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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


☐	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 000-54295

Sterling Real Estate Trust

d/b/a Sterling Multifamily Trust

(Exact name of registrant as specified in its charter)



North Dakota		90-0115411
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

4340 18^th Ave South Ste. 200 Fargo, North Dakota		58103
(Address of principal executive offices)		(Zip Code)

(701) 353-2720

(Registrant’s telephone number, including area code)

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


Title of each class:		Trading Symbol		Name of each exchange on which registered:
Common Shares of Beneficial Interest, par value $0.01 per share		N/A		N/A

Securities registered pursuant to Section 12(g) of the Act: none

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 Exchange 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 checkmark 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. ☐

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

There is no established public market for the registrant’s shares of common stock.

Indicate the number of shares outstanding of each of the issuer’s classes of common shares, as of the latest practicable date.


Class		Outstanding at March 11, 2026
Common Shares of Beneficial Interest, $0.01 par value per share		13,251,280

Documents Incorporated by Reference: Portions of Sterling’s Proxy Statement for its 2025 Annual Meeting of Shareholders, which Sterling intends to file with the Securities and Exchange Commission within 120 days after the end of Sterling’s fiscal year ended December 31, 2025, are incorporated by reference into Part III (Items 10, 11, 12, 13 and 14) of this Annual Report on Form 10-K to the extent described herein. If Sterling does not file its Proxy Statement on or before 120 days after the end of its 2025 fiscal year, Sterling will file the required information in an amendment to this Annual Report on Form 10-K.

Table of Contents

Sterling Real Estate Trust

INDEX


	PAGE
PART I
Item 1. Business		3
Item 1A. Risk Factors		8
Item 1B. Unresolved Staff Comments		22
Item 1C. Cybersecurity		23
Item 2. Properties		23
Item 3. Legal Proceedings		31
Item 4. Mine Safety Disclosures		31
PART II
Item 5. Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities		32
Item 6. [Reserved]		34
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations		35
Item 7A. Quantitative and Qualitative Disclosures about Market Risk		46
Item 8. Financial Statements and Supplementary Data		46
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		46
Item 9A. Controls and Procedures		46
Item 9B. Other Information		47
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections		47
PART III
Item 10. Trustees, Executive Officers and Corporate Governance		47
Item 11. Executive Compensation		47
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters		47
Item 13. Certain Relationships and Related Transactions, and Trustee Independence		47
Item 14. Principal Accountant Fees and Services		47
PART IV
Item 15. Exhibits and Financial Statement Schedules		48
Item 16. Form 10-K Summary		48
Report of Independent Registered Public Accounting Firm and Financial Statements		51
Signatures		98

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NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements included in this Annual Report on Form 10-K and the documents incorporated into this document by reference contain certain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Such forward-looking statements include statements regarding our plans and objectives, including, among other things, our future financial condition, anticipated capital expenditures, anticipated dividends and other matters. Forward-looking statements are typically identified by the use of terms such as “may,” “will,” “should,” “expect,” “intend,” “plan,” “anticipate,” “estimate,” “believe,” “continue,” “predict,” “potential” or the negative of such terms and other comparable terminology. These statements are only predictions and are not historical facts. Actual events or results may differ materially.

The forward-looking statements included herein are based on our current expectations, plans, estimates and beliefs that involve numerous risks and uncertainties. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond our control. Any of the assumptions underlying the forward-looking statements contained herein could be inaccurate. Although we believe the expectations reflected in such forward-looking statements are based on reasonable assumptions, we cannot assure readers that the forward-looking statements included in this filing will prove to be accurate. The accompanying information contained in this Annual Report on Form 10-K, including, without limitation, the information set forth under the section entitled “Risk Factors” in Item 1A, identifies important additional factors that could materially adversely affect actual results and performance. We undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of certain unanticipated events or changes to future operating results.

PART I

All dollar amounts in this Form 10-K are stated in thousands, with the exception of share and per share amounts, unless otherwise indicated.

ITEM 1. BUSINESS

GENERAL

Sterling Real Estate Trust (“we,” “us,” “our,” “Company,” “Trust” or “Sterling”) is a real estate investment trust (“REIT”). Sterling was registered in North Dakota as an unincorporated business trust in December 2002. References in this Annual Report on Form 10-K to the “Company,” “Sterling,” “Trust,” “we,” “us,” or “our” include consolidated subsidiaries, unless the context indicates otherwise. As a REIT, we are not subject to U.S. federal income taxation as long as we satisfy certain requirements, principally relating to the nature of our income, the level of our dividends and other factors. As of December 31, 2025, we owned directly or through our Operating Partnership, 175 properties in 12 states.

UPREIT Structure

The Trust operates as an Umbrella Partnership Real Estate Investment Trust (“UPREIT”), which is a REIT that holds all or substantially all of its assets through a partnership which the REIT controls as general partner. Therefore, the Trust conducts substantially all investment activities and holds substantially all of the Trust’s assets through the Operating Partnership Sterling Properties, LLLP. The Trust controls the Operating Partnership as the general partner and owns approximately 41.11% of the Operating Partnership as of December 31, 2025. For purposes of satisfying the asset and income tests for qualification as a REIT for tax purposes, the proportionate shares of the assets and income of the Operating Partnership are deemed to be the assets and income of the Trust.

The UPREIT structure is used to facilitate acquisitions of real estate properties. A sale of property directly to a REIT is generally a taxable transaction to the property seller. However, in an UPREIT structure, if a property seller exchanges the property for limited partnership units, the seller may defer taxation of gain in such exchange until the seller resells its limited partnership units or exchanges its limited partnership units for the REIT’s common stock. By offering the ability

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to defer taxation, the Trust may gain a competitive advantage in acquiring desired properties over other buyers who cannot offer this benefit. In addition, investing in the Operating Partnership, rather than directly in the Trust, may be more attractive to certain institutional or other investors due to their business or tax structure. If an investor is interested in making a substantial investment in our Operating Partnership, the structure provides the Trust the flexibility to accommodate different terms for each investment, while applicable tax laws generally restrict a REIT from charging different fee rates among its shareholders. Finally, if the Trust’s shares become publicly traded, the former property seller may be able to achieve liquidity for the investment in order to pay taxes.

Operating Partnership

Sterling Properties, LLLP was formed as a North Dakota limited liability limited partnership in April 2003 to acquire, own and operate properties on the Trust’s behalf. The Operating Partnership holds a diversified portfolio of multifamily dwellings and commercial properties located principally in the upper and central Midwest United States.

Since formation, the Trust’s focus has consisted of owning and operating income-producing real estate properties. In 2006, the Trust held 23 total properties approximating $56,265 in total assets, in the Operating Partnership. Between 2007 and 2025, the Trust focused extensively on strengthening the multifamily component of the portfolio, acquiring properties directly or through UPREIT transactions. A majority of these multifamily properties are located in North Dakota. The portfolio has grown to 175 properties, approximating $979,011 in total assets, and book equity, including noncontrolling interests, of approximately $335,592 as of December 31, 2025. As of December 31, 2025, the portfolio contained approximately 12,295 apartment units and 1,159,000 square feet of leasable commercial space.

OUR PEOPLE

We do not have any employees. Instead, we rely on our external Advisor, Sterling Management LLC, to conduct our day-to-day affairs. The Company’s employees are employees of Sterling Management LLC.

Advisor to the Trust

Sterling Management, LLC, a related party to the Trust, is a North Dakota limited liability company formed in November 2002, is the external Advisor to the Trust (the Advisor). The Advisor is responsible for managing our day-to-day affairs and for identifying, acquiring and disposing investments on our behalf. The Advisor is 100% owned by Trustmark Enterprises, Inc., formerly known as Alloy, a North Dakota corporation (“Trustmark”). Trustmark is owned in part by the Trust’s Chief Executive Officer and Trustee Kenneth P. Regan, by Trustee James S. Wieland, by the Trust’s President and Chief Financial Officer and Treasurer Megan E. Schreiner, by the Trust’s General Counsel and Secretary Michael P. Carlson, by the Trust’s Chief Investment Officer Luke B. Swenson, and by the Trust’s Vice President David F. Perkins. Messrs. Regan, Carlson, Swenson, and Perkins and Mrs. Schreiner all serve as officers of the Advisor. Messrs. Regan, Wieland, Carlson, Swenson, and Perkins and Mrs. Schreiner also all serve on the Advisor’s Board of Governors. The Advisor’s employee base has seen considerable growth, both in number and expertise, since its inception.

Audit and Disclosure Committee

The Audit and Disclosure Committee was established by the Board of Trustees to assist the Board in fulfilling its fiduciary duties and oversight responsibilities. The Audit and Disclosure Committee assists the Board by overseeing the integrity of the Trust’s financial statements, financial reporting and disclosure processes, internal accounting and financial controls and the annual independent audit of the Trust’s financial statements. The Audit and Disclosure Committee also oversees the establishment and maintenance of processes to assure the Trust’s compliance with all applicable laws, regulations, and Trust policy, including compliance with filing requirements under the Exchange Act and the rules and regulations promulgated thereunder. In performing its work, it is the Audit and Disclosure Committee’s responsibility to foster free and open means of communication between the Trustees, the independent auditors and the Trust’s financial managers. Our Audit and Disclosure Committee is currently comprised of Trustees Timothy A. Hunt (Chair of the Committee), Gregory P. Hammes, Timothy L. Haugen, Michelle L. Korsmo, and Mark T. Polovitz.

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Board of Trustees and Executive Officers

The Trust operates under the direction of our Board of Trustees, the members of which are accountable to both the Trust and its shareholders. The Trustees are elected annually by our shareholders. In addition, the Board has a duty to supervise our relationship with the Advisor and evaluate the performance of and fees paid to the Advisor on an annual basis. The Advisory Agreement was approved by the Board of Trustees (including all the independent trustees) on March 20, 2025, effective April 1, 2025 until March 31, 2026. The Board of Trustees has provided investment guidance for the Advisor to follow and must approve each investment recommended by the Advisor. Currently, the Advisor has nine members on the Board, seven of whom are independent.

Although the Trust has executive officers, it does not have any paid employees. The President, Chief Executive Officer, Chief Investment Officer, Chief Financial Officer and Treasurer, General Counsel and Secretary, and Vice President of the Trust, are also officers, employees, and governors of our Advisor. Among others, such executive officers oversee the Advisor’s day-to-day operations with respect to the Trust. However, when doing so, such executive officers are acting on behalf of the Advisor in performing the Advisor’s obligations under the Advisory Agreement. Generally, the only services performed by the Trust’s executive officers are those required by law or regulation, such as executing documents as required by North Dakota law and providing certifications required by the federal securities laws.

Organizational Structure

On January 1, 2021, the Advisor was acquired by Trustmark Enterprises, Inc. in an equity transfer, and is now the wholly-owned subsidiary of Trustmark Enterprises, Inc.

The following chart shows the relationship structure with the Advisor:

(1)

As of December 31, 2025, the Advisor was owned 100% by Trustmark Enterprises, Inc. Trustmark was owned in part by the Trust’s Chief Executive Officer and Trustee Kenneth P. Regan (35.50%), by Trustee James S. Wieland (22.00%), by the Trust’s President Megan E. Schreiner (10.20%), by the Trust’s General Counsel and Secretary Michael P. Carlson (4.10%), by the Trust’s Chief Investment Officer Luke B. Swenson (3.70%), and by the Trust’s Vice President David F. Perkins (2.50%). Messrs. Regan, Carlson, Swenson, and Perkins and Mrs. Schreiner all serve as officers of the Advisor. Messrs. Regan, Wieland, Carlson, Swenson, and Perkins and Mrs. Schreiner also all serve on the Advisor’s Board of Governors.

(2)	Sterling Management, LLC serves as Advisor to both the Trust and the Operating Partnership. The Advisor does not own any of our shares. Messrs. Regan and Wieland beneficially own approximately 2.03% and 1.54%, respectively, of our shares as of December 31, 2025.

(3)

The Trust controls the Operating Partnership as the general partner and owns approximately 41.11% of the Operating Partnership as of December 31, 2025. Messrs. Regan and Wieland beneficially owned and had voting power over approximately 20.03% and 10.10%, respectively, of the Operating Partnership as of December 31, 2025.

