10-Q

Sealy Industrial Partners IV, LP and Subsidiaries

Consolidated Balance Sheets


	September 30, 2026			December 31, 2025
(in thousands, except Units data)	(unaudited)
ASSETS
Real estate assets, at cost:
Buildings and improvements	$	323,552		$	347,880
Land		54,549			57,225
Land improvements		39,335			42,358
Work in progress		10,845			951
Tenant improvements		566			500
Total real estate assets, at cost		428,847			448,914
Less: accumulated depreciation		(26,013	)		(17,773	)
Total real estate assets, net		402,834			431,141

Cash and cash equivalents		26,211			12,199
Prepaid expenses and other assets		11,355			11,001
Deferred financing costs, net of accumulated amortization of $350 and $4 as of September 30, 2026 and December 31, 2025, respectively		1,273			68
Acquired value of in-place leases, net of accumulated amortization of $23,887 and $15,691 as of September 30, 2026 and December 31, 2025, respectively		23,872			35,969
Above market intangible lease asset, net of accumulated amortization of $130 and $81 as of September 30, 2026 and December 31, 2025, respectively		178			227
Total Assets	$	465,723		$	490,605

LIABILITIES AND PARTNERS' CAPITAL
Liabilities
Secured revolving credit facility (Note 6)	$	41,500		$	79,500
Term loan, net (Note 6)		103,814			103,585
Construction loan (Note 6)		6,932			—
Accounts payable and accrued expenses		16,503			15,197
Deferred revenues		2,228			1,463
Below market intangible lease liability, net of accumulated amortization of $2,298 and $1,380 as of September 30, 2026 and December 31, 2025, respectively		2,795			4,521
Total liabilities		173,772			204,266

Commitments and contingencies (Note 8)		—			—

Partners' Capital
Series A preferred equity		125			125
General Partner's capital, 111 Units outstanding as of September 30, 2026 and December 31, 2025, respectively		8			8
Limited Partners' capital, 4,194,199 Units and 3,887,128 Units outstanding as of September 30, 2026 and December 31, 2025, respectively		289,637			284,000
Non-controlling interests		2,181			2,206
Total partners' capital		291,951			286,339

Total Liabilities and Partners' Capital	$	465,723		$	490,605

The accompanying notes are an integral part of these consolidated financial statements.

Sealy Industrial Partners IV, LP and Subsidiaries

Consolidated Statements of Operations (unaudited)


	Three Months Ended						Nine Months Ended
(in thousands, except Units and per-Unit data)	September 30, 2026			September 30, 2025			September 30, 2026			September 30, 2025
Revenues
Rental revenue	$	9,719		$	9,742		$	29,965		$	26,706
Other revenues		(20	)		17			184			96
Total revenues		9,699			9,759			30,149			26,802

Operating expenses
Depreciation and amortization		5,518			5,006			16,689			13,147
Property taxes and insurance		1,993			1,859			6,467			5,276
Asset management fee		1,140			1,043			3,447			2,830
Property operating expenses		944			932			3,001			2,427
General and administrative		699			590			1,807			1,856
Total operating expenses		10,294			9,430			31,411			25,536

Operating income (loss)		(595	)		329			(1,262	)		1,266

Other income (expense)
Income from DST investment		938			—			2,548			—
Interest income		50			58			115			113
Interest expense		(2,196	)		(1,767	)		(7,175	)		(4,114	)
Gain on sale of real estate assets		—			5			—			1,157
Income taxes		(208	)		—			(625	)		—
Total other income (expense)		(1,416	)		(1,704	)		(5,137	)		(2,844	)

Net loss	$	(2,011	)	$	(1,375	)	$	(6,399	)	$	(1,578	)

Dividends to preferred shareholders		4			4			12			12
Net loss attributable to non-controlling interests		(13	)		(9	)		(43	)		(10	)
Net loss attributable to partners	$	(2,002	)	$	(1,370	)	$	(6,368	)	$	(1,580	)

Net loss attributable to General Partner	$	—		$	—		$	—		$	—
Net loss attributable to Limited Partners	$	(2,002	)	$	(1,370	)	$	(6,368	)	$	(1,580	)

Weighted average number of Units outstanding, basic and diluted		4,164,271			4,100,946			4,076,042			3,883,312
Earnings per Unit, basic and diluted	$	(0.48	)	$	(0.33	)	$	(1.56	)	$	(0.41	)

The accompanying notes are an integral part of these consolidated financial statements.

Sealy Industrial Partners IV, LP and Subsidiaries

Consolidated Statements of Changes in Partners' Capital (unaudited)


(in thousands)	Series A Preferred			General Partner		Limited Partners			Non-Controlling Interests			Total Partners' Capital
Balance, December 31, 2025	$	125		$	8	$	284,000		$	2,206		$	286,339
Contributions, net of issuance costs of $1,299		—			—		13,430			100			13,530
Distributions		(4	)		—		(3,965	)		(27	)		(3,996	)
Redemptions		—			—		(1,234	)		—			(1,234	)
Net loss		4			—		(2,331	)		(16	)		(2,343	)
Balance, March 31, 2026	$	125		$	8	$	289,900		$	2,263		$	292,296
Contributions, net of issuance costs of $1,052		—			—		8,395			—			8,395
Distributions		(4	)		—		(4,134	)		(27	)		(4,165	)
Redemptions		—			—		(5,026	)		—			(5,026	)
Net loss		4			—		(2,035	)		(14	)		(2,045	)
Balance, June 30, 2026	$	125		$	8	$	287,100		$	2,222		$	289,455
Contributions, net of issuance costs of $1,009		—			—		12,389			—			12,389
Distributions		(4	)		—		(4,248	)		(28	)		(4,280	)
Redemptions		—			—		(3,602	)		—			(3,602	)
Net loss		4			—		(2,002	)		(13	)		(2,011	)
Balance, September 30, 2026	$	125		$	8	$	289,637		$	2,181		$	291,951


(in thousands)	Series A Preferred			General Partner		Limited Partners			Non-Controlling Interests			Total Partners' Capital
Balance, December 31, 2024	$	125		$	8	$	276,252		$	2,075		$	278,460
Contributions, net of issuance costs of $2,099		—			—		19,667			—			19,667
Distributions		(4	)		—		(3,655	)		(27	)		(3,686	)
Net loss		4			—		(144	)		(1	)		(141	)
Balance, March 31, 2025	$	125		$	8	$	292,120		$	2,047		$	294,300
Contributions, net of issuance costs of $2,050		—			—		18,773			—			18,773
Distributions		(4	)		—		(3,922	)		(27	)		(3,953	)
Redemptions		—			—		(135	)		—			(135	)
Net loss		4			—		(66	)		—			(62	)
Balance, June 30, 2025	$	125		$	8	$	306,770		$	2,020		$	308,923
Contributions, net of issuance costs of $902		—			—		15,037			—			15,037
Distributions		(4	)		—		(4,185	)		(28	)		(4,217	)
Redemptions		—			—		(519	)		—			(519	)
Net loss		4			—		(1,370	)		(9	)		(1,375	)
Balance, September 30, 2025	$	125		$	8	$	315,733		$	1,983		$	317,849

The accompanying notes are an integral part of these consolidated financial statements.

Sealy Industrial Partners IV, LP and Subsidiaries

Consolidated Statements of Cash Flows (unaudited)


	Nine Months Ended
(in thousands)	September 30, 2026			September 30, 2025
Cash flows from operating activities
Net loss	$	(6,399	)	$	(1,578	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization expense		16,689			13,147
Above/below market rent intangibles amortization		(876	)		(624	)
Straight-line rent adjustment		(317	)		(825	)
Noncash interest expense		583			971
Gain on sale of real estate assets		—			(1,157	)
Changes in operating assets and liabilities:
Prepaid expenses and other assets		651			(640	)
Accounts payable and accrued expenses		750			2,219
Deferred revenues		765			329
Net cash provided by operating activities		11,846			11,842

Cash flows from investing activities
Purchase of real estate assets		—			(140,287	)
Earnest money deposit		(1,700	)		—
Capital expenditures		(10,324	)		(421	)
Deferred leasing costs		(177	)		(225	)
Return of investment from DST		33,358			—
Net proceeds from sale of real estate assets		—			7,921
Net cash provided by (used in) investing activities		21,157			(133,012	)

Cash flows from financing activities
Proceeds from revolving credit facility		41,800			106,500
Repayments of revolving credit facility		(79,800	)		(128,000	)
Proceeds from term loan		—			105,220
Proceeds from construction loan		6,932			—
Financing costs paid		(1,623	)		(2,629	)
Contributions		33,771			54,454
Payments for issuance costs		(3,309	)		(4,836	)
Distributions		(6,836	)		(6,952	)
Redemptions		(9,862	)		(654	)
Distribution fees paid net of recovery		(64	)		(226	)
Net cash provided by (used in) financing activities		(18,991	)		122,877
Net change in cash and cash equivalents		14,012			1,707
Cash and cash equivalents, beginning of period		12,199			11,389
Cash and cash equivalents, end of period	$	26,211		$	13,096

The accompanying notes are an integral part of these consolidated financial statements.

Sealy Industrial Partners IV, LP and Subsidiaries

Consolidated Statements of Cash Flows (unaudited, CONTINUED)


	Nine Months Ended
($s in thousands)	September 30, 2026			September 30, 2025
Supplemental Disclosure of Cash Flow Information
Cash paid for interest	$	(6,595	)	$	(2,892	)

Supplemental Disclosure of Noncash Investing and Financing Transactions
Increase in accrued issuance costs	$	51		$	215
Increase in accrued cash distributions	$	118		$	359
DRIP contributions	$	5,039		$	4,075
Increase in accrued DRIP distributions	$	205		$	335
DRIP distributions	$	(5,244	)	$	(4,410	)
Contribution of property to DST (Note 5)	$	(33,358	)	$	—

The accompanying notes are an integral part of these consolidated financial statements.

Sealy Industrial Partners IV, LP and Subsidiaries

Notes to Consolidated Financial Statements

(UNaudited)

Note 1. Organization and Description of Business

Sealy Industrial Partners IV, LP (the “Partnership”) was formed as a Georgia limited partnership on February 25, 2022. Sealy Industrial Partners IV REIT, LLC (the “SIP IV REIT”) is a controlled subsidiary of the Partnership and Sealy Industrial Partners IV OP, LP (the “OP”) is a controlled subsidiary of the SIP IV REIT. In December 2025, the Partnership formed Sealy SIP IV Aldine Westfield TRS, LLC ("TRS JV") and Sealy TRS I, LLC ("TRS I"), two TRSs, as wholly owned subsidiaries of the OP. Unless stated otherwise or the context otherwise requires, the terms the "Company," "we," "our," and "us" refer to the Partnership and its subsidiaries, including the SIP IV REIT, the OP, and all of its consolidated subsidiaries. Sealy Industrial Partners IV GP, LLC (the “GP”) is the general partner of the Partnership. Sealy & Company, LLC (“Sealy”) is the sole member of the GP.

