2024, the Operating Partnership had total debt outstanding of $273.4 million and $273.4 million, respectively, excluding the discount on assumed mortgage loan and unamortized debt issuance costs, and bore interest at a weighted average interest rate of 4.53% and 4.03% per annum, respectively. The debt consists of:

On October 30, 2025, the Operating Partnership amended and restated the CONA Mortgage Loan. The amendment increased the outstanding principal balance to $95 million, extended the maturity date to October 29, 2027, added three one-year extension options subject to the satisfaction of certain conditions, and changed the interest rate to Term SOFR plus 1.95% with interest-only payments for the entirety of the term. The Operating Partnership expects to extend or refinance the BMO Mortgage Loan, the Parkway UL Mortgage Loan and the Parkway Storage Mortgage Loan prior to their respective maturities.

As of September 30, 2025 and December 31, 2024, the Operating Partnership had an outstanding balance of $8 million and $10 million, respectively, on the revolving credit facility loan agreement and revolving promissory note entered into by the Operating Partnership with IPC, as lender (the "Credit Facility"). The Credit Facility provides for loan advances in aggregate an aggregate amount not to exceed $22.5 million. The current maturity date of the Credit Facility is November 30, 2025. The daily balance of the loan under the Credit Facility bears interest at a rate of 4.25% per annum, however in connection with the occurrence and continuance of certain events of default (and at IPC's option for all other events of default), the interest rate will increase to 9.25% per annum. The Operating Partnership has the right to prepay all or any part of the loan at any time upon five days' notice to IPC. The Credit Facility acts in the manner of a revolving credit facility wherein prepayments from the Operating Partnership shall be available for funding future advances to the Operating Partnership.

As of September 30, 2025 and December 31, 2024, the Operating Partnership's cash and cash equivalents balance was $7.8 million and $7.8 million, respectively.

As of September 30, 2025 and December 31, 2024, the Operating Partnership had paid all interest amounts when due, and was in compliance with all financial covenants under the mortgage loans as amended.

Cash Flow Analysis -Operating Partnership

Comparison of the nine months ended September 30, 2025 and September 30, 2024

Operating activities

The increase in cash from operating activities during the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 was primarily due to an increase in property operating income and lower general and administrative expenses partially offset by an increase in interest expense.

Investing activities

The decrease in cash used in investing activities during the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 was primarily due to the acquisition of the Storage Properties that occurred during the second quarter of 2024 with no comparable activity during 2025.

Financing activities

The decrease in cash provided by financing activities during the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 was primarily due to net inflows from debt in 2024 related to the acquisition of Storage Properties with no comparable activity during 2025, partially offset by an increase in contributions.

Distributions - Operating Partnership

A summary of the distributions accrued to unitholders, distributions paid to unitholders and cash flows provided by operations for the nine months ended September 30, 2025 and 2024 is as follows:

For both the nine months ended September 30, 2025 and 2024, 100% of the Operating Partnership's distributions were funded by cash flows from operations generated during the period.

Results of Operations - Operating Partnership

The Operating Partnership generates primarily all of its net operating income from property operations. In order to evaluate the overall portfolio, the Operating Partnership's management analyzes the net operating income of properties that the Operating Partnership owns and operates. Net operating income is a supplemental non-GAAP performance measure that the Operating Partnership believes is useful to investors in measuring the operating performance of the Operating Partnership's property portfolio because the Operating Partnership's primary business is the ownership of real estate, and net operating income excludes various items included in GAAP net income that do not relate to, or are not indicative of, the Operating Partnership's property operating performance, such as depreciation and amortization and parent-level corporate expenses (including general and administrative expenses).

The Operating Partnership considers property net operating income an important supplemental non-GAAP financial measure because it reflects only those income and expense items that are incurred at the property level, and when compared across periods, reflects the impact on operations from trends in occupancy rates, rental rates and operating expenses. Although property net operating income is a

widely used measure among REITs, there can be no assurance that property net operating income presented by the Operating Partnership is comparable to similarly titled metrics used by other REITs.

The Operating Partnership calculates property net operating income using net income and excluding general and administrative expenses, advisor management fee, depreciation and amortization, interest expense, and interest or other income.