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CORE INVESTMENT OBJECTIVES AND STRATEGY

Investment Objectives

The Trust’s primary investment objectives are to:

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Acquire quality real estate properties or interests in real estate properties that can provide stable cash flow for distribution to our shareholders, preservation of capital and realization of long-term capital appreciation upon the sale of such properties;

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Offer an investment option in which the value of the common shares is correlated to real estate as an asset class rather than traditional asset classes such as stocks and bonds; and

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Provide a hedge against inflation through use of month-to-month rentals or short-term and long-term lease arrangements with rental properties tenants.

The Trust may change the investment objectives only with the approval of holders of a majority of the outstanding common shares.

Investment Guidance

The Board of Trustees has provided investment guidance to the Advisor to direct the investment strategy of the Trust. Changes to the investment guidance must be approved by the Board. The Advisor has been authorized to execute:

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Commercial and multifamily real estate property acquisitions and dispositions;

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Investments in other real estate related assets, in each case so long as such investments are approved by our Board;

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Acquisitions of property or land for the purposes of future development; and

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Capital investments in the portfolio’s current properties through capital improvements.

The Board will have ultimate oversight over the Trust’s investments and may change from time to time the scope of authority delegated to the Advisor with respect to acquisition and disposition transactions.

Investment Strategy

Sterling’s current investment strategy and focus is on multifamily properties. Our Advisor monitors industry trends and invests in property believed to provide the most favorable return balanced with risk. We attempt to manage our real estate portfolio by evaluating changes or trends in the industries in which our tenants operate, the creditworthiness of our tenants and changes or trends in the area demographics surrounding our properties for evidence that our properties will continue to meet our investment objectives of cash flow, preservation of capital and capital appreciation. There is no current plan for the existing commercial properties (industrial, medical, office and retail) regarding retention, acquisition, or disposition.

The Trust will primarily invest in existing or newly developed real estate properties. The Trust may also invest in interests in real estate properties by acquiring direct ownership or ownership interests with other investors, including affiliates of the Advisor, through holding company structures or joint ventures, real estate partnerships, tenant-in-common deals, REITs, or other collective investment vehicles. The Trust may also invest in other real estate property types, including undeveloped land or other development opportunities if the land is acquired for the purpose of producing rental or other operating income in the future. The properties the Trust primarily invests in have existing rent and expense schedules, or the properties are newly constructed with predictable cash flows.

Most current acquisitions are in or near metropolitan areas. However, there is no limitation on the geographic areas in which we may acquire targeted investments.

The Trust may also acquire portfolios of real estate properties held by individual owners and real estate properties held by funds, including hedge funds. It is anticipated that such property owners will primarily sell the properties in exchange for limited partnership interests of the Operating Partnership.

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SEGMENT DATA

Segment information is presented in accordance with a “management approach,” which designates the internal reporting used by the Company's CODM for making decisions and assessing performance as the source of the Company’s reportable segments. The Company’s segments are organized in a manner consistent with which discrete financial information is available and evaluated regularly by the CODM in deciding how to allocate resources and assess performance.

An operating segment is defined as a component of an enterprise that engages in business activities from which it may earn revenue and incur expenses, and about which separate financial information is regularly evaluated by the CODM. The CODM is the Company’s chief executive officer.

Each of the operating segments are directly responsible for revenue and expenses related to their operations, including direct segment general and administrative expenses. The CODM assesses the performance of each operating segment using information about operating income (loss) as the primary measure of performance but does not evaluate segments using discrete asset information. There were no material inter-segment transactions during the years ended December 31, 2025, 2024 and 2023, and the Company does not allocate depreciation and amortization, interest, administration of REIT, loss on impairment of property or other income (loss) to the operating segments. The accounting policies for segment reporting are the same as for the Company as a whole.

We report our results in two reportable segments: residential and commercial properties. Our residential properties include multifamily properties. Our commercial properties include retail, office, industrial and medical properties. We assess and measure operating results based on the non-GAAP financial measurement of net operating income (“NOI”), which we define as total real estate segment revenues less real estate expenses (which consist of real estate taxes, property management fees, utilities, repairs and maintenance, insurance and direct administrative costs). Our management team believes that NOI, as a non-GAAP financial measurement, is an important metric of operating performance even though it should not be considered an alternative to net income or cash flow from operating activities. NOI is unaffected by financing, depreciation, amortization, legal and professional fees and certain general and administrative expenses.

COMPETITION

Our properties are located in highly competitive real estate markets. The number of competitive properties in a particular area could have a material adverse effect on our ability to lease space and the amount of rent we can charge at our properties. We compete with many property owners, such as corporations, limited partnerships, individual owners, other real estate investment trusts, insurance companies and pension funds.

Our competition also consists of other owners and developers of multifamily and commercial properties who are trying to attract tenants to their properties. This competition influences our ability to acquire properties and the prices that we may pay for those properties. We believe, however, that the diversity of our investments, the experience and abilities of our management and the quality of our assets affords us some competitive advantages that have in the past, and should in the future, allow us to operate our business successfully despite the competitive nature of our business.

Generally, there are multifamily and other similar commercial properties within relatively close proximity to each of our properties. Our retail properties primarily consist of restaurants, beauty and cosmetics, clothing and home furnishings department stores, and pharmacies. In addition to competitor retail properties with similar business models, we and our tenants face increasing competition from outlet malls, internet shopping websites, discount shopping clubs, catalog companies, direct mail and telemarketing.

ENVIRONMENTAL MATTERS AND GOVERNMENT REGULATION

As an owner of real estate, we are subject to various environmental laws, rules and regulations adopted by various governmental bodies or agencies. 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. Under these laws, a current or previous owner or operator of real estate may be liable for the costs of removal or remediation of certain hazardous or toxic substances released at a

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property and may be held liable to a governmental entity or to third parties for property damage or personal injuries and for investigation and clean-up costs incurred in connection with any contamination. We could be subject to liability in the form of fines or damages for noncompliance with these laws and regulations, and some environmental laws create a lien on a contaminated site in favor of the government for damages and costs it incurs in connection with the contamination. Some of these laws and regulations may impose joint and several liability on residents, owners, or operators for the costs of investigation or remediation of contaminated properties, regardless of fault or the legality of the original disposal. In addition, the presence of these substances, or the failure to properly remediate these substances, may adversely affect our ability to sell or rent the property or to use the property as collateral for future borrowing. Compliance with new or more stringent laws or regulations or stricter interpretation of existing laws may require material expenditures by us.

In addition, we are subject to many other laws and governmental regulations applicable to our properties, and changes in the laws and regulations, or in their interpretation by agencies and the courts, occur frequently. Under the Americans with Disabilities Act of 1990 (the “ADA”), all places of public accommodation are required to meet certain federal requirements related to access and use by disabled persons. The Fair Housing Amendments Act of 1988 (the “FHAA”) requires apartment communities first occupied after March 13, 1991, to be accessible to the handicapped and prohibits housing discrimination based upon familial status.

The Housing for Older Persons Act (“HOPA”) provides age-based discrimination exceptions for housing developments qualifying as housing for older persons. Non-compliance with ADA, FHAA or HOPA 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. We believe our properties which are subject to ADA, FHAA and/or HOPA are substantially in compliance with their present requirements.

Compliance with these laws, rules, and regulations has not had a material adverse effect on our business, assets, or results of operations, financial condition, or ability to pay dividends. We do not believe our existing portfolio as of December 31, 2025 will require us to incur material expenditures to comply with these laws and regulations. However, we cannot assure that future laws, ordinances, or regulations will not impose any material liability, or that the current environmental condition of our properties will not be affected by the operations of tenants, by the existing condition of the land, by operations in the vicinity of the properties, such as the presence of underground storage tanks, or by the activities of unrelated third parties.

AVAILABLE INFORMATION

We electronically file our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, proxy and information statements and all amendments to these filings with the Securities and Exchange Commission (“SEC”). The public may read any materials filed by us with the SEC on the internet site maintained by the SEC at www.sec.gov. We also maintain an internet site at www.smftrust.com, which includes the reports and other documents we file with the SEC. These reports are available as soon as reasonably practicable after such material is electronically filed or furnished to the SEC. This reference to our website is not intended to incorporate information found on the website into this filing.

ITEM 1A. RISK FACTORS

Risks Related to Sterling Real Estate Trust

Our results are dependent on amounts received from the leasing and resale of real estate investments, which are subject to market and economic changes. If income is insufficient to meet our capital needs, our ability to carry out our business plans could be adversely affected.

Our purpose is to acquire and hold real estate investments as long-term investments. The primary income that will be generated by us will be the profits, if any, from the operation or holding of the real estate and upon the resale of the investments. If circumstances arise which cause an investment to become undesirable or remain at its current value or decrease in value, we may generate a loss.

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Our success is based on continuing to locate and hold suitable real estate investments, and failure of our Advisor to locate additional suitable properties or the unsuccessful operation of our existing real estate investments could adversely affect our operations and our ability to pay dividends.

Our ability to achieve our investment objectives and to pay dividends to our shareholders and distributions to unitholders is dependent upon the performance of our Advisor in locating suitable investments and appropriate financing arrangements for us as well as on the successful management of our properties after acquisition. We currently own, through the Operating Partnership, the properties described under Item 2 — Properties. We cannot be sure our Advisor will be successful in locating suitable investments on financially attractive terms, or be certain that operation of the properties will avoid the risks attendant to real estate acquisitions, such as:

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The risk properties may not perform in accordance with expectations, including projected occupancy and rental rates.

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The risk we may have underestimated the cost of improvements or repairs required to bring or keep an acquired property up to or at standards established for its intended use or its intended market position.

We may have to make expedited decisions on whether to invest in certain properties, including prior to receipt of detailed information.

We may be required to make expedited decisions in order to effectively compete for the acquisition of desirable properties and other assets. In such cases, our Advisor and Board of Trustees may not have access to detailed information regarding real estate investments at the time of making an investment decision to pay a non-refundable deposit and to proceed with an acquisition. In addition, the actual time period during which our Advisor will be allowed to conduct due diligence may be limited. Therefore, there can be no assurance our Advisor and Board of Trustees will have knowledge of all circumstances that may adversely affect an investment.

We may change our investment and operational policies without shareholder consent, and such changes could increase our exposure to additional risks.

Generally, the Board of Trustees may change our investment and operational policies, including our policies with respect to investments, acquisitions, growth, operations, indebtedness, capitalization and distributions, at any time without the consent of our shareholders, which could result in our making investments different from, and possibly riskier than, investments made in the past. A change in our investment policies may, among other things, increase our exposure to interest rate risk, default risk and commercial real estate market fluctuations, all of which could materially affect our ability to achieve our investment objectives.

There can be no assurance dividends or distributions will be paid or increase over time.

There are many factors that can affect the availability and timing of cash dividends to our shareholders and distributions to unitholders. Dividends and distributions will be based principally on cash available from our real estate and other investments. The amount of cash available for dividends will be affected by many factors, such as our ability to acquire profitable real estate investments, successfully manage our real estate properties, our operating expenses, and general economic conditions. We can give no assurance we will be able to pay or maintain dividends or distributions or that dividends or distributions will increase over time.

Dividends may include a return of capital, and shareholders may be required to recognize capital gain on distributions.

Dividends payable to shareholders may include a return of capital. To the extent dividends exceed cash flow from operations, a shareholder’s basis in our shares will be reduced and, to the extent dividends exceed a shareholder’s basis, the shareholder may recognize capital gain and be required to make tax payments.

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We depend on certain executive officers and trustees, and the loss of such persons may delay or hinder our ability to carry out our investment strategies.

Our future success substantially depends on the active participation of our executive management team, including Kenneth Regan (Chief Executive Officer and trustee), Megan Schreiner (President and Chief Financial Officer and Treasurer), Luke Swenson (Chief Investment Officer), Michael Carlson (General Counsel and Secretary), David Perkins (Vice President), and other members of the Advisors management team. These individuals hold extensive experience in the commercial real estate industry, and have been instrumental in setting our strategic direction, operating our business, locating desirable real estate investments, arranging necessary financing, and managing our properties. Losing the services of individuals without replacing their position with someone of the same competence and experience could have a material adverse effect on our ability to successfully carry out our investment strategies and achieve our investment objectives. There can be no guarantee they will remain affiliated with us. See “Risks Related to Conflicts of Interest.”

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, all of which could negatively impact our financial results.

