# EDGAR Filing Document

**Accession Number:** 0001452936
**File Stem:** 0001452936-25-000083
**Filing Date:** 2025-8
**Character Count:** 321695
**Document Hash:** 9ab232ce1abc2b50fbd35636e6ce3292
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001452936-25-000083.hdr.sgml**: 20250813

**ACCESSION NUMBER**: 0001452936-25-000083

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 88

**CONFORMED PERIOD OF REPORT**: 20250630

**FILED AS OF DATE**: 20250813

**DATE AS OF CHANGE**: 20250813

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Pacific Oak Strategic Opportunity REIT, Inc.
- **CENTRAL INDEX KEY:** 0001452936
- **STANDARD INDUSTRIAL CLASSIFICATION:** REAL ESTATE INVESTMENT TRUSTS [6798]
- **ORGANIZATION NAME:** 05 Real Estate & Construction
- **EIN:** 263842535
- **STATE OF INCORPORATION:** MD
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 000-54382
- **FILM NUMBER:** 251213029

**BUSINESS ADDRESS:**
- **STREET 1:** 11766 WILSHIRE BLVD.
- **STREET 2:** SUITE 1670
- **CITY:** LOS ANGELES
- **STATE:** CA
- **ZIP:** 90025
- **BUSINESS PHONE:** 866-722-6257

**MAIL ADDRESS:**
- **STREET 1:** 11766 WILSHIRE BLVD.
- **STREET 2:** SUITE 1670
- **CITY:** LOS ANGELES
- **STATE:** CA
- **ZIP:** 90025

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** KBS Strategic Opportunity REIT, Inc.
- **DATE OF NAME CHANGE:** 20081230

?xml version='1.0' encoding='ASCII'? pacoaksor-20250630

<u>[**Table of Contents**](#ia5f53a08840d4a27a0d02be180a8740e_7)</u>

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**______________________________________________________**

**FORM 10-Q**

**______________________________________________________**

**(Mark One)**

☒ **QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**For the quarterly period ended June 30, 2025**

**OR**

☐ **TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**For the transition period from <u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u> to <u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u>** 

**Commission file number 000-54382**

**______________________________________________________**

**PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC.** 

**(Exact Name of Registrant as Specified in Its Charter)**

**______________________________________________________**

---

| | |
|:---|:---|
| **Maryland** | **26-3842535** |
| (State or Other Jurisdiction of<br>Incorporation or Organization) | (I.R.S. Employer<br>Identification No.) |
| **11766 Wilshire Blvd., Suite 1670** | |
| **Los Angeles, California** | **90025** |
| (Address of Principal Executive Offices) | (Zip Code) |

---

**(866) 722-6257** 

**(Registrant's Telephone Number, Including Area Code)**

______________________________________________________________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each class Trading Symbol(s) Name of each exchange on which registered <br> <u>None</u> <u>N/A</u> <u>N/A</u>

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.&nbsp;&nbsp;&nbsp;&nbsp;Yes ☒&nbsp;&nbsp;&nbsp;&nbsp;No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).&nbsp;&nbsp;&nbsp;&nbsp;Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):

---

| | | | |
|:---|:---|:---|:---|
| Large Accelerated Filer | ☐ | Accelerated Filer | ☐ |
| Non-Accelerated Filer | ☒ | Smaller reporting company | ☐ |
| | | Emerging growth company | ☐ |

---

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.&nbsp;&nbsp;&nbsp;&nbsp;☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).&nbsp;&nbsp;&nbsp;&nbsp;Yes ☐ No ☒

As of August 12, 2025, there were 102,951,395 outstanding shares of common stock of Pacific Oak Strategic Opportunity REIT, Inc.

------

<u>**Table of Contents**</u>

**PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC.**

**FORM 10-Q**

**June 30, 2025**

**INDEX** 

---

| | | | |
|:---|:---|:---|:---|
| PART I. | <u>[FINANCIAL INFORMATION](#ia5f53a08840d4a27a0d02be180a8740e_10)</u> | <u>[FINANCIAL INFORMATION](#ia5f53a08840d4a27a0d02be180a8740e_10)</u> | <u>[2](#ia5f53a08840d4a27a0d02be180a8740e_10)</u> |
|  | Item 1. | <u>[Financial Statements](#ia5f53a08840d4a27a0d02be180a8740e_10)</u> | <u>[2](#ia5f53a08840d4a27a0d02be180a8740e_10)</u> |
|  |  | <u>Consolidated Balance Sheets as of June 30, 2025 (unaudited) and December 31, 2024</u> | <u>[2](#ia5f53a08840d4a27a0d02be180a8740e_13)</u> |
|  |  | <u>[Consolidated Statements of Operations (unaudited) for the](#ia5f53a08840d4a27a0d02be180a8740e_16)Three[and](#ia5f53a08840d4a27a0d02be180a8740e_16)Six[Months Ended](#ia5f53a08840d4a27a0d02be180a8740e_16)June 30, 2025[and](#ia5f53a08840d4a27a0d02be180a8740e_16)2024</u> | <u>[3](#ia5f53a08840d4a27a0d02be180a8740e_16)</u> |
|  |  | <u>[Consolidated Statements of Equity (unaudited) for the](#ia5f53a08840d4a27a0d02be180a8740e_19)Three[and](#ia5f53a08840d4a27a0d02be180a8740e_19)Six[Mo](#ia5f53a08840d4a27a0d02be180a8740e_19)[nths Ended](#ia5f53a08840d4a27a0d02be180a8740e_19)June 30, 2025[and](#ia5f53a08840d4a27a0d02be180a8740e_19)2024</u> | <u>[4](#ia5f53a08840d4a27a0d02be180a8740e_19)</u> |
|  |  | <u>[Consolidated Statements of Cash Flows (unaudited) for the](#ia5f53a08840d4a27a0d02be180a8740e_22)Six[M](#ia5f53a08840d4a27a0d02be180a8740e_22)[onths Ended](#ia5f53a08840d4a27a0d02be180a8740e_22)June 30, 2025[and](#ia5f53a08840d4a27a0d02be180a8740e_22)2024</u> | <u>[5](#ia5f53a08840d4a27a0d02be180a8740e_22)</u> |
|  |  | <u>[Condensed Notes to Consolidated Financial Statements as of](#ia5f53a08840d4a27a0d02be180a8740e_25)June 30, 2025[(unaudited)](#ia5f53a08840d4a27a0d02be180a8740e_25)</u> | <u>[7](#ia5f53a08840d4a27a0d02be180a8740e_25)</u> |
|  | Item 2. | <u>[Management's Discussion and Analysis of Financial Condition and Results of Operations](#ia5f53a08840d4a27a0d02be180a8740e_70)</u> | <u>[21](#ia5f53a08840d4a27a0d02be180a8740e_70)</u> |
|  | Item 3. | <u>[Quantitative and Qualitative Disclosures about Market Risk](#ia5f53a08840d4a27a0d02be180a8740e_103)</u> | <u>[31](#ia5f53a08840d4a27a0d02be180a8740e_103)</u> |
|  | Item 4. | <u>[Controls and Procedures](#ia5f53a08840d4a27a0d02be180a8740e_109)</u> | <u>[33](#ia5f53a08840d4a27a0d02be180a8740e_109)</u> |
| PART II. | <u>[OTHER INFORMATION](#ia5f53a08840d4a27a0d02be180a8740e_112)</u> | <u>[OTHER INFORMATION](#ia5f53a08840d4a27a0d02be180a8740e_112)</u> | <u>[34](#ia5f53a08840d4a27a0d02be180a8740e_112)</u> |
|  | Item 1. | <u>[Legal Proceedings](#ia5f53a08840d4a27a0d02be180a8740e_115)</u> | <u>[34](#ia5f53a08840d4a27a0d02be180a8740e_115)</u> |
|  | Item 1A. | <u>[Risk Factors](#ia5f53a08840d4a27a0d02be180a8740e_118)</u> | <u>[34](#ia5f53a08840d4a27a0d02be180a8740e_118)</u> |
|  | Item 2. | <u>[Unregistered Sales of Equity Securities and Use of Proceeds](#ia5f53a08840d4a27a0d02be180a8740e_121)</u> | <u>[34](#ia5f53a08840d4a27a0d02be180a8740e_121)</u> |
|  | Item 3. | <u>[Defaults upon Senior Securities](#ia5f53a08840d4a27a0d02be180a8740e_127)</u> | <u>[34](#ia5f53a08840d4a27a0d02be180a8740e_127)</u> |
|  | Item 4. | <u>[Mine Safety Disclosures](#ia5f53a08840d4a27a0d02be180a8740e_130)</u> | <u>[35](#ia5f53a08840d4a27a0d02be180a8740e_130)</u> |
|  | Item 5. | <u>[Other Information](#ia5f53a08840d4a27a0d02be180a8740e_133)</u> | <u>[35](#ia5f53a08840d4a27a0d02be180a8740e_133)</u> |
|  | Item 6. | <u>[Exhibits](#ia5f53a08840d4a27a0d02be180a8740e_136)</u> | <u>[36](#ia5f53a08840d4a27a0d02be180a8740e_136)</u> |
| <u>[SIGNATURES](#ia5f53a08840d4a27a0d02be180a8740e_139)</u> | <u>[SIGNATURES](#ia5f53a08840d4a27a0d02be180a8740e_139)</u> | <u>[SIGNATURES](#ia5f53a08840d4a27a0d02be180a8740e_139)</u> | <u>[37](#ia5f53a08840d4a27a0d02be180a8740e_139)</u> |

---

------

<u>[**Table of Contents**](#ia5f53a08840d4a27a0d02be180a8740e_7)</u>

**PART I. FINANCIAL INFORMATION**

**Item 1. Financial Statements**

**PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC.**

**CONSOLIDATED BALANCE SHEETS**

(in thousands, except share amounts)

---

| | | |
|:---|:---|:---|
| | **June 30, 2025** | **December 31, 2024** |
| | **(unaudited)** | |
| Assets |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Real estate held for investment, net | $778921 | $828442 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Real estate held for sale, net | 39100 | 55637 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Real estate equity securities | 14116 | 13154 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total real estate and real estate-related investments, net | 832137 | 897233 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents | 14682 | 56000 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Restricted cash | 50634 | 42376 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Investments in unconsolidated entities | 72835 | 88087 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Due from affiliate | 2317 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Rents and other receivables, net | 22544 | 22084 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other assets | 17762 | 19176 |
| Total assets | $1012911 | $1124956 |
| Liabilities and equity |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notes and bonds payable related to real estate held for investment, net | $827323 | $824684 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notes payable related to real estate held for sale, net | 39515 | 40608 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notes and bonds payable, net | 866838 | 865292 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable and accrued liabilities | 35181 | 31233 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Due to affiliate | 27235 | 12660 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other liabilities | 55360 | 59968 |
| Total liabilities | 984614 | 969153 |
| Commitments, contingencies and guarantees (Note 9) |  |  |
| Equity |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Stockholders' equity |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Preferred stock, $.01 par value; 10,000,000 shares authorized, no shares issued and outstanding |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Common stock, $.01 par value; 1,000,000,000 shares authorized, 102,951,395 shares issued and outstanding as of June 30, 2025 and December 31, 2024 | 1030 | 1030 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Additional paid-in capital | 898602 | 898682 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Cumulative distributions and net loss | (867203) | (740770) |
| &nbsp;&nbsp;&nbsp;&nbsp;Total stockholders' equity | 32429 | 158942 |
| &nbsp;&nbsp;&nbsp;&nbsp;Noncontrolling interests | (4132) | (3139) |
| Total equity | 28297 | 155803 |
| Total liabilities and equity | $1012911 | $1124956 |

---

*See accompanying condensed notes to consolidated financial statements.*

------

<u>[**Table of Contents**](#ia5f53a08840d4a27a0d02be180a8740e_7)</u>

**PART I. FINANCIAL INFORMATION (CONTINUED)**

**Item 1. Financial Statements (continued)**

**PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC.**

**CONSOLIDATED STATEMENTS OF OPERATIONS**

(unaudited)

(in thousands, except per share amounts)

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended June 30,**  | **Three Months Ended June 30,**  | **Six Months Ended June 30,**  | **Six Months Ended June 30,**  |
| | **2025** | **2024** | **2025** | **2024** |
| Revenues: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Rental income | $28772 | $30612 | $57018 | $61822 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Hotel revenues | 1737 | 2235 | 4622 | 5039 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other operating income | 960 | 962 | 1935 | 1950 |
| Total revenues | 31469 | 33809 | 63575 | 68811 |
| Expenses: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating, maintenance, and management | 11591 | 11183 | 23611 | 22086 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Real estate taxes and insurance | 5420 | 6556 | 10903 | 13031 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Hotel expenses | 1637 | 1784 | 3373 | 3652 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Asset management fees to affiliate | 2739 | 3872 | 5396 | 7974 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;General and administrative expenses | 3361 | 4541 | 6211 | 7793 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Foreign currency transaction loss (gain), net | 30141 | (7368) | 24157 | (11280) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 10366 | 10380 | 20048 | 21129 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest expense, net <sup>(1)</sup> | 17151 | 18008 | 33294 | 34782 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Impairment charges on real estate and related intangibles | 51979 | 21026 | 51979 | 60291 |
| Total expenses | 134385 | 69982 | 178972 | 159458 |
| Other (loss) income: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss from unconsolidated entities, net | (6769) | (8653) | (14266) | (16730) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other income | 234 | 283 | 1016 | 738 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gain (loss) on real estate equity securities, net | 962 | (1282) | 962 | (16632) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gain on sale of real estate | 1080 | 167 | 1244 | 619 |
| Total other loss, net | (4493) | (9485) | (11044) | (32005) |
| Net loss before income taxes | (107409) | (45658) | (126441) | (122652) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Income tax provision |  |  | (830) |  |
| Net loss | (107409) | (45658) | (127271) | (122652) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net loss attributable to noncontrolling interests | 775 | 1437 | 838 | 1958 |
| Net loss attributable to common stockholders | $(106634) | $(44221) | $(126433) | $(120694) |
| Net loss per common share, basic and diluted | $(1.04) | $(0.43) | $(1.23) | $(1.17) |
| Weighted-average number of common shares outstanding, basic and diluted | 102951395 | 103134992 | 102951395 | 103208689 |

---

_____________________

<sup>(1)</sup> Includes related party interest expense of $0.2 million and $0.3 million for the three and six months ended June 30, 2025. There was no related party interest expense for the three and six months ended June 30, 2024. Refer to Note 6 for additional details.

*See accompanying condensed notes to consolidated financial statements.*

------

<u>[**Table of Contents**](#ia5f53a08840d4a27a0d02be180a8740e_7)</u>

**PART I. FINANCIAL INFORMATION (CONTINUED)**

**Item 1. Financial Statements (continued)**

**PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC.**

**CONSOLIDATED STATEMENTS OF EQUITY**

(unaudited)

(in thousands, except share amounts)

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Common Stock** | **Common Stock** | **Additional<br>Paid-in Capital** | **Cumulative Distributions and Net Loss** | **Total Stockholders' Equity** | **Noncontrolling Interests** | **Total Equity** |
| | **Shares** | **Amounts** | **Additional<br>Paid-in Capital** | **Cumulative Distributions and Net Loss** | **Total Stockholders' Equity** | **Noncontrolling Interests** | **Total Equity** |
| Balance, March 31, 2025 | 102951395 | $1030 | $898682 | $(760569) | $139143 | $(3262) | $135881 |
| Net loss |  |  |  | (106634) | (106634) | (775) | (107409) |
| Noncontrolling interest contribution |  |  |  |  |  | 10 | 10 |
| Noncontrolling interest distributions |  |  | (80) |  | (80) | (105) | (185) |
| Balance, June 30, 2025 | 102951395 | $1030 | $898602 | $(867203) | $32429 | $(4132) | $28297 |
|  | **Common Stock** | **Common Stock** | **Additional<br>Paid-in Capital** | **Cumulative Distributions and Net Loss** | **Total Stockholders' Equity** | **Noncontrolling Interests** | **Total Equity** |
|  | **Shares** | **Amounts** | **Additional<br>Paid-in Capital** | **Cumulative Distributions and Net Loss** | **Total Stockholders' Equity** | **Noncontrolling Interests** | **Total Equity** |
| Balance, March 31, 2024 | 103214807 | $1032 | $901050 | $(716406) | $185676 | $1044 | $186720 |
| Net loss |  |  |  | (44221) | (44221) | (1437) | (45658) |
| Transfers to redeemable common stock, net |  |  | (399) |  | (399) |  | (399) |
| Noncontrolling interest contribution |  |  |  |  |  | 47 | 47 |
| Noncontrolling interests distributions |  |  |  |  |  | (271) | (271) |
| Redemptions of common stock | (197839) | (2) | (1599) |  | (1601) |  | (1601) |
| Balance, June 30, 2024 | 103016968 | $1030 | $899052 | $(760627) | $139455 | $(617) | $138838 |

---

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Common Stock** | **Common Stock** | **Additional<br>Paid-in Capital** | **Cumulative Distributions and Net Loss** | **Total Stockholders' Equity** | **Noncontrolling Interests** | **Total Equity** |
| | **Shares** | **Amounts** | **Additional<br>Paid-in Capital** | **Cumulative Distributions and Net Loss** | **Total Stockholders' Equity** | **Noncontrolling Interests** | **Total Equity** |
| Balance, December 31, 2024 | 102951395 | $1030 | $898682 | $(740770) | $158942 | $(3139) | $155803 |
| Net loss |  |  |  | (126433) | (126433) | (838) | (127271) |
| Noncontrolling interest contribution |  |  |  |  |  | 10 | 10 |
| Noncontrolling interest distributions |  |  | (80) |  | (80) | (165) | (245) |
| Balance, June 30, 2025 | 102951395 | $1030 | $898602 | $(867203) | $32429 | $(4132) | $28297 |
|  | **Common Stock** | **Common Stock** | **Additional<br>Paid-in Capital** | **Cumulative Distributions and Net Loss** | **Total Stockholders' Equity** | **Noncontrolling Interests** | **Total Equity** |
|  | **Shares** | **Amounts** | **Additional<br>Paid-in Capital** | **Cumulative Distributions and Net Loss** | **Total Stockholders' Equity** | **Noncontrolling Interests** | **Total Equity** |
| Balance, December 31, 2023 | 103310648 | $1033 | $901049 | $(639933) | $262149 | $1215 | $263364 |
| Net loss |  |  |  | (120694) | (120694) | (1958) | (122652) |
| Transfers from redeemable common stock payable, net |  |  | 357 |  | 357 |  | 357 |
| Noncontrolling interests contributions |  |  |  |  |  | 397 | 397 |
| Noncontrolling interests distributions |  |  |  |  |  | (271) | (271) |
| Redemptions of common stock | (293680) | (3) | (2354) |  | (2357) |  | (2357) |
| Balance, June 30, 2024 | 103016968 | $1030 | $899052 | $(760627) | $139455 | $(617) | $138838 |

---

*See accompanying condensed notes to consolidated financial statements.*

------

<u>[**Table of Contents**](#ia5f53a08840d4a27a0d02be180a8740e_7)</u>

**PART I. FINANCIAL INFORMATION (CONTINUED)**

**Item 1. Financial Statements (continued)**

**PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC.**

**CONSOLIDATED STATEMENTS OF CASH FLOWS**

(unaudited)

(in thousands)

---

| | | |
|:---|:---|:---|
| | **Six Months Ended June 30,**  | **Six Months Ended June 30,**  |
| | **2025** | **2024** |
| Cash Flows from Operating Activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net loss | $(127271) | $(122652) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Adjustments to reconcile net loss to net cash used in operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Impairment charges on real estate and related intangibles | 51979 | 60291 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Loss from unconsolidated entities, net | 14266 | 16730 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 20048 | 21129 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Gain) loss on real estate equity securities, net | (962) | 16632 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Gain on sale of real estate | (1244) | (619) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amortization of deferred financing costs and debt discount and premium, net | 3590 | 4781 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Foreign currency transaction loss (gain), net | 24157 | (11280) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Changes in assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Rents and other receivables, net | (217) | (370) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Prepaid expenses and other assets | (912) | (1802) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts payable and accrued liabilities | 3410 | (2243) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Due to affiliate | 4575 | 3074 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other liabilities | (102) | 569 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in operating activities | (8683) | (15760) |
| Cash Flows from Investing Activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Improvements to real estate | (6458) | (17512) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceed from sales of real estate, net | 1845 | 3126 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Advances to affiliate | (2317) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payments on development obligations | (2311) | (3905) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Distribution of capital from an unconsolidated entity | 759 | 1497 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Purchase of interest rate caps |  | (1447) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from interest rate caps |  | 1687 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Contributions to an unconsolidated entity |  | (38689) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payments on foreign currency derivatives, net |  | (478) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from the sale of real estate equity securities |  | 16379 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds for development obligations |  | 5 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in investing activities | (8482) | (39337) |
| Cash Flows from Financing Activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Advances from affiliate loans | 10000 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Principal payments on notes and bonds payable | (26564) | (115169) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Noncontrolling interest contributions | 10 | 397 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Noncontrolling interest distributions | (245) | (271) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Proceeds from notes and bonds payable |  | 98850 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payments of deferred financing costs | (167) | (3890) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Redemptions of common stock |  | (2357) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in financing activities | (16966) | (22440) |
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | 1071 | 1809 |
| Net decrease in cash, cash equivalents and restricted cash | (33060) | (75728) |
| Cash, cash equivalents and restricted cash, beginning of period | 98376 | 155209 |
| Cash, cash equivalents and restricted cash, end of period | $65316 | $79481 |

---

*See accompanying condensed notes to consolidated financial statements.*

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<u>[**Table of Contents**](#ia5f53a08840d4a27a0d02be180a8740e_7)</u>

**PART I. FINANCIAL INFORMATION (CONTINUED)**

**Item 1. Financial Statements (continued)**

**PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC.**

**CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)**

(unaudited)

(in thousands)

---

| | | |
|:---|:---|:---|
| | **Six Months Ended June 30,**  | **Six Months Ended June 30,**  |
| | **2025** | **2024** |
| Supplemental Disclosure of Cash Flow Information: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest paid, net of capitalized interest of $957 and $2,186 for the six months ended June 30, 2025 and 2024, respectively | $25968 | $30490 |
| Supplemental Disclosure of Significant Noncash Transaction: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accrued development obligations | 9188 | 7313 |

---

*See accompanying condensed notes to consolidated financial statements.*

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<u>[**Table of Contents**](#ia5f53a08840d4a27a0d02be180a8740e_7)</u>

**PART I. FINANCIAL INFORMATION (CONTINUED)**

**Item 1. Financial Statements (continued)**

**PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC.**

**CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

June 30, 2025

(unaudited)

**1. ORGANIZATION**

Pacific Oak Strategic Opportunity REIT, Inc. (the "Company") was formed on October 8, 2008 as a Maryland corporation and elected to be taxed as a real estate investment trust ("REIT"). The Company conducts its business primarily through Pacific Oak SOR (BVI) Holdings, Ltd. ("Pacific Oak SOR BVI"), a private company limited by shares according to the British Virgin Islands Business Companies Act, 2004, which was incorporated on December 18, 2015 and is authorized to issue a maximum of 50,000 common shares with no par value. Upon incorporation, Pacific Oak SOR BVI issued one certificate containing 10,000 common shares with no par value to Pacific Oak Strategic Opportunity Limited Partnership (the "Operating Partnership"), a Delaware limited partnership formed on December 10, 2008. The Company is the sole general partner of, and owns a 0.1% partnership interest in, the Operating Partnership. Pacific Oak Strategic Opportunity Holdings LLC ("REIT Holdings"), a Delaware limited liability company formed on December 9, 2008, owns the remaining 99.9% interest in the Operating Partnership and is its sole limited partner. The Company is the sole member and manager of REIT Holdings.

**2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

There have been no significant changes to the Company's accounting policies since it filed its audited financial statements in its Annual Report on Form 10-K for the year ended December 31, 2024. For further information about the Company's accounting policies, refer to the Company's consolidated financial statements and notes thereto for the year ended December 31, 2024, included in the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission ("SEC").

**Principles of Consolidation and Basis of Presentation**

The accompanying unaudited consolidated financial statements and condensed notes thereto have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") for interim financial information as contained within the Financial Accounting Standards Board's ("FASB") Accounting Standards Codification and the rules and regulations of the SEC, including the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, the unaudited consolidated financial statements do not include all of the information and footnotes required by GAAP for audited financial statements. In the opinion of management, the financial statements for the unaudited interim periods presented include all adjustments, which are of a normal and recurring nature, necessary for a fair and consistent presentation of the results for such periods. Operating results for the three and six months ended June 30, 2025, are not necessarily indicative of the results that may be expected for the year ending December 31, 2025.

The consolidated financial statements include the accounts of the Company, REIT Holdings, the Operating Partnership, Pacific Oak SOR BVI and their direct and indirect wholly owned subsidiaries, and joint ventures in which the Company has a controlling interest and variable interest entities in which the Company is the primary beneficiary. All significant intercompany balances and transactions are eliminated in consolidation.

**Liquidity**

The Company generally finances its real estate investments and operations using notes payable that are typically structured as non-recourse secured mortgages with original maturities of three to five years, with short-term extension options available upon the Company meeting certain debt extension covenants. Additionally, the Company has issued bonds in Israel to finance its real estate investments which have original maturities of three to six years. The Company has $512.8 million of debt obligations coming due within one year from the date the financial statements are issued. Additionally, the Company expects to be out of compliance for the following financial covenants for the Series B and Series D bonds: the consolidated equity capital covenant and the net adjusted financial debt ratio to the net CAP, as defined under the deed of trusts for the quarters ended June 30, 2025 and September 30, 2025. If the Company is out of compliance for two consecutive quarters, the Series B and Series D bonds of 1.0 billion Israeli new shekels ($289.2 million as of June 30, 2025) may become due and payable. Refer to Note 4 for additional details on maturing debt obligations.

------

<u>[**Table of Contents**](#ia5f53a08840d4a27a0d02be180a8740e_7)</u>

**PART I. FINANCIAL INFORMATION (CONTINUED)**

**Item 1. &nbsp;&nbsp;&nbsp;&nbsp;Financial Statements (continued)**

**PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC.**

**CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)**

June 30, 2025

(unaudited)

These circumstances raise substantial doubt as to the Company's ability to continue as a going concern for at least one year following the date the financial statements are issued. In order to satisfy obligations as they mature, management's plan involve a combination of the following options: (i) may seek to utilize extension options (if available) in the respective loan agreements, (ii) may make partial loan repayments to meet debt covenant requirements, (iii) may seek to refinance or restructure certain debt instruments, (iv) may sell real estate properties or equity securities to convert to cash to make principal payments, or (v) may negotiate a turnover of one or more secured properties back to the related lender and remit payment for any associated loan guarantee. In addition, if the Company is out of compliance for two consecutive quarters, management plans to negotiate with the Series B and Series D bondholders to obtain either a waiver related to the expected financial covenants noncompliance, or an amendment to the deed of trusts amending the current financial covenants.

However, as a result of the commercial real estate lending environment, the current interest rate environment, leasing and transaction volume challenges in certain markets, there can be no assurances as to the certainty or timing of management's plans to be effectively implemented and as a result, management's plans do not alleviate the substantial doubt. The Company's financial statements are prepared assuming the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of obligations in the normal course of business.

**Use of Estimates**

The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could materially differ from those estimates.

**Reclassifications**

Certain amounts in the accompanying consolidated balance sheets have been reclassified to conform to the current period presentation. During the six months ended June 30, 2025, the Company sold 17 residential homes and one strategic opportunistic property met the held for sale criteria as of June 30, 2025. As a result, certain assets and liabilities were reclassified to held for sale in the accompanying consolidated balance sheets for all periods presented. These reclassifications have not changed the results of operations of the prior period.

**Square Footage, Occupancy and Other Measures**

Any references to square footage, number of homes, acreage, occupancy or annualized base rent are unaudited and outside the scope of the Company's independent registered public accounting firm's review of the Company's financial statements in accordance with the standards of the United States Public Company Accounting Oversight Board.

**Recently Issued Accounting Standards Updates**

In November 2024, the FASB issued Accounting Standards Update ("ASU") 2024-03, *Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40), Disaggregation of Income Statement Expenses*. The ASU will require the Company to provide more detailed information about the types of expenses (including purchases of inventory, employee compensation, depreciation, amortization, and depletion) in commonly presented expense captions (such as cost of sales, selling, general and administrative expenses, and research and development). The ASU does not change the expense captions an entity presents on the face of the income statement. The amendments in this update are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. The Company is currently evaluating the effect of this adoption on the Company's disclosures.

------

<u>[**Table of Contents**](#ia5f53a08840d4a27a0d02be180a8740e_7)</u>

**PART I. FINANCIAL INFORMATION (CONTINUED)**

**Item 1. &nbsp;&nbsp;&nbsp;&nbsp;Financial Statements (continued)**

**PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC.**

**CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)**

June 30, 2025

(unaudited)

**3. REAL ESTATE HELD FOR INVESTMENT**

As of June 30, 2025, the Company consolidated eight office complexes, encompassing, in the aggregate, 2.8 million rentable square feet and these properties were 64% occupied. In addition, the Company owned one residential home portfolio consisting of 2,078 residential homes, and one apartment property, containing 317 units, which were 92% and 90% occupied, respectively. The Company also owned one hotel property with 196 rooms, three investments in undeveloped land with 247 developable acres, and one office/retail development property. The following table summarizes the Company's real estate held for investment as of June 30, 2025 and December 31, 2024, respectively (in thousands):

---

| | | |
|:---|:---|:---|
| | **June 30, 2025** | **December 31, 2024** |
| Land | $180669 | $189449 |
| Buildings and improvements | 710685 | 787873 |
| Tenant origination and absorption costs | 8469 | 11254 |
| &nbsp;&nbsp;&nbsp;Total real estate, cost | 899823 | 988576 |
| Accumulated depreciation and amortization | (120902) | (160134) |
| &nbsp;&nbsp;&nbsp;Total real estate held for investment, net | $778921 | $828442 |

---

**Operating Leases**

Certain of the Company's real estate properties are leased to tenants under operating leases for which the terms and expirations vary. As of June 30, 2025, the leases, excluding options to extend, apartment leases and residential home leases, which have terms that are generally one year or less, had remaining terms of up to 15.2 years with a weighted-average remaining term of 3.9 years. Some of the leases have provisions to extend the lease agreements, options for early termination after paying a specified penalty and other terms and conditions as negotiated. The Company retains substantially all of the risks and benefits of ownership of the real estate assets leased to tenants. Generally, upon the execution of a lease, the Company requires a security deposit from tenants in the form of a cash deposit and/or a letter of credit. The amount required as a security deposit varies depending upon the terms of the respective leases and the creditworthiness of the tenant, but generally are not significant amounts. Therefore, exposure to credit risk exists to the extent that a receivable from a tenant exceeds the amount of its security deposit. Security deposits received in cash and assumed in real estate acquisitions related to tenant leases are included in other liabilities in the accompanying consolidated balance sheets totaled $6.6 million and $5.9 million as of June 30, 2025 and December 31, 2024, respectively.

