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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
x☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 20172021
OR
¨☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from             to             
Commission file number 000-54939
COLE CREDIT PROPERTYCIM REAL ESTATE FINANCE TRUST, IV, INC.
(Exact name of registrant as specified in its charter)
Maryland27-3148022
(State or other jurisdiction of

incorporation or organization)
(I.R.S. Employer

Identification Number)
23252398 East Camelback Road, Suite 1100
Phoenix, Arizona 850164th Floor
(602) 778-8700
Phoenix,Arizona85016
(Address of principal executive offices; zipoffices)(Zip code)
(602)778-8700
(Registrant’s telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each ClassTrading SymbolName of Each Exchange on Which Registered
NoneNoneNone
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x☒    No  ¨☐
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x☒    No  ¨☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer¨☐Accelerated filer¨☐
Non-accelerated filer
(Do not check if a smaller reporting company)

x☒
Smaller reporting company¨☐Emerging growth company¨☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨☐    No  x☒
As of November 9, 2017,8, 2021, there were approximately 310.8362.2 million shares of common stock, par value $0.01 per share, of Cole Credit PropertyCIM Real Estate Finance Trust, IV, Inc. outstanding.


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COLE CREDIT PROPERTYCIM REAL ESTATE FINANCE TRUST, IV, INC.
INDEX
 
Condensed Consolidated Balance Sheets as of September 30, 20172021 and December 31, 20162020
3
Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 20172021 and 20162020
4
Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and nine months ended September 30, 20172021 and 20162020
5
Condensed Consolidated StatementStatements of Stockholders’ Equity for the ninethree and nine months ended September 30, 20172021 and 2020
6
Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 20172021 and 20162020
78
Notes to Condensed Consolidated Financial Statements
810
2945
4062
4064
4265
4265
4268
4368
4368
4368
4469
4570

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PART I — FINANCIAL INFORMATION
Item 1.
Item 1.    Financial Statements
COLE CREDIT PROPERTY
CIM REAL ESTATE FINANCE TRUST, IV, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
 (in thousands, except share and per share amounts) (Unaudited)
September 30, 2017 December 31, 2016September 30, 2021December 31, 2020
ASSETS   ASSETS
Investment in real estate assets:   
Real estate assets:Real estate assets:
Land$1,193,043
 $1,156,417
Land$812,308 $881,896 
Buildings, fixtures and improvements3,364,812
 3,214,212
Buildings, fixtures and improvements2,145,479 2,490,030 
Intangible lease assets587,189
 553,149
Intangible lease assets347,370 389,564 
Total real estate investments, at cost5,145,044
 4,923,778
Condominium developmentsCondominium developments189,277 — 
Total real estate assets, at costTotal real estate assets, at cost3,494,434 3,761,490 
Less: accumulated depreciation and amortization(490,178) (389,768)Less: accumulated depreciation and amortization(459,138)(453,385)
Total real estate investments, net4,654,866
 4,534,010
Total real estate assets, netTotal real estate assets, net3,035,296 3,308,105 
Real estate-related securitiesReal estate-related securities185,247 38,194 
Loans held-for-investment and related receivables, netLoans held-for-investment and related receivables, net1,462,292 962,624 
Less: Allowance for credit lossesLess: Allowance for credit losses(11,219)(70,358)
Total loans held-for-investment and related receivables, netTotal loans held-for-investment and related receivables, net1,451,073 892,266 
Cash and cash equivalents4,231
 9,754
Cash and cash equivalents289,840 121,385 
Restricted cash11,002
 8,040
Restricted cash36,762 7,023 
Rents and tenant receivables, net68,916
 65,446
Rents and tenant receivables, net60,476 74,419 
Due from affiliates4
 58
Prepaid expenses, derivative assets, revenue bonds and other assets9,638
 5,513
Prepaid expenses and other assetsPrepaid expenses and other assets16,830 10,406 
Deferred costs, net3,270
 1,514
Deferred costs, net4,034 4,293 
Assets held for sale1,594
 —
Assets held for sale1,301 3,518 
Total assets$4,753,521
 $4,624,335
Total assets$5,080,859 $4,459,609 
LIABILITIES AND STOCKHOLDERS’ EQUITY   LIABILITIES AND STOCKHOLDERS’ EQUITY
Notes payable and credit facility, net$2,454,282
 $2,246,259
Accounts payable and accrued expenses32,989
 25,310
Notes payable, repurchase facilities and credit facilities, netNotes payable, repurchase facilities and credit facilities, net$2,776,215 $2,144,993 
Accrued expenses and accounts payableAccrued expenses and accounts payable36,935 30,419 
Due to affiliates3,784
 5,333
Due to affiliates15,124 14,723 
Intangible lease liabilities, net47,607
 49,075
Intangible lease liabilities, net24,998 32,718 
Distributions payable16,001
 16,498
Distributions payable10,985 10,969 
Deferred rental income, derivative liabilities and other liabilities14,890
 15,091
Deferred rental income and other liabilitiesDeferred rental income and other liabilities11,666 27,361 
Total liabilities2,569,553
 2,357,566
Total liabilities2,875,923 2,261,183 
Commitments and contingencies
 
Commitments and contingencies00
Redeemable common stock and noncontrolling interest187,056
 188,938
Redeemable common stockRedeemable common stock170,629 — 
STOCKHOLDERS’ EQUITY   STOCKHOLDERS’ EQUITY
Preferred stock, $0.01 par value per share; 10,000,000 shares authorized, none issued and outstanding—
 —
Preferred stock, $0.01 par value per share; 10,000,000 shares authorized, none issued and outstanding— — 
Common stock, $0.01 par value per share; 490,000,000 shares authorized, 311,637,622 and 311,817,004 shares issued and outstanding as of September 30, 2017 and December 31, 2016, respectively3,116
 3,118
Common stock, $0.01 par value per share; 490,000,000 shares authorized, 362,545,190 and 362,001,968 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectivelyCommon stock, $0.01 par value per share; 490,000,000 shares authorized, 362,545,190 and 362,001,968 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively3,625 3,620 
Capital in excess of par value2,607,301
 2,607,304
Capital in excess of par value2,991,308 3,157,859 
Accumulated distributions in excess of earnings(613,163) (531,567)Accumulated distributions in excess of earnings(962,190)(961,006)
Accumulated other comprehensive loss(342) (1,024)
Accumulated other comprehensive income (loss)Accumulated other comprehensive income (loss)1,564 (2,047)
Total stockholders’ equity1,996,912
 2,077,831
Total stockholders’ equity2,034,307 2,198,426 
Total liabilities, redeemable common stock, noncontrolling interest and stockholders’ equity$4,753,521
 $4,624,335
Total liabilities, redeemable common stock and stockholders’ equityTotal liabilities, redeemable common stock and stockholders’ equity$5,080,859 $4,459,609 
The accompanying notes are an integral part of these condensed consolidated financial statements.

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COLE CREDIT PROPERTYCIM REAL ESTATE FINANCE TRUST, IV, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 (in thousands, except share and per share amounts) (Unaudited)
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
Revenues:       
Rental income$94,103
 $89,370
 $278,354
 $265,341
Tenant reimbursement income12,921
 12,426
 37,954
 37,599
Total revenues107,024
 101,796
 316,308
 302,940
Operating expenses:       
General and administrative3,270
 3,246
 10,301
 9,735
Property operating7,345
 5,738
 20,881
 16,603
Real estate tax9,276
 8,612
 27,646
 25,939
Advisory fees and expenses11,149
 10,587
 32,863
 31,100
Acquisition-related110
 1,417
 1,520
 3,592
Depreciation and amortization36,461
 33,452
 106,145
 100,399
Impairment1,658
 1,430
 1,658
 1,430
Total operating expenses69,269
 64,482
 201,014
 188,798
Operating income37,755
 37,314
 115,294
 114,142
Other income (expense):       
Interest expense and other, net(23,335) (20,473) (67,968) (58,416)
Loss recognized on equity interest re-measured to fair value—
 (652) —
 (652)
Income before real estate dispositions14,420
 16,189
 47,326
 55,074
Gain on dispositions of real estate, net15,349
 1,939
 16,801
 2,053
Net income29,769
 18,128
 64,127
 57,127
Net income allocated to noncontrolling interest33
 32
 99
 99
Net income attributable to the Company$29,736
 $18,096
 $64,028
 $57,028
Weighted average number of common shares outstanding:       
Basic and diluted311,649,032
 311,558,083
 311,698,622
 311,871,727
Net income per common share:       
Basic and diluted$0.10
 $0.06
 $0.21
 $0.18
Distributions declared per common share$0.16
 $0.16
 $0.47
 $0.47
Three Months Ended September 30,Nine Months Ended September 30,
 2021202020212020
Revenues:
Rental and other property income$70,794 $66,011 $223,026 $194,550 
Interest income19,755 6,631 48,168 19,395 
Total revenues90,549 72,642 271,194 213,945 
Operating expenses:
General and administrative3,076 3,208 11,109 9,110 
Property operating11,157 5,214 32,632 16,890 
Real estate tax7,591 6,566 27,516 20,292 
Expense reimbursements to related parties2,516 1,439 8,387 6,674 
Management fees11,703 10,139 35,035 29,739 
Transaction-related6 58 37 308 
Depreciation and amortization22,801 19,967 73,186 60,486 
Real estate impairment891 476 5,268 15,983 
(Decrease) increase in provision for credit losses(1,792)7,355 (1,101)33,037 
Total operating expenses57,949 54,422 192,069 192,519 
Gain on disposition of real estate and condominium developments, net34,033 3,219 80,502 20,120 
Merger-related expenses, net(398)(1,207)(398)(1,207)
Operating income66,235 20,232 159,229 40,339 
Other expense:
Interest expense and other, net(20,381)(15,964)(56,863)(47,240)
Loss on extinguishment of debt(3,251)(89)(4,729)(4,841)
Total other expense(23,632)(16,053)(61,592)(52,081)
Net income (loss)$42,603 $4,179 $97,637 $(11,742)
Weighted average number of common shares outstanding:
Basic and diluted362,705,253 309,694,214 362,387,909 310,497,436 
Net income (loss) per common share:
Basic and diluted$0.12 $0.01 $0.27 $(0.04)
The accompanying notes are an integral part of these condensed consolidated financial statements.


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COLE CREDIT PROPERTYCIM REAL ESTATE FINANCE TRUST, IV, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
 (in thousands) (Unaudited)
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
Net income$29,769
 $18,128
 $64,127
 $57,127
Other comprehensive income (loss)       
Unrealized gain (loss) on interest rate swaps99
 3,751
 (2,175) (13,535)
Amount of loss reclassified from other comprehensive income into income as interest expense447
 2,181
 2,857
 6,768
Total other comprehensive income (loss)546
 5,932
 682
 (6,767)
        
Comprehensive income30,315
 24,060
 64,809
 50,360
Comprehensive income allocated to noncontrolling interest33
 32
 99
 99
Comprehensive income attributable to the Company$30,282
 $24,028
 $64,710
 $50,261
 Three Months Ended September 30,Nine Months Ended September 30,
 2021202020212020
Net income (loss)$42,603 $4,179 $97,637 $(11,742)
Other comprehensive (loss) income
Unrealized (loss) gain on real estate-related securities(813)41 1,239 61 
Reclassification adjustment for realized gain included in income as other income— — (648)— 
Unrealized loss on interest rate swaps(84)(35)(13)(11,645)
Amount of (gain) loss reclassified from other comprehensive (loss) income into income (loss) as interest expense and other, net(170)3,979 3,033 8,299 
Total other comprehensive (loss) income(1,067)3,985 3,611 (3,285)
Comprehensive income (loss)$41,536 $8,164 101,248 (15,027)
The accompanying notes are an integral part of these condensed consolidated financial statements.