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 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 investor relationships. As our reliance on technology has increased, so have the risks posed to our information systems, both internal and those provided by the Advisor and service providers. Our and our Advisor’s processes, procedures and internal controls that are designed to mitigate cybersecurity risks and cyber intrusions do not guarantee that a cyber incident will not occur or that our financial results, operations, or confidential information will not be negatively impacted by such an incident.

We are not required to comply with certain reporting requirements, including those relating to auditor’s attestation reports on the effectiveness of our system of internal control over financial reporting, accounting standards and disclosure about our executive compensation, that apply to other public companies.

So long as our shares of common stock are not traded on a securities exchange, we will be deemed to be a “non-accelerated filer” under the Exchange Act, and as a non-accelerated filer, we will be exempt from compliance with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act. In addition, so long as we are externally managed by the Advisor and we do not directly compensate our executive officers, or reimburse the Advisor or its affiliates for salaries, bonuses, benefits and severance payments for persons who also serve as one of our executive officers or as an executive officer of the Advisor, we do not have any executive compensation.

Many of our costs, such as operating and general and administrative expenses, real estate acquisition, and construction costs, could be adversely impacted by periods of heightened inflation.

A sustained or further increase in inflation could have an adverse impact on our operating expenses incurred in connection with, among others, the property-related services such as repairs and maintenance, janitorial, utilities, security and insurance. Our operating expenses may be recoverable through commercial lease arrangements.

Risks Related to Our Structure

Our shareholders may experience dilution if we or our Operating Partnership issues additional securities.

Our shareholders do not have preemptive rights to any shares issued by us in the future. If we sell or issue additional shares in the future to raise capital, pursuant to a dividend reinvestment plan or in exchange for limited partnership units pursuant to our Operating Partnership’s Limited Liability Limited Partnership Agreement (“LLLP Agreement”), our shareholders will experience dilution of their equity investment. In addition, if our Operating Partnership sells additional securities or

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issues additional securities in connection with a property acquisition transaction, we would, and indirectly our shareholders would, experience dilution in their equity position.

Our securityholders have limited control over our operation, and the Board of Trustees has the sole power to appoint and terminate the Advisor.

Our Board of Trustees has the authority to determine our major policies, including our policies regarding financing, growth, investment strategies, debt capitalization, REIT qualification, distribution, and to take certain actions including acquiring or disposing of real estate and real estate related investments, dividend declaration and the election or removal of the Advisor. Our securityholders do not have the right to remove the Advisor but have the right to elect and remove trustees. Under our Third Amended and Restated Declaration of Trust, our trustees may not do the following without the approval of the holders of a majority of the outstanding common shares of beneficial interest:

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Amend the Third Amended and Restated Declaration of Trust, except for amendments which do not adversely affect the rights, preference and privileges of shareholders.

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Sell all or substantially all of our assets other than in the ordinary course of business or in connection with a liquidation and dissolution.

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Conduct a merger or other reorganization of the trust; or

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Dissolve or liquidate us.

Our shareholders have the right, without the concurrence of the Board of Trustees, to terminate the trust and liquidate our assets or amend the Third Amended and Restated Declaration of Trust.

Shareholders have no role in determining our investments and must rely on our Advisor and oversight by the Board of Trustees.

For future acquisitions or dispositions, the Board of Trustees has the authority to approve investment acquisitions or dispositions without shareholder approval. Therefore, shareholders will not be able to evaluate the terms of future investment acquisitions or dispositions, their economic merit or other relevant financial data before we acquire or sell investments. Shareholders must rely entirely on the oversight of our Board of Trustees, the management ability of our Advisor and the performance of the property managers.

We may issue securities with more favorable terms than the outstanding shares without shareholder approval.

Under our Third Amended and Restated Declaration of Trust, our Board of Trustees has the authority to establish more than one class or series of shares and to fix the relative preferences and rights regarding conversion, voting powers, restrictions, limitations as to dividends and other distributions, and terms or conditions of redemption of such different classes or series without shareholder approval. Thus, our Board could authorize the issuance of a class or series of shares with terms and conditions that could have priority as to dividends and amounts payable upon liquidation over the rights of the holders of our outstanding common shares of beneficial interest. Such class or series of shares could also have the effect of delaying, deferring or preventing a change in control of us, including an extraordinary transaction (such as a merger, tender offer or sale of all or substantially all of our assets) that might otherwise provide a premium price to holders of our shares, even if it would be in the best interest of our shareholders.

Shareholders could incur current tax liability on dividends they elect to reinvest in our shares, and may have to use separate funds to pay their tax liability.

Shareholders that participate in our dividend reinvestment plan will be deemed to have received, and for income tax purposes will be taxed on, the amount reinvested in shares to the extent the amount reinvested was not a tax-free return of capital. In addition, our shareholders will be treated for tax purposes as having received an additional dividend to the extent the shares are purchased at a discount to fair market value. As a result, unless shareholders are a tax-exempt entity, they may have to use funds from other sources to pay their tax liability on the value of the shares received.

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There may be conflicts of interest between us and our shareholders on one side and our Operating Partnership and its limited partners on the other side.

Our trustees and officers have duties to us and our shareholders in connection with their management of us. At the same time, we, as general partner will have duties to our Operating Partnership and its limited partners in connection with the management of the Operating Partnership. Our duties as general partner of the Operating Partnership may come into conflict with the duties of our trustees and officers to us and our shareholders. The LLLP Agreement of our Operating Partnership expressly limits our liability for monetary damages by providing we will not be liable for losses sustained, liabilities incurred or benefits not derived if we acted in good faith. In addition, our Operating Partnership is required to indemnify us and our trustees and officers from and against any and all claims arising from operations of our Operating Partnership, unless it is established: (1) the act or omission was material and committed in bad faith or was the result of active and deliberate dishonesty; (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 the act or omission was unlawful. The LLLP Agreement also provides that we will not be held responsible for any misconduct or negligence on the part of any agent appointed by us in good faith.

There is no public trading market for our shares, nor do we expect one to develop, which may negatively impact our shareholders’ ability to sell their shares and the price at which shares may be sold.

There is no public market for our shares and there is no assurance one may develop. In addition, the price shareholders may receive for the sale of their shares is likely to be less than the proportionate value of our investments. If our shareholders are able to find a buyer for their shares, they may have to sell them at a substantial discount from the price they purchased the shares. Consequently, shareholders may not be able to liquidate their investments in the event of emergency or for any other reason. Therefore, shareholders should consider our securities as illiquid and a long-term investment and should be prepared to hold their shares for an indefinite period of time.

The estimated value of our common stock is based on a number of assumptions and estimates that may not be accurate and is also subject to a number of limitations.

The current estimated value of our common stock as of January 1, 2026, is $25.50 per share. The methodology used by our Board to determine this value was based on estimates of the value of our real estate investments, cash and other assets and debt and other liabilities as of a date certain and certain additional information. No formal valuation has been undertaken by us. Our valuation process involves a number of estimates, assumptions and subjective judgments that may not be accurate and complete. Further, different parties using different assumptions and estimates could derive a different estimated value per share, which could be significantly different from our estimated value per share. The estimated value per share may not represent current market values or fair values as determined in accordance with U.S. generally accepted accounting principles. A shareholder should not rely on the estimated value per share as being an accurate or precise measure of the then-current value of the shares of our common stock in making a decision to buy or sell shares of our common stock, including whether to reinvest dividends by participating in the dividend reinvestment plan and whether to request redemption pursuant to our share redemption program.

Risks Related to Our Status as a REIT and Related Federal Income Tax Matters

If we fail to continue to qualify as a REIT, we would incur additional tax liabilities that would adversely affect our operations and our ability to make distributions and could result in a number of other negative consequences.

Although our management believes we are organized, have operated, and will be able to continue to be organized and to operate in such a manner to qualify as a real estate investment trust (REIT), as that term is defined under the Internal Revenue Code, we may not have been organized, may not have operated, or may not be able to continue to be organized or to operate in a manner to have qualified or remain qualified as a REIT. Qualification as a REIT involves the application of highly technical and complex Internal Revenue Code provisions for which there are only limited judicial or administrative interpretations. Even a technical or inadvertent mistake could endanger our REIT status.

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The determination that we qualify as a REIT requires an ongoing analysis of various factual matters and circumstances, some of which may not be within our control, regarding our organization and ownership, distributions of our income and the nature and diversification of our income and assets. The fact we hold substantially all of our assets through our Operating Partnership and our ongoing reliance on factual determinations, such as determinations related to the valuation of our assets, further complicates the application of the REIT requirements for us.

If we lose our REIT qualification, we will face income tax consequences that will reduce substantially our available cash for dividends and investments for each of the years involved because:

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We would be subject to federal corporate income taxation on our taxable income, including any applicable alternative minimum tax, and could be subject to increased state and local taxes.

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We would not be allowed a deduction for dividends paid to shareholders in computing our taxable income; and

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Unless we are entitled to relief under applicable statutory provisions, we could not elect to be taxed as a REIT for four taxable years following the year during which we were disqualified.

The increased taxes could reduce the value of the shares as well as cash available for dividends to shareholders and investments in additional assets. In addition, if we fail to continue to qualify as a REIT, we will not be required to pay dividends to shareholders. Our failure to continue to qualify as a REIT also could impair our ability to expand our business and to raise capital.

As a REIT, we may be subject to tax liabilities that reduce our cash flow.

Even if we continue to qualify as a REIT for federal income tax purposes, we may be subject to federal and state taxes on our income or property, including the following:

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To continue to qualify as a REIT, we must distribute annually at least 90% of our REIT taxable income (which is determined without regard to the dividends-paid deduction or net capital gains) to our shareholders. If we satisfy the distribution requirement but distribute less than 100% of our REIT taxable income, we will be subject to corporate income tax on the undistributed income. In such situation, shareholders will be treated as having received the undistributed income and having paid the tax directly, but tax-exempt shareholders, such as charities or qualified pension plans, will receive no benefit from any deemed tax payments.

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We may be subject to state and local taxes on our income or property, either directly or indirectly, because of the taxation of our Operating Partnership or of other entities through which we indirectly own our assets.

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If we have net income from the sale of foreclosure property we hold primarily for sale to customers in the ordinary course of business or other non-qualifying income from foreclosure property, we must pay a tax on that income at the highest corporate income tax rate.

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If we sell a property, other than foreclosure property, we hold primarily for sale to customers in the ordinary course of business, our gain will be subject to the 100% “prohibited transaction” tax.

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We will be subject to a 4% nondeductible excise tax on the amount, if any, by which the distributions we pay 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 prior years.

We may be forced to borrow funds on a short-term basis, to sell assets or to issue securities to meet the REIT minimum distribution requirement or for working capital purposes.

To qualify as a REIT, in general, we must distribute to our shareholders at least 90% of our net taxable income each year, excluding capital gains. However, we could be required to include earnings in our net taxable income before we actually receive the related cash. If we do not have sufficient cash to pay the necessary dividends to preserve our REIT status for any year or to avoid taxation, we may need to borrow funds, to sell assets or to issue additional securities even if the then-prevailing market conditions are not favorable for such actions. In addition, we will require a minimum amount of cash to fund our daily operations. Due to the REIT distribution requirements, we may be forced to make distributions when we otherwise would use the cash to fund our working capital needs. Therefore, we may be forced to borrow funds, to sell assets or to issue additional securities at certain times for our working capital needs.

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If our Operating Partnership does not qualify as a partnership, its income may be subject to taxation, and we would no longer qualify as a REIT.

The Internal Revenue Code classifies “publicly traded partnerships” as associations taxable as corporations (rather than as partnerships), unless substantially all of their taxable income consists of specified types of passive income. We structured our Operating Partnership to be classified as a partnership for federal income tax purposes. However, no assurance can be given the IRS will not challenge our position or will classify our Operating Partnership as a “publicly traded partnership” for federal income tax purposes. To minimize this risk, we have placed certain restrictions on the transfer and/or redemption of partnership units in the LLLP Agreement. If the IRS would assert successfully our Operating Partnership should be treated as a “publicly traded partnership” and substantially all of the Operating Partnership’s gross income did not consist of the specified types of passive income, the Internal Revenue Code would treat the Operating Partnership as an association taxable as a corporation. In such event, we would cease to qualify as a REIT. In addition, the imposition of a corporate tax on the Operating Partnership would reduce the amount of distributions the Operating Partnership could make to us and, in turn, reduce the amount of cash available to us to pay dividends to our shareholders.

We have transfer restrictions on our shares that may limit offers to acquire substantial amounts of the Trust’s shares at a premium.