As of June 30, 2025 and December 31, 2024, the cumulative deferred rent receivable balance, including unamortized lease incentive receivables, was $18.5 million and $19.7 million, respectively, and is included in rents and other receivables in the accompanying consolidated balance sheets. The cumulative deferred rent balance included $2.2 million of unamortized lease incentives as of June 30, 2025 and December 31, 2024.

As of June 30, 2025, the future minimum rental income from the Company's office complexes, under non-cancelable operating leases was as follows (in thousands):

---

| | |
|:---|:---|
| July 1, 2025 through December 31, 2025 | $25507 |
| 2026 | 47380 |
| 2027 | 39496 |
| 2028 | 32646 |
| 2029 | 26816 |
| Thereafter | 60153 |
|  | $231998 |

---

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<u>[**Table of Contents**](#ia5f53a08840d4a27a0d02be180a8740e_7)</u>

**PART I. FINANCIAL INFORMATION (CONTINUED)**

**Item 1. &nbsp;&nbsp;&nbsp;&nbsp;Financial Statements (continued)**

**PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC.**

**CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)**

June 30, 2025

(unaudited)

**Geographic Concentration Risk**

As of June 30, 2025, the Company's real estate investments in California represented 11.2% or $113.3 million and in Tennessee represented 10.1% or $102.5 million, of the Company's total assets. As a result, the geographic concentration of the Company's portfolio makes it particularly susceptible to adverse economic developments in these real estate markets. Any adverse economic or real estate developments in these markets, such as business layoffs or downsizing, industry slowdowns, relocations of businesses, changing demographics and other factors, or any decrease in demand for office space resulting from the local business climate, could adversely affect the Company's operating results and its ability to make distributions to stockholders.

**Hotel Property**

The following table provides detailed information regarding the Company's hotel revenues during the three and six months ended June 30, 2025 and 2024 (in thousands):

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended June 30,**  | **Three Months Ended June 30,**  | **Six Months Ended June 30,**  | **Six Months Ended June 30,**  |
| | **2025** | **2024** | **2025** | **2024** |
| Hotel revenues: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Room | $1514 | $1947 | $4098 | $4413 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other | 223 | 288 | 524 | 626 |
| Hotel revenues | $1737 | $2235 | $4622 | $5039 |

---

**Contract Liabilities**

The Company's contract liabilities are comprised of: hotel advanced deposits, deferred proceeds received from the buyers of the Park Highlands land sales, and value of Park Highlands land that was contributed to a master association. As of June 30, 2025 and December 31, 2024, contract liabilities were $23.7 million and $25.7 million, respectively, which are included in other liabilities on the accompanying consolidated balance sheets.

During the three and six months ended June 30, 2025, the Company recognized $1.2 million related to Park Highlands land contributed to a master association, as a gain on sale of real estate in the accompanying consolidated statements of operations. During the three and six months ended June 30, 2025, the Company recognized hotel advanced deposits as hotel revenues of $0.2 million and $0.3 million, respectively, in the accompanying consolidated statements of operations.

During the three and six months ended June 30, 2024, there was no gain on sale of real estate recognized. During the three and six months ended June 30, 2024, the Company recognized hotel advanced deposits as hotel revenues of $0.2 million and $0.5 million, respectively, in the accompanying consolidated statements of operations.

**Impairment of Real Estate**

During the three and six months ended June 30, 2025, the Company recorded impairment charges on real estate in the aggregate of $52.0 million, to write down the carrying value of six strategic opportunistic properties and one hotel to their estimated fair value due to declines in market conditions and projected cash flows, changes in sales comparisons, and also based on quoted prices. Crown Pointe, a strategic opportunistic property, was impaired by $17.4 million due to declines in market conditions, as evidenced by a forbearance agreement on the mortgage loan. Georgia 400 Center, a strategic opportunistic property, was impaired by $13.8 million based on a quoted price, due to this property being sold subsequent to June 30, 2025.

During the three and six months ended June 30, 2024, the Company recorded impairment charges on real estate of $21.0 million and $60.3 million, respectively, to write down the carrying value of three of the Company's strategic opportunistic properties and one hotel due to declines in market conditions and projected cash flows.

------

<u>[**Table of Contents**](#ia5f53a08840d4a27a0d02be180a8740e_7)</u>

**PART I. FINANCIAL INFORMATION (CONTINUED)**

**Item 1. &nbsp;&nbsp;&nbsp;&nbsp;Financial Statements (continued)**

**PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC.**

**CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)**

June 30, 2025

(unaudited)

**4. NOTES AND BONDS PAYABLE**

As of June 30, 2025 and December 31, 2024, the Company's notes and bonds payable consisted of the following (dollars in thousands):

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Book Value as of** <br>**June 30, 2025** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Book Value as of** <br>**December 31, 2024** | **Contractual Interest Rate as of** <br>**June 30, 2025** | **Effective Interest Rate at** <br>**June 30, 2025** <sup>(1)</sup> | **Payment Type** <sup>(2)</sup> | **Maturity Date** <sup>(3)</sup> |
| Series B Bonds <sup>(4)</sup> | $115136 | $127486 | 4.43% | 4.43% | <sup>(4)</sup> | 01/31/2026 |
| Series C Bonds <sup>(4)</sup> | 42112 | 39049 | 9.00% | 9.00% | <sup>(4)</sup> | 06/30/2026 <sup>(4)</sup> |
| Series D Bonds <sup>(4)</sup> | 174099 | 161436 | 10.50% | 10.50% | <sup>(4)</sup> | 02/28/2029 |
| Crown Pointe Mortgage Loan | 54738 | 54738 | SOFR + 2.30% | 6.75% | Interest Only | 04/01/2025 <sup>(5)</sup> |
| Georgia 400 Center Mortgage Loan | 39515 | 39662 | SOFR + 2.75% | 7.20% | Principal & Interest | 03/22/2025 <sup>(6)</sup> |
| PORT Mortgage Loan 1 | 31793 | 31792 | 4.74% | 4.74% | Interest Only | 10/01/2025 |
| PORT Mortgage Loan 2 | 10523 | 10523 | 4.72% | 4.72% | Interest Only | 03/01/2026 |
| PORT MetLife Loan 1 <sup>(7)</sup> | 54796 | 55939 | 3.90% | 3.90% | Interest Only | 04/10/2026 |
| PORT MetLife Loan 2 <sup>(7)</sup> | 93044 | 93275 | 3.99% | 3.99% | Interest Only | 04/10/2026 |
| Lincoln Court Mortgage Loan <sup>(7)</sup> | 31325 | 31325 | SOFR + 3.25% | 7.70% | Interest Only | 08/07/2025 <sup>(8)</sup> |
| Madison Square Mortgage Loan <sup>(7)</sup> | 20722 | 20722 | SOFR + 3.00% | 7.45% | Interest Only | 11/30/2025 |
| Bank of America Mortgage Loan <sup>(9)</sup> | 153336 | 156836 | SOFR + 2.75% | 7.20% | Principal & Interest | 09/01/2026 |
| Richardson Office Mortgage Loan <sup>(10)</sup> | 11901 | 12018 | SOFR + 3.50% | 7.95% | Principal & Interest | 07/29/2025 <sup>(8)</sup> |
| Q&C Hotel Mortgage Loan <sup>(10)</sup> | 21847 | 21966 | SOFR + 3.50% | 7.95% | Principal & Interest | 07/29/2025 <sup>(8)</sup> |
| Eight & Nine Corporate Centre Mortgage Loan <sup>(11)</sup> | 19773 | 20000 | SOFR + 4.90% | 9.35% | Interest Only | 02/09/2026 |
| Total notes and bonds payable principal outstanding | 874660 | 876767 |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Deferred financing costs and debt discount and premium, net <sup>(12)</sup> | (7822) | (11475) |  |  |  |  |
| Total notes and bonds payable, net | $866838 | $865292 |  |  |  |  |

---

_____________________

<sup>(1)</sup> Contractual interest rate represents the interest rate in effect under the loan as of June 30, 2025. Effective interest rate was calculated as the actual interest rate in effect as of June 30, 2025 (consisting of the contractual interest rate and contractual floor rates), using Secured Overnight Financing Rate ("SOFR") as of June 30, 2025, where applicable.

<sup>(2)</sup> Represents the payment type required under these loans as of June 30, 2025. Certain future monthly payments due under these loans also include amortizing principal payments.

<sup>(3)</sup> Represents the initial maturity date or the maturity date as extended as of June 30, 2025. For more information of the Company's contractual obligations under its notes and bonds payable, see five-year maturity table, below.

<sup>(4)</sup> Subsequent to June 30, 2025, the Company paid off all outstanding Series C bonds. See "Israeli Bond Financings" below for additional details on the Company's bonds.

<sup>(5)</sup> On April 21, 2025, the Company entered into a forbearance agreement for the Crown Pointe Mortgage Loan, which provides for the acknowledgment of an existing event of default and the lender's agreement to forbear from exercising its remedies until September 30, 2025.

<sup>(6)</sup> Subsequent to June 30, 2025, the Company sold the Georgia 400 Center property and paid off the loan in full. Refer to Note 10 for additional details.

<sup>(7)</sup> The Company's notes and bonds payable are generally non-recourse. These mortgage loans have guarantees over certain balances whereby the Company would be required to make the remaining payments in the event that the Company turned the property over to the lender.

<sup>(8)</sup> As of the filing date of this Quarterly Report on Form 10-Q, the Company was in technical default for these loans.

<sup>(9)</sup> This loan was cross-collateralized by the associated properties: Park Centre, 1180 Raymond, The Marq, and Oakland City Center.

<sup>(10)</sup> These loans are cross-collateralized by the Richardson Office and Q&C Hotel properties. The effective interest rate is at the higher of one-month SOFR plus 3.50% or 7.50%.

<sup>(11)</sup> The effective interest rate is at the higher of one-month SOFR plus 4.90% or 8.90%. On March 28, 2025, the loan was amended to increase the maximum borrowing capacity to $23.5 million, subject to certain conditions.

<sup>(12)</sup> Represents the unamortized premium/discount on notes and bonds payable due to the above- and below-market interest rates when the debt was assumed. The discount/premium is amortized over the remaining life of the notes and bonds payable.

------

<u>[**Table of Contents**](#ia5f53a08840d4a27a0d02be180a8740e_7)</u>

**PART I. FINANCIAL INFORMATION (CONTINUED)**

**Item 1. &nbsp;&nbsp;&nbsp;&nbsp;Financial Statements (continued)**

**PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC.**

**CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)**

June 30, 2025

(unaudited)

During the three and six months ended June 30, 2025, the Company incurred $17.2 million and $33.3 million, respectively, of interest expense. Included in interest expense during the three and six months ended June 30, 2025 was $1.7 million and $3.6 million, respectively, of amortization of deferred financing costs and debt discount and premium.

During the three and six months ended June 30, 2024, the Company incurred $18.0 million and $34.8 million, respectively, of interest expense. Included in interest expense during the three and six months ended June 30, 2024 was $2.5 million and $4.8 million, respectively, of amortization of deferred financing costs and debt discount and premium.

As of June 30, 2025 and December 31, 2024, the Company's interest payable was $13.8 million and $11.0 million, respectively.

The following is a schedule of maturities, including principal amortization payments, for all notes and bonds payable outstanding as of June 30, 2025 (in thousands):

---

| | |
|:---|:---|
| July 1, 2025 through December 31, 2025 | $214642 |
| 2026 | 485919 |
| 2027 | 58033 |
| 2028 | 58033 |
| 2029 | 58033 |
|  | $874660 |

---

As of June 30, 2025, the Company had $554.2 million of debt obligations scheduled to mature over the period from July 1, 2025 through June 30, 2026. The Company has extension options with respect to $71.8 million of the debt obligations outstanding that are scheduled to mature over the next 12 months; however, the Company cannot exercise these options if not then in compliance with certain financial covenants in the loans without making a cash payment and there is no assurance that the Company will be able to meet these requirements. The Company's debt obligations are generally nonrecourse, subject to certain limited guaranty payments, as outlined in the table above, except for the Series Bonds (as defined below). The Company plans to utilize available extension options or seek to refinance the notes and bonds payable. The Company may also choose to market the properties for sale or may negotiate a turnover of the secured properties back to the related mortgage lender.

**Debt Covenant Compliance**

The Company's notes payable contain various financial debt covenants, including debt-to-value, debt yield, minimum equity requirements, and debt service coverage ratios. As of June 30, 2025, the Company was in compliance with all of these debt covenants with the exception that the Lincoln Court Mortgage Loan was not in compliance with the debt service coverage requirement. As a result of such non-compliance, the Company is required to provide a cash sweep for the Lincoln Court Mortgage Loan, and the remaining loans are at-risk of cash sweeps and/or principal pay downs if in non-compliance.

**Israeli Bond Financings**

As of June 30, 2025, the Company had bonds outstanding of 1.1 billion Israeli new shekels ($331.3 million as of June 30, 2025) ("Series Bonds"), of which 142.0 million Israeli new shekels ($42.1 million as of June 30, 2025) were collateralized by real estate (specified lands in Park Highlands and Richardson). The Series Bonds principal payments are due on dates ranging from January 2026 to February 2029 with interest rates of 4.43% to 10.50%. The deeds of trust that govern the terms of the Series Bonds contain various financial related covenants. As of June 30, 2025, the Company was in compliance with all of these financial debt covenants.

------

<u>[**Table of Contents**](#ia5f53a08840d4a27a0d02be180a8740e_7)</u>

**PART I. FINANCIAL INFORMATION (CONTINUED)**

**Item 1. &nbsp;&nbsp;&nbsp;&nbsp;Financial Statements (continued)**

**PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC.**

**CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)**

June 30, 2025

(unaudited)

**5. FAIR VALUE DISCLOSURES**

As of June 30, 2025 and December 31, 2024, the carrying amounts and fair values of the Company's financial instruments are as follows (in thousands):

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **June 30, 2025** | **June 30, 2025** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**December 31, 2024** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**December 31, 2024** |
| | **Carrying Amount** | **Fair Value** | **Carrying Amount** | **Fair Value** |
| Financial liabilities (Level 3): |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notes payable | $541743 | $535910 | $545906 | $540191 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Related party loan | $10000 | $10000 | $— | $— |
| Financial liabilities (Level 1): |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Series Bonds | $325095 | $272643 | $319386 | $329141 |

---

Disclosure of the fair value of financial instruments is based on pertinent information available to the Company as of the period end and requires a significant amount of judgment. This has made the estimation of fair values difficult and, therefore, both the actual results and the Company's estimate of value at a future date could be materially different.

As of June 30, 2025, the Company measured the following assets at fair value (in thousands):

---

| | | | | |
|:---|:---|:---|:---|:---|
| | | **Fair Value Measurements Using** | **Fair Value Measurements Using** | **Fair Value Measurements Using** |
| |<br>**Total** | **Quoted Prices in Active Markets for Identical Assets<br>(Level 1)** | **Significant Other Observable Inputs<br>(Level 2)** | **Significant Unobservable Inputs<br>(Level 3)** |
| Recurring Basis: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Real estate equity securities | $14116 | $14116 | $— | $— |
| Nonrecurring Basis: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Impaired real estate <sup>(1)</sup> | $294200 | $— | $96200 | $198000 |

---

_____________________

<sup>(1)</sup> Amount represents the fair value for a real estate asset impacted by impairment charges during the six months ended June 30, 2025, as of the date that the fair value measurement was made. During the six months ended June 30, 2025, six of the Company's strategic opportunistic properties and one hotel were impaired and written down to their estimated fair values due to declines in market conditions and projected cash flows. Three of the Company's strategic opportunistic properties and one hotel were measured based on an income approach with the significant unobservable inputs used in evaluating the estimated fair value of the properties, with discount rates between 9.50% to 10.25% and terminal cap rates between 8.00% to 9.00%. Of the three strategic opportunistic properties, Crown Pointe was measured at $54.7 million and based on a discount rate of 10.00% and terminal cap rate of 8.50%. Two strategic opportunistic properties were measured based on quoted prices, of which the Georgia 400 Center was measured at $39.1 million, and one was based on a sales comparison approach. The carrying value for the real estate asset may have subsequently increased or decreased from the fair value reflected due to activity that has occurred since the measurement date.

As of December 31, 2024, the Company measured the following assets at fair value (in thousands):

---

| | | | | |
|:---|:---|:---|:---|:---|
| | | **Fair Value Measurements Using** | **Fair Value Measurements Using** | **Fair Value Measurements Using** |
| |<br>**Total** | **Quoted Prices in Active Markets for Identical Assets (Level 1)** | **Significant Other Observable Inputs (Level 2)** | **Significant Unobservable Inputs (Level 3)** |
| Recurring Basis: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Real estate equity securities | $13154 | $13154 | $— | $— |
| Nonrecurring Basis: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Impaired real estate <sup>(1)</sup> | $338286 | $— | $126000 | $212286 |

---

_____________________

------

<u>[**Table of Contents**](#ia5f53a08840d4a27a0d02be180a8740e_7)</u>

**PART I. FINANCIAL INFORMATION (CONTINUED)**

**Item 1. &nbsp;&nbsp;&nbsp;&nbsp;Financial Statements (continued)**

**PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC.**

**CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)**

June 30, 2025

(unaudited)

<sup>(1)</sup> Amount represents the fair value for a real estate asset impacted by impairment charges during the year ended December 31, 2024, as of the date that the fair value measurement was made. During the year ended December 31, 2024, five of the Company's strategic opportunistic properties and one hotel were impaired and written down to their estimated fair values due to declines in market conditions and projected cash flows. Three of the Company's strategic opportunistic properties and one hotel were measured based on an income approach with the significant unobservable inputs used in evaluating the estimated fair value of the properties, with discount rates between 8.25% to 9.50% and terminal cap rates between 7.25% to 8.00%. One strategic opportunistic property was measured based on a quoted price and another based on a sales comparison approach. The carrying value for the real estate asset may have subsequently increased or decreased from the fair value reflected due to activity that has occurred since the measurement date.

**6. RELATED PARTY TRANSACTIONS**

The Company has entered into agreements with Pacific Oak Capital Advisors, LLC ("Pacific Oak Capital Advisors"), the Company's advisor. Pursuant to the terms of these agreements, summarized below are the related-party costs incurred by the Company for the three and six months ended June 30, 2025 and 2024, respectively, and any related amounts due to affiliate as of June 30, 2025 and December 31, 2024 (in thousands):

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Incurred during the three months ended June 30,**  | **Incurred during the three months ended June 30,**  | **Incurred during the six months ended June 30,**  | **Incurred during the six months ended June 30,**  | **Payable as of** | **Payable as of** |
| | **2025** | **2024** | **2025** | **2024** | **June 30, 2025** | **December 31, 2024** |
| Asset management fees | $2739 | $3872 | $5396 | $7974 | $16342 | $12006 |
| Property management fees |  | 647 |  | 1324 |  |  |
| Disposition fees |  | 21 |  | 36 |  |  |
| Reimbursable offering costs |  |  |  |  | 564 | 654 |
| Related party loan and related interest <sup>(1)</sup> | 239 |  | 329 |  | 10329 |  |
|  | $2978 | $4540 | $5725 | $9334 | $27235 | $12660 |

---

_____________________

<sup>(1)</sup> During the six months ended June 30, 2025, the Company entered into loan agreements with Pacific Oak Capital Advisors. As of June 30, 2025, the outstanding loan balance was $10.0 million, carried an annual interest rate of 10%, and matures to the earlier of June 30, 2028 or a triggering event, such as the sale of any or the closing date of any sale of any or all of the common shares of Pacific Oak Residential Trust, Inc. ("PORT"), the Company's subsidiary, not meeting financial covenants, or an event of a default. The loan interest is recorded as interest expense, net in the accompanying consolidated statements of operations. Additionally, the loan is secured by equity of PORT.

During the six months ended June 30, 2025, the Company provided $2.4 million of funding to the 110 William Joint Venture and a result, the Company recognized a due from affiliate of $2.4 million as of June 30, 2025. There were no distributions during the six months ended June 30, 2024.

**7. INVESTMENTS IN UNCONSOLIDATED ENTITIES**

As of June 30, 2025 and December 31, 2024, the Company's investments in unconsolidated entities were composed of the following (in thousands):

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Number of Properties as of**  | | | **Investment Balance as of** | **Investment Balance as of** | **Investment Balance as of** |
|<br>**Joint Venture** | **Number of Properties as of**  |<br>**Location** |<br>**Ownership %** | **June 30, 2025** | | **December 31, 2024** |
| 110 William Joint Venture | 1 | New York, New York | <sup>(1)</sup> | $54096 | <sup>(1)</sup> | $68467 |
| Pacific Oak Opportunity Zone Fund I | 4 | Various | 47.0% | 18739 | <sup>(2)</sup> | 19620 |
|  |  |  |  | $72835 |  | $88087 |

---

_____________________

<sup>(1)</sup> As of June 30, 2025, the Company owned 77.5% of preferred interest and 100% of common interest in the 110 William Joint Venture.

<sup>(2)</sup> The maximum exposure to loss as a result of the Company's investment in the Pacific Oak Opportunity Zone Fund I is limited to the carrying amount of the investment.

------

<u>[**Table of Contents**](#ia5f53a08840d4a27a0d02be180a8740e_7)</u>

**PART I. FINANCIAL INFORMATION (CONTINUED)**

**Item 1. &nbsp;&nbsp;&nbsp;&nbsp;Financial Statements (continued)**

**PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC.**

**CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)**

June 30, 2025

(unaudited)

The Company previously suspended the equity method of accounting for the 353 Sacramento Joint Venture and in June 2025, the 353 Sacramento Joint Venture disposed the property through a deed-in-lieu of foreclosure agreement with the lender.

Summarized financial information for investments in unconsolidated entities are as follows (in thousands):

---

| | | |
|:---|:---|:---|
| | **June 30, 2025** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**December 31, 2024** |
| Assets: |  |  |
| Real estate, net | $422143 | $486177 |
| Total assets | 481638 | 558371 |
| Liabilities: |  |  |
| Notes payable, net | 381788 | 446843 |
| Total liabilities | 409285 | 484040 |
| Total equity | $72353 | $74331 |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **For the Three Months Ended June 30,**  | **For the Three Months Ended June 30,**  | **For the Six Months Ended June 30,**  | **For the Six Months Ended June 30,**  |
| | **2025** | **2024** | **2025** | **2024** |
| Total revenues | $8336 | $13703 | $16377 | $22979 |
| Operating loss | (11903) | (18144) | (24100) | (28374) |
| Net income (loss) | $11357 | $(18120) | $(1007) | $(28350) |

---

------

<u>[**Table of Contents**](#ia5f53a08840d4a27a0d02be180a8740e_7)</u>

**PART I. FINANCIAL INFORMATION (CONTINUED)**

**Item 1. &nbsp;&nbsp;&nbsp;&nbsp;Financial Statements (continued)**

**PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC.**

**CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)**

June 30, 2025

(unaudited)

**8. REPORTING SEGMENTS**

The Company recognizes three reporting segments for the three and six months ended June 30, 2025 and 2024 and consists of strategic opportunistic properties and real estate-related investments ("strategic opportunistic properties"), residential homes, and hotel. The Company's Chief Executive Officer and President, who are also the chief operating decision makers (the "CODM"), measure the property-level operating performance on an unlevered basis, using net operating income, to make decisions about resource allocations. The following tables summarize information for the reporting segments (in thousands):

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended June 30, 2025** | **Three Months Ended June 30, 2025** | **Three Months Ended June 30, 2025** | **Three Months Ended June 30, 2025** |
| | **Strategic Opportunistic Properties** | **Residential Homes** | **Hotel** | **Total** |
| Total revenues | $20530 | $9202 | $1737 | $31469 |
| Less <sup>(1)</sup>: |  |  |  |  |
| Operating, maintenance and management | (8580) | (3011) |  | (11591) |
| Hotel expenses |  |  | (1637) | (1637) |
| Real estate taxes and insurance | (3304) | (2116) |  | (5420) |
| Reportable segment total rental operating expenses | (11884) | (5127) | (1637) | (18648) |
| Reportable segment net operating income | 8646 | 4075 | 100 | 12821 |
| Interest expense, net | (14193) | (2446) | (512) | (17151) |
| Impairment charges on real estate and related intangibles | (48877) |  | (3102) | (51979) |
| Other segment items <sup>(2)</sup> | (44419) | (1862) | (326) | (46607) |
| Total expenses | (119373) | (9435) | (5577) | (134385) |
| Loss from unconsolidated entities |  |  |  | (6769) |
| Other income |  |  |  | 234 |
| Gain on real estate equity securities |  |  |  | 962 |
| Gain on sale of real estate |  |  |  | 1080 |
| Total other loss, net |  |  |  | (4493) |
| Net loss |  |  |  | $(107409) |
|  | **Six Months Ended June 30, 2025** | **Six Months Ended June 30, 2025** | **Six Months Ended June 30, 2025** | **Six Months Ended June 30, 2025** |
|  | **Strategic Opportunistic Properties** | **Residential Homes** | **Hotel** | **Total** |
| Total revenues | $41092 | $17861 | $4622 | $63575 |
| Less <sup>(1)</sup>: |  |  |  |  |
| Operating, maintenance and management | (17063) | (6548) |  | (23611) |
| Hotel expenses |  |  | (3373) | (3373) |
| Real estate taxes and insurance | (6507) | (4396) |  | (10903) |
| Reportable segment total rental operating expenses | (23570) | (10944) | (3373) | (37887) |
| Reportable segment net operating income | 17522 | 6917 | 1249 | 25688 |
| Interest expense, net | (27502) | (4727) | (1065) | (33294) |

---

------

<u>[**Table of Contents**](#ia5f53a08840d4a27a0d02be180a8740e_7)</u>

**PART I. FINANCIAL INFORMATION (CONTINUED)**

**Item 1. &nbsp;&nbsp;&nbsp;&nbsp;Financial Statements (continued)**

**PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC.**

**CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)**

June 30, 2025

(unaudited)

---

| | | | | |
|:---|:---|:---|:---|:---|
| Impairment charges on real estate and related intangibles | (48877) |  | (3102) | (51979) |
| Other segment items <sup>(2)</sup> | (50330) | (4735) | (747) | (55812) |
| Total expenses | (150279) | (20406) | (8287) | (178972) |
| Loss from unconsolidated entities |  |  |  | (14266) |
| Other income |  |  |  | 1016 |
| Gain on real estate equity securities |  |  |  | 962 |
| Gain on sale of real estate |  |  |  | 1244 |
| Total other loss, net |  |  |  | (11044) |
| Net loss before income taxes |  |  |  | (126441) |
| Income tax provision |  |  |  | (830) |
| Net loss |  |  |  | $(127271) |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Three Months Ended June 30, 2024** | **Three Months Ended June 30, 2024** | **Three Months Ended June 30, 2024** | **Three Months Ended June 30, 2024** |
| | **Strategic Opportunistic Properties** | **Residential Homes** | **Hotel** | **Total** |
| Total revenues | $22921 | $8653 | $2235 | $33809 |
| Less <sup>(1)</sup>: |  |  |  |  |
| Operating, maintenance and management | (9012) | (2171) |  | (11183) |
| Hotel expenses |  |  | (1784) | (1784) |
| Real estate taxes and insurance | (3792) | (2764) |  | (6556) |
| Reportable segment total rental operating expenses | (12804) | (4935) | (1784) | (19523) |
| Reportable segment net operating income | 10117 | 3718 | 451 | 14286 |
| Interest expense, net | (15065) | (2339) | (604) | (18008) |
| Impairment charges on real estate and related intangibles | (21026) |  |  | (21026) |
| Other segment items <sup>(2)</sup> | (6502) | (3829) | (1093) | (11424) |
| Total expenses | (55397) | (11103) | (3482) | (69982) |
| Loss from unconsolidated entities |  |  |  | (8653) |
| Other income |  |  |  | 283 |
| Loss on real estate equity securities |  |  |  | (1282) |
| Gain on sale of real estate |  |  |  | 167 |
| Total other loss, net |  |  |  | (9485) |
| Net loss |  |  |  | $(45658) |
|  | **Six Months Ended June 30, 2024** | **Six Months Ended June 30, 2024** | **Six Months Ended June 30, 2024** | **Six Months Ended June 30, 2024** |
|  | **Strategic Opportunistic Properties** | **Residential Homes** | **Hotel** | **Total** |
| Total revenues | $46054 | $17718 | $5039 | $68811 |
| Less <sup>(1)</sup>: |  |  |  |  |

---

------

<u>[**Table of Contents**](#ia5f53a08840d4a27a0d02be180a8740e_7)</u>

**PART I. FINANCIAL INFORMATION (CONTINUED)**

**Item 1. &nbsp;&nbsp;&nbsp;&nbsp;Financial Statements (continued)**

**PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC.**

**CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)**

June 30, 2025

(unaudited)

---

| | | | | |
|:---|:---|:---|:---|:---|
| Operating, maintenance and management | (17505) | (4581) |  | (22086) |
| Hotel expenses |  |  | (3652) | (3652) |
| Real estate taxes and insurance | (7876) | (5155) |  | (13031) |
| Reportable segment total rental operating expenses | (25381) | (9736) | (3652) | (38769) |
| Reportable segment net operating income | 20673 | 7982 | 1387 | 30042 |
| Interest expense, net | (28899) | (4709) | (1174) | (34782) |
| Impairment charges on real estate and related intangibles | (56837) |  | (3454) | (60291) |
| Other segment items <sup>(2)</sup> | (16408) | (7592) | (1617) | (25617) |
| Total expenses | (127523) | (22037) | (9898) | (159458) |
| Loss from unconsolidated entities |  |  |  | (16730) |
| Other income |  |  |  | 738 |
| Loss on real estate equity securities |  |  |  | (16632) |
| Gain on sale of real estate |  |  |  | 619 |
| Total other loss, net |  |  |  | (32005) |
| Net loss |  |  |  | $(122652) |

---

_____________________

<sup>(1)</sup> The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM. All corporate related costs are included in the strategic opportunistic properties segment to align with how financial information is presented.

<sup>(2)</sup> Other segment items for each reportable segment include: asset management fees to affiliate, general and administrative expenses, foreign currency transaction loss or gain, net, and depreciation and amortization. Corporate overhead is not allocated between segments; all corporate overhead is included in the strategic opportunistic properties segment.

Total assets related to the reporting segments as of June 30, 2025 and December 31, 2024 are as follows (in thousands):

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Strategic Opportunistic Properties** | **Residential Homes** | **Hotel** | **Total** |
| Total assets as of June 30, 2025 | $696838 | $284193 | $31880 | $1012911 |
| Total assets as of December 31, 2024 | $800597 | $288908 | $35451 | $1124956 |

---

**9. COMMITMENTS, CONTINGENCIES AND GUARANTEES**

**Lease Obligations**

As of June 30, 2025 and December 31, 2024, the Company's lease and rights to a leasehold interest with respect to 210 West 31st, which was accounted as a finance lease, are included in the consolidated balance sheet as follows:

---

| | | |
|:---|:---|:---|
| | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**June 30, 2025** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**December 31, 2024** |
| Right-of-use asset (included in real estate held for investment, net, in thousands) | $5763 | $6014 |
| Lease obligation (included in other liabilities, in thousands) | 9666 | 9632 |
| Remaining lease term | 88.5 years | 89.0 years |
| Discount rate | 4.8% | 4.8% |

---

------

<u>[**Table of Contents**](#ia5f53a08840d4a27a0d02be180a8740e_7)</u>

**PART I. FINANCIAL INFORMATION (CONTINUED)**

**Item 1. &nbsp;&nbsp;&nbsp;&nbsp;Financial Statements (continued)**

**PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC.**

**CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)**

June 30, 2025

(unaudited)

As of June 30, 2025, the Company had a leasehold interest expiring in 2114. Future minimum lease payments under the Company's finance lease as of June 30, 2025 are as follows (in thousands):

---

| | |
|:---|:---|
| July 1, 2025 through December 31, 2025 | $198 |
| 2026 | 396 |
| 2027 | 396 |
| 2028 | 396 |
| 2029 | 396 |
| Thereafter | 50979 |
| Total expected minimum lease obligations | 52761 |
| Less: Amount representing interest <sup>(1)</sup> | (43095) |
| Present value of net minimum lease payments <sup>(2)</sup> | $9666 |

---

_____________________

<sup>(1)</sup> Interest includes the amount necessary to reduce the total expected minimum lease obligations to present value calculated at the Company's incremental borrowing rate at acquisition.

