Annual Report for Fiscal Year Ending 12-31, 2025 (Form 10-K)

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

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Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995

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Certain statements contained in this section and elsewhere in this Form 10-K constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve a number of known and unknown risks, uncertainties and other factors which may cause our actual results, performance, or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Please see "Note Regarding Forward-Looking Statements" and "Risk Factors" for more information. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statements were made and are not guarantees of future performance.

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Introduction

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The following discussion should be read in conjunction with the financial statements and related notes included under Part II, Item 8 of this Annual Report on Form 10-K.

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Our Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") within this section is focused on the years ended December 31, 2025 and 2024, including year-to-year comparisons between these years. Our MD&A for the year ended December 31, 2024, including year-to-year comparisons between 2024 and 2023, can be found in Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations in the Company's Annual Report on Form 10-K for the year ended December 31, 2024.

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Overview

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Sterling Real Estate Trust d/b/a Sterling Multifamily Trust ("Sterling", "the Trust" or "the Company") is a registered, but unincorporated business trust organized in North Dakota in December 2002. Sterling has elected to be taxed as a Real Estate Investment Trust ("REIT") under Sections 856-860 of the Internal Revenue Code, which requires that 75% of the assets of a REIT must consist of real estate assets and that 75% of its gross income must be derived from real estate. The net income of the REIT is allocated in accordance with the stock ownership in the same fashion as a regular corporation. Our real estate portfolio consisted of 175 properties containing 12,295 apartment units and approximately 1,159,000 square feet of leasable commercial space as of December 31, 2025. The portfolio has a net book value of real estate investments (cost less accumulated depreciation) of approximately $902,388, which includes construction in progress. Sterling's current acquisition strategy and focus is on multifamily apartment properties.

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Critical Accounting Policies and Estimates

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Below are the accounting policies and estimates that management believe are critical to the preparation of the audited consolidated financial statements included in this Report. Certain accounting policies used in the preparation of these consolidated financial statements are particularly important for an understanding of the financial position and results of operations presented in the historical consolidated financial statements included in this Report. A summary of significant accounting policies is also provided in the aforementioned notes to our consolidated financial statements (see note 2 to the audited consolidated financial statements). These policies require the application of judgment and assumptions by management and, as a result, are subject to a degree of uncertainty. Due to this uncertainty, actual results could differ materially from estimates calculated and utilized by management.

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Impairment of Real Estate Investments

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The Trust's investment properties are reviewed for potential impairment at the end of each reporting period or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. To assess potential impairment of the real estate portfolio, the Trust initially performs a screen test and reviews the net book value (NBV) of each property, compares the trailing twelve months (T12) net operating income (NOI) against the prior year's T12 NOI, and evaluates key assumptions, including the anticipated hold period and applicable capitalization rates, to determine whether any indicators of impairment exist.

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Examples of situations considered to be impairment indicators include, but are not limited to:

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If the presence of one or more impairment indicators as described above is identified with respect to an investment property, the asset is tested for recoverability by comparing its carrying value to the estimated future undiscounted cash flows. An investment property is considered to be impaired when the estimated future undiscounted cash flows are less than its current carrying value. When performing a test for recoverability or estimating the fair value of an impaired investment property, the Trust makes complex or subjective assumptions which include, but are not limited to:

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To the extent impairment has occurred, the Trust will record an impairment charge calculated as the excess of the carrying value of the asset over its fair value. Based on evaluation, there was one impairment loss of $735 recorded during the year ended December 31, 2025. There was no impairment loss during the year ended December 31, 2024. There was one impairment loss of $2,603 recorded during the year ended December 31, 2023.

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Acquisition of Real Estate Investments

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The Company allocates the purchase price of properties that meet the definition of an asset acquisition to net tangible and identified intangible assets acquired based on their relative fair values. In making estimates of relative fair values for purposes of allocating purchase price, the Company utilizes a number of sources, including independent appraisals that may be obtained in connection with the acquisition or financing of the respective property, our own analysis of recently acquired and existing comparable properties in our portfolio, and other market data. The Company also considers information obtained about each property as a result of its pre-acquisition due diligence, marketing, and leasing activities in estimating the relative fair value of the tangible and intangible assets acquired.