To qualify as a REIT, our shares must be beneficially owned by 100 or more persons and no more than 50% of the value of our issued and outstanding shares may be owned directly or indirectly by five or fewer individuals. Currently, Third Amended and Restated Declaration of Trust prohibits transfers of our shares that would result in: (1) our shares being beneficially owned by fewer than 100 persons, (2) five or fewer individuals, including natural persons, private foundations, specified employee benefit plans and trusts, and charitable trusts, owning more than 50% of our shares, applying broad attribution rules imposed by the federal income tax laws, or (3) before our shares qualify as a class of publicly-offered securities, 25% or more of our shares being owned by ERISA investors. If a shareholder acquires shares in excess of the ownership limits or in violation of the restrictions on transfer, we:

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May consider the transfer to be void ab initio.

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May not reflect the transaction on our books.

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May institute legal action to enjoin the transaction.

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May redeem such excess shares.

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Automatically transfer any excess shares to a charitable trust for the benefit of a charitable beneficiary.

If such excess shares are transferred to a trust for the benefit of a charitable beneficiary, the charitable trustee shall sell the excess shares and the shareholder will be paid the net proceeds from the sale equal to the lesser of: (1) the price paid by the shareholder or the “market price” of our shares if no value was paid or (2) the price per share received by the charitable trustee.

If shares are acquired in violation of the ownership limits or the restrictions on transfer described above:

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Transferee may lose its power to dispose of the shares; and

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Transferee may incur a loss from the sale of such shares if the fair market price decreases.

These limitations may have the effect of preventing a change of control or takeover of us by a third party, even if the change in control or takeover would be in the best interest of our shareholders.

Complying with REIT requirements may restrict our ability to operate in a way to maximize profits.

To qualify as a REIT, we must continually satisfy tests concerning, among other things, the sources of our income, the nature and diversification of our assets, the amounts we distribute to our shareholders, and the ownership of our common shares. For example, we may be required to pay dividends to our shareholders at disadvantageous times, including when we do not have readily available funds. Thus, compliance with the REIT requirements may hinder our ability to operate solely on the basis of maximizing profits.

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Complying with REIT requirements may force us to forego or liquidate otherwise attractive investments which could negatively impact shareholder value.

To qualify as a REIT, at the end of each calendar quarter, at least 75% 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 government securities and qualified real estate assets), in general, cannot include more than 10% of the voting securities of any one issuer or more than 10% of the value of the outstanding securities of any one issuer. In addition, 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, and no more than 25% of the value of our assets may be represented by securities of one or more taxable REIT subsidiaries. Therefore, we may be required to liquidate otherwise attractive investments or may be forced to forego attractive investments to satisfy these requirements. Such action or inaction could be adverse to our shareholder interests.

Gains from asset sales may be subject to a 100% prohibited transaction tax, which tax could reduce the Trust’s available assets and reduce shareholder value.

We may have to sell assets from time to time to satisfy our REIT distribution requirements and other REIT requirements or for other purposes. The IRS may posit one or more asset sales may be “prohibited transactions.” If we are deemed to have engaged in a “prohibited transaction,” our gain from such sale would be subject to a 100% tax. The Internal Revenue Code sets forth a safe harbor for REITs that wish to sell property without risking the imposition of the 100% tax, but we cannot assure you we will be able to qualify for the safe harbor. We will use reasonable efforts to avoid the 100% tax and we do not intend to hold assets in a manner to cause their dispositions to be treated as “prohibited transactions,” but we cannot assure you the IRS will not challenge our position, especially if we make frequent sales or sales of assets in which we have short holding periods. Payment of a 100% tax would adversely affect our results of operations.

Ordinary dividends payable by REITs generally are taxed at the higher ordinary income rate which could reduce the net cash received by shareholders.

The maximum U.S. federal income tax rate for “qualified dividends” payable by U.S. corporations to individual U.S. shareholders currently is 20%. In addition, the 3.8% tax on net investment income may apply to such dividends. In general, ordinary dividends payable by REITs to its individual U.S. shareholders, however, are generally not eligible for the reduced rates and generally are taxed at ordinary income rates (for REIT dividends received after December 31, 2017, the maximum individual income tax rate currently is 37%, but the current maximum, effective federal income tax rate as to REIT dividends may be reduced to 29.6% because of a partial deduction that may apply with respect to REIT dividends; in addition, the 3.8% tax on net investment income may apply to REIT dividends). It is also possible tax legislation that has or may be enacted might increase this rate differential. The differing treatment of dividends received from REITs and other corporations might cause individual investors to view an investment in REITs as less attractive related to other corporations which might be detrimental to our ability to raise additional funds through the sale of our common shares.

Changes in legislative or other actions affecting REITs may adversely affect our status as a REIT.

The rules dealing with U.S. federal income taxation are constantly under review by the legislative process, the IRS and the U.S. Treasury Department. Changes to tax laws (which changes may apply retroactively) could adversely affect us or our shareholders. Furthermore, new legislation, regulations, administrative interpretations or court decisions could change the federal income tax laws with respect to our qualification as a REIT or the federal income tax consequences of our qualification. We cannot predict whether, when, in what forms, or with what effective dates, the laws applicable to us or our shareholders may be changed.

Our Board of Trustees may revoke our REIT election without shareholder approval, and we would no longer be required to make distributions of our net income.

Our Board of Trustees can revoke or otherwise terminate our REIT election without the approval of our shareholders if our Board determines it is not in our best interest to continue to qualify as a REIT. In such case, we would become subject to U.S. federal income tax on our taxable income, and we no longer would be required to distribute most of our net income to our shareholders, which may reduce the total return to our shareholders and affect the value of the shares.

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Risks Related to Tax-Exempt Investors

Common shares may not be a suitable investment for tax-exempt investors.

There are special considerations that apply to investing in common shares on behalf of a trust, pension, profit sharing or 401(k) plans, health or welfare plans, trusts, individual retirement accounts (IRAs), or Keogh plans. If you are investing the assets of any of the above in common shares, you should satisfy yourself:

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Your investment is consistent with your fiduciary obligations under applicable law, including common law, ERISA and the Internal Revenue Code.

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Your investment is made in accordance with the documents and instruments that govern the trust, plan or IRA, including any investment policy.

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Your investment satisfies the prudence and diversification requirements of Sections 404(a)(1)(B) and 404(a)(1)(C) of ERISA and other applicable provisions of ERISA and the Internal Revenue Code.

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Your investment will not impair the liquidity of the trust, plan or IRA.

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Your investment will not produce “unrelated business taxable income” for the trust, plan or IRA.

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You will be able to value the assets of the trust, plan or IRA annually in accordance with ERISA requirements and applicable provisions of the trust, plan, or IRA; and

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Your investment will not constitute a prohibited transaction under Section 406 of ERISA or Section 4975 of the Internal Revenue Code.

We have not evaluated, and will not evaluate, whether an investment in us is suitable for any particular trust, plan, or IRA.

Under certain circumstances, tax-exempt shareholders may be subject to unrelated business taxable income, which could adversely affect such shareholders.

Neither ordinary nor capital gain distributions with respect to our common shares nor gain from the sale of our common shares, in general, should constitute unrelated business taxable income to tax-exempt shareholders. The following, however, are some exceptions to this rule:

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Under certain circumstances, part of the income and gain recognized by certain qualified employee pension trusts with respect to our common shares may be treated as unrelated business taxable income if our common shares are held predominately by qualified employee pension trusts (which we do not expect to be the case).

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Part of the income and gain recognized by a tax-exempt shareholder with respect to common shares would constitute unrelated business taxable income if the tax-exempt shareholder incurs debt to acquire the common shares; and

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Part or all of the income or gain recognized with respect to our common shares held by social clubs, voluntary employee benefit associations, supplemental unemployment benefit trusts and qualified group legal services plans that are exempt from federal income taxation under Sections 501(c)(7), (9), (17), or (20) of the Internal Revenue Code may be treated as unrelated business taxable income.

Therefore, tax-exempt shareholders are not assured all dividends received from the trust will be tax-exempt.

Risks Related to Our Relationship with the Advisor and Its Affiliates

We depend on our Advisor for the day-to-day management and successful operations of the REIT, and if required, we may not be able to find a suitable replacement advisor.

Our ability to achieve our investment objectives is dependent upon the successful performance of our Advisor in locating attractive acquisitions, advising on dispositions of real estate properties and other real estate related assets, advising on any financing arrangements and other administrative tasks to operate our business. If the Advisor suffers or is distracted by adverse financial and operational problems in connection with its operations unrelated to us or for any reason, it may be unable to allocate a sufficient amount of time and resources to our operations. If this occurs, our ability to achieve our investment objectives or pay dividends to our shareholders may be adversely affected. Any adversity experienced by the

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Advisor or problems in our relationship with the Advisor could also adversely impact the operation of our properties and, consequently, our cash flow and ability to pay dividends to shareholders.

Either we or the Advisor can terminate the Advisory Agreement upon 60 days written notice to the other party for any reason, or we can terminate the Advisory Agreement immediately for cause or material breach of the Advisory Agreement. In addition, the Board of Trustees may determine not to renew the Advisory Agreement in any year. If this occurs, we would need to find another advisor to provide us with day-to-day management services or engage employees to provide these services directly to us, which would likely be difficult to do and may be costly. There can be no assurances we would be able to find a suitable replacement advisor or suitable employees or enter into agreements for such services on acceptable terms.

The termination or replacement of the Advisor could trigger a default or repayment event under financings.

Lenders providing financing for our acquired properties may include provisions in the mortgage loan documentation that state the termination or replacement of the Advisor is an event of default or an event triggering acceleration of the repayment of the loan in full. Even though we will attempt to have such provisions excluded from the loan documents, the lenders may still require them to be included. In addition, the termination or replacement of the Advisor could trigger an event of default under any credit agreement governing a line of credit we may obtain. If an event of default or repayment event occurs with respect to any of our properties, our ability to achieve our investment objectives could be materially adversely affected.

The Advisor may not be able to retain its key employees, which could adversely affect our ability to carry out our investment strategies.

We depend on the Advisor’s key officers, employees and governors. However, none of these individuals have an employment agreement with the Advisor and the loss of any or all of such person’s services and the Advisor’s inability to find, or any delay in finding, replacements with equivalent skills and experience, could adversely impact our ability to successfully carry out our investment strategies and achieve our investment objectives.

Our future success also depends on the Advisor’s and its affiliates’ ability to identify, hire, train and retain highly qualified real estate, managerial, financial, marketing, and technical personnel to provide the services to us pursuant to the Advisory Agreement and any other written services agreement, including any property management agreements. Competition for such personnel is intense, and the Advisor or its affiliates may not be able to attract, assimilate or retain such personnel in the future. The inability to attract and retain the necessary personnel could have a material adverse effect on our business and results of operations.

Risks Related to Investments in Real Estate

Insufficient geographic diversity of our real estate investments could adversely affect our operating results if economic changes impact real estate markets where we own significant assets.

Geographic concentration of our properties may expose us to economic downturns in those areas where our properties are located. A recession in any area where we own several properties or interests in properties could adversely affect our ability to generate or increase operating revenues, locate, and retain financially sound tenants or dispose of unproductive properties. In addition, it could have an adverse impact on our tenant’s ability to meet their obligations to us. Likewise, we may be required to lower our rental rates to attract desirable tenants in such an environment. Currently, the majority of our properties are located in North Dakota and Minnesota, and we hold several properties in Fargo, North Dakota and Moorhead, Minnesota. To the extent weak economic or real estate conditions affect North Dakota, Minnesota, or other markets in which we own properties more severely than other areas of the country, our financial performance could be negatively impacted.

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We may invest in and develop undeveloped real property, which requires us to pay expenses prior to receiving any income on the property.

Under our Third Amended and Restated Declaration of Trust, we have the discretion to invest up to 10% of our total assets in undeveloped property. When we invest in undeveloped property, such property does not generate operating revenue while costs are incurred to develop the property and may generate other expenses including property taxes and insurance. In addition, construction and development of such properties may not be completed within budget or as scheduled and projected rental levels may not be achieved. In addition to the risks of real estate investments in general, an investment in undeveloped property is subject to additional risks, including the expense and delay which may be associated with rezoning the land for a higher use and the development and environmental concerns of governmental entities and/or community groups. Therefore, we will not generate income on such property until development is completed and we begin leasing the property.