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COLE CREDIT PROPERTYCIM REAL ESTATE FINANCE TRUST, IV, INC.
CONDENSED CONSOLIDATED STATEMENTSTATEMENTS OF STOCKHOLDERS’ EQUITY
 (in thousands, except share amounts) (Unaudited)
 Common StockCapital in Excess
of Par Value		Accumulated
Distributions in Excess of Earnings		Accumulated Other Comprehensive (Loss) IncomeTotal
Stockholders’
Equity
 Number of
Shares		Par Value
Balance as of January 1, 2021362,001,968 $3,620 $3,157,859 $(961,006)$(2,047)$2,198,426 
Equity-based compensation— — 40 — — 40 
Distributions declared on common stock — $0.09 per common share— — — (32,906)— (32,906)
Comprehensive (loss) income— — — (2,753)3,377 624 
Balance as of March 31, 2021362,001,968 $3,620 $3,157,899 $(996,665)$1,330 $2,166,184 
Issuance of common stock917,769 9 6,651 — — 6,660 
Equity-based compensation4,104 — 49 — — 49 
Distributions declared on common stock — $0.09 per common share— — — (32,948)— (32,948)
Changes in redeemable common stock— — (173,628)— — (173,628)
Comprehensive income— — — 57,787 1,301 59,088 
Balance as of June 30, 2021362,923,841 $3,629 $2,990,971 $(971,826)$2,631 $2,025,405 
Issuance of common stock1,334,145 13 9,591 — — 9,604 
Equity-based compensation— — 62 — — 62 
Distributions declared on common stock — $0.09 per common share— — — (32,967)— (32,967)
Redemptions of common stock(1,712,796)(17)(12,315)— — (12,332)
Changes in redeemable common stock— — 2,999 — — 2,999 
Comprehensive income (loss)— — — 42,603 (1,067)41,536 
Balance as of September 30, 2021362,545,190 $3,625 $2,991,308 $(962,190)$1,564 $2,034,307 

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 Common Stock 
Capital in Excess
of Par Value
 
Accumulated
Distributions in Excess of Earnings
 Accumulated
Other Comprehensive Income (Loss)		 
Total
Stockholders’
Equity
 
Number of
Shares
 Par Value 
Balance, January 1, 2017311,817,004
 $3,118
 $2,607,304
 $(531,567) $(1,024) $2,077,831
Issuance of common stock7,665,673
 76
 76,775
 —
 —
 76,851
Distributions to investors—
 —
 —
 (145,624) —
 (145,624)
Redemptions of common stock(7,845,055) (78) (78,545) —
 —
 (78,623)
Changes in redeemable common stock—
 —
 1,767
 —
 —
 1,767
Comprehensive income—
 —
 —
 64,028
 682
 64,710
Balance, September 30, 2017311,637,622
 $3,116
 $2,607,301
 $(613,163) $(342) $1,996,912

CIM REAL ESTATE FINANCE TRUST, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
 (in thousands, except share amounts) (Unaudited) — Continued

 Common StockCapital in Excess
of Par Value		Accumulated
Distributions in Excess of Earnings		Accumulated
Other Comprehensive (Loss) Income		Total
Stockholders’
Equity
 Number of
Shares		Par Value
Balance as of January 1, 2020311,207,725 $3,112 $2,606,925 $(816,181)$(3,908)$1,789,948 
Cumulative effect of accounting changes— — — (2,002)— (2,002)
Issuance of common stock2,223,298 22 19,209 — — 19,231 
Equity-based compensation— — 40 — — 40 
Distributions declared on common stock — $0.15 per common share— — — (48,332)— (48,332)
Redemptions of common stock(2,256,037)(22)(19,492)— — (19,514)
Changes in redeemable common stock— — 283 — — 283 
Comprehensive loss— — — (12,175)(9,828)(22,003)
Balance as of March 31, 2020311,174,986 $3,112 $2,606,965 $(878,690)$(13,736)$1,717,651 
Issuance of common stock1,242,475 12 9,531 — — 9,543 
Equity-based compensation— — 40 — — 40 
Distributions declared on common stock — $0.04 per common share— — — (13,072)— (13,072)
Redemptions of common stock(2,468,754)(25)(19,166)— — (19,191)
Changes in redeemable common stock— — 9,643 — — 9,643 
Comprehensive (loss) income— — — (3,746)2,558 (1,188)
Balance as of June 30, 2020309,948,707 $3,099 $2,607,013 $(895,508)$(11,178)$1,703,426 
Issuance of common stock746,001 8 5,409 — — 5,417 
Equity-based compensation— — 40 — — 40 
Distributions declared on common stock — $0.09 per common share— — — (28,181)— (28,181)
Redemptions of common stock(1,289,203)(13)(9,347)— — (9,360)
Changes in redeemable common stock— — 170,912 — — 170,912 
Comprehensive income— — — 4,179 3,985 8,164 
Balance as of September 30, 2020309,405,505 $3,094 $2,774,027 $(919,510)$(7,193)$1,850,418 
The accompanying notes are an integral part of these condensed consolidated financial statements.

7

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COLE CREDIT PROPERTYCIM REAL ESTATE FINANCE TRUST, IV, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (in thousands) (Unaudited)
Nine Months Ended September 30,
20212020
Cash flows from operating activities:
Net income (loss)$97,637 $(11,742)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization, net71,535 59,546 
Amortization of deferred financing costs6,616 3,061 
Amortization of fair value adjustment of mortgage notes payable assumed(149)(70)
Amortization and accretion on deferred loan fees(1,945)(1,603)
Amortization of premiums and discounts on credit investments(6,368)(342)
Capitalized interest income on real estate-related securities(703)(539)
Equity-based compensation151 120 
Straight-line rental income(4,398)(4,416)
Write-offs for uncollectible lease-related receivables109 5,334 
Gain on disposition of real estate assets and condominium developments, net(80,502)(20,120)
(Gain) loss on sale of credit investments, net(902)562 
Amortization of fair value adjustment and gain on interest rate swaps(2,887)(11)
Loss on interest rate caps171 — 
Impairment of real estate assets5,268 15,983 
(Decrease) increase in provision for credit losses(1,101)33,037 
Write-off of deferred financing costs2,951 633 
Changes in assets and liabilities:
Rents and tenant receivables, net15,889 (12,923)
Prepaid expenses and other assets(7,908)1,698 
Accrued expenses and accounts payable7,040 9,552 
Deferred rental income and other liabilities(3,387)(4,254)
Due to affiliates401 (1,740)
Net cash provided by operating activities97,518 71,766 
Cash flows from investing activities:
Investment in real estate-related securities(171,880)(76,644)
Investment in broadly syndicated loans(266,978)(474,990)
Investment in real estate assets and capital expenditures(23,391)(18,795)
Origination and acquisition of loans held-for-investment, net(720,134)(223,608)
Origination and exit fees received on loans held-for-investment7,320 3,200 
Principal payments received on loans held-for-investment285,104 80,263 
Principal payments received on real estate-related securities31 1,448 
Net proceeds from sale of real estate-related securities27,625 — 
Net proceeds from disposition of real estate assets and condominium developments459,705 194,691 
Net proceeds from sale of broadly syndicated loans55,224 25,837 
Payment of property escrow deposits— (550)
Refund of property escrow deposits— 250 
Proceeds from the settlement of insurance claims58 — 
Net cash used in investing activities(347,316)(488,898)


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 Nine Months Ended September 30,
 2017 2016
Cash flows from operating activities:   
Net income$64,127
 $57,127
Adjustments to reconcile net income to net cash provided by operating activities:   
Depreciation and amortization, net104,220
 99,555
Amortization of deferred financing costs3,958
 4,190
Amortization of fair value adjustment of mortgage notes payable assumed(64) (63)
Straight-line rental income(7,651) (8,888)
Bad debt expense1,637
 (1)
Equity in income of unconsolidated joint venture—
 (615)
Return on investment from unconsolidated joint venture—
 615
Impairment of real estate assets1,658
 1,430
Fair value adjustment to contingent consideration(337) (2,672)
Ineffectiveness of interest rate swaps(80) —
Write-off of deferred financing costs896
 —
Gain on disposition of real estate assets, net(16,801) (2,053)
Loss recognized on equity interest re-measured to fair value—
 652
Changes in assets and liabilities:   
Rents and tenant receivables1,667
 139
Prepaid expenses and other assets(1,443) (618)
Accounts payable and accrued expenses7,819
 8,237
Deferred rental income and other liabilities47
 (1,404)
Due from affiliates54
 47
Due to affiliates(1,549) (161)
Net cash provided by operating activities158,158
 155,517
Cash flows from investing activities:   
Investment in real estate assets and capital expenditures(309,412) (197,038)
Investment in revenue bonds(2,081) —
Return of investment in unconsolidated joint venture—
 1,033
Acquisition of unconsolidated joint venture partner's interest—
 (1,626)
Proceeds from disposition of real estate assets97,154
 25,947
Payment of property escrow deposits(11,416) (5,404)
Refund of property escrow deposits11,666
 6,404
Change in restricted cash(2,962) (1,714)
Net cash used in investing activities(217,051) (172,398)
Cash flows from financing activities:   
Redemptions of common stock(78,623) (83,517)
Offering costs related to DRIP Offerings—
 (66)
Distributions to investors(69,270) (64,068)
Proceeds from notes payable and credit facility1,514,706
 441,420
Repayments of credit facility and notes payable(1,300,001) (279,315)
Payment of loan deposits(1,064) (3,378)
Refund of loan deposits1,064
 3,378
Deferred financing costs paid(13,228) (3,341)
Distributions to noncontrolling interest(214) (199)
Earnout liability paid—
 (1,866)
Net cash provided by financing activities53,370
 9,048
Net decrease in cash and cash equivalents(5,523) (7,833)
Cash and cash equivalents, beginning of period9,754
 26,316
Cash and cash equivalents, end of period$4,231
 $18,483
CIM REAL ESTATE FINANCE TRUST, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 (in thousands) (Unaudited) — Continued

Nine Months Ended September 30,
20212020
Cash flows from financing activities:
Redemptions of common stock(12,332)(48,065)
Distributions to stockholders(82,541)(62,529)
Proceeds from notes payable, repurchase facilities and credit facilities2,217,489 461,194 
Repayments of notes payable, repurchase facilities and credit facilities(1,633,426)(223,351)
Termination of interest rate swaps(6,401)— 
Payment of loan deposits(650)(65)
Refund of loan deposits565 — 
Deferred financing costs paid(34,712)(2,258)
Net cash provided by financing activities447,992 124,926 
Net increase (decrease) in cash and cash equivalents and restricted cash198,194 (292,206)
Cash and cash equivalents and restricted cash, beginning of period128,408 473,355 
Cash and cash equivalents and restricted cash, end of period$326,602 $181,149 
Reconciliation of cash and cash equivalents and restricted cash to the condensed consolidated balance sheets:
Cash and cash equivalents$289,840 $175,224 
Restricted cash36,762 5,925 
Total cash and cash equivalents and restricted cash$326,602 $181,149 
Supplemental Disclosures of Non-Cash Investing and Financing Activities:
Distributions declared and unpaid$10,985 $9,375 
Accrued capital expenditures$1,374 $365 
Accrued deferred financing costs$40 $251 
Real estate acquired via foreclosure$191,990 $— 
Foreclosure of assets securing the mezzanine loans$(79,968)$— 
Mortgage notes payable assumed in connection with foreclosure of assets securing the mezzanine loans$102,553 $— 
Mortgage note payable assumed by buyer in connection with disposition of real estate assets$(31,801)$— 
Change in interest income capitalized to loans held-for-investment$(9,469)$539 
Common stock issued through distribution reinvestment plan$16,264 $34,191 
Change in fair value of derivative instruments$5,907 $(3,335)
Change in fair value of real estate-related securities$591 $— 
Supplemental Cash Flow Disclosures:
Interest paid$52,200 $45,297 
Cash paid for taxes$1,851 $1,555 

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



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COLE CREDIT PROPERTYCIM REAL ESTATE FINANCE TRUST, IV, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 20172021 (Unaudited)
NOTE 1 — ORGANIZATION AND BUSINESS
Cole Credit PropertyCIM Real Estate Finance Trust, IV, Inc. (the “Company”) is a non-exchange traded real estate investment trust (“REIT”) formed as a Maryland corporation incorporated on July 27, 2010, that elected to be taxed, and currently qualifies, as a real estate investment trust (“REIT”)REIT for U.S. federal income tax purposes beginning with its taxable year ended December 31, 2012. The Company operates a diversified portfolio of core commercial real estate assets primarily consisting of net leased properties located throughout the United States. The Company continues to pursue a more diversified investment strategy across the capital structure by balancing the Company’s existing core of commercial real estate assets leased to creditworthy tenants under long-term net leases with a portfolio of commercial mortgage loans and other credit investments in which the Company’s sponsor and its affiliates have expertise. As of September 30, 2021, the Company owned 403 properties, comprising 17.6 million rentable square feet of commercial space located in 40 states. As of September 30, 2021, the rentable square feet at these properties was 94.2% leased, including month-to-month agreements, if any. As of September 30, 2021, the Company’s loan portfolio consisted of 273 loans with a net book value of $1.5 billion, and investments in real estate-related securities with a net book value of $185.2 million. On January 7, 2021, the Company completed foreclosure proceedings to take control of the assets which previously secured its 8 mezzanine loans, including 75 condominium units and 21 rental units across 4 buildings. As of September 30, 2021, the Company owned condominium developments with a net book value of $189.3 million.
A majority of the Company’s business is conducted through CIM Real Estate Finance Operating Partnership, LP, a Delaware limited partnership, of which the Company is the sole general partner of, and owns, directly or indirectly, 100% of the partnership interests in Cole Operating Partnership IV, LP, a Delaware limited partnership. interests.
The Company is externally managed by Cole REIT Advisors IV,CIM Real Estate Finance Management, LLC, (“CR IV Advisors”), a Delaware limited liability company and(“CMFT Management”), which is an affiliate of CIM Group, LLC (“CIM”). CIM is a community-focused real estate and infrastructure owner, operator, lender and developer. Headquartered in Los Angeles, California, CIM has offices across the United States and in Tokyo, Japan.
CCO Group, LLC is a subsidiary of CIM and owns and controls CMFT Management, the Company’s sponsor, Colemanager, and is the indirect owner of CCO Capital,®, which is a trade name used to refer to a group of affiliated entities directly or indirectly controlled by VEREIT, Inc. LLC (“VEREIT”CCO Capital”), a widely-held public company whose shares of common stock are listed on the New York Stock Exchange (NYSE: VER). VEREIT indirectly owns and/or controls the Company’s external advisor, CR IV Advisors, the Company’s dealer manager, for the Offering (as defined below), Cole Capital Corporation (“CCC”), the Company’s property manager,and CREI Advisors, LLC (“CREI Advisors”), the Company’s property manager. CCO Group, LLC and its subsidiaries (collectively, “CCO Group”) serve as the Company’s sponsor Cole Capital. and as a sponsor to CIM Income NAV, Inc. (“CIM Income NAV”). The Company relies upon CIM Capital IC Management, LLC, the Company’s investment advisor (the “Investment Advisor”), to provide substantially all of the Company’s day-to-day management with respect to investments in securities.
On January 26, 2012,, pursuant to a Registration Statement on Form S-11 (Registration No. 333-169533) (the “Registration Statement”) filed under the Securities Act of 1933, as amended (the “Securities Act”), the Company commenced its initial public offering on a “best efforts” basis of up to a maximum of $2.975 billion in shares of common stock (the “Offering”). On November 25, 2013, the Company reallocated $400.0 million in shares from the distribution reinvestment plan (the “DRIP”) portion of the Offering to the primary portion of the Offering, and on February 18, 2014, the Company reallocated an additional $23.0 million in shares from the DRIP portion of the Offering to the primary portion of the Offering. As a result of these reallocations, the Offering offered up to a maximum of approximately 292.3 million shares of common stock at a price of $10.00 per share in the primary portion of the Offering and up to approximately 5.5 million additional shares pursuant to the DRIP portion of the Offering under which the Company’s stockholders could have elected to have distributions reinvested in additional shares of common stock at a price of $9.50 per share.
The Company ceased issuing shares in the Offering on April 4, 2014. At the completion of the Offering, a total of approximately 297.4 million shares of common stock had been issued, including approximately 292.3 million shares of common stock sold to the public pursuant to the primary portion of the Offering and approximately 5.1 million shares of common stock issued pursuant to the DRIPdistribution reinvestment plan (“DRIP”) portion of the Offering. The remaining approximately 404,000 unsold shares from the Offering were deregistered.
The Company registered $247.0 million of shares of common stock under the DRIP (the “Initial DRIP Offering”) pursuant to a Registration Statement filed on Form S-3 (Registration No. 333-192958) (the “Initial DRIP Offering”), which was filed with the U.S. Securities and Exchange Commission (the “SEC”) on December 19, 2013 and automatically became effective with the SEC upon filing. The Company ceased issuing shares under the Initial DRIP Offering effective as of June 30, 2016. At the completion of the Initial DRIP Offering, a total of approximately $241.7 million of shares of common stock had been issued. The remaining $5.3 million of unsold shares from the Initial DRIP Offering were deregistered.
The Company registered an additional $600.0 million of shares of common stock under the DRIP pursuant to a Registration Statement filed on Form S-3 (Registration No. 333-212832) (the “Secondary DRIP Offering,” and together with the Initial DRIP Offering, the “DRIP Offerings,” and the DRIP Offerings collectively with the Offering, the “Offerings”) pursuant to a Registration Statement on Form S-3 (Registration No. 333-212832), which was filed with the SEC on August 2, 2016 and automatically became effective with the SEC upon filing. The Company began to issue shares under the Secondary DRIP Offering on August 2, 2016 and will continuecontinued to issue shares under the Secondary DRIP Offering.
On September 27, 2015,Offering until, on August 30, 2020, the Company announced that itsCompany’s board of directors (the “Board”) had establishedsuspended the Secondary DRIP Offering in connection with the entry of the Company into the merger agreements with Cole Office & Industrial REIT (CCIT III), Inc.
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CIM REAL ESTATE FINANCE TRUST, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2021 (Unaudited) – (Continued)

