# EDGAR Filing Document

**Accession Number:** 0001914496
**File Stem:** 0001914496-26-000038
**Filing Date:** 2026-3
**Character Count:** 1042552
**Document Hash:** 620061d969b08ed10ceaa4c4035e686b
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001914496-26-000038.hdr.sgml**: 20260331

**ACCESSION NUMBER**: 0001914496-26-000038

**CONFORMED SUBMISSION TYPE**: 10-K

**PUBLIC DOCUMENT COUNT**: 167

**CONFORMED PERIOD OF REPORT**: 20251231

**FILED AS OF DATE**: 20260331

**DATE AS OF CHANGE**: 20260330

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Sculptor Diversified Real Estate Income Trust, Inc.
- **CENTRAL INDEX KEY:** 0001914496
- **STANDARD INDUSTRIAL CLASSIFICATION:** REAL ESTATE INVESTMENT TRUSTS [6798]
- **ORGANIZATION NAME:** 05 Real Estate & Construction
- **EIN:** 000000000
- **STATE OF INCORPORATION:** MD
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-K
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 000-56566
- **FILM NUMBER:** 26816030

**BUSINESS ADDRESS:**
- **STREET 1:** 9 WEST 57TH STREET
- **STREET 2:** 40TH FLOOR
- **CITY:** NEW YORK
- **STATE:** NY
- **ZIP:** 10019
- **BUSINESS PHONE:** 212.790.0000

**MAIL ADDRESS:**
- **STREET 1:** 9 WEST 57TH STREET
- **STREET 2:** 40TH FLOOR
- **CITY:** NEW YORK
- **STATE:** NY
- **ZIP:** 10019

?xml version='1.0' encoding='ASCII'? sdreit-20251231

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**______________________________________________________**

**FORM 10-K**

**____________________________________________________________________**

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

**FOR THE FISCAL YEAR ENDED December 31, 2025**

**OR**

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

**FOR THE TRANSITION PERIOD FROM TO** 

**Commission file number 000-56566**

**______________________________________________________**

**Sculptor Diversified Real Estate Income Trust, Inc.** 

(Exact Name of Registrant as Specified in Its Charter)

**______________________________________________________**

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| | |
|:---|:---|
| **Maryland** | **88-0870670** |
| (State or Other Jurisdiction of<br>Incorporation or Organization) | (I.R.S. Employer<br>Identification No.) |
| **9 West 57**<sup>th</sup> **Street, 40th Floor** |  |
| **New York** | **10019** |
| (Address of Principal Executive Offices) | (Zip Code) |

---

(Registrant's Telephone Number, Including Area Code) **(212) 790-0000** 

______________________________________________________________________

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>

Securities Registered pursuant to Section 12(g) of the Act:

Class S Common Stock, $0.01 par value per share

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

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. Yes ☒ 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). 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.

---

| | | | |
|:---|:---|:---|:---|
| 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. Yes ☒ No ☐

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Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

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

The aggregate market value of the common stock held by non-affiliates of the registrant is: There is no established market for any class of the registrant's shares of common stock.

As of March 30, 2026, the registrant had the following shares outstanding: 23,204,852 outstanding shares of Class F common stock, 6,190,592 outstanding shares of Class FF common stock, 14,421,419 outstanding shares of Class E common stock, 7,804,928 outstanding shares of Class AA common stock, 850,096 outstanding shares of Class A common stock, and 61,066 outstanding shares of Class I-S common stock.

**DOCUMENTS INCORPORATED BY REFERENCE** 

Part III of this Annual Report on Form 10-K incorporates certain information by reference to the definitive proxy statement for the registrant's 2025 Annual Meeting of Stockholders, which will be filed with the Securities and Exchange Commission within 120 days after the close of the registrant's fiscal year.

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**SCULPTOR DIVERSIFIED REAL ESTATE INCOME TRUST, INC.**

**TABLE OF CONTENTS**

---

| | | |
|:---|:---|:---|
| **PART I.** |  | |
| ITEM 1. | <u>[BUSINESS](#i478720b2ac764c71ac103cbc4f0d8ad6_25)</u> | [5](#i478720b2ac764c71ac103cbc4f0d8ad6_25) |
| ITEM 1A. | <u>[RISK FACTORS](#i478720b2ac764c71ac103cbc4f0d8ad6_28)</u> | [9](#i478720b2ac764c71ac103cbc4f0d8ad6_28) |
| ITEM 1B. | <u>[UNRESOLVED STAFF COMMENTS](#i478720b2ac764c71ac103cbc4f0d8ad6_31)</u> | [63](#i478720b2ac764c71ac103cbc4f0d8ad6_31) |
| ITEM 1C. | <u>[CYBERSECURITY](#i478720b2ac764c71ac103cbc4f0d8ad6_34)</u> | [64](#i478720b2ac764c71ac103cbc4f0d8ad6_34) |
| ITEM 2. | <u>[PROPERTIES](#i478720b2ac764c71ac103cbc4f0d8ad6_37)</u> | [65](#i478720b2ac764c71ac103cbc4f0d8ad6_37) |
| ITEM 3. | <u>[LEGAL PROCEEDINGS](#i478720b2ac764c71ac103cbc4f0d8ad6_40)</u> | [65](#i478720b2ac764c71ac103cbc4f0d8ad6_40) |
| ITEM 4. | <u>[MINE SAFETY DISCLOSURES](#i478720b2ac764c71ac103cbc4f0d8ad6_43)</u> | [65](#i478720b2ac764c71ac103cbc4f0d8ad6_43) |
| **PART II.** | | [65](#i478720b2ac764c71ac103cbc4f0d8ad6_49) |
| ITEM 5. | <u>[MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES](#i478720b2ac764c71ac103cbc4f0d8ad6_55)</u> | [66](#i478720b2ac764c71ac103cbc4f0d8ad6_55) |
| ITEM 6. | <u>[RESERVED](#i478720b2ac764c71ac103cbc4f0d8ad6_79)</u> | [75](#i478720b2ac764c71ac103cbc4f0d8ad6_79) |
| ITEM 7. | <u>[M](#i478720b2ac764c71ac103cbc4f0d8ad6_85)[ANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](#i478720b2ac764c71ac103cbc4f0d8ad6_85)</u> | [76](#i478720b2ac764c71ac103cbc4f0d8ad6_85) |
| ITEM 7A. | <u>[Q](#i478720b2ac764c71ac103cbc4f0d8ad6_130)[UANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](#i478720b2ac764c71ac103cbc4f0d8ad6_130)</u> | [88](#i478720b2ac764c71ac103cbc4f0d8ad6_130) |
| ITEM 8. | <u>[FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA](#i478720b2ac764c71ac103cbc4f0d8ad6_136)</u> | [89](#i478720b2ac764c71ac103cbc4f0d8ad6_136) |
| ITEM 9. | <u>[CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE](#i478720b2ac764c71ac103cbc4f0d8ad6_217)</u> | [126](#i478720b2ac764c71ac103cbc4f0d8ad6_217) |
| ITEM 9A. | <u>[C](#i478720b2ac764c71ac103cbc4f0d8ad6_223)[ONTROLS AND PROCEDURES](#i478720b2ac764c71ac103cbc4f0d8ad6_223)</u> | [126](#i478720b2ac764c71ac103cbc4f0d8ad6_223) |
| ITEM 9B. | <u>[O](#i478720b2ac764c71ac103cbc4f0d8ad6_226)[THER INFORMATION](#i478720b2ac764c71ac103cbc4f0d8ad6_226)</u> | [127](#i478720b2ac764c71ac103cbc4f0d8ad6_226) |
| ITEM 9C. | <u>[DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS](#i478720b2ac764c71ac103cbc4f0d8ad6_229)</u> | [128](#i478720b2ac764c71ac103cbc4f0d8ad6_229) |
| **PART III.** | | [129](#i478720b2ac764c71ac103cbc4f0d8ad6_232) |
| ITEM 10. | <u>[DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE](#i478720b2ac764c71ac103cbc4f0d8ad6_235)</u> | [129](#i478720b2ac764c71ac103cbc4f0d8ad6_235) |
| ITEM 11. | <u>[EXECUTIVE COMPENSATION](#i478720b2ac764c71ac103cbc4f0d8ad6_238)</u> | [129](#i478720b2ac764c71ac103cbc4f0d8ad6_238) |
| ITEM 12. | <u>[SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS](#i478720b2ac764c71ac103cbc4f0d8ad6_241)</u> | [129](#i478720b2ac764c71ac103cbc4f0d8ad6_241) |
| ITEM 13. | <u>[CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE](#i478720b2ac764c71ac103cbc4f0d8ad6_202)</u> | [129](#i478720b2ac764c71ac103cbc4f0d8ad6_244) |
| ITEM 14. | <u>[PRINCIPAL ACCOUNTING FEES AND SERVICES](#i478720b2ac764c71ac103cbc4f0d8ad6_247)</u> | [129](#i478720b2ac764c71ac103cbc4f0d8ad6_247) |
| **PART IV.** | | [130](#i478720b2ac764c71ac103cbc4f0d8ad6_250) |
| ITEM 15. | <u>[E](#i478720b2ac764c71ac103cbc4f0d8ad6_253)[XHIBITS, FINANCIAL STATEMENT SCHEDULES](#i478720b2ac764c71ac103cbc4f0d8ad6_253)</u> | [130](#i478720b2ac764c71ac103cbc4f0d8ad6_253) |
| | <u>[SIGNATURES](#i478720b2ac764c71ac103cbc4f0d8ad6_265)</u> | [133](#i478720b2ac764c71ac103cbc4f0d8ad6_265) |

---

------

**CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS**

Certain statements included in this Annual Report on Form 10-K are forward-looking statements. Those statements include statements regarding the intent, belief or current expectations of Sculptor Diversified Real Estate Income Trust, 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 other similar words. These statements include our plans and objectives for future operations, including plans and objectives relating to future growth and availability of funds, and are based on current expectations that involve numerous risks and uncertainties. Assumptions relating to these statements involve judgments with respect to, among other things, future economic, competitive and market conditions, regulatory developments, future business decisions, and other aspects of our business or general economic conditions, all of which are difficult or impossible to accurately predict and many of which are beyond our control.

Although we believe the assumptions underlying the forward-looking statements, and the forward-looking statements themselves, are reasonable, any of the assumptions could be inaccurate and, therefore, there can be no assurance that these forward-looking statements will prove to be accurate and our actual results, performance and achievements may be materially different from that expressed or implied by these forward-looking statements. In light of the significant uncertainties inherent in these forward looking statements, the inclusion of this information should not be regarded as a representation by us or any other person that our plans and objectives, which we consider to be reasonable, will be achieved. Except as otherwise required by federal securities laws, we do not undertake to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

**RISK FACTORS SUMMARY** 

This risk factor summary below should be read together with the more detailed discussion of risks and uncertainties set forth under Item 1A. "Risk Factors" of this Annual Report on Form 10-K.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We have limited prior operating history, and there is no assurance that we will achieve our investment objectives.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We have made a limited number of investments to date, and you will not have the opportunity to evaluate our investments before we make them.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Since there is no public trading market for shares of our common stock, repurchase of shares by us will likely be the only way to dispose of your shares. Our share repurchase plan provides stockholders with the opportunity to request that we repurchase their shares on a monthly basis, but we are not obligated to repurchase any shares and may choose to repurchase only some, or even none, of the shares that have been requested to be repurchased in any particular month in our discretion. In addition, repurchases will be subject to available liquidity and other significant restrictions. Further, our board of directors may make exceptions to, modify, suspend or terminate our share repurchase plan if in its reasonable judgment it deems a suspension to be in our best interest, such as when a repurchase request would place an undue burden on our liquidity, adversely affect our operations or risk having an adverse impact on the Company that would outweigh the benefit of the repurchase offer. As a result, our shares should be considered as having only limited liquidity and at times may be illiquid.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We cannot guarantee that we will make distributions, and if we do, we may fund such distributions from sources other than cash flow from operations, including, without limitation, borrowings, offering proceeds or the sale of our assets, and we have no limits on the amounts we may pay from such sources.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The purchase and repurchase price for shares of our common stock will generally be based on our prior month's net asset value ("NAV") and will not be based on any public trading market. Although there will be independent valuations of our properties from time to time, the valuation of properties is inherently subjective and our NAV may not accurately reflect the actual price at which our properties could be liquidated on any given day.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Other than twelve employees of CapGrow (as defined below) who operate the CapGrow business, we have no employees, and are dependent on our Adviser to conduct our operations. Our Adviser (as defined below) will face conflicts of interest as a result of, among other things, the allocation of investment opportunities among us and other investment funds, programs, REITs, entities and separate accounts formed, advised or managed by Sculptor Capital Management, Inc. and its affiliates (collectively, "Other Sculptor Accounts"), the allocation of time of its investment professionals and the level of fees that we will pay to our Adviser.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• If we are not able to raise a substantial amount of capital in the near term, our ability to achieve our investment objectives could be adversely affected.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• On acquiring shares, you will experience immediate dilution in the net tangible book value of your investment.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Principal and interest payments on any borrowings will reduce the amount of funds available for distribution or investment in additional real estate assets.

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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The acquisition of investment properties may be financed in substantial part by borrowing, which increases our exposure to loss. The use of leverage involves a high degree of financial risk and will increase the exposure of the investments to adverse economic factors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Investing in commercial real estate assets involves certain risks, including but not limited to: tenants' inability to pay rent (whether due to property-specific factors, sector-level issues, or broader macroeconomic conditions), increases in interest rates and lack of availability of financing, tenant turnover and vacancies and changes in supply of or demand for similar properties in a given market.

**PART I.**

**ITEM 1. BUSINESS**

References herein to "Sculptor Diversified Real Estate Income Trust," the "REIT," "SDREIT," "Company," "we," "us," or "our" refer to Sculptor Diversified Real Estate Income Trust, Inc., a Maryland corporation, and its subsidiaries including Sculptor Diversified REIT Operating Partnership LP, a Delaware limited partnership, which we refer to herein as the "Operating Partnership" or "SDREIT OP," unless the context specifically requires otherwise.

**General Description of Business and Operations**

Sculptor Diversified Real Estate Income Trust, Inc. is a Maryland corporation formed on February 11, 2022 for the principal purpose of investing in stabilized income-generating commercial real estate across a variety of both traditional and non-traditional sectors in the United States and Europe. These assets may include multifamily, single family, industrial, net lease, retail and office assets, as well as others, including, without limitation, healthcare, student housing, senior living, lodging, data centers, manufactured housing and self-storage properties. The Company elected to be taxed as a REIT for U.S. federal income tax purposes beginning with our taxable year ended December 31, 2023 and we intend to continue to operate in such a manner. We are the sole general partner of the Operating Partnership. We and the Operating Partnership are externally managed by our adviser, Sculptor Advisors LLC (in its capacity as our adviser, the "Adviser"), a Delaware limited liability company and a registered investment adviser. Our Adviser is an affiliate of Sculptor Capital Management, Inc., our sponsor (together with its affiliates, "Sculptor"). Sculptor Diversified REIT Special Limited Partner LP (the "Special Limited Partner"), an affiliate of the Adviser, owns a special limited partner interest in the Operating Partnership.

In March 2023, we commenced a private offering of shares of our common stock pursuant to the exemption from registration provided by Section 4(a)(2) of the U.S. Securities Act of 1933, as amended (the "Securities Act"), and Regulation D promulgated thereunder, and other exemptions of similar import in the laws of the states and other jurisdictions where the offering is being made.

As of December 31, 2025, the Company's investments in real estate consists of (a) through its wholly-owned subsidiary CapGrow Holdings Member, LLC (the "CapGrow Member"), a 93.38% controlling interest in CapGrow Holdings JV LLC ("CapGrow JV," and together with CapGrow Member, "CapGrow"), that owns a portfolio of primarily single-family homes (the "CapGrow Portfolio") leased to and operated by care providers that serve individuals with intellectual and developmental disabilities, (b) a 90% equity interest in a joint venture that owns University Courtyard, a 240-unit, 792-bed student housing property located in Denton, Texas, (c) an 85.10% controlling interest in a joint venture that owns two parking garage properties located in Rochester, New York, and (d) a 100% equity interest in a 1.3 million square foot distribution center (the "Marysville Property") located in Marysville, Ohio that is 100% leased on a long-term basis to a wholly-owned subsidiary of a leading marketer of branded consumer lawn and garden care products listed on the NYSE.

From time to time, the Company invests in interests in real estate debt, such as commercial mortgage backed securities ("CMBS"), loans, direct real estate loans, and/or preferred equity investments. As of December 31, 2025, the Company's investments in real estate debt consists of (i) an investment in preferred equity in a real estate company (the "Veterinary Real Estate Company") that owns 69 net-leased veterinary hospitals and clinics, (ii) a junior mortgage loan collateralized by a casino and hotel property located in Las Vegas, Nevada, (iii) a participation in a senior secured term loan issued to finance

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the acquisition of a 15-asset, 5,793-key resort portfolio located in Mexico, the Dominican Republic, and Jamaica, and (iv) investments in CMBS.

**Investment Objectives**

Our investment objectives are to invest in real estate assets that will enable us to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• provide attractive current income in the form of regular, stable cash distributions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• preserve and protect invested capital;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• realize appreciation in NAV from proactive investment management and asset management; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• provide an investment alternative for stockholders seeking to allocate a portion of their long-term investment portfolios to commercial real estate with lower volatility than listed public real estate companies.

We cannot assure investors that we will achieve our investment objectives. In particular, we note that the NAV of non-traded REITs may be subject to volatility related to the values of their underlying assets.

**Investment Strategy**

Founded in 2003, Sculptor Real Estate has completed over 225 transactions across 30 diverse real estate asset classes with over $30.0 billion of total enterprise value as of December 31, 2025. Sculptor Real Estate has raised over $14.4 billion in total commitments across its opportunistic equity, opportunistic credit, and core+ platforms in the United States and Europe as of January 1, 2026. Through its affiliation with Sculptor Real Estate, our Adviser will acquire, manage and sell properties in our portfolio on our behalf, subject to the supervision and oversight of our board of directors.

Our investment strategy is to invest in income-oriented commercial real estate across a variety of both traditional and non-traditional sectors in the United States and Europe. We expect to invest primarily in equity interests, but also anticipate investing in debt and hybrid investment structures. To a lesser extent, we also plan to invest in real estate related securities to provide a source of liquidity for our share repurchase plan, cash management and other purposes.

Our investment strategy is expected to capitalize on Sculptor Real Estate's experience investing across 30 different real estate related asset classes to identify and acquire our target investments at attractive pricing. These asset classes may include traditional sectors (i.e., office, hotel, industrial, multifamily and retail) as well as non-traditional real estate related asset classes, including, without limitation, cellular towers, single-family, gaming, healthcare, leisure-related sectors, parking garages, student housing, senior housing, and manufactured housing.

We believe that our real estate related securities will generally help maintain sufficient liquidity to satisfy monthly repurchase requests under our share repurchase plan and manage cash before investing subscription proceeds into properties while also seeking attractive investment returns. Our real estate related securities strategy is designed to generate current income. We expect to work with other groups within the Sculptor organization, including the Equities, Corporate Credit, and Structured Credit groups, to assist in this portion of the portfolio.

We believe that our structure as a perpetual-life REIT will allow us to acquire and manage our investment portfolio in a more active and flexible manner.

Subject to limitations in our corporate governance guidelines, we may enter into one or more joint ventures, tenant-in-common investments or other co-ownership arrangements for the acquisition, development or improvement of properties with third parties or affiliates of our Adviser, including present and future real estate limited partnerships and REITs sponsored by affiliates of our Adviser. We also may acquire interests in or securities issued by these joint ventures, tenant-in-common investments or other joint venture arrangements or other Sculptor-sponsored programs.

**Borrowing Policies**

We intend to use financial leverage to provide additional funds to support our investment activities. This allows us to make more investments than would otherwise be possible, resulting in a broader portfolio. Subject to the limitation on indebtedness for money borrowed in our corporate governance guidelines described below, our target leverage ratio after our ramp-up

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period is approximately 55% of our gross real estate assets (measured using the greater of fair market value and purchase price, including equity in our securities portfolio), inclusive of property-level and entity-level debt and cash, but excluding debt on our securities portfolio. There is, however, no limit on the amount we may borrow with respect to any individual property or portfolio. Indebtedness incurred (i) in connection with funding a deposit in advance of the closing of an investment or (ii) as other working capital advances, will not be included as part of the calculation above.

Our real estate debt portfolio may have embedded leverage through the use of reverse repurchase agreements and may also have embedded leverage through the use of derivatives, including, but not limited to, total return swaps, securities lending arrangements and credit default swaps. During times of increased investment and capital market activity, but subject to the limitation on indebtedness for money borrowed in our corporate governance guidelines described below, we may employ greater leverage in order to quickly build a broader portfolio of assets. We may leverage our portfolio by assuming or incurring secured or unsecured property-level or entity-level debt. An example of property-level debt is a mortgage loan secured by an individual property or portfolio of properties incurred or assumed in connection with our acquisition of such property or portfolio of properties. An example of entity-level debt is a line of credit obtained by us or our Operating Partnership. We may seek to obtain lines of credit under which we would reserve borrowing capacity. Borrowings under lines of credit may be used not only to repurchase shares, but also to fund acquisitions or for any other corporate purpose.

Our actual leverage level will be affected by a number of factors, some of which are outside our control. Significant inflows of proceeds from the sale of shares of our common stock generally will cause our leverage as a percentage of our net assets, or our leverage ratio, to decrease, at least temporarily. Significant outflows of equity as a result of repurchases of shares of our common stock generally will cause our leverage ratio to increase, at least temporarily. Our leverage ratio will also increase or decrease with decreases or increases, respectively, in the value of our portfolio. If we borrow under a line of credit to fund repurchases of shares of our common stock or for other purposes, our leverage will increase and may exceed our target leverage. In such cases, our leverage may remain at the higher level until we receive additional net proceeds from our continuous offering or sell some of our assets to repay outstanding indebtedness.

Our board of directors reviews our aggregate borrowings at least quarterly. In connection with such review, our board of directors may determine to modify our target leverage ratio in light of then-current economic conditions, relative costs of debt and equity capital, fair values of our properties, general conditions in the market for debt and equity securities, growth and investment opportunities or other factors. We may exceed our targeted leverage ratio at times if our Adviser deems it advisable for us. For example, if we fund a repurchase under a line of credit, we will consider actual borrowings when determining whether we are at our leverage target, but not unused borrowing capacity. If, therefore, we are at a leverage ratio in the range of 55% and we borrow additional amounts under a line of credit, or if the value of our portfolio decreases, our leverage could exceed the range of 55% of our gross real estate assets. In the event that our leverage ratio exceeds our target, regardless of the reason, we will thereafter endeavor to manage our leverage back down to our target.

There is no limit on the amount we may borrow with respect to any individual property or portfolio. However, under our corporate governance guidelines we may not incur indebtedness for money borrowed in an amount exceeding 300% of the cost of our net assets, which approximates borrowing 75% of the cost of our investments, unless any excess over this limit is approved by a majority of our independent directors. This limitation includes indebtedness for money borrowed with respect to our real estate debt portfolio. "Net assets" is defined as our total assets other than intangibles valued at cost (prior to deducting depreciation, reserves for bad debts and other non-cash reserves) less total liabilities.

**Our Taxation as a REIT**

We elected to be taxed as a REIT under the Code commencing with our taxable year ended December 31, 2023. Furthermore, we intend to continue to operate in such a manner as to qualify for taxation as a REIT under the applicable provisions of the Code so long as our board of directors determines that REIT qualification remains in our best interest. Our qualification and taxation as a REIT depend upon our ability to meet on a continuing basis, through actual annual operating results, certain qualification tests set forth in the U.S. federal tax laws. Those qualification tests involve the percentage of income that we earn from specified sources, the percentage of our assets that falls within specified categories, the diversity of the ownership of our shares, and the percentage of our taxable income that we distribute. Accordingly, no assurance can be given by us that our actual results of operations for any particular taxable year will satisfy such requirements.

**Employees**

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The Company is externally managed and currently has no employees, other than personnel of CapGrow Partners, LLC who operate the CapGrow business. Aside from the CapGrow personnel, employees of our Adviser perform substantially all of the services related to our asset management, accounting, investor relations, and other administrative activities.

**Governmental Regulations**

As an owner of real estate, our operations are subject, in certain instances, to supervision and regulation by U.S. and other governmental authorities, and may be subject to various laws and judicial and administrative decisions imposing various requirements and restrictions, which include, among other things: (i) federal and state securities laws and regulations; (ii) federal, state and local tax laws and regulations, (iii) state and local laws relating to real property; and (iv) federal, state and local environmental laws, ordinances, and regulations.

Compliance with the federal, state and local laws described above has not had a material adverse effect on our business, assets, results of operations, financial condition and ability to pay distributions, and we do not believe that our existing portfolio will require us to incur material expenditures to comply with these laws and regulations.

**Environmental**

As an owner of real estate, we are subject to various environmental laws of federal, state, and local governments. Compliance with existing laws has not had a material adverse effect on our financial condition or results of operations, and management does not believe it will have such an impact in the future. However, we cannot predict the impact of unforeseen environmental contingencies or new or changed laws or regulations on properties we currently own, or on properties that may be acquired in the future.

**Competition**

As we purchase properties to build our portfolio, we are in competition with other potential buyers for the same properties, which may result in an increase in the amount we must pay to acquire a property or may require us to locate another property that meets our investment criteria. Such other potential buyers may include other listed and non-listed REITs, real estate operating companies, pension funds, insurance companies, investment funds and companies, partnerships and developers. These potential buyers may have substantially greater financial resources and experience than we do. At the time we elect to dispose of our properties, we may be in competition with sellers of similar properties to locate suitable purchasers.

**Conflicts of Interest**

We are subject to conflicts of interest arising out of our relationship with Sculptor, including the Adviser and its affiliates. See Item 1A - "Risk Factors - Risks Related to Conflicts of Interest."

**Available Information** 

We do not have a website. Our public filings, including our Annual Reports on Form 10-K, our Quarterly Reports on Form 10-Q, our Current Reports on Form 8-K, our proxy statements and reports filed by our executive officers and directors under Section 16(a) of the Securities Exchange Act, and any amendments to those filings, are available free of charge on the SEC's website at www.sec.gov.

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**ITEM 1A. RISK FACTORS**

*You should specifically consider the following material risks in addition to the other information contained in this Annual Report on Form 10-K. The occurrence of any of the following risks might have a material adverse effect on our business and financial condition. The risks and uncertainties discussed below are not the only ones we face, but do represent those risks and uncertainties that we believe are most significant to our business, operating results, financial condition, prospects and forward-looking statements. As used herein, the term "you" refers to our current stockholders or potential investors in our common stock, as applicable.*

**Risks Related to Our Organizational Structure**

***We have a limited operating history, and there is no assurance that we will be able to achieve our investment objectives.***

We have a limited operating history and may not be able to achieve our investment objectives. We cannot assure you that the past experiences of the Adviser and its affiliates will be sufficient to allow us to successfully achieve our investment objectives. As a result, an investment in our shares of common stock entails more risk than the shares of common stock of a REIT with a substantial operating history.

***We have held our current investments for only a short period of time, and you will not have the opportunity to evaluate our future investments before we make them.***

We have held most of our current investments for a limited period of time and as a result, it may be difficult for you to evaluate our success in achieving our investment objectives. We will continue to seek to invest substantially all of the net offering proceeds from our offering, after the payment of fees and expenses, in the acquisition of or investment in interests in properties and real estate related securities in the future. However, because you will be unable to evaluate the economic merit of our investments before we make them, you will have to rely entirely on the ability of our Adviser to select suitable and successful investment opportunities. Furthermore, our Adviser will have broad discretion in selecting the types of properties we will invest in and the tenants of those properties, and you will not have the opportunity to evaluate potential investments. These factors increase the risk that your investment may not generate returns comparable to other real estate investment alternatives.

***There is no public trading market for shares of our common stock; therefore, your ability to dispose of your shares will likely be limited to repurchase by us. If you do sell your shares to us, you may receive less than the price you paid.***

There is no current public trading market for shares of our common stock, and we do not expect that such a market will ever develop. Therefore, repurchase of shares by us may be the only way for you to dispose of your shares. We will repurchase shares at a price equal to the transaction price on the date of repurchase (which will generally be equal to our prior month's NAV per share) and not based on the price at which you initially purchased your shares. Subject to limited exceptions, shares that have not been outstanding for at least one year will be repurchased at 95% of the transaction price. As a result, you may receive less than the price you paid for your shares when you sell them to us pursuant to our share repurchase plan. See "Item 5—"Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities—Share Repurchases."

***Your ability to have your shares repurchased through our share repurchase plan is limited.***

We may choose to repurchase fewer shares than have been requested in any particular month to be repurchased under our share repurchase plan, or none at all, in our discretion at any time. We may repurchase fewer shares than have been requested to be repurchased due to lack of readily available funds, the need to maintain liquidity for our operations or because we have determined that investing in real property or other illiquid investments is a better use of our capital than repurchasing our shares.

In addition, the total amount of aggregate repurchases of shares of our common stock will be limited during each calendar month to 2% of the aggregate NAV of all classes as of the last calendar day of the previous quarter and in each calendar quarter will be limited to 5% of the aggregate NAV of all classes of shares as of the last calendar day of the previous calendar quarter; provided, however, that every month and quarter each class of our common stock will be allocated capacity within such aggregate limit to allow stockholders in such class to either (a) redeem shares equal to at least 2% of the aggregate NAV of such share class as of the last calendar day of the previous quarter, or, if more limiting, (b) redeem shares over the course of a given quarter equal to at least 5% of the aggregate NAV of such share class as of the last calendar day of the previous

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quarter (collectively referred to herein as the "2% and 5% limits"). We have in the past received, and may in the future receive, repurchase requests that exceed the limits under our share repurchase plan, and we have in the past repurchased less than the full amount of shares requested, resulting in the repurchase of shares on a pro rata basis. Further, our board of directors may make exceptions to, modify, suspend or terminate our share repurchase plan if in its reasonable judgment it deems such action to be in our best interest. As a result, a stockholder's ability to have their shares repurchased by us may be limited and at times stockholders may not be able to liquidate their investment. See "Item 5—"Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities—Share Repurchases."

***Economic events that may cause our stockholders to request that we repurchase their shares may materially adversely affect our cash flow and our results of operations and financial condition.***

Events affecting economic conditions in the United States, other countries or regions and /or globally, such as the general negative performance of the real estate sector or market volatility (including as a result of uncertainties regarding actual and potential shifts in foreign, trade, economic, central bank, tax and other policies in the United States and/or other countries, including with respect to treaties and tariffs, inflationary pressures or higher interest rates, actual or perceived instability in the United States and /or global banking system and other geopolitical events affecting the financing markets generally), could cause our stockholders to seek the repurchase of their shares pursuant to our share repurchase plan at a time when such events are adversely affecting the performance of our assets. If we decide to satisfy all or a large amount of repurchase requests, our cash flow could be materially adversely affected. In addition, if we determine to sell assets to satisfy repurchase requests, we may not be able to realize the return on such assets that we may have been able to achieve had we sold at a more favorable time, and our results of operations and financial condition could be materially adversely affected.

***Our Adviser manages our portfolio pursuant to very broad investment guidelines and is not required to seek the approval of our board of directors for each investment, financing or asset allocation decision made by it.***

Our board of directors has approved very broad investment guidelines that delegate to our Adviser the authority to execute acquisitions and dispositions of real estate and real estate related securities on our behalf, in each case so long as such investments are consistent with our board-approved investment guidelines and our corporate governance guidelines. Our board of directors will review our investment guidelines on an annual basis (or more often as it deems appropriate) and review our investment portfolio periodically. Transactions entered into on our behalf by our Adviser may be costly and difficult or impossible to unwind when they are subsequently reviewed by our board of directors.

***We face risks associated with the deployment of our capital.***

In light of the nature of our offering, there could be a delay between the time we receive net proceeds from the sale of shares of our common stock in our offering and the time we invest the net proceeds. Pending investment, we may hold large amounts of cash or money market accounts or similar temporary investments, which are subject to management fees.

It is not anticipated that the temporary investment of such cash into money market accounts or other similar temporary investments pending deployment into investments will generate significant interest, and investors should understand that such low interest payments on the temporarily invested cash may adversely affect overall returns. In the event we fail to timely invest the net proceeds of sales of our common stock or do not deploy sufficient capital to meet our targeted leverage, our results of operations and financial condition may be adversely affected.

***If we are unable to raise substantial funds, we will be limited in the number and type of investments we make, and the value of your investment in us will be more dependent on the performance of any of the specific assets we acquire.***

The amount of proceeds we raise in our offering may be substantially less than the amount we would need to achieve a broader portfolio of investments. If we are unable to raise substantial funds, we will make fewer investments, resulting in less breadth in terms of the type, number, geography and size of investments that we make. In that case, the likelihood that any single asset's performance would adversely affect our profitability will increase. There is a greater risk that you will lose money in your investment if we have less breadth in our portfolio. Further, we will have certain fixed operating expenses, regardless of whether we are able to raise substantial funds. Our inability to raise substantial funds would increase our fixed operating expenses as a percentage of gross income, reducing our net income and limiting our ability to make distributions.

***We may change our corporate governance guidelines without stockholder consent.***

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Our board of directors, with the approval of a majority of our independent directors, may change our corporate governance guidelines at any time and, except in limited circumstances, without the consent of any stockholders. Our corporate governance guidelines currently require a majority of our board seats to be for independent directors and require a standing affiliate transaction committee comprised of our independent directors. In conjunction with our corporate governance guidelines, the affiliate transaction committee is responsible for reviewing and approving the terms of all transactions between us and the sponsor or its affiliates (including the Adviser) or any member of our board of directors, including (when applicable) the economic, structural and other terms of all acquisitions and dispositions. Generally, under our corporate governance guidelines, we may enter into transactions with the sponsor, the Adviser, our directors, and their respective affiliates only if a majority of our board of directors, and a majority of the affiliate transaction committee (which is comprised of each of our independent directors), not otherwise interested in the transaction approve the transaction as being fair and reasonable to us. Under our corporate governance guidelines, the affiliate transaction committee is also responsible for reviewing the Adviser's performance and the fees and expenses paid by us to the Adviser and any of its affiliates.

Our corporate governance guidelines also contain provisions limiting certain types of fees and expenses and investment types. Our corporate governance guidelines also require us to provide an annual report to our stockholders with audited financial statements and disclosure about transactions with affiliates. If our board of directors were to amend our corporate governance guidelines, our company could be at greater risk of harm from conflicts of interests with our Adviser and its affiliates, we could have fewer limits on investments, and stockholders could receive less information from us. All of these changes could materially impair the value of an investment in us.

***We may change our investment and operational policies without stockholder consent.***

We may change our investment and operational policies, including our policies with respect to investments, operations, indebtedness, capitalization and distributions, at any time without the consent of our stockholders, which could result in our making investments that are different from, and possibly riskier or more highly leveraged than, the types of investments we have made to date. Our board of directors approved very broad investment guidelines with which we must comply, but these guidelines provide our Adviser with broad discretion and can be changed by our board of directors. A change in our investment strategy may, among other things, increase our exposure to real estate market fluctuations, default risk and interest rate risk, all of which could materially affect our results of operations and financial condition.

***The amount and source of distributions we may make to our stockholders is uncertain, and we may be unable to generate sufficient cash flows from our operations to make distributions to our stockholders at any time in the future.***

We have not established a minimum distribution payment level, and our ability to make distributions to our stockholders may be adversely affected by a number of factors, including the risk factors described in this Annual Report on Form 10-K. We have a limited track record and may not generate sufficient income to make distributions to our stockholders in the future. Our board of directors will make determinations regarding distributions based upon, among other factors, our financial performance, debt service obligations, debt covenants, REIT qualification and tax requirements and capital expenditure requirements. Among the factors that could impair our ability to make distributions to our stockholders are:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our inability to invest the proceeds from sales of our shares on a timely basis in income-producing properties;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our inability to generate sufficient income from our investments;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• high levels of expenses or reduced revenues that reduce our cash flow or non-cash earnings; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• defaults in our investment portfolio or decreases in the value of our investments.

As a result, we may not be able to make distributions to our stockholders at any time in the future, and the level of any distributions we do make to our stockholders may not be maintained over time, any of which could materially and adversely affect the value of your investment.

***We may fund distributions from sources other than our cash flow from operations, including, without limitation, borrowings, offering proceeds or the sale of our assets, and we have no limits on the amounts we may pay from such sources.***

We may not generate sufficient cash flow from operations to fund distributions to stockholders. Therefore, we may fund distributions to our stockholders from sources other than cash flow from operations, including, without limitation, borrowings, offering proceeds or the sale of our assets. The extent to which we fund distributions from sources other than cash flow from operations will depend on various factors, including the level of participation in our distribution reinvestment plan, the extent to which our Adviser elects to receive its management fee in Class E shares or Class E units, the extent to

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which the Special Limited Partner elects to receive distributions on its performance participation interest in Class E units, how quickly we invest the proceeds from our current and any future offering and the performance of our investments. Although we cannot predict the amount of future distributions or their sources of funding, the funding of distributions from offering proceeds or borrowings would likely cause our NAV per share to be lower than it otherwise would be and would likely not be sustainable for an extended period. Funding distributions from borrowings, offering proceeds or the sale of or repayment of our assets will result in us having less funds available to acquire properties or other real estate related securities. As a result, the return you realize on your investment may be reduced. Funding distributions from such sources may also negatively impact our ability to generate cash flows. Likewise, funding distributions from the sale of additional securities will dilute your ownership interest on a percentage basis and may impact the value of your investment especially if we sell these securities at prices less than the price you paid for your shares. We may be required to continue to fund our regular distributions from a combination of some of these sources if our investments fail to perform, if expenses are greater than our revenues or due to numerous other factors. We have not established a limit on the amount of our distributions that may be funded from any of these sources.

To the extent we borrow funds to pay distributions, we would incur borrowing costs and these borrowings would require a future repayment. The use of these sources for distributions and the ultimate repayment of any liabilities incurred could adversely impact our ability to pay distributions in future periods, decrease our NAV, decrease the amount of cash we have available for operations and new investments and adversely impact the value of your investment.

We may also defer operating expenses or pay expenses (including the fees of our Adviser or distributions to the Special Limited Partner if so requested by them) with shares of our common stock or Operating Partnership units in order to preserve cash flow for the payment of distributions. The ultimate repayment of these deferred expenses could adversely affect our operations and reduce the future return on your investment. We may repurchase shares or redeem Operating Partnership units from our Adviser or the Special Limited Partner shortly after issuing such units or shares as compensation. The payment of expenses in shares of our common stock or with Operating Partnership units will dilute your ownership interest in our portfolio of assets. There is no guarantee any of our operating expenses will be deferred, and our Adviser and Special Limited Partner are under no obligation to receive future fees or distributions in shares of our common stock or Operating Partnership units.

***Purchases and repurchases of shares of our common stock are not made based on the current NAV per share of our common stock.***

Generally, our offering price per share and the price at which we make repurchases of our shares will equal the most recently announced NAV per share, plus, in the case of our offering price, applicable upfront selling commissions. We expect to announce the NAV per share mid-month (as of the prior month end) and expect to redeem shares at that price at month end and issue shares at that price on the first day of the following month. The NAV per share, if calculated as of the date of issuance or repurchase, might be significantly different than the transaction price you pay or the repurchase price you receive. Certain of our investments or liabilities may be subject to high levels of volatility from time to time and could change in value significantly between the end of the prior month as of which our NAV is determined and the date that you acquire or repurchase our shares; however the prior month's NAV per share will generally continue to be used as the transaction price per share and repurchase price per share.

***Valuations and appraisals of our real estate and real estate debt are estimates of value and may not necessarily correspond to realizable value.***

The valuation methodologies used to value our real estate and real estate debt involve subjective judgments regarding such factors as comparable sales, rental revenue and operating expense data, known contingencies, the capitalization or discount rate, and projections of future rent and expenses based on appropriate analysis. As a result, valuations and appraisals of our real estate and real estate debt are only estimates of current market value. Ultimate realization of the value of an asset depends to a great extent on economic and other conditions beyond our control and the control of the independent valuation advisors and other parties involved in the valuation of our assets. Further, these valuations may not necessarily represent the price at which an asset would sell, because market prices of assets are best determined by negotiation between a willing buyer and seller. Valuations used for determining our NAV also are generally made without consideration of the expenses that would be incurred by us in connection with disposing of assets. Therefore, the valuations of our properties and real estate debt may not correspond to the timely realizable value upon a sale of those assets and liabilities. In addition to being a month old when share purchases and repurchases take place, our NAV does not currently represent enterprise value and may not accurately reflect the actual prices at which our assets could be liquidated on any given day, the value a third party would pay for all or substantially all of our shares or the price that our shares would trade at on a national stock exchange. There will be

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no retroactive adjustment in the valuation of such assets or liabilities, the price of our shares of common stock, the price we paid to redeem shares of our common stock or NAV-based fees we paid to our Adviser and participating broker-dealers to the extent such valuations prove to inaccurately reflect the true estimate of value and are not a precise measure of realizable value. Because the price you will pay for shares of our common stock in our offering, and the price at which your shares may be redeemed by us pursuant to our share repurchase plan, are generally based on our estimated NAV per share, you may pay more than realizable value or receive less than realizable value for your investment.

***It may be difficult to reflect, fully and accurately, material events that may impact our monthly NAV.***

The determination of our monthly NAV per share will be based in part on appraisals of each of our properties provided annually by independent third-party appraisal firms in individual appraisal reports reviewed by our independent valuation advisors and monthly valuations of our real estate debt and other securities for which market prices are not readily available provided by our Adviser and reviewed by our independent valuation advisors, each in accordance with valuation guidelines approved by our board of directors. As a result, our published NAV per share in any given month may not fully reflect any or all changes in value that may have occurred since the most recent appraisal or valuation. Our Adviser will review appraisal reports and monitor our real estate and real estate debt, and is responsible for notifying the independent valuation advisor of the occurrence of any property-specific or market-driven event it believes may cause a material valuation change in the real estate valuation, but it may be difficult to reflect fully and accurately rapidly changing market conditions or material events that may impact the value of our real estate and real estate debt or liabilities between valuations, or to obtain complete information regarding any such events in a timely manner. For example, an unexpected termination or renewal of a material lease, a material increase or decrease in vacancies or an unanticipated structural or environmental event at a property may cause the value of a property to change materially, yet obtaining sufficient relevant information after the occurrence has come to light or analyzing fully the financial impact of such an event may be difficult to do and may require some time. As a result, the NAV per share may not reflect a material event until such time as sufficient information is available and analyzed, and the financial impact is fully evaluated, such that our NAV may be appropriately adjusted in accordance with our valuation guidelines. Depending on the circumstance, the resulting potential disparity in our NAV may be in favor or to the detriment of either stockholders whose shares we repurchase, or stockholders who buy new shares.

***NAV calculations are not governed by governmental or independent securities, financial or accounting rules or standards.***

The methods used by our Adviser and HedgeServ (Cayman) Ltd. to calculate our monthly NAV, including the components used in calculating our NAV, are not prescribed by rules of the SEC or any other regulatory agency. Further, there are no accounting rules or standards that prescribe which components should be used in calculating our NAV, and our NAV is not audited by our independent registered public accounting firm. We calculate and publish NAV monthly solely for purposes of establishing the price at which we sell and repurchase shares of our common stock on a monthly basis, and you should not view our monthly NAV as a measure of our historical or future financial condition or performance. The components and methodology used in calculating our NAV may differ from those used by other companies now or in the future.

In addition, calculations of our NAV, to the extent that they incorporate valuations of our assets and liabilities, are not prepared in accordance with generally accepted accounting principles. These valuations may differ from liquidation values that could be realized in the event that we were forced to sell assets.

Additionally, errors may occur in calculating our NAV, which could impact the price at which we sell and repurchase shares of our common stock and the amount of our Adviser's management fee and the Special Limited Partner's performance participation interest. For more information regarding our valuation policies and how NAV will be calculated, please refer to "Item 9. Market Price of and Dividends on the Registrant's Common Equity and Related Stockholder Matters—Net Asset Value Calculation and Valuation Guidelines" in our Form 10.

***If we quickly raise a substantial amount of capital, we may have difficulty investing it in a timely manner.***

If we quickly raise capital during our private offering, we may have difficulty identifying and purchasing suitable investments on attractive terms. Therefore, there could be a delay between the time we receive net proceeds from the sale of shares of our common stock in our private offering and the time we invest the net proceeds. This could cause a substantial delay in the time it takes for your investment to generate returns and could adversely affect our ability to pay regular distributions of cash flow from operations to you. If we fail to invest the net proceeds of our offering promptly, our results of operations and financial condition may be adversely affected.

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***Our UPREIT structure may result in potential conflicts of interest with limited partners in our Operating Partnership whose interests may not be aligned with those of our stockholders.***

Our directors and officers have duties to our corporation and our stockholders under Maryland law and our charter in connection with their management of the corporation. At the same time, we, as general partner, have fiduciary duties under Delaware law to our Operating Partnership and to the limited partners in connection with the management of our Operating Partnership. Our duties as general partner of our Operating Partnership and its partners may come into conflict with the duties of our directors and officers to the corporation and our stockholders. Under Delaware law, a general partner of a Delaware limited partnership owes its limited partners the duties of good faith and fair dealing. Other duties, including fiduciary duties, may be modified or eliminated in the partnership's partnership agreement. The partnership agreement of our Operating Partnership provides that, for so long as we own a controlling interest in our Operating Partnership, any conflict that cannot be resolved in a manner not adverse to either our stockholders or the limited partners may be resolved in favor of our stockholders.

Additionally, to the extent permitted by our charter, the partnership agreement expressly limits our liability, and provides for our indemnification, by providing that we and our officers, directors, employees and designees will not be liable to, and will be indemnified by, our Operating Partnership for losses of any nature unless it is established that: (1) the act or omission was material to the matter giving rise to the proceeding and was committed in bad faith, was the result of active and deliberate dishonesty or constituted willful misconduct or gross negligence; (2) the indemnified party received an improper personal benefit in money, property or services; or (3) in the case of a criminal proceeding, the indemnified person had reasonable cause to believe that the act or omission was unlawful.

The provisions of Delaware law that allow the fiduciary duties of a general partner to be modified by a partnership agreement have not been tested in a court of law, and we have not obtained an opinion of counsel covering the provisions set forth in the partnership agreement that purport to waive or restrict our fiduciary duties.

***Payments to our Adviser or the Special Limited Partner in the form of common stock or Operating Partnership units they elect to receive in lieu of fees or distributions will dilute future cash available for distribution to our stockholders.***

Our Adviser or the Special Limited Partner may choose to receive our common stock or Operating Partnership units in lieu of certain fees or distributions. The holders of all Operating Partnership units are entitled to receive cash from operations pro rata with the distributions being paid to us and such distributions to the holder of the Operating Partnership units will reduce the cash available for distribution to us and to our stockholders. Furthermore, under certain circumstances the Operating Partnership units held by our Adviser or the Special Limited Partner are required to be repurchased, in cash at the holder's election, and there may not be sufficient cash to make such a repurchase payment; therefore, we may need to use cash from operations, borrowings, offering proceeds or other sources to make the payment, which will reduce cash available for distribution to you or for investment in our operations. Repurchases of our shares or Operating Partnership units from our Adviser paid to our Adviser as a management fee are not subject to the monthly and quarterly volume limitations or the Early Repurchase Deduction, and such sales receive priority over other shares being put for repurchase during such period. Repurchases of our shares or Operating Partnership units from the Special Limited Partner distributed to the Special Limited Partner with respect to its performance participation interest are not subject to the Early Repurchase Deduction, but such repurchases are subject to the monthly and quarterly volume limitations and do not receive priority over other shares being put for repurchase during such period.

***We may not be able to build and maintain a network of licensed broker-dealers, which failure could have a material adverse effect on our business and our offering.***

If we are unable to build and maintain a sufficient network of selected dealers to distribute shares in our private offering, our ability to raise proceeds through our private offering and implement our investment strategy may be adversely affected. Further, the selected dealers we retain may have numerous competing investment products, some with similar or identical investment strategies and areas of focus as us, which they may elect to emphasize to their retail clients.

***Our board of directors may, in the future, adopt certain measures under Maryland law without stockholder approval that may have the effect of making it less likely that a stockholder would receive a "control premium" for his or her shares.***

Corporations organized under Maryland law with a class of equity securities registered under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and at least three independent directors are permitted to elect to be subject, by a

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charter or bylaw provision or a resolution of its board of directors and notwithstanding any contrary charter or bylaw provision, to any or all of five provisions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• staggering the board of directors into three classes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• requiring a two-thirds vote of stockholders to remove directors;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• providing that only the board of directors can fix the size of the board;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• providing that all vacancies on the board, regardless of how the vacancy was created, may be filled only by the affirmative vote of a majority of the remaining directors in office and for the remainder of the full term of the class of directors in which the vacancy occurred; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• providing for a majority requirement for the calling by stockholders of a special meeting of stockholders.

These provisions may discourage an extraordinary transaction, such as a merger, tender offer or sale of all or substantially all of our assets, all of which might provide a premium price for stockholders' shares. In our charter, we have elected that at such time as we become eligible to make the election provided for under Subtitle 8 of Title 3 of the Maryland General Corporation Law (the "MGCL"), vacancies on our board of directors be filled only by the remaining directors and for the remainder of the full term of the directorship in which the vacancy occurred. Through other provisions in our charter and bylaws, we vest in our board of directors the exclusive power to fix the number of directorships, provided that the number is not less than three. We have not elected to be subject to any of the other provisions described above, but our charter does not prohibit our board of directors from opting into any of these provisions in the future.

Further, under the Maryland Business Combination Act, we may not engage in any merger or other business combination with an "interested stockholder" (which is defined as (1) any person who beneficially owns, directly or indirectly, 10% or more of the voting power of our outstanding voting stock and (2) an affiliate or associate of ours who, at any time within the two-year period prior to the date in question, was the beneficial owner, directly or indirectly, of 10% or more of the voting power of our then outstanding stock) or any affiliate of that interested stockholder for a period of five years after the most recent date on which the interested stockholder became an interested stockholder. A person is not an interested stockholder if our board of directors approved in advance the transaction by which such stockholder would otherwise have become an interested stockholder. In approving a transaction, our board of directors may provide that its approval is subject to compliance, at or after the time of approval, with any terms or conditions determined by our board of directors. After the five-year period ends, any merger or other business combination with the interested stockholder or any affiliate of the interested stockholder must be recommended by our board of directors and approved by the affirmative vote of at least:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 80% of all votes entitled to be cast by holders of outstanding shares of our voting stock; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• two-thirds of all of the votes entitled to be cast by holders of outstanding shares of our voting stock other than those shares owned or held by the interested stockholder with whom or with whose affiliate the business combination is to be effected or held by an affiliate or associate of the interested stockholder.

These supermajority voting provisions do not apply if, among other things, our stockholders receive a minimum price (as defined in the MGCL) for their common stock and the consideration is received in cash or in the same form as previously paid by the interested stockholder.

The statute permits various exemptions from its provisions, including business combinations that are exempted by our board of directors prior to the time the interested stockholder becomes an interested stockholder. Our board of directors has adopted a resolution exempting any business combination involving us and any person, including Sculptor and our Adviser, from the provisions of this law, provided that such business combination is first approved by our board of directors; however, our board may revoke this exemption at any time.

***Our charter permits our board of directors to authorize us to issue preferred stock on terms that may subordinate the rights of the holders of our current common stock or discourage a third party from acquiring us.***

Our board of directors is permitted, subject to certain restrictions set forth in our charter, to authorize the issuance of shares of preferred stock without stockholder approval. Further, our board of directors may classify or reclassify any unissued shares of common or preferred stock into other classes or series of stock and establish the preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends and other distributions, qualifications, and terms or conditions of redemption of the stock and may amend our charter from time to time to increase or decrease the aggregate number of shares or the number of shares of any class or series that we have authority to issue without stockholder approval. Thus, our board of directors could authorize us to issue shares of preferred stock with terms and conditions that could subordinate the rights of the holders of our common stock or have the effect of delaying, deferring or preventing a change in control of us, including

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an extraordinary transaction such as a merger, tender offer or sale of all or substantially all of our assets, that might provide a premium price for holders of our common stock.

***Maryland law and our organizational documents limit our rights and the rights of our stockholders to recover claims against our directors and officers, which could reduce your and our recovery against them if they cause us to incur losses.***

Maryland law provides that a director will not have any liability as a director so long as he or she performs his or her duties in accordance with the applicable standard of conduct. Moreover, our charter generally requires us to indemnify and advance expenses to our directors and officers for losses they may incur by reason of their service in those capacities unless their act or omission was material to the matter giving rise to the proceeding and was committed in bad faith or was the result of active and deliberate dishonesty, they actually received an improper personal benefit in money, property or services or, in the case of any criminal proceeding, they had reasonable cause to believe the act or omission was unlawful. Further, we have entered into separate indemnification agreements with each of our officers and directors. As a result, you and we may have more limited rights against our directors or officers than might otherwise exist under common law, which could reduce your and our recovery from these persons if they act in a manner that causes us to incur losses. In addition, we are generally obligated to fund the defense costs incurred by these persons. See "Item 12. Indemnification of Directors and Officers" in our Form 10.

***Your interest in us will be diluted if we issue additional shares. Your interest in our assets will also be diluted if the Operating Partnership issues additional units.***

Holders of our common stock will not have preemptive rights to any shares we issue in the future. Our charter authorizes us to issue up to 2,400,000,000 shares of capital stock, of which 2,300,000,000 shares are classified as common stock, of which 300,000,000 shares are classified as Class A shares, 300,000,000 shares are classified as Class AA shares, 300,000,000 shares are classified as Class D shares, 100,000,000 shares are classified as Class E shares, 300,000,000 shares are classified as Class F shares, 300,000,000 shares are classified as Class FF shares, 300,000,000 shares are classified as Class I shares, 100,000,000 shares are classified as Class I-S shares and 300,000,000 shares are classified as Class S shares, and 100,000,000 shares are classified as preferred stock. We also may issue shares in other private offerings and Operating Partnership units to holders other than the Company. In addition, our board of directors may amend our charter from time to time to increase or decrease the aggregate number of authorized shares of capital stock or the number of authorized shares of capital stock of any class or series without stockholder approval. Our board of directors may elect, without stockholder approval, to: (1) sell additional shares in our offering; (2) sell shares of our common stock in a future public offering; (3) issue shares of our common stock or units in our Operating Partnership in other private offerings; (4) issue shares of our common stock or units in our Operating Partnership upon the exercise of the options we may grant to our independent directors or future employees; or (5) issue shares of our common stock or units in our Operating Partnership to sellers of properties we acquire. In addition, we may be obligated to issue shares of our common stock or units in our Operating Partnership to our Adviser or the Special Limited Partner, or their successors or assigns, in payment of an outstanding obligation to pay fees for services rendered to us or the performance participation allocation. To the extent we issue additional shares of common stock, your percentage ownership interest in us will be diluted. Because we will hold all of our assets through the Operating Partnership, to the extent we issue additional units of our Operating Partnership after you purchase in our offering, your percentage ownership interest in our assets will be diluted. Because certain classes of the units of our Operating Partnership may, in the discretion of our board of directors, be exchanged for shares of our common stock, any issuance of units in our Operating Partnership could result in the issuance of a corresponding number of shares of our common stock, thereby diluting the percentage ownership interest of other stockholders. Because of these and other reasons, our stockholders may experience substantial dilution in their percentage ownership of our shares or their interests in the underlying assets held by our Operating Partnership. Operating Partnership units may have different and preferential rights to the claims of common units of our Operating Partnership which correspond to the common stock held by our stockholders. Certain units in our Operating Partnership may have different and preferential rights to the terms of the common Operating Partnership units which correspond to the common stock held by our stockholders.

***The net tangible book value of your shares will be substantially below the price you pay for them, thus increasing the risk of a loss on your investment.***

We have incurred substantial organization and offering expenses, which costs include the costs of raising $150 million from a founder investor (the "Founding Investor") in December of 2022 as well as the costs associated with our efforts to register a public offering with the SEC and the states (such as filing fees with the states and FINRA and related legal fees), which efforts were not pursued after deciding to conduct our offering privately. We expect to incur substantial offering expenses going forward as well (although less than we would have otherwise incurred if our offering were registered with the SEC and the states). Although our Adviser has paid those costs on our behalf, we must reimburse our Adviser for them over a 60-

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month period, except for amounts that the Adviser has chosen not to seek to recover from us, such as state and FINRA filing fees. Although the net asset value of our shares will only be affected by this liability as it is paid, the net tangible book value of our shares is a figure under generally accepted accounting principles in the U.S. ("GAAP") and must reflect the full amount of the liability. As of December 31, 2025 and December 31, 2024, the net tangible book value of our shares was $8.10 and $8.31 per share, respectively. As a result, the net tangible book value of your shares will be less than the amount you paid for them. Moreover, many purchasers of our shares will have to pay an upfront commission for their shares, further widening the spread between your purchase price and the net tangible book value of your shares. These factors increase the risk of loss on your investment.

***Our bylaws designate the Circuit Court for Baltimore City, Maryland or, if that court does not have jurisdiction, the U.S. District Court for the District of Maryland, Baltimore Division, as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders' ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.***

***Your investment return may be reduced if we are required to register as an investment company under the Investment Company Act of 1940, as amended (the "Investment Company Act").***

We intend to continue to conduct our operations so that neither we, nor our Operating Partnership nor the subsidiaries of our Operating Partnership are investment companies under the Investment Company Act. However, there can be no assurance that we and our subsidiaries will be able to successfully avoid operating as an investment company.

A change in the value of any of our assets could negatively affect our ability to maintain our exemption from regulation under the Investment Company Act. To maintain compliance with the applicable exemption under the Investment Company Act, we may be unable to sell assets we would otherwise want to sell and may need to sell assets we would otherwise wish to retain. In addition, we may have to acquire additional assets that we might not otherwise have acquired or may have to forego opportunities to acquire assets that we would otherwise want to acquire and would be important to our investment strategy.

If we were required to register as an investment company but failed to do so, we would become subject to substantial regulation with respect to our capital structure (including our ability to use borrowings), management, operations, transactions with affiliated persons (as defined in the Investment Company Act), and portfolio composition, including disclosure requirements and restrictions with respect to diversification and industry concentration, and other matters. Compliance with the Investment Company Act would, accordingly, limit our ability to make certain investments and require us to restructure our business plan, which could materially adversely affect our NAV and our ability to pay distributions to our stockholders.

***We depend on our Adviser to develop appropriate systems and procedures to control operational risk.***

Operational risks arising from mistakes made in the confirmation or settlement of transactions, from transactions not being properly booked, evaluated or accounted for or other similar disruption in our operations may cause us to suffer financial losses, the disruption of our business, liability to third parties, regulatory intervention or damage to our reputation. We

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depend on our Adviser and its affiliates to develop the appropriate systems and procedures to control operational risk. We rely heavily on our Adviser's financial, accounting and other data processing systems. The ability of our Adviser's systems to accommodate transactions could also constrain our ability to properly manage our portfolio. Generally, our Adviser will not be liable for losses incurred due to the occurrence of any such errors.

We are subject to the risk that our trading orders may not be executed in a timely and efficient manner due to various circumstances, including, without limitation, systems failure or human error. As a result, we could be unable to achieve the market position selected by our Adviser or might incur a loss in liquidating our positions. Since some of the markets in which we may effect transactions are over-the-counter or interdealer markets, the participants in such markets are typically not subject to credit evaluation or regulatory oversight comparable to that to which members of exchange-based markets are subject. We are also exposed to the risk that a counterparty will not settle a transaction in accordance with its terms and conditions, thereby causing us to suffer a loss.

***We are dependent on information systems, and systems failures, as well as operating failures, could significantly disrupt our business.***

Our business is dependent on our and third parties' communications and information systems. Any failure or interruption of those systems, including as a result of the termination of an agreement with any third-party service providers, could cause delays or other problems in our activities. Our financial, accounting, data processing, backup or other operating systems and facilities may fail to operate properly or become disabled or damaged as a result of a number of factors including events that are wholly or partially beyond our control and adversely affect our business. There could be:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• sudden electrical or telecommunications outages;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• natural disasters such as earthquakes, tornadoes and hurricanes;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• disease pandemics;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• events arising from local or larger scale political or social matters, including terrorist acts and war; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• cyber incidents.

In addition to our dependence on information systems, poor operating performance by our service providers could adversely impact us.

These events, in turn, could have a material adverse effect on our operating results and negatively affect the market price of our securities and our ability to pay distributions to our stockholders.

***Compliance with the SEC's Regulation Best Interest by selected dealers may negatively impact our ability to raise capital in our offering, which could harm our ability to achieve our investment objectives.***

Broker-dealers are required to comply with Regulation Best Interest, which, among other requirements, establishes a standard of conduct for broker-dealers and their associated persons when making a recommendation of any securities transaction or investment strategy involving securities to a retail customer. Regulation Best Interest may negatively impact whether selected dealers and their associated persons recommend our offering to certain retail customers. In particular, under SEC guidance concerning Regulation Best Interest, a broker-dealer recommending an investment in our shares should consider a number of factors, including but not limited to cost and complexity of the investment and reasonably available alternatives in determining whether there is a reasonable basis for the recommendation. Broker-dealers may recommend a more costly or complex product as long as they have a reasonable basis to believe is in the best interest of a particular retail customer. However, if broker-dealers instead choose alternatives to our shares, many of which likely exist, our ability to raise capital will be adversely affected. If Regulation Best Interest reduces our ability to raise capital in our offering, it may harm our ability to achieve our objectives.

***Cybersecurity risks and cyber incidents may adversely affect our business by causing a disruption to our operations, a compromise or corruption of our confidential information and/or damage to our business relationships.*** 

A cyber incident is considered to be any adverse event that threatens the confidentiality, integrity or availability of our information resources. These incidents may be an intentional attack or an unintentional event and could involve gaining unauthorized access to our information systems or those of our Adviser for purposes of misappropriating assets, stealing confidential information, corrupting data or causing operational disruption. The result of these incidents may include disrupted operations, misstated or unreliable financial data, liability for stolen assets or information, increased cybersecurity protection and insurance costs, litigation and damage to our business relationships. As our reliance on technology has

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increased, so have the risks posed to our information and operation systems, both internal and those provided by Sculptor and third-party service providers. Our Adviser may not be able to verify the risks or reliability of such third-party systems. The failure of one or more systems or the inability of such systems to satisfy our growing business could have a material adverse effect on us. Sculptor and these third-party service providers have implemented processes, procedures and internal controls to help mitigate cybersecurity risks and cyber intrusions, but these measures, as well as our increased awareness of the nature and extent of a risk of a cyber incident, do not guarantee that a cyber incident will not occur and/or that our financial results, operations or confidential information will not be negatively impacted by such an incident.

***We are subject to risks associated with artificial intelligence and machine learning technology.***

Technological developments in artificial intelligence, including machine learning, generative artificial intelligence and similar technologies that collect, aggregate, analyze or generate data or other materials (collectively "AI"), and their current and potential future applications including in the real estate, capital and financial markets, as well as the legal and regulatory frameworks within which they operate, are rapidly evolving. We and our Adviser may also be exposed to the risks of AI if third-party service providers or any counterparties, whether or not known to us, also use AI in their business activities. We and our Adviser may not be in a position to control the use of AI technology in third-party products or services. Use of AI could include the input of confidential information in contravention of applicable policies, contractual or other obligations or restrictions, resulting in such confidential information becoming accessible by other third-party AI applications and users. The use of AI could also exacerbate or create new and unpredictable risks to our business and the Adviser's business, including by potentially significantly disrupting the markets in which we operate or subjecting us and our Adviser to increased competition and regulation, which could materially and adversely affect the business, financial condition or results of operations of us and our Adviser. The use of AI may also impact the value, use and utility of real estate and real estate operating companies, which could materially impact the ability to make new investments, finance new and existing investments, and sell existing investments, all of which could materially and adversely affect the business, financial condition or results of our operations. The use of AI by bad actors could heighten the sophistication and effectiveness of cybersecurity attacks experienced by us and our Adviser. Further, AI technology is generally highly reliant on the collection and analysis of large amounts of data, and it is not possible or practicable to incorporate all relevant data into the model that AI technology utilizes to operate. Certain data in such models will inevitably contain a degree of inaccuracy and error. As AI technology and its applications continue to develop rapidly, it is impossible to predict the future risks that may arise from such developments to our industry or business.

***We will face risks associated with hedging transactions.***

We may utilize a wide variety of derivative and other hedging instruments for risk management purposes, the use of which is a highly specialized activity that may entail greater than ordinary investment risks. Any such derivatives and other hedging transactions may not be effective in mitigating risk in all market conditions or against all types of risk (including unidentified or unanticipated risks), thereby resulting in losses to us. Engaging in derivatives and other hedging transactions may result in a poorer overall performance for us than if we had not engaged in any such transaction, and our Adviser may not be able to hedge against, or anticipate, certain risks that may adversely affect our investment portfolio. In addition, our investment portfolio will always be exposed to certain risks that cannot be fully or effectively hedged, such as credit risk relating both to particular securities and counterparties as well as interest rate risks. See "—General Risks Related to Investments in Real Estate Related Securities—We may invest in derivatives, which involve numerous risks" below.

***Uncertainty with respect to market disruption and terrorism could have a significant adverse effect on our business, financial condition and results of operations.***

Regional tensions, conflicts, hostilities, terrorist attacks or threats of terrorist attacks and political unrest may create an unstable geopolitical climate that could have a material effect on general economic conditions, market conditions and market liquidity. We could also be adversely affected by social instability, changes in government administrations and policies, or economic, political, legal, or regulatory developments that are not within our control. Market uncertainty and volatility have been magnified as a result of the 2024 U.S. presidential and congressional elections and resulting uncertainties regarding actual and potential shifts in U.S. and foreign, trade, economic and other policies, including with respect to treaties and tariffs. In addition, the foregoing list of factors could impact imports from, or exports to, a given region with adverse impact on the economy as a whole, any industry, and / or the operations of any particular investment. Any serious dispute between the United States and another nation may escalate the tension in the region with negative implications for economic fundamentals and overall consumer confidence, which in turn may result in adverse financial losses to us.

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The military operations of the United States and its allies, the instability in various parts of the world and the increasing prevalence of terrorist attacks throughout the world could have significant adverse effects on the global economy. For example, the armed conflict between Israel and Hamas, general conflicts in the Middle East, as well as the armed conflict between Russia and Ukraine, and the varying involvement of the United States and other countries, as well as political and civil unrest related to the foregoing, have had, and could continue to have, severe adverse effects on regional and global economic markets. Terrorist attacks, in particular, may exacerbate some of the foregoing risk factors. A terrorist attack involving or otherwise impacting or relating to us may result in a loss for us far in excess of available insurance coverage. The Adviser cannot predict the likelihood of these types of events occurring in the future or how such events may affect our investments or collateral.

**Risks Related to Our Acquisition of CapGrow**

***Our acquisition of CapGrow was not on an arms-length basis, increasing the risk that we may have paid more for our interest in CapGrow than we otherwise would have.***

As described below under Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations—Investment Portfolio," we acquired our interest in CapGrow from a party related to our officers, directors, sponsor and external adviser. At the time of the initial acquisition, we did not have any independent directors to review and approve the transaction.

Entering into transactions with related parties increases the risk of doing so on terms that are less favorable to us than those that would be available from a third party. That risk is heightened when the transaction occurs without the consideration of independent directors.

***Our inability to increase rents beyond the fixed amounts set forth in the leases for the CapGrow Portfolio may adversely affect our performance, thereby reducing the value of your investment in us.***

The primarily single-family homes in the CapGrow Portfolio are subject to leases with remaining lease terms of up to ten years with rent escalations of generally 1-2% per year. Such rent increases are below current inflation rates and may remain below inflation rates in the future. Our inability to increase rents beyond the fixed amounts set forth in the leases for the CapGrow Portfolio may cause our rents to be below market and may adversely affect our performance.

***Our inability to complete new acquisitions in line with our expectations may result in a lower future value for CapGrow than anticipated.***

We anticipate continuing to invest in CapGrow to acquire additional homes at attractive yields. CapGrow's ownership of 1,125 primarily single-family homes, as of December 31, 2025, represented approximately a 2% market share of the homes nationwide that are leased to and operated by care providers that serve individuals with intellectual and developmental disabilities. If CapGrow is unable to continue acquiring additional homes and portfolios at attractive yields, it may adversely affect our performance.

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***Approximately 38% of our revenue is derived from affiliates of Sevita. If Sevita became unable to honor its obligations to us, our results of operation and financial condition would be adversely affected and the value of your investment in us could decline substantially.***

National Mentor Holdings, Inc., a Delaware corporation doing business as "Sevita," is the largest home-based care provider serving individuals with intellectual and developmental disabilities in the country. Through 49 separate subsidiaries, Sevita has leased 519 of CapGrow's properties and its leases represent approximately 38% of our rental income for the year ended December 31, 2025 and 26% of total assets as of December 31, 2025. There are no cross-default provisions among the hundreds of leases. Although Sevita is not a party to those leases, Sevita has entered into separate guarantees with respect to each of the hundreds of leases by its subsidiaries for 433 of CapGrow's properties, which represents approximately 32% of our rental income for the year ended December 31, 2025 and 22% of total assets as of December 31, 2025. Sevita has guaranteed a significant concentration of our revenue. Sufficiently adverse developments with respect to the business of such subsidiaries and/or Sevita that result in them not able to honor their lease obligations or such that Sevita could not honor its many separate guarantees would likely have a greater adverse impact on our results of operation and financial condition than would otherwise be the case without this concentration risk. Sevita's audited financial statements for its fiscal years ended September 30, 2025 and 2024 are available at Exhibit 99.1 to this Annual Report on Form 10-K. We rely on certain third parties (including Sevita) to provide us with financial statements and other financial information necessary for our financial reporting and compliance obligations. There is a risk that we may not receive such financial information from these third parties in a timely manner, or at all, in the next fiscal year. Any failure by these third parties to provide required financial information could delay our ability to meet our financial reporting obligations, hinder our decision-making processes, and impair our ability to provide accurate and timely disclosures to our investors. In such circumstances, we may also be unable to accurately assess our financial position or results of operations, which could result in negative consequences for our business, including potential regulatory actions or harm to our reputation.

***Medicaid reimbursement rates could be cut or could be increased below the amount necessary to meet our expected 1.75% annual lease escalations.***

There has been significant bipartisan support for the de-institutionalization and care provision for the disabled population, with strong support at the federal and state level and significant increases in funding over time. Cuts or reductions in Medicaid reimbursement rates to care providers could adversely affect CapGrow's performance given that CapGrow's rent is typically paid by tenants through this Medicaid reimbursement.

**General Risks Related to Investments in Real Estate** 

***Our operating results will be affected by economic and regulatory changes that impact the real estate market in general.***

We are subject to risks generally attributable to the ownership of real property, including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changes in global, national, regional or local economic, demographic or capital market conditions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• future adverse national real estate trends, including increasing vacancy rates, declining rental rates and general deterioration of market conditions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changes in supply of or demand for similar properties in a given market or metropolitan area, which could result in rising vacancy rates or decreasing market rental rates;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• increased competition for properties targeted by our investment strategy;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• bankruptcies, financial difficulties or lease defaults by our tenants, particularly for tenants with net leases for large properties;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• increases in interest rates and lack of availability of financing; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changes in government rules, regulations and fiscal policies, including changes in tax laws and increases in property taxes, changes in zoning laws, climate-change initiatives, limitations on rental rates and increasing costs to comply with environmental laws.

All of these factors are beyond our control. Any negative changes in these factors could affect our performance and our ability to meet our obligations and make distributions to stockholders.

***Our success is dependent on general market and economic conditions.***

The real estate industry generally and the success of our investment activities in particular will both be affected by global and national economic and market conditions generally and by the local economic conditions where our properties are located.

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These factors may affect the level and volatility of real estate prices, which could impair our profitability or result in losses. In addition, general fluctuations in the market prices of securities and interest rates may affect our investment opportunities and the value of our investments. Sculptor's financial condition may be adversely affected by a significant economic downturn and it may be subject to legal, regulatory, reputational and other unforeseen risks that could have a material adverse effect on Sculptor's businesses and operations (including our Adviser).

A recession or slowdown in the U.S. real estate market or one or more regional real estate markets and, to a lesser extent, the global economy (or any particular segment thereof) would have a pronounced impact on us, the value of our assets and our profitability, impede the ability of our assets to perform under or refinance their existing obligations, and impair our ability to deploy our capital or realize upon investments on favorable terms. We would also be affected by any overall weakening of, or disruptions in, the financial markets. Any of the foregoing events could result in substantial losses to our business, which losses will likely be exacerbated by the presence of leverage in our capital structure or our investments' capital structures.

Market disruptions in a single country could cause a worsening of conditions on a regional and even global level, and economic problems in a single country are increasingly affecting other markets and economies. A continuation of this trend could result in problems in one country adversely affecting regional and even global economic conditions and markets. For example, concerns about the fiscal stability and growth prospects of certain European countries in the last economic downturn had a negative impact on most economies of the Eurozone and global markets. The occurrence of similar crises in the future could cause increased volatility in the economies and financial markets of countries throughout a region, or even globally.

Additionally, geopolitical concerns and other global events such as trade conflict, civil unrest, national and international security events, war, terrorism, natural and environmental disasters and the spread of infectious illnesses, pandemics or other public health emergencies may adversely affect the global economy and the markets in which we invest. For example, in the U.S., the current Presidential administration has stated its intention to make governmental policy and regulatory changes in a variety of areas, including the imposition of tariffs or other trade barriers, and certain countries subject to those changes have expressed an intent to impose similar measures in return. Outside the U.S., ongoing conflicts in the Middle East and Ukraine, as well as concern as to whether China's stimulus measures will effectively stabilize slowing economic growth in the country, have further contributed to global economic uncertainty and volatility in the global financial markets, which may adversely impact our performance. These events could reduce consumer demand or economic output, result in market closure, travel restrictions or quarantines, and generally have a significant impact on the economy, our operations and performance.

For example, as a result of the global financial crisis of 2007-2008, the availability of debt financing secured by commercial real estate had been significantly restricted as a result of tightened lending standards for a prolonged period. As a result of the uncertainties in the credit market, real estate investors were unable to obtain debt financing on attractive terms, which adversely affected investment returns on acquisitions or their ability to make acquisitions or property improvements. Any future financial market disruptions (including financial market distributions related to COVID-19 or future pandemics) may force us to use a greater proportion of our offering proceeds to finance our acquisitions and fund property improvements, reducing the cash available to pay distributions or satisfy repurchase requests and reducing the number of acquisitions we would otherwise make.

***We will depend on tenants for our revenue, and therefore our revenue is dependent on the success and economic viability of our tenants. Our reliance on single or significant tenants in certain buildings may decrease our ability to lease vacated space and could adversely affect our income, performance, operations and ability to pay distributions.***

Rental income from real property will, directly or indirectly, constitute a significant portion of our income. Delays in collecting accounts receivable from tenants could adversely affect our cash flows and financial condition. In addition, the inability of a single major tenant or a number of smaller tenants to meet their rental obligations would adversely affect our income. Therefore, our financial success is indirectly dependent on the success of the businesses operated by the tenants in our properties or in the properties securing debts we may own. The weakening of the financial condition of or the bankruptcy or insolvency of a significant tenant or a number of smaller tenants and vacancies caused by defaults of tenants or the expiration of leases may adversely affect our operations, performance and our ability to pay distributions.

Generally, under U.S. bankruptcy law, a debtor tenant has 120 days to exercise the option of assuming or rejecting the obligations under any unexpired lease for nonresidential real property, which period may be extended once by the bankruptcy court for an additional 90 days. If the tenant assumes its lease, the tenant must cure all defaults under the lease and may be required to provide adequate assurance of its future performance under the lease. If the tenant rejects the lease, we will have a

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claim against the tenant's bankruptcy estate. Although rent owing for the period between filing for bankruptcy and rejection of the lease may be afforded administrative expense priority and paid in full, pre-bankruptcy arrears and amounts owing under the remaining term of the lease will be afforded general unsecured claim status (absent collateral securing the claim). Moreover, amounts owing under the remaining term of the lease will be capped. Other than equity and subordinated claims, general unsecured claims are the last claims paid in a bankruptcy, and therefore funds may not be available to pay such claims in full.

Some of our properties may be leased to a single or significant tenant and, accordingly, may be suited to the particular or unique needs of such tenant. We may have difficulty replacing such a tenant if the floor plan of the vacant space limits the types of businesses that can use the space without major renovation. In addition, the resale value of the property could be diminished because the market value of a particular property will depend principally upon the value of the leases of such property.

Similarly, certain of our properties, such as industrial warehouses and student housing properties, may be leased to single tenants or tenants that are otherwise reliant on a single enterprise to remain in business and other properties, such as hotels, will generally be operated by a single operator. Adverse impacts to such tenants, businesses or operators, including as a result of changes in market or economic conditions, natural disasters, outbreaks of an infectious disease, pandemic or any other serious public health concern, political events or other factors that may impact the operation of these properties, may have negative effects on our business and financial results. As a result, such tenants or operators may be required to suspend operations at our properties for what could be an extended period of time. Further, if such tenants default under their leases or such operators are unable to operate our properties, we may not be able to enter into a new lease or operating arrangement for such properties promptly, rental rates or other terms under any new leases or operating arrangement may be less favorable than the terms of the current lease or operating arrangement or we may be required to make capital improvements to such properties for a new tenant or operator, any of which could adversely impact our operating results.

***We may be subject to additional risks from non-U.S. investments.***

We may invest in real estate located outside of the U.S. and real estate debt issued in, and/or backed by real estate in, countries outside the U.S., including Canada, Europe and potentially elsewhere. Non-U.S. real estate and real estate related securities involve certain factors not typically associated with investing in real estate and real estate related securities in the U.S., including risks relating to (i) currency exchange matters, including fluctuations in the rate of exchange between the U.S. dollar and the various non-U.S. currencies in which such investments are denominated, and costs associated with conversion of investment principal and income from one currency into another; (ii) differences in conventions relating to documentation, settlement, corporate actions, stakeholder rights and other matters; (iii) differences between U.S. and non-U.S. real estate markets, including potential price volatility in and relative illiquidity of some non-U.S. markets; (iv) the absence of uniform accounting, auditing and financial reporting standards, practices and disclosure requirements and differences in government supervision and regulation; (v) certain economic, social and political risks, including potential exchange-control regulations, potential restrictions on non-U.S. investment and repatriation of capital, the risks associated with political, economic or social instability, including the risk of sovereign defaults, regulatory change, and the possibility of expropriation or confiscatory taxation or the imposition of withholding or other taxes on dividends, interest, capital gains, other income or gross sale or disposition proceeds, and adverse economic and political developments; (vi) the possible imposition of non-U.S. taxes on income and gains and gross sales or other proceeds recognized with respect to such investments; (vii) differing and potentially less well-developed or well-tested corporate laws regarding stakeholder rights, creditors' rights (including the rights of secured parties), fiduciary duties and the protection of investors; (viii) different laws and regulations including differences in the legal and regulatory environment or enhanced legal and regulatory compliance; (ix) political hostility to investments by foreign investors; (x) war or other hostilities; and (xi) less publicly available information. Furthermore, while we may have the capacity, but not the obligation, to mitigate such additional risks, including through the utilization of certain foreign exchange hedging instruments, there is no guarantee that we will be successful in mitigating such risks and in turn may introduce additional risks and expenses linked to such efforts.

***Our portfolio may be concentrated in a limited number of industries, geographies or investments.***

Our portfolio may be heavily concentrated at any time in only a limited number of industries, geographies or investments, and, as a consequence, our aggregate return may be substantially affected by the unfavorable performance of even a single investment. Concentration of our investments in a particular type of asset or geography makes us more susceptible to fluctuations in value resulting from adverse economic or business conditions affecting that particular type of asset or geography. Investors have no assurance as to the degree of diversification in our investments, either by geographic region or asset type.

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***We face risks associated with property acquisitions.***

We intend to acquire properties and portfolios of properties, including large portfolios that could result in changes to our capital structure. Our acquisition activities and their success are subject to the following risks:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• we may be unable to complete an acquisition after making a non-refundable deposit or guarantee and incurring certain other acquisition-related costs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• we may be unable to obtain financing for acquisitions on commercially reasonable terms or at all;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• acquired properties may fail to perform as expected;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• acquired properties may be located in markets in which we may face risks associated with a lack of market knowledge or understanding of the local economy, lack of business relationships in the area and unfamiliarity with local governmental and permitting procedures; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• we may be unable to integrate new acquisitions efficiently, particularly acquisitions of portfolios of properties, into our existing operations.

In addition, while we will invest primarily in stabilized, income-generating real estate, we may also acquire assets that require some amount of capital investment in order to be renovated or repositioned. These investments are generally subject to higher risk of loss than investments in stabilized real estate, and there is no guarantee that any renovation or repositioning will be successful or that the actual costs will not be greater than our estimates.

***Competition for investment opportunities may reduce our profitability and the return on your investment.***

We face competition from various entities for investment opportunities in properties, including other REITs, real estate operating companies, pension funds, insurance companies, investment funds and companies, partnerships and developers. In addition to third-party competitors, other programs sponsored by our Adviser and its affiliates, particularly those with investment strategies that overlap with ours, may seek investment opportunities in accordance with Sculptor's policies and procedures. Some of these entities, including other REITs, have greater access to capital to acquire properties than we have. Competition from these entities may reduce the number of suitable investment opportunities offered to us, increase the bargaining power of property owners seeking to sell or cause us to pay more for an investment than we otherwise would. Additionally, disruptions and dislocations in the credit markets could have a material impact on the cost and availability of debt to finance real estate acquisitions, which is a key component of our acquisition strategy. The lack of available debt on reasonable terms or at all could result in a further reduction of suitable investment opportunities and create a competitive advantage for other entities that have greater financial resources than we do. In addition, over the past several years, a number of real estate funds and publicly traded and non-traded REITs have been formed and others have been consolidated (and many such existing funds have grown in size) for the purpose of investing in real estate and/or real estate related securities. Additional real estate funds, vehicles and REITs with similar investment objectives are expected to be formed in the future by other unrelated parties and further consolidations may occur (resulting in larger funds and vehicles). Consequently, it is expected that competition for appropriate investment opportunities would reduce the number of investment opportunities available to us and adversely affect the terms, including price, upon which investments can be made. This competition may cause us to acquire properties and other investments at higher prices or by using less-than-ideal capital structures, and in such case our returns will be lower and the value of our assets may not appreciate or may decrease significantly below the amount we paid for such assets. If such events occur, you may experience a lower return on your investment.

***Acquiring or attempting to acquire multiple properties in a single transaction may adversely affect our operations.***

From time to time, we may acquire multiple properties in a single transaction. Portfolio acquisitions typically are more complex and expensive than single-property acquisitions, and the risk that a multiple-property acquisition does not close may be greater than in a single-property acquisition. Portfolio acquisitions may also result in us owning investments in geographically dispersed markets, placing additional demands on our Adviser in managing the properties in the portfolio. In addition, a seller may require that a group of properties be purchased as a package and/or also include certain additional investments or transactions even though, were it not part of the overall transaction, we may not want to purchase one or more properties included in such portfolio or participate in additional investments or transactions. In these situations, if we are unable to identify another person or entity to acquire the unwanted properties or investments, or if the seller imposes a lock-out period or other restriction on a subsequent sale, we may be required to operate such properties or attempt to dispose of such properties or investments (if not subject to a lock-out period). We may also share the acquisition of large portfolios of properties with our affiliates, which can result in conflicts of interest, including as to the allocation of properties within the portfolio and the prices attributable to such properties. It may also be difficult for our Adviser to analyze each property

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thoroughly in a large portfolio, increasing the risk that properties do not perform as anticipated. Therefore, acquiring multiple properties in a single transaction may reduce the overall yield on our portfolio.

***We may incur "dead deal costs" in connection with potential acquisitions.***

We may incur costs in connection with potential acquisitions that ultimately are not acquired. These "dead deal costs" and expenses may include those expenses that may be attributable to prospective co-investors (including the organizational costs of any co-investment vehicle) when such expenses are not reimbursed by such co-investors. For example, we may enter into contracts with non-refundable deposits to acquire certain properties. The amount deposited, if any, may be surrendered if the property is not purchased and may or may not be credited against the purchase price if the property is purchased. Additionally, we may incur due diligence and other costs when considering whether to acquire an asset, and such costs will not be reduced if the transaction fails to close. Any unreturned deposits, due diligence costs and other "dead deal costs" will reduce the amount of cash available for further investments or distributions to our stockholders.

***In our due diligence review of potential investments, we may rely on third-party consultants and advisors and representations made by sellers of potential properties, and we may not identify all relevant facts that may be necessary or helpful in evaluating potential investments.***

Before making investments, due diligence will typically be conducted in a manner that we deem reasonable and appropriate based on the facts and circumstances applicable to each investment. Due diligence may entail evaluation of important and complex business, financial, tax, accounting, environmental, social governance, real property, regulatory and legal issues. Outside consultants, legal advisors, appraisers, accountants, investment banks and other third parties may be involved in the due diligence process to varying degrees depending on the type of investment, the costs of which will be borne by us. Such involvement of third-party advisors or consultants may present a number of risks primarily relating to our Adviser's reduced control of the functions that are outsourced. In the due diligence process and making an assessment regarding a potential investment, our Adviser will rely on the resources available to it, including information provided by the seller of the investment and, in some circumstances, third-party investigations. The due diligence investigation carried out with respect to any investment opportunity may not reveal or highlight all relevant facts that may be necessary or helpful in evaluating such investment opportunity, particularly for large portfolio investments. Moreover, such an investigation will not necessarily result in the investment being successful. There can be no assurance that attempts to provide downside protection with respect to investments, including pursuant to risk-management procedures, will achieve their desired effect, and potential investors should regard an investment in us as being speculative and having a high degree of risk.

***There can be no assurance that our Adviser will be able to detect or prevent irregular accounting, employee misconduct or other fraudulent practices or material misstatements or omissions during the due diligence phase or during our efforts to monitor and disclose information about any investment on an ongoing basis or that any risk management procedures implemented by us will be adequate.***

When conducting due diligence and making an assessment regarding an investment, our Adviser will rely on the resources available to it, including information provided or reported by the seller of the investment and, in some circumstances, third-party investigations. The due diligence investigation that our Adviser carries out with respect to any investment opportunity may not reveal or highlight all relevant facts that may be necessary or helpful in evaluating such investment opportunity. Moreover, such an investigation will not necessarily result in the investment being successful. Conduct occurring at the property, even activities that occurred prior to our investment therein, could have an adverse impact on us.

In the event of fraud by the seller of any property, we may suffer a partial or total loss of capital invested in that property. An additional concern is the possibility of material misrepresentation or omission on the part of the seller. Such inaccuracy or incompleteness may adversely affect the value of our investments in such property. We will rely upon the accuracy and completeness of representations made by sellers of properties in the due diligence process to the extent reasonable when we make our investments, but cannot guarantee such accuracy or completeness.

In addition, we will rely on information, including financial information and non-GAAP metrics, provided by sellers of our investments for disclosure to our investors about potential acquisitions or current assets owned by us. Accordingly, although we may believe such information to be accurate, such information cannot be independently verified by our Adviser, and in some cases such information may not be independently reviewed or audited while under our ownership or control or at all. We cannot assure you that the financial statements or metrics of properties we will acquire would not be materially different if such statements or metrics had been independently audited or reviewed.

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***Certain properties may require an expedited transaction, which may result in limited information being available about the property prior to its acquisition.***

Investment analyses and decisions by our Adviser may be required to be undertaken on an expedited basis to take advantage of investment opportunities. In such cases, the information available to our Adviser at the time of making an investment decision may be limited, and our Adviser may not have access to detailed information regarding the investment property or portfolio of properties, such as physical characteristics, environmental matters, zoning regulations or other local conditions affecting such investment. Therefore, no assurance can be given that our Adviser will have knowledge of all circumstances that may adversely affect an investment, and we may make investments which we would not have made if more extensive due diligence had been undertaken. Because large portfolios of properties still generally require diligence to analyze individual properties, these risks are exacerbated in expedited transactions of large portfolios. In addition, our Adviser may use consultants, legal advisors, appraisers, accountants, investment banks and other third parties in connection with its evaluation and/or diligence of certain investments. No assurance can be given as to the accuracy or completeness of the information provided by such third parties.

***We will face risks in effecting operating improvements.***

In some cases, the success of an investment will depend, in part, on our ability to restructure and effect improvements in the operations of a property. The activity of identifying and implementing restructuring programs and operating improvements at properties entails a high degree of uncertainty. There can be no assurance that we will be able to successfully identify and implement such restructuring programs and improvements.

***We may have difficulty selling our properties, which may limit our flexibility and ability to pay distributions.***

Because real estate investments are relatively illiquid, it could be difficult for us to sell one or more of our properties promptly on favorable terms. Additionally, we may agree to lock-out or other provisions when we acquire a property that materially restrict us from selling such property or our interest in such property for a period of time. This may limit our ability to change our portfolio quickly in response to adverse changes in the performance of any such property or economic or market trends. In addition, U.S. federal tax laws that impose a 100% excise tax on gains from sales of dealer property by a REIT (generally, property held for sale, rather than investment) could limit our ability to sell properties and may affect our ability to sell properties without adversely affecting returns to our stockholders. These restrictions could adversely affect our results of operations and financial condition.

***Investments in real properties carry certain litigation risks at the property level that may reduce our profitability and the return on your investment.***

The acquisition, ownership and disposition of real properties carry certain specific litigation risks. Litigation may be commenced with respect to a property acquired by us in relation to activities that took place prior to our acquisition of such property. In addition, at the time of disposition of an individual property, a potential buyer may claim that it should have been afforded the opportunity to purchase the asset or alternatively that such potential buyer should be awarded due diligence expenses incurred or statutory damages for misrepresentation relating to disclosure made, if such buyer is passed over in favor of another as part of our efforts to maximize sale proceeds. Similarly, successful buyers may later sue us under various damages theories, including tort claims, for losses associated with latent defects or other problems not uncovered in due diligence.

***We may make a substantial amount of joint venture investments, including with Sculptor affiliates. Joint venture investments could be adversely affected by our lack of sole decision-making authority, our reliance on the financial condition of our joint venture partners and disputes between us and our joint venture partners.***

We may make joint venture investments with third parties and, subject to the requirements in our corporate governance guidelines, co-invest in the future with Sculptor affiliates or third parties in partnerships or other entities that own real properties. We may enter into joint ventures as part of an acquisition with the seller of the properties. We may acquire non-controlling interests or shared control interests in joint ventures. Even if we have some control in a joint venture, we may not be in a position to exercise sole decision-making authority regarding the joint venture. Investments in joint ventures may, under certain circumstances, involve risks not present were another party not involved, including the possibility that joint venture partners might become bankrupt or fail to fund their required capital contributions. Joint venture partners may have economic or other business interests or goals that are inconsistent with our business interests or goals, and may be in a position to take actions contrary to our policies or objectives. Such investments may also have the potential risk of impasses

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on decisions, such as a sale, because neither we nor the joint venture partner would have full control over the joint venture. Disputes between us and joint venture partners may result in litigation or arbitration that would increase our expenses and prevent our officers and directors from focusing their time and effort on our business. Consequently, actions by or disputes with joint venture partners might subject properties owned by the joint venture to additional risk. In some cases, our joint venture partner may be entitled to property management fees, promote or other incentive fee payments as part of the arrangement of the joint venture. In addition, we may in certain circumstances be liable for the actions of our joint venture partners.

We may co-invest with Other Sculptor Accounts in certain types of debt investments in which we do not have control rights or rights over major decisions. In such cases our Adviser and/or the Other Sculptor Account may make decisions that are not in our best interest. In addition, in connection with any investments in which we participate alongside any Other Sculptor Accounts, our Adviser may decline to exercise, or delegate to a third party, certain control, foreclosure and similar governance rights relating to such shared investments for legal, tax, regulatory or other reasons. There is no guarantee that we will be able to co-invest with any Other Sculptor Account. We will not participate in joint ventures in which we do not have or share control to the extent that we believe such participation would potentially require us to register as an investment company under the Investment Company Act. This may prevent us from receiving an allocation with respect to certain investment opportunities that are suitable for both us and one or more Other Sculptor Accounts.

If we have a right of first refusal to buy out a joint venture partner, we may be unable to finance such a buy-out if it becomes exercisable or we are required to purchase such interest at a time when it would not otherwise be in our best interest to do so. If our interest is subject to a buy/sell right, we may not have sufficient cash, available borrowing capacity or other capital resources to allow us to elect to purchase an interest of a joint venture partner subject to the buy/sell right, in which case we may be forced to sell our interest as the result of the exercise of such right when we would otherwise prefer to keep our interest. In some joint ventures we may be obligated to buy all or a portion of our joint venture partner's interest in connection with a crystallization event, and we may be unable to finance such a buy-out when such crystallization event occurs, which may result in interest or other penalties accruing on the purchase price. If we buy our joint venture partner's interest we will have increased exposure in the underlying investment. The price we use to buy our joint venture partner's interest or sell our interest will typically be determined by negotiations between us and our joint venture partner, and there is no assurance that such price will be representative of the value of the underlying property or equal to our then-current valuation of our interest in the joint venture that is used to calculate our NAV. Finally, we may not be able to sell our interest in a joint venture if we desire to exit the venture for any reason, or if our interest is subject to a right of first refusal of our joint venture partner, our ability to sell such interest may be adversely impacted by such right. Joint ownership arrangements with Sculptor affiliates may also entail further conflicts of interest. Joint venture partners may receive ongoing fees in connection with providing service to the joint venture or its properties, including promote payments, beyond their equity investment, which would reduce the amount of our economic interest.

Some additional risks and conflicts related to our joint venture investments (including joint venture investments with Sculptor affiliates) include:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The joint venture partner could have economic or other interests that are inconsistent with or different from our interests, including interests relating to the financing, management, governance, operation, leasing or sale of the assets purchased by such joint venture.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our joint venture partners may receive ongoing fees from our joint ventures, including promote payments and potential buyouts of their equity investments, all of which may reduce amounts otherwise payable to us.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Tax, Investment Company Act and other regulatory requirements applicable to the joint venture partner could cause it to want to take actions contrary to our interests.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The joint venture partner could have joint control or joint governance of the joint venture even in cases where its economic stake in the joint venture is significantly less than ours.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Under the joint venture arrangement, it is possible that neither we nor the joint venture partner will be in a position to unilaterally control the joint venture, and deadlocks may occur. Such deadlocks could adversely impact the operations and profitability of the joint venture, including as a result of the inability of the joint venture to act quickly in connection with a potential acquisition or disposition. In addition, depending on the governance structure of such joint venture partner, decisions of such vehicle may be subject to approval by individuals who are independent of Sculptor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Under the joint venture arrangement, we and the joint venture partner may have a buy/sell right and, as a result of an impasse that triggers the exercise of such right, we could be forced to sell our investment in the joint venture, or buy the joint venture partner's share of the joint venture at a time when it would not otherwise be in our best interest to do so.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our participation in investments in which a joint venture partner participates will be less than what our participation would have been had such joint venture partner not participated, and because there may be no limit on the amount of capital that such joint venture partner can raise, the degree of our participation in such investments may decrease over time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Under the joint venture arrangement, we and the joint venture partner could each have preemptive rights in respect of future issuances by the joint venture, which could limit a joint venture's ability to attract new third-party capital.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Under the joint venture arrangement, we and the joint venture partner could be subject to lock-ups, which could prevent us from disposing of our interests in the joint venture at a time it determines it would be advantageous to exit.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The joint venture partner could have a right of first refusal, tag-along rights, drag-along rights, consent rights or other similar rights in respect of any transfers of the ownership interests in the joint venture to third parties, which could have the effect of making such transfers more complicated or limiting or delaying us from selling our interest in the applicable investment.

Furthermore, we may have conflicting fiduciary obligations if we acquire properties with our affiliates or other related entities; as a result, in any such transaction we may not have the benefit of arm's-length negotiations of the type normally conducted between unrelated parties.

***We may be subject to expenses and liabilities related to employees of certain portfolio entities owned by us.***

We have acquired and may in the future continue to acquire portfolio entities with employees and thereby become subject to expenses and liabilities related to such employees. These expenses and liabilities could include compensation, overhead and other administrative costs, as well as potential liabilities that are commonly faced by employers, such as workers' disability and compensation claims, potential labor disputes and other employee-related liabilities and grievances. We may also be subject to other operational risks from such employees, including cybersecurity risks or as a result of employee error or malfeasance. In addition, we may encounter unforeseen costs and expenses associated with acquiring such portfolio entities and such expenses may have an adverse effect on our results of operations.

***We will rely on management companies to operate our properties and leasing agents to lease vacancies in our properties.***

Our Adviser intends to hire management companies to manage our properties and leasing agents to lease vacancies in our properties. These management companies may be our partners in joint ventures that we enter into. The management companies will have significant decision-making authority with respect to the management of our properties. In cases where we use third-party property managers, our ability to direct and control how our properties are managed on a day-to-day basis may be limited. Thus, the success of our business may depend in large part on the ability of our management companies to manage the day-to-day operations and the ability of our leasing agents to lease vacancies in our properties. Any adversity experienced by, or problems in our relationship with, our management companies or leasing agents could adversely impact the operation and profitability of our properties.

***We may be unable to renew leases as leases expire.***

We may not be able to lease properties that are vacant or become vacant because a tenant decides not to renew its lease or by the continued default of a tenant under its lease. In addition, certain of the properties we acquire may have some level of vacancy at the time of acquisition. Certain other properties may be specifically suited to the particular needs of a tenant and may become vacant after we acquire them. Even if a tenant renews its lease or we enter into a lease with a new tenant, the terms of the new lease may be less favorable than the terms of the old lease. In addition, the resale value of the property could be diminished because the market value may depend principally upon the value of the property's leases. If we are unable to renew or enter into new leases promptly, or if the rental rates are lower than expected, our results of operations and financial condition will be adversely affected. For example, following the termination or expiration of a tenant's lease there may be a period of time before we will begin receiving rental payments under a replacement lease. During that period, we will continue to bear fixed expenses such as interest, real estate taxes, maintenance, security, repairs and other operating expenses. In addition, declining economic conditions may impair our ability to attract replacement tenants and achieve rental rates equal to or greater than the rents paid under previous leases. Increased competition for tenants may require us to make capital improvements to properties that would not have otherwise been planned. Any unbudgeted capital improvements that we undertake may divert cash that would otherwise be available for distributions or for satisfying repurchase requests. Ultimately, to the extent that we are unable to renew leases or relet space as leases expire, decreased cash flow from tenants will result, which could adversely impact our operating results.

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We may be required to expend funds to correct defects or to make improvements before a tenant can be found for a property at an attractive lease rate or an investment in a property can be sold. No assurance can be given that we will have funds available to correct those defects or to make those improvements. In acquiring a property, we may agree to lock-out provisions that materially restrict us from selling that property for a period of time or impose other restrictions, such as a limitation on the amount of debt that can be placed on that property. These factors and others that could impede our ability to respond to adverse changes in the performance of our properties could significantly affect our financial condition and operating results.