We may acquire multiple properties in a single transaction, which may adversely affect our operations through the inclusion of less desirable investments or financing requirements greater than we would otherwise be willing to incur.

Periodically, we may acquire multiple properties in a single transaction. Portfolio acquisitions are more complex and expensive than single property acquisitions, and the risk 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 ability to manage the properties in the portfolio. In addition, a seller may require a group of properties be purchased as a package even though we may not want to purchase one or more properties in the portfolio. In these situations, if we are unable to identify another person or entity to acquire the unwanted properties, we may be required to operate or attempt to dispose of these properties. To acquire multiple properties in a single transaction we may be required to accumulate a large amount of cash. We would expect the returns we can earn on such cash to be less than the ultimate returns in real property and therefore, accumulating such cash could reduce the funds available for dividends. Any of the foregoing events may increase the risk of adverse business results and negatively affect our results of operations.

We may invest in co-ventures, where our co-venture partners, co-tenants or other partners in co-ownership arrangements could take actions that decrease the value of a real estate investment and lower our overall return.

We may enter into joint ventures, tenant-in-common investments or other co-ownership arrangements with our Advisor, its affiliates, our trustees, or third parties having investment objectives similar to ours in the acquisition of real estate investments. In such arrangements, we may be acquiring non-controlling interests in or sharing responsibility for managing the affairs of the investment. In such event, we would not be in a position to exercise sole decision-making authority. Investments such as these may, under certain circumstances, involve risks not present where another party is not involved, including the possibility that partners or co-investees might become bankrupt or fail to fund their required capital contributions. Co-investees may have economic or other business interests or goals which 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 on decisions, such as a sale, because neither we nor the co-investee would have full control over the joint venture. Disputes between us and co-investees may result in litigation or arbitration that would increase our expenses and prevent our management and the Advisor from focusing their time and effort on our business. Consequently, actions by or disputes with co-investees might result in subjecting additional risk to properties owned by the investment. In addition, we may in certain circumstances be liable for the actions of our co-investees. Any of these risks could subject us to liabilities in excess of those contemplated and reduce our returns on that investment.

We could experience difficulties or delays renewing leases or re-leasing space, which will increase our costs to maintain such properties without receiving income.

We derive a significant portion of our net income from rent received from our tenants. Our properties include both residential as well as commercial properties. If a tenant experiences a downturn in its business or other types of financial distress, it may be unable to make timely rental payments. If lease defaults occur, we may experience delays in enforcing

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our rights as landlord. Also, if our tenants decide not to renew their leases, terminate early or default on their lease, we may not be able to re-let the space or may experience delays in finding suitable replacement tenants. Even if tenants decide to renew or lease new space, the terms of renewals or new leases, including the cost of required renovations or concessions to tenants, particularly commercial tenants, may be less favorable to us than current lease terms. As a result, our net income and ability to pay dividends to shareholders could be materially adversely affected. Further, if one of our properties cannot be leased on terms and conditions favorable to us, the property may not be marketable at a suitable price without substantial capital improvements, alterations, or at all.

We could face potential adverse effects if a commercial tenant is unable to make timely rental payments, declares bankruptcy or become insolvent.

If a commercial tenant experiences a downturn in its business or other types of financial distress, it may be unable to make timely rental payments. Delayed rental payments could adversely affect cash flow available for dividends. If a commercial tenant declares bankruptcy or becomes insolvent, it may adversely affect the income produced by our properties. If a tenant defaults, we may experience delays and incur substantial costs in enforcing our rights as landlord. However, if a tenant files for bankruptcy, we cannot evict the tenant solely because of such bankruptcy. If a court authorizes the commercial tenant to reject and terminate its lease with us, our claim against the tenant for unpaid future rent would be subject to a statutory cap that might be substantially less than the remaining rent actually owed under the lease. In addition, it is unlikely a bankrupt tenant would pay in full amounts it owes us under a lease. Additionally, we may be required to incur additional costs in the form of tenant improvements and leasing commissions in our efforts to lease the space to a new tenant, as well as lower our rental rates to reflect any decline in market rents. This shortfall could adversely affect our cash flow and results of operations.

Investments in real estate are illiquid, and we may not be able to resell a property on terms favorable to us.

We intend to hold real estate properties until such time as our Advisor determines a sale or other disposition appears to be advantageous or when our shareholders approve our termination and liquidation. Because real estate investments are relatively illiquid, it could be difficult for us to promptly sell one or more of our real estate properties on favorable terms. This may be a result of economic conditions, availability of financing, interest rates and other factors beyond our control. This may limit our ability to change our portfolio promptly in response to adverse changes in the performance of any such property or economic or market trends. We cannot predict the length of time needed to find a willing purchaser and to close the sale of a property. Real estate investments by their nature are often difficult or time consuming to liquidate. In addition, federal tax laws imposing a 100% excise tax on gains from sales of certain types of property sales by a REIT (generally, property viewed as being purchased for resale, rather than investment) could limit our ability to sell properties and may affect our ability to sell properties without adversely affecting returns to our shareholders. These restrictions could adversely affect our ability to achieve our investment objectives.

Valuations and appraisals of our investments may not necessarily correspond to realizable value.

We value our real estate properties initially at cost, which we expect to represent fair value at that time. After acquisition, valuations may include appraisals of our properties periodically. The valuation methodologies used to value our real estate properties will involve subjective judgments regarding such factors as comparable sales, rental and operating expense data, the capitalization and/or discount rate and projections of future rent and expenses based on appropriate analysis. Although we believe our valuation procedures are designed to determine the accurate fair value of our assets, appraisals and valuations of our real estate properties and other investments assets will be only estimates of fair value and therefore may not correspond to realizable value upon a sale of those assets.

Uninsured losses related to real estate investments may adversely affect our results of operation.

We purchase, and we may be required by lenders of mortgage loans or other financings to obtain, certain insurance coverage on our real estate investments. Either the property manager or the Advisor selects policy specifications and insured limits which it believes to be appropriate and adequate given the risk of loss, the cost of the coverage and industry practice. The nature of the tenants at the properties we hold may expose us and our operations to an increase in liability for personal injuries or other losses. There can be no assurance that such insurance will be sufficient to cover potential

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liabilities. Some of our policies may be subject to limitations involving large deductibles or co-payments and policy limits which may not be sufficient to cover losses. Furthermore, insurance against certain risks, such as terrorism, flood, and toxic mold, may be unavailable or available at commercially unreasonable rates or in amounts less than the full market value or replacement cost of the properties. There can be no assurance particular risks that are currently insurable, will continue to be insurable on an economical basis or current levels of coverage will continue to be available. If a loss occurs that is partially or completely uninsured, we may lose all or part of our investment in a property as well as the anticipated future cash flows from such 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. We may also be liable for any uninsured or underinsured personal injury, death, or property damage claims, which could result in decreased dividends to shareholders.

We may acquire a property or properties “AS IS,” which increases the risk of an investment that requires us to remedy defects or costs without recourse to the prior owner.

We may acquire real estate properties “as is” with only limited representations and warranties from the property seller regarding matters affecting the condition, use and ownership of the property. As a result, if defects in the property (including any building on the property) or other matters adversely affecting the property are discovered, we may not be able to pursue a claim for any or all damage against the property seller. Such a situation could negatively affect our results of operations.

We rely on affiliated and outside property managers to properly manage and lease our properties.

The Advisor and an affiliate of the Advisor serve as our principal property managers, and the Advisor has hired and intends to hire other affiliates and/or third parties to serve as additional property managers, to manage our properties and act as leasing agents to lease vacancies in our real estate properties. These property managers will have significant decision-making authority with respect to the management of our properties. Our ability to direct and control how our properties are managed may be limited. We will not, and the Advisor will not as to its affiliates and third-party property managers, supervise any of the property managers or any of their respective personnel on a day-to-day basis. Thus, the success of our business may depend in large part on the ability of our property managers to manage the day-to-day operations and their ability to lease vacancies in our properties. Any adversity experienced by our property managers could adversely impact the operation and profitability of our properties and, consequently, our ability to achieve our investment objectives.

Risks Related with Our Indebtedness and Financing

Market conditions could adversely affect our ability to obtain financing.

As a REIT, we are required to distribute at least 90% of our taxable income (excluding net capital gains) to our shareholders in each taxable year, and thus our ability to retain internally generated cash is limited. Accordingly, our ability to acquire properties or to make capital improvements to or remodel properties can depend on our ability to obtain debt or equity financing from third parties or the sellers of properties or to sell other properties. Market fluctuations and disruptions in the credit markets could significantly affect our ability to access capital. Reductions in our available borrowing capacity, or inability to establish a credit facility when required or when business conditions warrant, could then limit the number, size and quality of properties we could acquire or the amount of improvements we could make on acquired properties, which could materially affect our ability to achieve our investment objectives and may result in price or value decreases of our real estate assets.

Derivatives and hedging activity could adversely affect cash flow.

In the normal course of business, we use derivatives to manage our exposure to interest rate volatility on debt instruments, including hedging for future debt issuances. At other times we may utilize derivatives to decrease our exposure to floating interest rates. There can be no assurance that these hedging arrangements will have the desired beneficial impact. These arrangements, which can include a number of counterparties, may expose us to additional risks, including failure of any of

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our counterparties to perform under these contracts, and may involve extensive costs, such as transaction fees or breakage costs, if we terminate them. No strategy can completely insulate us from the risks associated with interest rate volatility.

We could face difficulties in refinancing loans involving balloon payment obligations.

Some of our mortgage loans require us to make a lump-sum or “balloon” payment at maturity. Our ability to make a balloon payment at maturity could be uncertain and may depend upon our ability to obtain additional financing, to refinance the debt or our ability to sell the particular property. If we try and refinance the debt, we may not be able to obtain terms as favorable as the original loan. Based on current market interest rates, the interest rate obtained upon refinancing in subsequent years may be higher than the original loan. If we are not able to refinance the debt, or obtain acceptable terms, we may be required to sell the mortgaged property at a time which may not permit realization of the maximum return on such property. The effect of a refinancing or sale could affect the rate of return to shareholders and the projected time of disposition of our assets.

Lenders may require restrictive covenants relating to our operations, which may adversely affect our flexibility and our ability to achieve our investment objectives.

Mortgage loans obtained by us could impose restrictions that affect our distribution and operating policies, our ability to incur additional debt and our ability to resell interests in the property. Loan documents may contain covenants that limit our ability to further mortgage the property, discontinue insurance coverage, replace the Advisor or the property manager, or terminate certain operating or lease agreements related to the property. Such restrictions may limit our ability to achieve our investment objectives.

Increases in interest rates on variable rate debt incurred and new financings by us will reduce cash available for dividends.

Increases in interest rates on any variable rate debt incurred or new financings would increase our interest costs, which could reduce our cash flows and our ability to pay dividends to our shareholders. In addition, if we need to repay existing debt during periods of rising interest rates, we could be required to liquidate one or more of our investments in properties at times which may not permit realization of the maximum return on such investments.

Complying with REIT requirements may limit our ability to hedge liabilities through tax-efficient means, which may adversely affect our results of operations.

We have entered into a number of hedging transactions and may enter into additional such transactions. Hedging transactions could take a variety of forms, including interest rate swaps or cap agreements, options, futures contracts, forward rate agreements, or similar financial instruments. The REIT provisions of the Code substantially limit our ability to hedge liabilities. Because we conduct substantially all of our operations through our Operating Partnership, any income from a hedging transaction entered into to manage risk of interest rate changes with respect to borrowings made or to be made to acquire or carry real estate assets will not constitute gross income to us for purposes of the 75% or 95% gross income test. As a result, we may be required to limit the Operating Partnership’s use of advantageous hedging techniques or to implement hedges through certain taxable corporations. This could increase the costs and risks of hedging activities. We intend to structure any hedging transaction in a manner that does not jeopardize our ability to qualify as a REIT.

Risks Related to Other Investments

Investments in other real estate related investments could involve higher risks than investment in real estate properties, which could adversely affect our operations and ability to make dividend payments.

We are permitted to invest in other real estate assets. We can invest in real estate equity, debt, and derivative securities. These assets can be quite risky, illiquid, and volatile and the value of these assets could cause the value of our shares to fluctuate and could result in losses that materially adversely affect our results of operations.

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Risks Related to Conflicts of Interest

We are subject to several conflicts of interest arising out of our relationships with our affiliates, including our Advisor and its affiliates.

