Pacific Oak Strategic Opportunity REIT, Inc. (Form: 10-Q, Received: 08/13/2025 17:23:18)

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Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

______________________________________________________

FORM 10-Q

______________________________________________________

(Mark One)


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

For the quarterly period ended June 30, 2025


☐			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 000-54382

______________________________________________________

PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC.

(Exact Name of Registrant as Specified in Its Charter)

______________________________________________________


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

(866) 722-6257

(Registrant’s Telephone Number, Including Area Code)

______________________________________________________________________

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


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

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

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

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

Large Accelerated Filer

☐

Accelerated Filer

☐

Non-Accelerated Filer

☒

Smaller reporting company

☐

Emerging growth company

☐

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

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

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

Table of Contents

PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC.

FORM 10-Q

June 30, 2025

INDEX


PART I.	FINANCIAL INFORMATION		2
	Item 1.	Financial Statements	2
		Consolidated Balance Sheets as of June 30, 2025 (unaudited) and December 31, 2024	2
		Consolidated Statements of Operations (unaudited) for the Three and Six Months Ended June 30, 2025 and 2024	3
		Consolidated Statements of Equity (unaudited) for the Three and Six Mo nths Ended June 30, 2025 and 2024	4
		Consolidated Statements of Cash Flows (unaudited) for the Six M onths Ended June 30, 2025 and 2024	5
		Condensed Notes to Consolidated Financial Statements as of June 30, 2025 (unaudited)	7
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
	Item 3.	Quantitative and Qualitative Disclosures about Market Risk	31
	Item 4.	Controls and Procedures	33
PART II.	OTHER INFORMATION		34
	Item 1.	Legal Proceedings	34
	Item 1A.	Risk Factors	34
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	34
	Item 3.	Defaults upon Senior Securities	34
	Item 4.	Mine Safety Disclosures	35
	Item 5.	Other Information	35
	Item 6.	Exhibits	36
SIGNATURES			37

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share amounts)


	June 30, 2025		December 31, 2024
	(unaudited)
Assets
Real estate held for investment, net	$	778,921	$	828,442
Real estate held for sale, net	39,100		55,637
Real estate equity securities	14,116		13,154
Total real estate and real estate-related investments, net	832,137		897,233
Cash and cash equivalents	14,682		56,000
Restricted cash	50,634		42,376
Investments in unconsolidated entities	72,835		88,087
Due from affiliate	2,317		—
Rents and other receivables, net	22,544		22,084
Prepaid expenses and other assets	17,762		19,176
Total assets	$	1,012,911	$	1,124,956
Liabilities and equity
Notes and bonds payable related to real estate held for investment, net	$	827,323	$	824,684
Notes payable related to real estate held for sale, net	39,515		40,608
Notes and bonds payable, net	866,838		865,292
Accounts payable and accrued liabilities	35,181		31,233
Due to affiliate	27,235		12,660
Other liabilities	55,360		59,968
Total liabilities	984,614		969,153
Commitments, contingencies and guarantees (Note 9)
Equity
Stockholders’ equity
Preferred stock, $.01 par value; 10,000,000 shares authorized, no shares issued and outstanding	—		—
Common stock, $.01 par value; 1,000,000,000 shares authorized, 102,951,395 shares issued and outstanding as of June 30, 2025 and December 31, 2024	1,030		1,030
Additional paid-in capital	898,602		898,682
Cumulative distributions and net loss	(867,203)		(740,770)
Total stockholders’ equity	32,429		158,942
Noncontrolling interests	(4,132)		(3,139)
Total equity	28,297		155,803
Total liabilities and equity	$	1,012,911	$	1,124,956

See accompanying condensed notes to consolidated financial statements.

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 1. Financial Statements (continued)

PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

(in thousands, except per share amounts)


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Revenues:
Rental income	$	28,772	$	30,612	$	57,018	$	61,822
Hotel revenues	1,737		2,235		4,622		5,039
Other operating income	960		962		1,935		1,950
Total revenues	31,469		33,809		63,575		68,811
Expenses:
Operating, maintenance, and management	11,591		11,183		23,611		22,086
Real estate taxes and insurance	5,420		6,556		10,903		13,031
Hotel expenses	1,637		1,784		3,373		3,652
Asset management fees to affiliate	2,739		3,872		5,396		7,974
General and administrative expenses	3,361		4,541		6,211		7,793
Foreign currency transaction loss (gain), net	30,141		(7,368)		24,157		(11,280)
Depreciation and amortization	10,366		10,380		20,048		21,129
Interest expense, net (1)	17,151		18,008		33,294		34,782
Impairment charges on real estate and related intangibles	51,979		21,026		51,979		60,291
Total expenses	134,385		69,982		178,972		159,458
Other (loss) income:
Loss from unconsolidated entities, net	(6,769)		(8,653)		(14,266)		(16,730)
Other income	234		283		1,016		738
Gain (loss) on real estate equity securities, net	962		(1,282)		962		(16,632)
Gain on sale of real estate	1,080		167		1,244		619
Total other loss, net	(4,493)		(9,485)		(11,044)		(32,005)
Net loss before income taxes	(107,409)		(45,658)		(126,441)		(122,652)
Income tax provision	—		—		(830)		—
Net loss	(107,409)		(45,658)		(127,271)		(122,652)
Net loss attributable to noncontrolling interests	775		1,437		838		1,958
Net loss attributable to common stockholders	$	(106,634)	$	(44,221)	$	(126,433)	$	(120,694)
Net loss per common share, basic and diluted	$	(1.04)	$	(0.43)	$	(1.23)	$	(1.17)
Weighted-average number of common shares outstanding, basic and diluted	102,951,395		103,134,992		102,951,395		103,208,689

_____________________

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

See accompanying condensed notes to consolidated financial statements.

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 1. Financial Statements (continued)

PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC.