***Our properties may be leased at below-market rates under long-term leases.***

We may seek to negotiate longer-term leases to reduce the cash flow volatility associated with lease rollovers, provided that contractual rent increases are generally included. In addition, where appropriate, we will seek leases that provide for operating expenses, or expense increases, to be paid by the tenants. These leases may allow tenants to renew the lease with pre-defined rate increases. If we do not accurately judge the potential for increases in market rental rates, or if our negotiated increases provide for a discount to then-current market rental rates (in exchange for lower volatility), we may set the rental rates of these long-term leases at levels such that even after contractual rental increases, the resulting rental rates are less than then-current market rental rates. Further, we may be unable to terminate those leases or adjust the rent to then-prevailing market rates. As a result, our income and distributions to our stockholders could be lower than if we did not enter into long-term leases.

***Short-term leases expose us to the effects of declining market rent and could adversely impact our ability to make cash distributions to you.***

To the extent we invest in any properties with short-term leases, such as multifamily residential (business) and student housing properties, we may suffer losses if market rents decline. Thus, our ability to make distributions to you may be less certain than if we were to buy real estate with longer lease terms.

***Certain of our real estate investments may not include title to the underlying land, exposing us to greater risks.***

We may invest from time to time in real properties without acquiring title to the underlying land. This means that while we would have a right to use the property, we would not hold fee title to the underlying land. Accordingly, we would have no economic interest in the land or, in many instances the improvements located on the land, at the expiration of the ground lease, easement or permit. As the remaining term of a ground lease gets shorter, the prospect of expiration of the ground lease can result in a discount in its value and difficulty in subleasing the property. In addition, a default by us under the ground lease, easement or permit could cause a termination of the ground lease, easement or permit which may adversely impact our investment performance. Finally, there are complexities associated with financing a ground leasehold, easement interest or permit.

***Our properties may face significant competition.***

We may face significant competition from owners, operators and developers of properties. Many of our properties will face competition from similar properties in the same market. This competition may affect our ability to attract and retain tenants and may reduce the rents we are able to charge. These competing properties may have vacancy rates higher than our properties, which may result in their owners being willing to lease available space at lower prices than the space in our properties. If one of our properties were to lose an anchor tenant, this could impact the leases of other tenants, who may be able to modify or terminate their leases as a result.

***We may experience material losses or damage related to our properties and such losses may not be covered by insurance policies.***

We may experience material losses related to our properties arising from natural disasters, such as extreme weather events, climate change, hurricanes, earthquakes or floods, and acts of God, vandalism or other crime, faulty construction or accidents, fire (including wildfires), outbreaks of an infectious disease, pandemic or any other serious public health concern, war, acts of terrorism (including cyber sabotage or similar attacks) or other catastrophes. We plan to carry insurance covering our properties under policies our Adviser deems appropriate. Our Adviser will select policy specifications and insured limits that it believes to be appropriate and adequate given the relative risk of loss, the cost of the coverage and industry practice. Insurance policies on our properties may include some coverage for losses that are generally catastrophic in nature, such as losses due to terrorism, earthquakes and floods, but we cannot assure you that it will be adequate to cover all losses and some

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of our policies will be insured subject to limitations involving large deductibles or co-payments and policy limits that may not be sufficient to cover losses. In general, losses related to terrorism are becoming harder and more expensive to insure against. In some cases, the insurers exclude terrorism, in others the coverage against terrorist acts is limited, or available only for a significant price. A similar dynamic has been unfolding with respect to certain weather and fire events, with insurers excluding certain investments and/or geographical markets that have high risk of weather, earthquake or fire events. As the effects of climate change increase, we expect the frequency and impact of weather and climate related events and conditions could increase as well. Climate change may also increase the cost of, or decrease the availability of, property insurance on terms we find acceptable. As a result, not all investments may be insured against terrorism, weather or fire. If we or one or more of our tenants experience a loss that is uninsured or that exceeds policy limits, we could lose the capital invested in the damaged properties as well as the anticipated future cash flows from those properties. In addition, if the damaged properties are subject to recourse indebtedness, we would continue to be liable for the indebtedness, even if these properties were irreparably damaged. Certain of these events, such as war or an outbreak of an infectious disease, could have a broader negative impact on the global or local economy, thereby affecting us or our Adviser.

***We could become subject to liability for environmental violations, regardless of whether we caused such violations.***

We could become subject to liability in the form of fines or damages for noncompliance with environmental laws and regulations. These laws and regulations generally govern wastewater discharges, air emissions, the operation and removal of underground and above-ground storage tanks, the use, storage, treatment, transportation and disposal of solid hazardous materials, the remediation of contaminated property associated with the disposal of solid and hazardous materials and other health and safety-related concerns. Some of these laws and regulations may impose joint and several liability on tenants, owners or managers for the costs of investigation or remediation of contaminated properties, regardless of fault or the legality of the original disposal. Under various federal, state and local environmental laws, ordinances and regulations, a current or former owner or manager of real property may be liable for the cost to remove or remediate hazardous or toxic substances, wastes or petroleum products on, under, from or in such property. These costs could be substantial and liability under these laws may attach whether or not the owner or manager knew of, or was responsible for, the presence of such contamination. Even if more than one person may have been responsible for the contamination, each liable party may be held entirely responsible for all of the clean-up costs incurred.

In addition, third parties may sue the owner or manager of a property for damages based on personal injury, natural resources, property damage or for other costs, including investigation and clean-up costs, resulting from the environmental contamination. The presence of contamination on one of our properties, or the failure to properly remediate a contaminated property, could give rise to a lien in favor of the government for costs it may incur to address the contamination, or otherwise adversely affect our ability to sell or lease the property or borrow using the property as collateral. In addition, if contamination is discovered on our properties, environmental laws may impose restrictions on the manner in which the property may be used or businesses may be operated, and these restrictions may require substantial expenditures or prevent us from entering into leases with prospective tenants. There can be no assurance that future laws, ordinances or regulations will not impose any material environmental liability, or that the environmental condition of our properties will not be affected by the operations of the tenants, by the existing condition of the land, by operations in the vicinity of the properties. There can be no assurance that these laws, or changes in these laws, will not have a material adverse effect on our business, results of operations or financial condition. We could also suffer losses if reserves or insurance proceeds prove inadequate to cover any such matters. The cost to perform any remediation, and the cost to defend against any related claims, could exceed the value of the relevant investment, and in such cases we could be forced to satisfy the claims from other assets and investments. We may have an indemnity from a third party purporting to cover these liabilities, but there can be no assurance as to the financial viability of any indemnifying party at the time a claim arises. We may also provide such an indemnity to a purchaser of a property, which could adversely affect the profitability of any such disposition. In addition, some environmental laws create a lien on a contaminated asset in favor of governments or government agencies for costs they may incur in connection with the contamination.

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***Our costs associated with complying with the Americans with Disabilities Act of 1990 (the "ADA") or the Fair Housing Amendment Act of 1988 (the "FHAA") may affect cash available for distributions.***

Any domestic properties we acquire will generally be subject to the ADA. Under the ADA, all places of public accommodation are required to comply with federal requirements related to access and use by disabled persons. The ADA has separate compliance requirements for "public accommodations" and "commercial facilities" that generally require that buildings and services be made accessible and available to people with disabilities. The ADA's requirements could require removal of access barriers and could result in the imposition of injunctive relief, monetary penalties or, in some cases, an award of damages. We may not acquire properties that comply with the ADA or we may not be able to allocate the burden on the seller or other third party, such as a tenant, to ensure compliance with the ADA in all cases.

The multifamily residential properties in which we invest domestically, if any, must comply with the FHAA, which requires that multifamily communities first occupied after March 13, 1991 be accessible to handicapped residents and visitors. Compliance with the FHAA could require removal of structural barriers to handicapped access in a community, including the interiors of apartment units covered under the FHAA. Recently there has been heightened scrutiny of multifamily housing communities for compliance with the requirements of the FHAA and the ADA and an increasing number of substantial enforcement actions and private lawsuits have been brought against multifamily communities to ensure compliance with these requirements. Noncompliance with the FHAA and the ADA could result in the imposition of fines, awards of damages to private litigants, payment of attorneys' fees and other costs to plaintiffs, substantial litigation costs and substantial costs of remediation.

***Rent control and other changes in applicable laws, or noncompliance with applicable laws, could adversely affect our multifamily residential properties.***

Lower revenue growth or significant unanticipated expenditures may result from changes in rent control or rent stabilization laws or other residential landlord/tenant laws. Municipalities may implement, consider or be urged by advocacy groups to consider rent control or rent stabilization laws and regulations or take other actions that could limit our ability to raise rents based on market conditions. These initiatives and any other future enactments of rent control or rent stabilization laws or other laws regulating multifamily housing, as well as any lawsuits against us arising from such rent control or other laws, may reduce rental revenues or increase operating costs. Such laws and regulations may limit our ability to charge market rents, increase rents, evict tenants or recover increases in our operating costs and could make it more difficult for us to dispose of properties in certain circumstances. Expenses associated with investments in residential properties, such as debt service, real estate taxes, insurance and maintenance costs, are generally not reduced when circumstances cause a reduction in rental income from such properties.

***Legislative and regulatory initiatives aimed at limiting institutional ownership or acquisition of single-family and other residential housing could restrict our investment activity, increase our costs, reduce asset values, or require changes to our strategy.***

Federal, state and local policymakers have proposed—and in some cases advanced—measures intended to limit, deter or penalize large scale ownership or acquisition of single family homes and other residential housing by institutional investors. These measures, if enacted, could take many forms, including: prohibitions or caps on acquisitions of single family homes above specified thresholds; taxes, fees, or surcharges tied to the number of residential units owned within a jurisdiction; restrictions on converting single family homes to rental use; mandated hold periods or divestiture requirements; enhanced reporting and compliance obligations; limits on the availability or terms of public or government sponsored financing; and other operational constraints. Any such actions could materially adversely affect our ability to source and close transactions, particularly in residential strategies, finance and/or refinance new acquisitions or existing assets, increase our acquisition and holding costs, reduce the liquidity and fair value of affected assets, limit exit options, and negatively impact our net asset value and distributions.

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We have exposure to residential real estate through existing investments and our broader investment mandate, which contemplates residential strategies among other sectors. Legislative or regulatory changes targeting institutional participation in residential housing could therefore limit our capacity to deploy capital in line with our strategy, require us to reallocate capital to less affected sectors on potentially less favorable terms, or cause us to incur additional compliance and monitoring costs. There can be no assurance that any legislation will include grandfathering or exemptions applicable to us, our joint ventures, or our tenants (including operators that lease single family homes for specialized community based uses), or that any such exemptions—if provided—would not be narrowed or eliminated in the future. Measures of this type could also interact with, or be additive to, other existing or prospective regulations governing residential operations (such as rent control, landlord tenant, zoning, licensing, and permitting regimes), compounding adverse effects on our results of operations and financial condition. The timing, scope, and ultimate impact of these initiatives are uncertain, and adverse developments could be rapid and material.

***Our properties are, and any properties we acquire in the future will be, subject to property taxes that may increase in the future, which could adversely affect our cash flow.***

Our properties are, and any properties we acquire in the future will be, subject to real and personal property taxes that may increase as property tax rates change and as the properties are assessed or reassessed by taxing authorities. Some of our leases may provide that the property taxes, or increases therein, are charged to the lessees as an expense related to the properties that they occupy. As the owner of the properties, however, we are ultimately responsible for payment of the taxes to the government. If property taxes increase, our tenants may be unable (or may not be obligated) to make the required tax payments, ultimately requiring us to pay the taxes. In addition, we are generally responsible for property taxes related to any vacant space. If we purchase residential properties, the leases for such properties typically will not allow us to pass through real estate taxes and other taxes to residents of such properties. Consequently, any tax increases may adversely affect our results of operations at such properties.

***We may be exposed to third-party liability, which can reduce the performance of any associated investment.***

The actions or omissions of any third-party operator, employee, guest or resident of our properties may involve criminal or civil liability, which could result in liability to us as owners of, or lenders to, such properties, loss of or restrictions on required licenses, fines, litigation, reputational impact and other matters that may adversely affect our performance.

***Certain of our investments may have additional capital requirements.***

Certain of our investments, including those that may be in a development phase, if any, are expected to require additional financing to satisfy their working capital requirements or development strategies. The amount of such additional financing needed will depend upon the maturity and objectives of the particular asset, and such financings may be only available at an unfavorable rate at such time. Each round of financing (whether from us or other investors) is typically intended to provide enough capital to reach the next major milestone in an asset's lifecycle. If the funds provided are not sufficient, additional capital may be required to be raised at a price unfavorable to the existing investors, including us. In addition, we may make additional debt and equity investments or exercise warrants, options, convertible securities or other rights that were acquired in the initial investment in such property in order to preserve our proportionate ownership when a subsequent financing is planned, or to protect our investment when such property's performance does not meet expectations. The availability of capital is generally a function of capital market conditions that are beyond our control. There can be no assurance that we will be able to predict accurately the future capital requirements necessary for success or that additional funds will be available from any source. Failure to provide sufficient additional capital with respect to an investment could adversely affect our performance.

***Technological or other innovations may disrupt the markets and sectors in which we operate and subject us to increased competition or negatively impact the tenants of our properties and the value of our properties***.

In this period of rapid technological and commercial innovation, new businesses and approaches may be created that could affect us, tenants of our properties or our investments or alter the market practices that help frame our strategy. For example, the value of our hospitality properties may be affected by competition from the non-traditional hospitality sector (such as short-term rental services), our office properties may be affected by competition from shared office spaces (including co-working environments), our retail properties may be affected by increased shopping via the internet, and our warehouse industrial properties may be affected if supply chains evolve in a way that decreases the need for traditional warehousing. Any of these new approaches could damage our investments, significantly disrupt the market in which we operate and subject us to increased competition, which could materially and adversely affect our business, financial condition and results of

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investments. Moreover, given the pace of innovation in recent years, the impact on a particular investment may not be foreseeable at the time we make the investment. Furthermore, we could base investment decisions on views about the direction or degree of innovation that prove inaccurate and lead to losses.

***Many factors affect the single-family rental housing market, and we may be negatively affected by our assumptions surrounding and general conditions of the single-family rental housing market.***

Any potential returns on our investments related to the single-family rental housing market will depend upon many factors including, but not limited to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the availability of properties or other investments that meet our investment criteria and our ability to acquire such properties at favorable prices and interest rates;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• real estate appreciation or depreciation in our target markets;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the condition of our properties;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to contain renovation, maintenance, marketing and other operating costs for our properties;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• our ability to maintain high occupancy rates and target rent levels;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• general economic conditions in our target markets, such as changes in employment and household earnings and expenses; the effects of rent controls, stabilization laws and other laws or regulations regarding rental rates and tenant rights; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• changes in, and changes in enforcement of, laws, regulations and government policies including health, safety, environmental, property, zoning and tax laws.

We will have no control over many of these factors, which could adversely affect our operations. Our success will also depend, in part, on our assumptions about our target properties, target lessees, renovation, maintenance and other operating costs, and rental rates and occupancy levels and, if our assumptions prove to be inaccurate, this may adversely affect our operations and results.

***Certain of our industrial properties may be special use and/or build-to-suit and may be difficult to sell or relet upon tenant defaults or lease terminations.***

Certain of our industrial properties may include special use and/or build-to-suit properties. These types of properties are relatively illiquid compared to other types of real estate and financial assets, and this illiquidity will limit our ability to change our portfolio in response to changes in economic or other conditions. With such properties, if the current lease is terminated or not renewed, we may be required to renovate the property or to make rent concessions in order to lease the property to another tenant, finance the property or sell the property. In addition, in the event we are forced to sell the property, we may have difficulty selling it to a party other than the tenant or borrower due to the special purpose for which the property may have been designed. These and other limitations may affect our ability to sell or relet our industrial properties and adversely affect our results of operations at such properties.

***We could be negatively impacted by the condition of the Federal National Mortgage Association ("Fannie Mae") and the Federal Home Loan Mortgage Corporation ("Freddie Mac") and by changes in government support for multifamily housing.***

Fannie Mae and Freddie Mac are a major source of financing for multifamily real estate in the U.S. We expect to utilize loan programs sponsored by these entities as a key source of capital to finance our growth and our operations. In September 2008, the U.S. government increased its control of Fannie Mae and Freddie Mac and placed both companies into a government conservatorship under the Federal Housing Finance Agency. In December 2009, the U.S. Treasury increased its financial support for these conservatorships. In February 2011, the Obama administration released its blueprint for winding down Fannie Mae and Freddie Mac and for reforming the system of housing finance. Since that time, members of Congress have introduced and Congressional committees have considered a substantial number of bills that include comprehensive or incremental approaches to winding down Fannie Mae and Freddie Mac or changing their purposes, businesses or operations. A decision by the U.S. government to eliminate or downscale Fannie Mae or Freddie Mac or to reduce government support for multifamily housing more generally may adversely affect interest rates, capital availability, development of multifamily communities and the value of multifamily assets and, as a result, may adversely affect our future growth and operations. Any potential reduction in loans, guarantees and credit-enhancement arrangements from Fannie Mae and Freddie Mac could jeopardize the effectiveness of the multifamily sector's derivative securities market, potentially causing breaches in loan covenants, and through reduced loan availability, impact the value of multifamily assets, which could impair the value of a

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significant portion of multifamily communities. Specifically, the potential for a decrease in liquidity made available to the multifamily sector by Fannie Mae and Freddie Mac could:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• make it more difficult for us to secure new takeout financing for any multifamily development projects we acquire;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• hinder our ability to refinance any completed multifamily assets;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• decrease the amount of available liquidity and credit that could be used to broaden our portfolio through the acquisition of multifamily assets; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• require us to obtain other sources of debt capital with potentially different terms.

***Potential Federal Actions Limiting Institutional Investment in Single-Family Housing Could Adversely Affect Our Business***

Recent and potential future actions by the U.S. federal government, including executive orders or other directives, may seek to limit or restrict the acquisition, ownership, financing, or operation of single-family residential properties by large institutional investors, including by directing federal agencies to halt or condition approvals, support, guarantees, or financing for such acquisitions and to prioritize sales of single-family homes to owner-occupants. Any such actions, whether implemented through executive action, agency rulemaking, enforcement priorities, or legislation, could materially reduce the availability of acquisition opportunities for institutional investors, increase regulatory compliance costs, limit access to government-related financing programs, or otherwise adversely affect the economics of owning or acquiring single-family residential assets.

If enacted or expanded, these measures could constrain our ability to grow or rebalance our portfolio, negatively affect asset values, reduce liquidity in the single-family housing market, increase competition for permitted acquisitions, or require changes to our investment strategy. In addition, regulatory uncertainty surrounding the scope, interpretation, and implementation of such actions could adversely affect investor sentiment, transaction activity, and the valuation of single-family residential assets. Any of the foregoing could have a material adverse effect on our business, financial condition, results of operations, cash flows, and ability to achieve our investment objectives.

***The hospitality market is seasonal, highly competitive and generally subject to greater volatility than our other market segments.***

The hospitality business is seasonal, highly competitive and influenced by factors such as general and local economic conditions, location, room rates, quality, service levels, reputation and reservation systems, among many other factors. Furthermore, upon acquisition of a hotel, the owner generally has limited visibility into future bookings. Certain hotels acquired by us may be managed by third-party hotel management companies pursuant to management agreements that may not be terminable for a period of time. In these cases, the hotel's business and operating results would depend in large part upon the performance of a third party, not originally retained by us. While we will seek to invest in hotel properties with quality management, there is no guarantee that the third-party management company for any given hotel property will meet our performance objectives. The hospitality industry generally experiences seasonal slowdown in the third quarter and, to a lesser extent, in the fourth quarter of each year. As a result of such seasonality, there will likely be quarterly fluctuations in results of operations of any hospitality properties that we may own. There are many competitors in this market, and these competitors may have substantially greater marketing and financial resources than those available to us. Competition also comes from non-traditional hospitality sources, such as home-sharing platforms. If a property's occupancy or room rates drop such that its revenues are insufficient to cover its operating expenses, additional funds, including reserves, will be required to cover operating expenses. Also, more so than certain other property types, hospitality properties need to make capital expenditures in order to remain competitive. There is a risk that cash flow from operations and reserves may be inadequate to fund capital improvements, or financing for these capital improvements may not be available on attractive terms. Also, hotel properties may not readily be converted to alternative uses if they were to become unprofitable due to competition, obsolescence, or decreased demand, given zoning, structural and other considerations. This competition, along with other factors, such as over-building in the hospitality industry and certain deterrents to traveling, may increase the number of rooms available and may decrease the average occupancy and room rates of our hospitality properties. The demand for rooms at any hospitality properties that we may acquire will change much more rapidly than the demand for space at other properties that we acquire. In addition, any such properties that we may own may be adversely affected by factors outside our control, such as extreme weather conditions or natural disasters, terrorist attacks or alerts, outbreaks of contagious diseases, airline strikes, economic factors and other considerations affecting travel. These factors could have a material adverse effect on our financial condition, results of operations and ability to pay distributions to stockholders.

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***We may invest in leisure properties, and the profitability of such investments may be affected by seasonality, changes in business and leisure travel and other factors that are beyond our control.***

We may invest in leisure properties such as ski or other resorts, golf courses and marinas. The profitability of such investments may be negatively affected by, and can change based on, any of the following items: (i) changes in the national, regional and local economic climate, (ii) reduced demand and increased operating costs and other conditions resulting from pandemics, terrorist attacks and/or war, (iii) changes in business and leisure travel patterns, (iv) the attractiveness of such resorts or areas to consumers and competition from comparable resorts and areas and (v) unionization.

Additionally, certain expenses associated with owning and operating leisure properties are fixed and do not necessarily decrease when circumstances such as marketing factors and competition cause a reduction in income from the properties. Cost reductions may be difficult to achieve if operating levels continue to decline. Regardless of these efforts to reduce costs, the expenses of leisure investments may be affected by inflationary increases, and certain costs, such as wages, benefits and insurance, may exceed the rate of inflation. We may be unable to offset these increased expenses. Operating expenses may also be increased by, among other factors, new or amended collective bargaining agreements. Any efforts to reduce operating costs or failure to make scheduled capital expenditures could adversely affect the growth of the leisure investments' businesses and the value of their properties.

***We will be subject to risks associated with our investment in student-housing properties.***

Student-housing properties are typically leased during leasing seasons, and any student-housing properties will therefore be highly dependent on the effectiveness of our marketing and leasing efforts and personnel during such seasons. Additionally, any student-housing properties will generally be on short-term leases, exposing us to increased leasing risk. Availability of student grants or funding programs may also be affected by changes in state and federal funding, which may result in lower student enrollment and/or the leasing of student housing. We also face economic and operational risks related to the supply of and demand for student housing space in the local market, tenant quality, the higher tenant turnover rate relative to other housing properties, physical attributes of the building in relation to competing buildings (e.g., age, condition, design, appearance, amenities, and location) and access to transportation and proximity to campus, among other factors. We may not be able to re-lease our properties on similar terms, if we are able to re-lease our properties at all. The terms of renewal or re-lease (including the cost of required renovations) may be less favorable to us than the prior lease. If we are unable to re-lease all or a substantial portion of our properties, or if the rental rates upon such re-leasing are significantly lower than expected rates, our cash flows from operations could be adversely affected.

Prior to the commencement of each new lease period, we prepare the units for new incoming residents. Other than revenue generated by in-place leases for returning residents, we do not generally recognize lease revenue during this period referred to as "turn" as we have no leases in place. In addition, during turn, we incur expenses preparing our units for occupancy, which we recognize immediately. This lease turn period results in seasonality in our operating results, and as a result, we may experience significantly reduced cash flows during such periods.

In addition, we may be adversely affected by a change in university admission policies. For example, if a university reduces the number of student admissions, the demand for our student housing properties may be reduced and our occupancy rates may decline. Any student housing properties will also compete with university-owned student housing and other national and regional owner-operators of off-campus student housing in a number of markets as well as with smaller local owner-operators. The demand for student housing has been, and may in the future be, impacted by epidemics or pandemics, such as the COVID-19 pandemic, where students could be restricted from living in student housing for all or a considerable portion of the academic school year (or may otherwise have less desire to live in student housing, such as where classes are taught online during such period). In such circumstances, student housing properties may remain unoccupied and accordingly may not generate any revenue and cash flow during such time and the value of an investment in such properties may be adversely affected.

***Our retail tenants will face competition from numerous retail channels and will be subject to the overall health of the economy.***

Retailers leasing our properties will face continued competition from shopping via the internet, discount or value retailers, factory outlet centers, wholesale clubs, mail order catalogs and operators and television shopping networks. Additionally, a number of retail leases, in addition to or in lieu of base rent, may include a provision for percentage rent that is dependent upon the amount of a tenant's sales. Rental income attributable to leases with percentage rent provisions may decrease as competition increases and may decrease in a general economic downturn that adversely affects tenant sales. Furthermore, to

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the extent that an epidemic, such as COVID-19, results in a "shelter-in-place" order or similar restriction on travel or business operations, the revenues and values of retail properties may decrease. Such competition and economic conditions could adversely affect our tenants and, consequently, our revenues and funds available for distribution.

***Leases with retail tenants may restrict us from re-leasing space.***

Many leases with retail tenants contain provisions giving the particular tenant the exclusive right to sell particular types of merchandise or provide specific types of services within the particular retail center. These provisions may limit the number and types of prospective tenants interested in leasing space in a particular retail property.

***Retail properties depend on anchor tenants to attract shoppers and could be adversely affected by the loss of a key anchor tenant.***

We may acquire retail properties. Retail properties, like other properties, are subject to the risk that tenants may be unable to make their lease payments or may decline to extend a lease upon its expiration. A lease termination by a tenant that occupies a large area of a retail center (commonly referred to as an anchor tenant) could impact leases of other tenants. Other tenants may be entitled to modify the terms of their existing leases in the event of a lease termination by an anchor tenant, or the closure of the business of an anchor tenant that leaves its space vacant even if the anchor tenant continues to pay rent. Any such modifications or conditions could be unfavorable to us as the property owner and could decrease rents or expense recoveries. Additionally, major tenant closures may result in decreased customer traffic, which could lead to decreased sales at other stores. In the event of default by a tenant or anchor store, we may experience delays and costs in enforcing our rights as landlord to recover amounts due to us under the terms of our agreements with those parties.

***We may be adversely affected by trends in the office real estate industry.***

Some businesses are rapidly evolving to make employee telecommuting, flexible work schedules, open workplaces, teleconferencing, and the use of artificial intelligence increasingly common. These practices enable businesses to reduce their space requirements. A continuation of the movement towards these practices could over time erode the overall demand for office space and, in turn, place downward pressure on occupancy, rental rates and property valuations, each of which could have an adverse effect on our financial position, results of operations, cash flows and ability to make expected distributions to our stockholders. We may also be negatively impacted by competition from other short-term office or shared space leasing companies.

***We may invest in office properties, and the value of any such investment may change based on the diversification of the tenant base, location of the property and other factors.***

A number of factors may affect the value of office properties, including, among other things, diversification of the tenant base, the location, appearance, amenities and other physical attributes of the properties, and competition from other office properties. Office properties generally require their owners to expend significant amounts for general capital improvements, tenant improvements and costs of reletting space. In addition, office properties that are not equipped to accommodate the needs of modern businesses may become functionally obsolete and thus non-competitive, or may require substantial capital investment to upgrade facilities in order to be competitive. Office properties may also be adversely affected if there is an economic decline in the businesses operated by their tenants. The risks of such an adverse effect are increased if the property revenue is dependent on a single tenant or if there is a significant concentration of tenants in a particular business or industry.

***We could be negatively impacted by increased competition, decreased demand and restrictive zoning ordinances in the manufactured housing markets in which we invest.***

Our operating results from our manufactured housing investments may be adversely affected by: (i) competition from other available manufactured housing sites or available land for the placement of manufactured homes outside of established communities and alternative forms of housing (such as apartment buildings and site built single-family homes) and (ii) local real estate market conditions such as the oversupply of manufactured housing sites or a reduction in demand for manufactured housing sites in an area.

***Any self-storage investments will be subject to risks from fluctuating demand and competition in the self-storage industry.***

Any self-storage investments will be subject to operating risks common to the self-storage industry, which include business layoffs or downsizing, industry slowdowns, relocation of businesses and changing demographics, changes in supply of, or

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demand for, similar or competing self-storage properties in an area and the excess amount of self-storage space in a particular market, changes in market rental rates and inability to collect rents from customers. The self-storage industry has at times experienced overbuilding in response to perceived increases in demand. A recurrence of overbuilding might cause our self-storage investments to experience a decrease in occupancy levels, as well as limit the ability to increase rents and offer discounted rents.

***We may invest in commercial properties subject to net leases, which could subject us to losses.***

We may invest in commercial properties subject to net leases. Typically, net leases require the tenants to pay substantially all of the operating costs associated with the properties. As a result, the value of, and income from, investments in commercial properties subject to net leases will depend, in part, upon the ability of the applicable tenant to meet its obligations to maintain the property under the terms of the net lease. If a tenant fails or becomes unable to so maintain a property, we will be subject to all risks associated with owning the underlying real estate. In addition, we may have limited oversight into the operations or the managers of these properties, subject to the terms of the net leases.

Certain commercial properties subject to net leases in which we may invest may be occupied by a single tenant and, therefore, the success of such investments is largely dependent on the financial stability of each such tenant. A default of any such tenant on its lease payments to us would cause us to lose the revenue from the property and cause us to have to find an alternative source of revenue to meet any mortgage payment and prevent a foreclosure if the property is subject to a mortgage. In the event of a default, we may experience delays in enforcing our rights as landlord and may incur substantial costs in protecting our investment and reletting our property. If a lease is terminated, we may also incur significant losses to make the leased premises ready for another tenant and experience difficulty or a significant delay in re-leasing such property.

In addition, net leases typically have longer lease terms, and thus there is an increased risk that contractual rental increases in future years will fail to result in fair market rental rates during those years.

***We may make investments in or related to properties used in the gaming industry, which may make an investment in our shares more speculative and expose you to a greater risk of loss.***

The gaming industry is highly regulated, dynamic and subject to rapid change. In some instances, existing casinos or gaming operators propose and support legislation or litigation designed to make it difficult or impossible for competition to enter a market. This political and regulatory environment makes it impossible to predict the effects that the adoption of and changes in gaming laws, rules and regulations or competition will have on our investments related to gaming enterprises. Moreover, state, tribal and federal legislatures often consider wide-ranging legislation and regulations, which could adversely affect the operations and expected revenues of our investments. State and tribal regulatory authorities have broad powers with respect to the licensing of casino or gaming operations and may revoke, suspend, condition or limit an operator's gaming license, impose substantial fines and take other actions, any one of which could have a significant adverse effect on the operations and financial condition of a gaming operation leasing one of our properties. Investments in properties leased to Native American gaming operators pose additional legal and regulatory uncertainties, including our ability to enforce our rights and remedies against Native American tribes.

***We may be exposed to the risks of investing in industrial properties.***

Although owners of industrial properties are not generally required to expend substantial amounts for general capital improvements, tenant improvements or reletting costs, various other factors may affect the returns from this type of property in addition to the risks generally applicable to real estate, including, among other things, the design and adaptability of the property and the degree to which it is generally functional for industrial purposes, the proximity to highways and other means for the transportation of goods, the number and diversity of tenants among businesses or industries and the cost of converting a previously adapted space to general use. An industrial property may be more likely to have one or only a few tenants, which increases the risk that a decline in their operations or their particular business or industry segments may adversely affect the returns from the property. Additionally, a property designed for a particular use or function may be difficult to relet to another tenant or may become functionally obsolete compared to other properties. Particular uses of industrial properties may increase their risk of environmental problems. In addition, because of unique construction requirements of many industrial properties, many vacant industrial property spaces may not be easily converted to other uses. Thus, if the operations of any industrial property become unprofitable, the liquidation value of that industrial property may be substantially less than would be the case if the industrial property were readily adaptable to other uses.

***We may invest in the data and communications real estate sector, which may expose us to losses associated with that industry.***

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Companies in the data and communications real estate sector may be affected by unique supply and demand factors that do not apply to other real estate sectors, such as changes in demand for communications developments, consolidation of tower sites, consolidation of major tenants, new technologies that may affect demand for communications towers and changes in demand for wireless infrastructure and wireless connectivity. This exposure could make an investment in our shares more speculative and expose you to a greater risk of loss.

***We may invest in parking facilities, exposing your investment to the risks associated therewith.***

We may invest in parking facilities. The profitability of parking lots and garages may be affected by many factors, including the following: (i) the number of rentable parking spaces and rates charged; (ii) the location of the lot or garage and its proximity to places where large numbers of people work, shop or live; (iii) the amount of alternative parking spaces in the area; (iv) the availability of mass transit; and (v) the perceptions of the safety, convenience and services of the lot or garage. Changes in zoning requirements or regulations may also affect the operations or profitability of parking facility investments. Additionally, any investment in parking facilities may also be generally subject to the risks associated with the businesses that are in close proximity to such parking facility (e.g., office parking facilities may be subject to some of the risks associated with investments in office properties), which could impact the profitability of such investments.

***We may be exposed to the risks of investing in senior housing.***

We may invest in senior housing. Revenues from senior housing facilities are primarily driven by occupancy and private pay rates. A weakened economy may have an adverse effect on the residents of these properties. If the operations' cash flows are materially adversely impacted by economic conditions, these properties' revenues and operations may be adversely affected. Additionally, senior housing facilities may be subject to a reduced availability of labor and increased employee costs and are subject to operational hazards and health-related risks. Finally, government reimbursement has, and may continue to, come under pressure due to reimbursement cuts and state budget shortfalls. This could have a negative impact on the industry and impact the value of senior housing properties. Senior housing properties are generally subject to varying levels of federal, state, local, and industry-regulated licensure, certification and inspection laws, regulations and standards and may require licenses, registrations or certificates of need to operate. Failure to comply with any of these laws, regulations or standards could result in loss of accreditation, denial of reimbursement, imposition of fines, suspension, decertification or exclusion from federal and state health care programs, loss of license or closure of the facility. Such actions may adversely affect the profitability of these facilities and the value of our investment in them.

***We may invest in properties where revenues are dependent on funding from government programs.***

We may invest in residential (business) properties where revenues are fully or partially dependent on funding from government programs, including Section 8 of the Housing Act of 1937, as amended, and Medicare or Medicaid reimbursements. See Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations—Investment Portfolio." Given this reliance, the performance of such properties is susceptible to risks associated with governmental programs and funding generally, including changing political support for different kinds of programs, temporary cessations in funding due to delays in legislative or bureaucratic processes, and ongoing governmental audits or inspections.

***We may make investments outside of the U.S., which may increase your risk of loss on account of exchange rate fluctuations, legal and other factors.***

We may make investments outside the U.S. The legal systems of some countries lack transparency or could limit the protections available to foreign investors, and our investments may be subject to nationalization and confiscation without fair compensation. Investing in real estate related securities outside the U.S. involves additional risks including the following: (i) currency exchange rate fluctuations and costs associated with conversion of investment principal and income from one currency into another; (ii) differences in conventions relating to documentation, settlement, corporate actions, shareholder rights and other matters; (iii) differences between U.S. and foreign securities and real estate markets, including potentially higher price volatility and relative illiquidity of some markets; (iv) the absence of uniform accounting, auditing and financial reporting standards, practices and disclosure requirements and differences in government supervision and regulation; (v) the risks associated with political, economic or social instability, including the risk of sovereign defaults, regulatory change and the possibility of expropriation or confiscatory taxation and other adverse economic and political developments; (vi) the possible imposition of non-U.S. taxes on income and gains and gross sales or other proceeds recognized with respect to such investments; (vii) less developed corporate laws regarding stakeholder rights, creditors' rights (including the rights of secured

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parties), fiduciary duties and investor protections; (viii) differences in the legal and regulatory environment or enhanced legal and regulatory compliance, including potential currency control regulations and potential restrictions on investment and repatriation of capital; (ix) political hostility to investments by foreign or private equity investors; and (x) less publicly available information.

***We may invest in gas stations, and the value of any such investments will be adversely affected by changes in the availability of alternative fuel sources, trends in travel and other factors.***

We may invest in gas stations and the profitability of any such investment may be impacted by a number of factors, including the availability of alternative fuel sources, increased adoption of electric and hybrid vehicles, trends in travel (e.g., decreased vehicular travel due to a pandemic) and changes in legislation. Further, environmental changes and climate-change initiatives could negatively impact the value of any gas station investments. Additionally, any investment in gas stations will be subject to the risks impacting the gasoline industry generally, including fluctuation of fuel prices and supply chain disruption.

**General Risks Related to Investments in Real Estate Debt**

***Investments in real estate debt are subject to risks including various credit risks and early redemption features, which may materially adversely affect our results of operations and financial condition.***

The debt and other interests in which we may invest may include secured or unsecured debt at various levels of an issuer's capital structure. The real estate debt in which we may invest may not be protected by financial covenants or limitations upon additional indebtedness, may be illiquid or have limited liquidity, and may not be rated by a credit rating agency. Real estate debt is also subject to other creditor risks, including (i) the possibility that the debt will be uncollectible on account of applicable bankruptcy or similar laws affecting the enforcement of creditors' rights, (ii) so-called lender liability claims by the issuer of the obligation and (iii) environmental liabilities that may arise with respect to collateral securing the obligations. Our investments may be subject to early redemption features, refinancing options, pre-payment options or similar provisions, which could result in the issuer repaying the principal on an obligation held by us earlier than expected, resulting in a lower return to us than anticipated, or reinvesting in a new obligation at a lower return to us.

***Debt-oriented real estate investments face a number of general market-related risks that can affect the creditworthiness of issuers, and modifications to certain loan structures and market terms make it more difficult to monitor and evaluate investments.***

Any deterioration of real estate fundamentals generally, and in the United States in particular, could negatively impact our performance by making it more difficult for issuers to satisfy their debt payment obligations, increasing the default risk applicable to issuers, and making it relatively more difficult for us to generate attractive risk-adjusted returns. Changes in general economic conditions will affect the creditworthiness of issuers and real estate collateral relating to our investments and may include economic and market fluctuations, changes in environmental and zoning laws, casualty or condemnation losses, regulatory limitations on rents, decreases in property values, changes in the appeal of properties to tenants, changes in supply and demand for competing properties in an area (as a result, for instance, of overbuilding), fluctuations in real estate fundamentals (including average occupancy and room rates for hotel properties), the financial resources of tenants, changes in availability of debt financing which may render the sale or refinancing of properties difficult or impracticable, changes in building, environmental and other laws, energy and supply shortages, various uninsured or uninsurable risks, natural disasters, political events, trade barriers, currency exchange controls, changes in government regulations (such as rent control), changes in real property tax rates and operating expenses, changes in interest rates, changes in the availability of debt financing which may render the sale or refinancing of properties difficult or impracticable, increased mortgage defaults, increases in borrowing rates, outbreaks of an infectious disease, epidemics/pandemics or other serious public health concerns, negative developments in the economy or political climate that depress travel activity (including restrictions on travel or quarantines imposed), environmental liabilities, contingent liabilities on disposition of assets, acts of God, terrorist attacks, war, real estate values generally and other factors that are beyond the control of our Adviser. Such changes may develop rapidly, and it may be difficult to determine the comprehensive impact of such changes on our investments, particularly for investments that may have inherently limited liquidity. These changes may also create significant volatility in the markets for our investments, which could cause rapid and large fluctuations in the values of such investments. There can be no assurance that there will be a ready market for the resale of our debt investments because such investments may not be liquid. Illiquidity may result from the absence of an established market for the investments, as well as legal or contractual restrictions on their resale by us.

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Our Adviser cannot predict whether economic conditions generally, and the conditions for real estate debt investing in particular, will deteriorate in the future. Declines in the performance of the U.S. and global economies or in the real estate debt markets could have a material adverse effect on our investment activities. In addition, market conditions relating to real estate debt investments have evolved since the global financial crisis of 2007-2008, which has resulted in a modification to certain loan structures and market terms. These changes in loan structures or market terms may make it more difficult for us to monitor and evaluate investments.

***The operating and financial risks of issuers and the underlying default risk across capital structures may adversely affect our results of operations and financial condition.***

Our securities investments will involve credit or default risk, which is the risk that an issuer or borrower will be unable to make principal and interest payments on its outstanding debt when due. The risk of default and losses on real estate debt instruments will be affected by a number of factors, including global, regional and local economic conditions, interest rates, the commercial real estate market in general, an issuer's equity and the financial circumstances of the issuer, as well as general economic conditions. Such default risk will be heightened to the extent we make relatively junior investments in an issuer's capital structure since such investments are structurally subordinate to more senior tranches in such issuer's capital structure, and our overall returns would be adversely affected to the extent one or more issuers is unable to meet its debt payment obligations when due. To the extent we hold an equity or "mezzanine" interest in any issuer that is unable to meet its debt payment obligations, such equity or mezzanine interest could become subordinated to the rights of such issuer's creditors in a bankruptcy. See "—We may invest in subordinated debt, which is subject to greater credit risk than senior debt" below. Furthermore, the financial performance of one or more issuers could deteriorate as a result of, among other things, adverse developments in their businesses, changes in the competitive environment or an economic downturn. As a result, underlying properties or issuers that we expected to be stable may operate, or expect to operate, at a loss or have significant fluctuations in ongoing operating results, may otherwise have a weak financial condition or be experiencing financial distress and subject our investments to additional risk of loss and default.

***Our debt investments will face prepayment risk and interest rate fluctuations that may adversely affect our results of operations and financial condition.***

During periods of declining interest rates, the issuer of a security or borrower under a loan may exercise its option to prepay principal earlier than scheduled, forcing us to reinvest the proceeds from such prepayment in lower-yielding securities or loans, which may result in a decline in our return. Debt investments frequently have call features that allow the issuer to redeem the security at dates prior to its stated maturity at a specified price (typically greater than par) only if certain prescribed conditions are met. An issuer may choose to redeem debt if, for example, the issuer can refinance the debt at a lower cost due to declining interest rates or an improvement in the credit standing of the issuer. In addition, the market price of our investments will change in response to changes in interest rates and other factors. During periods of declining interest rates, the market price of fixed-rate debt investments generally rises. Conversely, during periods of rising interest rates, the market price of such investments generally declines. The magnitude of these fluctuations in the market price of debt investments is generally greater for securities with longer maturities. If the U.S. Federal Reserve or other relevant central banks increase benchmark interest rates, this could also negatively impact the price of debt instruments and could adversely affect the value of our investments and the NAV of our shares.

***Reinvestment risk could affect the price for our shares or their overall returns.***

Reinvestment risk is the risk that income from our portfolio will decline if we invest the proceeds from matured, traded or called securities at market interest rates that are below our real estate debt portfolio's then-current earnings rate. A decline in income could affect the NAV of our shares or their overall returns.

***Some of our securities investments may become distressed, which securities would have a high risk of default and may be illiquid.***

Although it is generally anticipated that our investments in real estate related securities will focus primarily on non-distressed real estate (based on our belief that there is a high likelihood of repayment), our investments may become distressed following our acquisition thereof. Additionally, we may invest in real estate debt instruments that we believe are available to purchase at "discounted" rates or "undervalued" prices. Purchasing real estate debt at what may appear to be "undervalued" or "discounted" levels is no guarantee that these investments will generate attractive returns to us or will not be subject to further reductions in value. There is no assurance that such investments can be acquired at favorable prices, that such

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investments will not default or that the market for such interests will improve. In addition, the market conditions for real estate debt investments may deteriorate further, which could have an adverse effect on the performance of our investments.

During an economic downturn or recession, securities of financially troubled or operationally troubled issuers are more likely to go into default than securities of other issuers. Securities of financially troubled issuers and operationally troubled issuers are less liquid and more volatile than securities of companies not experiencing financial difficulties. The market prices of such securities are subject to erratic and abrupt market movements and the spread between bid and asked prices may be greater than normally expected. Investment in the securities of financially troubled issuers and operationally troubled issuers involves a high degree of credit and market risk. There is no assurance that our Adviser will correctly evaluate the value of the assets collateralizing such investments or the prospects for a successful reorganization or similar action.

These financial difficulties may never be overcome and may cause issuers to become subject to bankruptcy or other similar administrative proceedings, or may require a substantial amount of workout negotiations or restructuring, which may entail, among other things, an extension of the term, a substantial reduction in the interest rate, a substantial writedown of the principal of such investment and other concessions, which could adversely affect our returns on the investment. There is a possibility that we may incur substantial or total losses on our investments and in certain circumstances, subject us to certain additional potential liabilities that may exceed the value of our original investment therein.

Under certain circumstances, a lender who has inappropriately exercised control over the management and policies of a debtor may have its claims subordinated or disallowed or may be found liable for damages suffered by parties as a result of such actions. In any reorganization or liquidation proceeding relating to our investments, we may lose our entire investment, may be required to accept cash or securities with a value less than our original investment and may be required to accept different terms, including payment over an extended period of time. In addition, under certain circumstances payments to us may be reclaimed if any such payment or distribution is later determined to have been a fraudulent conveyance, preferential payment or similar transactions under applicable bankruptcy and insolvency laws. Furthermore, bankruptcy laws and similar laws applicable to administrative proceedings may delay our ability to realize on collateral for loan positions we held, or may adversely affect the economic terms and priority of such loans through doctrines such as equitable subordination or may result in a restructure of the debt through principles such as the "cramdown" provisions of the bankruptcy laws.

However, even if a restructuring were successfully accomplished, a risk exists that, upon maturity of such investment, replacement "takeout" financing will not be available, resulting in an inability by the issuer to repay the investment. Although unlikely, it is possible that our Adviser may find it necessary or desirable to foreclose on collateral securing one or more real estate debt instruments we acquire. The foreclosure process varies jurisdiction by jurisdiction and can be lengthy and expensive. Issuers often resist foreclosure actions by asserting numerous claims, counterclaims and defenses against the holder of a real estate loan, including, without limitation, lender liability claims and defenses, even when such assertions may have no basis in fact, in an effort to prolong the foreclosure action, which often prolongs and complicates an already difficult and time-consuming process. In some states or other jurisdictions, foreclosure actions can take up to several years or more to conclude. During the foreclosure proceedings, an issuer may have the ability to file for bankruptcy, potentially staying the foreclosure action and further delaying the foreclosure process. Foreclosure litigation tends to create a negative public image of the collateral property and may result in disrupting ongoing leasing, management, development and other operations of the property. In the event we foreclose on an investment, we will be subject to the risks associated with owning and operating real estate.

***We may invest in subordinated debt, which is subject to greater credit risk than senior debt.***

We may from time to time invest in debt instruments, including junior tranches of commercial mortgage-backed securities ("CMBS"), "mezzanine" loans, junior mortgage loans or mortgage loan participations, that are subordinated in an issuer's capital structure. To the extent we invest in subordinated debt of an issuer's capital structure, including subordinated CMBS bonds or other "mezzanine" debt, such investments and our remedies with respect thereto, including the ability to foreclose on any collateral securing such investments, will be subject to the rights of holders of more senior tranches in an issuer's capital structure and, to the extent applicable, contractual inter-creditor, co-lender and participation agreement provisions.

Investments in subordinated debt involve greater credit risk of default and loss than the more senior classes or tranches of debt in an issuer's capital structure. Subordinated tranches of debt instruments (including CMBS) absorb losses from default before other more senior tranches of such instruments, which creates a risk particularly if such instruments (or securities) have been issued with little or no credit enhancement or equity. As a result, to the extent we invest in subordinate debt instruments (including CMBS), we would likely receive payments or interest distributions after, and must bear the effects of losses or defaults before, the holders of other more senior tranches of debt instruments with respect to such issuer.

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***We may invest in commercial mortgage loans that are non-recourse in nature and include limited options for financial recovery in the event of default.***

We may invest from time to time in commercial mortgage loans, including mezzanine loans and B-notes, which are secured by multifamily, commercial or other properties and are subject to risks of delinquency and foreclosure and risks of loss. Commercial real estate loans are generally not fully amortizing, which means that they may have a significant principal balance or balloon payment due on maturity. Full satisfaction of the balloon payment by a commercial borrower is heavily dependent on the availability of subsequent financing or a functioning sales market, as well as other factors such as the value of the property, the level of prevailing mortgage rates, the borrower's equity in the property and the financial condition and operating history of the property and the borrower. In certain situations, and during periods of credit distress, the unavailability of real estate financing may lead to default by a commercial borrower. In addition, in the absence of any such takeout financing, the ability of a borrower to repay a loan secured by an income-producing property will depend upon the successful operation of such property rather than upon the existence of independent income or assets of the borrower. If the net operating income of the property is reduced, the borrower's ability to repay the loan may be impaired. Furthermore, we may not have the same access to information in connection with investments in commercial mortgage loans, either when investigating a potential investment or after making an investment, as compared to investments in direct real estate.

Commercial mortgage loans are usually non-recourse in nature. Therefore, if a commercial borrower defaults on the commercial mortgage loan, then the options for financial recovery are limited in nature. To the extent the underlying default rates increase with respect to the pool or tranche of commercial real estate loans in which we invest, the performance of our investments related thereto may be adversely affected. Default rates and losses on commercial mortgage loans will be affected by a number of factors, including global, regional and local economic conditions in the area where the mortgage properties are located, the borrower's equity in the mortgage property, the financial circumstances of the borrower, tenant mix and tenant bankruptcies, property management decisions, including with respect to capital improvements, property location and condition, competition from other properties offering the same or similar services, environmental conditions, real estate tax rates, operating expenses, governmental rules, regulations and fiscal policies, acts of God, terrorism, social unrest and civil disturbances. A continued decline in specific commercial real estate markets and property valuations may result in higher delinquencies and defaults and potentially foreclosures. In the event of default, the lender will have no right, other than customary recourse carveouts, to assets beyond collateral attached to the commercial mortgage loan.

In the event of any default under a mortgage or real estate loan held directly by us, we will bear a risk of loss of principal to the extent of any deficiency between the value of the collateral and the principal and accrued interest of the mortgage or real estate loan, which could have a material adverse effect on our profitability. In the event of the bankruptcy of a mortgage or real estate loan borrower, the mortgage or real estate loan to such borrower will be deemed to be secured only to the extent of the value of the underlying collateral at the time of bankruptcy (as determined by the bankruptcy court), and the lien securing the mortgage or real estate loan will be subject to the avoidance powers of the bankruptcy trustee or debtor-in-possession to the extent the lien is unenforceable under state law. Additionally, in the event of a default under any senior debt, the junior or subordinate lender generally forecloses on the equity, purchases the senior debt or negotiates a forbearance or restructuring arrangement with the senior lender in order to preserve its collateral.

***Certain risks associated with CMBS may adversely affect our results of operations and financial condition.***

We may invest a portion of our assets in pools or tranches of CMBS, including horizontal and other risk-retention investments. The collateral underlying CMBS generally consists of commercial mortgages on real property that has a multifamily or commercial use, such as retail space, office buildings, warehouse property and hotels, and which from time to time may include assets or properties owned directly or indirectly by one or more Other Sculptor Accounts. CMBS have been issued in a variety of issuances, with varying structures including senior and subordinated classes. The commercial mortgages underlying CMBS generally face the risks described above in "—We may invest in commercial mortgage loans that are non-recourse in nature and include limited options for financial recovery in the event of default."

Mortgage-backed securities may also have structural characteristics that distinguish them from other securities. The interest rate payable on these types of securities may be set or effectively capped at the weighted-average net coupon of the underlying assets themselves. As a result of this cap, the return to investors in such a security would be dependent on the relevant timing and rate of delinquencies and prepayments of mortgage loans bearing a higher rate of interest. In general, early prepayments will have a greater impact on the yield to investors. Federal and state law may also affect the return to investors by capping the interest rates payable by certain mortgagors. Certain mortgage-backed securities may provide for the payment of only interest for a stated period of time. In addition, in a bankruptcy or similar proceeding involving the

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originator or the servicer of the CMBS (often the same entity or an affiliate), the assets of the issuer of such securities could be treated as never having been truly sold to the issuer and could be substantively consolidated with those of the originator, or the transfer of such assets to the issuer could be voided as a fraudulent transfer.

The credit markets, including the CMBS market, have periodically experienced decreased liquidity on the primary and secondary markets during periods of market volatility. Such market conditions could re-occur and would impact the valuations of our investments and impair our ability to sell such investments if we were required to liquidate all or a portion of our CMBS investments quickly. Additionally, certain of our securities investments, such as horizontal or other risk-retention investments in CMBS, may have certain holding period and other restrictions that limit our ability to sell such investments.

***Concentrated CMBS investments may pose specific risks beyond the control of our Adviser that may adversely affect our results of operations and financial condition.***

Default risks with respect to CMBS investments may be further pronounced in the case of single-issuer CMBS or CMBS secured by a small or less diverse collateral pool, such as single-asset, single-borrower CMBS. At any one time, a portfolio of CMBS may be backed by commercial mortgage loans disproportionately secured by properties in only a few states, regions or foreign countries. As a result, such investments may be more susceptible to geographic risks relating to such areas, including adverse economic conditions, declining home values, adverse events affecting industries located in such areas and other factors beyond the control of our Adviser relative to investments in multi-issuer CMBS or a pool of mortgage loans having more diverse property locations.

***There are certain risks associated with the insolvency of obligations backing CMBS and other investments.***

The real estate loans backing CMBS and other investments may be subject to various laws enacted in the jurisdiction or state of the borrower for the protection of creditors. If an unpaid creditor files a lawsuit seeking payment, the court may invalidate all or part of the borrower's debt as a fraudulent conveyance, subordinate such indebtedness to existing or future creditors of the borrower or recover amounts previously paid by the borrower in satisfaction of such indebtedness, based on certain tests for borrower insolvency and other facts and circumstances, which may vary by jurisdiction. There can be no assurance as to what standard a court would apply in order to determine whether the borrower was "insolvent" after giving effect to the incurrence of the indebtedness constituting the mortgage backing the CMBS and other investments, or that regardless of the method of valuation, a court would not determine that the borrower was "insolvent" after giving effect to such incurrence. In addition, in the event of the insolvency of a borrower, payments made on such mortgage loans could be subject to avoidance as a "preference" if made within a certain period of time (which may be as long as one year and one day) before insolvency

***There are certain risks associated with CMBS interest shortfalls.***

Our CMBS investments may be subject to interest shortfalls due to interest collected from the underlying loans not being sufficient to pay accrued interest to all of the CMBS interest holders. Interest shortfalls to the CMBS trust will occur when the servicer does not advance full interest payments on defaulted loans. The servicer in a CMBS trust is required to advance monthly principal and interest payments due on a delinquent loan. Once a loan is delinquent for a period of time (generally 60 days), the servicer is required to obtain a new appraisal to determine the value of the property securing the loan. The servicer is only required to advance interest based on the lesser of the loan amount or 90%, generally, of the appraised value. Interest shortfalls occur when 90%, generally, of the appraised value is less than the loan amount and the servicer does not advance interest on the full loan amount. The resulting interest shortfalls impact interest payments on the most junior class in the trust first. As interest shortfalls increase, more senior classes may be impacted. Over time, senior classes may be reimbursed for accumulated shortfalls if the delinquent loans are resolved, but there is no guarantee that shortfalls will be collected. Interest shortfalls to the CMBS trust may also occur as a result of accumulated advances and expenses on defaulted loans. When a defaulted loan or foreclosed property is liquidated, the servicer will be reimbursed for accumulated advances and expenses prior to payments to CMBS bond holders. If proceeds are insufficient to reimburse the servicer or if a defaulted loan is modified and not foreclosed, the servicer is able to make a claim on interest payments that is senior to the bond holders to cover accumulated advances and expenses. If the claim is greater than interest collected on the loans, interest shortfalls could impact one or more bond classes in a CMBS trust until the servicer's claim is satisfied.

***We may acquire CMBS affiliated with Sculptor.***

We may acquire CMBS where the mortgages underlying the CMBS were issued or acquired by a Sculptor affiliate or the properties underlying the mortgages in the CMBS are owned by a Sculptor affiliate or the CMBS is serviced, structured or

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distributed by a Sculptor affiliate. Since certain of our executives are also executives of Sculptor, the same personnel may determine the price and terms for the investments for both us and these entities, and there can be no assurance our conflict-of-interest policies will prevent the consideration we pay for these investments from exceeding their fair value or ensure that we receive terms for a particular investment opportunity that are as favorable as those available from an independent third party. Additionally, we may also invest from time to time in collateralized debt obligations ("CDOs") and collateralized loan obligations ("CLOs") and other similarly structured securities (see CDO risk factor section below.)

***Our Adviser may aggregate purchases or sales with Other Sculptor Accounts.***

Our Adviser may aggregate purchases or sales of investments for us with Other Sculptor Accounts. It could be impossible, as determined by our Adviser and its affiliates in their sole discretion, to receive the same price or execution on the entire volume of securities sold, and the various prices will, in certain circumstances, therefore be averaged which may be disadvantageous to us. Further, such aggregate purchases may result in us receiving a lower allocation of an investment than we would otherwise receive if we were the sole purchaser.

***Our CMBS investments face risks associated with extensions that may adversely affect our results of operations and financial condition.***

Our CMBS and other investments may be subject to extension, resulting in the term of the securities being longer than expected, which could adversely affect our results of operation and financial condition. Extensions are affected by a number of factors, including the general availability of financing in the market, the value of the related mortgaged property, the borrower's equity in the mortgaged property, the financial circumstances of the borrower, fluctuations in the business operated by the borrower on the mortgaged property, competition, general economic conditions and other factors. Such extensions may also be made without our Adviser's consent.

***We may depend on the servicers of commercial real estate loans underlying CMBS and other investments.***

The exercise of remedies and successful realization of liquidation proceeds relating to commercial real estate loans underlying CMBS and other investments may be highly dependent on the performance of the servicer or special servicer. The servicer may not be appropriately staffed or compensated to address issues or concerns with the underlying loans promptly. Such servicers may exit the business and need to be replaced, which could have a negative impact on the portfolio due to lack of focus during a transition. Special servicers frequently are affiliated with investors who have purchased the most subordinate bond classes, and certain servicing actions, such as a loan extension instead of forcing a borrower pay off, may benefit the subordinate bond classes more so than the senior bonds. Although servicers are obligated to service the portfolio subject to a servicing standard and maximize the present value of the loans for all bond classes, servicers with an affiliate investment in the CMBS or other investments may have a conflict of interest. There may be a limited number of special servicers available, particularly those which do not have conflicts of interest. In addition, to the extent any such servicers fail to perform their obligations pursuant to the applicable servicing agreements, such failure may adversely affect our investments.

***We may find it necessary or desirable to foreclose on certain of the loans or CMBS we acquire, and the foreclosure process may be lengthy and expensive.***

We may find it necessary or desirable to foreclose on certain of the loans or CMBS we acquire, and the foreclosure process may be lengthy and expensive. The protection of the terms of the applicable loan, including the validity or enforceability of the loan and the maintenance of the anticipated priority and perfection of the applicable security interests, may not be adequate. Furthermore, claims may be asserted by lenders or borrowers that might interfere with enforcement of our rights. Borrowers may resist foreclosure actions by asserting numerous claims, counterclaims and defenses against us, including, without limitation, lender liability claims and defenses, even when the assertions may have no basis in fact, in an effort to prolong the foreclosure action and seek to force the lender into a modification of the loan or a favorable buy-out of the borrower's position in the loan. In some states, foreclosure actions can take several years or more to litigate. At any time prior to or during the foreclosure proceedings, the borrower may file for bankruptcy or its equivalent, which would have the effect of staying the foreclosure actions and further delaying the foreclosure process and potentially result in a reduction or discharge of a borrower's debt. Foreclosure may create a negative public perception of the related property, resulting in a diminution of its value, and in the event of any such foreclosure or other similar proceeding, we would also become the subject to the various risks associated with direct ownership of real estate, including environmental liabilities. Even if we are successful in foreclosing on a loan, the liquidation proceeds upon sale of the underlying real estate may not be sufficient to

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recover our cost basis in the loan, resulting in a loss to us. Furthermore, any costs or delays involved in the foreclosure of the loan or a liquidation of the underlying property will further reduce the net proceeds and, thus, increase the loss.

***Our investments in residential mortgage-backed securities ("RMBS"), which may include government mortgage pass-through securities and non-agency RMBS, will be subject to default and other risks, which may adversely affect our results of operations and financial condition*.** 

Our investments in RMBS are subject to the risks of defaults, foreclosure timeline extension, fraud, home price depreciation and unfavorable modification of loan principal amount, interest rate and amortization of principal accompanying the underlying residential mortgage loans. To the extent that assets underlying our investments are concentrated geographically, by property type or in certain other respects, we may be subject to certain of the foregoing risks to a greater extent. In the event of defaults on the residential mortgage loans that underlie our investments in RMBS and the exhaustion of any underlying or any additional credit support, we may not realize our anticipated return on our investments and we may incur a loss on these investments. We may also acquire non-agency RMBS, which are backed by residential property but, in contrast to agency RMBS, their principal and interest are not guaranteed by federally chartered entities such as Fannie Mae and Freddie Mac. In addition, we may invest in government mortgage pass-through securities, which represent participation interests in pools of residential mortgage loans purchased from individual lenders by a federal agency or originated by private lenders and guaranteed by a federal agency, including those issued or guaranteed by Fannie Mae and Freddie Mac. Fannie Mae and Freddie Mac certificates are not backed by the full faith and credit of the U.S., but the issuing agency or instrumentality has the right to borrow to meet its obligations from an existing line of credit with the U.S. Treasury. The U.S. Treasury has no legal obligation to provide such line of credit and may choose not to do so.

***We will face risks related to our investments in collateralized debt obligations.***

We may also invest from time to time in collateralized debt obligations ("CDOs"). CDOs include, among other things, collateralized loan obligations ("CLOs") and other similarly structured securities. A CLO is a trust typically collateralized by a pool of loans, which may include, among others, domestic and foreign senior secured loans, senior unsecured loans and subordinate corporate loans, including loans that may be rated below investment grade or equivalent unrated loans. For CLOs, the cash flows from the trust are split into two or more portions, called tranches. CLO tranches can experience substantial losses due to actual defaults, increased sensitivity to defaults due to collateral default and disappearance of protecting tranches, market anticipation of defaults and aversion to CLO securities as a class. The risks of an investment in a CDO depend largely on the type of the collateral and the class of the CDO in which we invest.

Normally, CLOs and other CDOs are privately offered and sold, and thus are not registered under the securities laws. As a result, certain investments in CDOs may be characterized as illiquid securities, and volatility in CLO and CDO trading markets may cause the value of these investments to decline. Moreover, if the underlying mortgage portfolio has been overvalued by the originator, or if the values subsequently decline and, as a result, less collateral value is available to satisfy interest and principal payments and any other fees in connection with the trust or other conduit arrangement for such securities, we may incur significant losses. Also, with respect to the CLOs and CDOs in which we may invest, control over the related underlying loans will be exercised through a special servicer or collateral manager designated by a "directing certificate holder" or a "controlling class representative," or otherwise pursuant to the related securitization documents. We may acquire classes of CLOs or CDOs for which we may not have the right to appoint the directing certificate holder or otherwise direct the special servicing or collateral management. With respect to the management and servicing of those loans, the related special servicer or collateral manager may take actions that could adversely affect our interests. In addition to the risks associated with debt instruments (e.g., interest rate risk and credit risk), CDOs carry additional risks including, but not limited to: (i) the possibility that distributions from collateral securities will not be adequate to make interest or other payments, (ii) the quality of the collateral may decline in value or default, (iii) the possibility that we may invest in CDOs that are subordinate to other classes and (iv) the complex structure of the security may not be fully understood at the time of investment and may produce disputes with the issuer or unexpected investment results.

***We may invest in real estate corporate debt, which consists of secured and unsecured obligations issued by companies in the business of owning and/or operating real estate related businesses.***

We may invest in corporate debt obligations of varying maturities issued by U.S. and foreign corporations and other business entities, which may include loans, corporate bonds, debentures, notes and other similar corporate debt instruments, including convertible securities. Bonds are fixed- or variable-rate debt obligations, including bills, notes, debentures, money market instruments and similar instruments and securities. Corporate debt is generally used by corporations and other issuers to borrow money from investors. The issuer pays the investor a rate of interest and normally must repay the amount borrowed

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on or before maturity. The rate of interest on corporate debt may be fixed, floating or variable, and may vary inversely with respect to a reference rate. The rate of return or return of principal on some debt obligations may be linked or indexed to the level of exchange rates between the U.S. dollar and a foreign currency or currencies. Debt instruments may be acquired with warrants attached. Certain bonds are "perpetual" in that they have no maturity date.

Our investments in real estate related corporate credit will be subject to a number of risks, including interest rate risk, credit risk, high yield risk, issuer risk, foreign (non-U.S.) investment risk, inflation/deflation risk, liquidity risk, smaller company risk and management risk. We generally will not have direct recourse to real estate assets owned or operated by the issuers of the corporate debt obligations that we invest in and the value of such corporate debt obligations may be impacted by numerous factors and may not be closely tied to the value of the real estate held by the corporate issuer.

***We may invest in structured products or similar products that may include structural and legal risks.***

We may invest from time to time in structured products, including pools of mortgages, loans and other real estate related securities. These investments may include debt securities issued by a private investment fund that invests, on a leveraged basis, in bank loans, high-yield debt or other asset groups, certificates issued by a structured investment vehicle that holds pools of commercial mortgage loans. We may also invest in credit risk transfer notes that, while not structured products, face similar risks as structured products because they are debt securities issued by governmental agencies but their value depends in part on a pool of mortgage loans. Our investments in structured products will be subject to a number of risks, including risks related to the fact that the structured products will be leveraged, and other structural and legal risks related thereto. Utilization of leverage is a speculative investment technique and will generally magnify the opportunities for gain and risk of loss borne by an investor investing in the subordinated debt securities. Many structured products contain covenants designed to protect the providers of debt financing to such structured products. A failure to satisfy those covenants could result in the untimely liquidation of the structured product and a complete loss of our investment therein. In addition, if the particular structured product is invested in a security in which we are also invested, this would tend to increase our overall exposure to the credit of the issuer of such securities, at least on an absolute, if not on a relative basis. The value of an investment in a structured product will depend on the investment performance of the assets in which the structured product invests and will, therefore, be subject to all of the risks associated with an investment in those assets. These risks include the possibility of a default by, or bankruptcy of, the issuers of such assets or a claim that the pledging of collateral to secure any such asset constituted a fraudulent conveyance or preferential transfer that can be subordinated to the rights of other creditors of the issuer of such asset or nullified under applicable law.

***We may invest in high-yield debt, which is subject to more risk than higher-rated securities.***

Debt that is, at the time of purchase, rated below investment grade (below Baa by Moody's and below BBB by S&P and Fitch), an equivalent rating assigned by another nationally recognized statistical rating organization or unrated but judged by our Adviser to be of comparable quality are commonly referred to as "high-yield" securities.

Investments in high-yield securities generally provide greater income and increased opportunity for capital appreciation than investments in higher-quality securities, but they also typically entail greater price volatility and principal and income risk, including the possibility of issuer default and bankruptcy. High-yield securities are regarded as predominantly speculative with respect to the issuer's continuing ability to meet principal and interest payments. Debt instruments in the lowest investment grade category also may be considered to possess some speculative characteristics by certain rating agencies. In addition, analysis of the creditworthiness of issuers of high-yield securities may be more complex than for issuers of higher quality securities.

High-yield securities may be more susceptible to real or perceived adverse economic and competitive industry conditions than investment-grade securities. A projection of an economic downturn or of a period of rising interest rates, for example, could cause a decline in high-yield security prices because the advent of a recession could lessen the ability of an issuer to make principal and interest payments on its debt obligations. If an issuer of high-yield securities defaults, in addition to risking non-payment of all or a portion of interest and principal, we may incur additional expenses to seek recovery. The market prices of high-yield securities structured as zero-coupon, step-up or payment-in-kind securities will normally be affected to a greater extent by interest rate changes, and therefore tend to be more volatile than the prices of securities that pay interest currently and in cash.

The secondary market on which high-yield securities are traded may be less liquid than the market for investment grade securities. Less liquidity in the secondary trading market could adversely affect the price at which we could sell a high-yield security, and could adversely affect the NAV of our shares. Adverse publicity and investor perceptions, whether or not based

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on fundamental analysis, may decrease the values and liquidity of high-yield securities, especially in a thinly traded market. When secondary markets for high-yield securities are less liquid than the market for investment-grade securities, it may be more difficult to value the securities because such valuation may require more research, and elements of judgment may play a greater role in the valuation because there is less reliable, objective data available. During periods of thin trading in these markets, the spread between bid and asked prices is likely to increase significantly, and we may have greater difficulty selling our portfolio securities. We will be more dependent on our Adviser's research and analysis when investing in high-yield securities.

***B-Notes and A/B Structures may pose additional risks that may adversely affect our results of operations and financial condition.***

We may invest in B-notes, which are mortgage loans typically (i) secured by a first mortgage on a commercial property or group of related properties and (ii) subordinated to an A-note portion of the same first mortgage secured by the same collateral (which we would not expect to hold). As a result, if a borrower defaults, there may not be sufficient funds remaining to repay B-note holders after payment to the A-note holders. Since each transaction is privately negotiated, B-notes can vary in their structural characteristics and risks. In addition to the risks described above, certain additional risks apply to B-note investments, including those described herein. The B-note portion of a loan is typically small relative to the overall loan, and is in the first loss position. As a means to protect against the holder of the A-note from taking certain actions or receiving certain benefits to the detriment of the holder of the B-note, the holder of the B-note often (but not always) has the right to purchase the A-note from its holder. If available, this right may not be meaningful to us. For example, we may not have the capital available to protect our B-note interest or purchasing the A-note may alter our overall portfolio and risk/return profile to the detriment of our stockholders. In addition, a B-note may be in the form of a "rake bond." A "rake bond" is a CMBS backed solely by a single promissory note secured by a mortgaged property, which promissory note is subordinate in right of payment to one or more separate promissory notes secured by the same mortgaged property.

***We will face risks related to our investments in mezzanine loans.***

Although not directly secured by the underlying real estate, mezzanine loans are also subject to risk of subordination and share certain characteristics of subordinate loan interests described above. As with commercial mortgage loans, repayment of a mezzanine loan is dependent on the successful operation of the underlying commercial properties and, therefore, is subject to similar considerations and risks. Mezzanine loans may also be affected by the successful operation of other properties, like mortgage loans, but mezzanine loans are not secured by interests in the underlying commercial properties.

With most mezzanine loans, the bulk of the loan balance is payable at maturity with a one-time "balloon payment." Full satisfaction of the balloon payment by a borrower is heavily dependent on the availability of subsequent financing or a functioning sales market, and full satisfaction of a loan will be affected by a borrower's access to credit or a functioning sales market. In certain situations, and during periods of credit distress, the unavailability of real estate financing may lead to default by a borrower. In addition, in the absence of any such takeout financing, the ability of a borrower to repay a loan may be impaired. Moreover, mezzanine loans are usually non-recourse in nature. Therefore, if a borrower defaults on the loan, then the options for financial recovery are limited in nature.

***We may invest in equity securities of real estate owners, which is subordinate to any indebtedness of such owners.***

We may invest from time to time in non-controlling preferred equity positions, common equity and other equity securities issued by real estate companies. Preferred equity investments generally rank junior to all existing and future indebtedness, including commercial mezzanine and mortgage loans, but rank senior to the owners' common equity. Preferred equity investments typically pay a dividend rather than interest payments and often have the right for such dividends to accrue if there is insufficient cash flow to pay currently. These interests are not secured by the underlying real estate, but upon the occurrence of a default, the preferred equity provider typically has the right to effectuate a change of control with respect to the ownership of the property. In addition, equity investments may be illiquid or have limited liquidity due to lock-out periods, limited trading volume or other limitations or prohibitions against their transfer, sale, pledge or disposition, including any necessary registration with the SEC requiring coordination with the issuer for the sale of such securities. Our investments in equity securities issued by real estate companies will involve risks relating to the particular issuer of the equity securities, including the financial condition and business outlook of the issuer. Issuers of real estate related equity securities are subject to their own operating and other expenses and may be subject to a management fee and performance-based compensation (e.g., promote), which we as equity holders will indirectly bear. Issuers of real estate related equity securities generally invest in real estate or real estate related securities and are subject to the inherent risks associated with real estate discussed in "—General Risks Related to Investments in Real Estate."

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***We may invest in equity of other REITs that invest in real estate or real estate debt as one of their core businesses and other real estate related companies, which subjects us to certain risks including those risks associated with an investment in our own common stock.***

REITs that invest primarily in real estate or real estate debt are subject to the risks of the real estate market, the real estate debt market and the securities market.

REITs are dependent upon specialized management skills, have limited diversification and are, therefore, subject to risks inherent in financing a limited number of projects. REITs may be subject to management fees and other expenses. When we invest in REITs, we will bear our proportionate share of the costs of the REITs' operations. Investing in REITs and real estate related companies involves certain unique risks in addition to those risks associated with investing in the real estate industry in general. The market value of REIT shares and the ability of the REIT to distribute income may be adversely affected by several factors, including the risks described herein that relate to an investment in our common stock. REITs depend generally on their ability to generate cash flow to make distributions to shareholders, and certain REITs have self-liquidation provisions by which mortgages held may be paid in full and distributions of capital returns may be made at any time. In addition, distributions received by us from REITs may consist of dividends, capital gains and/or return of capital. Generally, dividends received by us from REIT shares and distributed to our stockholders will not constitute "qualified dividend income" eligible for the reduced tax rate applicable to qualified dividend income. In addition, the performance of a REIT may be affected by changes in the tax laws or by its failure to qualify for tax-free pass-through of income.

REITs (especially mortgage REITs) are also subject to interest rate risk and availability of financing their loan portfolios. Rising interest rates may cause REIT investors to demand a higher annual yield, which may, in turn, cause a decline in the market price of the equity securities issued by a REIT.

Investing in certain REITs and real estate related companies, which often have small market capitalizations, may also involve the same risks as investing in other small capitalization companies. REITs and real estate related companies may have limited financial resources, and their securities may trade less frequently and in limited volume and may be subject to more abrupt or erratic price movements than larger company securities.

***We may invest in derivatives, which involve numerous risks.***

The ability to successfully use derivative investments depends on the ability of our Adviser. The skills needed to employ derivatives strategies are different from those needed to select portfolio investments and, in connection with such strategies, our Adviser must make predictions with respect to market conditions, liquidity, market values, interest rates or other applicable factors, which may be inaccurate. The use of derivative investments may require us to sell or purchase portfolio investments at inopportune times or for prices below or above the current market values, may limit the amount of appreciation we can realize on an investment or may cause us to hold a security that we might otherwise want to sell. We will

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also be subject to credit risk with respect to the counterparties to our derivatives contracts (whether a clearing corporation in the case of exchange-traded instruments or another third party in the case of over-the-counter instruments). In addition, the use of derivatives will be subject to additional unique risks associated with such instruments including a lack of sufficient asset correlation, heightened volatility in reference to interest rates or prices of reference instruments and duration/term mismatch, each of which may create additional risk of loss.

***We may make open market purchases or invest in traded securities.***

We have the ability to invest in securities that are traded (publicly or through other active markets (including through private transactions)) and are, therefore, subject to the risks inherent in investing in traded securities. When investing in traded securities, we may be unable to obtain financial covenants or other contractual governance rights, including management rights that we might otherwise be able to obtain in making privately negotiated investments. Moreover, we may not have the same access to information in connection with investments in traded securities, either when investigating a potential investment or after making the investment, as compared to privately negotiated investments. Furthermore, we may be limited in our ability to make investments, and to sell existing investments, in traded securities because Sculptor may be deemed to have material, non-public information regarding the issuers of those securities or as a result of other internal policies or requirements. The inability to sell traded securities in these circumstances could materially adversely affect the investment results. In addition, securities acquired of a public company may, depending on the circumstances and securities laws of the relevant jurisdiction, be subject to lock-up periods.

***Failure to obtain and maintain an exemption from being regulated as a commodity pool operator could subject us to additional regulation compliance requirements that could materially adversely affect our business, results of operations and financial condition.***

Registration with the U.S. Commodity Futures Trading Commission (the "CFTC") as a "commodity pool operator" or any change in our operations (including, without limitation, any change that causes us to be subject to certain specified covered statutory disqualifications) necessary to maintain our ability to rely upon the exemption from being regulated as a commodity pool operator could adversely affect our ability to implement our investment program, conduct our operations or achieve our objectives and subject us to certain additional costs, expenses and administrative burdens. Furthermore, any determination by us to cease or to limit entering into hedging transactions that may be treated as "commodity interests" in order to comply with the regulations of the CFTC may have a material adverse effect on our ability to implement our investment objectives and to hedge risks associated with our operations.

**Risks Related to Debt Financing**

***We may encounter adverse changes in the credit markets.***

Any adverse changes, such as those experienced as a result of rising interest rates, in the global credit markets could make it more difficult for us to obtain favorable financing. Our ability to generate attractive investment returns for our stockholders will be adversely affected to the extent we are unable to obtain favorable financing terms. If we are unable to obtain favorable financing terms, we may not be able to adequately leverage our portfolio, may face increased financing expenses or may face increased restrictions on our investment activities, any of which would negatively impact our performance.

***We will incur mortgage indebtedness and other borrowings, which increases our financial risks, could hinder our ability to make distributions and could decrease the value of your investment.***

The acquisition of investment properties may be financed in substantial part by borrowing, which increases our exposure to loss. Under our corporate governance guidelines, we have a limitation that precludes us from borrowing in excess of 300% of our net assets, which approximates borrowing 75% of the cost of our investments (unless a majority of our independent directors approves any borrowing in excess of the limit and, if we have a class of securities registered under the Exchange Act, we disclose the justification for doing so to our stockholders), but such restriction does not restrict the amount of indebtedness we may incur with respect to any single investment. Our target leverage ratio after our ramp-up period is approximately 55% of our gross real estate assets (measured using the greater of fair market value and purchase price, including equity in our securities portfolio), inclusive of property-level and entity-level debt and cash, but excluding debt on our securities portfolio. See Item 1 "Business—Borrowing Policies." We may exceed our target leverage ratio, particularly during a market downturn or in connection with a large acquisition. The use of leverage involves a high degree of financial risk and will increase the exposure of the investments to adverse economic factors such as rising interest rates, downturns in the economy or deteriorations in the condition of the investments. Principal and interest payments on indebtedness (including

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mortgages having "balloon" payments) will have to be made regardless of the sufficiency of cash flow from the properties. Our investments will be impaired by a smaller decline in the value of the properties than would be the case if our properties were owned with a smaller amount of debt.

We may incur or increase our mortgage debt by obtaining loans secured by a portfolio of some or all of the real estate acquired and may borrow under mortgages on properties after they are acquired. Depending on the level of leverage and decline in value, if mortgage payments are not made when due, one or more of the properties may be lost (and our investment therein rendered valueless) as a result of foreclosure by the mortgagee. A foreclosure may also have substantial adverse tax consequences for us.

Many of these same issues also apply to credit facilities which are expected to be in place at various times as well. For example, the loan documents for such facilities may include various coverage ratios, the continued compliance with which may not be completely within our control. If such coverage ratios are not met, the lenders under such credit facilities may declare any unfunded commitments to be terminated and declare any amounts outstanding to be due and payable. We may also rely on short-term financing that would be especially exposed to changes in availability.

Although borrowings by us have the potential to enhance overall returns that exceed our cost of funds, they will further diminish returns (or increase losses on capital) to the extent overall returns are less than our cost of funds. As a result, the possibilities of profit and loss are increased. Borrowing money to purchase properties exposes us to greater market risks and higher current expenses.

***In certain cases, financings for our properties may be recourse to us.***

Generally, commercial real estate financings are structured as non-recourse to the borrower, which limits a lender's recourse to the property pledged as collateral for the loan, and not the other assets of the borrower or to any parent of borrower, in the event of a loan default. However, lenders customarily will require that a creditworthy parent entity enter into so-called "recourse carveout" or "bad boy" guarantees to protect the lender against certain bad-faith or other intentional acts of the borrower in violation of the loan documents. A "bad boy" guarantee typically provides that the lender can recover losses from the guarantors for certain bad acts, such as fraud or intentional misrepresentation, intentional waste, willful misconduct, criminal acts, misappropriation of funds, voluntary incurrence of prohibited debt and environmental losses sustained by lender. In addition, "bad boy" guarantees typically provide that the loan will be a full personal recourse obligation of the guarantor, for certain actions, such as prohibited transfers of the collateral or changes of control and voluntary bankruptcy of the borrower. Financing arrangements with respect to our investments will generally require "bad boy" guarantees from us and in the event that such a guarantee is called, our assets could be adversely affected. Moreover, our "bad boy" guarantees could apply to actions of the joint venture partners associated with our investments. Although our Adviser expects to negotiate indemnities from such joint venture partners to protect against such risks, there remains the possibility that the acts of such joint venture partner could result in liability to us under such guarantees.

***If we draw on a line of credit to fund repurchases or for any other reason, our financial leverage ratio could increase beyond our target.***

We may seek to obtain lines of credit in an effort to provide for a ready source of liquidity for any business purpose, including to fund repurchases of shares of our common stock. There can be no assurances that we will be able to borrow under or maintain our lines of credit or obtain additional lines of credit on financially reasonable terms. In addition, we may not be able to obtain lines of credit of an appropriate size for our business. If we borrow under a line of credit to fund repurchases of shares of our common stock, our financial leverage will increase and may exceed our target leverage ratio. Our leverage may remain at the higher level until we receive additional net proceeds from our continuous offering or generate sufficient operating cash flow or proceeds from asset sales to repay outstanding indebtedness. In connection with a line of credit, distributions may be subordinated to payments required in connection with any indebtedness contemplated thereby.

***Increases in interest rates could increase the amount of our loan payments and adversely affect our ability to make distributions to our stockholders.***

Interest we pay on our loan obligations will reduce cash available for distributions. We have and will likely in the future obtain variable rate loans, and as a result, increases in interest rates could increase our interest costs, which could reduce our cash flows and our ability to make distributions to you. In addition, if we need to repay existing loans during periods of rising or elevated interest rates, we could be required to liquidate one or more of our investments at times that may not permit realization of the maximum return on such investments.

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***Volatility in the financial markets and challenging economic conditions could adversely affect our ability to secure debt financing on attractive terms and our ability to service or refinance any future indebtedness that we may incur.***

The volatility of the credit markets could make it more difficult to obtain favorable financing for investments. During periods of volatility, which often occur during economic downturns, generally credit spreads widen, interest rates rise and investor demand for high-yield debt declines. These trends result in reduced willingness by investment banks, commercial banks and other lenders to finance new investments and deterioration of available terms. If the overall cost of borrowing increases, either by increases in the index rates or by increases in lender spreads, the increased costs may result in future acquisitions generating lower overall economic returns and potentially reducing future cash flow available for distribution. Disruptions in the debt markets negatively impact our ability to borrow monies to finance the purchase of, or other activities related to, real estate assets. If we are unable to borrow monies on terms and conditions that we find acceptable, we likely will have to reduce the number of properties we can purchase, and the return on the properties we do purchase may be lower. In addition, we may find it difficult, costly or impossible to refinance indebtedness that is maturing. Moreover, to the extent that such marketplace events are not temporary, they could have an adverse impact on the availability of credit to businesses generally and could lead to an overall weakening of the U.S. economy.

***Lenders may require us to enter into restrictive covenants relating to our operations, which could limit our ability to make distributions to our stockholders.***

When providing financing, a lender may impose restrictions on us that affect our distribution and operating policies and our ability to obtain additional loans. Loan documents we enter into may contain covenants that limit our ability to further mortgage or dispose of the property or discontinue insurance coverage. In addition, loan documents may limit our ability to enter into or terminate certain operating or lease agreements related to the property. Loan documents may also require lender approval of certain actions and as a result of the lender's failure to grant such approval, we may not be able to take a course of action we deem most profitable. These or other limitations may adversely affect our flexibility and our ability to make distributions to you and the value of your investment.

***If we enter into financing arrangements involving balloon payment obligations, it may adversely affect stockholder returns.***

Some of our financing arrangements may require us to make a lump-sum or "balloon" payment at maturity. Our ability to make a balloon payment is uncertain and may depend upon our ability to obtain replacement financing or our ability to sell particular properties. At the time the balloon payment is due, we may or may not be able to refinance the balloon payment on terms as favorable as the original loan or sell the particular property at a price sufficient to make the balloon payment. Such a refinancing would be dependent upon interest rates and lenders' policies at the time of refinancing, economic conditions in general and the value of the underlying properties in particular. The effect of a refinancing or sale could affect the rate of return to stockholders and the projected time of disposition of our assets.

***Failure to hedge effectively against interest rate changes may materially adversely affect our results of operations and financial condition.***

Subject to any limitations required to maintain qualification as a REIT, we may seek to manage our exposure to interest rate volatility by using interest rate hedging arrangements, such as interest rate cap or collar agreements and interest rate swap agreements. These agreements involve risks, such as the risk that counterparties may fail to honor their obligations under these arrangements and that these arrangements may not be effective in reducing our exposure to interest rate changes. These interest rate hedging arrangements may create additional assets or liabilities from time to time that may be held or liquidated separately from the underlying property or loan for which they were originally established. Hedging may reduce the overall returns on our investments. Failure to hedge effectively against interest rate changes may materially adversely affect our results of operations and financial condition.

***We may enter into loans with cross-collateralization provisions, which would heighten the risk of a default on any particular loan and increase the risk of a loss in the value of your investment in us.***

We may enter into loans with cross-collateralization provisions that provide that a default under any obligation of a certain dollar threshold or more by us constitutes a default under the loan. If any of our future investments are foreclosed upon due to a default, our ability to pay distributions may be limited, which would have an adverse effect on your investment in us.

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**Risks Related to our Relationship with our Adviser**

***We depend on our Adviser to select our investments and otherwise conduct our business, and any material adverse change in its financial condition or our relationship with our Adviser could have a material adverse effect on our business and ability to achieve our investment objectives.***

Our success is dependent upon our relationship with, and the performance of, our Adviser in the acquisition and management of our investments, and our corporate operations. Our Adviser may suffer adverse financial or operational problems in connection with Sculptor's business and activities unrelated to us and over which we have no control. Should our Adviser fail to allocate sufficient resources to perform its responsibilities to us for any reason, we may be unable to achieve our investment objectives.

***The termination or replacement of our Adviser could trigger a repayment event under a mortgage loan for a property, a credit agreement governing a line of credit and repurchase agreements.***

Lenders may request provisions in mortgage loan documentation that would make the termination or replacement of our Adviser an event requiring the immediate repayment of the full outstanding balance of the loan. The termination or replacement of our Adviser could also trigger repayment of outstanding amounts under credit agreements that may govern lines of credit that we may obtain or under repurchase agreements that we may enter into. If a repayment event occurs with respect to any of our properties, our results of operations and financial condition may be adversely affected.

***Our Adviser's inability to retain the services of key real estate professionals could hurt our performance.***

Our success depends to a significant degree upon the contributions of certain key real estate professionals employed by our Adviser, each of whom would be difficult to replace. There is increasing competition among alternative asset firms, financial institutions, private equity firms, investment advisors, investment managers, real estate investment companies, real estate investment trusts and other industry participants for hiring and retaining qualified investment professionals, and there can be no assurance that such professionals will continue to be associated with the us or our Adviser, particularly in light of our perpetual-life nature, or that replacements will perform well. Neither we nor the Adviser have employment agreements with these individuals and they may not remain associated with us. If any of these persons were to cease their association with our Adviser, our operating results could suffer. We do not maintain key person life insurance on any person. Our future success depends, in large part, upon our Adviser's ability to attract and retain highly skilled managerial, operational, investment and marketing professionals. If our Adviser loses or is unable to obtain the services of highly skilled professionals, our ability to implement our investment strategies could be delayed or hindered.

***We do not own the Sculptor name, but we may use it as part of our corporate name pursuant to a trademark license agreement with an affiliate of Sculptor. Use of the name by other parties or the termination of our trademark license agreement may harm our business.***

We have entered into a trademark license agreement ("Trademark License Agreement") with Sculptor (the "Licensor"), pursuant to which it will grant us a fully paid-up, royalty-free, non-exclusive, non-transferable license to use the name "Sculptor Diversified Real Estate Income Trust, Inc." and the SCULPTOR trademark. The Trademark License Agreement grants us the right to use the SCULPTOR trademark for a term that automatically renews upon appointment of our Adviser (or another affiliate of the Licensor) as our advisor (or another advisory entity), as long as our Adviser remains an affiliate of the Licensor. In the event our Adviser ceases to be an affiliate of the Licensor, the Licensor may immediately terminate the Trademark License Agreement. The Trademark License Agreement may also be earlier terminated by either party as a result of certain breaches or for convenience upon 90 days' prior written notice, provided that upon notification of such termination by us, the Licensor may elect to effect termination of the Trademark License Agreement immediately at any time after 30 days from the date of such notification. The Licensor and its affiliates will retain the right to continue using the SCULPTOR trademark. We will further be unable to preclude the Licensor from licensing or transferring the ownership of the SCULPTOR trademark to third parties, some of whom may compete with us. Consequently, we will be unable to prevent any damage to goodwill that may occur as a result of the activities of the Licensor, Sculptor or others. Furthermore, in the event that the Trademark License Agreement is terminated, we will be required to, among other things, change our name. Any of these events could disrupt our recognition in the marketplace, damage any goodwill we may have generated and otherwise harm our business.

**Risks Related to Our Relationship with the Founding Investor**

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***The Founding Investor is not required to vote its shares neutrally in all circumstances. Until we raise substantial proceeds to dilute the Founding Investor's voting power, which may never occur, in those circumstances where the Founding Investor is not required to vote neutrally, the Founding Investor is likely to control the outcome of any stockholder vote.***

As of the date of this Annual Report on Form 10-K, the Founding Investor owns 48% of our shares. The Founding Investor has agreed to vote those shares in a neutral manner, i.e., in the same proportion as other votes cast on a matter, in most circumstances. However, there are some circumstances in which there are no restrictions on how the Founding Investor may vote its shares. See Item 11 "Description of Registrants Securities to be Registered—Common Stock—Issuance of Class F Shares to OPERF" in our Form 10. In those circumstances, to the extent the Founding Investor's interests differ from yours, the outcome of a stockholder vote may be less likely to be as you desire, which increases the risks of your investment.

***Should the Founding Investor seek to redeem a large portion of its shares, it could reduce the number of Class F shares that other holders thereof would otherwise be able to redeem.*** 

As the monthly 2% limit and quarterly 5% limit on share repurchases are applied first on a class-by-class basis, other holders of Class F shares who seek to have us repurchase their shares (i.e., Sculptor Diversified Real Estate Income Trust iCapital Offshore Access Fund SPC, an offshore fund formed for the purpose of investing in the Company, and institutional investors who purchase shares directly from us) may be less likely to be able to redeem all of their shares if the Founding Investor also seeks to redeem a large portion of its shares. This risk will decline as the number of Class F shares sold in our offering increases. However, there is a risk that large redemption requests by the Founding Investor may reduce the number of Class F shares that other holders thereof would otherwise be able to redeem.

**Risks Related to Conflicts of Interest**

***We pay our Adviser and its affiliates fees, which could lead to conflicts of interest.***

Our Adviser and its affiliates receive substantial fees from us, which fees were not negotiated at arm's length. These fees could influence our Adviser's advice to us as well as the judgment of its affiliates, some of whom also serve as our executive officers and our directors. Among other matters, these compensation arrangements could affect their judgment with respect to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the continuation, renewal or enforcement of our agreements with our Adviser and its affiliates, including the advisory agreement between us the and Adviser (the "Advisory Agreement");

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• equity offerings by us, including using our securities to acquire portfolios or other companies, which would entitle our Adviser to additional asset management fees, which are based on our aggregate NAV irrespective of stockholder returns;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the recommendation of higher-yielding but riskier investments, which may be encouraged by the Special Limited Partner's performance participation interest in our Operating Partnership, which is based on our total distributions plus the change in NAV per share;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• recommendations to our board of directors with respect to developing, overseeing, implementing, coordinating and determining our NAV and our NAV procedures, the provision of forward-looking property-level information to the independent valuation advisor or the decision to adjust the value of certain of our assets or liabilities in connection with the determination of our NAV, especially given that the advisory fees we pay our Adviser and the Special Limited Partner's performance participation interest are based on our NAV;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• share repurchases, which have the effect of reducing asset management fees payable to our Adviser;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• asset sales, which have the effect of reducing asset management fees if the proceeds are distributed to our stockholders rather than reinvested; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• whether we engage affiliates of our Adviser for other services, which affiliates may receive fees in connection with the services regardless of the quality of the services provided to us.

These conflicts of interest may not be resolved in our favor.

***Our Adviser and its affiliates have interests in other programs or accounts managed by Sculptor, which gives rise to conflicts of interest.***

Our Adviser and its affiliates sponsor or manage other programs, such as private investment funds and publicly traded investment vehicles as well as managed accounts. All of our executive officers and our affiliated directors are also officers,

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directors, managers, key professionals or holders of direct or indirect interests in (i) our Adviser, (ii) other affiliated investment advisers that are the managers of other programs or managed accounts, or (iii) other Sculptor-managed or -sponsored investment vehicles. Our Adviser and its affiliates have legal and financial obligations with respect to other programs or accounts managed or sponsored by them. In the future, our Adviser and its affiliates are expected to sponsor and manage other programs.

Conflicts of interest may arise between us and the current and future programs advised or sponsored by our Adviser and its affiliates, including with respect to:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the allocation of investment opportunities among programs and accounts managed by our Adviser and its affiliates (see "—Certain Other Sculptor Accounts have similar or overlapping investment objectives and guidelines, and we will not be allocated certain opportunities" below);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the allocation of personnel and time among programs and accounts managed or sponsored by our Adviser and its affiliates;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• the acquisition of assets from, or the sale of assets to, other Sculptor-managed programs and accounts; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• competition from other Sculptor-managed programs or accounts when leasing a property or selling an asset or hiring service providers.

These conflicts of interest could result in decisions that are less favorable to us than they otherwise would be.

***Certain Other Sculptor Accounts have similar or overlapping investment objectives and guidelines, and we will not be allocated certain opportunities.***

We rely on our Adviser to present investment opportunities to us. Our Adviser and its affiliates also manage other programs that invest in real estate and real estate related securities. Our Adviser is not contractually obligated to present any particular opportunities to us and may present them to other programs and managed accounts it advises. On the other hand, affiliates of our Adviser are contractually obligated to present certain opportunities to other managed programs or accounts before they are presented to us, and our Adviser or its affiliates may enter into similar arrangements with other programs it manages in the future. Moreover, these other managed programs may have investors that are affiliated with Sculptor. As a result, we will not participate in every investment opportunity that falls within our investment objectives.

With respect to Other Sculptor Accounts with investment objectives or guidelines that overlap with ours but that do not have priority over us, investment opportunities are allocated among us and one or more Other Sculptor Accounts in accordance with Sculptor's policies and procedures on a basis that our Adviser and its affiliates believe to be fair and equitable over time in their sole discretion, which may be subject to one or more of the following considerations: (i) any applicable investment objectives or focus of ours and such Other Sculptor Accounts (which, for us, includes our primary objective of providing attractive current income in the form of regular, stable cash distributions), (ii) any investment limitations, parameters or contractual provisions of ours and such Other Sculptor Accounts, (iii) the sector, geography/location, expected return profile, expected distribution rates, anticipated cash flows, expected stability or volatility of cash flows, leverage profile, risk profile and other features of the applicable investment opportunity and its impact on portfolio concentration and diversification, (iv) maintaining structuring and financing flexibility, (v) legal, tax, accounting and regulatory considerations, (vi) any other requirements or considerations set forth in the governing documents of any Other Sculptor Account and (vii) other considerations deemed relevant by our Adviser and its affiliates (including, without limitation, maintaining our qualification as a REIT and our ability to avoid registration as an investment company under the Investment Company Act).

Despite these conflicts and priority arrangements, we generally expect our Adviser to offer real estate investment opportunities to Other Sculptor Accounts when those opportunities involve either debt or equity investments that (i) have an opportunistic or value-add risk profile (e.g., may involve acquiring, developing or lending on vacant or partially vacant properties or repositioning assets in whole or in part from one use to another) or (ii) have a shorter-term investment horizon consistent with the finite-life nature of the other real estate programs managed by our Adviser. On the other hand, subject to our Adviser's contractual obligations and other investment considerations set forth above, we generally expect our Adviser to offer us the opportunity to invest in "stabilized" assets with a longer-term holding period consistent with our program's perpetual life. However, there will likely be exceptions to these general expectations, and Other Sculptor Accounts may be offered "stabilized" and longer-term investments before we are.

Our Adviser could also consider other factors when making allocation decisions among programs, such as a program's portfolio composition, objectives, guidelines, restrictions (including those imposed by law or regulation), strategy, capacity and liquidity. Our Adviser has adopted investment allocation policies and procedures in order to guide its allocation

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decisions. These policies and procedures may be amended without our input and without notice to us. There can be no assurance that any conflicts arising out of our Adviser's allocation of investment opportunities will be resolved in our favor.

***Our Adviser faces a conflict of interest because the fees it receives for services performed are based in part on our NAV, which our Adviser is ultimately responsible for determining.***

Our Adviser is paid a management fee for its services based on our NAV. In addition, the distributions to be received by the Special Limited Partner with respect to its performance participation interest in the Operating Partnership will be based in part upon the Operating Partnership's net assets (which is a component of our NAV). Although third-party appraisals will be utilized in the calculation of our NAV, such appraisals will be based in part on information and estimates provided by our Adviser. Other components of our NAV will also be based on the subjective judgments of personnel of our Adviser. Therefore, there is a risk that conflicts of interest could influence the fees payable to our Adviser and the distributions payable to the Special Limited Partner.

***Sculptor and its employees and affiliates may invest for their own accounts.***

Sculptor and its employees and affiliates may engage in investment activities for their personal accounts, which may involve the purchase and sale of securities that are the same as, but in different concentrations or effectuated at different times and prices than, those purchased or sold by us. However, since entering into new or augmented positions of most publicly traded equity and debt securities (and options, futures and derivatives thereon) is generally prohibited under Sculptor's Code of Ethics, the aforementioned activities would generally only occur when there is a sale of a security that was either entered into prior to an employee's start date or previously pre-approved prior to the date when the policy that effected the prohibition was implemented. In addition, they may also involve the purchase and sale of securities that are different from those purchased by the us. Additionally, Sculptor's principals, employees and other affiliates may engage in limited investment activities, which may from time to time involve passive investments in companies or funds that may have dealings with Sculptor.

***Sculptor may come into possession of information that may restrict our trading ability and that may not be provided to us.***

Sculptor is a global institutional asset management firm that manages multiple investment strategies for many different accounts. As part of its investment advisory activities, Sculptor and its affiliates sometimes come into possession of material non-public or price-sensitive information regarding other issuers, including both public and private companies, information that it will be prohibited from using for our benefit. This may occur, for example, if Sculptor obtains material, non-public information or enters into a nondisclosure agreement if it is contemplating a transaction in furtherance of certain investment strategies. Sculptor may therefore be precluded from effecting transactions in issuers for our account as a result of the receipt of confidential or material, non-public information in furtherance of strategies on behalf of other accounts.

