Nuveen Global Cities REIT Inc.

03/20/2026 | Press release | Distributed by Public on 03/20/2026 09:24

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

Management's Discussion and Analysis of Financial Condition and Results of Operations.
References herein to "Company," "we," "us," or "our" refer to Nuveen Global Cities REIT, Inc. and its subsidiaries unless the context specifically requires otherwise.
The following discussion should be read in conjunction with the consolidated financial statements and notes thereto appearing elsewhere in this Annual Report on Form 10-K. In addition to historical data, this discussion contains forward-looking statements about our business, operations and financial performance based on current expectations that involve risks, uncertainties and assumptions. Our actual results may differ materially from those in this discussion as a result of various factors, including but not limited to those discussed under "Item 1A. Risk Factors"
Overview
Nuveen Global Cities REIT, Inc. is a Maryland corporation formed on May 1, 2017 that qualifies as a real estate investment trust ("REIT") for U.S. federal income tax purposes. We were formed to invest in properties in or around certain global cities selected for their resilience, long-term structural performance and ability to deliver an attractive and stable distribution yield. We expect that over time a majority of our real estate investments will be located in the United States and that a substantial but lesser portion of our portfolio will include real properties located in Canada, Europe and the Asia-Pacific region. We seek to complement our real property investments by investing a smaller portion of our portfolio in real estate-related assets. We are externally managed by our advisor, Nuveen Real Estate Global Cities Advisors, LLC (the "Advisor"), an investment advisory affiliate of Nuveen Real Estate. Nuveen Real Estate is the real estate investment management division of our sponsor, Nuveen, LLC ("Nuveen"). Nuveen is the asset management arm and a wholly owned subsidiary of Teachers Insurance and Annuity Association of America ("TIAA").
Public Offerings
Our Registration Statement on Form S-11 (File No. 333-222231) for our initial public offering of our common stock (the "Initial Public Offering") was declared effective by the SEC on January 31, 2018 and terminated on July 2, 2021. Our Registration Statement on Form S-11 (File No. 333-252077) for our follow-on public offering (the "Follow-on Public Offering") was declared effective by the SEC on July 2, 2021 and terminated on November 6, 2024.
Our Registration Statement on Form S-11 (File No. 333-280368) for our third public offering of up to $5.0 billion in shares of our common stock, consisting of up to $4.0 billion in shares of common stock in our primary offering and up to $1.0 billion in shares of common stock pursuant to our distribution reinvestment plan (the "Third Public Offering") was declared effective on November 6, 2024. We are offering to the public any combination of four classes of shares of our common stock, Class T shares, Class S shares, Class D shares and Class I shares, with a dollar value up to the maximum offering amount. The publicly offered share classes have different upfront selling commissions and ongoing stockholder servicing fees. The purchase price per share for each class of common stock varies and generally equals our prior month's net asset value ("NAV") per share, as calculated monthly, plus applicable upfront selling commissions and dealer manager fees.
Private Offerings
TIAA invested $200,000 through the purchase of 20,000 shares of common stock at $10.00 per share as our initial capitalization. Subsequent to our initial capitalization, TIAA purchased $300.0 million in shares (less the $200,000 initial capitalization amount), a portion of which has been repurchased.
We are conducting a private offering of Class I shares to feeder vehicles primarily created to hold our Class I shares, which in turn will offer interests in themselves to investors. We are conducting such offering pursuant to an exemption to registration under the Securities Act of 1933, as amended (the "Securities Act").
Through Nuveen Global Cities REIT OP, LP ("Operating Partnership"), we launched in June 2025 a private placement program (the "DST Program") to issue and sell up to a maximum aggregate offering amount of $3.0 billion of beneficial interests ("DST Interests") in specific Delaware statutory trusts (the "DSTs") holding real properties (the "DST Properties"). These DST interests will be issued and sold to "accredited investors", as that term is defined under Regulation D promulgated by the SEC under the Securities Act in private placements exempt from registration pursuant to Section 4(a)(2) of the Securities Act (the "DST Offerings"). Under the DST Program, each DST Property may be sourced from our real properties or from third parties, will be held in a DST, and will be leased back by a wholly-owned subsidiary of the Operating Partnership in accordance with a master lease agreement. Each master lease agreement will be guaranteed by the Operating Partnership, which will retain a fair market value purchase option (the "FMV Option") giving it the right, but not the obligation, to acquire the interests in the applicable DST or specific DST Properties held by the applicable DST from the investors for a period of one year commencing two years from the closing of the applicable DST offering in exchange for units of the Operating Partnership ("OP Units") or cash. After a one-year holding period, investors who acquire OP Units under the FMV Option generally have the right to cause the Operating Partnership to redeem all or a portion of their OP Units for, at our sole discretion, shares of our common stock, cash, or a combination of both.
The DST Program provides us the opportunity to expand and diversify our capital-raising strategies by offering what we believe to be an attractive investment product with potential tax advantages for investors that may be seeking replacement properties to complete like-kind exchange transactions under Section 1031 of the Internal Revenue Code of 1986, as amended. Certain affiliates of the Adviser receive fees in connection with the sale of the DST Interests and the management of the DSTs. We intend to use the offering proceeds from the DST Program to make investments in accordance with our investment strategy and policies, repay indebtedness, fund the repurchase of shares of all classes of our common stock under our share repurchase plan and for other corporate purposes. As of December 31, 2025, we have raised $26.6 million in proceeds from the DST Program.
2025 Highlights
Operating results:
•Declared and paid monthly net distributions totaling $118.5 million during the year ended December 31, 2025. The details of the average annualized distribution rates and total returns are shown in the following table:
Class I Class D Class T Class S
Average Annualized Distribution Rate 5.59% 5.34% 4.75% 4.81%
Year-to-Date Total Return, without upfront selling commissions 2.77% 2.52% 1.91% 1.95%
Year-to-Date Total Return, assuming maximum upfront selling commissions N/A 0.99% (1.64)% (1.60)%
Inception-to-Date Total Return, without upfront selling commissions 7.15% 6.91% 6.48% 6.10%
Inception-to-Date Total Return, assuming maximum upfront selling commissions N/A 6.70% 5.95% 5.49%
Investments:
•In March 2025, we acquired Mountain View Industrial Center, a warehouse distribution center located in the Herriman submarket of Salt Lake City, Utah. The purchase price was $30.0 million. The 264,832 square foot property is 100% leased.