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REIT Status

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We operate in a manner intended to enable us to continue to qualify as a REIT under Sections 856-860 of the Internal Revenue Code. Under those sections, a REIT which distributes at least 90% of its REIT taxable income, excluding net capital gains, as a distribution to its shareholders each year and which meets certain other conditions will not be taxed on

that portion of its taxable income which is distributed to its shareholders. We intend to distribute to our shareholders 100% of our taxable income. Therefore, no provision for Federal income taxes is required. If we fail to distribute the required amount of income to our shareholders, we would fail to qualify as a REIT and substantial adverse tax consequences may result.

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There have been no material changes in our Critical Accounting Policies as disclosed in Note 2 to our financial statements for the year ended December 31, 2025 included elsewhere in this report.

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Principal Business Activity

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The Operating Partnershipcurrently directly owns 175 properties. Of these, 141 residential properties located in North Dakota, Minnesota, Missouri, Nebraska and Texas and are principally multifamily apartment buildings. The remaining 34 are commercial properties primarily located in North Dakota with others located in Arkansas, Colorado, Iowa, Louisiana, Michigan, Minnesota, Mississippi, Nebraska and Wisconsin. The commercial properties include retail, office, industrial, and medical properties. The Trust's mix of properties is 83.9% residential and 16.1% commercial (based on cost) with a total carrying value of $902,388 at December 31, 2025. The Trust has one property held for sale at December 31, 2025 with a carrying value of $2,730. The Trust has no properties held for sale at December 31, 2024. Currently our focus is limited to multifamily apartment properties. We will consider unsolicited offers for purchase of commercial properties on a case-by-case basis.

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The following table represents the number of properties the Trust owns in each state as of December 31, 2025:

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Management Highlights

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Results of Operations for the Years Year Ended December 31, 2025 and 2024

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Revenues

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Property revenues totaled approximately $174,350 for the year ended December 31, 2025, which constituted an increase of approximately $15,044 or 9.4% compared to the same period in 2024. Residential property revenues increased approximately $14,017 or 10.1% and commercial property revenues increased approximately $1,027.

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The following table illustrates the occupancy percentage for the periods ended indicated:

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Residential revenues for the year ended December 31, 2025, increased $14,017 or 10.1%, in comparison to the same period in 2024. Residential properties acquired during the year ended December 31, 2025, contributed approximately $1,599 to the increase in total residential revenues. The remaining increase is due to decreased vacancies caused by increased renewals and general market rent increases at our stabilized properties. Residential revenues comprised 87.9% of total revenues for the year ended December 31, 2025, compared to 87.4% of total revenues for the year ended December 31, 2024. Residential economic occupancy year-over-year increased 0.5% to 93.0%, during the year ended December 31, 2025.

For the year ended December 31, 2025, total commercial revenues increased $1,027 or 5.1%, in comparison to the same period in 2024. The increase was primarily attributed to the scheduled rent escalation and a slight increase in occupancy during the year ended December 31, 2025.

Expenses

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Residential expenses from operations of $83,209 during the year ended December 31, 2025 increased $4,429 or 5.6% in comparison to the same period in 2024. The increase is attributed to an increase in repairs and maintenance of $2,878 or 10.5%, property management fees of $1,129 or 6.0%, and utilities of $1,111 or 9.6%. These increases are partially offset by a decrease of $673 or 10.5% in insurance.

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Commercial expenses from operations of $5,898 during the year ended December 31, 2025 increased $260 or 4.6% in comparison to the same period in 2024. The increase is attributed to an increase in repairs and maintenance of $192 or 14.3%, utilities of $31 or 3.1% and property management of $31 or 3.4%.

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Interest expense of $26,858 during the year ended December 31, 2025 increased $2,395 or 9.8% in comparison to the same period in 2024. The increase is attributed to a general increase in debt compared to the prior year and higher interest rates.

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Depreciation and amortization expense of $28,401 during the year ended December 31, 2025 increased $913 or 3.3% in comparison to the same period in 2024. Amortization expense will continue to decrease as lease intangibles become fully amortized but will increase upon acquisitions of new properties, of which a portion of the purchase price is allocated to intangibles.

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REIT administration expenses of $5,843 for the year ended December 31, 2025, increased $397 or 7.3% in comparison to the same period in 2024. The increase is attributed to an increase in REIT advisory fees paid of $575 and licensing and taxes of $187. These increases were offset by a decrease in development fees of $350.

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Other income of $9,985 for the year ended December 31, 2025 increased $9,133 in comparison to the same period in 2024. The increase is attributed to the recognition of gain on sale of properties in 2025.