***Certain of our investment interests may conflict with the interests of Other Sculptor Accounts and vice versa.***

Our Adviser and its affiliates employ a wide range of investment strategies for us and the Other Sculptor Accounts. In specific instances, these strategies include buying and selling different securities and instruments within an issuer's capital structure for different programs or accounts or pursuant to different strategies pursued by a single program or account. In pursuing these investment strategies, a program or an account may acquire an instrument that is senior or junior in the capital structure of an issuer relative to an instrument that may be acquired by us. These investment decisions may be made by the same team of investment professionals for the same or different programs or accounts depending upon the investment strategy employed. Under normal circumstances, investments in instruments that have different rankings of seniority in an issuer's capital structure do not raise conflicts of interest. However, in other circumstances, such as when an issuer defaults on its debt or seeks protection from creditors in bankruptcy or reorganizations, a conflict of interest can arise as action taken to protect the interest of one set of holders (such as senior bank debt holders or preferred stockholders) can be at the potential detriment of other holders of the same issuer's securities or instruments (such as unsecured debt holders or common stockholders). When different programs or accounts own securities and instruments of the same issuer in different ranks of seniority, action taken for the benefit of one account or program can favor that account or program at the expense of other accounts or programs.

Additionally, certain investments made by one account or program may indirectly benefit positions held by another program. For example, one program may hold a position in the equity of an issuer and another account may participate in a syndicated loan offering, the proceeds of which are applied to finance a third party's acquisition of all or a portion of the issuer's outstanding equity (including any portion owned by other accounts). Further, in certain instances, proceeds of an investment

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in an issuer made by one account may be applied by the issuer (or an affiliate thereof) to make interest payments or distributions in respect of securities held by another account. For example, an account may participate in an offering of securities by a subsidiary or affiliate of an issuer in which another account holds a position. The proceeds of the offering, or a portion thereof, may be distributed directly or indirectly to the parent company (or other affiliate) in which another account owns a position, and the parent company (or other affiliate) may use these proceeds to make payments or distributions to its debt and/or equity investors, including other accounts.

Investors should expect that in employing various strategies for programs with differing investment objectives, our Adviser and its affiliates will make investment decisions that result in some programs owning senior positions and other programs owning junior positions or certain investments of some programs impacting positions of other programs indirectly. These investments may give rise to conflicts of interest, which may not be resolved in our favor.

***The financial or other benefits received by our Adviser from us may be less than such benefits received by our Adviser from Other Sculptor Accounts.***

A conflict of interest arises where the financial or other benefits available to our Adviser or its affiliates differ among the programs and accounts that it manages. If the amount or structure of the management fee, the Special Limited Partner's performance participation interest and/or our Adviser's or its affiliates' compensation differs among programs and accounts (such as where certain funds or accounts pay higher base management fees, incentive fees, performance-based management fees or other fees), our Adviser or its affiliates might be motivated to help certain programs or accounts over others. Similarly, the desire to maintain assets under management or to enhance our Adviser's performance record or to derive other rewards, financial or otherwise, could influence our Adviser or its affiliates in affording preferential treatment to those programs or accounts that could most significantly benefit our Adviser or its affiliates. Our Adviser may, for example, have an incentive to allocate favorable or limited opportunity investments or structure the timing of investments to favor certain programs or accounts. Additionally, our Adviser or its affiliates might be motivated to favor programs or accounts in which it has an ownership interest or in which Sculptor or its affiliates have ownership interests. If an investment professional at our Adviser or its affiliates does not personally hold an investment in us but holds investments in other Sculptor-affiliated vehicles, such investment professional's conflicts of interest with respect to us may be more acute.

***The fees we pay in connection with our offering and the agreements entered into with our Adviser and its affiliates were not determined on an arm's-length basis and therefore may not be on the same terms we could achieve from a third party.***

The compensation paid to our Adviser and the Special Limited Partner for services they provide us was not determined on an arm's-length basis. All service agreements, contracts or arrangements between or among Sculptor and its affiliates, including our Adviser and us, were not negotiated at arm's-length. Such agreements include our Advisory Agreement, the Operating Partnership's partnership agreement, and any property-related corporate services and other agreements we may enter into with affiliates of our Adviser from time to time.

***Our Adviser's management fee and the Special Limited Partner's performance participation interest may not create proper incentives or may induce our Adviser and its affiliates to make certain investments, including speculative investments, that increase the risk of our real estate portfolio.***

We pay our Adviser a management fee regardless of the performance of our portfolio. We are required to pay our Adviser a management fee in a particular period even if we experienced a net loss or a decline in the value of our portfolio during that period. Our Adviser's entitlement to a management fee, which is not based upon performance metrics or goals, might reduce its incentive to devote its time and effort to seeking investments that provide attractive risk-adjusted returns for our portfolio. Because the management fee is based on our NAV, our Adviser may also be motivated to accelerate acquisitions in order to increase NAV or, similarly, delay or curtail repurchases to maintain a higher NAV.

The existence of the Special Limited Partner's performance participation interest in our Operating Partnership, which is based on our total distributions plus the change in NAV per share, may create an incentive for our Adviser to recommend riskier or more speculative investments or to recommend us to use more leverage than it otherwise would. In addition, the change in NAV per share will be based on the value of our investments on the applicable measurement dates and not on realized gains or losses. As a result, the Special Limited Partner may receive distributions based on unrealized gains in certain assets at the time of such distributions and such gains may not be realized when those assets are eventually disposed of.

***Sculptor will consider client and other relationships and the reputation of Sculptor in managing us.***

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Sculptor has long-term relationships with many significant participants in the real estate and related financial markets, including lenders and government agencies. Sculptor also has longstanding relationships with, and regularly provides financing, investment banking and other services to, a significant number of corporations, private equity sponsors and other owners of real estate and real estate related securities and their respective senior managers, shareholders and partners. Some of these parties may directly or indirectly compete with us for investment opportunities. Sculptor also has relationships with investors (including institutional investors and their senior management) that may invest in other investment funds or real estate assets. Sculptor considers these relationships in its management of us. In this regard, there may be certain investment opportunities or certain investment strategies that Sculptor does not undertake on our behalf in view of these relationships or refers to clients instead of referring to us. Sculptor's advice and actions, with respect to any of its clients or proprietary accounts, may differ from the advice given, or may involve a different timing or nature of action taken, than with respect to us. Because of different objectives or other factors, a particular investment may be bought or sold by our Adviser, Sculptor or its investment funds, clients or the employees of Sculptor at a time when another one of these persons or entities is selling or purchasing such investment. Further, because of the importance of Sculptor's reputation, our Adviser may or may not take certain actions in order to protect or preserve such reputation. Sculptor's consideration of these and other related factors give rise to various conflicts of interest, which may not be resolved in our favor.

***We may sell or purchase assets to or from our Adviser and its affiliates, and the conflicts of interest inherent in such transactions could result in terms that are less favorable to us than they would be if the transactions were not with a related party.***

We may sell or purchase assets to or from our Adviser and its affiliates. Although, pursuant to our corporate governance guidelines, such transactions will be subject to the approval of a majority of directors (including a majority of our independent directors) not otherwise interested in the transaction, there is still a risk that the conflicts of interest inherent in such transactions could result in terms that are less favorable to us than they would be if the transactions were not with a related party. This risk is heightened on account of our directors' reliance, at least in part, on our Adviser and its affiliates for information regarding the proposed and alternative transactions. The possibility of such related-party transactions makes an investment in our shares more speculative than it otherwise would be.

***Our Adviser will engage consultants, advisors and service providers on our behalf.***

Our Adviser and entities affiliated with our Adviser will provide certain accounting, administrative and other services to us, and will charge expenses to us for the provision of such services by their internal staff that will be in addition to the management fee payable by us to our Adviser. Please see See Item 7, "Certain Relationships and Related Transactions-The Advisory Agreement-Management Fee, Performance Participation and Expense Reimbursements." in our Form 10 for further details.

Individual consultants or advisors (some of whom may be former employees of Sculptor) may be engaged by our Adviser on our behalf to provide consulting or advisory services to us. These consultants or advisors may not work exclusively for our Adviser or us. Compensation paid to these consultants or advisors for consulting/advisory services is generally borne by us, is not offset against the management paid to our Adviser and may include an annual fee and a discretionary performance-related bonus.

Our Adviser, on behalf of us and our investments, expects to engage service providers (including attorneys and consultants), some of which may also provide services to Sculptor and other programs or accounts managed by other parts of Sculptor. In addition, certain service providers to our Adviser, us and our investments may also be affiliates of Sculptor. These service providers may have business, financial, or other relationships with Sculptor or its employees, which may influence our Adviser's selection of these service providers for us or our investments.

***Sculptor personnel work on other projects and conflicts may arise in the allocation of personnel between us and other projects.***

Our Adviser and its affiliates will devote such time as they determine to be necessary to conduct our business affairs in an appropriate manner. However, Sculptor personnel, including members of the investment committee, will work on other projects, serve on other committees (including boards of directors) and source potential investments for and otherwise assist other programs and accounts, including other programs and accounts to be developed in the future. Time spent on these other initiatives diverts attention from our activities, which could negatively impact us. Furthermore, Sculptor and Sculptor personnel derive financial benefit from these other activities, including fees and performance-based compensation. Our

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sponsor's personnel share in the fees and performance-based compensation generated by other programs and accounts. These and other factors create conflicts of interest in the allocation of time by such personnel.

***Our Adviser may have interests in recommending that we invest alongside Other Sculptor Accounts and such interests could cause us to make acquisitions that we otherwise would not make.***

Our Adviser and its affiliates may become aware of investment opportunities that are too big for us or any Other Sculptor Account to take on individually but which we and Other Sculptor Accounts could acquire collectively. Our Adviser may have incentives to recommend that we invest in such an opportunity even if it would not be in our best interest in order that the Other Sculptor Accounts not miss out on the opportunity and in order that our Adviser and its affiliates not miss out on the opportunity for higher fee income. The existence of Other Sculptor Accounts and the possibility of investments alongside them, therefore, increases the risk that we may participate in an acquisition that is not in our best interest.

***Our board of directors has adopted a resolution that renounces our interest or expectancy with respect to business opportunities and competitive activities.***

Our board of directors has adopted a resolution that provides, subject to certain exceptions, that none of Sculptor or its affiliates, our directors or any person our directors control will be required to refrain directly or indirectly from engaging in any business opportunities, including any business opportunities in the same or similar business activities or lines of business in which we or any of our affiliates may from time to time be engaged or propose to engage, or from competing with us, and that we renounce any interest or expectancy in, or in being offered an opportunity to participate in, any such business opportunities, unless offered to a person expressly and solely in his or her capacity as one of our directors or officers. As a result, our potential investment opportunities may be reduced.

***Sculptor will receive various kinds of information and data from us, which it may use without benefit to us.***

Sculptor will receive or obtain various kinds of data and information from us, Other Sculptor Accounts and portfolio entities, including data and information relating to business operations, trends, budgets, customers and other metrics, some of which is sometimes referred to as "big data." Sculptor may enter into arrangements regarding information sharing and use with us, Other Sculptor Accounts, portfolio entities, related parties and service providers which will give Sculptor access to (and rights regarding) data that it would not otherwise obtain in the ordinary course. Although Sculptor believes that these activities improve Sculptor's investment management activities on our behalf and on behalf of Other Sculptor Accounts, information obtained from us also provides material benefits to Sculptor or Other Sculptor Accounts without compensation or other benefit accruing to us or our stockholders.

Furthermore, except for contractual obligations to third parties to maintain confidentiality of certain information, and regulatory limitations on the use of material nonpublic information, Sculptor will generally be free to use data and information from our activities to assist in the pursuit of Sculptor's various other activities, including to trade for the benefit of Sculptor or an Other Sculptor Account.

The sharing and use of "big data" and other information presents potential conflicts of interest, and any benefits received by Sculptor or its personnel (including fees, costs and expenses) will not offset our Adviser's management fee or otherwise be shared with investors. As a result, our Adviser has an incentive to pursue investments that generate data and information that can be utilized in a manner that benefits Sculptor or Other Sculptor Accounts.

***We may be subject to potential conflicts of interest as a consequence of family relationships that Sculptor employees have with other real estate professionals.***

Certain personnel and other professionals of Sculptor may have family members or relatives that are actively involved in industries and sectors in which we invest or may have business, personal, financial or other relationships with companies in such industries and sectors (including the advisors and service providers described herein) or other industries, which gives rise to potential or actual conflicts of interest. For example, such family members or relatives might be officers, directors, personnel or owners of companies or assets that are actual or potential investments of ours or our other counterparties and properties. Moreover, in certain instances, we may purchase or sell companies or assets from or to, or otherwise transact with, companies that are owned by such family members or relatives or in respect of which such family members or relatives have other involvement. In most such circumstances, we will not be precluded from undertaking any of these investment activities or transactions.

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***Other potential or actual conflicts of interest may arise, and these conflicts may not be identified or resolved in a manner favorable to us.***

Sculptor has conflicts of interest, or conflicting loyalties, as a result of the numerous activities and relationships of Sculptor, our Adviser and the affiliates, partners, members, shareholders, officers, directors and employees of the foregoing, some of which are described herein. However, not all potential, apparent and actual conflicts of interest are included herein, and additional conflicts of interest could arise as a result of new activities, transactions or relationships commenced in the future. There can be no assurance that our board of directors or our Adviser will identify or resolve all conflicts of interest in a manner that is favorable to us.

***We may be subject to additional potential conflicts of interest arising from Sculptor's parent company.***

Sculptor Capital Management, Inc., our sponsor, is wholly owned by Rithm Capital Corp. ("RITM"), a publicly traded company listed on the New York Stock Exchange. RITM has significant economic and business interests and objectives that are different than or conflict with those of the Company and its stockholders. Moreover, RITM has and may in the future make seed or other investments in newly formed or existing funds, accounts or clients managed by the Adviser or Sculptor. Accordingly, the interests of shareholders of RITM are sometimes not aligned with the interests of the Company and its stockholders. In situations where these interests are not aligned, the Adviser may face a conflict of interest when it acts or fails to act. RITM may have direct relationships with counterparties that have relationships with the Adviser and the Company—certain of these counterparties may provide underwriting, consulting, administration and financing services to RITM and to the Adviser and the Company. Certain counterparties have in the past, and may in the future, underwrite and analyze RITM's shares.

Further, RITM currently has and in the future may form or acquire other entities that advise third party accounts with investment programs that are similar to, or which overlap to some extent with, the interests of the Company and its stockholders. RITM and its affiliates have no obligation to consider the interests of the Company or its stockholders in making decisions on behalf of its own proprietary capital or any accounts that it may manage. In addition, it is possible that the Company or the portfolio investments or other entities in which they invest may own properties or businesses in the same market as properties or businesses owned by entities in which RITM or accounts advised by other RITM affiliates invest and may compete with such parties for tenants and customers.

**Risks Related to our REIT Status and Certain Other Tax Items** 

***If we do not qualify as a REIT, we will be subject to tax as a regular corporation and could face a substantial tax liability.***

We expect to operate so as to qualify as a REIT under the Code. However, qualification as a REIT involves the application of highly technical and complex Code provisions for which only a limited number of judicial or administrative interpretations exist. Notwithstanding the availability of cure provisions in the Code, we may fail to meet various compliance requirements, which could jeopardize our REIT status. Furthermore, new tax legislation, administrative guidance or court decisions, in each instance potentially with retroactive effect, could make it more difficult or impossible for us to qualify as a REIT. If we fail to qualify as a REIT in any tax year, then:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• we would be taxed as a regular domestic corporation, which under current laws, among other things, means being unable to deduct distributions to stockholders in computing taxable income and being subject to federal income tax on our taxable income at regular corporate income tax rates;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• any resulting tax liability could be substantial and could have a material adverse effect on our book value;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• unless we were entitled to relief under applicable statutory provisions, we would be required to pay taxes, and therefore, our cash available for distribution to stockholders would be reduced for each of the years during which we did not qualify as a REIT and for which we had taxable income; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• we generally would not be eligible to requalify as a REIT for the subsequent four full taxable years.

***To maintain our REIT status, we may have to borrow funds on a short-term basis during unfavorable market conditions.***

To qualify as a REIT, we generally must distribute annually to our stockholders a minimum of 90% of our net taxable income, determined without regard to the dividends-paid deduction and excluding net capital gains. We will be subject to regular corporate income taxes on any undistributed REIT taxable income each year. Additionally, we will be subject to a 4% nondeductible excise tax on any amount by which distributions paid by us in any calendar year are less than the sum of 85% of our ordinary income, 95% of our capital gain net income and 100% of our undistributed income from previous years.

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Payments we make to our stockholders under our share repurchase plan will not be taken into account for purposes of these distribution requirements. If we do not have sufficient cash to make distributions necessary to preserve our REIT status for any year or to avoid taxation, we may be forced to borrow funds or sell assets even if the market conditions at that time are not favorable for these borrowings or sales. These options could increase our costs or reduce our equity.

***Compliance with REIT requirements may cause us to forego otherwise attractive opportunities, which may hinder or delay our ability to meet our investment objectives and reduce your overall return.***

To qualify as a REIT, we are required at all times to satisfy tests relating to, among other things, the sources of our income, the nature and diversification of our assets, the ownership of our stock and the amounts we distribute to our stockholders. Compliance with the REIT requirements may impair our ability to operate solely on the basis of maximizing profits. For example, we may be required to make distributions to stockholders at disadvantageous times or when we do not have funds readily available for distribution.

***Compliance with REIT requirements may force us to liquidate or restructure otherwise attractive investments.***

To qualify as a REIT, at the end of each calendar quarter, at least 75% of the value of our assets must consist of cash, cash items, government securities and qualified real estate assets. The remainder of our investments in securities (other than qualified real estate assets and government securities) generally cannot include more than 10% of the voting securities (other than securities that qualify for the straight debt safe harbor) of any one issuer or more than 10% of the value of the outstanding securities of more than any one issuer unless we and such issuer jointly elect for such issuer to be treated as a "taxable REIT subsidiary" under the Code. Debt will generally meet the "straight debt" safe harbor if the debt is a written unconditional promise to pay on demand or on a specified date a certain sum of money, the debt is not convertible, directly or indirectly, into stock and the interest rate and the interest payment dates of the debt are not contingent on the profits, the borrower's discretion or similar factors. Additionally, no more than 5% of the value of our assets (other than government securities and qualified real estate assets) can consist of the securities of any one issuer, no more than 25% of the value of our assets may be represented by securities of one or more taxable REIT subsidiaries and no more than 25% of our assets may be represented by "nonqualified publicly offered REIT debt instruments." If we fail to comply with these requirements at the end of any calendar quarter, we must dispose of a portion of our assets within 30 days after the end of the calendar quarter or qualify for certain statutory relief provisions in order to avoid losing our REIT qualification and suffering adverse tax consequences. In order to satisfy these requirements and maintain our qualification as a REIT, we may be forced to liquidate assets from our portfolio or not make otherwise attractive investments. These actions could reduce our income and amounts available for distribution to our stockholders.

***Our charter does not permit any person or group to own more than 9.9% in value or number of shares, whichever is more restrictive, of our outstanding common stock or of our outstanding capital stock of all classes or series, and attempts to acquire our common stock or our capital stock of all other classes or series in excess of these 9.9% limits would not be effective without an exemption (prospectively or retroactively) from these limits by our board of directors.***

For us to qualify as a REIT under the Code, not more than 50% of the value of our outstanding stock may be owned, directly or indirectly, by five or fewer individuals (including certain entities treated as individuals for this purpose) during the last half of a taxable year. For the purpose of assisting our qualification as a REIT for U.S. federal income tax purposes, among other purposes, our charter prohibits beneficial or constructive ownership by any person or group of more than 9.9%, in value or number of shares, whichever is more restrictive, of the outstanding shares of our outstanding common stock, or 9.9% in value or number of shares, whichever is more restrictive, of our outstanding capital stock of all classes or series, which we refer to as the "Ownership Limit." The constructive ownership rules under the Code and our charter are complex and may cause shares of the outstanding common stock owned by a group of related persons to be deemed to be constructively owned by one person. As a result, the acquisition of less than 9.9% of our outstanding common stock or our capital stock by a person could cause another person to constructively own in excess of 9.9% of our outstanding common stock or our capital stock, respectively, and thus violate the Ownership Limit. There can be no assurance that our board of directors, as permitted in the charter, will not decrease this Ownership Limit in the future. Any attempt to own or transfer shares of our common stock or capital stock in excess of the Ownership Limit without the consent of our board of directors will result either in the shares in excess of the limit being transferred by operation of our charter to a charitable trust, and the person who attempted to acquire such excess shares not having any rights in such excess shares, or in the transfer being void.

The Ownership Limit may have the effect of precluding a change in control of us by a third party, even if such change in control would be in the best interests of our stockholders or would result in receipt of a premium to the price of our common stock (and even if such change in control would not reasonably jeopardize our REIT status). The exemptions to the ownership

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limit granted to date may limit our board of directors' power to increase the ownership limit or grant further exemptions in the future.

***Non-U.S. holders may be subject to U.S. federal income tax upon their disposition of shares of our common stock or upon their receipt of certain distributions from us.***

In addition to any potential withholding tax on ordinary dividends, a non-U.S. holder (i.e., a beneficial owner of our common stock that is neither a U.S. holder nor a partnership (or an entity treated as a partnership for U.S. federal income tax purposes)), other than a "qualified shareholder" or a "qualified foreign pension fund," that disposes of a "U.S. real property interest" ("USRPI") (which includes shares of stock of a U.S. corporation whose assets consist principally of USRPIs), is generally subject to U.S. federal income tax under the Foreign Investment in Real Property Tax Act of 1980, as amended ("FIRPTA"), on the amount received from such disposition. Such tax does not apply, however, to the disposition of stock in a REIT that is "domestically controlled." Generally, a REIT is domestically controlled if less than 50% of its stock, by value, has been owned directly or indirectly by non-U.S. persons during a continuous five-year period ending on the date of disposition or, if shorter, during the entire period of the REIT's existence. No assurance can be given, however, that we are or will be a domestically-controlled REIT. If we were to fail to so qualify as a domestically controlled REIT, amounts received by a non-U.S. holder on certain dispositions of shares of our common stock (including a redemption) would be subject to tax under FIRPTA, unless (i) our shares of common stock were "regularly traded" on an established securities market and (ii) the non-U.S. holder did not, at any time during a specified testing period, hold more than 10% of our common stock. However, it is not anticipated that our common stock will be "regularly traded" on an established market.

A non-U.S. holder other than a "qualified shareholder" or a "qualified foreign pension fund" that receives a distribution from a REIT that is attributable to gains from the disposition of a USRPI as described above, including in connection with a repurchase of our common stock, is generally subject to U.S. federal income tax under FIRPTA to the extent such distribution is attributable to gains from such disposition, regardless of whether the difference between the fair market value and the tax basis of the USRPI giving rise to such gains is attributable to periods prior to or during such non-U.S. holder's ownership of our common stock. In addition, a repurchase of our common stock, to the extent not treated as a sale or exchange, may be subject to withholding as an ordinary dividend. See "Material U.S. Federal Income Tax Considerations—Taxation of Non-U.S. Holders of Our Common Stock—Distributions" and "—Repurchases of our Common Stock."

We seek to act in the best interests of the Company as a whole and not in consideration of the particular tax consequences to any specific holder of our stock. Potential non-U.S. holders should inform themselves as to the U.S. tax consequences, and the tax consequences within the countries of their citizenship, residence, domicile and place of business, with respect to the purchase, ownership and disposition of shares of our common stock.

***Investments outside the U.S. may subject us to additional taxes and could present additional complications to our ability to satisfy the REIT qualification requirements.***

Non-U.S. investments may subject us to various non-U.S. tax liabilities, including withholding taxes. In addition, operating in functional currencies other than the U.S. dollar and in environments in which real estate transactions are typically structured differently than they are in the U.S. or are subject to different legal rules may present complications to our ability to structure non-U.S. investments in a manner that enables us to satisfy the REIT qualification requirements.

***We may incur tax liabilities that would reduce our cash available for distribution to you.***

Even if we qualify and maintain our status as a REIT, we may become subject to U.S. federal income taxes and related state and local taxes. For example, net income from the sale of properties that are "dealer" properties sold by a REIT (a "prohibited transaction" under the Code) will be subject to a 100% tax. We may not make sufficient distributions to avoid excise taxes applicable to REITs. Similarly, if we were to fail an income test (and did not lose our REIT status because such failure was due to reasonable cause and not willful neglect) we would be subject to tax on the income that does not meet the income test requirements. We also may decide to retain net capital gain we earn from the sale or other disposition of our investments and pay income tax directly on such income. In that event, our stockholders would be treated as if they earned that income and paid the tax on it directly. However, stockholders that are tax-exempt, such as charities or qualified pension plans, would have no benefit from their deemed payment of such tax liability unless they file U.S. federal income tax returns and thereon seek a refund of such tax. We also may be subject to state and local taxes on our income or property, including franchise, payroll, mortgage recording and transfer taxes, either directly or at the level of the other companies through which we indirectly own our assets, such as our taxable REIT subsidiaries, which are subject to full U.S. federal, state, local and foreign corporate-level income taxes. Any taxes we pay directly or indirectly will reduce our cash available for distribution to you.

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***Our board of directors is authorized to revoke our REIT election without stockholder approval, which may cause adverse consequences to our stockholders.***

Our charter authorizes our board of directors to revoke or otherwise terminate our REIT election, without the approval of our stockholders, if it determines that changes to U.S. federal income tax laws and regulations or other considerations mean it is no longer in our best interests to qualify as a REIT. Our board of directors has fiduciary duties to us and our stockholders and could only cause such changes in our tax treatment if it determines in good faith that such changes are in our best interests and in the best interests of our stockholders. In this event, we would become subject to U.S. federal income tax on our taxable income and we would no longer be required to distribute most of our net income to our stockholders, which may cause a reduction in the total return to our stockholders.

***You may have current tax liability on distributions you elect to reinvest in our common stock.***

If you participate in our distribution reinvestment plan, you will be deemed to have received, and for U.S. federal income tax purposes will be taxed on, the amount reinvested in shares of our common stock to the extent the amount reinvested was not a tax-free return of capital. Therefore, unless you are a tax-exempt entity, you may be forced to use funds from other sources to pay your tax liability on the reinvested dividends.

***Generally, ordinary dividends payable by REITs do not qualify for reduced U.S. federal income tax rates.***

Currently, the maximum tax rate applicable to qualified dividend income payable to certain non-corporate U.S. stockholders is 20%. Dividends payable by REITs, however, generally are not eligible for the reduced rate. Although this does not adversely affect the taxation of REITs or dividends payable by REITs, the more favorable rates applicable to regular corporate qualified dividends could cause certain non-corporate investors to perceive investments in REITs to be relatively less attractive than investments in the stocks of non-REIT corporations that pay dividends, which could adversely affect the value of the shares of REITs, including our common stock. However, individual taxpayers may be entitled to claim a deduction in determining their taxable income of 20% of ordinary REIT dividends (dividends other than capital gain dividends and dividends attributable to certain qualified dividend income received by us), which reduces the effective tax rate on such dividends. The deduction, if allowed in full, equates to a maximum effective U.S. federal income tax rate on ordinary REIT dividends of 29.6%. You are urged to consult with your tax advisor regarding the effect of this change on your effective tax rate with respect to REIT dividends.

***We may be subject to adverse legislative or regulatory tax changes that could increase our tax liability, reduce our operating flexibility and reduce the price of our common stock.***

In recent years, numerous legislative, judicial and administrative changes have been made in the provisions of U.S. federal income tax laws applicable to investments similar to an investment in shares of our common stock.

Legislation has been previously proposed that includes, among other changes, increases in the corporate and capital gains rates and an overhaul of the international tax rules. It is unclear whether any legislation will be enacted into law or, if enacted, what form it would take, and it is also unclear whether there could be regulatory or administrative action that could affect U.S. tax rules. The current U.S. presidential administration recently signed into law the "One Big Beautiful Bill Act" (the "OBBBA") which includes several new provisions (and other amendments) to the Code (including with respect to the LIHTC program). How the OBBBA will be implemented will depend on future administrative guidance and court rulings. The U.S. Congress may also pass additional tax reform legislation in the future. The timing and details of any such guidance, ruling and legislation, and the impact of the OBBBA and any other potential tax changes on us is uncertain.

Additional changes to the tax laws are likely to continue to occur, and we cannot assure you that any such changes will not adversely affect the taxation of our stockholders. Any such changes could have an adverse effect on an investment in our shares or on the market value or the resale potential of our assets. You are urged to consult with your tax advisor with respect to the impact of the recent legislation on your investment in our shares and the status of legislative, regulatory or administrative developments and proposals and their potential effect on an investment in our shares. Although REITs generally receive certain tax advantages compared to entities taxed as regular corporations, it is possible that future legislation would result in a REIT having fewer tax advantages, and it could become more advantageous for a company that invests in real estate to elect to be treated for U.S. federal income tax purposes as a corporation. As a result, our charter authorizes our board of directors to revoke or otherwise terminate our REIT election, without the approval of our stockholders, if it determines that it is no longer in our best interests to qualify as a REIT. The impact of tax reform on an

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investment in our shares is uncertain. Prospective investors should consult their own tax advisors regarding changes in tax laws.

***We may not be able to recoup the costs associated with increased property taxes, which would adversely affect our performance and the value of your investment in us.***

We may be responsible for paying real property taxes applicable to properties owned by us. The property taxes may increase as property tax rates change and as the properties are assessed or reassessed by taxing authorities. We may be unable to recoup such increased costs, which could have a material adverse effect on our operations and the value of your investment.

**ITEM 1B. UNRESOLVED STAFF COMMENTS**

None.

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**ITEM 1C. CYBERSECURITY**

**Assessment, Identification and Management of Material Risks from Cybersecurity**

We rely on the cybersecurity strategy and policies implemented by Sculptor, our sponsor and an affiliate of the Adviser. Sculptor's cybersecurity strategy prioritizes detection and analysis of and response to known, anticipated or unexpected threats, effective management of security risks and resilience against cyber incidents. Sculptor's cybersecurity risk management processes include technical security controls, policy enforcement mechanisms, monitoring systems, tools and related services, which include tools and services from third-party providers, and management oversight to assess, identify and manage risks from cybersecurity threats. Sculptor has implemented and continues to implement risk-based controls designed to prevent, detect and respond to information security threats and we rely on those controls to help us protect our information, our information systems, and the information of our investors, and other third parties who entrust us with their sensitive information.

Sculptor's cybersecurity program includes physical, administrative and technical safeguards, as well as plans and procedures designed to help Sculptor prevent and timely and effectively respond to cybersecurity threats and incidents, including threats or incidents that may impact us, our Adviser or Sculptor. Sculptor's cybersecurity risk management process seeks to monitor cybersecurity vulnerabilities and potential attack vectors, evaluate the potential operational and financial effects of any threat and mitigate such threats. The assessment of cybersecurity risks, including those which may impact us, our Adviser or Sculptor, is integrated into Sculptor's risk management program. In addition, Sculptor periodically engages with third-party consultants and key vendors to assist it in assessing, enhancing, implementing, and monitoring its cybersecurity risk management programs and responding to incidents.

Sculptor's cybersecurity risk management and awareness programs include periodic identification and testing of vulnerabilities, regular phishing simulations and annual general cybersecurity awareness training, including for all of the employees of Sculptor. Sculptor undertakes periodic internal security reviews of its information systems and related controls, including systems affecting personal data and the cybersecurity risks of Sculptor's and our critical third-party vendors and other partners. Sculptor also completes periodic external reviews of its cybersecurity program and practices, which include assessments of relevant data protection practices and targeted attack simulations.

In the event of a cybersecurity incident impacting us, our Adviser or Sculptor, Sculptor has developed an incident response plan that provides guidelines for responding to such an incident and facilitates coordination across multiple operational functions of Sculptor, including coordinating with the relevant members of our Adviser. The incident response plan includes notification to the applicable members of cybersecurity leadership, and, as appropriate, escalation to the full Sculptor risk management team and/or an internal ad-hoc group of senior employees, tasked with helping to manage the cybersecurity incident. Depending on their nature, incidents may also be reported to the audit committee of our board of directors and to our full board of directors, if appropriate.

**Oversight of Cybersecurity Risks**

Our board of directors and audit committee have primary responsibility for oversight and review of guidelines and policies with respect to risk assessment and risk management, including cybersecurity. Certain members of the Sculptor cybersecurity team periodically report to our audit committee as well as our full board of directors, as appropriate, on cybersecurity matters. Such reporting includes updates on Sculptor's cybersecurity program as it impacts us, the external threat environment, and Sculptor's programs to address and mitigate the risks associated with the evolving cybersecurity threat environment. These reports also include updates on our and Sculptor's preparedness, prevention, detection, responsiveness, and recovery with respect to cyber incidents.

**Material Impact of Cybersecurity Risks**

As of the date of this filing, we have not experienced a material information security breach incident and the expenses we have incurred from information security incidents have been immaterial, and we are not aware of any cybersecurity risks that are reasonably likely to materially affect our business. However, future incidents could have a material impact on our business strategy, results of operations, or financial condition. For additional discussion of the risks posed by cybersecurity threats, see "Item 1A. Risk Factors-Cybersecurity risks and cyber incidents may adversely affect our business by causing a

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disruption to our operations, a compromise or corruption of our confidential information and/or damage to our business relationships."

**ITEM 2. PROPERTIES**

For an overview of our real estate investments, see Item 7 - "Management's Discussion and Analysis of Financial Condition and Results of Operations - Portfolio" and Schedule III, Real Estate and Accumulated Depreciation.

**<u>Principal Executive Offices</u>**

Our principal executive and administrative offices are located in leased space at 9 West 57th Street, 40th Floor, New York, New York 10019. We consider these facilities to be suitable and adequate for the management and operations of our business.

**ITEM 3. LEGAL PROCEEDINGS**

From time to time, we may be involved in various claims and legal actions arising in the ordinary course of business. As of December 31, 2025, we were not involved in any material legal proceedings.

**ITEM 4. MINE SAFETY DISCLOSURES**

Not applicable.

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**PART II.**

**ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES**

**Market Information**

There is no established public trading market for our shares of common stock, and we do not expect a public trading market to develop. The Company has not agreed to register under the Securities Act for sale by stockholders any securities of the Company.

**Offering of Common Stock**

We are conducting a private offering of shares of our common stock pursuant to the exemption from registration provided by Section 4(a)(2) of the Securities Act, and Regulation D promulgated thereunder, and other exemptions of similar import in the laws of the states and other jurisdictions where the offering is being made. Our Class A, Class AA, Class D, Class E, Class F, Class FF, Class I, Class S, and Class I-S shares are generally available for issuance in our private offering. Our Class E shares are only expected to be held by Sculptor, its personnel, and affiliates. Our Class FF shares are now only available pursuant to our distribution reinvestment plan. All shares will be sold at the then-current transaction price for the applicable class of shares, which will generally be our prior month's NAV per share for such class as of the last calendar day of such month, plus applicable upfront selling commissions, as disclosed below. The share classes have different upfront selling commissions and different class-specific expenses, such as management fees, distribution fees, performance participation allocations, and organization and offering expenses. Other than these differences, each class of common stock is subject to the same economic and voting rights. Shares of our common stock are not listed for trading on a stock exchange or other securities market and there is no established public trading market for our common stock. As of March 30, 2026, there were 4 holders of record of our Class F common stock, 109 holders of record of our Class FF common stock, 7 holders of record of our Class E common stock, 158 holder of record of our Class AA common stock, 1 holder of record of our Class A common stock, and 2 holders of record of our Class I-S common stock.

The following table shows the upfront selling commissions payable at the time an investor subscribes for shares.

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| | |
|:---|:---|
| | **Maximum Upfront**<br>**Selling Commissions**<br>**as a % of**<br>**Transaction Price** |
| Class A shares | up to 2.0% |
| Class AA shares | up to 2.0% |
| Class D shares | up to 1.5% |
| Class F shares | up to 2.0% |
| Class FF shares | up to 2.0% |
| Class I shares |  |
| Class S shares | up to 3.5% |
| Class I-S shares | up to 2.0% |

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The following table shows the distribution fees we pay selected dealers on an annualized basis as a percentage of our NAV for such class. The distribution fees will be paid monthly in arrears.

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| | |
|:---|:---|
| | **Annual Distribution**<br>**Fee as a % of NAV** |
| Class A shares |  |
| Class AA shares | 0.50% |
| Class D shares | 0.25% |
| Class F shares |  |
| Class FF shares | 0.50% |
| Class I shares |  |
| Class S shares | 0.85% |
| Class I-S shares |  |

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The following table presents our monthly NAV per share for each of our outstanding classes of shares from January 31, 2024 through December 31, 2025:

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Class F Shares** | **Class FF Shares** | **Class E Shares** | **Class AA Shares** | **Class A Shares** | **Class I-S Shares** |
| January 31, 2024 | 10.8491 | 10.7269 | 10.8868 | 10.7395 |  |  |
| February 29, 2024 | 10.8133 | 10.6894 | 10.8467 | 10.7031 |  |  |
| March 31, 2024 | 10.7743 | 10.6542 | 10.8282 | 10.7307 |  |  |
| April 30, 2024 | 10.8056 | 10.6865 | 10.8774 | 10.7376 |  |  |
| May 31, 2024 | 10.7813 | 10.6618 | 10.8590 | 10.7204 |  |  |
| June 30, 2024 | 10.7321 | 10.6121 | 10.7929 | 10.6497 | 10.6978 |  |
| July 31, 2024 | 11.0020 | 10.8790 | 11.1170 | 10.9278 | 10.9678 |  |
| August 31, 2024 | 10.9569 | 10.8327 | 11.0677 | 10.8367 | 10.6511 |  |
| September 30, 2024 | 10.8938 | 10.7697 | 11.0109 | 10.7788 | 10.7306 |  |
| October 31, 2024 | 10.9244 | 10.7995 | 11.0554 | 10.8058 | 10.7379 |  |
| November 30, 2024 | 10.7348 | 10.6112 | 10.8589 | 10.6409 | 10.5370 |  |
| December 31, 2024 | 10.6691 | 10.5134 | 10.7269 | 10.5268 | 10.3956 | 10.3956 |
| January 31, 2025 | 10.6794 | 10.5230 | 10.7510 | 10.5579 | 10.5137 | 10.3956 |
| February 28, 2025 | 10.6304 | 10.4737 | 10.7004 | 10.5077 | 10.3795 | 10.3394 |
| March 31, 2025 | 10.5831 | 10.4263 | 10.6977 | 10.4604 | 10.3321 | 10.2905 |
| April 30, 2025 | 10.6345 | 10.4762 | 10.7559 | 10.5144 | 10.3787 | 10.3370 |
| May 31, 2025 | 10.6863 | 10.5263 | 10.8311 | 10.5551 | 10.4378 | 10.3921 |
| June 30, 2025 | 10.6769 | 10.5157 | 10.8159 | 10.5446 | 10.4246 | 10.3824 |
| July 31, 2025 | 10.9835 | 10.8169 | 11.1619 | 10.8232 | 10.6823 | 10.6441 |
| August 30, 2025 | 10.9919 | 10.8231 | 11.1797 | 10.7968 | 10.6849 | 10.6438 |
| September 30, 2025 | 11.0600 | 10.8892 | 11.2555 | 10.8555 | 10.7422 | 10.7006 |
| October 31, 2025 | 10.0878 | 10.9153 | 11.2907 | 10.8697 | 10.7616 | 10.7194 |
| November 30, 2025 | 11.1366 | 10.9632 | 11.3553 | 10.9104 | 10.8017 | 10.7591 |
| December 31, 2025 | 11.4822 | 11.3025 | 11.7312 | 11.2290 | 11.1167 | 11.0725 |

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**Net Asset Value** 

We calculate NAV per share in accordance with the valuation guidelines that have been approved by our board of directors. Our total NAV presented in the following tables includes the NAV of our outstanding classes of common stock as of

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December 31, 2025, as well as the partnership interests of the Operating Partnership held by parties other than the Company, which, in aggregate, was reduced by the noncontrolling interests in our consolidated subsidiaries.

We calculate NAV per share for each share class monthly. Our NAV for each class of shares is based on the net asset values of our investments (including investments in real estate debt and other securities and real estate businesses, such as CapGrow), the addition of any other assets (such as cash on hand), and the deduction of any liabilities, including the allocation/accrual of any performance participation to the Special Limited Partner, and will also include the deduction of management fees and certain organization and offering expenses (which are class-specific expenses) and any distribution fees applicable to such class of shares. Please refer to Item 9. "Market Price of and Dividends on the Registrant's Common Equity and Related Stockholder Matters—Net Asset Value Calculation and Valuation Guidelines" in our Form 10 for further details on how our NAV is determined.

The following table provides a breakdown of the major components of our NAV as of December 31, 2025 (amounts in thousands, except per share/unit data):

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| | |
|:---|:---|
| **Components of NAV** | **December 31, 2025** |
| Investments in real estate (including goodwill) | $776900 |
| Investment in an unconsolidated joint venture | 2604 |
| Investments in real estate debt | 102058 |
| Cash and cash equivalents | 37591 |
| Restricted cash | 40759 |
| Receivables | 1561 |
| Other assets | 3627 |
| Mortgages, credit facility and financing obligations, net  | (358334) |
| Accounts payable and other liabilities | (50107) |
| Management fee payable | (380) |
| Accrued performance participation allocation | (3939) |
| Due to related parties, net | (15) |
| Noncontrolling interests in the consolidated subsidiaries | (32958) |
| **Net Asset Value** | $519367 |
| **Number of outstanding shares/units** | 45333877 |

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**NAV and NAV Per Share Calculation**

The following table provides a breakdown of our total NAV and NAV per share/unit by class as of December 31, 2025 (amounts in thousands, except per share/unit data):

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| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** |
|<br>**NAV per share** | **Class F Shares** | **Class FF Shares** | **Class E Shares** | **Class AA Shares** | **Class A Shares** | **Class I-S Shares** | **Operating Partnership Units** | **Total** |
| NAV | $235507 | $71722 | $111251 | $78730 | $19401 | $565 | $2191 | $519367 |
| Number of outstanding shares/ units | 20510611 | 6345659 | 9483386 | 7011253 | 1745168 | 51051 | 186749 | 45333877 |
| NAV Per Share/Unit | $11.4822 | $11.3025 | $11.7312 | $11.2290 | $11.1167 | $11.0725 | $11.7312 | $11.4565 |

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The following table details the discount rate and the weighted-average capitalization rate by property type, which are the key assumptions from the valuations as of December 31, 2025:

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| | | |
|:---|:---|:---|
| **Investment Type** | **Discount Rate** | **Exit Capitalization Rate** |
| Residential (Business) | 8.3% | 6.8% |
| Student Housing | 8.8% | 6.3% |
| Commercial Properties | 12.5% | 10.0% |
| Industrial Properties | 7.8% | 6.0% |

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These weighted averages of key assumptions are calculated by the Adviser using information from the appraisals that are provided by the independent valuation advisor and reviewed by our Adviser. A change in these assumptions would impact the calculation of the value of our property investments. For example, assuming all other factors remain unchanged, the changes listed below would result in the following effects on our investment values at December 31, 2025:

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Input** | **Hypothetical Change** | **Residential (Business)** | **Student Housing** | **Commercial Properties** | **Industrial Properties** |
| Discount Rate | 0.25% decrease | 1.3% | 1.0% | 1.7% | 1.9% |
| Discount Rate | 0.25% increase | (1.3)% | (1.0)% | (1.7)% | (1.9)% |
| Exit Capitalization Rate (weighted average) | 0.25% decrease | 3.6% | 4.4% | 0.9% | 2.5% |
| Exit Capitalization Rate (weighted average) | 0.25% increase | (3.4)% | (3.9)% | (0.9)% | (2.3)% |

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The following table details the weighted average contractual rates for the Company's borrowings compared to the weighted average market rates, which are key assumptions from the debt valuations as of December 31, 2025:

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| | | |
|:---|:---|:---|
| **Debt Type** | **Contractual Interest Rates** | **Market Interest Rate** |
| Fixed Rate Debt (weighted average) | 5.01% | 6.01% |
| Variable Rate Debt (weighted average) <sup>(1)</sup> | SOFR + 2.92% | SOFR + 2.47% |

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(1) Includes University Courtyard's debt obligation without consideration of the effect of the interest rate cap.

These weighted averages of key assumptions are calculated by the Adviser using information from debt valuations that are provided by the independent valuation advisor who values our debt and are reviewed by the Adviser. A change in these assumptions would impact the calculation of the value of the debt owed by CapGrow, University Courtyard and the Marysville Property. Examples of changes in market mortgage interest rates, assuming no other changes to our December 31, 2025 debt balances, would have the following effects on the value of our debt balances.

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| | | | | |
|:---|:---|:---|:---|:---|
| **Input** | **Hypothetical Change** | **Residential (Business)** | **Student Housing** | **Industrial Properties** |
| Mortgage Interest Rates (weighted average) | 0.25% decrease | 0.5% | 0.3% | 0.4% |
| Mortgage Interest Rates (weighted average) | 0.25% increase | (0.5)% | (0.3)% | (0.5)% |

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The following table reconciles stockholders' equity per our consolidated balance sheets to our NAV as of December 31, 2025 (amounts in thousands):

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| | |
|:---|:---|
|  | **December 31, 2025** |
| Stockholders' equity | $385968 |
| Redeemable non-controlling interest in SDREIT Operating Partnership | 2191 |
| Total SDREIT stockholders' equity and SDREIT Operating Partnership partners' capital under GAAP | 388159 |
| Adjustments: |  |
| Accrued organizational and offering costs | 2233 |
| Accumulated depreciation and amortization under GAAP | 46464 |
| Straight line rent receivable | (2245) |
| Unrealized net real estate appreciation | 84747 |
| Unvested dividends reinvestment | 9 |
| NAV | $519367 |

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The following details the adjustments to reconcile GAAP stockholders' equity to our NAV:

• The Adviser agreed to advance certain organization and offering costs on our behalf through March 31, 2024. Such costs will be reimbursed to the Adviser on a pro-rata basis over a 60-month period beginning March 31, 2024. Under GAAP, organization costs are expensed as incurred. For purposes of calculating NAV, such costs will be recognized as paid over the 60-month reimbursement period.

• We depreciate our investments in real estate and amortize certain other assets and liabilities (i.e., above- and below-market leases, in-place lease costs and deferred commissions) in accordance with GAAP. Such depreciation and amortization is not recorded for purposes of calculating our NAV.

• Our investments in real estate are presented at their depreciated cost basis in our GAAP condensed consolidated financial statements. Additionally, our mortgage loans and revolving credit facility (collectively, our "Debt") are presented at their amortized cost basis in our GAAP condensed consolidated financial statements. As such, any increases or decreases in the fair market value of our investments in real estate or our Debt are not included in our GAAP results. For purposes of calculating our NAV, our investments in real estate and our Debt are recorded at fair value.

• We recognize rental revenue on a straight-line basis under GAAP. Such straight-line rent adjustments are excluded for purposes of calculating NAV.

• We accrue dividends on unvested restricted stock in accordance with GAAP. For purposes of calculating our NAV, we exclude these accrued unvested dividends until the vesting period associated to the underlying restricted stock expires.

**Distributions**

Distributions are authorized at the discretion of our board of directors, in accordance with our earnings, cash flows and general financial condition. Our board of directors' discretion is directed, in substantial part, by its obligation to cause us to comply with the REIT requirements. To qualify as a REIT, we are required to pay distributions sufficient to satisfy the requirements for qualification as a REIT for tax purposes. We intend to distribute sufficient income so that we satisfy the requirements for qualification as a REIT. In order to qualify as a REIT, we are required to distribute 90% of our annual REIT taxable income, determined without regard to the dividends-paid deduction and excluding net capital gains, to our stockholders. We intend to declare monthly distributions as authorized by our board of directors (or a committee of the board of directors) and to pay such distributions on a monthly basis. Our distribution policy is set by our board of directors and is

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subject to change based on available cash flows. Distributions are made on all classes of our common stock at the same time. We normally expect that the accrual of ongoing fees on a class-specific basis will result in different amounts of distributions being paid with respect to certain classes of shares.

Since March 31, 2023, we have declared monthly distributions for each class of our common shares, which are generally paid 12 days after month-end. We have paid distributions consecutively each month since such time. Each class of our common shares received the same aggregate gross distribution per share, which was $0.0648 per share for the month ended December 31, 2025. The net distribution varies for each class based on the applicable distribution fee, which is deducted from the monthly distribution per share and paid directly to the applicable distributor. On October 1, 2023, Class FF shares became subject to an annual distribution fee of 0.50% per annum. Class AA shares are subject to an annual distribution fee of 0.50% per annum since issuance.

The following table details the net distributions for each of our outstanding share classes from inception through December 31, 2025:

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Date** | **Class F Shares** | **Class FF Shares** | **Class E Shares** | **Class AA Shares** | **Class A Shares** | **Class I-S Shares** |
| Inception through December 31, 2023 | $0.6143 | $0.4832 | $0.0633 | $— | $— | $— |
| January 31, 2024 | 0.0627 | 0.0582 | 0.0627 |  |  |  |
| February 29, 2024 | 0.0631 | 0.0589 | 0.0631 | 0.0588 |  |  |
| March 31, 2024 | 0.0629 | 0.0584 | 0.0629 | 0.0584 |  |  |
| April 30, 2024 | 0.0627 | 0.0583 | 0.0627 | 0.0583 |  |  |
| May 31, 2024 | 0.0628 | 0.0583 | 0.0628 | 0.0583 |  |  |
| June 30, 2024 | 0.0627 | 0.0583 | 0.0627 | 0.0583 |  |  |
| July 31, 2024 | 0.0624 | 0.0579 | 0.0624 | 0.0579 |  |  |
| August 30, 2024 | 0.0640 | 0.0594 | 0.0640 | 0.0594 | 0.0640 |  |
| September 30, 2024 | 0.0637 | 0.0593 | 0.0637 | 0.0593 | 0.0637 |  |
| October 31, 2024 | 0.0633 | 0.0587 | 0.0633 | 0.0587 | 0.0633 |  |
| November 30, 2024 | 0.0635 | 0.0591 | 0.0635 | 0.0591 | 0.0635 |  |
| December 31, 2024 | 0.0624 | 0.0579 | 0.0624 | 0.0579 | 0.0624 |  |
| January 31, 2025 | 0.0620 | 0.0575 | 0.0620 | 0.0575 | 0.0620 |  |
| February 28, 2025 | 0.0620 | 0.0580 | 0.0620 | 0.0580 | 0.0620 | 0.0620 |
| March 31, 2025 | 0.0617 | 0.0574 | 0.0617 | 0.0572 | 0.0617 | 0.0617 |
| April 30, 2025 | 0.0615 | 0.0572 | 0.0615 | 0.0572 | 0.0615 | 0.0615 |
| May 31, 2025 | 0.0618 | 0.0574 | 0.0618 | 0.0573 | 0.0618 | 0.0618 |
| June 30, 2025 | 0.0621 | 0.0578 | 0.0621 | 0.0578 | 0.0621 | 0.0621 |
| July 31, 2025 | 0.0620 | 0.0575 | 0.0620 | 0.0575 | 0.0620 | 0.0620 |
| August 31, 2025 | 0.0638 | 0.0592 | 0.0638 | 0.0592 | 0.0638 | 0.0638 |
| September 30, 2025 | 0.0638 | 0.0594 | 0.0638 | 0.0594 | 0.0638 | 0.0638 |
| October 31, 2025 | 0.0643 | 0.0597 | 0.0643 | 0.0597 | 0.0643 | 0.0643 |
| November 30, 2025 | 0.0645 | 0.0600 | 0.0645 | 0.0600 | 0.0645 | 0.0645 |
| December 31, 2025 | 0.0648 | 0.0601 | 0.0648 | 0.0602 | 0.0648 | 0.0648 |
| Total | $2.1248 | $1.8871 | $1.5738 | $1.3454 | $1.0712 | $0.6923 |

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For the years ended December 31, 2025 and 2024, we declared distributions in the amount of $27.6 million and $17.8 million, respectively. The following table outlines the tax character of our distributions paid in 2025 and 2024 as a percentage

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of total distributions. The distribution declared on December 31, 2025 was paid in January 2026 and is excluded from the analysis below as it will be a 2026 tax event.

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| | | | |
|:---|:---|:---|:---|
| | **Ordinary Income** | **Capital Gains** | **Return of Capital** |
| 2025 Tax Year | —% | —% | 100% |
| 2024 Tax Year | —% | —% | 100% |

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The following table details our net distributions declared for the years ended December 31, 2025 and 2024, respectively (amounts in thousands):

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Year Ended December 31, 2025** | **Year Ended December 31, 2025** | **Year Ended December 31, 2024** | **Year Ended December 31, 2024** |
| | **Amount** | **Percentage** | **Amount** | **Percentage** |
| **Distributions** | | | | |
| Payable in cash | $21943 | 79% | $14324 | 81% |
| Reinvested in shares | 5798 | 21% | 3468 | 19% |
| Total distributions | $27741 | 100% | $17792 | 100% |
| **Sources of Distributions** |  |  |  |  |
| Cash flows from operating activities<sup>(1)</sup> | $21604 | 78% | $17792 | 100% |
| Cash flows from other sources<sup>(2)</sup> | 6137 | 22% |  | —% |
| **Total Sources of Distributions** | $27741 | 100% | $17792 | 100% |
| Cash flows from operating activities | $21211 |  | $15827 |  |
| Funds from operations<sup>(3)</sup> | $19061 |  | $15790 |  |
| Adjusted funds from operations<sup>(3)</sup> | $17363 |  | $12112 |  |

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____________________________________________________

<sup>(1)</sup> Includes cash flows from operating activities since inception.

<sup>(2)</sup> Includes distributions reinvested in shares of our common stock through our distribution reinvestment plan and cash flows from investing activities, such as proceeds from sale of real estate.

<sup>(3)</sup> See "Funds from Operations, Adjusted Funds from Operations and Funds Available for Distribution" below for a description of Funds from Operations and Adjusted Funds from Operations, for reconciliations of these amounts to GAAP net loss attributable to SDREIT stockholders and for considerations on how to review these metrics.

Subsequent to December 31, 2025, we declared $5.2 million of distributions in cash and $1.3 million of distributions in shares under our distribution reinvestment plan.

There is no assurance we will pay distributions in any particular amount, if at all. We may fund any distributions from sources other than cash flow from operations, including, without limitation, the sale of or repayment of our assets, borrowings or offering proceeds, and we have no limits on the amounts we may pay from such sources.

**Funds from Operations, Adjusted Funds from Operations and Funds Available for Distribution**

Funds from operations ("FFO") is an operating measure defined by the National Association of Real Estate Investment Trusts ("NAREIT") that is broadly used in the REIT industry. FFO, as defined by NAREIT and presented below, is calculated as net income or loss (computed in accordance with GAAP), excluding (i) depreciation and amortization, (ii) impairment of investments in real estate, (iii) net gains or losses from sales of real estate, and (iv) similar adjustments for non-controlling interests and unconsolidated entities. We believe FFO is a meaningful non-GAAP supplemental measure of our operating results. Our consolidated financial statements are presented using historical cost accounting which, among other things, requires depreciation of real estate investments to be calculated on a straight-line basis. As a result, our operating results imply that the value of our real estate investments have decreased over time. However, we believe that the value of our real estate investments will fluctuate over time based on market conditions and, as such, depreciation under historical cost accounting may be less informative as a measure of our performance.

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We also believe that adjusted FFO ("AFFO") is an additional meaningful non-GAAP supplemental measure of our operating results. AFFO further adjusts FFO to reflect the performance of our portfolio by adjusting for items we believe are not directly attributable to our operations. Our adjustments to FFO to arrive at AFFO include removing the impact of (i) straight-line rental income and expense, (ii) deferred income amortization, (iii) amortization of above- and below-market lease intangibles, (iv) amortization of mortgage premium/discount, (v) unrealized gains or losses from changes in the fair value of real estate debt and other financial instruments, (vi) gains and losses resulting from foreign currency translations, (vii) non-cash performance participation allocation paid in shares or Operating Partnership units, even if repurchased by us, (viii) amortization of restricted stock awards, (ix) non-cash interest expense on affiliate line of credit paid in shares or Operating Partnership units, even if subsequently repurchased by us, (x) organizational costs, (xi) amortization of deferred financing costs, (xii) transaction fees, and (xiii) similar adjustments for non-controlling interests and unconsolidated entities.

We also believe that funds available for distribution ("FAD") is an additional meaningful non-GAAP supplemental measure of our operating results. FAD provides useful information for considering our operating results and certain other items relative to the amount of our distributions. Further, FAD is a metric, among others, that is considered by our board of directors and executive officers when determining the amount of our dividend to stockholders, and we believe is therefore meaningful to stockholders. FAD is calculated as AFFO adjusted for (i) management fees paid in shares or Operating Partnership units, even if subsequently repurchased by us, (ii) realized losses (gains) on financial instruments, (iii) recurring tenant improvements, leasing commissions, and other capital expenditures, (iv) distribution fees paid during the period, and (v) similar adjustments for non-controlling interests and unconsolidated entities. FAD is not indicative of cash available to fund our cash needs and does not represent cash flows from operating activities in accordance with GAAP, as FAD is adjusted for distribution fees and recurring tenant improvements, leasing commission, and other capital expenditures, which are not considered when determining cash flows from operations. Furthermore, FAD excludes (i) adjustments for working capital items and (ii) amortization of discounts and premiums on investments in real estate debt. Cash flows from operating activities in accordance with GAAP would generally be adjusted for such items.

FFO, AFFO, and FAD should not be considered more relevant or accurate than GAAP net income (loss) in evaluating our operating performance. In addition, FFO, AFFO, and FAD should not be considered as alternatives to net income (loss) as indications of our performance or as alternatives to cash flows from operating activities as indications of our liquidity, but rather should be reviewed in conjunction with these and other GAAP measurements. Further, FFO, AFFO, and FAD are not intended to be used as liquidity measures indicative of cash flow available to fund our cash needs, including our ability to make distributions to our stockholders. In addition, our methodology for calculating AFFO and FAD may differ from the methodologies employed by other companies to calculate the same or similar supplemental performance measures, and accordingly, our reported AFFO and FAD may not be comparable to the AFFO and FAD reported by other companies.

The following table presents a reconciliation of net income (loss) attributable to SDREIT stockholders to FFO, AFFO and FAD attributable to SDREIT stockholders for the years ended December 31, 2025 and 2024 (in thousands):

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| | | |
|:---|:---|:---|
|  | **Year Ended December 31, 2025** | **Year Ended December 31, 2024** |
| Net income (loss) attributable to SDREIT stockholders | $(2755) | $(5542) |
| Adjustments to arrive at FFO: |  |  |
| &nbsp;&nbsp;Depreciation and amortization | 21051 | 23079 |
| &nbsp;&nbsp;&nbsp;Gain on the sale of real estate | (491) | (34) |
| &nbsp;&nbsp;&nbsp;Impairment on investments in real estate | 2913 | 2553 |
| &nbsp;&nbsp;Amount attributable to non-controlling interests in the consolidated subsidiary for above adjustments | (1669) | (4286) |
| &nbsp;&nbsp;&nbsp;Unconsolidated entities depreciation and noncontrolling interests adjustments | 12 | 20 |
| FFO attributable to SDREIT stockholders | $19061 | $15790 |
| Adjustments to arrive at AFFO: |  |  |
| &nbsp;&nbsp;&nbsp;Straight-line rental income and expense | (833) | (549) |
| &nbsp;&nbsp;&nbsp;Amortization of above- and below-market lease intangibles | (5093) | (5500) |
| &nbsp;&nbsp;&nbsp;Amortization of discount on mortgage and other loans payable | 269 | 276 |
| &nbsp;&nbsp;&nbsp;Amortization of deferred financing fees - property level | 317 | 298 |

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| | | |
|:---|:---|:---|
|  | **Year Ended December 31, 2025** | **Year Ended December 31, 2024** |
| &nbsp;&nbsp;&nbsp;Amortization of restricted stock awards | 225 | 216 |
| &nbsp;&nbsp;&nbsp;Organizational costs and transaction costs | 457 | 364 |
| &nbsp;&nbsp;&nbsp;Origination fees | (605) |  |
| &nbsp;&nbsp;&nbsp;Non-cash performance participation allocation | 3940 |  |
| &nbsp;&nbsp;&nbsp;Unrealized (gains) losses from changes in the fair value of investments in real estate debt and other financial instruments | 926 | 218 |
| &nbsp;&nbsp;&nbsp;Paid-in-kind interest | (1562) |  |
| &nbsp;&nbsp;&nbsp;Amount attributable to unconsolidated entities for above adjustments | 258 | 7 |
| &nbsp;&nbsp;&nbsp;Amount attributable to non-controlling interests for above adjustments | 3 | 992 |
| AFFO attributable to SDREIT stockholders | $17363 | $12112 |
| &nbsp;&nbsp;&nbsp;Recurring tenant improvements and other capital expenditures | (111) | (235) |
| &nbsp;&nbsp;&nbsp;Management fee | 1980 | 1334 |
| &nbsp;&nbsp;&nbsp;Stockholder distribution fees paid | (588) | (382) |
| FAD attributable to SDREIT stockholders | $18644 | $12829 |

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**Unregistered Sales of Equity Securities**

During the year ended December 31, 2025, we sold equity securities that were not registered under the Securities Act as described below. During the year ended December 31, 2025, we issued 10,924 Class E units of the Operating Partnership to the Special Limited Partner pursuant to the distribution reinvestment plan. Such Class E units in the Operating Partnership may be redeemed by the holder for cash or Class E shares of common stock, at the holder's option. The offer and sale of these units were exempt from the registration provisions of the Securities Act of 1933, as amended, pursuant to Section 4(a)(2), Regulation D and/or Regulation S thereunder.

All other sales of unregistered securities during the year ended December 31, 2025 were previously reported in a Quarterly Report on Form 10-Q or a Current Report on Form 8-K.

**Share Repurchases**

Under our share repurchase plan, to the extent we choose to repurchase shares in any particular month, we will only repurchase shares as of the opening of the last calendar day of that month (each such date, a "Repurchase Date"). Repurchases will be made at the transaction price in effect on the Repurchase Date, except that shares that have not been outstanding for at least one year will be repurchased at 95% of the transaction price (an "Early Repurchase Deduction"). The Early Repurchase Deduction may only be waived in the case of repurchase requests arising from the death or qualified disability of the holder and in other limited circumstances. The Early Repurchase Deduction will not apply to shares acquired through our distribution reinvestment plan.

The total amount of aggregate repurchases of shares of our common stock will be limited during each calendar month to 2% of the aggregate NAV of all classes as of the last calendar day of the previous quarter and in each calendar quarter will be limited to 5% of the aggregate NAV of all classes of shares as of the last calendar day of the previous calendar quarter; provided, however, that every month and quarter each class of our common stock will be allocated capacity within such aggregate limit to allow stockholders in such class to either (a) redeem shares equal to at least 2% of the aggregate NAV of such share class as of the last calendar day of the previous quarter, or, if more limiting, (b) redeem shares over the course of a given quarter equal to at least 5% of the aggregate NAV of such share class as of the last calendar day of the previous quarter (collectively referred to herein as the "2% and 5% limits"). In the event that we repurchase some but not all of the shares submitted for repurchase during any month, shares repurchased at the end of the month will be repurchased on a pro rata basis. Repurchases and pro rata treatment, if necessary, will first be applied within the class-specific allocated capacity and then applied on an aggregate basis to the extent there is remaining capacity. For purposes of calculating the 2% and 5% limits, the repurchase price will be deemed to be the price before any Early Repurchase Deduction.

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Should repurchase requests, in our judgment, place an undue burden on our liquidity, adversely affect our operations or risk having an adverse impact on us, or should we otherwise determine that investing our liquid assets in real properties or other investments rather than repurchasing our shares is in our best interests, we may choose to repurchase fewer shares in any particular month than have been requested to be repurchased, or none at all. Further, our board of directors may make exceptions to, modify, suspend or terminate our share repurchase plan if in its reasonable judgment it deems such action to be in our best interest and the best interest of our stockholders.

If the transaction price for the applicable month is not made available by the tenth business day prior to the last business day of the month (or is changed after such date), then no repurchase requests will be accepted for such month and stockholders who wish to have their shares repurchased the following month must resubmit their repurchase requests. Material modifications, including any amendment to the 2% monthly or 5% quarterly limitations on repurchases, to and suspensions of the share repurchase plan will be promptly disclosed to stockholders via their financial representatives. In addition, we may determine to suspend the share repurchase plan due to regulatory changes, changes in law or if we become aware of undisclosed material information that we believe should be publicly disclosed before shares are repurchased. Our board of directors must affirmatively authorize the recommencement of the plan if it is suspended before stockholder requests will be considered again.

During the year ended December 31, 2025, we repurchased shares of our common stock under the share repurchase plan in the following amounts, which represented all of the share repurchase requests received for the same period.

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| | | | | |
|:---|:---|:---|:---|:---|
| **Month** | **Total Number of Shares Repurchased** <sup>(1)(2)</sup> | **Average Price per Share** | **Total Number of Share Repurchased as Part of Publicly Announced Plans or Programs** | **Maximum Number of Shares Pending Repurchase Pursuant to Publicly Announced Plans or Programs (1)** |
| January 2025<sup>(3)</sup> | 591694 | $10.67 | 591694 |  |
| February 2025 | 548558 | 10.65 | 548558 |  |
| March 2025 | 76616 | 10.47 | 76616 |  |
| April 2025 |  |  |  |  |
| May 2025 | 16319 | 10.48 | 16319 |  |
| June 2025 |  |  |  |  |
| July 2025 | 5263 | 10.52 | 5263 |  |
| August 2025 |  |  |  |  |
| September 2025 |  |  |  |  |
| October 2025 |  |  |  |  |
| November 2025 | 43113 | 10.90 | 43113 |  |
| December 2025 |  |  |  |  |
| Total | 1281563 | $10.65 | 1281563 |  |

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<sup>(1)</sup> Repurchases are limited under the share repurchase plan as described above.

<sup>(2)</sup> Share repurchases are funded through a combination of sales of our common stock and proceeds from asset dispositions.

<sup>(3)</sup> In January 2025, we received repurchase requests in excess of the 2% monthly limit. As per the terms of our share repurchase plan, we honored all repurchase requests for January 2025, up to the 2% monthly limitation. As such, approximately 57% of the stockholder's January repurchase request was satisfied. The remaining unsatisfied repurchase request was fully satisfied in February.

**ITEM 6. RESERVED**

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**ITEM 7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS**

*References herein to "Sculptor Diversified Real Estate Income Trust," "SDREIT," the "Company," "we," "us," or "our" refer to Sculptor Diversified Real Estate Income Trust, Inc., a Maryland corporation, and its subsidiaries including Sculptor Diversified REIT Operating Partnership LP, a Delaware limited partnership, which we refer to herein as the "Operating Partnership" unless the context specifically requires otherwise.*

*The following discussion should be read in conjunction with the consolidated financial statements and notes thereto appearing elsewhere in this Annual Report on Form 10-K. In addition to historical data, this discussion contains forward-looking statements about our business, operations and financial performance based on current expectations that involve risks, uncertainties and assumptions. Our actual results may differ materially from those in this discussion as a result of various factors, including but not limited to those discussed in Part 1 Item 1A - "Risk Factors" in this Annual Report on Form 10-K.*

**Forward-Looking Statements**

This Annual Report on Form 10-K contains forward-looking statements within the meaning of the federal securities laws and the Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by the use of forward-looking terminology such as "believe," "expect," "anticipate," "estimate," "plan," "continue," "intend," "should," "may" or similar expressions, or the negatives thereof. These may include our financial projections and estimates and their underlying assumptions, statements about plans, objectives and expectations with respect to future operations, statements with respect to acquisitions, statements regarding future performance and statements regarding identified but not yet closed acquisitions. Such forward-looking statements are inherently uncertain and there are or may be important factors that could cause actual outcomes or results to differ materially from those indicated in such statements. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this. Except as otherwise required by federal securities laws, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future developments or otherwise.

**Overview**

Sculptor Diversified Real Estate Income Trust invests primarily in stabilized income-generating commercial real estate across a variety of both traditional and non-traditional sectors in the U.S. and Europe, and to a lesser extent, invests in real estate related securities. The Company is the sole general partner and a limited partner of Sculptor Diversified REIT Operating Partnership LP (the "Operating Partnership"), and the Company owns substantially all of its assets through the Operating Partnership.

The Company was formed on February 11, 2022 ("Inception") as a Maryland corporation and has operated and elected to be treated as a real estate investment trust ("REIT") for U.S. federal income tax purposes commencing with the taxable year ended December 31, 2023. We generally are not subject to U.S. federal income taxes on our taxable income to the extent we annually distribute all of our net taxable income to stockholders and maintain our qualification as a REIT.

The Company and the Operating Partnership are externally managed by Sculptor Advisors LLC (in its capacity as our adviser, the "Adviser"), a Delaware limited liability company and a registered investment adviser. The Adviser is an affiliate of Sculptor Capital Management, Inc. (together with its affiliates, "Sculptor"). Sculptor Diversified REIT Special Limited Partner LP (the "Special Limited Partner"), an affiliate of the Adviser, owns a special limited partner interest in the Operating Partnership.

The Company's board of directors has at all times oversight and policy-making authority over the Company, including responsibility for governance, financial controls, compliance and disclosure. Pursuant to an advisory agreement, the Company has delegated to the Adviser the authority to source, evaluate and monitor the Company's investment opportunities and make decisions related to the acquisition, management, financing and disposition of the Company's assets, in accordance with the Company's investment objectives, guidelines, policies and limitations, subject to oversight by the Company's board of directors.

As of December 31, 2025, the Company's investments in real estate consisted of (a) through its wholly-owned subsidiary, CapGrow Holdings Member LLC (the "CapGrow Member"), a 93.38% controlling interest in CapGrow Holdings JV LLC ("CapGrow JV," and together with CapGrow Member, "CapGrow"), that owns a portfolio of primarily single-family homes leased to and operated by care providers that serve individuals with intellectual and developmental disabilities, (b) a 90.0%

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equity interest in a joint venture that owns University Courtyard, a 240-unit, 792-bed student housing property ("University Courtyard") located in Denton, Texas, (c) an 85.10% controlling interest in a joint venture that owns two parking garage properties located in Rochester, New York, and (d) a 100% equity interest in a 1.3 million square foot distribution center located in Marysville, Ohio (the "Marysville Property") that is 100% leased on a long-term basis to a wholly-owned subsidiary of a leading marketer of branded consumer lawn and garden care products listed on the NYSE.

On February 23, 2024, CapGrow, CapGrow's founder and CapGrow Neptune Investor LLC, an affiliate of Sculptor, formed a joint-venture, CapGrow Neptune JV LLC, and closed on the acquisition of a portfolio of 33 single-family residences and intermediate care facilities located in California and Minnesota. This investment is accounted under the equity method of accounting.

From time to time, the Company acquires or enters into interests in real estate debt, such as CMBS, loans, direct real estate loans, loan participations, and/or preferred equity investments. As of December 31, 2025, investments in real estate debt consisted of (i) an investment in preferred equity in the Veterinary Real Estate Company that owns 69 net-leased veterinary hospitals and clinics, (ii) a junior mortgage loan collateralized by a casino and hotel property located in Las Vegas, Nevada, (iii) a participation in a senior secured term loan issued to finance the acquisition of a 15-asset, 5,793-key resort portfolio located in Mexico, the Dominican Republic, and Jamaica, and (iv) investments in CMBS.

See "Investment Portfolio" below for additional information on these investments.

**Current Market Conditions and Related Risks and Opportunities**

The Company's business is materially affected by conditions in the financial markets and economic conditions in the U.S. and to a lesser extent, elsewhere in the world (including as a result the 2024 U.S. presidential and congressional elections and resulting uncertainties regarding actual and potential shifts in U.S. and foreign trade, economic, tax, and other policies, including with respect to treaties and tariffs). High interest rates and a reduction in the availability of financing, especially from banks, has led to greater spreads between the prices sought by sellers and buyers, which may adversely affect the value of our real estate assets. However, given that we are seeking to raise and invest substantial equity capital, we believe that market stresses could lead to attractive acquisition opportunities. While higher interest rates make financing more expensive, CapGrow has the benefit of having previously locked in all of its mortgage loans at favorable fixed interest rates, which represented approximately 63% of our total debt obligations. Also, we have a five-year interest rate protection agreement which caps University Courtyard's mortgage at a fixed interest rate of 3.56% through November 2028. The only variable rate loan that is indexed to SOFR is CapGrow's revolving credit facility, which had a balance of $13.1 million as of December 31, 2025. A 100 basis point increase or decrease in SOFR would have resulted in an increase or decrease in interest expense of $0.1 million during the year ended December 31, 2025. See "Liquidity and Capital Resources — Capital Resources" below. With respect to the Veterinary Real Estate Company, the Veterinary Real Estate Company has a senior loan facility with a variable rate loan that is indexed to SOFR. In general, higher interest rates will increase CapGrow's and the Veterinary Real Estate Company's financing costs associated with existing and newly acquired homes and facilities and are also likely to adversely affect the financial performance of CapGrow's and the Veterinary Real Estate Company's tenants, which could adversely affect our results of operation and financial condition. The senior loan ahead of our junior mortgage loan collateralized by the casino and hotel property is a variable rate loan. An increase in interest rates may limit the cash flow available to pay our junior mortgage loan.

High interest rates will also increase the federal government's interest payments and contribute to growing federal deficits, which deficits may lead to efforts to cut federal spending. Such efforts could result in lower Medicaid expenditures, on which CapGrow's lessees and tenants rely. In addition, inflation, which has been pronounced over the last three years, may result in higher general and administrative expenses for our Company and for our tenants. Insurance costs in certain markets have increased more than inflation due to property locations in high risk markets, increased claims due to natural disasters, higher property replacement costs, and fewer insurers serving high risk markets. Further, state and local governments may also look to increase real estate taxes and other related fees in order to offset lower revenues from other sources. While CapGrow's, the Veterinary Real Estate Company's and the Marysville Property's leases are triple net or modified net, high insurance costs and real estate taxes may result in higher overall occupancy expenses for tenants, as well as for the Company's assets for which the Company is responsible to pay these costs.

Changes in the presidential administration in the U.S, and changes in laws and regulations at both the federal and state level, may result in changes, reductions, or cancellation of government programs and fundings which may directly or indirectly impact CapGrow's tenants and lessees. Changes in the financing programs previously available through Freddie Mac for CapGrow may impact the availability and cost of future financings and refinancings. Changes in laws and regulations, both at

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the federal and state level, may impact the ownership of single family homes by institutional or corporate owners, including, without limitation, imposing limitations on future acquisitions by such owners, reducing the buyer market for single family home portfolios, and changing tax policies applicable to such owners. Government programs and fundings for universities and their students may also be changed, reduced, or cancelled which may directly or indirectly affect University Courtyard's tenants.

Investing in commercial real estate assets also involves certain risks, including but not limited to, tenants' inability to pay rent (whether due to property-specific factors, company-specific factors, sector-level issues, or broader macroeconomic conditions), increases in interest rates and lack of availability of financing, tenant turnover and vacancies and changes in supply of or demand for similar properties in a given market. Any negative changes in these factors could affect the Company's performance and our ability to meet our obligations and make distributions to stockholders.

**2025 Highlights**

***Operating Results***

• We declared monthly distributions totaling $27.6 million for the year ended December 31, 2025. During the year ended December 31, 2025, our investments produced operating earnings and distributions that contributed to our total return. The details of the annualized distribution rate and total returns are shown in the following table:

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **Class F** | **Class FF** | **Class E** | **Class AA** | **Class A** | **Class I-S** |
| First issuance date | 12/27/2022 | 5/1/2023 | 12/1/2023 | 2/1/2024 | 8/1/2024 | 2/1/2025 |
| Annualized Distribution Rate<sup>(1)</sup> | 6.98% | 6.58% | 6.85% | 6.62% | 7.20% | 7.23% |
| Year-to-Date Total Return, without upfront selling commissions<sup>(2)</sup> | 15.32% | 14.75% | 17.07% | 13.86% | 14.80% | 13.70% |
| Year-to-Date Total Return, assuming maximum upfront selling commissions<sup>(2)(3)</sup> | 13.02% | 12.45% | 17.07% | 11.58% | 12.51% | 11.43% |
| Inception-to-Date Total Return, without upfront selling commissions<sup>(2)</sup> | 11.75% | 10.26% | 11.58% | 9.26% | 10.32% | 13.70% |
| Inception-to-Date Total Return, assuming maximum upfront selling commissions<sup>(2)(3)</sup> | 11.00% | 9.44% | 11.58% | 8.11% | 8.76% | 11.43% |

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____________________________________________________________________________

<sup>(1)</sup>  The annualized distribution rate is calculated as the December 2025 distribution annualized and divided by the prior month's net asset value, which is inclusive of all fees and expenses.

<sup>(2)</sup>  Total return is calculated as the change in NAV per share during the respective periods plus any distributions per share declared in the period and assumes any distributions are reinvested in accordance with our distribution reinvestment plan. Total return for periods greater than one year are annualized.

<sup>(3)</sup>  There were no actual selling commissions charged in respect of the Class F, Class A, Class I-S and E shares. No upfront selling commissions were assumed for Class E shares.

***Investments***

• We acquired 91 vacant homes through CapGrow at an aggregate purchase price of $38.1 million during the year ended December 31, 2025, which were leased to tenants following their acquisition.

• We sold 44 CapGrow homes for aggregate net proceeds of $12.3 million during the year ended December 31, 2025.

• In October 2025, we acquired a 1.3 million square foot distribution center in Marysville, Ohio with a total purchase price of approximately $123.0 million, including transaction costs.

• During the year ended December 31, 2025, we invested $35.3 million in CMBS.

***Capital and Financing Activity***

• During the year ended December 31, 2025, we raised an aggregate of $179.6 million of gross proceeds from the sale of our common shares, including proceeds from our distribution reinvestment plan, and repurchased common shares of $13.7 million.

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• During the year ended December 31, 2025, CapGrow drew down on its revolving credit facility to fund asset acquisitions and then refinanced it with long-term debt, resulting in a net repayment of $5.1 million.

• CapGrow repaid $14.2 million of its existing mortgage loans and obtained a new mortgage loan of $35.6 million as part of the refinancing of its revolving credit facility during the year ended December 31, 2025.

• The acquisition of the Marysville Property was partly funded through a five-year mortgage loan of $76.3 million.

**Subsequent Event Highlights**

• Subsequent to December 31, 2025, we raised aggregate gross proceeds of $96.7 million from the sale of our common shares and repurchased $13.3 million of our common shares.

• On January 14, 2026, we closed on a $65.0 million financing facility (the "Facility") to an operator of equestrian show venues. The Facility consists of (i) $40.0 million of senior financing, (ii) $25.0 million of preferred equity, (iii) a $5.0 million revolver for future draw down, and (iv) a $10.0 million delayed-draw term loan, which can only be drawn at our sole discretion. As of March 26, 2026, $2.1 million has been drawn under the revolving credit facility.

• To fund the closing of the Facility, we entered into a $7.0 million loan agreement with our Adviser on January 14, 2026 and paid back the amount with interest of $26.4 thousand in full on February 3, 2026.

• On February 27, 2026, the Company entered into an agreement to acquire the JW Marriott Marco Island Beach Resort and related assets in Florida for $835.0 million in cash, subject to customary prorations and closing adjustments. In connection with the transaction, the Company made nonrefundable deposits totaling $5.2 million. The transaction is expected to close by May 1, 2026, subject to extension as provided in the purchase agreement and the satisfaction or waiver of customary closing conditions, and will be funded with offering proceeds and third-party financing.

• On March 26, 2026 the Company, through a joint venture in which it holds a 98% ownership interest, closed on the acquisition of a 313,618 square foot industrial facility located in Detroit, Michigan for a purchase price of approximately $26.0 million, excluding closing costs. The property is leased on a long-term, triple-net basis to a subsidiary of a global steel producer, with a remaining lease term through December 2036. The acquisition was financed with approximately and $9.1 million of equity and $16.9 million of third-party debt .

**Investment Portfolio**

*Summary of Portfolio*

*Investments in Real Estate*

The following table provides a summary of our portfolio as of December 31, 2025:

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **Property Type** | **Number of Properties** <sup>(1)</sup> | **Sq. Feet / Units/ Beds / Homes** | **Occupancy Rate**<sup>(2)</sup> | **Average Effective Annual Base Rent Per Leased Square Foot/Units/Key**<sup>(3)</sup> | **Gross Asset Value ($ in thousands)** <sup>(4)</sup> | **Segment Revenue ($ in thousands)**<sup>(5)</sup> | **Percentage of Total Segment Revenue** |
| Residential (Business)<sup>(6)</sup> | N/A | 1,125 units | 98% | $29852 | $554000 | $39924 | 79% |
| Student Housing | 1 | 792 beds | 74% | $7703 | 71400 | 7084 | 14% |
| Commercial Properties | 2 | 564,990 sq ft | 100% | $2.11 | 11700 | 1052 | 2% |
| Industrial Properties | 1 | 1,280,496 sq ft | 100% | $6.11 | 139800 | 2359 | 5% |
| Total | 4 |  |  |  | $776900 | $50419 | 100% |

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<sup>(1)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Single family homes are accounted for in the number of units and are not reflected in the number of properties.

<sup>(2)</sup> &nbsp;&nbsp;&nbsp;&nbsp;For single family rental properties, occupancy is defined as the percentage of occupied homes as of December 31, 2025. For student housing, occupancy is defined as the percentage of occupied beds as of December 31, 2025. The two parking garages included under the commercial properties have leases in place with a national parking operator and the distribution center under Industrial Properties is 100% leased to a single tenant.

<sup>(3)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Average effective annual base rent represents the annual base rent for the year ended December 31, 2025 per leased unit, bed, or square foot, and excludes tenant recoveries, straight line rent, variable rent, and above-market and below-market lease amortization.

<sup>(4)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Based on fair value as of December 31, 2025.

<sup>(5)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Segment revenue is presented for the year ended December 31, 2025.

<sup>(6)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Under the business combination, CapGrow was acquired as a business. CapGrow owns primarily single family homes across the United States with a total square footage of 2.6 million.

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The following table provides additional information regarding our portfolio of real estate as of December 31, 2025:

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Segment and Investment** | **Number of Properties** | **Location** | **Acquisition Date(s)** | **Ownership Interest**<sup>(1)</sup> | **Purchase Price ($ in thousands)** | **Sq. Feet / Units/ Beds / Homes/ Square Feet** |
| <u>Business:</u> |  |  |  |  |  |  |
| CapGrow<sup>(2)</sup> | N/A | Various | January, July and October 2023 and December 2024 | 93.38% | 455000 | 1,125 units |
| <u>Student Housing:</u> |  |  |  |  |  |  |
| University Courtyard | 1 | Texas | October 2023 | 90.00% | 58000 | 792 beds |
| <u>Commercial Properties:</u> |  |  |  |  |  |  |
| Rochester garages | 2 | New York | March 2025 | 85.10% | 8500 | 564,990 sq ft |
| <u>Industrial Properties:</u> |  |  |  |  |  |  |
| Marysville Property | 1 | Ohio | October 2025 | 100.00% | 122982 | 1,280,496 sq ft |
| Total | 4 |  |  |  | $644482 |  |

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______________________________________________

<sup>(1)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Ownership interest as December 31, 2025. Certain of the joint venture agreements entered into by us provide the other partner a profits interest based on certain internal rate of return hurdles being achieved. Such investments are consolidated by us and any interests due to the other partner will be reported within non-controlling interests in consolidated joint ventures on our consolidated balance sheets.

<sup>(2)</sup> &nbsp;&nbsp;&nbsp;&nbsp;Purchase price represents the total enterprise value at the initial acquisition date of January 4, 2023.

*Lease Expirations*

The following table details the expiring leases at our real estate properties by annualized base rent and square footage as of December 31, 2025 (amounts and square feet data in thousands). The table below excludes our student housing and parking garage properties as substantially all of their leases expire within 12 months:

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Year** | **Number of Expiring Leases** | **Annualized Base Rent**<sup>(1)</sup> | **% of Total Annualized Base Rent Expiring** | **Square Feet** | **% of Total Square Feet Expiring** |
| 2026 | 152 | $4409 | 10% | 382 | 10% |
| 2027 | 489 | 13174 | 28% | 983 | 26% |
| 2028 | 87 | 3392 | 7% | 207 | 5% |
| 2029 | 113 | 3266 | 7% | 228 | 6% |
| 2030 | 182 | 5250 | 11% | 389 | 10% |
| 2031 | 36 | 1920 | 4% | 138 | 4% |
| 2032 | 24 | 2597 | 5% | 151 | 4% |
| 2033 | 3 | 94 | —% | 8 | —% |
| 2034 | 14 | 931 | 2% | 52 | 1% |
| 2035 | 6 | 579 | 1% | 30 | 1% |
| Thereafter | 1 | 11834 | 25% | 1280 | 33% |
| Total | 1107 | $47446 | 100% | 3848 | 100% |

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______________________________________________________

<sup>(1)</sup> Annualized base rent represents the amount of lease revenue that our portfolio would have generated in monthly contractual rent under existing leases as of December 31, 2025 multiplied by 12. The Company had not entered into any tenant concessions or rent abatements as of December 31, 2025. Amount excludes tenant recoveries, straight-line rent, and above-market and below-market lease amortization.

***Tenant Concentration in CapGrow***

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While CapGrow currently leases properties to 48 different care providers, there are two that each represent more than 5% of the Company's total rental income, and collectively, the leases on the properties with these tenants contributed approximately 45% of the Company's rental income for the year ended December 31, 2025. National Mentor Holdings, Inc., a Delaware corporation doing business as "Sevita," is the largest home-based care provider serving individuals with intellectual and developmental disabilities in the country. As of December 31, 2025, there are 49 separate subsidiaries of Sevita that have leased 519 of CapGrow's properties, none of which contain cross-default provisions within the leases. Such leases in the aggregate represent approximately 38% of the Company's rental income for the year ended December 31, 2025, and 26% of the Company's total assets as of December 31, 2025. Although Sevita is not a party to these leases, Sevita has entered into separate guarantees with respect to leases by its subsidiaries for 433 of CapGrow's properties, which represents approximately 32% of the Company's rental income for the year ended December 31, 2025, and 22% of the Company's total assets as of December 31, 2025. Accordingly, Sevita has guaranteed a significant concentration of our revenue. Sufficiently adverse developments with respect to the business of such subsidiaries and/or Sevita that result in them not being able to honor their lease obligations, or such that Sevita could not honor its many separate guarantees, would likely have a greater adverse impact on our results of operation and financial condition than would otherwise be the case without this concentration of risk.

Sevita's audited financial statements for its fiscal year ended September 30, 2025 and 2024 are available at Exhibit 99.1 to this Annual Report on Form 10-K. We rely on certain third parties (including Sevita) to provide us with accurate financial statements and other financial information necessary for our financial reporting and compliance obligations. We did not independently verify the financial information provided to us by Sevita. There is a risk that we may not receive such financial information from these third parties in a timely manner, or at all, in the next fiscal year. Any failure by these third parties to provide the required accurate financial information could delay our ability to meet our financial reporting obligations, hinder our decision-making processes, and impair our ability to provide accurate and timely disclosures to our investors. In such circumstances, we may also be unable to accurately assess our financial position or results of operations, which could result in negative consequences for our business, including potential regulatory actions or harm to our reputation.

Generally, there are individual leases on each owned property, so the risk of an individual lease expiring or otherwise being terminated would not have a significant impact on CapGrow's business or the overall revenues earned by the Company. Additionally, CapGrow has experienced a very strong lease renewal rate with its tenants renewing 82% of expiring leases cumulatively from 2012 through December 31, 2025. When assessing the financial position of a tenant, the Company is focused on the ability of the tenant to make rental payments underlying the lease. For existing tenants, this includes their track record of making timely payments, their source of funding (e.g., Medicaid), and to a lesser extent, information that can be gleaned from a review of their financial statements. Much of the tenant credit risk is mitigated since the payor stream is principally derived through Medicaid waivers. We believe that Medicaid's involvement in the payor stream has contributed to a long-term and consistent collection record of rent payments, with CapGrow experiencing no defaults by any of our four largest tenants. Moreover, even if a default occurred, CapGrow's experience suggests that states would generally find a new provider for those in our homes rather than displace the residents.

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*Investments in Real Estate Debt*

The following table details our investments in real estate debt as of December 31, 2025 (in thousands):

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | | | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** |
| |<br>**Coupon** |<br>**Maturity Date** | **Face Amount** | **Cost Basis** | **Fair Value** |
| Preferred equity<sup>(1)</sup> | 12.25%<sup>(2)</sup> | N/A<sup>(3)</sup> | $36562 | $36562 | $36562 |
| Junior mortgage loan | 1M Term SOFR + 7.50%<sup>(4)</sup> | May 5, 2030 | 17000 | 17000 | 17000 |
| Senior secured term loan | 3M Term SOFR + 3.25% | December 2032 | 5000 | 4975 | 4944 |
| CMBS - floating | 1M Term SOFR + 2.941% | January 2030 | 8000 | 7980 | 8040 |
| CMBS - floating | 1M Term SOFR + 4.00% | August 2030 | 2500 | 2500 | 2501 |
| CMBS - floating | 1M Term TSFR + 2.89% | March 2039 | 5000 | 5034 | 5027 |
| CMBS - floating | 1M Term TSFR +3.10% | December 2030 | 21500 | 21500 | 21500 |
| CMBS - floating | 1M Term TSFR + 4.50% | December 2030 | 6281 | 6281 | 6281 |
|  |  |  | $101843 | $101832 | $101855 |

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_______________________________________

<sup>(1)</sup> Investment in preferred equity includes original stated balance of $35.0 million plus paid-in-kind interest as of December 31, 2025.

<sup>(2)</sup> Interest accrues monthly with a current pay rate of 7.00% and a deferred interest rate of 5.25% through March 2030, after which the current pay rate increases to 12.00% and the deferred interest rate remains at 5.25% until the preferred units are fully redeemed, including accrued interest.

<sup>(3)</sup> The Company's preferred equity investment does not contain a stated maturity date. The Company has the right to cause the issuer to market and sell assets sufficient to redeem all remaining preferred units, including accrued interest, beginning in March 2031.

<sup>(4)</sup> Interest accrues monthly at a rate of adjusted 1M Term SOFR + 7.50% with an adjusted 1M Term SOFR floor of 3.00%.

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**Results of Operations**

The following table sets forth information regarding the condensed consolidated results of operations for the years ended December 31, 2025 and 2024 (amounts in thousands):

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| | | | |
|:---|:---|:---|:---|
| | **Year Ended December 31, 2025** | **Year Ended December 31, 2024** | **Change** |
| **Revenues** | | | |
| Rental revenue | $48745 | $44468 | $4277 |
| Other revenue | 1673 | 1539 | 134 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total revenues | 50418 | 46007 | 4411 |
| **Expenses** |  |  |  |
| Property operating expenses | 5854 | 4333 | 1521 |
| Management fees | 1980 | 1334 | 646 |
| Performance participation allocation | 3940 |  | 3940 |
| General and administrative | 9889 | 7881 | 2008 |
| Depreciation and amortization | 21051 | 23079 | (2028) |
| &nbsp;&nbsp;&nbsp;&nbsp;Total expenses | 42714 | 36627 | 6087 |
| Operating income | 7704 | 9380 | (1676) |
| **Other income (expense):** |  |  |  |
| Interest expense, net | (13724) | (12095) | (1629) |
| Impairment of investments in real estate | (2913) | (2553) | (360) |
| Income from investments in real estate debt, net | 6461 |  | 6461 |
| Income (loss) from an unconsolidated entity | 115 | 46 | 69 |
| Unrealized gain (loss) on derivative instruments | (945) | (223) | (722) |
| Gain (loss) on sale of real estate | 491 | 34 | 457 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total other income (expense) | (10515) | (14791) | 4276 |
| **Net income (loss)**  | $(2811) | $(5411) | $2600 |
| Net (income) loss attributable to non-controlling interest in the consolidated subsidiaries | 72 | (164) |  |
| Net (income) loss attributable to non-controlling interest in the Operating Partnership | (16) | 33 |  |
| **Net income (loss) attributable to SDREIT stockholders** | $(2755) | $(5542) |  |
| **Net income (loss) per common share - basic and diluted** | $(0.07) | $(0.23) |  |
| **Weighted-average common shares outstanding - basic and diluted** | 37297160 | 23940780 |  |

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***Rental Revenue***

Rental revenue from property operations increased by $4.3 million, from $44.5 million during the year ended December 31, 2024 to $48.7 million during the year ended December 31, 2025, which was primarily due to the acquisitions of the parking garages in March 2025 and the Marysville Property in October 2025, which generated rental income of $1.1 million and $2.2

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million, respectively in 2025. In addition, rental income at CapGrow increased $1.5 million due to more properties added to the portfolio, partially offset by a decrease in rental income from University Courtyard as a result of decreased occupancy.

***Other Revenue***

***Property Operating Expenses***

Property operating expenses increased by $1.5 million, from $4.3 million during the year ended December 31, 2024 to $5.9 million during the year ended December 31, 2025, primarily due to the increase in repair and maintenance expenses at CapGrow and the acquisitions of the parking garages and the Marysville Property in 2025.

***Management Fees***

Management fees increased by $0.6 million from $1.3 million during the year ended December 31, 2024 to $2.0 million for the year ended December 31, 2025. The increase was due to the increase in net asset value partly driven by the appreciation of CapGrow and the acquisition and subsequent appreciation of the Marysville Property and the capital raised in 2025.

***Performance Participation Allocation***

During the year ended December 31, 2025, we accrued participation allocation of $3.9 million of which the Company issued Class E units to the Special Limited Partner in January 2026 as payment of the amount accrued as of December 31, 2025. There was no such performance participation allocation as of December 31, 2024 as a result of the performance metrics that would result in a performance participation allocation not being met.

***General and Administrative Expenses***

General and administrative expenses increased by $2.0 million from $7.9 million during the year ended December 31, 2024 to $9.9 million during the year ended December 31, 2025 which was primarily due to the accrual of a performance bonus for employees at a wholly-owned subsidiary of CapGrow JV and CapGrow's increases in (i) payroll, primarily due to increased headcount, and (ii) professional fees.

***Depreciation and Amortization***

Depreciation and amortization expenses decreased by $2.0 million from $23.1 million during the year ended December 31, 2024 to $21.1 million during the year ended December 31, 2025 primarily due to the in-place lease intangibles we acquired as part of the acquisition of University Courtyard being fully amortized in June 2024. This was partially offset by the depreciation associated with the acquisitions of the parking garages and the Marysville Property in 2025 and an increase in depreciation and amortization expense at CapGrow due to new properties acquired and increased leasing activities.

***Interest Expense, net***

Interest expense, net increased by $1.6 million from $12.1 million during the year ended December 31, 2024 to $13.7 million during the year ended December 31, 2025 primarily due to (i) a prepayment penalty and higher interest expense at CapGrow due to the draw down of its revolving line of credit during the year for property acquisitions and (ii) interest expense associated with the acquisition of the Marysville Property that was partly financed through debt. Interest expense is net of interest income earned on cash on hand that was invested in a money market fund throughout the year.

***Impairment of Investments in Real Estate***

Impairment of investments in real estate increased $0.4 million from $2.6 million during the year ended December 31, 2024 to $2.9 million during the year ended December 31, 2025. These impairments relate to the write down of impaired vacant assets, held for sale assets, and assets sold. It is part of CapGrow's normal business operations to sell a property when a tenant vacates and no immediate replacement tenant is expected, at which time impairment is evaluated.

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***Income from Investments in Real Estate Debt, net***

During the year ended December 31, 2025, we recognized income from our investment in real estate debt of $6.5 million due to the investments in (i) CMBS throughout 2025, (ii) the preferred equity in a private real estate company in March 2025 and (iii) a junior mortgage loan collateralized by a casino and hotel property in May 2025.

***Unrealized Gain (Loss) on Derivative Instruments***

Unrealized loss of $0.9 million and $0.2 million on derivative instruments for the years ended December 31, 2025 and 2024, respectively, pertained to University Courtyard's fair value adjustments relating to its interest rate cap.

***Gain (Loss) on Sale of Real Estate***

Gain on sale of real estate increased $0.5 million from $34 thousand during the year ended December 31, 2024 to $0.5 million for the year ended December 31, 2025 as CapGrow sold several of its properties at a gain during the year ended December 31, 2025 as compared to one property sold at a gain during the year ended December 31, 2024.

**Liquidity and Capital Resources**

***Liquidity***

We believe we have sufficient liquidity to operate our business, with $37.6 million of immediate liquidity as of December 31, 2025, which is comprised of cash and cash equivalents, including certain amounts held in anticipation of the closing of the Facility to an equestrian show operator. Aside from cash flows from operations, we obtain incremental liquidity through the sale of our common shares. We may incur indebtedness secured by our real estate and real estate debt investments, borrow money through unsecured financings, or incur other forms of indebtedness. We may also generate incremental liquidity through the sale of our real estate and real estate debt investments.

Our primary liquidity needs are to fund our investments, make distributions to our stockholders, repurchase common shares pursuant to our share repurchase plan, pay operating expenses, fund capital expenditures, and repay indebtedness. Our operating expenses include, among other things, the management fee we pay to the Adviser and the performance participation allocation that the Operating Partnership pays to the Special Limited Partner, both of which will impact our liquidity to the extent the Adviser or the Special Limited Partner elect to receive such payments in cash, or subsequently redeem shares of our common stock or units in the Operating Partnership previously issued to them.

Our cash needs for acquisitions and other capital investments are expected to be funded primarily from the sale of common stock and through the incurrence or assumption of debt. Other potential future sources of capital include proceeds from the sale of assets. If necessary, we may use financings or other sources of capital in the event of unforeseen significant capital expenditures.

***Capital Resources***

As of December 31, 2025, our indebtedness included loans secured by our properties, our credit facility and a financing obligation. The following table is a summary of our indebtedness as of December 31, 2025 (amount in thousands):

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| | | | | |
|:---|:---|:---|:---|:---|
| **Indebtedness** | **Weighted Average Interest Rate**  | **Weighted Average Maturity Date**<sup>(1)</sup> | **Maximum Facility Size** | **Principal Balance Outstanding** |
| Mortgages and other loans payable<sup>(2)</sup> | 4.92% | October 2031 | N/A | $327304 |
| Revolving credit facility<sup>(3)</sup> | 7.81% | February 2027 | $50000 | 13133 |
| Financing obligations<sup>(4)</sup> |  |  |  | 23198 |
| Discount and deferred financing costs, net |  |  |  | (4383) |
| Total indebtedness |  |  |  | $359252 |

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(1) &nbsp;&nbsp;&nbsp;&nbsp;For loans where the Company, at its sole discretion, has extension options, the maximum maturity date has been assumed.

(2) &nbsp;&nbsp;&nbsp;&nbsp;Mortgages and other loans payable bear varying fixed rates, including the effect of applicable interest rate caps, and maturities ranging from January 2026 through January 2039. There were no extension options for any of our loans.

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(3) &nbsp;&nbsp;&nbsp;&nbsp;The revolving credit facility bears interest equal to 1M Term SOFR plus 3.50% per annum and matures in February 2027. The weighted average interest rate for the revolving credit facility for the year ended December 31, 2025 was 7.81%.