(“CCIT III”) and Cole Credit Property Trust V, Inc. (“CCPT V”) (the “CCIT III and CCPT V Mergers”). On March 25, 2021, the Board reinstated the Secondary DRIP Offering, effective April 1, 2021.
The Board establishes an updated estimated per share net asset value (“NAV”) of the Company’s common stock as of August 31, 2015, of $9.70 per shareon at least an annual basis for purposes of assisting broker-dealers that participated in the Offering in meeting their customer account statement reporting obligations under National Association of Securities Dealers ConductFinancial Industry Regulatory Authority Rule 2340. On November 10, 2016, the Board established an updated estimated per share net asset value (“NAV”)2231. Distributions are reinvested in shares of the Company’s common stock under the DRIP at the estimated per share NAV as determined by the Board. Additionally, the estimated per share NAV as determined by the Board serves as the per share NAV for purposes of the share redemption program. As of September 30, 2016, of $9.92 per share. On March 24, 2017,2021, the Board established an updated estimated per share NAV of the Company’s common stock was $7.20, which was established by the Board on May 25, 2021 using a valuation date of March 31, 2021. Commencing on May 26, 2021, $7.20 served as of December 31, 2016, of $10.08 per share. In determining the estimated per share NAVsNAV under the DRIP. The Board previously established a per share NAV as of August 31, 2015, September 30, 2016, and December 31, 2016, the Board considered informationDecember 31, 2017, December 31, 2018, December 31, 2019, March 31, 2020 and analysis, including valuation materials that were provided by a third-party valuation expert, information provided by CR IV Advisors, and the estimated per share NAV recommendation made by the valuation committee of the Board, which committee is comprised entirely of independent directors.June 30, 2020. The Company’s estimated per share NAVs are not audited or reviewed by its independent registered public accounting firm.

Pending Merger
On September 21, 2021, the Company, CIM Income NAV and Cypress Merger Sub, LLC, a wholly owned subsidiary of the Company (“Merger Sub”), entered into an Agreement and Plan of Merger (the “Merger Agreement”). Subject to the terms and conditions of the Merger Agreement, CIM Income NAV will merge with and into Merger Sub (the “CIM Income NAV Merger”), with Merger Sub surviving the CIM Income NAV Merger, such that following the CIM Income NAV Merger, the surviving entity will continue as a wholly owned subsidiary of the Company. In accordance with the applicable provisions of the Maryland General Corporation Law, the separate existence of CIM Income NAV shall cease.
At the effective time of the CIM Income NAV Merger and subject to the terms and conditions of the Merger Agreement, each issued and outstanding share of CIM Income NAV’s Class D common stock, $0.01 par value per share (the “Class D Common Stock”), will be converted into the right to receive 2.574 shares of the Company’s common stock, $0.01 par value per share (the “CMFT Common Stock”), each issued and outstanding share of CIM Income NAV’s Class T common stock, $0.01 par value per share (the “Class T Common Stock”), will be converted into the right to receive 2.510 shares of CMFT Common Stock, each issued and outstanding share of CIM Income NAV’s Class S common stock, $0.01 par value per share (the “Class S Common Stock”), will be converted into the right to receive 2.508 shares of CMFT Common Stock, and each issued and outstanding share of CIM Income NAV’s Class I common stock, $0.01 par value per share (the “Class I Common Stock” and, together with the Class D Common Stock, Class T Common Stock and Class S Common Stock, the “CIM Income NAV Common Stock”), will be converted into the right to receive 2.622 shares of CMFT Common Stock, in each case, subject to the treatment of fractional shares in accordance with the Merger Agreement (the “Merger Consideration”). At the effective time of the CIM Income NAV Merger and subject to the terms and conditions of the Merger Agreement, each issued and outstanding share of CIM Income NAV Common Stock granted under CIM Income NAV’s 2018 Equity Incentive Plan, whether vested or unvested, will be cancelled in exchange for an amount equal to the Merger Consideration for the applicable share class.
The Merger Agreement contains customary representations, warranties and covenants, including covenants relating to the conduct of CIM Income NAV’s and the Company’s respective businesses during the period between the execution of the Merger Agreement and the completion of the CIM Income NAV Merger, subject to certain exceptions.
CIM Income NAV has agreed not to solicit or enter into an agreement regarding an Acquisition Proposal (as defined in the Merger Agreement), and, subject to certain exceptions, is not permitted to enter into discussions or negotiations concerning, or provide nonpublic information to a third party in connection with, any Acquisition Proposal. However, prior to obtaining Stockholder Approval (as defined below), CIM Income NAV may engage in discussions or negotiations and provide nonpublic information to a third party which has made an unsolicited, bona fide written Acquisition Proposal if the special committee of CIM Income NAV’s board of directors determines in good faith, after consultation with outside legal counsel and outside financial advisors, that such Acquisition Proposal either constitutes or could reasonably be expected to lead to a Superior Proposal (as defined in the Merger Agreement).
The Merger Agreement also provides that prior to the Stockholder Approval, the board of directors may, under specified circumstances, make an Adverse Recommendation Change (as defined in the Merger Agreement), including withdrawing its recommendation of the CIM Income NAV Merger, subject to complying with certain conditions set forth in the Merger Agreement.
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 20172021 (Unaudited) – (Continued)



The Merger Agreement may be terminated under certain circumstances, including but not limited to, by either the Company or CIM Income NAV if the CIM Income NAV Merger has not been consummated on or before 11:59 p.m. New York City time on May 30, 2022 (the “Outside Date”), if a final and non-appealable order is entered permanently restraining or otherwise prohibiting the transactions contemplated by the Merger Agreement, if the Stockholder Approval has not been obtained at the stockholders meeting to be called to consider the CIM Income NAV Merger or upon a material uncured breach of the respective obligations, covenants or agreements by the other party that would cause the closing conditions in the Merger Agreement not to be satisfied.
PriorIn addition, CIM Income NAV may terminate the Merger Agreement in order to enter into an “Alternative Acquisition Agreement” with respect to a “Superior Proposal” (each as defined in the Merger Agreement) at any time prior to receipt by CIM Income NAV of the Stockholder Approval pursuant to and subject to the terms and conditions of the Merger Agreement.
The Company may terminate the Merger Agreement at any time prior to the receipt of the Stockholder Approval, in certain limited circumstances, including upon (i) an Adverse Recommendation Change, (ii) a tender offer or exchange offer that is commenced which CIM Income NAV’s board of directors fails to recommend against or (iii) a breach by CIM Income NAV, in any material respect, of its obligations under the no solicitation provisions set forth in the Merger Agreement.
If the Merger Agreement is terminated because the CIM Income NAV Merger was not consummated before the Outside Date or because the Stockholder Approval was not obtained, and (i) an Acquisition Proposal has been publicly announced or otherwise communicated to CIM Income NAV stockholders prior to the CIM Income NAV Stockholders Meeting (as defined in the Merger Agreement) and (ii) within 12 months after the date of such termination (A) CIM Income NAV consummates or enters into an agreement (that is thereafter consummated) in respect of an Acquisition Proposal for 50% or more of CIM Income NAV’s equity or 75% or more of CIM Income NAV’s assets or (B) the board of directors of CIM Income NAV recommends or fails to recommend against an Acquisition Proposal structured as a tender or exchange offer for 75% or more of CIM Income NAV’s equity and such Acquisition Proposal is actually consummated, then CIM Income NAV must pay the Company a termination payment of $14.78 million and up to $2.68 million as reimbursement for CMFT’s Expenses (as defined in the Merger Agreement).
The Merger Agreement provides that, in connection with the termination of the Merger Agreement under specified circumstances, CIM Income NAV may be required to pay to the Company a termination payment of $14.78 million and reimburse CMFT’s Expenses up to an amount equal to $2.68 million. However, the termination payment payable by CIM Income NAV to the Company will be $6.72 million if the Merger Agreement is terminated before the end of the “Window Period End Time” by (i) CIM Income NAV in order for CIM Income NAV to accept a Superior Proposal from a Qualified Bidder (as defined in the Merger Agreement) or (ii) the Company in response to an Adverse Recommendation Change with respect to or as a result of a Superior Proposal by a Qualified Bidder. The term “Window Period End Time” in the Merger Agreement means, with respect to a Qualified Bidder, the later of (i) 11:59 p.m. (New York City time) on October 1, 2015, distributions were reinvested in21, 2021, and (ii) 11:59 p.m. (New York City time) on the first (1st) business day after the end of a required notice period with respect to a Superior Proposal by such Qualified Bidder provided that such notice period (as may be extended) began on or prior to 11:59 p.m. (New York City Time) on October 21, 2021.
The obligation of each party to consummate the CIM Income NAV Merger is subject to a number of customary conditions, including receipt of the approval of the CIM Income NAV Merger (and of an amendment to the CIM Income NAV charter that is required to consummate the CIM Income NAV Merger) by holders of a majority of the outstanding shares of the Company’s common stock underCIM Income NAV Common Stock entitled to vote thereon (the “Stockholder Approval”), delivery of certain documents and legal opinions, the DRIP at a pricetruth and correctness of $9.50 per share. Fromthe representations and warranties of the parties (subject to the materiality standards contained in the Merger Agreement), the effectiveness of the registration statement on Form S-4 (Registration No. 333-260358) filed by the Company on October 1, 201519, 2021 to November 13, 2016, distributions were reinvested inregister the shares of the Company’s common stock underCMFT Common Stock to be issued as consideration in the DRIPCIM Income NAV Merger, and the absence of a CIM Income NAV Material Adverse Effect or CMFT Material Adverse Effect (as each term is defined in the Merger Agreement).
Concurrently with the entry into the Merger Agreement, CIM Income NAV, its operating partnership and its advisor entered into a letter agreement (the “Termination Agreement”). Pursuant to the Termination Agreement, the advisory agreement between CIM Income NAV and its advisor (the “Advisory Agreement”) will be terminated at a price of $9.70 per share, the estimated value per share as of August 31, 2015, as determined by the Board. From November 14, 2016 to March 27, 2017, distributions were reinvested in shareseffective time of the Company’s common stock underCIM Income NAV Merger. Also pursuant to the DRIP at a priceTermination Agreement, CIM Income NAV’s advisor agreed to waive any Performance Fee (as defined in the Advisory Agreement) it otherwise would be entitled to pursuant to the Advisory Agreement related to the CIM Income NAV Merger. In the event the Merger Agreement is terminated in accordance with its terms, the Termination Agreement will be automatically terminated.
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CIM REAL ESTATE FINANCE TRUST, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2016, as determined by the Board. Commencing on March 28, 2017, distributions are reinvested in shares of the Company’s common stock under the DRIP at a price of $10.08 per share, the estimated per share NAV as of December 31, 2016, as determined by the Board.2021 (Unaudited) – (Continued)
As of September 30, 2017, the Company had issued approximately 336.8 million shares of its common stock in the Offerings, including 38.5 million shares issued in the DRIP Offerings, for gross offering proceeds of $3.3 billion before organization and offering costs, selling commissions and dealer manager fees of $306.0 million. As of September 30, 2017, the Company owned 908 properties, which includes nine properties owned through a consolidated joint venture arrangement (the “Consolidated Joint Venture”), comprising 26.8 million rentable square feet of commercial space located in 45 states. As of September 30, 2017, the rentable square feet at these properties was 97.5% leased, including month-to-month agreements, if any.
NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The summary of significant accounting policies presented below is designed to assist in understanding the Company’s condensed consolidated financial statements. These accounting policies conform to accounting principles generally accepted in the United States of America (“GAAP”), in all material respects, and have been consistently applied in preparing the accompanying condensed consolidated financial statements.
Principles of Consolidation and Basis of Presentation
The condensed consolidated financial statements of the Company have been prepared in accordance with the rules and regulations of the SEC regarding interim financial reporting, including the instructions to Form 10-Q and Article 10 of Regulation S-X, and do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, the statements for the interim periods presented include all adjustments, which are of a normal and recurring nature, necessary for a fair presentation of the results for such periods. Results for these interim periods are not necessarily indicative of full year results.
The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the Company’s audited consolidated financial statements as of and for the year ended December 31, 2016,2020, and related notes thereto, set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016.2020. The condensed consolidated financial statements should also be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in this Quarterly Report on Form 10-Q.
The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries and the Consolidated Joint Venture in which the Company has a controlling financial interest.subsidiaries. All intercompany balances and transactions have been eliminated in consolidation.
Reclassifications
Certain amounts in the Company’s prior period condensed consolidated financial statements have been reclassified to conform to the current period presentation. Other than as shown below, the reclassifications had no effect on previously reported totals or subtotals. The Company evaluates its relationshipsreclassifications have been made to the condensed consolidated statements of operations for the three and investments to determine if it has variable interests. A variable interest is an investment or other interest that will absorb portions of an entity’s expected losses or receive portions of the entity’s expected residual returns. Ifnine months ended September 30, 2020 as follows (in thousands):
Three Months Ended September 30, 2020Nine Months Ended September 30, 2020
As previously reportedReclassificationAs RevisedAs previously reportedReclassificationAs Revised
Condensed Consolidated Statements of Operations
General and administrative$3,762 $(554)$3,208 $11,679 $(2,569)$9,110 
Management fees$10,934 $(795)$10,139 $33,422 $(3,683)$29,739 
Transaction-related$148 $(90)$58 $730 $(422)$308 
Expense reimbursements to related parties$— $1,439 $1,439 $— $6,674 $6,674 
Condensed Consolidated Statements of Cash Flows
 Accrued expenses and accounts payable$5,344 $4,208 $9,552 
Net cash provided by operating activities$67,558 $4,208 $71,766 
Repayments of notes payable, repurchase facilities and credit facilities$(219,143)$(4,208)$(223,351)
Net cash provided by financing activities$129,134 $(4,208)$124,926 
Additionally, the Company determinesreclassified $1.2 million of merger-related expenses, net that it has a variable interestwere previously included in an entity, it evaluates whether such interest isoperating expenses in a variable interest entity (“VIE”). VIEs are entities where investors lack sufficient equity at riskthe condensed consolidated statements of operations for the entity to finance its activities without additional subordinated financial support or where equity investors, as a group, lack one of the following characteristics: (a) the power to direct the activities that most significantly impact the entity’s economic performance, (b) the obligation to absorb the expected losses of the entity, or (c) the right to receive the expected returns of the entity. The Company consolidates any VIEs when it is determined to be the primary beneficiary of the VIE’s operations.