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Construction in Progress and Development Projects

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The Trust capitalizes direct and certain indirect project costs incurred during the development period such as construction, insurance, architectural, legal, interest and other financing costs, and real estate taxes. At such time as the development is considered substantially complete, the capitalization of certain indirect costs such as real estate taxes, interest, and financing costs cease, all project-related costs included in construction in process are reclassified to land and building and other improvements.

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Construction in progress as of December 31, 2025, consists primarily of construction at several residential properties located in North Dakota and Minnesota. The Rosedale Estates has a project for a parking structure and parking lot which represents approximately $7,136 of construction in progress. Stony Brook has an exterior project consisting of siding, windows and gutters and represents approximately $3,541 of construction in progress. Both projects are expected to be complete in 2026. Remaining construction in progress projects are primarily related to building and roof system, roof replacements on multiple residential properties, residential exterior window systems, and new deck systems on multiple residential properties.

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The Trust has one on-going development through a joint venture with a consolidated affiliate.

SE Rosemount, LLC, currently being developed in Rosemount, MN is expected to be completed in the first quarter of 2028. The current project budget approximates $64,200, of which $6,124 has been incurred as of December 31, 2025.

The Trust has one on-going development through a joint venture with an unconsolidated affiliate.

Emory North Liberty, currently being developed in North Liberty, IA. As of December 31, 2025, phase II of the project is underway. Phase II consists of five buildings containing 204 apartment units and is on schedule to be fully complete in Q1 2027.

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Funds From Operations (FFO)

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Funds From Operations (FFO) applicable to common shares and limited partnership units means net income (computed in accordance with GAAP), excluding gains (or losses) from sales of property, plus depreciation and amortization from continuing operations, plus pro rata share of unconsolidated affiliate depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures will be calculated to reflect funds from operations on the same basis.

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Historical cost accounting for real estate assets implicitly assumes the value of real estate assets diminishes predictably over time. Since real estate values have historically risen or fallen with market conditions, many industry investors have considered presentations of operating results for real estate companies that use historical cost accounting to be insufficient by themselves. The term Funds From Operations (FFO) was created to address this problem. It was intended to be a standard supplemental measure of REIT operating performance that excluded historical cost depreciation from - or "added back" to - GAAP net income.

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Our management believes this non-GAAP measure is useful to investors because it provides supplemental information that facilitates comparisons to prior periods and for the evaluation of financial results. Management uses this non-GAAP measure to evaluate our financial results, develop budgets and manage expenditures. The method used to produce non-GAAP results is not computed according to GAAP, is likely to differ from the methods used by other companies and should not be regarded as a replacement for corresponding GAAP measures. Management encourages the review of the reconciliation of this non-GAAP financial measure to the comparable GAAP results.

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Since the introduction of the definition of FFO, the term has come to be widely used by REITs. In the view of National Association of Real Estate Investment Trusts ("NAREIT"), the use of the definition of FFO (combined with the primary GAAP presentations required by the Securities and Exchange Commission) has been fundamentally beneficial, improving the understanding of operating results of REITs among the investing public and making it easier than before to compare the results of one REIT with another.

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While FFO applicable to common shares and limited partnership units are widely used by REITs as performance metrics, all REITs do not use the same definition of FFO or calculate FFO in the same way. The FFO reconciliation presented here is not necessarily comparable to FFO presented by other real estate investment trusts. FFO should also not be considered as an alternative to net income as determined in accordance with GAAP as a measure of a real estate investment trust's performance, but rather should be considered as an additional, supplemental measure, and should be viewed in conjunction with net income as presented in the consolidated financial statements included in this report. FFO applicable to common shares and limited partnership units does not represent cash generated from operating activities in accordance with GAAP and is not necessarily indicative of sufficient cash flow to fund a real estate investment trust's needs or its ability to service indebtedness or to pay dividends to shareholders.

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The following tables include calculations of FFO, and the reconciliations from net income, for the years ended December 31, 2025, 2024 and 2023, respectively. We believe these calculations are the most comparable GAAP financial measure (in thousands):

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Reconciliation of Net Income Attributable to Sterling to FFO Applicable to Common Shares and Limited Partnership Units

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Liquidity and Capital Resources

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Evaluation of Liquidity

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We continually evaluate our liquidity and ability to fund future operations, debt obligations, and any repurchase requests. As part of our analysis, we consider among other items, the credit quality of tenants current lease terms and projected expiration dates.