(4) &nbsp;&nbsp;&nbsp;&nbsp;This financing obligation is related to the sale and leaseback transaction of University Courtyard, which is accounted for as a failed sale and leaseback transaction because the lease is classified as a finance lease. Accordingly, the underlying land is still included in the investments in real estate in the condensed consolidated balance sheets and the proceeds from the sale are accounted for as a financing obligation. The rental payment under the lease will be allocated between interest expense and principal repayment of the financing obligation using the effective interest method and amortize over the 99-yeaar lease term. The total principal payments will not exceed the difference between the gross proceeds from the sale of $23.2 million and the initial carrying value of the land of $4.1 million, resulting in maximum principal payments of $19.1 million.

In March 2023, we commenced the offering of our shares through a continuous private placement offering pursuant to the exemption from registration provided by Section 4(a)(2) of the Securities Act, and Regulation D promulgated thereunder, and other exemptions of similar import in the laws of the states and other jurisdictions where the offering is being made. Our Class A, Class AA, Class D, Class E, Class F, Class I, Class S, and Class I-S shares are generally available for issuance in our private offering. Our Class E shares are only expected to be held by Sculptor, its personnel, and affiliates. Our Class FF shares are now only available pursuant to our distribution reinvestment plan.

As of December 31, 2025, we have received net proceeds of 332.9 million including proceeds from our distribution reinvestment plan, from issuing an aggregate of 6,517,021 Class F common shares, 6,590,670 Class FF common shares, 7,026,882 Class AA shares, 1,745,168 Class A shares, 51,051 Class I-S common shares and 8,998,204 Class E common shares in the private offering. This is in addition to the $150.2 million raised from the sale of 15,023,972 Class F common shares (including reinvestment of distributions) in private transactions that preceded this offering. Additionally, as of December 31, 2025, we have issued an aggregate 5.3 million, or 485,182 of Class E common shares, inclusive of shares issued to our independent directors under the terms of the independent director compensation plan, to our Advisor as payment of management fees, and to an employee of Sculptor who purchased such shares.

As of December 31, 2025, we have repurchased 1,030,382 Class F common shares, 245,011 Class FF common shares and 15,629 Class AA common shares totaling $13.8 million.

**Cash Flows**

***Years Ended December 31, 2025 and 2024 (in thousands):***

---

| | | | |
|:---|:---|:---|:---|
|  | **Year Ended December 31, 2025** | **Year Ended December 31, 2024** | **Difference** |
| Cash flows provided by operating activities | $21211 | 15827 | $5384 |
| Cash flows used in investing activities | (245908) | (23901) | (222007) |
| Cash flows provided by financing activities | 248207 | 39812 | 208395 |
| Net change in cash and cash equivalents and restricted cash | $23510 | $31738 | $(8228) |

---

Cash flows provided by operating activities increased $5.4 million from the year ended December 31, 2024, primarily due to improved operating results during the year ended December 31, 2025.

Cash flows used in investing activities increased by $222.0 million from the year ended December 31, 2024, primarily due to the acquisitions of real estate properties and investments in real estate debt totaling totaling $256.9 million during the year ended December 31, 2025 as compared to $23.5 million incurred in the prior year.

Cash flows provided by financing activities increased by approximately $208.4 million from the year ended December 31, 2024, primarily due to (i) more proceeds from stock issuances, partially offset by higher repurchases of our common stock and distributions to stockholders, and (ii) increased net borrowings at CapGrow to fund property acquisitions during the year ended December 31, 2025.

**Recent Accounting Pronouncements**

See Note 2 — "Summary of Significant Accounting Policies" to our consolidated financial statements in this Annual Report on Form 10-K for a discussion concerning recent accounting pronouncements.

------

**Critical Accounting Estimates** 

The preparation of the consolidated financial statements in accordance with GAAP involve significant judgments and assumptions and require estimates about matters that are inherently uncertain. These judgments will affect our 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 consolidated financial statements. The following is a summary of our significant accounting policies that we believe are the most affected by our judgments, estimates, and assumptions. See Note 2 to our consolidated financial statements for further descriptions of the below accounting policies.

***Investments in Real Estate***

We may acquire assets that will qualify as either asset acquisitions or business combinations pursuant to ASC 805. Upon the acquisition of a property, we assess the fair value of the acquired tangible and intangible assets (including land, buildings, tenant improvements, "above-market" and "below-market" leases, acquired in-place leases, other identified intangible assets and assumed liabilities) and we allocate the purchase price to the acquired assets and assumed liabilities, on a relative fair value basis. The most significant portion of the allocation is to building, land, and intangibles and requires the use of market based estimates and assumptions. We assess and consider fair value based on estimated cash flow projections that utilize appropriate discount and/or capitalization rates, as well as other available market information. Estimates of future cash flows are based on a number of factors including the historical operating results, known and anticipated trends, and market and economic conditions.

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

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

***Impairment of Investments in Real Estate***

We review real estate properties for impairment each quarter or when there is an event or change in circumstances that indicates an impaired value. If the carrying amount of the real estate investment is no longer recoverable and exceeds the fair value of such investment, an impairment loss is recognized. The impairment loss is recognized based on the excess of the carrying amount of the asset over its fair value. The evaluation of anticipated future cash flows is highly subjective and is based in part on assumptions regarding future occupancy, rental rates and capital requirements that could differ materially from actual results. Since cash flows on real estate properties considered to be "long-lived assets to be held and used" are considered on an undiscounted basis to determine whether an asset has been impaired, our strategy of holding properties over the long term directly decreases the likelihood of recording an impairment loss. If our strategy changes or market conditions otherwise dictate an earlier sale date, an impairment loss may be recognized, and such loss could be material to our results. If we determine that an impairment has occurred, the affected assets must be reduced to their fair value.

**Off-Balance Sheet Arrangements**

We currently have no off-balance sheet arrangements that are reasonably likely to have a material current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

------

**Commitments and Contingencies** 

The following table aggregates our contractual obligations and commitments with payments due subsequent to December 31, 2025 (in thousands).

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Total** | **Less than 1 year** | **1-3 years** | **3-5 years** | **More than 5 years** |
| Indebtedness <sup>(1)</sup> | $359578 | $8477 | $41934 | $205285 | $103882 |
| Organization and offering costs<sup>(2)</sup> | 2233 | 687 | 1374 | 172 |  |
| Total | $361811 | $9164 | $43308 | $205457 | $103882 |

---

______________________________________________

(1)&nbsp;&nbsp;&nbsp;&nbsp;Loan maturities are based on the contractual maturity dates.

(2)&nbsp;&nbsp;&nbsp;&nbsp;Amounts owed to our Adviser as of December 31, 2025.

**Emerging Growth Company Status** 

We will be and we will remain an "emerging growth company" as defined in the JOBS Act until the earlier of (a) the last day of the fiscal year (i) following the fifth anniversary of the date of an initial public offering pursuant to an effective registration statement under the Securities Act, (ii) in which we have total annual gross revenue of at least $1.235 billion, or (iii) in which we are deemed to be a large accelerated filer, which means the market value of our shares that is held by non-affiliates exceeds $700 million as of the date of our most recently completed second fiscal quarter, and (b) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period. For so long as we remain an "emerging growth company" we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not "emerging growth companies" including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act.

In addition, Section 107 of the JOBS Act also provides that an "emerging growth company" can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an "emerging growth company" can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to opt out of this transition period and will therefore comply with new or revised accounting standards on the applicable dates on which the adoption of these standards is required for non-emerging growth companies.

**ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**

For quantitative and qualitative disclosure about market risk, see Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operation - Current Market Conditions and Related Risks and Opportunities" in this Annual Report on Form 10-K for the year ended December 31, 2025 for the Company. Our exposures to market risk have not changed materially since December 31, 2025.

------

**ITEM 8. &nbsp;&nbsp;&nbsp;&nbsp;FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA**

**INDEX TO CONSOLIDATED FINANCIAL STATEMENTS**

---

| | |
|:---|:---|
| **Consolidated Financial Statements:** | |
| <u>[Report of Independent Registered Public Accounting Firm](#i478720b2ac764c71ac103cbc4f0d8ad6_139)</u> PCAOB ID: 42 | <u>[90](#i478720b2ac764c71ac103cbc4f0d8ad6_139)</u> |
| <u>[Consolidated Balance Sheets](#i478720b2ac764c71ac103cbc4f0d8ad6_148)[as of December 31, 202](#i478720b2ac764c71ac103cbc4f0d8ad6_148)[5](#i478720b2ac764c71ac103cbc4f0d8ad6_148)[and 20](#i478720b2ac764c71ac103cbc4f0d8ad6_148)[24](#i478720b2ac764c71ac103cbc4f0d8ad6_148)</u> | <u>[91](#i478720b2ac764c71ac103cbc4f0d8ad6_148)</u> |
| <u>[Consolidated Statements of Operations](#i478720b2ac764c71ac103cbc4f0d8ad6_151)[for the](#i478720b2ac764c71ac103cbc4f0d8ad6_151)[year](#i478720b2ac764c71ac103cbc4f0d8ad6_151)[s](#i478720b2ac764c71ac103cbc4f0d8ad6_151)[ended](#i478720b2ac764c71ac103cbc4f0d8ad6_151)[December 31, 202](#i478720b2ac764c71ac103cbc4f0d8ad6_151)[5](#i478720b2ac764c71ac103cbc4f0d8ad6_151)[and](#i478720b2ac764c71ac103cbc4f0d8ad6_151)[2024](#i478720b2ac764c71ac103cbc4f0d8ad6_151)</u> | <u>[89](#i478720b2ac764c71ac103cbc4f0d8ad6_151)</u> |
| <u>[Consolidated Statements of Equity](#i478720b2ac764c71ac103cbc4f0d8ad6_154)[for the](#i478720b2ac764c71ac103cbc4f0d8ad6_154)[year](#i478720b2ac764c71ac103cbc4f0d8ad6_154)[s](#i478720b2ac764c71ac103cbc4f0d8ad6_154)[ended](#i478720b2ac764c71ac103cbc4f0d8ad6_154)[December 31, 202](#i478720b2ac764c71ac103cbc4f0d8ad6_154)[5](#i478720b2ac764c71ac103cbc4f0d8ad6_154)[and](#i478720b2ac764c71ac103cbc4f0d8ad6_154)[2024](#i478720b2ac764c71ac103cbc4f0d8ad6_154)</u> | <u>[90](#i478720b2ac764c71ac103cbc4f0d8ad6_154)</u> |
| <u>[Consolidated Statements of Cash Flows](#i478720b2ac764c71ac103cbc4f0d8ad6_157)[for the](#i478720b2ac764c71ac103cbc4f0d8ad6_157)[year](#i478720b2ac764c71ac103cbc4f0d8ad6_157)[s](#i478720b2ac764c71ac103cbc4f0d8ad6_157)[ended](#i478720b2ac764c71ac103cbc4f0d8ad6_157)[December 31, 202](#i478720b2ac764c71ac103cbc4f0d8ad6_157)[5](#i478720b2ac764c71ac103cbc4f0d8ad6_157)[and](#i478720b2ac764c71ac103cbc4f0d8ad6_157)[2024](#i478720b2ac764c71ac103cbc4f0d8ad6_157)</u> | <u>[91](#i478720b2ac764c71ac103cbc4f0d8ad6_157)</u> |
| <u>[Notes to Consolidated Financial Statements](#i478720b2ac764c71ac103cbc4f0d8ad6_160)</u> | <u>[93](#i478720b2ac764c71ac103cbc4f0d8ad6_160)</u> |
| Schedules |  |
| <u>[Schedule III — Real Estate and Accumulated Depreciation as of December 31, 20](#i478720b2ac764c71ac103cbc4f0d8ad6_214)[25](#i478720b2ac764c71ac103cbc4f0d8ad6_214)</u> | <u>[124](#i478720b2ac764c71ac103cbc4f0d8ad6_214)</u> |
| Financial statement schedules other than those listed are omitted as they are not applicable or the required or equivalent information has been included in the consolidated financial statements or notes thereto. | Financial statement schedules other than those listed are omitted as they are not applicable or the required or equivalent information has been included in the consolidated financial statements or notes thereto. |

---

------

**Report of Independent Registered Public Accounting Firm**

To the Shareholders and the Board of Directors of Sculptor Diversified Real Estate Income Trust, Inc.

**Opinion on the Financial Statements**

We have audited the accompanying consolidated balance sheets of Sculptor Diversified Real Estate Income Trust, Inc. (the Company) as of December 31, 2025 and 2024, the related consolidated statements of operations, changes in equity and changes in cash flows for each of the two years in the period ended December 31, 2025, and the related notes and financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles.

**Basis for Opinion**

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

*/s/* Ernst & Young LLP

We have served as the Company's auditor since 2022.

New York, New York

March 30, 2026

------

**PART I. FINANCIAL INFORMATION**

**ITEM 1. FINANCIAL STATEMENTS**

**Sculptor Diversified Real Estate Income Trust, Inc.**

**Consolidated Balance Sheets**

**(in thousands, except share and per share data)**

---

| | | |
|:---|:---|:---|
| | **December 31, 2025** | **December 31, 2024** |
| **Assets** | | |
| Investments in real estate, net | $587861 | $467812 |
| Investment in an unconsolidated entity | 1725 | 1782 |
| Investments in real estate debt | 101855 | 7985 |
| Cash and cash equivalents | 37591 | 36174 |
| Restricted cash | 40759 | 18666 |
| Deferred rent and other receivables | 4009 | 2149 |
| Goodwill | 34458 | 34458 |
| Lease intangible assets, net | 46445 | 35466 |
| Other assets | 8353 | 4520 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Total assets** | $863056 | $609012 |
| **Liabilities and Equity** |  |  |
| **Liabilities** |  |  |
| Mortgages and other loans payable, net | $323264 | $225826 |
| Revolving credit facility | 13133 | 18201 |
| Accounts payable and other liabilities | 50589 | 20225 |
| Financing obligation, net | 22959 | 22959 |
| Due to related parties | 6568 | 3235 |
| Lease intangible liabilities, net | 42064 | 47807 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Total liabilities** | 458577 | 338253 |
| Commitment and contingencies |  |  |
| Redeemable noncontrolling interest in the Operating Partnership | 2191 | 1648 |
| **Equity** |  |  |
| Common stock, Class F shares, $0.01 par value per share, 300,000,000 shares authorized; 20,510,611 and 20,637,033 shares issued and outstanding, respectively | 205 | 206 |
| Common stock, Class FF shares, $0.01 par value per share, 300,000,000 shares authorized; 6,345,659 and 6,311,042 shares issued and outstanding, respectively | 63 | 63 |
| Common stock, Class E shares, $0.01 par value per share, 100,000,000 shares authorized; 9,483,386 and 266,204 shares issued and outstanding, respectively | 95 | 3 |
| Common stock, Class AA shares, $0.01 par value per share, 300,000,000 shares authorized, 7,011,253 and 2,566,352 shares issued and outstanding, respectively | 70 | 26 |
| Common stock, Class A shares, $0.01 par value per share, 300,000,000 shares authorized, 1,745,168 and 128,535 shares issued and outstanding, respectively | 17 | 1 |
| Common stock, Class I-S shares, $0.01 par value per share, 100,000,000 shares authorized, 51,051 and no shares issued and outstanding, respectively | 1 |  |
| Preferred stock, $0.01 par value per share, 100,000,000 shares authorized, no shares issued and outstanding |  |  |
| Additional paid-in capital | 459684 | 295294 |
| Accumulated deficit and cumulative distributions | (74167) | (43792) |
| &nbsp;&nbsp;&nbsp;&nbsp;**Total stockholders' and members' equity** | 385968 | 251801 |
| Non-controlling interests in the consolidated subsidiaries | 16320 | 17310 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Total equity** | 402288 | 269111 |
| &nbsp;&nbsp;&nbsp;&nbsp;**Total liabilities and equity** | $863056 | $609012 |

---

The accompanying notes are an integral part of these consolidated financial statements.

------

**Sculptor Diversified Real Estate Income Trust, Inc.**

**Consolidated Statements of Operations**

**(in thousands, except share and per share data)**

---

| | | |
|:---|:---|:---|
| | **Year Ended December 31, 2025** | **Year ended December 31, 2024** |
| **Revenues** | | |
| Rental revenue | $48745 | $44468 |
| Other revenue | 1673 | 1539 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total revenues | 50418 | 46007 |
| **Expenses** |  |  |
| Property operating expenses | 5854 | 4333 |
| Management fees | 1980 | 1334 |
| Performance participation allocation | 3940 |  |
| General and administrative | 9889 | 7881 |
| Depreciation and amortization | 21051 | 23079 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total expenses | 42714 | 36627 |
| Operating income | 7704 | 9380 |
| **Other income (expense):** |  |  |
| Interest expense, net | (13724) | (12095) |
| Impairment of investments in real estate | (2913) | (2553) |
| Income from investments in real estate debt, net | 6461 |  |
| Income (loss) from an unconsolidated entity | 115 | 46 |
| Unrealized gain (loss) on derivative instruments | (945) | (223) |
| Gain (loss) on sale of real estate | 491 | 34 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total other income (expense) | (10515) | (14791) |
| **Net income (loss)**  | (2811) | (5411) |
| Net (income) loss attributable to non-controlling interest in the consolidated subsidiaries | 72 | (164) |
| Net (income) loss attributable to redeemable non-controlling interest in the Operating Partnership | (16) | 33 |
| **Net loss attributable to SDREIT stockholders** | $(2755) | $(5542) |
| **Net loss per common share - basic and diluted** | $(0.07) | $(0.23) |
| **Weighted-average common shares outstanding - basic and diluted** | 37297160 | 23940780 |

---

The accompanying notes are an integral part of these consolidated financial statements.

------

**Sculptor Diversified Real Estate Income Trust, Inc.**

**Consolidated Statements of Changes in Equity**

**(in thousands, except share and per share data)** 

---

| | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Year Ended December 31, 2025** | **Year Ended December 31, 2025** | **Year Ended December 31, 2025** | **Year Ended December 31, 2025** | **Year Ended December 31, 2025** | **Year Ended December 31, 2025** | **Year Ended December 31, 2025** | **Year Ended December 31, 2025** | **Year Ended December 31, 2025** | **Year Ended December 31, 2025** | **Year Ended December 31, 2025** | **Year Ended December 31, 2025** |
| | **Par Value** | **Par Value** | **Par Value** | **Par Value** | **Par Value** | | | **Accumulated Deficit and cumulative distributions** | **Total Stockholders' and Members' Equity** | **Non-controlling interests in the consolidated subsidiaries** | |
| | **Common Stock Class F** | **Common Stock Class FF** | **Common Stock Class E** | **Common Stock Class AA** | **Common Stock Class A** | **Common Stock Class I-S** | **Additional Paid-in Capital** | **Accumulated Deficit and cumulative distributions** | **Total Stockholders' and Members' Equity** | **Non-controlling interests in the consolidated subsidiaries** | **Total Equity** |
| **Balance at December 31, 2024** | $206 | $63 | $3 | $26 | $1 | $— | $295294 | $(43792) | $251801 | $17310 | $269111 |
| Common stock issued | 9 |  | 92 | 42 | 16 | 1 | 173946 |  | 174106 |  | 174106 |
| Repurchase of common stock | (10) | (2) |  |  |  |  | (13640) |  | (13652) |  | (13652) |
| Distribution reinvestment |  | 2 |  | 2 |  |  | 5458 |  | 5462 |  | 5462 |
| Offering costs |  |  |  |  |  |  | (1073) |  | (1073) |  | (1073) |
| Amortization of compensation awards, net |  |  |  |  |  |  | (22) |  | (22) |  | (22) |
| Distributions declared on common stock |  |  |  |  |  |  |  | (27620) | (27620) |  | (27620) |
| Contributions from non-controlling interests |  |  |  |  |  |  |  |  |  | 1342 | 1342 |
| Distributions to non-controlling interests |  |  |  |  |  |  |  |  |  | (2260) | (2260) |
| Adjustment to carrying value of redeemable equity instruments |  |  |  |  |  |  | (279) |  | (279) |  | (279) |
| Net income (loss) |  |  |  |  |  |  |  | (2755) | (2755) | (72) | (2827) |
| **Balance at December 31, 2025** | $**205** | $**63** | $**95** | $**70** | $**17** | $**1** | $**459684** | $**(74167)** | $**385968** | $**16320** | $**402288** |
| **Year Ended December 31, 2024** | **Year Ended December 31, 2024** | **Year Ended December 31, 2024** | **Year Ended December 31, 2024** | **Year Ended December 31, 2024** | **Year Ended December 31, 2024** | **Year Ended December 31, 2024** | **Year Ended December 31, 2024** | **Year Ended December 31, 2024** | **Year Ended December 31, 2024** | **Year Ended December 31, 2024** | **Year Ended December 31, 2024** |
|  | **Par Value** | **Par Value** | **Par Value** | **Par Value** | **Par Value** |  |  | **Accumulated Deficit and cumulative distributions** | **Total Stockholders' and Members' Equity** | **Non-controlling interests in the consolidated subsidiaries** |  |
|  | **Common Stock Class F** | **Common Stock Class FF** | **Common Stock Class E** | **Common Stock Class AA** | **Common Stock Class A** | **Common Stock Class I-S** | **Additional Paid-in Capital** | **Accumulated Deficit and cumulative distributions** | **Total Stockholders' and Members' Equity** | **Non-controlling interests in the consolidated subsidiaries** | **Total Equity** |
| **Balance at December 31, 2023** | $160 | $59 | $1 | $— | $— | $— | $221253 | $(20458) | $201015 | $46886 | $247901 |
| Common stock issued | 46 | 1 | 1 | 26 | 1 |  | 81381 |  | 81456 |  | 81456 |
| Repurchase of common stock |  |  |  |  |  |  | (102) |  | (102) |  | (102) |
| Exchange of common stock | (1) |  | 1 |  |  |  |  |  |  |  |  |
| Distribution reinvestment |  | 3 |  |  |  |  | 3367 |  | 3370 |  | 3370 |
| Offering costs |  |  |  |  |  |  | (475) |  | (475) |  | (475) |
| Amortization of restricted stock grants | 1 |  |  |  |  |  | 215 |  | 216 |  | 216 |
| Distributions declared on common stock |  |  |  |  |  |  |  | (17792) | (17792) |  | (17792) |
| Contributions from non-controlling interests |  |  |  |  |  |  |  |  |  | 1531 | 1531 |
| Distributions to non-controlling interests |  |  |  |  |  |  |  |  |  | (3512) | (3512) |
| Noncontrolling interest acquired |  |  |  |  |  |  | (10222) |  | (10222) | (27759) | (37981) |
| Adjustments to carrying value of redeemable equity instruments |  |  |  |  |  |  | (123) |  | (123) |  | (123) |
| Net income (loss) |  |  |  |  |  |  |  | (5542) | (5542) | 164 | (5378) |
| **Balance at December 31, 2024** | $**206** | $**63** | $**3** | $**26** | $**1** | $**—** | $**295294** | $**(43792)** | $**251801** | $**17310** | $**269111** |

---

The accompanying notes are an integral part of these consolidated financial statements.

------

**Sculptor Diversified Real Estate Income Trust, Inc.**

**Consolidated Statements of Changes in Cash Flows**

**(in thousands)**

---

| | | |
|:---|:---|:---|
| | **Year Ended December 31, 2025** | **Year ended December 31, 2024** |
| **Cash Flows from Operating Activities:** | | |
| Net income (loss) | $(2811) | $(5411) |
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Management fees | 1980 | 1334 |
| &nbsp;&nbsp;&nbsp;&nbsp;Performance participation allocation | 3940 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 21051 | 23079 |
| &nbsp;&nbsp;&nbsp;&nbsp;Amortization of discounts and deferred financing costs | 586 | 574 |
| &nbsp;&nbsp;&nbsp;&nbsp;Impairment of investments in real estate | 2913 | 2553 |
| &nbsp;&nbsp;&nbsp;&nbsp;(Gain) loss on sale of real estate | (491) | (34) |
| &nbsp;&nbsp;&nbsp;&nbsp;Straight-line rent adjustment | (833) | (549) |
| &nbsp;&nbsp;&nbsp;&nbsp;Amortization of above- and below-market leases | (5093) | (5500) |
| &nbsp;&nbsp;&nbsp;&nbsp;Amortization of share-based compensation | 225 | 216 |
| &nbsp;&nbsp;&nbsp;&nbsp;Unrealized (gain) loss on investments in real estate debt | (19) | (5) |
| &nbsp;&nbsp;&nbsp;&nbsp;Unrealized loss (gain) on interest rate cap | 945 | 223 |
| &nbsp;&nbsp;&nbsp;&nbsp;(Income) loss on an unconsolidated entity | (115) | (46) |
| &nbsp;&nbsp;&nbsp;&nbsp;Paid-in-kind interest | (1562) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Other reconciling items | 145 | 101 |
| Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Deferred rent and other receivables | (1174) | (376) |
| &nbsp;&nbsp;&nbsp;&nbsp;Other assets | (1058) | (251) |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts payable and other liabilities | 2627 | 282 |
| &nbsp;&nbsp;&nbsp;&nbsp;Due to related parties | (45) | (363) |
| **Net cash provided by operating activities** | 21211 | 15827 |
| **Cash Flows From Investing Activities:** |  |  |
| Acquisition of real estate | (169547) | (15543) |
| Additions to real estate | (1221) | (3037) |
| Deposit on real estate acquisition, net of refunds | (327) | 85 |
| Proceeds from sale of real estate | 12329 | 4311 |
| Investments in real estate debt | (87315) | (7980) |
| Investment in an unconsolidated entity |  | (1935) |
| Distributions in excess of cumulative earnings from an unconsolidated entity | 173 | 198 |
| **Net cash used in investing activities** | (245908) | (23901) |
| **Cash Flows from Financing Activities:** |  |  |
| Proceeds from mortgages and other loans payable | 111840 |  |
| Repayments of mortgages and other loans payable | (14189) | (4807) |
| Repayments of financing obligation | (2) |  |
| Repayments from revolving credit facility | (28612) | (488) |
| Proceeds from revolving credit facility | 23512 | 8583 |
| Payment of deferred financing costs | (1580) | (351) |
| Payment of offering costs | (1051) | (707) |
| Due to related parties | (687) | (475) |

---

------

**Sculptor Diversified Real Estate Income Trust, Inc.**

**Consolidated Statements of Changes in Cash Flows**

**(in thousands)**

---

| | | |
|:---|:---|:---|
| | **Year Ended December 31, 2025** | **Year ended December 31, 2024** |
| Subscriptions received in advance | 22414 | 11936 |
| Issuance of common stock | 172003 | 80178 |
| Redemption of common stock | (13652) | (102) |
| Distribution to shareholders | (21121) | (13993) |
| Acquisition of noncontrolling interest in consolidated subsidiaries |  | (37981) |
| Contribution by noncontrolling interests in the consolidated subsidiaries | 1342 | 1531 |
| Distribution to noncontrolling interests in the consolidated subsidiary | (2260) | (3512) |
| Contribution by noncontrolling interests in the Operating Partnership | 250 |  |
| **Net cash provided by (used in) financing activities** | 248207 | 39812 |
| **Net change in cash and cash equivalents and restricted cash** | 23510 | 31738 |
| **Cash and cash equivalents and restricted cash at beginning of period** | 54840 | 23102 |
| **Cash and cash equivalents and restricted cash at end of period** | $78350 | $54840 |
| **Reconciliation of Cash and Cash Equivalents and Restricted Cash:** |  |  |
| Cash and cash equivalents | $37591 | $36174 |
| Restricted cash | 40759 | 18666 |
| Total cash and cash equivalents and restricted cash | $78350 | $54840 |
| **Supplemental Information:** |  |  |
| Interest paid | $12931 | $11582 |
| **Supplemental Disclosure of Noncash Investing and Financing Activities:** |  |  |
| Dividends unpaid | $2884 | $1828 |
| Distribution reinvestment | $5462 | $3367 |
| Contributions by noncontrolling interests in the Operating Partnership | $370 | $1568 |
| Distributions to noncontrolling interests in the Operating Partnership | $122 | $10 |
| Transfer to assets held for sale | $2770 | $22 |
| Management fee paid in shares | $1855 | $1279 |
| Performance allocation paid in Operating Partnership units | $— | $1568 |
| Accrued distribution fee | $22 | $232 |
| Adjustment to carrying value of redeemable common stock | $279 | $123 |
| Vested shares issued to board of directors | $248 | $— |

---

The accompanying notes are an integral part of these consolidated financial statements.

------

**Sculptor Diversified Real Estate Income Trust, Inc.** 

**Notes to the Consolidated Financial Statements**

**(in thousands, except share and per share data)** 

**1. ORGANIZATION AND DESCRIPTION OF THE BUSINESS**

Sculptor Diversified Real Estate Income Trust, Inc. (the "Company" ,"we" or "us") was formed on February 11, 2022 as a Maryland corporation and has operated and elected to be treated as a real estate investment trust ("REIT") for U.S. federal income tax purposes beginning January 1, 2023.

The Company is the sole general partner and a limited partner of Sculptor Diversified REIT Operating Partnership LP, a Delaware limited partnership (the "Operating Partnership"). Sculptor Diversified REIT Special Limited Partner LP (the "Special Limited Partner"), an indirect subsidiary of Sculptor Capital LP ("Sculptor"), is the special limited partner in the Operating Partnership. The Company was organized to invest primarily in stabilized, income-generating commercial real estate across a variety of both traditional and non-traditional sectors in the U.S. and Europe, and to a lesser extent, invest in real estate related securities. These assets may include multifamily, industrial, net lease, retail and office assets, as well as others, including, without limitation, healthcare, student housing, single-family, senior living, lodging, data centers, manufactured housing, parking and self-storage properties. Substantially all of the Company's business is conducted through the Operating Partnership, which was formed on February 22, 2022. The Company and the Operating Partnership are externally managed by Sculptor Advisors LLC (the "Adviser"), an affiliate of Sculptor.

In March 2023, the Company launched a private placement offering exempt from registration under the Securities Act of 1933, as amended (the "Securities Act") (the "Offering"). The Company sells shares monthly in the Offering at a price generally equal to the prior month's net asset value ("NAV") per share as determined pursuant to the valuation guidelines adopted by the Company's board of directors (the "Board"), including a majority of its independent directors, plus applicable fees and commissions. NAV is not a measure used under accounting principles generally accepted in the U.S. ("GAAP") and the valuations of and certain adjustments to the Company's assets and liabilities used in the determination of NAV will differ from GAAP. Our Class A, Class AA, Class D, Class E, Class F, Class FF, Class I, Class S, and Class I-S shares are generally available for issuance in our private offering. Our Class E shares are only expected to be held by Sculptor, its personnel, and affiliates. Our Class FF shares are now only available pursuant to our distribution reinvestment plan.

The Company commenced its principal operations upon the acquisition of its first asset. On January 4, 2023, the Operating Partnership acquired a controlling interest in CapGrow Holdings Member, LLC (the "CapGrow Member"), which holds an interest in CapGrow Holdings JV LLC ("CapGrow JV," and together with CapGrow Member, "CapGrow"), that owns a portfolio of primarily single-family homes (the "CapGrow Portfolio") leased to and operated by care providers that serve individuals with intellectual and developmental disabilities. This interest was acquired from Sculptor RE Holdings XVII LLC ("Seller"), which is an affiliate of our Adviser, for a purchase price of $455.0 million.

During 2023, the Company acquired additional indirect equity interests in CapGrow Member in two additional transactions for an aggregate $43.0 million, increasing its indirect controlling interests in CapGrow to 79.64%. On December 5, 2024, the Company acquired the remaining equity interests in CapGrow Member and became its sole owner for $38.0 million, thereby increasing its indirect controlling interest in CapGrow to 92.70%.

Consistent with our corporate governance guidelines, the affiliate transaction committee approved all of the acquisitions referenced above, and determined that although the price to the Company was in excess of the cost of the asset to Seller, substantial justification existed for such excess and such excess was reasonable because (1) the Seller had owned its interest in CapGrow since February 27, 2015 and the CapGrow business and real estate assets had increased in value during the Seller's ownership period (as supported by the third-party bids, valuation report and the approval of the Founding Investor), (2) our stockholders had benefited from the returns from our investment in CapGrow through each of the acquisition dates and (3) we ran the risk of a forced sale of our interest in CapGrow if we did not acquire all of the remaining interests in CapGrow Member by January 3, 2025, which sale could be on terms that we viewed as unattractive.

As of December 31, 2025, the Company owns a 93.38% indirect controlling interest in CapGrow, which owns a portfolio of 1,125 single-family rental homes.

On October 27, 2023, the Operating Partners&nbsp;&nbsp;&nbsp;&nbsp;hip, together with a third party joint venture partner (such joint venture, the "Denton JV"), closed on the acquisition of a 240-unit, 792-bed student housing property ("University Courtyard") located in Denton, Texas. As of December 31, 2025, the Company owns a 90.00% controlling interest in University Courtyard.

------

**Sculptor Diversified Real Estate Income Trust, Inc.** 

**Notes to the Consolidated Financial Statements**

**(in thousands, except share and per share data)** 

On February 23, 2024, CapGrow JV, CapGrow's founder and CapGrow Neptune Investor LLC ("Neptune Investor"), an affiliate of Sculptor, formed a joint-venture, CapGrow Neptune JV LLC ("Neptune JV"), and closed on the acquisition of a portfolio of 33 single-family residences and intermediate care facilities located in California and Minnesota (the "Neptune Portfolio"). As of December 31, 2025, the Company owns a 4.67% indirect noncontrolling interest in Neptune JV.

On March 18, 2025, the Company, together with a third-party joint venture partner (such joint venture, the "Parking JV"), closed on the acquisition of two parking garage properties located in Rochester, New York. Concurrent with the acquisition, leases were entered into with a national parking operator for both garages. As of December 31, 2025, the Company owns a 85.10% controlling interest in the Parking JV.

On October 9, 2025, the Company, through an indirect wholly owned subsidiary, acquired a 1.3 million square foot distribution center on an approximately 81-acre site in Marysville, Ohio (the "Marysville Property") from an unaffiliated third-party seller, Sierra Marysville Storage, LLC, for $123.0 million, including transaction costs. The Marysville Property is 100% leased to a wholly owned subsidiary of a leading marketer of branded consumer lawn and garden care products listed on the NYSE.

From time to time, the Company acquires or enters into interests in real estate debt, such as commercial mortgage backed securities ("CMBS"), loans, and/or preferred equity investments. As of December 31, 2025, investments in real estate debt consists of (i) an investment in preferred equity in a real estate company that owns 69 net-leased veterinary hospitals and clinics, (ii) a junior mortgage loan collateralized by a casino and hotel property located in Las Vegas, Nevada, (iii) a participation in a senior secured term loan issued to finance the acquisition of a 15-asset, 5,793-key resort portfolio located in Mexico, the Dominican Republic, and Jamaica, and (iv) investments in CMBS.

**2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

***Basis of Presentation***

The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") and include the accounts of the Company, the Company's subsidiaries and joint ventures in which the Company has a controlling financial interest. All intercompany balances and transactions have been eliminated in consolidation.

***Principles of Consolidation***

The Company consolidates entities in which the Company has a controlling financial interest. Entities in which, directly or indirectly, the Company does not have a controlling interest, are accounted for under the equity method. In determining whether the Company has a controlling financial interest in a partially owned entity and the requirement to consolidate the accounts of that entity, the Company considers whether the entity is a variable interest entity ("VIE") and whether it is the primary beneficiary. The Company is the primary beneficiary of a VIE when it has (i) the power to direct the most significant activities impacting the economic performance of the VIE and (ii) the obligation to absorb losses or receive benefits significant to the VIE. Entities that do not qualify as VIEs are generally considered voting interest entities ("VOEs") and are evaluated for consolidation under the voting interest model. VOEs are consolidated when the Company controls the entity through a majority voting interest or other means.

For consolidated joint ventures, the non-controlling partner's share of the assets, liabilities, and operations of each joint venture is included in non-controlling interests as equity of the Company. The non-controlling partner's interest is generally computed as the joint venture partner's ownership percentage. Certain of the joint ventures formed by the Company provide the other partner a profits interest based on certain return hurdles being achieved. Any profits interest due to the other partner is reported within non-controlling interests.

When the requirements for consolidation are not met, the investment is accounted for under the equity method of accounting, with the investment initially recorded at cost, with subsequent adjustments for the Company's pro-rata share of net income, contributions and distributions.

The assets of consolidated VIEs will be used first to settle obligations of the applicable VIE. Remaining assets may then be distributed to the VIEs' owners, including the Company, subject to the liquidation preferences of certain noncontrolling interest holders and any other preferential distribution provisions contained within the operating agreements of the relevant VIEs.

------

**Sculptor Diversified Real Estate Income Trust, Inc.** 

**Notes to the Consolidated Financial Statements**

**(in thousands, except share and per share data)** 

As of December 31, 2025, the total assets and liabilities of the Company's consolidated VIEs were $828.6 million and $424.1 million, respectively. As of December 31, 2024, the total assets and liabilities of the Company's consolidated VIEs were $597.0 million and $326.2 million, respectively. Such amounts are included on the Company's consolidated balance sheets.

***Use of Estimates***

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

***Cash and Cash Equivalents***

Cash and cash equivalents represent cash held in banks, cash on hand, and liquid investments with maturities of three months or less when purchased. The Company may have bank balances in excess of federally insured amounts; however, the Company maintains its cash and cash equivalents with high credit-quality institutions.

***Restricted Cash***

Restricted cash consists of subscriptions received in advance and escrows held by lenders for property taxes, insurance premiums, ground rent payments, debt service and capital expenditures.

***Deferred Leasing Costs***

Deferred leasing costs consist primarily of leasing commissions incurred to initiate or renew operating leases. These costs are capitalized as part of other assets in the consolidated balance sheets and amortized on a straight-line basis over the related lease term. Amortization of deferred leasing costs is recorded as part of depreciation and amortization expenses in the consolidated statements of operations. Upon the early termination of a lease, any unamortized deferred leasing costs are charged to expense.

***Deferred Financing Costs***

Deferred financing costs, which consist of lender fees, legal, title and other third-party costs related to the issuance of debt, are capitalized and are reported as a deduction from the face amount of the related debt, and are amortized over the term of the related debt agreements using the straight-line method which approximates the effective interest method. Deferred costs under the revolving credit facility are reported as an asset on the consolidated balance sheets. In the event of early redemption, any unamortized costs are charged to operations. Amortization of deferred financing costs is included in interest expense on the consolidated statements of operations.

***Investments in Real Estate***

Real estate properties are carried at cost less accumulated depreciation and impairment losses, if any. Upon acquisition, the Company evaluates each acquisition transaction for the purpose of determining whether a transaction should be accounted for as an asset acquisition or business combination. The acquisition transaction qualifies as a business combination when the assets acquired and liabilities assumed constitute a business. If the property acquired does not constitute a business, the Company accounts for the transaction as an asset acquisition. The guidance for business combinations ("screen test") states that when substantially all of the fair value of the gross assets to be acquired is concentrated in a single identifiable asset or group of similar identifiable assets, the asset or set of assets is not a business.

Whether an acquisition is considered a business combination or asset acquisition, the Company determines the fair value of acquired tangible and intangible assets and liabilities (including land, buildings, site improvements, tenant improvements, above-market and below-market leases, acquired in-place leases, leasing commissions and other identified intangible assets and assumed liabilities), the liabilities assumed and any non-controlling interest in the acquired entity. For transactions that are business combinations, the Company evaluates the existence of goodwill or a gain from a bargain purchase. Under the business combination, acquisition-related costs are expensed as incurred. For asset acquisitions, the Company allocates the purchase price to the acquired assets and assumed liabilities based on their relative fair values. Acquisition-related costs associated with asset acquisitions are capitalized as part of the acquisition costs.

------

**Sculptor Diversified Real Estate Income Trust, Inc.** 

**Notes to the Consolidated Financial Statements**

**(in thousands, except share and per share data)** 

Ordinary repairs and maintenance are expensed as incurred. Major replacements and betterments, which improve or extend the life of the asset, are capitalized and depreciated over their estimated useful lives.

Depreciation is computed using the straight-line method. The estimated useful life of our buildings ranges from eight to 43 years. Improvements to buildings made after the initial acquisition are capitalized and depreciated over useful lives ranging from three to 15 years. Tenant improvements are capitalized and depreciated over the non-cancellable term of the related lease or their estimated useful life, whichever is shorter. Furniture, fixtures, and equipment are capitalized and depreciated over useful lives ranging from two to seven years. Depreciation expense amounted to $16.3 million and $14.5 million for the years ended December 31, 2025 and 2024, respectively.

The Company evaluates its real estate investments for impairment upon occurrence of a significant adverse change in its operations to assess whether any impairment indicators are present that affect the recovery of the recorded value. If indicators of impairment are identified, the Company estimates the future undiscounted cash flows from the use and eventual disposition of the property and compares this amount to the carrying value of the property. If any real estate investment is considered impaired, a loss is recognized to reduce the carrying value of the property to its estimated fair value. Refer to Note 3, "Investments in Real Estate, Net", for detailed information regarding impairment loss recorded.

From time to time, the Company may identify properties to be sold. The Company considers whether the following conditions have been met in determining whether or not such properties should be classified as held for sale in accordance with GAAP: (i) there is a committed plan to sell a property; (ii) the property is immediately available for sale in its present condition; (iii) an active program to locate a buyer and other actions required to complete the plan to sell a property have been initiated; (iv) the sale of a property is probable within one year (generally determined based upon listing for sale); (v) the property is being actively marketed for sale at a price that is reasonable in relation to its current fair value; and (vi) actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. To the extent that these factors are all present, depreciation is discontinued, and properties held for sale are stated at the lower of its carrying amount or its fair value less estimated costs to sell. Assets held for sale and related liabilities are included in other assets and accounts payable and other liabilities, respectively, in the condensed consolidated balance sheets.

***Investments in Real Estate Debt***

The Company's investments in real estate debt consists of: (i) a preferred equity investment in a real estate company; (ii) a junior mortgage loan collateralized by a casino-hotel property; (iii) a participation in a senior secured term loan acquired through a syndication; and (iv) CMBS. The Company has elected the fair value option ("FVO") for the investments other than CMBS, and records these investments at fair value, with unrealized gains and losses of such investment included in income from investment in real estate debt, net on the on the Company's consolidated statements of operations and records any related upfront costs and fees in earnings as incurred.

The Company has elected to classify its CMBS as a trading security and records such investment at fair value, with unrealized gains and losses on such security included in income from investments in real estate debt, net on the Company's consolidated statements of operations.

Interest income is recognized based on the stated terms of the security and is included in other revenue on the consolidated statements of operations.

***Derivative Financial Instruments***

The Company uses interest rate caps, a derivative financial instrument, to manage risks from increases in interest rates. The Company records all derivatives at fair value on the consolidated balance sheets. At the inception of a derivative contract, the Company will determine whether the instrument will be part of a qualifying hedge accounting relationship or a contract as a trading instrument. The Company has elected not to apply hedge accounting to all derivative contracts. Changes in the fair value of our derivatives are recorded in unrealized gain on derivative instruments on the consolidated statements of operations. Derivative financial instruments are recorded as a component of other assets on the consolidated balance sheets at fair value. The Company has elected to classify our interest rate derivative instruments as financing activities on the consolidated statements of changes in cash flows in the same category as the cash flow from the instrument for which the interest rate derivative instruments provide an economic hedge. Refer to Note 12, "Fair Value Measurements," for additional information.

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**Sculptor Diversified Real Estate Income Trust, Inc.** 

**Notes to the Consolidated Financial Statements**

**(in thousands, except share and per share data)** 

***Goodwill***

Goodwill represents the excess of the consideration transferred over the fair value of the identifiable tangible and intangible assets acquired and liabilities assumed in a business combination and is allocated to an entity's reporting unit, which as of December 31, 2025 and 2024, relates to CapGrow.

The Company evaluates goodwill for impairment when an event occurs or circumstances change that indicate the carrying value may not be recoverable, or at least annually. Unless circumstances otherwise dictate, the annual impairment test is performed as of December 31. In evaluating goodwill for impairment, the Company assesses qualitative factors such as significant decline in real estate valuations or enterprise value of the reporting unit, current macroeconomic conditions, and the overall financial performance of the reporting unit, among others. If the carrying value of a reporting unit exceeds its estimated fair value, then an impairment charge is recorded in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. As of December 31, 2025 and 2024, goodwill recognized in connection with the acquisition of CapGrow was $34.5 million and there was no recorded goodwill impairment charge.

***Organization and Offering Expenses***

Organization costs are expensed as incurred and offering costs are charged to equity as such amounts are incurred.

***Fair Value Measurements***

See Note 12, "Fair Value Measurements," for related disclosures.

***Segment Reporting***

Under the provisions of ASC 280, "Segment Reporting," the Company has determined that it has five reportable segments: Residential (Business), Student Housing, Commercial Properties, Industrial Properties and Investments in Real Estate Debt. The first, Residential (Business), is associated with the CapGrow Portfolio as well as CapGrow's investment in Neptune. The CapGrow Portfolio engages in activities related to acquiring, renovating, developing, leasing and operating single-family homes as rental properties. The CapGrow Portfolio is geographically dispersed, and management evaluates operating performance on a total portfolio basis. The aggregation of individual homes constitutes the total portfolio. Decisions regarding acquisitions and dispositions of homes are made at the individual home level with a focus on accretion in high-growth locations where there is greater scale and density.

The second reportable segment, Student Housing, is associated with University Courtyard.

The third reportable segment, Commercial Properties, is associated with the Company's investment in two parking garages located in Rochester, New York. Decisions regarding the allocation of resources are made at the property level.

The fourth reportable segment, Industrial Properties, is associated with the Company's investment in a distribution center located in Marysville, Ohio.

The fifth reportable segment, Investments in Real Estate Debt, includes the Company's investment in the preferred equity of a real estate company, a junior mortgage loan collateralized by a casino and hotel property, a participation in a senior secured term loan acquired through a syndication and CMBS. Decisions regarding the allocation of resources are made at the investment level.

See Note 16, "Segment Reporting", for related disclosures.

***Revenue Recognition***

The Company derives a significant portion of its revenues from single-family residential leases, which are accounted for as operating leases. The majority of these leases are under a triple net lease arrangement which requires tenants to pay the taxes, insurance and maintenance costs, among others, of the property it leases in addition to its contractual base rent. Other leases are under a modified net lease arrangement wherein tenants pay, for most, but not all property expenses in addition to its contractual base rent. Additionally, the Company also derives revenue from leases at a student housing property, two parking

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**Sculptor Diversified Real Estate Income Trust, Inc.** 

**Notes to the Consolidated Financial Statements**

**(in thousands, except share and per share data)** 

garages and a distribution center which are also accounted for as operating leases. Under the terms of these leases, tenants pay monthly rental income, various fees, including utility charges, amenity fees and parking fees and/or recoveries from tenants. Recoveries from tenants represent amounts that are charged to a tenant for its share of operating expenses (common area maintenance, real estate taxes, insurance, repairs and maintenance, and other expenses that are generally subject to recovery) incurred by the property in accordance with the lease agreement. Recoveries from tenants are recognized as revenue in the same period the related expenses are incurred. As a practical expedient, the Company elected to account for both the lease and non-lease components as a single lease component because the timing and pattern of revenue recognition are generally the same.

Rental revenue is recognized on the straight-line basis over the non-cancellable terms of the leases from the later of (i) the date of the commencement of the lease or (ii) the date of acquisition of the property. For lease modifications, the commencement date is considered to be the date the lease modification is executed. Rental revenue recognition begins when tenants control the space and continues through the term of their respective leases, which typically have an initial lease term of five to ten years for CapGrow, 15 years for the Marysville Property and 12 months or less for University Courtyard and the parking garages. Any excess of rents recognized over amounts contractually due pursuant to the underlying leases are included in deferred rent and other receivables on the consolidated balance sheets. Any amounts paid in advance by the tenants are recorded as deferred revenue, which is included in accounts payable and other liabilities on the consolidated balance sheets and are recognized as rental income in accordance with the Company's revenue recognition policy.

Rental revenue is recognized if collectability is probable. For leases that are deemed not probable of collection, revenue is recorded as the lesser of (i) the amount which would be recognized on a straight-line basis or (ii) cash that has been received from the tenant, with any tenant and deferred rent receivable balances charged as a direct write-off against rental income in the period of the change in the collectability determination.

Other revenue includes termination income and late fees. Termination income, which relates to fees paid by tenants to terminate their lease prior to the contractual lease expiration date, and late fees, are recognized during the period when: (i) the termination agreement is executed or the condition is met, (ii) the fee is determinable, and (iii) collectability of the fee is assured.

Interest income earned on debt investments, which is included in income on investments in real estate debt, is recognized when earned.

Gain or loss on sale of real estate is recognized when the Company no longer has a controlling financial interest in the real estate, a contract exists with a third party and that third party has control of the assets acquired.

***Leasing Arrangements***

CapGrow leases its corporate office. Prior to business combination with the Company, CapGrow accounted for this lease as an operating lease in accordance with the adoption of ASC 842, "Leases," effective January 1, 2020, which requires a recognition of right-of-use ("ROU") asset and lease liability in the consolidated balance sheets for the rights and obligations created from this lease. CapGrow recognized the operating lease ROU asset and lease liability based on the present value of future minimum lease payments over the expected lease term at commencement date, which was calculated using CapGrow's incremental borrowing rate. At acquisition date, the Company remeasured the ROU asset and lease liability, as if it were a new lease, at the present value of the remaining lease payments, which was calculated using the Company's incremental borrowing rate and considered adjustment related to favorable or unfavorable terms of the lease as compared to market terms.

The Company elected to not separate non-lease components from the associated lease component of the office lease. Lease expense is recognized on a straight-line basis over the expected lease term, which is included in property operating expenses in the consolidated statements of operations. As of December 31, 2025 and 2024, the ROU asset, which was included in other assets in the consolidated balance sheets, was $0.2 million and $0.2 million, respectively. As of December 31, 2025 and 2024, lease liability, which was included in accounts payable and other liabilities in the consolidated balance sheets was $0.2 million and $0.2 million, respectively. See Note 15, "Commitments and Contingencies," for the related disclosures.

***Share-based Compensation***

The Company records all equity-based incentive grants to non-employee members of the Board based on their fair values determined on the date of grant. Stock-based compensation expense, which is included in general and administrative

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**Sculptor Diversified Real Estate Income Trust, Inc.** 

**Notes to the Consolidated Financial Statements**

**(in thousands, except share and per share data)** 

expenses in the consolidated statements of operations, is recognized on a straight-line basis over the requisite service period of the award, which is generally the vesting term of the outstanding equity awards.

***Income Taxes***

The Company elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended (the "Code"), for U.S. federal income tax purposes beginning with the Company's taxable year ending December 31, 2023 and we intend to continue to operate in such a manner. The Company believes that it has been organized and has operated in conformity with the requirements for qualification and taxation as a REIT under the Code for its taxable year ended December 31, 2025. As a REIT, the Company generally is not subject to federal corporate income tax to the extent it distributes 100% of its taxable income to its stockholders. REITs are subject to a number of organizational and operational requirements. If the Company fails to qualify as a REIT in any taxable year, without the benefit of certain relief provisions, the Company will be subject to federal and state income tax on its taxable income at regular corporate tax rates. Even if the Company qualifies for taxation as a REIT, the Company may be subject to certain state and local taxes on its income and property, and federal income and excise taxes on its undistributed income.

The Operating Partnership is classified as a partnership for U.S. federal and state income tax purposes and are therefore not subject to income tax. Each partner is responsible for the tax liability, if any, related to their share of Operating Partnership taxable income or loss.

The Company may elect to treat certain of our corporate subsidiaries as taxable REIT subsidiaries ("TRSs"). In general, a TRS may perform additional services for our tenants and generally may engage in any real estate or non-real estate-related business. The TRSs are subject to taxation at the federal, state and local levels, as applicable. The Company accounts for applicable income taxes by utilizing the asset and liability method. As such, the Company records deferred tax assets and liabilities for the future tax consequences resulting from the difference between the carrying value of existing assets and liabilities and their respective tax basis. A valuation allowance for deferred tax assets is provided if the Company believes all or some portion of the deferred tax asset may not be realized.

For the years ended December 31, 2025 and 2024, the Company recorded a net income tax expense of $0.1 million and $0.2 million, respectively, which is included in the general and administrative expenses in the consolidated statements of operations. As of December 31, 2025, the Company recorded a deferred tax asset and a corresponding valuation allowance of $0.9 million, within Other Assets on the Company's consolidated balance sheets.

Management is responsible for determining whether a tax position taken by the Company or the Operating Partnership is more likely than not to be sustained on the merits. The Company has no material unrecognized tax benefits or uncertain income tax positions and therefore no interest or penalties associated with uncertain tax positions.

***Earnings per Share***

Basic net income (loss) per share ("EPS") of common stock is determined by net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding during the period.

Diluted EPS of common stock is determined by net income (loss) attributable to common shareholders by the weighted average number of common shares and common share equivalents outstanding for the period. Diluted EPS excludes all dilutive potential of shares of common stock if their effect is anti-dilutive. All classes of common stock are allocated to net income (loss) at the same rate and receive the same gross distribution share. There were no common share equivalents outstanding that would have a dilutive effect and accordingly, the weighted average number of common shares outstanding is identical to both basic and diluted shares for both the years ended December 31, 2025 and 2024.

The restricted stock grants of Class E shares held by the Company's independent directors are not considered to be participating securities because they have forfeitable rights to distributions. As a result, there is no impact of these restricted stock grants on basic and diluted net income (loss) per common share until the restricted stock grants have been fully vested.

**Recent Accounting Pronouncements**

***Accounting Pronouncements Recently Adopted***

------

**Sculptor Diversified Real Estate Income Trust, Inc.** 

**Notes to the Consolidated Financial Statements**

**(in thousands, except share and per share data)** 

On October 1, 2024, the Company adopted ASU 2023-07 "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures". This update enhanced the disclosures required for reportable segments, primarily through enhanced disclosures about significant segment expenses as well as certain other disclosures to help users of financial statements understand how an entity's chief operating decision maker ("CODM") evaluates segment expenses and operating results. See Note 16, "Segment Reporting," for related disclosures.

In December 2023, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") 2023-09 "Income Taxes (Topic 740): Improvements to Income Tax Disclosures," or ASU 2023-09. ASU 2023-09 requires additional disaggregated disclosures on the entity's effective tax rate reconciliation and additional details on income taxes paid. ASU 2023-09 is effective on a prospective basis, with the option for retrospective application, for annual periods beginning after December 15, 2024 and early adoption is permitted. The Company adopted this guidance on January 1, 2025 and it did not have a material impact on our consolidated financial statements.

***Accounting Pronouncements Not Yet Adopted***

In November 2024, the FASB issued ASU No. 2024-03, "Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses" ("ASU 2024-03"), which requires disclosure of certain costs and expenses on an interim and annual basis in the notes to the financial statements. ASU 2024-03 is effective for annual periods beginning after December 15, 2026, and interim periods within annual periods beginning after December 15, 2027, and early adoption is permitted. The Company is evaluating the impact this ASU will have on our consolidated financial statements.

In July 2025, the FASB issued ASU No. 2025-05, "Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets" ("ASU 2025-05"), which amends the guidance in ASC 326 to provide a practical expedient for estimating expected credit losses on current accounts receivable and current contract assets arising from transactions accounted for under ASC 606. The amendments allow entities to assume that current conditions as of the balance sheet date will remain unchanged for the remaining life of the asset when developing reasonable and supportable forecasts. ASU 2025-05 is effective for fiscal years beginning after December 15, 2025, and interim periods within those fiscal years. Early adoption is permitted. The Company concluded that the adoption of this ASU will not have a material impact on our consolidated financial statements.

**3. INVESTMENTS IN REAL ESTATE, NET**

Investments in real estate, net consist of (in thousands):

---

| | | |
|:---|:---|:---|
| | **December 31, 2025** | **December 31, 2024** |
| Land and land improvements | $91129 | $77098 |
| Building and improvements | 536585 | 415498 |
| Furniture, fixtures and equipment | 1799 | 1612 |
| Total real estate properties, at cost | 629513 | 494208 |
| Less: accumulated depreciation | (41652) | (26396) |
| Investments in real estate, net | $587861 | $467812 |

---

**Business Combination**

On January 4, 2023, the Company, through the Operating Partnership, acquired a 61.64% controlling indirect interest in CapGrow at a total enterprise value of approximately $455.0 million. Debt of approximately $221.1 million was assumed in the transaction which resulted in an approximate cash outlay of $141.1 million by the Company to acquire this interest. As part of this transaction, CapGrow retained the employees responsible for implementing strategic decisions relating to acquisitions, dispositions and cash flow management, including CapGrow's chief executive officer. Since the Company consolidates CapGrow, it recognizes all of the tangible and intangible assets acquired, the liabilities assumed and noncontrolling interest in CapGrow Member and CapGrow JV at the acquisition-date fair value. Goodwill was recognized as the excess of the consideration transferred and the net assets acquired, including the noncontrolling interests. The material components of goodwill, amounts paid in excess of amounts attributable to the fair value of the net assets acquired, represent the value assigned to a growing and profitable business that includes an experienced management team and the expected

------

**Sculptor Diversified Real Estate Income Trust, Inc.** 

**Notes to the Consolidated Financial Statements**

**(in thousands, except share and per share data)** 

synergies and continued expansion of CapGrow's operations. The long-tenured senior members of Capgrow have specific skill sets and significant industry knowledge, including its regulatory and policy environment. These elements make up goodwill, which do not qualify for separate recognition.

During 2023, the Company acquired additional indirect equity interests in CapGrow Member in two additional transactions for an aggregate $43.0 million, increasing its indirect controlling interests in CapGrow 79.64%. On December 5, 2024, the Company acquired the remaining interest in CapGrow Member and became the sole owner for $38.0 million, thereby increasing its indirect controlling interest in CapGrow JV to 92.70%. The Company accounted for these changes in ownership interests that did not result in a change of control as an equity transaction. The identifiable net assets remained unchanged and the difference between the fair value of the consideration paid and the proportionate interest of the carrying value of the noncontrolling interest by which it is adjusted, which amounted to $10.2 million for the year ended December 31, 2024 is recognized as an adjustment in additional paid in capital for the respective period. As of December 31, 2025 and 2024, the Company owned a 93.38% and 92.70%, respectively, indirect controlling interest in CapGrow JV.

**Asset Acquisitions**

During the years ended December 31, 2025 and 2024, the Company, through CapGrow, acquired 91 and 33 vacant homes at an aggregate purchase price of approximately $38.1 million and $15.5 million, respectively.

On March 18, 2025, the Company, through the Parking JV, closed on the acquisition of two parking garages located in Rochester, New York for a total purchase price, inclusive of closing costs, of $8.5 million, of which the Company's share was $7.2 million. As of December 31, 2025, the Company owned an 85.10% indirect controlling interest in the Parking JV. Concurrent with the closing of the acquisition, the Company entered into lease agreements with a national parking operator.

On October 9, 2025, the Company, through an indirect wholly-owned subsidiary, acquired the Marysville Property from an unaffiliated third-party seller, Sierra Marysville Storage, LLC, for $123.0 million, including transaction costs. The Marysville Property is 100% leased to a wholly owned subsidiary of a leading marketer of branded consumer lawn and garden care products listed on the NYSE. The acquisition was funded through a combination of available cash and proceeds from a $76.3 million mortgage loan (the "Marysville Mortgage Loan"). The following table summarizes the purchase price allocation for the Marysville Property (in thousands):

---

| | |
|:---|:---|
| Land | $7595 |
| Building and Improvements | 94296 |
| Site Improvements | 4763 |
| Lease intangible assets, net | 16328 |
| Total purchase price | $122982 |

---

**Asset Dispositions**

During the years ended December 31, 2025 and 2024, the Company sold 44 and 14 homes for aggregate net proceeds of $12.3 million and $4.3 million, respectively. During the years ended December 31, 2025 and 2024, the Company recognized an impairment loss of $1.2 million and $0.8 million, respectively, and gain on sale of $0.5 million and $34 thousand, respectively, on these assets sold.

**Properties Held-for-Sale**

As of December 31, 2025 and 2024, the Company classified 12 properties and two property, respectively, as held for sale. As of December 31, 2025 and 2024, assets held for sale, which are included in other assets in the condensed consolidated balance sheets, amounted to $4.2 million and $0.9 million, respectively. As of December 31, 2024, liabilities of $0.7 million associated with a held for sale property, that was subsequently sold in 2025, was included in accounts payable and other liabilities in the condensed consolidated balance sheets.

------

**Sculptor Diversified Real Estate Income Trust, Inc.** 

**Notes to the Consolidated Financial Statements**

**(in thousands, except share and per share data)** 

**Asset Impairment**

The Company evaluates impairment on held for use properties generally when leases are terminated and/or are vacant. As of December 31, 2025 and 2024, the Company, through CapGrow, had five and 16 impaired held for use properties, respectively.

The details of impairment losses for the years ended December 31, 2025 and 2024 are as follows (in thousands):

---

| | | |
|:---|:---|:---|
| | **Year Ended December 31, 2025** | **Year ended December 31, 2024** |
| Impairment loss - assets sold | $1220 | $774 |
| Impairment loss - held for sale | 702 | 195 |
| Impairment loss - held for use | 991 | 1584 |
|  | $2913 | $2553 |

---

**4. INVESTMENT IN UNCONSOLIDATED ENTITIES**

In February 2024, Neptune JV, through Neptune Owner, closed on the acquisition of the Neptune Portfolio for a gross purchase price of $101.5 million, exclusive of closing costs. Concurrently with the acquisition, Neptune Owner obtained debt financing in the amount of $66.0 million. Neptune JV is a VIE in which the Company is not the primary beneficiary. Therefore, the Company accounts for this investment under the equity method of accounting. The Company owns an indirect equity interest of 4.67% in the Neptune Portfolio as of December 31, 2025. Our maximum loss is limited to the amount of our equity investment in this VIE. As of December 31, 2025 and 2024, the Company's investment in the unconsolidated entity was $1.7 million and $1.8 million, respectively. During the years ended December 31, 2025 and 2024, the income from the unconsolidated entity, which was included in income (loss) from an unconsolidated entity on the consolidated statements of operations, was $0.2 million.

**5. INVESTMENTS IN REAL ESTATE DEBT**

Investments in real estate debt consists of (in thousands):

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | | | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** |
| |<br>**Coupon** |<br>**Maturity Date** | **Face Amount**<sup>(1)</sup> | **Cost Basis**<sup>(1)</sup> | **Fair Value** |
| Preferred equity | 12.25%<sup>(2)</sup> | N/A<sup>(3)</sup> | $36562 | $36562 | $36562 |
| Junior mortgage loan | 1M Term SOFR + 7.50%<sup>(4)</sup> | May 5, 2030 | 17000 | 17000 | 17000 |
| Senior secured term loan | 3M Term SOFR + 3.25% | December 2032 | 5000 | 4975 | 4944 |
| CMBS - floating | 1M Term SOFR + 2.941% | January 2030 | 8000 | 7980 | 8040 |
| CMBS - floating | 1M Term SOFR + 4.00% | August 2030 | 2500 | 2500 | 2501 |
| CMBS - floating | 1M Term TSFR + 2.89% | March 2039 | 5000 | 5034 | 5027 |
| CMBS - floating | 1M Term TSFR +3.10% | December 2030 | 21500 | 21500 | 21500 |
| CMBS - floating | 1M Term TSFR + 4.50% | December 2030 | 6281 | 6281 | 6281 |
|  |  |  | $101843 | $101832 | $101855 |
|  |  |  | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
|  | **Coupon** | **Maturity Date** | **Face Amount** | **Cost Basis** | **Fair Value** |
| CMBS - floating | 1M Term SOFR + 2.941% | January 2030 | $8000 | $7980 | $7985 |
|  |  |  | $8000 | $7980 | $7985 |

---

------

**Sculptor Diversified Real Estate Income Trust, Inc.** 

**Notes to the Consolidated Financial Statements**

**(in thousands, except share and per share data)** 

_______________________________________

<sup>(1)</sup> Investment in preferred equity includes original stated balance of $35.0 million plus paid-in-kind interest as of December 31, 2025.

<sup>(2)</sup> Interest accrues monthly with a current pay rate of 7.00% and a deferred interest rate of 5.25% through March 2030, after which the current pay rate increases to 12.00% and the deferred interest rate remains at 5.25% until the preferred units are fully redeemed, including accrued interest.

<sup>(3)</sup> The Company's preferred equity investment does not contain a stated maturity date. The Company has the right to cause the issuer to market and sell assets sufficient to redeem all remaining preferred units, including accrued interest, beginning in March 2031.

<sup>(4)</sup> Interest accrues monthly at a rate of adjusted 1M Term SOFR+ 7.50% with an adjusted 1M Term SOFR floor of 3.00%.

In March 2025, the Company closed on the acquisition of $35.0 million of 12.25% cumulative preferred equity interests in a private real estate company that owns 69 net-leased veterinary hospitals and clinics. From the issue date through the fifth anniversary of the issue date, interest accrues monthly at a rate of 12.25%, with a current pay rate of 7.00% and the remainder deferred and added to the outstanding balance of the investment. Unless the preferred units are fully redeemed, after the fifth anniversary of the issue date, interest accrues at a rate of 17.25%, with a current pay rate of 12.00%. If the preferred units are not redeemed prior to the sixth anniversary of the issue date, the Company has the right to cause the issuer to market and sell assets of the issuer sufficient to redeem all remaining preferred units, including any accrued but unpaid interest. As the investment in preferred equity is subject to the Company's right to cause redemption, if not already redeemed by the issuer itself, the instrument is considered a debt security and is included in our investment in real estate debt.

On May 5, 2025, the Company closed on a $17.0 million junior mortgage loan collateralized by a casino and hotel property located in Las Vegas, Nevada. The loan accrues interest monthly at a rate of adjusted 1M Term SOFR + 7.50% with an adjusted 1M Term SOFR floor of 3.00%. The interest rate may increase by 0.50% if the borrower fails to comply with certain provisions under the first lien credit facility. The loan matures on May 5, 2030, unless repaid earlier, and is secured by a second-priority lien on substantially all assets of the borrower and guarantors, subordinated to the first lien facility.

In August 2025, the Company entered into an agreement to acquire a $5.0 million participation in a $1.4 billion senior secured term loan to TRQ Sales LLC made in connection with the acquisition of Playa Resorts Holding B.V ("Playa Financing"). The transaction was subject to regulatory approval and upon such approval being obtained, the Company recognized the investment and a corresponding liability. The Company settled the participation in the Playa Financing in January 2026. The participation accrues interest monthly at a rate of 1M Term SOFR + 3.25%. The Playa Financing matures on December 30, 2032, unless repaid earlier, and is secured by a first-priority lien on substantially all assets of the borrower and guarantors, subject to customary exceptions and permitted liens.

From time to time, the Company acquires CMBS as part of its investment strategy. During the years ended December 31, 2025 and 2024, the Company acquired $35.3 million and $8.0 million of CMBS, respectively.

The following table details the Company's income (loss) from investments in real estate debt (in thousands):

---

| | | |
|:---|:---|:---|
| | **Year Ended December 31, 2025** | **Year Ended December 31, 2024**<sup>(2)</sup> |
| Interest income | $5802 | $3 |
| Unrealized (loss) gain | 19 | 5 |
| Other<sup>(1)</sup> | 640 |  |
| Total | $6461 | $8 |

---

_______________________________________

<sup>(1)</sup> Represents origination fees and ticking fees received concurrent with the origination of our investments. As a result of the election of the FVO, these fees were recognized at origination.

<sup>(2)</sup> Income from investments in real estate debt was included Other Revenue for the year ended December 31, 2024.

------

**Sculptor Diversified Real Estate Income Trust, Inc.** 

**Notes to the Consolidated Financial Statements**

**(in thousands, except share and per share data)** 

**6. LEASE INTANGIBLES**

The gross carrying amount and accumulated amortization of the Company's intangible assets and liabilities as of December 31, 2025 and 2024 are as follows (in thousands):

---

| | | | |
|:---|:---|:---|:---|
| | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** |
| | **Cost** | **Accumulated Amortization** | **Net** |
| <u>Intangible assets, net:</u> |  |  |  |
| Above-market lease intangibles | $3096 | $(1897) | $1199 |
| In-place lease intangibles | 20211 | (2650) | 17561 |
| Leasing commissions | 35372 | (7687) | 27685 |
| &nbsp;&nbsp;&nbsp;Total intangible assets | $58679 | $(12234) | $46445 |
| <u>Intangible liabilities, net:</u> |  |  |  |
| Below-market lease intangibles | $(54635) | $12571 | $(42064) |

---

---

| | | | |
|:---|:---|:---|:---|
| | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
| | **Cost** | **Accumulated Amortization** | **Net** |
| <u>Intangible assets, net:</u> |  |  |  |
| Above-market lease intangibles | $3126 | $(1288) | $1838 |
| In-place lease intangibles | 8370 | (1782) | 6588 |
| Leasing commissions | 32290 | (5250) | 27040 |
| &nbsp;&nbsp;&nbsp;Total intangible assets | $43786 | $(8320) | $35466 |
| <u>Intangible liabilities, net:</u> |  |  |  |
| Below-market lease intangibles | $(56572) | $8765 | $(47807) |

---

For the years ended December 31, 2025 and 2024, the Company recognized $5.1 million and $5.5 million, respectively, of rental revenue for the amortization of aggregate below-market leases in excess of above-market leases resulting from the allocation of the purchase price of the applicable properties and wrote off $1.9 million and $2.0 million, respectively, of accumulated amortization related to fully amortized assets, held for sale assets, and assets sold. Additionally, during the years ended December 31, 2025 and the 2024, the Company recorded $4.7 million and $8.6 million, respectively, of amortization of in-place leases and leasing commissions, and wrote off $1.4 million and $6.6 million, respectively, of accumulated amortization related to fully amortized assets, held for sale assets, and assets sold. Amortization of the in-place leases and leasing commissions are included in depreciation and amortization on the consolidated statements of operations.

As of December 31, 2025, the weighted-average amortization period for above-market leases, in-place lease intangibles, leasing commissions and below-market lease costs is 3.5 years, 13.5 years, 12.1 years, and 12.2 years, respectively. The

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**Sculptor Diversified Real Estate Income Trust, Inc.** 

**Notes to the Consolidated Financial Statements**

**(in thousands, except share and per share data)** 

estimated future amortization of the Company's lease intangibles for each of the next five years and thereafter as of December 31, 2025 is as follows (in thousands):

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Above-market Lease Intangibles** | **In-place Lease Intangibles** | **Leasing Commissions** | **Below-market Lease Intangibles** |
| 2026 | 511 | 1558 | 2730 | (4140) |
| 2027 | 343 | 1460 | 2612 | (3982) |
| 2028 | 94 | 1349 | 2451 | (3819) |
| 2029 | 86 | 1340 | 2433 | (3781) |
| 2030 | 86 | 1325 | 2411 | (3716) |
| Thereafter | 79 | 10529 | 15048 | (22626) |
|  | $1199 | $17561 | $27685 | $(42064) |

---

**7. OTHER ASSETS**

The following table summarizes the components of other assets (in thousands). Refer to Note 12, "Fair Value Measurements," for additional information on the interest rate cap included in Derivative assets below.

---

| | | |
|:---|:---|:---|
| | **December 31, 2025** | **December 31, 2024** |
| Assets held for sale | $4173 | $859 |
| Derivative assets | 1324 | 2269 |
| Deferred costs | 796 | 410 |
| Deposit for real estate investment | 350 |  |
| Prepaid insurance | 404 | 418 |
| Prepaid ground rent | 97 | 95 |
| Right of use asset - operating lease | 224 | 234 |
| Other | 985 | 235 |
| Total | $8353 | $4520 |

---

**8. ACCOUNTS PAYABLE AND OTHER LIABILITIES**

The following table summarizes the components of accounts payable and other liabilities (in thousands):

---

| | | |
|:---|:---|:---|
| | **December 31, 2025** | **December 31, 2024** |
| Accounts payable and accrued expenses | $3173 | $1729 |
| Performance bonus payable | 474 |  |
| Tenant security deposits | 2755 | 2426 |
| Distribution payable | 2884 | 1846 |
| Subscriptions received in advance | 34475 | 12061 |
| Property taxes payable | 1377 | 899 |
| Liabilities related to assets held for sale |  | 713 |
| Lease liability - operating lease | 230 | 239 |
| Deferred income | 246 | 312 |
| Payable for unsettled investment | 4975 |  |
| Total | $50589 | $20225 |

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**Sculptor Diversified Real Estate Income Trust, Inc.** 

**Notes to the Consolidated Financial Statements**

**(in thousands, except share and per share data)** 

**9. BORROWINGS**

***Mortgages and Other Loans Payable, net***

The following table provides information regarding the Company's mortgages and other loans payable, some of which were assumed upon acquisition of CapGrow and were secured by certain properties of CapGrow (amounts in thousands):

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| | | | | |
|:---|:---|:---|:---|:---|
| | **December 31, 2025** | **December 31, 2024** | **Interest<br>Rate** | **Initial Maturity<br>Date** |
| Mortgage note payable<sup>(1)(2)</sup> | $4504 | $5330 | 7.50% | October 2026 |
| Mortgage note payable<sup>(2)</sup> | 7775 | 8942 | 5.19% | June 2027 |
| Mortgage note payable<sup>(2)</sup> | 8457 | 8726 | 3.75% | April 2028 |
| Mortgage note payable<sup>(2)</sup> | 5887 | 7445 | 5.59% | April 2028 |
| Mortgage note payable<sup>(2)</sup> | 16797 | 18111 | 4.28% | November 2029 |
| Mortgage note payable<sup>(3)</sup> | 45746 | 48172 | 3.59% | September 2030 |
| Mortgage note payable<sup>(4)</sup> | 34578 | 37901 | 3.85% | January 2031 |
| Mortgage note payable<sup>(2)</sup> | 1912 | 1969 | 4.35% | February 2031 |
| Mortgage note payable<sup>(5)</sup> | 23069 | 24982 | 4.01% | January 2032 |
| Mortgage note payable<sup>(2)</sup> | 13535 | 13907 | 4.00% | March 2032 |
| Mortgage note payable<sup>(6)</sup> | 31652 | 32241 | 6.60% | September 2033 |
| Mortgage note payable<sup>(7)</sup> | 20880 | 20880 | 3.56% | November 2033 |
| Mortgage note payable<sup>(8)</sup> | 76250 |  | 5.80% | November 2030 |
| Mortgage note payable<sup>(2)</sup> | 35590 |  | 6.12% | January 2031 |
| Mortgage note payable<sup>(2)</sup> | 628 | 729 | 5.75% to 6.38% | February 2037<br>through January 2039 |
| Notes payable<sup>(9)</sup> | 44 | 318 | 7.00% | January 2026 |
| **Total** | 327304 | 229653 |  |  |
| Discounts and deferred financing costs, net | (4040) | (3114) |  |  |
| Total mortgages and other loans payable, net | $323264 | $226539 |  |  |

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_______________________________________

<sup>(1)</sup> Includes one mortgage loan related to assets held for sale amounting to $0.7 million at December 31, 2024, which is included in accounts payable and other liabilities on the consolidated balance sheets. On June 28, 2024, the Company entered into a modification and extension agreement which provides, among other items, the extension of the original maturity date from June 28, 2024 to October 31, 2026 and an increase in interest rate from 5% to 7.5%.

<sup>(2)</sup> These loans are subject to monthly principal and interest payments through maturity date.

<sup>(3)</sup> Interest only payment loan through September 2023, with the principal balance and any accrued and unpaid interest due at maturity.

<sup>(4)</sup> Interest only payment loan through January 2024, with the principal balance and any accrued and unpaid interest due at maturity.

<sup>(5)</sup> Interest only payment loan through January 2025, with the principal balance and any accrued and unpaid interest due at maturity.

<sup>(6)</sup> Interest only payment loan through September 2026, with the principal balance and any accrued and unpaid interest due at maturity.

<sup>(7)</sup> The acquisition of University Courtyard was funded partly by equity, a $20.8 million leasehold mortgage, and $23.2 million of financing proceeds derived from a failed sale and leaseback transaction. This leasehold mortgage bears interest based on SOFR plus 2.56% per annum and is subject to interest only payments through November 2028, at which time monthly principal and interest payments are due through maturity date. In connection with this leasehold mortgage, University Courtyard entered into a 5-year interest rate cap agreement which caps SOFR at 1% per annum. The interest rate above represents the effective interest rate giving consideration to the interest rate cap. The contractual rate not giving effect to the interest rate cap is 6.57%. Refer to "Financing Obligation, net" below for additional information relating to the failed sale and leaseback transaction. Refer to Note 12, "Fair Value Measurements," for additional information related to this interest rate cap.

<sup>(8)</sup> Interest only payment loan through November 2030, with the principal balance and any accrued and unpaid interest due at maturity.

<sup>(9)</sup> These loans, which are owed to private parties, bear interest at 7%. Interest is due quarterly, with the principal balance and any accrued and unpaid interest due at maturity January 2026. The loan was subsequently paid off in January 2026.

***Mortgage Note Payable***

On October 9, 2025, in connection with the acquisition of the Marysville Property, the Company entered into a five-year mortgage loan with USAA Life Insurance Company, an unaffiliated lender, for borrowings of $76.3 million. The loan is

------

**Sculptor Diversified Real Estate Income Trust, Inc.** 

**Notes to the Consolidated Financial Statements**

**(in thousands, except share and per share data)** 

interest only throughout the term with any principal balance and accrued and unpaid interest due at maturity. The loan bears interest at a fixed rate of 5.80% per annum and matures in November 2030. The loan is secured by the Marysville Property.

***Revolving Credit Facility***

Upon the acquisition of CapGrow, the Company assumed the existing revolving line of credit agreement (the "Credit Facility") with CIBC Bank USA, which carried an outstanding loan balance of $30.3 million, allowed for a maximum borrowing facility of $50.0 million and had a maturity date of February 2024. The maturity date of the Credit Facility was extended to February 2025 as a result of the Company exercising its one-year extension option, and was further extended to February 2027. The Credit Facility bears interest equal to 1M Term SOFR plus 3.5% per annum. As of December 31, 2025 and 2024, the interest rate was 7.19% and 7.83%, respectively. As of December 31, 2025 and 2024, the Credit Facility had an outstanding principal balance of $13.1 million and $18.2 million, respectively. The Credit Facility is guaranteed by certain subsidiaries of CapGrow.

***Financing Obligation, Net***

In connection with the acquisition of University Courtyard in October 2023, the Company entered into a sale and leaseback transaction whereby the underlying land was sold to an unaffiliated third party for $23.2 million and simultaneously entered into a lease agreement with the same unaffiliated third party to lease the property back. The sale and leaseback of University Courtyard is accounted for as a failed sale and leaseback because the lease is classified as a finance lease. Accordingly, the sale of the underlying land is not recognized and the property continues to be included within the Company's consolidated financial statements. The Company will continue to depreciate the property as if the Company is the legal owner. The proceeds received from the sale, net of debt financing costs of $0.2 million, are accounted for as a financing obligation on our consolidated balance sheets. The Company allocates the rental payments under the lease between interest expense and principal repayment of the financing obligation using the effective interest method and amortizes over the 99-year lease term. The total principal payments are not expected to exceed the difference between the gross proceeds from the sale of $23.2 million and the initial carrying value of the land of $4.1 million, resulting in maximum principal payments of $19.1 million over the term of the arrangement. As of December 31, 2025 and 2024, the net carrying value of the financing obligation was $23.0 million.

***Restrictive Covenants***

The Company is subject to various financial and operational covenants under certain of its mortgages and other loans payable and the Credit Facility. These covenants require the Company to maintain a minimum debt service coverage ratio, liquidity, net worth and a minimum of two-years of remaining lease term of all of the CapGrow Portfolio, among others.

As of December 31, 2025 and 2024, the Company was in compliance with all of its loan covenants.

***Contractual Maturities***

The scheduled principal maturities of the mortgages and other loans payable and Credit Facility for each of the next five years and thereafter as of December 31, 2025 were as follows for the Company (in thousands):

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Year Ending** | **Mortgages and Other Loans Payable** | **Credit Facility** | **Financing Obligation** | **Total** |
| December 31, 2026 | 8474 |  | 3 | 8477 |
| December 31, 2027 | 11421 | 13133 | 5 | 24559 |
| December 31, 2028 | 17368 |  | 7 | 17375 |
| December 31, 2029 | 19653 |  | 8 | 19661 |
| December 31, 2030 | 185614 |  | 10 | 185624 |
| Thereafter | 84774 |  | 19108 | 103882 |
|  | $327304 | $13133 | $19141 | $359578 |

---

------

**Sculptor Diversified Real Estate Income Trust, Inc.** 

**Notes to the Consolidated Financial Statements**

**(in thousands, except share and per share data)** 

**10. STOCKHOLDERS' AND MEMBERS' EQUITY AND NON-CONTROLLING INTERESTS IN THE OPERATING PARTNERSHIP AND CONSOLIDATED SUBSIDIARIES**

***Authorized Capital Stock***

As of December 31, 2025, the Company's authorized capital stock was as follows:

---

| | | |
|:---|:---|:---|
| | **Number of Shares** | **Par Value per Share** |
| Class F Shares | 300000000 | $0.01 |
| Class FF Shares | 300000000 | $0.01 |
| Class S Shares | 300000000 | $0.01 |
| Class D Shares | 300000000 | $0.01 |
| Class I Shares | 300000000 | $0.01 |
| Class A Shares | 300000000 | $0.01 |
| Class AA Shares | 300000000 | $0.01 |
| Class I-S Shares | 100000000 | $0.01 |
| Class E Shares | 100000000 | $0.01 |
| Total | 2300000000 |  |
| Preferred Stock | 100000000 | $0.01 |
|  | 2400000000 |  |

---

***Common Stock***

The following tables detail the movement in the Company's outstanding shares of common stock as of December 31, 2025 and 2024.

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Year Ended December 31, 2025** | **Year Ended December 31, 2025** | **Year Ended December 31, 2025** | **Year Ended December 31, 2025** | **Year Ended December 31, 2025** | **Year Ended December 31, 2025** | **Year Ended December 31, 2025** |
| | **Class F** | **Class FF** | **Class E** | **Class AA** | **Class A** | **Class I-S** | **Total** |
| December 31, 2024 | 20637033 | 6311042 | 266204 | 2566352 | 128535 |  | 29909166 |
| Common stock issued | 902350 |  | 9167876 | 4259967 | 1605848 | 48097 | 15984138 |
| Distribution reinvestment | 1610 | 270168 | 24888 | 200563 | 10785 | 2954 | 510968 |
| Shares repurchased | (1030382) | (235551) |  | (15629) |  |  | (1281562) |
| Restricted stock grant<sup>(2)</sup> |  |  | 24418 |  |  |  | 24418 |
| December 31, 2025 | 20510611 | 6345659 | 9483386 | 7011253 | 1745168 | 51051 | 45147128 |

---

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Year Ended December 31, 2024** | **Year Ended December 31, 2024** | **Year Ended December 31, 2024** | **Year Ended December 31, 2024** | **Year Ended December 31, 2024** | **Year Ended December 31, 2024** | **Year Ended December 31, 2024** |
| | **Class F** | **Class FF** | **Class E** | **Class AA** | **Class A** | **Class I-S** | **Total** |
| December 31, 2023 | 16058619 | 5943910 | 69325 |  |  |  | 22071854 |
| Common stock issued | 4576910 | 121867 | 118125 | 2527112 | 126885 |  | 7470899 |
| Distribution reinvestment | 6245 | 254725 | 11809 | 39240 | 1650 |  | 313669 |
| Shares repurchased |  | (9460) |  |  |  |  | (9460) |
| Shares exchanged<sup>(1)</sup> | (67152) |  | 66945 |  |  |  | (207) |
| Restricted stock grant<sup>(2)</sup> | 62411 |  |  |  |  |  | 62411 |
| December 31, 2024 | 20637033 | 6311042 | 266204 | 2566352 | 128535 |  | 29909166 |

---

_______________________________________

<sup>(1)</sup> The Class F shares held by our independent directors were exchanged for Class E shares.

<sup>(2)</sup> Represents the vested shares.

------

**Sculptor Diversified Real Estate Income Trust, Inc.** 

**Notes to the Consolidated Financial Statements**

**(in thousands, except share and per share data)** 

Holders of Class F shares purchased before January 1, 2023, totaling 15,019,800 shares, were prohibited from seeking repurchase of their shares before January 1, 2026 except in the event of a material violation, amendment or waiver of the Company's corporate governance guidelines without the prior consent of the holders of a majority of the outstanding Class F shares.

The following is a summary of the rights and privileges of the holders of common stock as of December 31, 2025.

*Conversion of Certain Share Classes:* The Company's charter provides that it will cease paying the distribution fee with respect to any Class A, Class AA, Class S, or Class D share held in a stockholder's account at the end of the month in which the Company, in conjunction with the transfer agent, determines that total upfront selling commissions and distribution fees paid with respect to the shares held by such stockholder within such account would equal or exceed, in the aggregate, the percentage limit (if any, and as set forth in the applicable agreement with a soliciting dealer at the time such shares were issued) of the gross proceeds from the sale of such shares (including the gross proceeds of any shares issued under the Company's distribution reinvestment plan with respect thereto) (collectively, the "Fee Limit"). At the end of such month, each such Class A, Class AA, Class S, or Class D share in such account (including shares in such account purchased through the distribution reinvestment plan or received as a stock dividend) will convert into a number of Class I shares (including any fractional shares) with an equivalent aggregate NAV as such share.

In addition, if not already converted into Class I shares upon a determination that total upfront selling commissions and distribution fees paid with respect to such shares would exceed the applicable Fee Limit, if any, each Class A, Class AA, Class I-S , Class S, Class D, Class E, Class F and Class FF share held in a stockholder's account (including shares in such account purchased through the distribution reinvestment plan or received as a stock dividend) will automatically and without any action on the part of the holder thereof convert into a number of Class I shares (including fractional shares) with an equivalent NAV as such share on the earliest of (i) a listing of Class I shares, (ii) the Company's merger or consolidation with or into another entity in which the Company is not the surviving entity or (iii) the sale or other disposition of all or substantially all of the Company's assets. However, with respect to Class A, Class AA, Class E, Class F, Class FF and Class I-S shares only, such conversion will not occur if immediately after the occurrence of any such event the Company is externally advised with different management fee allocations (which may or may not include different performance allocations) for holders of Class I shares on the one hand and holders of Class A, Class AA, Class E, Class F, Class FF, or Class I-S shares on the other hand.

*Liquidation Preference:* In the event of liquidation, dissolution or winding up, holders of common stock will be entitled to share ratably in the net assets legally available for distribution to stockholders after the payment of all debts and other liabilities and the satisfaction of any liquidation preference granted to the holders of any then-outstanding shares of preferred stock. Immediately before any liquidation, dissolution or winding up, or any distribution of the assets of the Company pursuant to a plan of liquidation, dissolution or winding up, Class A, Class AA, Class S, Class D, Class E, Class F, Class FF, and Class I-S shares will automatically convert to Class I shares at the conversion rate applicable to each share class. Following such conversion, the aggregate assets of the Company available for distribution to holders of the shares, or the proceeds therefrom, shall be distributed to each holder of Class I shares, ratably with each other holder of Class I shares, which will include all converted Class A, Class AA, Class I-S, Class S, Class D, Class E, Class F and Class FF shares, in such proportion as the number of outstanding Class I shares held by such holder bears to the total number of outstanding Class I shares then outstanding.

*Dividends:* Subject to any preferential rights of any outstanding class or series of shares of stock and to the provisions in the Company's charter regarding the restrictions on ownership and transfer of stock, holders of common stock are entitled to such distributions as may be authorized from time to time by the board of directors (or a committee of the board of directors) and declared by the Company out of legally available funds.

*Voting Rights:* Each holder of common stock is entitled to one vote per share on all matters voted on by stockholders, including the election of directors. Under the Company's charter, stockholders do not have cumulative voting rights. Therefore, the holders of a majority of the Company's outstanding shares of common stock can elect the entire board of directors.

*Rights and Preferences:* Holders of common stock have no preemptive rights or automatic option to purchase any new shares of stock.

------

**Sculptor Diversified Real Estate Income Trust, Inc.** 

**Notes to the Consolidated Financial Statements**

**(in thousands, except share and per share data)** 

The Company's board of directors has the ability to establish without any action by the stockholders, to classify or reclassify any unissued common stock into one or more classes or series by setting or changing the preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends and other distributions, qualifications and terms or conditions of repurchase of any new class or series of shares of stock.

***Share Repurchase Plan***

On February 10, 2023, the Company adopted a Share Repurchase Plan (the "Repurchase Plan"), whereby, subject to certain limitations, stockholders may request on a monthly basis that the Company repurchase all or any portion of their shares. The total amount of aggregate repurchases of the Company's stock is limited during each calendar month to 2% of the aggregate NAV of all classes as of the last calendar day of the previous quarter and in each calendar quarter will be limited to 5% of the aggregate NAV of all share classes as of the last calendar day of the previous calendar quarter; provided, however, that every month and quarter each class of the Company's stock will be allocated capacity within such aggregate limit to allow stockholders in such class to either (a) redeem shares equal to at least 2% of the aggregate NAV of such share class as of the last calendar day of the previous quarter, or, if more limiting, (b) redeem shares over the course of a given quarter equal to at least 5% of the aggregate NAV of such share class as of the last calendar day of the previous quarter. Shares will be repurchased at a price equal to the transaction price on the applicable repurchase date, subject to any Early Repurchase Deduction (as defined below). The transaction price will generally equal the prior month's NAV per share for that share class. Shares repurchased within one year of the date of issuance will be repurchased at 95% of the current transaction price (the "Early Repurchase Deduction"). The Early Repurchase Deduction will not apply to shares acquired through the distribution reinvestment plan. Due to the illiquid nature of investments in real estate, the Company may not have sufficient liquid resources to fund repurchase requests, and the Company has established limitations on the amount of funds it may use for repurchases during any calendar month and quarter as described above. The Company's Board may modify, suspend or terminate the Repurchase Plan. During the year ended December 31, 2025, the Company repurchased 1,281,562 shares under the Repurchase Plan for $13.7 million. During the year ended December 31, 2024, the Company repurchased 9,460 shares under the Repurchase Plan for $0.1 million.

***Distributions***

To comply with the REIT provisions of the Code, the Company generally intends to distribute substantially all of its taxable income, which does not necessarily equal net income as calculated in accordance with GAAP, to our stockholders.

Each class of common stock receives the same gross distribution per share. The net distribution varies for each class based on the applicable distribution fee, which is deducted from the monthly distribution per share and paid directly to the applicable distributor, and/or certain other class-specific fees, as applicable. The following tables detail the aggregate distributions declared for each applicable class of common stock for the years ended December 31, 2025 and 2024:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Year Ended December 31, 2025** | **Year Ended December 31, 2025** | **Year Ended December 31, 2025** | **Year Ended December 31, 2025** | **Year Ended December 31, 2025** | |
| | **Class F** | **Class FF** | **Class E** | **Class AA** | **Class A** | **Class I-S** |
| Aggregate gross distributions declared per share of common stock | $0.7543 | $0.7543 | $0.7543 | $0.7543 | $0.7543 | $0.6923 |
| Distribution fee per share of common stock |  | (0.0532) |  | (0.0533) |  |  |
| Net distributions declared per share of common stock | $0.7543 | $0.7011 | $0.7543 | $0.7010 | $0.7543 | $0.6923 |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Year Ended December 31, 2024** | **Year Ended December 31, 2024** | **Year Ended December 31, 2024** | **Year Ended December 31, 2024** | **Year Ended December 31, 2024** | **Year Ended December 31, 2024** |
| | **Class F** | **Class FF** | **Class E** | **Class AA** | **Class A** | **Class I-S** |
| Aggregate gross distributions declared per share of common stock | $0.7562 | $0.7562 | $0.7562 | $0.6935 | $0.3169 | $— |
| Distribution fee per share of common stock |  | (0.0535) |  | (0.0492) |  |  |
| Net distributions declared per share of common stock | $0.7562 | $0.7027 | $0.7562 | $0.6443 | $0.3169 | $— |

---

------

**Sculptor Diversified Real Estate Income Trust, Inc.** 

**Notes to the Consolidated Financial Statements**

**(in thousands, except share and per share data)** 

***Distribution Reinvestment Plan***

In February 2023, the Company adopted a distribution reinvestment plan ("DRIP") whereby participating stockholders will have their cash distributions attributable to the class of shares purchased automatically reinvested in the same class of shares. The per share purchase price for shares purchased under the DRIP will be equal to the transaction price on the record date of the distribution that is payable. Stockholders will not pay upfront selling commissions when purchasing shares pursuant to the DRIP, but such shares will be subject to distribution fees, if any. The distribution fees (when applicable) are calculated based on the NAV for the applicable shares and may reduce the NAV, or alternatively, the distributions payable with respect to the shares of each such class, including shares issued under the DRIP.

***Share-Based Compensation Plan***

On March 7, 2023, the Board approved the independent director compensation plan (the "Compensation Plan"), which provides independent directors an initial one-time grant of Class F restricted shares of common stock valued at $100,000 (the "Initial Grant"), annual compensation consisting of a number of restricted shares (the "Equity Retainer") valued at $25,000 and all or a portion of their cash compensation (the "Cash Retainer") if the independent directors elect to receive such cash compensation in the form of restricted shares of the Company's common stock. Prior to September 3, 2023, any grant of restricted stock was based on the then-current per share transaction price of the Class F shares at the time of grant. In April 2024, the Board approved the exchange of these Class F shares for a number of Class E shares with an equivalent aggregate net asset value. Thereafter, any grant of restricted stock will be based on the then-current per share transaction price of the Class E shares at the time of grant. Restricted stock grants will generally vest on the first anniversary of the date of grant. During the restricted period, these restricted shares are automatically subject to the Company's DRIP with all dividends and other distributions declared and paid in respect of such restricted shares being applied to the purchase of additional restricted shares of the same class until the later of (i) such restricted shares becomes fully vested or (ii) receipt of nonparticipation in the DRIP by such independent director. The maximum number of shares that will be available for issuance under the Compensation Plan is 500,000.

In March 2023, the Company granted approximately $0.6 million or approximately 62,411 Class F restricted shares of common stock which represented the Initial Grant, Equity Retainer and a portion of the Cash Retainer that the independent directors have elected to receive in restricted shares of stock. These restricted stock grants along with the additional restricted shares earned under the DRIP vested between February 2024 and April 2024. Upon the Board's approval, all Class F Shares previously granted were exchanged for Class E Shares of common stock. In June 2024, the Company granted approximately $0.2 million or approximately 22,792 Class E restricted shares which represented the Equity Retainer and a portion of the Cash Retainer that the independent directors have elected to receive in restricted shares of common stock. These restricted stock grants along with the additional restricted shares earned under the DRIP were vested in June 2025. In June 2025, the Company granted approximately $0.2 million, or approximately 18,927 Class E restricted shares, which represented the Equity Retainer and a portion of the Cash Retainer that the independent directors have elected to receive in restricted shares of common stock. These restricted stock grants along with the additional restricted shares earned under the DRIP will vest in June 2026.

As of December 31, 2025, 395,870 shares of common stock remain available for issuance under the Compensation Plan. During the years ended December 31, 2025 and 2024, total compensation cost recognized was $0.2 million and $0.2 million, respectively. The Company adopted the policy of accounting for forfeitures as they occur. As of December 31, 2025, the Company expects that the independent directors will complete their requisite service period. If awards are ultimately forfeited prior to vesting, then the Company will reclassify amounts previously charged to retained earnings to compensation cost in the period the award is forfeited.

***Non-controlling Interest in the Operating Partnership***

As discussed in Note 11, "Related Party Transactions," the Special Limited Partner holds a performance participation interest in the Operating Partnership. Because the Special Limited Partner has the ability to redeem its Class E units for cash or Class E shares, at its election, the Company has classified these Class E units as a redeemable non-controlling interest in the Operating Partnership on our condensed consolidated balance sheets. The redeemable non-controlling interest in the Operating Partnership is recorded at the greater of the carrying amount, adjusted for its share of the allocation of income or loss and dividends, or the redemption value, which is equivalent to fair value, of such units at the end of each measurement period.

------

**Sculptor Diversified Real Estate Income Trust, Inc.** 

**Notes to the Consolidated Financial Statements**

**(in thousands, except share and per share data)** 

Below are the details of the non-controlling interest in the Operating Partnership (in thousands):

---

| | | |
|:---|:---|:---|
| | **Year Ended December 31, 2025** | **Year Ended December 31, 2024** |
| **Balance at the beginning of the year** | $1648 | $2 |
| Issuance of Class E units | 370 | 1669 |
| Distributions | (122) | (113) |
| GAAP income allocation | 16 | (33) |
| Adjustment to carrying value of redeemable equity instrument | 279 | 123 |
| **Ending balance** | $2191 | $1648 |

---

***Non-controlling Interest in the Consolidated Subsidiaries***

Non-controlling interest in the consolidated subsidiaries represents an affiliate and third-party equity interests in certain consolidated entities that are not wholly owned by the Company.

***Members' Equity of CapGrow***

Within CapGrow, the members' obligations and rights relating to contributions, distributions, and allocation of income and loss, among others, are governed by CapGrow's limited liability company agreement, as further amended from time to time (the "CapGrow Agreement"). Distributions of available cash are distributed to the members of CapGrow based on their respective membership interests until certain internal rate of return thresholds are met. As the rate of return thresholds are achieved, the allocation of distributions is modified as further described in the CapGrow Agreement. Income or losses are allocated to the members in amounts that result in ending capital account balances reflecting the amounts that would be distributed to them assuming CapGrow was liquidated at book value at the end of the reporting period.

**11. RELATED PARTY TRANSACTIONS**

***Due from Related Parties***

Since our initial investment, CapGrow has overseen the day to day operations of the Neptune JV and is entitled to a reimbursement of expenses borne on behalf of the Neptune JV. As of December 31, 2025 and 2024, there were no reimbursement of expenses due from CapGrow Neptune.

***Due to Related Parties***

The components of due to related parties of the Company are as follows (in thousands):

---

| | | |
|:---|:---|:---|
| | **December 31, 2025** | **December 31, 2024** |
| Accrued management fee | $380 | $255 |
| Accrued performance participation allocation | 3940 |  |
| Due to adviser | 1 | 21 |
| Advanced organization and offering costs | 2233 | 2920 |
| Due to affiliates, net | 14 | 39 |
|  | $6568 | $3235 |

---

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**Sculptor Diversified Real Estate Income Trust, Inc.** 

**Notes to the Consolidated Financial Statements**

**(in thousands, except share and per share data)** 

***Management Fee***

The Company pays the Adviser an annual asset management fee equal to 0.50% of the NAV of the Company's Class F and Class FF Common Shares, and 0.75% of the NAV of the Company's Class AA, Class A and Class I-S Common Shares. If in the future the Company sells other classes of shares, the Company will pay the Adviser a management fee of 1.25% of the aggregate NAV of Class S Common Shares, Class D Common Shares and Class I Common Shares and 0.75% of the aggregate NAV of Class I-S shares, both per annum, payable monthly. Additionally, to the extent that the Operating Partnership issues Operating Partnership units to parties other than the Company, the Operating Partnership will pay the Adviser a management fee equal to 1.25% of the aggregate NAV of the Operating Partnership attributable to such Operating Partnership units not held by the Company per annum, payable monthly in arrears. No management fee will be paid with respect to Class E Common Shares or Class E Units, which are only expected to be held by Sculptor, its personnel and affiliates. In calculating the management fee, the Company will use its NAV and the NAV of the Operating Partnership units not held by the Company before giving effect to monthly accruals for the management fee, the performance participation allocation, distribution fees or distributions payable on the Company's shares of stock or Operating Partnership units.