•In March 2025, we acquired Meidaimae Multifamily, a multifamily asset located in Tokyo, Japan. The purchase price was approximately $30.2 million, which includes the assumption of a mortgage of $17.2 million. The 28,614 square foot property is 98% leased.
•In July 2025, we acquired additional multifamily properties that will be incorporated into the Casa Nord portfolio, which are located in Copenhagen, Denmark. The purchase price was approximately $13.7 million, which includes the assumption of a mortgage of $7.5 million. The 32,206 square feet of additional properties are 100% leased.
•In August 2025, we acquired Henderson Square, a grocery anchored retail property located within the Philadelphia metropolitan area in King of Prussia, Pennsylvania. The purchase price was approximately $34.5 million. The 107,368 square foot property is 100% leased.
•In October 2025, we originated a $54.2 million floating-rate senior loan to refinance existing debt on a five-property self-storage portfolio with assets located in College Station, Round Rock, Leander, Georgetown, and San Marcos, Texas.
•In November 2025, we originated a $82.5 million floating-rate senior loan to finance the acquisition by an unrelated third-party borrower of a two-property industrial portfolio with assets located in Justin, Texas and Buford, Georgia.
Capital Activity and Financings:
•Raised $454.9 million of gross proceeds during the year ended December 31, 2025.
•Raised $26.6 million of gross proceeds from the DST Program during the year ended December 31, 2025.
•Satisfied all share repurchase requests, totaling $272.8 million, for the year ended December 31, 2025.
Portfolio
The following charts outline the allocation of our investments based on fair value as of December 31, 2025(1)(2):
(1) North America within allocation by region includes publicly-listed REITs (3%), CMBS (5%), and Commercial Mortgage Loans (9%).
(2) RE-related Securities within asset allocation includes publicly-listed REITs (3%) and CMBS (5%) as shown on our Consolidated Balance Sheets.
The following charts further describe the diversification of our direct investments in real properties based on fair value as of December 31, 2025(3)(4):
2
(3) Allocation by region includes only directly-owned domestic property investments.
(4) Allocation by sector includes our directly held property in Copenhagen, Denmark and Tokyo, Japan.
The following map shows the location and property type of directly held real estate investments owned by European Cities Partnership SCSp ("ECF"), in which we are currently invested, as of December 31, 2025:
The following map shows the location and property type of directly held real estate investments owned by Asia Pacific Cities Fund ("APCF"), in which we are currently invested, as of December 31, 2025:
Investments in Real Estate
The following charts provide information on the nature and geographical locations of our direct investments in real properties as of December 31, 2025:
Sector and Property/Portfolio Name Number of
Properties 		Location Acquisition Date Ownership
Interest 		Sq. Ft. (in
thousands)
/ # of units 		Occupancy
Multifamily:
Kirkland Crossing 1 Aurora, IL Dec, 2017 100% 266 Units 95%
Tacara Steiner Ranch 1 Austin, TX June, 2018 100% 246 Units 98%
Brookson Flats 1 Huntersville, NC June, 2021 100% 296 Units 93%
Signature at Hartwell 1 Seneca, SC Nov, 2021 96.5% 185 Units 100%
The Reserve at Stonebridge Ranch 1 McKinney, TX Dec, 2021 100% 301 Units 91%
Meidaimae Multifamily 1 Tokyo, JP Mar, 2025 100% 60 Units 98%
CASA Nord Portfolio 5 Copenhagen, DK Various 100% 110 Units 100%
Total Multifamily 11 1,464 Units 96%
Industrial:
West Phoenix Industrial 1 Phoenix, AZ Dec, 2017 100% 265 Sq. Ft 100%
Denver Industrial 3 Golden & Denver, CO Dec, 2017 100% 486 Sq. Ft 85%
Henderson Interchange 1 Henderson, NV Dec, 2018 100% 197 Sq. Ft 100%
Globe Street Industrial 1 Moreno Valley, CA Oct, 2019 100% 252 Sq. Ft 100%
1 National Street 1 Boston, MA Nov, 2020 100% 300 Sq. Ft 0%
Rittiman West 6 & 7 2 San Antonio, TX Dec, 2020 100% 147 Sq. Ft 92%
10850 Train Ct. 1 Houston, TX Dec, 2021 100% 113 Sq. Ft 100%
5501 Mid Cities Pkwy 1 San Antonio, TX Dec, 2021 100% 88 Sq. Ft 100%
Tampa Lakeland Industrial 3 Tampa, FL Jan, 2022 100% 366 Sq. Ft 95%
610 Loop 5 Houston, TX Mar, 2022 100% 709 Sq. Ft 97%
UP Minneapolis 3 Minneapolis, MN June, 2022 100% 406 Sq. Ft 100%
Wilsonville Logistics Center 1 Wilsonville, OR July, 2022 100% 508 Sq. Ft 100%
Alliance Logistics 7 Various Oct, 2022 100% 1,236 Sq. Ft 98%
Mountain View 1 Salt Lake City, UT Mar, 2025 100% 265 Sq. Ft 100%
Total Industrial 31 5,338 Sq. Ft 91%
Retail:
Main Street at Kingwood 1 Houston, TX Oct, 2018 100% 199 Sq. Ft 98%
GFI Grocery Anchored Portfolio 5 Various Sep, 2022 95% 496 Sq. Ft 99%
Short Pump Station 1 Short Pump, VA Dec, 2024 100% 499 Sq. Ft 92%
Henderson Square 1 King of Prussia, PA Aug, 2025 100% 107 Sq. Ft 100%
Total Retail 8 1,301 Sq. Ft 97%
Office:
Defoor Hills 1 Atlanta, GA June, 2018 100% 91 Sq. Ft 100%
East Sego Lily 1 Salt Lake City, UT May, 2019 100% 148 Sq. Ft 88%
Perimeter's Edge
1 Raleigh, NC Sept, 2021 100% 85 Sq. Ft 77%
Total Office 3 324 Sq. Ft 88%
Healthcare:
9725 Datapoint 1 San Antonio, TX Dec, 2019 100% 205 Sq. Ft 100%
Linden Oaks 1 Chicago, IL Nov, 2020 100% 43 Sq. Ft 100%