The following tables present the property net operating income broken out between same store and non-same store for the three and nine months ended September 30, 2025 and 2024, prior to general and administrative expenses, advisor management fee, depreciation and amortization, and interest, along with a reconciliation to net (loss) income, calculated in accordance with GAAP. All 35 properties the Operating Partnership currently holds were held for the entirety of both the three months ended September 30, 2025 and 2024. A total of 30 medical outpatient properties with 31 operating leases and one student housing property that were acquired before January 1, 2024 represent "same store" properties during the nine months ended September 30, 2025 and 2024. "Non-same store," as reflected in the table below, consists of properties acquired after January 1, 2024. Four self-storage properties were acquired on April 5, 2024 and are included as non-same store properties for the nine months ended September 30, 2025 and 2024.

Comparison of the three months ended September 30, 2025 and September 30, 2024

Property net operating income. During the three months ended September 30, 2025, property net operating income decreased $252, total property revenues decreased $140, and total property operating expenses, including real estate tax expense, increased $112.

The decrease in total property revenues is primarily due to the move-out of one medical outpatient tenant and a decrease in rental income at our student housing property due to a decrease in occupancy.

The increase in total property operating expenses is primarily due to an increase in insurance expense and an increase in real estate tax expense.

General and administrative expenses.General and administrative expenses decreased $51 in 2025 compared to 2024. The decrease is primarily due to a decrease in professional fees.

Advisor management fee.Advisor management fees increased $12 in 2025 compared to 2024.

Depreciation and amortization.Depreciation and amortization decreased $980 in 2025 compared to 2024. The decrease is primarily due to an increase in fully amortized assets in 2025.

Interest expense.Interest expense increased $14 in 2025 compared to 2024.

Interest and other income.Interest and other income increased $1 in 2025 compared to 2024.

Comparison of the nine months ended September 30, 2025 and September 30, 2024

Property net operating income. On a same store basis, comparing the results of operations of properties owned during the nine months ended September 30, 2025 with the results of the same properties owned during the nine months ended September 30, 2024, property net operating income decreased $194, total property revenues increased $281, and total property operating expenses including real estate tax expense increased $475.

The increase in same store total property revenues is primarily due to an increase in rental income due to increased rates at our student housing property, partially offset by a decrease in occupancy, and an increase in rents at our medical outpatient properties.

The increase in same store total property operating expenses is primarily due to an increase in insurance expense and an increase in real estate tax expense.

Non-same store total property net operating income increased $549 during the nine months ended September 30, 2025 as compared to 2024. The increase is a result of acquiring four self-storage properties on April 5, 2024. On a non-same store basis, total property revenues increased $923 and total property operating expenses including real estate tax expense increased $374 during the nine months ended September 30, 2025 as compared to 2024 as a result of this acquisition.

General and administrative expenses.General and administrative expenses decreased $377 in 2025 compared to 2024. The decrease is primarily due to a decrease in professional fees.

Advisor management fee.Advisor management fees increased $16 in 2025 compared to 2024.

Depreciation and amortization.Depreciation and amortization decreased $1,224 in 2025 compared to 2024. The decrease is primarily due to an increase in fully amortized assets in 2025.

Interest expense.Interest expense increased $790 in 2025 compared to 2024. The increase is primarily due to an increase in debt and proceeds from the Credit Facility.

Interest and other income.Interest and other income decreased $207 in 2025 compared to 2024. The decrease is primarily due to a decrease in swap termination income in 2025.

Non-GAAP Financial Measures - Operating Partnership

Accounting for real estate assets in accordance with GAAP assumes the value of real estate assets is reduced over time due primarily to non-cash depreciation and amortization expense. Because real estate values may rise and fall with market conditions, operating results from real estate companies that use GAAP accounting may not present a complete view of their performance. The Operating Partnership uses Funds from Operations, or "FFO", a non-GAAP metric to evaluate its performance. FFO provides a supplemental measure to compare the Operating Partnership's performance and operations to other REITs. Due to certain unique operating characteristics of real estate companies, the National Association of Real Estate Investment Trusts, or "NAREIT", has promulgated a standard known as FFO, which the Operating Partnership believes more accurately reflects the operating performance of a REIT. FFO, as defined by NAREIT and presented below, is net income (loss) computed in accordance with GAAP, excluding depreciation and amortization related to real estate, excluding gains (or losses) from sales of certain real estate assets, excluding impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate and excluding gains and losses from change in control.

The Operating Partnership also believes that adjusted FFO ("AFFO") is an additional meaningful non-GAAP supplemental measure of its operating results. AFFO further adjusts FFO to reflect the performance of the Operating Partnership's portfolio by adjusting for items the Operating Partnership believes are not directly attributable to its operations. The Operating Partnership's adjustments to FFO to arrive at AFFO include removing the impact of (i) amortization of above- and below-market lease intangibles, (ii) straight-line income and expense, (iii) amortization of deferred financing costs, (iv) amortization of mortgage premium/discount, and (v) amortization of derivatives costs.