CONSOLIDATED STATEMENTS OF EQUITY

(unaudited)

(in thousands, except share amounts)


	Common Stock			Additional Paid-in Capital		Cumulative Distributions and Net Loss		Total Stockholders' Equity		Noncontrolling Interests		Total Equity
	Shares	Amounts
Balance, March 31, 2025	102,951,395	$	1,030	$	898,682	$	(760,569)	$	139,143	$	(3,262)	$	135,881
Net loss	—	—		—		(106,634)		(106,634)		(775)		(107,409)
Noncontrolling interest contribution	—	—		—		—		—		10		10
Noncontrolling interest distributions	—	—		(80)		—		(80)		(105)		(185)
Balance, June 30, 2025	102,951,395	$	1,030	$	898,602	$	(867,203)	$	32,429	$	(4,132)	$	28,297

	Common Stock			Additional Paid-in Capital		Cumulative Distributions and Net Loss		Total Stockholders' Equity		Noncontrolling Interests		Total Equity
	Shares	Amounts
Balance, March 31, 2024	103,214,807	$	1,032	$	901,050	$	(716,406)	$	185,676	$	1,044	$	186,720
Net loss	—	—		—		(44,221)		(44,221)		(1,437)		(45,658)
Transfers to redeemable common stock, net	—	—		(399)		—		(399)		—		(399)
Noncontrolling interest contribution	—	—		—		—		—		47		47
Noncontrolling interests distributions	—	—		—		—		—		(271)		(271)
Redemptions of common stock	(197,839)	(2)		(1,599)		—		(1,601)		—		(1,601)
Balance, June 30, 2024	103,016,968	$	1,030	$	899,052	$	(760,627)	$	139,455	$	(617)	$	138,838


	Common Stock			Additional Paid-in Capital		Cumulative Distributions and Net Loss		Total Stockholders' Equity		Noncontrolling Interests		Total Equity
	Shares	Amounts
Balance, December 31, 2024	102,951,395	$	1,030	$	898,682	$	(740,770)	$	158,942	$	(3,139)	$	155,803
Net loss	—	—		—		(126,433)		(126,433)		(838)		(127,271)
Noncontrolling interest contribution	—	—		—		—		—		10		10
Noncontrolling interest distributions	—	—		(80)		—		(80)		(165)		(245)
Balance, June 30, 2025	102,951,395	$	1,030	$	898,602	$	(867,203)	$	32,429	$	(4,132)	$	28,297

	Common Stock			Additional Paid-in Capital		Cumulative Distributions and Net Loss		Total Stockholders' Equity		Noncontrolling Interests		Total Equity
	Shares	Amounts
Balance, December 31, 2023	103,310,648	$	1,033	$	901,049	$	(639,933)	$	262,149	$	1,215	$	263,364
Net loss	—	—		—		(120,694)		(120,694)		(1,958)		(122,652)
Transfers from redeemable common stock payable, net	—	—		357		—		357		—		357
Noncontrolling interests contributions	—	—		—		—		—		397		397
Noncontrolling interests distributions	—	—		—		—		—		(271)		(271)
Redemptions of common stock	(293,680)	(3)		(2,354)		—		(2,357)		—		(2,357)
Balance, June 30, 2024	103,016,968	$	1,030	$	899,052	$	(760,627)	$	139,455	$	(617)	$	138,838

See accompanying condensed notes to consolidated financial statements.

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 1. Financial Statements (continued)

PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(in thousands)


	Six Months Ended June 30,
	2025		2024
Cash Flows from Operating Activities:
Net loss	$	(127,271)	$	(122,652)
Adjustments to reconcile net loss to net cash used in operating activities:
Impairment charges on real estate and related intangibles	51,979		60,291
Loss from unconsolidated entities, net	14,266		16,730
Depreciation and amortization	20,048		21,129
(Gain) loss on real estate equity securities, net	(962)		16,632
Gain on sale of real estate	(1,244)		(619)
Amortization of deferred financing costs and debt discount and premium, net	3,590		4,781
Foreign currency transaction loss (gain), net	24,157		(11,280)
Changes in assets and liabilities:
Rents and other receivables, net	(217)		(370)
Prepaid expenses and other assets	(912)		(1,802)
Accounts payable and accrued liabilities	3,410		(2,243)
Due to affiliate	4,575		3,074
Other liabilities	(102)		569
Net cash used in operating activities	(8,683)		(15,760)
Cash Flows from Investing Activities:
Improvements to real estate	(6,458)		(17,512)
Proceed from sales of real estate, net	1,845		3,126
Advances to affiliate	(2,317)		—
Payments on development obligations	(2,311)		(3,905)
Distribution of capital from an unconsolidated entity	759		1,497
Purchase of interest rate caps	—		(1,447)
Proceeds from interest rate caps	—		1,687
Contributions to an unconsolidated entity	—		(38,689)
Payments on foreign currency derivatives, net	—		(478)
Proceeds from the sale of real estate equity securities	—		16,379
Proceeds for development obligations	—		5
Net cash used in investing activities	(8,482)		(39,337)
Cash Flows from Financing Activities:
Advances from affiliate loans	10,000		—
Principal payments on notes and bonds payable	(26,564)		(115,169)
Noncontrolling interest contributions	10		397
Noncontrolling interest distributions	(245)		(271)
Proceeds from notes and bonds payable	—		98,850
Payments of deferred financing costs	(167)		(3,890)
Redemptions of common stock	—		(2,357)
Net cash used in financing activities	(16,966)		(22,440)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	1,071		1,809
Net decrease in cash, cash equivalents and restricted cash	(33,060)		(75,728)
Cash, cash equivalents and restricted cash, beginning of period	98,376		155,209
Cash, cash equivalents and restricted cash, end of period	$	65,316	$	79,481

See accompanying condensed notes to consolidated financial statements.