The GP contributed $5,000 to the Partnership in exchange for 55.4 Class I units of limited partnership interest in the Partnership and $5,000 to the OP in exchange for 55.4 units of limited partnership interest in the OP (the "OP Units"). Sealy SIP IV Investor, LLC (“SIP IV Investor”) owns subordinated participation interests (see "Note 9. Equity" for details) in the Partnership and the OP. Sealy Capital Investor II, LLC (“SCI-II”), through the transactions contemplated in a Distribution and Contribution Agreement with SIP IV Investor, among other parties, effective as of December 31, 2022, acquired SIP IV Investor's Class I units and OP Units and is deemed to have contributed $5,000 to the Partnership for 55.4 Class I units and $2,445,000 to the OP in exchange for 27,091.4 OP Units. The ownership interests of SIP IV Investor and SCI-II in the OP are recognized and measured as noncontrolling interests in the consolidated financial statements. As of September 30, 2026, noncontrolling interests represented 0.6% of the partnership interests in the OP.

In April 2022, the Partnership commenced an offering of Class A units of limited partnership interest (the "Class A Units"), Class I units of limited partnership interest (the "Class I Units"), and Class R units of limited partnership interest (the "Class R Units", and collectively with the Class A Units and the Class I Units, the "Units") for up to $750 million, expandable to $1 billion at the discretion of the GP (the “Private Offering”). Sealy is the sponsor of the Private Offering. For each Class I Unit and Class R Unit, the Partnership receives a capital contribution of $90.25; for each Class A Unit, the Partnership receives the net amount after deducting selling commission of up to $6.00, managing broker-dealer fee of up to $2.75, and broker-dealer due diligence fee of up to $1.00 from the investor contribution of $100.00. As of September 30, 2026, there were 4,194,199 Units issued and outstanding (see "Note 9. Equity" for details) under the Private Offering. All Units have the same voting rights and holders of such Units are together referred to as "Limited Partners". The Limited Partners, together with the GP, SIP IV Investor, and SCI-II, are referred to herein as the “Partners”.

On December 2, 2022, the SIP IV REIT admitted preferred shareholders through an offering of $125,000 in preferred shares at $1,000 per share.

The Company commenced operations on July 15, 2022 and primarily focuses on acquiring, owning, financing, developing, redeveloping, maintaining, operating, managing, leasing, and selling income-producing industrial and other commercial real estate properties throughout the United States. Substantially all of our business is conducted through the OP. As of September 30, 2026, we owned real estate located primarily in the Southern and Midwestern United States.

Note 2. Summary of Significant Accounting Policies and Recent Accounting Pronouncement

Basis of presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with GAAP. The presentation includes the accounts of the Company and those entities in which the Company has a controlling financial interest. The outside equity interests in the entities controlled by the Company are reflected in the consolidated financial statements as a noncontrolling interest. All intercompany transactions have been eliminated.

We have prepared the accompanying unaudited financial information pursuant to the rules and regulations of the SEC. Management believes that the disclosures presented in these financial statements are adequate to make the information presented not misleading. In our opinion, all adjustments and eliminations, consisting only of normal recurring adjustments, necessary to present fairly the financial position and results of operations for the reported periods have been included.

The results of operations for such interim periods are not necessarily indicative of the results for the full year and should be read in conjunction with the consolidated financial statements for the years ended December 31, 2025 and 2024 included in our Annual Report on Form 10-K.

Use of estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses for the reported periods. These estimates and assumptions are based on management's experiences and judgments and believed to be reasonable at the time. Management evaluates its estimates and assumptions on an ongoing basis and makes adjustments when facts and circumstances warrant. Actual results could differ from those estimates.

Real estate assets

The Company evaluates whether a real estate acquisition is a business acquisition or an asset purchase in accordance with GAAP. GAAP defines a business as an integrated set of activities and assets that can be managed to produce economic benefits. To date, all of our acquisitions have consisted of properties whereby substantially all the fair value of the gross assets acquired is concentrated in a single asset and, therefore, the acquisitions are accounted for as asset purchases.

Assets acquired are recorded at cost based on the contract purchase price plus transaction costs (the “Purchase Price”). The Purchase Price is then allocated based on the fair value of assets acquired and liabilities assumed, which generally consists of land, land improvements, buildings, tenant improvements, deferred leasing commissions, and intangible lease assets and liabilities. The fair value of the tangible assets is determined as if they were vacant. The determination of fair value includes the use of significant assumptions such as land comparables, discount rates, terminal capitalization rates, and market rent assumptions. The value of acquired in-place leases is based on the difference on the date of the acquisition between (i) the property valued with existing in-place leases adjusted to market rental rates and (ii) the property valued "as-if" vacant. In allocating the fair value to identified intangibles for above-market or below-market leases, an amount is recorded based on the present value of the difference between prevailing market rental rates and the in-place lease rental rates measured over a period equal to the remaining term of the leases.

Expenditures for tenant improvements, leasehold improvements, and leasing commissions (inclusive of incentive compensation costs of personnel directly attributable to executed leases) are capitalized and amortized over the terms of the respective lease. Repairs and maintenance are charged to expense as incurred.

Real estate assets are depreciated using the straight-line method over the remaining estimated useful lives of the assets. Estimated useful lives range from 5 to 39 years for buildings and improvements, and 15 years for land improvements. Depreciation of tenant improvements is computed using the straight-line method over the shorter of the useful life of the improvement or the term of the respective lease.

The value of the acquired in-place lease intangible is amortized over the remaining lease term as depreciation and amortization expense. The amount of above-market and below-market lease intangibles are amortized as a decrease or increase of rental revenue, respectively, over the remaining lease term.

The Company classifies properties and related assets and liabilities as held for sale when the sale of an asset has been approved by management and the sale is probable within a year, a legally enforceable contract has been executed and the buyer's due diligence period, if any, has expired. Once classified as held for sale, the respective assets and liabilities are presented separately on the consolidated balance sheets, depreciation ceases and the properties are valued at the lower of depreciated cost or fair value, less costs to sell.

Impairment of Real Estate Assets

The Company reviews real estate assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The judgments regarding the existence of indicators of impairment are based on operating performance, market conditions, as well as our intent and ability to hold each property. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net cash flows expected to be generated by the operation and disposal of the asset. If the carrying amount of such assets are not recoverable, an impairment loss is recognized to reduce the carrying value of the property to its estimated fair value. The impairment loss is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. The impairment assessment and fair value measurement requires the use of estimates and assumptions related to the timing and amounts of cash flow projections, discount rates, and terminal capitalization rates.

No impairment charge was recorded for the nine months ended September 30, 2026 and 2025.

Fair value measurements

The Company utilizes a valuation technique to measure the fair value of assets and liabilities by using a fair value hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs. The objective of a fair value measurement is to determine the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). Accordingly, the fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of the fair value hierarchy are described below:

•

Level 1 – unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities;

•

Level 2 – quoted prices in markets that are not considered to be active or financial instruments for which all significant inputs are observable, either directly or indirectly;

•

Level 3 – prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.

The Company applies the provisions of this valuation technique in recording the assets acquired and liabilities assumed upon real estate acquisitions based on information obtained from independent appraisals, market data, information obtained during due diligence, and information related to the marketing and leasing at the specific property, which is a Level 3 measurement valuation technique. Accordingly, the assessed fair values are not necessarily indicative of the amounts the Company could realize on disposition of such assets. The use of different assumptions and/or estimation methodologies may have a material effect on the assessed fair value amounts.

The estimated fair value of the Company’s fixed-rate term loan as of September 30, 2026 was approximately $99.7 million, calculated by discounting future cash payments through the term of the loan at a risk-adjusted rate. The discount rate used included a risk-free rate derived from the U.S. Treasury note interest rate as of September 30, 2026 and a risk premium provided by our lenders for companies with similar profiles as ours, which was a Level 3 input. The carrying amounts for the Company’s variable-rate debt approximate fair value given that the interest rates are variable and adjust with current market rates for instruments with similar risks and maturities.

Cash and cash equivalents

Cash and cash equivalents include cash on hand and short-term highly liquid instruments with original maturities of three months or less. We ensure that there is enough cash on hand to cover estimated amounts for upcoming property taxes, insurance, tenant improvements and commissions, and repairs and improvements expected for up to twelve months. Cash equivalents also include funds received for equity contributions pending approval and admittance to the Partnership. Such funds are recorded as liabilities pending approval of the contribution.

Prepaid expenses and other assets

Prepaid expenses and other assets include straight-line rent receivables, right-of-use assets, prepaid distribution fees (see "Note 9. Equity" for details), prepaid property insurance premiums, earnest money deposits for future acquisitions of real estate in contract, rent and other tenant receivables, deferred leasing costs, and other refundable deposits and prepaid expenses. Prepaid insurance is amortized over the respective insurance policy period. Management evaluates collectability of tenant receivables based on historical loss, current economic conditions, and tenant profile as of each reporting date.

The following table sets forth the balances of our prepaid expenses and other assets as of September 30, 2026 and December 31, 2025, respectively.


($s in thousands)	September 30, 2026		December 31, 2025
Straight-line rents	$	3,090	$	2,773
Right-of-use asset		2,315		2,335
Prepaid distribution fees		2,140		2,204
Earnest money deposits		1,700		—
Contributions in transit		—		1,131
Lease commissions		844		787
Tenant receivables		332		621
Prepaid insurance		537		439
Other		397		711
Total prepaid expenses and other assets	$	11,355	$	11,001

Deferred financing costs

Financing costs are direct costs incurred in obtaining debt instruments and are deferred and amortized over the term of the related debt. Deferred financing costs attributable to revolving debt are presented in the consolidated balance sheets as an asset. Deferred financing costs attributable to term loans are presented in the consolidated balance sheets as a direct reduction from the carrying amount of the associated debt. See "Note 6. Credit Facilities" for details.

Revenue recognition

All current leases where the Company is the lessor are classified as operating leases and rental income is recognized on a straight-line basis over the term of the lease agreements regardless of when payments are due. Differences between rents billed in accordance with the lease terms and the minimum rent income recognized on a straight-line basis are reported as rent receivable in prepaid expenses and other assets in the accompanying consolidated balance sheets. Rents received in advance are recognized as deferred revenues.

All of our leases are triple-net or double-net leases, where the majority of property operating expenses are recovered from the tenants. Tenant recoveries are recognized as revenue in the same period the related expenses are incurred. As the timing and pattern of transfer for the rental income and the associated tenant recoveries are the same, we account for rental income and tenant recoveries as a single combined component as rental revenue on the accompanying consolidated statement of operations in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 842 – Leases.

Income Taxes

Under the present law, partnerships are pass-through entities and are not subject to U.S. federal income taxes. The SIP IV REIT has elected to be taxed as a REIT under the Code; as a REIT, the SIP IV REIT generally is not subject to federal income tax provided it continues to satisfy certain distribution, income, asset, and ownership tests under the Code. Taxable income from non-REIT activities managed through the Company’s TRSs is subject to federal, state, and local taxes. During the three and nine months ended September 30, 2026, we made income tax provisions totaling $0.2 million and $0.6 million, respectively, at a federal income tax rate of 21% and a state income tax rate of 4.9%.

Earnings per Unit

Earnings per Unit is calculated by dividing net income (loss) attributable to Limited Partners, who held partnership interests in Units, by the weighted average number of Units outstanding during the period. The Company had not issued any dilutive Units as of September 30, 2026.