The management fee, which is due monthly in arrears, may be paid, at the Adviser's election, in cash, Class E shares or Class E units of our Operating Partnership. The Adviser may defer the payment of management fee at its discretion.

During the years ended December 31, 2025 and 2024, the Company incurred management fees amounting to $2.0 million and $1.3 million, respectively.

During the year ended December 31, 2025, the Company issued 169,672 Class E shares as payment for the management fee from November 2024 through October 2025. During the year ended December 31, 2024, the Company issued 117,226 Class E shares as payment for the management fee from November 2023 through October 2024.

As of December 31, 2025 and 2024, the Company owed management fees amounting to $0.4 million and $0.3 million, respectively.

***Performance Participation***

The Special Limited Partner holds a performance participation interest in the Operating Partnership, which has multiple components: a performance participation interest with respect to the Class D units, Class I units and Class S units (the "Performance Allocation"); a performance allocation with respect to the Class A units and Class AA units (the "Class A Performance Allocation"); a performance allocation with respect to the Class I-S units (the "Class I-S Performance Allocation"); and a performance allocation with respect to the Class F units and Class FF units (the "Class F Performance Allocation"). The Performance Allocation entitles the Special Limited Partner to receive an allocation from the Operating Partnership equal to 12.5% of the Total Return, subject to a 5% Hurdle Amount and a High-Water Mark, with a Catch-Up; the Class A Performance Allocation entitles the Special Limited Partner to receive an allocation equal to 10.0% of the Class A Total Return, subject to a 7% Class A Hurdle Amount and a High-Water Mark, with a 50% Catch-Up; the Class I-S Performance Allocation entitles the Special Limited Partner to receive an allocation equal to 10.0% of the Class I-S Total Return, subject to a 7% Class I-S Hurdle Amount and a High-Water Mark, with a 50% Catch-Up; and the Class F Performance Allocation entitles the Special Limited Partner to receive an allocation equal to 6.25% of the Class F Total Return, subject to a 7% Class F Hurdle Amount and a High-Water Mark, with a 50% Catch-Up (as each of those terms is defined in the amended and restated limited partnership agreement of the Operating Partnership). Distributions on the Performance Allocation, Class A Performance Allocation, Class I-S Performance Allocation, and Class F Performance Allocation are payable in cash or Class E Units at the election of the Special Limited Partner.

The performance allocations are accrued on a monthly basis and are paid on an annual basis. As of December 31, 2025, the Company owed performance allocations amounting $3.9 million. In January 2026, the Company issued 335,843 Class E units to the Special Limited Partner as payment for the 2025 performance allocation. As of December 31, 2024, there was no accrued performance allocation.

------

**Sculptor Diversified Real Estate Income Trust, Inc.** 

**Notes to the Consolidated Financial Statements**

**(in thousands, except share and per share data)** 

***Expense Reimbursements***

Except for the employees of CapGrow, the Company does not have any employees. Currently, the Adviser is responsible for the payroll costs and related expenses of the Adviser's personnel who are involved in the operation and management of the Company.

The Adviser is entitled to reimbursement of all costs and expenses incurred on behalf of the Company, which includes (a) organization and offering expenses (excluding upfront selling commissions and distribution fees), (b) professional fees for services obtained from third parties that directly relate to the management and operations of the Company, (c) expenses of managing and operating our properties, whether payable to an affiliate or a non-affiliated person, and (d) out-of-pocket expenses in connection with the selection and acquisition of properties and real estate debt, whether or not such investments are acquired. As of December 31, 2025 and 2024, the Company owed the Adviser less than $0.1 million for expenses paid on its behalf.

The Company began reimbursing organization and offering expenses incurred prior to the first anniversary of the commencement of the Offering ratably over 60 months commencing in the first month following the first anniversary of the date the Company commenced the Offering. Any additional organization and offering expenses incurred subsequently are reimbursed on a monthly basis. Commencing four fiscal quarters after the acquisition of CapGrow, the Company may not reimburse the Adviser at the end of any fiscal quarter for total operating expenses that in the four consecutive fiscal quarters then ended exceed the greater of: 2% of our "average invested assets" or 25% of the Company's "net income" (as defined in the advisory agreement) unless the independent directors determine that the excess expenses were justified based on such factors that they deem sufficient. As of December 31, 2025 and 2024, the Company owed offering and organization costs of $2.2 million and $2.9 million, respectively.

***Employment Agreement***

At acquisition, CapGrow renewed the employment agreement with its chief executive officer, whose primary responsibility is to manage the day-to-day business and affairs of CapGrow, as directed by the Company. The employment agreement, which expires in January 2028, provides a minimum salary amount and a performance-based bonus. The total compensation costs were included in payroll costs on the consolidated statements of operations.

A wholly-owned subsidiary of CapGrow JV has a performance bonus plan that allows its qualified employees to be entitled to a cash bonus at the end of the 5-year performance period ending January 3, 2028. The performance bonus is calculated at 2% of the hypothetical distributions to members of CapGrow JV after CapGrow Member would have received a certain IRR. As of December 31, 2025, the Company had accrued $0.5 million based on estimated hypothetical distributions, which was partly based on the fair market value of the CapGrow investment at the end of the performance period. The accrued amount is included in accounts payable and other liabilities on the consolidated balance sheets. No amount was accrued as of December 31, 2024.

***Property Management Agreements***

Certain of the Company's investments are managed by the Company's joint venture partners and such joint venture partners' affiliates. They provide management, leasing, construction supervision and asset management services. These agreements typically provide for property and asset management fees based on either predetermined fees or fees as a percentage of the effective gross revenue generated by the respective asset. Fees for construction management are typically based on a percentage of costs incurred. Additionally, certain agreements require the Company to reimburse the property manager for any expenses incurred on its behalf.

During the years ended December 31, 2025 and 2024, the total property and asset management fees, which were included in property operating expenses in the consolidated statements of operations, were $0.3 million and $0.3 million, respectively.

As of December 31, 2025 and 2024, the amounts due to affiliates under the property management agreements totaled less than $0.1 million.

**12. FAIR VALUE MEASUREMENTS**

------

**Sculptor Diversified Real Estate Income Trust, Inc.** 

**Notes to the Consolidated Financial Statements**

**(in thousands, except share and per share data)** 

The Company is required to disclose fair value information regarding certain financial instruments, whether or not recognized at fair value in the consolidated balance sheets, for which it is practical to estimate fair value. The FASB guidance defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date (e.g., the exit price). The Company measures and/or discloses the estimated fair value of certain financial assets and liabilities based on a hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity and the reporting entity's own assumptions about market participant assumptions. This hierarchy consists of three broad levels: Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity can access at the measurement date; Level 2 - inputs other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and Level 3 - unobservable inputs for the asset or liability that are used when little or no market data is available. The Company follows this hierarchy for our assets and liabilities measured at fair value on a recurring and nonrecurring basis. In instances in which the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level of input that is significant to the fair value measurement in its entirety. Our assessment of the significance of the particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability.

***Valuation of Financial Instruments Measured at Fair Value***

From time to time, the Company may use derivative instruments, such as interest rate swaps or caps to manage or hedge interest rate risk. The Company hedges its exposure to variability in future cash flows for forecasted transactions in addition to anticipated future interest payments on its existing debt. The Company does not anticipate designating any of its derivative financial instruments as hedges. As such, derivatives that are not hedges are adjusted to fair value through earnings. The valuation of these instruments is determined by a third-party service provider using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and utilizes observable market-based inputs, including interest rate curves and implied volatilities. The valuation of these derivatives is considered Level 2 within the fair value hierarchy.

As of December 31, 2025 and 2024, the Company has an interest rate cap agreement, which is used to manage the interest payments related to the mortgage payable held by University Courtyard. The fair value of this interest rate cap is presented as part of other assets in the consolidated balance sheets. During the years ended December 31, 2025 and 2024, the Company recorded unrealized loss on derivative instrument amounting to $0.9 million and $0.2 million, respectively.

The following table summarizes the fair value, notional amount and other information related to this instrument as of December 31, 2025 and 2024, respectively:

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Notional Value** | **Index** | **Strike Rate** | **Effective Date** | **Expiration Date** | **December 31, 2025** | **December 31, 2024** |
| Interest rate cap | $20880 | SOFR | 1% | October 2023 | November 2028 | $1324 | $2269 |
|  |  |  |  |  |  | $1324 | $2269 |

---

From time to time, the Company may invest in certain real estate-related debt investments, including preferred equity and debt securities, which upon the election of FVO, are recorded at fair value. The Company generally determines the fair value of its real estate debt investments utilizing third-party pricing service providers, who may use broker-dealer quotations, reported trades, or valuation estimates from their pricing models to determine the estimated price. The pricing service providers' models usually consider the attributes applicable for similar securities (e.g., credit rating, seniority), current market data, and estimated cash flows and incorporate deal collateral performance, such as prepayment speeds and default rates, as available. The valuation of our investments in CMBS and loan syndication is generally considered Level 2 within the fair value hierarchy.

As of December 31, 2025, the valuation of our investments in preferred equity and the junior mortgage loan were classified as Level 3 within the fair value hierarchy. During the year ended December 31, 2025, there was no unrealized gain or loss related to these investments.

The fair value of the Level 3 debt investments is determined primarily using discounted cash flow models and recent transaction pricing, adjusted for market conditions. The models incorporate significant unobservable inputs, including: (i) estimated cash flows and exit scenarios based on expected distributions and redemption rights; (ii) discount rates, reflecting

------

**Sculptor Diversified Real Estate Income Trust, Inc.** 

**Notes to the Consolidated Financial Statements**

**(in thousands, except share and per share data)** 

credit risk and liquidity; (iii) estimated timing and probability of exit events; and (iv) subordination features or waterfall priority in capital structures. Because these inputs are based on judgment and assumptions that are not directly observable in the market, changes to these inputs could result in significantly different fair values. For example, increases in the discount rate or a delay in expected exit timing would reduce the fair value. Interrelationships among these assumptions (e.g., higher risk assumptions leading to lower expected exit proceeds) can magnify valuation sensitivity.

The following table summarizes the significant unobservable inputs used in the valuation of Level 3 investments included in investments in real estate debt as of December 31, 2025:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** | **December 31, 2025** |
| | **Valuation Technique** | **Unobservable Inputs** | **Weighted Average Rate** | **Impact to Valuation from an Increase in Input** |
| Preferred equity | Discounted cash flow | Discount rate | 12.25% | Decrease |
| Junior mortgage loan | Discounted cash flow | Discount rate | 11.03% | Decrease |

---

As of December 31, 2024, the Company did not have any investments classified as Level 3 within the fair value hierarchy.

The following table details the Company's assets measured at fair value on a recurring basis using Level 3 inputs:

---

| | |
|:---|:---|
| | **Investments in<br>Real Estate Debt** |
| **Balance as of December 31, 2024** | $— |
| Purchases | 52000 |
| Paid-in-kind interest | 1562 |
| Net unrealized gain / (loss) included in earnings |  |
| **Balance as of December 31, 2025** | $53562 |

---

***Valuation of Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis***

When performing a business combination or asset acquisition, the Company is required to measure assets and liabilities at fair value as of the acquisition date consistent with ASC 805. The fair value of each property is determined primarily based on unobservable data inputs, which utilized market knowledge obtained from historical transactions and published market data. Any above- and below market lease intangibles are derived (using a discount rate which reflects the risks associated with the lease acquired) based on the difference between contractual rent and market rent, measured over a period equal to the remaining term of each of the leases, including the renewal options for below market leases. In estimating in-place leases and deferred commissions, the Company uses estimates of its carry costs during hypothetical expected lease-up periods and costs to execute similar leases, which include estimates of lost rental income at market rates as well as leasing commissions. Debt is valued by a third-party appraiser, utilizing the discounted cash flow and inputs such as discount rate, prepayment speeds, general economic and industry trends, and is considered Level 3 within the fair value hierarchy.

Certain of the Company's assets are not measured at fair value on an ongoing basis but are subject to fair value adjustments, such as when there is evidence of impairment, and therefore measured at fair value on a nonrecurring basis. The Company reviews its real estate properties for impairment each quarter or when there is an event or change in circumstances that could indicate the carrying amount of the real estate value may not be recoverable. The valuation methodologies used to value our real estate with indicators of impairment involve subjective judgments regarding such factors as comparable sales, rental revenue and operating expense data, known contingencies, the capitalization or discount rate, and projections of future rent and expenses based on appropriate analysis.

The Company recorded impairment losses in respect of the assets sold, held for sale properties and certain held for use properties where leases were terminated and/or are vacant, with expected sales proceeds to be lower than the carrying value of the properties. The fair value of these impaired assets is primarily based on the sale price pursuant to the binding executed

------

**Sculptor Diversified Real Estate Income Trust, Inc.** 

**Notes to the Consolidated Financial Statements**

**(in thousands, except share and per share data)** 

contracts, list price or third-party estimated fair value less applicable estimated costs to sell, and are considered Level 3 within the fair value hierarchy. Refer to Note 3, "Investments in Real Estate," for additional disclosure relating to asset impairment.

***Valuation of Liabilities Not Measured at Fair Value***

The following table presents the carrying value and estimated fair value of our financial instruments that are not carried at fair value on the consolidated balance sheets as of December 31, 2025 and 2024:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **December 31, 2025** | **December 31, 2025** | **December 31, 2024** | **December 31, 2024** |
| | **Carrying Value**<sup>(1)</sup> | **Estimated Fair Value** | **Carrying Value**<sup>(1)</sup> | **Estimated Fair Value** |
| Mortgages and other loans payable | $327304 | $322001 | $229653 | $220631 |
| Revolving credit facility | 13133 | 13133 | 18233 | 18233 |
| <sup>(1)</sup> The carrying value of these loans do not include unamortized premium or discount and debt issuance costs. | <sup>(1)</sup> The carrying value of these loans do not include unamortized premium or discount and debt issuance costs. | <sup>(1)</sup> The carrying value of these loans do not include unamortized premium or discount and debt issuance costs. | <sup>(1)</sup> The carrying value of these loans do not include unamortized premium or discount and debt issuance costs. |  |

---

The fair value of the Company's borrowings is estimated by modeling the cash flows required by our debt agreements and discounting them back to present value using the appropriate discount rate. Additionally, the Company considers current market rates and conditions by evaluating similar borrowing agreements with comparable loan-to-value ratios and credit profiles. These estimates are considered Level 3 within the fair value hierarchy.

**13. ECONOMIC DEPENDENCY**

The Company is dependent on the Adviser and its affiliates for certain services that are essential to it, including the sale of the Company's shares of common stock, acquisition and disposition decisions, and certain other responsibilities. In the event that the Adviser and its affiliates are unable to provide such services, the Company would be required to find alternative service providers.

**14. RENTAL INCOME**

The Company leases the CapGrow Portfolio to various companies who serve adults with behavioral health needs, primarily under triple-net lease agreements, with terms extending through July 2035. Under the terms of the triple-net lease agreements, tenants are responsible for the payment of all taxes, maintenance, repairs, insurance, environmental and other operating expenses relating to the residential and commercial real estate. Variable lease payments consist of tenant reimbursements and other fees such as late fees, among others. As of December 31, 2025, 49 subsidiaries of National Mentor Holdings, Inc., a Delaware corporation doing business as "Sevita," leased approximately 519 of the CapGrow Portfolio properties, representing 26% of the Company's total assets. As of December 31, 2024, 44 subsidiaries of National Mentor Holdings, Inc. leased approximately 500 of CapGrow Portfolio properties, representing 33% of the Company's total assets. These leases accounted for 38% and 40% of the Company's total rental revenues for the years ended December 31, 2025 and 2024, respectively. These leases have various expiration dates extending through June 2035.

There are no cross-default provisions among the leases with the subsidiaries of Sevita. Although Sevita is not a party to these leases, Sevita has entered into separate guarantee agreements with respect to 433 and 426 of CapGrow's properties and 22% and 28% of total assets as of December 31, 2025 and 2024, respectively.

During the years ended December 31, 2025 and 2024, these properties represented 32% and 34% of total rental revenues, respectively.

During the year ended December 31, 2025, there were two tenants that each represent more than 5% of total rental income, which collectively represent over 45% of the Company's rental revenue. During the year ended December 31, 2024, there were two tenants that each represent more than 5% of total rental income, which collectively represent over 49% of the Company's rental revenue.

------

**Sculptor Diversified Real Estate Income Trust, Inc.** 

**Notes to the Consolidated Financial Statements**

**(in thousands, except share and per share data)** 

While this represents a significant concentration risk with regard to revenue, the credit risk associated with these tenants is mitigated since the payor stream is principally derived through Medicaid waivers. A majority of the CapGrow Portfolio is located in Minnesota, Texas, Ohio, Michigan, Arizona and Washington DC.

Leases at the Company's student housing and parking garage properties are generally rented under lease agreements with terms of one year or less, renewable on an annual or monthly basis. All of the leases related to the Company's student housing property as of December 31, 2025 expire on or before July 2026 as is customary for student housing where lease terms are generally based on the start of the academic year in the fall. Such leases generally provide for a fixed monthly rent during the lease term. The leases related to the Company's parking garage properties provide for a fixed monthly rent and variable lease payments based on a percentage of revenues in excess of a predetermined revenue threshold generated by the garages during the annual lease term.

As of December 31, 2025, the future minimum rents to be received over the next five years and thereafter for noncancellable operating leases are as follows:

---

| | |
|:---|:---|
| **Year Ending** | |
| December 31, 2026 | 41612 |
| December 31, 2027 | 35182 |
| December 31, 2028 | 25209 |
| December 31, 2029 | 23012 |
| December 31, 2030 | 18602 |
| Thereafter | 113971 |
|  | $257588 |

---

The components of rental income from operating leases are as follows (in thousands):

---

| | | |
|:---|:---|:---|
| | **Year Ended December 31, 2025** | **Year Ended December 31, 2024** |
| Fixed lease payments | $48451 | $44254 |
| Variable lease payments | 294 | 214 |
| Total | $48745 | $44468 |

---

**15. COMMITMENTS AND CONTINGENCIES**

***Office Lease***

CapGrow leases its office space from a third party under an operating lease. Effective August 1, 2025, CapGrow leased additional space in the same building and the lease is accounted for as a new lease. Both leases expire in February 2028.

During the years ended December 31, 2025 and 2024, rent expense, which is included in general and administrative in the consolidated statements of operations, was less than $0.1 million for each year.

------

**Sculptor Diversified Real Estate Income Trust, Inc.** 

**Notes to the Consolidated Financial Statements**

**(in thousands, except share and per share data)** 

The following table reflects the future minimum lease payments as of December 31, 2025 (in thousands):

---

| | |
|:---|:---|
| **Year Ending** | |
| December 31, 2026 | 109 |
| December 31, 2027 | 112 |
| December 31, 2028 | 19 |
| December 31, 2029 |  |
| December 31, 2030 |  |
| Total minimum lease payments | 240 |
| Imputed interest | (10) |
| Total operating lease liabilities | $230 |

---

***Legal Matters***

The Company is not involved in any material litigation nor, to management's knowledge, was any material litigation threatened against the Company which if adversely determined could have a material adverse impact on the Company other than routine litigation arising in the ordinary course of business.

***Environmental Matters***

As an owner of real estate, the Company is subject to various environmental laws of federal, state, and local governments. The Company's compliance with existing laws has not had a material adverse effect on its financial condition and results of operations, and the Company does not believe it will have a material adverse effect in the future. However, the Company cannot predict the impact of unforeseen environmental contingencies or new or changed laws or regulations on its current properties or on properties that the Company may acquire.

**16. SEGMENT REPORTING**

The Company operates in five reportable segments as of December 31, 2025: Residential (Business), Student Housing, Commercial Properties, Industrial Properties and Investments in Real Estate Debt. Prior to the acquisition of various real estate debt, the two parking garages and the Marysville Property, the Company operated in two reportable segments.

The following table details the total assets by segment (in thousands):

---

| | | |
|:---|:---|:---|
| | **December 31, 2025** | **December 31, 2024** |
| Residential (Business) | $503137 | $494852 |
| Student Housing | 56116 | 58783 |
| Commercial Properties | 8226 |  |
| Investments in Real Estate Debt | 102057 | 7985 |
| Industrial Properties | 123105 |  |
| Other (Corporate) | 70415 | 47392 |
| Total assets | $863056 | $609012 |

---

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**Sculptor Diversified Real Estate Income Trust, Inc.** 

**Notes to the Consolidated Financial Statements**

**(in thousands, except share and per share data)** 

The following tables detail the financial results of operations by segment for the years ended December 31, 2025 and 2024 (in thousands):

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Year Ended December 31, 2025** | **Year Ended December 31, 2025** | **Year Ended December 31, 2025** | **Year Ended December 31, 2025** | **Year Ended December 31, 2025** | **Year Ended December 31, 2025** | **Year Ended December 31, 2025** |
| | **Residential<br>(Business)** | **Student Housing** | **Commercial Properties** | **Investments in Real Estate Debt** | **Industrial Properties** | **Other (Corporate)** | **Total** |
| **Revenues** | | | | | | | |
| Rental revenue | $39376 | $6101 | $1052 | $— | $2216 | $— | $48745 |
| Other revenue | 548 | 983 |  |  | 143 | (1) | 1673 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total revenues | 39924 | 7084 | 1052 |  | 2359 | (1) | 50418 |
| **Expenses** |  |  |  |  |  |  |  |
| Property operating expenses | (1859) | (3432) | (232) |  | (331) |  | (5854) |
| General and administrative | (4272) | (821) | (94) | (233) | (14) | (4455) | (9889) |
| &nbsp;&nbsp;&nbsp;&nbsp;Total expenses | (6131) | (4253) | (326) | (233) | (345) | (4455) | (15743) |
| Segment net operating income (loss) | 33793 | 2831 | 726 | (233) | 2014 | (4456) | 34675 |
| Income from an unconsolidated joint venture | 115 |  |  |  |  |  | 115 |
| Income from investments in real estate debt, net |  |  |  | 6461 |  |  | 6461 |
| Gain on sale of real estate | 491 |  |  |  |  |  | 491 |
| Interest expense, net | (12281) | (1934) |  |  | (974) | 1465 | (13724) |
| Impairment of investments in real estate | (2913) |  |  |  |  |  | (2913) |
| GAAP segment income (loss) | $19205 | $897 | $726 | $6228 | $1040 | $(2991) | $25105 |
| Other segment income (expense) <sup>(1)</sup> | (17382) | (3169) | (535) |  | (910) | (5920) | (27916) |
| **Net income (loss)** | 1823 | (2272) | 191 | 6228 | 130 | (8911) | (2811) |
| Net (income) loss attributable to non-controlling interest in the consolidated subsidiary | (127) | 228 | (29) |  |  |  | 72 |
| Net (income) loss attributable to non-controlling interest in the Operating Partnership |  |  |  |  |  | (16) | (16) |
| **Net income (loss) attributable to SDREIT stockholders** | $1696 | $(2044) | $162 | $6228 | $130 | $(8927) | $(2755) |

---

_______________________________________

<sup>(1)</sup> Includes property expenses that are not significant or regularly provided to the CODM, including depreciation and amortization and unrealized gain (loss) on derivative instruments as well as corporate expenses, including management fees and performance participation allocation.

------

**Sculptor Diversified Real Estate Income Trust, Inc.** 

**Notes to the Consolidated Financial Statements**

**(in thousands, except share and per share data)** 

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Year Ended December 31, 2024** | **Year Ended December 31, 2024** | **Year Ended December 31, 2024** | **Year Ended December 31, 2024** |
| | **Residential<br>(Business)** | **Student Housing** | **Other (Corporate)** | **Total** |
| **Revenues** | | | | |
| Rental revenue | $37972 | $6496 | $— | $44468 |
| Other revenue | 428 | 1106 | 5 | 1539 |
| &nbsp;&nbsp;&nbsp;&nbsp;Total revenues | 38400 | 7602 | 5 | 46007 |
| **Expenses** |  |  |  |  |
| Property operating expenses | (874) | (3459) |  | (4333) |
| General and administrative | (3115) | (871) | (3895) | (7881) |
| &nbsp;&nbsp;&nbsp;&nbsp;Total expenses | (3989) | (4330) | (3895) | (12214) |
| Segment net operating income (loss) | 34411 | 3272 | (3890) | 33793 |
| Income from an unconsolidated joint venture | 46 |  |  | 46 |
| Gain on sale of real estate | 34 |  |  | 34 |
| Interest expense, net | (11326) | (1908) | 1139 | (12095) |
| Impairment of investments in real estate | (2491) | (62) |  | (2553) |
| GAAP segment income (loss) | $20674 | $1302 | $(2751) | $19225 |
| Other segment income (expense) <sup>(1)</sup> | (17478) | (5824) | (1334) | (24636) |
| **Net income (loss)** | 3196 | (4522) | (4085) | (5411) |
| Net (income) loss attributable to non-controlling interest in the consolidated subsidiary | (616) | 452 |  | (164) |
| Net (income) loss attributable to non-controlling interest in the Operating Partnership |  |  | 33 | 33 |
| **Net income (loss) attributable to SDREIT stockholders** | $2580 | $(4070) | $(4052) | $(5542) |

---

_______________________________________

<sup>(1)</sup> Includes property expenses that are not significant or regularly provided to the CODM, including depreciation and amortization and unrealized gain (loss) on derivative instruments as well as corporate expenses, including management fees and performance participation allocation.

**17. SUBSEQUENT EVENTS**

***Private Placement Offering***

Subsequent to December 31, 2025, the Company issued the following shares for aggregate gross proceeds of $96.7 million.

---

| | | |
|:---|:---|:---|
| | **Number of Shares Issued** | **Gross Proceeds <br>(in thousands)** |
| Class E Shares<sup>(1)</sup> | 4929416 | $57786 |
| Class F Shares | 2693821 | 30000 |
| Class A Shares<sup>(2)</sup> | 58803 | 654 |
| Class AA Shares<sup>(2)</sup> | 728102 | 8180 |
| Class I-S Shares | 9031 | 100 |
| Total | 8419173 | $96720 |

---

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**Sculptor Diversified Real Estate Income Trust, Inc.** 

**Notes to the Consolidated Financial Statements**

**(in thousands, except share and per share data)** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>(1)</sup> Includes (i) an independent director, (ii) an employee and (iii) $0.6 millions of shares, or 50,221 shares, issued to Sculptor Advisors LLC as payment for accrued management fees.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<sup>(2)</sup> Includes sales load fees of $58 thousand for Class AA Shares.

***Distribution Reinvestment Plan***

Subsequent to December 31, 2025, the Company issued the following shares for aggregate purchase price of $1.2 million.

---

| | | |
|:---|:---|:---|
| | **Number of Shares Issued** | **Purchase Price <br>(in thousands)** |
| Class E Shares<sup>(1)</sup> | 5864 | $68 |
| Class F Shares | 279 | 3 |
| Class FF Shares | 46507 | 518 |
| Class A Shares<sup>(2)</sup> | 1962 | 21 |
| Class AA Shares<sup>(2)</sup> | 49077 | 543 |
| Class I-S Shares | 617 | 7 |
| Total | 104306 | $1160 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Includes distributions of 224 Class E restricted shares at $3 thousand in connection with the restricted stock held by our independent directors under our independent director compensation plan

***Repurchases***

Subsequent to December 31, 2025, the Company repurchased common shares of $13.3 million.

***Distributions***

The following table summarizes the Company's distributions per share as declared and paid or payable (net of distribution fees) to stockholders subsequent to December 31, 2025:

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Declaration Date** | **Record Date** | **Class F Shares** | **Class FF Shares** | **Class E Shares** | **Class AA Shares** | **Class A Shares** | **Class I-S Shares** | **Payment Date** |
| January 31, 2026 | January 31, 2026 | $0.0668 | $0.0620 | $0.0668 | $0.0620 | $0.0668 | $0.0668 | February 12, 2026 |
| February 28, 2026 | February 28, 2026 | $0.0668 | $0.0625 | $0.0668 | $0.0625 | $0.0668 | $0.0668 | March 12, 2026 |

---

***Investments***

On January 5, 2026, the Company settled its previously agreed purchase of a participation in the Playa Financing by acquiring a $5.0 million principal amount of the initial term loan to TRQ Sales LLC. The Company paid net cash consideration of approximately $4.9 million at settlement, reflecting a 99.5% purchase price on the par amount less a $34 thousand ticking-fee credit.

On January 14, 2026, the Company closed on a $65.0 million facility (the "Facility") to an equestrian show operator. The Facility consists of (i) $40.0 million of senior financing, (ii) $25.0 million of preferred equity, (iii) a $5.0 million revolver for future draw down, and (iv) a $10.0 million delayed-draw term loan, which can only be drawn at our sole discretion. As of March 26, 2026, $2.1 million has been drawn under the revolving credit facility.

To fund the closing of the Facility, the Company entered into a $7.0 million loan agreement with our Adviser on January 14, 2026. The loan bore interest at one-month SOFR plus 3.1% and had a stated maturity date of February 5, 2026. The Company repaid the loan in full on February 3, 2026 including $26.4 thousand of interest.

On February 27, 2026, the Company entered into an agreement to acquire the JW Marriott Marco Island Beach Resort and related assets in Florida for $835.0 million in cash, subject to customary prorations and closing adjustments. In connection with the transaction, the Company made nonrefundable deposits totaling $5.2 million. The transaction is expected to close by

------

**Sculptor Diversified Real Estate Income Trust, Inc.** 

**Notes to the Consolidated Financial Statements**

**(in thousands, except share and per share data)** 

May 1, 2026, subject to extension as provided in the purchase agreement and the satisfaction or waiver of customary closing conditions, and will be funded with offering proceeds and third-party financing.

On March 26, 2026 the Company, through a joint venture in which it holds a 98% ownership interest, closed on the acquisition of an industrial facility located in Detroit, Michigan for a purchase price of approximately $26.0 million, excluding closing costs. The property is leased on a long-term, triple-net basis to a subsidiary of a global steel producer, with a remaining lease term through December 2036. The acquisition was financed with approximately $9.1 million of equity and $16.9 million of third-party debt.

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**Sculptor Diversified Real Estate Income Trust, Inc.** 

**Schedule III—Real Estate and Accumulated Depreciation as of December 31, 2025**

**($ in thousands)**

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| | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | | | | **Initial Cost** | **Initial Cost** | **Costs Capitalized Subsequent to Acquisition** | **Costs Capitalized Subsequent to Acquisition** | **Gross Amounts at which Carried at the Close of Period**<sup>(1)</sup> | **Gross Amounts at which Carried at the Close of Period**<sup>(1)</sup> | | | |
|<br>**Segment** |<br>**Location** |<br>**Number of Properties** |<br>**Encumbrances** | **Land and Land Improvements** | **Building and Building Improvements** | **Land and Land Improvements** | **Building and Building Improvements** | **Land and Land Improvements** | **Building and Building Improvements** |<br>**Total** |<br>**Accumulated Depreciation**<sup>(2)</sup> |<br>**Year Acquired** |
| Residential (Business): | Residential (Business): | Residential (Business): |  |  |  |  |  |  |  |  |  |  |
|  | Alabama | 1 | $96 | $35 | $172 | $— | $— | $35 | $172 | $207 | $18 | 2023 |
|  | Arizona | 85 | 12204 | 4609 | 24980 | (56) | (272) | 4553 | 24708 | 29261 | 2539 | 2023 |
|  | California | 7 | 3326 | 2082 | 5683 | (189) | (931) | 1893 | 4752 | 6645 | 358 | 2023 - 2025 |
|  | Colorado | 7 | 4308 | 1550 | 5419 |  | 300 | 1550 | 5719 | 7269 | 375 | 2023 - 2025 |
|  | Connecticut | 8 | 1538 | 598 | 3587 |  | 61 | 598 | 3648 | 4246 | 374 | 2023 |
|  | Delaware | 1 | 127 | 52 | 288 |  |  | 52 | 288 | 340 | 30 | 2023 |
|  | Florida | 21 | 6299 | 2233 | 12506 |  | 300 | 2233 | 12806 | 15039 | 1234 | 2023 - 2025 |
|  | Georgia | 2 | 118 | 95 | 491 | (51) | (241) | 44 | 250 | 294 | 26 | 2023 |
|  | Idaho | 5 | 212 | 144 | 809 |  |  | 144 | 809 | 953 | 84 | 2023 |
|  | Illinois | 12 | 1461 | 408 | 1916 | (26) | (122) | 382 | 1794 | 2176 | 187 | 2023 |
|  | Indiana | 38 | 5166 | 1814 | 9714 | (68) | (297) | 1746 | 9417 | 11163 | 979 | 2023 |
|  | Iowa | 10 | 2300 | 721 | 3796 |  |  | 721 | 3796 | 4517 | 386 | 2023 - 2024 |
|  | Kansas | 2 |  |  |  |  |  |  |  |  | 0 | 2023 |
|  | Kentucky | 3 | 209 | 70 | 319 |  |  | 70 | 319 | 389 | 33 | 2023 |
|  | Louisiana | 1 | 1201 | 298 | 1131 |  |  | 298 | 1131 | 1429 | 120 | 2023 |
|  | Maine | 14 | 5574 | 1403 | 7360 |  |  | 1403 | 7360 | 8763 | 128 | 2025 |
|  | Maryland | 11 | 2884 | 877 | 4359 |  |  | 877 | 4359 | 5236 | 401 | 2023 - 2024 |
|  | Massachusetts | 2 | 434 | 166 | 970 |  |  | 166 | 970 | 1136 | 101 | 2023 |
|  | Michigan | 37 | 22344 | 5861 | 26640 |  |  | 5861 | 26640 | 32501 | 2650 | 2023 - 2025 |
|  | Minnesota | 295 | 66705 | 18826 | 94034 | 28 | 212 | 18854 | 94246 | 113100 | 9484 | 2023 - 2025 |
|  | Missouri | 11 | 2366 | 683 | 3125 |  |  | 683 | 3125 | 3808 | 67 | 2024 - 2025 |
|  | Nebraska | 2 |  |  |  |  |  |  |  |  | 0 | 2023 |
|  | Nevada | 8 | 1848 | 625 | 3314 |  |  | 625 | 3314 | 3939 | 345 | 2023 |
|  | New Hampshire | 1 | 366 | 139 | 821 |  |  | 139 | 821 | 960 | 85 | 2023 |
|  | New Jersey | 25 | 7279 | 2311 | 9953 |  | 31 | 2311 | 9984 | 12295 | 797 | 2023 - 2025 |
|  | New Mexico | 2 | 294 | 105 | 503 |  |  | 105 | 503 | 608 | 53 | 2023 |
|  | New York | 0 |  |  |  |  |  |  |  |  | 0 | 2023 |
|  | North Carolina | 11 | 1595 | 466 | 2843 | (114) | (647) | 352 | 2196 | 2548 | 124 | 2023 - 2025 |
|  | North Dakota | 10 | 2057 | 663 | 3545 |  |  | 663 | 3545 | 4208 | 369 | 2023 |
|  | Ohio | 158 | 23990 | 6809 | 27647 | (63) | (275) | 6746 | 27372 | 34118 | 2286 | 2023 - 2025 |
|  | Oregon | 2 | 317 | 161 | 860 |  |  | 161 | 860 | 1021 | 90 | 2023 |
|  | Pennsylvania | 69 | 12219 | 4167 | 23210 | 6 | 95 | 4173 | 23305 | 27478 | 2196 | 2023 - 2025 |
|  | South Carolina | 12 | 2617 | 719 | 3696 | (6) | (239) | 713 | 3457 | 4170 | 360 | 2023 |
|  | Tennessee | 14 | 1626 | 573 | 3000 |  |  | 573 | 3000 | 3573 | 266 | 2023 - 2025 |
|  | Texas | 215 | 27296 | 10007 | 54286 | (206) | (1122) | 9801 | 53164 | 62965 | 5492 | 2023 |
|  | Utah | 1 | 1219 | 606 | 3552 |  |  | 606 | 3552 | 4158 | 368 | 2023 |
|  | Virginia | 11 | 3571 | 1161 | 5492 | (64) | (255) | 1097 | 5237 | 6334 | 370 | 2023 - 2025 |
|  | Washington | 14 | 2816 | 1334 | 7056 |  | 69 | 1334 | 7125 | 8459 | 702 | 2023 - 2024 |
|  | West Virginia | 13 | 1859 | 619 | 3445 |  |  | 619 | 3445 | 4064 | 358 | 2023 |
|  | Wisconsin | 59 | 8959 | 3177 | 14670 | (49) | (210) | 3128 | 14460 | 17588 | 1205 | 2023 - 2025 |

---

------

---

| | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | Washington DC | 12 | 4509 | 1643 | 8267 |  |  | 1643 | 8267 | 9910 | 862 | 2023 |
| Student Housing: | Student Housing: | Student Housing: |  |  |  |  |  |  |  |  |  |  |
|  | Denton, Texas | 1 | 20880 | 5712 | 47473 |  | 2609 | 5712 | 50082 | 55794 | 4093 | 2023 |
| Parking: |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Rochester, New York | 2 |  | 869 | 7526 |  | 3 | 869 | 7529 | 8398 | 518 | 2025 |
| Industrial: |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Marysville, Ohio | 1 | 76250 | 7595 | 99059 |  |  | 7595 | 99059 | 106654 | 664 | 2025 |
|  |  |  | $340439 | $91986 | $537517 | $(858) | $(931) | $91128 | $536586 | $627714 | $41177 |  |

---

_______________________________________

(1) As of December 31, 2025, the aggregate cost basis for tax purposes was $744.5 million (unaudited).

(2) Refer to Note 2, "Summary of Significant Accounting Policies" to our consolidated financial statements for details of depreciable lives.

The total included on Schedule III does not include furniture, fixtures and equipment totaling $1.8 million. Accumulated depreciation does not include $0.5 million of accumulated depreciation related to furniture, fixtures and equipment.

The changes in real estate for the years ended December 31, 2025 and 2024 are as follows (in thousands):

---

| | | |
|:---|:---|:---|
| | **December 31, 2025** | **December 31, 2024** |
| Balance at beginning of year | $492596 | $481974 |
| Property acquisitions | 153154 | 15543 |
| Improvements | 1100 | 2619 |
| Retirements/disposals/deconsolidation | (19136) | (7540) |
| Balance at end of year | $627714 | $492596 |

---

The changes in accumulated depreciation, exclusive of amounts relating to furniture and fixtures, for the years ended December 31, 2025 and 2024 are as follows (in thousands):

---

| | | |
|:---|:---|:---|
| | **December 31, 2025** | **December 31, 2024** |
| Balance at beginning of year | $26178 | $12358 |
| Depreciation for year | 16071 | 14340 |
| Retirements/disposals/deconsolidation | (1072) | (520) |
| Balance at end of year | $41177 | $26178 |

---

------

**ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE**

None.

**ITEM 9A. CONTROLS AND PROCEDURES**

**Evaluation of Disclosure Controls and Procedures**

The Company maintains disclosure controls and procedures (as that term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed in the Company's reports under the Exchange Act is recorded, processed, and summarized and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to the Company's management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures. Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. An evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this annual report on Form 10-K was made under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer. Based upon this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures (a) are effective to ensure that information required to be disclosed by us in reports filed or submitted under the Exchange Act is timely recorded, processed, summarized and reported and (b) include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

**Changes in Internal Controls over Financial Reporting**

There have been no changes in our "internal control over financial reporting" (as defined in Rule 13a-15(f) of the Exchange Act) that occurred during our most recent quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

**Management's Annual Report on Internal Control over Financial Reporting**

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2025, based upon criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013). Based on that evaluation, our management concluded that our internal control over financial reporting was effective as of December 31, 2025.

------

**ITEM 9B. OTHER INFORMATION**

During the year ended December 31, 2025, none of the Company's directors or executive officers adopted or terminated any contract, instruction, or written plan for the purchase or sale of the Company's securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any "non-Rule 10b5-1 trading arrangement."

&nbsp;&nbsp;&nbsp;&nbsp;

------

**ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS**

Not applicable.

------

**PART III.**

**ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE**

The information required by this Item will be presented in our definitive proxy statement for our 2025 annual meeting of stockholders, which is expected to be filed with the SEC within 120 days after December 31, 2025, and is incorporated herein by reference.

**ITEM 11. EXECUTIVE COMPENSATION**

The information required by this Item will be presented in our definitive proxy statement for our 2025 annual meeting of stockholders, which is expected to be filed with the SEC within 120 days after December 31, 2025, and is incorporated herein by reference.

**ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS**

The information required by this Item will be presented in our definitive proxy statement for our 2025 annual meeting of stockholders, which is expected to be filed with the SEC within 120 days after December 31, 2025, and is incorporated herein by reference.

**ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE**

The information required by this Item will be presented in our definitive proxy statement for our 2025 annual meeting of stockholders, which is expected to be filed with the SEC within 120 days after December 31, 2025, and is incorporated herein by reference.

**ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES**

The information required by this Item will be presented in our definitive proxy statement for our 2025 annual meeting of stockholders, which is expected to be filed with the SEC within 120 days after December 31, 2025, and is incorporated herein by reference.

------

**Part IV**

**ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES**

**(a)&nbsp;&nbsp;&nbsp;&nbsp;Financial Statement Schedules**

---

| | |
|:---|:---|
| **Consolidated Financial Statements:** | |
| <u>[Report of Independent Registered Public Accounting Firm](#i478720b2ac764c71ac103cbc4f0d8ad6_139)</u> | <u>[90](#i478720b2ac764c71ac103cbc4f0d8ad6_139)</u> |
| <u>[Consolidated Balance Sheets](#i478720b2ac764c71ac103cbc4f0d8ad6_148)[as of December 31, 202](#i478720b2ac764c71ac103cbc4f0d8ad6_148)[5](#i478720b2ac764c71ac103cbc4f0d8ad6_148)[and 20](#i478720b2ac764c71ac103cbc4f0d8ad6_148)[24](#i478720b2ac764c71ac103cbc4f0d8ad6_148)</u> | <u>[91](#i478720b2ac764c71ac103cbc4f0d8ad6_148)</u> |
| <u>[Consolidated Statements of Operations](#i478720b2ac764c71ac103cbc4f0d8ad6_151)[for the year](#i478720b2ac764c71ac103cbc4f0d8ad6_151)[ended December 31, 202](#i478720b2ac764c71ac103cbc4f0d8ad6_151)[5](#i478720b2ac764c71ac103cbc4f0d8ad6_151)[and](#i478720b2ac764c71ac103cbc4f0d8ad6_151)[for the year ended](#i478720b2ac764c71ac103cbc4f0d8ad6_151)[December 2024](#i478720b2ac764c71ac103cbc4f0d8ad6_151)</u> | <u>[89](#i478720b2ac764c71ac103cbc4f0d8ad6_151)</u> |
| <u>[Consolidated Statements of Equity](#i478720b2ac764c71ac103cbc4f0d8ad6_154)[for the year ended December 31, 202](#i478720b2ac764c71ac103cbc4f0d8ad6_154)[5](#i478720b2ac764c71ac103cbc4f0d8ad6_154)[and](#i478720b2ac764c71ac103cbc4f0d8ad6_154)[for the year ended](#i478720b2ac764c71ac103cbc4f0d8ad6_154)[December 2024](#i478720b2ac764c71ac103cbc4f0d8ad6_154)</u> | <u>[90](#i478720b2ac764c71ac103cbc4f0d8ad6_154)</u> |
| <u>[Consolidated Statements of Cash Flows](#i478720b2ac764c71ac103cbc4f0d8ad6_157)[for the year ended December 31, 202](#i478720b2ac764c71ac103cbc4f0d8ad6_157)[5](#i478720b2ac764c71ac103cbc4f0d8ad6_157)[and](#i478720b2ac764c71ac103cbc4f0d8ad6_157)[for the year ended](#i478720b2ac764c71ac103cbc4f0d8ad6_157)[December 2024](#i478720b2ac764c71ac103cbc4f0d8ad6_157)</u> | <u>[91](#i478720b2ac764c71ac103cbc4f0d8ad6_157)</u> |
| <u>[Notes to Consolidated Financial Statements](#i478720b2ac764c71ac103cbc4f0d8ad6_160)</u> | <u>[93](#i478720b2ac764c71ac103cbc4f0d8ad6_160)</u> |
| Schedules |  |
| <u>[Schedule III — Real Estate and Accumulated Depreciation as of December 31, 202](#i478720b2ac764c71ac103cbc4f0d8ad6_214)[5](#i478720b2ac764c71ac103cbc4f0d8ad6_214)</u> | <u>[124](#i478720b2ac764c71ac103cbc4f0d8ad6_214)</u> |
| Financial statement schedules other than those listed are omitted as they are not applicable or the required or equivalent information has been included in the consolidated financial statements or notes thereto. | Financial statement schedules other than those listed are omitted as they are not applicable or the required or equivalent information has been included in the consolidated financial statements or notes thereto. |

---

(b). &nbsp;&nbsp;&nbsp;&nbsp;Exhibits:

---

| | |
|:---|:---|
| **Ex.** | **Description** |
| [3.1](https://www.sec.gov/Archives/edgar/data/1914496/000114036123033130/ny20009481x1_ex3-1.htm) | Second Articles of Amendment and Restatement of Sculptor Diversified Real Estate Income Trust, Inc. (the "Registrant"), effective as of March 3, 2023 (filed as Exhibit 3.1 to the Company's Registration Statement on Form 10-12G (File No. 000-56566) filed on July 5, 2023 and incorporated herein by reference) |
| [3.2](https://www.sec.gov/Archives/edgar/data/1914496/000191449624000128/sdreitye2024ex31-articleso.htm) | Articles of Amendment, effective as of November 18, 2024 (filed as Exhibit 3.1 to the Company's Current Report on Form 8-K filed on November 20, 2024 and incorporated herein by reference) |
| [3.3](https://www.sec.gov/Archives/edgar/data/1914496/000191449624000128/sdreitye2024ex32-articless.htm) | Articles Supplementary, effective as of November 18, 2024 (filed as Exhibit 3.2 to the Company's Current Report on Form 8-K filed on November 20, 2024 and incorporated herein by reference) |
| [3.4](https://www.sec.gov/Archives/edgar/data/1914496/000191449624000137/sdreitye2024ex31-articleso.htm) | Articles of Amendment, effective as of December 6, 2024 (filed as Exhibit 3.1 to the Company's Current Report on Form 8-K filed on December 10, 2024 and incorporated herein by reference) |
| [3.](https://www.sec.gov/Archives/edgar/data/1914496/000114036123033130/ny20009481x1_ex3-2.htm)5 | Second Amended and Restated Bylaws of the Registrant, dated of as March 7, 2023 (filed as Exhibit 3.2 to the Company's Registration Statement on Form 10-12G (File No. 000-56566) filed on July 5, 2023 and incorporated herein by reference) |
| [4.1](https://www.sec.gov/Archives/edgar/data/1914496/000114036123033130/ny20009481x1_ex4-1.htm) | Amended and Restated Distribution Reinvestment Plan (filed as Exhibit 4.1 to the Company's Current Report on Form 8-K filed on November 5, 2024 and incorporated herein by reference) |
| [4.2](https://www.sec.gov/Archives/edgar/data/1914496/000114036123033130/ny20009481x1_ex4-2.htm) | Share Repurchase Plan (filed as Exhibit 4.2 to the Company's Registration Statement on Form 10-12G filed on July 5, 2023 and incorporated herein by reference) |
| [4.3](https://www.sec.gov/Archives/edgar/data/1914496/000191449625000017/sculptorreit-descriptionof.htm) | Description of Common Stock (filed as Exhibit 4.3 to the Company's Annual Report on Form 10-K filed on March 28, 2025 and incorporated herein by reference) |
| <u>[10.1](https://www.sec.gov/Archives/edgar/data/1914496/000191449625000093/sculptordiversifiedreit-si.htm)</u> | Sixth Amended and Restated Advisory Agreement among the Registrant, Sculptor Diversified REIT Operating Partnership LP, and Sculptor Advisors LLC, dated as of August 11, 2025 (filed as Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q filed on August 14, 2025 and incorporated herein by reference) |
| <u>[10.2](amendment-imaxsdreit113202.htm)</u>\* | Amendment No. 1 to the Sixth Amended and Restated Advisory Agreement among the Registrant, Sculptor Diversified REIT Operating Partnership LP, and Sculptor Advisors LLC dated as of January 13, 2026 |
| <u>[10.3](https://www.sec.gov/Archives/edgar/data/1914496/000191449625000061/sculptordiversifiedreit-fi.htm)</u> | Fifth Amended and Restated Advisory Agreement among the Registrant, Sculptor Diversified REIT Operating Partnership LP, and Sculptor Advisors LLC, dated as of June 21, 2025 (filed as Exhibit 10.1 to the Company's Current Report on Form 8-K filed on June 25, 2025 and incorporated herein by reference) |

---

------

---

| | |
|:---|:---|
| <u>[10.4](https://www.sec.gov/Archives/edgar/data/1914496/000191449625000017/thirdamendedandrestatedlim.htm)</u> | Third Amended and Restated Limited Partnership Agreement of Sculptor Diversified REIT Operating Partnership LP, dated as of December 6, 2024 (filed as Exhibit 10.4 to the Company's Annual Report on Form 10-K filed on March 28, 2025 and incorporated herein by reference) |
| <u>[10.5](https://www.sec.gov/Archives/edgar/data/1914496/000114036123033130/ny20009481x1_ex10-3.htm)</u> | Trademark License Agreement between the Registrant and Sculptor Capital LP, dated as of February 10, 2023 (filed as Exhibit 10.3 to the Company's Registration Statement on Form 10-12G (File No. 000-56566) filed on July 5, 2023 and incorporated herein by reference) |
| <u>[10.6](https://www.sec.gov/Archives/edgar/data/1914496/000114036123033130/ny20009481x1_ex10-4.htm)</u> | Form of Indemnification Agreement (filed as Exhibit 10.4 to the Company's Registration Statement on Form 10-12G (File No. 000-56566) filed on July 5, 2023 and incorporated herein by reference) |
| <u>[10.7](https://www.sec.gov/Archives/edgar/data/1914496/000114036123039929/ny20010047x1_ex10-5.htm)</u> | Second Amended and Restated Independent Director Compensation Plan, dated as of August 9, 2023 (filed as Exhibit 10.5 to the Company's Registration Statement on Form 10-12G/A (File No. 000-56566) filed on August 15, 2023 and incorporated herein by reference) |
| <u>[10.8](https://www.sec.gov/Archives/edgar/data/1914496/000114036123033130/ny20009481x1_ex10-6.htm)</u> | Form of Grant Notice and Restricted Stock Award Agreement (filed as Exhibit 10.6 to the Company's Registration Statement on Form 10-12G (File No. 000-56566) filed on July 5, 2023 and incorporated herein by reference) |
| <u>[10.9](https://www.sec.gov/Archives/edgar/data/1914496/000114036123033130/ny20009481x1_ex10-7.htm)</u> | Voting Agreement between the Registrant and OPERF, dated as of December 22, 2022 (filed as Exhibit 10.7 to the Company's Registration Statement on Form 10-12G (File No. 000-56566) filed on July 5, 2023 and incorporated herein by reference) |
| <u>[10.10](https://www.sec.gov/Archives/edgar/data/1914496/000114036123033130/ny20009481x1_ex10-8.htm)</u> | CapGrow Holdings JV LLC Second Amended and Restated Limited Liability Company Agreement, dated as of January 4, 2023 (filed as Exhibit 10.8 to the Company's Registration Statement on Form 10-12G (File No. 000-56566) filed on July 5, 2023 and incorporated herein by reference) |
| <u>[10.11](https://www.sec.gov/Archives/edgar/data/1914496/000114036123033130/ny20009481x1_ex10-9.htm)</u> | CapGrow Holdings Member LLC Amended and Restated Limited Liability Company Agreement, dated as of January 4, 2023 (filed as Exhibit 10.9 to the Company's Registration Statement on Form 10-12G (File No. 000-56566) filed on July 5, 2023 and incorporated herein by reference) |
| <u>[10.12](https://www.sec.gov/Archives/edgar/data/1914496/000114036123033130/ny20009481x1_ex10-10.htm)</u> | Membership Interest Purchase Agreement between Sculptor RE Holdings XVII LLC and Sculptor Diversified REIT Operating Partnership LP, dated as of January 4, 2023 (filed as Exhibit 10.10 to the Company's Registration Statement on Form 10-12G (File No. 000-56566) filed on July 5, 2023 and incorporated herein by reference) |
| <u>[10.13](https://www.sec.gov/Archives/edgar/data/1914496/000114036123039929/ny20010047x1_ex10-11.htm)</u> | Membership Interest Purchase Agreement between Sculptor RE Holdings XVII LLC and Sculptor Diversified REIT Operating Partnership LP, dated as of July 5, 2023 (filed as Exhibit 10.11 to the Company's Registration Statement on Form 10-12G/A (File No. 000-56566) filed on August 15, 2023 and incorporated herein by reference) |
| <u>[10.14](https://www.sec.gov/Archives/edgar/data/1914496/000191449624000042/exhibit1012capgrowmipathir.htm)</u> | Membership Interest Purchase Agreement between Sculptor RE Holdings XVII LLC and Sculptor Diversified REIT Operating Partnership LP, dated as of October 2, 2023 (filed as Exhibit 10.12 to the Company's Annual Report on Form 10-K filed on April 1, 2024 and incorporated herein by reference) |
| <u>[10.15](https://www.sec.gov/Archives/edgar/data/1914496/000191449625000017/membershipinterestpurchase.htm)</u> | Membership Interest Purchase Agreement between Sculptor RE Holdings XVII LLC and Sculptor Diversified REIT Operating Partnership LP, dated as of December 5, 2024 (filed as Exhibit 10.15 to the Company's Annual Report on Form 10-K filed on March 28, 2025 and incorporated herein by reference) |
| <u>[10.16\*\*\*](https://www.sec.gov/Archives/edgar/data/1914496/000191449625000134/sierramarysvillepsa-sculpt.htm)</u> | Real Estate Purchase and Sale Agreement dated as of August 14, 2025 by and between Sierra Marysville Storage, LLC and Marysville Owner LLC (filed as Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q filed on November 13, 2025 and incorporated herein by reference) |
| <u>[10.17](https://www.sec.gov/Archives/edgar/data/1914496/000191449625000134/sierramarysville-amendment.htm)</u> | First Amendment to the Real Estate Purchase and Sale Agreement dated as of September 15, 2025 by and between Sierra Marysville Storage, LLC and Marysville Owner LLC (filed as Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q filed on November 13, 2025 and incorporated herein by reference) |
| <u>[10.18](https://www.sec.gov/Archives/edgar/data/1914496/000191449625000134/sierramarysville-secondame.htm)</u> | Second Amendment to the Real Estate Purchase and Sale Agreement dated as of September 18, 2025 by and between Sierra Marysville Storage, LLC and Marysville Owner LLC (filed as Exhibit 10.3 to the Company's Quarterly Report on Form 10-Q filed on November 13, 2025 and incorporated herein by reference) |
| <u>[10.19\*\*\*](https://www.sec.gov/Archives/edgar/data/1914496/000191449625000134/sierramarysville-thirdamen.htm)</u> | Third Amendment to the Real Estate Purchase and Sale Agreement dated as of September 19, 2025 by and between Sierra Marysville Storage, LLC and Marysville Owner LLC (filed as Exhibit 10.4 to the Company's Quarterly Report on Form 10-Q filed on November 13, 2025 and incorporated herein by reference) |
| <u>[10.20](https://www.sec.gov/Archives/edgar/data/1914496/000191449625000134/sierramarysville-fourthame.htm)</u> | Fourth Amendment to the Real Estate Purchase and Sale Agreement dated as of October 2, 2025 by and between Sierra Marysville Storage, LLC and Marysville Owner LLC (filed as Exhibit 10.5 to the Company's Quarterly Report on Form 10-Q filed on November 13, 2025 and incorporated herein by reference) |
| <u>[10.21](loanagreementsculptor-scot.htm)</u>\* | Loan Agreement by and between USAA Life Insurance Company and Marysville Owner LLC dated as of October 9, 2025 |
| <u>[14.1](https://www.sec.gov/Archives/edgar/data/1914496/000191449625000017/sdreit-codeofbusinesscondu.htm)</u> | Code of Business Conduct and Ethics (filed as Exhibit 14.1 to the Company's Annual Report on Form 10-K filed on March 28, 2025 and incorporated herein by reference) |
| <u>[21.1\*](sdreitye2025ex211listofsub.htm)</u> | Subsidiaries of the Company |
| <u>[31.1\*](sdreitye2025ex311certifica.htm)</u> | Certification of Chief Executive Officer, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
| <u>[31.2\*](sdreitye2025ex312certifica.htm)</u> | Certification of Chief Financial Officer, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |

---

------

---

| | |
|:---|:---|
| <u>[32.1\*\*](sdreitye2025ex321certifica.htm)</u> | Certification of Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
| <u>[32.2\*\*](sdreitye2025ex322certifica.htm)</u> | Certification of Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
| <u>[99.1\*](nationalmentorfy25audite.htm)</u> | Consolidated Financial Statements for National Mentor Holdings, Inc. as of and for the years ended September 30, 2025 and 2024 |
| 101 | The following financial information from the Company's Annual Report on Form 10-K for the year ended December 31, 2025, formatted in iXBRL (inline eXtensible Business Reporting Language): (i) Consolidated Balance Sheets; (ii) Consolidated Statements of Operations; (iii) Consolidated Statements of Changes in Equity; (iv) Consolidated Statements of Cash Flows and (v) Notes to Consolidated Financial Statements. |
| 104 | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) |
| \* Filed herewith. | \* Filed herewith. |
| \*\* This exhibit shall not be deemed "filed" for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that Section. Such exhibit shall not be deemed incorporated into any filing under the Securities Act or the Exchange Act. | \*\* This exhibit shall not be deemed "filed" for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that Section. Such exhibit shall not be deemed incorporated into any filing under the Securities Act or the Exchange Act. |
| \*\*\* Portions of this document have been redacted pursuant to Item 601(b)(10)(iv) of Regulation S-K. | \*\*\* Portions of this document have been redacted pursuant to Item 601(b)(10)(iv) of Regulation S-K. |

---

**ITEM 16. FORM 10-K SUMMARY**

None.

------

**SIGNATURES**

Pursuant to the requirements of Section 13 or 15(d) 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, in the City of New York, State of New York, on March 30, 2026.

---

| | |
|:---|:---|
| **SCULPTOR DIVERSIFIED REAL ESTATE INCOME TRUST, INC.** | **SCULPTOR DIVERSIFIED REAL ESTATE INCOME TRUST, INC.** |
| By: | /s/ Steven Orbuch |
|  | **Steven Orbuch** |
|  | *Chief Executive Officer and Chairman of the Board*<br>*(principal executive officer)* |

---

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:

---

| | | |
|:---|:---|:---|
| /s/ Steven Orbuch | Chief Executive Officer and Chairman of the Board | March 30, 2026 |
| Steven Orbuch | (principal executive officer) |  |
| /s/ Nicholas Hecker | President and Director | March 30, 2026 |
| Nicholas Hecker |  |  |
| /s/ Ellen Conti | Chief Financial Officer, Treasurer and Director | March 30, 2026 |
| Ellen Conti | (principal financial officer) |  |
| /s/ Scott Ciccone | Chief Accounting Officer | March 30, 2026 |
| Scott Ciccone | (principal accounting officer) |  |
| /s/ John Jenks | Independent Director | March 30, 2026 |
| John Jenks |  |  |
| /s/ Robert Winston | Independent Director | March 30, 2026 |
| Robert Winston |  |  |
| /s/ Jonathan G. Geanakos | Independent Director | March 30, 2026 |
| Jonathan G. Geanakos |  |  |
| /s/ Kristi Jackson | Independent Director | March 30, 2026 |
| Kristi Jackson |  |  |

---

## Exhibit 10.2

AMENDMENT NO. 1

Dated January 13, 2026

to the

SIXTH AMENDED AND RESTATED ADVISORY AGREEMENT AMONG

SCULPTOR DIVERSIFIED REAL ESTATE INCOME TRUST, INC.,

SCULPTOR DIVERSIFIED REIT OPERATING PARTNERSHIP LP,

AND

SCULPTOR ADVISORS LLC

This Amendment No. 1 (this "<u>Amendment</u>") to the Sixth Amended and Restated Advisory Agreement among Sculptor Diversified Real Estate Income Trust, Inc., Sculptor Diversified REIT Operating Partnership LP, and Sculptor Advisors LLC dated August 11, 2025 (as amended from time to time, the "<u>Advisory Agreement</u>"), is made on the date set forth above. Capitalized terms used herein without definition have the respective meanings set forth in the Advisory Agreement.

WHEREAS, the terms and provisions of the Advisory Agreement may be modified or amended pursuant to Section 24(b) of the Advisory Agreement.

NOW, THEREFORE, the Advisory Agreement is hereby amended as follows:

<u>2. Amendment to Section 11(b)</u>. Section 11(b)(iii) of the Advisory Agreement is hereby amended by adding the language indicated with **<u>bold underlining</u>** as follows:

"fees, costs and expenses in connection with the issuance and transaction costs incident to the trading, settling, disposition and financing of Investments (whether or not consummated), including brokerage commissions, hedging costs, prime brokerage fees, custodial expenses, clearing and settlement charges, forfeited deposits, and other investment costs, fees and expenses actually incurred in connection with the pursuit, making, holding, settling, monitoring or disposing of actual or potential investments**<u>, including, for the avoidance of doubt, with respect to expenses incurred in connection with the pursuit of proposed Investments that are not consummated, those expenses (including the organizational costs of any co-investment vehicle) that may be attributable to prospective co-investors when such expenses are not reimbursed by such co-investors, including when the Adviser determines it is in the best interests of the Company to not pursue reimbursement from such potential co-investors</u>**;"

2. Counterparts. This Amendment may be executed in any number of counterparts, each of which shall be deemed an original and all of which taken together shall constitute one and the same instrument.

3. Governing Law. This Amendment and the rights and obligations of the parties hereunder shall be governed by and construed and enforced in accordance with the laws of the State of New York without regard to conflicts of laws principles. The parties hereby irrevocably submit to the exclusive jurisdiction of the courts of the State of New York and the Federal courts of the United States of America located in the Borough of Manhattan, New York for purposes of any suit, action or other proceeding arising from this Amendment, and hereby waive, and agree not to

------

assert, as a defense in any action, suit or proceeding for the interpretation or enforcement hereof or thereof, that it is not subject thereto or that such action, suit or proceeding may not be brought or is not maintainable in such courts or that the venue thereof may not be appropriate or that this Amendment may not be enforced in or by such courts. EACH OF THE PARTIES HERETO IRREVOCABLE WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AMENDMENT.

4. Severability of Provisions. Each provision of this Amendment shall be considered severable and if for any reason any provision or provisions herein are determined to be invalid, unenforceable or illegal under any existing or future law, such invalidity, unenforceability or illegality shall not impair the operation of or affect those portions of this Amendment which are valid, enforceable and legal.

*[Remainder of page intentionally left blank.]* 

IN WITNESS WHEREOF, each of the undersigned has duly executed this Amendment on the date first set forth above.

SCULPTOR DIVERSIFIED REAL ESTATE INCOME TRUST, INC.

By:&nbsp;&nbsp;&nbsp;&nbsp;<u>/s/Steven Orbuch</u>

Name: Steven Orbuch<br>Title: President

SCULPTOR DIVERSIFIED REIT OPERATING PARTNERSHIP LP

By:&nbsp;&nbsp;&nbsp;&nbsp;Sculptor Diversified Real Estate Income Trust, Inc., as general partner

&nbsp;&nbsp;&nbsp;&nbsp;

By:&nbsp;&nbsp;&nbsp;&nbsp;<u>/s/Steven Orbuch</u>

Name: Steven Orbuch

Title: President

SCULPTOR ADVISORS LLC

By:&nbsp;&nbsp;&nbsp;&nbsp;Sculptor Real Estate Advisors LP, its manager

By: &nbsp;&nbsp;&nbsp;&nbsp;Sculptor Real Estate GP LLC, its general paSCULPTOR DIVERSIFIED REAL ESTATE INCOME TRUST, INC.

By:&nbsp;&nbsp;&nbsp;&nbsp;<u>/s/Wayne Cohen</u>

Name: Wayne Cohen

Title: President and COO

------

## Exhibit 10.21

**Exhibit 10.21**

**LOAN AGREEMENT**

by and between

**USAA LIFE INSURANCE COMPANY**,

a life insurance company organized under the laws of Texas

as Lender

and

**MARYSVILLE OWNER LLC**,

a Delaware limited liability company,

as Borrower

Date: As of October 9, 2025

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;&nbsp;&nbsp;&nbsp;

------

**<u>**TABLE OF CONTENTS**</u>**

<u>Page</u> 

1.&nbsp;&nbsp;&nbsp;&nbsp;DEFINED TERMS &nbsp;&nbsp;&nbsp;&nbsp;1

2.&nbsp;&nbsp;&nbsp;&nbsp;TERMS OF THE LOAN AND DOCUMENTS&nbsp;&nbsp;&nbsp;&nbsp;[8](#i56e8ef9b2187440990e8bafcf294b641_7)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1&nbsp;&nbsp;&nbsp;&nbsp;Agreement to Borrow and Lend&nbsp;&nbsp;&nbsp;&nbsp;[8](#i56e8ef9b2187440990e8bafcf294b641_7)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2&nbsp;&nbsp;&nbsp;&nbsp;Loan Documents&nbsp;&nbsp;&nbsp;&nbsp;[8](#i56e8ef9b2187440990e8bafcf294b641_7)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3&nbsp;&nbsp;&nbsp;&nbsp;Terms of the Loan&nbsp;&nbsp;&nbsp;&nbsp;[9](#i56e8ef9b2187440990e8bafcf294b641_7)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.4&nbsp;&nbsp;&nbsp;&nbsp;Nonrecourse&nbsp;&nbsp;&nbsp;&nbsp;[14](#i56e8ef9b2187440990e8bafcf294b641_7)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.5&nbsp;&nbsp;&nbsp;&nbsp;Recourse to Borrower&nbsp;&nbsp;&nbsp;&nbsp;[14](#i56e8ef9b2187440990e8bafcf294b641_7)

3.&nbsp;&nbsp;&nbsp;&nbsp;COVENANTS REGARDING THE PREMISES&nbsp;&nbsp;&nbsp;&nbsp;[17](#i56e8ef9b2187440990e8bafcf294b641_7)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1&nbsp;&nbsp;&nbsp;&nbsp;Maintenance&nbsp;&nbsp;&nbsp;&nbsp;[17](#i56e8ef9b2187440990e8bafcf294b641_7)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.2&nbsp;&nbsp;&nbsp;&nbsp;Lease Obligations&nbsp;&nbsp;&nbsp;&nbsp;[18](#i56e8ef9b2187440990e8bafcf294b641_7)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.3&nbsp;&nbsp;&nbsp;&nbsp;Taxes, Other Governmental Charges, Liens and Utility Charges&nbsp;&nbsp;&nbsp;&nbsp;[19](#i56e8ef9b2187440990e8bafcf294b641_7)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.4&nbsp;&nbsp;&nbsp;&nbsp;Insurance&nbsp;&nbsp;&nbsp;&nbsp;[20](#i56e8ef9b2187440990e8bafcf294b641_7)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.5&nbsp;&nbsp;&nbsp;&nbsp;Use of Premises&nbsp;&nbsp;&nbsp;&nbsp;[24](#i56e8ef9b2187440990e8bafcf294b641_7)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.6&nbsp;&nbsp;&nbsp;&nbsp;Management of Premises&nbsp;&nbsp;&nbsp;&nbsp;[24](#i56e8ef9b2187440990e8bafcf294b641_7)

4.&nbsp;&nbsp;&nbsp;&nbsp;FINANCIAL INFORMATION&nbsp;&nbsp;&nbsp;&nbsp;[25](#i56e8ef9b2187440990e8bafcf294b641_7)

5.&nbsp;&nbsp;&nbsp;&nbsp;ESCROWS&nbsp;&nbsp;&nbsp;&nbsp;[26](#i56e8ef9b2187440990e8bafcf294b641_7)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.1&nbsp;&nbsp;&nbsp;&nbsp;Assessments and Insurance&nbsp;&nbsp;&nbsp;&nbsp;[26](#i56e8ef9b2187440990e8bafcf294b641_7)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.2&nbsp;&nbsp;&nbsp;&nbsp;Letters of Credit&nbsp;&nbsp;&nbsp;&nbsp;[26](#i56e8ef9b2187440990e8bafcf294b641_7)

6.&nbsp;&nbsp;&nbsp;&nbsp;ENVIRONMENTAL MATTERS&nbsp;&nbsp;&nbsp;&nbsp;[27](#i56e8ef9b2187440990e8bafcf294b641_7)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1&nbsp;&nbsp;&nbsp;&nbsp;Definitions&nbsp;&nbsp;&nbsp;&nbsp;[27](#i56e8ef9b2187440990e8bafcf294b641_7)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2&nbsp;&nbsp;&nbsp;&nbsp;Environmental Representations, Warranties and Covenants&nbsp;&nbsp;&nbsp;&nbsp;[29](#i56e8ef9b2187440990e8bafcf294b641_7)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.3&nbsp;&nbsp;&nbsp;&nbsp;Right to Inspect and Cure&nbsp;&nbsp;&nbsp;&nbsp;[30](#i56e8ef9b2187440990e8bafcf294b641_7)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.4&nbsp;&nbsp;&nbsp;&nbsp;Indemnification&nbsp;&nbsp;&nbsp;&nbsp;[31](#i56e8ef9b2187440990e8bafcf294b641_7)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.5&nbsp;&nbsp;&nbsp;&nbsp;Remediation&nbsp;&nbsp;&nbsp;&nbsp;[31](#i56e8ef9b2187440990e8bafcf294b641_7)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.6&nbsp;&nbsp;&nbsp;&nbsp;Survival&nbsp;&nbsp;&nbsp;&nbsp;[32](#i56e8ef9b2187440990e8bafcf294b641_7)

7.&nbsp;&nbsp;&nbsp;&nbsp;DAMAGE TO, DESTRUCTION OF, AND CONDEMNATION OF THE PREMISES&nbsp;&nbsp;&nbsp;&nbsp;[32](#i56e8ef9b2187440990e8bafcf294b641_7)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1&nbsp;&nbsp;&nbsp;&nbsp;Application of Insurance Proceeds&nbsp;&nbsp;&nbsp;&nbsp;[32](#i56e8ef9b2187440990e8bafcf294b641_7)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2&nbsp;&nbsp;&nbsp;&nbsp;Application of Condemnation Award&nbsp;&nbsp;&nbsp;&nbsp;[33](#i56e8ef9b2187440990e8bafcf294b641_7)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.3&nbsp;&nbsp;&nbsp;&nbsp;Lender to Make Proceeds Available&nbsp;&nbsp;&nbsp;&nbsp;[33](#i56e8ef9b2187440990e8bafcf294b641_7)

8.&nbsp;&nbsp;&nbsp;&nbsp;COVENANTS, REPRESENTATIONS AND WARRANTIES&nbsp;&nbsp;&nbsp;&nbsp;[34](#i56e8ef9b2187440990e8bafcf294b641_7)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.1&nbsp;&nbsp;&nbsp;&nbsp;Status&nbsp;&nbsp;&nbsp;&nbsp;[34](#i56e8ef9b2187440990e8bafcf294b641_7)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.2&nbsp;&nbsp;&nbsp;&nbsp;Authority&nbsp;&nbsp;&nbsp;&nbsp;[34](#i56e8ef9b2187440990e8bafcf294b641_7)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.3&nbsp;&nbsp;&nbsp;&nbsp;Binding&nbsp;&nbsp;&nbsp;&nbsp;[35](#i56e8ef9b2187440990e8bafcf294b641_7)

&nbsp;&nbsp;&nbsp;&nbsp;Page 1 &nbsp;&nbsp;&nbsp;&nbsp;[LOAN AGREEMENT]

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.4&nbsp;&nbsp;&nbsp;&nbsp;No Conflict&nbsp;&nbsp;&nbsp;&nbsp;[35](#i56e8ef9b2187440990e8bafcf294b641_7)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.5&nbsp;&nbsp;&nbsp;&nbsp;EO 13224&nbsp;&nbsp;&nbsp;&nbsp;[35](#i56e8ef9b2187440990e8bafcf294b641_7)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.6&nbsp;&nbsp;&nbsp;&nbsp;Business Loan; Margin Regulations&nbsp;&nbsp;&nbsp;&nbsp;[35](#i56e8ef9b2187440990e8bafcf294b641_7)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.7&nbsp;&nbsp;&nbsp;&nbsp;Tax Status of Borrower&nbsp;&nbsp;&nbsp;&nbsp;[36](#i56e8ef9b2187440990e8bafcf294b641_7)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.8&nbsp;&nbsp;&nbsp;&nbsp;Relationship&nbsp;&nbsp;&nbsp;&nbsp;[36](#i56e8ef9b2187440990e8bafcf294b641_7)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.9&nbsp;&nbsp;&nbsp;&nbsp;Special Purpose Entity&nbsp;&nbsp;&nbsp;&nbsp;[36](#i56e8ef9b2187440990e8bafcf294b641_7)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.10&nbsp;&nbsp;&nbsp;&nbsp;Bankruptcy; Solvency; Fraudulent or Voidable Conveyance&nbsp;&nbsp;&nbsp;&nbsp;[37](#i56e8ef9b2187440990e8bafcf294b641_7)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.11&nbsp;&nbsp;&nbsp;&nbsp;Litigation&nbsp;&nbsp;&nbsp;&nbsp;[38](#i56e8ef9b2187440990e8bafcf294b641_7)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.12&nbsp;&nbsp;&nbsp;&nbsp;Title to Premises; No Liens&nbsp;&nbsp;&nbsp;&nbsp;[38](#i56e8ef9b2187440990e8bafcf294b641_7)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.13&nbsp;&nbsp;&nbsp;&nbsp;Leases; Possessory Rights&nbsp;&nbsp;&nbsp;&nbsp;[38](#i56e8ef9b2187440990e8bafcf294b641_7)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.14&nbsp;&nbsp;&nbsp;&nbsp;No Damage, Condemnation&nbsp;&nbsp;&nbsp;&nbsp;[38](#i56e8ef9b2187440990e8bafcf294b641_7)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.15&nbsp;&nbsp;&nbsp;&nbsp;Zoning&nbsp;&nbsp;&nbsp;&nbsp;[38](#i56e8ef9b2187440990e8bafcf294b641_7)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.16&nbsp;&nbsp;&nbsp;&nbsp;Access&nbsp;&nbsp;&nbsp;&nbsp;[39](#i56e8ef9b2187440990e8bafcf294b641_7)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.17&nbsp;&nbsp;&nbsp;&nbsp;Separate Tax Parcel&nbsp;&nbsp;&nbsp;&nbsp;[39](#i56e8ef9b2187440990e8bafcf294b641_7)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.18&nbsp;&nbsp;&nbsp;&nbsp;Flood Zone&nbsp;&nbsp;&nbsp;&nbsp;[39](#i56e8ef9b2187440990e8bafcf294b641_7)

9.&nbsp;&nbsp;&nbsp;&nbsp;TRANSFERS AND ASSIGNMENTS&nbsp;&nbsp;&nbsp;&nbsp;[39](#i56e8ef9b2187440990e8bafcf294b641_7)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.1&nbsp;&nbsp;&nbsp;&nbsp;Due on Sale or Encumbrance&nbsp;&nbsp;&nbsp;&nbsp;[39](#i56e8ef9b2187440990e8bafcf294b641_7)

10.&nbsp;&nbsp;&nbsp;&nbsp;EVENTS OF DEFAULT&nbsp;&nbsp;&nbsp;&nbsp;[41](#i56e8ef9b2187440990e8bafcf294b641_7)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.1&nbsp;&nbsp;&nbsp;&nbsp;Events of Default&nbsp;&nbsp;&nbsp;&nbsp;[41](#i56e8ef9b2187440990e8bafcf294b641_7)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.2&nbsp;&nbsp;&nbsp;&nbsp;Acceleration&nbsp;&nbsp;&nbsp;&nbsp;[43](#i56e8ef9b2187440990e8bafcf294b641_7)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.3&nbsp;&nbsp;&nbsp;&nbsp;Attorney-in-Fact; Remedies of Lender&nbsp;&nbsp;&nbsp;&nbsp;[43](#i56e8ef9b2187440990e8bafcf294b641_7)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.4&nbsp;&nbsp;&nbsp;&nbsp;Advances&nbsp;&nbsp;&nbsp;&nbsp;[44](#i56e8ef9b2187440990e8bafcf294b641_7)

11.&nbsp;&nbsp;&nbsp;&nbsp;GENERAL PROVISIONS&nbsp;&nbsp;&nbsp;&nbsp;[44](#i56e8ef9b2187440990e8bafcf294b641_7)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.1&nbsp;&nbsp;&nbsp;&nbsp;Captions&nbsp;&nbsp;&nbsp;&nbsp;[44](#i56e8ef9b2187440990e8bafcf294b641_7)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.2&nbsp;&nbsp;&nbsp;&nbsp;Merger&nbsp;&nbsp;&nbsp;&nbsp;[44](#i56e8ef9b2187440990e8bafcf294b641_7)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.3&nbsp;&nbsp;&nbsp;&nbsp;Notices&nbsp;&nbsp;&nbsp;&nbsp;[45](#i56e8ef9b2187440990e8bafcf294b641_7)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.4&nbsp;&nbsp;&nbsp;&nbsp;Modification; Waiver&nbsp;&nbsp;&nbsp;&nbsp;[46](#i56e8ef9b2187440990e8bafcf294b641_7)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.5&nbsp;&nbsp;&nbsp;&nbsp;Governing Law&nbsp;&nbsp;&nbsp;&nbsp;[46](#i56e8ef9b2187440990e8bafcf294b641_7)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.6&nbsp;&nbsp;&nbsp;&nbsp;Acquiescence Not to Constitute Waiver of Lender's Requirements&nbsp;&nbsp;&nbsp;&nbsp;[46](#i56e8ef9b2187440990e8bafcf294b641_7)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.7&nbsp;&nbsp;&nbsp;&nbsp;Disclaimer by Lender&nbsp;&nbsp;&nbsp;&nbsp;[46](#i56e8ef9b2187440990e8bafcf294b641_7)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.8&nbsp;&nbsp;&nbsp;&nbsp;Right of Lender to Make Advances to Cure Borrower's Defaults&nbsp;&nbsp;&nbsp;&nbsp;[47](#i56e8ef9b2187440990e8bafcf294b641_7)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.9&nbsp;&nbsp;&nbsp;&nbsp;Definitions Include Amendments&nbsp;&nbsp;&nbsp;&nbsp;[47](#i56e8ef9b2187440990e8bafcf294b641_7)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.10&nbsp;&nbsp;&nbsp;&nbsp;Time Is of the Essence&nbsp;&nbsp;&nbsp;&nbsp;[47](#i56e8ef9b2187440990e8bafcf294b641_7)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.11&nbsp;&nbsp;&nbsp;&nbsp;Execution in Counterparts&nbsp;&nbsp;&nbsp;&nbsp;[47](#i56e8ef9b2187440990e8bafcf294b641_7)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.12&nbsp;&nbsp;&nbsp;&nbsp;Waiver of Consequential Damages&nbsp;&nbsp;&nbsp;&nbsp;[48](#i56e8ef9b2187440990e8bafcf294b641_7)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.13&nbsp;&nbsp;&nbsp;&nbsp;Claims Against Lender&nbsp;&nbsp;&nbsp;&nbsp;[48](#i56e8ef9b2187440990e8bafcf294b641_7)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.14&nbsp;&nbsp;&nbsp;&nbsp;Jurisdiction and Venue&nbsp;&nbsp;&nbsp;&nbsp;[48](#i56e8ef9b2187440990e8bafcf294b641_7)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.15&nbsp;&nbsp;&nbsp;&nbsp;Severability&nbsp;&nbsp;&nbsp;&nbsp;[48](#i56e8ef9b2187440990e8bafcf294b641_7)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.16&nbsp;&nbsp;&nbsp;&nbsp;Incorporation of Recitals&nbsp;&nbsp;&nbsp;&nbsp;[49](#i56e8ef9b2187440990e8bafcf294b641_7)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.17&nbsp;&nbsp;&nbsp;&nbsp;WAIVER OF JURY TRIAL&nbsp;&nbsp;&nbsp;&nbsp;[49](#i56e8ef9b2187440990e8bafcf294b641_7)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.18&nbsp;&nbsp;&nbsp;&nbsp;General Indemnification&nbsp;&nbsp;&nbsp;&nbsp;[49](#i56e8ef9b2187440990e8bafcf294b641_7)

&nbsp;&nbsp;&nbsp;&nbsp;Page 2 &nbsp;&nbsp;&nbsp;&nbsp;[LOAN AGREEMENT]

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

------

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.19&nbsp;&nbsp;&nbsp;&nbsp;Secondary Financing&nbsp;&nbsp;&nbsp;&nbsp;[50](#i56e8ef9b2187440990e8bafcf294b641_7)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.20&nbsp;&nbsp;&nbsp;&nbsp;Cross-Default&nbsp;&nbsp;&nbsp;&nbsp;[50](#i56e8ef9b2187440990e8bafcf294b641_7)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.21&nbsp;&nbsp;&nbsp;&nbsp;ERISA&nbsp;&nbsp;&nbsp;&nbsp;[50](#i56e8ef9b2187440990e8bafcf294b641_7)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.22&nbsp;&nbsp;&nbsp;&nbsp;Certain Disclosures&nbsp;&nbsp;&nbsp;&nbsp;[51](#i56e8ef9b2187440990e8bafcf294b641_7)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.23&nbsp;&nbsp;&nbsp;&nbsp;Enforcement Costs&nbsp;&nbsp;&nbsp;&nbsp;[51](#i56e8ef9b2187440990e8bafcf294b641_7)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.24&nbsp;&nbsp;&nbsp;&nbsp;Participations; Secondary Market&nbsp;&nbsp;&nbsp;&nbsp;[52](#i56e8ef9b2187440990e8bafcf294b641_7)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.25&nbsp;&nbsp;&nbsp;&nbsp;Replacement or Bifurcation of Note&nbsp;&nbsp;&nbsp;&nbsp;[53](#i56e8ef9b2187440990e8bafcf294b641_7)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.26&nbsp;&nbsp;&nbsp;&nbsp;Further Acts&nbsp;&nbsp;&nbsp;&nbsp;[53](#i56e8ef9b2187440990e8bafcf294b641_7)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.27&nbsp;&nbsp;&nbsp;&nbsp;Lender's Consent; Costs of Administration of Loan&nbsp;&nbsp;&nbsp;&nbsp;[53](#i56e8ef9b2187440990e8bafcf294b641_7)

ATTACHMENTS:

&nbsp;&nbsp;&nbsp;&nbsp;Exhibit A – Description of Land

&nbsp;&nbsp;&nbsp;&nbsp;Schedule 8.1 – Organizational Chart of Borrower

&nbsp;&nbsp;&nbsp;&nbsp;Page 3 &nbsp;&nbsp;&nbsp;&nbsp;[LOAN AGREEMENT]

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**<u>LOAN AGREEMENT</u>**

This Loan Agreement is made as of October 9, 2025, by and between **MARYSVILLE OWNER LLC**, a Delaware limited liability company ("Borrower") and **USAA LIFE INSURANCE COMPANY**, a life insurance company organized under the laws of Texas, and its successors and assigns ("Lender").

**<u>RECITALS</u>**

A.&nbsp;&nbsp;&nbsp;&nbsp;Borrower owns fee title to certain real estate (the "Land") as described on <u>Exhibit A</u> hereto, which Land is improved with buildings and other improvements thereon (the "Improvements").

B.&nbsp;&nbsp;&nbsp;&nbsp;Borrower has applied to Lender for a loan ("Loan") in the amount of SEVENTY-SIX MILLION TWO HUNDRED AND FIFTY THOUSAND AND 00/100 DOLLARS ($76,250,000.00) and Lender has agreed to make the Loan on the terms and conditions contained herein.

**NOW**, **THEREFORE**, in consideration of the foregoing Recitals, and for other valuable consideration the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

**1.<u>DEFINED TERMS</u>.** The following terms as used herein shall have the following meanings:

<u>Agreement</u>: This Loan Agreement, as originally executed or as may be hereafter supplemented or amended from time to time in writing.

<u>AML/OFAC Letter</u>: means either (a) an AML/OFAC letter in substantially the same form provided by Sculptor Real Estate Advisors LP (or an Affiliate thereof) to Lender and approved by Lender on or prior to the Loan Opening Date in contemplation of the Loan (or such other form of AML/OFAC letter subsequently approved by Lender in its reasonable discretion), or (b) a signed written notice from Sculptor Real Estate Advisors LP (or an Affiliate thereof), or another SEC registered investment adviser delivered upon Lender's written request therefor and approved by Lender (which shall not be more than once every twelve (12) months after delivery of any prior AML/OFAC Letter meeting the parameters of clause (a) of this definition), which letter shall confirm that the AML/OFAC letter most recently delivered to Lender within the prior twelve (12) month period remains in full force and effect.

<u>Application/Commitment</u>: The "Application" to Lender for the Loan dated September 19, 2025, and the acceptance thereof by Lender as a commitment dated September 19, 2025.

<u>Assessment</u>: All taxes, liens, assessments, utility charges (public or private and including sewer fees), ground rents, maintenance charges, dues, fines, impositions and public and other charges of any character (including penalties and interest) assessed against, or which could become a lien against the Premises.

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<u>Borrower</u>: The meaning set forth in the introductory paragraph of this Agreement.

<u>Borrower's Certificate</u>: The certificate described in <u>Section 2.2(i)</u> of this Agreement.

<u>Building Laws</u>: All federal, state and local laws, statutes, regulations, codes, ordinances, orders, rules and requirements applicable to the development, construction, use, operation, management and maintenance of the Premises, including, without limitation, all access, building, zoning, planning, subdivision, fire, traffic, safety, health, labor, discrimination, environmental, air quality, wetlands, shoreline, flood plain laws, regulations and ordinances, including, without limitation, all applicable requirements of the Fair Housing Act of 1988, as amended, the Americans with Disabilities Act of 1990, as amended, and all orders or decrees of any court adopted or enacted with respect thereto applicable to the Premises, as any of the same may from time to time be amended, modified or supplemented.

<u>Business Day</u>: A day other than a Saturday, Sunday or holiday on which national banks are authorized to be closed.

<u>Cash Management Agreement</u>: The meaning set forth in <u>Section 2.2(g)</u> of this Agreement.

<u>CMA</u>: The meaning set forth in <u>Section 5.3</u> of this Agreement.

<u>Control</u>: Means the power, directly or indirectly, to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. "Controlling", "controlled by" and "under common control with" have meanings correlative thereto.

<u>Control Party</u>: Means (A) Sculptor Advisors LLC, a Delaware limited liability company, (B) Sculptor Real Estate Advisors LP, a Delaware limited partnership, (C) Sculptor Capital Management, Inc., a Delaware corporation and/or (D) any Person that is directly or indirectly controlled by any of the foregoing Control Party entities.

<u>Correspondent</u>: Lender shall have the right to appoint a correspondent at any time during the term of the Loan upon written notice to Borrower. Borrower hereby acknowledges that Lender may utilize Correspondent, at Lender's expense, and/or other outside third parties selected by Lender in any aspects of the Loan, including, but not limited to, the servicing, administration and monitoring of the Loan. For clarity, (i) Servicer is not a Correspondent, and (ii) Lender's use of a Correspondent at Lender's expense does not negate Borrower's obligation to pay the Servicing Fee or any other cost, expense or fee set forth in the Loan Documents. For purposes of this Agreement, where it is referenced that information will be provided to "Correspondent and Lender," unless designated otherwise in writing by Lender, the information shall be provided to Correspondent, who will provide the same to Lender. Lender may, at any time, request in writing that the information be provided to both Correspondent and Lender or to another third party in place of Correspondent.

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<u>Debt Yield</u>: The number calculated by dividing NOI by the aggregate principal balance of the Loan.

<u>Default</u>: Any event that would, if it were to continue uncured, with notice or lapse of time or both, constitute an Event of Default.

<u>Default Rate</u>: The default interest rate specified in <u>Section 2.3(d)</u> of this Agreement.

<u>Enterprise Zone/Tax Abatement</u>: That certain Enterprise Zone Agreement Among Union County, Ohio, The Scotts Company, and Sierra Marysville Storage, LLC, identified as Resolution No. 22-185, and consented to by the City of Marysville, as assigned to Borrower pursuant to that certain Assignment, Assumption and Amendment Agreement dated October 9, 2025, and the tax exemption provided for therein.

<u>Environmental Indemnification Agreement</u>: The Environmental Indemnification Agreement described in <u>Section 2.2(e)</u> of this Agreement, executed by Borrower and Guarantor, as originally executed or as may be hereafter supplemented or amended from time to time in writing.

<u>Environmental Report:</u> means that certain Phase I Environmental Site Assessment Report prepared by Partner Engineering and Science, Inc., dated as of September 4, 2025.

<u>Event of Default</u>: The meaning set forth in <u>Section 10.1</u> of this Agreement.

<u>Governmental Authority</u>: Any federal, state, county or municipal government, or political subdivision thereof, any governmental or quasi-governmental agency, authority, board, bureau, commission, department, instrumentality, or public body, or any court, administrative tribunal, or public utility.

<u>Guarantor</u>: Sculptor Diversified Real Estate Income Trust, Inc., a Maryland corporation.

<u>Improvements</u>: The meaning set forth in <u>Recital A</u> of this Agreement.

<u>Include or including</u>: Including, but not limited to.

<u>Knowledge</u>: When used to modify a representation or warranty, actual knowledge.

<u>KYC Threshold</u>: a direct or indirect membership interest in Borrower aggregating (i) twenty five percent (25%) for a domestic Person and its affiliates (U.S. domicile or formation), or (ii) ten percent (10%) for a foreign Person and its affiliates (as either such threshold may be lowered, if Lender has given notice to Borrower of changes in laws or regulations necessitating a more stringent threshold percentage).

<u>Land</u>: The parcel of land legally described in <u>Exhibit A</u> hereto underlying the Premises.

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<u>Laws</u>: Collectively, all federal, state and local laws, statutes, codes, ordinances, orders, rules and regulations, including judicial opinions or precedential authority in the applicable jurisdiction, as any of the same may from time to time be amended, modified or supplemented.

<u>Lease Termination Fees</u>: The meaning set forth in <u>Section 3.2</u> of this Agreement.

<u>Leases</u>: All leases and other agreements or arrangements affecting the use or occupancy of all or any portion of the Premises now in effect or hereafter entered into (including all lettings, subleases, licenses, concessions, tenancies and other occupancy agreements covering or encumbering all or any portion of the Premises), together with any guarantees, supplements, amendments, modifications, extensions and renewals of the same.

<u>Lender</u>: The meaning set forth in the introductory paragraph of this Agreement.

<u>Limited Guaranty</u>: The Limited Guaranty described in <u>Section 2.2(f)</u> of this Agreement executed by Guarantor with respect to the exceptions from the recourse limitations provided therein, as originally executed or as may be hereafter supplemented or amended from time to time in writing.

<u>Loan</u>: The meaning set forth in <u>Recital B</u> of this Agreement.

<u>Loan Documents</u>: This Agreement, the Environmental Indemnification Agreement, the Limited Guaranty, the Security Instrument, the Note, the Assignment and Subordination of Management Agreement, the other documents and instruments listed or described in <u>Section 2.2</u> of this Agreement, and all other documents and instruments given to Lender from time to time in connection with or to secure the Loan, as originally executed or as any of the same may be hereafter supplemented or amended from time to time, in writing.

<u>Loan to Value Ratio</u>: the ratio, as reasonably determined by Lender, of (i) the aggregate principal balance of the Loan to (ii) the fair market value of the Premises.

<u>Loan Opening Date</u>: The date of the disbursement of the Loan.

<u>Loan Year</u>: A period of twelve consecutive months, the first of which shall commence on the date hereof, if such date is the first (1st) day of the month, and otherwise on the first (1st) day of the month following the date hereof (and the first Loan Year also shall include the partial month from the date hereof until such date), and each succeeding Loan Year shall commence on the anniversary of such date.

<u>Management Agreement</u>: That certain 12575 Industrial Parkway Property Management Agreement between Borrower and Manager dated October 9, 2025.

<u>Manager</u>: Friedman Real Estate Management OH INC., an Ohio corporation.

<u>Maturity Date</u>:&nbsp;&nbsp;&nbsp;&nbsp; The meaning set forth in <u>Section 2.3(b)</u> of this Agreement.

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<u>Maximum Legal Rate of Interest</u>: The meaning set forth in <u>Section 2.3(g)</u> of this Agreement.

<u>NOI</u>: the gross annual income realized from operations of the Premises for the applicable twelve (12) month period after subtracting all necessary and ordinary operating expenses (both fixed and variable) for that twelve (12) month period, including, without limitation, utilities, administrative expenses, cleaning, landscaping, security, repairs and maintenance, ground rent payments (if applicable), management fees equal to the greater of actual or 2% of effective gross income, real estate and other taxes (on a fully-assessed basis after transfer of the Premises), assessments and insurance, and Lender's underwritten reserves for replacements, but excluding deductions for federal, state and other income taxes, debt service expense, depreciation or amortization of capital expenditures, asset management fees and other similar items. Gross annual income shall be based on the then current rent roll, with tenants that are current in their rental obligations, adjusted for free rent and other concessions, projecting income based on the leases in place for the next succeeding twelve (12) months and near-term lease expirations, each as reasonably determined by Lender, and ordinary operating expenses shall be normalized. Documentation of NOI shall be certified by an officer of Borrower with detail reasonably satisfactory to Lender and shall be subject to the reasonable approval of Lender.

<u>Note</u>: The promissory note described in <u>Section 2.2(a)</u> of this Agreement, as originally executed or as may be hereafter supplemented or amended from time to time in writing.

<u>Note Rate</u>: The interest rate under the Note, described in <u>Section 2.3(a)</u> of this Agreement.

<u>Parcel</u>: The portion of the Premises described on <u>Exhibit A</u> and identified by a specific "Parcel" designation.

<u>Permitted Exceptions</u>: Those title matters to which the interests of Borrower in the Real Property is subject on the Loan Opening Date and Permitted Encumbrances.

<u>Permitted Ownership Encumbrances</u>: The meaning set forth in <u>Section 9.1(a)</u> of this Agreement.

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<u>Permitted Ownership Transfers</u>: (A) any transfer or series of transfers of any indirect ownership interests in Borrower, so long as each of the following conditions are satisfied at all times before, during and after each such transfer or series of transfers: (i) SRE Funds own, directly or indirectly, at least fifty-one percent (51%) of the limited liability company interests in Borrower and Sole Member, (ii) Guarantor owns, directly or indirectly, limited liability company interests in each of Borrower and Sole Member that are no less than the limited liability company interests Guarantor owned in each such entity as of the Loan Opening Date, (iii) Sole Member owns one hundred percent (100%) of the limited liability company interests in Borrower, (iv) a Control Party controls Borrower and Sole Member and manages the day-to-day operations of Guarantor, and (v) no Event of Default shall occur as the result of such transfer or series of transfers, and (B) any transfers of any indirect ownership interests in Borrower consisting of publicly traded shares or other publicly traded securities in any Person which is listed on a national or international stock exchange.

Notwithstanding the foregoing, prior to the acquisition by any Person, whether individually or together with such Person's affiliates, of a direct or indirect ownership interest in Borrower that is equal to or greater than the KYC Threshold (and such Person, together with such Person's affiliates, did not have a direct or indirect ownership interest equal to or greater than the KYC Threshold prior to such Transfer), Borrower shall have provided not less than twenty (20) days' prior written notice to Lender of the proposed transfer, together with such information about the proposed transferee (and its affiliates, as applicable) and transfer as Lender may reasonably request, and Lender shall have confirmed to Borrower that such transferee (and its affiliates, as applicable) and transfer have been approved by Lender which is required solely with respect to Lender's "Know Your Customer" and other commercially reasonable requirements adopted to comply with applicable laws.

For clarity, Lender's agreement to the foregoing Permitted Ownership Transfers is specific to the membership transfers described above and is not an express or implied waiver by Lender of any other Lender notice or consent rights set forth in the Loan Documents.

<u>Person</u>: Means an individual, sole proprietorship, joint venture, association, trustee of a trust, trust, estate, business trust, corporation, nonprofit corporation, partnership, limited liability company, sovereign government or agency, instrumentality, or political subdivision thereof, or any similar entity or organization.

<u>Premises</u>: As described on <u>Exhibit A</u>, each Parcel (if so identified) of, or the entirety of, the Land together with any and all buildings, structures and improvements located or to be located thereon and all rights, privileges, easements, hereditaments and appurtenances, thereunto relating or appertaining, including parking in compliance with any applicable zoning ordinance and Leases, and all personal property, fixtures and equipment required or used (or to be used) for the operation thereof. <u>Exhibit A</u> sets forth the local street address and the associated legal description.

<u>Prepayment Date</u>: The meaning set forth in <u>Section 2.3(f)</u> of this Agreement.

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<u>Prepayment Premium</u>: The meaning set forth in <u>Section 2.3(f)</u> of this Agreement.

<u>PSA</u>: That certain Real Estate Purchase and Sale Agreement, dated August 14, 2025, between Seller, as Seller, and Borrower, as Purchaser, with respect to the purchase and sale of the Premises, as amended by that certain First Amendment to Purchase and Sale Agreement, dated September 15, 2025, that certain Second Amendment to Purchase and Sale Agreement, dated September 18, 2025, that certain Third Amendment to Purchase and Sale Agreement, dated September 19, 2025 ("3<sup>rd</sup> Amendment to PSA"), and that certain Fourth Amendment to Purchase and Sale Agreement, dated October 9, 2025 (4<sup>th</sup> Amendment to PSA").

<u>Real Property</u>: That portion of the Premises constituting real property.

<u>Rents</u>: All rents (whether denoted as advance rent, minimum rent, percentage rent or otherwise), receipts, issues, income, royalties, profits, revenues, proceeds, bonuses, deposits (whether denoted as security deposits or otherwise), lease termination fees or payments, rejection damages, buy-out fees and any other fees made or to be made in lieu of rent, any award made hereafter to Borrower in any court proceeding involving any tenant, lessee, licensee or concessionaire under any of the Leases in any bankruptcy, insolvency or reorganization proceedings in any state or federal court, and all other payments, rights and benefits of whatever nature from time to time due under the Leases.

<u>Revenue Code</u>: The Internal Revenue Code of 1986, as amended, and the regulations thereunder.

<u>Scotts Lease</u>: That certain Lease, dated June 12, 2025, between Borrower's predecessor in interest, as landlord, and The Scotts Company LLC, as tenant, as amended by that certain First Amendment to Lease, dated October 9, 2025, as assigned to Borrower by that certain Assignment of Leases and Assumption Agreement, dated October 9, 2025.

<u>Security Instrument</u>: The mortgage, deed of trust or similar instrument described in <u>Section 2.2(b)</u> of this Agreement for the Premises and for any Substitute Property, each as originally executed or as may be hereafter supplemented or amended from time to time in writing.