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 1. Financial Statements (continued)

PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

(unaudited)

(in thousands)


	Six Months Ended June 30,
	2025		2024
Supplemental Disclosure of Cash Flow Information:
Interest paid, net of capitalized interest of $957 and $2,186 for the six months ended June 30, 2025 and 2024, respectively	$	25,968	$	30,490
Supplemental Disclosure of Significant Noncash Transaction:

Accrued development obligations	9,188		7,313

See accompanying condensed notes to consolidated financial statements.

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 1. Financial Statements (continued)

PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2025

(unaudited)

1.ORGANIZATION

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

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

Principles of Consolidation and Basis of Presentation

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

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

Liquidity

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

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 1. Financial Statements (continued)

PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2025

(unaudited)

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

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

Use of Estimates

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

Reclassifications

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

Square Footage, Occupancy and Other Measures

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

Recently Issued Accounting Standards Updates

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

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 1. Financial Statements (continued)

PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2025

(unaudited)

3.REAL ESTATE HELD FOR INVESTMENT

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


	June 30, 2025		December 31, 2024
Land	$	180,669	$	189,449
Buildings and improvements	710,685		787,873
Tenant origination and absorption costs	8,469		11,254
Total real estate, cost	899,823		988,576
Accumulated depreciation and amortization	(120,902)		(160,134)
Total real estate held for investment, net	$	778,921	$	828,442

Operating Leases

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

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

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



July 1, 2025 through December 31, 2025	$	25,507
2026	47,380
2027	39,496
2028	32,646
2029	26,816
Thereafter	60,153
	$	231,998

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 1. Financial Statements (continued)

PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2025

(unaudited)

Geographic Concentration Risk

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

Hotel Property

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


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Hotel revenues:
Room	$	1,514	$	1,947	$	4,098	$	4,413
Other	223		288		524		626
Hotel revenues	$	1,737	$	2,235	$	4,622	$	5,039

Contract Liabilities

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

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

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

Impairment of Real Estate

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

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

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 1. Financial Statements (continued)

PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2025

(unaudited)

4.NOTES AND BONDS PAYABLE

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


	Book Value as of June 30, 2025		Book Value as of December 31, 2024		Contractual Interest Rate as of June 30, 2025	Effective Interest Rate at June 30, 2025 (1)	Payment Type (2)	Maturity Date (3)
Series B Bonds (4)	$	115,136	$	127,486	4.43%	4.43%	(4)	01/31/2026
Series C Bonds (4)	42,112		39,049		9.00%	9.00%	(4)	06/30/2026 (4)
Series D Bonds (4)	174,099		161,436		10.50%	10.50%	(4)	02/28/2029
Crown Pointe Mortgage Loan	54,738		54,738		SOFR + 2.30%	6.75%	Interest Only	04/01/2025 (5)
Georgia 400 Center Mortgage Loan	39,515		39,662		SOFR + 2.75%	7.20%	Principal & Interest	03/22/2025 (6)
PORT Mortgage Loan 1	31,793		31,792		4.74%	4.74%	Interest Only	10/01/2025
PORT Mortgage Loan 2	10,523		10,523		4.72%	4.72%	Interest Only	03/01/2026
PORT MetLife Loan 1 (7)	54,796		55,939		3.90%	3.90%	Interest Only	04/10/2026
PORT MetLife Loan 2 (7)	93,044		93,275		3.99%	3.99%	Interest Only	04/10/2026
Lincoln Court Mortgage Loan (7)	31,325		31,325		SOFR + 3.25%	7.70%	Interest Only	08/07/2025 (8)
Madison Square Mortgage Loan (7)	20,722		20,722		SOFR + 3.00%	7.45%	Interest Only	11/30/2025
Bank of America Mortgage Loan (9)	153,336		156,836		SOFR + 2.75%	7.20%	Principal & Interest	09/01/2026
Richardson Office Mortgage Loan (10)	11,901		12,018		SOFR + 3.50%	7.95%	Principal & Interest	07/29/2025 (8)
Q&C Hotel Mortgage Loan (10)	21,847		21,966		SOFR + 3.50%	7.95%	Principal & Interest	07/29/2025 (8)
Eight & Nine Corporate Centre Mortgage Loan (11)	19,773		20,000		SOFR + 4.90%	9.35%	Interest Only	02/09/2026
Total notes and bonds payable principal outstanding	874,660		876,767
Deferred financing costs and debt discount and premium, net (12)	(7,822)		(11,475)
Total notes and bonds payable, net	$	866,838	$	865,292

_____________________

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

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

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

(4) Subsequent to June 30, 2025, the Company paid off all outstanding Series C bonds. See “Israeli Bond Financings” below for additional details on the Company’s bonds.

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

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

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

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

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

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

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

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

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 1. Financial Statements (continued)

PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2025

(unaudited)

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

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

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

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



July 1, 2025 through December 31, 2025	$	214,642
2026	485,919
2027	58,033
2028	58,033
2029	58,033

	$	874,660

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

Debt Covenant Compliance

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

Israeli Bond Financings

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

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 1. Financial Statements (continued)

PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2025

(unaudited)

5.FAIR VALUE DISCLOSURES

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


	June 30, 2025				December 31, 2024
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Financial liabilities (Level 3):
Notes payable	$	541,743	$	535,910	$	545,906	$	540,191
Related party loan	$	10,000	$	10,000	$	—	$	—
Financial liabilities (Level 1):
Series Bonds	$	325,095	$	272,643	$	319,386	$	329,141

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

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


			Fair Value Measurements Using
	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Recurring Basis:
Real estate equity securities	$	14,116	$	14,116	$	—	$	—
Nonrecurring Basis:
Impaired real estate (1)	$	294,200	$	—	$	96,200	$	198,000

_____________________

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

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


			Fair Value Measurements Using
	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Recurring Basis:
Real estate equity securities	$	13,154	$	13,154	$	—	$	—
Nonrecurring Basis:
Impaired real estate (1)	$	338,286	$	—	$	126,000	$	212,286