For legal entities being evaluated for consolidation, the Company must first determine whether the interests that it holdsthree and fees it receives qualify as variable interestsnine months ended September 30, 2020. This reclassification had no effect on previously reported operating income in the entity. A variable interest is an investment or other interest that will absorb portionscondensed consolidated statements of an entity’s expected losses or receive portions of the entity’s expected residual returns. The Company’s evaluation includes consideration of fees paid to the Company where the Company acts as a decision maker or service provider to the entity being evaluated. If the Company determines that it holds a variable interest in an entity, it evaluates whether that entity is a VIE.

operations.
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 20172021 (Unaudited) – (Continued)



A VIE must be consolidated by its primary beneficiary, which is generally defined as the party who has a controlling financial interest in the VIE. The Company qualitatively assesses whether it is (or is not) the primary beneficiary of a VIE. Consideration of various factors include, but are not limited to, the Company’s ability to direct the activities that most significantly impact the entity’s economic performance and its obligation to absorb losses from or right to receive benefits of the VIE that could potentially be significant to the VIE. The Company consolidates any VIEs when the Company is determined to be the primary beneficiary of the VIE, and the difference between consolidating the VIE and accounting for it using the equity method could be material to the Company’s consolidated financial statements. The Company continually evaluates the need to consolidate any VIEs based on standards set forth in GAAP as described above.
As of September 30, 2017 and December 31, 2016, the Company determined that it had a controlling interest in the Consolidated Joint Venture and therefore met the GAAP requirements for consolidation.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Real Estate InvestmentsAssets
Real estate assets are stated at cost, less accumulated depreciation and amortization. Amounts capitalized to real estate assets consist of the costs of acquisition, including acquisition-related fees and certain acquisition-related expenses, construction and any tenant improvements, major improvements and betterments that extend the useful life of the real estate assets and leasing costs. All repairs and maintenance costs are expensed as incurred. In April 2017, the Company early adopted Accounting Standards Update (“ASU”) No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business (“ASU 2017-01”), which clarifies the definition of a business by adding guidance to assist entities in evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The Company’s acquisitions qualify as asset acquisitions, and as such, acquisition-related fees and certain acquisition-related expenses related to these asset acquisitions are capitalized. Prior to the adoption of ASU 2017-01, all acquisition-related fees and expenses were expensed as incurred, and all of the Company’s acquisitions were accounted for as business combinations.
The Company considers the period of future benefit of each respective asset to determine the appropriate useful life. The estimated useful lives of the Company’s real estate assets by class are generally as follows:
Buildings40 years
Site improvements15 years
Tenant improvementsLesser of useful life or lease term
Intangible lease assetsLease term
Recoverability of Real Estate Assets
The Company continually monitors events and changes in circumstances that could indicate that the carrying amounts of its real estate assets may not be recoverable. Impairment indicators that the Company considers include, but are not limited to,to: bankruptcy or other credit concerns of a property’s major tenant, such as a history of late payments, rentallease concessions and other factors,factors; a significant decrease in a property’s revenues due to lease terminations, vacancies,terminations; vacancies; co-tenancy clauses,clauses; reduced lease rates or other circumstances.rates; and changes in anticipated holding periods. When indicators of potential impairment are present, the Company assesses the recoverability of the assets by determining whether the carrying amount of the assets will be recovered through the undiscounted future cash flows expected from the use of the assets and their eventual disposition. In the event that such expected undiscounted future cash flows do not exceed the carrying amount, the Company will adjust the real estate assets to their respective fair values and recognize an impairment loss. Generally, fair value is determined using a discounted cash flow analysis and recent comparable sales transactions. AsDuring the nine months ended September 30, 2021, as part of the Company’s quarterly impairment review procedures, the Company recorded impairment charges of $1.7$5.3 million related to one property11 properties, of which impairment at 7 properties was due to sales prices that were less than their respective carrying values and impairment at 4 properties was due to vacancy. The Company’s impairment assessment as aof September 30, 2021 was based on the most current information available to the Company, including expected holding periods. If the Company’s expected holding periods for assets change, subsequent tests for impairment could result of delinquent rental paymentsin additional impairment charges in the future. The Company cannot provide any assurance that additional material impairment charges with respect to the Company’s real estate assets will not occur during 2021 or in future periods. During the nine months ended September 30, 2017. As part of the Company’s quarterly impairment review procedures,2020, the Company recorded impairment charges of $1.4$16.0 million related to one10 properties due to revised cash flow estimates as a result of market conditions and 1 property leaseddue to a tenant that filed for bankruptcy during the nine months ended September 30, 2016.bankruptcy. The assumptions and uncertainties utilized in the evaluation of the impairment of real estate

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assets are discussed in detail in Note 3 — Fair Value Measurements. See also Note 4 — Real Estate InvestmentsAssets for further discussion regarding real estate investment activity.
Assets Held for Sale
When a real estate asset is identified by the Company as held for sale, the Company will cease recording depreciation and amortization of the assets related to the property and estimate theits fair value, net of selling costs. If, in management’s opinion, the fair value, net of selling costs, of the asset is less than the carrying amount of the asset, an adjustment to the carrying amount would beis then recorded to reflect the estimated fair value of the property, net of selling costs. During the nine months endedAs of September 30, 2017,2021, the Company identified one1 property with a fair value of $1.3 million as held for sale, which was sold subsequent to September 30, 2017, as discussed in Note 14 — Subsequent Events. There were no assets2021 at a gain of $16,000. As of December 31, 2020, the Company identified 1 property with a fair value of $3.5 million as held for sale, aswhich was sold during the nine months ended September 30, 2021. No gain or loss was recognized on this disposition.
Disposition of December 31, 2016.Real Estate Assets
Gains and losses from dispositions are recognized once the various criteria relating to the terms of sale and any subsequent involvement by the Company with the asset sold are met. A discontinued operation includes only the disposal of a component of an entity and represents a strategic shift that has (or will have) a major effect on an entity’s financial results. The Company’s dispositions during the nine months ended September 30, 2021 and 2020 did not qualify for discontinued operations
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presentation and thus, the results of the properties and condominiums that were sold will remain in operating income, and any associated gains or losses from the disposition are included in gain on disposition of real estate and condominium developments, net. See Note 4 — Real Estate Assets for a discussion of the disposition of individual properties and condominiums during the nine months ended September 30, 2021.
Allocation of Purchase Price of Real Estate Assets
Upon the acquisition of real properties, the Company allocates the purchase price including acquisition-related fees and certain acquisition-related expenses after the adoption of ASU 2017-01, to acquired tangible assets, consisting of land, buildings and improvements, and to identified intangible assets and liabilities, consisting of the value of above- and below-market leases and the value of in-place leases and other intangibles, based in each case on their respectiverelative fair values. The Company utilizes independent appraisals to assist in the determination of the fair values of the tangible assets of an acquired property (which includes land and buildings). The information in the appraisal, along with any additional information available to the Company’s management, is used in estimating the amount of the purchase price that is allocated to land. Other information in the appraisal, such as building value and market rents, may be used by the Company’s management in estimating the allocation of purchase price to the building and to intangible lease assets and liabilities. The appraisal firm has no involvement in management’s allocation decisions other than providing this market information.
The determination of the fair values of the real estate assets and liabilities acquired requires the use of significant assumptions with regard to the current market rental rates, rental growth rates, capitalization and discount rates, interest rates and other variables. The use of alternative estimates may result in a different allocation of the Company’s purchase price, which could materially impact the Company’s results of operations.
InvestmentCertain acquisition-related expenses related to asset acquisitions are capitalized and allocated to tangible and intangible assets and liabilities, as described above. Acquisition-related manager expense reimbursements are expensed as incurred and are included in Held-to-Maturity Securities
The Company has investments classified as held-to-maturity securities, which consist of revenue bonds acquiredexpense reimbursements to related parties in connection with the purchase of an anchored shopping center. The bonds have a 9.0% interest rate and mature on November 1, 2044. As of September 30, 2017, the Company classified these investments as held-to-maturity as the Company has the intent and ability to hold the securities to maturity. These investments are initially recognized in prepaid expenses, derivative assets, revenue bonds and other assets on theaccompanying condensed consolidated balance sheetsstatements of operations. Other acquisition-related expenses continue to be expensed as incurred and are subsequently measured using amortized cost.
The Company’s investmentsincluded in revenue bonds are reviewed for impairment, including the evaluation of changes in events or circumstances that may indicate that the carrying amount of the investment may not be recoverable. Realization is dependent on a number of factors, including investment performance, market conditions and payment structure. The Company will record an impairment charge if it is determined that a declinetransaction-related expenses in the value of the investment below its carrying amount is other than temporary, recovery of its cost basis is uncertain, and/or it is uncertain if the investment will be held to maturity. The analysis of determining whether the impairment of a security is deemed to be other-than-temporary requires significant judgments and assumptions. The use of alternative judgments and assumptions could result in a different conclusion.
Redeemable Noncontrolling Interest in Consolidated Joint Venture
On June 27, 2014, the Company completed the formation of the Consolidated Joint Venture. Pursuant to the joint venture agreement, the joint venture partner has a right to exercise an option (the “Option”), which became effective on June 27, 2016, whereby the Company will be required to purchase the ownership interest of the joint venture partner at fair market value. As of September 30, 2017, the Option has not been exercised. The Company determined it had a controlling interest in the Consolidated Joint Venture and, therefore, met the GAAP requirements for consolidation. The Company recorded net income of $99,000 and paid distributions of $214,000 related to the noncontrolling interest during the nine months ended September 30, 2017. The Company recorded the noncontrolling interest of $2.4 million as temporary equity in the mezzanine section of theaccompanying condensed consolidated balance sheets, due to the ability to exercise the Option being outside the controlstatements of the Company.