	Three Months Ended						Nine Months Ended
	September 30, 2026			September 30, 2025			September 30, 2026			September 30, 2025
Numerator:
Net loss attributable to Limited Partners ('000s)	$	(2,002	)	$	(1,370	)	$	(6,368	)	$	(1,580	)
Denominator:
Weighted average number of Units outstanding, basic and diluted		4,164,271			4,100,946			4,076,042			3,883,312

Earnings per Unit, basic and diluted	$	(0.48	)	$	(0.33	)	$	(1.56	)	$	(0.41	)

Segment Reporting

The Company operates within one single business segment. We manage our operations on a consolidated basis to assess performance and make strategic operating decisions. Our GP and the officers of Sealy serve as the chief operating decision maker ("CODM") for the Company. The CODM primarily uses consolidated net income to measure overall Company performance and allocate resources.

Recent Accounting Pronouncements

In November 2024, the FASB issued Accounting Standards Update ("ASU") 2024-03, "Disaggregation of Income Statement Expenses" ("ASU 2024-03"). ASU 2024-03 requires enhanced disclosures that disaggregate significant income statement expense captions such as purchase of inventory, depreciation and amortization, employee compensation, and selling expenses. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. We are currently evaluating ASU 2024-03 to determine its impact on our financial statement disclosures.

On December 8, 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow Scope Improvements ("ASU 2025-11"). ASU 2025-11 applies to all entities that prepare interim financial statements and notes under U.S. GAAP. This ASU specifies the form and content choices for interim financial statements and accompanying notes; adds a comprehensive list of required interim disclosures from numerous other ASC topics to Topic 270; and introduces a disclosure principle that requires disclosure of events since the end of the previous annual reporting period that materially affect the reporting entity. ASU 2025-11 is effective for interim periods within annual reporting periods beginning after December 15, 2027 for public business entities, and one-year deferral for all other entities. Early adoption is permitted for all entities. The Company is currently evaluating ASU 2025-11 to determine its impact on our financial statements and disclosures.

On December 8, 2025, the FASB issued ASU 2025-12, Codification Improvements ("ASU 2025-12") to correct, clarify, and otherwise improve U.S. GAAP. ASU 2025-12 provides 33 improvements that span a wide range of topics with six focus areas. The amendments are part of an ongoing FASB project to make non-substantive technical corrections, clarifications, and improvements that are not expected to have a significant effect on accounting practice or create a significant administrative cost to most entities. ASU 2025-12 is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. The Company is currently reviewing ASU 2025-12 to identify any implications for its accounting policies, processes, or disclosures.

Note 3. Investments in Real Estate

Portfolio

As of September 30, 2026, we wholly owned 21 industrial real estate properties totaling approximately 5.1 million square feet of GLA located in eight states, including Indiana, Iowa, Kansas, Mississippi, Missouri, Ohio, Oklahoma, and Texas. Below is a summary of our investments in wholly-owned real estate, before depreciation and amortization, as of September 30, 2026 and December 31, 2025:


($s in thousands)	September 30, 2026			December 31, 2025
Buildings and improvements	$	323,552		$	347,880
Land		50,349			53,025
Land improvements		39,335			42,358
Work in progress		171			86
Tenant improvements		566			500
Acquired value of in-place leases		47,759			51,660
Above market rent lease intangibles		308			308
Below market rent lease intangibles		(5,094	)		(5,901	)
Total investments in real estate	$	456,946		$	489,916

(1)

A property with a book value of approximately $33.4 million was contributed to a DST. See Note 5. Investment in DST for more details.

During the three and nine months ended September 30, 2026 and 2025, we recognized the following depreciation expense associated with our tangible real estate assets:


	Three Months Ended				Nine Months Ended
	September 30, 2026		September 30, 2025		September 30, 2026		September 30, 2025
Depreciation	$	2,768	$	2,540	$	8,341	$	6,899

Acquisitions

During the nine months ended September 30, 2026, we did not make any acquisitions. During the nine months ended September 30, 2025, we acquired five industrial real estate assets, totaling approximately 1.6 million square feet, for a total Purchase Price (including contract purchase price and transaction costs, as defined previously) of approximately $140.3 million.

Disposition

During the nine months ended September 30, 2026, we did not make any dispositions. On April 25, 2025, we sold one industrial property of 56,000 square feet in Sulphur, Louisiana, for $8.3 million. The book basis of the sold property was approximately $6.8 million. We recognized a gain of approximately $1.2 million. The net sales proceeds of $7.9 million were used to partially fund an acquisition that closed on June 30, 2025.

Investment in DST

In January 2026, the Company contributed a property acquired in December 2025 to a DST. See "Note 5. Investment in DST" for more information.

Lease intangibles

During the three and nine months ended September 30, 2026 and 2025, the Company recognized the following lease intangibles amortization:


	Three Months Ended						Nine Months Ended
($s in thousands)	September 30, 2026			September 30, 2025			September 30, 2026			September 30, 2025
Acquired value of in-place leases	$	2,708		$	2,428		$	8,228		$	6,140
Above market intangible lease asset	$	17		$	16		$	49		$	18
Below market intangible lease liability	$	(308	)	$	(263	)	$	(925	)	$	(642	)

The following table summarizes future amortization of acquired lease intangibles as of September 30, 2026:


($s in thousands)	Acquired Value of In-Place Leases		Above Market Intangible Lease Asset		Below Market Intangible Lease Liability
2026	$	2,647	$	16	$	(307	)
2027		8,925		65		(1,052	)
2028		5,352		27		(594	)
2029		3,349		2		(393	)
2030		1,088		2		(130	)
Thereafter		2,511		66		(319	)
Total	$	23,872	$	178	$	(2,795	)
Weighted average amortization period (years)		3.1		13.6		3.3

Note 4. Investment In Joint Venture

On December 4, 2025, the Company, through its wholly owned TRS, TRS JV, entered into a joint venture agreement with IDV Aldine Westfield, LLC ("IDV") to form Sealy IDV Aldine Westfield, LLC (the "IDV JV"). On December 5, 2025, the IDV JV purchased a 10.1-acre land parcel located in Houston, Texas from IDV for $4.2 million to develop an industrial warehouse of approximately 164,600 square feet (the "Aldine Westfield Property"). The Company maintains a 95% interest and IDV holds the remaining 5% interest in the IDV JV. In accordance with the consolidation principles in ASC Topic 810, Consolidation ("ASC 810"), the Company consolidated the IDV JV's financial statements and has included IDV's equity interest in the IDV JV as a non-controlling interest in the consolidated balance sheets.

As of September 30, 2026 and December 31, 2025, the Company has contributed approximately $6.8 million and $4.8 million to the IDV JV. The following table summarizes the joint venture amounts included in our consolidated balance sheets (in thousands):


Financial Statement Line	September 30, 2026		December 31, 2025
Land	$	4,200	$	4,200
Work in Progress	$	10,674	$	865
Cash and cash equivalents	$	—	$	28
Prepaid expenses and other assets	$	—	$	8
Deferred financing costs	$	—	$	65
Accounts payable and accrued expenses	$	802	$	177
Construction loan	$	6,932	$	—
Non-controlling interests	$	292	$	192

The development of the Aldine Westfield Property was completed in October 2026.

Note 5. Investment in DST

On December 10, 2025, the Company acquired a property of approximately 303,000 square feet in Anderson, Indiana (the "DST Property") for approximately $33.4 million, plus transaction costs, through a wholly owned subsidiary of the OP (the "Owner LLC"). On January 12, 2026, the OP assigned all of its rights, title, and interest in the Owner LLC to TRS I (the "Depositor"), who converted the Owner LLC into a DST, which was renamed as Sealy Industrial I, DST ("DST-I" or the "Trust") on January 13, 2026. The Depositor owned 100% of the beneficial interests in DST-I as of January 13, 2026. Under the trust agreement of DST-I (the "Trust Agreement"), Sealy Master DST Trustee, LLC (the "Administrative Trustee"), a Georgia limited liability company and a wholly-owned subsidiary of Sealy, is the trust manager and is responsible for the operation of DST-I. DST-I has entered into an asset management agreement with Sealy for the management of the day-to-day affairs of the Trust; and a property management agreement with Sealy for the management and operation of the DST Property. The Administrative Trustee is prohibited from taking actions that would constitute a power to vary the investment, including reinvestment beyond constrained cash management, mortgage financing/refinancing, entering new leases except in tenant bankruptcy/insolvency, and more than minor non-structural modifications except as required by law.

On January 13, 2026, DST-I commenced a private placement offering of up to 100% of its beneficial interests to certain qualified accredited investors (the "DST-I Offering"). The maximum offering amount was approximately $40.5 million. As the beneficial interests in DST-I were sold and investor contributions were received, DST-I paid the Depositor for the purchase price plus transaction costs of the DST Property, as well as a bridge carry fee of up to $1.6 million, or 4% of the maximum offering amount.

As of September 30, 2026, all of the beneficial interests in DST-I had been sold. The Depositor earned $1.6 million of bridge carry fee and $0.8 million of distribution income during the DST-I Offering.

Management performed a consolidation assessment pursuant to the consolidation guidance under ASC 810. We concluded that, while DST-I is a variable interest entity ("VIE"), the Company is not required to consolidate as the Company is not the primary beneficiary of the VIE. Under the Trust Agreement, the investors (including the Company) generally have no right to manage or operate the Trust and their rights are primarily limited to receiving pro rata distributions. As the Company has no significant influence over the Trust and the DST investment, the Company accounts for its investment in DST-I under ASC 321, Investments – Equity Securities. In accordance with ASC 321, the Company applies the measurement alternative for equity securities without readily determinable fair values. Under the measurement alternative, the Company's investment in DST-I is measured at cost, with remeasurements to fair value upon impairment or upon a price change observed in an orderly transaction of the same or similar investment of the same issuer. As of September 30, 2026, the Company has no remaining exposure to loss as a result of its involvement with the VIE.

Note 6. Credit Facilities

The following table summarizes the Company's credit facilities as of September 30, 2026 and December 31, 2025, respectively:


		Outstanding Principal as of
($s in thousands)	Type	September 30, 2026			December 31, 2025			Interest Rate as of September 30, 2026			Maturity
KeyBank credit facility	Floating	$	41,500		$	79,500			5.64	%	3/30/2029

Thrivent term loan	Fixed		105,220			105,220			5.39	%	10/1/2030
Unamortized deferred financing costs			(1,406	)		(1,635	)
Term loan, net		$	103,814		$	103,585

Construction loan	Floating	$	6,932		$	—			6.25	%	12/5/2028

KeyBank Credit Facilities

The Company is a party to a credit agreement with KeyBank National Association ("KeyBank") as agent and lender. Prior to January 15, 2026, the KeyBank credit agreement provided a revolving credit facility with an aggregate commitment amount of $100 million, maturing on January 16, 2026. On January 15, 2026, the Company entered into an amended and restated credit agreement with KeyBank (the "A&R Credit Agreement"), which amended and restated the previous agreement with KeyBank. The A&R Credit Agreement provides for borrowings in the initial amount of $150 million of senior secured facilities (the “2026 KeyBank Credit Facility”), consisting of (i) a $150 million revolving line of credit (the “Revolver"), (ii) a term loan with no initial amount outstanding or committed (“KeyBank Term Loan A”), and subsequently in the amount designated upon the exercise of the accordion provision described below, and (iii) a term loan with no initial amount outstanding or committed (“KeyBank Term Loan B” and together with KeyBank Term Loan A, the “KeyBank Term Loans”), and subsequently in the amount designated upon the exercise of the accordion. So long as no default or event of default has occurred, the Company may increase the aggregate amount of the 2026 KeyBank Credit Facility to a maximum aggregate size of $500 million. Such increase may be allocated to (i) the then-existing revolving line of credit commitment, (ii) the initial KeyBank Term Loan A commitment (or, once the initial KeyBank Term Loan A commitment is provided, to the then-existing KeyBank Term Loan A commitment), (iii) the initial KeyBank Term Loan B commitment (or, once the initial KeyBank Term Loan B commitment is provided, to the then-existing KeyBank Term Loan B commitment), or (iv) any combination thereof satisfactory to KeyBank and applicable lenders. The Revolver matures on March 30, 2029, with the option for a 12-month extension upon satisfaction of certain conditions. The KeyBank Term Loans mature on the date selected by the Company and agreed to by KeyBank and applicable lenders, provided that in no event shall such maturity date occur earlier than the maturity date of the Revolver or the maturity date of any then-established KeyBank Term Loans.

