6.      Loans Payable

Mortgages Payable

The Company’s mortgages payable, net consists of the following:

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On October 23, 2025 and February 13, 2026, the Company sold the Salisbury Marketplace and Greenbrier Business Center Properties, respectively and used $5,145,479 and $7,000,000, respectfully, of the net proceeds of the sales to reduce the principal balance of the Wells Fargo Mortgage Facility in exchange for Wells Fargo releasing its security interest in the respective properties. As of December 31, 2025 the portion of the Wells Fargo Mortgage Facility allocated to the Greenbrier Business Center Property was included in mortgages payable, net, associated with assets held for sale on the Company’s condensed consolidated balance sheet. As of June 30, 2026, the monthly payment is $30,000 and the remaining outstanding balance of the Wells Fargo Mortgage Facility is secured solely by the Lancer Center Property.

The Company’s mortgages payables, net, associated with assets held for sale, consists of the following:

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Pledged Asset Line

During the three months ended June 30, 2026, the Company entered into a Pledged Asset Line Agreement (the “PAL Agreement”) with Charles Schwab & Co., Inc. (“Schwab”). The PAL Agreement provides for a revolving, non-purpose margin credit facility, secured by a first-priority lien on the Company’s brokerage account maintained at Schwab (the “Collateral Account”), of an amount based on the collateral value in the Collateral Account.  The Company holds its marketable securities in the Collateral Account.  Based on the collateral value in the Collateral Account as of June 30, 2026, the Company is permitted to borrow up to approximately $16.5 million under the PAL Agreement.

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Borrowings under the PAL Agreement bear interest at a variable rate based on the SOFR plus 75 basis points.  As of June 30, 2026, SOFR was 3.63%.  The PAL Agreement contains customary events of default, including, without limitation, failure to make any payment upon demand or otherwise when due or deposit additional collateral when required under the PAL Agreement; initiation of a bankruptcy petition or other insolvency proceeding; any event of default under any security agreement executed in connection with the Collateral Account; or the insufficiency of the value of the financial assets in the Collateral Account.

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As of June 30, 2026, the outstanding balance on the PAL Agreement was $0.  

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Farmers Line of Credit

On July 18, 2025, in connection with the completion of the acquisition of the Tesla Pensacola Property discussed in Note 3, above, the Company, through its wholly-owned subsidiaries, entered into a loan agreement with Farmers and Merchants Bank of Long Beach, for the Farmers Line of Credit in the maximum amount of $14,700,000. The Farmers Line of Credit is cross collateralized by the Tesla Pensacola Property, the Citibank Property, the Buffalo Wild Wings Property, and the United Rentals. Amounts outstanding under the Farmers Line of Credit bear interest at a floating rate pegged to the prime rate announced by Farmers.

On November 7, 2025, in connection with the Company’s contribution of the Tesla Pensacola Property to the XXV DST, the Company repaid $7,350,000 of the Farmers Line of Credit and Farmers released its lien on the Tesla Pensacola Property.  During November and December 2025, the Company made additional principal payments of $2,000,000 and $948,997, respectively.  On December 30, 2025, the Company used $4,401,003 from the proceeds of the sale of the Buffalo Wild Wings and United Rentals Properties to complete the repayment of the Farmers Line of Credit.  

The Farmers Line of Credit was unconditionally guaranteed by the Company and the Operating Partnership, had a one-year term, maturing on August 10, 2026.  As of June 30, 2026 and December 31, 2025, respectively, the balance of the Farmers Line of Credit was $0.  

Tesla DST Mortgage

On November 7, 2025, in connection with the contribution of the Tesla Pensacola Property to the XXV DST discussed in Note 3, the XXV DST entered into the Tesla DST Mortgage with Pinnacle Bank for a principal amount of $7,710,000.  The Pinnacle Loan is collateralized by the Tesla Pensacola Property. Amounts outstanding under the Pinnacle Loan bear interest at a floating rate of one month SOFR plus 2.5%.  As of  June 30, 2026 and December 31, 2025, SOFR was 3.63% and 3.69%, respectively.  The Pinnacle Loan provides for monthly interest only payments and has a five-year term and matures on November 7, 2030. The XXV DST received $6,932,061 in net proceeds which was used to fund a portion of the total consideration associated with the Company’s contribution of the Tesla Pensacola Property to the XXV DST.  The Company used these proceeds, and cash on hand, to make a $7,350,000 principal repayment on the Farmers Line of Credit.  

In connection with the Tesla DST Mortgage, the Operating Partnership agreed to provide a limited guaranty (the “Guaranty”) with respect to certain potential costs, expenses, losses, damages and other sums for which the XXV DST is directly liable under the Tesla DST Mortgage, including losses or damages that may result from certain intentional actions committed by the XXV DST in

violation of the Tesla DST Mortgage. The Operating Partnership also provide a guaranty of the principal balance and any interest or other sums outstanding under the Tesla DST Mortgage in the event of certain bankruptcy or insolvency proceedings involving the XXV DST.