_____________________

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 1. Financial Statements (continued)

PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2025

(unaudited)

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

6.RELATED PARTY TRANSACTIONS

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



	Incurred during the three months ended June 30,				Incurred during the six months ended June 30,				Payable as of
	2025		2024		2025		2024		June 30, 2025		December 31, 2024
Asset management fees	$	2,739	$	3,872	$	5,396	$	7,974	$	16,342	$	12,006
Property management fees	—		647		—		1,324		—		—
Disposition fees	—		21		—		36		—		—
Reimbursable offering costs	—		—		—		—		564		654
Related party loan and related interest (1)	239		—		329		—		10,329		—
	$	2,978	$	4,540	$	5,725	$	9,334	$	27,235	$	12,660

_____________________

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

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

7.INVESTMENTS IN UNCONSOLIDATED ENTITIES

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


	Number of Properties as of			Investment Balance as of
Joint Venture		Location	Ownership %	June 30, 2025			December 31, 2024
110 William Joint Venture	1	New York, New York	(1)	$	54,096	(1)	$	68,467
Pacific Oak Opportunity Zone Fund I	4	Various	47.0%	18,739		(2)	19,620
				$	72,835		$	88,087

_____________________

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

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

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 1. Financial Statements (continued)

PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2025

(unaudited)

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

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


	June 30, 2025		December 31, 2024
Assets:
Real estate, net	$	422,143	$	486,177
Total assets	481,638		558,371
Liabilities:
Notes payable, net	381,788		446,843
Total liabilities	409,285		484,040
Total equity	$	72,353	$	74,331


	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2025		2024		2025		2024
Total revenues	$	8,336	$	13,703	$	16,377	$	22,979
Operating loss	(11,903)		(18,144)		(24,100)		(28,374)
Net income (loss)	$	11,357	$	(18,120)	$	(1,007)	$	(28,350)

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PART I. FINANCIAL INFORMATION (CONTINUED)

Item 1. Financial Statements (continued)

PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2025

(unaudited)

8.REPORTING SEGMENTS

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



	Three Months Ended June 30, 2025
	Strategic Opportunistic Properties		Residential Homes		Hotel		Total
Total revenues	$	20,530	$	9,202	$	1,737	$	31,469
Less (1):
Operating, maintenance and management	(8,580)		(3,011)		—		(11,591)
Hotel expenses	—		—		(1,637)		(1,637)
Real estate taxes and insurance	(3,304)		(2,116)		—		(5,420)
Reportable segment total rental operating expenses	(11,884)		(5,127)		(1,637)		(18,648)
Reportable segment net operating income	8,646		4,075		100		12,821
Interest expense, net	(14,193)		(2,446)		(512)		(17,151)
Impairment charges on real estate and related intangibles	(48,877)		—		(3,102)		(51,979)
Other segment items (2)	(44,419)		(1,862)		(326)		(46,607)
Total expenses	(119,373)		(9,435)		(5,577)		(134,385)
Loss from unconsolidated entities							(6,769)
Other income							234
Gain on real estate equity securities							962
Gain on sale of real estate							1,080
Total other loss, net							(4,493)


Net loss							$	(107,409)

	Six Months Ended June 30, 2025
	Strategic Opportunistic Properties		Residential Homes		Hotel		Total
Total revenues	$	41,092	$	17,861	$	4,622	$	63,575
Less (1):
Operating, maintenance and management	(17,063)		(6,548)		—		(23,611)
Hotel expenses	—		—		(3,373)		(3,373)
Real estate taxes and insurance	(6,507)		(4,396)		—		(10,903)
Reportable segment total rental operating expenses	(23,570)		(10,944)		(3,373)		(37,887)
Reportable segment net operating income	17,522		6,917		1,249		25,688
Interest expense, net	(27,502)		(4,727)		(1,065)		(33,294)

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 1. Financial Statements (continued)

PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2025

(unaudited)


Impairment charges on real estate and related intangibles	(48,877)	—	(3,102)	(51,979)
Other segment items (2)	(50,330)	(4,735)	(747)	(55,812)
Total expenses	(150,279)	(20,406)	(8,287)	(178,972)
Loss from unconsolidated entities				(14,266)
Other income				1,016
Gain on real estate equity securities				962
Gain on sale of real estate				1,244
Total other loss, net				(11,044)
Net loss before income taxes				(126,441)
Income tax provision				(830)
Net loss				$	(127,271)


	Three Months Ended June 30, 2024
	Strategic Opportunistic Properties		Residential Homes		Hotel		Total
Total revenues	$	22,921	$	8,653	$	2,235	$	33,809
Less (1):
Operating, maintenance and management	(9,012)		(2,171)		—		(11,183)
Hotel expenses	—		—		(1,784)		(1,784)
Real estate taxes and insurance	(3,792)		(2,764)		—		(6,556)
Reportable segment total rental operating expenses	(12,804)		(4,935)		(1,784)		(19,523)
Reportable segment net operating income	10,117		3,718		451		14,286
Interest expense, net	(15,065)		(2,339)		(604)		(18,008)
Impairment charges on real estate and related intangibles	(21,026)		—		—		(21,026)
Other segment items (2)	(6,502)		(3,829)		(1,093)		(11,424)
Total expenses	(55,397)		(11,103)		(3,482)		(69,982)
Loss from unconsolidated entities							(8,653)
Other income							283
Loss on real estate equity securities							(1,282)
Gain on sale of real estate							167
Total other loss, net							(9,485)


Net loss							$	(45,658)

	Six Months Ended June 30, 2024
	Strategic Opportunistic Properties		Residential Homes		Hotel		Total
Total revenues	$	46,054	$	17,718	$	5,039	$	68,811
Less (1):

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 1. Financial Statements (continued)

PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2025

(unaudited)