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operations.
Restricted Cash
The Company had $11.0$36.8 million and $8.0$7.0 million in restricted cash as of September 30, 20172021 and December 31, 2016,2020, respectively. Included in restricted cash was $3.9$6.9 million and $4.0$3.6 million held by lenders in lockbox accounts, as of September 30, 20172021 and December 31, 2016,2020, respectively. As part of certain debt agreements, rents from certain encumbered properties are deposited directly into a lockbox account, from which the monthly debt service payment is disbursed to the lender and the excess is disbursed to the Company. Also included in restricted cash was $7.1$29.8 million and $4.0$3.4 million of construction reserves, amounts held by lenders in escrow accounts for real estate taxes and other lender reserves for certain properties, in accordance with the associated lender’s loan agreement, as of September 30, 20172021 and December 31, 2016,2020, respectively.
Revenue RecognitionReal Estate-Related Securities
Certain properties have leases where minimum rental payments increase during the termReal estate-related securities consists primarily of the lease.Company’s investment in commercial mortgage-backed securities (“CMBS”) and preferred units. The Company determines the appropriate classification for real estate-related securities at the time of purchase and reevaluates such designation as of each balance sheet date.
As of September 30, 2021, the Company classified its investments in CMBS as available-for-sale as the Company is not actively trading the securities; however, the Company may sell them prior to their maturity. These investments are carried at their estimated fair value with unrealized gains and losses reported in other comprehensive (loss) income. During the nine months ended September 30, 2021, the Company invested $108.4 million in CMBS. During the same period, the Company sold CMBS with a carrying value of $27.0 million resulting in net proceeds of $27.6 million and a gain of $648,000. As of September 30, 2021, the Company had investments in 15 CMBS with an estimated aggregate fair value of $121.8 million.
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The Company monitors its available-for-sale securities for changes in fair value. An allowance for credit losses is recorded when the Company acquires CMBS, and any subsequent impairment is recognized when the Company determines that a decline in the estimated fair value of a security below its amortized cost has resulted from a credit loss or other factors. The Company records rentalimpairments related to credit losses through the allowance for credit losses. However, the allowance is limited by the amount that the fair value is less than the amortized cost basis. The Company considers many factors in determining whether a credit loss exists, including, but not limited to, the extent to which the fair value is less than the amortized cost basis, recent events specific to the security, industry or geographic area, the payment structure of the security, the failure of the issuer of the security to make scheduled interest or principal payments, and external credit ratings and recent changes in such ratings. The analysis of determining whether a credit loss exists requires significant judgments and assumptions. The use of alternative judgments and assumptions could result in a different conclusion.
During the nine months ended September 30, 2021, the Company invested $63.5 million in preferred units related to a multi-family, office and retail building in Fort Lauderdale, Florida with a preferred dividend rate of 8.9% and a maturity date of June 1, 2022. As of September 30, 2021, the Company classified the investment as held-to-maturity as the Company has the intent and ability to hold the preferred units to maturity and included the investment in real estate-related securities on the condensed consolidated balance sheets. Investments classified as held-to-maturity are initially recognized at cost and are subsequently measured using amortized cost.
The amortized cost of real estate-related securities is adjusted for amortization of premiums and accretion of discounts to maturity computed under the effective interest method and is recorded in the accompanying condensed consolidated statements of operations in interest income. Upon the sale of a security, the realized net gain or loss is computed on the specific identification method.
Interest earned is either received in cash or capitalized to real estate-related securities in the Company’s condensed consolidated balance sheets. Interest is capitalized when certain conditions are met as specified in each security agreement. During the three and nine months ended September 30, 2021, the Company capitalized $703,000 of interest income to real estate-related securities. No such amounts were capitalized during the three and nine months ended September 30, 2020.
Loans Held-for-Investment
The Company has acquired, and may continue to acquire, loans related to real estate assets. Additionally, the Company may acquire and originate credit investments, including commercial mortgage loans, mezzanine loans, preferred equity, and other loans and securities related to commercial real estate assets, as well as corporate loan opportunities that are consistent with the Company’s investment strategy and objectives. The Company intends to hold the loans held-for-investment for the full termforeseeable future or until maturity. Loans held-for-investment are carried on the Company’s condensed consolidated balance sheets at amortized cost, net of each leaseany allowance for credit losses. Discounts or premiums, origination fees and exit fees are amortized as a component of interest income using the effective interest method over the life of the respective loans, or on a straight-line basis when it approximates the effective interest method. Upon the sale of a loan, the realized net gain or loss is computed on the specific identification method.
Interest earned is either received in cash or capitalized to loans held-for-investment and collectabilityrelated receivables, net in the Company’s condensed consolidated balance sheets. Interest is capitalized when certain conditions are met as specified in each loan agreement. During the three and nine months ended September 30, 2020, the Company recorded $6.6 million and $19.4 million, respectively, in interest income on its credit investments, $539,000 of which was capitalized during the nine months ended September 30, 2020. No such amounts were capitalized during the three months ended September 30, 2020.
Accrual of interest income is suspended on nonaccrual loans. Loans that are past due 90 days or more as to principal or interest, or where reasonable doubt exists as to timely collection, are generally considered nonperforming and placed on nonaccrual status. Interest collected is recognized on a cash basis by crediting income when received. Loans may be restored to accrual status when all principal and interest are current and full repayment of the remaining contractual principal and interest are reasonably assured. As of September 30, 2021, the Company did not have nonaccrual loans.
Allowance for Credit Losses
The Company adopted Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments - Credit Losses (Topic 326) (“ASU 2016-13”), on January 1, 2020. The allowance for credit losses required under ASU 2016-13 reflects the Company’s current estimate of potential credit losses related to the Company’s loans held-for-investment included in the condensed consolidated balance sheets. The initial allowance for credit losses recorded on January 1, 2020 is reflected as a direct charge to retained earnings on the Company’s condensed consolidated statements of stockholders’ equity; however,
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subsequent changes to the allowance for credit losses are recognized through net income on the Company’s condensed consolidated statements of operations. While ASU 2016-13 does not require any particular method for determining the allowance for credit losses, it does specify the allowance should be based on relevant information about past events, including historical loss experience, current portfolio and market conditions, and reasonable and supportable forecasts for the duration of each respective loan. In addition, other than a few narrow exceptions, ASU 2016-13 requires that all financial instruments subject to the credit loss model have some amount of loss reserve to reflect the GAAP principal underlying the credit loss model that all loans, debt securities, and similar assets have some inherent risk of loss, regardless of credit quality, subordinate capital, or other mitigating factors.
The Company has elected to use a discounted cash flow model to estimate the allowance for credit losses. This model requires the Company to develop cash flows which project estimated credit losses over the life of the loan and discount these cash flows at the asset’s effective interest rate. The Company then records an allowance for credit losses equal to the difference between the amortized cost basis of the asset and the present value of the expected cash flows. The Company considers loan investments that are both (i) expected to be substantially repaid through the operation or sale of the underlying collateral, and (ii) for which the borrower is experiencing financial difficulty, to be “collateral-dependent” loans. For such loans that the Company determines that foreclosure of the collateral is probable, the Company measures the expected losses based on the difference between the fair value of the collateral less costs to sell and the amortized cost basis of the loan as of the measurement date. For collateral-dependent loans that the Company determines foreclosure is not probable, the Company applies a practical expedient to estimate expected losses using the difference between the collateral’s fair value (less costs to sell the asset if repayment is expected through the sale of the collateral) and the amortized cost basis of the loan. For the Company’s broadly syndicated loans, the Company uses a probability of default and loss given default method using an underlying third-party CMBS/Commercial Real Estate (“CRE”) loan database with historical loan losses from 1998 to 2019. The Company may use other acceptable alternative approaches in the future depending on, among other factors, the type of loan, underlying collateral, and availability of relevant historical market loan loss data.
The Company adopted ASU 2016-13 using the modified retrospective method for all financial assets measured at amortized cost. Prior to adoption, the Company had no allowance for credit losses on its condensed consolidated balance sheets. The Company recorded a cumulative-effective adjustment to the opening retained earnings in its condensed consolidated statement of stockholders’ equity as of January 1, 2020 of $2.0 million.
Quarterly, the Company evaluates the risk of all loans and assigns a risk rating based on a variety of factors, grouped as follows: (i) loan and credit structure, including the as-is loan-to-value (“LTV”) ratio and structural features; (ii) quality and stability of real estate value and operating cash flow, including debt yield, dynamics of the geography, property type and local market, physical condition, stability of cash flow, leasing velocity and quality and diversity of tenancy; (iii) performance against underwritten business plan; and (iv) quality, experience and financial condition of sponsor, borrower and guarantor(s).
Based on a 5-point scale, the Company’s loans are rated “1” through “5,” from least risk to greatest risk, respectively, which ratings are defined as follows:
1-Outperform — Most satisfactory asset quality and liquidity, good leverage capacity. A “1” rating maintains predictable and strong cash flows from operations. The trends and outlook for the credit's operations, balance sheet, and industry are neutral to favorable. Collateral, if appropriate, exceeds performance metrics;
2-Meets or Exceeds Expectations — Acceptable asset quality, moderate excess liquidity, modest leverage capacity. A “2” rating could have some financial/non-financial weaknesses which are offset by strengths; however, the credit demonstrates an ample current cash flow from operations. The trends and outlook for the credit's operations, balance sheet, and industry are generally positive or neutral. Collateral performance, if appropriate, meets or exceeds substantially all performance metrics included in original or current underwriting / business plan;
3-Satisfactory — Acceptable asset quality, somewhat strained liquidity, minimal leverage capacity. A “3” rating is at times characterized by acceptable cash flows from operations. The trends and conditions of the credit's operations and balance sheet are neutral. Collateral performance, if appropriate, meets or is on track to meet underwriting; business plan can reasonably be achieved;
4-Underperformance — The debt investment possesses credit deficiencies or potential weaknesses which deserve management’s close and continued attention. The portfolio company’s operations and/or balance sheet have demonstrated an adverse trend or deterioration which, while serious, has not reached the point where the liquidation of debt is jeopardized. These weaknesses are generally considered correctable by the borrower in the
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normal course of business but may weaken the asset or inadequately protect the Company’s credit position if not checked or corrected. Collateral performance, if appropriate, falls short of original underwriting, material differences exist from business plan, or both; technical milestones have been missed; defaults may exist, or may soon occur absent material improvement; and
5-Default/Possibility of Loss — The debt investment is protected inadequately by the current enterprise value or paying capacity of the obligor or of the collateral, if any. The underlying company’s operations have well-defined weaknesses based upon objective evidence, such as recurring or significant decreases in revenues and cash flows. Major variance from business plan; loan covenants or technical milestones have been breached; timely exit from loan via sale or refinancing is questionable; risk of principal loss. Collateral performance, if appropriate, is significantly worse than underwriting.
The Company generally assigns a risk rating of “3” to all newly originated or acquired loans held-for-investment during a most recent quarter, except in the case of specific circumstances warranting an exception.
Leases
The Company has lease agreements with lease and non-lease components. The Company has elected to not separate non-lease components from lease components for all classes of underlying assets (primarily real estate assets) and will account for the combined components as rental and other property income. Non-lease components included in rental and other property income include certain tenant reimbursements for maintenance services (including common-area maintenance services or “CAM”), real estate taxes, insurance and utilities paid for by the lessor but consumed by the lessee. As a lessor, the Company has further determined that this policy will be effective only on a lease that has been classified as an operating lease and the revenue recognition pattern and timing is the same for both types of components. The Company is not a party to any material leases where it is the lessee.
Significant judgments and assumptions are inherent in not only determining if a contract contains a lease, but also the lease classification, terms, payments, and, if needed, discount rates. Judgments include the nature of any options, including if they will be exercised, evaluation of implicit discount rates and the assessment and consideration of “fixed” payments for straight-line rent revenue calculations.
The Company has an investment in a real estate property that is subject to a ground lease, for which a lease liability and right of use (“ROU”) asset of $2.3 million and $2.4 million was recorded as of September 30, 2021 and December 31, 2020, respectively. See Note 14 — Leases for a further discussion regarding this ground lease.
Lease costs represent the initial direct costs incurred in the origination, negotiation and processing of a lease agreement. Such costs include outside broker commissions and other independent third-party costs and are amortized over the life of the lease on a straight-line basis. Costs related to salaries and benefits, supervision, administration, unsuccessful origination efforts and other activities not directly related to completed lease agreements are expensed as incurred. Upon successful lease execution, leasing commissions are capitalized.
Development Activities
Project costs and expenses, including interest incurred, associated with the development, construction and lease-up of a real estate project are capitalized as construction in progress. During the nine months ended September 30, 2021, the Company capitalized $1.4 million of interest expense associated with the development of condominiums acquired via foreclosure, which is included in condominium developments in the accompanying condensed consolidated balance sheets. There were no development projects during the nine months ended September 30, 2020.
Revenue Recognition
Revenue from leasing activities
Rental and other property income is primarily derived from fixed contractual payments from operating leases, and therefore, is generally recognized on a straight-line basis over the term of the lease, which typically begins the date the tenant takes control of the space. When the Company acquires a property, the terms of existing leases are considered to commence as of the acquisition date for the purpose of this calculation. Variable rental and other property income consists primarily of tenant reimbursements for recoverable real estate taxes and operating expenses which are included in rental and other property income in the period when such costs are incurred, with offsetting expenses in real estate taxes and property operating expenses,
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respectively, within the condensed consolidated statements of operations. The Company defers the recognition of contingentvariable rental and other property income, such as percentage rents, until the specific target that triggers the contingent rental income is achieved. Expected reimbursements from tenants for recoverable real estate taxes and operating expenses are included in tenant reimbursement income in the period when such costs are incurred.
The Company continually reviews whether collection of lease-related receivables, related to rent, including any straight-line rent, and current and future operating expense reimbursements from tenants and determinesare probable. The determination of whether collectability by takingis probable takes into consideration the tenant’s payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates and economic conditions in the area in which the property is located. InUpon the eventdetermination that the collectability of a receivable is uncertain,not probable, the Company will record an increasea reduction to rental and other property income for amounts previously recorded and a decrease in the allowance for uncollectible accounts. Asoutstanding receivable. Revenue from leases where collection is deemed to be not probable is recorded on a cash basis until collectability becomes probable. Management’s estimate of the collectability of lease-related receivables is based on the best information available at the time of estimate. The Company does not use a general reserve approach and lease-related receivables are adjusted and taken against rental and other property income only when collectability becomes not probable.
During the nine months ended September 30, 20172021, the Company identified certain tenants where collection was no longer probable. For these tenants, the Company made the determination to record revenue on a cash basis and wrote off a net total of outstanding receivables of $109,000 for the nine months ended September 30, 2021. These write-offs reduced rental and other property income during the nine months ended September 30, 2021.
Revenue from lending activities
Interest income from the Company’s loans held-for-investment and real estate-related securities is comprised of interest earned on loans and the accretion and amortization of net loan origination fees and discounts. Interest income on loans is accrued as earned, with the accrual of interest suspended when the related loan becomes a nonaccrual loan. Interest income on the Company’s broadly syndicated loans is accrued as earned beginning on the settlement date.
Reportable Segments
During the year ended December 31, 2016,2020, the Company had an allowanceupdated its reportable segment information to reflect how the chief operating decision makers regularly review and manage the business and determined that it has 2 reportable segments:
Credit — engages primarily in acquiring and originating loans related to real estate assets. The Company may acquire first and second lien mortgage loans, mezzanine loans, bridge loans, wraparound mortgage loans, construction mortgage loans on real property and loans on leasehold interest mortgages. This segment also includes investments in CMBS and broadly syndicated loans.
Real estate — engages primarily in acquiring and managing income-producing retail properties that are primarily single-tenant properties or anchored shopping centers, which are leased to creditworthy tenants under long-term net leases. The commercial properties are geographically diversified throughout the United States and have similar economic characteristics.
See Note 15 — Segment Reporting for uncollectible accounts of $1.4 million and $221,000, respectively.a further discussion regarding these segments.
Recent Accounting Pronouncements
From time to time, new accounting pronouncements are issued by various standard setting bodies that may have an impact on the Company’s accounting and reporting. Except as otherwise stated below, the Company is currently evaluating the effect that certain of these new accounting requirements may have on the Company’s accounting and related reporting and disclosures in the Company’s condensed consolidated financial statements:statements.
In May 2014,April 2020, the Financial Accounting Standards Board (“FASB”(the “FASB”) issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”a question and answer document (the “Lease Modification Q&A”), which supersedes focused on the revenue recognition requirements in Revenue Recognition, Accounting Standards Codification  (“ASC”) (Topic 605) and will require an entityapplication of lease accounting guidance to recognize revenue inlease concessions provided as a way that depicts the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. For public business entities, the guidance should be applied to annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Companies may use either a full retrospective or a modified retrospective approach to adopt ASU 2014-09. The Company plans to use the modified retrospective approach to adopt ASU 2014-09. In accordance with the Company’s plan for the adoption of ASU 2014-09, the Company’s implementation team has identified the Company’s revenue streams, performed an in-depth reviewresult of the Company’s revenue contractscurrent novel coronavirus (“COVID-19”) pandemic. Due to the business disruptions and identifiedchallenges severely affecting the related performance obligationsglobal economy caused by the COVID-19 pandemic, many lessors may be required to provide rent deferrals and is evaluatingother lease concessions to lessees. While the impact on the Company’s consolidated financial statements and internal accounting processes and controls. Oncelease modification guidance in ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”ASC 842”), which, as discussed below, sets forth principles for addresses routine changes to lease terms resulting from negotiations between the recognition, measurement, presentationlessee and disclosurethe lessor, this guidance did not contemplate concessions being so rapidly executed to address the sudden liquidity constraints of leases, goes into effect, ASU 2014-09 may applysome lessees arising from COVID-19 related impacts. Under existing lease guidance, the Company would have to non-lease components indetermine, on a lease by lease basis, if a lease concession was the result of a new arrangement reached with the tenant (treated within the lease agreements.
In February 2016, the FASB issued ASU 2016-02, which will require that a lessee recognize assets and liabilities on the balance sheet for all leases with a lease term of more than 12 months, with the result being the recognition of a right of use asset and a lease liability and the disclosure of key information about the entity’s leasing arrangements. The lessormodification accounting model under ASU 2016-02 is similar to current guidance; however it limits the capitalization of initial direct leasing costs, such as internally generated costs. ASU 2016-02 retains a distinction between finance leases (i.e., capital leases under current GAAP) and operating leases. The classification criteria for distinguishing between finance leases and operating leases will be substantially similar to the classification criteria for distinguishing between capital leases and operating leases under current GAAP. The amendments in ASU 2016-02 are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted. A modified retrospective approach is required for existing