Locust Grove 1 Atlanta, GA Nov, 2020 100% 40 Sq. Ft 100%
2945 Wilderness Place 1 Boulder, CO Jan, 2021 100% 31 Sq. Ft 100%
Hillcroft Medical Clinic 1 Sugarland, TX June, 2021 100% 41 Sq. Ft 100%
Pacific Center 1 San Diego, CA May, 2021 100% 92 Sq. Ft 100%
Buck's Town Medical Campus I
5 Philadelphia, PA Sept, 2021 100% 142 Sq. Ft 83%
620 Roseville Parkway 1 Roseville, CA Oct, 2021 100% 194 Sq. Ft 88%
Buck's Town Medical Campus II
2 Langhorne, PA Oct, 2021 100% 69 Sq. Ft 85%
Project Sullivan 10 Various Various 100% 661 Sq. Ft 98%
Total Healthcare 24 1,518 Sq. Ft 95%
Self-Storage:
Out O' Space Storage
1 Palm Bay, FL June, 2022 100% 240 Units 79%
Imperial Sugar Land 1 Sugarland, TX June, 2022 100% 791 Units 84%
Advantage Storage 1 Houston, TX Aug, 2022 100% 781 Units 68%
Pflugerville Self-Storage 1 Pflugerville, TX Dec, 2022 100% 546 Units 82%
Brighton Storage 1 Brighton, CO Mar, 2023 100% 716 Units 79%
Total Self-Storage 5 3,074 Units 78%
Single-Family Housing:
Single-Family Rentals 383 Various Various 100% 774 Sq. Ft 94%
Total Single-Family Housing 383 94%
Total Investment Properties 465 92%
The following schedule details the expiring leases at our industrial, retail, office and healthcare properties by annualized base rent and square footage as of December 31, 2025 ($ and square feet data in thousands). The table below excludes our multifamily properties, single-family rentals and self-storage properties as substantially all leases at such properties expire within 12 months.
Year Number of Expiring Leases
Annualized Base Rent(1)
% of Total Annualized Base Rent Expiring Square Feet % of Total
Square Feet
Expiring
2026 54 $ 9,382 10 % 1,056 14 %
2027 67 15,240 16 % 1,098 15 %
2028 66 15,330 16 % 1,433 19 %
2029 53 7,104 8 % 585 8 %
2030 61 11,171 12 % 654 9 %
2031 19 3,092 3 % 205 3 %
2032 15 10,936 12 % 1,371 18 %
2033 23 9,032 10 % 547 7 %
2034 6 1,161 1 % 30 - %
2035 5 1,791 2 % 106 1 %
Thereafter 13 8,916 10 % 375 6 %
Total 382 $ 93,155 100 % 7,460 100 %
(1) The annualized base rent associated with leased square foot of the applicable year excluding tenant recoveries, straight-line rent and above-market and below-market lease amortization.
Investments in Real Estate-Related Securities
We invest in real estate-related securities including shares of common stock of publicly-listed REITs. As of December 31, 2025, we had 60 holdings and have invested $99.5 million in securities that are valued at $102.8 million.
The following chart further describes the diversification of our investments in real estate-related securities as of December 31, 2025:
Investments in Real Estate Debt
We invest in CMBS, securities that evidence interests in, or are secured by, a single commercial mortgage loan or a pool of commercial mortgage loans. CMBS are generally pass-throughs and represent beneficial ownership interests in trusts whose assets consist of defined portfolios of one or more commercial mortgage loans. Losses are usually borne by the most subordinate class, which receive payments only after the senior classes have received payments they are entitled to. CMBS are subject to the risks of the underlying mortgage loans. The majority (approximately 95%) of our CMBS are single-asset, single-borrower deals, and nearly all our CMBS are rated Investment Grade (BBB- or higher) with approximately 6.7% being non-Investment Grade (BB+ or lower). The greatest concentration by property sector of our CMBS is in industrial properties (37%). Additionally, to minimize interest rate risk, the portfolio is concentrated in floating-rate securities (approximately 81%, with the remaining 19% comprised of fixed-rate securities) whose base index rate of one-month SOFR is 3.69%, and help to generate a current portfolio yield of approximately 6.58%. As of December 31, 2025, we have invested $141.1 million in CMBS that are valued at $140.0 million on our Consolidated Balance Sheet.
The following charts further describe our investments in CMBS as of December 31, 2025:
Investments in International Affiliated Funds
European Cities Partnership SCSp
ECF was launched in March 2016 as an open-end, Euro-denominated fund that seeks to build a diversified portfolio of high-quality and stabilized commercial real estate with good fundamentals (i.e., core real estate) located in or around certain investment cities in Europe selected for their resilience, potential for long-term structural performance and ability to deliver an attractive and stable distribution yield. As of December 31, 2025, ECF had total equity commitments of $1.3 billion (€1.2 billion), all of which had been called. As of September 30, 2025, ECF had 13 assets with a gross asset value of $1.5 billion (€1.4 billion) and a loan to value ("LTV") ratio of 40.3%. The ECF portfolio is well diversified and had a balanced country exposure with 24.3% in the United Kingdom, 18.3% in Spain, 14.1% in Finland, 13.2% in Germany, 11.6% in Netherlands, 10.5% in Austria, and 8.0% in Italy. The 12-month net total return and since inception net total return was 3.3% and 1.7%, respectively, as of September 30, 2025.
Income (loss) income from equity investments in unconsolidated international affiliated funds from ECF for the years ended December 31, 2025, 2024 and 2023 was $2.5 million, $(3.2) million and $(8.7) million, respectively.