<sup>(2)</sup> The present value of net minimum lease payments is included in other liabilities in the accompanying consolidated balance sheets.

**Guarantee Agreements**

As of June 30, 2025, and as part of the previous 110 William Joint Venture debt and restructuring agreements, the Company guaranteed the completion of the construction and the development of the building expenditures and tenant improvements. The Company also guaranteed all debt servicing costs and timely debt payments by the 110 William Joint Venture. The guaranteed amounts are due upon occurrence of a triggering event, such as default for nonpayment or failure to perform based on the conditions defined in the agreement. As of June 30, 2025, the maximum potential amount of future payments under the Company's guarantees is not estimable as it is dependent on various factors including the 110 William Joint Venture's future operating performance level, potential completion cost overages, future levels of variable-rate debt and related interest, and the amount of future contributions by the Company. Due to uncertainties surrounding these factors, the Company was unable to estimate the maximum amounts payable under the guarantees. As of June 30, 2025, no triggering events had occurred, the likelihood of loss was determined to be remote, and no liability related to the guarantees was recognized.

As of June 30, 2025, and as part of the Georgia 400, Madison Square, and Lincoln Court mortgage loans, the Company guaranteed the payment of $58.0 million, whereby the Company would be required to make payments in the event that the Company turned the property over to the lender. Subsequent to June 30, 2025 and due to the sale of Georgia 400 Center, the Company no longer guaranteed $5.9 million related to this mortgage loan.

**Economic Dependency**

The Company is dependent on Pacific Oak Capital Advisors and a subsidiary of Second Avenue Group, LLC, which is the advisor for the Company's residential homes portfolio, for certain services that are essential to the Company, including the identification, evaluation, negotiation, origination, acquisition and disposition of investments; management of the daily operations of the Company's investment portfolio; and other general and administrative responsibilities. In the event that the advisors are unable to provide these services, the Company will be required to obtain such services from other sources.

**Environmental** 

As an owner of real estate, the Company is subject to various environmental laws of federal, state and local governments. Although there can be no assurance, the Company is not aware of any environmental liability that could have a material adverse effect on its financial condition or results of operations as of June 30, 2025.

**Legal Matters**

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<u>[**Table of Contents**](#ia5f53a08840d4a27a0d02be180a8740e_7)</u>

**PART I. FINANCIAL INFORMATION (CONTINUED)**

**Item 1. &nbsp;&nbsp;&nbsp;&nbsp;Financial Statements (continued)**

**PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC.**

**CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)**

June 30, 2025

(unaudited)

In the ordinary course of business, the Company may become subject to litigation, claims and regulatory matters. As of June 30, 2025, there are no material legal or regulatory proceedings pending or known to be contemplated against the Company or its properties.

**10. SUBSEQUENT EVENTS**

The Company evaluates subsequent events up until the date the consolidated financial statements are issued.

**Whitehawk Loan and Series C Bonds Payoff**

In July 2025, the Company entered into a credit agreement with Whitehawk Capital Partners LP for a loan of $80.0 million. The loan has an annual interest rate of one-month SOFR plus 6.50% with a SOFR floor of 3.50% and a maturity date of the earlier of December 1, 2027 or upon disposition of securitized Park Highlands land. The December 1, 2027 maturity date may be extended to March 1, 2028, assuming no event of default. The loan is secured by the Company's undeveloped lands in Park Highlands and Richardson and 210 West 31st Street, a development property. As a result of entering into the loan, the Company paid all outstanding Series C bonds of 142.0 million Israeli new shekels ($42.2 million as of July 29, 2025) and was subject to a 5.0 million Israeli new shekels ($1.5 million as of July 29, 2025) early pay interest penalty.

**Real Estate Sale**

In July 2025, the Company sold Georgia 400 Center, an office property, for gross sale proceeds of $39.1 million, before closing costs and credits. In connection with the sale, the Company repaid $39.5 million of the outstanding principal due under the secured mortgage loan. The purchaser was not affiliated with the Company or Pacific Oak Capital Advisors and as a result of the sale, the property was classified as held for sale as of June 30, 2025.

------

<u>[**Table of Contents**](#ia5f53a08840d4a27a0d02be180a8740e_7)</u>

**PART I. FINANCIAL INFORMATION (CONTINUED)**

**Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations**

The following discussion and analysis should be read in conjunction with the accompanying financial statements of Pacific Oak Strategic Opportunity REIT, Inc. and the notes thereto. As used herein, the terms "we," "our" and "us" refer to Pacific Oak Strategic Opportunity REIT, Inc., a Maryland corporation, and, as required by context, Pacific Oak Strategic Opportunity Limited Partnership, a Delaware limited partnership, which we refer to as the "Operating Partnership," and to their subsidiaries.

**Forward-Looking Statements**

Certain statements included in this Quarterly Report on Form 10-Q are forward-looking statements. Those statements include statements regarding the intent, belief or current expectations of Pacific Oak Strategic Opportunity REIT, Inc. and members of our management team, as well as the assumptions on which such statements are based, and generally are identified by the use of words such as "may," "will," "seeks," "anticipates," "believes," "estimates," "expects," "plans," "intends," "should" or similar expressions. Actual results may differ materially from those contemplated by such forward-looking statements. Further, forward-looking statements speak only as of the date they are made, and we undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time, unless required by law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following are some of the risks and uncertainties, although not all of the risks and uncertainties, which could cause our actual results to differ materially from those presented in our forward-looking statements:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We have substantial indebtedness maturing over the 12-month period ending June 30, 2026. Considering the current real estate lending environment, this raises substantial doubt as to our ability to continue as a going concern for at least one year from the date the financial statements are issued. If we are unable to repay, refinance or extend maturing debt, the lenders or bondholders may declare events of default and seek to foreclose on the underlying collateral. There is no assurance that we will be able to satisfy, refinance or extend the maturing debt, and even if we do, we may still be adversely affected if substantial principal paydowns are required.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Because no public trading market for our shares currently exists, and we have indefinitely suspended our share redemption program, it will be difficult for our stockholders to sell their shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We have limited liquidity relative to our current and anticipated needs, which may limit our ability to retain certain investments and to make new investments.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our opportunistic investment strategy involves a higher risk of loss than would a strategy of investing in some other types of real estate and real estate-related investments.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We depend on our advisor, Pacific Oak Capital Advisors, LLC, and a subsidiary of Second Avenue Group, LLC which is the advisor for our residential homes portfolio ("PORT Advisor"), to conduct our operations and eventually dispose of our investments.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• A concentration of our real estate investments in any one property class may leave our profitability vulnerable to a downturn in such sector.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Because of the concentration of a significant portion of our assets in two geographic areas, any adverse economic, real estate or business conditions in these areas could affect our operating results and our ability to make distributions to our stockholders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Disruptions in the financial markets and uncertain economic conditions could adversely affect our ability to implement our business strategy, including market rental rates, commercial real estate values, and our ability to secure debt financing and service debt obligations, and generate returns to stockholders. In addition, our real estate investments may be affected by unfavorable real estate market and general economic conditions, which could decrease the value of those assets and reduce the investment return to our stockholders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Elevated market and economic volatility due to adverse economic and geopolitical conditions, health crises or dislocations in the credit markets, could have a material adverse effect on our results of operations, financial condition and ability to borrow on terms and conditions that we find acceptable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Inflation and increased interest rates may adversely affect our financial condition and results of operations, including with respect to our ability to refinance maturing debt.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We cannot guarantee that we will make distributions. Our distribution policy is not to use the proceeds of our offerings to make distributions. However, our charter permits us to pay distributions from any source, including offering proceeds or borrowings (which may constitute a return of capital), and our charter does not limit the amount of funds we may use from any source to pay such distributions. From time to time, we may use proceeds from third party financings to fund at least a portion of distributions in anticipation of cash flow to be received in later periods. We may

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<u>[**Table of Contents**](#ia5f53a08840d4a27a0d02be180a8740e_7)</u>

**PART I. FINANCIAL INFORMATION (CONTINUED)**

**Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (continued)**

also fund such distributions from the sale of assets. If we pay distributions from sources other than our cash flow from operations, the overall return to our stockholders may be reduced.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• All of our executive officers, our affiliated directors and other key real estate and debt finance professionals of our advisor are also officers, affiliated directors, managers, key professionals and/or holders of a direct or indirect controlling interest in our advisor, our dealer manager and/or other Pacific Oak-affiliated entities. As a result, they face conflicts of interest, including but not limited to, conflicts arising from time constraints and allocation of investment opportunities.&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We have no employees and are dependent on our advisor to conduct our operations, to identify investments, to manage our investments and for the disposition of our properties. If our advisor faces challenges in performing its obligations to us, it could negatively impact our ability to achieve our investment objectives.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Because investment opportunities that are suitable for us may also be suitable for other Pacific Oak-sponsored programs or Pacific Oak-advised investors, our advisor faces conflicts of interest relating to the purchase of properties and other investments and such conflicts may not be resolved in our favor, meaning that we could invest in less attractive assets, which could reduce the investment return to our stockholders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• There are limits on the ownership and transferability of our shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We depend on tenants for the revenue generated by our real estate investments and, accordingly, the revenue generated by our real estate investments is dependent upon the success and economic viability of our tenants. Revenues from our properties could decrease due to a reduction in occupancy (caused by factors including, but not limited to, tenant defaults, tenant insolvency, early termination of tenant leases and non-renewal of existing tenant leases) and/or lower rental rates, making it more difficult for us to meet our debt service obligations and limiting our ability to pay distributions to our stockholders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our policies do not limit us from incurring debt until our aggregate borrowings would exceed 300% of our net assets, which approximates aggregate liabilities of 75% of the cost of our tangible assets (before deducting depreciation or other non-cash reserves), and we may exceed this limit with the approval of the conflicts committee of our board of directors. To the extent financing in excess of this limit is available on attractive terms, our conflicts committee may approve debt such that our total liabilities would exceed this limit. High debt levels could limit the amount of cash we have available to distribute and could result in a decline in the value of an investment in us.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• If we fail to qualify as a REIT and no relief provisions apply, our cash available for distribution to our stockholders could materially decrease.

All forward-looking statements should be read in light of the risks identified in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2024 and Part II, Item 1A of our Quarterly Report on Form 10-Q for the period ended March 31, 2025, each as filed with the Securities and Exchange Commission (the "SEC"), and the risks identified in Part II, Item 1A herein.

**Overview**

Pacific Oak Strategic Opportunity REIT, Inc. was formed on October 8, 2008 as a Maryland corporation, elected to be taxed as a real estate investment trust ("REIT") beginning with the taxable year ended December 31, 2010 and intends to operate in such manner. As used herein, the terms "we," "our" and "us" refer to Pacific Oak Strategic Opportunity REIT, Inc. and as required by context, Pacific Oak Strategic Opportunity Limited Partnership, a Delaware limited partnership formed on December 10, 2008 (the "Operating Partnership"), and its subsidiaries. Our advisor manages our day-to-day operations and our portfolio of investments and has the authority to make all of the decisions regarding our investments, except for our residential home portfolio. Our residential home portfolio, held through our subsidiary Pacific Oak Residential Trust, Inc. ("PORT"), is managed by the PORT Advisor. The advisory duties are subject to the limitations in our charter and the direction and oversight of our board of directors. Our advisor also provides asset-management, marketing, investor-relations, and other administrative services on our behalf. We have sought to invest in and manage a diverse portfolio of opportunistic real estate, real estate equity securities and other real estate-related investments.

As of June 30, 2025, we had bonds outstanding of 1.1 billion Israeli new shekels ($331.3 million as of June 30, 2025) ("Series Bonds"), of which 142.0 million Israeli new shekels ($42.1 million as of June 30, 2025) were collateralized by real estate (specified lands in Park Highlands and Richardson). The Series Bonds principal payments are due on dates ranging from January 2026 to February 2029 with annual interest rates of 4.43% to 10.50%. The deeds of trust that govern the terms of the Series Bonds contain various financial covenants. As of June 30, 2025, we were in compliance with all of these financial debt covenants.

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<u>[**Table of Contents**](#ia5f53a08840d4a27a0d02be180a8740e_7)</u>

**PART I. FINANCIAL INFORMATION (CONTINUED)**

**Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (continued)**

As of June 30, 2025, we consolidated eight office complexes, encompassing, in the aggregate, 2.8 million rentable square feet, one office property held for sale, one residential home portfolio consisting of 2,078 residential homes, one apartment property containing 317 units, one hotel property with 196 rooms, three investments in undeveloped land with approximately 247 developable acres, one office/retail development property and held an interest in two investments in unconsolidated entities and one investment in real estate equity securities.

**Market Outlook – Real Estate and Real Estate Finance Markets**

Volatility in global financial markets and changing political environments can cause fluctuations in the performance of the U.S. commercial real estate markets. Possible future declines in rental rates, slower or potentially negative net absorption of leased space and expectations of future rental concessions, including free rent to renew tenants early, to retain tenants who are up for renewal or to attract new tenants, may result in decreases in cash flows from investment properties. To the extent there are increases in the cost of financing due to higher interest rates, this may cause difficulty in refinancing debt obligations at terms as favorable as the terms of existing indebtedness. Further, increases in interest rates would increase the amount of our debt payments on our variable rate debt to the extent the interest rates on such debt are not limited by interest rate caps. Market conditions can change quickly, potentially negatively impacting the value of real estate investments. Management continuously reviews our investment and debt financing strategies to optimize our portfolio and the cost of our debt exposure.

**Liquidity and Capital Resources**

Our principal demand for funds during the short and long-term is and will be for payments under debt and funding obligations, including principal repayments, the acquisition of real estate and real estate-related investments, payment of operating expenses, capital expenditures and general and administrative expenses. To date, we have had five primary sources of capital for meeting our cash requirements:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Proceeds from the primary portion of our initial public offering;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Proceeds from our dividend reinvestment plan;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Debt financing, including bond offerings in Israel;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Proceeds from the sale of real estate and real estate-related investments; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Cash flow generated by our real estate and real estate-related investments.

Our investments in real estate generate cash flow in the form of rental revenues and tenant reimbursements, which are reduced by operating expenditures and corporate general and administrative expenses. Cash flow from operations from our real estate investments is primarily dependent upon the occupancy levels of our properties, the net effective rental rates on our leases, the collectability of rent and operating recoveries from our tenants and how well we manage our expenditures. As of June 30, 2025, our office complexes were collectively 64% occupied, our residential home portfolio was 92% occupied and our apartment property was 90% occupied.

Under our charter, we are required to limit our total operating expenses to the greater of 2% of our average invested assets or 25% of our net income for the four most recently completed fiscal quarters, as these terms are defined in our charter, unless the conflicts committee has determined that such excess expenses were justified based on unusual and non-recurring factors. Operating expenses for the four fiscal quarters ended June 30, 2025 did not exceed the charter-imposed limitation.

For the six months ended June 30, 2025, our cash needs for capital expenditures and debt requirements were met with proceeds from dispositions of real estate, proceeds from debt financing and cash on hand, except where otherwise noted. Operating cash needs during the same period were met through cash flow generated by our real estate and real estate-related investments and cash on hand. As of June 30, 2025, we had outstanding debt obligations in the aggregate principal amount of $874.7 million, with a weighted-average remaining term of 1.3 years. As of June 30, 2025, we had $554.2 million of debt obligations scheduled to mature over the period from July 1, 2025 through June 30, 2026. This raises substantial doubt as to our ability to continue as a going concern for at least one year from the date the financial statements are issued. Of these debt obligations $71.8 million have extension options if we comply with certain debt covenants that may include one or a combination of the following ratios: debt-to-value, debt yield, minimum equity requirements and debt service coverage. In order to satisfy obligations as they mature, we plan to utilize extension options available in the respective loan agreements, may seek to refinance certain debt instruments, may market one or more properties for sale or may negotiate a turnover of one or more secured properties back to the related mortgage lender. Timing mismatches between cash inflows from asset sales and financings and outflows due to capital expenditures, interest payments and debt maturities are creating a challenge from a liquidity perspective. In recent years, we have accessed debt capital through the Israeli capital markets, but that source of debt capital may be limited in the future because of changing market and geopolitical conditions. Our mortgage loans are primarily

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<u>[**Table of Contents**](#ia5f53a08840d4a27a0d02be180a8740e_7)</u>

**PART I. FINANCIAL INFORMATION (CONTINUED)**

**Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (continued)**

non-recourse to us, meaning the lender's recourse is to take possession of the underlying property. It is possible we may choose not to repay or refinance some of the maturing loans, which would ultimately result in losing possession of the underlying property. There can be no assurance as to the certainty or timing of any of our plans. As a result of our upcoming loan maturities and required principal paydowns, the challenging commercial real estate markets as well as general market instability, management's plans may not be considered probable and thus do not alleviate substantial doubt about our ability to continue as a going concern for at least one year from the date the financial statements are issued.

As of June 30, 2025, we have deferred the payment of $16.3 million of asset management fees to our advisor to provide us with an additional source of short-term liquidity. During the six months ended June 30, 2025, we entered into loan agreements with our advisor. As of June 30, 2025, the outstanding loan balance was $10.0 million, carried an annual interest rate of 10%, and matures to the earlier of June 30, 2028 or a triggering event. Additionally, the loan is secured by equity of PORT.

**Guarantee Agreements**

As of June 30, 2025, and as part of the previous 110 William Joint Venture debt and equity restructuring, we guaranteed: all debt servicing costs and timely debt payments, completion for the construction and development of tenant improvement work, and recourse obligations. The related debt has an initial maturity of July 5, 2026, and guarantee amounts are due upon occurrence of any one triggering event. As of June 30, 2025, the 110 William Joint Venture had $326.3 million of variable-rate debt outstanding that was subject to our guarantee. The debt was collateralized by the underlying real estate and the initial maturity date of July 5, 2026 may be extended under certain circumstances.

As of June 30, 2025, and as part of the Georgia 400, Madison Square, and Lincoln Court mortgage loans, we guaranteed the payment of $58.0 million, whereby we would be required to make payments in the event that we turned the properties over to the lenders. Subsequent to June 30, 2025 and due to the sale of Georgia 400 Center, we no longer guaranteed $5.9 million related to this mortgage loan.

***Cash Flows from Operating Activities***

As of June 30, 2025, we consolidated eight office complexes, encompassing, in the aggregate, approximately 2.8 million rentable square feet and these properties were 64% occupied and had one office property held for sale. In addition, we owned one residential home portfolio consisting of 2,078 residential homes, and one apartment properties containing 317 units, which were 92% and 90% occupied, respectively. We also owned one hotel property with 196 rooms, three investments in undeveloped land with approximately 247 developable acres, and one office/retail development property, and held an interest in two investments in unconsolidated entities and one investment in real estate equity securities. During the six months ended June 30, 2025, net cash used in operating activities was $8.7 million. We expect that our cash flows from operating activities will increase in future periods as a result of leasing additional space that is currently unoccupied and anticipated future acquisitions of real estate and real estate-related investments. However, our cash flows from operating activities may decrease to the extent that we dispose of additional assets.

In addition to making investments in accordance with our investment objectives, we use or have used our capital resources to make certain payments to our advisor and our dealer manager. During our offering stage, these payments included payments to our dealer manager for selling commissions and dealer manager fees related to sales in our primary offering and payments to our dealer manager and our advisor for reimbursement of certain organization and other offering expenses related both to the primary offering and the dividend reinvestment plan. During our acquisition and development stage, we have continued to make payments to our advisor in connection with the selection and origination or purchase of investments, the management of our assets and costs incurred by our advisor in providing services to us as well as for any dispositions of assets (including the discounted payoff of non-performing loans). The advisory agreement with our advisor has a one-year term but may be renewed for an unlimited number of successive one-year periods upon the mutual consent of our advisor and our conflicts committee.

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<u>[**Table of Contents**](#ia5f53a08840d4a27a0d02be180a8740e_7)</u>

**PART I. FINANCIAL INFORMATION (CONTINUED)**

**Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (continued)**

Among the fees payable to our advisor is an asset management fee. With respect to investments other than real property, the asset management fee is a monthly fee calculated, each month, as one-twelfth of 1.0%, of the lesser of (i) the amount actually paid or allocated to acquire or fund the loan or other investment, inclusive of fees and expenses related thereto and the amount of any debt associated with or used to acquire or fund such investment and (ii) the outstanding principal amount of such loan or other investment, plus the fees and expenses related to the acquisition or funding of such investment, as of the time of calculation. With respect to investments in real property, the asset management fee is a monthly fee equal to one-twelfth of 1.0%, of the sum of the amount paid or allocated to acquire the investment, plus the cost of any subsequent development, construction or improvements to the property, and inclusive of fees and expenses related thereto and the amount of any debt associated with or used to acquire such investment. In the case of investments made through joint ventures, the asset management fee will be determined based on our proportionate share of the underlying investment, inclusive of our proportionate share of any fees and expenses related thereto.

Investments made in or through PORT are excluded from the calculation of the asset management fee we pay to our advisor. In addition to other fees described in the advisory agreement between PORT and the PORT Advisor, PORT pays PORT Advisor a quarterly asset management fee equal to 0.25% (1.0% annually) on the aggregate value of PORT's assets, as determined in accordance with our valuation guidelines, as of the end of each quarter.

***Cash Flows from Investing Activities***

Net cash used in investing activities was $8.5 million for the six months ended June 30, 2025, and consisted primarily of improvements to real estate of $6.4 million and advances to affiliate of $2.3 million.

***Cash Flows from Financing Activities***

Net cash used in financing activities was $17.0 million for the six months ended June 30, 2025 and consisted primarily of principal payments on notes and bonds payable of $26.6 million and partially offset by proceeds from loans from our advisor of $10.0 million.

In order to execute our investment strategy, we utilize secured debt, and we may, to the extent available, utilize unsecured debt, to finance a portion of our investment portfolio. Management remains vigilant in monitoring the risks inherent with the use of debt in our portfolio and is taking actions to ensure that these risks, including refinancing and interest risks, are properly balanced with the benefit of using leverage. There is no limitation on the amount we may borrow for any single investment. Our charter does not limit us from incurring debt until our aggregate borrowings would exceed 300% of our net assets, which approximates aggregate liabilities of 75% of the cost of our tangible assets (before deducting depreciation or other non-cash reserves); however, we may exceed that limit if a majority of the conflicts committee approves each borrowing in excess of our charter limitation and we disclose such borrowing to our common stockholders in our next quarterly report with an explanation from the conflicts committee of the justification for the excess borrowing. As of June 30, 2025, liabilities were within the limits stated in our charter.

**Contractual Commitments and Contingencies**

The following is a summary of our contractual obligations as of June 30, 2025 (in thousands):

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | | **Payments Due During the Years Ending December 31,** | **Payments Due During the Years Ending December 31,** | **Payments Due During the Years Ending December 31,** | **Payments Due During the Years Ending December 31,** |
|<br>**Contractual Obligations** |<br>**Total** | **Remainder of 2025** | **2026-2027** | **2028-2029** | **Thereafter** |
| Outstanding debt obligations <sup>(1)</sup> | $874660 | $214642 | $543952 | $116066 | $— |
| Interest payments on outstanding debt obligations <sup>(2)</sup> | 79654 | 26265 | 45264 | 8125 |  |
| Finance lease obligation <sup>(3)</sup> | 52761 | 198 | 792 | 792 | 50979 |
| Development obligations <sup>(4)</sup> | 9188 | 8420 | 768 |  |  |
| Related party loan and interest <sup>(2)(5)</sup> | 13329 | 829 | 2000 | 10500 |  |

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<sup>(1)</sup> Amounts include principal payments based on the outstanding principal amounts, maturity dates and foreign currency rates in effect as of June 30, 2025.

<sup>(2)</sup> Projected interest payments are based on the outstanding principal amounts, maturity dates, foreign currency rates and interest rates in effect as of June 30, 2025.

<sup>(3)</sup> Amounts are related to a leasehold interest expiring on 2114.

<sup>(4)</sup> Amounts are development obligations related to previous sales of Park Highlands land.

<sup>(5)</sup> Amounts are related to loans and related accrued interest due to our advisor.

**Results of Operations**

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<u>[**Table of Contents**](#ia5f53a08840d4a27a0d02be180a8740e_7)</u>

**PART I. FINANCIAL INFORMATION (CONTINUED)**

**Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (continued)**

***Overview***

As of June 30, 2025, we consolidated eight office complexes, encompassing, in the aggregate, approximately 2.8 million rentable square feet, one office property held for sale, one residential home portfolio consisting of 2,078 residential homes, one apartment properties containing 317 units, one hotel property with 196 rooms, three investments in undeveloped land with approximately 247 developable acres, one office/retail development property, held an interest in two investments in unconsolidated entities and one investment in real estate equity securities.

Our results of operations for the three and six months ended June 30, 2025, may not be indicative of those in future periods due to acquisition and disposition activities. Additionally, the occupancy in our office complexes has not been stabilized. As of June 30, 2025, our office complexes were collectively 64% occupied, our residential home portfolio was 92% occupied and our apartment property was 90% occupied. However, due to the amount of near-term lease expirations, we do not put significant emphasis on quarterly changes in occupancy (positive or negative) in the short run. Our underwriting and valuations are generally more sensitive to "terminal values" that may be realized upon the disposition of the assets in the portfolio and less sensitive to ongoing cash flows generated by the portfolio in the years leading up to an eventual sale. There are no guarantees that the occupancy of our assets will increase, or that we will recognize a gain on the sale of our assets. In general, we expect that our income and expenses related to our portfolio will increase in future periods as a result of leasing additional space and acquiring additional assets but decrease due to disposition activity.

*<u>Comparison of the three months ended June 30, 2025 versus the three months ended June 30, 2024</u>*

The following table provides summary information about our results of operations for the three months ended June 30, 2025 and 2024 (dollar amounts in thousands):

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Three Months Ended June 30,**  | **Three Months Ended June 30,**  | **Increase (Decrease)** | **Percentage Change** | **$ Change Due to Acquisitions/Dispositions** <sup>(1)</sup> | **$ Change Due to** <br>**Investments Held Throughout** <br>**Both Periods** <sup>(2)</sup> |
| | **2025** | **2024** | **Increase (Decrease)** | **Percentage Change** | **$ Change Due to Acquisitions/Dispositions** <sup>(1)</sup> | **$ Change Due to** <br>**Investments Held Throughout** <br>**Both Periods** <sup>(2)</sup> |
| &nbsp;&nbsp;&nbsp;&nbsp;Rental income | $28772 | $30612 | $(1840) | (6)% | $(2307) | $467 |
| &nbsp;&nbsp;&nbsp;&nbsp;Hotel revenues | 1737 | 2235 | (498) | (22)% |  | (498) |
| &nbsp;&nbsp;&nbsp;&nbsp;Other operating income | 960 | 962 | (2) | —% |  | (2) |
| &nbsp;&nbsp;&nbsp;&nbsp;Operating, maintenance, and management | 11591 | 11183 | 408 | 4% | (518) | 926 |
| &nbsp;&nbsp;&nbsp;&nbsp;Real estate taxes and insurance | 5420 | 6556 | (1136) | (17)% | (481) | (655) |
| &nbsp;&nbsp;&nbsp;&nbsp;Hotel expenses | 1637 | 1784 | (147) | (8)% |  | (147) |
| &nbsp;&nbsp;&nbsp;&nbsp;Asset management fees to affiliate | 2739 | 3872 | (1133) | (29)% | (234) | (899) |
| &nbsp;&nbsp;&nbsp;&nbsp;General and administrative expenses | 3361 | 4541 | (1180) | (26)% |  | (1180) |
| &nbsp;&nbsp;&nbsp;&nbsp;Foreign currency transaction loss (gain), net | 30141 | (7368) | 37509 | (509)% | n/a | n/a |
| &nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 10366 | 10380 | (14) | —% | (859) | 845 |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest expense, net | 17151 | 18008 | (857) | (5)% | (1403) | 546 |
| &nbsp;&nbsp;&nbsp;&nbsp;Impairment charges on real estate and related intangibles | 51979 | 21026 | 30953 | 147% | n/a | n/a |
| &nbsp;&nbsp;&nbsp;&nbsp;Loss from unconsolidated entities, net | (6769) | (8653) | 1884 | (22)% |  | 1884 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other income | 234 | 283 | (49) | (17)% | n/a | n/a |
| &nbsp;&nbsp;&nbsp;&nbsp;Gain (loss) on real estate equity securities, net | 962 | (1282) | 2244 | (175)% | 127 | 2117 |
| &nbsp;&nbsp;&nbsp;&nbsp;Gain on sale of real estate | 1080 | 167 | 913 | 547% | 913 | n/a |

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<sup>(1)</sup> Represents the dollar amount increase (decrease) for the three months ended June 30, 2025, compared to the three months ended June 30, 2024 related to real estate and real estate-related investments acquired or disposed on or after July 1, 2024.

<sup>(2)</sup> Represents the dollar amount increase (decrease) for the three months ended June 30, 2025, compared to the three months ended June 30, 2024 with respect to real estate and real estate-related investments owned by us during the entirety of both periods presented.

Rental income decreased to $28.8 million for the three months ended June 30, 2025, from $30.6 million for the three months ended June 30, 2024, primarily due to the disposition of 76 residential homes and one apartment property, which resulted in a decrease in rental income of approximately $2.3 million. The occupancy rates and income for properties held throughout both periods remained consistent for the three months ended June 30, 2025 and 2024, except for a slight decrease in occupancy rates for office complexes. We expect rental income to increase in future periods as a result of new lease activity, but to decrease to the extent we dispose of properties or from naturally expiring leases.

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<u>[**Table of Contents**](#ia5f53a08840d4a27a0d02be180a8740e_7)</u>

**PART I. FINANCIAL INFORMATION (CONTINUED)**

**Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (continued)**

Operating, maintenance, and management expenses increased to $11.6 million for the three months ended June 30, 2025, from $11.2 million for the three months ended June 30, 2024. The increase was primarily due to $1.0 million of asset management fees related to PORT being recognized in operating, maintenance, and management due to the advisor for PORT no longer being an affiliate as of December 2024 and partially offset by decreases of $0.5 million related to dispositions.

Foreign currency transaction loss was $30.1 million for the three months ended June 30, 2025 and a $7.4 million foreign currency transaction gain for the three months ended June 30, 2024, primarily due to the outstanding Series Bonds being denominated in Israeli new shekel and experienced unfavorable exchange rates during the three months ended June 30, 2025. We expect to recognize foreign transaction gains and losses due to changes in the value of the U.S. dollar relative to the Israeli new shekel, which may be offset with foreign currency derivative hedges in future periods, and changes in the level of foreign currency exposure.