Operating, maintenance and management	(17,505)	(4,581)	—	(22,086)
Hotel expenses	—	—	(3,652)	(3,652)
Real estate taxes and insurance	(7,876)	(5,155)	—	(13,031)
Reportable segment total rental operating expenses	(25,381)	(9,736)	(3,652)	(38,769)
Reportable segment net operating income	20,673	7,982	1,387	30,042
Interest expense, net	(28,899)	(4,709)	(1,174)	(34,782)
Impairment charges on real estate and related intangibles	(56,837)	—	(3,454)	(60,291)
Other segment items (2)	(16,408)	(7,592)	(1,617)	(25,617)
Total expenses	(127,523)	(22,037)	(9,898)	(159,458)
Loss from unconsolidated entities				(16,730)
Other income				738
Loss on real estate equity securities				(16,632)
Gain on sale of real estate				619
Total other loss, net				(32,005)


Net loss				$	(122,652)

_____________________

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

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

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


	Strategic Opportunistic Properties		Residential Homes		Hotel		Total
Total assets as of June 30, 2025	$	696,838	$	284,193	$	31,880	$	1,012,911
Total assets as of December 31, 2024	$	800,597	$	288,908	$	35,451	$	1,124,956

9.COMMITMENTS, CONTINGENCIES AND GUARANTEES

Lease Obligations

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


	June 30, 2025			December 31, 2024
Right-of-use asset (included in real estate held for investment, net, in thousands)	$	5,763		$	6,014
Lease obligation (included in other liabilities, in thousands)	9,666			9,632

Remaining lease term	88.5 years			89.0 years
Discount rate	4.8		%	4.8		%

Table of Contents

PART I. FINANCIAL INFORMATION (CONTINUED)

Item 1. Financial Statements (continued)

PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2025

(unaudited)

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



July 1, 2025 through December 31, 2025	$	198
2026	396
2027	396
2028	396
2029	396
Thereafter	50,979
Total expected minimum lease obligations	52,761
Less: Amount representing interest (1)	(43,095)
Present value of net minimum lease payments (2)	$	9,666

_____________________

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

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

Guarantee Agreements

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

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

Economic Dependency

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

Environmental

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

Legal Matters

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PART I. FINANCIAL INFORMATION (CONTINUED)

Item 1. Financial Statements (continued)

PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

June 30, 2025

(unaudited)

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

10.SUBSEQUENT EVENTS

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

Whitehawk Loan and Series C Bonds Payoff

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

Real Estate Sale

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

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PART I. FINANCIAL INFORMATION (CONTINUED)

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

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

Forward-Looking Statements

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

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

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

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

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

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

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

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

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

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

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

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

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

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PART I. FINANCIAL INFORMATION (CONTINUED)

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

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

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

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

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

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

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

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

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

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

Overview

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

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

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PART I. FINANCIAL INFORMATION (CONTINUED)

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

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

Market Outlook – Real Estate and Real Estate Finance Markets

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

Liquidity and Capital Resources

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

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

•Proceeds from our dividend reinvestment plan;

•Debt financing, including bond offerings in Israel;

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

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

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

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

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

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

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

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

Guarantee Agreements

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

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

Cash Flows from Operating Activities

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

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

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PART I. FINANCIAL INFORMATION (CONTINUED)

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

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

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

Cash Flows from Investing Activities

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

Cash Flows from Financing Activities

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

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

Contractual Commitments and Contingencies

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


			Payments Due During the Years Ending December 31,
Contractual Obligations	Total		Remainder of 2025		2026-2027		2028-2029		Thereafter
Outstanding debt obligations (1)	$	874,660	$	214,642	$	543,952	$	116,066	$	—
Interest payments on outstanding debt obligations (2)	79,654		26,265		45,264		8,125		—
Finance lease obligation (3)	52,761		198		792		792		50,979
Development obligations (4)	9,188		8,420		768		—		—
Related party loan and interest (2)(5)	13,329		829		2,000		10,500		—

_____________________

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

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

(3) Amounts are related to a leasehold interest expiring on 2114.

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

(5) Amounts are related to loans and related accrued interest due to our advisor.

Results of Operations

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PART I. FINANCIAL INFORMATION (CONTINUED)

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

Overview

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

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

Comparison of the three months ended June 30, 2025 versus the three months ended June 30, 2024

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


	Three Months Ended June 30,				Increase (Decrease)		Percentage Change		$ Change Due to Acquisitions/Dispositions (1)		$ Change Due to Investments Held Throughout Both Periods (2)
	2025		2024
Rental income	$	28,772	$	30,612	$	(1,840)	(6)	%	$	(2,307)	$	467
Hotel revenues	1,737		2,235		(498)		(22)	%	—		(498)
Other operating income	960		962		(2)		—	%	—		(2)
Operating, maintenance, and management	11,591		11,183		408		4	%	(518)		926
Real estate taxes and insurance	5,420		6,556		(1,136)		(17)	%	(481)		(655)
Hotel expenses	1,637		1,784		(147)		(8)	%	—		(147)
Asset management fees to affiliate	2,739		3,872		(1,133)		(29)	%	(234)		(899)
General and administrative expenses	3,361		4,541		(1,180)		(26)	%	—		(1,180)
Foreign currency transaction loss (gain), net	30,141		(7,368)		37,509		(509)	%	n/a		n/a
Depreciation and amortization	10,366		10,380		(14)		—	%	(859)		845
Interest expense, net	17,151		18,008		(857)		(5)	%	(1,403)		546
Impairment charges on real estate and related intangibles	51,979		21,026		30,953		147	%	n/a		n/a
Loss from unconsolidated entities, net	(6,769)		(8,653)		1,884		(22)	%	—		1,884
Other income	234		283		(49)		(17)	%	n/a		n/a
Gain (loss) on real estate equity securities, net	962		(1,282)		2,244		(175)	%	127		2,117
Gain on sale of real estate	1,080		167		913		547	%	913		n/a