Asia Pacific Cities Fund
APCF was launched in November 2018 as an open-end, U.S. dollar-denominated fund that seeks durable income and capital appreciation from a balanced and diversified portfolio of real estate investments in a defined list of investment cities in the Asia-Pacific region. As of December 31, 2025, APCF had total equity commitments of $1.2 billion and had called $1.1 billion of these commitments. As of September 30, 2025, APCF had 13 investments (27 assets) with a gross asset value of $1.9 billion and a LTV ratio of 38.8%. APCF had 31.6% in South Korea, 28.3% exposure in Singapore, 25.6% in Japan, 9.0% in Hong Kong and 5.5% in Australia resulting in a 12-month total return and a since inception total return of 0.8% and 3.6% (foreign exchange neutral), respectively, as of September 30, 2025.
Income (loss) from equity investments in unconsolidated international affiliated funds from APCF for the years ended December 31, 2025, 2024 and 2023 was ($0.3) million, $2.0 million and $1.7 million, respectively.
Investments in Commercial Mortgage Loans
The following table summarizes our investments in commercial mortgage loans as of December 31, 2025 ($ in thousands):
Investment Name Origination Date Loan Type Property Type Location Interest Rate Maturity Date Periodic Payment Terms Commitment Amount Principal Receivable Fair Value
9-90 Corporate Center(1)
11/9/2021 Senior Office Framingham, MA SOFR + 186 bps 11/9/2025 Interest only $72,033 $59,774 $57,680
9-90 Corporate Center 11/9/2021 Mezzanine Office Framingham, MA SOFR + 586 bps 11/9/2025 Interest only $23,344 $23,258 $12,610
Tucson IV 3/28/2022 Senior Multifamily Tucson, AZ SOFR + 295 bps 4/9/2026 Interest only $76,260 $76,260 $76,200
Tucson IV 3/28/2022 Mezzanine Multifamily Tucson, AZ SOFR + 295 bps 4/9/2026 Interest only $25,420 $25,420 $24,360
Dolce Living Royal Palm(1)
7/8/2022 Senior Multifamily Kissimmee, FL SOFR + 185 bps 7/9/2027 Interest only $51,432 $51,432 $50,990
Dolce Living Royal Palm 7/8/2022 Mezzanine Multifamily Kissimmee, FL SOFR + 525 bps 7/9/2027 Interest only $17,144 $17,144 $16,700
Sterling Self-Storage 10/8/2025 Senior Self-Storage Various SOFR + 300 bps 10/8/2027 Interest Only $54,200 $54,061 $54,061
Sterling Industrial 11/19/2025 Senior Industrial Various SOFR + 230 bps 11/19/2028 Interest Only $82,500 $82,500 $82,500
Total $389,849 $375,101
(1) Sold to unaffiliated parties, but did not qualify for sale accounting under GAAP and were not derecognized.
In accordance with the adoption of the fair value option allowed under ASC 825, Financial Instruments, and at our election, the existing commercial mortgage loans are stated at fair value and were initially valued at the face amount of the loan funding. Subsequently, the commercial mortgage loans are valued at least quarterly by an independent third-party valuation firm with additional oversight being performed by the Advisor's internal valuation department. The value will be based on market factors, such as market interest rates and spreads for comparable loans, the performance of the underlying collateral (such as the LTV ratio and the cash flow of the underlying collateral), and the credit quality of the borrower.
For the years ended December 31, 2025, 2024 and 2023, we had unrealized losses (gains) on our commercial mortgage loans of $(9.1) million, $2.3 million, and $(3.3) million respectively.
For the years ended December 31, 2025, 2024 and 2023, we recognized interest and loan origination income from our investment in commercial mortgage loans of $26.7 million, $30.7 million and $27.9 million, respectively.
Factors Impacting Our Operating Results
Our business is affected by conditions in the financial markets and economic conditions in the United States and to a lesser extent, elsewhere in the world. During the year ended December 31, 2025, global markets continued to experience volatility, driven by concerns over persistent inflation, elevated interest rates, slowing economic growth and geopolitical uncertainty. However, global real estate values started to show signs of stabilization as total returns for real estate became positive during 2024 and continuing in 2025, driven by consistently positive and stable income returns coupled with modest valuation changes. The ease of inflation has led most developed market central banks to begin to taper interest rates. Though, as the market stabilization is in the early stages, it remains difficult to predict the full impact of the new geopolitical environment and any future changes in interest rates or inflation.
Results of operations are also dependent on the rental revenue we receive from the properties that we acquire, the timing of lease expirations, operating expenses, the competitive environment for real estate assets and income from our investments in real estate-related securities, real estate debt, commercial mortgages and the International Affiliated Funds. Real estate has produced strong returns over the last few years and has priced in the effects of higher inflation and monetary policy to a more limited extent than other asset classes. Higher market rents, particularly from industrial, healthcare and housing properties, are translating into strong net operating income growth, and investors continue to view real estate as a key portfolio diversifier in a high-inflation environment. U.S. commercial real estate should benefit even during a rising interest rate environment, as real estate assets will continue to be a higher-yielding alternative to fixed-income assets in the short term.
Competitive Environment
We face competition from a diverse mix of market participants, including other companies with similar business models, REITs, private equity funds, independent investors and other real estate investors. Competition from others may diminish our opportunity to acquire a desired property on favorable terms or at all. In addition, this competition may put pressure on us to reduce the rental rates below those that we expect to charge for the properties that we acquire, which would adversely affect our financial results.
Rental Revenues
We receive income primarily from rental revenue generated by the properties that we acquire. The amount of rental revenue depends upon a number of factors, including: our ability to enter into leases with increasing or market value rents for the properties that we acquire and rent collection, which primarily relates to each future tenant's financial condition and ability to make rent payments to us on time.
Operating Expenses
Our operating expenses include general and administrative expenses, including legal, accounting and other expenses related to corporate governance, public reporting and compliance with the various provisions of U.S. securities laws. As we have with the leases associated with our industrial, retail, office and healthcare properties, we generally expect to structure our leases so that
the tenant is responsible for taxes, maintenance, insurance and structural repairs with respect to the premises throughout the lease term. Increases or decreases in such operating expenses will impact our overall financial performance.