<u>Seller</u>: Sierra Marysville Storage, LLC, an Ohio limited liability company.

<u>Seller Parties</u>: Seller, Brent Crawford, Bob Hoying and/or any affiliate of any of them that has any Seller Parties' Payment Obligations.

<u>Seller Parties' Post-Closing Obligations</u>: Any payment or performance obligations of the Seller Parties, and each of them, to Borrower under the PSA that survive the closing of the purchase and sale of the Premises, including, without limitation, Section 8 of the 3<sup>rd</sup> Amendment to PSA, the indemnity set forth in Section 2 of the 4<sup>th</sup> Amendment to PSA, the guaranty provided for in the Purchase and Sale Agreement from Brent Crawford and Bob Hoying, and/or any other

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guaranty, indemnity or other agreement entered into between Borrower and any Seller Party or from any Seller Party in favor of Borrower.

<u>Sole Member</u>: Marysville Holdings LLC, a Delaware limited liability company.

<u>SRE Fund</u>: Limited liability companies, limited partnerships, or similar investment vehicles that are controlled, managed or advised by a Control Party.

<u>Tenant</u>: Any person or entity obligated by contract or otherwise (including, without limitation, under the terms of the Leases) to pay rent or other consideration for any occupancy or other rights with respect to the Premises.

<u>Tenant Estoppel Certificate</u>: That certain Tenant Estoppel Certificate relating to the Scotts Lease dated as of October 9, 2025 executed by The Scotts Company LLC.

<u>Tenant Letter of Credit</u>: The meaning set forth in <u>Section 5.2</u> of this Agreement.

<u>Title Insurer</u>: Stewart Title Guaranty Company.

Defined terms may be used in the singular or the plural. When used in the singular preceded by "a," "an," or "any," such term shall be taken to indicate one or more members of the relevant class. When used in the plural, such term shall be taken to indicate all members of the relevant class.

**2.<u>TERMS OF THE LOAN AND DOCUMENTS</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.1<u>Agreement to Borrow and Lend</u>**. Subject to all of the terms, provisions and conditions set forth in this Agreement, Lender agrees to make and Borrower agrees to accept the Loan. Borrower agrees to pay all indebtedness and perform all obligations evidenced and secured by the Loan Documents in accordance with the terms thereof without offset for any claims Borrower may assert against Lender.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.2<u>Loan Documents</u>**. In consideration of Lender's entry into this Agreement and Lender's agreement to make the Loan, Borrower and Guarantor, as the case may be, have executed and delivered or caused to be executed and delivered to Lender the following documents and instruments:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)A Promissory Note from Borrower payable to the order of Lender in the original principal amount of SEVENTY SIX MILLION TWO HUNDRED FIFTY THOUSAND AND NO/100 DOLLARS ($76,250,000.00) (as defined above, such Promissory Note is referred to as the "Note");

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)A first mortgage or deed of trust (designated, as the case may be, "Open-End Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Financing Statement") on Borrower's fee simple estate in the Real Property securing the Note subject only to the Permitted Exceptions, including an assignment of all Leases relating to or connected with the Premises and a security agreement granting Lender a security interest in all personal property, tangible and intangible, owned or hereafter acquired by Borrower and relating to operation or maintenance of the Premises, including bank accounts, accounts receivable, all

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escrow, impound or reserve accounts required in the Loan Documents, and other intangible property;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)[Intentionally omitted];

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)Uniform Commercial Code financing statements naming Borrower as debtor with respect to all of Borrower's interest in the personal property (if any) at the Premises;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)An indemnification agreement (designated "Environmental Indemnification Agreement") by Borrower and by Guarantor with respect to certain matters pertaining to the Premises including environmental covenants;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)A guaranty agreement (designated "Limited Guaranty") by Guarantor with respect to certain matters excluded from the non-recourse provisions of this Agreement, executed by Guarantor with respect to the Loan;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)A Cash Management Agreement (designed "Cash Management Agreement") among Borrower, Lender, and Key Bank National Association, a national banking association;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)An assignment and subordination of the Management Agreement in favor of Lender (designated "Assignment and Subordination of Management Agreement") by Borrower and Manager;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)A certificate containing certain warranties and representations with respect to the Premises by Borrower;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)Any other documents required by the Application/Commitment; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k)Such other agreements, instruments, certificates, and documents as may be required by this Agreement or as Lender may reasonably require.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.3<u>Terms of the Loan</u>**. The Loan will bear interest for the period and at the rate or rates set forth below, and be payable in accordance with the terms of this Agreement and the Note. The outstanding principal balance, all accrued and unpaid interest and all other sums due and payable under the Note or other Loan Documents, if not sooner paid, shall be paid in full on the Maturity Date. The Note includes, shall be repaid in accordance with, and is subject to the following terms and conditions:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)<u>Interest</u>. The principal balance of the Note outstanding from time to time shall bear interest at the rate ("Note Rate") equal to the lesser of (i) Five and Eighty Hundredths Percent (5.80%) per annum and (ii) the Maximum Legal Rate of Interest. Interest shall be calculated for the actual number of days in any partial month on the basis of a 360-day year of twelve thirty-day months.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)<u>Scheduled Payments</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)Interest only on the unpaid principal balance from and including the date advanced through the end of that calendar month, shall be paid on the date of disbursement.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)Payment of the interest thereon shall be made in sixty (60) consecutive monthly installments in the amount of $368,541.67 per month commencing on December 1, 2025, and on the first (1st) day of each month thereafter until November 1, 2030 ("Maturity Date"); provided, however, if the first (1st) day of any such month is not a Business Day, the payment shall be due on the next following Business Day.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)On the Maturity Date, the entire balance of principal and interest then unpaid thereon, together with any amounts owed by Borrower under the Note or under any of the other Loan Documents, shall be due and payable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)Except during the continuance of an Event of Default, all payments received under the Note shall be applied in the following order: (a) to unpaid fees, costs, and expenses due to Lender pursuant to the Loan Documents; (b) to unpaid Late Charges and out-of-pocket costs of collection actually incurred; (c) to any Prepayment Premium due; (d) to accrued and unpaid interest due on the principal balance of the Note; and (e) then to the principal balance of the Note. During the continuance of an Event of Default, all payments shall be applied in any order determined by Lender.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)<u>Payment Default</u>. If a monthly payment is not received by (i) the date it falls due, it shall constitute a default under the terms hereof and of the Note, and (ii) the tenth (10<sup>th</sup>) day after it falls due, it shall constitute an Event of Default under the terms hereof and of the Note. Time is of the essence hereof and it is expressly agreed that should default be made in the payment of any installment of principal or interest when due under this Agreement or the Note (including any applicable grace period), or if an Event of Default shall occur, then the entire unpaid principal balance and accrued interest shall, at the option of Lender, become immediately due and payable, without further notice and demand, such notice and demand being expressly waived, anything contained herein, in the Note, or in any instrument now or hereafter securing the Note to the contrary notwithstanding. Said option shall continue until all such defaults have been cured and such cure has been accepted by Lender.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)<u>Default Rate</u>. Upon the occurrence of an Event of Default, or after maturity or accelerated maturity of the principal balance of the Loan, or if the obligations evidenced hereby or by the Note are reduced to a judgment, to the extent permitted by applicable law, interest shall be payable on demand on the unpaid principal balance or the judgment, as the case may be, and accrued interest thereon, from time to time outstanding, at a rate ("<u>Default Rate</u>") equal to the Note Rate plus five hundred basis points or, if less, the Maximum Legal Rate of Interest, until paid.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)<u>Late Charge</u>. (i) In the event that any payment required to be made pursuant to the foregoing (excluding the principal payment due on the Maturity Date or the acceleration thereof) is not received by (a) the date it falls due it shall constitute a default under the terms hereof and of the Note, and (b) the tenth (10th) day after it falls due, a late charge of five cents ($.05) for each dollar ($1.00) so overdue shall be assessed, unless prohibited by law, which shall become immediately due and payable as liquidated damages for defraying expenses incident to handling such delinquent payment and by reason of failure to make prompt payment, and the same shall be deemed to be evidenced by the Note and secured by the Security Instrument. In the event of the failure of Borrower to pay any such late charge within five (5) days after demand, then the unpaid principal balance and accrued interest shall, at the option of Lender, become immediately due and payable without further notice and demand, such notice and demand being expressly waived, but in such event said late charge shall be voided and shall not be payable by Borrower nor receivable by Lender and the rate of interest effective after maturity shall be applicable. If at the time any late charge provided for herein is due, any portion

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thereof would be deemed to be interest under applicable law and as such would result in interest payable hereunder exceeding the Maximum Legal Rate of Interest, said late charge shall be reduced so that the portion thereof deemed to be interest, when added to all other interest payable under the Loan Documents or otherwise in connection with the Loan, computed from the date of disbursement of the proceeds of the Loan until the date of final payment hereunder (such combined interest to be allocated and spread throughout such entire term) does not exceed the Maximum Legal Rate of Interest as construed by courts having jurisdiction thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)<u>Prepayment</u>. Except as expressly provided for in this Agreement, Borrower may not prepay any portion of the principal balance of the Loan. Borrower reserves the privilege to prepay, in full but not in part, the principal indebtedness evidenced hereby and by the Note on the first (1st) day of the second (2<sup>nd</sup>) Loan Year, Borrower may repay the Note in its entirety (but not in part) on any date, provided that (i) Borrower gives Lender written notice not less than thirty (30) days prior to the anticipated prepayment date that the Note will be prepaid (the "Prepayment Date"), (ii) Borrower on such Prepayment Date pays to Lender the entire remaining principal balance of the Note and all accrued interest then unpaid, and (iii) Borrower on such Prepayment Date pays to Lender a prepayment premium ("Prepayment Premium") in an amount determined as follows:

On or after the first day of the second (2<sup>nd</sup>) Loan Year but on or before the last day of the second (2<sup>nd</sup>) Loan Year, the Prepayment Premium shall be the greater of (A) one percent (1.0%) of the principal balance of the Note being repaid as of the Prepayment Date, and (B) the Present Value of the Loan (as hereinafter defined) less the total amount of the then outstanding principal balance of the Note being repaid as of the Prepayment Date. The "Present Value of the Loan" shall be determined by discounting back to the Prepayment Date all scheduled payments of interest remaining from the Prepayment Date to and including the Maturity Date (and including any additional payment of principal payable at maturity) at the Discount Rate. The "Discount Rate" is the rate that, when compounded monthly, is equivalent to the semi-annual yield to maturity of the U.S. Treasury Security selected by Lender in its sole discretion as of a date five days prior to the Prepayment Date with a maturity date that most closely corresponds to the Maturity Date of the Note, from any commonly available market source selected by Lender, such as *The Wall Street Journal* or the *Bloomberg News Service* plus fifty (50) basis points.

On and after the first day of the third (3<sup>rd</sup>) Loan Year but on or before the last day of the third (3<sup>rd</sup>) Loan Year, the Prepayment Premium shall be two percent (2.0%) of the principal balance of the Note being repaid as of the Prepayment Date.

On and after the first day of the fourth (4<sup>th</sup>) Loan Year but on or before the last day of the fourth (4<sup>th</sup>) Loan Year, the Prepayment Premium shall be one percent (1.0%) of the principal balance of the Note being repaid as of the Prepayment Date.

Thereafter there shall be no Prepayment Premium.

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In addition to the above, Borrower may prepay in full the then outstanding principal balance of the indebtedness evidenced by the Note on or after the first day of the fifth (5<sup>th</sup>) Loan Year with no Prepayment Premium.

If at the time any Prepayment Premium provided for herein is due, any portion thereof would be deemed to be interest under applicable law and as such would result in interest payable hereunder exceeding the Maximum Legal Rate of Interest, said Prepayment Premium shall be reduced so that the portion thereof deemed to be interest, when added to all other interest payable under the Loan Documents or otherwise in connection with the Loan, computed from the date of disbursement of the proceeds of the Loan until the date of final payment hereunder (such combined interest to be allocated and spread throughout such entire term) does not exceed the Maximum Legal Rate of Interest as construed by courts having jurisdiction thereof.

In the event that after giving Lender a notice of prepayment (Lender shall have the right to charge a reasonable sum for payoff requests), Borrower rescinds such notice or otherwise fails to make the prepayment as indicated in such a notice, Borrower shall reimburse Lender for all of Lender's reasonable costs and expenses incurred in connection with the anticipated prepayment; provided, however, that Borrower shall not be permitted to rescind such notices more than two (2) times per calendar year (or such greater number as may be approved by Lender in Lender's sole discretion).

In the event that pursuant to the provisions of the Security Instrument (in connection with the application upon the principal balance hereof of proceeds of insurance or condemnation awards) or as a matter of grace, any partial prepayment of the principal balance of the Note is accepted, the same shall not operate to defer or reduce the amount of any of the scheduled required monthly installment payments of principal and interest herein provided for; and each and every such scheduled required monthly installment payment shall be paid in full when due until the Note has been paid in full.

In the event Lender applies any insurance proceeds or condemnation proceeds to the reduction of the principal balance of the Note in accordance with the terms and conditions of the Security Instrument, and if, at such time, no Event of Default has occurred and is continuing, then no Prepayment Premium shall be due or payable as a result of such application.

Except as otherwise expressly set forth in this Agreement, Borrower waives any right to prepay the principal balance of the Note in whole or in part, without premium. If the maturity of the indebtedness evidenced hereby is accelerated by Lender as a consequence of the occurrence of an Event of Default, Borrower agrees that an amount equal to the greater of (x) the Prepayment Premium, if applicable (determined as if prepayment were made on the date of acceleration), or (y) only if such acceleration occurs prior to the first day of the second (2<sup>nd</sup>) Loan Year, five percent (5.0%) of the then principal balance of the Note, shall be added to the balance of unpaid principal and interest then outstanding, and that the indebtedness shall not be discharged except: (i) by

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payment of such Prepayment Premium (or such other amount, as the case may be), together with the balance of principal and interest and all other sums then outstanding, if Borrower tenders payment of the indebtedness prior to completion of a non-judicial foreclosure or entry of a judicial order or judgment of foreclosure; or (ii) by inclusion of such Prepayment Premium (or such other amount, as the case may be) as a part of the indebtedness in any such non-judicial foreclosure or judicial order or judgment of foreclosure.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)<u>Usury Savings</u>. The invalidity, or unenforceability in particular circumstances, of any provision of this Agreement, the Note or the other Loan Documents shall not extend beyond such provision or such circumstances and no other provision of any such agreement or instrument shall be affected thereby. The term "Maximum Legal Rate of Interest" shall mean and refer to the maximum rate of non-usurious interest, if any, that Lender may from time to time charge Borrower and in regard to which Borrower would be prevented successfully from raising the claim or defense of usury under applicable law as now, or to the extent permitted by law, as may hereafter be, in effect and which allow a higher maximum non-usurious interest rate than applicable laws now allow (said law permitting the highest rate being herein referred to as the "Interest Law"). Unless changed in accordance with law, the applicable rate ceiling under Texas law shall be the weekly rate ceiling, from time to time in effect, as provided in Chapter 303 of the Texas Finance Code, as amended. It is the intention of Borrower and Lender to conform strictly to the Interest Law applicable to this loan transaction. Accordingly, it is agreed that notwithstanding any provision to the contrary in this Agreement, the Note, or any of the documents securing payment hereof or thereof or otherwise relating hereto or thereto, the aggregate of all interest and any other charges or consideration constituting interest under applicable Interest Law that is taken, reserved, contracted for, charged or received under this Agreement, under the Note, or under any of the other aforesaid agreements or otherwise in connection with this loan transaction shall under no circumstances exceed the maximum amount of interest allowed by the Interest Law applicable to this loan transaction. If any excess of interest in such respect is provided for, or shall be adjudicated to be so provided for, in this Agreement, the Note, or in any of the documents securing payment hereof or thereof or otherwise relating hereto or thereto, then in such event (i) the provisions of this Section shall govern and control, (ii) neither Borrower nor Borrower's heirs, legal representatives, successors or assigns or any other party liable for the payment of the Note shall be obligated to pay the amount of such interest to the extent that it is in excess of the maximum amount of interest allowed by the Interest Law applicable to this loan transaction, (iii) any excess shall be deemed a mistake and cancelled automatically and, if theretofore paid, shall be credited on the Note by Lender (or if the Note shall have been paid in full, refunded to Borrower) and (iv) the effective rate of interest shall be automatically subject to reduction to the Maximum Legal Rate of Interest allowed under such Interest Law as now or hereafter construed by courts of appropriate jurisdiction. The foregoing specifically includes, but is not limited to, prepayment premiums that may become due in the event of an acceleration of maturity under the Note or the Security Instrument. All sums paid or agreed to be paid Lender for the use, forbearance or detention of the indebtedness evidenced hereby or by the Note shall, to the extent permitted by the Interest Law applicable to this loan transaction, be amortized, prorated, allocated and spread throughout the full term of the Note. In no event shall the provisions of Chapter 346 of the Texas Finance Code as amended (which regulates certain revolving credit loan amounts and tri-party accounts) apply to the loan evidenced by this Agreement or the Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)<u>Servicing Fee</u>. In addition to, and without limitation of, any other costs, expenses or fees set forth elsewhere in the Loan Documents, Borrower acknowledges and agrees that Lender shall appoint, in its sole and absolute discretion, a servicer to administer day-to-day

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servicing of the Loan (the "Servicer"), the cost and expense of which shall be paid monthly by Borrower during the term of the Loan (the "Servicing Fee"). The Servicing Fee shall not exceed $10,000.00 per annum ($833.33 per month). On the date of disbursement of the Loan, Borrower shall pay the monthly Servicing Fee for the calendar month in which the disbursement occurs, prorated for the period from and including the date of disbursement through the end of the calendar month. Thereafter, payment of the Servicing Fee shall be made in consecutive monthly installments, commencing on December 1, 2025, and on the first (1st) day of each month thereafter through and including the Maturity Date; provided, however, if the first (1st) day of any such month is not a Business Day, the payment shall be due on the next following Business Day.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.4<u>Nonrecourse</u>.** Except as specifically otherwise set forth below and in the Environmental Indemnification Agreement, no personal liability under the Loan Documents shall be asserted or enforceable against Borrower personally, all such liability being expressly waived by Lender (provided, the foregoing shall not affect the liability of any guarantor of any obligations arising under the Limited Guaranty or any indemnitor under the Environmental Indemnification Agreement); and Lender accepts the Note upon the express condition that in case of the occurrence of an Event of Default, the remedies of Lender in its sole discretion shall be any or all of:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)foreclosure of or exercise of powers of sale under the Security Instrument in accordance with the terms and provisions set forth in the Security Instrument;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)action against any other security at any time given to secure the payment of the Loan; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)action to enforce the personal liability of Borrower and/or each Guarantor (if any) of the payment of the Loan as specifically undertaken below or in a separate agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2.5<u>Recourse to Borrower</u>. PROVIDED, HOWEVER, NOTWITHSTANDING ANYTHING IN THIS AGREEMENT OR THE NOTE TO THE CONTRARY, THERE SHALL AT NO TIME BE ANY LIMITATION ON BORROWER'S PERSONAL LIABILITY FOR THE PAYMENT TO LENDER OF, AND BORROWER SHALL BE PERSONALLY LIABLE TO LENDER FOR, THE FOLLOWING:**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Any loss, costs, damages, and expenses, including reasonable attorney fees, incurred by Lender on account of any intentional physical waste of the Premises or portion thereof by Borrower or any of its Affiliates and all reasonable costs incurred by Lender in order to protect the Premises from Borrower or its Affiliates' intentional physical waste.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Any loss, costs, damages, and expenses, including reasonable attorney fees, related to fraud or intentional material misrepresentation by or on behalf of Borrower in connection with the Premises or contained in any of the documents executed in connection with the Loan or any of the Loan Documents, or, to the extent Borrower knew or should have known, any material submitted to Lender or any other party in connection therewith.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Any loss, costs, damages and expenses, including reasonable attorney fees, related to a breach of <u>Section 8.9</u> of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)Any of the following actions by Borrower or its Affiliates in contravention of the Loan Documents: (i) misapplication, misappropriation or conversion of prepaid rents, lease termination payments, security deposits or other similar sums attributable to the Premises,

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(ii) failure to turn over to Lender all unapplied security deposits and prepaid rents upon Lender's demand, following an Event of Default, and (iii) any rents, profits, advances or rebates collected by or for Borrower following an Event of Default and not applied to the normal and necessary operating expenses of the Premises or to the indebtedness evidenced by the Note or as required by Lender or turned over to Lender.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)The amount of any unpaid real estate taxes and assessments imposed on the Premises in respect of the time during which Borrower owns the Premises (except to the extent (i) that there is insufficient gross revenue from the Premises for Borrower to pay such taxes and assessments after Borrower first uses any gross revenue to pay such taxes and assessments (but excluding any gross revenue that Borrower is prevented from using to pay such taxes and assessments by the express terms and conditions of the Loan Documents), and that Borrower provided written notice to Lender of its inability to pay such taxes and assessments not less than 10 Business Days prior to delinquency, or (ii) of deposits made by Borrower and held in an escrow account established at Lender's request for such purpose).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)Any loss, costs, damages, or expenses to Lender, including reasonable attorney fees, arising out of or in connection with any construction lien, mechanic's lien, materialman's lien or similar lien against the Premises arising out of acts or omissions of Borrower (except to the extent (i) that there is insufficient gross revenue from the Premises for Borrower to pay any such lien when due after Borrower first uses any gross revenue to pay such liens (but excluding any gross revenue that Borrower is prevented from using to pay such liens by the express terms and conditions of the Loan Documents or that is utilized to pay taxes on the Premises or insurance on the Premises) and that Borrower provided written notice to Lender of its inability to pay such lien not less than 10 Business Days after any contest and cure period set forth in the Loan Documents has expired and prior to any imminent risk of loss of any portion of the Premises, or (ii) of deposits made by Borrower and held in an escrow account established at Lender's request for such purpose).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)Misapplication, misappropriation or conversion by Borrower or its Affiliates of any of the following in contravention of the Loan Documents: condemnation awards or insurance proceeds paid or payable as a result of condemnation or casualty relating to the Premises (plus any deductible amount) that were not paid to Lender or used to restore the Premises in accordance with the terms of this Agreement or the Security Instrument.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)Any loss, costs, damages, and expenses, including reasonable attorney fees and insurance premiums, incurred by Lender as a result of Borrower's failure to maintain the insurance required under the terms of this Agreement, the Security Instrument or any other Loan Document (except to the extent (i) that there is insufficient gross revenue from the Premises for Borrower to maintain such insurance after Borrower first uses any gross revenue to maintain such insurance (but excluding any gross revenue that Borrower is prevented from using to pay such insurance premiums or otherwise maintain such insurance by the express terms and conditions of the Loan Documents or that is utilized to pay taxes on the Premises) and that Borrower provided written notice to Lender of its inability to maintain such insurance not less than 10 Business Days prior to delinquency, or (ii) of deposits made by Borrower and held in an escrow account established at Lender's request for such purpose).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)Any loss, costs, damages, and expenses, including reasonable attorney fees, incurred by Lender on account of a breach of any environmental provision contained in this Agreement or the Security Instrument.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)Any loss, costs, damages, and expenses, including reasonable attorney fees, incurred by Lender as a result of or in connection with any claim that by reason of the operation of federal bankruptcy, state insolvency, or similar creditors' rights laws, the transaction contemplated by this Agreement or the Security Instrument constituted a fraudulent or voidable transfer, a fraudulent or voidable conveyance or a preferential transfer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k)Any loss, costs, damages and expenses, including reasonable attorney fees, incurred by Lender, as a result of Borrower's entering into a new Lease or an amendment or termination of an existing Lease in breach of any leasing restrictions set forth in the Loan Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l)The amount of any Tenant Letter of Credit which was not either assigned or reissued to Lender in accordance with <u>Section 5.2</u>, plus reasonable attorney fees incurred by Lender as a result of Borrower's failure to perform its obligations under <u>Section 5.2</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m)The full amount due under the Note, including accrued interest, and other amounts due with respect to this Agreement, the Security Instrument and any other Loan Documents executed by the Borrower in connection with this Agreement if without Lender's prior written consent there is an unpermitted transfer of title to any of the Premises or ownership interests in Borrower (expressly excluding any Permitted Ownership Transfer) or if a material unpermitted encumbrance is placed against any of the Premises or ownership interests in Borrower; provided, however, there shall be no liability under this subsection for Borrower's unintentional failure to provide notice to Lender of an otherwise Permitted Ownership Transfer under the Loan Documents (unless such failure resulted in a transfer that Lender would have been entitled to disapprove and the resulting transferee is a person who does not satisfy Lender's "Know Your Customer" and other commercially reasonable requirements adopted to comply with applicable laws).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n)Any loss, costs, damages, and expenses, including reasonable attorney fees, incurred by Lender if a non-material unpermitted encumbrance is placed against any of the Premises or ownership interests in Borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o)The full amount due under this Agreement and the Note, including accrued interest, and other amounts due with respect to this Agreement, the Note, the Security Instrument and any other Loan Documents executed by the Borrower in connection with this Agreement in the event of any attempt by Borrower or any other person directly or indirectly responsible for the management of Borrower or liable for repayment of Borrower's obligations under this Agreement and the Note (whether as maker, endorser, guarantor, surety, general partner or otherwise), to materially delay or obstruct any foreclosure against the Premises or any other exercise by Lender of its remedies under the Loan Documents (excluding any defense raised in good faith by Borrower as determined by a court of competent jurisdiction in a final, non-appealable judgment), which attempts shall include, without limitation, (i) any claim that any Loan Document is invalid or unenforceable to an extent that would preclude any such foreclosure or other exercise of remedies, (ii) Borrower filing a petition in bankruptcy, failing to oppose in good faith the entry of an order for relief pursuant to any involuntary bankruptcy petition filed against it or seeking any reorganization, liquidation, dissolution or similar relief under the bankruptcy laws of the United States or under any other similar federal, state or other statute relating to relief from indebtedness, and (iii) the appointment (other than at the request of Lender) of a receiver, trustee or liquidator with respect to Borrower or the Premises or any part thereof and if the appointment is involuntary (other than at the request of Lender), such appointment is not discharged or revoked within sixty (60) days.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p)Any loss, costs, damages and expenses, including reasonable attorney fees, incurred by Lender, as a result of Borrower's breach(es) of or default(s) under any Enterprise Zone/Tax Abatement. The foregoing expressly excludes any losses, costs, damages and expenses arising out of Tenant's failure to perform any obligations solely allocated to Tenant pursuant to the Scotts Lease.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q)Any loss, costs, damages and expenses, including reasonable attorney fees, incurred by Lender, as a result of or in connection with the "Original Landlord Surviving Obligations" and the "Excluded Matters" (including, but not limited to those matters described as "Key Findings & Actions Taken" and "Ongoing Concerns & Recommendations" in Exhibit A of the Tenant Estoppel Certificate), each as defined in the Tenant Estoppel Certificate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(r)Any loss, costs, damages, and expenses, including reasonable attorney fees, incurred by Lender in enforcing and collecting any amounts due under these recourse provisions.

**3.<u>COVENANTS REGARDING THE PREMISES</u>.** Borrower covenants and agrees with Lender as set forth in this <u>Section 3</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.1<u>Maintenance</u>**. Borrower will cause the Premises and every part thereof to be maintained, preserved and kept in safe and good repair, working order and condition, will abstain from and not permit the commission of waste in or about the Premises, and will comply with all Building Laws and other laws and regulations of any Governmental Authority with reference to the Premises and the manner of using or operating the same, and with all restrictive covenants, if any, affecting the title to the Premises, or any part thereof. Borrower also will from time to time make all necessary and proper repairs, renewals, replacements, additions and betterments thereto, so that the value and efficient use thereof shall be fully preserved and maintained and so as to comply with all laws and regulations as aforesaid. Borrower will not otherwise make any material modifications to the Premises without the written consent of Lender.

If Lender has reasonable cause to believe that the Premises is not in compliance with applicable laws and regulations (including Building Laws, environmental, health and safety laws and regulations), at the request of Lender, from time to time, Borrower, at its sole cost and expense will furnish Lender with engineering studies and soil tests with respect to the Premises, the form, substance and results of which shall be satisfactory and certified to Lender. If any such engineering studies or soil tests indicate any violation or potential violation, of environmental, health, safety or similar laws or regulations, then Borrower, at its sole cost and expense, will promptly take whatever corrective action is necessary to assure the Premises is in full compliance with law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.2<u>Lease Obligations</u>**. Borrower has, concurrently herewith, executed and delivered to Lender the Security Instrument, wherein and whereby, among other things, Borrower has assigned to Lender all of the Rents and any and all Leases and the rights of management of the Premises, all as therein more specifically set forth, which Security Instrument is hereby incorporated herein by reference as fully and with the same effect as if set forth herein at length. Borrower shall not, except with the prior written consent of Lender in each instance, (a) sell, assign, pledge, mortgage or otherwise transfer or encumber (except hereby) any of the Leases, Rents or any right, title or interest of Borrower therein; (b) accept prepayments of any Rents for a period of more than one (1) month in advance of the due dates thereof; (c) waive, excuse, condone, discount, set off, compromise, or in any manner release or discharge any Tenant from

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any of its obligations under the Leases (other than *de minimis* adjustments in Additional Rent [as defined in the Scotts Lease] made in the ordinary course of business and in a commercially reasonable manner); (d) enter into any settlement of any action or proceeding arising under, or in any manner connected with, the Leases or with the obligations of the landlord or the Tenants thereunder; (e) modify, cancel or terminate any guaranties under any Lease; or (f) lease any portion of the Premises to a dry cleaner that uses dry cleaning solvents on the Premises. Borrower agrees that it will duly perform and observe all of the material terms and provisions on the landlord's part to be performed and observed under any and all Leases and that it will refrain from any action or inaction which would result in the termination by the tenants thereunder of any such Leases or in the diminution of the value thereof or of the Rents thereunder. Nothing herein contained shall be deemed to obligate Lender to perform or discharge any obligation, duty or liability of landlord under any Lease of the Premises, and BORROWER SHALL AND DOES HEREBY AGREE TO INDEMNIFY AND HOLD LENDER HARMLESS FROM ANY AND ALL LIABILITY, LOSS OR DAMAGE WHICH LENDER MAY OR MIGHT INCUR UNDER ANY LEASE OF THE PREMISES OR BY REASON OF THE ASSIGNMENT IN THE SECURITY INSTRUMENT (INCLUDING ANY LIABILITY ARISING OUT OF THE SOLE, CONCURRENT OR COMPARATIVE NEGLIGENCE OR THE STRICT LIABILITY OF LENDER); and any and all such liability, loss or damage incurred by Lender, together with the costs and expenses, including reasonable attorneys' fees, incurred by Lender in the defense of any claims or demands therefor (whether successful or not), shall be so much additional indebtedness hereby secured, and Borrower shall reimburse Lender therefor on demand, together with interest at the Default Rate per annum, until paid.

Borrower shall not lease or sublease any portion of the Premises without the prior written consent of Lender, nor will Borrower (unless Borrower is obligated to do so under the express terms of the Lease) permit or enter into any sublease, assignment, modification, amendment or termination of any prior approved lease or sublease without the prior written consent of Lender. Borrower shall give Lender prompt notice of any Lease it enters into subsequent to the date hereof, together with a certified copy of such Lease. At Borrower's expense, Borrower shall (i) deliver to Lender, within ten (10) days after receiving such notice, copies of all notices of default Borrower has received from any Tenant, (ii) deliver to Lender, within ten (10) days after sending such notice, copies of all notices of default Borrower has sent to any Tenant, (iii) enforce the Leases and all remedies available to Borrower upon any Tenant's default, (iv) upon Lender's request, deliver to Lender copies of all papers served in connection with any such enforcement proceedings, and (v) upon Lender's request, consult with Lender, its agents and attorneys with respect to the conduct thereof.

All fees or payments paid to Borrower for an early termination of a Lease or similar event ("Lease Termination Fees") shall be paid to Lender within five (5) days of receipt by Borrower to be held by Lender in a non-interest bearing escrow account. The Lease Termination Fees shall be released to Borrower for reimbursement of Lender approved costs for tenant improvements and leasing commissions related to the space for which the Lease Termination Fees were paid and the balance remitted to Borrower absent an existing Event of Default.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.3<u>Taxes, Other Governmental Charges, Liens and Utility Charges</u>**. Except to the extent being contested in accordance with the terms and conditions set forth below, Borrower shall, prior to delinquency, pay and discharge or cause to be paid and discharged all Assessments imposed upon or against the Premises or upon or against the Note and the indebtedness secured

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by the Security Instrument, and will not suffer to exist any mechanic's, statutory or other lien on the Premises or any part thereof unless consented to by Lender in writing; provided, however, Borrower may, at its own cost and expenses, contest any mechanic's or materialmen's liens pursuant to Section 1.3 of the Security Instrument. If Lender is required by legislative enactment or judicial decision to pay any such tax, assessment or charge, then at the option of Lender, the Note and any accrued interest thereon together with any additions to the debt shall be and become due and payable at the election of Lender upon notice of such election to Borrower; provided, however, said election shall be unavailing and the Security Instrument and the Note shall be and remain in effect as though said law had not been enacted or said decision had not been rendered if, notwithstanding such law or decision, Borrower lawfully pays such tax, assessments or charge to or for Lender. Copies of paid tax and assessment receipts shall be furnished to Lender not less than ten (10) days prior to the delinquent dates.

So long as no Event of Default has occurred and is continuing, Borrower may, prior to delinquency and at its sole expense, contest any Assessment with respect to the Premises, but this shall not change or extend Borrower's obligation to pay the Assessment as required above unless (i) Borrower gives Lender prior written notice of its intent to contest an Assessment; (ii) Borrower demonstrates to Lender's reasonable satisfaction that (A) the Premises will not be sold to satisfy the applicable Assessment prior to the final determination of the legal proceedings, (B) Borrower has taken such actions as are required or permitted to accomplish a stay of any such sale, and (C) Borrower has either (1) furnished a bond or surety (satisfactory to Lender in form and amount) sufficient to prevent a sale of the Premises, (2) at Lender's option, deposited one hundred twenty percent (120%) of the full amount necessary to pay any unpaid portion of the applicable Assessments with Lender or (3) otherwise satisfied Lender, in Lender's sole discretion, as to the availability of funds to pay such Assessment; and (iii) such proceeding shall be permitted under any other instrument to which Borrower or the Premises is subject (whether superior or inferior to the Security Instrument); provided, however, that the foregoing shall not restrict the contesting of (x) any income taxes, franchise taxes, ground rents, maintenance charges, and utility charges or (y) the contesting in good faith of any Assessments after payment of the same (i.e., payment under protest).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.4<u>Insurance</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Borrower shall procure and maintain, or cause to be procured and maintained with Borrower included as a Named Insured/Additional Named Insured, continuously in effect with respect to the Premises policies of insurance against such risks and in such amounts as are customary for a prudent owner of property comparable to that comprising the Premises. Irrespective of, and without limiting the generality of the foregoing provision, Borrower shall specifically maintain the following insurance coverages:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)Property insurance with respect to the Premises (excluding any land) against loss or damage from any perils included within the classification "All Risks" or "Special Form" Causes of Loss, including coverage from damage caused by windstorm (including any named storm) and hail. The policy referred to in this <u>Section 3.4(a)(i)</u> shall (A) be in an amount equal to 100% of the full insurable value on a replacement cost basis of the Premises (waiving depreciation); and (B) be written on a no coinsurance form or contain an "Agreed Amount Endorsement", waiving all coinsurance provisions. As used herein, "full insurable value" means the actual replacement cost of the Premises (excluding any land and without taking into account any depreciation),

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determined annually by an insurer or by Borrower or, at the request of Lender, by an insurance broker (subject to Lender's reasonable approval). In all cases where any of the Premises or the use of the Premises shall at any time constitute legal non-conforming structures or uses under applicable Building Laws, the policy referred to in this <u>Section 3.4(a)(i)</u> must include "Ordinance and Law Coverage," with "Time Element," "Loss to the Undamaged Portion of the Building," "Demolition Cost" and "Increased Cost of Construction" endorsements, with "Loss to the Undamaged Portion of the Building" in an amount equal to the building limit and "Demolition Cost" and "Increased Cost of Construction" in an amount equal to 10%, each, if the property is deemed to be "Legal" and "Conforming", or 15% of the insurable value, each, if the property is not both "Legal" and "Conforming";

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)Commercial general liability insurance, including contractual liability for insured contracts, bodily injury (including death), personal injury, to be on the so-called "occurrence" form and property damage liability against claims, including legal liability and, all to the extent insurable, all court costs and attorneys' fees and expenses imposed upon Borrower, arising out of or connected with the possession, use, leasing, operation, maintenance or condition of the Premises with a combined limit of not less than $2,000,000 in the aggregate and $1,000,000 per occurrence. In addition, umbrella/excess liability insurance with limits of $15,000,000 per occurrence and $15,000,000 general aggregate shall be obtained on terms consistent with the commercial general liability insurance. If applicable, commercial auto liability coverage for all owned and non-owned vehicles (including rented and leased vehicles) containing minimum limits per occurrence, including umbrella/excess coverage, of $1,000,000.00;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)Business interruption and/or loss of "rental value" insurance for the Premises covering all risks required to be insured against herein, including, without limitation, clauses (i), (v), (vi), (vii), (viii(B)) and (ix) of this Section, in an amount equal to gross revenue less non-continuing expenses as determined by Lender for an eighteen (18) month period from the date of any casualty and otherwise sufficient to avoid any co-insurance penalty, together with an extended period of indemnity endorsement which provides that after the physical loss to the Premises has been repaired, the continued loss of income will be insured until such income either returns to the same level it was at prior to the loss, or the expiration of twelve (12) months from the date the Premises is repaired or replaced and operations are resumed, whichever first occurs, and notwithstanding that the policy may expire prior to the end of such period. The amount of such insurance shall be increased from time to time as and when the gross revenues from the Premises increase;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)Statutory workers' compensation insurance and employer's liability insurance with limits as required by Lender (if applicable);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)If all or any portion of the improvements on the Premises is currently or at any time in the future located within a federally designated "special flood hazard area", flood insurance, compliant with all statutory guidelines, and in an amount equal to the lesser of (i) the full insurable value of the Premises and including business/rental income, (ii) the outstanding principal balance of the Loan amount, or (iii) the maximum allowed under the National Flood Insurance Program, plus such additional excess limits as shall be reasonably requested by Lender, in all cases, with deductibles not to exceed $25,000or such greater deductibles acceptable to Lender;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi)Insurance against loss or damage from explosion of steam boilers, air conditioning equipment, pressure vessels or similar apparatus now or hereafter installed at the Premises, in such amounts as Lender may from time to time reasonably require and which are customarily required by institutional lenders with respect to similar properties similarly situated;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii)The insurance required under clauses (i), (ii) and (iii) above shall cover perils of terrorism and acts of terrorism for foreign and domestic acts and Borrower shall maintain insurance for loss resulting from perils and acts of terrorism on terms (including amounts) consistent with those required under clauses (i), (ii) and (iii) above at all times during the term of the Loan. Notwithstanding the foregoing, for so long as the Terrorism Risk Insurance Program Reauthorization Act of 2015 ("TRIPRA"), as amended, is in effect (including any extensions) and continues to cover foreign and domestic acts, Lender shall accept terrorism insurance which covers against "covered acts" as defined therein. If the Terrorism Risk Insurance Program Reauthorization Act (TRIPRA) of 2019 or a comparable statute is no longer and if any of the policies under clauses (i), (ii) and (iii) above contain a terrorism exclusion, then Borrower shall purchase a separate insurance policy reasonably acceptable to Lender for such terrorism coverage. Notwithstanding the foregoing, (x) Borrower shall only be required to carry terrorism coverage in an amount equal to the lesser of (a) the outstanding principal balance of the Loan, or (b) the amount of terrorism coverage that Borrower can purchase for an amount equal to two hundred percent (200%) of the premium that Borrower is currently paying for the "All Risks" or "Special Form" Causes of Loss policy, including business/rental income as well as the liability insurance as required herein, required in clause (i), (ii), (iii) and (viii) with a terrorism exclusion; and (y) Borrower shall only be required to maintain such terrorism coverage on renewals of such coverage occurring after the Loan Opening Date if such coverage is available either through Borrower's "All Risks" or "Special Form" Causes of Loss policy or a separate policy (provided, however, for purposes of both clauses (x) and (y), above, the deductible applicable to such terrorism coverage shall, subject to Lender's prior written approval, be increased as necessary to permit Borrower to carry terrorism coverage in the amount specified in time (x) (a) or (x) (b), above.) All insurance coverages specified in this subparagraph shall be provided on a replacement cost, agreed amount basis with no coinsurance provision;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii)During any period of construction, repair or restoration at the Premises, and only if the property and liability coverage forms do not otherwise apply (A) commercial general liability and umbrella liability insurance covering claims related to the repairs or restoration at the Premises that are not covered by or under the terms or provisions of the commercial general liability umbrella liability insurance policies required herein this <u>Section 3.4</u>; and (ii) the insurance provided for in this subsection (B) above written in a so-called builder's risk completed value form or equivalent coverage, including permission to occupy the Premises, in an amount equal to 100% of the total reoccurring hard costs and 100% of reoccurring soft costs of the repair or restoration on a non-reporting basis against all risks as Lender may request, in form and substance acceptable to Lender;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix)Intentionally Deleted; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x)Insurance against such other casualties and contingencies, or such other limits, as Lender may from time to time require (including liquor/dramshop, mold, and fungus insurance), if such insurance against such other casualties and contingencies

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is available and customarily carried by other like properties in the same geography, all in such manner and for such amounts as may be reasonably satisfactory to Lender.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Borrower will maintain the insurance coverage described in <u>Section 3.4(a)</u> with companies rated A- or better and having a class size of at least X in accordance with the latest "Best Insurance Guide". All insurers providing insurance required by this Agreement shall be authorized or qualified to issue insurance in the state where the Premises is located.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)The insurance coverage required under <u>Section 3.4(a)</u> may be effected under a blanket policy or policies covering the Premises and other property and assets not constituting a part of the Premises; provided that any such blanket policy shall provide coverage in an amount (based on concentration and similar category of exposure) and scope which is substantially equal to what would be provided if the required coverage was purchased on an individual basis as determined by Lender and which shall in any case comply in all other respects with the requirements of this <u>Section 3.4</u>. Borrower shall also provide to Lender a copy of their schedule of locations and values for covered locations under such blanket policy.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)Borrower agrees that all insurance policies shall: (i) be in such form and with such endorsements and in such amounts as may be satisfactory to Lender; (ii) name Borrower as the named insured/additional named insured and name Lender, with respect to liability insurance, as an additional insured, and in the case of property insurance, including but not limited to special form/all risk, business income, flood, boiler and machinery, terrorism, windstorm, wind/hail, named storm, and if applicable, earthquake insurance, shall contain a standard primary and non-contributory mortgagee clause and Lender's Loss Payable endorsement in favor of Lender as their respective interests may appear, and its successors and assigns naming Lender as the person to whom all payments shall be paid and providing that no policy shall be impaired or invalidated by any act, failure to act, negligence of, or violation of declarations, warranties or conditions contained in such policy by Borrower, Lender or any other named insured, additional insured or loss payee; (iii) contain a waiver of subrogation endorsement from its insurers and, consequently, Borrower for itself, and on behalf of its insurers, hereby waives and releases any and all right to claim or recover against Lender and its officers, employees, agents, representatives, successors and assigns for any loss of or damage to Borrower, other persons, the Premises, Borrower's property or the property of others, from any cause required to be insured against by the provisions of this Agreement or otherwise insured against by Borrower; (iv) contain an endorsement indicating that neither Lender nor Borrower shall be or be deemed to be a co-insurer with respect to any risk insured by such policies and shall provide for a deductible per loss for all policies, unless otherwise approved by Lender in writing (such consent not to be unreasonably withheld), not in excess of $100,000.00, except as otherwise permitted herein and, in the case of windstorm coverage, which shall have deductibles not in excess of 5% of the total insurable value of the Premises); and (v) each policy of insurance herein required shall contain a provision that the insurer shall not cancel or non-renew without at least thirty (30) days prior notice (except ten (10) days prior notice for non-payment of premium) to Lender.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)Certificates of insurance with respect to all renewal and replacement policies stating that such insurance is in force and effect shall be delivered to Lender (provided any such certificate is satisfactory to Lender in its sole discretion) prior to the expiration date of any of the insurance policies required to be maintained hereunder, and upon Lender request, redacted copies of such insurance policies shall be delivered to Lender promptly after Borrower's receipt thereof. Prior to expiration of the insurance policies, Lender may request confirmation from Borrower's insurance broker that coverage is being quoted in compliance with the terms of the loan agreement. If certificates of insurance are not provided prior to expiration, Borrower's

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insurance broker must provide written confirmation that coverage has been bound and in effect and will provide evidence of bound coverage within seven (7) days of expiration. Borrower shall pay premiums under each such policy as they become due and payable and Lender shall be furnished with proof of such payment reasonably satisfactory to it. If Borrower fails to maintain the insurance required by this Agreement and deliver to Lender evidence of same and proof of payment as required hereunder, Lender may, at its option and after ten (10) days' written notice to Borrower, procure such insurance, and Borrower shall reimburse Lender for the amount of all premiums paid by Lender thereon promptly, after demand by Lender, with interest thereon at the Default Rate from the date paid by Lender to the date of repayment, and such sum shall be a part of the indebtedness secured by the Loan Documents. All insurance premiums shall be paid annually in advance, and in no event shall Borrower finance any portion of the premiums for insurance policies required to be maintained hereunder without the written consent of Lender. Lender shall not by the fact of approving, disapproving, accepting, preventing, obtaining or failing to obtain any insurance, incur any liability for or with respect to the amount of insurance carried, the form or legal sufficiency of insurance contracts, solvency of insurance companies, or the carriers' or Borrower's payment or defense of lawsuits, and Borrower hereby expressly assumes full responsibility therefor and all liability, if any, with respect thereto. Borrower has not knowingly done or permitted to be done, by act or omission, anything which would impair the coverage of any of such insurance policies.

**TEXAS FINANCE CODE §307.052 COLLATERAL PROTECTION INSURANCE NOTICE:** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(A)&nbsp;&nbsp;&nbsp;&nbsp;BORROWER IS REQUIRED TO: (i) KEEP THE PREMISES INSURED AGAINST DAMAGE IN THE AMOUNT LENDER SPECIFIES, (ii) PURCHASE THE INSURANCE FROM AN INSURER THAT IS AUTHORIZED TO DO BUSINESS IN THE STATE OF TEXAS OR AN ELIGIBLE SURPLUS LINES INSURER; AND (iii) NAME LENDER AS THE PERSON TO BE PAID UNDER THE POLICY IN THE EVENT OF A LOSS;** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(B)&nbsp;&nbsp;&nbsp;&nbsp;BORROWER MUST, IF REQUIRED BY LENDER, DELIVER TO LENDER A COPY OF THE POLICY AND PROOF OF THE PAYMENT OF PREMIUMS; AND**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**(C)&nbsp;&nbsp;&nbsp;&nbsp;IF BORROWER FAILS TO MEET ANY REQUIREMENT LISTED IN PARAGRAPH (A) OR (B), LENDER MAY OBTAIN COLLATERAL PROTECTION INSURANCE ON BEHALF OF BORROWER AT BORROWER'S EXPENSE.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.5<u>Use of Premises</u>**. Borrower shall furnish and keep in force a Certificate of Occupancy, or its equivalent, and comply with all restrictions affecting the Premises and with all laws, ordinances, acts, rules, regulations and orders of any legislative, executive, administrative or judicial body, commission or officer (whether Federal, State or local), exercising any power of regulation or supervision over Borrower, or any part of the Premises, whether the same be directed to the erection, repair, manner of use or structural alteration of buildings or otherwise. Borrower shall not initiate, join in, acquiesce in, or consent to any change in any private restrictive covenant, zoning law or other public or private restriction, limiting or defining the uses which may be made of the Premises or any part thereof, nor shall Borrower initiate, join in, acquiesce in, or consent to any zoning change or zoning matter affecting the Premises. If under

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applicable zoning provisions the use of all or any portion of the Premises is or shall become a nonconforming use, Borrower will not cause or permit such nonconforming use to be discontinued or abandoned without the express written consent of Lender. Borrower shall not permit or suffer to occur any waste on or to the Premises or to any portion thereof and shall not take any steps whatsoever to convert the Premises, or any portion thereof, to a condominium or cooperative form of management. Borrower will not install or permit to be installed on the Premises any underground storage tank. Borrower will maintain the Premises as a single tax lot and will not permit the Premises to be assessed with any other property.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**3.6<u>Management of Premises</u>**. The Premises will be managed at all times by the Manager pursuant to the Management Agreement unless terminated as provided in the Loan Documents. Borrower shall diligently perform all material terms and covenants of the Management Agreement. Borrower shall not (a) surrender, terminate, cancel, or materially modify the Management Agreement, (b) enter into any other agreement for the management or operation of the Premises with Manager or any other person, (c) consent to the assignment by Manager of its interest under the Management Agreement or (d) waive or release any of its material rights and remedies under the Management Agreement, in each case, without the consent of Lender, which consent shall not be unreasonably withheld or delayed. If at any time Lender consents to the appointment of a new manager, such new manager and Borrower shall, as a condition to Lender's consent, execute a subordination of management agreement in form and substance reasonably satisfactory to Lender. Borrower may from time to time appoint a successor manager to manage the Premises, subject to Lender's prior written approval, which approval shall not be unreasonably withheld, <u>provided</u> that any successor manager selected hereunder by Lender or Borrower to serve as Manager (i) shall be a reputable management company having at least seven (7) years' experience in the management of at least five (5) commercial properties with similar sizes and uses as the Premises, (ii) shall not be paid management fees in excess of fees which are market fees for comparable managers of comparable properties in the same geographic area, (iii) shall have all the necessary licenses and other permits required under applicable Building Laws and (iv) shall not be the subject of a bankruptcy or similar insolvency action.

&nbsp;&nbsp;&nbsp;&nbsp;In no event shall the management fee exceed two percent (2%) of gross revenues from the Premises.

**4.<u>FINANCIAL INFORMATION</u>.** 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Borrower shall maintain complete and accurate books and records with respect to all operations of, or transactions involving, the Premises. Borrower shall furnish Lender annually, within ninety (90) days following the end of each fiscal year of Borrower, the following reports: (i) annual financial statements (audited, if available) prepared in accordance with generally accepted accounting principles on an accrual basis, including balance sheets, income statements and cash flow statements, covering the operation of the Premises and Borrower for the previous fiscal year, (ii) a current rent roll of the Premises, and (iii) any appraisals or valuations of the Premises performed during the previous year; all of the foregoing to be certified to Lender to be complete, correct and accurate by Borrower or an officer, manager or a general partner of Borrower, or by the individual or the managing partner or chief financial officer of such other party as the report concerns. Notwithstanding the foregoing, throughout the term of the Loan, Lender shall have the right to request and receive within ten (10) business days of making such written request, quarterly income and expense statements that shall include current cash flow and up-to-date payables and receivables in respect of the Premises, and periodic updates on the rent roll to reflect tenant leasing.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Guarantor shall furnish to Lender annually, within ninety (90) days following the end of each fiscal year of Guarantor, annual financial statements in a form substantially similar to the financial statements provided by Guarantor at the closing of the Loan or another form reasonably acceptable to Lender. It is anticipated that Lender will rely on publicly available financial statements similar to the following (<u>https://www.sec.gov/Archives/edgar/data/1914496/000191449625000093/sdreit-20250630.htm</u>) with respect to the requirements of this Section 4(b).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Borrower shall deliver to Lender, within thirty (30) days before the commencement of any fiscal year of Borrower, a budget showing projected income and expenses for the next fiscal year, certified to Lender to be complete, correct and accurate by Borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)Borrower shall deliver to Lender within forty five (45) days after the last day of each fiscal quarter of Borrower, financial reports (audited, if available) prepared in accordance with generally accepting accounting principles on an accrual basis, including balance sheets, trailing 12-month income statements and cash flow statements, covering the operation of the Premises and Borrower for the previous fiscal quarter, and a current rent roll, all certified to Lender to be complete, correct and accurate by an officer, manager, or general partner of Borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)Borrower shall deliver to Lender, concurrently upon delivery and within five (5) business days of receipt, a true, correct and complete copy of any notice of default or other material notice or communication related to the Enterprise Zone/Tax Abatement delivered by or received by Borrower (and to the extent in Borrower's possession or reasonable control those required to be delivered by Tenant), including, without limitation, copies of any reports or other submittals required under the Enterprise Zone/Tax Abatement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)Lender shall have the right at any time and from time-to-time to request such additional financial information as Lender determines is necessary or appropriate, including, without limitation, up-to-date payables, receivables and collections in respect of the Premises and updated rent rolls for the Premises for purposes of monitoring current leasing. In addition, Borrower shall allow Lender or any person designated by Lender to examine, audit, and make copies of all of Borrower's books and records and all supporting data at the place where these items are located during business hours after at least forty-eight (48) hours' advance notification to Borrower, which shall be at Borrower's cost and no more than once a year unless an Event of Default exists. Borrower shall assist Lender in effecting such examination. Upon five (5) days' prior notice, Lender may inspect and make copies of Borrower's income tax returns during business hours for the purpose of verifying any items referenced in this <u>Article 4</u>.

**5.<u>ESCROWS</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.1<u>Assessments and Insurance</u>**. Borrower shall pay to Lender, together with and in addition to the monthly payments of principal and interest provided for in the Note, an amount reasonably estimated by Lender to be sufficient to pay one twelfth (1/12<sup>th</sup>) of the estimated annual Assessments against the Premises and one twelfth (1/12<sup>th</sup>) of the annual premiums on insurance required in <u>Section 3.4</u> hereof, to be held by Lender and used to pay said Assessments and insurance premiums when same shall fall due; provided that upon the occurrence of an Event of Default, Lender may apply such funds as Lender shall deem appropriate. If at the time that payments are to be made, the funds set aside for payment of either Assessments or insurance premiums are insufficient, Borrower shall upon demand pay such additional sums as Lender shall determine to be necessary to cover the required payment. Lender need not segregate such funds. No interest shall be payable to Borrower upon any such payments.

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Notwithstanding the foregoing, Lender waives the collection of escrow deposits for insurance and Assessments for so long as all of the following conditions are complied with:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)no Event of Default (as defined in <u>Section 10.1</u>) has occurred and is continuing;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)there is no monetary default, material non-monetary default, or event of default under the Scotts Lease beyond any applicable notice or cure period set forth therein;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)the ownership and management of the Premises remain as constituted as of the date hereof, subject to Permitted Ownership Transfers;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)Lender has received (in form and substance satisfactory to Lender in its sole discretion) an ACORD 28 Evidence of Commercial Property Insurance (2003 form) or an ACORD 27 Evidence of Property Insurance (3/93 form) and an ACORD 25 Certificate of Liability Insurance (covering all types of insurance required by Lender) before the expiration date of insurance policies then in force;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)Lender receives satisfactory evidence of payment of insurance premiums at least thirty (30) days before the expiration date of the policies then in force; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)Lender receives satisfactory evidence of payment of real estate taxes not less than ten (10) days prior to the date the same would become delinquent.

The foregoing conditional waiver is applicable only to Borrower as of the date hereof and shall not be applicable to any transferee of the Premises or of interests in Borrower (other than Permitted Ownership Transfers).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.2<u>Letters of Credit</u>**. Borrower agrees that, within ten (10) days after receipt of written demand from Lender, which demand shall only be given from and after the occurrence of an Event of Default, Borrower shall (a) assign to Lender any Tenant Letter of Credit (as hereinafter defined) which, pursuant to the terms thereof, is assignable or (b) with respect to any Tenant Letter of Credit which is not assignable, cause the tenant under the applicable Lease to have a new letter of credit, in substantially the form of the Tenant Letter of Credit, issued to Lender. Any such assignment or re-issuance shall be at the sole cost and expense of Borrower. In addition, Borrower agrees that it shall cooperate with Lender, in connection with any attempt made by Lender, from and after the date that Lender shall have taken title to the Premises (by foreclosure, deed-in-lieu of foreclosure or otherwise) to draw on any Tenant Letter of Credit which has not been assigned to Lender and/or re-issued to Lender. Notwithstanding the foregoing, Lender acknowledges that the Tenant Letter of Credit may only be drawn upon and/or applied in the manner set forth in the applicable Lease. As used herein, the term "Tenant Letter of Credit" shall mean, individually and/or collectively, any letter of credit delivered to Borrower, as landlord under a Lease, as security for such tenant's obligations under such Lease.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**5.3<u>Cash Management</u>**. On the Loan Opening Date, a lockbox and related cash management account, in Lender's name and under the sole dominion and control of Lender ("CMA"), shall be established at KeyBank and governed by the Cash Management Agreement. During the Loan term, all revenue generated by the Premises shall be deposited either into the lockbox for processing into the CMA or directly into the CMA. Lender shall have a first priority perfected security interest in the Cash Management Agreement, the lockbox and CMA (and any sub or ledger accounts thereof) and all deposits therein. So long as no Event of Default has

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occurred, all monies in the CMA (after deduction of the Minimum Balance, as defined the Cash Management Agreement) shall be disbursed each Business Day into Borrower's operating account. Upon the occurrence of an Event of Default, and at all times thereafter, all monies in the CMA shall be applied and disbursed by Lender in accordance with the Cash Management Agreement; provided, however, that Lender may, at any time and from time to time after the occurrence of an Event of Default, apply any funds in the CMA to any obligations under the Loan in such order of priority as Lender may determine in its sole discretion, including, without limitation, to pay down the outstanding principal balance of the Loan. In the event any monies remain in the CMA upon the repayment in full of the Loan, such amount shall either be used as a portion of the repayment in full of the Loan or deposited into Borrower's operating account.

**6.<u>ENVIRONMENTAL MATTERS</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.1<u>Definitions</u>**. As used herein, the following terms will have the meaning set forth below:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)"<u>Enforcement or Remedial Action</u>" means any action taken by any person or entity in an attempt or asserted attempt to enforce, to achieve compliance with, or to collect or impose assessments, penalties, fines, or other sanctions provided by, any Environmental Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)"<u>Environmental Law</u>" means any federal, state or local law, statute, rule, regulation or ordinance pertaining to health, industrial hygiene or the environmental or ecological conditions on, under or about the Premises, including without limitation each of the following (and their respective successor provisions and all their respective state law counterparts): the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. sections 9601 et seq.; the Resource Conservation and Recovery Act of 1976, as amended, 42 U.S.C. sections 6901 et seq.; the Toxic Substances Control Act, as amended, 15 U.S.C. sections 2601 et seq.; the Clean Air Act, as amended, 42 U.S.C. sections 7401 et seq.; the Clean Water Act, as amended, 33 U.S.C. sections 1251 et seq.; the Hazardous Materials Transportation Act, 49 U.S.C. sections 5101 et seq.; and the rules, regulations and ordinances of the U.S. Environmental Protection Agency and of all other agencies, boards, commissions and other governmental bodies and officers having jurisdiction over the Premises or the use or operation of the Premises.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)"<u>Environmental Liability</u>" means any claim, demand, obligation, cause of action, accusation, allegation, order, violation, damage (including consequential damage), injury, judgment, assessment, penalty, fine, cost of Enforcement or Remedial Action, or any other cost or expense whatsoever, including actual, reasonable attorneys' fees and disbursements, resulting from or arising out of the violation or alleged violation of any Environmental Law, any Enforcement or Remedial Action, or any alleged exposure of any person or property to any Hazardous Substance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)"<u>Hazardous Substance</u>" means: (i) those substances included within the definitions of "hazardous substances," "hazardous materials," "toxic substances," "pollutants," "hazardous waste," or "solid waste" in any Environmental Law; (ii) those substances listed in the U.S. Department of Transportation Table or amendments thereto (49 C.F.R. section 172.101) or by the U.S. Environmental Protection Agency (or any successor agency) as hazardous substances (40 C.F.R. Part 302.4 and any amendments thereto); (iii) those other substances, materials and wastes that are or become regulated under any applicable federal, state or local law, regulation or ordinance or by any federal, state or local governmental agency, board, commission or other governmental body, or that are or become classified as hazardous or toxic by any such law, regulation or ordinance; and (iv) any material, waste or substance that is any of the following:

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(A) asbestos; (B) a polychlorinated biphenyl; (C) designated or listed as a "hazardous substance" pursuant to sections 307 or 311 of the Clean Water Act (33 U.S.C. sections 1251 et seq.); (D) explosive; (E) radioactive; (F) a petroleum product; (G) infectious waste; or (H) a mold or mycotoxin.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)"<u>Permitted Hazardous Substance</u>" means any commercially sold products otherwise within the definition of the term "Hazardous Substance," but (1) that are used or disposed of by Borrower or used or sold by tenants of the Premises in the ordinary course of their respective businesses, (2) the presence of which is not prohibited by applicable Environmental Law, and (3) the use and disposal of which are in all respects in accordance with applicable Environmental Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)"<u>Release</u>" means any release, spill, discharge, leak, disposal or emission, whether past, present or future.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.2<u>Environmental Representations, Warranties and Covenants</u>**. Borrower represents, warrants, covenants and agrees as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Neither Borrower nor the Premises or any occupant thereof are in violation of, or subject to any existing, pending or threatened investigation or inquiry by any governmental authority pertaining to, any Environmental Law. Borrower shall not cause or permit the Premises to be in violation of, or do anything which would subject the Premises to any remedial obligations under, any Environmental Law, and shall promptly notify Lender in writing of any existing, pending or threatened investigation or inquiry by any governmental authority in connection with any Environmental Law; provided if any Tenant causes such violation Borrower shall not be in default of its remediation obligations hereunder if Borrower is diligently taking all commercially reasonable efforts to promptly remediate such violation including enforcing any obligations of Tenant under any Lease and in fact cures such violation in accordance with Section 6.5 within a reasonable amount of time under the circumstances (or, if such cure is required in a shorter timeframe pursuant to any Environmental Law, then within such shorter timeframe). In addition, Borrower shall provide Lender with copies of any and all material written communications with any governmental authority in connection with any Environmental Law, concurrently with Borrower's giving or receiving of same.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Except as disclosed in the Environmental Report, there are no underground storage tanks, radon, asbestos materials, polychlorinated biphenyls or urea formaldehyde insulation present at or installed in the Premises. Borrower covenants and agrees that if any such materials are found to be present at the Premises, Borrower shall remove or remediate the same to the extent required by Environmental Law promptly upon discovery at its sole cost and expense and in accordance with Environmental Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Other than to the extent disclosed in the Environmental Report, there has been no Release of any Hazardous Substance at, upon, under or within the Premises. The use which Borrower or any other occupant of the Premises makes or intends to make of the Premises will not result in Release of any Hazardous Substance on or to the Premises. During the term of the Security Instrument, Borrower shall take prudent steps as warranted to determine whether there has been a Release of any Hazardous Substance on or to the Premises and if Borrower finds a Release has occurred, Borrower shall remove or remediate the same promptly upon discovery at its sole cost and expense to the extent required by Environmental Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)Except as may be disclosed in the Environmental Report, none of the real property owned and/or occupied by Borrower and located in Ohio, including without limitation

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the Premises, has ever been used by the present or, to Borrower's knowledge, previous owners and/or operators or will be used in the future to refine, produce, store, handle, transfer, process, transport, generate, manufacture, treat, recycle or dispose of Hazardous Substances (other than a Permitted Hazardous Substance).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)Borrower has not received any notice of violation, request for information, summons, citation, directive or other communication, written or oral, from any Ohio department of environmental protection (howsoever designated) or the United States Environmental Protection Agency concerning any intentional or unintentional act or omission on Borrower's or any occupant's part resulting in the Release of Hazardous Substances into the waters or onto the lands within the jurisdiction of the State of Ohio or into the waters outside the jurisdiction of the State of Ohio resulting in damage to the lands, waters, fish, shellfish, wildlife, biota, air or other resources owned, managed, held in trust or otherwise controlled by or within the jurisdiction of the State of Ohio.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)The real property owned and/or occupied by Borrower and located in Ohio, including without limitation the Premises: (i) is being and has been operated in compliance with all Environmental Laws, and all permits required thereunder have been obtained and complied with in all respects; and (ii) except as disclosed in the Environmental Report, does not have any Hazardous Substances present (other than a Permitted Hazardous Substance).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)Borrower will and will cause its tenants to operate the Premises in compliance with all Environmental Laws and will not place or permit to be placed any Hazardous Substances (other than a Permitted Hazardous Substance) on the Premises.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)No lien has been attached to or threatened to be imposed upon any revenue from the Premises, and there is no basis for the imposition of any such lien based on any governmental action under Environmental Laws. Neither Borrower nor any other party has been, is or will be involved in operations at the Premises that could lead to the imposition of Environmental Liability on Borrower, or, to Borrower's knowledge, on any subsequent or former owner of the Premises, or the creation of an environmental lien on the Premises. In the event that any such lien is filed, Borrower shall, within thirty (30) days from the date that Borrower is given notice of such lien (or within such shorter period of time as is appropriate in the event that the State of Ohio or the United States has commenced steps to have the Premises sold), either: (i) pay the claim and remove the lien from the Premises; or (ii) furnish a cash deposit, bond or other security satisfactory in form and substance to Lender in an amount sufficient to discharge the claim out of which the lien arises.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)In the event that Borrower shall cause or permit to exist a Release of Hazardous Substances into the waters or onto the lands within the jurisdiction of the State of Ohio, or into the waters outside the jurisdiction of the State of Ohio resulting in damage to the lands, waters, fish, shellfish, wildlife, biota, air or other resources owned, managed, held in trust or otherwise controlled by or within the jurisdiction of the State of Ohio, without having obtained a permit issued by the appropriate governmental authorities, Borrower shall promptly remediate such Release in accordance with the applicable provisions of all Environmental Laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.3<u>Right to Inspect and Cure</u>**. Lender shall have the right to conduct or have conducted by its agents or contractors such environmental inspections, audits and tests as Lender shall deem necessary or advisable from time to time at the sole cost and expense of Borrower, provided, however, that Borrower shall not be obligated to bear the expense of such environmental inspections, audits and tests so long as (a) no Event of Default exists, and (b) Lender has no cause to believe in its sole judgment that there has been a Release or threatened

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Release of Hazardous Substances at the Premises or that Borrower or the Premises is in violation of any Environmental Law. The cost of such inspections, audits and tests, if chargeable to Borrower as aforesaid, shall be added to the indebtedness secured hereby and shall be secured by the Security Instrument. Borrower shall, and shall cause each tenant of the Premises to, cooperate with such inspection efforts; such cooperation shall include, without limitation, supplying all information requested concerning the operations conducted and Hazardous Substances located at the Premises. In the event that Borrower fails to comply with any Environmental Law, Lender may, in addition to any of its other remedies under the Security Instrument, cause the Premises to be in compliance with such laws and the cost of such compliance shall be added to the sums secured by the Security Instrument.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.4<u>Indemnification</u>**. Borrower shall protect, indemnify, defend, and hold harmless Lender and its directors, officers, employees, agents, successors and assigns from and against any and all loss, injury, damage, cost, expense and liability (including without limitation reasonable attorneys' fees and costs) directly or indirectly arising out of or attributable to (a) the installation, use, generation, manufacture, production, storage, Release, threatened Release, discharge, disposal or presence of a Hazardous Substance on, under or about the Premises, or (b) the presence of any underground storage tank on, under or about the Premises, or (c) any Environmental Liability, or (d) any misrepresentation, inaccurate representation or warranty, material breach or failure to perform under the provisions of this <u>Article 6</u>, including without limitation: (1) all consequential damages, (2) the costs of any required or necessary repair, remediation or detoxification of the Premises, and (3) the preparation and implementation of any closure, remedial or other required plans. The foregoing agreement to indemnify, defend and hold harmless Lender expressly includes, but is not limited to, any losses, liabilities, damages, injuries, costs, expenses and claims suffered or incurred by Lender upon or subsequent to Lender becoming owner of the Premises through foreclosure, acceptance of a deed in lieu of foreclosure, or otherwise, excepting only such losses, liabilities, damages, injuries, costs, expenses and claims that are caused by or arise out of actions taken by Lender, or by those contracting with Lender, subsequent to Lender taking possession or becoming owner of the Premises. WITHOUT LIMITATION, THE FOREGOING INDEMNITY SHALL APPLY TO EACH OF THE INDEMNIFIED PARTIES WITH RESPECT TO LOSSES THAT IN WHOLE OR IN PART ARE CAUSED BY OR ARISE OUT OF THE SOLE, CONCURRENT OR COMPARATIVE NEGLIGENCE OR THE STRICT LIABILITY OF ANY SUCH INDEMNIFIED PARTIES. The indemnity evidenced hereby shall survive the satisfaction, release or extinguishment of the lien of the Security Instrument, including without limitation any extinguishment of the lien of the Security Instrument by foreclosure or deed in lieu thereof.

Notwithstanding the foregoing, such indemnity shall not apply to matters caused solely and directly by the gross negligence, willful misconduct, fraud or illegal acts of the indemnified parties, and Borrower shall not be obligated to indemnify hereunder with regard to any Hazardous Substances which Borrower can conclusively prove were (a) first used, generated, stored, treated, released, discharged or disposed in, on, under or about the Premises by any third party after the earliest of: (i) the date of foreclosure (or Lender's acceptance of a deed in lieu thereof); or (ii) the date Lender has assumed actual and direct physical possession and control of the Premises and (b) not the result of any action or omission of Borrower, its agents or affiliates in, on, under or near the Premises; provided, however, notwithstanding the foregoing, if any Hazardous Substances are discovered in, on under or about the Premises after such date that are consistent with the ownership, occupancy, use or operation of the Premises which occurred during Borrower's ownership, occupancy, use or operation of the Premises, then there is a presumption that the use, generation, storage, disposal of, transportation or presence of any of

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said Hazardous Substances in, on, under, about, or migrating from, the Premises occurred during Borrower's ownership, occupancy, use or operation of the Premises, and Borrower shall continue to be obligated to indemnify hereunder unless Borrower overcomes said presumption with the burden of proof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.5<u>Remediation</u>**. If any investigation, site monitoring, containment, remediation, removal, restoration or other remedial work of any kind or nature (the "Remedial Work") is reasonably desirable (in the case of an operation and maintenance program or similar monitoring or preventative programs) or necessary, both as determined by an independent environmental consultant selected by Lender under any applicable federal, state or local law, regulation or ordinance, or under any judicial or administrative order or judgment, or by any governmental person, board, commission or agency, because of or in connection with the current or future presence, suspected presence, Release or suspected Release of a Hazardous Substance into the air, soil, groundwater, or surface water at, on, about, under or within the Premises or any portion thereof, Borrower shall within ten (10) days after written demand by Lender for the performance (or within such shorter time as may be required under applicable law, regulation, ordinance, order or agreement), commence and thereafter diligently prosecute to completion all such Remedial Work to the extent required by law. All Remedial Work shall be performed by contractors approved in advance by Lender and under the supervision of a consulting engineer approved in advance by Lender (which approval in each case shall not be unreasonably withheld or delayed). All costs and expenses of such Remedial Work (including without limitation the reasonable fees and expenses of Lender's counsel) incurred in connection with monitoring or review of the Remedial Work shall be paid by Borrower. If Borrower shall fail or neglect to timely commence or cause to be commenced, or shall fail to diligently prosecute to completion, such Remedial Work, Lender may (but shall not be required to) cause such Remedial Work to be performed; and all costs and expenses thereof, or incurred in connection therewith (including, without limitation, the reasonable fees and expenses of Lender's counsel), shall be paid by Borrower to Lender forthwith after demand and shall be a part of the indebtedness secured hereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**6.6<u>Survival</u>**. All warranties and representations above shall be deemed to be continuing and shall remain true and correct in all material respects until all of the indebtedness secured hereby has been paid in full and any limitations period expires. Borrower's covenants above shall survive any exercise of any remedy by Lender hereunder or under any other instrument or document now or hereafter evidencing or securing the said indebtedness, including foreclosure of the Security Instrument (or deed in lieu thereof), even if, as a part of such foreclosure or deed in lieu of foreclosure, the said indebtedness is satisfied in full and/or the Security Instrument shall have been released. 

**7.<u>DAMAGE TO, DESTRUCTION OF, AND CONDEMNATION OF THE PREMISES</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.1<u>Application of Insurance Proceeds</u>**. If any damage to, loss, or destruction of the Premises occurs in excess of $250,000.00, then Borrower shall notify Lender within five (5) days after the occurrence of such damage and shall take all necessary steps to preserve any undamaged part of the Premises. Borrower shall promptly make proof of loss with its insurer and if Borrower fails to do so, then Lender may, but is not obligated to, make proof of loss with Borrower's insurance company. All proceeds of insurance maintained pursuant to <u>Sections 3.4(a)(i) and (iii)</u> hereof shall be paid to Lender and shall be applied first to the payment of all costs and expenses incurred by Lender in obtaining such proceeds and, second, at the option of Lender, either: (a) to the reduction of the indebtedness secured by the Security Instrument (without any otherwise applicable prepayment premium); or (b) to the restoration or repair of the

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Premises, without affecting the lien of the Security Instrument or the obligations of Borrower thereunder. Lender is authorized at its option to compromise and settle all loss claims on said policies and each insurance company concerned is authorized and directed to make payment directly to Lender; provided, however, that with respect to periods during which an Event of Default does not exist, Lender shall use commercially reasonable efforts to confer with Borrower with respect to any such settlement). Any application to the reduction of the indebtedness secured by the Security Instrument shall not reduce or postpone the monthly payments otherwise required pursuant to the Note. No interest shall be payable to Borrower on the insurance proceeds while held by Lender. Notwithstanding the foregoing, so long as no Event of Default has occurred, with respect to proceeds of $750,000.00 or less, Borrower may compromise and settle such claims and receive such proceeds from insurer directly, provided that Borrower shall apply such proceeds toward the restoration of the Premises or the principal of the Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.2<u>Application of Condemnation Award</u>**. Borrower will promptly notify Lender of any threatened or instituted proceedings for the condemnation or taking by eminent domain of the Premises, including any change in any street (whether as to grade, access or otherwise). Borrower shall, at its sole cost and expense: (i) diligently prosecute these proceedings, (ii) deliver to Lender copies of all papers served in connection therewith, and (iii) consult and cooperate with Lender in the handling of these proceedings. No settlement of these proceedings shall be made by Borrower without Lender's prior written consent (A) for any award in excess of $250,000.00, or (B) if an Event of Default then exists. Lender may participate in these proceedings (but shall not be obligated to do so), and Borrower will sign and deliver all instrument requested by Lender to permit this participation. Should any of the Premises be taken by exercise of the power of eminent domain, any award or consideration for the property so taken shall be paid over to Lender and shall be applied first to the payment of all costs and expenses incurred by Lender in obtaining such award or consideration and, second, at the option of Lender, either: (a) to the reduction of the indebtedness secured by the Security Instrument (without any otherwise applicable prepayment premium); or (b) to the restoration or repair of the Premises, without affecting the lien of the Security Instrument or the obligations of Borrower thereunder. Lender is authorized at its option to compromise and settle all awards or consideration for the property so taken. Any such awards, if applied to the reduction of indebtedness, shall not reduce or postpone the monthly payments otherwise required pursuant to the Note. No interest shall be payable to Borrower on any award while held by Lender.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**7.3<u>Lender to Make Proceeds Available</u>**. Notwithstanding the provisions of <u>Sections 7.1 and 7.2</u> above, in the event of insured damage to the Premises or in the event of a taking by eminent domain of only a portion of the Premises, and provided that: (a) the portion remaining can with restoration or repair continue to be operated for the purposes utilized immediately prior to such damage or taking, (b) the appraised value of the Premises after such restoration or repair shall not have been reduced from the appraised value as of the date hereof, (c) no Event of Default exists hereunder and no event has occurred that with the passage of time or the giving of notice would be or become an Event of Default, (d) the Leases remain in full force and effect and, if Tenant is entitled to a termination right, then Tenant certifies to Lender their intention to remain in possession of the leased premises without any reduction in rental payments (other than temporary abatements during the period of restoration and repair), and (e) such restoration or repair can be completed within nine (9) months after the casualty or condemnation and completion thereof will be not less than six (6) months prior to maturity of the Note; Lender agrees to make the insurance proceeds or condemnation awards available for such restoration and repair, except for proceeds payable pursuant to <u>Section 3.4(a)(iii)</u>. Lender may, at its option, hold such proceeds or awards in escrow (subject to the following paragraph) until the required restoration and repair has been satisfactorily completed, and all costs and expenses incurred by Lender in administering the same, including without limitation any costs of

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inspection, shall be paid or reimbursed by Borrower. No interest shall be payable to Borrower with respect to any such escrow.

In the event insurance proceeds or condemnation awards are made available for restoration in accordance with the foregoing, such proceeds shall be made available, from time to time, upon Lender being furnished with such information, documents, instruments and certificates as Lender may require, including, but not limited to, satisfactory evidence of the estimated cost of completion of the repair or restoration of the Premises, such architect's certificates, waivers of lien, contractor's sworn statements and other evidence of cost and of payments, including, at the option of Lender, insurance against mechanics' liens and/or a performance bond or bonds in form satisfactory to Lender, with premium fully prepaid, under the terms of which Lender shall be either the sole or dual obligee, and which shall be written with such surety company or companies as may be satisfactory to Lender, and all plans and specifications for such rebuilding or restoration which shall be subject to approval by Lender. No payment made prior to the final completion of the work shall exceed ninety percent (90%) of the value of the work performed, from time to time, and at all times the undisbursed balance of said proceeds, plus additional funds deposited by Borrower remaining in the hands of Lender shall be at least sufficient to pay for the cost of completion of the work free and clear of liens. At Lender's election, a disbursing agent selected by Lender shall disburse the proceeds, and Borrower shall pay such agent's reasonable fees and expenses. All proceeds held by Lender or its agent shall constitute additional security for the Loan, and Borrower shall execute, deliver, file and/or record, at its expense, such instruments as Lender reasonably requires to grant to Lender a perfected, first-priority security interest in these funds. If the proceeds are made available for restoration and (x) Borrower refuses or fails to complete the restoration, (y) an Event of Default occurs and is continuing, or (z) the proceeds are not applied to restoration, then any undisbursed portion may, at Lender's option, be applied to the reduction of the indebtedness secured by the Security Instrument, in any order of priority.

**8.<u>COVENANTS, REPRESENTATIONS AND WARRANTIES</u>.** Borrower hereby covenants, represents and warrants to Lender as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.1<u>Status</u>**. Borrower (i) is a limited liability company duly organized and validly existing under the laws of Delaware; (ii) has the power and authority to own its properties and to carry on its business as now being conducted; (iii) is qualified to do business in every jurisdiction in which the nature of its business or its properties make such qualification necessary, including Ohio; and (iv) is in compliance with all laws, regulations, ordinances, and orders of public authorities applicable to it. Borrower is not (A) an "investment company" or a company "controlled" by an "investment company", within the meaning of the Investment Company Act of 1940, as amended, or (B) subject to any other applicable Law which purports to restrict or regulate its ability to borrow money. The organizational chart attached hereto as <u>Schedule 8.1</u> is true, complete and correct on and as of the date hereof. In addition, the confidential organizational chart provided to Lender prior to the date hereof is true, complete and correct on and as of the date hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.2<u>Authority</u>**. The execution, delivery and performance by Borrower of this Agreement, the Security Instrument, the Note and the other Loan Documents, and the borrowing evidenced by the Note: (i) are within the powers of Borrower; (ii) have been duly authorized by all requisite action; (iii) have received all necessary governmental approval; and (iv) will not

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violate any provision of law, any order of any court or other agency of government, or the organizational or chartering documents and agreements of Borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.3<u>Binding</u>**. This Agreement, the Security Instrument, the Note and other Loan Documents constitute the legal, valid and binding obligations of Borrower and other obligors named therein, if any, enforceable in accordance with their respective terms.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.4<u>No Conflict</u>**. Neither the execution and delivery of this Agreement, the Security Instrument or the Note, the consummation of the transactions contemplated hereby, or thereby, nor the fulfillment of or compliance with the terms and conditions of this Agreement, the Security Instrument or the Note, conflicts with or results in a breach of any of the terms, conditions or provisions of any restriction or any agreement or instrument to which Borrower is now a party or by which it is bound.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.5<u>EO 13224</u>**. None of Borrower, any affiliate of Borrower, or any person owning an interest in Borrower or any such affiliate, is or will be an entity or person (i) listed in the Annex to, or is otherwise subject to the provisions of, Executive Order 13224 issued on September 23, 2001 (the "Executive Order"), (ii) included on the most current list of "Specially Designated Nationals and Blocked Persons" published by the United States Treasury Department's Office of Foreign Assets Control ("OFAC") (which list may be published from time to time in various media including, but not limited to, the OFAC website page, http:www.treas.gov/offices/enforcement/ofac/sdn/t11sdn.pdf), (iii) which or who commits, threatens to commit or supports "terrorism," as that term is defined in the Executive Order, or (iv) affiliated with any entity or person described in clauses (i), (ii) or (iii) above (any and all parties or persons described in clauses (i) through (iv) are herein referred to individually and collectively as a "Prohibited Person"). Borrower has taken reasonable measures appropriate to the circumstances (and in any event as required by Law), to ensure that: (A) Borrower is in compliance with all current and future laws, regulations and government guidance for the prevention of terrorism, terrorist financing and drug trafficking, including, without limitation, the Executive Order, (B) funds invested by each holder of an interest in Borrower are derived from legal sources, and (C) no person or entity who owns or controls a direct or indirect interest in Borrower is or shall be a Prohibited Person. Borrower covenants and agrees that none of Borrower, any affiliate of Borrower, or any person owning an interest in Borrower or any such affiliate, will (i) conduct any business, or engage in any transaction or dealing, with any Prohibited Person, including, but not limited to the making or receiving of any contribution of funds, goods, or services, to or for the benefit of a Prohibited Person, or (ii) engage in or conspire to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in the Executive Order. Borrower further covenants and agrees to deliver (from time to time) to Lender any such certification or other evidence as may be requested by Lender in its sole and absolute discretion, confirming compliance with this <u>Section 8.5</u>, including, without limitation that (i) Borrower is not a Prohibited Person and (ii) Borrower has not engaged in any business, transaction or dealings with a Prohibited Person, including, but not limited to, the making or receiving of any contribution of funds, goods, or services, to or for the benefit of a Prohibited Person.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.6<u>Business Loan; Margin Regulations</u>**. The loan evidenced by the Note is solely for the purpose of carrying on or acquiring a business of Borrower, and is not for personal, family, household or agricultural purposes and is a "commercial loan" as such term is defined in Chapter 306 of the Texas Finance Code, as same may be amended from time to time. The Premises forms no part of any property owned, used or claimed by Borrower as a residence or business homestead and is not exempt from forced sale under the laws of the state in which the Premises is located. Borrower hereby disclaims and renounces each and every claim to all or any

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portion of the Premises as a homestead. No part of the proceeds of the Loan will be used for the purpose of purchasing or acquiring any "margin stock" within the meaning of Regulation U of the Board of Governors of the Federal Reserve System or for any other purpose which would be inconsistent with such Regulation U or any other regulations of such Board of Governors, or for any purpose prohibited by applicable Laws.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.7<u>Tax Status of Borrower</u>**. Borrower's United States employee tax identification number is 88-0870924, and its mailing address is as set forth in <u>Section 11.3</u> hereof. Borrower is not a "foreign person," "foreign partnership," "foreign trust," or "foreign estate" within the meaning of Sections 1445 and 7701 of the Revenue Code. Borrower further represents and warrants to Lender that Borrower is not a "disregarded entity" as defined in Section 1.1445-2(b)(2)(iii) of the Income Tax Regulations issued under the Revenue Code. These statements are made by Borrower in compliance with Sections 1445 and 7701 of the Revenue Code to exempt any transferee of the Premises from withholding the tax required upon a foreign transferor's disposition of a U.S. real property interest.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.8<u>Relationship</u>**. Notwithstanding any prior business or personal relationship between Borrower and Lender, or any officer, director or employee of Lender, the relationship between Borrower and Lender is solely that of debtor and creditor, Lender has no fiduciary or other special relationship with Borrower, Borrower and Lender are not partners or joint venturers, and no term or condition of any Loan Document shall be construed so as to deem the relationship between Borrower and Lender to be other than that of debtor and creditor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.9<u>Special Purpose Entity</u>**. During the time the Note remains outstanding, Borrower (i) will not engage in any business unrelated to the Premises, (ii) will not have any assets other than those related to the Premises, (iii) will not engage in, seek or consent to any dissolution, winding up, liquidation, consolidation or merger, and, except as otherwise expressly permitted by the Loan Documents, will not engage in, seek or consent to any asset sale, transfer of ownership or equity interests, or amendment of its organizational documents (articles of organization or incorporation, certificate of limited partnership, operating agreement or bylaws, as the case may be), (iv) will not fail to correct any known misunderstanding regarding the separate identity of Borrower, (v) will not with respect to itself or to any other entity in which it has a direct or indirect legal or beneficial ownership interest (A) file a bankruptcy, insolvency or reorganization petition or otherwise institute insolvency proceedings or otherwise seek any relief under any laws relating to the relief from debts or the protection of debtors generally; (B) seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian or any similar official for such entity or all or any portion of such entity's properties; (C) make any assignment for the benefit of such entity's creditors; or (D) take any action that might cause such entity to become insolvent, provided, however, that nothing in this subpart (D) will require any direct or indirect member or partner of Borrower to make any equity contribution to Borrower, (vi) will maintain its financial statements, accounting records, and other entity documents separate from any other person or entity, (vii) will maintain its books, records, resolutions and agreements as official records, (viii) has not commingled and will not commingle its funds or assets with those of any other person or entity, (ix) has held and will hold its assets in its own name, (x) will conduct its business in its name, (xi) will pay its own liabilities out of its own funds and assets, (xii) will observe all entity formalities, (xiii) has maintained and, except as otherwise expressly permitted or required by the Loan Documents, will maintain an arms-length relationship with its affiliates, (xiv) will have no indebtedness other than as evidenced by the Loan Documents, Permitted Encumbrances and commercially reasonable unsecured trade payables incurred by Borrower in the ordinary course of business relating to the ownership and operation of the Premises that do not exceed one percent (1.0%) of the outstanding principal amount of the Loan in the aggregate at any one time and are paid within thirty (30) days of the

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date incurred, (xv) except as expressly permitted or required by the Loan Documents, will not assume or guarantee or become obligated for the debts of any other person or entity or hold out its credit as being available to satisfy the obligations of any other person or entity, except as evidenced by the Loan Documents, (xvi) will not acquire obligations or securities of its owners (members, partners, shareholders), (xvii) will allocate fairly and reasonably shared expenses, including, without limitation, shared office space and use separate stationery, invoices and checks, (xviii) will not pledge its assets for the benefit of any other person or entity, (xix) will hold itself out and identify itself as a separate and distinct entity under its own name and not as a division or part of any other person or entity, (xx) will not make loans to any person or entity, (xxi) will not identify its owners (members, partners, shareholders) or any affiliates of any of them as a division or part of it, (xxii) except as otherwise expressly permitted or required by the Loan Documents, will not enter into or be a party to, any transaction with its owners (members, partners, shareholders) or its affiliates except in the ordinary course of its business and on terms which are intrinsically fair and are no less favorable to it than would be obtained in a comparable arms-length transaction with an unrelated third party, (xxiii) will pay the salaries of its own employees from its own funds, (xxiv) will endeavor in good faith to maintain adequate capital in light of its contemplated business operations, and (xxv) will continue (and not dissolve) for so long as a solvent managing member, partner or shareholder exists.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.10<u>Bankruptcy; Solvency; Fraudulent or Voidable Conveyance</u>.** No bankruptcy, reorganization, insolvency, liquidation, or other proceeding for the relief of debtors has been instituted by or, to Borrower's knowledge, against Borrower, any general partner of Borrower (if Borrower is a partnership), or any manager or managing member of Borrower (if Borrower is a limited liability company). Borrower (i) has not entered into this Agreement or any Loan Document with the actual intent to hinder, delay, or defraud any creditor, and (ii) has received reasonably equivalent value in exchange for its obligations under the Loan Documents. In Borrower's opinion, the fair saleable value of Borrower's assets is and will, immediately following the execution and delivery of the Loan Documents, be greater than Borrower's total liabilities (including the maximum amounts of its subordinated, unliquidated, disputed, or contingent liabilities or its debts as such debts become absolute and matured). In Borrower's opinion, Borrower's assets do not and will not, immediately following the execution and delivery of the Loan Documents, constitute unreasonably small capital to carry out its business as conducted or as proposed to be conducted. Borrower does not intend to, and does not believe that it will, incur debts and liabilities (including contingent liabilities and other commitments) beyond its ability to pay such debts as they mature (taking into account the timing and amount to be payable on or in respect of obligations of Borrower and, in the case of the Indebtedness refinance at maturity).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.11<u>Litigation</u>.** Neither Borrower, Guarantor, nor the Premises is the subject of any action, suit or proceeding that may involve or adversely affect the validity or enforceability of the Note or the Security Instrument or the priority of the lien of the Security Instrument, or Borrower's right, power or authority to accept the Loan. There is no litigation pending to which Borrower or any Guarantor is a party that would, if determined adversely to Borrower or any Guarantor, have an adverse effect on the financial condition of Borrower or any Guarantor or their respective ability to perform their respective obligations under the Loan Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.12<u>Title to Premises; No Liens</u>**. Borrower is the owner of the fee simple or indefeasible title to the Premises. The Premises is now unencumbered and free of all liens of every kind and description, except the Permitted Exceptions. The buildings and improvements upon the Premises are fully completed and all costs and expenses of any construction have been fully paid; there have been no repairs, redecoration or new improvements made in or about the Premises within the past six (6) months for which complete and final payment has not been

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made; and there are no unpaid bills or claims for labor or services performed or material furnished or delivered upon the Premises, except current bills for minor maintenance and repairs, none of which are overdue.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.13<u>Leases; Possessory Rights</u>**. The schedule of the Leases previously provided to Lender is a true and correct schedule of all Leases as of the date thereof. All Leases are in full force and effect on this date, there are no defaults under any Leases and, to Borrower's knowledge, there has occurred no event which, with the passage of time or the giving of notice or both, will ripen into an event of default under any of the Leases. All construction and other obligations to be performed by Borrower under any Lease have been performed and any required payments by Borrower under any Lease for tenant improvements have been made. Borrower is in possession of the Premises subject only to the Leases, and no party has any unrecorded deeds, contracts or options to purchase the Premises. There are no other persons, firms or corporations having any right of possession to the Premises under any lease, option, deed or other written instrument of any kind or character or any right to possession of the Premises of any kind or nature whatsoever. To Borrower's knowledge, no petition in bankruptcy or arrangement or reorganization under any Federal or State law has been filed by, or against any Tenant, no receiver has been appointed for any Tenant, and no Tenant has made any assignment for the benefit of creditors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.14<u>No Damage, Condemnation</u>**. The Premises has not been damaged or destroyed in whole or in material part by fire or other casualty, no proceeding has been threatened or commenced by any authority having the power of eminent domain to condemn the Premises or any material part thereof. No event has occurred that may materially adversely affect the value of the Premises or any material part thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.15<u>Zoning</u>**. The buildings and improvements located on the Premises and their present use comply in all respects with applicable Building Laws, building codes, zoning laws (including required parking) and regulations and all other applicable ordinances and regulations. All permits and approvals, including, without limitation, certificates of occupancy, required by any Governmental Authority for the use, occupancy and operation (other than the operation of any tenant's business therein) of the Premises in the manner in which it is currently being used, occupied and operated have been obtained and are in full force and effect. The uses being made of the Premises are in material conformity with the certificate of occupancy which has been issued by the applicable Governmental Authority.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.16<u>Access</u>**. The Premises has access to a public thoroughfare, and is served by electric, telephone and other telecommunications services, water, sewer, sanitary sewer and storm drain facilities adequate to service the Premises for its intended uses.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.17<u>Separate Tax Parcel</u>**. The Premises constitutes a separate tax parcel and is not taxed as a part of a larger tax parcel.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.18<u>Flood Zone</u>**. The Premises is not located in a designated flood hazard area.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.19<u>Enterprise Zone/Tax Abatement</u>**. The Enterprise Zone/Tax Abatement is in full force and effect and has not been modified or amended, and Borrower is not and to Borrower's knowledge no other party to the Enterprise Zone/Tax Abatement is in default or breach of any terms, conditions, obligations, or covenants under the Enterprise Zone/Tax Abatement, and no event has occurred which, with the giving of notice or passage of time, or both, could result in such a default or breach. Borrower shall (a) comply with the terms and provisions of the Enterprise Zone/Tax Abatement applicable to it and perform each of its covenants and

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agreements thereunder, and (b) use commercially reasonable efforts to cause each other party to the Enterprise Zone/Tax Abatement to comply with the terms and provisions of the Enterprise Zone/Tax Abatement applicable to it and perform each of its covenants and agreements thereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**8.20<u>Seller Parties' Payment Obligations</u>**. Borrower shall (a) use commercially reasonable efforts to cause the Seller Parties to pay and perform their respective Seller Parties' Post-Closing Obligations, (b) use any payments received from a Seller Party in payment of a Seller Parties' Post-Closing Obligations for the applicable repairs at the Premises, and (c) provide such evidence of the foregoing as Lender may reasonably request from time to time. Borrower's right, title and interest in the Seller Parties' Post-Closing Obligations are additional Collateral (as defined in the Security Instrument) for the Loan.

**9.<u>TRANSFERS AND ASSIGNMENTS</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**9.1<u>Due on Sale or Encumbrance</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Except for Permitted Ownership Transfers and Permitted Ownership Encumbrances, in the event Borrower directly or indirectly sells, conveys, transfers, disposes of, or further encumbers all or any part of the Premises or any interest therein, or in the event any ownership interest in Borrower (including without limitation voting rights in respect thereof and including any bifurcation or division of Borrower into separate entities) is directly or indirectly issued, transferred or encumbered, or in the event Borrower or any owner of Borrower agrees so to do, in any case without the written consent of Lender being first obtained (which consent Lender may withhold in its sole and absolute discretion), then, at the sole option of Lender, Lender may accelerate the Loan and declare the principal of and the accrued interest of the Note, and including all sums advanced hereunder with interest, to be forthwith due and payable, and thereupon the Note, including both principal and all interest accrued thereon, and including all sums advanced hereunder and interest thereon, shall be and become immediately due and payable without presentment, demand or further notice of any kind. Without limiting the generality of the foregoing, a merger, consolidation, reorganization, entity conversion or other restructuring or transfer by operation of law, whereby Borrower or, in the case of an ownership interest, the holder of an ownership interest in Borrower, is not the surviving entity as such entity exists on the date hereof, shall be deemed to be a transfer of the Premises or of an ownership interest in Borrower; and any transfer or encumbrance of an ownership interest in a general or limited partnership, corporation or limited liability company holding an ownership interest in Borrower (or in an entity that holds directly or indirectly an ownership interest in Borrower) shall be deemed to be a transfer or encumbrance of an ownership interest in Borrower. Consent as to any one transaction shall not be deemed to be a waiver of the right to require consent to future or successive transactions. Without limiting the generality of the foregoing, there shall be no subordinate liens on or financing relating to the Premises (including, without limitation, any secondary financing secured by any interest in the Premises or any mezzanine financing secured by ownership interests in Borrower), nor shall there be any change, removal, addition or resignation of any general partner (if Borrower is a partnership) or any managing member (if Borrower is a limited liability company) of Borrower, in any case without the written consent of Lender being first obtained (which consent Lender may withhold in its sole and absolute discretion). Pledges, hypothecation or other security interests secured indirectly by beneficial ownership interests in Borrower (but excluding effectuated transfers of ownership interests in Borrower) relating to credit and other fund level financing to entities above the Sole Member will be permitted so long as (i) such upstream financing does not result in the creation of any unpermitted lien or encumbrance on the Premises or any other collateral for the Loan, and (ii) the collateral taken for such upstream financing, if any, includes a material portion of the assets and

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subsidiaries of such upstream borrower entity and is not limited to the ownership interests of such upstream borrower entity in Sole Member (the foregoing, "Permitted Ownership Encumbrances"). No Permitted Ownership Encumbrance shall be deemed a Permitted Ownership Transfer and any exercise of remedies under any such Permitted Ownership Encumbrance (e.g., exercise of a pledge) that results in a transfer that does not independently satisfy the conditions of a Permitted Ownership Transfer shall be and remain an Event of Default under the Loan Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Notwithstanding the foregoing, and provided no Event of Default (as hereinafter defined) has occurred and is continuing, commencing on the first anniversary of the date of this Agreement, one transfer or conveyance of the entire Premises to a transferee and replacement guarantor approved by Lender in its sole and absolute discretion shall be permitted upon (i) execution by the transferee of an assumption agreement satisfactory to Lender in its sole and absolute discretion; (ii) receipt by Lender of a non-refundable servicing fee of $5,000 at the time of the request, and an assumption fee equal to one percent (1%) of the outstanding amount of the Note at the time of the closing of such transfer and assumption; (iii) at the time of such transfer, the Loan to Value Ratio does not exceed sixty-two and one-half percent (62.50%) (provided, however, that if the Loan to Value Ratio does not meet this requirement, Borrower shall have the right to pay down the Loan by an amount, as reasonably determined by Lender in each case, necessary to reduce the Loan to Value Ratio to the required level, together with the applicable Prepayment Premium on the amount so paid by Borrower); (iv) the Debt Yield for the preceding twelve (12) month period is at least nine and one-half percent (9.50%) (provided, however, that if the Debt Yield does not meet this requirement, Borrower shall have the right to pay down the Loan by an amount, as reasonably determined by Lender in each case, necessary to bring the Debt Yield to the required level, together with the applicable Prepayment Premium on the amount so paid by Borrower); (v) receipt by Lender of an endorsement to Lender's title policy, in form and substance acceptable to Lender; (vi) receipt by Lender of opinions of counsel, and authorization documents of Borrower and the transferee, satisfactory to Lender; and (vii) Borrower pays all fees, out-of-pocket costs and expenses actually incurred by Lender in connection with the transfer, including, without limitation, all legal fees and disbursements (including reasonable attorneys' fees), accounting, title insurance, documentary stamp taxes, intangible taxes, mortgage taxes, recording fees and appraisal fees, whether or not the transfer is actually consummated. An acceptable transferee must have, without limitation, a financial and credit standing, and commercial real estate management experience, acceptable to Lender, and must be able to make the representations and warranties made by Borrower in this Agreement, including, without limitation, those contained in <u>Article 8</u> above and in <u>Section 11.21</u> below. Further, Lender, in its sole and absolute discretion, may require individuals specifically named by Lender to deliver to Lender a Limited Guaranty and an Environmental Indemnification Agreement on Lender's standard form. The rights granted to Borrower in this paragraph are personal to the original Borrower, shall be extinguished after the exercise thereof, and shall not inure to the benefit of any transferee. Any such transfer and assumption will not release the original Borrower or any Guarantor from any liability to Lender without the written consent of Lender, which consent may be given or withheld in Lender's sole and absolute discretion and may be conditioned upon the execution of new guaranties from the principals of the transferee, execution by the principals of the transferee of Lender's standard Environmental Indemnification Agreement, and such other requirements as Lender may deem appropriate in its discretion.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)In all events, Lender shall be notified in advance of any proposed transfer, and Borrower shall pay, or reimburse Lender for, all costs and expenses, including reasonable attorneys' fees and expenses, associated with Lender's review and documentation of any proposed transfer of the Premises or interests in Borrower, whether or not consummated.