There are conflicts of interest in our relationship with the Advisor and its affiliates and several trustees, which could adversely affect our operations and business operations.

We are subject to potential conflicts of interest arising out of our relationships with the Advisor, its affiliates, and certain trustees. Conflicts of interest may arise among a trustee or the Advisor and its respective affiliates, on the one hand, and us and our shareholders, on the other hand. As a result of these conflicts, the trustee or Advisor may favor its own interests or the interests of its affiliates over the interest of our shareholders or Operating Partnership.

Division of Loyalty/Allocation of time and effort

Several of our officers and/or trustees serve as officers, governors, and owners of one or more entities (certain of which are affiliated with our Advisor or trustees), property managers, tenants of our properties, brokerage companies and other real estate entities owning real estate investments. As a result, these individuals owe duties to these other entities and their investors, which may conflict with the duties that they owe to us and our shareholders. Their loyalties to these other entities and investors could result in action or inaction detrimental to our business or result in conflicts relating to the allocation of their time and services, which could harm implementation of our business strategy and investment and leasing opportunities.

Allocation of investment opportunities

The Advisor and its affiliates are or may become committed to the management of other business ventures. Accordingly, there may be conflicts of interest between our investments and other investments or business ventures in which the Advisor and its affiliates are participants. In addition, the Advisor and its officers will advise other investment programs that invest in commercial real estate properties and real estate related assets in which we may be interested. Therefore, the Advisor could face conflicts of interest in allocating and determining which programs will have the opportunity to acquire and participate in such investments as they become available. As a result, other investment programs advised by the Advisor may compete with us with respect to investors and certain investments we may want to acquire.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

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ITEM 1C. CYBERSECURITY

With oversight from the Board of Trustees, the Advisor is responsible for managing all cyber risks and overseeing our security programs. Cybersecurity risk management has been delegated to the Advisor’s executive officers, with day-to-day management carried out by the Advisor’s Chief of Staff, Jamie Bucholz. Annually, management reviews and prepares a memorandum for the Audit and Disclosure Committee in regards to management’s cybersecurity risk management plan.

The Advisor’s cybersecurity risk oversight includes: (i) reviewing and approving technology security policies and internal cybersecurity controls, (ii) monitoring cybersecurity and information security exposures, (iii) confirming the Advisor has adequate procedures in place to not only control and limit these exposures but also to timely respond to any cyber incident, and (iv) mandatory cyber security trainings for all Advisor personnel.

The Advisor partners with several third-party technology providers to monitor and protect internal IT infrastructure and data. The Advisor has hired Marco Technologies as the organization’s Managed IT provider with tools that systematically update hardware and software while also monitoring uptime to ensure seamless business operations. Marco Technologies also provides cyber security trainings, which all Advisor personnel are required to complete on a monthly basis. The Advisor utilizes Red Canary to provide 24/7 monitoring on all end points with triggers to isolate and mitigate any suspicious cyber activity. Finally, High Point Networks provides physical and cloud-based network data backup solutions for the Advisor. In collaboration with the Advisor, an extensive data back-up plan is in place with Return to Operations objectives of less than 24 hours. Although our CFO does not come from an information technology background, she relies on her extensive organization and project management experience to coordinate and manage the third-party providers who perform our cybersecurity function and to implement our cybersecurity incident response plan described below.

The Board of Trustees and Advisor are aware that preventive measures cannot prevent all cyber incidents. When a cyber incident occurs, our actions are guided by an incident response plan decision tree to (i) detect, contain and eradicate any threats, (ii) assess materiality, (iii) notify internal parties, (iv) recover any compromised data and information systems, (v) limit impacts of any such incident on the Trust’s operations, and (vi) report any such incident as required by law or as otherwise necessary.

Our business strategy, results of operations or financial condition have not been materially impacted by cybersecurity threats, including as a result of any previous cybersecurity incidents. Although we cannot predict the cybersecurity incidents we may face in the future, we believe we have implemented reasonable cybersecurity protections and do not have reason to believe our business strategy, results of operations or financial condition will be materially impacted by cybersecurity incidents in the future.

For a discussion of risks from cybersecurity threats, please see “Item 1A. Risk Factors.”

ITEM 2. PROPERTIES

General

Our policy is to acquire assets with an intention to hold these assets as long-term investments seeking income and capital appreciation through an increase in value of our real estate portfolio, as well as increased revenue as a result of higher rent. These types of investments are the core of our strategy of creating shareholder value. We currently own and maintain a portfolio of real estate diversified by geographical location and by type and size.

The majority of our real estate investments are managed by a third party. Property management firms usually receive between 2% and 5% of gross rent collection for their services. Substantially all of our commercial revenues consist of base rents received under leases having terms ranging from month-to-month to over 25 years. Additionally, commercial revenue may also include the reimbursement of operating costs such as common area maintenance expenses, utilities, insurance and real estate taxes. More than half of our existing commercial property leases as of December 31, 2025 contain “step up” rental clauses providing for annual increases in the base rental payments of approximately 1.0% to 3.0% each year during the term of the lease.

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Properties

As of December 31, 2025, we owned 175 properties located in 12 states, containing approximately 12,295 apartment units and 1,159,000 square feet of leasable commercial space. The residential and commercial portfolio of properties includes a diversified mixture of multifamily, single, and multi-tenant retail and office buildings as well as industrial and medical facility properties. The majority of the properties are located in the largest cities in the states of North Dakota and Minnesota.

As of December 31, 2025, approximately 83.9% (based on cost) of the properties were apartment communities. Most multifamily dwelling properties are leased to a variety of tenants under short-term leases of less than a year.

As of December 31, 2025, approximately 16.1% (based on cost) of the properties were comprised of industrial, office, retail and medical commercial properties. Most commercial properties are leased to a variety of tenants under long-term leases.

The following information applies to all of our operating properties:

●

We believe all of our properties are adequately covered by insurance and suitable for their intended purposes.

●

Our properties are located in markets where we are subject to competition in attracting new tenants and retaining current tenants; and

●

Depreciation is provided on a straight-line basis over the estimated useful lives of the buildings.

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The below table sets forth certain information regarding each of our properties owned, including unconsolidated affiliates, as of December 31, 2025 (in thousands, except units or leasable sq. ft.).


			# of		Physical
			Units or		Occupancy
		Year	Leasable	Total	at December
Property	Location	Acquired	Sq. Ft	Investment	31, 2025
Amberwood	Grand Forks, ND	2016	96	3,319	100.00	%
Arbor	Bismarck, ND	2013	12	510	100.00	%
Arbor II	Bismarck, ND	2013	12	489	100.00	%
Arbor III	Bismarck, ND	2013	12	543	75.00	%
Ashbury	Fargo, ND	2013 & 2016	61	3,545	91.80	%
Auburn II	Fargo, ND	2007	24	688	95.83	%
Autumn Ridge	Grand Forks, ND	2004	144	5,700	97.92	%
Barrett Arms	Crookston, MN	2014	24	885	100.00	%
Bayview	Fargo, ND	2007	100	3,967	93.00	%
Bell Plaza* (FKA Northland Plaza)	Bloomington, MN	2015	299,671	31,851	83.55	%
Belmont	Bismarck, ND	2020	26	1,389	92.31	%
Berkshire	Fargo, ND	2008	12	382	100.00	%
Betty Ann	Fargo, ND	2009	24	780	87.50	%
Biolife Plasma Center	Bismarck, ND	2008	11,737	1,557	100.00	%
Biolife Plasma Center	Janesville, WI	2008	12,225	1,271	100.00	%
Biolife Plasma Center	Mankato, MN	2008	12,965	2,402	100.00	%
Biolife Plasma Center	Marquette, MI	2008	11,737	1,749	100.00	%
Biolife Plasma Center	Onalaska, WI	2008	12,180	1,347	100.00	%
Biolife Plasma Center	Oshkosh, WI	2008	12,191	1,230	100.00	%
Biolife Plasma Center	Sheboygan, WI	2008	12,965	1,584	100.00	%
Biolife Plasma Center	Stevens Point, WI	2008	13,190	1,320	100.00	%
Birchwood I	Fargo, ND	2017	18	480	100.00	%
Birchwood II	Fargo, ND	2017	48	2,607	92.59	%
Bluemont Lakes Financial Center	Fargo, ND	2004	31,307	3,257	88.51	%
Bradbury	Bismarck, ND	2018	96	5,242	95.83	%
Briar Pointe	Fargo, ND	2021	30	1,758	96.67	%
Bridgeport	Fargo, ND	2016	120	7,007	95.83	%
Bristol Park	Grand Forks, ND	2016	80	4,742	96.25	%
Brookfield	Fargo, ND	2008	72	1,634	98.61	%
Brownstone	Fargo, ND	2021	72	4,312	97.22	%
Cambridge (FKA 44th Street)	Fargo, ND	2013	42	1,796	88.10	%
Candlelight	Fargo, ND	2012	66	1,838	92.42	%
Carling Manor	Grand Forks, ND	2008	12	535	100.00	%
Carlton Place	Fargo, ND	2008	213	6,043	92.02	%
Carr	Fargo, ND	2017	18	698	88.89	%
Cedars 4	Fargo, ND	2018	18	1,094	77.78	%
Chandler 1802	Grand Forks, ND	2014	24	1,009	91.67	%
Chandler 1834	Grand Forks, ND	2018	12	616	100.00	%
Chandler 1866	Grand Forks, ND	2005	12	232	100.00	%
Chandler 1898	Grand Forks, ND	2022	12	570	91.67	%
Cherry Creek (FKA Village)	Grand Forks, ND	2008	35	2,038	68.57	%
Cobalt	Fort Worth, TX	2022	270	49,807	88.20	%
Columbia West	Grand Forks, ND	2008	70	2,676	95.71	%

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Country Club	Fargo, ND	2011	40	1,241	95.00	%
Countryside	Fargo, ND	2011	24	824	91.67	%
Dairy Queen	Dickinson, ND	2012	2,811	757	100.00	%
Dairy Queen	Moorhead, MN	2011	2,712	757	100.00	%
Dakota Manor	Fargo, ND	2014	54	2,437	92.59	%
Danbury	Fargo, ND	2007	134	5,060	97.01	%
Deer Park	Hutchinson, MN	2022	138	13,315	94.93	%
Dellwood Estates	Anoka, MN	2013	132	8,777	96.21	%
Desoto Estates	Grand Forks, ND	2022	68	5,422	94.12	%
Desoto Townhomes	Grand Forks, ND	2022	24	2,994	95.83	%
Diamond Bend	Mandan, ND	2022	78	9,722	92.31	%
Eagle Run	West Fargo, ND	2010	144	4,741	94.44	%
Eagle Sky I	Bismarck, ND	2016	20	1,274	95.00	%
Eagle Sky II	Bismarck, ND	2016	20	1,376	85.00	%
East Bridge	Fargo, ND	2017	58	5,287	96.55	%
Eastbrook	Bismarck, ND	2020	24	1,313	91.67	%
Echo Manor	Hutchinson, MN	2014	30	836	90.00	%
Eide Bailly Building***	Fargo, ND	2007	74,646	7,995	100.00	%
Emerald Court	Fargo, ND	2008	24	754	93.33	%
Emory North Liberty Joint Venture ***	North Liberty, IA	2025	192	48,227	76.04	%
Evergreen Terrace	Omaha, NE	2020	144	8,631	81.94	%
Fairview	Bismarck, ND	2008	84	3,567	92.86	%
Falcon Apartments	North Branch, MN	2025	144	24,530	97.20	%
Flagstone	Fargo, ND	2021	121	7,168	94.21	%
Flickertail	Fargo, ND	2008	180	5,711	95.00	%
Forest Avenue	Fargo, ND	2013	20	565	75.00	%
Four Points Office Building	Fargo, ND	2007	12,681	849	100.00	%
Foxtail Creek Townhomes	Fargo, ND	2020	30	1,325	96.67	%
Galleria III	Fargo, ND	2010	18	849	94.44	%
Garden Grove	Bismarck, ND	2016	95	5,391	96.84	%
Georgetown	Fridley, MN	2014	468	31,590	90.17	%
Glen Pond	Eagan, MN	2011	528	33,743	94.02	%
Goldmark Office Park	Fargo, ND	2007	127,238	15,581	100.00	%
Grand Forks Marketplace**	Grand Forks, ND	2003	182,522	18,718	100.00	%
Granger Court	Fargo, ND	2013	59	3,699	94.75	%
Great American Insurance Building	Fargo, ND	2005	14,796	1,381	100.00	%
Guardian Building Products	Fargo, ND	2012	100,600	2,530	100.00	%
Hannifin	Bismarck, ND	2013	14	612	92.86	%
Harrison Richfield	Grand Forks, ND	2007	140	5,116	99.29	%
Hartford	Fargo, ND	2018	30	1,298	93.33	%
Hawn	Fargo, ND	2020	48	2,755	93.75	%
Highland Meadows	Bismarck, ND	2011	144	8,805	94.44	%
Hunter’s Run I	Fargo, ND	2007	12	277	91.67	%
Hunter’s Run II	Fargo, ND	2008	12	310	83.33	%
Huntington	Fargo, ND	2015	10	405	90.00	%
Islander	Fargo, ND	2011	24	985	91.67	%
Kennedy	Fargo, ND	2013	12	600	66.67	%
Lexington Lofts ****	Forest Lake, MN	2024	355	67,100	93.99	%
Library Lane	Grand Forks, ND	2007	60	1,858	96.67	%