Interest expense, net decreased to $17.2 million for the three months ended June 30, 2025, from $18.0 million for the three months ended June 30, 2024, primarily due to the decrease in the weighted-average variable rate to 6.6% as of June 30, 2025, from 8.2% as of June 30, 2024. The decrease in the weighted-average variable rate is primarily due to a decrease in the SOFR rates. Additionally, the weighted-average fixed rate decreased to 5.2% as of June 30, 2025, from 5.6% as of June 30, 2024, primarily due to the partial repayment of Series C bonds. Our interest expense in future periods will vary based on interest rates on variable and fixed rate debt, the amount of interest capitalized, level of future borrowings, interest rate derivative instruments, and the impact of refinancing efforts.

Impairment charges on real estate and related intangibles increased to $52.0 million for the three months ended June 30, 2025 from $21.0 million for the three months ended June 30, 2024. We impaired six strategic opportunistic properties and one hotel during the three months ended June 30, 2025 due to declines in market conditions and projected cash flows, changes in sales comparisons, and quoted prices. We impaired two strategic opportunistic properties during the three months ended June 30, 2024 due to declines in market conditions and projected cash flows.

*<u>Comparison of the six months ended June 30, 2025 versus the six months ended June 30, 2024</u>*

The following table provides summary information about our results of operations for the six months ended June 30, 2025 and 2024 (dollar amounts in thousands):

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Six Months Ended June 30,**  | **Six Months Ended June 30,**  | **Increase (Decrease)** | **Percentage Change** | **$ Change Due to Acquisitions/ Dispositions** <sup>(1)</sup> | **$ Change Due to** <br>**Investments Held Throughout** <br>**Both Periods** <sup>(2)</sup> |
| | **2025** | **2024** | **Increase (Decrease)** | **Percentage Change** | **$ Change Due to Acquisitions/ Dispositions** <sup>(1)</sup> | **$ Change Due to** <br>**Investments Held Throughout** <br>**Both Periods** <sup>(2)</sup> |
| &nbsp;&nbsp;&nbsp;&nbsp;Rental income | $57018 | $61822 | $(4804) | (8)% | $(4682) | $(122) |
| &nbsp;&nbsp;&nbsp;&nbsp;Hotel revenues | 4622 | 5039 | (417) | (8)% |  | (417) |
| &nbsp;&nbsp;&nbsp;&nbsp;Other operating income | 1935 | 1950 | (15) | (1)% |  | (15) |
| &nbsp;&nbsp;&nbsp;&nbsp;Operating, maintenance, and management | 23611 | 22086 | 1525 | 7% | (1084) | 2609 |
| &nbsp;&nbsp;&nbsp;&nbsp;Real estate taxes and insurance | 10903 | 13031 | (2128) | (16)% | (948) | (1180) |
| &nbsp;&nbsp;&nbsp;&nbsp;Hotel expenses | 3373 | 3652 | (279) | (8)% |  | (279) |
| &nbsp;&nbsp;&nbsp;&nbsp;Asset management fees to affiliate | 5396 | 7974 | (2578) | (32)% | (466) | (2112) |
| &nbsp;&nbsp;&nbsp;&nbsp;General and administrative expenses | 6211 | 7793 | (1582) | (20)% |  | (1582) |
| &nbsp;&nbsp;&nbsp;&nbsp;Foreign currency transaction loss (gain), net | 24157 | (11280) | 35437 | (314)% | n/a | n/a |
| &nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 20048 | 21129 | (1081) | (5)% | (1706) | 625 |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest expense, net | 33294 | 34782 | (1488) | (4)% | (2698) | 1210 |
| &nbsp;&nbsp;&nbsp;&nbsp;Impairment charges on real estate and related intangibles | 51979 | 60291 | (8312) | (14)% | n/a | n/a |
| &nbsp;&nbsp;&nbsp;&nbsp;Loss from unconsolidated entities, net | (14266) | (16730) | 2464 | (15)% |  | 2464 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other income | 1016 | 738 | 278 | 38% | n/a | n/a |
| &nbsp;&nbsp;&nbsp;&nbsp;Gain (loss) on real estate equity securities, net | 962 | (16632) | 17594 | (106)% | 1168 | 16426 |
| &nbsp;&nbsp;&nbsp;&nbsp;Gain on sale of real estate | 1244 | 619 | 625 | 101% | 625 | n/a |
| &nbsp;&nbsp;&nbsp;&nbsp;Income tax provision | (830) |  | (830) | 100% | 3662 | n/a |

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_____________________

<sup>(1)</sup> Represents the dollar amount increase (decrease) for the six months ended June 30, 2025 compared to the six months ended June 30, 2024 related to real estate and real estate-related investments acquired or disposed on or after July 1, 2024.

<sup>(2)</sup> Represents the dollar amount increase (decrease) for the six months ended June 30, 2025 compared to the six months ended June 30, 2024 with respect to real estate and real estate-related investments owned by us during the entirety of both periods presented.

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<u>[**Table of Contents**](#ia5f53a08840d4a27a0d02be180a8740e_7)</u>

**PART I. FINANCIAL INFORMATION (CONTINUED)**

**Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (continued)**

Rental income decreased to $57.0 million for the six months ended June 30, 2025, from $61.8 million for the six months ended June 30, 2024, primarily due to the disposition of 76 residential homes and one apartment property, which resulted in a decrease in rental income of approximately $4.7 million. The occupancy rates and income for properties held throughout both periods remained consistent for the six months ended June 30, 2025 and 2024, except for a slight decrease in occupancy rates for office complexes. We expect rental income to increase in future periods as a result of new lease activity, but to decrease to the extent we dispose of properties or from naturally expiring leases.

Operating, maintenance, and management expenses increased to $23.6 million for the six months ended June 30, 2025, from $22.1 million for the six months ended June 30, 2024. The increase was primarily due to $2.0 million of asset management fees related to PORT being recognized in operating, maintenance, and management due to the advisor for PORT no longer being an affiliate as of December 2024 and partially offset by decreases of $1.1 million related to dispositions.

Foreign currency transaction loss was $24.2 million for the six months ended June 30, 2025 and a $11.3 million foreign currency transaction gain the six months ended June 30, 2024, primarily due to the outstanding Series Bonds being denominated in Israeli new shekels and more favorable exchange rates during the six months ended June 30, 2025. We expect to recognize foreign transaction gains and losses due to changes in the value of the U.S. dollar relative to the Israeli new shekel, which may be offset with foreign currency derivative hedges in future periods, and changes in the level of foreign currency exposure.

Interest expense, net decreased to $33.3 million for the six months ended June 30, 2025, from $34.8 million for the six months ended June 30, 2024, primarily due to the decrease in the weighted-average variable rate to 6.6% as of June 30, 2025, from 8.2% as of June 30, 2024. The decrease in the weighted-average variable rate is primarily due to a decrease in the SOFR rates. Additionally, the weighted-average fixed rate decreased to 5.2% as of June 30, 2025, from 5.6% as of June 30, 2024, primarily due to the partial repayment of Series C bonds. Our interest expense in future periods will vary based on interest rates on variable and fixed rate debt, the amount of interest capitalized, level of future borrowings, interest rate derivative instruments, and the impact of refinancing efforts.

Impairment charges on real estate and related intangibles decreased to $52.0 million for the six months ended June 30, 2025 from $60.3 million for the six months ended June 30, 2024. We impaired six strategic opportunistic properties and one hotel during the six months ended June 30, 2025 due to declines in market conditions and projected cash flows, changes in sales comparisons, and quoted prices. We impaired three strategic opportunistic properties and one hotel during the six months ended June 30, 2024 due to declines in market conditions and projected cash flows.

**Funds from Operations, Modified Funds from Operations and Adjusted Modified Funds from Operations**

We believe that funds from operations ("FFO") is a beneficial indicator of the performance of an equity REIT. We compute FFO in accordance with the current National Association of Real Estate Investment Trusts ("NAREIT") definition. FFO represents net income, excluding gains and losses from sales of real estate assets (which can vary among owners of identical assets in similar conditions based on historical cost accounting and useful-life estimates), impairment losses on real estate assets, depreciation and amortization of real estate assets, and adjustments for unconsolidated partnerships and joint ventures. In addition, we elected the option to exclude mark-to-market changes in value recognized on equity securities in the calculation of FFO. We believe FFO facilitates comparisons of operating performance between periods and among other REITs. However, our computation of FFO may not be comparable to other REITs that do not define FFO in accordance with the NAREIT definition or that interpret the current NAREIT definition differently than we do. Our management believes that historical cost accounting for real estate assets in accordance with U.S. Generally Accepted Accounting Principles ("GAAP") implicitly assumes that 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 and analysts have considered the presentation of operating results for real estate companies that use historical cost accounting to be insufficient by themselves. As a result, we believe that the use of FFO, together with the required GAAP presentations, provides a more complete understanding of our performance relative to our competitors and provides a more informed and appropriate basis on which to make decisions involving operating, financing, and investing activities.

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<u>[**Table of Contents**](#ia5f53a08840d4a27a0d02be180a8740e_7)</u>

**PART I. FINANCIAL INFORMATION (CONTINUED)**

**Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (continued)**

Changes in accounting rules have resulted in a substantial increase in the number of non-operating and non-cash items included in the calculation of FFO. As a result, our management also uses modified funds from operations ("MFFO") as an indicator of our ongoing performance. MFFO excludes from FFO: acquisition fees and expenses (to the extent that such fees and expenses have been recorded as operating expenses); adjustments related to contingent purchase price obligations; amounts relating to straight-line rents and amortization of above- and below-market intangible lease assets and liabilities; accretion of discounts and amortization of premiums on debt investments; amortization of closing costs relating to debt investments; impairments of real estate-related investments; mark-to-market adjustments included in net income; and gains or losses included in net income for the extinguishment or sale of debt or hedges. We compute MFFO in accordance with the definition of MFFO included in the practice guideline issued by the Institute for Portfolio Alternatives ("IPA") in November 2010 as interpreted by management. Our computation of MFFO may not be comparable to other REITs that do not compute MFFO in accordance with the current IPA definition or that interpret the current IPA definition differently than we do.

In addition, our management uses an adjusted MFFO ("Adjusted MFFO") as an indicator of our ongoing performance. Adjusted MFFO provides adjustments to reduce MFFO related to operating expenses that are capitalized with respect to certain of our investments in undeveloped land.

We believe that MFFO and Adjusted MFFO are helpful as measures of ongoing operating performance because they exclude costs that management considers more reflective of investing activities and other non-operating items included in FFO. Management believes that excluding acquisition costs, prior to our early adoption of ASU No. 2017-01 on January 1, 2017, from MFFO and Adjusted MFFO provides investors with supplemental performance information that is consistent with management's analysis of the operating performance of the portfolio over time, including periods after our acquisition stage. MFFO and Adjusted MFFO also exclude non-cash items such as straight-line rental revenue. Additionally, we believe that MFFO and Adjusted MFFO provide investors with supplemental performance information that is consistent with the performance indicators and analysis used by management, in addition to net income and cash flows from operating activities as defined by GAAP, to evaluate the sustainability of our operating performance. MFFO provides comparability in evaluating the operating performance of our portfolio with other non-traded REITs which typically have limited lives with short and defined acquisition periods and targeted exit strategies. MFFO, or an equivalent measure, is routinely reported by non-traded REITs, and we believe often used by analysts and investors for comparison purposes.

FFO, MFFO and Adjusted MFFO are non-GAAP financial measures and do not represent net income as defined by GAAP. Net income as defined by GAAP is the most relevant measure in determining our operating performance because FFO, MFFO and Adjusted MFFO include adjustments that investors may deem subjective, such as adding back expenses such as depreciation and amortization and the other items described above. Accordingly, FFO, MFFO and Adjusted MFFO should not be considered as alternatives to net income as an indicator of our current and historical operating performance. In addition, FFO, MFFO and Adjusted MFFO do not represent cash flows from operating activities determined in accordance with GAAP and should not be considered an indication of our liquidity. We believe FFO, MFFO and Adjusted MFFO, in addition to net income and cash flows from operating activities as defined by GAAP, are meaningful supplemental performance measures.

Although MFFO includes other adjustments, the exclusion of straight-line rent, the amortization of above- and below market leases, amortization of premium or discount on bond and notes payable, mark-to-market foreign currency transaction adjustments and extinguishment of debt are the most significant adjustments for the periods presented. We have excluded these items based on the following economic considerations:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Adjustments for straight-line rent.* These are adjustments to rental revenue as required by GAAP to recognize contractual lease payments on a straight-line basis over the life of the respective lease. We have excluded these adjustments in our calculation of MFFO to more appropriately reflect the current economic impact of our in-place leases, while also providing investors with a useful supplemental metric that addresses core operating performance by removing rent we expect to receive in a future period or rent that was received in a prior period;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Amortization of above- and below-market leases.* Similar to depreciation and amortization of real estate assets and lease related costs that are excluded from FFO, GAAP implicitly assumes that the value of intangible lease assets and liabilities diminishes predictably over time and requires that these charges be recognized currently in revenue. Since market lease rates in the aggregate have historically risen or fallen with local market conditions, management believes that by excluding these charges, MFFO provides useful supplemental information on the realized economics of the real estate;

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<u>[**Table of Contents**](#ia5f53a08840d4a27a0d02be180a8740e_7)</u>

**PART I. FINANCIAL INFORMATION (CONTINUED)**

**Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (continued)**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Amortization of premium and discount on notes and bonds payable*. These are net adjustments to interest expense as required by GAAP to recognize notes and bonds payable discount and premiums on a straight-line basis over the life of the respective notes and bonds payable. We have excluded these adjustments in our calculation of MFFO to appropriately reflect the current economic impact of our bond and notes payable and related interest expense;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• *Unrealized gain or loss from interest rate caps.* These adjustments include unrealized gains from mark-to-market adjustments on interest rate caps. The change in fair value of interest rate caps not designated as a hedge are non-cash adjustments recognized directly in earnings and are included in interest expense. We have excluded these adjustments in our calculation of MFFO to more appropriately reflect the economic impact of our interest rate cap agreements; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*• Mark-to-market foreign currency transaction adjustments.* The U.S. Dollar is our functional currency. Transactions denominated in currency other than our functional currency are recorded upon initial recognition at the exchange rate on the date of the transaction. After initial recognition, monetary assets and liabilities denominated in foreign currency are remeasured at each reporting date into the foreign currency at the exchange rate on that date. In addition, we have entered into foreign currency collars and foreign currency options that results in a foreign currency transaction adjustment. These amounts can increase or reduce net income. We exclude them from MFFO to more appropriately present the ongoing operating performance of our real estate investments on a comparative basis.

Adjusted MFFO includes adjustments to reduce MFFO primarily related to income tax provision, as well as real estate taxes, property insurance, and financing costs which are capitalized with respect to certain of our investments in undeveloped land.

Our calculation of FFO, which we believe is consistent with the calculation of FFO as defined by NAREIT, is presented in the following table, along with our calculations of MFFO and Adjusted MFFO, for the three and six months ended June 30, 2025 and 2024 (in thousands). No conclusions or comparisons should be made from the presentation of these periods.

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| | | | | |
|:---|:---|:---|:---|:---|
| | **For the Three Months Ended June 30,**  | **For the Three Months Ended June 30,**  | **For the Six Months Ended June 30,**  | **For the Six Months Ended June 30,**  |
| | **2025** | **2024** | **2025** | **2024** |
| Net loss attributable to common stockholders | $(106634) | $(44221) | $(126433) | $(120694) |
| &nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 10366 | 10380 | 20048 | 21129 |
| &nbsp;&nbsp;&nbsp;&nbsp;Impairment charges on real estate and related intangibles | 51979 | 21026 | 51979 | 60291 |
| &nbsp;&nbsp;&nbsp;&nbsp;Gain on sale of real estate | (1080) | (167) | (1244) | (619) |
| &nbsp;&nbsp;&nbsp;&nbsp;(Gain) loss on real estate equity securities, net | (962) | 1282 | (962) | 16632 |
| &nbsp;&nbsp;&nbsp;&nbsp;Adjustments for noncontrolling interests <sup>(1)</sup> | (670) | (1345) | (839) | (1835) |
| &nbsp;&nbsp;&nbsp;&nbsp;Adjustments for investments in unconsolidated entities <sup>(2)</sup> | 1068 | 829 | 2089 | 2664 |
| FFO attributable to common stockholders | (45933) | (12216) | (55362) | (22432) |
| &nbsp;&nbsp;&nbsp;&nbsp;Straight-line rent and amortization of above- and below-market leases | 561 | (356) | 867 | (491) |
| &nbsp;&nbsp;&nbsp;&nbsp;Amortization of premium and discount on notes and bonds payable, net | 576 | 895 | 1197 | 1845 |
| &nbsp;&nbsp;&nbsp;&nbsp;Unrealized loss (gain) on interest rate caps | 1 | (169) | 7 | (417) |
| &nbsp;&nbsp;&nbsp;&nbsp;Foreign currency transaction loss (gain), net | 30141 | (7368) | 24157 | (11280) |
| &nbsp;&nbsp;&nbsp;&nbsp;Adjustments for noncontrolling interests <sup>(1)</sup> | 16 | 7 | 31 | 4 |
| &nbsp;&nbsp;&nbsp;&nbsp;Adjustments for investments in unconsolidated entities <sup>(2)</sup> | 375 | 737 | 980 | 1259 |
| MFFO attributable to common stockholders | (14263) | (18470) | (28123) | (31512) |
| &nbsp;&nbsp;&nbsp;&nbsp;Other capitalized operating expenses <sup>(3)</sup> | (623) | (1365) | (1000) | (2667) |
| &nbsp;&nbsp;&nbsp;&nbsp;Income tax provision |  |  | (830) |  |
| Adjusted MFFO attributable to common stockholders | $(14886) | $(19835) | $(29953) | $(34179) |

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<sup>(1)</sup> Reflects adjustments to eliminate the noncontrolling interest holders' share of the adjustments to convert our net income (loss) attributable to common stockholders to FFO, MFFO and Adjusted MFFO.

<sup>(2)</sup> Reflects adjustments to add back our noncontrolling interest share of the adjustments to convert our net income (loss) attributable to common stockholders to FFO, MFFO and Adjusted MFFO for our equity investments in unconsolidated entities.

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<u>[**Table of Contents**](#ia5f53a08840d4a27a0d02be180a8740e_7)</u>

**PART I. FINANCIAL INFORMATION (CONTINUED)**

**Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (continued)**

<sup>(3)</sup> Reflects real estate taxes, property insurance and financing costs capitalized with respect to certain of our investments in undeveloped land and unconsolidated entity. During the periods in which we are incurring costs necessary to bring these investments to their intended use, certain normal recurring operating costs are capitalized in accordance with GAAP and not reflected in our net income (loss), FFO and MFFO.

FFO, MFFO and Adjusted MFFO may also be used to fund all or a portion of certain capitalizable items that are excluded from FFO, MFFO and Adjusted MFFO, such as tenant improvements, building improvements and deferred leasing costs. We expect FFO, MFFO and Adjusted MFFO to improve in future periods to the extent that we continue to lease up vacant space and acquire additional assets. We expect FFO, MFFO and Adjusted MFFO to decrease as a result of dispositions.

**Critical Accounting Policies**

Our consolidated interim financial statements have been prepared in accordance with GAAP and in conjunction with the rules and regulations of the SEC. The preparation of our financial statements requires significant management judgments and assumptions, requires estimates about matters that are inherently uncertain and which are important for understanding and evaluating our reported financial results. These judgments will affect the reported amounts of assets and liabilities and our disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. With different estimates or assumptions, materially different amounts could be reported in our 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. A discussion of the accounting policies that management considers critical in that they involve significant management judgments, assumptions and estimates is included in our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC. There have been no significant changes to our policies during 2025.

**Subsequent Events**

We evaluate subsequent events up until the date the consolidated financial statements are issued.

**Whitehawk Loan and Series C Bonds Payoff**

In July 2025, we entered into a credit agreement with Whitehawk Capital Partners LP for a loan of $80.0 million. The loan has an annual interest rate of one-month SOFR plus 6.50% with a SOFR floor of 3.50% and a maturity date of the earlier of December 1, 2027 or upon disposition of securitized Park Highlands land. The December 1, 2027 maturity date may be extended to March 1, 2028, assuming no event of default. The loan is secured by our undeveloped lands in Park Highlands and Richardson and 210 West 31st Street, a development property. As a result of entering into the loan, we paid all outstanding Series C bonds of 142.0 million Israeli new shekels ($42.2 million as of July 29, 2025) and was subject to a 5.0 million Israeli new shekels ($1.5 million as of July 29, 2025) early pay interest penalty.

**Real Estate Sale**

In July 2025, we sold Georgia 400 Center, an office property, for gross sale proceeds of $39.1 million, before closing costs and credits. In connection with the sale, we repaid $39.5 million of the outstanding principal due under the secured mortgage loan. The purchaser was not affiliated with us or our advisor.

**Item 3. Quantitative and Qualitative Disclosures about Market Risk**

**Foreign Currency, Interest Rate and Financial Market Risk**

Certain transactions, assets, and liabilities are exposed to foreign currency risk. We monitor our foreign currency exposures to maximize the economic effectiveness of our foreign currency positions, including hedges. Principal currency exposure is Israeli new shekel; in particular, we are exposed to the effects of foreign currency changes in Israel with respect to the bonds issued to investors in Israel.

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<u>[**Table of Contents**](#ia5f53a08840d4a27a0d02be180a8740e_7)</u>

**PART I. FINANCIAL INFORMATION (CONTINUED)**

**Item 3. Quantitative and Qualitative Disclosures about Market Risk**

In addition, we are exposed to the effects of interest rate changes as a result of borrowings used to maintain liquidity, fund distributions and to fund the refinancing of our real estate investment portfolio and operations. We may also be exposed to the effects of changes in interest rates as a result of the acquisition and origination of mortgage, bonds, and other loans and the acquisition of real estate securities. Our profitability and the value of our investment portfolio may be adversely affected during any period as a result of interest rate changes. Our interest rate risk management objectives are to limit the impact of interest rate changes on earnings, prepayment penalties and cash flows and to lower overall borrowing costs. We may manage interest rate risk by maintaining a ratio of fixed rate, long-term debt such that floating rate exposure is kept at an acceptable level. We may also utilize a variety of financial instruments, including interest rate caps, floors, and swap agreements, in order to limit the effects of changes in interest rates on our operations. Additionally, certain of these strategies may reduce the funds available for payments to holders of our common stock.

In addition, our profitability and the value of our investment portfolio may be adversely affected during any period as a result of foreign currency changes. In order to limit the effects of changes in foreign currency on our operations, we may utilize a variety of foreign currency hedging strategies such as cross currency swaps, forward contracts, puts or calls. When we use these types of derivatives to hedge the risk of interest-earning assets or interest-bearing liabilities, we may be subject to certain risks, including the risk that losses on a hedge position will reduce the funds available for payments to holders of our common stock and the risk that the losses may exceed the amount we invested in the instruments. Additionally, certain of these strategies may cause us to fund a margin account periodically to offset changes in foreign currency rates which may also reduce the funds available for payments to holders of our common stock.

As of June 30, 2025, we held 40.2 million Israeli new shekels and 10.4 million Israeli new shekels in cash and restricted cash, respectively. In addition, as of June 30, 2025, we had Series Bonds outstanding and the related interest payable in the amounts of 1.1 billion Israeli new shekels and 27.3 million Israeli new shekels, respectively. Foreign currency exchange rate risk is the possibility that our financial results could be better or worse than planned because of changes in foreign currency exchange rates. Based solely on the remeasurement for the six months ended June 30, 2025, if foreign currency exchange rates were to increase or decrease by 10%, our net income would increase or decrease by approximately $33.1 million for the same period. The foreign currency transaction income or loss as a result of the change in foreign currency exchange rates does not take into account any gains or losses on our foreign currency collar as a result of such change, which would reduce our foreign currency exposure.

We borrow funds at a combination of fixed and variable rates. Interest rate fluctuations will generally not affect our future earnings or cash flows on our fixed rate debt unless such instruments mature or are otherwise terminated. However, interest rate changes will affect the fair value of our fixed rate instruments. As of June 30, 2025, the fair value of our bonds was $272.6 million and the outstanding principal balance was $331.3 million. The fair value estimates of the Series Bonds were calculated based on the Tel Aviv Stock Exchange for each bond. As of June 30, 2025, excluding the Series Bonds, the fair value of our fixed rate debt was $183.0 million and the outstanding principal balance of our fixed rate debt was $190.2 million. The fair value estimate of our fixed rate debt, excluding the Series Bonds, was calculated using a discounted cash flow analysis utilizing rates we would expect to pay for debt of a similar type and remaining maturity if the loans were originated as of June 30, 2025. As we expect to hold our fixed rate instruments to maturity and the amounts due under such instruments would be limited to the outstanding principal balance and any accrued and unpaid interest, we do not expect that fluctuations in interest rates, and the resulting changes in fair value of our fixed rate instruments, would have a significant impact on our operations.

Conversely, movements in interest rates on variable rate debt would change our future earnings and cash flows, but would not significantly affect the fair value of those instruments. However, changes in required risk premiums would result in changes in the fair value of floating rate instruments. Based on interest rates as of June 30, 2025, if interest rates were 100 basis points higher or lower during the 12 months ending June 30, 2025, interest expense on our variable rate debt would increase or decrease by $3.6 million.

The weighted-average interest rates of our fixed rate debt and variable rate debt as of June 30, 2025 were 5.2% and 6.6%, respectively. The interest rate and weighted-average interest rate represent the actual interest rate in effect as of June 30, 2025 (consisting of the contractual interest rate and the effect of contractual floor rates, if applicable), using interest rate indices as of June 30, 2025 where applicable.

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<u>[**Table of Contents**](#ia5f53a08840d4a27a0d02be180a8740e_7)</u>

**PART I. FINANCIAL INFORMATION (CONTINUED)**

**Item 3. Quantitative and Qualitative Disclosures about Market Risk (continued)**

We are exposed to financial market risk with respect to our real estate equity securities. Financial market risk is the risk that we will incur economic losses due to adverse changes in our real estate equity security prices. Our exposure to changes in real estate equity security prices is a result of our investment in these types of securities. Market prices are subject to fluctuation and, therefore, the amount realized in the subsequent sale of an investment may significantly differ from the reported market value. Fluctuation in the market prices of a real estate equity security may result from any number of factors, including perceived changes in the underlying fundamental characteristics of the issuer, the relative price of alternative investments, interest rates, default rates and general market conditions. In addition, amounts realized in the sale of a particular security may be affected by the relative quantity of the real estate equity security being sold. As of June 30, 2025, we owned real estate equity securities with a book value of $14.1 million. Based solely on the prices of real estate equity securities as of June 30, 2025, if prices were to increase or decrease by 10%, our net income would increase or decrease by approximately $1.4 million.

**Item 4. Controls and Procedures**

**Disclosure Controls and Procedures**

As of the end of the period covered by this report, management, including our principal executive officer and principal financial officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures. Based upon, and as of the date of, the evaluation, our principal executive officer and principal financial officer concluded that the disclosure controls and procedures were effective as of the end of the period covered by this report to ensure that information required to be disclosed in the reports we file and submit under the Securities Exchange Act of 1934, as amended (the "Exchange Act") is recorded, processed, summarized and reported as and when required. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports we file and submit under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and our principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

**Internal Control Over Financial Reporting**

There have been no changes in our internal control over financial reporting that occurred during the quarter ended June 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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<u>[**Table of Contents**](#ia5f53a08840d4a27a0d02be180a8740e_7)</u>

**PART II. OTHER INFORMATION**

**Item 1. Legal Proceedings**

None.

**Item 1A. Risk Factors**

In addition to the risk factors discussed below, please see the risk factors in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2024 and Part II, Item 1A of our Quarterly Report on Form 10-Q for the period ended March 31, 2025, each as filed with the SEC.

***We have substantial indebtedness maturing over the 12-month period ending June 30, 2026. Considering the current real estate lending environment, this raises substantial doubt as to our ability to continue as a going concern for at least one year from the date the financial statements are issued. If we are unable to repay, refinance or extend maturing debt, the lenders or bondholders may declare events of default and seek to foreclose on the underlying collateral. There is no assurance that we will be able to satisfy, refinance or extend the maturing debt, and even if we do, we may still be adversely affected if substantial principal paydowns are required.***

As of June 30, 2025, we had debt obligations in the aggregate principal amount of $874.7 million, with a weighted-average remaining term of 1.3 years. As of June 30, 2025, we had $554.2 million of debt obligations scheduled to mature over the period from July 1, 2025 through June 30, 2026, of which $71.8 million had available extension options if we comply with certain debt covenants that may include one or a combination of the following ratios: debt-to-value, debt yield, minimum equity requirements and debt service coverage. In order to satisfy obligations as they mature, we may: (i) utilize extension options (if available) in the respective loan agreements, (ii) make partial loan repayments to meet debt covenant requirements, (iii) seek to refinance or restructure certain debt instruments, (iv) sell real estate properties or equity securities to convert to cash to make principal payments, or (v) may negotiate a turnover of one or more secured properties back to the related mortgage lender and remit payment for any associated loan guarantee. There can be no assurances as to the certainty or timing of management's plans, as certain elements of management's plans are outside our control, including our ability to sell assets or successfully refinance or restructure certain of our debt obligations. If we are unable to meet loan compliance tests and/or repay, refinance or extend maturing mortgage loans, the lenders or bondholders may declare events of default and will have the right to sell or dispose of the collateral and/or enforce and collect the collateral securing the loans, which would negatively affect our results of operations, financial condition, cash flows, asset valuations and ability to continue as a going concern.

***Continued non-compliance with the minimum equity bond covenants and further bond rating downgrades may cause the Series B and Series D bonds to become due and payable.***

As of June 30, 2025, we had Series B and Series D bonds outstanding of $289.2 million and also as of June 30, 2025, we expect to be out of compliance for the following financial covenants for the Series B and Series D bonds: the consolidated equity capital covenant and the net adjusted financial debt ratio to the net CAP, as defined under the deed of trusts for the quarters ended June 30, 2025 and September 30, 2025. If we are out of compliance for two consecutive quarters, the Series B and Series D bonds may become due and payable. Additionally, the bonds have experienced recent downgrades in the bond ratings. In July 2025, S&P Global Ratings Maalot announced an update to the rating for the Series B and Series D bonds from to ilA to ilBBB. Further rating downgrades would constitute a covenant violation, if the Series B and Series D bonds drops lower than an ilBBB rating. This violation may also cause the Series B and Series D bonds to become due and payable. We may seek to obtain waivers for non-compliance of these covenants or negotiate with bondholders for more favorable terms. We may be unsuccessful in bondholders negotiations and it would severely impact our liquidity position.

**Item 2 Unregistered Sales of Equity Securities and Use of Proceeds** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a)During the period covered by this Form 10-Q, we did not sell any equity securities that were not registered under the Securities Act of 1933.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b)Not applicable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c)On July 16, 2024, our board of directors indefinitely suspended our share redemption program, effective July 30, 2024 due to our liquidity position. Accordingly, we did not redeem or repurchase any shares of our common stock during the six months ended June 30, 2025.