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framework) or if a lease concession was under the enforceable rights and obligations within the existing lease agreement (precluded from applying the lease modification accounting framework). The Lease Modification Q&A allows the Company, if certain criteria have been met, to bypass the lease by lease analysis, and instead elect to either apply the lease modification accounting framework or not, with such election applied consistently to leases with similar characteristics and similar circumstances. 
leasesThe Company has elected to apply this guidance to avoid performing a lease by lease analysis for the lease concessions that have not expired upon adoption(1) were granted as relief due to COVID-19 related impacts and provides for certain practical expedients. The Company’s implementation team has developed an inventory of all leases and is identifying any non-lease components(2) result in the cash flows remaining substantially the same or less than the original contract and will account for these lease agreementsconcessions as if no changes were made to the leases. During the three and is evaluatingnine months ended September 30, 2021, the majority of the lease concessions provided by the Company were in the form of rental abatements, to certain tenants in response to the impact toof the COVID-19 pandemic on those tenants.
As of November 8, 2021, the Company both as lessor and lessee, and its consolidated financial statements. Uponhas collected approximately 99% of rental payments billed to tenants during the adoption of ASU 2016-02,three months ended September 30, 2021. During the three months ended September 30, 2021, the Company will record certain expenses paid directly by a tenant that protect the Company’s interestsgranted an additional $104,000 in its properties, such as insurance and real estate taxes, and the related operating expense reimbursement revenue, with no impact on net income. Based upon a preliminary analysis,rent deferrals. As of November 8, 2021, the Company does not expectcollected $6.4 million of deferred rent, representing approximately 97% of amounts due through September 30, 2021.
In January 2021, the FASB issued ASU No. 2021-01, Reference Rate Reform (Topic 848) (“ASU 2021-01”). The amendments in ASU 2021-01 clarify that certain optional expedients and exceptions for contract modifications and hedge accounting apply to derivative instruments that use an interest rate for leases pursuant to which the Companymargining, discounting, or contract price alignment that is the lessor to materially changemodified as a result of the adoption of ASU 2016-02. The Company does not expect the accounting for one ground lease pursuant to which the Company is the lessee to have a material impact on its consolidated financial statements.
ASU No. 2016-01, Financial Instruments (Subtopic 825-10) — The amendments in this update require all equity investments to be measured at fair value with changes in the fair value recognized through net income (other than those accounted for under the equity method of accounting or those that result in consolidationdiscontinuation of the investee). The amendments in this update also require an entity to present separately in other comprehensive income (loss) the portionuse of the total change in the fair value ofLondon Interbank Offered Rate (“LIBOR”) as a liability resulting from a change in the instrument-specific credit risk when the entity has electedbenchmark interest rate due to measure the liability at fair value in accordancereference rate reform. ASU 2021-01 is effective immediately for all entities with the fair value option for financial instruments. In addition, the amendments in this update require separate presentationto apply retrospectively as of financial assets and financial liabilities by measurement category and form of financial asset on the consolidated balance sheets or the accompanying notes to the consolidated financial statements. The amendments in this update are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years.
In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326) (“ASU 2016-13”). ASU 2016-13 is intended to improve financial reporting requiring more timely recognition of credit losses on loans and other financial instruments that are not accounted for at fair value through net income, including loans held for investment, held-to-maturity debt securities, trade and other receivables, net investment in leases and other such commitments. ASU 2016-13 requires that financial assets measured at amortized cost be presented at the net amount expected to be collected, through an allowance for credit losses that is deductedany date from the amortized cost basis. The amendments in ASU 2016-13 require the Companybeginning of an interim period that includes or is subsequent to measure all expected credit losses based upon historical experience, current conditions,March 12, 2020, and reasonable and supportable forecasts that affect the collectability of the financial assets and eliminates the “incurred loss” methodology under current GAAP. ASU 2016-13 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2019. Early adoption is permitted for fiscal years, and interim periods within those years, beginning after December 15, 2018. 
In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows(Topic 230): Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”), which is intended to address diversity in practice related to how certain cash receipts and cash payments are presented and classified in the statement of cash flows. ASU 2016-15 is effective for public business entities for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption permitted, and requires retrospective adoption unless it is impracticable to apply, in which case it is tocan be applied prospectively as of the earliest date practicable.to any new contract modifications made on or after January 7, 2021. The Company plans to adopt ASU 2016-15 during the fourth quarter of fiscal year 2017currently uses LIBOR as its benchmark interest rate for its derivative instruments, and has determined that this standard is relevant to its presentation of debt prepayment and debt extinguishment costs and contingent consideration payments madenot entered into any new contracts on or after a business combination.
In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (“ASU 2016-18”), which provides guidance on the presentation of restricted cash and restricted cash equivalents in the statement of cash flows. In accordance with ASU 2016-18, restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period amounts shown on the statements of cash flows. The amendmentseffective date of ASU 2016-18 are effective for reporting periods beginning after December 15, 2017, with early adoption permitted.2021-01. The Company plans to adopt ASU 2016-18 duringhas evaluated the fourth quarterimpact of 2017this ASU’s adoption, and apply the standard retrospectively for all periods presented. The Company does not expect itbelieve this ASU will have a material impact on its condensed consolidated financial statements.
In February 2017, the FASB issued ASU No. 2017-05, Other Income – Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets (“ASU 2017-05”), which clarifies the following: (1) nonfinancial assets within the scope of Subtopic 610-20 may include nonfinancial assets transferred within a legal entity to a counterparty; (2) an entity should allocate consideration to each distinct asset by applying the guidance in Topic 606 on allocating the transaction price to performance obligations; and (3) entities are required to derecognize a distinct nonfinancial asset or distinct in substance nonfinancial asset in a partial sale transaction when it (a) does not have (or ceases to have) a controlling financial interest in the legal entity that holds the asset in accordance with Subtopic 810 and (b) transfers control of the asset in accordance with Topic 606. The adoption of this standard may result in higher gains on the sale of partial real estate interests, including contributions of

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nonfinancial assets to a joint venture or other noncontrolling investee, due to recognizing the full gain when the derecognition criteria are met and recording the retained noncontrolling interest at its fair value. ASU 2017-05 is effective for annual periods, and interim periods therein, beginning after December 15, 2017. Early adoption is permitted.
In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities (“ASU 2017-12”). The targeted amendments in this ASU help simplify certain aspects of hedge accounting and result in a more accurate portrayal of the economics of an entity’s risk management activities in its financial statements. This ASU applies to the Company’s interest rate swaps designated as cash flow hedges. Upon adoption of this ASU, all changes in the fair value of highly effective cash flow hedges will be recorded in accumulated other comprehensive income rather than recognized directly in earnings. Under current U.S. GAAP, the ineffective portion of the change in fair value of cash flow hedges is recognized directly in earnings. This eliminates the requirement to separately measure and disclose ineffectiveness for qualifying cash flow hedges. ASU 2017-12 is effective for public entities for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. The ASU is required to be adopted using a modified retrospective approach with early adoption permitted. The Company plans to adopt ASU 2017-12 during the first quarter of fiscal year 2018 and does not expect that it will have a material impact on its consolidated financial statements.
NOTE 3 — FAIR VALUE MEASUREMENTS
GAAP defines fair value, establishes a framework for measuring fair value and requires disclosures about fair value measurements. GAAP emphasizes that fair value is intended to be a market-based measurement, as opposed to a transaction-specific measurement.
Fair value is defined as 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 under current market conditions. Depending on the nature of the asset or liability, various techniques and assumptions can be used to estimate the fair value. Assets and liabilities are measured using inputs from three levels of the fair value hierarchy, as follows:
Level 1 — Inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date. An active market is defined as a market in which transactions for the assets or liabilities occur with sufficient frequency and volume to provide pricing information on an ongoing basis.
Level 2 — Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active (markets with few transactions), inputs other than quoted prices that are observable for the asset or liability (i.e., interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data correlation or other means (market corroborated inputs).
Level 3 — Unobservable inputs, which are only used to the extent that observable inputs are not available, reflect the Company’s assumptions about the pricing of an asset or liability.
The following describes the methods the Company uses to estimate the fair value of the Company’s financial assets and liabilities:
NotesReal estate-related securities — The Company generally determines the fair value of its real estate-related securities by utilizing broker-dealer quotations, reported trades or valuation estimates from pricing models to determine the reported price. Pricing models for real estate-related securities are generally discounted cash flow models that usually consider the attributes applicable to a particular class of security (e.g., credit rating, seniority), current market data, and estimated cash flows for each class and incorporate deal collateral performance such as prepayment speeds and default rates, as available. Depending upon the
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significance of the fair value inputs used in determining these fair values, these securities are valued using Level 1, Level 2 or Level 3 inputs.
Credit facilities and notes payable and credit facility — The fair value is estimated by discounting the expected cash flows based on estimated borrowing rates available to the Company as of the measurement date. Current and prior period liabilities’ carrying and fair values exclude net deferred financing costs. These financial instruments are valued using Level 2 inputs. As of September 30, 2017,2021, the estimated fair value of the Company’s debt was $2.48$2.74 billion, compared to thea carrying value of $2.47$2.81 billion. The estimated fair value of the Company’s debt as of December 31, 20162020 was $2.25$2.14 billion, compared to thea carrying value of $2.26$2.15 billion.
Derivative instruments — The Company’s derivative instruments are comprised of interest rate swaps.swaps and interest rate caps. All derivative instruments are carried at fair value and are valued using Level 2 inputs. The fair value of these instruments is determined using interest rate market pricing models. In addition, credit valuation adjustments are incorporated into the fair values to account for the Company’s potential nonperformance risk and the performance risk of the respective counterparties.
Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with those derivatives utilize Level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of default by the Company and its counterparties. However, as of September 30, 20172021 and December 31, 2016,2020, the Company assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and determined that the credit valuation adjustments are not