Borrowings under the Revolver bear interest at floating rates based on the daily Secured Overnight Financing Rate ("SOFR") plus an applicable margin depending on the then-current leverage ratio as defined in the A&R Credit Agreement, which is 1.75% if the Company’s leverage ratio is less than 50% and 1.85% if the Company’s leverage ratio is equal to or greater than 50% (in each case a decrease from the applicable margin of 2.00% in the prior KeyBank credit agreement). Monthly interest payments are required on the outstanding balance. As of September 30, 2026 and December 31, 2025, the weighted average interest rate on the borrowings under the Revolver was 5.64% and 5.83%, respectively.

The Company pays an unused facility fee of either 0.20% or 0.25% per annum (depending on the amount of the unused borrowing capacity), payable quarterly. During the three months ended September 30, 2026 and 2025, we incurred approximately $74,000 and $18,000 of unused commitment fees, respectively. During the nine months ended September 30, 2026 and 2025, we incurred approximately $178,000 and $57,000 of unused commitment fees, respectively.

Borrowings under the KeyBank credit agreements are secured by the ownership interest in certain real estate assets owned by the Company. The KeyBank credit agreements imposed certain customary financial and other covenants, including limitations on permitted investments and distributions. We were in compliance with all debt covenants under the KeyBank credit agreements as of September 30, 2026 and December 31, 2025.

Thrivent Term Loan

On September 11, 2025, Sealy Gardner Avenue, LLC, Sealy South Green Road, LLC, Sealy Commercial Drive II, LLC, Sealy Pederson Road, LLC, Sealy Crossroads L, LLC, Sealy Stateline K, LLC, and Sealy Northpoint One, LLC (collectively, the "Borrowers"), each a Georgia limited liability company and a wholly owned subsidiary of the Company, entered into a loan agreement (the "Thrivent Loan Agreement") and a promissory note (the "Thrivent Promissory Note") with Thrivent Financial for Lutherans ("Thrivent") for a 5-year term loan in the amount of $105.2 million (the "Thrivent Term Loan"). The proceeds from the Thrivent Term Loan, net of lenders fees and expenses, were used to pay off the then-outstanding $76.5 million balance under the KeyBank credit facility and for general corporate purposes.

The outstanding principal balance of the Thrivent Term Loan bears a fixed interest rate at 5.39% per annum. Interest for the period from September 11, 2025 to September 30, 2025 in the amount of $315,000 was prepaid on September 11, 2025. Subsequently, an interest-only payment of $473,000 is due on the first day of each month starting November 1, 2025. The Thrivent Term Loan matures on October 1, 2030. Prepayment in full is allowed upon payment of a Reinvestment Charge

(as defined in the Thrivent Promissory Note) if prepaid on or before April 1, 2030 and without payment of a Reinvestment Charge if prepaid after April 1, 2030.

The Thrivent Term Loan is secured by, among other things, first-lien deeds of trust and mortgages encumbering seven properties owned by the Borrowers and is guaranteed by the OP.

Construction Loan

Through its investment in the IDV JV, the Company is party to a loan agreement with Huntington Bank (as successor by merger to Cadence Bank) for a 3-year construction loan with a principal amount of up to $10.8 million (the "Construction Loan"). Proceeds from this loan were used to finance the development and construction of a 164,600 square-foot industrial building in Houston, Texas. The construction loan matures on December 5, 2028, with two 12-month extension options available.

Outstanding principal on the construction loan as of September 30, 2026 was approximately $6.9 million. Borrowings under this loan agreement bear interest at floating rates based on 1-month SOFR plus a margin of 2.5%. As of September 30, 2026, the interest rate on borrowings was 6.25%. As of September 30, 2026, approximately $126,000 of interest on the outstanding construction loan balance and approximately $65,000 of financing costs were capitalized as work in progress real estate asset.

Deferred Financing Costs

Deferred financing costs related to the A&R Credit Agreement were approximately $1.6 million (paid in January 2026) and are amortized using the straight-line method over 3.2 years (the term of the 2026 KeyBank Credit Facility). Deferred financing costs related to the previous KeyBank credit agreement had been fully amortized when we entered into the A&R Credit Agreement and written off. Deferred financing costs for the KeyBank credit agreements are presented as a deferred asset on our consolidated balance sheets, net of accumulated amortization.

Deferred financing costs related to the Thrivent Term Loan were approximately $1.7 million (paid in September 2025), and are amortized using the effective interest method over the term of the loan.

During the three and nine months ended September 30, 2026 and 2025, we recognized the following amortization expense related to the KeyBank credit facility and Thrivent Term loan:


	Three Months Ended				Nine Months Ended
($s in thousands)	September 30, 2026		September 30, 2025		September 30, 2026		September 30, 2025
KeyBank credit facility	$	137	$	342	$	354	$	971
Thrivent term loan		77		—		229		—
Total	$	214	$	342	$	583	$	971

Note 7. Operating Leases

Lessor Disclosures

The Company leases industrial real estate to tenants under operating leases with a weighted-average remaining lease term of 3.3 years as of September 30, 2026. The leases typically provide for base rent and other charges to cover certain operating expenses. Some of our operating leases include options to extend the lease term. For purposes of determining the lease term and lease classification, we exclude these extension periods unless it is reasonably certain at lease commencement that the option will be exercised.

As of September 30, 2026, future base rent under non-cancelable leases were as follows, assuming no exercise of lease renewal options, if any:


($s in thousands)
2026	$	7,119
2027		25,930
2028		20,675
2029		17,852
2030		9,237
Thereafter		20,189
Total	$	101,002

As of September 30, 2026 and December 31, 2025, security deposit liabilities of $774,000 and $895,000, respectively, were included in accounts payable and accrued expenses on our consolidated balance sheets.

Lessee Disclosures

We are a lessee to a ground lease associated with an industrial property acquired in 2025. The lease terminates on March 31, 2059 with one ten-year renewal option. As of September 30, 2026, the ground lease had a remaining lease term of 32.5 years. The ROU asset and lease liability associated with the ground lease was calculated by discounting future ground lease payments at the Company's incremental borrowing rate at 6.74% as of the acquisition date.

The following table details the future lease payments due under the ground lease as of September 30, 2026:


($s in thousands)
2026	$	41
2027		166
2028		166
2029		170
2030		172
Thereafter		5,322
Total lease payment		6,037
Difference between undiscounted cash flows and discounted cash flow		(3,695	)
Total lease liability	$	2,342

Note 8. Commitments and Contingencies

From time to time in the normal course of our business, we may be party to legal proceedings arising from the ownership and operation of our industrial properties. We believe that the liabilities, if any, that may result from such legal proceedings will not have a materially adverse effect on our consolidated financial position, operations, or liquidity.

Note 9. Equity

As of September 30, 2026, the Partners' respective ownership interests, life-to-date contributions and redemptions or repurchases were as follows:


($s in thousands)	% Owned			# of Units Owned (1)		# of OP Units Owned		Contributions (2)		Redemptions/Repurchases (3)
Formation Contribution
General Partner (4)		0.0	%		56		55	$	10	$	—
SCI-II (4)		0.6	%		55		27,092		2,450		—
Total Formation Contribution		0.6	%		111		27,147		2,460		—

Private Offering
Class A Limited Partners		63.7	%		2,687,228		—		251,792		(9,269	)
Class I Limited Partners		3.0	%		128,399		—		51,588		(40,000	)
Class R Limited Partners		32.7	%		1,378,572		—		128,232		(3,817	)
Total Limited Partners		99.4	%		4,194,199		—		431,612		(53,086	)

Total		100.0	%		4,194,310		27,147	$	434,072	$	(53,086	)

(1)

Includes 4,607,953 Units issued under the Private Offering and 174,457 Units issued pursuant to the Partnership's DRIP, and net of 588,211 Units redeemed or repurchased.

(2)

Includes approximately $415.9 million of initial contributions under the Private Offering and approximately $15.7 million of DRIP contributions.

(3)

Redemptions/repurchases amounts reflect 102,709 Class A Units, 443,213 Class I Units, and 42,289 Class R Units redeemed or repurchased.

(4)

Numbers of Units and OP Units rounded to show the correct totals owned by the GP and SCI-II.

Private Offering

In April 2022, we commenced the Private Offering of Units for up to $750 million, expandable to $1 billion at the sole discretion of the GP. All classes of Units differ only with respect to the fees paid to broker-dealers in connection with their sale and are viewed as the same ownership interest.

The following tables set forth the net proceeds raised from the Private Offering and the number of Units issued for the three and nine months ended September 30, 2026 and 2025:


	Three Months Ended								Nine Months Ended
	September 30, 2026				September 30, 2025				September 30, 2026				September 30, 2025
($s in thousands)	# of Units Issued		Proceeds		# of Units Issued		Proceeds		# of Units Issued		Proceeds		# of Units Issued		Proceeds
Class A		89,675	$	8,094		106,541	$	9,615		257,259	$	23,218		367,949	$	33,206
Class I		2,216		200		—		—		2,216		200		14,404		1,300
Class R		37,346		3,371		53,730		4,849		101,047		9,120		221,010		19,946
Total		129,237	$	11,665		160,271	$	14,464		360,522	$	32,538		603,363	$	54,452

The Partnership's DRIP allows the Limited Partners to elect to have their cash distributions attributable to the class of Units owned automatically reinvested in additional Units of the same class. The following tables set forth the DRIP contributions

received, and the number of Units issued pursuant to the DRIP, during the three and nine months ended September 30, 2026 and 2025:


	Three Months Ended								Nine Months Ended
	September 30, 2026				September 30, 2025				September 30, 2026				September 30, 2025
($s in thousands)	# of Units Issued		DRIP Proceeds		# of Units Issued		DRIP Proceeds		# of Units Issued		DRIP Proceeds		# of Units Issued		DRIP Proceeds
Class A		12,617	$	1,139		10,525	$	950		36,296	$	3,276		29,214	$	2,637
Class I		520		47		530		48		1,543		139		1,674		151
Class R		6,070		548		5,281		477		17,983		1,623		14,269		1,288
Total		19,207	$	1,734		16,336	$	1,475		55,822	$	5,038		45,157	$	4,076

Distributions

The Company's distributable cash, as defined in the partnership agreement of the Partnership (as amended from time to time, the "Partnership Agreement"), is apportioned among the Limited Partners pro rata in accordance with their respective Units and pursuant to the distribution waterfall, which may include distributions to SIP IV Investor in respect of its subordinated participation interest. Distributions to each Limited Partner other than the GP will be distributed in the following order of priority:

first, to the Limited Partner until such Limited Partner’s preferred return account balance is reduced to zero. Preferred return means 6% cumulative, non-compounding annual return on the Limited Partners’ unreturned capital account balances;

ii.

second, to the Limited Partner until such Limited Partner’s unreturned capital account balance is reduced to zero; and

iii.