Our Qualification as a REIT
We have elected to be taxed as a REIT for U.S. federal income tax purposes. Shares of our common stock are subject to restrictions on ownership and transfer that are intended, among other purposes, to assist us in qualifying and maintaining our qualification as a REIT. In qualifying for taxation as a REIT under the Code, we are subject to federal corporate income tax to the extent we distribute less than 100% of our REIT taxable income (including any net capital gains) to our stockholders and meet certain tests regarding the nature of our income and assets. In order to satisfy a requirement that five or fewer individuals do not own (or be treated as owning) more than 50% of our stock, subject to certain exceptions, no person or entity may own, or be deemed to own, by virtue of the applicable constructive ownership provisions of the Code, more than 9.8% (in value or number of shares, whichever is more restrictive) of the aggregate of our outstanding shares of stock or more than 9.8% (in value or number of shares, whichever is more restrictive) of our outstanding common stock.
Results of Operations
The following table sets forth the results of our operations for the years ended December 31, 2025 and 2024 ($ in thousands):
For the Year Ended December 31,
2025 2024 2025 vs 2024
Revenues
Rental revenue $ 185,304 $ 175,492 $ 9,812
Income from commercial mortgage loans 26,732 30,718 (3,986)
Total revenues 212,036 206,210 5,826
Expenses
Rental property operating 64,668 61,521 3,147
General and administrative 9,232 8,859 373
Advisory fee due to affiliate 30,869 29,843 1,026
Depreciation and amortization 81,034 79,744 1,290
Total expenses 185,803 179,967 5,836
Other income (expense)
Realized and unrealized gain from real estate-related securities 2,985 5,190 (2,205)
Realized and unrealized gain from real estate debt 686 3,175 (2,489)
Realized gain on sale of real estate investments - 15 (15)
Gain (loss) from equity investment in unconsolidated international affiliated funds 2,217 (1,215) 3,432
Unrealized (loss) gain on commercial mortgage loans (9,058) 2,313 (11,371)
Unrealized gain (loss) from interest rate derivatives 331 (597) 928
Unrealized gain (loss) on note payable 110 (5) 115
Interest income 9,719 7,798 1,921
Interest expense (42,842) (44,477) 1,635
Total other income (expense) (35,852) (27,803) (8,049)
Net loss $ (9,619) $ (1,560) $ (8,059)
Net income (loss) attributable to non-controlling interests 38 (23) 61
Net income attributable to preferred stock 15 15 -
Net loss attributable to common stockholders $ (9,672) $ (1,552) $ (8,120)
Rental Revenue and Rental Property Operating Expenses
Due to acquisitions of real estate we made during the year ended December 31, 2025, our rental revenues and rental property operating expenses for the years ended December 31, 2025 and 2024 are not comparable. However, certain properties in our portfolio were owned for both the years ended December 31, 2025 and 2024 and are further discussed below in "Same Property Results of Operations."
Income from Commercial Mortgage Loans
During the year ended December 31, 2025, income from commercial mortgage loans decreased $(4.0) million in comparison to the corresponding period in 2024, due to payoffs of three loans and a write off on interest income related to 9-90 Corporate Center in 2025, offset slightly by the origination of two commercial mortgage loans in Q4 2025.
General and Administrative Expenses
During the year ended December 31, 2025, general and administrative expenses increased by $0.4 million in comparison to the corresponding period in 2024, primarily attributable to an increase in fund administrative fees offset by a decrease in federal and state taxes.
Advisory Fee Due to Affiliate
During the year ended December 31, 2025, the advisory fee due to affiliate increased by $1.0 million as compared to the corresponding period in 2024 due to an increase in our NAV.
Depreciation and Amortization
During the year ended December 31, 2025, depreciation and amortization increased by $1.3 million, in comparison to the corresponding period in 2024 primarily due to increased acquisition activity.
Realized and Unrealized Gain from Real Estate-Related Securities
During the year ended December 31, 2025, realized and unrealized gain from real estate-related securities decreased $(2.2) million in comparison to the corresponding period in 2024. The change was primarily driven by less favorable market conditions during the year.
Realized and Unrealized Gain from Real Estate Debt
Realized and unrealized gain from real estate debt decreased $(2.5) million in comparison to the corresponding period in 2024. The change was primarily due to fair value adjustments driven by changes in market assumptions.
Gain (Loss) from Equity Investment in Unconsolidated International Affiliated Funds
Gain (Loss) from equity investments in unconsolidated International Affiliated Funds went from loss of $(1.2) million for the year ended December 31, 2024, to a gain of $2.2 million for the year ended December 31, 2025. The change was primarily driven by valuation increases in the retail markets for ECF and positive fluctuations in foreign currency for APCF.
Unrealized Gain (Loss) on Commercial Mortgage Loans
During the year ended December 31, 2025, unrealized gain (loss) on commercial mortgage loans changed $11.4 million from a gain of $2.3 million, to a loss of $(9.1) million for the year ended December 31, 2025. The change were primarily due to a change in valuation for the 9-90 commercial mortgage loan after its placement in nonaccrual status as further described in Note 7. Investment in Commercial Mortgage Loans.
Interest Income
During the year ended December 31, 2025, interest income increased $1.9 million, compared to the corresponding period in 2024 due to increased investment activity in CMBS and accelerated amortization of discount related to CMBS paydowns before maturity.
Interest Expense
During the year ended December 31, 2025, interest expense decreased $1.6 million, compared to the corresponding period in 2024 due to the impact of falling interest rates.
Same Property Results of Operations
We evaluate our consolidated results of operations on a same property basis, which allows us to analyze our property operating results excluding acquisitions during the periods under comparison. Properties in our portfolio are considered same property if they were owned for the full periods presented, otherwise they are considered non-same property. Newly acquired or recently developed properties that have not achieved stabilized occupancy are excluded from same property results and are considered non-same property. We do not consider our real estate-related securities, real estate debt, commercial mortgage loans, single-family housing and International Affiliated Funds segments to be same property.
For the year ended December 31, 2025, our same property portfolio consisted of 30 industrial, 24 healthcare, nine multifamily, six retail, five self-storage, and three office properties.