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significant to the overall valuation of the Company’s derivatives. As a result, the Company has determined that its derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy.
Contingent consideration arrangementsLoans held-for-investment — The contingent consideration arrangementsCompany’s loans held-for-investment are carriedrecorded at fair valuecost upon origination and are valued using Level 3 inputs.adjusted by net loan origination fees and discounts. The Company estimates the fair value of additionalits loans held-for-investment by performing a present value analysis for the anticipated future cash flows using an appropriate market discount rate taking into consideration paid in connection with the acquisition of properties subject to contingent consideration arrangements is determined based on key assumptions, including, but not limited to, rental rates, discount rates and the estimated timing and probability of successfully leasing vacant space subsequent to the Company’s acquisition of certain properties. 
Revenue bonds —credit risk. The fair value estimates of the Company’s revenue bonds are based on assumptions that management believes market participants would use in pricing, using widely accepted valuation techniques including discounted cash flow analysis. This analysis reflects the contractual terms of the bonds, including the period to maturity, and uses unobservable market-based inputs, including discount rates ranging from 7.75% to 9.0%. As a result, the Company has determined that its revenue bondsCRE loans held-for-investment are classified in Level 3 of the fair value hierarchy. The Company’s broadly syndicated loans are classified as Level 2 or Level 3 depending on the number of market quotations or indicative prices from pricing services that are available, and whether the depth of the market is sufficient to transact at those prices in amounts approximating the Company’s investment position at the measurement date. As of September 30, 2017,2021, $474.9 million and $96.8 million of the Company’s broadly syndicated loans were classified in Level 2 and Level 3 of the fair value hierarchy, respectively. As of December 31, 2020, $359.6 million and $114.1 million of the Company’s broadly syndicated loans were classified in Level 2 and Level 3 of the fair value hierarchy, respectively. As of September 30, 2021, the estimated fair value of the Company’s revenue bondsloans held-for-investment and related receivables, net was $2.1$1.47 billion, compared to its carrying value of $1.45 billion. As of December 31, 2020, the estimated fair value of the Company’s loans held-for-investment was $907.8 million, compared to its carrying value of $892.3 million.
Other financial instruments—The Company considers the carrying values of its cash and cash equivalents, restricted cash, tenant receivables, accounts payable and accrued expenses, other liabilities, due to affiliates and distributions payable in order to approximate their fair values because of the short period of time between their origination and their expected realization as well as their highly-liquid nature. Due to the short-term maturities of these instruments, Level 1 inputs are utilized to estimate the fair value of these financial instruments.
Considerable judgment is necessary to develop estimated fair values of financial assets and liabilities. Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Company could realize, or be liable for, upon disposition of the financial assets and liabilities. As of September 30, 20172021 and December 31, 2016,2020, there have been no transferstransfers of financial assets or liabilities between fair value hierarchy levels.
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Items Measured at Fair Value on a Recurring Basis
In accordance with the fair value hierarchy described above, the following tables show the fair value of the Company’s financial assets and liabilities that are required to be measured at fair value on a recurring basis as of September 30, 20172021 and December 31, 20162020 (in thousands):
 Balance as of
September 30, 2017		 
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
 
Significant Other
Observable Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Financial assets:       
Interest rate swaps$3,178
 $—
 $3,178
 $—
Total financial assets$3,178
 $—
 $3,178
 $—
Financial liabilities:       
Interest rate swaps$(3,440) $—
 $(3,440) $—
Total financial liabilities$(3,440) $—
 $(3,440) $—
        
  
Balance as of
December 31, 2016		 
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
 
Significant Other
Observable Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
Financial assets:       
Interest rate swaps$2,327
 $—
 $2,327
 $—
Total financial assets$2,327
 $—
 $2,327
 $—
Financial liabilities:       
Interest rate swaps$(3,351) $—
 $(3,351) $—
Contingent consideration(337) —
 —
 (337)
Total financial liabilities$(3,688) $—
 $(3,351) $(337)
Balance as of
September 30, 2021		Quoted Prices in Active Markets for Identical Assets (Level 1)Significant Other Observable Inputs (Level 2)Significant Unobservable Inputs (Level 3)
Financial assets:
CMBS$121,756 $47,750 $32,133 $41,873 
Interest rate caps51 — 51 — 
Total financial assets$121,807 $47,750 $32,184 $41,873 

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Balance as of
December 31, 2020		Quoted Prices in Active Markets for Identical Assets (Level 1)Significant Other Observable Inputs (Level 2)Significant Unobservable Inputs (Level 3)
Financial assets:
CMBS$38,194 $— $27,461 $10,733 
Total financial assets$38,194 $— $27,461 $10,733 
Financial liabilities:
Interest rate swaps$(12,308)$— $(12,308)$— 
Total financial liabilities$(12,308)$— $(12,308)$— 
The following are reconciliations of the changes in financial assets and liabilities with Level 3 inputs in the fair value hierarchy for the nine months ended September 30, 2017 and 20162021 (in thousands):
  Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
Beginning Balance, December 31, 2016 $(337)
Purchases and fair value adjustments:  
Purchases 2,081
Fair value adjustments 337
Ending Balance, September 30, 2017 $2,081
  Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
Beginning Balance, December 31, 2015 $(4,538)
Purchases and fair value adjustments:  
Purchases (332)
Fair value adjustments 2,672
Payments made 1,866
Ending Balance, September 30, 2016 $(332)
CMBS
Beginning Balance, January 1, 2021$10,733 
Total gains and losses:
Unrealized loss included in other comprehensive income (loss), net1,045 
Purchases and payments received:
Purchases34,491 
Discounts, net(5,068)
Capitalized interest income703 
Principal payments received(31)
Ending Balance, September 30, 2021$41,873 
Items Measured at Fair Value on a Non-Recurring Basis (Including Impairment Charges)

Certain financial and nonfinancial assets and liabilities are measured at fair value on a nonrecurring basis and are subject to fair value adjustments in certain circumstances, such as when there is evidence of impairment. The Company’s process for identifying and recording impairment related to real estate assets and intangible assets is discussed in Note 2 — Summary of Significant Accounting Policies.
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2021 (Unaudited) – (Continued)

As discussed in Note 4 — Real Estate Investments,Assets, during the nine months ended September 30, 2017,2021, real estate assets related to one property totaling approximately 5,000 square feet11 properties were deemed to be impaired and itstheir carrying value wasvalues were reduced to an estimated fair value of $1.0$43.1 million, resulting in impairment charges of $1.7$5.3 million. During the nine months ended September 30, 2016,2020, real estate assets related to one property totaling approximately 7,000 square feet11 properties were deemed to be impaired and itstheir carrying value wasvalues were reduced to an estimated fair value of $1.4$71.5 million, resulting in impairment charges of $1.4$16.0 million. The Company estimates fair values using Level 3 inputs and using a combined income and market approach, specifically using discounted cash flow analysis and recent comparable sales transactions. The evaluation of real estate assets for potential impairment requires the Company’s management to exercise significant judgment and to make certain key assumptions, including, but not limited to, the following: (1) terminal capitalization;capitalization rates; (2) discount rates; (3) the number of years the property will be held; (4) property operating expenses; and (5) re-leasing assumptions, including the number of months to re-lease, market rental income and required tenant improvements. There are inherent uncertainties in making these estimates such as market conditions and the future performance and sustainability of the Company’s tenants. The Company determined that the selling prices used to determine the fair values were Level 2 inputs.
The following summarizes the ranges of discount rates and terminal capitalization rates used for the Company’s impairment test for the real estate assets during the nine months ended September 30, 2021:
Nine Months Ended September 30,
20212020
Discount RateTerminal Capitalization RateDiscount RateTerminal Capitalization Rate
8.0% – 9.7%7.5% – 9.2%7.9% – 9.7%7.4% – 9.2%
The following table presents the impairment charges by asset class recorded during the nine months ended September 30, 20172021 and 20162020 (in thousands):
Nine Months Ended September 30,
20212020
Asset class impaired:
Land$997 $3,595 
Buildings, fixtures and improvements4,138 11,737 
Intangible lease assets263 696 
Intangible lease liabilities(130)(45)
Total impairment loss$5,268 $15,983 
NOTE 4 — REAL ESTATE ASSETS
  Nine Months Ended September 30,
  2017 2016
Asset class impaired:    
Land 375
 $502
Buildings, fixtures and improvements 887
 713
Intangible lease assets 396
 215
Total impairment loss $1,658
 $1,430
2021 Property Acquisitions

During the nine months ended September 30, 2021, the Company did not acquire any properties.
Assets Acquired Via Foreclosure
On January 7, 2021, the Company completed foreclosure proceedings to take control of the assets which previously secured its 8 mezzanine loans, including 75 condominium units and 21 rental units across 4 buildings, including certain units that are under development. No land was acquired in connection with the foreclosure.
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September 30, 20172021 (Unaudited) – (Continued)



NOTE 4 — REAL ESTATE INVESTMENTS
2017 Property Acquisitions
During the nine months ended September 30, 2017, the Company acquired 40 commercial properties for an aggregate purchase price of $300.5 million (the “2017 Acquisitions”), of which 36 were determined to be asset acquisitions and four were accounted for as business combinations as they were acquired prior to the adoption of ASU 2017-01 in April 2017. The Company funded the 2017 Acquisitions with net cash provided by operations and available borrowings.
The following table summarizes the consideration transferred for the properties purchased during the nine months ended September 30, 2017 (in thousands):
 2017 Acquisitions
Investments in real estate: 
Purchase price of asset acquisitions$245,138
Purchase price of business combinations55,386
Total purchase price of real estate investments acquired (1)
$300,524
______________________
(1)The weighted average amortization period for the 2017 Acquisitions is 16.6 years for acquired in-place leases and other intangibles, 13.6 years for acquired above-market leases and 8.5 years for acquired intangible lease liabilities.
During the nine months ended September 30, 2017, the Company acquired a 100% interest in 36 commercial properties for an aggregate purchase price of $245.1 million, which were accounted for as asset acquisitions (the “2017 Asset Acquisitions”). The aggregate purchase price includes $5.9 million of external acquisition-related expenses that were capitalized in accordance with ASU 2017-01. Prior to the adoption of ASU 2017-01, costs related to property acquisitions were expensed as incurred. The following table summarizes the purchase price allocation for the 2017 Asset Acquisitions purchased during the nine months ended September 30, 2017real estate acquired via foreclosure (in thousands):
As of September 30, 2021
Buildings, fixtures and improvements$192,182 
Acquired in-place leases and other intangibles134 
Intangible lease liabilities(326)
Total purchase price$191,990 
 2017 Asset Acquisitions
Land$32,583
Buildings, fixtures and improvements173,681
Acquired in-place leases and other intangibles36,733
Acquired above-market leases3,624
Revenue bonds2,081
Intangible lease liabilities(3,564)
Total purchase price$245,138
In connection with the foreclosure, the Company assumed $102.6 million of mortgage notes payable related to the assets, as further discussed in Note 9 — Notes Payable, Repurchase Facilities and Credit Facilities.
2021 Condominium Development Project
During the nine months ended September 30, 2017,2021, the Company acquired a 100% interest in four commercial properties for an aggregate purchase price of $55.4 million, which were accounted for as business combinations (the “2017 Business Combination Acquisitions”). The purchase price allocation for each of the Company’s 2017 Business Combination Acquisitions is preliminary and subject to change as the Company finalizes the allocations, which the Company expects will be prior to the end of the current fiscal year. The Company preliminarily allocated the purchase price of these properties to the fair value of the assets acquired and liabilities assumed. The following table summarizes the preliminary purchase price allocations for the 2017 Business Combination Acquisitions purchased during the nine months ended September 30, 2017 (in thousands):
 2017 Business Combination Acquisitions
Land$9,873
Buildings, fixtures and improvements41,186
Acquired in-place leases and other intangibles5,974
Acquired above-market leases988
Intangible lease liabilities(2,635)
Total purchase price$55,386

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2017 (Unaudited) – (Continued)


The Company recorded revenue for the three and nine months ended September 30, 2017 of $1.3 million and $3.6 million, respectively, and net income of $491,000 and $163,000 for the three and nine months ended September 30, 2017, respectively, related to the 2017 Business Combination Acquisitions. In addition, the Company recorded $1.3capitalized $5.9 million of acquisition-related expenses foras construction in progress associated with the nine months ended September 30, 2017,development of condominiums acquired via foreclosure, which is included in acquisition-related expenses oncondominium developments in the accompanying condensed consolidated statements of operations.balance sheets.
The following information summarizes selected financial information of the Company as if all of the 2017 Business Combination Acquisitions were completed on January 1, 2016 for each period presented below. The table below presents the Company’s estimated revenue and net income, on a pro forma basis, for the three and nine months ended September 30, 2017 and 2016, respectively (in thousands):
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
Pro forma basis:       
Revenue$107,024
 $103,140
 $316,619
 $306,864
Net income$29,736
 $18,374
 $65,114
 $56,740
The pro forma information for the nine months ended September 30, 2017 was adjusted to exclude $1.3 million of acquisition-related fees and expenses recorded during such periods related to the 2017 Business Combination Acquisitions. Accordingly, these expenses were instead recognized in the pro forma information for the nine months ended September 30, 2016.
The pro forma information is presented for informational purposes only and may not be indicative of what actual results of operations would have been had the transactions occurred at the beginning of 2016, nor does it purport to represent the results of future operations.
2017 Property2021 Condominium Dispositions
During the nine months ended September 30, 2017,2021, the Company disposed of 14condominium units for an aggregate sales price of $28.6 million, resulting in proceeds of $26.5 million after closing costs and a gain of $4.9 million. The Company has no continuing involvement with these condominium units. The gain on sale of condominium units is included in gain on disposition of real estate and condominium developments, net in the condensed consolidated statements of operations.
2021 Property Dispositions and Real Estate Assets Held for Sale
During the nine months ended September 30, 2021, the Company disposed of 113 properties, including 109 retail properties, 3 anchored shopping centers, 1 industrial property and an outparcel of land for an aggregate gross sales price of $98.6$484.4 million, resulting in proceeds of $64.1$470.2 million after closing costs and the repayment of the $33.0 million variable rate debt secured by one of the disposed properties and a gain of $16.8$75.6 million. No disposition fees were paid to CR IV Advisors or its affiliates in connection with the sale of the properties and theThe Company has no continuing involvement with these properties. The gain on sale of real estate is included in gain on disposition of real estate and condominium developments, net in the condensed consolidated statements of operations.
2017As of September 30, 2021, there was 1 property classified as held for sale with a carrying value of $1.3 million included in assets held for sale in the accompanying condensed consolidated balance sheets. Subsequent to September 30, 2021, the Company disposed of this property, as further discussed in Note 16 — Subsequent Events.
2021 Impairment of a Property
The Company performs quarterly impairment review procedures, primarily through continuous monitoring of events and changes in circumstances that could indicate that the carrying value of certain of its real estate assets may not be recoverable. See Note 2 — Summary of Significant Accounting Policies for a discussion of the Company’s accounting policies regarding impairment of real estate assets.
During the nine months ended September 30, 2017, one property2021, 11 properties totaling approximately 260,000 square feet with a carrying value of $2.7$48.4 million waswere deemed to be impaired and itstheir carrying value wasvalues were reduced to an estimated fair value of $1.0$43.1 million, resulting in impairment charges of $1.7$5.3 million, which were recorded in the condensed consolidated statements of operations. See Note 3 — Fair Value Measurements for a further discussion regarding these impairment charges.