20% of the remaining distributable cash to SIP IV Investor as its subordinated participation interest and 80% to Limited Partners.

In each of the nine months ended September 30, 2026 and 2025, the Company made distributions at an annualized rate of $4.05 per unit to holders of Units of record as of the last day of each quarter, payable the following month. Distributions payable as of September 30, 2026 and December 31, 2025 were approximately $4.2 million and $3.9 million, respectively.

Redemptions

In accordance with the Partnership Agreement, Limited Partners who have held their Units for at least one year may request to have the Company redeem, in part or in whole, Units held by such Limited Partners. The redemption price for Limited Partners who have held their Units for at least one year but less than two years will equal ninety-five percent of the then current gross offering price. As the distributable cash of the Company permits, a redemption request shall be accommodated as determined by the GP in its sole discretion. To the extent the redemption amount, as defined in the Partnership Agreement, exceeds the Limited Partner's preferred return account and unreturned capital, 80% of such excess will be paid to the Limited Partner, and 20% to SIP IV Investor as part of its subordinated participation interest.

Any redemption request that would result in the Limited Partner owning less than $50,000 in Units (based upon the per Unit net asset value then in effect) shall be deemed to be a request for redemption of all such Limited Partner’s Units.

The following table sets forth the redemptions processed pursuant to the Partnership Agreement, during the three and nine months ended September 30, 2026 and 2025:


	Three Months Ended								Nine Months Ended
	September 30, 2026				September 30, 2025				September 30, 2026				September 30, 2025
($s in thousands)	# of Units		$		# of Units		$		# of Units		$		# of Units		$
Redemptions		39,912	$	3,602		5,746	$	519		109,275	$	9,862		7,246	$	654

Preferred Equity

In December 2022, the SIP IV REIT issued 125 non-voting Series A preferred shares at $1,000 per share for aggregate consideration before expenses of $125,000. The SIP IV REIT pays preferred dividends at an annual rate of 12% per share, payable in two installments each year.

Note 10. Related-Party Transactions

The following is a summary of amounts incurred with the GP, Sealy, and their affiliates during the three and nine months ended September 30, 2026 and 2025:


	Three Months Ended				Nine Months Ended
($s in thousands)	September 30, 2026		September 30, 2025		September 30, 2026		September 30, 2025		Financial Statement Line
Acquisition fees	$	—	$	382	$	—	$	1,379	Real estate assets
Asset management fee	$	1,140	$	1,043	$	3,447	$	2,830	Asset management fee
Distribution fees	$	44	$	76	$	178	$	418	Prepaid expenses and other assets
Financing fees	$	—	$	526	$	750	$	876	Deferred financing costs; Term loan
Issuance costs	$	666	$	703	$	2,045	$	3,392	Issuance costs
Leasing commissions	$	—	$	88	$	44	$	93	Prepaid expenses and other assets
Property management fees	$	263	$	269	$	819	$	710	Property operating expenses
Other	$	470	$	247	$	984	$	739	Various

•

Acquisition fees – the Company pays Sealy an acquisition fee of up to 1.0% of the total contract purchase price for real estate assets acquired. The Company also reimburses Sealy for acquisition-related expenses.

•

Asset management fee – the Company pays the GP an asset management fee of up to 1.0% of the book value of assets under management (the “AUM”) per annum payable monthly. The AUM is not adjusted for accumulated depreciation. As of both September 30, 2026 and December 31, 2025, the asset management fee payable to the GP was $570,000.

•

Distribution fees – the Class R Unit is subject to a distribution fee of 0.25% of the Class R Unit price per annum, payable to Sealy Investment Securities, LLC ("SIS"), a Sealy affiliate and the managing broker-dealer for the Private Offering, from quarterly and liquidating distributions. The Company may prepay SIS, and has prepaid, the distribution fee in the amount of 2.5% of the Class R Unitholders’ gross contributions. As of September 30, 2026 and December 31, 2025, prepaid distribution fees were $2.1 million, and $2.2 million, respectively. The Company withholds from the investors’ quarterly distributions at an annual rate of 0.25% of gross contributions currently and will withhold from liquidating distributions, not to exceed 2.5% in total.

•

Financing fees – the GP may earn a financing coordination fee of up to 0.5% of the principal amount of new or refinanced loans for services related to loan negotiations.

•

Issuance costs – the Company reimburses Sealy and SIS for offering-related costs and costs in connection with the administration of the DRIP. The following table sets forth issuance costs we incurred with related parties for the respective periods:


	Three Months Ended				Nine Months Ended
(in thousands)	September 30, 2026		September 30, 2025		September 30, 2026		September 30, 2025
Issuance costs - Sealy	$	—	$	—	$	102	$	1,231
Issuance costs - SIS	$	666	$	703	$	1,943	$	2,161

As of September 30, 2026 and December 31, 2025, issuance costs payable to SIS were approximately $165,000 and $399,000, respectively; no issuance costs remained payable to Sealy.

Additionally, the Company may pay SIS an alternative selling commission on Class I Units not to exceed 4.25% of gross offering proceeds. During the three and nine months ended September 30, 2026, the Company incurred $1,000

in alternative selling commissions. During the three and nine months ended September 30, 2025, the Company incurred $55,000 in alternative selling commissions.

•

Property management fees and leasing commissions – the Company has property management agreements with Sealy, under which it pays a monthly property management fee of 2.00% to 4.00% of monthly gross receipts from the properties, less any management fee paid to a third party. Additionally, Sealy receives 50% of all late payments and returned checks collected. The property management agreements also state that Sealy may receive leasing commissions based on the market in which each property is located, less any commission paid to a third party.

•

Other costs – the Company has no employees and, in accordance with the Partnership Agreement and the confidential private placement memorandum of the Private Offering, periodically reimburses Sealy and its affiliates for costs incurred on its behalf. These costs include compensation for management and administrative personnel providing services such as accounting and property management, as well as compliance costs, consulting services related to insurance, property tax, design services, and other expenses such as postage and pursuit costs on dead deals. As of September 30, 2026 and December 31, 2025, approximately $89,000 and $21,000 of other costs remained payable, respectively.

Note 11. Concentration Risks

The Company currently owns real estate located primarily in the Southern and Midwestern United States. This geographic concentration creates a concentration of credit risk with respect to revenue generation. The Company has not experienced losses with respect to its geographic concentration.

As of September 30, 2026, one of the Company's 34 tenants had an annualized base rent representing 11.4% of total annualized base rent. This tenant owed $39,000 for current month property tax reimbursement as of September 30, 2026.

Note 12. Subsequent Events

On October 8, 2026, the Company closed the purchase of two industrial properties totaling approximately 306,000 square feet near Minneapolis, Minnesota for a combined purchase price of $34.4 million. Both properties are fully occupied with weighted average lease terms remaining of 1.2 and 5.1 years, respectively.

On October 9, 2026, the Company, through its wholly owned TRS, TRS JV, entered into a joint venture agreement with IDV Risinger L.L.C. to form Sealy IDV Risinger, LLC (the "IDV JV II"). IDV JV II acquired a land parcel in Fort Worth, Texas for development of an industrial property. The Company contributed $5.0 million to IDV JV II and maintains a 95% interest in IDV JV II.

On October 15, 2026, the Company contributed $55.1 million to Sealy Industrial II, DST ("DST-II") through its wholly owned TRS, TRS-I. On the same day, DST-II completed an acquisition of an industrial property of 534,000 square feet in Cincinnati, Ohio, for $55.0 million, plus transaction costs. TRS-I owned 100% of the beneficial interest in DST-II as of October 15, 2026. On October 16, 2026, DST-II commenced a private placement offering of up to 100% of its beneficial interests to certain qualified accredited investors (the "DST-II Offering"). The maximum offering amount is approximately $66.5 million. As the beneficial interests in DST-II are sold and investor contributions are received, DST-II will pay TRS-I for the purchase price plus transaction costs of the DST-II property, as well as a bridge carry fee of up to $2.6 million, or 3.9% of the maximum offering amount.

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 consolidated financial statements and notes thereto appearing elsewhere in this Quarterly Report on Form 10-Q and with our Annual Report on Form 10-K. We make statements in this section that are forward-looking statements within the meaning of the federal securities laws. Certain risks may cause our actual results, performance, or achievements to differ materially from those expressed or implied by the following discussion. For a complete discussion of such risk factors, see "Item 1A. Risk Factors" in our Annual Report on Form 10-K.

Capitalized terms used herein, but not otherwise defined, shall have the meanings ascribed to such terms in the Glossary immediately following the Table of Contents to this Quarterly Report on Form 10-Q or, if not defined therein, "Part I. Financial Information", "Item 1. Financials Statements" of this Quarterly Report on Form 10-Q, including the notes to the consolidated financial statements contained therein.

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements that involve known and unknown risks, uncertainties, and other factors. Undue reliance should not be placed upon such statements. These forward-looking statements are not historical facts, but rather are based on current expectations, estimates and projections about the Company, our current and prospective portfolio investments, our industry, our beliefs and opinions, and our assumptions. Words such as “anticipates,” “expects,” “intends,” “plans,” “will,” “may,” “continues,” “believes,” “seeks,” “estimates,” “would,” “could,” “should,” “targets,” “projects,” “outlook,” “potential,” “predicts” and variations of these words and similar expressions are intended to identify forward-looking statements. All forward-looking statements, by their nature, are subject to risks and uncertainties. Therefore, such statements are not intended to be a guarantee of the Company's performance in future periods. The Company's actual future results may differ materially from those set forth in the Company's forward-looking statements. For information concerning these factors and related matters, see "Item 1A. Risk

Factors" of our Annual Report on Form 10-K. However, other factors besides those referenced could adversely affect the Company’s results, and you should not consider any such list of factors to be a complete set of all potential risks or uncertainties. Any forward-looking statements made by the Company herein speak as of the date of this Quarterly Report on Form 10-Q. The Company does not undertake to update any forward-looking statement, except as required by law. As a result, you should not place undue reliance on these forward-looking statements.

Overview

We have invested, and intend to continue to invest, in well-located industrial real estate assets throughout the United States with an emphasis on purchasing properties at a discount to replacement cost that produce consistent, growing cash flow, and equity appreciation. The GP manages our day-to-day business and other affairs.

Our revenues and results of operations are affected by a variety of factors, including the conditions of national, local, and global economic and political environments, such as inflationary pressures, interest rates, supply chain configurations and disruptions, geopolitical risks (including the ongoing tension in the Middle East), the imposition of tariffs and other changes to trade policy in the U.S. and other jurisdictions, government shutdowns, and increased volatility in the financial markets.

In addition, inflation, which has been pronounced over the last several years, may result in higher general and administrative expenses for our Company and for our tenants. Insurance costs in certain markets have increased and may increase more than inflation due to property locations in high-risk markets and higher property replacement costs. Further, state and local governments may also look to increase real estate taxes and other related fees to offset higher operating expenses and lower revenues from other sources. While our properties typically are subject to triple-net or double-net leases, which means the tenant is obligated to pay for most of the expenses of operating and maintaining the property and property taxes, high insurance costs and real estate taxes may result in higher overall occupancy costs for tenants, which may result in a failure to make rental payments when due.