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**10.<u>EVENTS OF DEFAULT</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**10.1<u>Events of Default</u>**. If any of the following events occurs, it is hereby defined as and declared to be and to constitute an "Event of Default":

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)failure by Borrower to pay when due (including any applicable grace period) any amounts required to be paid hereunder (including without limitation real estate taxes and escrow payments) or under the Note at the time specified herein or therein (or if a non-recurring payment has no time period specified herein or therein, then within five (5) days after written notice from Lender); or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)an event as to which Lender elects to accelerate the Loan as provided for in <u>Section 9.1</u> above ("Due on Sale or Encumbrance"); or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)failure by Borrower to observe and perform the covenants, conditions and agreements set forth in <u>Section 3.3</u> above ("Taxes, Other Governmental Charges, Lien and Utility Charges") or <u>Section 3.4</u> above ("Insurance"), except to the extent that amounts in respect of the related insurance premiums and/or Assessments have been escrowed with Lender pursuant to <u>Section 5</u> above and not applied to the payment thereof; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)failure by Borrower to observe and perform the covenants, conditions and agreements set forth in <u>Section 8.9</u> above ("Special Purpose Entity"); provided, however, that such failure shall not constitute an Event of Default hereunder, if: (1) such breach is immaterial, inadvertent and non-recurring, (2) such failure is curable (meaning that the facts and circumstances to which such assumption relates can be changed so as to make such assumption true and correct), and (3) Borrower promptly cures such failure and provides Lender with evidence of such cure satisfactory to Lender within ten (10) days after the date on which Borrower first obtained knowledge of such failure from any source whatsoever (including, without limitation, notice thereof from Lender); or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)failure by Borrower to observe and perform any covenant, condition or agreement on its part to be observed or performed in this Agreement, the Security Instrument or the Note other than as referred to in (a) through (d) above, for a period of thirty (30) days after written notice, specifying such failure and requesting that it be remedied, given to Borrower by Lender, or such longer period not exceeding an additional sixty (60) days if such default is not susceptible of cure within the initial 30-day period, Borrower commences to cure within ten (10) days after such notice is given, and proceeds with diligence and continuity of effort to cure such default; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)any representation or warranty made in writing by or on behalf of Borrower in this Agreement, the Security Instrument or the other Loan Documents, any financial statement, certificate, or report furnished in order to induce Lender to make the Loan secured by the Security Instrument, shall prove to have been false or incorrect in any material respect, or materially misleading as of the time such representation or warranty was made; provided, however, that such falsehood, breach or violation shall not constitute an Event of Default if (w) such falsehood, breach or violation was inadvertent and non-recurring, (x) such falsehood, breach or violation is curable, (y) the same shall not have a material adverse effect on the Premises, Borrower or Lender, and (z) Borrower (or Guarantor, as applicable) promptly cures such falsehood, breach or violation within ten (10) days after Borrower first obtained knowledge of such falsehood, breach or violation from any source whatsoever (including, without limitation, notice thereof from Lender); or

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)Borrower or any Guarantor shall:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)become insolvent; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)admit in writing its inability to pay its debts generally as they become due; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)file a petition in bankruptcy to be adjudicated a voluntary bankrupt or file a similar petition under any insolvency act, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv)make an assignment for the benefit of its creditors, or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v)consent to the appointment of a receiver of itself or of the whole or any substantial part of its property; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)Borrower or a Guarantor shall file a petition or answer seeking reorganization or arrangement of Borrower or such Guarantor under the Federal bankruptcy laws or any other applicable law or statute of the United States of America or any state thereof; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)Borrower or a Guarantor shall, on a petition in bankruptcy filed against it, be adjudicated a bankrupt or if a court of competent jurisdiction shall enter an order or decree appointing without the consent of Borrower or such Guarantor a receiver or trustee of Borrower or such Guarantor or of the whole or substantially all of its property, or approving a petition filed against it seeking reorganization or arrangement of Borrower or such Guarantor under the Federal bankruptcy laws or any other applicable law or statute of the United States of America or any state thereof, and such adjudication, order or decree shall not be vacated or set aside or stayed within ninety (90) days from the date of the entry thereof; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)any Borrower (as defined in the Note) who is a natural person dies or any Borrower that is an entity dissolves or otherwise ceases to exist; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k)a Guarantor shall repudiate such Guarantor's obligations; or any such individual Guarantor shall die, or any such entity Guarantor shall dissolve or otherwise cease to exist, unless within sixty (60) days after such death, or prior to such dissolution or cessation, a substitute guarantor satisfactory to Lender shall become liable to Lender by executing a guaranty agreement satisfactory to Lender; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l)an event of default has occurred under any of the Loan Documents and the period for cure thereof, if any, has elapsed without cure; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m)Borrower shall be in default of, or in violation of, beyond any applicable grace period, any material conditions, covenants or restrictions that benefit or burden the Premises; provided, however, such default or violation shall not be an Event of Default if (i) such breach or violation is not reasonably likely to have a material adverse effect on the Premises or on the ability of Borrower to perform its obligations under the Loan Documents to which it is a party, and (ii) Borrower cures such breach within ten (10) days (or, if such conditions, covenants or restrictions or any applicable law requires such breach to be cured in a shorter time period, then within such shorter time period) after Borrower first obtained knowledge of such breach or violation from any source whatsoever (including, without limitation, notice thereof from Lender); or

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n)if the Premises shall be taken, attached, or sequestered on execution or other process of law in any action against Borrower (other than by way of a condemnation or other exercise of the power of eminent domain that is not part of a collusive business arrangement between Borrower and the condemning authority); or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o)if Borrower shall be in default under any other mortgage, deed of trust, deed to secure debt or security agreement covering any part of the Premises, whether it be superior or junior in lien to the Security Instrument; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p)if any claim of priority (except based upon a Permitted Exception) to the Loan Documents by title, lien, or otherwise shall be upheld by any court of competent jurisdiction or shall be consented to by Borrower; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q)(i) the consummation by Borrower of any transaction which would cause (A) the Loan or any exercise of Lender's rights under the Loan Documents to constitute a non-exempt prohibited transaction under ERISA or (B) a violation of a state statute regulating governmental plans; (ii) the failure of any representation in <u>Section 11.21</u> to be true and correct in all material respects; or (iii) the failure of Borrower to comply with the obligations in <u>Section 11.21</u> within the lesser of (x) fifteen (15) days after written notice of such default to Borrower or (y) the shortest cure period, if any, provided for under any Laws applicable to such matters (including, without limitation, ERISA); or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(r)(i) the consummation by Borrower of any transaction which would cause an OFAC violation; (ii) the failure of any representation in <u>Section 8.5</u> to be true and correct in all respects; or (iii) the failure of Borrower to comply with the provisions of <u>Section 8.5</u>, unless such default is cured within the lesser of (A) fifteen (15) days after written notice of such default to Borrower or (B) the shortest cure period, if any, provided for under any Laws applicable to such matters (including, without limitation, OFAC).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(s)failure by a Guarantor to observe and perform the covenants, conditions and agreements set forth in <u>Section 22</u> of the Guaranty ("Net Worth and Liquidity").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**10.2<u>Acceleration</u>**. Upon the occurrence of an Event of Default, Lender may declare the principal of and the accrued interest of the Note, and including all sums advanced hereunder or under the Security Instrument with interest, to be forthwith due and payable, and thereupon the Note, including both principal and all interest accrued thereon, and including all sums advanced hereunder or under the Security Instrument and interest thereon, shall be and become immediately due and payable without presentment, demand or further notice of any kind.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**10.3<u>Attorney-in-Fact; Remedies of Lender</u>**. Borrower hereby irrevocably and unconditionally constitutes and appoints Lender as Borrower's true and lawful attorney-in-fact, with full power of substitution, at any time after the occurrence and during the continuance of an Event of Default to execute, acknowledge and deliver any documents, agreements or instruments and to exercise and enforce every right, power, remedy, option and privilege of Borrower under all Loan Documents, and do in the name, place and stead of Borrower, all such acts, things and deeds for and on behalf of and in the name of Borrower under any Loan Document, which Borrower could or might do or which Lender may deem necessary or desirable to more fully vest in Lender the rights and remedies provided for under the Loan Documents and to accomplish the purposes thereof. The foregoing powers of attorney are irrevocable and coupled with an interest. Upon the occurrence of an Event of Default, or in case the principal of the Note shall have become due and payable, whether by lapse of time or by acceleration, then and in every such case Lender may proceed to protect and enforce its right by a suit or suits in equity or at law,

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either for the specific performance of any covenant or agreement contained herein or in the Security Instrument or the other Loan Documents, or in aid of the execution of any power herein or therein granted, or for the foreclosure of the Security Instrument, or for the enforcement of any other appropriate legal or equitable remedy. The remedies of Lender, as provided herein and in the other Loan Documents shall be cumulative and concurrent and may be pursued singularly, successively or together, at the sole discretion of Lender, and may be exercised as often as occasion therefor shall occur; and the failure to exercise any such right or remedy shall in no event be construed as a waiver or release thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**10.4<u>Advances</u>**. If Borrower shall fail to comply with any of the terms, covenants and conditions herein with respect to the procuring of insurance, the payment of taxes, assessments and other charges, the keeping of the Premises in repair, or any other term, covenant or condition herein contained, Lender may make advances to perform the same and, where necessary, enter the Premises for the purpose of performing any such term, covenant or condition, and without limitation of the foregoing, Lender may procure and place insurance coverage in accordance with the requirements of <u>Section 3.4</u> of this Agreement. Borrower agrees to repay all sums so advanced upon demand, with interest at a rate equal to the Default Rate per annum or, if less, the Maximum Legal Rate of Interest, until paid. All sums so advanced, with interest, shall be secured by the Security Instrument in priority to the indebtedness evidenced by the Note, but no such advance shall be deemed to relieve Borrower from any default hereunder. After making any such advance, payments made pursuant to the Note shall be first applied toward reimbursement for any such advance and interest thereon, prior to the application toward accrued interest and principal payments due pursuant to this Agreement or the Note.

**11.<u>GENERAL PROVISIONS</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**11.1<u>Captions</u>**. The captions and headings of various Sections of this Agreement and Exhibits and Schedules pertaining hereto, are for convenience only and are not to be considered as defining or limiting in any way, the scope or intent of the provisions hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**11.2<u>Merger</u>**. This Agreement, the Application/Commitment and the Loan Documents and instruments delivered in connection herewith, as may be amended from time to time in writing, constitute the entire agreement of the parties with respect to the Premises and the Loan, and all prior discussions, negotiations and document drafts are merged herein and therein. If there are any inconsistencies between the Application/Commitment and this Agreement or the Loan Documents, the terms contained in this Agreement and the other Loan Documents shall prevail. Neither Lender nor any employee of Lender has made or is authorized to make any representation or agreement upon which Borrower may rely unless such matter is made for the benefit of Borrower and is in writing signed by an authorized officer of Lender. Borrower agrees that they have not and will not rely on any custom or practice of Lender, or on any course of dealing with Lender, in connection with the Loan unless such matters are set forth in this Agreement or the Loan Documents or in an instrument made for the benefit of Borrower and in a writing signed by an authorized officer of Lender.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**11.3<u>Notices</u>**. All notices, demands, consents, requests or other written communications that are either required or desired to be given or furnished hereunder or under any other Loan Document (a "Notice") shall be in writing and shall be deemed to have been properly given if either delivered personally or by nationally-recognized overnight commercial courier or sent by United States registered or certified mail, postage prepaid, return receipt requested, to the address of the parties set forth below. Such Notice shall be effective upon receipt or refusal if by personal delivery, the first Business Day (a day other than a Saturday, Sunday or holiday on which national banks are authorized to be closed) after the deposit of such

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Notice with a nationally-recognized overnight courier service by the time deadline for next Business Day delivery if by commercial courier, and upon the earliest of receipt or refusal (which shall include a failure to respond to notification of delivery by the U.S. Postal Service) or five (5) Business Days following mailing if sent by U.S. Postal Service mail. A courtesy copy of each Notice shall be sent via email to the applicable parties as well; provided that the date of delivery of the hard copy of such Notice shall be controlling and no party's failure to receive or open an emailed copy of such Notice shall be deemed a failure of the sending party to have given such Notice. By Notice complying with the foregoing, each party may from time to time change the address to be subsequently applicable to it for the purpose of the foregoing.

&nbsp;&nbsp;&nbsp;&nbsp;If to Borrower or Guarantor:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Marysville Owner LLC

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9 West 57th Street, 40th Floor

New York, NY 10019

Attention: Steven Orbuch

Email: srenotices@sculptor.com

With a copy to:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Bryan Cave Leighton Paisner LLP

1290 Avenue of the Americas

New York, New York 10104

Attention: Ron Emanuel, Esq.

Email: ronald.emanuel@bclplaw.com<br>

&nbsp;&nbsp;&nbsp;&nbsp;If to Lender:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;USAA Life Insurance Company

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c/o Affinius Capital LLC

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9830 Colonnade Boulevard

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Suite 600

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;San Antonio, Texas 78230

Attention: Loan Asset Manager, Capital Markets

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Email: Kuwananh.Ezulike@affiniuscapital.com

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;and <u>notice@affiniuscapital.com</u>

&nbsp;&nbsp;&nbsp;&nbsp;With a copy to:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;USAA Life Insurance Company

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c/o Affinius Capital LLC

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;277 Park Avenue, 39th Floor

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;New York, NY 10172

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Attention: General Counsel

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Emails: <u>Beth.Newman@affiniuscapital.com</u>

&nbsp;&nbsp;&nbsp;&nbsp;With a copy to:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Barack Ferrazzano Kirschbaum & Nagelberg LLP

200 West Madison Street, Suite 3900

Chicago, Illinois 60606

Attention: T. Randall Graeb

Email: <u>randy.graeb@bfkn.com</u>

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or at such other address as the party to be served with notice may have furnished in writing to the party seeking or desiring to serve notice as a place for the service of notice. Notices given in any other fashion shall be deemed effective only upon receipt; provided, however, in all instances, service of a notice required by the Texas Property Code Section 51.002, as amended, shall be considered complete when the requirements of that statute are met.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**11.4<u>Modification; Waiver</u>**. No modification, waiver, amendment, discharge or change of this Agreement or of any other Loan Document shall be valid unless the same is in writing and signed by the party against which the enforcement of such modification, waiver, amendment, discharge or change is sought. Lender reserves the right to charge a reasonable administrative fee for any such modification, waiver, amendment, discharge, or change of this Agreement. Lender shall not be deemed, by any act of omission or commission, to have waived any of its rights or remedies under any of the Loan Documents unless such waiver is in writing and signed by Lender and then, only to the extent specifically set forth in the writing. A waiver with reference to one event shall not be construed as continuing or as a bar to or waiver of any right or remedy as to a subsequent event. Without limiting the generality of the foregoing, no waiver of, or election by Lender not to pursue, enforcement of any provision imposing recourse liability on Borrower shall affect, waive or diminish in any manner Lender's right to pursue the enforcement of any other such provision.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**11.5<u>Governing Law</u>**. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED UNDER THE INTERNAL LAWS (AS OPPOSED TO THE LAWS OF CONFLICTS) OF THE STATE OF TEXAS.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**11.6<u>Acquiescence Not to Constitute Waiver of Lender's Requirements</u>**. Each and every covenant and condition for the benefit of Lender contained in this Agreement may be waived by Lender.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**11.7Disclaimer by Lender.** (a) This Agreement is made for the sole benefit of Borrower and Lender (and Lender's successors and assigns and participants, if any), and no other person or persons shall have any benefits, rights or remedies under or by reason of this Agreement, or by reason of any actions taken by Lender pursuant to this Agreement. Lender shall not be liable for any debts or claims accruing in favor of any third parties against Borrower or others or against the Premises. Borrower is not and shall not be an agent of Lender for any purposes. Lender is not and shall not be an agent of Borrower for any purpose. Lender, by making the Loan or taking any action pursuant to any of the Loan Documents, shall not be deemed a partner or a joint venturer with Borrower or any fiduciary of Borrower. (b) Any review, investigation or inspection conducted by Lender, any architectural or engineering consultants retained by Lender or any agent or representative of Lender in order to verify independently Borrower's satisfaction of any conditions precedent to the disbursement of the Loan, Borrower's performance of any of the covenants, agreements and obligations of Borrower under this Agreement, or the truth of any representations and warranties made by Borrower hereunder (regardless of whether or not the party conducting such review, investigation or inspection should have discovered that any of such conditions precedent were not satisfied or that any such covenants, agreements or obligations were not performed or that any such representations or warranties were not true), shall not affect, or constitute a waiver by Lender of, (i) any of Borrower's representations and warranties under this Agreement or Lender's reliance thereon, or (ii) Lender's reliance upon any certifications required under this Agreement or any other facts, information or reports furnished Lender by Borrower hereunder.

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(c) By accepting or approving anything required to be observed, performed, fulfilled or given to Lender pursuant to the Loan Documents, including any certificate, statement of profit and loss or other financial statement, survey, appraisal, lease or insurance policy, Lender shall not be deemed to have warranted or represented the sufficiency, legality, effectiveness or legal effect of the same, or of any term, provision or condition thereof, and such acceptance or approval thereof shall not constitute a warranty or representation to anyone with respect thereto by Lender.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**11.8<u>Right of Lender to Make Advances to Cure Borrower's Defaults</u>**. If Borrower shall fail to perform in a timely fashion any of its covenants, agreements or obligations contained in this Agreement or the Loan Documents within any applicable notice and cure periods, Lender may (but shall not be required to) perform any of such covenants, agreements and obligations. Any funds advanced by Lender in the exercise of its judgment that the same are reasonably needed to protect its security for the Loan are deemed to be obligatory advances hereunder and any reasonable amounts expended (whether by disbursement of undisbursed Loan proceeds or otherwise) by Lender in so doing, shall constitute additional indebtedness evidenced and secured by the Note, the Security Instrument and the other Loan Documents, shall, if not paid by Borrower when due, bear interest from the date expended at the Default Rate and be payable together with such interest within ten (10) days of demand.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**11.9<u>Definitions Include Amendments</u>**. Definitions contained in this Agreement which identify documents, including the Loan Documents, shall be deemed to include all amendments and supplements to such documents from the date hereof, and all future amendments and supplements thereto entered into from time to time to satisfy the requirements of this Agreement or otherwise with the consent of the Lender. Reference to this Agreement contained in any of the foregoing documents shall be deemed to include all amendments and supplements to this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**11.10<u>Time Is of the Essence</u>**. Time is hereby declared to be of the essence of this Agreement and the other Loan Documents, and of every part hereof and thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**11.11<u>Execution in Counterparts</u>**. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which when taken together shall constitute but one and the same instrument. Executed copies of the signature pages of this Agreement sent by facsimile or transmitted electronically in either Tagged Image Format ("TIFF") or Portable Document Format ("PDF") shall be treated as originals, fully binding and with full legal force and effect, and the parties waive any rights they may have to object to such treatment. The pages of any counterpart of this Agreement containing any party's signature or the acknowledgment of such party's signature hereto may be detached therefrom without impairing the effect of the signature or acknowledgment, provided such pages are attached to any other counterpart identical thereto except having additional pages containing the signatures or acknowledgments thereof of other parties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**11.12<u>Waiver of Consequential Damages</u>**. In no event shall Lender be liable to Borrower for consequential damages, whatever the nature of a breach by Lender of its obligations under this Agreement, or any of the Loan Documents, and Borrower for itself and all of its affiliates hereby waive all claims for consequential damages to the maximum extent permitted by law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**11.13<u>Claims Against Lender</u>**. Lender shall not be in default under this Agreement, or under any other Loan Documents, unless a written notice specifically setting forth the claim of Borrower shall have been given to Lender within thirty (30) days after Borrower first had Knowledge of the occurrence of the event which Borrower alleges gave rise to such claim and

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Lender does not remedy or cure the default, if any there be, promptly thereafter. If it is determined in any proceedings that Lender has improperly failed to grant its consent or approval, where such consent or approval is required by this Agreement or any other Loan Documents, Borrower's sole remedy shall be to obtain declaratory relief determining such withholding to have been improper, and for itself and all of its affiliates and Borrower hereby waives all claims for damages or set-off against Lender resulting from any withholding of consent or approval by Lender.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**11.14<u>Jurisdiction and Venue</u>**. Borrower hereby irrevocably submits to the non-exclusive jurisdiction of any United States federal or state court for Bexar County, Texas, in any action or proceeding arising out of or relating to any of the Loan Documents, and irrevocably agrees that all claims in respect of such action or proceeding may be heard and determined in such United States federal or state court; provided that a foreclosure action against real estate shall be brought in the jurisdiction in which the subject real estate is located. Borrower irrevocably waives any objection, including without limitation, any objection to the laying of venue or based on the grounds of *forum non conveniens*, that it may now or hereafter have to the brining of any such action or proceedings in such jurisdiction. Borrower irrevocably consents to the service of any and all process in any such action or proceeding brought in any such court by the delivery of copies of such process to Borrower at its address specified for notices to be given hereunder or by certified mail directed to such address.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**11.15<u>Severability.</u>** The parties hereto intend and believe that each provision in this Agreement comports with all applicable local, state and federal laws. However, if any provision or provisions, or if any portion of any provision or provisions, in this Agreement is found by a court of law to be in violation of any applicable law, and if such court declares such portion, provision, or provisions of this Agreement to be illegal, invalid, unlawful, void or unenforceable as written, then it is the intent of all parties hereto that such portion, provision, or provisions shall be given force to the fullest possible extent that they are legal, valid and enforceable, and that the remainder of this Agreement shall be construed as if such illegal, invalid, unlawful, void, or unenforceable portion, provision, or provisions were not contained herein, and that the rights, obligations, and interests of Borrower and Lender under the remainder of this Agreement shall continue in full force and effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**11.16<u>Incorporation of Recitals</u>**. The Recitals set forth herein and the Exhibits and Schedules attached hereto are incorporated herein and expressly made a part hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**11.17<u>WAIVER OF JURY TRIAL</u>. BORROWER AND LENDER EACH HEREBY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR RELATING THERETO OR ARISING FROM THE LENDING RELATIONSHIP THAT IS THE SUBJECT OF THIS AGREEMENT AND AGREE THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**11.18<u>General Indemnification</u>**. (a) Borrower shall, at its sole cost and expense, protect, defend, indemnify, release and hold harmless the Indemnified Parties (defined below) from and against any and all Losses (defined below) imposed upon or incurred by or asserted against any Indemnified Parties and directly or indirectly arising out of or in any way relating to any one or more of the following: (i) any accident, injury to or death of persons or loss of or damage to property occurring in, on or about the Premises or any part thereof or on the adjoining sidewalks, curbs, adjacent property or adjacent parking areas, streets or ways; (ii) any use, nonuse or condition in, on or about the Premises or any part thereof or on the adjoining

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sidewalks, curbs, adjacent property or adjacent parking areas, streets or ways; (iii) performance of any labor or services or the furnishing of any materials or other property in respect of the Premises or any part thereof; (iv) any failure of the Premises to be in compliance with any applicable laws; (v) any and all claims, demands or undertakings on its part to perform or discharge any of the terms, covenants, or agreements contained in any Lease; or (vi) the payment of any commission, charge or brokerage fee to anyone which may be payable in connection with the funding of the Loan evidenced by this Agreement or the Note and secured by the Security Instrument. Any amounts payable to Lender by reason of the application of this Section shall become immediately due and payable and shall bear interest at the Default Rate from the date loss or damage is sustained by Lender until paid. WITHOUT LIMITATION, THE FOREGOING RELEASE AND INDEMNITY SHALL APPLY TO EACH OF THE INDEMNIFIED PARTIES WITH RESPECT TO LOSSES THAT IN WHOLE OR IN PART ARE CAUSED BY OR ARISE OUT OF THE SOLE, CONCURRENT OR COMPARATIVE NEGLIGENCE OR THE STRICT LIABILITY OF ANY SUCH INDEMNIFIED PARTIES. The term "Losses" shall mean any and all claims, suits, liabilities (including, without limitation, strict liabilities), actions, proceedings, obligations, debts, damages, losses, costs, expenses, fines, penalties, charges, fees, judgments, awards, amounts paid in settlement of whatever kind or nature (including but not limited to reasonable attorneys' fees and other costs of defense). The term "Indemnified Parties" shall mean (i) Lender, (ii) any prior owner or holder of the Note, (iii) any servicer or prior servicer of the Loan, (iv) any participant or any prior participant in any portion of the Loan, (v) any trustees, custodians or other fiduciaries who hold or who have held a full or partial interest in the Loan for the benefit of any participant or other third party, (vi) any receiver or other fiduciary appointed in a foreclosure or other collection proceeding, (vii) any officers, directors, shareholders, partners, members, employees, agents, servants, representatives, contractors, subcontractors, affiliates or subsidiaries of any and all of the foregoing, and (viii) the heirs, legal representatives, successors and assigns of any and all of the foregoing (including, without limitation, any successors by merger, consolidation or acquisition of all or a substantial portion of the Indemnified Parties' assets and business), in all cases whether during the term of the Loan or as part of or following a foreclosure of the Loan. (b) Upon written request by any Indemnified Party, Borrower shall defend such Indemnified Party (if requested by any Indemnified Party, in the name of the Indemnified Party) by attorneys and other professionals approved by the Indemnified Parties. Notwithstanding the foregoing, any Indemnified Parties may, in their sole discretion, engage their own attorneys and other professionals to defend or assist them, and, at the option of the Indemnified Parties, their attorneys shall control the resolution of any claim or proceeding. Upon demand, Borrower shall pay or, in the sole discretion of the Indemnified Parties, reimburse, the Indemnified Parties for the payment of reasonable fees and disbursements of attorneys, engineers, environmental consultants, laboratories and other professionals in connection therewith. (c)Borrower shall, at its sole cost and expense, protect, defend, indemnify, release and hold harmless the Indemnified Parties from and against any and all Losses imposed upon or incurred by or asserted against any Indemnified Parties and directly or indirectly arising out of or in any way relating to any tax on the making and/or recording of the Security Instrument, the Note or any of the other Loan Documents, excluding any tax on the income of such Indemnified Parties. WITHOUT LIMITATION, THE FOREGOING RELEASE AND INDEMNITY SHALL APPLY TO EACH OF THE INDEMNIFIED PARTIES WITH RESPECT TO LOSSES THAT IN WHOLE OR IN PART ARE CAUSED BY OR ARISE OUT OF THE SOLE, CONCURRENT OR COMPARATIVE NEGLIGENCE OR THE STRICT LIABILITY OF ANY SUCH INDEMNIFIED PARTIES.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**11.19<u>Secondary Financing</u>**. Except as set forth in this Agreement, no secondary financing on the Premises shall be permitted without the prior written consent of Lender, which consent may be withheld in the sole and absolute discretion of Lender.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**11.20<u>Cross-Default</u>**. An Event of Default hereunder or under any of the Note, Security Instrument or other Loan Documents shall, at Lender's election, constitute an Event of Default hereunder and under all of the Note, Security Instrument and other Loan Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**11.21<u>ERISA</u>**. Borrower hereby represents, warrants and agrees that as of the date hereof, none of the investors in or owners of Borrower is an employee benefit plan as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974 as amended ("ERISA"), a plan as defined in Section 4975(e)(1) of the Internal Revenue Code of 1986 as amended, nor an entity the assets of which are deemed to include plan assets pursuant to Department of Labor regulation Section 2510.3-101 (the "Plan Asset Regulation"). Borrower further represents, warrants and agrees that at all times during the term of the Note, Borrower shall satisfy an exception to the Plan Asset Regulation, such that the assets of Borrower shall not be deemed to include plan assets. If at any time during the entire term of the Note any of the investors in or owners of Borrower shall include a plan or entity described in the first sentence of this Section, Borrower shall as soon as reasonably possible following an investment by such a plan or entity, provide Lender with an opinion of counsel reasonably satisfactory to Lender indicating that the assets of Borrower are not deemed to include plan assets pursuant to the Plan Asset Regulation. In lieu of such an opinion, Lender may in its sole discretion accept such other assurances from Borrower as are necessary to satisfy Lender in its sole discretion that the assets of Borrower are not deemed to include plan assets pursuant to the Plan Asset Regulation. Borrower understands that the representations and warranties herein are a material inducement to Lender in the making of the Loan evidenced by the Note, without which Lender would have been unwilling to proceed with the closing of the Loan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**11.22<u>Certain Disclosures</u>**. Lender (and its Correspondent and their respective assigns) shall have the right to disclose in confidence such financial information regarding Borrower as may be necessary (a) to complete any sale or attempted sale of the Note or participations in the Loan (or any transfer of the mortgage servicing thereof) evidenced by the Note and the Loan Documents, (b) to service the Loan or Note, (c) to furnish information concerning the payment status of the Loan or Note to the holder or beneficial owner thereof, or (d) to any federal or state regulators that request information pertaining to the Borrower, including, without limitation, all Loan Documents, financial statements, projections, internal memoranda, audits, reports, payment history, appraisals and any and all other information and documentation in Lender's files (and Correspondent's files) relating to Borrower; provided that the recipient of such financial information is notified that the information being provided is confidential, and agrees to hold such information as confidential in accordance with the provisions hereof. This authorization shall be irrevocable in favor of Lender (and Correspondent and their respective assigns), and Borrower waives any claims that it may have against Lender, Correspondent and their respective assigns or the party receiving information from Lender pursuant hereto and accordance herewith regarding disclosure of information in such files and further waive any alleged damages which they may suffer as a result of such disclosure.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**11.23<u>Enforcement Costs</u>.** Borrower shall pay within ten (10) days of demand all actual costs and expenses incurred by Lender in enforcing or protecting its rights and remedies hereunder or under any of the Loan Documents, including, but not limited to, all costs of collection and litigation, reasonable attorneys' fees (which term as used in this Agreement or in any other Loan Document, shall include any and all legal fees and expenses incurred in connection with litigation, mediation, arbitration and other alternative dispute processes), and legal expenses, including, without limitation, expert witness fees, any post-judgment fees, costs or expenses incurred on any appeal, in collection of any judgment, or in appearing and/or enforcing any claim in any bankruptcy proceeding. In the event of a judgment on the Note or any other Loan Document, Borrower agrees to pay to Lender within ten (10) days of demand all

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costs and expenses incurred by Lender in satisfying such judgment, including without limitation, reasonable fees and expenses of Lender's counsel, including taxes and post-judgment insurance. It is expressly understood that such agreement by to pay the aforesaid post-judgment costs and expenses of Lender is absolute and unconditional and (i) shall survive (and not merge into) the entry of a judgment for amounts owing under the Loan Documents and (ii) shall not be limited regardless of whether the Note or other obligation of Borrower or a guarantor, as applicable, is secured or unsecured, and regardless of whether Lender exercises any available rights or remedies against any collateral pledged as security for the Note and shall not be limited or extinguished by merger of the Note or other Loan Documents into a judgment of foreclosure or other judgment of a court of competent jurisdiction, and shall remain in full force and effect post-judgment and shall continue in full force and effect with regard to any subsequent proceedings in a court of competent jurisdiction including but not limited to bankruptcy court and shall remain in full force and effect after collection of such foreclosure or other judgment until such fees and costs are paid in full. Such fees or costs shall be added to Lender's lien on the Premises that shall also survive foreclosure or other judgment and collection of said judgment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**11.24<u>Participations; Secondary Market</u>.** Borrower acknowledges and agrees that Lender may, in Lender's sole discretion and at Lender's sole cost and expense, sell, transfer or assign the Loan and the Loan Documents, and any servicing rights with respect thereto, grant participation interests in the Loan and may seek to securitize the Loan and sell interests therein in the secondary market.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)<u>Dissemination of Information</u>. Subject to the obligations of Lender in Section 11.22, in connection with any transfer by Lender of the Loan (including a participation therein) or any servicing rights with respect thereto, the Lender may forward any documents and information that Lender now has or acquires in the future concerning the Loan, including the financial statements of Borrower or Guarantor, and such other information as may be reasonably related to Borrower or Guarantor, the Premises or the Leases to any:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)transferee or prospective transferee of the Loan;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)any rating agency rating the Loan, a participation, or any securitized interest in the Loan; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)purchaser, transferee, assignee, servicer, participant, investor or prospective investor in any securitization of the Loan, or to any of their advisors.

Borrower irrevocably waives any and all rights it may have under applicable law to prohibit such disclosure, including any right of privacy.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)<u>Cooperation</u>. Borrower and any Guarantor agree to cooperate with Lender in connection with any transfer of the Loan or any participation or securitized interest in the Loan. Borrower agrees to provide to Lender or to any persons to whom Lender may disseminate such information, at the Lender's reasonable request, financial statements of Borrower or Guarantor, an estoppel certificate and such other documents as may be reasonably related to Borrower or Guarantor, the Premises, or the Leases, in a form substantially similar to that provided at the closing of the Loan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)<u>Reserves/Escrows</u>. If participations are granted or securitized interests issued in connection with the Loan, all funds held by Lender in escrow or as reserves in accordance with the Loan Documents may, at the Lender's discretion, be deposited in "eligible

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accounts" at "eligible institutions" and invested in "permitted investments" as then defined and required by the applicable rating agencies.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)<u>No Change</u>. Nothing in this Section shall permit a material change in the aggregate rights, obligations or liabilities of Borrower.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**11.25<u>Replacement or Bifurcation of Note</u>.&nbsp;&nbsp;&nbsp;&nbsp;**If the Note is lost or destroyed, the Borrower shall, at the Lender's request, execute and return to the Lender a replacement promissory note identical to the Note, provided the Lender delivers to the Borrower an affidavit to the foregoing effect. Upon delivery of the executed replacement note, the Lender shall indemnify the Borrower from and against its actual damages suffered as a result of the existence of two notes evidencing the same obligation. No replacement of the Note under this Section shall result in a novation of the Borrower's obligations under the Note. In addition, the Lender may at its sole and absolute discretion require that the Borrower execute and deliver two separate promissory notes, which shall replace the Note as evidence of the Borrower's obligations. The two replacement notes shall, taken together, evidence the exact obligations set forth in the Note. The replacement notes shall be independently transferable. If the Note is so replaced, the Lender shall return the Note to the Borrower marked to evidence its cancellation. Nothing in this Section shall permit a material change in the aggregate rights, obligations or liabilities of Borrower. .

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**11.26<u>Further Acts</u>**. Borrower shall take all necessary actions to (i) keep valid and effective the lien and rights of Lender under the Loan Documents and (ii) protect the lawful owner of the Loan Documents. Promptly upon request by Lender, Borrower shall execute additional instruments and take such actions as Lender reasonably believes are necessary or desirable to (a) maintain or grant Lender a first-priority, perfected lien on the Premises, (b) grant to Lender to the fullest extent permitted by Laws, the right to foreclose on, or transfer title to, the Premises non-judicially upon the occurrence of an Event of Default, (c) correct any error or omission in the Loan Documents, and (d) effect the intent of the Loan Documents, including filing/recording the Loan Documents, additional mortgages, deeds of trust, deeds to secure debt, financing statements, and other instruments.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**11.27<u>Lender's Consent; Costs of Administration of Loan</u>**. Wherever in this Agreement there is a requirement for Lender's consent or approval and/or Lender is asked to make a judgment or determination and/or a document is to be provided in form or substance "satisfactory to Lender" or "acceptable to Lender" or an action taken "to the satisfaction of Lender", or words of similar import, it is understood by such phrase that Lender may exercise its consent, right or judgment in its sole and absolute discretion, except where otherwise expressly set forth. Borrower shall also pay all costs and expenses incurred by Lender, and all fees charged by Lender, in connection with any request for consent or approval and any amendment, modification or waiver of the terms and conditions of the Loan Documents. Such costs, expenses and fees shall be payable within ten (10) days after written demand from Lender to Borrower. Borrower shall pay Lender (a) within ten (10) days following written demand all costs and expenses incurred by Lender in connection with the preparation of this Agreement, all other Loan Documents and any other documents or instruments contemplated hereby; and (b) within ten (10) days following demand all costs and expenses incurred by Lender in connection with the administration of this Agreement and the Loan. For all purposes of this Agreement, Lender's costs and expenses shall include, without limitation, all appraisal fees, cost engineering and inspection fees, reasonable legal fees and expenses, accounting fees, environmental consultant fees, auditor fees, UCC filing fees and/or UCC vendor fees, flood certification vendor fees, tax service vendor fees, documentary stamp tax, intangible tax, recording and/or filing fees, and the cost to Lender of any title insurance premiums or endorsements, title surveys, mortgage registration taxes (if applicable), release, reconveyance, satisfaction and notary fees. Borrower

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recognizes and agrees that Lender may, from time to time, at its option, require inspection of the Premises by an independent supervising architect and/or cost engineering specialist selected by Lender. If any of the services described above are provided by an employee of Lender or its affiliates, Lender's costs and expenses for such services shall be calculated in accordance with Lender's standard charge for such services.

THE WRITTEN LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

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**IN WITNESS WHEREOF**, Borrower and Lender have executed this Agreement to be effective as of the day and year first set forth above.

**&nbsp;&nbsp;&nbsp;&nbsp;BORROWER:**

**MARYSVILLE OWNER LLC**,

a Delaware limited liability company

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;By: <u>/s/ Steven Orbuch&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u>&nbsp;&nbsp;&nbsp;&nbsp;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Name: <u>Steven Orbuch&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u> 

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Title: <u>President&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u> 

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**LENDER:**

**USAA LIFE INSURANCE COMPANY**, a life insurance company organized under the laws of Texas

By:&nbsp;&nbsp;&nbsp;&nbsp;Affinius Capital Advisors LLC, a Texas limited liability company, its authorized agent

By:&nbsp;&nbsp;&nbsp;&nbsp;Affinius Capital LLC, a Delaware limited liability company, its sole member

By: <u>/s/ Beth Newman</u>

Name: Beth Newman

Title: Authorized Signatory

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EXHIBIT A

&nbsp;&nbsp;&nbsp;&nbsp;<u>DESCRIPTION OF LAND</u>

Parcel 1

Situated in the State of Ohio, County of Union, City of Marysville, Township of Millcreek, Virginia Military Survey Number 3349, being part of a 151.044 acre tract of land described in deed to David Fladt Road LLC and John Fladt Road LLC of record in Instrument Number 202106020007430, all references to records being on file in the Office of the Recorder, Union County, Ohio, said 83.994 acre tract being more fully described herein:

BEGINNING FOR REFERENCE at a MAG Nail set at the centerline intersection of Industrial Parkway (County Road 1) and Fladt Road (County Road 35), and being on the south line of Virginia Military Survey Number 3349 and the north line of Virginia Military Survey Number 419;

Thence North 49°11'56" West, a distance of 566.99 feet, with the centerline of said Industrial Parkway, to a MAG Nail set at a southeast corner of said 151.044 acre tract, and being at the northeast corner of a 3.400 acre tract of land described in deed to The City of Marysville, Ohio of record in Official Record Volume 40, Page 323, being the TRUE POINT OF BEGINNING;

Thence with the east line of said 151.044 acre tract, and with the west line of said 3.400 acre tract, the following two (2) courses:

1. South 40°47'31" West, passing over a 1" iron pipe found at a distance of 29.97 feet, for a total distance of 298.95 feet, to a 5/8" rebar found (CTL Engineering 7176);

2. South 06°02'17" East, passing over a 1" iron pipe found at a distance of 183.80 feet, for a total distance of 209.00 feet to a railroad spike found at the southeast corner of said 151.044 acre tract, being at the southwest corner of said 3.400 acre tract, being on the south line of said Virginia Military Survey Number 3349 and the north line of said Virginia Military Survey Number 419, being on the south line of Millcreek Township, being the north line of Jerome Township, and being in the centerline of said Fladt Road;

Thence South 83°57'59" West, a distance of 1243.43 feet with the south line of said 151.044 acre tract, with the south line of said Virginia Military Survey Number 3349 and the north line of said Virginia Military Survey Number 419, being on the south line of said Millcreek Township, being the north line of said Jerome Township, and with the centerline of said Fladt Road, to a MAG Nail set;

Thence North 49°11'56" West, passing over an iron pin set at 34.28 feet, for a total distance of 2231.34 feet, through said 151.044 acre tract, to an iron pin set on the north line of said 151.044 acre tract, and being on the south line of an original 119.5 acre tract of land (Exhibit A)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

------

described in deed to Thomas V. Vollrath and Sarah L. Vollrath, Trustees of record in Instrument Number 202006100005496;

Thence North 41°36'06" East, a distance of 1140.10 feet, with the north line of said 151.044 acre tract, and with the south line of said 119.5 acre tract, to a 5/8" rebar found (CTL Engineering 7176), at a northeast corner of said 151.044 acre tract, and being at the southwest corner of a 1.00 acre tract of land described in deed to Richard K Reiselt of record in Instrument Number 201411180008234;

Thence with the common lines of said 151.044 acre tract, and said 1.00 acre tract, the following two (2) courses:

1. South 49°19'39" East, a distance of 208.65 feet, to a 5/8" rebar found in concrete;

2. North 41°23'59" East, passing over a 1" iron pipe found at a distance of 178.61 feet, for a total distance of 208.42 feet, to a MAG Nail set at the northeast corner of said 151.044 acre tract, being at the southeast corner of said 1.00 acre tract, and being in the centerline of said Industrial Parkway;

Thence South 49°11'56" East, a distance of 2702.72 feet, with the east line of said 151.044 acre tract, and with the centerline of said Industrial Parkway, to the True Point of Beginning, containing 83.994 acres, where 2.582 acres lies within Millcreek Township, 81.412 acres lies within the City of Marysville, 11.625 acres lies within parcel number 2700080200000, and 72.369 acres lies within parcel number 2700080170020;

Commonly known as: Sierra Marysville Sale, 12575 Industrial Parkway, Marysville, OH 43040

Parcel Number (s): 27-0008017.0030, 27-0008017.0037 (Tax Abatement Parcel)

LESS AND EXCEPT FROM PARCEL 1:

The property conveyed to the Union County Board of Commissioners in Warranty Deed, recorded October 24, 2023, in Instrument Number 202310240007846, Recorder's Office, Union County, Ohio and described as follows:

Situated in the State of Ohio, County of Union, City of Marysville, Township of Millcreek, Virginia Military Survey Number 3349, being part of an 83.994 acre tract of land described in deed to Sierra Marysville Storage, LLC of record in Instrument Number 202209190008829, all references to records being on file in the Office of the Recorder, Union County, Ohio, said 1.159 acre tract being more fully described herein;

COMMENCING at a MAG Nail found at the centerline intersection of Industrial Parkway (County Road 1) and Fladt Road (County Road 35), and being on the south line of Virginia Military Survey Number 3349 and the north line of Virginia Military Survey Number 419;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

------

Thence South 83°57'59" West, a distance of 605.88 feet, with the centerline of said Fladt Road, with the south line of said Virginia Military Survey Number 3349, with the north line of said Virginia Military Survey Number 419, with the south line of Millcreek Township, and with the north line of Jerome Township, to a MAG Nail found at the southeast corner of said 83.994 acre tract, being at the southwest corner of a 3.400 acre tract of land described in deed to The City of Marysville, Ohio of record in Official Record Volume 40, Page 323, and being the POINT OF BEGINNING;

Thence South 83°57'59" West, a distance of 1243.43 feet, with the south line of said 83.994 acre tract, with the south line of said Virginia Military Survey Number 3349, with the north line of said Virginia Military Survey Number 419, with the south line of said Millcreek Township, with the north line of said Jerome Township and with the centerline of said Fladt Road, to a MAG Nail found at the southwest corner of said 83.994 acre tract and being at the southeast corner of the residual of an original 151.044 acre tract of land described in deed to David Fladt Road LLC and John Fladt Road LLC of record in Instrument Number 202106020007430;

Thence North 49°11'56" West, passing over a 5/8" rebar found (CEC INC) at a distance of 34.27 feet, for a total distance of 54.84 feet, with the southwest line of said 83.994 acre tract and with the northeast line of the residual of said 151.044 acre tract, to an iron pin set;

Thence North 83°57'59" East, a distance of 1280.95 feet, crossing said 83.994 acre tract, to an iron pin set on an east line of said 83.994 acre tract and being on the west line of said 3.400 acre tract;

Thence South 06°02'17" East, passing over a 1 inch iron pipe found at a distance of 14.80 feet, for a total distance of 40.00 feet, with the east line of said 83.994 acre tract and with the west line of said 3.400 acre tract, to the POINT OF BEGINNING, containing 1.159 acres, subject to all easements and documents of record. Which 0.439 of an acre lies within PID: 2700080170030 and within the City of Marysville, and 0.720 of an acre lies within PID: 700080170030, within the (P.R.O.) Present Road Occupied and within Millcreek Township.

Parcel 2

Real estate situated in the State of Ohio, County of Union and Township of Paris, City of Marysville, Survey No. 3349, and bounded and described as follows:

Beginning at the northwesterly corner of the 155.50 acre tract described in Union County Deed Record Volume 207, Page 531, said corner being a point in the center of the Columbus Road (State Route No. 33); thence with the center-line of said road South 52 deg. 30' East 208.73 feet to a point; thence South 38 deg. 16' West (passing over an iron pin at 30 feet) 208.73 feet to an iron pin; thence North 52 deg. 30' West 208.73 feet to an iron pin in the northwesterly line of the above mentioned 155.50 acre tract; thence with said northwesterly line North 38 deg. 16' East (passing over an iron pin at 179.73 feet) 208.73 feet to the point of beginning.

Containing 1.00 acre, more or less, but subject to all legal road right of way.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

------

Being part of the 155.50 acre tract described in Union County Deed Record Vol. 207, page 531

Commonly known as: 12863 Industrial Parkway, Marysville, OH 43040

Parcel Number (s): 27-0001022-0000

FURTHER LESS AND EXCEPTING FROM PARCEL 1 AND PARCEL 2:

Situated in the State of Ohio, County of Union, City of Marysville, Township of Millcreek, Virginia Military Survey Number 3349, being part of an 83.994 acre tract of land described in deed to Sierra Marysville Storage, LLC of record in Instrument Number 202209190008829, and being part of a 1.00 acre tract of land described in deed to Sierra Marysville Storage, LLC of record in Instrument Number 202211150010622, all references to records being on file in the Office of the Recorder, Union County, Ohio, said 3.342 acre tract being more fully described herein;

COMMENCING at a MAG Nail found at the centerline intersection of Industrial Parkway (County Road 1) and Fladt Road (County Road 35), and being on the south line of Virginia Military Survey Number 3349 and the north line of Virginia Military Survey Number 419;

Thence North 49°11'56" West, a distance of 566.99 feet, with the centerline of said Industrial Parkway, to a MAG Nail found at a southeast corner of said 83.994 acre tract, being at the northeast corner of a 3.400 acre tract of land described in deed to The City of Marysville, Ohio of record in Official Record Volume 40, Page 323, and being the POINT OF BEGINNING;

Thence South 40°47'31" West, passing over a 1 inch iron pipe found at a distance of 29.97 feet for a total distance of 50.00 feet, with the southeast line of said 83.994 acre tract, and with the northwest line of said 3.400 acre tract, to an iron pin set;

Thence North 49°11'56" West, a distance of 2911.89 feet, crossing said 83.994, and crossing said 1.00 acre tract, to an iron pin set on the northwest line of said 1.00 acre tract, and being on the southeast line of an original 119.5 acre tract of land (Exhibit A) described in deed to Thomas V. Vollrath and Sarah L. Vollrath, Trustees of record in Instrument Number 202006100005496;

Thence North 41°23'59" East, a distance of 50.00 feet, with the northwest line of said 1.00 acre tract, and with the southeast line of said 119.5 acre tract, to a MAG Nail set at a northeast corner of said 1.00 acre tract, being at the southeast corner of said 119.5 acre tract, and being on the centerline of said Industrial Parkway;

Thence South 49°11'56" East, passing over a MAG Nail found at a distance of 208.64 feet, for a total distance of 2911.36 feet, with the northeast line of said 1.00 acre tract, with the northeast line of said 83.994 acre tract, and with the centerline of said Industrial Parkway, to the POINT OF BEGINNING, containing 3.342 acres, subject to all easements and documents of record. Which 0.096 of an acre lies within PID: 2700010220000 and within the City of Marysville, 0.144 of an acre lies within PID: 2700010220000, within the (P.R.O.) Present Road Occupied &

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

------

Millcreek Township, 1.241 acres lies within PID: 2700080170030 and within the City of Marysville, and 1.861 acres lies within PID: 2700080170030, within the (P.R.O.) Present Road Occupied & Millcreek Township.

Commonly known as: Sierra Marysville Sale, 12575 Industrial Parkway, Marysville, OH 43040 and 12863 Industrial Parkway, Marysville, OH 43040

Parcel Number (s): 27-0008017.0030, 27-0008017.0037 (Tax Abatement Parcel), AND 27-0001022-0000

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

------

<u>SCHEDULE 8.1</u>

<u>Organizational Chart of Borrower</u>

![image_0.jpg](image_0.jpg)

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

## Exhibit 21.1

**Exhibit 21.1**

**Sculptor Diversified Real Estate Income Trust, Inc.**

**List of Subsidiaries**

---

| | |
|:---|:---|
| **Subsidiary** | **Jurisdiction of Formation** |
| Sculptor Diversified REIT Operating Partnership LP | Delaware |
| CapGrow Holdings Member LLC | Delaware |
| CapGrow Holdings JV LLC | Delaware |
| CapGrow TRS LLC | Delaware |
| CapGrow Holdings JV SUB I LLC | Delaware |
| CapGrow Holdings JV SUB II LLC | Delaware |
| CapGrow Holdings JV SUB III LLC | Delaware |
| CapGrow Holdings JV SUB IV LLC | Delaware |
| CapGrow Holdings JV SUB V LLC | Delaware |
| CapGrow Holdings JV SUB VI LLC | Delaware |
| CapGrow Holdings JV SUB VII LLC | Delaware |
| CapGrow Holdings JV SUB VIII LLC | Delaware |
| CapGrow Holdings JV SUB IX LLC | Delaware |
| CapGrow Holdings JV SUB X LLC | Delaware |
| CapGrow Holdings JV SUB XI LLC | Delaware |
| CapGrow Sub I and Sub V SPE LLC | Delaware |
| CapGrow Sub III SPE LLC | Delaware |
| CapGrow Sub IV SPE LLC | Delaware |
| CapGrow Sub VI SPE LLC | Delaware |
| CapGrow Sub VIII SPE LLC | Delaware |
| CapGrow Sub IX SPE LLC | Delaware |
| CapGrow Partners LLC | Illinois |
| HMP Holdings LLC | Florida |
| MVP Resources LLC | Florida |
| 1213 Capital LLC | Florida |
| RE Fund I LLC | Illinois |
| RE Fund II LLC | Illinois |
| CapGrow LLC | Illinois |
| CapGrow Holdings JV Sub Commercial I LLC | Delaware |
| CapGrow Holdings JV Sub Commercial II LLC | Delaware |
| CapGrow Holdings JV Sub Commercial III LLC | Delaware |
| CapGrow Holdings JV Sub Commercial IV LLC | Delaware |
| SCVH Denton JV LLC | Delaware |
| CA Funding Lender V LLC | California |
| SCVH Denton Owner LLC | Delaware |
| SCVH Denton TRS LLC | Delaware |
| SCVH Denton Investor LLC | Delaware |
| 8650 Mount Elliott LLC | Delaware |
| CapGrow Holdings JV SUB Commercial V LLC | Delaware |
| CapGrow SUB XI SPE LLC | Delaware |
| CLNL Portfolio I Holdings LLC | Delaware |

---

------

**Exhibit 21.1**

---

| | |
|:---|:---|
| CLNL Portfolio I Investor LLC | Delaware |
| DTR Parking Holdings 1 Investor LLC | Delaware |
| HHP Pref Funding LLC | Delaware |
| HHP Senior Funding LLC | Delaware |
| HHP TRS LLC | Delaware |
| Marysville Holdings LLC | Delaware |
| Marysville Owner LLC | Delaware |
| PHC SD Funding LLC | Delaware |
| Sculptor Diversified REIT Holdings Sarl | Luxembourg |
| DTR Parking Holdings 1 LLC | Delaware |
| LPRI II Washington Square Garage, LLC | Connecticut |
| LPRI II Court Street Garage, LLC | Connecticut |
| TVREIT Preferred Investor LLC | Delaware |

---

## Exhibit 31.1

**Exhibit 31.1**

**CERTIFICATION**

**PURSUANT TO 17 CFR 240.13a-14**

**PROMULGATED UNDER**

**SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002**

I, Steven Orbuch, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.I have reviewed this annual report on Form 10-K of Sculptor Diversified Real Estate Income Trust, Inc.;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)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.

---

| | | | |
|:---|:---|:---|:---|
| | | **Sculptor Diversified Real Estate Income Trust, Inc.** | **Sculptor Diversified Real Estate Income Trust, Inc.** |
| Date: | March 30, 2026 | By: | /s/ Steven Orbuch |
|  |  |  | **Steven Orbuch** |
|  |  |  | Chief Executive Officer |

---

## Exhibit 31.2

**Exhibit 31.2**

**CERTIFICATION**

**PURSUANT TO 17 CFR 240.13a-14**

**PROMULGATED UNDER**

**SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002**

I, Ellen Conti, certify that:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.I have reviewed this annual report on Form 10-K of Sculptor Diversified Real Estate Income Trust, Inc.;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)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

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)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;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)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.

---

| | | | |
|:---|:---|:---|:---|
| | | **Sculptor Diversified Real Estate Income Trust, Inc.** | **Sculptor Diversified Real Estate Income Trust, Inc.** |
| Date: | March 30, 2026 | By: | /s/ Ellen Conti |
|  |  |  | **Ellen Conti** |
|  |  |  | Chief Financial Officer and Treasurer |

---

## Exhibit 32.1

**Exhibit 32.1**

**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 Annual Report of Sculptor Diversified Real Estate Income Trust, Inc. (the "<u>Company</u>") on Form 10-K for the period ended December 31, 2025 as filed with the Securities and Exchange Commission on the date hereof (the "<u>Report</u>"), I, Steven Orbuch, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

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

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

---

| | | | |
|:---|:---|:---|:---|
| Date: | March 30, 2026 | By: | /s/ Steven Orbuch |
|  |  |  | **Steven Orbuch** |
|  |  |  | Chief Executive Officer |

---

This certification accompanies each Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

A signed original of this written statement required by Section 906 has been provided by the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

## Exhibit 32.2

**Exhibit 32.2**

**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 Annual Report of Sculptor Diversified Real Estate Income Trust, Inc. (the "<u>Company</u>") on Form 10-K for the period ended December 31, 2025 as filed with the Securities and Exchange Commission on the date hereof (the "<u>Report</u>"), I, Ellen Conti, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

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

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

---

| | | | |
|:---|:---|:---|:---|
| Date: | March 30, 2026 | By: | /s/ Ellen Conti |
|  |  |  | **Ellen Conti** |
|  |  |  | Chief Financial Officer and Treasurer |

---

This certification accompanies each Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

A signed original of this written statement required by Section 906 has been provided by the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

## Exhibit 99.1

![](nationalmentorfy25audite001.jpg)

&nbsp;&nbsp;&nbsp;&nbsp;CONSOLIDATED FINANCIAL STATEMENTS National Mentor Holdings, Inc. As of and for the years ended September 30, 2025 and 2024 With Independent Auditor's Report

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![](nationalmentorfy25audite002.jpg)

National Mentor Holdings, Inc. Consolidated Financial Statements Contents Independent Auditor's Report .................................................................................................................................................. 1 Consolidated Balance Sheets .................................................................................................................................................... 3 Consolidated Statements of Operations .................................................................................................................................... 4 Consolidated Statements of Comprehensive Loss .................................................................................................................... 5 Consolidated Statements of Stockholders' Deficit .................................................................................................................... 6 Consolidated Statements of Cash Flows .................................................................................................................................. 7 Notes to Consolidated Financial Statements ............................................................................................................................ 9 Supplemental Consolidating Information (Unaudited) ............................................................................................................ 36

------

![](nationalmentorfy25audite003.jpg)

To the Board of Directors of National Mentor Holdings, Inc. Opinion We have audited the consolidated financial statements of National Mentor Holdings, Inc. and subsidiaries (the "Company"), which comprise the consolidated balance sheets as of September 30, 2025 and 2024, and the related consolidated statements of operations, comprehensive loss, stockholders' deficit, and cash flows for the years then ended, and the related notes to the consolidated financial statements (collectively referred to as the "financial statements"). In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as of September 30, 2025 and 2024, and the results of its operations and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America. Basis for Opinion We conducted our audits in accordance with auditing standards generally accepted in the United States of America (GAAS). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Company and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company's ability to continue as a going concern for one year after the date that the financial statements are issued. Auditor's Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with GAAS will always detect a material misstatement when it exists. The risk of not detecting a material Deloitte & Touche LLP 115 Federal Street Boston, Massachusetts 02110 USA Tel.: +1 617 437 2000 www.deloitte.com

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misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements. In performing an audit in accordance with GAAS, we: • Exercise professional judgment and maintain professional skepticism throughout the audit. • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control. Accordingly, no such opinion is expressed. • Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements. • Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company's ability to continue as a going concern for a reasonable period of time. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit. Disclaimer of Opinion on Supplementary Information Our audits were conducted for the purpose of forming an opinion on the financial statements as a whole. The supplementary information listed in the table of contents is presented for the purpose of additional analysis and is not a required part of the financial statements. This supplementary information is the responsibility of the Company's management. Such information has not been subjected to the auditing procedures applied in our audits of the financial statements and, accordingly it is inappropriate to and we do not express an opinion on the supplementary information referred to above. November 26, 2025

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National Mentor Holdings, Inc. Consolidated Balance Sheets (Amounts in thousands, except share amounts) As of September 30, 2025 2024 ASSETS Current Assets: Cash and cash equivalents $3,026 $7,346 Restricted cash 820 545 Accounts receivable, net 311,232 298,231 Prepaid expenses and other current assets 40,212 32,133 Assets held for sale 10,752 — Total current assets 366,042 338,255 Property and equipment, net 125,689 140,212 Intangible assets, net 582,240 666,250 Goodwill 611,504 617,151 Operating lease right-of-use assets 367,485 388,350 Finance lease right-of-use assets 34,738 26,366 Restricted cash 50,000 50,000 Other assets 77,345 66,698 Total assets $2,215,043 $2,293,282 LIABILITIES AND STOCKHOLDERS' DEFICIT Current Liabilities: Accounts payable $72,130 $58,416 Accrued payroll and related costs 175,622 138,643 Other accrued liabilities 130,168 104,080 Current operating lease liabilities 101,234 101,248 Current finance lease liabilities 9,150 5,556 Borrowings under revolving commitments — 1,030 Current portion of long-term debt 24,341 30,397 Liabilities to be disposed of 10,252 — Total current liabilities 522,897 439,370 Other long-term liabilities 166,024 138,415 Deferred tax liabilities, net 9,565 42,038 Operating lease liabilities, less current portion 292,057 308,334 Finance lease liabilities, less current portion 30,090 24,460 Long-term debt, less current portion 1,934,566 2,007,756 Other commitments and contingencies (Note 16) Stockholders' Deficit National Mentor Holdings, Inc. stockholders' deficit Common stock, $0.01 par value; 100 shares authorized, issued and outstanding at September 30, 2025 and 2024 — — Additional paid-in capital 44,439 42,587 Accumulated loss on derivatives, net of tax benefit of $0 and $413 at September 30, 2025 and 2024, respectively (2,608) (1,081) Accumulated deficit (776,816) (704,905) Total National Mentor Holdings, Inc. stockholders' deficit (734,985) (663,399) Noncontrolling interests (5,171) (3,692) Total stockholders' deficit (740,156) (667,091) Total liabilities and stockholders' deficit $2,215,043 $2,293,282 See accompanying notes to these consolidated financial statements. 3

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National Mentor Holdings, Inc. Consolidated Statements of Operations (Amounts in thousands) For the Year Ended September 30, 2025 For the Year Ended September 30, 2024 Net revenue $3,188,309 $3,034,176 Cost of revenue (exclusive of depreciation and amortization expense below) 2,576,645 2,468,197 Operating expenses: General and administrative 338,650 297,613 Depreciation and amortization 155,736 170,841 Loss on assets held for sale and divestitures 10,647 2,502 Total operating expenses 505,033 470,956 Income from operations 106,631 95,023 Other income (expense): Interest expense (186,170) (208,584) Other income, net 2,252 3,672 Loss before income taxes (77,287) (109,889) (Benefit from) provision for income taxes (3,897) 34,036 Net loss (73,390) (143,925) Less: Net loss attributable to noncontrolling interests (1,479) (1,774) Net loss attributable to National Mentor Holdings, Inc. $(71,911) $(142,151) See accompanying notes to these consolidated financial statements. 4

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National Mentor Holdings, Inc. Consolidated Statements of Comprehensive Loss (Amounts in thousands) For the Year Ended September 30, 2025 For the Year Ended September 30, 2024 Net loss $(73,390) $(143,925) Other comprehensive loss, net of tax: Unrealized loss on derivative instrument classified as cash flow hedge, net of tax benefit of $23 and $1,109 for the years ended September 30, 2025 and 2024, respectively (645) (2,908) Realized gain on derivative instruments reclassified out of Other comprehensive loss into net loss, net of tax benefit (expense) of $435 and ($538) for the years ended September 30, 2025 and 2024, respectively (882) (1,410) Comprehensive loss (74,917) (148,243) Less: Comprehensive loss attributable to noncontrolling interests (1,479) (1,774) Comprehensive loss attributable to National Mentor Holdings, Inc. $(73,438) $(146,469) See accompanying notes to these consolidated financial statements. 5

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National Mentor Holdings, Inc. Consolidated Statements of Stockholders' Deficit (Amounts in thousands, except share amounts) National Mentor Holdings, Inc. Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Loss Accumulated Deficit Noncontrolling Interests Total Stockholders' DeficitShares Amount Balance at October 1, 2023 100 $— $43,652 $3,237 $(562,754) $(1,918) $(517,783) Dividends to Parent — — (4,782) — — — (4,782) Stock-based compensation — — 3,717 — — — 3,717 Other comprehensive loss, net of tax — — — (4,318) — — (4,318) Net loss — — — — (142,151) (1,774) (143,925) Balance at September 30, 2024 100 — 42,587 (1,081) (704,905) (3,692) (667,091) Dividends to Parent — — (492) — — — (492) Stock-based compensation — — 2,344 — — — 2,344 Other comprehensive loss, net of tax — — — (1,527) — — (1,527) Net loss — — — — (71,911) (1,479) (73,390) Balance at September 30, 2025 100 $— $44,439 $(2,608) $(776,816) $(5,171) $(740,156) See accompanying notes to these consolidated financial statements. 6

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National Mentor Holdings, Inc. Consolidated Statements of Cash Flows (Amounts in thousands) For the Year Ended September 30, 2025 For the Year Ended September 30, 2024 Cash Flows from operating activities: Net loss $(73,390) $(143,925) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 155,736 170,691 Amortization of original issue discount and financing costs 4,277 4,242 Non-cash operating lease expense 106,907 108,895 Stock-based compensation expense 2,344 3,717 Deferred income taxes (32,886) 3,618 Loss on assets held for sale and divestitures 10,647 2,502 Other non-cash transactions (375) — Loss (gain) on derivative financial instruments 1,577 (1,947) Net change in fair value of contingent liabilities — (650) Changes in operating assets and liabilities, net of acquisitions: Accounts receivable (13,506) 15,306 Other assets (18,777) (7,719) Accounts payable 13,291 (2,619) Accrued payroll and related costs 36,979 12,869 Other accrued liabilities 23,661 792 Other long-term liabilities 27,608 10,155 Obligations under operating leases (102,078) (100,418) Net cash provided by operating activities 142,015 75,509 Cash Flows from investing activities: Acquisition of businesses, net of cash acquired (6,102) — Purchases of property and equipment (49,027) (39,854) Proceeds from sale of property and equipment 831 744 Net cash used in investing activities (54,298) (39,110) Cash Flows from financing activities: Issuance of long term-debt — 1,144 Repayments of long-term debt (30,499) (35,088) Dividends to Parent (492) (4,782) Proceeds from borrowings under revolving commitments 1,143,400 1,069,333 Repayments of borrowings under revolving commitments (1,196,445) (1,101,210) Repayments of finance lease liabilities (7,502) (3,755) Cash paid for earn-out obligations (200) (200) Payments of deferred financing costs (24) (537) Net cash used in financing activities (91,762) (75,095) Net decrease in cash, cash equivalents, and restricted cash (4,045) (38,696) Cash, cash equivalents, and restricted cash at beginning of period 57,891 96,587 Cash, cash equivalents, and restricted cash at end of period $53,846 $57,891 7

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Reconciliation of cash, cash equivalents, and restricted cash to the consolidated balance sheets Cash and cash equivalents $3,026 $7,346 Restricted cash, current 820 545 Restricted cash, noncurrent 50,000 50,000 Total cash, cash equivalents, and restricted cash $53,846 $57,891 Supplemental disclosure of cash flow information Cash paid for interest $180,099 $196,765 Cash paid for income taxes, net $29,182 $28,793 Supplemental disclosure of non-cash investing activities: Accrued property and equipment $2,505 $2,082 Right-of-use assets obtained in exchange for operating lease liabilities $100,581 $87,225 Right-of-use assets obtained in exchange for finance lease liabilities $17,998 $18,457 See accompanying notes to these consolidated financial statements. 8

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National Mentor Holdings, Inc. Notes to Consolidated Financial Statements As of and for the year ended September 30, 2025 1. Business Overview National Mentor Holdings, Inc., through its wholly-owned subsidiaries (collectively, the "Company" or "NMHI"), is a leading provider of home-based and community-based health and human services to adults and children with intellectual and/or developmental disabilities ("I/DD"), acquired brain injury and other catastrophic injuries and illnesses; to youth with emotional, behavioral and/or medically complex challenges; and to other individuals who may require care across a lifetime. Since the Company's founding in 1980, the Company has evolved into a diversified national network providing an array of high-quality services and care in large, growing and highly-fragmented markets. The Company provides services to the individuals above in order to support their independence. During the month ended September 30, 2025, the Company operated in 40 states, and was serving an average of approximately 17,000 individuals in residential settings and an average of approximately 26,900 individuals in non-residential settings. The Company designs customized service plans to meet the individual needs of those served by the Company, which it delivers in home-based and community-based settings. Most of the Company's service plans involve various supports, typically in small group homes, host home settings, or specialized community facilities, designed to improve the quality of life of the individuals served by the Company and to promote their independence and participation in community life. Other services offered include supported living, day and transitional programs, vocational services, case management, family-based and outpatient therapeutic services, post-acute treatment and neurorehabilitation, neurobehavioral rehabilitation and physical, occupational and speech therapies, among others. The Company's customized service plans offer individuals as well as the payors of these services, an attractive, cost-effective alternative to health and human services provided in large, institutional settings. On October 1, 2024, the Company reorganized its operating divisions in order to align the business with the three distinct populations that the Company serves: (1) adults needing sustained physical or psychosocial support, (2) individuals living with a traumatic brain injury, and (3) children needing behavioral health support and therapeutic foster care. The reorganization resulted in a decrease from four to three operating divisions. The three new operating divisions are (1) Community Services ("CS"), which is a combination of the former CS and Sevita Connected Care ("SCC") operating divisions, (2) NeuroRestorative ("Neuro"), which consists of the former Neuro operating division, less the portion of the former Neuro operating division which served pediatrics, and (3) Pediatrics ("Peds") which is a combination of the operating division formerly referred to as Children & Family Services ("CFS"), as well as the pediatrics portion of the former Neuro operating division. The operating divisions are organized by service line and each group markets their services under various tradenames, including The MENTOR Network, MENTOR, REM, and NeuroRestorative, among others. In addition to these sub-brands, the Company operates under the corporate brand, Sevita. Merger and Related Transactions On March 8, 2019, Civitas Solutions, Inc., the parent of NMHI, entered into a merger agreement (the "Merger"), dated as of December 18, 2018, by and among Civitas, Celtic Intermediate Corp., an affiliate of Centerbridge Partners, L.P. ("Parent"), and Celtic Tier II Corp., a wholly-owned subsidiary of Parent ("Merger Sub"). In connection with the Merger and as a result of a series of downstream mergers, NMHI became a direct, wholly-owned subsidiary of Parent and successor to Civitas. All the outstanding shares of Celtic Intermediate Corp. are owned by Celtic Holdings CB, L.P. Recapitalization Transaction On November 12, 2021, affiliates of Parent, Vistria Group ("Vistria"), and Ascension Ventures ("Ascension") and Celtic Holdings CB, L.P., entered into a Unit Purchase Agreement (the "Unit Agreement") with affiliates of Madison Dearborn Capital Partners ("MDP"). Pursuant to the Unit Agreement, affiliates of Parent, Vistria, and Ascension and Celtic Holdings CB, 9

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L.P. agreed to sell a portion of their Class A Units, and MDP agreed to purchase, a 25% stake of Celtic Holdings CB, L.P. Class A Units. The Unit Agreement was subject to several closing conditions, including the consummation of the Continuation Fund Transaction Closing which occurred on May 6, 2022, pursuant to which the Class A Units of Celtic Holdings CB, L.P. was acquired by a continuation fund vehicle managed and controlled directly or indirectly by Parent (the "Recapitalization Transaction"). In connection with the Recapitalization Transaction, affiliates of Parent, Vistria, MDP, and Finback Investment Partners ("Finback") purchased Class A-1 Units. Additionally, all outstanding Class B Units issued under the 2019 Unit Incentive Plan were repurchased, with those individuals able to reinvest a portion of their proceeds into Class A-2 Units. Res-Care Community Living Acquisition On January 17, 2025, the Company entered into a definitive agreement (the "Agreement") to purchase the Community Living business of BrightSpring Health Services, Inc. ("BrightSpring") for $835.0 million in cash consideration, subject to customary adjustments, including working capital adjustments (the "Acquisition"). The Community Living business, also known as Res-Care Community Living, consists of home and community based waiver programs, intermediate care facilities, supported living, and other supports and services provided to individuals with I/DD. The Acquisition is subject to certain customary closing conditions, including approval of federal and state antitrust statutes. The Agreement contains customary representations and warranties made by BrightSpring and the Company, all of which terminate at the closing. The Company has obtained a representation and warranty insurance policy to provide coverage for breaches of representation and warranties of BrightSpring, which is subject to certain exclusions, deductibles and other terms and conditions set forth herein. The parties have also agreed to comply with certain operating covenants during the interim period between the date of the Agreement and the date of the closing of the Acquisition, including agreeing not to incur or guarantee additional indebtedness, enter into any merger with another party, make any material change in financial or accounting methods. The Agreement provides that, for five years following the closing of the Acquisition, BrightSpring and their respect affiliates will not engage in a business that is competitive with the Community Living business. In addition, for two years following the closing of the Acquisition, BrightSpring and its affiliates will not hire nor solicit customers, suppliers, or business relations of the Community Living business. The Agreement provides that at closing, and as a condition to the closing obligations of the parties, the parties and/or their affiliates will enter into certain ancillary agreements, including (a) a transition services agreement, pursuant to which, among other things BrightSpring will provide certain operational transitional services to the Company for a period of time after the closing, and (ii) a management agreement, in order to provide for continuity of operations of the Community Living business and to support the orderly transfer of the applicable permits to operate. The Agreement contains certain termination rights, including if the closing has not occurred by January 17, 2026. The Agreement provides that upon termination of the Agreement under specified circumstances, the Company will be required to pay a $35.0 million termination fee in cash, provided that in the event that the Agreement is terminated by either BrightSpring or the Company as a result of certain antitrust approvals not being obtained, the Company will be required to pay a termination fee of $40.0 million. In connection with the Acquisition, the Company has obtained the commitment of Goldman Sachs Bank USA ("GS") and Barclays Bank PLC ("Barclays") to provide an Incremental Term Facility in the amount of $740.0 million. The proceeds of the Incremental Term Loan may be used to fund the purchase price agreed upon pursuant to the terms of the Agreement. The commitment of the lenders to provide the Incremental Term Loan will expire on January 17, 2026. In addition to the commitment of GS and Barclays, the Company has also obtained a commitment by an affiliate of Parent to contribute an amount equal to $97.1 million in cash (or such lesser amount as set forth in the equity commitment letter) in exchange for additional equity to partially fund and close the Acquisition. Similarly, the Company has also obtained a commitment by an affiliate of MDP, to contribute an amount equal to $37.4 million in cash (or such lesser amount as set forth in the equity commitment letter) in exchange for equity to partially fund and close the Acquisition. The commitments of Parent and MDP will expire upon the earliest to occur of the (a) the termination of the Agreement, (b) the termination of the other's equity commitment, and (c) the Closing of the Acquisition. 10

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2. Significant Accounting Policies Basis of Presentation Principles of Consolidation The consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries, and any partially owned entities over which the Company has a controlling financial interest. Intercompany accounts and transactions between the Company and its subsidiaries have been eliminated in consolidation. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Adoption of New Accounting Pronouncements Business Combinations— In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. This update amends ASC 805 to add contract assets and contract liabilities to the list of exceptions to the recognition and measurement principles that apply to business combinations and to require that an entity recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC 606. As a result of the amendments made by ASU No. 2021-08, it is expected that an acquirer will generally recognize and measure acquired contract assets and contract liabilities in a manner consistent with how the acquiree recognized and measured them in its preacquisition financial statements. The update provides certain practical expedients related to circumstances in which (a) the acquirer has to assess long-term, complex contracts that may have been previously modified or (b) the acquirer is unable to assess or rely on the acquiree's accounting under Topic 606. The Company adopted this guidance on October 1, 2024. It did not have a material impact on the consolidated financial statements. Fair Value Measurements The accounting standard for fair value measurements defines fair value, establishes a framework for measuring fair value in accordance with U.S. GAAP, and requires detailed disclosures about fair value measurements. Under this standard, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The valuation techniques are based on observable and unobservable inputs. Observable inputs reflect readily obtainable data from independent sources, while unobservable inputs reflect certain market assumptions. This standard classifies these inputs into the following hierarchy: Level 1 Inputs - Quoted prices for identical instruments in active markets. Level 2 Inputs - Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable. Level 3 Inputs - Instruments with primarily unobservable value drivers. The fair value hierarchy level is determined by asset class based on the lowest level of significant input. In periods of market inactivity, the observability of prices and inputs may be reduced for certain instruments. This condition could cause an instrument to be reclassified between levels. 11

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Cash Equivalents The Company considers short-term investments with maturity dates of 90 days or less at the date of purchase to be cash equivalents. Cash equivalents consist of money market funds. Restricted Cash Restricted cash consists of a cash collateral account set up to support the issuance of letters of credit under the Company's term letter of credit facility and funds provided from government payors restricted for use by individuals served by the Company. Concentrations of Credit and Other Risks Financial instruments that potentially subject the Company to credit risk primarily consist of cash and cash equivalents, self-insurance receivables and accounts receivable. Cash and cash equivalents are deposited with federally insured commercial banks in the United States, which at times may exceed federally insured limits of $250 thousand for each financial institution. The Company has not experienced any losses in such accounts. As of September 30, 2025 and 2024, our accounts exceeded federally insured limits by $2.5 million and $6.6 million, respectively. The Company derived approximately 86% and 87% of its revenue from state and local government payors for the years ended September 30, 2025 and 2024, respectively. These entities fund a significant portion of their payments to the Company through federal matching funds, which pass through various state and local government agencies. Of the 40 states the Company operates in, Minnesota is the largest state and generates revenue from contracts with state and local governmental payors which accounted for approximately 13% and 14% of the Company's net revenue for the years ended September 30, 2025 and 2024, respectively. No other state governments accounted for 10% or more of the Company's net revenue during the years ended September 30, 2025 or 2024. As of the years ended September 30, 2025 and 2024, the Company's accounts receivable by payor type was as follows: September 30, 2025 September 30, 2024 State and local government 79.4% 81.6% Non-public 16.9% 14.5% Individual 3.7% 3.9% Total Accounts receivable 100.0% 100.0% Revenue Recognition The Company derives revenue at the amounts that reflect the consideration to which the Company expects to be entitled in exchange for providing care to individuals. These amounts are due from individuals, state and local government agencies and programs, as well as non-public payors, and they include explicit and implicit price concessions as well as variable consideration from retroactive revenue adjustments due to settlement of audits, reviews, and investigations. Revenue is recognized as performance obligations are satisfied. The Company has four types of contractual arrangements with payors which include negotiated contracts, fixed fee contracts, retrospective reimbursement contracts and prospective payment contracts. Under the Company's units-of-service contracts, which include negotiated contracts and fixed fee contracts, revenue is recognized at the time the service is performed. Under the Company's cost reimbursement contracts, which include retrospective reimbursement contracts and prospective payment contracts, revenue is recognized at the time the service costs are incurred. For the Company's cost- reimbursement contracts, the rate provided by the payor is based on a certain level of service and types of costs incurred in delivering the service. From time to time, the Company receives payments under cost-reimbursement contracts in excess of the 12

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allowable costs required to support those payments. In such instances, the Company estimates and records a liability for such excess payments. At the end of the contract period, any balance of excess payments is maintained as a liability until it is reimbursed to the payor or until the Company has exhausted efforts to make the reimbursement. Future revenues may be affected by changes in rate-setting structures, methodologies or interpretations that are enacted in states where the Company operates or by the federal government. The Company determines the transaction price based on standard billing rates for services provided, reduced by contractual adjustments provided to third party payors, discounts to uninsured individuals, implicit price concessions, and state provider taxes or gross receipts taxes levied on services the Company provides. The payment terms and rates of contracts vary by jurisdiction and service type. The Company uses the expected value method in determining the variable component that should be used to arrive at the transaction price, using contractual agreements, historical experience, and recent developments in payment trends. The amount of variable consideration which is included in the transaction price may be constrained, and is included in Net revenue only to the extent that it is probable that a significant reversal in the amount of the cumulative revenue recognized will not occur in a future period. Subsequent changes to the estimate of the transaction price are recorded as adjustments to Net revenue in the period such changes become known. The Company recognizes incremental costs of obtaining a contract with amortization periods of one year or less as expense when incurred. These costs are infrequent and have historically been immaterial. Included within the Company's consolidated balance sheets are contract asset balances, comprised of the amounts related to services provided to individuals for which they have not been billed and that do not meet the conditions of unconditional right to payment at the end of the reporting period, as well as contract liabilities which primarily represent payments the Company receives in advance of performance obligations being met to recognize revenue. The Company had no material contract assets during the years ended September 30, 2025 and 2024 and its contract liability balance consisted of deferred revenue, which is recorded within Other accrued liabilities, see Note 8. Cost of Revenue The Company classifies expenses directly related to providing services as cost of revenue, except for depreciation and amortization related to cost of revenue, which are shown separately in the consolidated statements of operations. Direct costs and expenses principally include salaries and benefits for service provider employees, per diem payments to independently contracted host-home caregivers ("Mentors"), residential occupancy expenses, which are primarily composed of rent, utilities and maintenance related to facilities providing direct care, certain expenses, such as food and medicine and transportation costs for individuals requiring services, professional and general liability expense, employment practices liability expense and workers' compensation expense. Property and Equipment Property and equipment are recorded at cost and are depreciated using a straight-line method when placed into service, based on their estimated useful lives as follows: Asset Description Estimated Useful Life (in years) Land Indefinite Building 30 Building improvements 10 or 30 Leasehold improvements Not to exceed 7 years or length of lease Vehicles 5 Computer hardware and software 3-5 Furniture, fixtures and equipment 3-5 13

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Expenditures for maintenance and repairs are charged to operating expenses as incurred. When assets are sold or retired, the corresponding cost and accumulated depreciation are removed from the related accounts and any gain or loss is recorded in the period of the sale or retirement. Accounts Receivable Accounts receivable primarily consist of amounts due from various state and local government agencies and non- public payors including commercial insurers and private consumers, net of estimates for variable consideration. Allowance for expected credit losses reflects the Company's best estimate of probable losses inherent in the accounts receivable balance. The Company's accounts receivable balance as of October 1, 2023 was $313.5 million. The Company estimates its expected credit losses under ASC Topic 326, Financial Instruments – Credit Losses, by considering its incurred loss experience and adjusts for known and expected events and other circumstances that management believes are relevant in assessing the collectability of its accounts receivable. The Company's historical credit losses have been infrequent and immaterial largely because the Company's accounts receivable are typically paid for by highly-solvent, creditworthy payors, such as Medicaid, other governmental programs, and highly-regulated commercial insurers, on behalf of the individual. Because of the infrequent and insignificant nature of the Company's historical credit losses, forecasts of expected credit losses are generally unnecessary. Expected credit losses are recognized by the Company through an allowance for credit losses and related credit loss expense. The Company completed its expected loss assessment for accounts receivable which resulted in no credit loss allowance as of September 30, 2025 and 2024. Goodwill The Company reviews costs of purchased businesses in excess of the fair value of net assets acquired (goodwill) for impairment at least annually. The Company conducts its annual impairment test for goodwill on July 1st of each year. The Company may first assess qualitative factors to determine if it is more likely than not (i.e., a likelihood of more than 50%) that the fair value of a reporting unit is less than its carrying amount, including goodwill. If the Company determines that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, no further testing is necessary. If, however, the Company determines that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the Company performs the quantitative goodwill impairment test. The initial assessment of qualitative factors is optional and at the Company's discretion. The Company may bypass the qualitative assessment for any reporting unit in any period. The quantitative goodwill impairment test consists of a comparison of each reporting unit's fair value to its carrying value. The fair value of the reporting unit is determined by using the income approach, specifically the discounted cash flow method, and the market approach. As described above, the fair value of a reporting unit and intangible asset is, in part, based on discounted estimated future cash flows. The assumptions used to estimate fair value include management's best estimates of future operating cash flows, including revenue growth, margins, and discount rates. As such, actual results may differ from these estimates. Impairment of Long-Lived Tangible and Intangible Assets The Company reviews long-lived tangible and intangible assets for impairment when events or circumstances have occurred that indicate the estimated useful life of these assets may warrant revision or that the carrying amount of these assets may be impaired. If indicators of impairment exist, the Company determines whether or not the carrying amount of these assets is recoverable by comparing the estimated undiscounted future cash flows for the estimated remaining useful life to the 14

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carrying value. If the carrying amount of the asset is determined to not be recoverable, an impairment is recognized based on the excess of the carrying amount of the asset over its fair value. Assets Held for Sale The Company classifies long-lived assets, or disposal groups comprised of assets and liabilities, as held for sale in the period in which the following six criteria are met; (i) management, having the authority to approve the action, commits to a plan to sell the property; (ii) the property is available for immediate sale in its present condition, subject only to terms that are usual and customary; (iii) an active program to locate a buyer and other actions required to complete the plan to sell have been initiated; (iv) the sale of the property is probable and is expected to be completed within one year; (v) the property is being actively marketed for sale at a price that is reasonable in relation to its current fair value; and (vi) actions necessary to complete the plan of sale indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. The long lived assets, or disposal groups assets and liabilities, classified as held for sale are recorded at the lower of its carrying amount or estimated fair value less cost to sell. If the carrying amount exceeds the estimated fair value less cost to sell, a loss is recognized. Long lived assets, or a disposal group comprised of assets and liabilities, are presented separately on the balance sheet in the period in which they are classified as held for sale. Income Taxes The Company accounts for income taxes using the asset and liability method. Under this method, deferred tax assets and liabilities are determined by multiplying the differences between the financial reporting and tax reporting bases for assets and liabilities by the enacted tax rates expected to be in effect when such differences are recovered or settled. Valuation allowances on deferred tax assets are estimated based on the Company's assessment of the realizability of such amounts. The Company recognizes the benefits of tax positions when certain criteria are satisfied. The Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon settlement. The Company recognizes interest and penalties related to uncertain tax positions as a component of income tax expense. Derivative Financial Instruments The Company, from time to time, enters into interest rate derivative agreements to hedge against variability in cash flows resulting from fluctuations in the benchmark interest rate on the Company's debt. Derivative financial instruments are recorded on the balance sheet at fair value, representing the price that would be paid to transfer the liability in an orderly transaction between market participants, and was determined based on pricing models and independent formulas using current assumptions. The Company establishes criteria for designation and effectiveness of hedging relationships. Changes in the fair value of derivatives are recorded each period in current operations or in the consolidated statements of comprehensive loss depending upon whether the derivative is designated as part of a hedge transaction and, if it is, the type of hedge transaction. For agreements designated as a cash flow hedge, the change in fair value was recorded as an adjustment to unrealized gain (loss) on derivative instrument within the consolidated statements of comprehensive loss. For agreements that are not designated as a cash flow hedge, prospective mark to market adjustments are recognized in interest expense in the consolidated statements of operations and accumulated mark to market adjustments as of the date the cash flow hedge was de- designated are amortized and recognized in interest expense over the term of the agreement. Stock-Based Compensation Stock-based compensation is based on the estimated grant-date fair value of the award and is recognized using an accelerated attribution model over the grantee's requisite service period. Stock-based compensation is recorded in General and 15

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administrative expenses in the consolidated statements of operations based on the classification of the grantee. The Company's equity awards generally consist of incentive units that are subject to various service, market, and performance conditions. The fair value of each award is estimated using a Monte Carlo pricing model or a Black-Scholes option-pricing model. For awards that include a performance condition contingent upon a change of control (as defined in the applicable agreement), no stock- based compensation expense is recognized in the consolidated statements of operations until a change of control occurs. Forfeitures are accounted for as they occur. See Note 19, Stock-Based Compensation for additional disclosures. Self-Insurance The Company maintains insurance for professional and general liability, workers' compensation, automobile liability and health insurance with policies that include self-insured retentions. Employment practices liability is fully self- insured. The Company records expenses related to claims on an incurred basis, which includes estimates of fully developed losses for both reported and unreported claims. The accruals for the health, workers' compensation, automobile, employment practices liability (with the exception of employee-related class action lawsuits which represent legal contingencies), and professional and general liability programs are based on reports by independent third party actuaries. Accruals are periodically reevaluated and increased or decreased based on new information. The Company records its insurance liabilities on a gross basis without giving effect to insurance recoveries. Insurance recovery receivables are recorded in Prepaid expenses and other current assets and Other assets in the consolidated balance sheets. Self-insured liabilities are presented in Accrued payroll and related costs, Other accrued liabilities and Other long-term liabilities on the Company's consolidated balance sheets. Insurance liabilities related to claims that existed as of March 8, 2019 are accounted for at fair value and remeasured on a recurring basis. See Note 13, Fair Value Measurements for additional disclosures. Legal Contingencies The Company reserves for costs related to contingencies when a loss is probable and the amount is reasonably estimable or a range of loss can be determined. These accruals represent management's best estimate of probable loss. Disclosure is also provided when it is reasonably possible that a loss will be incurred, when it is reasonably possible that the amount of loss will exceed the recorded provision, or when it is probable that a loss will be incurred that is not reasonably estimable. Significant judgment is required in both the determination of probability and the determination as to whether an exposure is reasonably estimable. Because of uncertainties related to these matters, accruals are based only on the best information available at the time. As additional information becomes available, the Company reassesses the potential liability related to pending claims and litigation and may revise its estimates. These revisions in the estimates of the probable liabilities could have a material impact on the consolidated results of operations and consolidated balance sheets. Leases The Company accounts for leases in accordance with ASC Topic 842, Leases. The Company determines whether a contract is or contains a lease at contract inception. If a contract is or contains a lease, the Company determines the appropriate classification at lease commencement. Lease commencement is the date on which the underlying asset is made available for use. Generally, the lease term is the noncancellable term, excluding any optional extension terms if the Company is not reasonably certain to exercise such options. Considerations made when assessing whether the Company is reasonably certain to exercise an extension option include the contractual terms and conditions for the option periods and costs relating to the termination of the lease, among others. The Company applies the short-term lease exception for its non-real estate leases and therefore does not recognize lease liabilities and right-of-use assets for those non-real estate leases with original lease terms of 12 months or less. Lease liabilities represent the Company's obligation to make lease payments over the lease term. Lease liabilities are measured as the present value of the lease payments over the remaining lease term. The Company does not separate lease 16

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and nonlease components when determining the lease payments to use in measuring its lease liabilities. Payments for nonlease components are generally variable and therefore are excluded from the measurement of lease liabilities. Security deposits are generally refundable and therefore are excluded from the measurement of lease liabilities as they represent collateral to the lessor rather than consideration under the lease. The Company uses incremental borrowing rates, determined at lease commencement, to measure its lease liabilities as interest rates implicit in its leases are generally not readily determinable. The incremental borrowing rate represents the interest rate at which the Company could borrow a fully collateralized amount equal to the lease payments over a similar term in a similar economic environment. Right-of-use assets represent the Company's right to use an underlying asset over the lease term. A right-of-use asset is initially calculated as the lease liability, plus initial direct costs and prepaid lease payments, less any incentives received. The Company remeasures right-of-use assets and lease liabilities when a lease is modified and the modification is not accounted for as a separate contract. The Company assesses its right-of-use assets for impairment consistent with its impairment process for long-lived tangible assets. 3. Recent Accounting Pronouncements Income Taxes— In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This update establishes new income tax disclosure requirements in addition to modifying and eliminating certain existing requirements. Under the new guidance, private entities are required to qualitatively disclose the nature and effect of the specific categories of reconciling items as well as individual jurisdictions that result in a significant difference between the statutory tax rate and the effective tax rate. The update is effective for the Company on October 1, 2026. 4. Government Assistance In March 2021, the American Rescue Plan Act ("ARPA") was enacted and authorized an additional $1.9 trillion in federal spending to address the COVID-19 public health emergency, and contained several provisions designed to increase coverage of certain healthcare services, expand eligibility and benefits, and incentivize state Medicaid expansion. The Company accounts for government grants by analogizing to the grant model in accordance with International Accounting Standard ("IAS") 20, Accounting for Government Grants and Disclosure of Government Assistance, and as such, has recognized income from grants in line with the recognition of expenses or the loss of revenues for which the grants are intended to compensate. For the years ended September 30, 2025 and 2024, the Company recognized Net revenue of $20.9 million and $28.9 million, respectively, from state and local governments in response to the impact of COVID-19. As of September 30, 2025 and 2024, $1.0 million and $17.5 million, respectively, of payments received from payors for COVID-19 reimbursements have been recorded as Other accrued liabilities in the consolidated balance sheet and will be recognized to Net revenue as expenses are incurred on behalf of the payor or reversed once paid back to the payor. For the years ended September 30, 2025 and 2024, there were no amounts repaid to the payor. 5. Business Combinations The operating results of the businesses acquired are included in the consolidated statements of operations from the date of acquisition. The Company accounted for these acquisitions under the acquisition method and, as a result, the purchase price was allocated to the assets acquired and liabilities assumed based upon their respective fair values. The excess of the purchase price over the estimated fair value of net tangible assets was allocated to specifically identified intangible assets, with the residual being allocated to goodwill. 17

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Fiscal 2025 Acquisitions During the year ended September 30, 2025, the Company acquired the assets of four companies for total consideration of $6.1 million. The Company recorded $4.1 million of identifiable intangible assets consisting of agency contracts with a weighted average useful life of 9 years and $1.1 million of tangible assets, consisting primarily of property and equipment. The Company also recorded $1.3 million of goodwill, which is expected to be deductible for tax purposes. As a result of one acquisition, the Company recorded a bargain purchase gain of $0.4 million which is included in General and administrative expenses on the consolidated statement of operations. Fiscal 2024 Acquisitions There were no acquisitions during the year ended September 30, 2024. 6. Goodwill and Intangible Assets Goodwill Annual Goodwill Impairment Testing The Company completes the annual testing of impairment for goodwill on July 1st. In addition to its annual test, the Company evaluates at fiscal year-end whether events or circumstances have occurred that may indicate a potential impairment of these assets. A number of significant assumptions and estimates are involved in the application of the income approach to forecast operating cash flows, including revenue growth, margins, and discount rate changes. These inputs are not observable in the market and represent Level 3 inputs within the fair value hierarchy. Cash flow forecasts are based on business unit operating plans and historical experience. The income approach is sensitive to changes in terminal growth rates and the discount rate. The discount rate was selected based on the estimated rate of return as well as the time value of money. Under the market approach, the fair value of each reporting unit is estimated by comparing the business to either similar transactions or similar businesses, or guideline public companies whose securities are actively traded in public markets. Significant estimates and assumptions used in the market approach include the selection of appropriate guideline companies and the determination of appropriate valuation multiples to apply to the reporting unit. As of July 1, 2025 and 2024, the Company conducted Step 1 of the annual goodwill impairment test, which indicated that the fair value of each reporting unit exceeded its carrying value, except for the impairment described below related to the Company's joint venture. The changes in goodwill for the years ended September 30, 2025 and 2024 are as follows (in thousands): Balance as of September 30, 2023 $621,975 Impairment (1) (4,824) Balance as of September 30, 2024 617,151 Goodwill acquired through acquisitions 1,264 Impairment (2) (6,911) Balance as of September 30, 2025 $611,504 (1) The Company recognized an impairment charge for the amount by which the carrying amount exceeded the fair value for the reporting unit that consists of the Company's joint venture. The fair value of the reporting unit was determined by using the income approach, specifically the discounted cash flow method. The joint venture is consolidated into the Company's consolidated financial statements due to a controlling financial interest in the joint venture. The impairment was recorded in Depreciation and amortization on the consolidated statement of operations for the year ended September 30, 2024. The impairment was attributable to a reduction in the amount and change in timing of the cash flow projections associated with the business. 18

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(2) The Company recognized a goodwill impairment charge of $6.9 million in connection with certain held for sale assets associated with the Acquisition. See discussion below. In connection with the reorganization, on October 1, 2024, the Company reassessed its reporting units and reallocated goodwill from the reporting units that existed prior to the change to the new reporting units, using a relative fair value approach. Intangible Assets Intangible assets consist of the following as of September 30, 2025 (in thousands): Description Weighted Average Remaining Life Gross Carrying Value Accumulated Amortization Intangible Assets, Net Agency contracts 7 years $1,054,575 $473,857 $580,718 Non-compete/non-solicit agreements 2 years 1,444 988 456 Licenses and permits 7 years 1,982 916 1,066 $1,058,001 $475,761 $582,240 Intangible assets consist of the following as of September 30, 2024 (in thousands): Description Weighted Average Remaining Life Gross Carrying Value Accumulated Amortization Intangible Assets, Net Agency contracts 8 years $1,053,308 $389,770 $663,538 Non-compete/non-solicit agreements 2 years 1,907 1,141 766 Trade names 1 year 17,221 16,496 725 Licenses and permits 8 years 1,982 761 1,221 $1,074,418 $408,168 $666,250 For the years ended September 30, 2025 and 2024, amortization expense was $86.9 million and $94.4 million, respectively. Long-Lived Asset Impairment Testing The Company reviews long-lived tangible and intangible assets for impairment when events or circumstances have occurred that indicate the estimated useful life of these assets may warrant revision or that the carrying amount of these assets may be impaired. During the years ended September 30, 2025 and 2024, the Company concluded that there were no triggering events that resulted in an impairment associated with long-lived assets, except for certain assets that have been classified as held for sale. In connection with the regulatory approval process of the Acquisition, the Company is required to sell certain programs within the CS operating division. The sale of these programs is expected to close in the first half of fiscal 2026. The Company has categorized the associated long-lived assets and liabilities of these programs as held for sale. The programs are not reported as discontinued operations because the disposition does not represent a strategic shift. The difference between the carrying value of these assets and the estimated fair value less costs to sell resulted in the recognition of a $9.2 million loss, which is included in Loss on assets held for sale and divestitures in the consolidated statement of operations for the year ended September 30, 2025. The fair value measurement was based on significant inputs not observable in the market, which represent Level 3 inputs within the fair value hierarchy 19

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The estimated remaining amortization expense related to intangible assets with finite lives for each of the five succeeding years and thereafter is as follows: Year Ending September 30, (In thousands) 2026 $85,581 2027 85,460 2028 85,293 2029 85,293 2030 84,443 Thereafter 156,170 $582,240 7. Property and Equipment Property and equipment consists of the following as of September 30 (in thousands): 2025 2024 Buildings, building improvements and land $19,462 $19,555 Vehicles 92,353 100,214 Computer hardware and software 25,011 30,612 Leasehold improvements 195,272 183,790 Furniture and fixtures 24,698 28,575 Office and telecommunication equipment 6,258 8,797 Software for internal use 47,901 39,495 Construction in progress 7,058 7,237 418,013 418,275 Less accumulated depreciation (292,324) (278,063) Property and equipment, net $125,689 $140,212 For the year ended September 30, 2025, depreciation expense on property and equipment was $60.1 million and depreciation expense on finance leases was $8.7 million. For the year ended September 30, 2024, depreciation expense on property and equipment was $67.1 million and depreciation expense on finance leases was $4.3 million. 8. Certain Balance Sheet Accounts Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consist of the following as of September 30 (in thousands): 2025 2024 Insurance recovery receivables $25,801 $17,591 Prepaid business expense 6,763 7,473 Prepaid income taxes 2,956 2,764 Other 4,692 4,305 Prepaid expenses and other current assets $40,212 $32,133 20

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Other Assets Other assets consist of the following as of September 30 (in thousands): 2025 2024 Insurance recovery receivables $50,466 $40,478 Cash value of life insurance policies 16,671 15,189 Security deposits 7,920 8,030 Other 2,288 3,001 Other assets $77,345 $66,698 Other Accrued Liabilities Other accrued liabilities consist of the following as of September 30 (in thousands): 2025 2024 Self-insurance reserves $61,855 $41,384 Due to third party payors 16,139 15,382 Accrued professional services (1) 27,475 6,423 Deferred revenue (2) 4,344 20,707 Interest rate derivatives 2,608 — Real estate and property taxes 6,334 5,824 Other 11,413 14,360 Other accrued liabilities $130,168 $104,080 (1) The increase in Accrued professional services is primarily due to legal and consulting fees associated with the Acquisition. (2) During the year ended September 30, 2025, the Company satisfied the performance obligations related to many of its revenue deferrals, resulting in an increase in Net revenue and a decrease in Deferred revenue. Other Long-Term Liabilities Other long-term liabilities consist of the following as of September 30 (in thousands): 2025 2024 Self-insurance reserves $147,280 $122,001 Deferred compensation liabilities 15,315 13,977 Sale-leaseback liability 1,043 2,085 Other 2,386 352 Other long-term liabilities $166,024 $138,415 9. Long-term Debt As of September 30, 2025, NMHI's first lien credit agreement, as amended on March 2, 2021 through the Amendment and Restatement Agreement to the First Lien Credit Agreement and as amended on December 21, 2021 through the Incremental Facility Agreement No. 1, consists of a $1.7 billion first lien term loan, a $50.0 million term C loan, and a $160.0 million revolving credit facility. The first lien term loan requires quarterly payments and matures on March 2, 2028. There are no quarterly payments associated with the term C loan, and the full balance of the loan will be due at maturity on March 2, 2028. As of September 30, 2025, the commitments under the revolving credit facility expire on March 2, 2026. NMHI also entered into a Second Lien Credit Agreement on March 2, 2021 which provided for a $180.0 million second lien term loan. 21