_____________________

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

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

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

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PART I. FINANCIAL INFORMATION (CONTINUED)

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

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

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

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

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

Comparison of the six months ended June 30, 2025 versus the six months ended June 30, 2024

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


	Six Months Ended June 30,				Increase (Decrease)		Percentage Change		$ Change Due to Acquisitions/ Dispositions (1)		$ Change Due to Investments Held Throughout Both Periods (2)
	2025		2024
Rental income	$	57,018	$	61,822	$	(4,804)	(8)	%	$	(4,682)	$	(122)
Hotel revenues	4,622		5,039		(417)		(8)	%	—		(417)
Other operating income	1,935		1,950		(15)		(1)	%	—		(15)
Operating, maintenance, and management	23,611		22,086		1,525		7	%	(1,084)		2,609
Real estate taxes and insurance	10,903		13,031		(2,128)		(16)	%	(948)		(1,180)
Hotel expenses	3,373		3,652		(279)		(8)	%	—		(279)
Asset management fees to affiliate	5,396		7,974		(2,578)		(32)	%	(466)		(2,112)
General and administrative expenses	6,211		7,793		(1,582)		(20)	%	—		(1,582)
Foreign currency transaction loss (gain), net	24,157		(11,280)		35,437		(314)	%	n/a		n/a
Depreciation and amortization	20,048		21,129		(1,081)		(5)	%	(1,706)		625
Interest expense, net	33,294		34,782		(1,488)		(4)	%	(2,698)		1,210
Impairment charges on real estate and related intangibles	51,979		60,291		(8,312)		(14)	%	n/a		n/a
Loss from unconsolidated entities, net	(14,266)		(16,730)		2,464		(15)	%	—		2,464
Other income	1,016		738		278		38	%	n/a		n/a
Gain (loss) on real estate equity securities, net	962		(16,632)		17,594		(106)	%	1,168		16,426
Gain on sale of real estate	1,244		619		625		101	%	625		n/a
Income tax provision	(830)		—		(830)		100	%	3,662		n/a

_____________________

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

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

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PART I. FINANCIAL INFORMATION (CONTINUED)

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

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

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

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

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

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

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

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

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PART I. FINANCIAL INFORMATION (CONTINUED)

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

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

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

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

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

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

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

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

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PART I. FINANCIAL INFORMATION (CONTINUED)

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

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

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

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

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

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


	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2025		2024		2025		2024
Net loss attributable to common stockholders	$	(106,634)	$	(44,221)	$	(126,433)	$	(120,694)
Depreciation and amortization	10,366		10,380		20,048		21,129
Impairment charges on real estate and related intangibles	51,979		21,026		51,979		60,291
Gain on sale of real estate	(1,080)		(167)		(1,244)		(619)
(Gain) loss on real estate equity securities, net	(962)		1,282		(962)		16,632
Adjustments for noncontrolling interests (1)	(670)		(1,345)		(839)		(1,835)
Adjustments for investments in unconsolidated entities (2)	1,068		829		2,089		2,664
FFO attributable to common stockholders	(45,933)		(12,216)		(55,362)		(22,432)
Straight-line rent and amortization of above- and below-market leases	561		(356)		867		(491)
Amortization of premium and discount on notes and bonds payable, net	576		895		1,197		1,845
Unrealized loss (gain) on interest rate caps	1		(169)		7		(417)
Foreign currency transaction loss (gain), net	30,141		(7,368)		24,157		(11,280)
Adjustments for noncontrolling interests (1)	16		7		31		4
Adjustments for investments in unconsolidated entities (2)	375		737		980		1,259
MFFO attributable to common stockholders	(14,263)		(18,470)		(28,123)		(31,512)
Other capitalized operating expenses (3)	(623)		(1,365)		(1,000)		(2,667)
Income tax provision	—		—		(830)		—
Adjusted MFFO attributable to common stockholders	$	(14,886)	$	(19,835)	$	(29,953)	$	(34,179)

_____________________

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

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

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PART I. FINANCIAL INFORMATION (CONTINUED)

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

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

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

Critical Accounting Policies

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

Subsequent Events

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

Whitehawk Loan and Series C Bonds Payoff

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

Real Estate Sale

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

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Foreign Currency, Interest Rate and Financial Market Risk

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

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PART I. FINANCIAL INFORMATION (CONTINUED)

Item 3. Quantitative and Qualitative Disclosures about Market Risk

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

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

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

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

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

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

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PART I. FINANCIAL INFORMATION (CONTINUED)

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

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

Item 4. Controls and Procedures

Disclosure Controls and Procedures

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

Internal Control Over Financial Reporting

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

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

None.

Item 1A. Risk Factors

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

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

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

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

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

Item 2 Unregistered Sales of Equity Securities and Use of Proceeds

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

b)Not applicable.

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

Item 3. Defaults upon Senior Securities

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PART II. OTHER INFORMATION (CONTINUED)

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

Item 4. Mine Safety Disclosures

None.

Item 5. Other Information

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

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PART II. OTHER INFORMATION (CONTINUED)

Item 6. Exhibits

Ex.