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

During the three months ended September 30, 2026, we accomplished the following:

•

Generated $9.7 million of total revenue, comparable to total revenue in the prior year quarter;

•

Raised $11.7 million of offering proceeds from the Private Offering by issuing an aggregate of 129,237 Units;

•

Paid $2.3 million of cash distributions in addition to reinvesting $1.7 million of distributions in accordance with the DRIP;

•

Substantially completed the development of the Aldine Westfield Property in Houston, Texas (see Note 4. Investment in Joint Venture in the accompanying unaudited consolidated financial statements for further details); and

•

Received $12.9 million of return of capital from our initial contribution to DST-I and recognized $0.9 million in income from our investment.

As of September 30, 2026:

•

Our portfolio consisted of 21 industrial properties in eight states with approximately 5.1 million square feet of GLA leased to 34 tenants;

•

The occupancy rate was 93.4% with an average remaining lease term of approximately 3.3 years;

•

$108.5 million remained available for borrowing under our 2026 KeyBank Credit Facility; and

•

We held a 95% interest through a TRS in the IDV JV (see Note 4. Investment in Joint Venture in the accompanying unaudited consolidated financial statements for further details).

The following tables set forth a summary of our consolidated financial data for the periods and dates indicated.


	Three Months Ended						Change			Nine Months Ended						Change
($s and units in thousands, except per-unit data)	September 30, 2026			September 30, 2025			$			September 30, 2026			September 30, 2025			$
Total revenues	$	9,699		$	9,759		$	(60	)	$	30,149		$	26,802		$	3,347
Total operating expenses	$	10,294		$	9,430		$	864		$	31,411		$	25,536		$	5,875
Net loss	$	(2,011	)	$	(1,375	)	$	(636	)	$	(6,399	)	$	(1,578	)	$	(4,821	)
Net loss attributable to Limited Partners	$	(2,002	)	$	(1,370	)	$	(632	)	$	(6,368	)	$	(1,580	)	$	(4,788	)
Weighted average number of Units outstanding, basic and diluted		4,164			4,101			63			4,076			3,883			193
Earnings per Unit, basic and diluted	$	(0.48	)	$	(0.33	)	$	(0.15	)	$	(1.56	)	$	(0.41	)	$	(1.15	)


	As of				Change
($s in thousands)	September 30, 2026		December 31, 2025		$			%
Real estate assets, at cost	$	428,847	$	448,914	$	(20,067	)		(4	%)
Cash and cash equivalents	$	26,211	$	12,199	$	14,012			115	%
Total assets	$	465,723	$	490,605	$	(24,882	)		(5	%)
Secured revolving credit facility	$	41,500	$	79,500	$	(38,000	)		(48	%)
Term loan, net	$	103,814	$	103,585	$	229			—
Construction loan	$	6,932	$	—	$	6,932			—
Total liabilities	$	173,772	$	204,266	$	(30,494	)		(15	%)
Total partners' capital	$	291,951	$	286,339	$	5,612			2	%

We continue to position ourselves for future acquisitions by continuing our capital raising efforts and by acquiring income-producing industrial and other commercial real estate properties located throughout the United States. We expect growing revenue and expenses with an expanding portfolio. Our future financial condition and results of operations, including rental revenues, will be impacted by future acquisitions (including the frequency, timing, size, and capitalization rates thereof), redevelopment and sale of properties, rental rate, occupancy rate, interest rate environment, and level of debt.

Results of Operations

For purposes of the discussions below, same-store properties are properties acquired before January 1, 2025 and held as in-service properties through September 30, 2026. Acquired properties are properties that were acquired on or after January 1, 2025 and held as in-service properties through September 30, 2026. Disposed properties includes an industrial property of 56,000 square feet sold on June 20, 2025 and the DST Property acquired on December 10, 2025 and contributed to DST-I on January 13, 2026.

Comparison of three months ended September 30, 2026 to three months ended September 30, 2025

Revenues decreased to $9.7 million in the three months ended September 30, 2026 from $9.8 million in the three months ended September 30, 2025, primarily due to $0.6 million higher revenue from acquired properties, offset by $0.7 million lower revenue from same-store properties. Revenues from same-store properties decreased primarily due to a 265,700-square-foot vacancy in the current quarter that contributed $0.6 million to the third quarter 2025 revenues, and a 140,400-square-foot vacancy in the current quarter that contributed $0.2 million to the third quarter 2025 revenues. This decrease was partially offset by a $0.1 million increase in tenant recoveries revenue.


		Three Months Ended
($s in thousands)		September 30, 2026		September 30, 2025		$ Change			% Change
Revenues
	Same-store properties	$	6,354	$	7,026	$	(672	)		(10	%)
	Acquired properties		3,345		2,733		612			22	%
		$	9,699	$	9,759	$	(60	)		(1	%)

Depreciation and amortization increased to $5.5 million in the three months ended September 30, 2026 from $5.0 million in the three months ended September 30, 2025, a $0.5 million increase driven by acquired properties.


		Three Months Ended
($s in thousands)		September 30, 2026		September 30, 2025		$ Change			% Change
Depreciation and Amortization
	Same-store properties	$	3,461	$	3,507	$	(46	)		(1	%)
	Acquired properties		2,057		1,499		558			37	%
		$	5,518	$	5,006	$	512			10	%

Taxes and insurance increased to $2.0 million in the three months ended September 30, 2026 from $1.9 million in the three months ended September 30, 2025, due to a $0.2 million increase from acquired properties.


		Three Months Ended
($s in thousands)		September 30, 2026		September 30, 2025		$ Change			% Change
Taxes and Insurance
	Same-store properties	$	1,219	$	1,273	$	(54	)		(4	%)
	Acquired properties		773		586		187			32	%
	Disposed properties		1		—		1			—
		$	1,993	$	1,859	$	134			7	%

Asset management fees increased to $1.1 million in the three months ended September 30, 2026 from $1.0 million in the three months ended September 30, 2025 as a direct result of an increase in the value of assets under management due to acquired properties.

Property operating expenses remained consistent at $0.9 million in the three months ended September 30, 2026 as compared to the three months ended September 30, 2025. The $21,000 decrease from acquired properties was due to non-routine common area maintenance projects in the prior year quarter not needed in the current year quarter.


		Three Months Ended
($s in thousands)		September 30, 2026		September 30, 2025		$ Change			% Change
Property Operating Expenses
	Same-store properties	$	655	$	622	$	33			5	%
	Acquired properties		283		304		(21	)		(7	%)
	Disposed properties		—		1		(1	)		(100	%)
	Corporate		6		5		1			20	%
		$	944	$	932	$	12			1	%

General and administrative expense increased to $0.7 million for the three months ended September 30, 2026 from $0.6 million for the three months ended September 30, 2025, a $0.1 million increase, primarily due to pursuit costs for a terminated real estate acquisition transaction in the current year quarter.


		Three Months Ended
($s in thousands)		September 30, 2026		September 30, 2025		$ Change			% Change
General and Administrative
	Same-store properties	$	5	$	8	$	(3	)		(38	%)
	Acquired properties		3		11		(8	)		(73	%)
	Corporate		691		571		120			21	%
		$	699	$	590	$	109			18	%

Investment income increased to approximately $0.9 million for the three months ended September 30, 2026 due to income from our investment in DST-I. We did not recognize any investment income during the three months ended September 30, 2025.

Interest expense increased by approximately $0.4 million from $1.8 million for the three months ended September 30, 2025 to just under $2.2 million for the three months ended September 30, 2026, as a result of higher outstanding debt balance partially offset by a lower weighted average interest rate during the current year period. The weighted average balance outstanding during the three months ended September 30, 2026 was $136.3 million, as compared to $82.7 million during the three months ended September 30, 2025. Weighted average interest rate on our borrowings, inclusive of the impact of unused fees on the credit facilities, decreased from 6.89% for the three months ended September 30, 2025 to 5.82% for the three months ended September 30, 2026. Noncash interest expense decreased by approximately $0.1 million due to deferred financing costs on the 2026 KeyBank Credit Facility amortizing over a longer term than the deferred financing cost on the previous KeyBank credit facility.

Income taxes were approximately $0.2 million for the three months ended September 30, 2026 due to provisions made for federal and state income taxes. No such provisions were made in the three months ended September 30, 2025. See "Note 2. Summary of Significant Accounting Policies and Recent Accounting Pronouncement – Income Taxes" for more information.

Our net loss for the three months ended September 30, 2026 was $2.0 million, as compared to $1.4 million for the three months ended September 30, 2025. The change was primarily a result of a $0.4 million increase in interest expense in the current year quarter, a $0.5 million increase in depreciation and amortization in the current year quarter, $0.1 million increases in each of property taxes and insurance, general and administrative and asset management fees in the current year quarter, offset by a $0.7 million increase in income from DST investment net of estimated income taxes during the three months ended September 30, 2026.

Comparison of nine months ended September 30, 2026 to nine months ended September 30, 2025

Revenues increased to $30.2 million in the nine months ended September 30, 2026 from $26.8 million in the nine months ended September 30, 2025, primarily due to $5.6 million higher revenue from acquired properties partially offset by $1.9 million lower revenue from same store properties. Revenues from same store properties decreased primarily due to a 265,700-square-foot vacancy in the current period that contributed $1.8 million to the first nine months of 2025 revenues, and a 140,400-square-foot vacancy in the current period that contributed $0.8 million to the first nine months of 2025 revenues. The decrease was partially offset by an increase of $0.2 million in tenant recoveries revenue.


		Nine Months Ended
($s in thousands)		September 30, 2026		September 30, 2025		$ Change			% Change
Revenues
	Same-store properties	$	19,714	$	21,649	$	(1,935	)		(9	%)
	Acquired properties		10,356		4,799		5,557			116	%
	Disposed properties		79		354		(275	)		(78	%)
		$	30,149	$	26,802	$	3,347			12	%

Depreciation and amortization increased to $16.7 million in the nine months ended September 30, 2026 from $13.1 million in the nine months ended September 30, 2025, a $3.5 million increase driven by acquired properties.


		Nine Months Ended
($s in thousands)		September 30, 2026		September 30, 2025		$ Change			% Change
Depreciation and Amortization
	Same-store properties	$	10,456	$	10,495	$	(39	)		—
	Acquired properties		6,169		2,562		3,607			141	%
	Disposed properties		64		90		(26	)		(29	%)
		$	16,689	$	13,147	$	3,542			27	%

Taxes and insurance increased to $6.5 million in the nine months ended September 30, 2026 from $5.3 million in the nine months ended September 30, 2025, a $1.2 million increase driven by acquired properties.


		Nine Months Ended
($s in thousands)		September 30, 2026		September 30, 2025		$ Change			% Change
Taxes and Insurance
	Same-store properties	$	4,089	$	4,099	$	(10	)		—
	Acquired properties		2,361		1,116		1,245			112	%
	Disposed properties		17		61		(44	)		(72	%)
		$	6,467	$	5,276	$	1,191			23	%

Asset management fees increased to $3.4 million in the nine months ended September 30, 2026 from $2.8 million in the nine months ended September 30, 2025 as a direct result of an increase in the value of assets under management due to acquired properties.

Property operating expenses increased to $3.0 million in the nine months ended September 30, 2026 from $2.4 million in the nine months ended September 30, 2025, mostly driven by acquired properties. The $197,000 increase of property operating expenses for same-store properties is driven by several maintenance projects in the current year period including pressure washing, landscaping, plumbing, painting and parking lot repair at properties throughout the Southern U.S.