Same property operating results are measured by calculating same property net operating income ("NOI"). Same property NOI is a supplemental non-GAAP disclosure of our operating results that we believe is meaningful as it enables management to evaluate the impact of occupancy, rents, leasing activity and other controllable property operating results at our real estate properties. We define same property NOI as operating revenues less operating expenses, which exclude (i) depreciation and amortization, (ii) interest expense and (iii) other non-property-related revenue and expense items such as (a) general and administrative expenses, (b) management fee, (c) interest income, (d) income from real estate-related securities, (e) income from equity investment in unconsolidated international affiliated funds and (f) income from commercial mortgage loans.
Our same property NOI may not be comparable to that of other REITs and should not be considered to be more relevant or accurate in evaluating our operating performance than the current GAAP methodology used in calculating net income (loss).
The following table reconciles GAAP net income attributable to our stockholders to same property NOI for the years ended December 31, 2025 and 2024 ($ in thousands):
For the Year Ended December 31,
2025 2024
Net loss attributable to common stockholders $ (9,672) $ (1,552)
Adjustments to reconcile to same property NOI
Straight-line rental income (2,389) (1,785)
General and administrative 9,232 8,859
Advisory fee due to affiliate 30,869 29,843
Depreciation and amortization 81,034 79,744
Realized and unrealized gain from real estate-related securities (2,985) (5,190)
Income from commercial mortgage loans (26,732) (30,718)
Realized and unrealized gain from real estate debt (686) (3,175)
Realized gain on sale of real estate investments - (15)
Unrealized (gain) loss from interest rate derivatives (331) 597
(Gain) Loss from equity investments in unconsolidated international affiliated funds (2,217) 1,215
Unrealized (gain) loss on commercial mortgage loans 9,058 (2,313)
Unrealized (gain) loss on note payable (110) 5
Interest income (9,719) (7,798)
Interest expense 42,842 44,477
Income (loss) attributable to non-controlling interests 38 (23)
Income attributable to preferred stock 15 15
NOI $ 118,247 $ 112,186
Non-same property NOI 13,082 5,681
Same property NOI $ 105,165 $ 106,505
The following table details the components of same property NOI for the years ended December 31, 2025 and 2024 ($ in thousands):
For the Year Ended December 31,
2025 vs 2024
2025 2024 $ %
Same property rental revenue
Industrial $ 49,899 $ 48,100 $ 1,799 4 %
Healthcare 48,502 49,135 (633) (1) %
Multifamily 31,941 32,041 (100) - %
Retail 19,054 18,825 229 1 %
Office 9,048 10,334 (1,286) (12) %
Self Storage 3,997 3,867 130 3 %
Total revenues 162,441 162,302 139 - %
Same property operating expenses
Industrial 14,717 14,556 161 1 %
Healthcare 18,247 16,953 1,294 8 %
Multifamily 13,295 13,250 45 - %
Retail 5,669 5,695 (26) - %
Office 2,853 2,615 238 9 %
Self Storage 2,495 2,728 (233) (9) %
Total expenses 57,276 55,797 1,479 3 %
Same property NOI $ 105,165 $ 106,505 $ (1,340) (1) %
Same Property - Revenue
Our rental revenue includes contracted rental income from our tenants based on the leases and tenant reimbursement income for costs related to common area maintenance, real estate taxes and other recoverable costs. For the year ended December 31, 2025, rental revenues increased $0.1 million across the same property portfolio as compared to the corresponding period in 2024.
The increase was primarily related to increased market rents and occupancy at certain of our industrial, retail, and self-storage properties, offset by increases in rent concessions at certain of our office and healthcare properties as well as decreased occupancy related to our office properties.
Same Property - Expenses
Same property rental property operating expenses primarily include real estate taxes, utilities, salaries and other maintenance expenses associated with our real estate properties. For the year ended December 31, 2025, property operating expenses increased $1.5 million across the same property portfolio as compared to the corresponding period in 2024.
The increase was driven primarily by increased real estate taxes, roads and grounds repairs at certain of our industrial, office, and healthcare properties and increased utility expenses at certain of our multifamily and healthcare properties, partially offset by decreased real estate taxes at certain of our self-storage and retail properties.
Liquidity and Capital Resources
We believe we are well positioned from a liquidity perspective with approximately $558.4 million of liquidity as of December 31, 2025, consisting of $271.0 million of an undrawn unsecured revolving credit facility, approximately $242.8 million in investments in real estate debt securities and real estate-related equity securities and $44.6 million of unrestricted cash on hand, that could be utilized to satisfy any potential liquidity requirements.
Our primary needs for liquidity and capital resources are to fund our investments, to make distributions to our stockholders, to repurchase shares of our common stock pursuant to our share repurchase plan, to pay our offering and operating expenses and capital expenditures and to pay debt service on our outstanding indebtedness. Our operating expenses include, among other things, fees and expenses related to managing our properties and other investments, the advisory fee we pay to the Advisor and general corporate expenses.
In addition to our current liquidity, we obtain incremental liquidity through the sale of shares of our common stock in our continuous public offering and private offerings, from which we have received net proceeds of $2.6 billion as of December 31, 2025.
The following table is a summary of our indebtedness as of December 31, 2025 and December 31, 2024 ($ in thousands):
December 31, 2025 Principal Balance as of
Indebtedness
Weighted Average Interest Rate(1)
Weighted Average Maturity Date(2)
Maximum Facility Size December 31, 2025 December 31, 2024
Fixed rate mortgage loans secured by our properties:
Fixed rate mortgages(3)
2.47% 2/20/2028 214,729 $ 214,729 $ 198,971
Variable rate mortgage loans secured by our properties:
Variable rate mortgage loans +0.78% 12/31/2032 29,963 29,963 19,785
Total mortgage loans secured by our properties 244,692 218,756
Deferred financing costs, net (1,225) (845)
Discount on assumed mortgage notes (6,680) (8,429)
Total net mortgage loans secured by our properties 236,787 209,482
Variable rate loans secured by other investments:
Variable rate note payable +1.65% 4/9/2026 71,947 71,947 71,947
Total loans secured by other investments $ 308,734 $ 281,429
Unsecured loans:
Unsecured variable rate revolving credit facility(4)
+applicable margin 9/26/2028 440,000 169,000 173,000
Unsecured variable rate TL facility +applicable margin 9/26/2028 225,000 225,000 134,000
Total unsecured loans 665,000 394,000 307,000
Total indebtedness $ 981,639 $ 702,734 $ 588,429
(1) "+" refers to the relevant floating benchmark, which include one-month SOFR and one-month Copenhagen Interbank Offered Rate, as applicable to each secured or unsecured loan.