Description

3.1

Second Articles of Amendment and Restatement, incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed February 4, 2010

3.2

Articles of Amendment, incorporated by reference to Exhibit 3.1 of the Company’s Current Report on Form 8-K filed November 1, 2019

3.3

Articles of Amendment, incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed December 23, 2019

3.4

Fourth Amended and Restated Bylaws, incorporated by reference to Exhibit 3.4 to the Company’s Annual Report on Form 10-K filed March 30, 2023

4.1

Statement regarding restrictions on transferability of shares of common stock (to appear on stock certificate or to be sent upon request and without charge to stockholders issued shares without certificates), incorporated by reference to Exhibit 4.2 to Pre-Effective Amendment No. 1 to the Company’s Registration Statement on Form S-11, Commission File No. 333-156633 filed February 25, 2009

4.2

Fifth Amended and Restated Dividend Reinvestment Plan, incorporated by reference to Exhibit 4.2 to the Company’s Quarterly Report on Form 10-Q filed May 14, 2015

10.1

Amended and Restated Loan Agreement by and between Pacific Oak Strategic Opportunity Limited Partnership and Pacific Oak Capital Advisors, LLC, effective June 26, 2025

10.2

Amended and Restated Promissory Note by Pacific Oak Strategic Opportunity Limited Partnership, effective June 26, 2025

10.3

Pledge and Security Agreement by SOR PORT Holdings, LLC, effective June 26, 2025

10.4

Form of Indemnification Agreement

31.1

Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2

Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1

Certification of Chief Executive Officer pursuant to 18 U.S.C. 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002

32.2

Certification of Chief Financial Officer pursuant to 18 U.S.C. 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002

99.1

Twelfth Amended and Restated Share Redemption Program, incorporated by reference to Exhibit 99.5 to the Company's Current Report on Form 8-K filed December 4, 2020

99.2

Amendment No. 1 to the Twelfth Amended and Restated Share Redemption Program, incorporated by reference to Exhibit 99.1 to the Company's Current Report on Form 8-K filed August 6, 2021

101.INS

Inline XBRL Instance Document

101.SCH

Inline XBRL Taxonomy Extension Schema

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase

104

Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).

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SIGNATURES

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



		PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC.

Date:	August 13, 2025	By:	/S/ KEITH D. HALL
			Keith D. Hall
			Chief Executive Officer and Director
			(principal executive officer)

Date:	August 13, 2025	By:	/S/ PETER MCMILLAN III
			Peter McMillan III
			Chairman of the Board, President and Director
			(principal financial officer)