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

FFO and AFFO for the nine months ended September 30, 2025 and 2024 are calculated as follows:

Net Asset Value

We calculate our NAV each month in accordance with valuation guidelines approved by our board of directors. NAV is not a measure used under GAAP and the valuations of and certain adjustments made to our assets and liabilities used in the determination of NAV will differ from GAAP. Stockholders should not consider NAV to be equivalent to stockholders' equity or any other GAAP measure. Please refer to Exhibit 4.3 to this Quarterly Report on Form 10-Q for further details on how our NAV is determined.

Our total NAV presented in the following tables shows the Company and the Operating Partnership on a combined basis and includes the NAV of the Company's common stockholders, as well as partnership interests of the Operating Partnership held by parties other than us.

The following table provides a breakdown of the major components of our NAV as of September 30, 2025 (dollars and shares/units in thousands):

The following table sets forth our NAV and NAV per share/unit by class as of September 30, 2025 (dollars and shares/units in thousands except per share/unit data):

Set forth below are the weighted averages of the key assumptions used by our independent valuation advisor in the discounted cash flow analysis used for the September 30, 2025 valuations, based on property types:

A change in these key assumptions would impact the calculation of the value of our property investments. For example, assuming all other factors remain unchanged, the changes listed below would result in the following effects on our property investment values:

The following table reconciles equity under GAAP per our combined balance sheets to our NAV (dollars in thousands):

Distributions by the Company

The table below presents the aggregate monthly gross distributions declared by the Company by record date for all classes of shares of common stock outstanding since January 1, 2024.

The gross distribution declared was reduced each month for Class T and Class D shares of the Company's common stock for applicable class-specific distribution fees to arrive at a lower net distribution amount paid to such class. For a description of the distribution fees applicable to Class D, Class S and Class T shares of the Company's stock, please see "Note 6 - Transactions with Related Parties" which is included in this Quarterly Report on Form 10-Q. As of September 30, 2025, the Company had not issued any shares of Class S, Class X-1 or Class X-2 common stock.

The following table shows the monthly net distribution per share for shares of Class T and Class D common stock outstanding since May 1, 2024, and December 1, 2024, respectively, the first day such shares became outstanding.

Sources of Distributions to Common Stockholders

During both the nine months ended September 30, 2025 and 2024, 100% of our distributions were funded by the Operating Partnership, which used its cash flows generated from operations to fund these distributions.

Critical Accounting Estimates and Policies

The Company's and the Operating Partnership's accounting policies have been established to conform with GAAP. The preparation of financial statements in conformity with GAAP requires management to use judgment in the application of accounting policies, including making estimates and assumptions. The Company's significant accounting policies are described in Note 2 - "Summary of Significant Accounting Policies" which is included in this Quarterly Report on Form 10-Q and the December 31, 2024 Notes to Financial Statements which is included in our Annual Report on Form 10-K and on Form 10-K/A. The Operating Partnership's significant accounting policies are described in Note 2 - "Summary of Significant Accounting Policies" which is included in the Operating Partnership's September 30, 2025 Notes to Consolidated Financial Statements included in Part II Item 5 in this Quarterly Report on Form 10-Q and the December 31, 2024 Notes to Financial Statements included in our Annual Report on Form 10-K and on Form 10-K/A. The Company has identified Impairment of Investments in Unconsolidated Entities and the Operating Partnership has identified Purchase Price Allocation of Acquired Real Estate andImpairment of Investment Properties as critical accounting policies.

The Company and the Operating Partnership consider these policies to be critical because they require the Company's and the Operating Partnership's management to use judgment in the application of the accounting policy, including making estimates and assumptions. These judgments affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. If management's judgment or interpretation of the facts and circumstances relating to various transactions had been different, it is possible that different accounting policies would have been applied, thus resulting in a different presentation of the financial statements. Additionally, other companies

may utilize different estimates that may impact comparability of the Company's and the Operating Partnership's results of operations to those of companies in similar businesses.

The Company

Impairment of Investments in Unconsolidated Entities

The Company's investments in unconsolidated entities are periodically assessed for impairment and an impairment loss is recorded when the fair value of the investment falls below the carrying value and such decline is determined to be other-than-temporary. The evaluation of an investment in an unconsolidated entity for potential impairment can require the Company to exercise significant judgment.