		Nine Months Ended
($s in thousands)		September 30, 2026		September 30, 2025		$ Change			% Change
Property Operating Expenses
	Same-store properties	$	2,148	$	1,951	$	197			10	%
	Acquired properties		831		420		411			98	%
	Disposed properties		5		40		(35	)		(88	%)
	Corporate		17		16		1			6	%
		$	3,001	$	2,427	$	574			24	%

General and administrative expense decreased to $1.8 million for the nine months ended September 30, 2026 from $1.9 million for the nine months ended September 30, 2025, a $0.1 million decrease, primarily due to lower legal fees associated with public reporting and filings under the Exchange Act. Most of the legal fees incurred in the nine months ended September 30, 2025 were associated with the Company's initial registration statement filing with the SEC. This is partially offset by increased pursuit costs on a terminated real estate acquisition in the nine months ended September 30, 2026.


		Nine Months Ended
($s in thousands)		September 30, 2026			September 30, 2025		$ Change			% Change
General and Administrative
	Same-store properties	$	49		$	48	$	1			2	%
	Acquired properties		34			38		(4	)		(11	%)
	Disposed properties		(5	)		1		(6	)		(600	%)
	Corporate		1,729			1,769		(40	)		(2	%)
		$	1,807		$	1,856	$	(49	)		(3	%)

Investment income increased to approximately $2.5 million for the nine months ended September 30, 2026 due to income from the Company's investment in DST-I. The Company did not recognize any investment income during the nine months ended September 30, 2025.

Interest expense increased by approximately $3.1 million from $4.1 million for the nine months ended September 30, 2025 to $7.2 million for the nine months ended September 30, 2026, as a result of higher outstanding debt balance partially offset by a lower weighted average interest rate during the current year period. The weighted average balance outstanding during the nine months ended September 30, 2026 was $153.3 million, as compared to $60.2 million during the nine months ended September 30, 2025. Weighted average interest rate on our borrowings, inclusive of the impact of unused fees on the credit facilities, decreased from 6.96% for the nine months ended September 30, 2025 to 5.73% for the nine months ended September 30, 2026. Noncash interest expense decreased by approximately $0.4 million in the nine months ended September 30, 2026 as compared to the nine months ended September 30, 2025 due to deferred financing costs on the 2026 KeyBank Credit Facility amortizing over a longer period than the deferred financing costs on the previous KeyBank credit facility.

Gain on sale of real estate assets was $1.2 million in the nine months ended September 30, 2025 from the disposition of a 56,000 square-foot industrial property in Sulphur, Louisiana. We did not make any dispositions in the nine months ended September 30, 2026. Please see "Note 3. Investment in Real Estate" for more information.

Income taxes were approximately $0.6 million for the nine months ended September 30, 2026 due to provisions made for federal and state income taxes. No such provisions were made in the nine months ended September 30, 2025. See "Note 2. Summary of Significant Accounting Policies and Recent Accounting Pronouncement – Income Taxes" for more information.

Our net loss for the nine months ended September 30, 2026 was $6.4 million, as compared to $1.6 million for the nine months ended September 30, 2025. The change was primarily a result of an increase of $3.3 million in revenue and a $1.9 million increase of income from our DST investment net of income taxes, offset by a $3.1 million increase in interest expense, a $3.5 million increase in depreciation and amortization, a $1.2 million increase in property taxes and insurance, a $0.6 million increase in asset management fees, and a $0.6 million increase in property expenses in the current year period. Further, we recognized a $1.2 million gain from dispositions of real estate assets in the prior year period; no such gain has been recognized in the current year period.

Liquidity and Capital Resources

Cash Flow Activity

The following table summarizes our cash flow activities for the nine months ended September 30, 2026 and 2025 respectively:


	Nine Months Ended						Change
($s in thousands)	September 30, 2026			September 30, 2025			$			%
Net cash provided by operating activities	$	11,846		$	11,842		$	4			—
Net cash provided by (used in) investing activities	$	21,157		$	(133,012	)	$	154,169			116	%
Net cash provided by (used in) financing activities	$	(18,991	)	$	122,877		$	(141,868	)		(115	%)

Changes in cash flow for the nine months ended September 30, 2026 as compared to the nine months ended September 30, 2025 are described as follows:

Operating Activities: Cash provided by operating activities was $11.8 million in the nine months ended September 30, 2026, consistent with that in the nine months ended September 30, 2025, primarily due to the following:

•

$2.5 million of bridge carry fees and distribution received from DST-I in the nine months ended September 30, 2026; no such fees or distributions were received in the nine months ended September 30, 2025;

•

$1.0 million increase in revenue net of property taxes and insurance, asset management fees, property operating expenses, and general and administrative expenses in the nine months ended September 30, 2026;

•

$0.3 million increase in working capital in the nine months ended September 30, 2026, which is a result of timing of payments and receipts of prepaid expenses and other assets, accounts payable and accrued expenses, and deferred revenues; offset by

•

$3.7 million more cash paid for interest in the nine months ended September 30, 2026.

Investing Activities: Cash provided by investing activities was $21.2 million in the nine months ended September 30, 2026, as compared to using $133.0 million for investing activities in the nine months ended September 30, 2025, primarily due to the following:

•

Paid $1.7 million of earnest money towards pending real estate acquisitions and no closings in the nine months ended September 30, 2026, as compared to $140.3 million used to acquire real estate assets in the nine months ended September 30, 2025;

•

Used $9.9 million more of capital to the IDV JV in the nine months ended September 30, 2026; and

•

Received $33.4 million return of investment from DST-I in the nine months ended September 30, 2026.

Financing Activities: $19.0 million was used in financing activities in the nine months ended September 30, 2026 as compared to $122.9 million provided by financing activities in the nine months ended September 30, 2025, a $141.9 million decrease in cash, primarily due to the following:

•

Net revolving credit facility repayments of $38.0 million in the nine months ended September 30, 2026, as compared to net repayments of $21.5 million in the nine months ended September 30, 2025;

•

Used $9.9 million to redeem 109,275 Units in the nine months ended September 30, 2026, as compared to $0.6 million used to redeem 7,246 Units in the nine months ended September 30, 2025;

•

Proceeds from the Private Offering were $20.7 million lower in the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2025;

•

Paid $1.0 million less in financing costs in the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2025;

•

Payments for issuance costs decreased $1.5 million in the nine months ended September 30, 2026, as compared to the nine months ended September 30, 2025; and

•

No proceeds from term loan in the nine months ended September 30, 2026, as compared to $105.2 million in proceeds from term loan in the nine months ended September 30, 2025.

The following table outlines gross distributions paid out (exclusive of impact of accruals) and sources used to fund the distributions for the periods as indicated:


	Nine Months Ended September 30, 2026						Nine Months Ended September 30, 2025
($s in thousands)	Amount			Percentage			Amount		Percentage
Net cash provided by operating activities	$	11,846					$	11,842

Distributions
Paid in cash	$	6,836			57	%	$	6,258		61	%
DRIP		5,244			43	%		4,075		39	%
Total	$	12,080			100	%	$	10,333		100	%
Sources of Distributions
Cash flows from operating activities	$	11,846			98	%	$	10,333		100	%
Cash flows from operating activities from prior period		234	(1)		2	%		-		0	%
Total	$	12,080			100	%	$	10,333		100	%

(1) Cash flows from operating activities include working capital changes, which fluctuate throughout the year. Cash flows from operating activities for the year ended December 31, 2025 of $15.9 million exceeded distributions (including DRIP) for the year ended December 31, 2025 of $15.3 million by $0.5 million. Cash flows from operating activities for the year ended December 31, 2024 of $14.4 million exceeded distributions (including DRIP) for the year ended December 31, 2024 of $11.6 million by $2.8 million.

Material Cash Requirements

We have considered our short-term liquidity needs over the next 12 months and the adequacy of our estimated cash flow from operations and other expected liquidity sources to meet these needs. We believe that our principal short-term liquidity needs are:

•

to fund normal recurring expenses, property acquisitions, renovations, expansions and other nonrecurring capital improvements, debt service requirements, the minimum distributions required to maintain the SIP IV REIT’s qualification as a REIT under the Code and distributions approved by the GP. We anticipate that these needs will be met with cash flows provided by operating activities; and

•

to fund property acquisitions.

These needs will be met by proceeds from the Private Offering as well as borrowings under our credit facilities. The A&R Credit Agreement we entered into on January 15, 2026 increased the borrowing capacity under the KeyBank credit facility from $100.0 million to $150.0 million and extended the maturity date to March 30, 2029, with the option for a 12-month extension upon satisfaction of certain conditions. As of September 30, 2026, $41.5 million is outstanding under the 2026 KeyBank Credit Facility and $108.5 million remained available for borrowing.

We expect to meet long-term liquidity requirements such as property acquisitions, developments, scheduled debt maturities, distributions, major renovations, expansions, and other nonrecurring capital improvements through cash flow from operations, long-term unsecured and secured indebtedness, the disposition of select assets, and the issuance of additional equity or debt securities, subject to market conditions.

We were in compliance with our financial covenants as of September 30, 2026, and we anticipate that we will be able to operate in compliance with our financial covenants throughout 2026. However, these financial covenants are complex and there can be no assurance that these provisions would not be interpreted by our lender in a manner that could impose and cause us to incur material costs and our access to borrowings on our 2026 KeyBank Credit Facility may be limited if we fail to meet any of these covenants.

Off-Balance Sheet Arrangements

At September 30, 2026, we had one letter of credit in lieu of cash security deposit totaling $0.5 million, which was not reflected as a liability on our balance sheets, nor was any cash reflected as an asset on our balance sheets. We had no other off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, results of operation or liquidity and capital resources.

Inflation

Many of our leases contain provisions designed to mitigate the adverse impact of inflation, including contractual rent escalations and requirements for tenants to pay their proportionate share of property operating expenses, including common area expenses, utilities, insurance, and real estate taxes, and certain capital expenditures related to the maintenance of our properties, thereby reducing our exposure to increases in property operating expenses resulting from inflation. However, under our leases we typically have exposure to increases in non-reimbursable property operating expenses, including expenses incurred related to vacant premises. In addition, we believe that some of the existing rental rates under our leases subject to renewal are below current market rates for comparable space and that upon renewal or re-leasing, such rates may be increased to be consistent with, or closer to, current market rates, which may also offset our exposure to inflationary expense pressures related to our leased properties. We also have exposure to inflation with respect to potential significant capital improvements. With respect to our outstanding indebtedness, we periodically evaluate our exposure to interest rate fluctuations, and may enter into derivatives or caps that mitigate, but do not eliminate, the impact of changes in interest rates on our 2026 KeyBank Credit Facility.

Non-GAAP Measure

We use net operating income ("NOI") as a supplemental operating performance measure. Historical cost accounting for real estate assets in accordance with GAAP implicitly assumes that the value of real estate assets diminishes predictably over time through depreciation. Since real estate values have historically risen or fallen with market conditions, investors and many industry analysts find it useful to supplement operating results that use historical cost accounting with measures such as NOI, among others. We provide information related to NOI because such industry analysts are interested in such information, and because our management believes NOI is an important performance measure.

NOI should not be considered as a substitute for net income or any other measures derived in accordance with GAAP. NOI does not represent cash generated from operating activities in accordance with GAAP and should not be considered as an alternative to cash flow from operating activities as a measure of our liquidity, nor is it indicative of funds available for our cash needs, including our ability to make cash distributions.