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

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

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

13 Section 6. DEFAULT 6.01 Events of Default. It shall be an “Event of Default” hereunder if any of the following shall occur: (a) the failure, neglect or refusal of Borrower to promptly pay any of the Obligations within five (5) days after the date when due under the Promissory Note, this Agreement or any of the Other Agreements; (b) the failure, neglect or refusal of Borrower to observe or perform any of the other conditions, provisions, covenants or obligations on its part to be kept or performed under this Agreement or under any of the Other Agreements (other than clause (a) above) and such failure shall continue for thirty (30) days after receipt of notice from Lender; (c) the breach of any of the material representations or warranties of Borrower and/or Pledgor as set forth in this Agreement or in any of the Other Agreements, in each case, after the expiration of all applicable grace or cure periods; (d) any material statement or representation made for the purpose of obtaining credit under this Agreement or any Other Agreement proves to be materially false as of the date when written; (e) Borrower, PORT and/or Pledgor becomes insolvent or admits in writing, in any legal proceeding, its inability to pay its debts as they become due or makes any assignment for the benefit of creditors or consents to, or acquiesces in the appointment of, a trustee or receiver for it or any of its property or, in the absence of such application, consent or acquiesce, a trustee or receiver is appointed for it or for a substantial portion of its property and is not discharged or stayed on appeal within sixty (60) days; (f) any bankruptcy, reorganization, state receivership, debt arrange- ment, readjustment of debts or moratorium law or statute or other proceeding under any bankruptcy or insolvency law, or any dissolution or liquidation proceeding, is instituted by or against Borrower, PORT and/or Pledgor and, if instituted against it, is consented to or acquiesced in by Borrower or remains for sixty (60) days undismissed or unstayed on appeal; (g) if Borrower, PORT and/or Pledgor voluntarily or involuntarily dissolves, liquidates or otherwise take or permit any action that effectively terminates its existence; (h) final judgment(s) for the payment of money in excess of $500,000 in the aggregate is entered against Borrower, PORT and/or Pledgor and such judgment(s) remains unsatisfied for sixty (60) calendar days; or (i) any other Event of Default as defined or described elsewhere in this Agreement or the Other Agreements. 14 Notwithstanding anything to the contrary in this Section 6.01, in no event shall it be an Event of Default under this Agreement or any of the Other Agreements, if any of the foregoing events described in this Section 6.01 are directly caused by Lender. 6.02 Acceleration in Event of Default. Upon the occurrence of any Event of Default, or at any time thereafter, all Obligations of Borrower to Lender, including, without limitation, repayment of the Promissory Note, shall, automatically in the case of an Event of Default under Section 6.01(e) through Section 6.01(g), inclusive, and, at the option of Lender in the case of any other Event of Default and notwithstanding any time allowed in any instrument evidencing an Obligation or in any of the Other Agreements, immediately become due and payable without demand and without notice to Borrower. 6.03 WAIVER OF TRIAL BY JURY. TO THE MAXIMUM EXTENT PERMITTED BY LAW, EACH OF THE PARTIES HERETO HEREBY WAIVES THE RIGHT TO TRIAL BY JURY IN ANY COURT IN ANY SUIT, ACTION OR PROCEEDING ARISING ON, OUT OF, UNDER, OR BY REASON OF, OR RELATING IN ANY WAY TO, THIS AGREEMENT OR THE OTHER AGREEMENTS OR RESULTING FROM ANY OTHER TRANSACTION HEREUNDER, OR CONCERNING THE VALIDITY, INTERPRETATION OR ENFORCEMENT OF THIS AGREEMENT OR THE OTHER AGREEMENTS, OR PERTAINING TO PROCEEDS, PRODUCTS OR EVIDENCE THEREOF OR TO ANY OTHER CONTROVERSY, CLAIM OR DISPUTE OF ANY KIND ARISING BETWEEN THE PARTIES HERETO OR THEIR RESPECTIVE REPRESENTATIVES, SUCCESSORS, ASSIGNS OR ASSIGNORS. Section 7. REMEDIES UPON DEFAULT 7.01 Remedies. If an Event of Default hereunder shall occur and be continuing, Lender may exercise, at its option and without further demand or notice to Borrower and without a prior court hearing, such action or actions including, but not limited to, any or all of the following actions: (a) Declare the outstanding principal balance of the Loan, together with all accrued interest thereon and other amounts owing in connection therewith, to be immediately due and payable in full, regardless of any other specified due date, and in the event of the occurrence of an Event of Default under Section 6.01(e) through Section 6.01(g), inclusive, such principal and interest shall become immediately due automatically. (b) Exercise any one or more or all of the rights and remedies available to it under this Agreement or the Other Agreements or at law plus such additional or enlarged remedies, if any, as may from time to time be provided for therein, or otherwise given to a lender by any other law or proceeding, at law or in equity, to assure the repayment of the Obligations and, in conjunction with, in addition to, or substitution for those rights and remedies, at Lender’s discretion. Lender may remedy any default in any reasonable manner, without waiving its rights and remedies upon default and without waiving any other prior or subsequent default. The 15 granting of specific rights and remedies to Lender herein shall not be deemed to limit or exclude any right or remedy granted to a Lender by law or proceeding. No delay on the part of Lender in the exercise of any right or remedy available to it shall operate as a waiver thereof. To the fullest extent permitted by applicable law, Borrower covenants and agrees that it will not at any time insist upon or plead or in any manner whatever claim or take any benefit or advantage of any law requiring the marshalling of assets. Lender’s remedies are cumulative and no single or partial exercise of any right or remedy available to Lender shall preclude other or further exercise thereof or the exercise of any other right or remedy. 7.02 Right to Assign. If Lender assigns this Agreement, the assignee shall be entitled to the performance of all of Borrower’s agreements and obligations under this Agreement, and the assignee shall be entitled to all the rights and remedies of such Lender under this Agreement, and Borrower expressly agrees that it will assert no claims or defenses as a result of such assignment it may have against such Lender against the assignee except those otherwise available to it in this Agreement. Section 8. TERM OF AGREEMENT The Loan under this Agreement shall commence as of the date hereof and shall continue until the earlier of (i) Maturity Date, or (ii) subject to Section 6.02 hereof, the occurrence of an Event of Default hereunder. Upon such dates, however, there shall be no termination of the provisions of this Agreement unless and until (a) Borrower has no outstanding Obligations to Lender; and (b) the security interest, liens and encumbrances provided for, created by or described in this Agreement or in the Other Agreements have been satisfied by purchase in full or by payment in full which Lender has collected without contest or objection as to Lender’s right to such satisfaction and collection. Section 9. MISCELLANEOUS 9.01 Materiality of Representations and Warranties. Each of the representations, warranties and covenants contained herein have been made by Borrower to Lender in order to induce Lender to enter into this Agreement and shall survive the execution and delivery of this Agreement and the making of any advance hereunder. Each of the representations, warranties and covenants of Borrower contained herein shall be deemed to be material and to have been relied upon by Lender notwithstanding any investigation made by Lender. This Agreement and all of the covenants, warranties and representations of Borrower and all of the powers and rights of Lender hereunder shall be in addition to and cumulative of all other covenants, representations and warranties of Borrower and all other rights and powers of Lender contained in or provided for in any other instrument or document now or hereafter executed and delivered by Borrower to or in favor of Lender. 9.02 No Waiver of Defaults. No Default hereunder, including any Event of Default, shall be waived by Lender except in writing and no waiver of any Default shall operate as a waiver of any other Default or of the same Default at a future occasion. All rights of Lender hereunder shall be cumulative. 16 9.03 Fees and Expenses. Borrower agrees to pay all of Lender’s fees and out- of-pocket expenses incurred in connection with administering and monitoring the Loan provided for hereunder, including without limitation, reasonable attorneys’ fees in connection with the preparation, negotiation, execution, amendment and administration of this Agreement and all documents required hereunder or in connection herewith. 9.04 Relationship. Borrower shall protect, defend, indemnify and hold Lender harmless from and against all claims, losses, costs, expenses (including, without limitation, reasonable attorneys’ fees) and damages arising from the relationship between Borrower and Lender pursuant to this Agreement being construed as anything other than that of borrower and lender. 9.05 Jurisdiction; Venue; Service of Process. To induce Lender to enter into this Agreement, Borrower irrevocably agrees that, subject to Lender’s sole and absolute election, all actions or proceedings in any way, manner or respect arising out of or from or related to this Agreement or any of the Other Agreements shall be litigated only in courts having situs within the City of Los Angeles, State of California. Borrower hereby consents and submits to the jurisdiction of any local, state or federal court located within said city and state. Borrower hereby waives any right it may have to transfer or change the venue of any litigation brought in accordance with this Section. 9.06 Notices. Any and all notices given in connection with this Agreement shall be deemed adequately given only if in writing and (i) personally delivered, (ii) sent by a nationally recognized overnight courier service or (iii) sent by e-mail (with read receipt selected). A written notice shall be deemed received (i) when delivered in person, (ii) on the next business day immediately following the day sent by overnight courier, and (iii) with respect to any e-mail, on the same business day if sent by 6 p.m. P.S.T. on such business day and on the next business day if sent after 6 p.m. P.S.T. A written notice shall also be deemed received on any date such delivery shall have been refused at the address required by this Agreement. Any and all notices referred to in this Agreement or which any party desires to give to the other party shall be addressed as follows: As to Lender: Pacific Oak Capital Advisors, LLC 3200 Park Center Drive, Suite 800 Costa Mesa, California 92626 Attention: Peter McMillan III E-mail: pmcmillan@pac-oak.com and: Pacific Oak Capital Advisors, LLC 3200 Park Center Drive, Suite 800 Costa Mesa, California 92626 Attention: Keith D. Hall E-mail: khall@pac-oak.com If to Borrower: Pacific Oak Strategic Opportunity Limited Partnership 3200 Park Center Drive, Suite 800 Costa Mesa, California 92626

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

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