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Madison (FKA Columbine)	Grand Forks, ND	2015	12	605	91.67	%
Maple Ridge	Omaha, NE	2008	174	7,209	94.25	%
Maplewood	Maplewood, MN	2014	240	14,527	91.25	%
Maplewood Bend	Fargo, ND	2009 and 2010	183	5,013	94.54	%
Martha Alice	Fargo, ND	2009	24	695	95.83	%
Mayfair (FKA Colony Manor)	Grand Forks, ND	2008	24	1,018	95.83	%
Midtown Plaza	Minot, ND	2004	17,808	673	68.12	%
Monticello	Fargo, ND	2013	18	717	88.89	%
Montreal Courts	Little Canada, MN	2013	444	23,198	93.69	%
Morningside	Fargo, ND	2018	17	760	88.24	%
Newgate	Bismarck, ND	2022	46	2,301	95.65	%
Oak Court	Fargo, ND	2008	81	2,173	91.36	%
Oakview Townhomes (FKA Arrowhead)	Grand Forks, ND	2017	82	5,310	97.56	%
Oxford	Fargo, ND	2021	145	9,897	96.55	%
Pacific Park I	Fargo, ND	2013	30	763	80.00	%
Pacific Park II	Fargo, ND	2013	39	876	94.87	%
Pacific South	Fargo, ND	2013	15	476	66.67	%
Park Circle	Fargo, ND	2017	18	780	88.89	%
Parkview Arms	Bismarck, ND	2015	62	3,594	95.16	%
Parkway Office (FKA Echelon Building)	Fargo, ND	2006	16,937	1,153	-	%
Parkwest Gardens	West Fargo, ND	2014	144	6,432	90.28	%
Parkwood	Fargo, ND	2008	40	984	90.00	%
Pebble Creek	Bismarck, ND	2008	70	1,591	98.57	%
Pinehurst	Fargo, ND	2021	210	14,214	94.76	%
Plumtree	Fargo, ND	2017	18	750	83.33	%
Prairiewood Court I & II	Fargo, ND	2006 and 2007	60	1,515	88.33	%
Prairiewood Meadows	Fargo, ND	2012	88	5,946	94.32	%
Quail Creek	Springfield, MO	2015	164	8,410	93.13	%
Robinwood	Coon Rapids, MN	2014	120	6,450	94.17	%
Rosedale Estates	Roseville, MN	2014	360	31,135	95.83	%
Rosegate	Fargo, ND	2008	90	2,600	96.67	%
Rosser	Bismarck, ND	2020	24	1,322	83.33	%
Roughrider	Grand Forks, ND	2016	12	587	91.67	%
Saddlebrook	West Fargo, ND	2008	60	1,170	93.33	%
Sage Park (FKA Brighton Village)	New Brighton, MN	2014	240	13,830	95.83	%
Sargent	Fargo, ND	2017	36	1,442	88.89	%
Schrock	Fargo, ND	2013	18	562	100.00	%
SE Brooklyn Park, LLLC *****	Brooklyn Park, MN	2022	146	25,719	96.60	%
SE Maple Grove, LLC****	Maple Grove, MN	2021	161	25,303	95.00	%
SE Rogers, LLC ****	Rogers, MN	2022	165	26,646	95.80	%
SE Rosemount, LLC *****	Rosemount, MN	2025	-	13,038	-	%
SE Savage, LLC****	Savage, MN	2021	190	27,595	94.20	%
Sheridan Pointe	Fargo, ND	2013	48	2,176	95.83	%
Sierra Ridge	Bismarck, ND	2006 and 2011	136	6,948	96.32	%
Somerset	Fargo, ND	2008	75	2,618	92.00	%
Southgate	Fargo, ND	2007	162	3,966	95.68	%
Southview III	Grand Forks, ND	2011	18	521	91.67	%
Southview Village	Fargo, ND	2007	72	2,355	91.67	%
Spring	Fargo, ND	2013	25	721	92.00	%

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ST Fossil Creek *	Fort Worth, TX	2023	228	44,618	88.00	%
ST Oak Cliff *	Fort Worth, TX	2022	318	43,940	92.80	%
Stanford Court	Grand Forks, ND	2013	96	3,756	98.86	%
Sterling Pointe	Grand Forks, ND	2025	196	21,209	92.89	%
Stonefield	Bismarck, ND	2014	192	11,031	98.72	%
Stony Brook	Omaha, NE	2009	148	11,159	89.19	%
Summerfield	Fargo, ND	2015	18	689	83.33	%
Summit Point	Fargo, ND	2015	87	5,140	91.95	%
Sunchase	Fargo, ND	2017	36	1,576	94.44	%
Sunset Ridge	Bismarck, ND	2008 and 2010	178	7,591	97.75	%
Sunview	Grand Forks, ND	2008	36	1,297	100.00	%
Sunwood Estates	Fargo, ND	2007	80	2,850	95.00	%
Thunder Creek	Fargo, ND	2018	57	4,618	94.74	%
Titan Machinery	Bismarck, ND	2015	22,293	1,993	100.00	%
Titan Machinery	Dickinson, ND	2012	17,760	1,471	100.00	%
Titan Machinery	Fargo, ND	2012	29,800	2,598	100.00	%
Titan Machinery	Marshall, MN	2011	67,600	2,730	100.00	%
Titan Machinery	Minot, ND	2012	23,690	1,717	100.00	%
Titan Machinery	North Platte, NE	2016	18,910	1,275	100.00	%
Titan Machinery	Sioux City, IA	2013	36,332	2,030	100.00	%
Trustmark	Fargo, ND	2020	43,253	11,129	100.00	%
Twin Oaks	Hutchinson, MN	2014	80	3,267	92.50	%
Twin Parks	Fargo, ND	2008	66	1,555	89.39	%
Urban Plains	Fargo, ND	2024	415	41,757	95.18	%
Valley Homes Duplexes	Grand Forks, ND	2015	24	1,969	95.83	%
Valley View	Golden Valley, MN	2014	72	5,970	94.44	%
Village Park	Fargo, ND	2008	60	1,979	93.33	%
Village West	Fargo, ND	2008	80	1,950	83.75	%
Walgreens	Alexandria, LA	2009	14,560	2,871	100.00	%
Walgreens	Batesville, AR	2009	14,820	4,235	100.00	%
Walgreens	Denver, CO	2011	17,228	3,847	100.00	%
Walgreens	Fayetteville, AR	2009	13,650	3,369	100.00	%
Walgreens	Laurel, MS	2010	14,820	3,108	100.00	%
Washington	Grand Forks, ND	2016	16	648	93.75	%
Wells Fargo Building	Duluth, MN	2007	98,068	2,964	62.94	%
West Oak	Fargo, ND	2017	18	733	100.00	%
Westcourt	Fargo, ND	2014	64	2,949	93.75	%
Westwood Estates	Fargo, ND	2008	200	5,733	94.50	%
Willow Park	Fargo, ND	2008	102	4,203	94.12	%
Wolf Creek	Fargo, ND	2020	54	4,693	88.89	%
Woodland Pines (FKA Fredericksburg)	Omaha, NE	2018	173	12,289	89.60	%

* 70.00% ownership interest
** 66.67% ownership interest
*** 50.00% ownership interest
**** 60% ownership interest
***** 75.00% ownership interest

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Geography

Of our 175 properties, 135 are located in North Dakota, with 84 being located in the greater Fargo, North Dakota and Moorhead, Minnesota metropolitan statistical area. The North Dakota region generated approximately 53.0% of our rental revenue for the year ended December 31, 2025.

The following table presents the total real estate investment amount by state and annual rental revenue by state, as of the year ended December 31, 2025 (in thousands):


	Real Estate				Rental
State	Investment		%		Revenue		%
North Dakota	$	587,214	50.7	%	$	92,437	53.0	%
Minnesota		409,427	35.3	%		62,097	35.6	%
Other		162,698	14.0	%		19,816	11.4	%
	$	1,159,339	100.0	%	$	174,350	100.0	%

Economy

The North Dakota workforce is concentrated in agricultural, energy, information technology, aerospace sciences and medical sciences. According to the U.S. Census Bureau, the 2025 estimated combined population of the Fargo, West Fargo and Moorhead metro area was 223,038 people.

The following chart depicts the difference in unemployment rates between North Dakota and the national average for 2025:


		Jan		Feb		Mar		Apr		May		Jun		Jul		Aug		Sep		Oct		Nov		Dec
National ⁽¹⁾		4.0	%	4.2	%	4.2	%	4.2	%	4.3	%	4.1	%	4.3	%	4.3	%	4.4	%	4.4	%	4.5	%	4.4	%
North Dakota⁽¹⁾		2.6	%	2.6	%	2.6	%	2.6	%	2.5	%	2.5	%	2.5	%	2.5	%	2.6	%	2.6	%	2.6	%	2.6	%

(1)	Seasonally adjusted

Source: Bureau of Labor Statistics

Acquisitions and Dispositions

We had two acquisitions, entered into one transaction with a consolidated affiliate, and had four dispositions of property during the year ended December 31, 2025. We had two acquisitions, entered into one transaction with an unconsolidated affiliate, and had nine dispositions of property during the year ended December 31, 2024. We had no acquisitions and two dispositions of property during the year ended December 31, 2023.

Capitalization rates are a key decision-making item used by the Board. In making acquisitions, the Board currently targets capitalization rates from 6.0% to 9.0% on trailing 12 month net operating income, depending on the amount of risk involved. For those properties with greater risk, the Board targets higher capitalization rates (9.0% or greater). For those properties exhibiting less risk, a lower capitalization risk is acceptable. For potential acquisitions, the Board also requires an adequate spread between the financing on the property and the capitalization rate. Capitalization rates for acquisitions are calculated using projected net operating income divided by the investment. Net operating income is calculated by taking GAAP net income and adding back depreciation, amortization, and interest expense. Capitalization rates for dispositions are calculated in the same way with the exception of using historical, rather than projected, net operating income. While capitalization rates have shown some improvement, market pricing remains resilient due to the significant amount of capital seeking deployment in a lower-volume transaction environment. This imbalance continues to create stickiness in cap rates despite broader market shifts.

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We use historical occupancy, rental income, and expenses to calculate projected net operating income for potential real estate investments. For residential properties, we make various assumptions about future rents, occupancy levels, and expenses based on historical financial information and our assessment of the property’s future potential. The projected NOI for residential acquisitions is typically based on historical occupancy and expenses over a three-to-five year period. When historical information is unavailable, market vacancy and credit loss factors are estimated.

For commercial and residential properties, assumptions regarding rental income and expenses are based on the terms of the in-place leases and available historical financial information which is then used to generate projected net operating income.

Numerous estimates and assumptions are necessary to generate projected net operating income for potential commercial and residential acquisitions, and there is no guarantee actual net operating income will equal projected net operating income.

Tenants

Our tenants are varied and consist of individuals and national, regional, and local businesses. Our commercial properties generally attract a mix of tenants. In each of 2025, 2024 and 2023, no single tenant represented more than 10% of our revenues. We have investments in several types of real estate, including multifamily, retail, office, industrial, and medical. Within our office, retail, and industrial properties, we have over 100 tenants who operate in various industries, including restaurants, pharmacy, medical, financing, banking, insurance, professional services, technology, wholesale and direct retail.