**Item 3. Defaults upon Senior Securities**

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**PART II. OTHER INFORMATION (CONTINUED)**

The Crown Pointe Mortgage Loan of $54.7 million matured on April 1, 2025. On April 21, 2025, we entered into a forbearance agreement for the Crown Pointe Mortgage Loan which provides for the acknowledgment of an existing event of default and the lender's agreement to forbear from exercising its remedies until September 30, 2025.

**Item 4. Mine Safety Disclosures**

None.

**Item 5. Other Information**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; c) During the quarterly period ended June 30, 2025, none of our directors or officers (as defined in Rule 16a-1(f) promulgated under the Exchange Act) adopted or terminated any "Rule 10b5-1 trading arrangement" or any "non-Rule 10b5-1 trading arrangement," as each term is defined in Item 408 of Regulation S-K.

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**PART II. OTHER INFORMATION (CONTINUED)**

**Item 6. Exhibits**

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| | |
|:---|:---|
| **Ex.** | **Description** |
| 3.1 | <u>[Second Articles of Amendment and Restatement, incorporated by reference to Exhibit 3.1 of the Company's Current Report on Form 8-K filed February 4, 2010](https://www.sec.gov/Archives/edgar/data/1452936/000119312510022005/dex31.htm)</u> |
| 3.2 | <u>[Articles of Amendment, incorporated by reference to Exhibit 3.1 of the Company's Current Report on Form 8-K filed November 1, 2019](https://www.sec.gov/Archives/edgar/data/1452936/000145293619000040/pacoaksor8k-exhibit31.htm)</u> |
| 3.3 | <u>[Articles of Amendment, incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed December 23, 2019](https://www.sec.gov/Archives/edgar/data/1452936/000145293619000062/pacoaksor8k-exhibit31.htm)</u> |
| 3.4 | <u>[Fourth Amended and Restated Bylaws, incorporated by reference to Exhibit 3.4 to the Company's Annual Report on Form 10-K filed March 30, 2023](https://www.sec.gov/Archives/edgar/data/1452936/000145293623000008/a34-sorxfourthamendedandre.htm)</u> |
| 4.1 | <u>[Statement regarding restrictions on transferability of shares of common stock (to appear on stock certificate or to be sent upon request and without charge to stockholders issued shares without certificates), incorporated by reference to Exhibit 4.2 to Pre-Effective Amendment No. 1 to the Company's Registration Statement on Form S-11, Commission File No. 333-156633 filed February 25, 2009](https://www.sec.gov/Archives/edgar/data/1452936/000119312509037385/dex42.htm)</u> |
| 4.2 | <u>[Fifth Amended and Restated Dividend Reinvestment Plan, incorporated by reference to Exhibit 4.2 to the Company's Quarterly Report on Form 10-Q filed May 14, 2015](https://www.sec.gov/Archives/edgar/data/1452936/000145293615000013/kbssorq12015exhibit42.htm)</u> |
| 10.1 | <u>[Amended and Restated Loan Agreement by and between Pacific Oak Strategic Opportunity Limited Partnership and Pacific Oak Capital Advisors, LLC, effective June 26, 2025](exhibit101posor-amendeda.htm)</u> |
| 10.2 | <u>[Amended and Restated Promissory Note by Pacific Oak Strategic Opportunity Limited Partnership, effective June 26, 2025](exhibit102posor-amendeda.htm)</u> |
| 10.3 | <u>[Pledge and Security Agreement by SOR PORT Holdings, LLC, effective June 26, 2025](exhibit103posor-pledgean.htm)</u> |
| 10.4 | <u>[Form of Indemnification Agreement](exhibit104formofindemnif.htm)</u> |
| 31.1 | <u>[Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](pacificoaksorq22025ex311.htm)</u> |
| 31.2 | <u>[Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](pacificoaksorq22025ex312.htm)</u> |

| 99.1 | <u>[Twelfth Amended and Restated Share Redemption Program, incorporated by reference to Exhibit 99.5 to the Company's Current Report on Form 8-K filed December 4, 2020](https://www.sec.gov/Archives/edgar/data/1452936/000145293620000102/posortwelfthamendedand.htm)</u> |
| 99.2 | <u>[Amendment No. 1 to the Twelfth Amended and Restated Share Redemption Program, incorporated by reference to Exhibit 99.1 to the Company's Current Report on Form 8-K filed August 6, 2021](https://www.sec.gov/Archives/edgar/data/1452936/000145293621000051/exhibit991amendmenttosrpau.htm)</u> |
| 101.INS | Inline XBRL Instance Document |
| 101.SCH | Inline XBRL Taxonomy Extension Schema |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase |
| 104 | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101). |

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**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

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| | | | |
|:---|:---|:---|:---|
| | | **PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC.** | **PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC.** |
| Date: | August 13, 2025 | By: | /S/ KEITH D. HALL&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; |
|  |  |  | **Keith D. Hall** |
|  |  |  | *Chief Executive Officer and Director* |
|  |  |  | (principal executive officer) |
| Date: | August 13, 2025 | By: | /S/ PETER MCMILLAN III |
|  |  |  | **Peter McMillan III** |
|  |  |  | *Chairman of the Board, President and Director* |
|  |  |  | (principal financial officer) |

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## Exhibit 10.1

![](exhibit101posor-amendeda001.jpg)

Execution Version 1 AMENDED AND RESTATED LOAN AGREEMENT THIS AMENDED AND RESTATED LOAN AGREEMENT (this "Agreement") is dated as of July 14, 2025 and deemed effective as of June 26, 2025 (the "Effective Date") by and between Pacific Oak Strategic Opportunity Limited Partnership, a Delaware limited partnership ("Borrower"), whose address is 3200 Park Center Drive, Suite 800, Costa Mesa, California 92626, and Pacific Oak Capital Advisors, LLC, a Delaware limited liability company ("Lender"), whose address is 3200 Park Center Drive, Suite 800, Costa Mesa, California 92626. R E C I T A L S WHEREAS, on or about February 26, 2025 (the "Original Closing Date") Lender made a loan to Borrower in the original principal amount of Eight Million and No/100ths Dollars ($8,000,000.00) (the "Initial Loan") pursuant to that certain Loan Agreement dated as of the Original Closing Date, between Borrower and Lender (the "Original Loan Agreement") and that certain Promissory Note dated as of the Original Closing Date, executed by Borrower in favor of Lender (the "Original Note," and together with the Original Loan Agreement and any other documents evidencing the Original Loan, collectively, the "Original Loan Documents"). WHEREAS, on June 26, 2025 (the "Loan Increase Date"), Lender made an additional loan in the original amount of TWO MILLION AND NO/100 DOLLARS ($2,000,000.00) (the "Loan Increase") to Borrower as evidenced by that certain Promissory Note dated as of the Loan Increase Date, as executed by Borrower and payable to the order of the Lender (the "Additional Note"). WHEREAS, Borrower and Lender desire to amend and restate the Original Loan Documents and the Additional Note to, among other things, decrease the interest rate and extend the Maturity Date of the Initial Loan, to fully document the Loan Increase and combine the Loan Increase with the Initial Loan, and to provide collateral for the combined loan as evidenced by the Security Agreement (defined below) (the "Loan Increase and Collateralization"). WHEREAS, Lender and Borrower are willing to execute this Agreement upon the terms and conditions hereinafter set forth. A G R E E M E N T NOW THEREFORE, in consideration of the mutual promises herein contained, and each intending to be legally bound thereby, each of Borrower and Lender hereby amend and restate the Original Loan Agreement in its entirety to, among other things, reflect the Loan Increase and Collateralization pursuant to the following terms and conditions: Exhibit 10.1 2 Section 1. DEFINITIONS 1.01 Definitions. The following terms, when used in this Agreement or the Promissory Note (as hereinafter defined) shall have the meanings set forth herein, and such meanings shall be applicable to the singular and plural form thereof giving effect to the numerical difference. "Default" means the occurrence of any event which would, with the passage of time, or the giving of notice, or both, constitute an Event of Default hereunder. "Default Rate" means the fixed rate of fifteen percent (15%) per annum. "Event of Default" means any of the events listed in Section 6.01 hereof. "GAAP" means generally accepted accounting principles as applied in the United States of America by the Financial Accounting Standards Board as may be amended from time to time. "Indebtedness" means, as to any Person: (i) all items arising from the borrowing of money that would be included in determining total liabilities as shown on the balance sheet of such Person; (ii) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments; (iii) all obligations of such Person to pay the deferred purchase price of property or services; (iv) all obligations of such Person as lessee under capital leases, (v) all obligations of such Person to purchase securities or other property which arise out of or in connection with the sale of the same or substantially similar securities or property; (vi) all obligations of such Person to purchase securities or other property which arise out of or in connection with the sale of the same or substantially similar securities or property; (vii) all obligations secured by any lien on property owned by such Person whether or not such obligations shall have been assumed; (viii) all guarantees and similar contingent liabilities with respect to obligations of others; (ix) all non-contingent obligations of such Person to reimburse any lender or other person in respect of amounts paid under a letter of credit or similar instrument; and (iv) all other obligations (including, without limitation, letters of credit) evidencing obligations to others. "Interest Rate" means the fixed rate of ten percent (10.0%) per annum. "Loan" means this Loan made hereunder and governed by the terms hereof, as may from time to time be amended, supplemented, restated or modified, in the original principal amount, in the aggregate, equal to Ten Million and No/100ths Dollars ($10,000,000.00). "Loan-to-Value Ratio" shall mean, as determined by Lender, the ratio of (i) the indebtedness under the Loan to (ii) the stock value of the PORT Assets pledged pursuant to the Pledge Agreement. "Material Adverse Effect" means (a) a material adverse change in, or a material adverse effect upon, the assets, business, properties, financial condition or results of operations of Borrower, (b) a material impairment of the ability of Borrower to 3 perform any of the Obligations under this Agreement or any of the Other Agreements or (c) a material adverse effect on (i) the legality, validity, binding effect or enforceability against Borrower of this Agreement or any of the Other Agreements, or (ii) the rights or remedies of Lender under this Agreement or any of the Other Agreements. "Maturity Date" means the earlier of (i) the closing date of any sale of any or all of the PORT Assets, (ii) June 30, 2028, or (iii) the date upon which a Lender declares the Obligations, or the Obligations become, due and payable after the occurrence of an Event of Default. "Obligations" means and include all loans, advances, debts, liabilities, obligations, covenants and duties owing to Lender from Borrower under the terms of this Agreement and the Other Agreements, present or future, whether or not evidenced by any note, guaranty or other instrument, whether arising by reason of an extension of credit, opening of a letter of credit, loan, guaranty, indemnification or in any other manner, whether direct or indirect (including those acquired by assignment), absolute or contingent, due or to become due, now existing or hereafter arising and however acquired. The term includes, without limitation, all interest, charges, out of pocket or other expenses, fees, and any other sums chargeable to Borrower under this Agreement or any of the Other Agreements with Borrower. The term further includes, without limitation, all costs and expenses of attorneys engaged by Lender, including reasonable local counsel fees and costs and expenses incurred by paralegals and other staff employed by such attorneys, and further, the reasonable fees, costs and expenses of appraisers, consultants, accountants or other professionals engaged in connection with the drafting and preparation of this Agreement and the Other Agreements, and the enforcement and defense of this Agreement, the Other Agreements or the relationships and security interest created hereunder and thereunder, or the collection of the Obligations. "Other Agreements" means all agreements, instruments and documents, as each may from time to time be amended, supplemented, restated or modified, including, without limitation, the Promissory Note, the Security Agreement, and all other notes, powers of attorney, consents, assignments, contracts, letters of credit, notices, leases, financing statements, applications and all other written matter heretofore, now or hereafter executed by or on behalf of Borrower and delivered to Lender, in connection with and limited to the Loan, the provisions of which are incorporated herein by reference. "Person" means any individual, sole proprietorship, general, limited or other partnership, joint venture, limited liability company, trust, unincorporated organization, association, corporation, institution, entity, party or government (whether national, federal, state, county, city, municipal or otherwise, including, without limitation, any instrumentality, division, agency, body, political subdivision or departments thereof). "Pledgor" means SOR PORT Holdings, LLC, a Delaware limited liability company. "PORT" means Pacific Oak Residential Trust, Inc., a Maryland real estate investment trust. 4 "PORT Assets" means any or all of the common shares of PORT and any new shares of PORT issued after the Effective Date. "Promissory Note" means that certain Amended and Restated Promissory Note dated an even date herewith, made by Borrower in favor of Lender, as may from time to time be amended, supplemented, restated or modified, in the original principal amount of Ten Million and No/100ths Dollars ($10,000,000.00) and evidencing the Loan. "REIT" means Pacific Oak Strategic Opportunity REIT, Inc., a Maryland corporation. "Security Agreement" means that certain Pledge and Security Agreement dated as of the Effective Date, by Pledgor in favor of Lender. "Transfer" means (i) any direct or indirect sale, conveyance, transfer, encumbrance, pledge, lease, or assignment, or the entry into any agreement to sell, convey, transfer, encumber, pledge, lease or assign, whether voluntary or involuntary by law or otherwise, whether or not for consideration or of record, of, on, in or affecting any direct or indirect interest in Borrower that would result in the REIT owning less than 51% of the indirect ownership interests of Borrower, or the REIT not having Control, directly or indirectly, of the day-to-day operations of Borrower. 1.02 General. Unless otherwise specifically defined in this Agreement, any accounting terms used in this Agreement which are not specifically defined shall have the meanings customarily given them in accordance with GAAP. Section 2. REPRESENTATIONS AND WARRANTIES To induce Lender to make the Loan, Borrower makes the following representations and warranties to Lender and all future holders of any part of the Obligations. Such representations and warranties shall be continuing and true and correct as of the Effective Date hereof and throughout the term of the Loan evidenced hereby. 2.01 Borrower Organization. Borrower is a limited partnership, duly formed, existing and in good standing under the laws of the State of Delaware, with full and adequate powers to carry on and conduct its business as presently conducted. Borrower is duly licensed or qualified in all foreign jurisdictions wherein the nature of its activities require such qualification or licensing. The exact legal name of Borrower is as set forth in the first paragraph of this Agreement, and Borrower does not currently conduct, nor has Borrower during the last five (5) years conducted, business under any other name or trade name. 2.02 Authorization; Validity. Borrower has full right, power and authority to enter into this Agreement, to make the borrowings and execute and deliver this Agreement and the Other Agreements as provided herein, and to perform all of its duties and obligations under this Agreement and the Other Agreements. The execution and delivery of this Agreement and the Other Agreements will not, nor will the observance or performance of any of the matters and things herein or therein set forth, violate or contravene any

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![](exhibit101posor-amendeda002.jpg)

&nbsp;&nbsp;&nbsp;&nbsp;5 provision of law or of the limited partnership agreement of Borrower. All necessary and appropriate limited partnership action has been taken on the part of Borrower to authorize the execution and delivery of this Agreement and the Other Agreements. This Agreement and the Other Agreements are valid and binding agreements and contracts of Borrower in accordance with their respective terms except to the extent that enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium and other laws enacted for the relief of debtors generally and other similar laws affecting the enforcement of creditors' rights generally or by equitable principles which may affect the availability of specific performance and other equitable remedies. The execution, delivery and performance by Borrower of this Agreement and the Other Agreements require no action by or in respect of, or filing with, any governmental body, agency or official and do not constitute (with or without the giving of notice or lapse of time or both) a default under any agreement, judgment, injunction, order, decree or other instrument binding upon each Borrower, or result in the creation or imposition of any lien on any of Borrower's assets. 2.03 Compliance With Laws. The nature and transaction of Borrower's business and operations and the use of its properties and assets, including, but not limited to, any real estate owned or occupied by Borrower, do not and during the term of the Loan shall not, violate or conflict with any applicable law, statute, ordinance, rule, regulation or order of any kind or nature. 2.04 Conflicts. The execution and delivery of this Agreement and the Other Agreements, and the performance by Borrower of its obligations under this Agreement, and the Other Agreements, does not and will not conflict with the provisions of or constitute a default under (i) any law, order, rule, regulation, writ, injunction or decree, now or hereafter in effect, of any government, governmental instrumentality or agency or court having jurisdiction over Borrower or Borrower's assets; or (ii) any contract, agreement, deed, commitment or other instrument binding upon Borrower, or give cause for acceleration of any Indebtedness of Borrower. Without limiting the generality of the foregoing, Borrower is not in default under any material contract, agreement, deed, commitment or other instrument to which it is a party or by which it is bound. No material contract, governmental or otherwise, to which Borrower is a party, is currently being renegotiated, nor is Borrower in default under any material contract. 2.05 Taxes and Assessments. Borrower has filed (or obtained appropriate extensions with respect to) all United States income tax returns and all state and municipal returns which are required to be filed, and have paid, or made adequate provision for the payment of, all material taxes which have become due pursuant to said returns or pursuant to any assessment received by Borrower except such taxes, if any, as are being contested in good faith and as to which adequate reserves have been provided. Borrower is unaware of any audit, assessment or other proposed action or inquiry of the Internal Revenue Service with respect to the United States income tax liability of Borrower. 2.06 Bankruptcies. Since formation, Borrower has not filed or had filed against it any bankruptcy, receivership or similar petitions nor has it made any assignments for the benefit of creditors. 6 2.07 Truthful Information. Neither this Agreement, the Other Agreements nor any such other documents, certificates, statements or writings delivered or made to Lender by or on behalf of Borrower in connection with the transactions contemplated hereby contains any untrue statement of a material fact or omits to state a material fact necessary in order to make any statement contained herein or therein not misleading in light of the circumstances in which such statement was made. There is no fact presently known to Borrower that has not been clearly and expressly disclosed to Lender that materially and adversely affects the assets, business, financial position, results of operations or prospects of Borrower, which is not set forth in a footnote included in the financial statements provided to Lender. 2.08 No Material Adverse Change. There have been no material changes in the assets, liabilities, or condition, financial or otherwise, of Borrower other than changes arising from transactions in the ordinary course of business, and none of such changes has been materially adverse, whether in the ordinary course of business or otherwise. 2.09 Pending Litigation. No litigation, arbitration or governmental proceedings are pending or known by Borrower to be threatened against Borrower, which is reasonably likely to affect materially and adversely the financial condition or business of Borrower or impair the ability of Borrower to perform its obligations under this Agreement or under any of the Other Agreements, or which in any manner draws into question the validity of any of the Loan Documents and there is no basis known to Borrower or Property Owner for any such action, suit or proceeding. 2.10 Financial Information. The financial statements of Borrower, copies of which have been delivered to the Lender, fairly present, in conformity with the GAAP, the financial position of Borrower as of such date and its results of operations and changes in financial position for such fiscal year. As of the date of such financial statements, Borrower has not incurred any material contingent obligation, contingent liability or liability for taxes, long-term lease or unusual forward or long-term commitment, which is not reflected in any of such financial statements or notes thereto, except as may have otherwise been disclosed by Borrower to Lender. All financial data, including the statements of cash flow and income and operating expense, but excluding financial projections, that have been delivered by Borrower to Lender in respect of Borrower (i) are true, complete and correct in all material respects, (ii) accurately represent the financial condition of Borrower as of the date of such reports, and (iii) to the extent prepared by an independent certified public accounting firm, have been prepared in accordance with the GAAP consistently applied throughout the periods covered, except as disclosed therein. Since the date of such financial statements, there has been no material adverse change in the business, financial position, results of operations or prospects of Borrower. 2.11 Fraudulent Transfer. Borrower has not entered into the Loan, this Agreement or any Other Agreement with the actual intent to hinder, delay, or defraud any creditor, and Borrower has received reasonably equivalent value in exchange for its obligations under this Agreement and/or the Other Agreements to which it is a party. Giving effect to the transactions contemplated by the Loan Documents the fair saleable value of Borrower's assets, as applicable, exceeds and will, immediately following the 7 execution and delivery of this Agreement and any Other Agreement, exceed Borrower's total probable liabilities, including subordinated, unliquidated, disputed or contingent liabilities. Borrower does not intend to, and do not believe that they will, incur debts and liabilities (including contingent liabilities and other commitments) beyond their ability to pay such debts as they mature (taking into account the timing and amounts of cash to be received by Borrower and the amounts to be payable on or in respect of the obligations of Borrower). Notwithstanding anything to the contrary in this Section 2, if any of the foregoing representations and warranties in this Section 2 fail to be true as a direct result of any action taken by Lender, the same shall not be deemed a default by Borrower or Event of Default hereunder. Section 3. COVENANTS Borrower makes the following covenants which shall be in effect throughout the term of this Agreement and so long as any Obligations remain unpaid. 3.01 Satisfaction of Obligations. Borrower agrees that until Borrower satisfies all of its Obligations to Lender, including, but not limited to, its obligations to pay in full all of the Obligations, Borrower shall not breach or fail to perform or observe any of the terms and conditions of this Agreement, the Promissory Note or any of the Other Agreements. 3.02 Indemnification. (a) Borrower hereby shall defend (with counsel satisfactory to Lender), indemnify and hold Lender their successors and assigns, including the directors, officers, partners, members, shareholders, participants, employees, professionals and agents of any of the foregoing (each, an "Indemnified Party"), harmless from and against any losses, costs, damages, penalties, forfeitures, claims, liabilities, actions, judgments, suits, disbursements or expenses of any kind or nature whatsoever imposed on, incurred by, asserted against or awarded against any Indemnified Party (including, without limitation, reasonable attorneys' fees and legal expenses and reasonably incurred disbursements of counsel for an Indemnified Party in connection with any investigative, administrative or judicial proceeding commenced or threatened, whether or not Lender shall be designated a party thereto, court costs and costs of appeal at all appellate levels, investigation and laboratory fees, consultant fees and litigation expenses) related to or arising from this Agreement, the Loan, the Other Agreements and/or or any of the rights and remedies granted to Lender under this Agreement or the Other Agreements, including, without limitation: (i) any breach by Borrower of its obligations under, or any misrepresentation by Borrower contained in, this Agreement or the Other Agreements; and (ii) any inaccurate, incomplete or misleading information provided by or on behalf of Borrower; but specifically excluding consequential damages, special damages, indirect damages, punitive damages or lost profits (other than third-party claims therefor) (collectively, the "Indemnified Liabilities"); provided, however, that Borrower shall not have any obligation to any Indemnified Party hereunder to the extent that it is finally judicially determined that such Indemnified Liabilities arise from the gross negligence, illegal acts, fraud or willful 8 misconduct of an Indemnified Party. Any Indemnified Liabilities payable to any Indemnified Party by reason of the application of this Section 3.02 shall be payable within thirty (30) days following written notice from such Indemnified Party itemizing the amounts thereof incurred to the date of such notice and, if not paid within such thirty (30)-day period, shall bear interest at the Default Rate from the date loss or damage is sustained by any Indemnified Party; the failure to pay any Indemnified Liabilities within such specified time period after notice from Lender shall be an Event of Default hereunder and no additional cure rights shall apply. The obligations and liabilities of a Borrower under this Section 3.02 shall survive the term of the Loan, the exercise by Lender of any of its rights or remedies under this Agreement and/or the Other Agreements. (b) Upon written request by any Indemnified Party, and in connection with the Indemnified Liabilities, Borrower shall defend such Indemnified Party (if requested by any Indemnified Party, in the name of the Indemnified Party) by attorneys and other professionals reasonably approved by the Indemnified Parties. To the extent an Indemnified Party actually incurs Indemnified Liabilities payable by Borrower pursuant to Section 3.02(a) above, Borrower shall be responsible for paying such Indemnified Liabilities in accordance with Section 3.02 (a) above. 3.03 Company Existence. Borrower shall at all times preserve and maintain its (a) existence and good standing in the jurisdiction of its organization, and (b) its qualification to do business and good standing in each jurisdiction where the nature of its business makes such qualification necessary (other than such jurisdictions in which the failure to be qualified or in good standing could not reasonably be expected to have a Material Adverse Effect), and shall at all times continue as a going concern in the business which Borrower is presently conducting. 3.04 Payment of Obligations. Borrower shall at all times pay and discharge, as the same shall become due and payable, (i) all lawful taxes, assessments, charges and/or levies made upon its property or assets, by any governmental body, agency or official, (ii) all claims (including claims for labor, materials and supplies) against Borrower or any of its properties, before the same shall become delinquent and before penalties accrue thereon, and (iii) all of its respective obligations and liabilities, unless (A) no Event of Default is continuing, (B) the same are being contested in good faith by appropriate proceedings and for which adequate reserves are being maintained, (C) Borrower notifies the Lender in writing of the occurrence of said matter, (D) Borrower shall promptly upon final determination thereof pay the amount of such taxes or other charges, together with all costs, interest and penalties, (E) such contest, in Lender's reasonable determination, shall not affect the ownership or use of any property of Lender and (F) Borrower shall, upon request by Lender, give Lender prompt notice of the status of such proceedings and/or confirmation of the continuing satisfaction of the conditions. 3.05 Notice of Proceedings. Borrower shall, promptly, but not more than five (5) days, after knowledge thereof shall have come to the attention of any officer of Borrower, give written notice to Lender of all threatened or pending actions, suits, and proceedings before any court or governmental department, commission, board or other administrative agency which may have a Material Adverse Effect.

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&nbsp;&nbsp;&nbsp;&nbsp;9 3.06 Notice of Default. Borrower shall, promptly, but not more than five (5) days, after the commencement thereof, give notice to Lender in writing of the occurrence of an Event of Default or Default hereunder. 3.07 Compliance with Laws. Borrower will comply in all material respects with all applicable laws, ordinances, rules, regulations, and requirements of governmental authorities. 3.08 Accounting; Inspection of Property, Books and Records. Borrower will keep full, true and accurate books of records and accounts, adequate to correctly reflect the results of the operation of its property in conformity with GAAP, and, at no additional cost or expense to Borrower, Borrower will permit Lender to examine and make abstracts from any of its books upon no less than four (4) business days' prior written request and during normal business hours as may reasonably be desired by Lender; provided, however, that no such access shall interfere with Borrower's business operations. 3.09 Consolidations, Mergers and Sales of Assets. Without the prior written consent of Lender, Borrower shall not directly or indirectly make, suffer or permit the occurrence of any Transfer. A breach of the foregoing shall be an Event of Default hereunder. 3.10 Transactions with Other Persons. Borrower shall not enter into any agreement with any Person whereby they shall agree to any restriction on Borrower's right to amend or waive any of the provisions of this Agreement. 3.11 Information. Borrower will deliver or cause to be delivered to the Lender: (a) Financial Reports. Within twenty (20) days after request by Lender, Borrower shall furnish, or cause to be furnished, to Lender, within ten (10) Business Days after request, any financial information with respect to the financial affairs of Borrower as Lender may reasonably request in writing (provided that the same is readily available to Borrower or prepared by Borrower in the ordinary course of business and is not subject to any restriction on disclosure). (b) Tax Filings. No later than May 15th of each year, a copy of Borrower's federal and state income tax returns (including all schedules and attachments) for the previous year; provided, however, that if Borrower files a valid extension for the delivery of any such tax return, said Borrower shall submit a copy of said tax return to the Lender within 30 days after the filing thereof; (c) Defaults. As soon as reasonably practicable after obtaining knowledge of the occurrence of any Default or Event of Default hereunder, a certificate of Borrower setting forth the details thereof and the action which Borrower is taking or proposes to take with respect thereto; (d) Actions. After (i) obtaining knowledge of the commencement of an action, suit or proceeding against Borrower which if adversely determined as to Borrower is reasonably likely to materially adversely affect the business, properties, financial 10 position, results of operations or prospects of Borrower, or (ii) the commencement of an action, suit or proceeding against Borrower, which in any manner questions the validity of any of this Agreement and/or the Other Agreements or any of the other transactions contemplated hereby or thereby, then Borrower shall, as soon as reasonably practicable, deliver to Lender information regarding the nature of such pending action, suit or proceeding and such additional information as Lender may reasonably request; and (e) Other Information. Such additional information in Borrower's possession regarding the financial position, results of operations or business of Borrower as the Lender may reasonably request in writing to Borrower, within such timeframe as shall be reasonably required by the Lender in writing to Borrower; provided, that, such timeframe shall not be less than sixty (60) days. (f) Breach. If Borrower fails to provide to Lender any of the financial statements, certificates, reports or information required by this Section 3.11 (the "Required Records") within fifteen (15) days after the date upon which such Required Record is due, and such failure shall continue for a period of fifteen (15) days following Borrower's receipt of notice of such failure, Lender shall have the option, upon fifteen (15) days' notice to Borrower to gain access to Borrower's books and records and prepare or have prepared at Borrower's expense, any Required Records not delivered by Borrower. Notwithstanding anything to the contrary in this Section 3.11, in the event that the required financial information, report or tax return is not available by the aforementioned deadlines, such deadlines shall be reasonably extended to permit Borrower to prepare the same in the normal course of Borrower's business and Borrower shall deliver such financial information, report or tax return, as applicable, to Lender as soon as practicable once available. 3.12 Financial Covenants. Borrower shall maintain a Loan-to-Value Ratio of no more than fifty percent (50%) (the "Maximum Loan-to-Value") while any Obligations hereunder are outstanding. Within fifteen (15) days after the end of each fiscal quarter, Borrower shall notify Lender of the Loan-to-Value Ratio for the immediately preceding quarter, as reasonably calculated by Borrower, and deliver to Lender sufficient backup documentation substantiating the calculation thereof. In the event Borrower fails to comply with the Maximum Loan-to-Value, then Borrower shall either (i) pay down the Loan in an amount sufficient for the remaining Loan balance to meet the Maximum Loan- to-Value or (ii) pledge (or cause to be pledged) an amount of additional common shares of PORT sufficient for the remaining Loan balance to meet the Maximum Loan-to-Value, and, in such case, execute such additional Loan Documents, or amendments to Loan Documents, to reflect the pledge of additional common shares of PORT as reasonably requested by Lender. Notwithstanding anything to the contrary in this Section 3, if Borrower's failure to uphold any of the covenants in this Section 3 is a direct result of any action taken by Lender, the same shall not be deemed a default by Borrower or Event of Default hereunder. 11 Section 4. LOAN 4.01 Borrowing. (a) Manner of Borrowing. On the Effective Date, Lender shall transfer the balance of the Loan to Borrower by the means requested by Borrower and acceptable to Lender. Borrower does hereby irrevocably confirm, ratify and approve such transfer by Lender and does hereby indemnify Lender against losses and expenses (including court costs, reasonable attorneys' fees) and shall hold Lender harmless with respect thereto. (b) Interest Rates. Prior to the occurrence of an Event of Default hereunder, Borrower agrees to pay interest on the daily balance of the Loan at the Interest Rate. After the occurrence and during the continuance of an Event of Default under this Agreement, at Lender's option, the rate per annum on the Loan shall be equal to the Default Rate. Notwithstanding the foregoing, upon the occurrence of an Event of Default under Section 6.01(e) through Section 6.01(g), inclusive, of this Agreement, such increase to the Default Rate shall occur automatically. (c) Interest Payments. Borrower shall make monthly payments of all then accrued and unpaid interest on the Loan beginning August 1, 2025, and continuing on the first (1st) day of each consecutive month thereafter or the acceleration of the Loan as provided herein. Borrower shall pay Lender all such amounts. Borrower shall have the right at any time to prepay all or any part of the Loan at any time on five (5) days' notice to Lender. (d) Computation of Interest. Interest on the Loan shall be computed for the actual number of days elapsed on the basis of a 360-day year. In computing interest on Loan, (i) the date of funding of the Loan shall be included and (ii) the date of payment of Loan shall be excluded; provided that if Loan is repaid on the same day on which it is made, one day's interest shall be paid on Loan. A partial prepayment of principal shall not affect the obligation of Borrower to make subsequent scheduled payments at the times and in the amounts required pursuant to Section 4.01(c) above until this Promissory Note is paid in full. 4.02 Usury; Interest Laws. It is the intent of the parties that the rate of interest and all other charges to Borrower be lawful; therefore, if for any reason the payment of a portion of interest or charges as required by this Agreement would exceed the limit established by applicable law, then the obligation to pay interest or charges shall automatically be reduced to such limit and if any amounts in excess of such limit shall have been paid, then such amount shall be applied first to the unpaid principal amount of the Obligations of Borrower to Lender and second refunded so that under no circumstances shall interest or charges required hereunder exceed the maximum rate allowed by law. Notwithstanding any provision to the contrary contained in this Agreement or the Other Agreements, Borrower shall not be required to pay, and Lender shall not be permitted to collect, any amount of interest in excess of the maximum amount of interest permitted by law ("Excess Interest"). If any Excess Interest is provided for or determined by a court of competent jurisdiction to have been provided for in this Agreement or in any 12 of the Other Agreements, then in such event: (a) the provisions of this Section shall govern and control; (b) Borrower shall not be obligated to pay any Excess Interest; (c) any Excess Interest that Lender may have received hereunder shall be, at Lender's option, (i) applied as a credit against the outstanding principal balance of Borrower's Obligations or accrued and unpaid interest (not to exceed the maximum amount permitted by law), (ii) refunded to the payor thereof, or (iii) any combination of the foregoing; (d) the interest rate(s) provided for herein shall be automatically reduced to the maximum lawful rate allowed from time to time under applicable law (the "Maximum Rate"), and this Agreement and the Other Agreements shall be deemed to have been and shall be reformed and modified to reflect such reduction; and (e) Borrower shall not have any action against Lender for any damages arising out of the payment or collection of any Excess Interest. 4.03 Terms of Repayment; Waivers. Borrower waives presentment and protest of any instrument and notice thereof, notice of default and, to the extent permitted by applicable law, all other notices to which Borrower might otherwise be entitled. To the extent that Borrower makes a payment or payments to Lender or Lender receive any payment or payments for Borrower's benefit, which payment or payments or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside and/or required to be repaid to a trustee, borrower in possession, receiver or any other party under any bankruptcy law, state or federal law, common law or equitable cause, then, to the extent of such payment or payments received, the Obligations or part thereof intended to be satisfied shall be revived and continue in full force and effect, as if such payment or payments had not been received by Lender. 4.04 Security. The Loan shall be secured by the Security Agreement. Section 5. CONDITIONS PRECEDENT TO DISBURSEMENTS OF THE LOAN 5.01 As a condition precedent to the right of Borrower to obtain the Loan hereunder, Borrower shall deliver or cause to be delivered to Lender, prior to or contemporaneously with the disbursement of the Loan hereunder, the following: (a) this Agreement, duly executed by Borrower, together with the Joinder to Agreement duly executed by PORT; (b) the Promissory Note duly executed by Borrower, together with the Joinder to Promissory Note duly executed by PORT; (c) the Security Agreement; (d) resolutions and organizational documents for Borrower, Pledgor and PORT; and (e) such other documentation as Lender may reasonably require.