(2) Weighted average maturity assumes earliest maturity date.
(3) See "Note 11. Mortgages Payable" for additional information related to the Company's variable and fixed rate mortgage loans.
(4) Additional borrowing under the Company's unsecured variable rate revolving credit facility is immediately available.
Capital Uses
During periods when we are selling more shares than we are repurchasing, we primarily use our capital to acquire investments, which we also fund with other capital resources. During periods when we are repurchasing more shares than we are selling, we primarily use our capital to fund repurchases. We continue to believe that our current liquidity position is sufficient to meet the needs of our business, and all repurchase requests from our inception through December 31, 2025 have been satisfied.
In addition, we may have other funding obligations, which we expect to satisfy with the cash flows generated from our investments and our capital resources described above. Such obligations may include distributions to our stockholders, operating expenses, capital expenditures, repayment of indebtedness, and debt service on our outstanding indebtedness. Our operating expenses include, among other things, the advisory fee we pay to the Advisor, which will impact our liquidity.
Cash Flows
The following table provides a breakdown of the net change in our cash and cash equivalents and restricted cash for the years ended December 31, 2025, 2024, and 2023 ($ in thousands):
For the Year Ended December 31,
2025 2024 2023
Cash flows provided by operating activities $ 74,479 $ 68,680 $ 77,840
Cash flows used in investing activities (245,803) (73,918) (28,186)
Cash flows provided by (used in) financing activities 192,306 7,517 (71,590)
Effect of exchange rate changes on cash and cash equivalents and restricted cash (354) - -
Net increase (decrease) in cash and cash equivalents and restricted cash $ 20,628 $ 2,279 $ (21,936)
Cash flows provided by operating activities increased $5.8 million during the year ended December 31, 2025 compared to the corresponding period in 2024, primarily due to an increase in operating payables.
Cash flows used in investing activities increased $171.9 million during the year ended December 31, 2025 compared to the corresponding period in 2024 due primarily to increased net purchases of real estate-related securities, real estate debt, and commercial mortgage loans of $95.8 million and a $78.5 million increase in acquisitions of real estate.
Cash flows provided by financing activities increased by $184.8 million during the year ended December 31, 2025 compared to the corresponding period in 2024 primarily due to a $98.5 million increase in proceeds from the issuance of common stock, increased borrowings of $49.3 million related to the credit facility and mortgages payable, and an increase of $24.1 million related to contributions from non-controlling interests due to the introduction of the DST Program.
Funds from Operations and Adjusted Funds from Operations
We believe funds from operations ("FFO") is a meaningful supplemental non-GAAP operating metric, which should be considered along with, but not as an alternative to, net income (loss) and cash provided by operating activities as a measure of operating performance. Our consolidated financial statements are presented under historical cost accounting which, among other things, requires depreciation of real estate investments to be calculated on a straight-line basis. As a result, our operating results imply that the value of our real estate investments will decrease evenly over a set time period. However, we believe that the value of real estate investments will fluctuate over time based on market conditions and as such, depreciation under historical cost accounting may be less informative. FFO is a standard REIT industry metric defined by the National Association of Real Estate Investment Trusts ("NAREIT").
FFO, as defined by NAREIT and presented below, is calculated as net income or loss (computed in accordance with GAAP), excluding gains or losses from sales of depreciable real property, impairment write-downs on depreciable real property, and real estate-related depreciation and amortization.
We also believe that Adjusted FFO ("AFFO") is a meaningful supplemental non-GAAP disclosure of our operating results which should be considered along with, but not as an alternative to, net income (loss) and cash provided by operating activities as a measure of operating performance. AFFO further adjusts FFO in order for our operating results to reflect the specific characteristics of our business by adjusting for items we believe are not related to our core operations. Our adjustments to FFO to arrive to AFFO include straight-line rental income, amortization of above-and below-market lease intangibles, amortization of deferred financing costs and mortgage discount, organization costs, unrealized gains or losses from changes in fair value of real estate-related securities and real estate debt, unrealized gains or losses on commercial mortgage loans and note payable, amortization of restricted stock awards and unrealized loss or income from investments in international affiliated funds. AFFO is not defined by NAREIT and our calculation of AFFO may not be comparable to the disclosures made by other REITs.
The following table presents a reconciliation of net loss under GAAP to FFO and to AFFO ($ in thousands):
For the Year Ended December 31,
2025 2024 2023
Net loss $ (9,619) $ (1,560) $ (12,832)
Adjustments:
Real estate depreciation and amortization 81,034 79,744 84,975
Amount attributable to non-controlling interests for above adjustments (290) (313) (348)
Funds from Operations attributable to common stockholders 71,125 77,871 71,795
Straight-line rental income (2,389) (1,785) (4,084)
Amortization of above-and-below market lease intangibles (4,115) (3,609) (4,124)
Amortization of deferred financing costs 773 1,200 1,229
Amortization of mortgage discount 1,749 1,178 1,194
Unrealized loss (gain) from changes in fair value of real estate-related securities 2,787 329 (19,247)
Unrealized (loss) gain from changes in fair value of real estate debt (521) (3,575) 1,057
Unrealized gain (loss) on commercial mortgage loans 9,058 (2,313) 3,325
Unrealized (gain) loss from interest rate derivatives (331) 597 122
Unrealized (gain) loss on note payable (110) 5 140
Amortization of restricted stock awards 338 197 263
Unrealized loss from investments in international affiliated funds 1,047 4,258 11,083
Adjusted Funds from Operations attributable to stockholders $ 79,411 $ 74,353 $ 62,753
FFO and AFFO should not be considered to be more relevant or accurate than the current GAAP methodology in calculating net income (loss) or in evaluating our operating performance. In addition, FFO and AFFO should not be considered as alternatives to net income (loss) as indications of our performance or as alternatives to cash flows from operating activities as indications of our liquidity, but rather should be reviewed in conjunction with these and other GAAP measurements. Further, FFO and AFFO are not intended to be used as liquidity measures indicative of cash flow available to fund our cash needs, including our ability to make distributions to our stockholders.