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Our principal demands for funds are for:

(i) acquisition of real estate and real estate-related investments,

(ii) payment of acquisition-related expenses and operating expenses,

(iii) payment of dividends/distributions,

(iv) payment of principal and interest on current and any future outstanding indebtedness,

(v) redemptions of our securities under our redemption plans and

(vi) capital improvements, development projects, and property-related expenditures.

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Generally, we expect to meet cash needs for the payment of operating expenses and interest on outstanding indebtedness from cash flow from operations. We expect to pay dividends/distributions and any repurchase requests to our shareholders and the unit holders of our Operating Partnership from cash flow from operations.

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At December 31, 2025, our unrestricted cash resources consisted of cash and cash equivalents totaling $7,764. Our unrestricted cash reserves can be used for working capital needs and other commitments. The In addition, we had unencumbered properties with a gross book value of $68,094, which could potentially be used as collateral to secure additional financing in future periods.

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Credit Facilities

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The Trust maintains a $4,915 variable rate (floating SOFR plus 2.00%) line of credit agreement with Old National Bank (formerly Bremer Bank), which expires in December 2026; and a $3,500 variable rate (floating SOFR plus 2.00%) line of credit agreement with Old National Bank, which expires in December 2026. As of December 31, 2025, there was no outstanding balance on the credit facilities maturing in 2026

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In November 2025, we extended our variable rate (Prime minus 1.50%) line of credit agreement with Gate City Bank, which will now expire in November 2028. Under the extension, we also increased the size of the credit facility from $19,800 to $20,000. In November 2025, the Trust also entered into a new $20,000 variable rate (Prime minus 0.75%) line of credit agreement with Gate City Bank, which expires in November 2028. The lines of credit are secured by specific properties. We expect to use the Gate City Bank credit facilities periodically for operating needs and to help facilitate real estate acquisitions.

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We also expect the sale of our securities and issuance of limited partnership units of the Operating Partnership in exchange for property acquisitions and sale of additional common or preferred shares to be a source of long-term capital for us.

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At December 31, 2025, the lines of credit had $48,415 available and an unused balance of $32,015 under the agreements. The Trust anticipates it will hold the lines of credit as cash resources to the Trust.

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Strategic Use of Credit Facilities

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In 2024 and 2025 the Trust increased utilization of lines of credit as a tactical response to favorable acquisition opportunities. While lines of credit continue to service as a treasury management tool, they are also used to provide flexibility for opportunistic investments and efficient cash management, consistent with our strategy and utilization of available credit.

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Capital and Equity

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During the year ended December 31, 2025, we did not sell any common shares in private placements. During the year ended December 31, 2024 we sold 1,356,000 common shares, which raised gross proceeds of $31,186 in private placements. During the year ended December 31, 2025, we issued 368,000 and 126,000 common shares under the dividend reinvestment plan and optional share purchases, respectively which raised gross proceeds of $11,420. During the year ended December 31, 2024, we did not sell any common shares in private placements. During the year ended December 31, 2024, we issued 343,000 and 121,000 common shares under the dividend reinvestment plan and as optional share purchases, respectively which raised gross proceeds of $10,267.

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Additionally, to reduce our cash investment and liquidity needs, the Trust utilizes the UPREIT structure whereby we can acquire property in whole or in part by issuing partnership units in lieu of cash payments. During the year ended December 31, 2025, the Operating Partnership issued approximately 321,000 limited partnership units of the Operating Partnership valued at $24.00 per unit for an aggregate consideration of approximately $10,518 for the purchase of real estate investments. During the year ended December 31, 2024, the Operating Partnership issued approximately 321,000 limited partnership units of the Operating Partnership valued at $23.00 per unit for an aggregate consideration of approximately $7,396 for the purchase of real estate investments.

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The Board of Trustees, acting as general partner for the Operating Partnership, determined an estimate of fair value for the limited partnership units exchanged through the UPREIT structure. In determining this value, the Board relied upon their experience with, and knowledge about, the Trust's real estate portfolio and debt obligations. The Board typically determines the fair value on an annual basis. The Trustees determine the fair value, in their sole discretion and use data points to guide their determination which is typically based on a consensus of opinion. Thus, the Trust does not employ any specific valuation methodology or formula. Rather, the Board looks to available data and information, which is often adjusted and weighted to comport more closely with the assets held by the Trust at the time of valuation. The principal valuation methodology utilized is the NAV calculation/direct capitalization method. The information made available to the Board is assembled by the Trust's Advisor. In addition, the Board considers how the price chosen will affect existing

share and unit values, redemption prices, dividend coverage ratios, yield percentages, dividend reinvestment factors, and future UPREIT transactions, among other considerations and information. The fair value was not determined based on, nor intended to comply with, fair value standards under US GAAP and the value may not be indicative of the price we would get for selling our assets in their current condition. At this time, no shares are held in street name accounts and the Trust is not subject to FINRA's specific pricing requirements set out in Rule 2340 or otherwise.