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&nbsp;&nbsp;&nbsp;&nbsp;17 Attention: Ryan Schluttenhofer E-mail: rschluttenhofer@pac-oak.com or in such other manner or to such other address, as such party shall designate in a written notice to the other party hereto. 9.07 Brokers. The parties hereto represent that neither has contracted with any broker or finder in connection with this transaction. 9.08 Delay Not a Waiver. Neither the failure or delay on the part of Lender to exercise any right, power or privilege hereunder or under any of the Other Agreements shall operate as a waiver thereof nor shall any single or partial exercise of any such right, power or privilege preclude any other or further exercise thereof or the exercise of any other right, power or privilege. 9.09 Severability. In the event any one or more of the provisions contained in this Agreement or in any of the Other Agreements shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall, at the option of Lender, not affect any other provisions of this Agreement or any of the Other Agreements, as the case may be, but this Agreement and the Other Agreements shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein. 9.10 Prohibition of Indirect Action. Any act which Borrower is prohibited from doing shall not be done indirectly through an affiliate or by any other indirect means. 9.11 Assignment and Participation. Lender may assign, negotiate, pledge or otherwise hypothecate all or any portion of this Agreement and in case of any such assignment, Borrower will accord full recognition thereto and agree that upon the occurrence of an Event of Default hereunder, all rights and remedies of Lender in connection with the interest so assigned shall be enforceable against Borrower by such assignee with the same force and effect and to the same extent as the same would have been enforceable by Lender but for such assignment, and Lender may, at its sole discretion, sell one or more participations in the loans and advances to Borrower hereunder, on such terms as Lender deems desirable without affecting the liability of Borrower hereunder. 9.12 Modifications and Waivers. Any modification or waiver of this Agreement or any provision herein contained shall be binding upon the parties hereto only if contained in a writing signed by the parties hereto. 9.13 Governing Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of California, which laws shall, without limitation, govern the enforceability, validity and interpretation of this Agreement, except to the extent that the perfection of any security interest or enforcement of any remedy is governed by the laws of any other state. 18 9.14 Successors and Assigns; Binding Effect. The rights and privileges of Lender hereunder shall also inure to the benefit of its permitted successors and assigns, and all obligations hereunder of Borrower shall also be binding upon its legal representatives, successors and assigns and shall inure to the benefit of Lender, its successors and assigns. 9.15 Entire Agreement. This Agreement constitutes the entire agreement between the parties hereto as to the subject matter hereof. 9.16 Terminology. All personal pronouns used in this Agreement, whether used in the masculine, feminine or neutral gender, shall include all other genders; the singular shall include the plural, and the plural shall include the singular, as the context requires. 9.17 Titles. The section titles and section headings herein are for convenience only and do not define, limit or construe the contents of such sections or paragraphs. 9.18 Construction. In the event of a conflict between the terms, covenants and conditions of this Agreement and those of any of the Other Agreements, the terms, covenants and conditions of the document which shall enlarge the interests of Lender and/or assure payment of the Obligations in full shall control. 9.19 Solely for Benefit of Lender and Borrower. It is expressly intended, understood and agreed that this Agreement, the Promissory Note and the Other Agreements are made and entered into for the sole protection and benefit of Lender and Borrower, and their respective successors and assigns (but in the case of assigns of Borrower, only to the extent permitted hereunder), and no other person or persons shall have any right of action hereunder or rights to the Loan at any time; that the Loan does not constitute a trust fund for the benefit of any third party; that no third party shall under any circumstances be entitled to any equitable lien on the Loan at any time. 9.20 Marshaling of Assets. To the extent permitted by law, Borrower hereby waives any and all rights to require marshaling of assets by Lender. 9.21 Electronic Signatures. Lender is hereby authorized to rely upon and accept as an original this Agreement, any Other Agreements or other communication which is sent to Lender by facsimile, telegraphic or other electronic transmission (each, a "Communication") which Lender in good faith believe has been signed by Borrower and has been delivered to Lender by a properly authorized representative of Borrower, whether or not that is in fact the case. Notwithstanding the foregoing, Lender shall not be obligated to accept any such Communication as an original and may in any instance require that an original document be submitted to Lender in lieu of, or in addition to, any such Communication. 9.22 Compliance with Certain Financial Institution Regulatory Restrictions. Borrower shall ensure that Borrower, nor any of its direct or indirect owners (excluding any retail investors of any real estate investment trust), is not nor shall be (a) listed on the Specially Designated Nationals and Blocked Person List maintained by the Office of Foreign Assets Control ("OFAC"), Department of the Treasury, and/or any other similar 19 lists maintained by OFAC pursuant to any authorizing statute, Executive Order or regulation or (b) a person designated under Section 1(b), (c) or (d) of Executive Order No. 13224 (November 23, 2001), any related enabling legislation or any other similar Executive Orders. Borrower shall comply with all applicable Bank Secrecy Act and anti- money laundering laws and regulations. 9.23 Patriot Act Notice. Lender hereby notifies Borrower that, pursuant to the requirements of the USA PATRIOT ACT (Title III of Pub. L.107-56) (signed into law October 26, 2001) (the "Act"), Lender may be required to obtain, verify and record information that identifies Borrower, which information includes the names and addresses of Borrower and other information that will allow the Lender to identify Borrower in accordance with said Act. 9.24 Counterparts. This Agreement may be executed simultaneously in one or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. Counterparts may be delivered by PDF or electronic transmission, including by electronic signature using Authentisign, DocuSign or similar technology, and may bear signatures affixed through .pdf or other software including without limitation any electronic signature platform complying with the Global and National Commerce Act, 15 U.S.C. § 7001, et. seq.; any counterpart so delivered shall be deemed to have been duly and validly executed and delivered and shall be valid and effective for all purposes. (SIGNATURE PAGE FOLLOWS) IN WITNESS WHEREOF, the undersigned parties have executed this Amended and Restated Loan Agreement to be effective as of the Effective Date. BORROWER: PACIFIC OAK STRATEGIC OPPORTUNITY LIMITED PARTNERSHIP, a Delaware limited partnership By: Pacific Oak Strategic Opportunity REIT, Inc., a Maryland corporation, its sole general partner Name) Title: Chief Accounting Offic LENDER: PACIFIC OAK CAPITAL ADVISORS, LLC, a Delaware limited liability company By: Name: Keith D. Hall Title: Managing Director (Signature Page to Amended and Restated Loan Agreement)

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&nbsp;&nbsp;&nbsp;&nbsp;(Signature Page to Amended and Restated Loan Agreement) IN WITNESS WHEREOF, the undersigned parties have executed this Amended and Restated Loan Agreement to be effective as of the Effective Date. BORROWER: PACIFIC OAK STRATEGIC OPPORTUNITY LIMITED PARTNERSHIP, a Delaware limited partnership By: Pacific Oak Strategic Opportunity REIT, Inc., a Maryland corporation, its sole general partner By:_______________________________ Name: Ryan Schluttenhofer Title: Chief Accounting Officer LENDER: PACIFIC OAK CAPITAL ADVISORS, LLC, a Delaware limited liability company By: ______________________________ Name: Keith D. Hall Title: Managing Director Docusign Envelope ID: DA39201E-CB32-4005-9832-2E65D1805A00

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## Exhibit 10.2

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Execution Version 1 AMENDED AND RESTATED PROMISSORY NOTE $10,000,000.00 Los Angeles, California Date: July 14, 2025 This Amended and Restated Promissory Note (this "Promissory Note") dated as of the date first written above and deemed effective as of June 26, 2025 (the "Effective Date") amends and restates in its entirety that certain (i) Promissory Note dated February 26, 2025 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time prior to the date hereof, the "Initial Note"), executed by Pacific Oak Strategic Opportunity Limited Partnership, a Delaware limited partnership ("Borrower"), and payable to the order of Pacific Oak Capital Advisors, LLC, a Delaware limited liability company ("Lender") in the original principal sum of Eight Million and No/100ths Dollars ($8,000,000.00), and (ii) Promissory Note dated June 26, 2025 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time prior to the date hereof, the "Additional Note", together with the Initial Note, the "Existing Notes"), executed by Borrower and payable to the order of Lender in the original sum of Two Million and No/100ths Dollars ($2,000,000.00) and shall evidence a loan made by Lender that is outstanding as of the date hereof in the aggregate amount of Ten Million and No/100ths Dollars ($10,000,000.00), together with accrued and unpaid interest thereon and other amounts payable with respect thereto, as well as future advances hereunder. This Promissory Note is not a novation of the obligations of the Existing Notes and all of the obligations outstanding under the Existing Notes remain outstanding under this Promissory Note. Concurrently with Lender's acceptance of this Promissory Note, Lender has marked the Existing Notes cancelled and is returning the cancelled Existing Notes to Borrower. FOR VALUE RECEIVED, Borrower, with its principal place of business at 3200 Park Center Drive, Suite 800, Costa Mesa, California 92626, promises to pay to the order of Lender, with an address at 3200 Park Center Drive, Suite 800, Costa Mesa, California 92626, on or before the Maturity Date Ten Million Dollars ($10,000,000.00) (as amended, restated, supplemented or modified from time to time, the "Loan") outstanding under and pursuant to this Promissory Note and that certain Amended and Restated Loan Agreement dates as of the Effective Date between Borrower and Lender (as amended, restated, supplemented or modified from time to time, the "Loan Agreement"), and made available by Lender to Borrower at the maturity or maturities and in the amount or amounts stated on the records of Lender, together with interest on the aggregate principal amount of the Loan outstanding from time to time, as provided in the Loan Agreement. Capitalized terms not otherwise defined herein shall have the meanings assigned thereto in the Loan Agreement. 1. Loan Agreement. This Promissory Note evidences the Loan incurred by Borrower under and pursuant to the Loan Agreement, to which reference is hereby made Exhibit 10.2 2 for a statement of the terms and conditions under which the Maturity Date or any payment hereon may be accelerated. The holders of this Promissory Note are entitled to all of the benefits and security provided for in the Loan Agreement and the Other Agreements. The Loan shall be repaid by Borrower on the Maturity Date, unless payable sooner pursuant to the provisions of the Loan Agreement. 2. Principal and Interest. Principal and interest shall be paid to Lender at its address set forth above, or at such other place as the holder of this Promissory Note shall designate in writing to Borrower. The Loan and all payments on account of the principal and interest thereof shall be maintained unilaterally by Lender without notice to Borrower and shall be presumed to be correct, provided, however, any failure of Lender to maintain such records or any error therein or in any notice hereunder shall not in any manner affect the obligation of Borrower to pay this Promissory Note in accordance with the terms hereof. The principal of and interest on this Promissory Note shall be payable in immediately available funds in lawful money of the United States which shall be legal tender for public and private debts at the time of payment. The making of any payment in other than immediately available funds which Lender, at its option, elects to accept shall be subject to collection, and interest shall continue to accrue until the funds by which payment is made are available to Lender for its use. Payments will be applied to interest, principal due at the time of receipt of payment, late charges and other charges due at the time such payments are received, and outstanding principal, in that order. All payments shall be applied to satisfaction of scheduled payments in the order in which they become due. 3. Attorneys' Fees; Collection Costs and Expenses. Borrower shall pay to Lender on demand all third-party, out-of-pocket costs actually incurred by Lender, including, without limitation, reasonable attorneys' fees, in the collection or enforcement of this Promissory Note upon the occurrence of an Event of Default, whether or not suit is brought, or in defending any third-party claim arising out of the execution of this Promissory Note or obligations which any of them evidence, or otherwise involving the employment by Lender of attorneys with respect to this Promissory Note and the obligations it evidences 4. Acceleration. At the option of Lender by written notice to Borrower, upon the occurrence and during the continuation of an Event of Default, the full amount remaining unpaid on this Promissory Note shall become immediately due and payable without presentment, demand or notice of any kind; no additional advances shall be made to Borrower under this Promissory Note; and Lender may exercise any or all remedies available to it under applicable law and this Promissory Note. 5. Collateral. This Promissory Note is executed by Borrower in connection the Loan Agreement, and this Promissory Note is secured by, among other things, that certain Pledge and Security Agreement dated as of the Effective Date, by SOR Port Holdings, LLC in favor of Lender (the "Security Agreement"), encumbering certain property as more particularly described therein. The Loan Agreement and the Security Agreement contain provisions for the acceleration of the Maturity Date of this Promissory 3 Note. Borrower agrees that Lender may accept additional or substitute security for this Promissory Note, or release any security or any party liable for this Promissory Note, or extend or renew this Promissory Note, all without notice to Borrower and without affecting the liability of Borrower. 6. Waivers by Borrower. Borrower and any endorser of this Promissory Note (i) waive presentment, demand, protest and notice of dishonor and protest, (ii) waive the benefit of their homestead exemptions as to this Promissory Note, (iii) waive any right which they may have to require Lender to proceed against any other party or any collateral given to secure the payment of this Promissory Note, and (iv) agree that, without notice to Borrower or any endorser of this Promissory Note and without affecting the liability of Borrower or any endorser of this Promissory Note, Lender, at any time or times, may grant extensions of the time for any payment due on this Promissory Note or any other indulgence or forbearance, release any party from the obligation to make payments on this Promissory Note, permit the renewal of this Promissory Note, or permit the substitution, exchange or release of any security for this Promissory Note. 7. Limitation of Damages. Each of Borrower and, by accepting this Promissory Note, Lender hereby covenants and agrees that in no event shall the other party be liable for consequential damages, special damages, punitive damages or lost profits, and to the fullest extent permitted by applicable law, each of Borrower and Lender hereby expressly waives all existing and future claims that it may have against the other party hereto for consequential damages, special damages, punitive damages or lost profits. 8. Cumulative Remedies. The rights and remedies of Lender under this Promissory Note and applicable law shall be cumulative and concurrent, and the exercise of any one or more of them shall not preclude the simultaneous or later exercise by Lender of any or all such other rights or remedies. In the event any provision of this Promissory Note is held to be invalid, illegal, or unenforceable for any reason, then such provision only shall be deemed null and void and shall not affect any other provisions of this Promissory Note, which shall remain effective. No modification or waiver of any provision of this Promissory Note shall be effective unless it is in writing and signed by Lender and Borrower, and any such waiver shall be effective only in the specific instance and for the specific purpose for which it is given. The failure of Lender to exercise its option to accelerate this Promissory Note as provided above, or to exercise any other option, right or remedy, in any one or more instances, or the acceptance by Lender of partial payments or partial performance, shall not constitute a waiver of any Default, or the right to exercise any option, right or remedy at any time. The nouns, pronouns, and verbs used in this Promissory Note shall be construed as being of such number and gender as the context may require. 9. Jurisdiction; Venue. Borrower and any endorser of this Promissory Note irrevocably (i) submit to the exclusive jurisdiction of the state courts of the State of California with respect to any suit, action, or proceeding relating to this Promissory Note, (ii) waive any objection which it may now or hereafter have to the laying of venue of any such suit, action, or proceeding brought in any such court and any claim that any such 4 suit, action, or proceeding brought in any such court has been brought in an inconvenient forum, (iii) waive the right to object that any such court does not have jurisdiction over it, and (iv) and consent to service of process by any means authorized by California and/or federal law. Nothing in this paragraph shall affect Lender's right to serve process in any manner authorized by California and/or federal law. 10. Business Purpose of Loan. The proceeds of this Promissory Note shall be used to acquire or carry on a business, professional, investment, or commercial enterprise or activity. 11. Notice. Any notice required to be given by any party to this Promissory Note shall be delivered in accordance with Section 9.06 of the Loan Agreement. 12. Additional Terms. The Loan evidenced hereby have been made and/or issued and this Promissory Note has been delivered at Lender's address set forth above. This Promissory Note shall be governed and construed in accordance with the laws of the State of California, in which state it shall be performed, except to the extent preempted by federal laws, and shall be binding upon Borrower, and its legal representatives, successors, and assigns. Wherever possible, each provision of the Loan Agreement and this Promissory Note shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of the Loan Agreement or this Promissory Note shall be prohibited by or be invalid under such law, such provision shall be severable, and be ineffective to the extent of such prohibition or invalidity, without invalidating the remaining provisions of the Loan Agreement or this Promissory Note. (Signature page follows)

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IN WITNESS WHEREOF，Borrower has executed this Amended and Restated Promissory Note as of the Effective Date. BORROWER: PACIFIC OAK STRATEGIC OPPORTUNITY LIMITED PARTNERSHIP, a Delaware limited partnership By: Pacific Oak Strategic Opportunity REIT, tnc., a Maryland corporation, its sole general partner Title: Chief Accounting Officer (End of signatures) (Signature Page to Amended and Restated Promissory Note)

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## Exhibit 10.3

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Execution Version 1 PLEDGE AND SECURITY AGREEMENT THIS PLEDGE AND SECURITY AGREEMENT (this "Security Agreement"), dated as of July 14, 2025 and deemed effective as of June 26, 2025 (the "Effective Date"), by SOR PORT HOLDINGS, LLC, a Maryland limited liability company ("Pledgor"), with a notice address of 3200 Park Center Drive, Suite 800, Costa Mesa, California 92626, Attention: Ryan Schluttenhofer, in favor of PACIFIC OAK CAPITAL ADVISORS, LLC, a Delaware limited liability company ("Secured Party"), with a notice address of 3200 Park Center Drive, Suite 800, Costa Mesa, California 92626, Attention: Keith D. Hall & Peter McMillan III. R E C I T A L S WHEREAS, on February 26, 2025 (the "Loan Origination Date"), Secured Party made a loan in the original amount of EIGHT MILLION AND NO/100 DOLLARS ($8,000,000.00) (the "Initial Loan") to Pacific Oak Strategic Opportunity Limited Partnership, a Delaware limited partnership ("Borrower"), pursuant to that certain Loan Agreement dated as of the Loan Origination Date (the "Original Loan Agreement"), subject to the terms and conditions of that certain Promissory Note dated as of the Loan Origination Date, as executed by Borrower and payable to the order of Secured Party (the "Original Note," and together with the Original Loan Agreement, collectively, the "Original Loan Documents"); WHEREAS, on June 26, 2025 (the "Loan Increase Date"), Secured Party made an additional loan in the original amount of TWO MILLION AND NO/100 DOLLARS ($2,000,000.00) (the "Loan Increase") to Borrower as evidenced by that certain Promissory Note dated as of the Loan Modification Date, as executed by Borrower and payable to the order of the Secured Party (the "Additional Note"). WHEREAS, the Original Loan Documents and the Additional Note are being amended and restated (to, among other things, decrease the interest rate and extend the Maturity Date of the Initial Loan, to fully document the Loan Increase and combine the Loan Increase with the Initial Loan, and to provide collateral for the combined loan as evidenced by this Security Agreement) pursuant to the terms of that certain Amended and Restated Promissory Note dated as of the Effective Date (the "Note"), by Borrower and payable to the order of Secured Party and that certain Amended and Restated Loan Agreement dated as of the Effective Date (the "Loan Agreement," and together with the Note, collectively, the "Loan Documents"), between Borrower and Secured Party, to evidence and secure the combined loan from Secured Party to Borrower in the original aggregate amount of TEN MILLION AND NO/100ths DOLLARS ($10,000,000.00) (the "Loan"); WHEREAS, in order to induce Secured Party to execute and deliver the Additional Note and the Loan Documents, Pledgor has agreed to enter into and deliver to Secured Party this Security Agreement as security for the full and prompt payment by Borrower of all Indebtedness (hereinafter defined) and the prompt performance by Exhibit 10.3 2 Borrower and Issuer of each and every covenant, agreement and undertaking of Borrower and Issuer made in the Loan Documents; WHEREAS, Pledgor is an indirect 99.9% owned subsidiary of Borrower and has received a benefit from the Loan being made by Secured Party to Borrower pursuant to the Loan Documents, and such benefit constitutes good and valuable consideration for Pledgor's execution and delivery of this Security Agreement to Secured Party; and WHEREAS, all capitalized terms used but not defined in this Security Agreement shall have the meaning ascribed to such capitalized terms in the Loan Agreement. ARTICLE 1 Grant of Security Interest 1.1 In consideration of Secured Party agreeing to amend Original Loan Documents, to fund the Loan Increase and enter the Loan Documents and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged and confessed, Pledgor hereby grants to Secured Party a security interest in and to the collateral defined below (the "Collateral"): All of Pledgor's rights, titles and interests in and to 3,000,000 shares of the common stock as more particularly described on Schedule 1 attached hereto (the "Pledged Equity Interests") held by and owned by Pledgor in and to Pacific Oak Residential Trust, Inc., a Maryland real estate investment trust ("Issuer" or "PORT"), together with all rights, titles, interests, benefits, privileges, claims and demands accruing or appurtenant thereto or associated therewith, including, without limitation: (i) all of Pledgor's voting rights, managerial rights, rights to return of capital and distributions of profit, cash, property or proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for any of the Pledged Equity Interests (collectively, the "Proceeds"); (ii) all additional rights to purchase membership interest in Issuer from time to time acquired by Pledgor in any manner; and (iii) whatever is received or receivable when any Collateral or Proceeds are sold, collected, exchanged or otherwise disposed of, whether such disposition is voluntary or involuntary. ARTICLE 2 Secured Indebtedness 2.1 This Security Agreement is made to secure and enforce the full and prompt payment and performance of the Note and all other obligations and indebtedness evidenced by the Loan Documents. 2.2 The payment and performance obligations referred to in Section 2.1 hereof are hereinafter collectively referred to as the "Indebtedness", which term is used herein in its most comprehensive sense and includes, without limitation, any and all advances, debts, obligations or liabilities of Borrower to Secured Party with respect to the Loan pursuant to the Note or the Loan Documents, whether now or hereafter made, 3 incurred or created, due or not due, absolute or contingent, liquidated or not liquidated, determined or undetermined, or whether recovery upon such Indebtedness may be or hereafter becomes unenforceable. ARTICLE 3 Continuing Agreement; Revocation; Obligation Under Other Agreements 3.1 This Security Agreement is continuing and all rights, powers and remedies hereunder shall apply to all past, present and future Indebtedness of Borrower to Secured Party in connection with the Loan Agreement, including that arising under successive transactions which shall either continue the Indebtedness, increase or decrease it, or from time to time restate the Indebtedness and, notwithstanding the dissolution, liquidation or bankruptcy of Borrower, Issuer and/or Pledgor or any other event or proceeding affecting Borrower, Issuer and/or Pledgor. 3.2 The obligations of Pledgor hereunder shall be in addition to any obligations of Pledgor under any other grants or pledges of security for any liabilities or obligations of Borrower or any other Person heretofore or hereafter given to Secured Party in respect of the Loan unless said other grants or pledges of security are modified or revoked in writing and this Security Agreement shall not, unless herein provided, affect or invalidate any such other grants or pledges of security. ARTICLE 4 Acknowledgments; Waiver of Statute of Limitations; Reinstatement of Liability 4.1 In the event of any Event of Default under this Security Agreement, Pledgor acknowledges that a separate action or actions may be brought and prosecuted against Pledgor whether action is brought against any other Person (including, without limitation, Borrower, Issuer or any other pledgor of security or collateral for the Loan) or whether any other Person is joined in any such action or actions. Pledgor further acknowledges that there are no conditions precedent to the effectiveness of this Security Agreement, and that this Security Agreement is in full force and effect and is binding on Pledgor as of the Effective Date, regardless of whether Secured Party obtains additional collateral or any guaranties from others or takes any other action. 4.2 Pledgor waives the benefit of any statute of limitations affecting Pledgor's liability hereunder or the enforcement thereof and Pledgor agrees that any payment of any Indebtedness or other act which shall toll any statute of limitations applicable thereto shall similarly operate to toll such statute of limitations applicable to Pledgor's liability hereunder. 4.3 The liability of Pledgor hereunder shall be reinstated and revived and the rights of Secured Party shall continue if and to the extent for any reason any amount at any time paid on account of any Indebtedness secured hereby is rescinded or must be otherwise restored by Secured Party, whether as a result of any proceedings in bankruptcy, insolvency, reorganization or otherwise, all as though such amount had not been paid. The determination as to whether any amount so paid must be rescinded or 4 restored shall be made by Secured Party, in its sole and absolute discretion; provided, however, that if Secured Party elects to contest any such matter at the request of Pledgor, Pledgor agrees to indemnify and hold Secured Party harmless from and against all out-of-pocket costs and expenses, including reasonable attorneys' fees, expended or incurred by Secured Party in connection therewith, including, without limitation, in any litigation with respect thereto, except for any costs and expenses resulting from Secured Party's gross negligence, fraud or willful misconduct. ARTICLE 5 Representations and Warranties To induce Secured Party to enter into this Security Agreement, Pledgor represents and warrants to Secured Party as of the Effective Date as follows: 5.1 Pledgor is an indirect 99.9% owned subsidiary of Borrower and has received and shall receive a direct or indirect benefit from the Initial Loan and the Loan Increase and from the amendment and restatement of the Original Loan Documents and the Additional Note (including, without limitation, the reduction of the interest rate and the extension of the Maturity Date of the Initial Loan) pursuant to the Loan Agreement, and such direct or indirect benefit constitutes good and valuable consideration for Pledgor's execution and delivery of this Security Agreement to Secured Party and its agreement to be bound by the provisions hereof. 5.2 Pledgor, and if it so chooses, its counsel, has/have reviewed this Security Agreement and that the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Security Agreement. 5.3 Pledgor fully, forever and unconditionally waives each and every defense of any nature whatsoever as to the validity or enforceability of this Security Agreement or any part thereof. 5.4 The Collateral is not subject to adverse claim, set-off, counterclaim, default, defense, allowance or adjustment of any kind or character or to objection or complaint by any account pledgor concerning liability on any such account. 5.5 Pledgor is the sole owner of all of the Collateral and has good title thereto, free and clear of all claims, mortgages, pledges, liens and security interests except the security interest evidenced by this Security Agreement. Pledgor has good right and authority to grant the security interest in the Collateral created hereby. The execution and delivery of this Security Agreement by Pledgor will not result in a breach or default under any term or provision of any indenture, contract, agreement or instrument to which Pledgor is bound. 5.6 There is no financing statement covering the Collateral on file in any public office other than any financing statement given to secure Pledgor's obligations under this Security Agreement.

