MORTGAGE NOTES PAYABLE AND MEZZANINE FINANCING

9 Months Ended

Mar. 31, 2026

MORTGAGE NOTES PAYABLE AND MEZZANINE FINANCING

NOTE 13 – MORTGAGE NOTES PAYABLE AND MEZZANINE FINANCING

The Company’s mortgage notes payable consist of (i) the senior mortgage loan secured by the Hilton San Francisco Financial District hotel (the “Hotel”), maintained at Portsmouth, a consolidated subsidiary of the Company, and (ii) mortgage loans secured by the Company’s non-hotel real estate properties. The following table summarizes the schedule maturities of mortgage notes payable as of March 31, 2026:

For the year ending June 30,	Amount
2026 (3 months)	$	296,000
2027		104,858,000
2028		6,589,000
2029		1,846,000
2030		16,033,000
Thereafter		65,395,000
Total Mortgage Notes Payable	$	195,017,000

Hotel Mortgage and Mezzanine Financing

The Company’s Annual Report on Form 10-K for the year ended June 30, 2025 includes a detailed description of the Hotel senior mortgage and mezzanine financing arrangements, including the March 28, 2025 refinancing and related covenants and cash-management provisions. There were no material changes to the terms of these arrangements during the nine months ended March 31, 2026.

Senior Mortgage and Mezzanine Financing (Current Facilities)

On March 28, 2025, the Company refinanced the senior mortgage and amended and restated the mezzanine loan, fully retiring the prior facilities.

	●	Mortgage Loan: Operating entered into a $67,000,000 Mortgage Loan Agreement with Prime. The loan bears interest at Term SOFR + 4.75% (with a Term SOFR cap of 4.50%) and has an initial maturity of April 9, 2027, with three one-year extension options, subject to satisfaction of financial and operational covenants. An interest rate cap was purchased at inception (premium approximately $136,000) (see Note 7). The loan is secured by the Hotel.
	●	Mezzanine Loan: Mezzanine executed a Mezzanine Loan Agreement with CRED REIT Holdco LLC for a principal amount of $36,300,000 at a fixed rate of 7.25% per annum, on matching terms to the senior loan. The loan is secured by Mezzanine’s membership interest in Operating.

Portsmouth and the Company continue to provide a limited guaranty in connection with both facilities. The Company is also subject to customary covenants, including financial ratios and affirmative obligations.

DSCR and Lockbox Arrangements

Operating has not met the Debt Service Coverage Ratio (“DSCR”) threshold required to permit distributions and release of the cash-management/lockbox arrangements in prior periods. Under the loan agreements, the DSCR threshold must be satisfied for two consecutive quarters in order to permit distributions and release of the lockbox arrangements. Although the DSCR threshold was satisfied for the quarter ended March 31, 2026, the lockbox arrangements remained in effect as of March 31, 2026 because the two-consecutive-quarter requirement had not yet been met. Cash receipts from the Hotel are deposited into lender-controlled accounts, with controlled disbursements based on agreed-upon budget approvals.

InterGroup Real Estate Mortgages (Non-Hotel)

In December 2025, the Company disposed of a non-core 12-unit multifamily property in Los Angeles. This property had been classified as held for sale at June 30, 2025.

During the nine months ended March 31, 2026, the Company did not enter into any new financing arrangements, modifications, or refinancings related to its non-hotel real estate properties. All mortgage loans remained in good standing and in compliance with their terms and conditions.