Lease Expirations

The vast majority of residential leases are for one-year periods. The following table lists a summary, as of December 31, 2025, of lease expirations on non-residential properties scheduled to occur during each of the ten calendar years from 2025 to 2035 and thereafter, assuming that tenants exercise no renewal options or early termination rights. Base rents do not include CAM (common area maintenance).

The table is based on leases on December 31, 2025 for our non-residential properties including our unconsolidated affiliates (in thousands, except leasable area data).


	# of Leases	Gross	% of Gross		Expiring		% of Total
Lease Expiration Year	Expiring	Leasable Area	Leasable Area		Base Rent		Base Rent
Month-to-Month	2	8,743	0.84	%	$	—	0.00	%
2026	11	146,615	14.04	%		1,160,806	9.11	%
2027	16	86,983	8.33	%		656,835	5.16	%
2028	10	76,175	7.30	%		690,673	5.42	%
2029	13	122,691	11.75	%		1,211,943	9.51	%
2030	15	155,467	14.89	%		4,685,740	36.79	%
2031	2	94,907	9.09	%		20,623	0.16	%
2032	6	253,641	24.29	%		3,512,823	27.58	%
2033	3	25,365	2.42	%		423,307	3.33	%
2034	2	32,048	3.07	%		343,733	2.70	%
2035	1	2,901	0.28	%		31,038	0.24	%
Thereafter	4	38,600	3.70	%		—	0.00	%
Total	85	1,044,136	100.00	%	$	12,737,521	100.00	%

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Mortgage Notes Secured by the Properties

On December 31, 2025, we had $565,534 in mortgage notes payable with respect to our properties. Principal payments on these notes are payable as follows (in thousands):


Years ending December 31,	Amount
2026	$	83,757
2027		79,586
2028		47,474
2029		91,801
2030		82,076
Thereafter		180,840
	$	565,534

Insurance

We believe we have adequate property damage, fire loss and liability insurance on all of our properties with reputable, commercially rated companies. We also believe our insurance policies contain commercially reasonable deductibles and limits, adequate to cover our properties. We expect to maintain this type of insurance coverage and to obtain similar coverage with respect to any additional properties we acquire in the near future. Further, we have title insurance relating to our properties in an aggregate amount we believe to be adequate.

Regulations

Our properties, as well as any other properties we may acquire in the future, are subject to various federal, state, and local laws, ordinances and regulations. They include, among other things, zoning regulations, land use controls, environmental controls relating to air and water quality, noise pollution and indirect environmental impacts such as increased motor vehicle activity. We believe we have all permits and approvals necessary under current law to operate our properties.

ITEM 3. LEGAL PROCEEDINGS

The Company is subject, from time to time, to various legal proceedings and claims that arise in the ordinary course of business. While the resolution of such matters cannot be predicted with certainty, management believes, based on currently available information, that the final outcome of such matters will not have a material effect on the financial statements of the Company.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

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PART II

Market Information

Our common shares of beneficial interest are not listed on any national exchange or over-the-counter market or quoted on any national securities market, and we currently do not have plans to list or have our common shares quoted.

Shareholders and Unit Holders

As of March 11, 2026, we had 13,251,280, common shares of beneficial interests outstanding, held by a total of 1,237 common shareholders and no outstanding options or warrants to purchase our common shares.

In addition, as of March 11, 2026, there were approximately 19,031,031 limited partnership units of our Operating Partnership outstanding held by approximately 526 limited partners. Pursuant to the exchange rights under the LLLP Agreement of the Operating Partnership, we have the option, upon redemption requests by the holders of the limited partnership units, to acquire the limited partnership units by paying the holders with our common shares of beneficial interest in lieu of delivering cash. The numbers of common shareholders and limited partners is based on the Company’s records. There is no public trading market for our common shares or the limited partnership units of our Operating Partnership.

Quarterly Dividend Data

We have declared and intend to continue to declare regular quarterly dividends to our common shareholders. Because all of our operations are conducted through our Operating Partnership, our ability to pay dividends depends on the Operating Partnership’s ability to make distributions to us and its other limited partners. We pay declared dividends quarterly, whereby the dividend attributable to a calendar quarter would be paid during the first month of the next quarter. Dividends will be paid to common shareholders as of the record dates selected by the Board of Trustees. We intend to make dividends sufficient to satisfy the requirements for qualification as a REIT for federal tax purposes.

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The following tables show the dividends we have declared (including the total amount paid on a per share basis, paid in cash, reinvested in shares of our common stock pursuant to the Dividend Reinvestment Plan, and the total amount paid) during the last two fiscal years (in thousands, except per share data).


	Dividends Per				Reinvested
2025 Quarter Ended	Common Share		Cash		via DRP		Total Dividends
December 31	$	0.300000	$	1,862		2,079	$	3,941	^(a)
September 30	$	0.300000		1,828		2,077		3,905
June 30	$	0.300000		1,747		2,131		3,878
March 31	$	0.300000		1,736		2,131		3,867
			$	7,173	$	8,418	$	15,591


	Dividends Per				Reinvested
2024 Quarter Ended	Common Share		Cash		via DRP		Total Dividends
December 31	$	0.287500	$	1,622	$	2,066	$	3,688	^(a)
September 30	$	0.287500		1,458		1,906		3,364
June 30	$	0.287500		1,407		1,844		3,251
March 31	$	0.287500		1,419		1,838		3,257
			$	5,906	$	7,654	$	13,560

(a)	Fourth quarter dividends paid on January 15^th of the following year, for the year ended December 31, 2025. Fourth Quarter dividends were paid on January 15^th of the following year, for the year ended December 31, 2024.

The Trust expects that future dividends will be maintained at least at the present rate, unless there are changes in our results of operations, our general financial condition, general economic conditions, or the Board determines other action prudent.

Sale of Securities

During the year ended December 31, 2025, the Trust issued approximately 438,000 limited partnership units of the Operating Partnership valued at $24.00 per unit for an aggregate consideration of $10,518, for the purchase of real estate investments. At the sole and absolute discretion of the Operating Partnership, and so long as our redemption plans exist, and applicable holding periods are met, limited partners may request the Operating Partnership to redeem their limited partnership units for common shares in lieu of cash for the redemption on a basis of one limited partnership unit for one Sterling common share. The units were sold to accredited investors unaffiliated with the Operating Partnership in private placement transactions exempt from the registration requirements of the Securities Act of 1933 pursuant to Section 4(a)(2) of such Act.

Other Sales

During each of the years ended December 31, 2025, 2024 and 2023, there were no common shares of the Trust issued in exchange for limited partnership units of the Operating Partnership.

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Redemptions of Securities

Set forth below is information regarding common shares and limited partnership units redeemed during the year ended December 31, 2025.


						Average			Total Number of		Total Number of		Approximate Dollar Value of
		Total Number		Total Number		Price			Shares Redeemed		Units Redeemed		Shares (or Units) that May
		of Common		of Limited		Paid per			as Part of		as Part of		Yet Be Redeemed Under
		Shares		Partner Units		Common			Publicly Announced		Publicly Announced		Publicly Announced
Period		Redeemed		Redeemed		Share/Unit			Plans or Programs		Plans or Programs		Plans or Programs
January 1-31, 2025		27,000		13,000		$	22.80		1,858,000		1,605,000		$	16,857
February 1-28, 2025		21,000		50,000		$	22.80		1,879,000		1,655,000		$	15,242
March 1-31, 2025		2,000		—		$	22.80		1,881,000		1,655,000		$	15,193
Total		50,000		63,000

April 1-30, 2025		4,000		5,000		$	22.80		1,885,000		1,660,000		$	14,979
May 1-31, 2025		10,000		16,000		$	22.80		1,895,000		1,676,000		$	14,390
June 1-30, 2025		75,000		30,000		$	22.80		1,970,000		1,706,000		$	11,998
Total		89,000		51,000

July 1-31, 2025		2,000		17,000		$	22.80		1,972,000		1,723,000		$	11,583
August 1-31, 2025		28,000		18,000		$	22.80		2,000,000		1,741,000		$	10,531
September 1-30, 2025		10,000		9,000		$	22.80		2,010,000		1,750,000		$	10,096
Total		40,000		44,000

October 1-31, 2025		4,000		18,000		$	22.80		2,014,000		1,768,000		$	9,601
November 1-30, 2025		15,000		48,000		$	22.80		2,029,000		1,816,000		$	8,166
December 1-31, 2025		—		3,000		$	22.80		2,029,000		1,819,000		$	8,094
Total		19,000		69,000

For the year ended December 31, 2025, the Trust redeemed all shares or units for which we received redemption requests. In addition, for the year ended December 31, 2025, all common shares and units redeemed were redeemed as part of the publicly announced plans.

The Amended and Restated Share Redemption Plan, effective June 20, 2024, permits us to repurchase common shares held by our shareholders and limited partnership units held by partners of our Operating Partnership, up to an aggregate amount of $75,000 worth of shares and units, upon request by the holders after they have held them for at least one year and subject to other conditions and limitations described in the plan. The amount remaining to be redeemed as of December 31, 2025, was $8,094. The redemption price for such shares and units redeemed under the plan was fixed at $22.80 per share or unit, which became effective January 1, 2025. The redemption plan will terminate in the event the shares become listed on any national securities exchange, the subject of bona fide quotes on any inter-dealer quotation system or electronic communications network or are the subject of bona fide quotes in the pink sheets. Additionally, the Board, in its sole discretion, may terminate, amend or suspend the redemption plan at any time if it determines to do so is in our best interest.

ITEM 6. [RESERVED]

None.

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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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

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

Introduction

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

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

Overview

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

Critical Accounting Policies and Estimates

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

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Impairment of Real Estate Investments

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

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

o

A substantial decline or negative cash flows;

o

Continued low occupancy rates;

o

Continued difficulty in leasing space;

o

Significant financially troubled tenants;

o

A change in plan to sell a property prior to the end of its useful life or holding period;

o

A significant decrease in market price not in line with general market trends; and

o

Any other quantitative or qualitative events or factors deemed significant by the Trust’s management or Board of Trustees.

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

o

Projected operating cash flows considering factors such as vacancy rates, rental rates, lease terms, tenant financial strength, demographics, holding period and property location;

o

Projected capital expenditures;

o

Projected cash flows from the eventual disposition of an operating property using a property specific capitalization rate;

o

Comparable selling prices; and

o

Property specific discount rates for fair value estimates as necessary.

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

Acquisition of Real Estate Investments

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

REIT Status

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

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

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

Principal Business Activity

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

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


Residential Property		Location		No. of Properties		Units
		North Dakota		119		7,695
		Minnesota		16		3,527
		Missouri		1		164
		Nebraska		4		639
		Texas		1		270
				141		12,295

Commercial Property		Location		No. of Properties		Sq. Ft
		North Dakota		16		473,000
		Arkansas		2		28,000
		Colorado		1		17,000
		Iowa		1		36,000
		Louisiana		1		15,000
		Michigan		1		12,000
		Minnesota		5		481,000
		Mississippi		1		15,000
		Nebraska		1		19,000
		Wisconsin		5		63,000
				34		1,159,000

Management Highlights

●

Increased revenues from rental operations by $15,044 or 9.4% for the year ended December 31, 2025, compared to the year ended December 31, 2024.

●

Two multifamily properties were acquired during the year ended December 31, 2025.

●

One consolidated affiliate transaction was entered into during the year ended December 31, 2025.

●

Disposed of one residential and three commercial properties during the year ended December 31, 2025.

●

Declared dividends aggregating $1.2000 per common share for the year ended December 31, 2025.

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


	Year ended December 31, 2025						Year ended December 31, 2024
	Residential		Commercial		Total		Residential		Commercial		Total

	(in thousands)						(in thousands)
Real Estate Revenues	$	153,247	$	21,103	$	174,350	$	139,230	$	20,076	$	159,306
Real Estate Expenses
Real Estate Taxes		14,574		1,840		16,414		14,590		1,834		16,424
Property Management		19,888		932		20,820		18,759		901		19,660
Utilities		12,636		1,046		13,682		11,525		1,015		12,540
Repairs and Maintenance		30,383		1,938		32,321		27,505		1,746		29,251
Insurance		5,728		142		5,870		6,401		142		6,543
Real Estate Expenses		83,209		5,898		89,107		78,780

Sterling Real Estate Trust 10-K