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&nbsp;&nbsp;&nbsp;&nbsp;5 5.7 The location of Pledgor's chief executive office and principal place of business is 3200 Park Center Drive, Suite 800, Costa Mesa, California 92626. 5.8 This Security Agreement constitutes the legal, valid and binding obligations of Pledgor, enforceable in accordance with its terms, subject, however, to applicable bankruptcy, insolvency or other laws affecting enforceability of creditors' rights generally. 5.9 Pledgor owns 20,663,209 shares of common stock in PORT, which constitutes one hundred percent (100%) of the issued and outstanding common stock of Issuer. The only other stock, units or equity interests in PORT are 125 preferred shares issued to third-parties in connection with PORT's election to be taxed as a real estate investment trust. 5.10 The Pledged Equity Interests are not certificated. 5.11 Specifically with respect to the Collateral and to Pledgor's knowledge, all Persons appearing to be obligated thereon have authority and capacity to contract and are bound as they appear to be and the same comply with applicable laws concerning form, content and manner of preparation and execution. ARTICLE 6 Covenants So long as the Indebtedness secured hereby, or any part thereof, remains unpaid, Pledgor covenants and agrees with Secured Party as follows: 6.1 Except for the pledge and security interest granted herein, Pledgor shall not (and shall not permit or allow the Issuer to), without the prior written consent of Secured Party: (a) sell, assign, pledge, lien or mortgage the Collateral or otherwise encumber the Collateral, or any interest therein; or (b) redeem, cancel, forfeit, rescind, split, assign, amend, alter, change, substitute, replace or modify the Collateral. Additionally, Pledgor shall keep (and shall cause the Issuer to keep) the Collateral free from unpaid charges, including taxes, and from liens, encumbrances and security interests other than that of the Secured Party and will warrant and defend the Collateral against the claims and demands of all other Persons. 6.2 If any legal proceedings are instituted against Pledgor or the Issuer with respect any rights, titles, liens or interests created or evidenced hereby with respect to the Collateral, Pledgor will give prompt written notice thereof to Secured Party and, at Pledgor's own cost and expense, will diligently endeavor to cure any material defect claimed and will take all necessary and proper steps for the defense of such legal proceedings, including, but not limited to, the employment of counsel, the prosecution or defense of litigation and the settlement, release or discharge of all adverse claims and, in the event of default by Pledgor in any material respect in the performance of any of the foregoing, Secured Party (whether or not named as a party to legal proceedings with respect thereto) is hereby authorized and empowered to take such additional steps 6 as in its commercially reasonable judgment and sole and absolute discretion may be necessary or proper for the defense of any such legal proceedings or the protection of the validity or priority of this Security Agreement, including, but not limited to, the employment of outside counsel (but only a single law firm), the prosecution or defense of litigation, the compromise or discharge of any adverse claims made with respect to the Collateral, the removal of prior liens or security interests and all out-of-pocket expenses so incurred of every kind and character, subject to reasonable attorneys' fees, shall be demand obligations owing by Pledgor and shall bear interest at the Interest Rate under the Loan Agreement (or at the Default Rate under the Loan Agreement upon the occurrence and during the continuance of an Event of Default (as defined below)) from the date ten that is (10) business days after written demand for reimbursement of such expenditure until paid and shall be secured by the security interest evidenced by this Security Agreement and the party incurring such expenses shall be subrogated to all rights of the Person receiving such payment. 6.3 Pledgor will keep (and will cause Issuer to keep) accurate books and records of the Collateral and will permit all such books and records to be inspected by Secured Party and its duly accredited representatives at all times during business hours. 6.4 Pledgor will (and will cause Issuer to), on the request of Secured Party: (a) execute, acknowledge, deliver and record and/or file such further instruments (including, without limitation, further security agreements, financing statements and continuation statements) and do such further acts as are reasonably necessary to carry out the purposes of this Security Agreement and the Loan Documents and to subject to the security interests hereof any property intended by the terms of this Security Agreement or the Loan Documents to be covered hereby; and (b) execute, acknowledge, deliver, procure and file and/or record any documents or instruments reasonably necessary to protect the security interest herein granted against the rights or interests of third Persons and Pledgor will pay all reasonable out-of-pocket costs connection with any of the foregoing. 6.5 Pledgor shall pay all reasonable recording fees, attorney's fees and all other out-of-pocket costs and expenses incurred by Pledgor attributable or chargeable to Pledgor as owner of the Collateral, and will reimburse Secured Party for all such reasonable expenses incurred by it with respect to the Collateral as provided in this Security Agreement prior to the termination of this Security Agreement and/or Secured Party's assumption of the Pledged Equity Interests in Issuer in accordance with the terms hereof (the "Termination Date"). Pledgor shall pay all reasonable out-of-pocket expenses and shall reimburse Secured Party for any expenditures, including, without limitation, reasonable attorney's fees and legal expenses, incurred or expended in connection with, the perfection, preservation, realization, enforcement and exercise of Secured Party's rights, powers and remedies hereunder, or Secured Party's reasonable protection of the Collateral and its security interests therein. Pledgor will indemnify and hold harmless Secured Party from and against, and reimburse it for, all claims, demands, liabilities, losses, damages, judgments, penalties, costs and expenses (including, without limitation, reasonable attorneys' fees) which may be imposed upon, 7 or incurred or paid by, it by reason of or in connection with any act performed or omitted to be performed hereunder, SAVE AND EXCEPT FOR SECURED PARTY'S AND/OR ITS AGENTS', EMPLOYEES' AND CONTRACTORS' WILLFUL MISCONDUCT OR NEGLIGENCE. Any amount to be paid hereunder by Pledgor to Secured Party shall be a demand obligation owing by Pledgor to Secured Party and due from Pledgor to Secured Party within ten (10) business days after written demand therefor, after which time such amounts shall bear interest from the date of demand for reimbursement of such expenditure by Secured Party until paid at the Interest Rate under the Loan Agreement (or at the Default Rate under the Loan Agreement upon the occurrence and during the continuance of an Event of Default), and in all events such amounts shall be a part of the Indebtedness and shall be secured by this Security Agreement. 6.6 In the event of the enactment after the Effective Date of any law of the State of Maryland or any other state having jurisdiction of any of the parties hereto or of the Collateral, that (i) imposes upon Secured Party the payment of the whole or any part of the taxes or assessments or charges or liens herein required to be paid by Pledgor, or (ii) changes in any way the laws relating to the taxation of security agreements or debts secured by security agreements or the Secured Party's interest in the property covered thereby or the manner of collection of such taxes so as to adversely affect this Security Agreement, the Indebtedness or Secured Party (clauses (i) and (ii) collectively, "Increased Expenses"), then, and in any such event to the extent such Increased Expenses arose or accrued prior to the Termination Date, Pledgor, within thirty (30) days after written demand therefor, shall pay all such taxes, assessments, charges or liens resulting therefrom, or reimburse Secured Party therefor to the extent any such expenses were incurred by Secured Party with respect thereto; provided, however, that if, in the reasonable opinion of counsel for Secured Party: (i) it might be unlawful to require Pledgor to make such payment; or, (ii) the making of such payment might result in the imposition of interest beyond the maximum rate permitted under applicable law, then and in such event, Secured Party may elect, by notice in writing given to Pledgor, to declare all of the Indebtedness to be and become due and payable one hundred twenty (120) days from the giving of such notice. 6.7 If Pledgor fails to perform any act or to take any action which hereunder Pledgor is required to perform or take or to pay any money which Pledgor is required to pay hereunder, and same constitutes an Event of Default that remains uncured, Secured Party, in Pledgor's name or in its own name, may, but shall not be obligated to, perform or cause to be performed such act or take such action or pay such money and any expenses so incurred by Secured Party and any money so paid by Secured Party shall be a demand obligation owing by Pledgor and shall bear interest from the date of making demand for reimbursement of such payment until paid at the Default Rate under the Loan Agreement and shall be a part of the Indebtedness and shall be secured by this Security Agreement and by any other instrument securing the Indebtedness and Secured Party, upon making such payment, shall be subrogated to all of the rights of the Person, corporation or body politic receiving such payment. 8 6.8 Pledgor shall execute and deliver such documents as Secured Party reasonably deems necessary to create, perfect and continue the security interests contemplated hereby. 6.9 Pledgor shall not change its chief place of business or the location of Pledgor's records concerning the Collateral without first giving Secured Party prompt written notice following such change of the address to which Pledgor is moving its chief place of business and/or said records. 6.10 Pledgor shall not change its jurisdiction of organization without the prior written consent of Secured Party, which consent shall not be unreasonably withheld or delayed. 6.11 Pledgor shall not (and shall not permit or allow Issuer to), without first obtaining the prior written consent of Secured Party: (a) enter into any side letters or other agreements with respect to distributions or payments pertaining to or arising from the Pledged Equity Interests or any other the stock or equity interests in Issuer; (b) amend (or consent to an amendment of) the current operating agreement or company agreement of Issuer; (c) permit the issuance of additional stock or equity interests, whether preferred, common or otherwise, in Issuer; or (d) consent to, authorize or allow the Pledged Equity Interests to be certificated. 6.12 If Issuer desires to convert to any other type of entity (corporation, limited partnership, etc.) and/or if Issuer desires to change its state of organization, Pledgor shall: (a) give Secured Party prompt written notice thereof in advance such conversion or change and obtain Secured Party's prior written consent thereto; (b) as a condition precedent to such conversion or change, execute and deliver to Secured Party a pledge and security agreement (in form and content substantially similar to this Security Agreement) whereby the Collateral provided in this Security Agreement shall either be updated (if Issuer changes its state of domicile) or replaced with comparable collateral, as determined by Secured Party in its sole discretion (if Issuer is converted to any other type of entity); and (c) provide Issuer's written consent to any of the actions set forth in item (b) above (with such written consent to be substantially in the same form of consent Issuer delivered to Secured Party on or about the Effective Date of this Security Agreement, unless otherwise agreed by Secured Party) to the extent required pursuant to the governing formation agreement of Issuer. ARTICLE 7 Authorizations to Secured Party Pledgor authorizes Secured Party either before or after revocation of such authorization, without notice or demand and without affecting Pledgor's liability hereunder, from time to time during the continuation of an Event of Default to: (i) realize upon the Collateral and apply the Collateral or the Proceeds thereof toward the payment of the Indebtedness in the order provided under the Loan Agreement, and otherwise in the order determined by Secured Party, in its sole and absolute discretion; and (ii) apply payments received by Secured Party from Pledgor to any Indebtedness of Borrowers to

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&nbsp;&nbsp;&nbsp;&nbsp;9 Secured Party in accordance with the order provided under the Loan Agreement and otherwise in such order as Secured Party shall determine in its sole and absolute discretion, and Pledgor hereby waives any provision of law regarding application of payments which specifies otherwise. ARTICLE 8 Powers of Secured Party During the continuation of an Event of Default, Pledgor shall be deemed to have appointed Secured Party its true and lawful agent and attorney-in-fact (with full power of substitution) to perform any of the following powers, which powers are coupled with an interest, are irrevocable until the termination of this Security Agreement as provided herein or until such Event of Default is cured to the satisfaction of Secured Party, and may be exercised from time to time by Secured Party's officers and employees, or any of them: (a) to perform any obligation of Pledgor hereunder in Pledgor's name or otherwise; (b) to notify any Person, including Issuer, obligated on any security, instrument or other document subject to this Security Agreement of Secured Party's rights hereunder; (c) to collect by legal proceedings or otherwise all the Collateral; (d) to exercise all rights, powers and remedies which Pledgor would have, but for this Security Agreement, with respect to the Collateral; and (e) to do all acts and things and execute all documents in the name of Pledgor or otherwise, deemed by Secured Party as necessary, proper or necessary in connection with the perfection, preservation, realization, enforcement or exercise of its rights, powers and remedies hereunder. To effect the purposes of this Security Agreement during the continuance of an Event of Default or otherwise upon the written instruction of Pledgor, Secured Party may cause any Collateral to be transferred to Secured Party's name or the name of Secured Party's nominee or designee. ARTICLE 9 Event of Default The occurrence of any one or more of the following shall constitute an event of default (an "Event of Default") under this Security Agreement: (a) Monetary. Pledgor's failure to pay (or cause to be paid) any sums payable under this Security Agreement within the time period prescribed herein or, if no time period is provided, within ten (10) days after the same is due and payable; (b) Performance of Obligations. Except for those obligations and failures addressed and governed by item (a) above, Pledgor's failure to perform (or cause to be performed) any other obligation under this Security Agreement within fifteen (15) days following the earlier of (i) Pledgor's actual knowledge thereof or (ii) written notice thereof from Secured Party; (c) Sequestration or Attachment. The sequestration or attachment of (or any levy or execution upon) any portion of the Collateral, which sequestration, 10 attachment, levy or execution is not released, expunged or dismissed within thirty (30) business days from such event; (d) Representations and Warranties. The failure of any representation or warranty of Pledgor in this Security Agreement to be true and correct (or the failure in any written instruments or certifications required to be delivered by Pledgor to Secured Party in accordance with this Security Agreement to be true and correct); (e) Voluntary Bankruptcy; Insolvency; Dissolution. (i) the filing of a petition by Pledgor and/or Issuer for relief under the United Stated Bankruptcy Code or under any other present or future state or federal law regarding bankruptcy, reorganization or other debtor relief law; (ii) a general assignment by Pledgor and/or Issuer for the benefit of creditors; or (iii) Pledgor and/or Issuer applying for the appointment of a receiver, trustee, custodian or liquidator of Pledgor and/or Issuer or Issuer or any of its property (including the Collateral); (f) Involuntary Bankruptcy. (i) the filing of any pleading or an answer by Pledgor and/or Issuer in any involuntary proceeding under the United States Bankruptcy Code or other debtor relief law which admits the petition's material allegations regarding Pledgor's and/or Issuer's, as applicable, insolvency; or (ii) the failure of Pledgor and/or Issuer to effect a full dismissal of any involuntary petition under the United States Bankruptcy Code or under any other debtor relief law that: (A) is filed against Pledgor and/or Issuer, as applicable, or (B) in any way restrains or limits Pledgor or Secured Party regarding any of the Collateral prior to the earlier of the entry of any court order granting relief sought in such involuntary petition or sixty (60) days following the date of filing of such involuntary petition; (g) Loss of Priority. The failure at any time of this Security Agreement to be a valid first lien and security interest upon any of the Collateral as a result of any direct actions of Pledgor; or (h) Default Under the Other Loan Documents. An "Event Default" (as defined therein) occurs under any of the other Loan Documents. ARTICLE 10 Remedies 10.1 Upon the occurrence of an Event of Default and during the continuation thereof, Secured Party may exercise Secured Party's rights of enforcement under the Maryland Uniform Commercial Code or the Uniform Commercial Code of any other State, if determined to govern the rights and remedies of Secured Party (as applicable, the "UCC"). 10.2 In addition to the above, during the continuance of an Event of Default, Secured Party shall have and may exercise all other rights conferred by law or under the Loan Documents and may resort to any remedy existing at law or in equity for the collection of the Indebtedness and for the enforcement of the covenants and 11 agreements contained herein, and the resort to any such remedy shall not prevent the concurrent or subsequent employment of any other appropriate remedy or remedies permitted hereby. 10.3 The rights granted hereunder are cumulative of any and all other security now or hereafter held by Secured Party or other holder for payment of the Indebtedness and Secured Party may resort to any security now or hereafter existing for the payment of the Indebtedness in such portions and in such order as may seem best to Secured Party to exercise to the extent permitted by the Loan Documents and, to the extent of the Loan Documents, no delay in exercising, any right, power or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise by Secured Party or any right, power or remedy hereunder preclude any other or further exercise thereof or the exercise of any right, power or remedy. ARTICLE 11 General Provisions 11.1 Upon the earlier of (the payment in full of all of the Indebtedness, the security interests evidenced hereby or provided for herein shall automatically terminate and Secured Party shall promptly take all steps necessary to release, at the expense of Pledgor, the security interest evidenced hereby, including Secured Party's execution of any documents reasonably requested by Pledgor to evidence such termination, and Secured Party shall cause the Collateral then held as such by Secured Party to become free and clear of such security interests. 11.2 Secured Party may remedy any Event Default in any manner without waiving the Event of Default remedied and may waive any Event of Default without waiving any prior or subsequent Event of Default. No modification or waiver of any provision of this Security Agreement nor consent to any departure by Pledgor therefrom shall in any event be effective unless the same shall be in writing and signed by Secured Party and then such waiver or consent shall be effective only in the specific instances, for the purpose for which given and to the extent therein specified. No notice to or demand on Pledgor in any case shall in and of itself entitle Pledgor to any other or further notice of demand in similar or other circumstances. 11.3 A carbon, photographic or other reproduction of this Security Agreement or of any financing statement relating to this Security Agreement shall be sufficient as a financing statement. Further, Pledgor authorizes Secured Party to execute and file, without further permission or signature of or notice to Pledgor, any financing statements, amendments thereto or continuations thereof as are deemed necessary or appropriate in Secured Party's sole discretion and in such jurisdictions as deemed appropriate by Secured Party, and as may be required or allowed by applicable laws, all in order to perfect and protect the priority of its security interests in the Collateral granted herein. 11.4 Secured Party may upon written notice to Pledgor assign this Security Agreement so that the assignee shall be entitled to the rights and remedies of Secured Party hereunder and in the event of such assignment, Pledgor will assert no claims or 12 defenses it may have against such assignee except arising from this Security Agreement or the obligations secured hereby. 11.5 All notices, demands, or other communications under this Security Agreement shall be in writing and shall be delivered to the appropriate party at the address set forth in the preamble paragraph of this Security Agreement (subject to change from time to time by written notice to all other parties to this Security Agreement). All communications shall be deemed served upon delivery of same, or if mailed, upon the first to occur of receipt or the expiration of two (2) business days after the deposit in the United States Postal Service mail, postage prepaid and addressed to the address of Pledgor or Secured Party at the address specified; provided, however, that non-receipt of any communication as the result of any change of address of which the sending party was not notified or as the result of a refusal to accept delivery shall be deemed receipt of such communication. 11.6 The terms, provisions, covenants, and conditions hereof shall be binding upon and inure to the benefit of Pledgor and its respective heirs, devisees, representatives, successors, substitutes and assigns and shall be binding upon and inure to the benefit of Secured Party and its successors and assigns. All references in this Security Agreement to Pledgor and Secured Party shall be deemed to include all such heirs, devisees, representatives, successors, substitutes and assigns. 11.7 A determination that any provision of this Security Agreement is unenforceable or invalid shall not affect the enforceability or validity of any other provision, and any determination that the application of any provision of this Security Agreement to any Person or circumstances is illegal or unenforceable shall not affect the enforceability or validity of such provision as it may apply to any others Persons or circumstances. 11.8 Within this Security Agreement, words of any gender shall be held and construed to include any other gender, and words in singular number shall be held and construed to include the plural, unless the context otherwise requires. 11.9 Venue for any cause of action hereunder shall be determined in accordance with the Loan Documents. 11.10 Secured Party, by its acceptance hereof, does not become a grantor, trustee or beneficiary of Pledgor (substitute or otherwise), and in no event shall Secured Party be liable for any of the debts, obligations or liabilities of the Pledgor, or the respective grantors, trustees or beneficiaries thereof, nor is Secured Party liable for any contributions to the Pledgor. 11.11 The obligations of Pledgor hereunder shall not be modified, changed, released, limited or impaired in any manner whatsoever on account of any or all of the following: (a) recovery from any other Person or entity becomes barred by any statute of limitations or is otherwise prevented; (b) any defenses, set-offs or counterclaims which may be available to any other Person or entity; (c) any release of any guarantor

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&nbsp;&nbsp;&nbsp;&nbsp;13 or any other Person (other than Pledgor) primarily or secondarily liable for the payment of the Indebtedness or any part thereof; (d) any modifications, extensions, amendments, consents, releases or waivers with respect to the Loan Documents, or this Security Agreement, except to the extent such modifications, extensions, amendments, consents, releases or waivers with respect to the Loan Documents, or this Security Agreement specifically modify, change, release or limit the obligations of Pledgor hereunder; or (e) any failure of Secured Party to give any notice to Pledgor of any Event of Default under this Security Agreement. 11.12 Time is of the essence of this Security Agreement. 11.13 The liability and obligations of Pledgor hereunder shall not be affected or impaired by any failure or delay by Secured Party in enforcing any of the Loan Documents or this Security Agreement or in exercising any right or power in respect thereto, or by any compromise, waiver, settlement, change, subordination, modification or disposition of any security therefor. In order to hold the undersigned liable hereunder, there shall be no obligation on the part of Secured Party, at any time, to resort for payment to any other security or other rights and remedies, and Secured Party shall have the right to enforce this Security Agreement irrespective of whether or not other proceedings or actions are pending or being taken seeking resort to or realization upon or from any of the foregoing. 11.14 This Security Agreement shall be governed by and construed in accordance with the laws of the State of Maryland exclusive of its conflict of laws principles. 11.15 TO THE EXTENT PERMITTED BY APPLICABLE LAW, NO CLAIM MAY BE MADE BY PLEDGOR, OR ANY OTHER PERSON, AGAINST SECURED PARTY OR THE AFFILIATES, DIRECTORS, OFFICERS, EMPLOYEES, ATTORNEYS OR AGENTS OF ANY OF THEM, FOR ANY SPECIAL, INDIRECT, CONSEQUENTIAL OR PUNITIVE DAMAGES IN RESPECT OF ANY CLAIM FOR BREACH OF CONTRACT OR ANY OTHER THEORY OF LIABILITY OTHER THAN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT ARISING OUT OF OR RELATED TO THE TRANSACTIONS CONTEMPLATED BY THIS SECURITY AGREEMENT OR THE OTHER LOAN DOCUMENTS, OR ANY ACT, OMISSION OR EVENT OCCURRING IN CONNECTION THEREWITH, AND PLEDGOR HEREBY WAIVES, RELEASES AND AGREES NOT TO SUE UPON ANY CLAIM FOR ANY SUCH DAMAGES, WHETHER OR NOT ACCRUED OR WHETHER OR NOT KNOWN OR SUSPECTED TO EXIST IN ITS FAVOR. 11.16 THIS SECURITY AGREEMENT EMBODIES THE FINAL, ENTIRE AGREEMENT OF PLEDGOR AND SECURED PARTY AND SUPERSEDES ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF PLEDGOR AND SECURED PARTY. THERE ARE NO ORAL 14 AGREEMENTS BETWEEN PLEDGOR AND SECURED PARTY. Any reference to the Loan Documents includes any amendments, renewals or extensions now or hereafter approved by the parties thereto in writing. (Signatures Commence on Following Page) IN WITNESS WHEREOF, this Security Agreement is executed to be effective as of the Effective Date. PLEDGOR SOR PORT HOLDINGS, LLC, a Maryland limited liability company By: SOR X ACQUISITION Ill, LLC, a Delaware limited liability company, its sole member By: PACIFIC OAK SOR EQUITY HOLDINGS X LLC, a Delaware limited liability company, its sole member By: PACIFIC OAK SOR (BVI) HOLDINGS, LTD., a British Virgin Islands company limited by shares, its sole member By: PACIFIC OAK STRATEGIC OPPORTUNITY LIMITED PARTNERSHIP, a Delaware limited partnership, its sole shareholder By: PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC., a Maryland corporation, its sole general partner By: Name: Ryan Schluttenhof Title: Chief Accounting Officer "\| The undersigned acknowledges and consents to this Security Agreement being executed by Pledgor in favor of Secured Party as collateral for the Loan Agreement. PACIFIC OAK RESIDENTIAL TRUST, INC.., a Maryland real estate investment trust By: Name: Michael S. Gough Title: Chief Executive Officer and President (Signature Page to Pledge and Security Agreement) IN WITNESS WHEREOF, this Security Agreement is executed to be effective as of the Effective Date. PLEDGOR SOR PORT HOLDINGS, LLC, a Maryland limited liability company By: SOR X ACQUISITION Ill, LLC, a Delaware limited liability company, its sole member By: PACIFIC OAK SOR EQUITY HOLDINGS X LLC, a Delaware limited liability company, its sole member By: PACIFIC OAK SOR (BVI) HOLDINGS, LTD., a British Virgin Islands company limited by shares, its sole member By: PACIFIC OAK STRATEGIC OPPORTUNITY LIMITED PARTNERSHIP, a Delaware limited partnership, its sole shareholder By: PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC., a Maryland corporation, its sole general partner By: Name: Ryan Schluttenhofer Title: Chief Accounting Officer The undersigned acknowledges and consents to this Security Agreement being executed by Pledgor in favor of Secured Party as collateral for the Loan Agreement. PACIFIC OAK RESIDENTIAL TRUST, INC., a Maryland real estate investment trust By: Decbud A AMugl Name: Michael S. Gough Title: Chief Executive Officer and President (Signature Page to Pledge and Security Agreement)

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## Exhibit 10.4

![](exhibit104formofindemnif001.jpg)