On June 30, 2026 the Company deconsolidated the XXV DST and no longer reports the Tesla DST Mortgage on its condensed consolidated balance sheet.

Interest Rate Protection Transactions

Parkway Mortgage Loan

On October 28, 2021, the Company entered into an interest rate protection transaction to limit its exposure to increases in interest rates on the variable rate mortgage loan on the Parkway Property (the “Interest Rate Protection Transaction”).  Under this agreement, the Company’s interest rate exposure is capped at 5.25% if USD 1-Month ICE LIBOR exceeds 3%. Effective on July 1, 2023, the interest rate index under the Interest Rate Protection Transaction automatically converted to SOFR.  As of December 31, 2025, SOFR was 3.69%. In accordance with the guidance on derivatives and hedging, the Company records all derivatives on the balance sheet at fair value under other assets with changes in fair value being included in other income on its condensed consolidated statements of operations. The fair value of the Interest Rate Protection Transaction is determined using Level 2 inputs. See Note 9 for additional information. The Company terminated the Interest Rate Protection Transaction on February 13, 2026 in conjunction with the sale of the Parkway Property.  

For the period from September 1, 2022 through June 30, 2023, LIBOR, and for the period from July 1, 2023 through the February 13, 2026 repayment of the Parkway mortgage, SOFR exceeded the 3% cap, and payments from the Interest Rate Protection Transaction reduced the Company’s net interest expense. Payments to the Company from the Interest Rate Protection Transaction are recorded as an offset to interest expense on the Company’s condensed consolidated statements of operations for the three and six months ended June 30, 2026 and 2025.

Tesla DST Mortgage

Concurrent with the Pinnacle Loan closing the XXV DST entered into an interest rate swap agreement with Pinnacle Bank (the “Interest Rate Swap”) to fix the interest rate at 5%.  The Interest Rate Swap has a $7,710,000 notional amount and provides for the XXV DST to make monthly payments to Pinnacle Bank based on a fixed 5% rate and for Pinnacle Bank to make monthly payments to the XXV DST based on a variable amount of one month SOFR plus 2.5%.  The XXV DST paid a premium of $417,136 to secure the 5% fixed rate.  The Interest Rate Swap matures concurrently with the maturity of the Tesla DST Mortgage, or November 7, 2030. The Company has not designated the Interest Rate Swap as a hedge and consequently hedge accounting will not apply.  

In accordance with the guidance on derivatives, the Company records all derivatives on the balance sheet at fair value under other assets with changes in fair value being included in other income on its condensed consolidate statements of operations. The fair value of the Interest Rate Swap is determined using Level 2 inputs. See Note 9 for additional information.

On June 30, 2026 the Company deconsolidated the XXV DST and no longer records the Interest Rate Swap on its condensed consolidated balance sheet.

Wells Fargo Line of Credit

In 2024, the Company, through its wholly-owned subsidiaries, entered into an amended and restated Revolving Line of Credit Note with Wells Fargo Bank, National Association for up to $4,000,000.  There were no borrowings or activity under this note during the periods presented.  In April 2025 the Company terminated the Revolving Line of Credit Note and Wells Fargo Bank, National Association released its security interest in the Citibank Property.

Loss on Extinguishment of Debt

Upon the sale of the Greenbrier Business Center Property, the Parkway Property and the Franklin Square Property, the Company repaid the mortgages payable that were secured by each of these properties.   The Company accounted for the repayment of the mortgage payable under debt extinguishment accounting in accordance with ASC 470.

On February 13, 2026, the Company sold the Greenbrier Business Center Property and repaid a portion of the Wells Fargo Mortgage facility that was partially secured by the Greenbrier Business Center Property. During the six months ended June 30, 2026, the Company recorded a loss on extinguishment of debt of $112,203 consisting of $11,195 in unamortized loan issuance costs and $101,008 in prepayment fees to the lender. No such loss was recorded during the six months ended June 30, 2025.

On February 27, 2026, the Company and its tenant in common partner sold the Parkway Property and repaid the mortgage loan secured by the Parkway Property.  During the six months ended June 30, 2026, the Company recorded a loss on extinguishment of debt of $64,320 consisting of unamortized loan issuance costs.  No such loss was recorded during the six months ended June 30, 2025.

On March 30, 2026, the Company sold the Franklin Square Property and repaid the mortgage loan secured by the Franklin Square Property. During, the six months ended June 30, 2026, the Company recorded a loss on extinguishment of debt of $195,817 consisting of $165,505 of unamortized loan issuance costs and $30,312 in costs associated with the defeasance of the mortgage loan.  No such loss was recorded during the six months ended June 30, 2025.

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Interest Expense

Interest expense, including amortization of capitalized issuance costs consists of the following:

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Interest accrued and accumulated amortization of capitalized issuance costs consist of the following:

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Debt Maturity

The Company’s scheduled principal repayments on indebtedness as of June 30, 2026 are as follows:

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