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There are no quarterly payments associated with the second lien term loan, and the full balance of the loan will be due at maturity on March 2, 2029. During the years ended September 30, 2024, 2023, and 2022 the Company entered into various sale-leaseback arrangements with a fleet management company which resulted in the sale of certain vehicles for aggregate sales prices of $1.0 million, $14.9 million, and $34.7 million, respectively. Concurrent with the sale of the vehicles, the Company leased back all of the vehicles for varying lease terms of between 24 and 50 months. The sale-leasebacks were accounted for as financing transactions as the Company has retained substantially all of the benefits and risks related to the vehicles. Accordingly, the vehicles remain in Property and equipment, net in the consolidated balance sheet and each asset will continue to be depreciated over the lesser of their lease terms or estimated useful lives. On December 23, 2022, Mentor SPV, LLC, an indirect subsidiary of the Company, entered into a Receivables Financing Agreement (the "RFA") by and among Mentor SPV, LLC, as borrower, the lenders from time to time party thereto, MUFG Bank, Ltd., as Administrative Agent and Mentor Management, Inc., as servicer. Pursuant to the terms of the RFA, the Company can borrow up to $125.0 million of debt limited to the amount of eligible accounts receivable supporting the Borrowing Base as defined in the RFA. The RFA contains certain financial covenants and events of default customary for this type of financing. Upon the closing of the RFA and related and ancillary transactions, Mentor SPV borrowed $100.0 million of which a portion was immediately used to pay down its revolving credit facility. On April 4, 2024, Mentor SPV, LLC entered into Amendment No. 2 to the RFA which increased the facility limit from $125.0 million to $175.0 million and amended the termination date of the facility. On November 15, 2024, Mentor SPV, LLC entered into Amendment No. 3 to the RFA which further amended the termination date of the facility to be the earliest of several key dates. As of September 30, 2025, the earliest date scheduled to occur is February 1, 2026. The RFA principal balance has been recorded in Long-term debt on the consolidated balance sheet as the termination date was extended to April 2, 2027 subsequent to September 30, 2025 but before issuance of the financial statements, see Note 20. Additionally, it is not probable that the extended termination date will be accelerated under the subjective acceleration clause. On February 6, 2023, the Company entered into Amendment No. 2 to the first lien credit agreement and Amendment No. 1 to the second lien credit agreement. Under the terms of these amendments, the reference interest rate was switched from LIBOR to Secured Overnight Financing Rate ("SOFR"). On February 14, 2023, the Company's joint venture issued a $1.9 million term loan that requires monthly payments. The term loan matures on February 14, 2028 and has a fixed interest rate of 6.75%. 22

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The Company's long-term debt consists of the following as of September 30, 2025 and 2024 (in thousands): 2025 2024 First lien term loan principal; principal and interest due in quarterly installments through March 2, 2028 $1,712,310 $1,730,240 Second lien term loan principal; principal due at maturity on March 2, 2029, interest due in quarterly installments 180,000 180,000 Receivables financing agreement; principal due at maturity on February 1, 2026, interest due in monthly installments 15,000 68,000 Term C loan principal; principal due at maturity on March 2, 2028, interest due in quarterly installments 50,000 50,000 Vehicle sale-leaseback debt; principal and interest due monthly throughout the respective lease term 7,566 19,744 Term loan associated with joint venture; principal due in monthly installments through February 14, 2028 1,076 1,467 Original issue discount on term loans, net of accumulated amortization (1,483) (2,660) Deferred financing costs, net of accumulated amortization (5,562) (8,638) 1,958,907 2,038,153 Less current portion – term debt 18,340 18,314 Less current portion – vehicle sale-leaseback debt 6,001 12,083 Long-term debt $1,934,566 $2,007,756 Interest on the first lien term loan and term C loan as of September 30, 2025 is calculated at either SOFR plus 385 basis points or an alternative base rate plus 285 basis points (rates of 7.98% and 8.65% as of September 30, 2025 and 2024, respectively). Interest on the revolving credit facility is calculated at the highest of the applicable prime rate, the federal funds rate plus 0.5%, or SOFR for a one-month tenor plus 1.0% (rates of 10.00% and 10.75% as of September 30, 2025 and 2024, respectively). Interest on the second lien term loan is calculated at either SOFR plus 735 basis points or an alternative base rate plus 635 basis points (rates as of 11.35% and 11.95% as of September 30, 2025 and 2024, respectively). Interest on the RFA is calculated at either the applicable commercial paper rate or the base rate which is the highest of (a) the applicable Prime Rate for such date; (b) the Federal Funds Rate for such date, plus 0.5%; and (c) Term SOFR for one-month tenor for such date, plus 0.5% (rates of 7.84% and 8.74% as of September 30, 2025 and 2024, respectively). As of September 30, 2025, the Company had no borrowings under the revolving credit facility, $50.0 million of term letters of credit, $17.3 million of revolving letters of credit issued under the facility, and no borrowings on a line of credit associated with its joint venture. As of September 30, 2024, the Company had no borrowings under the revolving credit facility, $50.0 million of term letters of credit, $9.5 million of revolving letters of credit issued under the facility, and $1.0 million of borrowings on a line of credit associated with its joint venture. The first lien credit agreement requires NMHI to make mandatory prepayments, subject to certain exceptions, with (i) commencing with the fiscal year ending September 30, 2023, a percentage of excess cash flow, as defined in the first lien credit agreement, based on the Company's first lien net leverage ratio, as defined in the first lien credit agreement; (ii) a percentage of Net Proceeds in respect of a "Prepayment Event" based on the Company's first lien net leverage ratio, and (iii) 100% of cash proceeds of any debt incurrence, other than debt permitted under the first lien credit agreement. NMHI was not required to make a prepayment for the fiscal years ended September 30, 2025 and 2024. Covenants The first lien credit agreement contains negative covenants, including, among other things, limitations on the Company's ability to incur additional debt, create liens on assets, transfer or sell assets, pay dividends, redeem stock or make other distributions or investments, and engage in certain transactions with affiliates. The first lien credit agreement contains a springing financial covenant. If at the end of any fiscal quarter, the Company's outstanding borrowings under the revolving 23

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credit facility exceeds 35% of the aggregate amount of revolving commitments, it is required to maintain at the end of each such fiscal quarter a consolidated first lien net leverage ratio of not more than 8.50 to 1.00. The springing financial covenant was not triggered as of September 30, 2025 as the Company's usage of the revolving credit facility did not exceed the threshold for that quarter. Future annual payments Future annual payments of the Company's debt as of September 30, 2025 are as follows: (In thousands) 2026 $24,341 2027 34,929 2028 1,726,682 2029 180,000 Total $1,965,952 Future amounts due at any year end may increase as a result of the provision in the first lien credit agreement that requires a prepayment of a portion of the outstanding term loan amount if NMHI generates certain levels of cash flow. Derivatives The Company uses interest rate derivative agreements to reduce the variability of cash flows of the Company's variable rate debt. These instruments are used to hedge the risk of changes in the floating rate of interest on borrowings under the term loans. On April 5, 2023, NMHI entered into two interest rate cap agreements in an aggregate notional amount of $1.4 billion. The interest rate caps had an effective date of April 28, 2023 and expired on April 30, 2025, and provided the Company with interest rate protection in the event the one-month term SOFR rate increased above 5% and remained below 6.5%. On April 23, 2025, NMHI entered into an interest rate swap agreement and an interest rate collar agreement, each in a notional amount of $700.0 million. The agreements have an effective date of April 30, 2025 and expire on April 30, 2027. Under the terms of the swap, NMHI will receive from the counterparty a monthly payment based on a rate equal to one-month term SOFR, and NMHI will make monthly payments to the counterparty based on a fixed rate of 3.649% per annum, in each case on the notional amount of $700.0 million, settled on a net payment basis. Under the terms of the collar, NMHI will receive from the counterparty a monthly payment if the one-month term SOFR increases above 4.5%, and NMHI will make monthly payments to the counterparty if the one-month term SOFR decreases below 2.4%. The fair value of the interest rate derivative agreements was $2.6 million in Other accrued liabilities on the consolidated balance sheet as of September 30, 2025 and $0.1 million in Prepaid expenses and other current assets as of September 30, 2024. 10. Stockholders' Equity Common Stock The Company has 100 shares of $0.01 par value common stock authorized. Celtic Intermediate Corp. owns all outstanding shares of the Company. Celtic Intermediate Corp. is entitled to receive dividends when and as declared by the Board of Directors. In addition, the Celtic Intermediate Corp. is entitled to one vote per share. 24

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Additional Paid-in Capital During the year ended September 30, 2025, the Company paid $0.5 million to an employee on behalf of Celtic Intermediate Corp. related to the grant of certain Class A-2 Units. The payment was treated as a Dividend to Parent and was recorded as a reduction to Additional paid-in capital. During the year ended September 30, 2024, the Company paid $4.8 million to a former employee on behalf of Celtic Intermediate Corp. related to an exchange of certain Class A-2 Units. The payment was treated as a Dividend to Parent and was recorded as a reduction to Additional paid-in capital. 11. Employee Savings and Retirement Plans The Company has a multi-company plan (the "Plan") which covers all of its wholly-owned subsidiaries. Under the Plan, employees may contribute a portion of their earnings, which are invested in mutual funds of their choice. After January 1, the Company makes a discretionary matching contribution for the previous calendar year on behalf of all participants employed on the last day of the year. This matching contribution vests immediately. The Company made contributions of $7.6 million and $7.2 million, respectively, for the years ended September 30, 2025 and 2024. The National Mentor Holdings, LLC Executive Deferral Plan The Company also has a deferred compensation plan, The National Mentor Holdings, LLC Executive Deferral Plan, which is available to highly compensated employees. Under this plan, participants contribute a percentage of salary and/or bonus earned during the year. Employees contributed $1.0 million for each of the years ended September 30, 2025 and 2024. The accrued liability related to this plan was $15.0 million and $13.6 million, respectively, as of September 30, 2025 and 2024 and was included in Other long-term liabilities on the Company's consolidated balance sheets. During the years ended September 30, 2025 and 2024, there was expense of $2.0 million and $3.2 million related to the deferred compensation plan, respectively. In connection with the National Mentor Holdings, LLC Executive Deferral Plan, the Company has purchased company owned life insurance ("COLI") policies on certain plan participants. The cash surrender value of the COLI policies is designed to provide a source for funding the accrued liability. The cash surrender value of the COLI policies was $16.7 million and $15.2 million as of September 30, 2025 and 2024, respectively, and was included in Other assets on the Company's consolidated balance sheets. The National Mentor Holdings, Inc. Long-Term Incentive Plan The National Mentor Holdings Inc. Long-Term Incentive Plan was established on October 1, 2022 ("2022 LTIP") to assist the Company in attracting, motivating and retaining selected individuals to serve as employees of the Company by providing such individuals an opportunity to benefit from the long-term growth in the value of the Company. Each participant who remains employed with the Company is entitled to a cash award upon the occurrence of a change of control (as defined in the 2022 LTIP) where the cash proceeds ensure a specified return on cumulative invested capital, and satisfy the Minimum Rate of Return of 8%. Because a change of control is not considered probable, there is no compensation expense recorded in the consolidated statement of operations until the change of control occurs. 12. Related Party Transactions Transactions with the Parent During the year ended September 30, 2025 and 2024, the Company paid the Parent $0.1 million and $0.7 million, respectively, to cover professional fees and travel expenses that the Parent incurred on the Company's behalf, which were recorded in General and administrative expenses in the consolidated statements of operations. 25

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Lease Agreements The Company leases several offices, homes and other facilities from its employees, or from relatives of employees, in the states of Minnesota, Wisconsin, and Florida. These leases have various expiration dates extending out as far as June 2029. Related party lease expense was $0.5 million and $0.8 million for the years ended September 30, 2025 and 2024, respectively. The operating lease right-of-use assets and operating lease liabilities associated with related party leases were $1.3 million as of September 30, 2025 and $1.6 million as of September 30, 2024. Employee Loan During the years ended September 30, 2025 and September 30, 2023, Celtic Holdings CB, L.P. granted 425,532 and 596,632 Class A-2 Units (the "restricted units"), respectively, to two employees. The Company issued a promissory note to each employee for payment of the applicable income tax withholdings. The promissory notes bear interest at an annual interest rate of 4.46% and 3.57%, and principal and interest are due upon the earliest of seven years from the grant date, termination of employment, or sale of Celtic Holdings CB, L.P. Pursuant to a pledge agreement executed simultaneously with the promissory note, the employees have pledged the restricted units as collateral. The promissory notes are considered fully non-recourse for accounting purposes. Accordingly, the restricted units are recognized as stock compensation expense ratably over the one year vesting period. During the years ended September 30, 2025 and 2024, $0.1 million and $0.5 million, respectively, of stock compensation expense was recognized related to the restricted units. The $0.5 million paid by the Company for the applicable income tax withholdings was recorded as a reduction to Additional paid-in capital during the year ended September 30, 2025. 13. Fair Value Measurements The Company measures and reports its financial assets and liabilities on the basis of fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques for assets and liabilities measured using Level 3 inputs may include methodologies such as the market approach, the income approach or the cost approach, and may use unobservable inputs such as projections, estimates and management's interpretation of current market data. These unobservable inputs are only utilized to the extent that observable inputs are not available or cost-effective to obtain. A description of the valuation methodologies used for instruments measured at fair value as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below. The following table sets forth the Company's assets and liabilities that were accounted for at fair value on a recurring basis as of September 30, 2025. (in thousands) Total Quoted Market Prices (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets Money market funds $4,300 $4,300 $— $— Liabilities Interest rate derivative agreements $2,608 $— $2,608 $— Self-insurance reserves 6,497 — — 6,497 Total $9,105 $— $2,608 $6,497 26

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The following table sets forth the Company's assets and liabilities that were accounted for at fair value on a recurring basis as of September 30, 2024. (in thousands) Total Quoted Market Prices (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets Interest rate derivative agreements $83 $— $83 $— Liabilities Contingent consideration obligations $200 $— $— $200 Self-insurance reserves 8,912 — — 8,912 Total $9,112 $— $— $9,112 Money market funds. The Company's money market funds are classified within Level 1 of the fair value hierarchy because they are valued using quoted prices in active markets for identical instruments. Interest rate derivative agreements. The Company's interest rate derivative agreements are classified within level 2 of the fair value hierarchy. Based on the nature and timing of the associated cash flows, the fair value of the agreements was recorded in Prepaid expenses and other current assets, Other assets, or Other accrued liabilities in the Company's consolidated balance sheets. The fair value of these agreements was determined based on pricing models and independent formulas using current assumptions that included terms, interest rates and forward curves, and the Company's credit risk. Contingent Consideration. In connection with the acquisition of Pediatric Therapy Partners, Inc. ("Pediatric Partners") in the year ended September 30, 2022, and the acquisition of Bright Light Behavioral and Developmental Services, LLC ("Bright Light") in the year ended September 30, 2023, the Company recorded contingent consideration pertaining to the amounts potentially payable to the former owners upon the businesses meeting certain performance targets. The fair values of the Company's contingent consideration obligations were based on a probability-weighted approach derived from the overall likelihood of meeting certain performance targets. The resultant probability-weighted earn-out payments are discounted using a discount rate based upon the weighted-average cost of capital. The fair value measurement are based on significant inputs not observable in the market, which represent Level 3 inputs within the fair value hierarchy. The valuation of contingent consideration uses assumptions the Company believes would be made by a market participant. The Company assesses these estimates at each reporting period, and increases or decreases in the fair values of the contingent consideration obligations may result from changes in discount periods and rates, changes in the timing and amount of earn-out criteria, and changes in probability assumptions with respect to the likelihood of meeting the various earn-out criteria. Changes in the fair value of contingent consideration related to updated assumptions and estimates are recognized within General and administrative expense within the consolidated statements of operations. The contingent consideration obligations associated with the Bright Light acquisition were settled in the years ending September 30, 2025 and September 30, 2024. The performance targets associated with the Pediatric Partners contingent consideration obligation were not met. Self-insurance liabilities. In connection with the Merger, the Company recorded its self-insurance liabilities at fair value in accordance with ASC 805 which requires the assets and liabilities of the Company to be adjusted to their fair market value as of March 8, 2019. The fair values of the Company's self-insurance liabilities were determined based on reports from independent third party actuaries which used claims data from the Company, as well as models such as Monte Carlo simulations. The fair values include unpaid losses as well as provisions for the time value of money and a risk margin associated with the variability of exposure to claims. The fair value measurement was based on significant inputs not observable in the market, which represent Level 3 inputs within the fair value hierarchy. There is limited measurement uncertainty resulting from changes in significant unobservable inputs, given the low number of pre-Merger claims open as of September 30, 2025. The Company re-assesses the fair values of these liabilities at each reporting period. 27

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The following table presents a summary of changes in fair value of the Company's Level 3 liabilities measured on a recurring basis for the years ended September 30, 2025 and 2024. (in thousands) Contingent Consideration Self-insurance liabilities Balance as of September 30, 2023 $1,050 $13,236 Adjustments to fair value (650) — Payments (200) (4,324) Balance as of September 30, 2024 200 8,912 Payments (200) (2,415) Balance as of September 30, 2025 $— $6,497 As of September 30, 2025, the Company had no contingent consideration liabilities. As of September 30, 2024, the Company had $0.2 million of contingent consideration liabilities which were reflected in Other accrued liabilities. As of September 30, 2025 and 2024, the Company had $6.5 million and $8.9 million of self-insurance liabilities, respectively, relating to claims that existed as of March 8, 2019 that were recorded at fair value, which were reflected in Accrued payroll and related costs, Other accrued liabilities and Other long-term liabilities on the Company's consolidated balance sheets. Items Measured at Fair Value on a Nonrecurring Basis. The Company's intangible assets are measured at fair value on a nonrecurring basis using Level 3 inputs (see Note 6). The Company also measures goodwill at fair value on a nonrecurring basis when an impairment charge is to be recognized. During the year ended September 30, 2024, the Company recorded a goodwill impairment charge for the reporting unit that consists of the Company's joint venture (see Note 6). As of September 30, 2024, the fair value of goodwill for this reporting unit was zero. There were no other items measured at fair value on a nonrecurring basis during the fiscal years ended September 30, 2025 and 2024. At September 30, 2025 and 2024, the carrying values of cash, accounts receivable, accounts payable and variable rate debt approximated fair value. During the fiscal years 2025 and 2024, there were no transfers between levels. 14. Leases The Company enters into noncancellable leases for office space, residential real estate and vehicles. The Company's real estate and vehicle leases have original lease terms of up to 20 years and 5 years, respectively. Real estate leases may contain rent escalation clauses, various incentives including periods of free rent, tenant improvement allowances, and options to extend or terminate. Total rent expense for the years ended September 30, 2025 and 2024 was $150.5 million and $153.8 million, respectively. The components of total lease costs were as follows (in thousands): Year Ended September 30, 2025 Year Ended September 30, 2024 Operating lease cost $143,307 $146,110 Finance lease cost: Amortization of right-of-use assets 8,675 4,326 Interest on lease liabilities 2,766 1,847 Variable lease cost 8,201 8,169 Total lease cost $162,949 $160,452 28

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Supplemental cash flow information related to the Company's lease activity was as follows (in thousands): Year Ended September 30, 2025 Year Ended September 30, 2024 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for finance leases $2,724 $1,758 Operating cash flows for operating leases $138,478 $137,633 Financing cash flows for finance leases $7,502 $3,755 The following table summarizes the maturity of the Company's lease liabilities as of September 30, 2025 (in thousands): Operating Leases Finance Leases 2026 $133,003 $11,704 2027 113,058 11,547 2028 81,424 9,278 2029 60,073 4,301 2030 41,613 1,664 Thereafter 99,993 11,825 Total undiscounted payments $529,164 $50,319 Less: imputed interest (135,873) (11,079) Total lease liabilities 393,291 39,240 Less: current portion of lease liabilities (101,234) (9,150) Lease liabilities, net of current portion $292,057 $30,090 Weighted average remaining lease terms and weighted average incremental borrow rates are summarized as follows: As of September 30, 2025 As of September 30, 2024 Weighted average remaining lease term – operating leases 5.1 years 5.1 years Weighted average remaining lease term – finance leases 5.8 years 7.0 years Weighted average incremental borrowing rate – operating leases 9.1% 9.0% Weighted average incremental borrowing rate – finance leases 7.3% 8.1% 15. Reserves for Self-Insurance The Company maintains insurance for professional and general liability, workers' compensation liability, automobile liability and health insurance liabilities that includes self-insured retentions. The Company intends to maintain such coverage in the future and is of the opinion that its insurance coverage is adequate to cover potential losses on asserted claims. The Company was self-insured for professional and general liability for $5.0 million per claim, with a buffer layer of $5.0 million per claim and $10.0 million in the aggregate for the year ended September 30, 2025. The Company was self- insured for professional and general liability for $4.0 million per claim and $28.0 million in the aggregate for the year ended September 30, 2024. For workers' compensation, the Company has a $1.0 million per claim retention with statutory limits for the year end September 30, 2025, and a $0.5 million per claim retention with statutory limits for the year ended September 30, 2024. For automobile liability, the Company has a $2.0 million per claim retention for the year ended September 30, 2025 and a $0.5 million per claim retention for the year ended September 30, 2024, with additional insurance coverage above the retention. The Company purchases specific stop loss insurance as protection against extraordinary claims liability for health 29

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insurance claims. Stop loss insurance covers claims that exceed $0.4 million on a per member, per event basis for the years ending September 30, 2025 and 2024. Employment practices liability is fully self-insured. 16. Other Commitments and Contingencies The Company is in the health and human services business and, therefore, has been and continues to be subject to numerous claims alleging that the Company, its employees or its Mentors failed to provide proper care for an individual served by the Company. The Company is also subject to claims by these individuals, its employees, its Mentors or community members against the Company for negligence, intentional misconduct or violation of applicable laws. Included in the Company's recent claims are claims alleging personal injury, assault, abuse, wrongful death, violations of wage and hour laws, harassment and discrimination claims, and other charges. Regulatory agencies may initiate administrative proceedings alleging that the Company's programs, employees or agents violate statutes and regulations and seek to impose monetary penalties on the Company. The Company could be required to incur significant costs to respond to regulatory investigations or defend against civil lawsuits and, if the Company does not prevail, the Company could be required to pay substantial amounts of money in damages, settlement amounts or penalties arising from these legal proceedings. The Company is also subject to potential lawsuits under the False Claims Act and other federal and state whistleblower statutes designed to combat fraud and abuse in the health care industry. These lawsuits can involve significant monetary awards that may incentivize private plaintiffs to bring these suits. If the Company is found to have violated the False Claims Act, it could be excluded from participation in Medicaid and other federal healthcare programs which would have a material adverse effect on our business. The Company is also subject to employee-related claims under state and federal law, including claims for wage and hour violations under the Fair Labor Standards Act or state wage and hour laws, and claims for discrimination, wrongful discharge or retaliation. During the year ended September 30, 2024, the Company was able to settle in principle the following lawsuits: (1) Ramirez v. California Mentor Family Agency, LLC; (2) Hassan v. CareMeridian and Correa v. CareMeridian (consolidated for mediation purposes); and (3) Kiera Williams v. California Mentor; Marcus Johnson and Lew Musselman v. California Mentor; Delores Ward v. Horrigan Cole Enterprises, Inc., and Natalie Cortez v. Cornerstone Living (consolidated for mediation purposes). In the aggregate, the Company expects to pay approximately $11.3 million for the settlement of these claims, $0.3 million of which was paid during the year ended September 30, 2025. The remainder is expected to be paid during the year ended September 30, 2026 and is recorded in self-insurance reserves within Other accrued liabilities on the consolidated balance sheet. During the year ended September 30, 2025, the Company was able to settle in principle the Hagans, et al. v. National Mentor Healthcare, LLC lawsuit in New Jersey, alleging the Company's failure to pay overtime wages in the amount of $2.3 million which is recorded in self-insurance reserves within Other long-term liabilities on the consolidated balance sheet. The settlement agreement is still pending court approval. The Company's policy is to accrue for all probable and estimable claims using information available at the time the financial statements are issued. Actual claims could settle in the future at materially different amounts due to the nature of litigation. 30

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17. Income Taxes For the years ended September 30, 2025 and 2024, the provision for (benefit from) income taxes consists of the following (in thousands): (in thousands) Year Ended September 30, 2025 Year Ended September 30, 2024 Current: Federal $24,554 $23,299 State 4,435 7,119 Total current tax provision 28,989 30,418 Deferred: Federal (30,517) 4,368 State (2,369) (750) Net deferred tax (benefit) provision (32,886) 3,618 Income tax provision $(3,897) $34,036 Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of the assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company's deferred tax assets and liabilities consist of the following as of September 30 (in thousands): 2025 2024 Gross deferred tax assets: Operating lease liabilities $111,051 $113,069 Deferred compensation 330 831 Interest rate derivative agreements 720 412 Accrued workers' compensation 11,467 10,247 Net operating loss carryforwards 16,292 14,191 Allowance for bad debts 1,091 1,097 Sale-leaseback liability 576 838 Interest expense limitation carryforwards 138,902 106,109 Other accrued liabilities 33,753 25,941 Depreciation 16,656 10,897 Tax credits 202 202 Other 283 1,027 331,323 284,861 Valuation allowance (159,078) (160,562) Deferred tax assets 172,245 124,299 Deferred tax liabilities: Operating lease right-of-use assets (103,857) (107,207) Prepaid insurance (99) (105) Amortization of goodwill and intangible assets (77,854) (59,025) Net deferred tax liabilities $(9,565) $(42,038) The Company regularly assesses its ability to realize its deferred tax assets. The Company is required to record a valuation allowance to reduce the deferred tax assets if, based on the weight of the evidence, it is more likely than not that some portion or all of the deferred tax asset will not be realized. 31

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Assessing the realization of deferred tax assets requires management judgment. In determining whether its deferred tax assets are more likely than not realizable, the Company evaluated all available positive and negative evidence, and weighted the evidence based on its objectivity. The Company has incurred three consecutive years of losses for income tax purposes. In addition, the net deferred tax liability as of September 30, 2025, includes a deferred tax liability generated by tax amortization of intangibles that have an indefinite reversal period for GAAP purposes. This component of the net deferred tax liability cannot be considered a source of future taxable income available to benefit finite-lived deferred tax assets. The Company does not have sufficient income from reversing taxable temporary differences to fully benefit its deferred tax assets. Accordingly, the Company has recorded a valuation allowance against its deferred tax assets of $159.1 million and $160.6 million as of September 30, 2025 and 2024, respectively. For federal purposes, the Company had $0.1 million of net operating loss carryforwards as of September 30, 2025. These net operating losses can be carried forward indefinitely, but annual utilization is limited to 80% of taxable income. For state purposes, the Company had $49.4 million of net operating losses for fiscal 2025 that can be carried forward indefinitely and $280.5 million of net operating loss carryforwards for fiscal 2025, which expire from 2025 through 2044. The interest expense limitation carryforwards are generally limited to 30% of earnings before interest, taxes, depreciation, and amortization and can be carried forward indefinitely. The following is reconciliation between the statutory and effective income tax rates for the years ended September 30, 2025 and 2024 (in thousands): Year Ended September 30, 2025 Year Ended September 30, 2024 Federal income tax at statutory rate 21.0 % 21.0 % State income taxes, net of federal taxes 7.0 (4.6) Other nondeductible expenses (4.3) (1.2) Tax credits 2.3 1.9 Valuation allowance (22.4) (47.3) Other 1.4 (0.8) Effective tax rate 5.0 % (31.0) % Companies may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. There was no unrecognized tax benefit for the years ended September 30, 2025 and 2024. The Company does not expect any significant changes to unrecognized tax benefits within the next twelve months. The Company recognizes interest and penalties related to uncertain tax positions as a component of income tax expense which is consistent with the recognition of these items in prior reporting periods. No interest and penalties were accrued as of September 30, 2025 and 2024. The Company files a federal consolidated return and files various state income tax returns and, generally, with the exception of the predecessor period from October 1, 2018 through March 7, 2019 and the successor period from March 8, 2019 through September 30, 2019, the Company is no longer subject to income tax examinations by the taxing authorities for years prior to September 30, 2021. The Company believes that it has appropriate support for the income tax positions taken and to be taken on the Company's income tax returns. In addition, the Company believes its accruals for income tax liabilities are 32

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adequate for all open years based on an assessment of many factors including past experience and interpretations of the tax laws as applied to the facts of each matter. On July 4, 2025, the One Big Beautiful Bill Act ("OBBBA") was enacted into law. The OBBBA makes permanent key elements of the Tax Cuts and Jobs Act, including full bonus depreciation, allowing interest deductions based on earnings before interest, taxes, depreciation, and amortization, and expensing research and development costs. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. The OBBBA resulted in a decrease in the federal tax liability for the year ended September 30, 2025, and it is expected to result in lower federal cash tax payments during the year ended September 30, 2026 and forward. 18. Revenue Recognition The mix of revenue recognized during the years ended September 30, 2025 and 2024, by major source of funding was as follows (in thousands): Year Ended September 30, 2025 Year Ended September 30, 2024 State and local government $2,755,788 $2,634,108 Non-public 302,597 276,892 Individual 129,924 123,176 Total Net revenue $3,188,309 $3,034,176 The Company provides services under four types of contractual arrangements with its payors: • Negotiated Contracts - for these contracts, services are priced pursuant to a "plan of care" for the individual that encompasses habilitation and therapies. Such contracts are not subject to retroactive adjustment or cost reimbursement requirements. However, there may be instances where rates are adjusted based upon a change in circumstances with a particular individual or in situations where additional services are needed. Subsequent adjustments to rates, if any, are recognized when approved by the payor. For the years ended September 30, 2025 and 2024, the Company recognized $753.5 million and $779.9 million, respectively, under these contracts. • Fixed Fee Contracts - for these contracts, payors set a standard rate or set of rates for a particular service usually dependent on the acuity of the individual being served. These rates are the same for all agencies providing the service. For these contract types, there is generally no cost report required. For the years ended September 30, 2025 and 2024, the Company recognized $2.1 billion and $1.9 billion, respectively, under these contracts. • Retrospective Reimbursement Contracts - for these contracts, a provisional rate is set for the year pending the filing of an annual cost report that may further adjust that rate. Cost reimbursement rules differ by jurisdiction and program type. Revenue under these contracts is limited to the allowable costs under the contract. To the extent revenue exceeds the allowable costs it is deferred and reimbursed to the payor after the closeout of the contract. For the years ended September 30, 2025 and 2024, the Company recognized $18.2 million and $32.7 million, respectively, under these contracts. • Prospective Payment Contracts - these contracts are cost reported in the same way as retrospective contracts, except the cost report for the annual period is used to set the rates in a future period. For these contracts, changes in rates are recognized in revenue prospectively. For the years ended September 30, 2025 and 2024, the Company recognized $298.7 million and $302.3 million, respectively, under these contracts. All four contract types are subject to review by the third-party payors and may be subject to retroactive adjustment if in performing services the Company has not adhered to the terms of the contract, or did not document services as specified by 33

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the payor. Therefore, amounts due from third-party payors, primarily state and local government agencies and commercial health insurers, include variable consideration for retroactive revenue adjustments due to settlements of audits and reviews. The Company makes estimates for these revenue adjustments based on historical experience and success rates in the claim appeals and adjudication process. As of September 30, 2025 and 2024, liabilities to payors associated with retroactive revenue adjustments were $18.5 million and $15.4 million, respectively. The Company recorded retroactive revenue adjustments resulting in a decrease to revenue of $2.6 million for the year ended September 30, 2025 and an increase to revenue of $0.6 million for the year ended September 30, 2024. 19. Stock-Based Compensation 2022 Unit Incentive Plan In September 2022, Celtic Holdings CB, L.P., which owns all of the outstanding shares of Celtic Intermediate Corp, established the 2022 Unit Incentive Plan (as amended in January 2023) which authorizes 43,571,574 Class B Units (the "2022 Incentive Units") and an unlimited number of Class A Units to be issued pursuant to Awards under this Plan. The 2022 Incentive Units are comprised of 30% of Time-Vesting Incentive Units which vest over five years based upon continued service to the Company. The Time-Vesting Incentive Units will participate upon achievement of a realized internal rate of return of at least 8% on aggregate invested capital ("Minimum Return"). In the event of a change of control (as defined in the 2022 Unit Incentive Plan), all unvested Time-Vesting Incentive Units will become vested. The 2022 Incentive Units are comprised of 60% of Exit-Vesting Incentive Units. The Exit-Vesting Incentive Units vest in the event of a change of control (as defined in the 2022 Unit Incentive Plan) where cash proceeds ensure a specified return on cumulative invested capital and satisfy the Minimum Return. The remaining 10% of the 2022 Incentive Units vest upon a change of control based on achievement of certain environmental, social, and governance ("ESG") metrics (the "ESG Incentive Units"). Achievement of the ESG metrics is measured annually over a period of five fiscal years, beginning with the year ended September 30, 2023. In addition, the ESG Incentive Units will become fully vested upon a change of control where the cash proceeds ensure a return equal to or greater than 6.0x cumulative invested capital. Unvested units are forfeited upon termination, and if the participant is terminated for cause, all unvested and vested units are forfeited. If the participant is terminated without cause, the Company has the right to repurchase units that have been vested for at least six months for consideration equal to the fair market value of the units. The grant-date fair value of the Time-Vesting Incentive Units and the Exit-Vesting Incentive Units is determined using a Monte Carlo pricing model, which requires extensive use of accounting judgment and financial estimation, including the estimated timing of achieving the market condition associated with the Minimum Return. The Exit-Vesting Incentive Units include a performance condition contingent upon a change of control, which is not considered probable until a change of control occurs. As a result, there is no compensation expense recognized in the consolidated statement of operations for the Exit-Vesting Incentive Units until a change of control occurs. The Time-Vesting Incentive Units include a market condition associated with the Minimum Return. Compensation expense for the Time-Vesting Incentive Units is recognized using an accelerated attribution model over the graded vesting period based on the grant-date fair value. The ESG Incentive Units include several performance conditions associated with certain ESG metrics as well as a performance condition contingent upon a change of control, which is not considered probable until a change of control occurs. The grant-date fair value associated with these units is determined using a Monte Carlo pricing model and a Black-Scholes option pricing model, however, no compensation expense is recognized in the consolidated statement of operations until a change of control occurs. 34

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The fair value of each 2022 Incentive Unit granted was estimated on the grant date using a Monte Carlo pricing model or a Black-Scholes option pricing model with the following assumptions: Year Ended September 30, 2025 Year Ended September 30, 2024 Risk-free interest rate 4.35% 3.65% Expected term 2.5 years 4.6 years Expected volatility 60.40% 59.49% Expected dividend yield —% —% The table below summarizes the 2022 Incentive Units activity during the year ended September 30, 2025. Number of Incentive Units Weighted Average Grant- Date Fair Value Non-vested units at October 1, 2024 31,588,027 $1.11 Granted 6,195,931 0.07 Cancelled or forfeited (1,768,944) 1.10 Vested (2,483,859) 1.11 Non-vested units at September 30, 2025 33,531,155 $0.92 The Company recorded $2.3 million and $3.7 million of compensation expense during the years ended September 30, 2025 and 2024, respectively. The total fair value of units vested during the years ended September 30, 2025 and 2024 was $2.8 million and $2.2 million, respectively. As of September 30, 2025, there was $2.3 million of unrecognized compensation expense related to unvested Time-Vesting Incentive Units which is expected to be recognized over a weighted-average period of 2.7 years. As of September 30, 2025, there was $24.4 million of unrecognized compensation expense related to unvested Exit-Vesting Incentive Units and unvested ESG Incentive Units, which is expected to be recognized upon a change of control. 20. Subsequent Events The Company considers events or transactions that have occurred after the balance sheet date of September 30, 2025, but prior to the issuance of the financial statements, to provide additional evidence relative to certain estimates or to identify matters that require additional recognition or disclosure. Subsequent events have been evaluated through the issuance of the financial statements on November 26, 2025. On November 13, 2025, NMHI entered into Amendment No. 3 to the first lien credit agreement which extended the expiration date of $142.0 million of the commitments under the revolving credit facility to November 13, 2030. On November 24, 2025, NMHI entered into Amendment. No. 4 to the RFA which amended the termination date. As of the date of financial statement issuance, pursuant to the terms of the RFA, the earliest the termination date can occur is April 2, 2027. 35

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SUPPLEMENTAL CONSOLIDATING INFORMATION

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National Mentor Holdings, Inc. and Subsidiaries Consolidating Balance Sheet As of September 30, 2025 (Unaudited) (Amounts in thousands) Pediatrics Community Services NeuroRestorative Central Office Elimination Other NMHI Consolidated Totals Assets Current Assets: Cash and cash equivalents 4$10$(205)$3,217$-$-$-$3,026$ Restricted cash - 820 - - - - - 820 Accounts receivable, net 25,296 175,026 110,910 - - - - 311,232 Intercompany receivables 11,336 17,089 68,605 2,000,424 (2,097,650) 196 - - Prepaid expenses and other current assets 93 1,404 1,360 37,355 - - - 40,212 Assets held for sale - - - 10,752 - - - 10,752 Total current assets 36,729 194,349 180,670 2,051,748 (2,097,650) 196 - 366,042 Property and equipment, net 4,757 69,528 31,289 21,392 (1,277) - - 125,689 Intangible assets, net 66,857 426,840 89,699 (1,156) - - - 582,240 Goodwill 73,806 350,054 177,606 10,038 - - - 611,504 Operating lease right-of-use assets 20,265 204,235 153,427 (10,442) - - - 367,485 Finance lease right-of-use assets 399 21,949 13,506 (1,116) - - - 34,738 Restricted cash - - - 50,000 - - - 50,000 Other assets 573 5,540 3,967 67,265 - - - 77,345 Investment in subsidiairies - 32,670 75,516 221,745 (372,482) - 42,551 - Total assets 203,386$1,305,165$725,680$2,409,474$(2,471,409)$196$42,551$2,215,043$ Liabilities and Stockholders' Deficit Current Liabilities: Accounts payable 884$22,020$4,528$44,698$-$-$-$72,130$ Intercompany payables 257,568 1,450,519 477,648 (88,278) (2,097,653) 196 - - Accrued payroll and related costs 3,892 62,880 11,911 96,939 - - - 175,622 Other accrued liabilities 1,790 32,201 5,835 91,918 (1,576) - - 130,168 Current operating lease liabilities 6,303 70,493 26,483 (2,045) - - - 101,234 Current finance lease liabilities 123 7,349 2,095 (417) - - - 9,150 Borrowings under revolving commitments - - - - - - - - Current portion of long-term debt - - - 24,341 - - - 24,341 Liabilities to be disposed of 10,252 10,252 Total current liabilities 270,560 1,645,462 528,500 177,408 (2,099,229) 196 - 522,897 Other long-term liabilities (139) 1,070 (110) 166,510 (1,307) - - 166,024 Deferred tax liabilities, net - 9,677 (9,181) 9,069 - - - 9,565 Operating lease liabilities, less current portion 16,705 142,009 138,556 (5,213) - - - 292,057 Finance lease liabilities, less current portion 296 15,738 14,911 (855) - - - 30,090 Long-term debt, less current portion - - - 1,934,566 - - - 1,934,566 Other commitments and contingencies (Note 16) - - - - - - - - Stockholders' Deficit National Mentor Holdings, Inc. stockholders' deficit Common stock - - - - - - - - Additional paid-in capital - - - 372,761 (372,761) - 44,439 44,439 Accumulated loss on derivatives, net - - - (2,608) 1,888 - (1,888) (2,608) Accumulated deficit (84,036) (508,791) 53,004 (236,993) - - - (776,816) Total National Mentor Holdings, Inc. stockholders' deficit (84,036) (508,791) 53,004 133,160 (370,873) - 42,551 (734,985) Noncontrolling interests - - - (5,171) - - - (5,171) Total stockholders' deficit (84,036) (508,791) 53,004 127,989 (370,873) - 42,551 (740,156) Total liabilities and stockholders' deficit 203,386$1,305,165$725,680$2,409,474$(2,471,409)$196$42,551$2,215,043$ See accompanying notes to these consolidated financial statements.

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Community Services Consolidating Balance Sheet As of September 30, 2025 (Unaudited) (Amounts in thousands) Alabama Arizona California Colorado Delaware Florida Georgia Idaho Illinois Indiana Iowa Kentucky Louisiana Massachusetts Minnesota Mississippi Missouri Montana Nevada New Jersey New Mexico North Dakota Ohio Pennsylvania South Carolina Tennessee Texas Virginia West Virginia Wisconsin Wyoming SCC Overhead Consolidated Totals Assets Current Assets: Cash and cash equivalents -$-$6$-$-$3$-$-$-$-$-$-$-$-$-$-$-$-$-$-$-$-$-$-$-$-$-$-$-$-$-$1$-$10$ Restricted cash - - - - - - - - - - - - 611 - - - - - - - - - - - - - 209 - - - - - - 820 Accounts receivable, net 306 14,938 32,591 193 2,201 8,411 2,014 1,632 2,945 6,212 7,344 380 1,452 1,127 23,103 2,657 13,457 193 3,463 2,771 212 1,648 6,392 3,833 1,629 3,891 12,257 1,165 4,447 2,147 106 9,909 - 175,026 Intercompany receivables - - - - 14,644 - - - - - - - - - - - - - - - - 2,445 - - - - - - - - - - - 17,089 Prepaid expenses and other current assets - 4 259 - 19 69 1 4 6 59 26 - 1 1 49 1 77 2 87 30 - 13 296 166 6 20 (2) 16 152 11 2 29 - 1,404 Assets held for sale - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Total current assets 306 14,942 32,856 193 16,864 8,483 2,015 1,636 2,951 6,271 7,370 380 2,064 1,128 23,152 2,658 13,534 195 3,550 2,801 212 4,106 6,688 3,999 1,635 3,911 12,464 1,181 4,599 2,158 108 9,939 - 194,349 Property and equipment, net 87 2,487 4,740 7 425 15,168 600 752 329 1,981 5,813 107 612 70 11,759 1,324 1,923 25 560 4,609 144 404 1,857 1,197 709 589 4,590 872 1,599 467 25 3,608 89 69,528 Intangible assets, net 104 19,713 6,008 759 - 4,264 1,180 5,662 1,822 6,115 - 5,966 4,200 2,036 21,125 423 4,335 824 2,302 6,050 787 - 1,388 7,979 952 26,615 48,702 19,710 4,435 - 729 23,738 198,917 426,840 Goodwill 60 12,249 3,537 354 - 2,311 218 3,642 1,085 2,040 - 3,728 1,521 1,087 15,338 228 2,257 262 1,663 4,320 580 - - 4,580 414 19,048 33,545 10,516 1,912 - 232 26,427 196,900 350,054 Operating lease right-of-use assets 345 9,964 19,767 217 3,019 12,091 1,561 2,366 3,136 6,593 11,168 920 1,114 214 41,161 5,231 10,972 178 1,633 8,343 921 1,183 7,856 5,122 2,721 1,721 17,713 6,336 2,125 4,887 142 13,367 148 204,235 Finance lease right-of-use assets 88 1,767 505 63 - 1,121 184 - - 783 1,185 - 335 - 4,983 1,009 1,721 - 36 692 126 52 227 485 332 937 2,822 94 262 366 - 1,774 - 21,949 Restricted cash - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Other assets 14 498 505 2 105 516 30 48 109 116 184 33 87 1 1,078 102 178 5 76 206 12 36 130 128 76 62 367 133 68 162 3 470 - 5,540 Investment in subsidiairies - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 32,670 32,670 Total assets 1,004$61,620$67,918$1,595$20,413$43,954$5,788$14,106$9,432$23,899$25,720$11,134$9,933$4,536$118,596$10,975$34,920$1,489$9,820$27,021$2,782$5,781$18,146$23,490$6,839$52,883$120,203$38,842$15,000$8,040$1,239$79,323$428,724$1,305,165$ Liabilities and Stockholders' Deficit Current Liabilities: Accounts payable 21$385$7,733$1$242$2,012$175$69$132$263$600$98$141$13$1,196$98$72$6$42$472$20$164$686$383$260$1,211$3,374$163$369$158$5$1,330$126$22,020$ Intercompany payables 2,074 118,489 42,501 2,857 - 10,547 5,474 16,425 21,518 69,275 8,506 46,442 15,455 5,527 7,829 11,409 3,201 2,462 13,313 18,679 6,521 - 21,570 886 5,990 110,700 238,080 59,487 33,070 34,043 2,595 66,826 448,768 1,450,519 Accrued payroll and related costs 27 3,671 23,592 27 848 2,338 463 603 438 2,502 1,533 287 261 174 4,325 480 2,417 125 491 1,360 257 296 717 843 554 2,070 2,100 345 1,099 469 42 1,884 6,242 62,880 Other accrued liabilities 5 5,417 3,960 64 19 9,039 49 996 586 708 857 291 1,114 75 686 121 247 2 231 307 160 55 373 72 183 291 3,852 673 288 1,017 1 462 - 32,201 Current operating lease liabilities 89 5,352 7,150 68 1,115 2,124 548 924 1,063 2,233 3,436 663 419 72 14,195 1,624 2,800 50 905 2,226 288 571 2,436 1,777 1,065 842 6,425 1,716 1,002 2,050 32 5,196 37 70,493 Current finance lease liabilities 27 468 183 12 - 356 65 - - 233 389 - 177 - 1,660 338 566 - 10 225 44 21 85 151 109 312 948 73 82 105 - 710 - 7,349 Borrowings under revolving commitments - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Current portion of long-term debt - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Liabilities to be disposed of - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Total current liabilities 2,243 133,782 85,119 3,029 2,224 26,416 6,774 19,017 23,737 75,214 15,321 47,781 17,567 5,861 29,891 14,070 9,303 2,645 14,992 23,269 7,290 1,107 25,867 4,112 8,161 115,426 254,779 62,457 35,910 37,842 2,675 76,408 455,173 1,645,462 Other long-term liabilities (4) (14) (70) - - (45) (1) - - (35) (2) (14) - - (59) - (20) - (2) 1,218 - 6 17 (18) - (4) (2) - (26) (6) - 14 137 1,070 Deferred tax liabilities, net - - - - - - - - - - - - - - 7,721 - - - - - - - - - - - - - - - - 1,956 - 9,677 Operating lease liabilities, less current portion 259 5,024 13,459 156 1,944 10,675 1,050 1,468 2,128 4,594 7,900 428 719 153 27,688 3,696 8,404 133 834 6,236 648 628 5,554 3,446 1,726 943 12,109 5,744 1,196 2,884 115 9,953 115 142,009 Finance lease liabilities, less current portion 65 1,318 364 52 - 859 139 - - 577 853 - 197 - 3,561 715 1,261 - 27 506 91 36 159 355 242 642 2,020 28 193 269 - 1,209 - 15,738 Long-term debt, less current portion - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Other commitments and contingencies (Note 16) - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Stockholders' Deficit National Mentor Holdings, Inc. stockholders' deficit Common stock - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Additional paid-in capital - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Accumulated loss on derivatives, net - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Accumulated deficit (1,559) (78,490) (30,954) (1,642) 16,245 6,049 (2,174) (6,379) (16,433) (56,451) 1,648 (37,061) (8,550) (1,478) 49,794 (7,506) 15,972 (1,289) (6,031) (4,208) (5,247) 4,004 (13,451) 15,595 (3,290) (64,124) (148,703) (29,387) (22,273) (32,949) (1,551) (10,217) (26,701) (508,791) Total National Mentor Holdings, Inc. stockholders' deficit (1,559) (78,490) (30,954) (1,642) 16,245 6,049 (2,174) (6,379) (16,433) (56,451) 1,648 (37,061) (8,550) (1,478) 49,794 (7,506) 15,972 (1,289) (6,031) (4,208) (5,247) 4,004 (13,451) 15,595 (3,290) (64,124) (148,703) (29,387) (22,273) (32,949) (1,551) (10,217) (26,701) (508,791) Noncontrolling interests - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Total stockholders' deficit (1,559) (78,490) (30,954) (1,642) 16,245 6,049 (2,174) (6,379) (16,433) (56,451) 1,648 (37,061) (8,550) (1,478) 49,794 (7,506) 15,972 (1,289) (6,031) (4,208) (5,247) 4,004 (13,451) 15,595 (3,290) (64,124) (148,703) (29,387) (22,273) (32,949) (1,551) (10,217) (26,701) (508,791) Total liabilities and stockholders' deficit 1,004$61,620$67,918$1,595$20,413$43,954$5,788$14,106$9,432$23,899$25,720$11,134$9,933$4,536$118,596$10,975$34,920$1,489$9,820$27,021$2,782$5,781$18,146$23,490$6,839$52,883$120,203$38,842$15,000$8,040$1,239$79,323$428,724$1,305,165$ See accompanying notes to these consolidated financial statements.

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Pediatrics Consolidating Balance Sheet As of September 30, 2025 (Unaudited) (Amounts in thousands) Alabama Arizona Connecticut Georgia Indiana Kentucky Maryland Massachusetts Minnesota New Jersey North Carolina North Dakota Ohio Pennsylvania South Carolina Texas Overhead Consolidated Totals Assets Current Assets: Cash and cash equivalents -$-$-$4$-$-$-$-$-$-$-$-$-$-$-$-$-$4$ Restricted cash - - - - - - - - - - - - - - - - - - Accounts receivable, net 1,897 183 258 1,578 1,239 - 1,071 7,266 1,836 803 50 689 3,054 4,169 901 302 - 25,296 Intercompany receivables 4,358 - - - 266 - 5,116 - - - - - 1,596 - - - - 11,336 Prepaid expenses and other current assets - - - 11 2 - - 31 4 15 - 4 4 3 19 - - 93 Assets held for sale - - - - - - - - - - - - - - - - - - Total current assets 6,255 183 258 1,593 1,507 - 6,187 7,297 1,840 818 50 693 4,654 4,172 920 302 - 36,729 Property and equipment, net 56 10 24 155 49 - 127 539 1,909 586 39 193 228 443 309 27 63 4,757 Intangible assets, net - 1,674 - 770 - - - 13,687 942 - - 9,688 - 370 514 2,331 36,881 66,857 Goodwill - 488 - - - - - 17,463 648 - - 6,787 - - - 731 47,689 73,806 Operating lease right-of-use assets 375 99 11 537 195 - 957 4,673 5,888 822 93 3,155 694 1,619 1,173 (26) - 20,265 Finance lease right-of-use assets - - - - 41 - 154 28 - 42 - - 134 - - - - 399 Restricted cash - - - - - - - - - - - - - - - - - - Other assets 5 9 12 14 6 - 29 221 104 27 5 30 16 56 24 - 15 573 Investment in subsidiairies - - - - - - - - - - - - - - - - - - Total assets 6,691$2,463$305$3,069$1,798$-$7,454$43,908$11,331$2,295$187$20,546$5,726$6,660$2,940$3,365$84,648$203,386$ Liabilities and Stockholders' Deficit Current Liabilities: Accounts payable 31$10$3$69$7$-$80$155$201$78$5$20$46$67$48$2$62$884$ Intercompany payables - 5,743 2,050 10,882 - 2,068 - 88,979 13,207 2,404 1,801 28,272 - 2,667 5,456 7,359 86,680 257,568 Accrued payroll and related costs 127 63 37 243 117 - 124 915 107 150 7 197 268 393 89 81 974 3,892 Other accrued liabilities 16 15 31 48 19 - 295 627 102 295 - 144 48 75 10 65 - 1,790 Current operating lease liabilities 105 64 6 234 97 8 368 2,102 1,195 407 54 763 223 322 351 4 - 6,303 Current finance lease liabilities - - - - 9 - 57 10 - 21 - - 26 - - - - 123 Borrowings under revolving commitments - - - - - - - - - - - - - - - - - - Current portion of long-term debt - - - - - - - - - - - - - - - - - - Liabilities to be disposed of - - - - - - - - - - - - - - - - - - Total current liabilities 279 5,895 2,127 11,476 249 2,076 924 92,788 14,812 3,355 1,867 29,396 611 3,524 5,954 7,511 87,716 270,560 Other long-term liabilities (7) - - (16) - - - (12) - (125) - - - - - - 21 (139) Deferred tax liabilities, net - - - - - - - - - - - - - - - - - - Operating lease liabilities, less current portion 280 209 4 326 105 - 687 2,798 5,012 567 39 4,091 481 1,278 855 (27) - 16,705 Finance lease liabilities, less current portion - - - - 31 - 111 20 - 24 - - 110 - - - - 296 Long-term debt, less current portion - - - - - - - - - - - - - - - - - - Other commitments and contingencies (Note 16) - - - - - - - - - - - - - - - - - - Stockholders' Deficit National Mentor Holdings, Inc. stockholders' deficit Common stock - - - - - - - - - - - - - - - - - - Additional paid-in capital - - - - - - - - - - - - - - - - - - Accumulated loss on derivatives, net - - - - - - - - - - - - - - - - - - Accumulated deficit 6,139 (3,641) (1,826) (8,717) 1,413 (2,076) 5,732 (51,686) (8,493) (1,526) (1,719) (12,941) 4,524 1,858 (3,869) (4,119) (3,089) (84,036) Total National Mentor Holdings, Inc. stockholders' deficit 6,139 (3,641) (1,826) (8,717) 1,413 (2,076) 5,732 (51,686) (8,493) (1,526) (1,719) (12,941) 4,524 1,858 (3,869) (4,119) (3,089) (84,036) Noncontrolling interests - - - - - - - - - - - - - - - - - - Total stockholders' deficit 6,139 (3,641) (1,826) (8,717) 1,413 (2,076) 5,732 (51,686) (8,493) (1,526) (1,719) (12,941) 4,524 1,858 (3,869) (4,119) (3,089) (84,036) Total liabilities and stockholders' deficit 6,691$2,463$305$3,069$1,798$-$7,454$43,908$11,331$2,295$187$20,546$5,726$6,660$2,940$3,365$84,648$203,386$ See accompanying notes to these consolidated financial statements.

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NeuroRestorative Consolidating Balance Sheet As of September 30, 2025 (Unaudited) (Amounts in thousands) Arizona Arkansas California Colorado Florida Georgia Illinois Iowa Kentucky Louisiana Maine Maryland Massachusetts Michigan Nevada New Hampshire New Jersey North Carolina Ohio Pennsylvania Rhode Island Tennessee Texas Utah Virginia Overhead Consolidated Totals Assets Current Assets: Cash and cash equivalents -$3$8$123$31$-$9$-$1$-$-$-$-$13$4$-$2$-$-$-$-$1$(400)$-$-$-$(205)$ Restricted cash - - - - - - - - - - - - - - - - - - - - - - - - - - - Accounts receivable, net 241 2,701 9,284 987 21,917 1,614 9,109 759 2,677 682 5,680 3,287 3,281 24,851 6,187 1,722 5,123 1,089 - 1,025 428 261 5,620 1,202 3,042 (1,859) 110,910 Intercompany receivables - - - - - 7,253 8,153 6,032 - - - - - 26,080 - - - 6,397 - - 3,240 653 10,797 - - - 68,605 Prepaid expenses and other current assets - - 116 - 67 - 13 1 3 - 1 109 113 591 1 1 10 4 - 55 9 - 256 - 10 - 1,360 Assets held for sale - - - - - - - - - - - - - - - - - - - - - - - - - - - Total current assets 241 2,704 9,408 1,110 22,015 8,867 17,284 6,792 2,681 682 5,681 3,396 3,394 51,535 6,192 1,723 5,135 7,490 - 1,080 3,677 915 16,273 1,202 3,052 (1,859) 180,670 Property and equipment, net 39 1,600 2,395 813 4,826 116 5,020 450 1,499 53 1,246 907 1,789 2,274 1,539 1,682 1,027 249 1 372 201 76 1,861 442 545 267 31,289 Intangible assets, net - - - - 10,096 - - - 158 - - 3,338 - 3,683 - - - - - 3,221 - - - - - 69,203 89,699 Goodwill - - - - 26,187 - - - - - - 1,263 - 288 - - - - - 3,855 - - - - - 146,013 177,606 Operating lease right-of-use assets 324 3,262 30,346 1,722 18,526 940 8,444 1,955 4,759 280 5,732 4,112 5,808 14,914 4,644 3,339 3,726 188 - 1,368 499 92 28,733 7,296 1,976 442 153,427 Finance lease right-of-use assets 100 - - 60 1,498 39 280 86 755 141 510 417 408 676 7,470 29 162 - - 18 143 - 483 - 175 56 13,506 Restricted cash - - - - - - - - - - - - - - - - - - - - - - - - - - - Other assets 6 1,722 388 78 141 5 123 41 103 3 94 67 144 343 133 23 111 7 - 38 14 4 206 108 19 46 3,967 Investment in subsidiairies - - - - - - - - - - - - - - - - - - - - - - - - - 75,516 75,516 Total assets 710$9,288$42,537$3,783$83,289$9,967$31,151$9,324$9,955$1,159$13,263$13,500$11,543$73,713$19,978$6,796$10,161$7,934$1$9,952$4,534$1,087$47,556$9,048$5,767$289,684$725,680$ Liabilities and Stockholders' Deficit Current Liabilities: Accounts payable 11$55$551$125$595$35$192$69$192$40$314$107$188$297$400$93$222$32$8$95$27$6$199$221$170$284$4,528$ Intercompany payables 4,568 6,955 21,071 18,661 13,540 - - - 20,167 289 8,024 7,599 4,427 - 27,421 5,219 - - 3,102 20,828 - - - 10,725 5,885 299,167 477,648 Accrued payroll and related costs 10 88 1,497 149 1,315 48 622 25 262 23 458 308 393 647 571 125 325 35 - 184 18 9 574 311 84 3,830 11,911 Other accrued liabilities 2 69 978 62 917 90 800 41 126 21 104 (75) 715 22 51 183 24 11 - 3 134 4 542 138 300 573 5,835 Current operating lease liabilities 92 648 4,056 1,160 1,771 201 1,751 371 1,415 73 1,028 628 1,575 3,743 909 296 1,118 52 - 425 119 47 3,247 1,279 346 133 26,483 Current finance lease liabilities 26 - - 16 422 10 92 24 220 38 136 106 134 207 322 9 46 - - 11 38 - 166 - 57 15 2,095 Borrowings under revolving commitments - - - - - - - - - - - - - - - - - - - - - - - - - - - Current portion of long-term debt - - - - - - - - - - - - - - - - - - - - - - - - - - - Liabilities to be disposed of - - - - - - - - - - - - - - - - - - - - - - - - - - - Total current liabilities 4,709 7,815 28,153 20,173 18,560 384 3,457 530 22,382 484 10,064 8,673 7,432 4,916 29,674 5,925 1,735 130 3,110 21,546 336 66 4,728 12,674 6,842 304,002 528,500 Other long-term liabilities - - (113) 34 (28) 1 (5) - (5) - (15) - 32 (16) - (1) (10) - - - (8) - (50) - - 74 (110) Deferred tax liabilities, net - - - - (6,120) - - - - - - - - - - - - - - - - - (3,061) - - - (9,181) Operating lease liabilities, less current portion 235 2,612 27,971 1,027 17,690 739 6,973 1,631 3,465 211 4,731 3,551 4,414 11,808 3,872 3,170 2,770 140 - 991 331 47 31,694 6,528 1,630 325 138,556 Finance lease liabilities, less current portion 76 - - 45 1,117 28 197 65 566 105 379 318 294 572 10,374 18 122 - - 10 109 - 345 - 128 43 14,911 Long-term debt, less current portion - - - - - - - - - - - - - - - - - - - - - - - - - - - Other commitments and contingencies (Note 16) - - - - - - - - - - - - - - - - - - - - - - - - - - - Stockholders' Deficit National Mentor Holdings, Inc. stockholders' deficit Common stock - - - - - - - - - - - - - - - - - - - - - - - - - - - Additional paid-in capital - - - - - - - - - - - - - - - - - - - - - - - - - - - Accumulated loss on derivatives, net - - - - - - - - - - - - - - - - - - - - - - - - - - - Accumulated deficit (4,310) (1,139) (13,474) (17,496) 52,070 8,815 20,529 7,098 (16,453) 359 (1,896) 958 (629) 56,433 (23,942) (2,316) 5,544 7,664 (3,109) (12,595) 3,766 974 13,900 (10,154) (2,833) (14,760) 53,004 Total National Mentor Holdings, Inc. stockholders' deficit (4,310) (1,139) (13,474) (17,496) 52,070 8,815 20,529 7,098 (16,453) 359 (1,896) 958 (629) 56,433 (23,942) (2,316) 5,544 7,664 (3,109) (12,595) 3,766 974 13,900 (10,154) (2,833) (14,760) 53,004 Noncontrolling interests - - - - - - - - - - - - - - - - - - - - - - - - - - - Total stockholders' deficit (4,310) (1,139) (13,474) (17,496) 52,070 8,815 20,529 7,098 (16,453) 359 (1,896) 958 (629) 56,433 (23,942) (2,316) 5,544 7,664 (3,109) (12,595) 3,766 974 13,900 (10,154) (2,833) (14,760) 53,004 Total liabilities and stockholders' deficit 710$9,288$42,537$3,783$83,289$9,967$31,151$9,324$9,955$1,159$13,263$13,500$11,543$73,713$19,978$6,796$10,161$7,934$1$9,952$4,534$1,087$47,556$9,048$5,767$289,684$725,680$ See accompanying notes to these consolidated financial statements.

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Community Services - California Consolidating Balance Sheet As of September 30, 2025 (Unaudited) (Amounts in thousands) CA MENTOR California Mentor Family Home Agency, LLC IFCS dba California Mentor Horrigan Cole Enterprises, Inc. First Step Independent Living, Inc. Unlimited Quest, Inc. Loyds Liberty Homes, Inc. Cornerstone Living Skills, Inc. SAR, PC REM California Consolidated Totals Assets Current Assets: Cash and cash equivalents 2$-$-$-$1$1$1$-$-$1$6$ Restricted cash - - - - - - - - - - - Accounts receivable, net 4,418 9,160 1,001 10,658 515 1,438 1,763 - - 3,638 32,591 Intercompany receivables - - - - - - - - - - - Prepaid expenses and other current assets 43 7 6 21 13 8 159 1 - 1 259 Assets held for sale - - - - - - - - - - - Total current assets 4,463 9,167 1,007 10,679 529 1,447 1,923 1 - 3,640 32,856 Property and equipment, net 1,169 219 285 1,023 254 154 586 - 21 1,029 4,740 Intangible assets, net - - - - - - - - - 6,008 6,008 Goodwill - - - - - - - - - 3,537 3,537 Operating lease right-of-use assets 5,021 1,227 505 4,648 2,343 1,231 1,292 - - 3,500 19,767 Finance lease right-of-use assets 162 - - 79 - - 205 - - 59 505 Restricted cash - - - - - - - - - - - Other assets 167 27 10 141 11 27 6 - - 116 505 Investment in subsidiairies - - - - - - - - - - - Total assets 10,982$10,640$1,807$16,570$3,137$2,859$4,012$1$21$17,889$67,918$ Liabilities and Stockholders' Deficit Current Liabilities: Accounts payable 487$6,775$17$204$26$15$66$-$11$132$7,733$ Intercompany payables 35,915 (19,103) 612 (19,180) (695) 1,084 8,133 2,131 388 33,216 42,501 Accrued payroll and related costs 3,302 4,753 168 9,612 821 1,691 764 - 112 2,369 23,592 Other accrued liabilities 184 20 3,208 26 - (3) 499 2 - 24 3,960 Current operating lease liabilities 1,545 567 294 2,037 480 521 494 - - 1,212 7,150 Current finance lease liabilities 80 - - 22 - - 61 - - 20 183 Borrowings under revolving commitments - - - - - - - - - - - Current portion of long-term debt - - - - - - - - - - - Liabilities to be disposed of - - - - - - - - - - - Total current liabilities 41,513 (6,988) 4,299 (7,279) 632 3,308 10,017 2,133 511 36,973 85,119 Other long-term liabilities 25 (10) - (54) - - (20) - (2) (9) (70) Deferred tax liabilities, net - - - - - - - - - - - Operating lease liabilities, less current portion 3,593 716 414 2,849 1,902 762 809 - - 2,414 13,459 Finance lease liabilities, less current portion 109 - - 61 - - 152 - - 42 364 Long-term debt, less current portion - - - - - - - - - - - Other commitments and contingencies (Note 16) - - - - - - - - - - - Stockholders' Deficit National Mentor Holdings, Inc. stockholders' deficit Common stock - - - - - - - - - - - Additional paid-in capital - - - - - - - - - - - Accumulated loss on derivatives, net - - - - - - - - - - - Accumulated deficit (34,258) 16,922 (2,906) 20,993 603 (1,211) (6,946) (2,132) (488) (21,531) (30,954) Total National Mentor Holdings, Inc. stockholders' deficit (34,258) 16,922 (2,906) 20,993 603 (1,211) (6,946) (2,132) (488) (21,531) (30,954) Noncontrolling interests - - - - - - - - - - - Total stockholders' deficit (34,258) 16,922 (2,906) 20,993 603 (1,211) (6,946) (2,132) (488) (21,531) (30,954) Total liabilities and stockholders' deficit 10,982$10,640$1,807$16,570$3,137$2,859$4,012$1$21$17,889$67,918$ See accompanying notes to these consolidated financial statements.

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Community Services - Arizona Consolidating Balance Sheet As of September 30, 2025 (Unaudited) (Amounts in thousands) AZ MENTOR Spectrum Home Healthcare, LLC AZ Healthcare AZ Tungland Consolidated Totals Assets Current Assets: Cash and cash equivalents -$-$-$-$-$ Restricted cash - - - - - Accounts receivable, net 7,235 (66) 2,127 5,642 14,938 Intercompany receivables - - - - - Prepaid expenses and other current assets 4 - - - 4 Assets held for sale - - - - - Total current assets 7,239 (66) 2,127 5,642 14,942 Property and equipment, net 1,395 1 316 775 2,487 Intangible assets, net 520 - 3,720 15,473 19,713 Goodwill - - 840 11,409 12,249 Operating lease right-of-use assets 6,096 - 655 3,213 9,964 Finance lease right-of-use assets 1,244 - 40 483 1,767 Restricted cash - - - - - Other assets 240 - 38 220 498 Investment in subsidiairies - - - - - Total assets 16,734$(65)$7,736$37,215$61,620$ Liabilities and Stockholders' Deficit Current Liabilities: Accounts payable 275$1$21$88$385$ Intercompany payables 39,843 13,137 14,160 51,349 118,489 Accrued payroll and related costs 2,129 - 201 1,341 3,671 Other accrued liabilities 1,987 - 3,381 49 5,417 Current operating lease liabilities 2,944 - 485 1,923 5,352 Current finance lease liabilities 327 - 10 131 468 Borrowings under revolving commitments - - - - - Current portion of long-term debt - - - - - Liabilities to be disposed of - - - - - Total current liabilities 47,505 13,138 18,258 54,881 133,782 Other long-term liabilities - - - (14) (14) Deferred tax liabilities, net - - - - - Operating lease liabilities, less current portion 3,434 - 254 1,336 5,024 Finance lease liabilities, less current portion 929 - 30 359 1,318 Long-term debt, less current portion - - - - - Other commitments and contingencies (Note 16) - - - - - Stockholders' Deficit National Mentor Holdings, Inc. stockholders' deficit Common stock - - - - - Additional paid-in capital - - - - - Accumulated loss on derivatives, net - - - - - Accumulated deficit (35,134) (13,203) (10,806) (19,347) (78,490) Total National Mentor Holdings, Inc. stockholders' deficit (35,134) (13,203) (10,806) (19,347) (78,490) Noncontrolling interests - - - - - Total stockholders' deficit (35,134) (13,203) (10,806) (19,347) (78,490) Total liabilities and stockholders' deficit 16,734$(65)$7,736$37,215$61,620$ See accompanying notes to these consolidated financial statements.

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Community Services - New Jersey Consolidating Balance Sheet As of September 30, 2025 (Unaudited) (Amounts in thousands) New Jersey MENTOR - IDD REM New Jersey, Inc. REM New Jersey Properties, Inc D&S New Jersey Consolidated Totals Assets Current Assets: Cash and cash equivalents -$-$-$-$-$ Restricted cash - - - - - Accounts receivable, net 91 2,002 - 678 2,771 Intercompany receivables - - - - - Prepaid expenses and other current assets 30 - - - 30 Assets held for sale - - - - - Total current assets 121 2,002 - 678 2,801 Property and equipment, net 45 2,236 1,916 412 4,609 Intangible assets, net - - - 6,050 6,050 Goodwill - - - 4,320 4,320 Operating lease right-of-use assets 9 6,077 - 2,257 8,343 Finance lease right-of-use assets - 632 - 60 692 Restricted cash - - - - - Other assets - 172 - 34 206 Investment in subsidiairies - - - - - Total assets 175$11,119$1,916$13,811$27,021$ Liabilities and Stockholders' Deficit Current Liabilities: Accounts payable 3$159$-$310$472$ Intercompany payables (7,379) 8,310 609 17,139 18,679 Accrued payroll and related costs 81 917 - 362 1,360 Other accrued liabilities 14 161 - 132 307 Current operating lease liabilities 13 1,607 - 606 2,226 Current finance lease liabilities - 205 - 20 225 Borrowings under revolving commitments - - - - - Current portion of long-term debt - - - - - Liabilities to be disposed of - - - - - Total current liabilities (7,268) 11,359 609 18,569 23,269 Other long-term liabilities - (89) 1,307 - 1,218 Deferred tax liabilities, net - - - - - Operating lease liabilities, less current portion (4) 4,533 - 1,707 6,236 Finance lease liabilities, less current portion - 462 - 44 506 Long-term debt, less current portion - - - - - Other commitments and contingencies (Note 16) - - - - - Stockholders' Deficit National Mentor Holdings, Inc. stockholders' deficit Common stock - - - - - Additional paid-in capital - - - - - Accumulated loss on derivatives, net - - - - - Accumulated deficit 7,447 (5,146) - (6,509) (4,208) Total National Mentor Holdings, Inc. stockholders' deficit 7,447 (5,146) - (6,509) (4,208) Noncontrolling interests - - - - - Total stockholders' deficit 7,447 (5,146) - (6,509) (4,208) Total liabilities and stockholders' deficit 175$11,119$1,916$13,811$27,021$ See accompanying notes to these consolidated financial statements.

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Community Services - West Virginia Consolidating Balance Sheet As of September 30, 2025 (Unaudited) (Amounts in thousands) REM Community Options, Inc REM West Virginia, Inc Consolidated Totals Assets Current Assets: Cash and cash equivalents -$-$-$ Restricted cash - - - Accounts receivable, net 2,846 1,601 4,447 Intercompany receivables - - - Prepaid expenses and other current assets 60 92 152 Assets held for sale - - - Total current assets 2,906 1,693 4,599 Property and equipment, net 367 1,232 1,599 Intangible assets, net - 4,435 4,435 Goodwill - 1,912 1,912 Operating lease right-of-use assets 1,135 990 2,125 Finance lease right-of-use assets 262 - 262 Restricted cash - - - Other assets 12 56 68 Investment in subsidiairies - - - Total assets 4,682$10,318$15,000$ Liabilities and Stockholders' Deficit Current Liabilities: Accounts payable 92$277$369$ Intercompany payables 12,903 20,167 33,070 Accrued payroll and related costs 877 222 1,099 Other accrued liabilities 204 84 288 Current operating lease liabilities 495 507 1,002 Current finance lease liabilities 82 - 82 Borrowings under revolving commitments - - - Current portion of long-term debt - - - Liabilities to be disposed of - - - Total current liabilities 14,653 21,257 35,910 Other long-term liabilities (29) 3 (26) Deferred tax liabilities, net - - - Operating lease liabilities, less current portion 669 527 1,196 Finance lease liabilities, less current portion 193 - 193 Long-term debt, less current portion - - - Other commitments and contingencies (Note 16) - - - Stockholders' Deficit National Mentor Holdings, Inc. stockholders' deficit Common stock - - - Additional paid-in capital - - - Accumulated loss on derivatives, net - - - Accumulated deficit (10,804) (11,469) (22,273) Total National Mentor Holdings, Inc. stockholders' deficit (10,804) (11,469) (22,273) Noncontrolling interests - - - Total stockholders' deficit (10,804) (11,469) (22,273) Total liabilities and stockholders' deficit 4,682$10,318$15,000$ See accompanying notes to these consolidated financial statements.

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Community Services - Indiana Consolidating Balance Sheet As of September 30, 2025 (Unaudited) (Amounts in thousands) IN Supported Living IN MENTOR Waiver Services REM Indiana, Inc REM Occazio, LLC REM Indiana Community Services, Inc Transitional Services, LLC Bridges of Indiana, Inc. Consolidated Totals Assets Current Assets: Cash and cash equivalents -$-$-$-$-$-$-$-$ Restricted cash - - - - - - - - Accounts receivable, net 1,427 463 1,385 802 596 579 960 6,212 Intercompany receivables - - - - - - - - Prepaid expenses and other current assets - - 32 5 10 4 8 59 Assets held for sale - - - - - - - - Total current assets 1,427 463 1,417 807 606 583 968 6,271 Property and equipment, net 357 34 849 393 67 181 100 1,981 Intangible assets, net - - - - 904 - 5,211 6,115 Goodwill - - - - 384 - 1,656 2,040 Operating lease right-of-use assets 2,282 - 1,317 1,571 258 828 337 6,593 Finance lease right-of-use assets 227 41 236 226 - 53 - 783 Restricted cash - - - - - - - - Other assets 37 - 49 - 6 14 10 116 Investment in subsidiairies - - - - - - - - Total assets 4,330$538$3,868$2,997$2,225$1,659$8,282$23,899$ Liabilities and Stockholders' Deficit Current Liabilities: Accounts payable 35$14$115$52$6$31$10$263$ Intercompany payables 2,385 6,392 24,314 6,096 7,006 8,660 14,422 69,275 Accrued payroll and related costs 727 171 742 179 191 144 348 2,502 Other accrued liabilities 58 - 385 161 (1) 109 (4) 708 Current operating lease liabilities 713 - 628 454 124 223 91 2,233 Current finance lease liabilities 62 9 80 61 - 21 - 233 Borrowings under revolving commitments - - - - - - - - Current portion of long-term debt - - - - - - - - Liabilities to be disposed of - - - - - - - - Total current liabilities 3,980 6,586 26,264 7,003 7,326 9,188 14,867 75,214 Other long-term liabilities - - (35) - - - - (35) Deferred tax liabilities, net - - - - - - - - Operating lease liabilities, less current portion 1,644 - 718 1,147 214 613 258 4,594 Finance lease liabilities, less current portion 170 30 171 170 - 36 - 577 Long-term debt, less current portion - - - - - - - - Other commitments and contingencies (Note 16) - - - - - - - - Stockholders' Deficit National Mentor Holdings, Inc. stockholders' deficit Common stock - - - - - - - - Additional paid-in capital - - - - - - - - Accumulated loss on derivatives, net - - - - - - - - Accumulated deficit (1,464) (6,078) (23,250) (5,323) (5,315) (8,178) (6,843) (56,451) Total National Mentor Holdings, Inc. stockholders' deficit (1,464) (6,078) (23,250) (5,323) (5,315) (8,178) (6,843) (56,451) Noncontrolling interests - - - - - - - - Total stockholders' deficit (1,464) (6,078) (23,250) (5,323) (5,315) (8,178) (6,843) (56,451) Total liabilities and stockholders' deficit 4,330$538$3,868$2,997$2,225$1,659$8,282$23,899$ See accompanying notes to these consolidated financial statements.

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Community Services - Iowa Consolidating Balance Sheet As of September 30, 2025 (Unaudited) (Amounts in thousands) REM Iowa, Inc REM Developmental Services, Inc REM Iowa Community Services, Inc Consolidated Totals Assets Current Assets: Cash and cash equivalents -$-$-$-$ Restricted cash - - - - Accounts receivable, net 1,680 273 5,391 7,344 Intercompany receivables - - - - Prepaid expenses and other current assets 24 1 1 26 Assets held for sale - - - - Total current assets 1,704 274 5,392 7,370 Property and equipment, net 2,218 1,016 2,579 5,813 Intangible assets, net - - - - Goodwill - - - - Operating lease right-of-use assets 1,820 1,744 7,604 11,168 Finance lease right-of-use assets 186 315 684 1,185 Restricted cash - - - - Other assets 43 12 129 184 Investment in subsidiairies - - - - Total assets 5,971$3,361$16,388$25,720$ Liabilities and Stockholders' Deficit Current Liabilities: Accounts payable 462$17$121$600$ Intercompany payables 14,936 3,592 (10,022) 8,506 Accrued payroll and related costs 435 93 1,005 1,533 Other accrued liabilities 832 - 25 857 Current operating lease liabilities 327 447 2,662 3,436 Current finance lease liabilities 49 98 242 389 Borrowings under revolving commitments - - - - Current portion of long-term debt - - - - Liabilities to be disposed of - - - - Total current liabilities 17,041 4,247 (5,967) 15,321 Other long-term liabilities (2) - - (2) Deferred tax liabilities, net - - - - Operating lease liabilities, less current portion 1,557 1,341 5,002 7,900 Finance lease liabilities, less current portion 141 233 479 853 Long-term debt, less current portion - - - - Other commitments and contingencies (Note 16) - - - - Stockholders' Deficit National Mentor Holdings, Inc. stockholders' deficit Common stock - - - - Additional paid-in capital - - - - Accumulated loss on derivatives, net - - - - Accumulated deficit (12,766) (2,460) 16,874 1,648 Total National Mentor Holdings, Inc. stockholders' deficit (12,766) (2,460) 16,874 1,648 Noncontrolling interests - - - - Total stockholders' deficit (12,766) (2,460) 16,874 1,648 Total liabilities and stockholders' deficit 5,971$3,361$16,388$25,720$ See accompanying notes to these consolidated financial statements.

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National Mentor Holdings, Inc. and Subsidiaries Consolidating Statement of Operations For the year ended September 30, 2025 (Unaudited) (Amounts in thousands) Pediatrics Community Services NeuroRestorative Central Office Elimination Other NMHI Consolidated Totals Net revenue 272,513$2,285,039$629,048$4,266$(2,557)$-$-$3,188,309$ Cost of revenue (exclusive of depreciation and amortization expense below) 219,449 1,885,075 465,452 9,226 (2,557) - - 2,576,645 Operating expenses: General and administrative 25,407 103,709 38,627 170,907 - - - 338,650 General and administrative - central support allocation 14,689 125,527 30,904 (171,120) - - - - Depreciation and amortization 14,264 103,374 28,825 9,273 - - - 155,736 Loss on assets held for sale and divestitures 96 1,341 277 8,933 - - - 10,647 Total operating expenses 54,456 333,951 98,633 17,993 - - - 505,033 Income from operations (1,392) 66,013 64,963 (22,953) - - - 106,631 Other income (expense): Interest expense (15,731) (135,703) (34,352) (383) (1) - - (186,170) Other income, net 264 292 137 795 764 - - 2,252 Loss before income taxes (16,859) (69,398) 30,748 (22,541) 763 - - (77,287) (Benefit from) provision for income taxes - - - (3,897) - - - (3,897) Net loss (16,859) (69,398) 30,748 (18,644) 763 - - (73,390) Less: Net loss attributable to noncontrolling interests - - - (1,479) - - - (1,479) Net loss attributable to National Mentor Holdings, Inc. (16,859)$(69,398)$30,748$(17,165)$763$-$-$(71,911)$ See accompanying notes to these consolidated financial statements.

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Community Services Consolidating Statement of Operations For the year ended September 30, 2025 (Unaudited) (Amounts in thousands) Alabama Arizona California Colorado Delaware Florida Georgia Idaho Illinois Indiana Iowa Kentucky Louisiana Massachusetts Minnesota Mississippi Missouri Montana Nevada New Jersey New Mexico North Dakota Ohio Pennsylvania South Carolina Tennessee Texas Virginia West Virginia Wisconsin Wyoming SCC Overhead Consolidated Totals Net revenue 3,022$161,141$256,655$3,865$40,284$171,132$38,703$28,739$36,944$106,306$92,907$14,479$16,551$14,007$414,624$30,595$134,878$3,204$24,285$64,912$7,339$26,891$83,123$54,214$32,349$83,741$120,255$22,414$54,570$43,835$1,700$97,375$-$2,285,039$ Cost of revenue (exclusive of depreciation and amortization expense below) 2,394 141,107 209,066 3,470 30,586 126,979 28,766 23,470 31,016 99,063 72,249 16,975 14,536 11,777 329,311 23,441 99,651 2,744 19,783 53,307 7,507 21,153 70,222 38,681 25,188 80,249 118,055 22,118 45,580 39,233 1,445 71,102 4,851 1,885,075 Operating expenses: General and administrative 110 5,240 8,498 139 1,019 5,251 1,440 1,350 1,628 3,766 3,842 976 829 599 11,538 922 4,339 173 1,297 1,176 537 922 2,279 2,027 1,177 3,557 7,033 987 2,709 2,022 127 5,768 20,432 103,709 General and administrative - central support allocation 226 12,956 18,818 320 2,736 12,587 2,630 2,280 2,799 9,424 6,832 1,693 1,518 1,108 29,726 2,205 9,037 257 1,865 4,951 711 1,949 6,335 3,674 2,301 7,610 11,892 2,198 4,403 3,535 147 4,836 (48,032) 125,527 Depreciation and amortization 103 4,876 4,441 107 206 5,520 559 1,160 446 2,375 2,592 962 1,158 331 10,374 1,533 2,216 118 704 2,447 238 284 1,275 1,864 744 5,006 11,552 3,485 1,550 471 103 7,259 27,315 103,374 Loss on assets held for sale and divestitures - 73 73 - 5 325 2 1 6 61 58 2 4 7 459 (24) 97 - 7 (3) 4 - (2) (14) 40 41 39 19 50 14 - (4) 1 1,341 Total operating expenses 439 23,145 31,830 566 3,966 23,683 4,631 4,791 4,879 15,626 13,324 3,633 3,509 2,045 52,097 4,636 15,689 548 3,873 8,571 1,490 3,155 9,887 7,551 4,262 16,214 30,516 6,689 8,712 6,042 377 17,859 (284) 333,951 Income from operations 189 (3,111) 15,759 (171) 5,732 20,470 5,306 478 1,049 (8,383) 7,334 (6,129) (1,494) 185 33,216 2,518 19,538 (88) 629 3,034 (1,658) 2,583 3,014 7,982 2,899 (12,722) (28,316) (6,393) 278 (1,440) (122) 8,414 (4,567) 66,013 Other income (expense): Interest expense (177) (9,936) (14,426) (245) (2,057) (9,717) (2,028) (1,740) (2,168) (7,127) (5,292) (1,299) (1,195) (833) (23,335) (1,757) (6,989) (196) (1,427) (3,767) (554) (1,514) (4,924) (2,798) (1,794) (5,899) (9,328) (1,711) (3,331) (2,757) (112) (5,270) - (135,703) Other income, net - 2 3 - - 4 - - - 2 1 - - - 94 - 2 - - 1 - - 1 1 - 1 4 - 1 1 - 44 130 292 Loss before income taxes 12 (13,045) 1,336 (416) 3,675 10,757 3,278 (1,262) (1,119) (15,508) 2,043 (7,428) (2,689) (648) 9,975 761 12,551 (284) (798) (732) (2,212) 1,069 (1,909) 5,185 1,105 (18,620) (37,640) (8,104) (3,052) (4,196) (234) 3,188 (4,437) (69,398) (Benefit from) provision for income taxes - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Net loss 12 (13,045) 1,336 (416) 3,675 10,757 3,278 (1,262) (1,119) (15,508) 2,043 (7,428) (2,689) (648) 9,975 761 12,551 (284) (798) (732) (2,212) 1,069 (1,909) 5,185 1,105 (18,620) (37,640) (8,104) (3,052) (4,196) (234) 3,188 (4,437) (69,398) Less: Net loss attributable to noncontrolling interests - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Net loss attributable to National Mentor Holdings, Inc. 12$(13,045)$1,336$(416)$3,675$10,757$3,278$(1,262)$(1,119)$(15,508)$2,043$(7,428)$(2,689)$(648)$9,975$761$12,551$(284)$(798)$(732)$(2,212)$1,069$(1,909)$5,185$1,105$(18,620)$(37,640)$(8,104)$(3,052)$(4,196)$(234)$3,188$(4,437)$(69,398)$ See accompanying notes to these consolidated financial statements.

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Pediatrics Consolidating Statement of Operations For the year ended September 30, 2025 (Unaudited) (Amounts in thousands) Alabama Arizona Connecticut Georgia Indiana Kentucky Maryland Massachusetts Minnesota New Jersey North Carolina North Dakota Ohio Pennsylvania South Carolina Texas Overhead Consolidated Totals Net revenue 8,814$2,227$4,456$18,588$7,656$-$11,141$79,607$29,000$15,141$593$10,879$31,373$35,279$10,919$6,840$-$272,513$ Cost of revenue (exclusive of depreciation and amortization expense below) 5,959 2,543 3,785 15,984 4,982 11 7,433 64,258 21,622 13,752 621 10,871 23,821 26,378 8,609 5,955 2,865 219,449 Operating expenses: General and administrative 626 397 106 951 256 4 967 4,839 1,376 825 47 1,043 1,165 1,802 740 919 9,344 25,407 General and administrative - central support allocation 882 464 535 2,277 692 16 1,153 9,796 3,996 1,982 95 1,768 3,328 3,854 1,309 1,039 (18,497) 14,689 Depreciation and amortization 47 239 24 179 29 - 120 2,997 934 302 24 1,553 137 258 212 323 6,886 14,264 Loss on assets held for sale and divestitures - - - 1 - - (31) 22 - 89 - 1 4 5 3 1 1 96 Total operating expenses 1,555 1,100 665 3,408 977 20 2,209 17,654 6,306 3,198 166 4,365 4,634 5,919 2,264 2,282 (2,266) 54,456 Income from operations 1,300 (1,416) 6 (804) 1,697 (31) 1,499 (2,305) 1,072 (1,809) (194) (4,357) 2,918 2,982 46 (1,397) (599) (1,392) Other income (expense): Interest expense (435) (209) (256) (1,121) (342) (8) (581) (4,726) (1,618) (983) (45) (798) (1,639) (1,863) (639) (468) - (15,731) Other income, net - - - - - - 44 1 - - - - - 43 - - 176 264 Loss before income taxes 865 (1,625) (250) (1,925) 1,355 (39) 962 (7,030) (546) (2,792) (239) (5,155) 1,279 1,162 (593) (1,865) (423) (16,859) (Benefit from) provision for income taxes - - - - - - - - - - - - - - - - - - Net loss 865 (1,625) (250) (1,925) 1,355 (39) 962 (7,030) (546) (2,792) (239) (5,155) 1,279 1,162 (593) (1,865) (423) (16,859) Less: Net loss attributable to noncontrolling interests - - - - - - - - - - - - - - - - - - Net loss attributable to National Mentor Holdings, Inc. 865$(1,625)$(250)$(1,925)$1,355$(39)$962$(7,030)$(546)$(2,792)$(239)$(5,155)$1,279$1,162$(593)$(1,865)$(423)$(16,859)$ See accompanying notes to these consolidated financial statements.

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NeuroRestorative Consolidating Statement of Operations For the year ended September 30, 2025 (Unaudited) (Amounts in thousands) Arizona Arkansas California Colorado Florida Georgia Illinois Iowa Kentucky Louisiana Maine Maryland Massachusetts Michigan Nevada New Hampshire New Jersey North Carolina Ohio Pennsylvania Rhode Island Tennessee Texas Utah Virginia Overhead Consolidated Totals Net revenue 1,083$11,521$77,269$7,280$97,525$6,072$52,840$8,498$33,339$2,695$18,054$17,735$33,253$93,584$30,802$11,657$22,100$4,815$327$10,204$5,078$1,279$53,134$18,045$10,859$-$629,048$ Cost of revenue (exclusive of depreciation and amortization expense below) 740 10,133 64,688 7,828 64,845 3,091 37,615 5,956 27,826 1,883 14,818 11,444 23,071 57,299 24,230 8,656 20,995 2,214 (411) 10,015 2,715 718 33,169 16,915 5,601 9,398 465,452 Operating expenses: General and administrative 32 313 1,935 102 1,065 46 824 182 676 26 383 239 233 2,592 446 94 322 46 21 873 39 15 1,074 322 159 26,568 38,627 General and administrative - central support allocation 112 1,478 9,220 1,148 9,329 432 5,463 875 4,056 275 2,063 1,625 3,272 8,522 3,835 1,267 2,971 320 (26) 1,610 400 108 4,748 2,386 809 (35,394) 30,904 Depreciation and amortization 54 357 955 526 3,387 64 1,277 222 1,056 103 504 628 960 1,986 1,578 682 701 111 6 785 195 48 941 291 311 11,097 28,825 Loss on assets held for sale and divestitures - - 104 1 110 - 22 (8) (27) (10) (1) - (34) 27 2 5 (18) - 111 - 5 - (18) - 9 (3) 277 Total operating expenses 198 2,148 12,214 1,777 13,891 542 7,586 1,271 5,761 394 2,949 2,492 4,431 13,127 5,861 2,048 3,976 477 112 3,268 639 171 6,745 2,999 1,288 2,268 98,633 Income from operations 145 (760) 367 (2,325) 18,789 2,439 7,639 1,271 (248) 418 287 3,799 5,751 23,158 711 953 (2,871) 2,124 626 (3,079) 1,724 390 13,220 (1,869) 3,970 (11,666) 64,963 Other income (expense): Interest expense (60) (728) (4,610) (575) (4,753) (220) (2,720) (437) (2,033) (142) (1,029) (815) (1,681) (4,245) (2,925) (639) (1,509) (162) 28 (802) (206) (54) (2,427) (1,191) (415) (2) (34,352) Other income, net - - 1 - 1 - 1 - - - - - - 1 - - - - - - - - 4 - - 129 137 Loss before income taxes 85 (1,488) (4,242) (2,900) 14,037 2,219 4,920 834 (2,281) 276 (742) 2,984 4,070 18,914 (2,214) 314 (4,380) 1,962 654 (3,881) 1,518 336 10,797 (3,060) 3,555 (11,539) 30,748 (Benefit from) provision for income taxes - - - - - - - - - - - - - - - - - - - - - - - - - - - Net loss 85 (1,488) (4,242) (2,900) 14,037 2,219 4,920 834 (2,281) 276 (742) 2,984 4,070 18,914 (2,214) 314 (4,380) 1,962 654 (3,881) 1,518 336 10,797 (3,060) 3,555 (11,539) 30,748 Less: Net loss attributable to noncontrolling interests - - - - - - - - - - - - - - - - - - - - - - - - - - - Net loss attributable to National Mentor Holdings, Inc. 85$(1,488)$(4,242)$(2,900)$14,037$2,219$4,920$834$(2,281)$276$(742)$2,984$4,070$18,914$(2,214)$314$(4,380)$1,962$654$(3,881)$1,518$336$10,797$(3,060)$3,555$(11,539)$30,748$ See accompanying notes to these consolidated financial statements.

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Community Services - California Consolidating Statement of Operations For the year ended September 30, 2025 (Unaudited) (Amounts in thousands) CA MENTOR California Mentor Family Home Agency, LLC IFCS dba California Mentor Horrigan Cole Enterprises, Inc. First Step Independen t Living, Inc. Unlimited Quest, Inc. Loyds Liberty Homes, Inc. SAR, PC REM California Consolidated Totals Net revenue 46,356$69,548$8,786$64,103$6,727$8,246$18,616$-$34,273$256,655$ Cost of revenue (exclusive of depreciation and amortization expense below) 50,163 51,769 7,564 43,710 4,841 6,430 14,460 30 30,099 209,066 Operating expenses: General and administrative 5,908 1,231 302 231 43 19 360 - 404 8,498 General and administrative - central support allocation (7,100) 8,298 1,244 7,022 803 1,043 2,475 2 5,031 18,818 Depreciation and amortization 1,019 145 198 770 157 120 638 15 1,379 4,441 Loss on assets held for sale and divestitures 3 2 - 1 1 - (7) - 73 73 Total operating expenses (170) 9,676 1,744 8,024 1,004 1,182 3,466 17 6,887 31,830 Income from operations (3,637) 8,103 (522) 12,369 882 634 690 (47) (2,713) 15,759 Other income (expense): Interest expense (3,093) (3,594) (559) (3,027) (352) (449) (1,127) (1) (2,224) (14,426) Other income, net 1 1 - 1 - - - - - 3 Loss before income taxes (6,729) 4,510 (1,081) 9,343 530 185 (437) (48) (4,937) 1,336 (Benefit from) provision for income taxes - - - - - - - - - - Net loss (6,729) 4,510 (1,081) 9,343 530 185 (437) (48) (4,937) 1,336 Less: Net loss attributable to noncontrolling interests - - - - - - - - - - Net loss attributable to National Mentor Holdings, Inc. (6,729)$4,510$(1,081)$9,343$530$185$(437)$(48)$(4,937)$1,336$ See accompanying notes to these consolidated financial statements.

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Community Services - Arizona Consolidating Statement of Operations For the year ended September 30, 2025 (Unaudited) (Amounts in thousands) AZ MENTOR Spectrum Home Healthcare, LLC AZ Healthcare AZ Tungland Consolidated Totals Net revenue 88,954$1,286$5,973$64,928$161,141$ Cost of revenue (exclusive of depreciation and amortization expense below) 78,201 701 7,791 54,414 141,107 Operating expenses: General and administrative 4,147 14 383 696 5,240 General and administrative - central support allocation 3,624 83 1,464 7,785 12,956 Depreciation and amortization 1,379 7 706 2,784 4,876 Loss on assets held for sale and divestitures (40) 14 30 69 73 Total operating expenses 9,110 118 2,583 11,334 23,145 Income from operations 1,643 467 (4,401) (820) (3,111) Other income (expense): Interest expense (5,308) (52) (616) (3,960) (9,936) Other income, net 1 - - 1 2 Loss before income taxes (3,664) 415 (5,017) (4,779) (13,045) (Benefit from) provision for income taxes - - - - - Net loss (3,664) 415 (5,017) (4,779) (13,045) Less: Net loss attributable to noncontrolling interests - - - - - Net loss attributable to National Mentor Holdings, Inc. (3,664)$415$(5,017)$(4,779)$(13,045)$ See accompanying notes to these consolidated financial statements.

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Community Services - New Jersey Consolidating Statement of Operations For the year ended September 30, 2025 (Unaudited) (Amounts in thousands) New Jersey MENTOR - IDD REM New Jersey, Inc. D&S New Jersey Consolidated Totals Net revenue 1,775$46,852$16,285$64,912$ Cost of revenue (exclusive of depreciation and amortization expense below) 1,125 38,942 13,240 53,307 Operating expenses: General and administrative 168 904 104 1,176 General and administrative - central support allocation (431) 3,729 1,653 4,951 Depreciation and amortization 26 1,286 1,135 2,447 Loss on assets held for sale and divestitures - 15 (18) (3) Total operating expenses (237) 5,934 2,874 8,571 Income from operations 887 1,976 171 3,034 Other income (expense): Interest expense (56) (2,735) (976) (3,767) Other income, net - 1 - 1 Loss before income taxes 831 (758) (805) (732) (Benefit from) provision for income taxes - - - - Net loss 831 (758) (805) (732) Less: Net loss attributable to noncontrolling interests - - - - Net loss attributable to National Mentor Holdings, Inc. 831$(758)$(805)$(732)$ See accompanying notes to these consolidated financial statements.

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Community Services - West Virginia Consolidating Statement of Operations For the year ended September 30, 2025 (Unaudited) (Amounts in thousands) REM Community Options, Inc REM West Virginia, Inc Consolidated Totals Net revenue 37,160$17,410$54,570$ Cost of revenue (exclusive of depreciation and amortization expense below) 30,246 15,334 45,580 Operating expenses: General and administrative 1,855 854 2,709 General and administrative - central support allocation 2,813 1,590 4,403 Depreciation and amortization 338 1,212 1,550 Loss on assets held for sale and divestitures (86) 136 50 Total operating expenses 4,920 3,792 8,712 Income from operations 1,994 (1,716) 278 Other income (expense): Interest expense (2,131) (1,200) (3,331) Other income, net - 1 1 Loss before income taxes (137) (2,915) (3,052) (Benefit from) provision for income taxes - - - Net loss (137) (2,915) (3,052) Less: Net loss attributable to noncontrolling interests - - - Net loss attributable to National Mentor Holdings, Inc. (137)$(2,915)$(3,052)$ See accompanying notes to these consolidated financial statements.

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Community Services - Indiana Consolidating Statement of Operations For the year ended September 30, 2025 (Unaudited) (Amounts in thousands) IN Supported Living IN MENTOR Waiver Services REM Indiana, Inc REM Occazio, LLC REM Indiana Community Services, Inc Transitional Services, LLC Bridges of Indiana, Inc. Consolidated Totals Net revenue 27,422$7,666$21,763$13,821$10,829$8,998$15,807$106,306$ Cost of revenue (exclusive of depreciation and amortization expense below) 25,103 6,978 22,701 12,616 9,483 8,709 13,473 99,063 Operating expenses: General and administrative 1,189 - 1,462 281 52 243 539 3,766 General and administrative - central support allocation 887 1,577 1,135 1,914 887 940 2,084 9,424 Depreciation and amortization 363 22 632 296 194 190 678 2,375 Loss on assets held for sale and divestitures 8 - 2 36 13 2 - 61 Total operating expenses 2,447 1,599 3,231 2,527 1,146 1,375 3,301 15,626 Income from operations (128) (911) (4,169) (1,322) 200 (1,086) (967) (8,383) Other income (expense): Interest expense (1,666) (516) (1,695) (962) (640) (646) (1,002) (7,127) Other income, net - - - - - - 2 2 Loss before income taxes (1,794) (1,427) (5,864) (2,284) (440) (1,732) (1,967) (15,508) (Benefit from) provision for income taxes - - - - - - - - Net loss (1,794) (1,427) (5,864) (2,284) (440) (1,732) (1,967) (15,508) Less: Net loss attributable to noncontrolling interests - - - - - - - - Net loss attributable to National Mentor Holdings, Inc. (1,794)$(1,427)$(5,864)$(2,284)$(440)$(1,732)$(1,967)$(15,508)$ See accompanying notes to these consolidated financial statements.

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Community Services - Iowa Consolidating Statement of Operations For the year ended September 30, 2025 (Unaudited) (Amounts in thousands) REM Iowa, Inc REM Developmental Services, Inc REM Iowa Community Services, Inc Consolidated Totals Net revenue 15,549$3,858$73,500$92,907$ Cost of revenue (exclusive of depreciation and amortization expense below) 14,313 3,095 54,841 72,249 Operating expenses: General and administrative 1,741 243 1,858 3,842 General and administrative - central support allocation (20) 301 6,551 6,832 Depreciation and amortization 570 543 1,479 2,592 Loss on assets held for sale and divestitures (26) (7) 91 58 Total operating expenses 2,265 1,080 9,979 13,324 Income from operations (1,029) (317) 8,680 7,334 Other income (expense): Interest expense (1,059) (269) (3,964) (5,292) Other income, net - - 1 1 Loss before income taxes (2,088) (586) 4,717 2,043 (Benefit from) provision for income taxes - - - - Net loss (2,088) (586) 4,717 2,043 Less: Net loss attributable to noncontrolling interests - - - - Net loss attributable to National Mentor Holdings, Inc. (2,088)$(586)$4,717$2,043$ See accompanying notes to these consolidated financial statements.

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