Net Operating Income

NOI is a non-GAAP supplemental measure of operating performance. We use NOI to evaluate and compare the performance of our properties to other comparable properties, to determine trends in earnings, and to compute the fair value of our properties. We define NOI as revenues minus property operating expenses such as real estate taxes, repairs and maintenance, property management, utilities, insurance, and other expenses, which is calculated by excluding the following items from net income computed in accordance with GAAP:

•

depreciation and amortization;

•

general and administrative expense;

•

asset management fees;

•

impact of straight-line rent;

•

amortization of above/below market leases;

•

interest income and expense;

•

gains and losses on the sale of real estate; and

•

equity in income and loss from joint ventures.

The table below is a reconciliation from our GAAP net loss to NOI, without adjusting for the effects of noncontrolling interests, for the three and nine months ended September 30, 2026 and 2025:


	Three Months Ended						Nine Months Ended
($s in thousands)	September 30, 2026			September 30, 2025			September 30, 2026			September 30, 2025
Net loss	$	(2,011	)	$	(1,375	)	$	(6,399	)	$	(1,578	)

Adjustments:
Depreciation and amortization		5,518			5,006			16,689			13,147
Asset management fee		1,140			1,043			3,447			2,830
General and administrative		699			590			1,807			1,856
Straight-line rent		(84	)		(254	)		(317	)		(825	)
Above/below market rent intangibles amortization		(291	)		(247	)		(876	)		(624	)
Interest expense		2,196			1,767			7,175			4,114
Interest income		(50	)		(58	)		(115	)		(113	)
Income from DST Investment		(938	)		—			(2,548	)		—
Gain on sale of real estate assets		—			(5	)		—			(1,157	)
Income taxes		208			—			625			—
Total adjustments		8,398			7,842			25,887			19,228

NOI	$	6,387		$	6,467		$	19,488		$	17,650

Our NOI may not be comparable to same-store NOI or similar measures reported by other real estate companies who define NOI differently. The major factors influencing NOI are occupancy levels, rental rate increases or decreases, and tenant recoveries increases or decreases. Our success depends on our ability to lease space and to recover the operating costs associated with those leases from our tenants.

The following table breaks down our NOI by same store properties, acquired properties and other for the three and nine months ended September 30, 2026 and 2025:


	Three Months Ended							Nine Months Ended
($s in thousands)	September 30, 2026				September 30, 2025			September 30, 2026			September 30, 2025
Same-store properties
Revenues	$	6,354			$	7,026		$	19,714		$	21,649
Expenses		(1,874	)			(1,895	)		(6,237	)		(6,050	)
Same-store NOI before adjustments		4,480				5,131			13,477			15,599
Adjustments:
Straight-line rent		(36	)			(171	)		(153	)		(674	)
Above/below market rent intangibles amortization		(134	)			(142	)		(404	)		(427	)
Same Store NOI	$	4,310		(1)	$	4,818		$	12,920		$	14,498

Acquired properties
Revenues	$	3,345			$	2,733		$	10,356		$	4,799
Expenses		(1,056	)			(890	)		(3,192	)		(1,536	)
Acquired properties NOI before adjustments		2,289				1,843			7,164			3,263
Adjustments:
Straight-line rent		(48	)			(83	)		(180	)		(144	)
Above/below market rent intangibles amortization		(157	)			(105	)		(470	)		(197	)
Acquired properties NOI	$	2,084			$	1,655		$	6,514		$	2,922

Disposed properties and other
Revenues	$	—			$	—		$	79		$	354
Expenses		(7	)			(6	)		(39	)		(117	)
Disposed properties and other NOI before adjustments		(7	)			(6	)		40			237
Adjustments:
Straight-line rent		—				—			16			(7	)
Above/below market rent intangibles amortization		—				—			(2	)		—
Disposed properties and other NOI	$	(7	)		$	(6	)	$	54		$	230

Total NOI	$	6,387			$	6,467		$	19,488		$	17,650

(1) Same-store NOI decreased in the three and nine months ended September 30, 2026 by approximately $0.5 million and $1.6 million, respectively, as compared to the three and nine months ended September 30, 2025. This is due to vacancies in two units where tenants contributed approximately $0.8 million and $2.6 million in rental revenue in the three and nine months ended September 30, 2025, respectively. This is partially offset due to a decrease in straight-line rent adjustment associated with these terminations.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not applicable for smaller reporting companies.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management is responsible for establishing and maintaining a system of disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) that is designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.


Georgia	88-1030040
( State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
333 Texas Street, Suite 1050, Shreveport, LA	71101
(Address of principal executive offices)	(Zip Code)


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
Emerging growth company	☒


Annualized Base Rental Revenue	Contractual monthly base rent as of September 30, 2026 (which differs from rent calculated in accordance with GAAP) multiplied by 12. If a tenant is in a free rent period as of September 30, 2026, the total annualized base rental revenue is calculated based on the first contractual monthly base rent amount multiplied by 12.
Capitalization Rate	Commonly referred to as Cap Rate, determined by dividing the property’s net operating income by its purchase price.
Cash Rent Rate Change	The percentage change comparing the cash base rent of the new or renewal lease commenced during the period to the cash base rent of the last expiring comparable lease for in-service properties. The calculation compares the first cash base rent payment due after the lease commencement date to the cash base rent of the last monthly payment due prior to the termination of the lease, excluding holdover rent. All leases that are short-term, which is defined as less than 24 months, are excluded from the calculation.
Code	Internal Revenue Code of 1986, as amended.
Comparable Lease	A lease in the same space with a similar lease structure as the previous in-place lease.
DRIP	Distribution reinvestment plan.
DST	Delaware statutory trust.
Exchange Act	The Securities Exchange Act of 1934, as amended.
GAAP	Generally accepted accounting principles in the United States.
GLA	Gross leasable area.
In-service Property	A property is deemed as in service unless it is considered a value-add or redevelopment property. Properties are placed back in service upon the earlier of attaining 90% occupancy or 12 months after the move-out or completion of redevelopment.
NAV	Net asset value, which means the market value of all of a company’s assets, including but not limited to its real estate assets, after subtracting the market value of all of its liabilities.
New Lease	A lease that is signed for an initial term equal to or greater than 12 months for any vacant space, including a lease signed by a new tenant or an existing tenant that is expanding into new (additional) space.
Occupancy Rate	Leased and commenced square footage divided by gross leasable square footage.
REIT	Real estate investment trust.
Renewal Lease	A lease signed by an existing tenant to extend the term for 12 months or more, including (i) a renewal of the same space as the current lease at lease expiration, (ii) a renewal of only a portion of the current space at lease expiration, or (iii) an early renewal or workout, which ultimately does extend the original term for 12 months or more.
Retention Rate	The percentage of tenants that renewed during a fiscal year, based on the month when the activity physically impacts the occupancy. A space is considered retained (i) if a space is backfilled within one month of move-out with a positive rent rate change on either cash or GAAP basis; or (ii) if a sub-lessee signs a lease for longer than 24 months upon expiration of the original lease. Space is excluded from retention in the following situations: (i) renewal or new leases for less than 24 months; (ii) early terminations and bankruptcies; or (iii) if a move-out is expected within the first 12 months of acquisition.
Same Store Properties/Acquired Properties	Same Store Properties are properties acquired before January 1, 2025 and held as in-service properties at September 30, 2026. Acquired Properties are properties acquired on or after January 1, 2025 and held as in-service properties at September 30, 2026.
SEC	The Securities and Exchange Commission.
Securities Act	The Securities Act of 1933, as amended.
TRS	Taxable REIT subsidiary.
Value-Add/Redevelopment Properties	Properties that meet any of the following criteria: (i) less than 75% occupied as of the acquisition date or will be less than 75% occupied due to known move-outs within two years of the acquisition date; or (ii) 20% or greater of the acquisition cost will be spent to redevelop the property within 24 months of the acquisition date.
Weighted-Average Lease Term	The contractual lease term in years, assuming that tenants exercise no renewal options, purchase options, or early termination rights, weighted by annualized base rent revenue.


Exhibit No.	Description
3.1	Certificate of Limited Partnership (incorporated by reference to Exhibit 3.1 to the registrant’s Registration Statement on Form 10 (Commission File No. 000-56738) filed on April 21, 2025)
3.2	First Amended and Restated Agreement of Limited Partnership of Sealy Industrial Partners IV, LP, dated as of April 22, 2022 (incorporated by reference to Exhibit 3.2 to the registrant’s Registration Statement on Form 10 (Commission File No. 000-56738) filed on April 21, 2025)
3.3	Sealy Industrial Partners IV REIT, LLC Limited Liability Company Agreement, dated as of February 25, 2022 (incorporated by reference to Exhibit 3.3 to the registrant’s Registration Statement on Form 10 (Commission File No. 000-56738) filed on April 21, 2025)
3.4	First Amended and Restated Agreement of Limited Partnership of Sealy Industrial Partners IV OP, LP, dated as of April 22, 2022 (incorporated by reference to Exhibit 3.4 to the registrant’s Registration Statement on Form 10 (Commission File No. 000-56738) filed on April 21, 2025)
4.1	Form of Subscription Agreement (incorporated by reference to Exhibit 3.2 to the registrant’s Registration Statement on Form 10 (Commission File No. 000-56738) filed on April 21, 2025)
4.2	Distribution Reinvestment Plan (incorporated by reference to Exhibit 3.2 to the registrant’s Registration Statement on Form 10 (Commission File No. 000-56738) filed on April 21, 2025)
31.1 *	Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2 *	Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1 **	Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS *	Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH *	Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents
104 *	Cover Page Interactive Date File (formatted as Inline XBRL and contained in Exhibit 101)

*	Filed herewith
**	In accordance with Item 601(b)(32) of Regulation S-K, this Exhibit is not deemed "filed" for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section. Such certifications will not be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act except to the extent that the registrant specifically incorporates it by reference.


		SEALY INDUSTRIAL PARTNERS IV, LP
Date:	November 4, 2026
		By: Sealy Industrial Partners IV GP, LLC, its general partner

		By:	/s/ Mark P. Sealy
		Name:	Mark P. Sealy
		Title:	Manager

		By:	/s/ James Gilligan
		Name:	James Gilligan
		Title:	Principal Financial Officer


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


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


			Page

PART I.	FINANCIAL INFORMATION		1

Item 1.	Financial Statements (Unaudited)
		Consolidated Balance Sheets	2
		Consolidated Statements of Operations	3
		Consolidated Statements of Changes in Partners' Capital	4
		Consolidated Statements of Cash Flows	5
		Notes to Unaudited Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		22
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		32
Item 4.	Controls and Procedures		32

PART II.	OTHER INFORMATION		33

Item 1.	Legal Proceedings		33
Item 1A.	Risk Factors		33
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		33
Item 3.	Defaults Upon Senior Securities		34
Item 4.	Mine Safety Disclosures		34
Item 5.	Other Information		34
Item 6.	Exhibits		35
	Signatures		36


Period	Total Number of Units Redeemed or Repurchased	Average Price Paid per Unit	Total Number of Units Redeemed as Part of Publicly Announced Plans or Programs	Maximum Number of Units that May Yet Be Redeemed Under the Plans or Programs
July 1, 2026 - July 31, 2026	—	N/A	—	(1)
August 1, 2026 - August 31, 2026	—	N/A	—	(1)
September 1, 2026 - September 30, 2026	39,912	$90.25	39,912	(1)

GLOSSARY