Exhibit 10.4 ACTIVE\200474927.2 FORM OF INDEMNIFICATION AGREEMENT THIS INDEMNIFICATION AGREEMENT ("Agreement") is made and entered into as of the __ day of _____, ___ by and between Pacific Oak Strategic Opportunity REIT, Inc., a Maryland corporation (the "Company"), and [name] ("Indemnitee"). WHEREAS, at the request of the Company, Indemnitee currently serves as [a director] [and] [an officer] of the Company and may, therefore, be subjected to claims, suits or proceedings arising as a result of [his][her] service; WHEREAS, as an inducement to Indemnitee to serve or continue to serve as [a director] [and] [an officer], the Company has agreed to indemnify Indemnitee and to advance expenses and costs incurred by Indemnitee in connection with any such claims, suits or proceedings; and WHEREAS, the parties by this Agreement desire to set forth their agreement regarding indemnification and advance of expenses; NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows: Section 1. Definitions. For purposes of this Agreement: (a) "Applicable Legal Rate" means a fixed rate of interest equal to the applicable federal rate for mid-term debt instruments as of the day that it is determined that Indemnitee must repay any advanced expenses. (b) "Change in Control" means a change in control of the Company occurring after the Effective Date of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or in response to any similar item on any similar schedule or form) promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), whether or not the Company is then subject to such reporting requirement; provided, however, that, without limitation, such a Change in Control shall be deemed to have occurred if, after the Effective Date (i) any "person" (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 15% or more of the combined voting power of all of the Company's then-outstanding securities entitled to vote generally in the election of directors without the prior approval of at least two-thirds of the members of the Board of Directors in office immediately prior to such person's attaining such percentage interest; (ii) the Company is a party to a merger, consolidation, sale of assets, plan of liquidation or other reorganization not approved by at least two-thirds of the members of the Board of Directors then in office, as a consequence of which members of the Board of Directors in office immediately prior to such transaction or event constitute less than a majority of the Board of Directors thereafter; or (iii) at any time, a majority of the members of the Board of Directors are not individuals (A) who were directors as of the Effective Date or (B) whose election by the Board of Directors or nomination for election by the Company's stockholders was approved or recommended by the affirmative vote of at least two-thirds of the directors then in office who were directors as of the Effective Date or whose election or nomination for election was previously so approved or recommended. (c) "Corporate Status" means the status of a person as a present or former director, officer, employee or agent of the Company or as a director, trustee, officer, partner, manager, managing member, fiduciary, employee or agent of any other foreign or domestic corporation, real estate investment trust, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise that such person is or was serving in such capacity at the request of the Company. As a clarification and without limiting the circumstances in which Indemnitee may be serving at the request of the Company, service by Indemnitee shall be deemed to be at the request of the Company: (i) if Indemnitee serves or served as a director, trustee, officer, partner, manager, managing member, fiduciary, employee or agent of any corporation, partnership, limited liability company, joint venture, trust or other enterprise (1) of which a majority of the voting power or equity interest is or was owned directly or indirectly by the Company or (2) the management of which is controlled directly or indirectly by the Company and (ii) if, as a result of Indemnitee's service to the Company or any of its affiliated entities, Indemnitee is subject to duties to, or required to perform services for, an employee benefit plan or its participants or beneficiaries, including as a deemed fiduciary thereof. (d) "Determination" means a determination that either (1) Indemnitee is entitled to indemnification under this Agreement (a "Favorable Determination") or (2) Indemnitee is not entitled to indemnification under this Agreement (an "Adverse Determination"). (e) "Disinterested Director" means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification and/or advance of Expenses is sought by Indemnitee. (f) "Effective Date" means the date set forth in the first paragraph of this Agreement. (g) "Expenses" means any and all reasonable out-of-pocket attorneys' fees and costs, retainers, court costs, arbitration and mediation costs, transcript costs, fees of experts, witness fees, bonds, costs of collecting and producing documents, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, federal, state, local or 2 ACTIVE\200474927.2 foreign taxes imposed on Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement, ERISA excise taxes and penalties and any other disbursements or expenses incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in or otherwise participating in a Proceeding. Expenses shall also include Expenses incurred in connection with any appeal resulting from any Proceeding including, without limitation, the premium for, security for and other costs relating to any cost bond, supersedeas bond or other appeal bond or its equivalent. (h) "Independent Counsel" means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither is, nor in the past five years has been, retained to represent: (i) the Company or Indemnitee in any matter material to either such party (other than with respect to matters concerning Indemnitee under this Agreement or of other indemnitees under similar indemnification agreements), or (ii) any other party to or participant or witness in the Proceeding giving rise to a claim for indemnification or advance of Expenses hereunder. Notwithstanding the foregoing, the term "Independent Counsel" shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee's rights under this Agreement. (i) "Proceeding" means any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing, claim, demand, discovery request, or other threatened, pending or completed proceeding, whether brought by or in the right of the Company or otherwise and whether of a civil (including intentional or unintentional tort claims), criminal, administrative or investigative (formal or informal) nature in which Indemnitee was, is, will or might be involved as a party or non-party witness by reason of Indemnitee's Corporate Status, including any appeal therefrom, except one pending or completed on or before the Effective Date, unless otherwise specifically agreed in writing by the Company and Indemnitee. If Indemnitee reasonably believes that a given situation may lead to or culminate in the institution of a Proceeding, such situation shall also be considered a Proceeding. Section 2. Services by Indemnitee. Indemnitee [will serve][serves] as [a director] [and] [an officer] of the Company. However, this Agreement shall not impose any independent obligation on Indemnitee or the Company to continue Indemnitee's service to the Company. Indemnitee shall be entitled to resign or otherwise terminate such service with immediate effect at any time, and neither such resignation or termination nor the length of such service shall affect Indemnitee's rights under this Agreement. This Agreement shall not be deemed an employment contract, supersede any employment agreement to which Indemnitee is a party or create any right of Indemnitee to continued employment or appointment. Section 3. General. Subject to the limitations in Section 5, the Company shall indemnify, and advance Expenses to, Indemnitee (a) as provided in this Agreement and (b) as otherwise permitted by Maryland law in effect on the Effective Date and as amended from time to time; provided, however, that no change in Maryland law shall have the effect of reducing the benefits available to Indemnitee hereunder based on Maryland law as in effect on the Effective Date. Subject to the limitations in Section 5, the rights of Indemnitee provided in this Section 3 shall include, without limitation, the rights set forth in the other sections of this Agreement, including any additional indemnification permitted by the Maryland General Corporation Law (the "MGCL"), including, without limitation, Section 2-418 of the MGCL. Section 4. Standard for Indemnification. Subject to the limitations in Section 5, if, by reason of Indemnitee's Corporate Status, Indemnitee is, or is threatened to be, made a party to any Proceeding, the Company shall indemnify Indemnitee against all judgments, penalties, fines and amounts paid in settlement and all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee's behalf in connection with any such Proceeding unless it is established by clear and convincing evidence that (a) the act or omission of Indemnitee was material to the matter giving rise to the Proceeding and (i) was committed in bad faith or (ii) was the result of active and deliberate dishonesty, (b) Indemnitee actually received an improper personal benefit in money, property or services or (c) in the case of any criminal Proceeding, Indemnitee had reasonable cause to believe that Indemnitee's conduct was unlawful. Section 5. Certain Limits on Indemnification. Notwithstanding any other provision of this Agreement (other than Section 6), Indemnitee shall not be entitled to: (a) indemnification for any loss or liability unless all of the following conditions are met: (i) Indemnitee has determined, in good faith, that the course of conduct that caused the loss or liability was in the best interests of the Company; (ii) Indemnitee was acting on behalf of or performing services for the Company; (iii) such loss or liability was not the result of negligence or misconduct, or, if Indemnitee is an independent director, gross negligence or willful misconduct; and (iv) such indemnification is recoverable only out of the Company's net assets and not from the Company's stockholders; (b) indemnification for any loss or liability arising from an alleged violation of federal or state securities laws unless one or more of the following conditions are met: (i) there has been a successful adjudication on the merits of each count involving alleged securities law violations as to Indemnitee; (ii) such claims have been dismissed with prejudice on the merits by a court of competent jurisdiction as to Indemnitee; or (iii) a court of competent jurisdiction approves a settlement of the claims against Indemnitee and finds that indemnification of the settlement and the related costs should be made, and the court considering the request for indemnification has been advised of the position of the Securities and Exchange Commission and of the published position of any 3 ACTIVE\200474927.2 state securities regulatory authority in which securities of the Company were offered or sold as to indemnification for violations of securities laws; (c) indemnification hereunder if the Proceeding was one by or in the right of the Company and Indemnitee is adjudged, in a final adjudication of the Proceeding not subject to further appeal, to be liable to the Company; (d) indemnification hereunder if Indemnitee is adjudged, in a final adjudication of the Proceeding not subject to further appeal, to be liable on the basis that personal benefit in money, property or services was improperly received in any Proceeding charging improper personal benefit to Indemnitee, whether or not involving action in Indemnitee's Corporate Status; or (e) indemnification or advance of Expenses hereunder if the Proceeding was brought by Indemnitee, unless: (i) the Proceeding was brought to enforce indemnification under this Agreement, and then only to the extent in accordance with and as authorized by Section 12 of this Agreement, or (ii) the Company's charter or Bylaws, a resolution of the stockholders entitled to vote generally in the election of directors or of the Board of Directors or an agreement approved by the Board of Directors to which the Company is a party expressly provide otherwise. Section 6. Court-Ordered Indemnification. Subject to the limitations in Section 5(a) and (b), a court of appropriate jurisdiction, upon application of Indemnitee and such notice as the court shall require, may order indemnification of Indemnitee by the Company in the following circumstances: (a) if such court determines that Indemnitee is entitled to reimbursement under Section 2-418(d)(1) of the MGCL, the court shall order indemnification, in which case Indemnitee shall be entitled to recover the Expenses of securing such reimbursement; or (b) if such court determines that Indemnitee is fairly and reasonably entitled to indemnification in view of all the relevant circumstances, whether or not Indemnitee (i) has met the standards of conduct set forth in Section 2-418(b) of the MGCL or (ii) has been adjudged liable for receipt of an improper personal benefit under Section 2-418(c) of the MGCL, the court may order such indemnification as the court shall deem proper. However, indemnification with respect to any Proceeding by or in the right of the Company or in which liability shall have been adjudged in the circumstances described in Section 2-418(c) of the MGCL shall be limited to Expenses. Section 7. Indemnification for Expenses of an Indemnitee Who is Wholly or Partially Successful. Subject to the limitations in Section 5, to the extent that Indemnitee was or is, by reason of Indemnitee's Corporate Status, made a party to (or otherwise becomes a participant in) any Proceeding and is successful, on the merits or otherwise, in the defense of such Proceeding, the Company shall indemnify Indemnitee for all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee's behalf in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee under this Section 7 for all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee's behalf in connection with each such claim, issue or matter, allocated on a reasonable and proportionate basis. For purposes of this Section 7 and, without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter. Section 8. Advance of Expenses for Indemnitee. If, by reason of Indemnitee's Corporate Status, Indemnitee is, or is threatened to be, made a party to any Proceeding, the Company shall, without requiring a preliminary Determination of Indemnitee's ultimate entitlement to indemnification hereunder, advance all reasonable Expenses incurred by or on behalf of Indemnitee in connection with such Proceeding if (a) such Proceeding is initiated by a third party who is not a stockholder of the Company or is initiated by a stockholder of the Company acting in his or her capacity as such and for which a court of competent jurisdiction specifically approves such advancement and (b) such Proceeding relates to acts or omissions with respect to the performance of duties or services on behalf of the Company. The Company shall make such advance or advances shall be made within ten days after the receipt by the Company of a statement or statements requesting such advance or advances from time to time, whether prior to or after final disposition of such Proceeding and may be in the form of, in the reasonable discretion of the Indemnitee (but without duplication) (a) payment of such Expenses directly to third parties on behalf of Indemnitee, (b) advancement to Indemnitee of funds in an amount sufficient to pay such Expenses or (c) reimbursement to Indemnitee for Indemnitee's payment of such Expenses. Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee and shall include or be preceded or accompanied by a written affirmation by Indemnitee of Indemnitee's good faith belief that the standard of conduct necessary for indemnification by the Company as authorized by law and by this Agreement has been met and a written undertaking by or on behalf of Indemnitee, in substantially the form attached hereto as Exhibit A or in such form as may be required under applicable law as in effect at the time of the execution thereof, to reimburse the portion of any Expenses advanced to Indemnitee relating to claims, issues or matters in the Proceeding as to which it shall ultimately be established that the standard of conduct has not been met by Indemnitee and which have not been successfully resolved as described in Section 7 of this Agreement. To the extent that Expenses advanced to Indemnitee do not relate to a specific claim, issue or matter in the Proceeding, such Expenses shall be allocated on a reasonable and proportionate basis. The undertaking required by this Section 8 shall be an unlimited general obligation by or on behalf of Indemnitee 4 ACTIVE\200474927.2 and shall be accepted without reference to Indemnitee's financial ability to repay such advanced Expenses and without any requirement to post security therefor. Section 9. Indemnification and Advance of Expenses as a Witness or Other Participant. Subject to the limitations in Section 5, to the extent that Indemnitee is or may be, by reason of Indemnitee's Corporate Status, made a witness or otherwise asked to participate in any Proceeding or is called upon to produce documents in connection with any such Proceeding, whether instituted by the Company or any other person, and to which Indemnitee is not a party, Indemnitee shall be advanced all reasonable Expenses and indemnified against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee's behalf in connection therewith within ten days after the receipt by the Company of a statement or statements requesting any such advance or indemnification from time to time, whether prior to or after final disposition of such Proceeding. Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee. In connection with any such advance of Expenses, the Company may require Indemnitee to provide an affirmation and undertaking substantially in the form attached hereto as Exhibit A or in such form as may be required under applicable law as in effect at the time of execution thereof. Section 10. Procedure for Determination of Entitlement to Indemnification. (a) To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request as soon as practicable, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary or appropriate to determine whether and to what extent Indemnitee is entitled to indemnification provided that any failure or delay in giving such notice shall not relieve the Company of its obligations under this Agreement unless and to the extent that (i) none of the Company or its subsidiaries are party to or aware of such Proceeding and (ii) the Company is materially prejudiced by such failure or delay. Subject to the foregoing, Indemnitee may submit one or more such requests from time to time and at such time(s) as Indemnitee deems appropriate in Indemnitee's sole discretion. The officer of the Company receiving any such request from Indemnitee shall, promptly upon receipt of such a request for indemnification, advise the Board of Directors in writing that Indemnitee has requested indemnification. (b) Upon written request by Indemnitee for indemnification pursuant to Section 10(a) above, a Determination, if required by applicable law, with respect to Indemnitee's entitlement shall promptly be made in the specific case: (i) if a Change in Control shall have occurred, by Independent Counsel, in a written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee, which Independent Counsel shall be selected by Indemnitee and approved by the Board of Directors in accordance with Section 2-418(e)(2)(ii) of the MGCL, which approval shall not be unreasonably withheld; or (ii) if a Change in Control shall not have occurred, (A) by the Board of Directors by a majority vote of a quorum consisting of Disinterested Directors or, if such a quorum cannot be obtained, then by a majority vote of a duly authorized committee of the Board of Directors consisting solely of one or more Disinterested Directors, (B) if Independent Counsel has been selected by the Board of Directors in accordance with Section 2-418(e)(2)(ii) of the MGCL and approved by the Indemnitee, which approval shall not be unreasonably withheld or delayed, by Independent Counsel, in a written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee or (C) if so directed by the Board of Directors, by the stockholders of the Company, other than directors or officers who are parties to the Proceeding. If it is so determined that Indemnitee is entitled to indemnification, the Company shall make payment to Indemnitee within ten days after such Determination. Indemnitee shall cooperate with the person, persons or entity making such Determination with respect to Indemnitee's entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary or appropriate to such Determination in the discretion of the Board of Directors or Independent Counsel if retained pursuant to clause (ii)(B) of this Section 10(b). Any Expenses incurred by Indemnitee in so cooperating with the person, persons or entity making such Determination shall be borne by the Company (irrespective of whether the Determination is a Favorable Determination or an Adverse Determination) and the Company shall indemnify and hold Indemnitee harmless therefrom. (c) The Company shall pay the reasonable fees and expenses of Independent Counsel, if one is appointed. Section 11. Presumptions and Effect of Certain Proceedings. (a) In making a Determination hereunder, the person or persons or entity making such Determination shall presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 10(a) of this Agreement, and the Company shall have the burden of proof to overcome that presumption and may only do so by showing that there is a reasonable basis to support it. (b) The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, upon a plea of nolo contendere or its equivalent, or entry of an order of probation prior to judgment, does not create a presumption that Indemnitee did not meet the requisite standard of conduct described herein for indemnification. (c) The knowledge and/or actions, or failure to act, of any other director, officer, employee or agent of the Company or any other director, trustee, officer, partner, manager, managing member, fiduciary, employee or agent of any other foreign or domestic

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![](exhibit104formofindemnif002.jpg)

5 ACTIVE\200474927.2 corporation, real estate investment trust, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise shall not be imputed to Indemnitee for purposes of determining any other right to indemnification under this Agreement. Section 12. Remedies of Indemnitee. (a) If (i) an Adverse Determination is made pursuant to Section 10(b) of this Agreement, (ii) advance of Expenses is not timely made pursuant to Sections 8 or 9 of this Agreement, (iii) no Favorable Determination shall have been made pursuant to Section 10(b) of this Agreement within 60 days after receipt by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to Sections 7 or 9 of this Agreement within ten days after receipt by the Company of a written request therefor, or (v) payment of indemnification pursuant to any other section of this Agreement or the charter or Bylaws of the Company is not made within ten days after a Favorable Determination, Indemnitee shall be entitled to an adjudication in an appropriate court located in the State of Maryland, or in any other court of competent jurisdiction, of Indemnitee's entitlement to such indemnification or advance of Expenses. Alternatively, Indemnitee, at Indemnitee's option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the Commercial Arbitration Rules of the American Arbitration Association. Indemnitee shall commence a proceeding seeking an adjudication or an award in arbitration within 180 days following the date on which Indemnitee first has the right to commence such proceeding pursuant to this Section 12(a); provided, however, that the foregoing clause shall not apply to a proceeding brought by Indemnitee to enforce Indemnitee's rights under Section 7 of this Agreement. Except as set forth herein, the provisions of Maryland law (without regard to its conflicts of laws rules) shall apply to any such arbitration. The Company shall not oppose Indemnitee's right to seek any such adjudication or award in arbitration. (b) In any judicial proceeding or arbitration commenced pursuant to this Section 12, Indemnitee shall be presumed to be entitled to indemnification or advance of Expenses, as the case may be, under this Agreement and the Company shall have the burden of proving that Indemnitee is not entitled to indemnification or advance of Expenses, as the case may be. Any Proceeding commenced by Indemnitee pursuant to Section 12 shall be de novo with respect to all determinations of fact and law. If Indemnitee commences a judicial proceeding or arbitration pursuant to this Section 12, Indemnitee shall not be required to reimburse the Company for any advances pursuant to Section 8 of this Agreement until a final Determination is made with respect to Indemnitee's entitlement to indemnification (as to which all rights of appeal have been exhausted or lapsed). The Company shall, to the fullest extent not prohibited by law, be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Section 12 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or before any such arbitrator that the Company is bound by all of the provisions of this Agreement. (c) If a Favorable Determination shall have been made pursuant to Section 10(b) of this Agreement, the Company shall be bound by such Favorable Determination in any judicial proceeding or arbitration commenced pursuant to this Section 12, absent a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee's statement not materially misleading, in connection with the request for indemnification. (d) In the event that Indemnitee is successful in seeking, pursuant to this Section 12, a judicial adjudication of or an award in arbitration to enforce Indemnitee's rights under, or to recover damages for breach of, this Agreement, Indemnitee shall be entitled to recover from the Company, and shall be indemnified by the Company for, any and all Expenses actually and reasonably incurred by Indemnitee in such judicial adjudication or arbitration. If it shall be determined in such judicial adjudication or arbitration that Indemnitee is entitled to receive part but not all of the indemnification or advance of Expenses sought, the Expenses incurred by Indemnitee in connection with such judicial adjudication or arbitration shall be appropriately prorated. (e) Interest shall be paid by the Company to Indemnitee at the maximum rate allowed to be charged for judgments under the Courts and Judicial Proceedings Article of the Annotated Code of Maryland for amounts which the Company pays or is obligated to pay for the period (i) commencing with either the tenth day after the date on which the Company was requested to advance Expenses in accordance with Sections 8 or 9 of this Agreement or the 60th day after the date on which the Company was requested to make the Determination of entitlement to indemnification under Section 10(b) of this Agreement, as applicable, and (ii) ending on the date such payment is made to Indemnitee by the Company. Section 13. Defense of the Underlying Proceeding. (a) Indemnitee shall notify the Company promptly in writing upon being served with any summons, citation, subpoena, complaint, indictment, request or other document relating to any Proceeding which may result in the right to indemnification or the advance of Expenses hereunder and shall include with such notice a description of the nature of the Proceeding and a summary of the facts underlying the Proceeding. The failure to give any such notice shall not disqualify Indemnitee from the right, or otherwise affect in any manner any right of Indemnitee, to indemnification or the advance of Expenses under this Agreement unless the Company's ability to defend in such Proceeding or to obtain proceeds under any insurance policy is materially and adversely prejudiced thereby, and then only to the extent the Company is thereby actually so prejudiced. (b) Subject to the provisions of the last sentence of this Section 13(b) and of Section 13(c) below, the Company shall have the right to defend Indemnitee in any Proceeding which may give rise to indemnification hereunder; provided, however, that the Company shall notify Indemnitee of any such decision to defend within 15 days following receipt of notice of any such Proceeding 6 ACTIVE\200474927.2 under Section 13(a) above. The Company shall not, without the prior written consent of Indemnitee, which shall not be unreasonably withheld or delayed, consent to the entry of any judgment against Indemnitee or enter into any settlement or compromise with respect to Indemnitee which (i) includes an admission of fault of Indemnitee, (ii) does not include, as an unconditional term thereof, the full release of Indemnitee from all liability in respect of such Proceeding, which release shall be in form and substance reasonably satisfactory to Indemnitee or (iii) would impose any Expense, judgment, fine, penalty or limitation on Indemnitee. This Section 13(b) shall not apply to a Proceeding brought by Indemnitee under Section 12 of this Agreement. (c) Notwithstanding the provisions of Section 13(b) above, if in a Proceeding to which Indemnitee is a party by reason of Indemnitee's Corporate Status, (i) Indemnitee reasonably concludes, based upon an opinion of counsel approved by the Company, which approval shall not be unreasonably withheld or delayed, that Indemnitee may have separate defenses or counterclaims to assert with respect to any issue which may not be consistent with other defendants in such Proceeding, (ii) Indemnitee reasonably concludes, based upon an opinion of counsel approved by the Company, which approval shall not be unreasonably withheld or delayed, that an actual or apparent conflict of interest or potential conflict of interest exists between Indemnitee and the Company, or (iii) if the Company fails to assume the defense of such Proceeding in a timely manner, Indemnitee shall be entitled to be represented by separate legal counsel of Indemnitee's choice, subject to the prior approval of the Company, which approval shall not be unreasonably withheld or delayed, at the expense of the Company. In addition, if the Company fails to comply with any of its obligations under this Agreement or in the event that the Company or any other person takes any action to declare this Agreement void or unenforceable, or institutes any Proceeding to deny or to recover from Indemnitee the benefits intended to be provided to Indemnitee hereunder, Indemnitee shall have the right to retain counsel of Indemnitee's choice, subject to the prior approval of the Company, which approval shall not be unreasonably withheld or delayed, at the expense of the Company (subject to Section 12(d) of this Agreement), to represent Indemnitee in connection with any such matter. Section 14. Non-Exclusivity; Survival of Rights; Primacy of Indemnification; Subrogation. (a) The rights of indemnification and advance of Expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the charter or Bylaws of the Company, any agreement or a resolution of the stockholders entitled to vote generally in the election of directors or of the Board of Directors, or otherwise. Unless consented to in writing by Indemnitee, no amendment, alteration or repeal of the charter or Bylaws of the Company, this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in Indemnitee's Corporate Status prior to such amendment, alteration or repeal, regardless of whether a claim with respect to such action or inaction is raised prior or subsequent to such amendment, alteration or repeal. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right or remedy shall be cumulative and in addition to every other right or remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion of any right or remedy hereunder, or otherwise, shall not prohibit the concurrent assertion or employment of any other right or remedy. (b) [The Company hereby acknowledges that Indemnitee may have certain rights to indemnification, advancement of expenses and/or insurance provided by Pacific Oak Capital Advisors, LLC and certain of its affiliates (collectively, the "POCA Indemnitors"). The Company hereby agrees (i) that, as between the Company and the POCA Indemnitors, the Company is the indemnitor of first resort (i.e., its obligations to Indemnitee are primary and any obligation of the POCA Indemnitors to advance Expenses or to provide indemnification for the same Expenses or liabilities incurred by Indemnitee are secondary), (ii) that the Company shall be required to advance the full amount of expenses incurred by Indemnitee and shall be liable for the full amount of all Expenses, judgments, penalties, fines and amounts paid in settlement to the extent legally permitted and as required by the terms of this Agreement and the charter or Bylaws of the Company (or any other agreement between the Company and Indemnitee), without regard to any rights Indemnitee may have against the POCA Indemnitors, and, (iii) that the Company irrevocably waives, relinquishes and releases the POCA Indemnitors from any and all claims against the POCA Indemnitors for contribution, subrogation or any other recovery of any kind in respect thereof. The Company further agrees that no advancement or payment by the POCA Indemnitors on behalf of Indemnitee with respect to any claim for which Indemnitee has sought indemnification from the Company shall affect the foregoing and the POCA Indemnitors shall have a right of contribution and/or be subrogated to the extent of such advancement or payment to all of the rights of recovery of Indemnitee against the Company. The Company and Indemnitee agree that the POCA Indemnitors are express third party beneficiaries of the terms of this Section 14.1] (c) In the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights. Section 15. Insurance. (a) The Company will use its reasonable best efforts to acquire directors and officers liability insurance, on terms and conditions deemed appropriate by the Board of Directors, with the advice of counsel, covering Indemnitee or any claim made against 1 To be inserted if the Indemnitee is employed by Pacific Oak Capital Advisors, LLC or any of its affiliates. 7 ACTIVE\200474927.2 Indemnitee by reason of Indemnitee's Corporate Status and covering the Company for any indemnification or advance of Expenses made by the Company to Indemnitee for any claims made against Indemnitee by reason of Indemnitee's Corporate Status. In the event of a Change in Control, the Company will use its reasonable best efforts to maintain in force any and all directors and officers liability insurance policies that were maintained by the Company immediately prior to the Change in Control for a period of six years with the insurance carrier or carriers and through the insurance broker in place at the time of the Change in Control; provided, however, (i) if the carriers will not offer the same policy and an expiring policy needs to be replaced, a policy substantially comparable in scope and amount shall be obtained and (ii) if any replacement insurance carrier is necessary to obtain a policy substantially comparable in scope and amount, such insurance carrier shall have an AM Best rating that is the same or better than the AM Best rating of the existing insurance carrier; provided, further, however, in no event shall the Company be required to expend in the aggregate in excess of 250% of the annual premium or premiums paid by the Company for directors and officers liability insurance in effect on the date of the Change in Control. In the event that 250% of the annual premium paid by the Company for such existing directors and officers liability insurance is insufficient for such coverage, the Company shall spend up to that amount to purchase such lesser coverage as may be obtained with such amount. (b) Without in any way limiting any other obligation under this Agreement, the Company shall indemnify Indemnitee for any payment by Indemnitee which would otherwise be indemnifiable hereunder arising out of the amount of any deductible or retention and the amount of any excess of the aggregate of all judgments, penalties, fines, settlements and Expenses incurred by Indemnitee in connection with a Proceeding over the coverage of any insurance referred to in Section 15(a). The purchase, establishment and maintenance of any such insurance shall not in any way limit or affect the rights or obligations of the Company or Indemnitee under this Agreement except as expressly provided herein, and the execution and delivery of this Agreement by the Company and Indemnitee shall not in any way limit or affect the rights or obligations of the Company under any such insurance policies. If, at the time the Company receives notice from any source of a Proceeding to which Indemnitee is a party or a participant (as a witness or otherwise), the Company has director and officer liability insurance in effect, the Company shall give prompt notice of such Proceeding to the insurers in accordance with the procedures set forth in the respective policies. (c) Indemnitee shall cooperate with the Company or any insurance carrier of the Company with respect to any Proceeding. Section 16. Coordination of Payments. [Subject to Section 14(b),2] The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable or payable or reimbursable as Expenses hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise. Section 17. Contribution. If the indemnification provided in this Agreement is unavailable in whole or in part and may not be paid to Indemnitee for any reason, other than for failure to satisfy the standard of conduct set forth in Section 4 or due to the provisions of Section 5, then, with respect to any Proceeding in which the Company is jointly liable with Indemnitee (or would be if joined in such Proceeding), to the fullest extent permissible under applicable law, the Company, in lieu of indemnifying and holding harmless Indemnitee, shall pay, in the first instance, the entire amount incurred by Indemnitee, whether for Expenses, judgments, penalties, and/or amounts paid or to be paid in settlement, in connection with any Proceeding without requiring Indemnitee to contribute to such payment, and the Company hereby waives and relinquishes any right of contribution it may have at any time against Indemnitee. Section 18. Reports to Stockholders. To the extent required by the MGCL, the Company shall report in writing to its stockholders the payment of any amounts for indemnification of, or advance of Expenses to, Indemnitee under this Agreement arising out of a Proceeding by or in the right of the Company with the notice of the meeting of stockholders of the Company next following the date of the payment of any such indemnification or advance of Expenses or prior to such meeting. Section 19. Duration of Agreement; Binding Effect. (a) This Agreement shall continue until and terminate on the later of (i) the date that Indemnitee shall have ceased to serve as a director, officer, employee or agent of the Company or as a director, trustee, officer, partner, manager, managing member, fiduciary, employee or agent of any other foreign or domestic corporation, real estate investment trust, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise that such person is or was serving in such capacity at the request of the Company and (ii) the date that Indemnitee is no longer subject to any actual or possible Proceeding (including any rights of appeal thereto and any Proceeding commenced by Indemnitee pursuant to Section 12 of this Agreement). (b) The indemnification and advance of Expenses provided by, or granted pursuant to, this Agreement shall be binding upon and be enforceable by the parties hereto and their respective successors and assigns (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business or assets of the Company), shall continue as to an Indemnitee who has ceased to be a director, officer, employee or agent of the Company or a director, trustee, officer, partner, manager, managing member, fiduciary, employee or agent of any other foreign or domestic corporation, real estate investment trust, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise that such person is or was serving 2 To be inserted if the Indemnitee is employed by Pacific Oak Capital Advisors, LLC or any of its affiliates. 8 ACTIVE\200474927.2 in such capacity at the request of the Company, and shall inure to the benefit of Indemnitee and Indemnitee's spouse, assigns, heirs, devisees, executors and administrators and other legal representatives. (c) The Company shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation or otherwise) to all, substantially all or a substantial part, of the business and/or assets of the Company, by written agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place. (d) The Company and Indemnitee agree that a monetary remedy for breach of this Agreement, at some later date, may be inadequate, impracticable and difficult of proof, and further agree that such breach may cause Indemnitee irreparable harm. Accordingly, the parties hereto agree that Indemnitee may enforce this Agreement by seeking injunctive relief and/or specific performance hereof, without any necessity of showing actual damage or irreparable harm and that by seeking injunctive relief and/or specific performance, Indemnitee shall not be precluded from seeking or obtaining any other relief to which Indemnitee may be entitled. Indemnitee shall further be entitled to such specific performance and injunctive relief, including temporary restraining orders, preliminary injunctions and permanent injunctions, without the necessity of posting bonds or other undertakings in connection therewith. The Company acknowledges that, in the absence of a waiver, a bond or undertaking may be required of Indemnitee by a court, and the Company hereby waives any such requirement of such a bond or undertaking. Section 20. Severability. If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including, without limitation, each portion of any Section, paragraph or sentence of this Agreement containing any such provision held to be invalid, illegal or unenforceable that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and shall remain enforceable to the fullest extent permitted by law; (b) such provision or provisions shall be deemed reformed to the extent necessary to conform to applicable law and to give the maximum effect to the intent of the parties hereto; and (c) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any Section, paragraph or sentence of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby. Section 21. Identical Counterparts. This Agreement may be executed in one or more counterparts (delivery of which may be by facsimile or via e-mail as a portable document format (.pdf) or other electronic format), each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement. One such counterpart signed by the party against whom enforceability is sought shall be sufficient to evidence the existence of this Agreement. Section 22. Headings. The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof. Section 23. Modification and Waiver. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver, unless otherwise expressly stated, constitute a continuing waiver. Section 24. Notices. All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given if (i) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed, on the day of such delivery, or (ii) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed: (a) If to Indemnitee, to the address set forth on the signature page hereto. (b) If to the Company, to: Pacific Oak Strategic Opportunity REIT, Inc. 11766 Wilshire Blvd. Suite 1670 Los Angeles, CA 90025 Attn: [officer of the REIT] Email: or to such other address as may have been furnished in writing to Indemnitee by the Company or to the Company by Indemnitee, as the case may be.

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![](exhibit104formofindemnif003.jpg)

9 ACTIVE\200474927.2 Section 25. Governing Law. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State of Maryland, without regard to its conflicts of laws rules. [SIGNATURE PAGE FOLLOWS] 10 ACTIVE\200474927.2 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written. COMPANY: Pacific Oak Strategic Opportunity REIT, Inc. By: Name: Title: INDEMNITEE: Name: Address: ACTIVE\200474927.2 EXHIBIT A AFFIRMATION AND UNDERTAKING TO REPAY EXPENSES ADVANCED To: The Board of Directors of Pacific Oak Strategic Opportunity REIT, Inc. Re: Affirmation and Undertaking Ladies and Gentlemen: This Affirmation and Undertaking is being provided pursuant to that certain Indemnification Agreement dated the day of _______, 20__, by and between Pacific Oak Strategic Opportunity REIT, Inc., a Maryland corporation (the "Company"), and the undersigned Indemnitee (the "Indemnification Agreement"), pursuant to which I am entitled to advance of Expenses in connection with [Description of Proceeding] (the "Proceeding"). Terms used herein and not otherwise defined shall have the meanings specified in the Indemnification Agreement. I am subject to the Proceeding by reason of my Corporate Status or by reason of alleged actions or omissions by me in such capacity. I hereby affirm my good faith belief that at all times, insofar as I was involved as [a director] [an officer] of the Company, in any of the facts or events giving rise to the Proceeding, I (1) did not act with bad faith or active or deliberate dishonesty, (2) did not receive any improper personal benefit in money, property or services and (3) in the case of any criminal proceeding, had no reasonable cause to believe that any act or omission by me was unlawful. In consideration of the advance of Expenses by the Company for reasonable attorneys' fees and related Expenses incurred by me in connection with the Proceeding (the "Advanced Expenses"), I hereby agree that if, in connection with the Proceeding, it is established that (1) an act or omission by me was material to the matter giving rise to the Proceeding and (a) was committed in bad faith or (b) was the result of active and deliberate dishonesty or (2) I actually received an improper personal benefit in money, property or services or (3) in the case of any criminal proceeding, I had reasonable cause to believe that the act or omission was unlawful, then I shall promptly reimburse the portion of the Advanced Expenses, together with the Applicable Legal Rate of interest thereon, relating to the claims, issues or matters in the Proceeding as to which the foregoing findings have been established. IN WITNESS WHEREOF, I have executed this Affirmation and Undertaking on this ____ day of _______, 20__. Name:

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## Exhibit 31.1

**<u>Exhibit 31.1</u>**

**Certification of Chief Executive Officer pursuant to** 

**Section 302 of the Sarbanes-Oxley Act of 2002**

I, Keith D. Hall, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Pacific Oak Strategic Opportunity REIT, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) &nbsp;&nbsp;&nbsp;&nbsp;Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) &nbsp;&nbsp;&nbsp;&nbsp;Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) &nbsp;&nbsp;&nbsp;&nbsp;Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d) &nbsp;&nbsp;&nbsp;&nbsp;Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) &nbsp;&nbsp;&nbsp;&nbsp;All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) &nbsp;&nbsp;&nbsp;&nbsp;Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | | | |
|:---|:---|:---|:---|
| Date: | August 13, 2025 | By: | /s/ Keith D. Hall |
|  |  |  | **Keith D. Hall** |
|  |  |  | *Chief Executive Officer and Director* |
|  |  |  | (principal executive officer) |

---

## Exhibit 31.2

**<u>Exhibit 31.2</u>**

**Certification of Principal Financial Officer pursuant to** 

**Section 302 of the Sarbanes-Oxley Act of 2002**

I, Peter McMillan III, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Pacific Oak Strategic Opportunity REIT, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) &nbsp;&nbsp;&nbsp;&nbsp;Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) &nbsp;&nbsp;&nbsp;&nbsp;Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c) &nbsp;&nbsp;&nbsp;&nbsp;Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d) &nbsp;&nbsp;&nbsp;&nbsp;Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a) &nbsp;&nbsp;&nbsp;&nbsp;All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b) &nbsp;&nbsp;&nbsp;&nbsp;Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

---

| | | | |
|:---|:---|:---|:---|
| Date: | August 13, 2025 | By: | /s/ Peter McMillan III |
|  |  |  | **Peter McMillan III** |
|  |  |  | *Chairman of the Board, President and Director* |
|  |  |  | (principal financial officer) |

---

## Exhibit 32.1

**<u>Exhibit 32.1</u>**

**Certification pursuant to 18 U.S.C. Section 1350, as Adopted pursuant to Section 906 of the**

**Sarbanes-Oxley Act of 2002**

In connection with the Quarterly Report on Form 10-Q of Pacific Oak Strategic Opportunity REIT, Inc. (the "Registrant") for the quarter ended June 30, 2025, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), the undersigned, Keith D. Hall, Chief Executive Officer and Director of the Registrant, hereby certifies, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to the best of his knowledge and belief:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

---

| | | | |
|:---|:---|:---|:---|
| Date: | August 13, 2025 | By: | /s/ Keith D. Hall |
|  |  |  | **Keith D. Hall** |
|  |  |  | *Chief Executive Officer and Director* |
|  |  |  | (principal executive officer) |

---

## Exhibit 32.2

**<u>Exhibit 32.2</u>**

**Certification pursuant to 18 U.S.C. Section 1350, as Adopted pursuant to Section 906 of the**

**Sarbanes-Oxley Act of 2002**

In connection with the Quarterly Report on Form 10-Q of Pacific Oak Strategic Opportunity REIT, Inc. (the "Registrant") for the quarter ended June 30, 2025, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), the undersigned, Peter McMillan III, Chairman of the Board, President and Director of the Registrant, hereby certifies, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to the best of his knowledge and belief:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

---

| | | | |
|:---|:---|:---|:---|
| Date: | August 13, 2025 | By: | /s/ Peter McMillan III |
|  |  |  | **Peter McMillan III** |
|  |  |  | *Chairman of the Board, President and Director* |
|  |  |  | (principal financial officer) |

---

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