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As with any valuation methodology, the methodologies utilized by the Board in reaching an estimate of the value of the shares and limited partnership units are based upon a number of estimates, assumptions, judgments or opinions that may, or may not, prove to be correct. The use of different estimates, assumptions, judgments, or opinions would likely have resulted in significantly different estimates of the value of the shares and limited partnership units. In addition, the Board's estimate of share and limited partnership unit value is not based on the book values of our real estate, as determined by GAAP, as our book value for most real estate is based on the amortized cost of the property, subject to certain adjustments.

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Liquidity Outlook

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Cash on hand, together with cash from operations and access to the lines of credit is expected to provide sufficient capital to meet the Company's needs for at least the next 12 months and, we will use cash flows from operations, net proceeds from share offerings, debt proceeds, and proceeds from the disposition of real estate investments to meet long term liquidity demands.

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Credit Quality of Tenants

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We are exposed to credit risk within our tenant portfolio, which can reduce our results of operations and cash flow from operations if our tenants are unable to pay their rent. Tenants experiencing financial difficulties may become delinquent on their rent or default on their leases and, if they file for bankruptcy protection, may reject our lease in bankruptcy court, resulting in reduced cash flow. This may negatively impact net asset values and require us to incur impairment charges. Even if a default has not occurred and a tenant is continuing to make the required lease payments, we may restructure or renew leases on less favorable terms, or the tenant's credit profile may deteriorate, which could affect the value of the leased asset and could in turn require us to incur impairment charges.

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To mitigate credit risk on commercial properties, we have historically looked to invest in assets that we believe are critically important to our tenant's operations and have attempted to diversify our portfolio by tenant, tenant industry and geography. We also monitor all of our properties' performance through review of rent delinquencies as a precursor to a potential default, meetings with tenant management and review of tenants' financial statements and compliance with financial covenants. When necessary, our asset management process includes restructuring transactions to meet the evolving needs of tenants, refinancing debt and selling properties, as well as protecting our rights when tenants default or enter into bankruptcy.

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Lease Expirations and Occupancy

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Our residential leases are for a term of one year or less. The Advisor, with the assistance of our property managers, actively manages our real estate portfolio and begins discussing options with tenants in advance of scheduled lease expirations. In certain cases, we may obtain lease renewals from our tenants; however, tenants may elect to move out at the end of their term. In the cases where tenants elect not to renew, we may seek replacement tenants or try to sell the property.

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Cash Flow Analysis

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Our objectives are to generate sufficient cash flow over time to provide shareholders with increasing dividends and to seek investments with potential for strong returns and capital appreciation throughout varying economic cycles. We have funded 100% of dividends paid with operating cash flows. In setting a dividend rate, we focus primarily on expected returns from investments we have already made to assess the sustainability of a particular dividend rate over time.

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Operating Activities

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Our real estate properties generate cash flow in the form of rental revenues, which is reduced by interest payments, direct lease costs and property-level operating expenses. Property-level operating expenses consist primarily of property management fees including salaries and wages of property management personnel, utilities, cleaning, repairs, insurance, security and building maintenance cost, and real estate taxes. Additionally, we incur general and administrative expenses, advisory fees, acquisition and disposition expenses and financing fees. As of the year ended December 31, 2025 and 2024, salaries and wages of property management personnel with a related party was $10,041 and $9,971, respectively.

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Net cash provided by operating activities was $54,831 and $46,559 for the years ended December 31, 2025 and 2024, respectively, which consists primarily of net income from property operations, adjusted for non-cash depreciation and amortization.

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Investing Activities

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Our investing activities generally consist of real estate-related transactions (purchases and sales of properties) and payments of capitalized property-related costs such as intangible assets.