Critical Accounting Policies
The preparation of the consolidated financial statements in accordance with GAAP involves significant judgments and assumptions and requires estimates about matters that are inherently uncertain. These judgments affect our reported amounts of assets and liabilities and our disclosure of contingent assets and liabilities at the dates of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. With different estimates or assumptions, materially different amounts could be reported in our consolidated financial statements. Additionally, other companies may utilize different estimates that may impact the comparability of our results of operations to those of companies in similar businesses. The accounting policies and estimates that we consider critical accounting policies are discussed below.
Investments in Real Estate
In accordance with the guidance for business combinations, the Company determines whether the acquisition of a property qualifies as a business combination, which requires that the assets acquired and liabilities assumed constitute a business. If the property acquired is not a business, the Company accounts for the transaction as an asset acquisition. All property acquisitions to date have been accounted for as asset acquisitions.
Whether the acquisition of a property acquired is considered a business combination or asset acquisition, the Company recognizes the identifiable assets acquired, the liabilities assumed and any non-controlling interest in the acquired entity. In addition, for transactions accounted for as business combinations, the Company evaluates the existence of goodwill or a gain from a bargain purchase. The Company expenses acquisition-related costs associated with business combinations as they are incurred. The Company capitalizes acquisition-related costs associated with asset acquisitions.
Upon acquisition of a property, the Company assesses the fair value of acquired tangible and intangible assets and assumed liabilities (including land, buildings, tenant improvements, above-market and below-market leases, acquired in-place leases, other identified intangible assets) and allocates the purchase price to the acquired assets and assumed liabilities. The Company assesses and considers fair value using the income approach's discounted cash flow method, using discount, capitalization, and fair market lease rates that it deems appropriate, and taking into consideration all contractual rent payments over the life of the lease term offset by any capitalized expenditures, as well as other available market information. Estimates of future cash flows are based on a number of factors, including historical operating results, known and anticipated trends and market and economic conditions.
The fair value of the tangible assets of an acquired property considers the value of the property as if it were vacant. The Company also considers an allocation of purchase price of other acquired intangibles, including acquired in-place leases that may have a customer relationship intangible value, including the nature and extent of the existing relationship with the tenants,
the tenants' credit quality and expectations of lease renewals. For its acquisitions to date, the Company's allocation to customer relationship intangible assets has not been material.
The Company records acquired above-market and below-market leases at fair value (using a discount rate which reflects the risks associated with the leases acquired), which is equal to the difference between (1) the contractual amounts to be paid pursuant to 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 Company'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. In estimating carrying costs, the Company 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. In estimating costs to execute similar leases, the Company considers leasing commissions, legal and other related expenses.
Intangible assets and intangible liabilities are recorded as separate components on the Company's Consolidated Balance Sheets. The amortization of acquired above-market and below-market leases is recorded as an adjustment to Rental Revenue on the Company's Consolidated Statements of Operations. The amortization of in-place leases is recorded as an adjustment to Depreciation and Amortization on the Company's Consolidated Statements of Operations.
Management reviews the Company's real estate properties for impairment each quarter or when there is an event or change in circumstances that indicates an impaired value. If the carrying amount of the real estate investment is no longer recoverable and exceeds the fair value of such investment, an impairment loss is recognized. The impairment loss is recognized based on the excess of the carrying amount of the asset over its fair value, or fair value less cost to sell if classified as held for sale. If the Company's strategy changes or market conditions otherwise dictate an earlier sale date, an impairment loss may be recognized and such loss could be material to the Company's results. During the periods presented, no such impairment occurred.
See Note 2 "Summary of Significant Accounting Policies" and Note 3 "Investments in Real Estate" to the consolidated financial statements in this Annual Report on Form 10-K for more information regarding real estate investments.
Investments in Commercial Mortgage Loans
The Company originates commercial mortgage loans and elects the fair value option for each loan. In accordance with the adoption of the fair value option allowed under ASC 825, Financial Instruments, and at the election of the Company, the commercial mortgage loans are stated at fair value and initially valued at the face amount of the loan funding. Subsequently, the commercial mortgage loans are valued at least quarterly by an independent third-party valuation firm with additional oversight performed by the Advisor's internal valuation department. The value is based on market factors, such as market interest rates and spreads for comparable loans, the performance of the underlying collateral (such as the loan-to-value ratio and the cash flow of the underlying collateral), and the credit quality of the borrower.
See Note 2 "Summary of Significant Accounting Policies" and Note 7 "Investments in Commercial Mortgage Loans" to the consolidated financial statements in this Annual Report on Form 10-K for more information regarding investments in commercial mortgage loans.
Contractual Obligations
The following table aggregates our contractual obligations and commitments with payments due after December 31, 2025
($ in thousands):
Obligations Total Less than
1 year 		1-3 Years 3-5 Years More than
5 Years
Indebtedness $ 710,639 $ 126,569 $ 480,300 $ 31,484 $ 72,286
Organization and offering costs 739 739 - - -
Interest expense(1)
75,418 26,617 43,751 4,047 1,003
Ground leases(2)
17,444 388 776 776 15,504
Total $ 804,240 $ 154,313 $ 524,827 $ 36,307 $ 88,793
(1) Represents interest expense for our fixed and variable rate mortgages payable, note payable and credit facility, with the assumption that the Credit Facility is paid off at maturity. The weighted-average interest rates on the credit facility and note payable for the year ended December 31, 2025 were 5.65% and 5.98%, respectively.
(2) Represents minimum future payments for land under non-cancelable operating and finance leases at a number of our properties expiring in various years through 2070.
Off-Balance Sheet Arrangements
We have no off-balance sheet arrangements.
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