Refer to Exhibit 4.3 to this Quarterly Report on Form 10-Q for further details on the assumptions and estimates used in determination of fair value of the Company's investment in the Operating Partnership.

The Operating Partnership

Purchase Price Allocation of Acquired Real Estate

The Operating Partnership generally accounts for the acquisition of real estate as an asset acquisition which requires that the Operating Partnership assess the fair value of acquired tangible and intangible assets and liabilities (including land, buildings, tenant improvements, above-market and below-market leases, acquired in-place leases, other identified intangible assets and assumed liabilities) and allocate the purchase price to the acquired assets and assumed liabilities. The cost of the acquisition is then allocated to the assets acquired and liabilities assumed based on their relative estimated fair values. The Operating Partnership assesses relative fair value based on estimated cash flow projections that utilize discount and/or capitalization rates that the Operating Partnership deems appropriate, as well as other available market information. The Operating Partnership estimates future cash flows based on a number of factors including historical operating results, known and anticipated trends, and market and economic conditions. Valuation is highly subjective and is based in part on assumptions, such as comparable sales values, discount rates, capitalization rates, revenue and expense growth rates and lease-up assumptions, at a particular point in time.

The fair value of the tangible assets of an acquired property considers the value of the property as if it were vacant. The Operating Partnership also considers an allocation of purchase price to acquired intangibles, including acquired in-place leases that may have a customer relationship intangible value, including but not limited to the nature and extent of the existing relationship with the tenants, the tenants' credit quality and expectations of lease renewals.

The Operating Partnership records acquired above-market and below-market leases at their fair values (using a discount rate that reflects the risks associated with the leases acquired) equal to the difference between (1) the contractual amounts to be paid under each in-place lease and (2) management's estimate of fair market lease rates for each corresponding in-place lease, measured over a period equal to the remaining term of the lease for above-market leases and the initial term plus the term of any below-market fixed rate renewal options for below-market leases. Other intangible assets acquired include amounts for in-place lease values that are based on the Operating Partnership's evaluation of the specific characteristics of each tenant's lease. Factors to be considered include estimates of carrying costs during hypothetical expected lease-up periods considering current market conditions, and costs to execute similar leases. When estimating carrying costs, the Operating Partnership includes real estate taxes, insurance and other operating expenses and estimates of lost rentals at market rates during the expected lease-up periods, depending on local market conditions. When estimating costs to execute similar leases, the Operating Partnership considers leasing commissions, legal and other related expenses.

Impairment of Investment Properties

The Operating Partnership assesses the carrying values of long-lived assets each quarter or whenever events or changes in circumstances indicate that the carrying amounts of these assets may not be fully recoverable. The evaluation of anticipated future cash flows is highly subjective and is based in part on assumptions regarding the economic condition of the property at a particular point in time, future occupancy, rental rates and capital requirements that could differ materially from actual results. If it is determined that the carrying value is not recoverable because the undiscounted cash flows do not exceed the carrying value, the Operating Partnership will be required to record an impairment loss to the extent that the carrying value exceeds fair value.

Recent Accounting Pronouncements

For information related to the Company's recently issued accounting pronouncements, reference is made to Note 2 - "Summary of Significant Accounting Policies" which is included in this Quarterly Report on Form 10-Q and Note 2 - "Summary of Significant Accounting Policies" which is included in our December 31, 2024 Notes to Financial Statements included in our Annual Report on

Form 10-K and on Form 10-K/A. For information related to the Operating Partnership's recently issued accounting pronouncements, reference is made to Note 2 - "Summary of Significant Accounting Policies" which is included in the Operating Partnership's September 30, 2025 Notes to Consolidated Financial Statements included in Part II Item 5 in this Quarterly Report on Form 10-Q and December 31, 2024 Notes to Financial Statements included in our Annual Report on Form 10-K and on Form 10-K/A.

Off-Balance Sheet Arrangements

As of September 30, 2025, the Company and the Operating Partnership had no off-balance sheet arrangements that are reasonably likely to have a material current or future effect on their financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources. The Company does not consolidate the Operating Partnership.

Subsequent Events

For information related to subsequent events, reference is made to "Note 9 - Subsequent Events," which is included in our Notes to Financial Statements included in this Quarterly Report on Form 10-Q and Note 14 - "Subsequent Events"which is included in the Operating Partnership's September 30, 2025 Notes to Financial Statements included in Part II Item 5 in this Quarterly Report on Form 10-Q.