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Net cash used in investing activities was ($50,816) and ($40,841) for the years ended the year ended December 31, 2025 and 2024, respectively (this does not include the value of UPREIT units issued in connection with investing activities). For the years ended December 31, 2025 and 2024, cash flows used in investing activities related specifically to the acquisition of properties and capital expenditures was ($50,269) and ($46,955), respectively. Proceeds received from the sale of real estate investments during the year ended December 31, 2025 and 2024, offset this amount by $20,300 and $9,057, respectively.

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Financing Activities

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Our financing activities generally consist of funding property purchases by raising proceeds and securing mortgage notes payable as well as paying dividends, paying syndication costs, and making principal payments on mortgage notes payable.

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Net cash used in financing activities was ($1,364) and ($27,854), respectively, for the years ended December 31, 2025 and 2024. During the year ended December 31, 2025, we paid $29,072 in dividends and distributions, redeemed $9,679 of shares and units, received $60,030 from new mortgage notes payable, and made mortgage principal payments of $50,081. For the year ended December 31, 2024, we paid $27,104 in dividends and distributions, redeemed $11,915 of shares and units, received $30,803 from new mortgage notes payable, and made mortgage principal payments of $65,677.

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Dividends and Distributions

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Common Stock

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We declared cash dividends to our shareholders during the period from January 1, 2025 to December 31, 2025 totaling $15,592 or $1.2000 per share, of which $7,173 was cash dividends and $8,414 were reinvested through the dividend reinvestment plan. The cash dividends were paid from our $54,831 of cash flows from operations.

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We declared cash dividends to our shareholders during the period from January 1, 2024 to December 31, 2024 totaling $13,561 or $1.1500 per share, of which $5,907 was cash dividends and $7,654 were reinvested through the dividend reinvestment plan. The cash dividends were paid from our $46,559 of cash flows from operations.

We continue to provide cash dividends to our shareholders from cash generated by our operations. The following chart summarizes the sources of our cash used to pay dividends. Our primary source of cash is cash flow provided by operating activities from our investments as presented in our cash flow statement. We also include distributions from unconsolidated affiliates to the extent that the underlying real estate operations in these entities generate these cash flows and the gain on sale of properties relates to net profits from the sale of certain properties. Our presentation is not intended to be an alternative to our consolidated statement of cash flows and does not present all sources and uses of our cash.

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The following table presents certain information regarding our dividend coverage:

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Limited Partnership Units

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The Operating Partnership agreement provides that our Operating Partnership will distribute to the partners (subject to certain limitations) cash from operations on a quarterly basis (or more frequently, if we so elect) in accordance with the percentage interests of the partners. We determine the amounts of such distributions in our sole discretion.

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For the year ended December 31, 2025, we declared quarterly distributions totaling $22,428 to holders of limited partnership units in our Operating Partnership, which we paid on April 15, July 15, and October 15, 2025, and January 15, 2026. Distributions were paid at a rate of $0.3000 per unit per quarter, which is equal to the per share distribution rate paid to the common shareholders.

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For the year ended December 31, 2024, we declared quarterly distributions totaling $21,448 to holders of limited partnership units in our Operating Partnership, which we paid on April 17, July 17, October 16, 2024, and January 16, 2025. Distributions were paid at a rate of $0.2875 per unit per quarter, which is equal to the per share distribution rate paid to the common shareholders.

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Sources of Dividends and Distributions

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For the year ended December 31, 2025, we paid aggregate dividends of $15,338, which were paid with cash flows provided by operating activities. Our funds from operations, or FFO, was $58,360, therefore, our management believes our distribution policy is sustainable over time. For the year ended December 31, 2024, we paid aggregate dividends of $13,109 which were paid with cash flows provided by operating activities. Our FFO was $49,283 for the year ended December 31, 2024. For a further discussion of FFO, including a reconciliation of FFO to net income, see "Funds from Operations" above.

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Recently Issued Accounting Pronouncements

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For a discussion of recently issued accounting pronouncements, see Note 2, Principal Activity and Significant Accounting Policies- Recently Issued Accounting Pronouncements, to the consolidated financial statements that are a part of this Annual Report on Form 10-K.

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Recent Developments

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On January 15, 2026, we paid a dividend or distribution of $0.3000 per share on our common shares of beneficial interest or limited partnership units, to common shareholders and limited unit holders of record on December 31, 2025.

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We have evaluated subsequent events through the date of this filing. We are not aware of any other subsequent events which would require recognition or disclosure in the consolidated financial statements.

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