2020 Property Acquisitions
During the nine months ended September 30, 2020, the Company acquired 3 commercial properties for an aggregate purchase price of $14.5 million (the “2020 Property Acquisitions”), which includes $111,000 of external acquisition-related expenses that were capitalized. The Company funded the 2020 Property Acquisitions with proceeds from real estate dispositions and available borrowings.
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 20172021 (Unaudited) – (Continued)



2016 Property Acquisitions
During the nine months ended September 30, 2016, the Company acquired 14 commercial properties for an aggregate purchase price of $197.0 million (the “2016 Acquisitions”). The 2016 Acquisitions were accounted for as business combinations. The Company funded the 2016 Acquisitions with net proceeds from the Initial DRIP Offering, net cash provided by operations and available borrowings. The Company allocated the purchase price of these properties to the fair value of the assets acquired and liabilities assumed. The following table summarizes the purchase price allocationsallocation for the 20162020 Property Acquisitions (in thousands):
 2016 Acquisitions
Land$45,741
Buildings, fixtures and improvements134,375
Acquired in-place leases and other intangibles (1)
16,807
Acquired above-market leases (2)
3,398
Intangible lease liabilities (3)
(3,295)
Total purchase price$197,026

(1)The weighted average amortization period for acquired2020 Property Acquisitions
Land$4,677 
Buildings, fixtures and improvements8,415 
Acquired in-place leases and other intangibles was 7.2 years for the 2016 Acquisitions.(1)
1,418 
(2)The weighted average amortization period for acquired above-market leases was 5.2 years for the 2016 Acquisitions.
(3)Total purchase price
The weighted average amortization period for acquired intangible lease liabilities was 6.1 years for the 2016 Acquisitions.
$		14,510 
______________________
(1)    The Company recorded revenueamortization period for the threeacquired in-place leases and nine months ended September 30, 2016 of $3.4 million and $5.3 million, respectively, and a net loss for the three and nine months ended September 30, 2016 of $313,000 and $2.1 million, respectively, related to the 2016 Acquisitions.other intangibles is 14.7 years.
The following information summarizes selected financial information of the Company as if all of the 2016 Acquisitions were completed on January 1, 2015 for each period presented below. The table below presents the Company’s estimated revenue and net income, on a pro forma basis, for the three and nine months ended September 30, 2016 and 2015, respectively (in thousands):
 Three Months Ended September 30, Nine Months Ended September 30,
 2016 2015 2016 2015
Pro forma basis:       
Revenue$103,315
 $98,982
 $311,312
 $284,660
Net income$17,973
 $18,728
 $58,777
 $51,839
The pro forma information for the three and nine months ended September 30, 2016 was adjusted to exclude $1.4 million and $3.6 million, respectively, of acquisition-related fees and expenses recorded during the three and nine months ended September 30, 2016. Accordingly, these costs were instead recognized in the pro forma information for the three and nine months ended September 30, 2015.
The pro forma information is presented for informational purposes only and may not be indicative of what actual results of operations would have been had the transactions occurred at the beginning of 2015, nor does it purport to represent the results of future operations.
20162020 Property Dispositions
During the nine months ended September 30, 2016,2020, the Company disposed of three19 properties, consisting of 12 retail properties and one7 anchored shopping centercenters, for an aggregate gross sales price of $26.6$199.2 million, resulting in proceeds of $25.9$194.7 million after closing costs and disposition fees due to CMFT Management or its affiliates, and a gain of $2.1$20.1 million. No disposition fees were paid to CR IV Advisors or its affiliates in connection with the sale of the properties and theThe Company has no continuing involvement with these properties. The gain on sale of real estate is included in gain on disposition of real estate and condominium developments, net in the condensed consolidated statements of operations.

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COLE CREDIT PROPERTY TRUST IV, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2017 (Unaudited) – (Continued)


20162020 Impairment of a Property
During the nine months ended September 30, 2016, one property2020, 11 properties totaling approximately 699,000 square feet with a carrying value of $2.8$87.5 million waswere deemed to be impaired and itstheir carrying value wasvalues were reduced to an estimated fair value of $1.4$71.5 million, resulting in impairment charges of $1.4$16.0 million, which were recorded in the condensed consolidated statements of operations. See Note 3 — Fair Value Measurements for a further discussion regarding these impairment charges.
2016 Unconsolidated Joint Venture
During the nine months ended September 30, 2016, the Company acquired the partner’s (the “Unconsolidated Joint Venture Partner”) approximately 10% interest in a multi-tenant property comprising 176,000 rentable square feet of commercial space (the “Unconsolidated Joint Venture”). The Company has determined that this transaction qualified as a business combination to be accounted for under the acquisition method. Accordingly, the assets and liabilities of this transaction were recorded in the Company’s condensed consolidated balance sheets at their estimated fair value as of the acquisition date. The fair value of the assets acquired, liabilities assumed and equity interests were estimated using significant assumptions consistent with the Company’s policy concerning the allocation of the purchase price of real estate assets, including current market rental rates, rental growth rates, capitalization and discount rates, interest rates and other variables. The results of this transaction are included in the Company’s condensed consolidated statements of operations beginning September 22, 2016.
The following table summarizes the transaction related to the business combination, including the preliminary amounts recognized for assets acquired and liabilities assumed, as indicated (in thousands):
 September 22, 2016
Carrying value of the Company’s equity interest before business combination (1)
$18,952
Fair value of amounts recognized for assets acquired and liabilities assumed: 
Land4,685
Buildings, fixtures and improvements11,615
Acquired in-place leases and other intangibles1,340
Acquired above-market leases1,168
Intangible lease liabilities(618)
Other assets and liabilities110
Total net assets18,300
Loss recognized on equity interest re-measured to fair value$(652)

(1)    Includes $1.6 million of cash paid to the Unconsolidated Joint Venture Partner.
Consolidated Joint Venture
As of September 30, 2017, the Company had an interest in a Consolidated Joint Venture that owns and manages nine properties, with total assets of $52.7 million, which included $52.1 million of real estate assets, net of accumulated depreciation and amortization of $4.8 million, and total liabilities of $769,000. The Consolidated Joint Venture does not have any debt outstanding as of September 30, 2017. The Company has the ability to control operating and financial policies of the Consolidated Joint Venture. There are restrictions on the use of these assets as the Company would generally be required to obtain the partner’s (the “Consolidated Joint Venture Partner”) approval in accordance with the joint venture agreement for any major transactions. The Company and the Consolidated Joint Venture Partner are subject to the provisions of the joint venture agreement, which includes provisions for when additional contributions may be required to fund certain cash shortfalls.

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COLE CREDIT PROPERTY TRUST IV, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2017 (Unaudited) – (Continued)


NOTE 5 — INTANGIBLE LEASE ASSETS AND LIABILITIES
Intangible lease assets and liabilities consisted of the following as of September 30, 20172021 and December 31, 20162020 (in thousands, except weighted average life remaining):
  September 30, 2017 December 31, 2016
In-place leases and other intangibles, net of accumulated amortization of $155,772 and $125,620, respectively (with a weighted average life remaining of 10.6 and 10.7 years, respectively)   
$363,977
 $364,038
Acquired above-market leases, net of accumulated amortization of $23,888 and $18,723, respectively   
 (with a weighted average life remaining of 8.8 and 8.9 years, respectively)43,552
 44,768
  $407,529
 $408,806
September 30, 2021December 31, 2020
Intangible lease assets:
In-place leases and other intangibles, net of accumulated amortization of $137,730 and $132,967, respectively (with a weighted average life remaining of 9.3 years and 9.7 years, respectively)
$173,336 $217,431 
Acquired above-market leases, net of accumulated amortization of $21,704 and $22,054, respectively (with a weighted average life remaining of 7.7 years and 7.6 years, respectively)
14,600 17,112 
Total intangible lease assets, net$187,936 $234,543 
Intangible lease liabilities:
Acquired below-market leases, net of accumulated amortization of $32,303 and $31,933, respectively (with a weighted average life remaining of 7.3 years and 7.5 years, respectively)
$25,337 $32,718 
Amortization of the above-market leases is recorded as a reduction to rental revenue,and other property income, and amortization expense for the in-place leases and other intangibles is included in depreciation and amortization in the accompanying condensed consolidated statements of operations. Amortization of below-market leases is recorded as an increase to rental and other property income in the accompanying condensed consolidated statements of operations.
The following table summarizes the amortization expense related to the intangible lease assets and liabilities for the three and nine months ended September 30, 20172021 and September 30, 20162020 (in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
2021202020212020
In-place lease and other intangible amortization$6,865 $5,837 $22,066 $17,392 
Above-market lease amortization$590 $772 $1,839 $2,409 
Below-market lease amortization$1,240 $1,273 $4,083 $3,939 
25
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
In-place lease and other intangible amortization$12,567
 $11,055
 $35,402
 $34,486
Above-market lease amortization$1,877
 $1,705
 $5,498
 $4,901
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CIM REAL ESTATE FINANCE TRUST, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2021 (Unaudited) – (Continued)

As of September 30, 2017,2021, the estimated amortization expense relating to the intangible lease assets for each of the five succeeding fiscal yearsand liabilities is as follows (in thousands):
Amortization
In-Place Leases and
Other Intangibles		Above-Market LeasesBelow-Market Leases
Remainder of 2021$6,714 $586 $1,221 
202225,224 2,249 4,319 
202321,965 1,996 3,655 
202418,797 1,501 2,695 
202515,034 1,259 2,326 
Thereafter85,602 7,009 11,121 
Total$173,336 $14,600 $25,337 
  Amortization Expense
  
In-Place Leases and
Other Intangibles
 Above-Market Leases
Remainder of 2017 $10,923
 $1,774
2018 $42,289
 $6,397
2019 $38,454
 $5,299
2020 $36,120
 $4,724
2021 $32,685
 $4,100
NOTE 6 — REAL ESTATE-RELATED SECURITIES
As of September 30, 2021, the Company had CMBS investment securities and an investment in preferred units with an aggregate estimated fair value of $185.2 million. The CMBS mature on various dates from September 2023 through June 2058 and have interest rates ranging from 1.2% to 13.0%, with 1 CMBS earning a zero coupon rate. The preferred units mature on June 1, 2022 and have an interest rate of 8.9%. The following is a summary of the Company’s real estate-related securities as of September 30, 2021 (in thousands):
Real Estate-Related Securities
Amortized Cost BasisUnrealized GainFair Value
CMBS$120,019 $1,738 $121,757 
Preferred units63,490 — 63,490 
Total real estate-related securities$183,509 $1,738 $185,247 
The following table provides the activity for the real estate-related securities during the nine months ended September 30, 2021 (in thousands):
Amortized Cost BasisUnrealized GainFair Value
Real estate-related securities as of January 1, 2021$37,047 $1,147 $38,194 
Face value of real estate-related securities acquired114,373 — 114,373 
Investment in preferred units63,490 — 63,490 
Premiums and discounts on purchase of real estate-related securities, net of acquisition costs(5,982)— (5,982)
Amortization of discount on real estate-related securities886 — 886 
Sale of real estate-related securities(26,977)(648)(27,625)
Capitalized interest income on real estate-related securities703 — 703 
Principal payments received on real estate-related securities(31)— (31)
Unrealized gain on real estate-related securities— 1,239 1,239 
Real estate-related securities as of September 30, 2021$183,509 $1,738 $185,247 
During the nine months ended September 30, 2021, the Company invested $171.9 million in CMBS and preferred units. During the same period, the Company sold CMBS with a carrying value of $27.0 million resulting in net proceeds of $27.6 million and a gain of $648,000. Unrealized gains and losses on CMBS are recorded in other comprehensive (loss) income, with a portion of the amount subsequently reclassified into interest expense and other, net in the accompanying condensed consolidated statements of operations as securities are sold and gains and losses are recognized. During the three and nine months ended September 30, 2021, the Company recorded $813,000 and $1.2 million, respectively, of unrealized gains on its CMBS included in other comprehensive (loss) income in the accompanying condensed consolidated statements of comprehensive income (loss).
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CIM REAL ESTATE FINANCE TRUST, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2021 (Unaudited) – (Continued)

The scheduled maturities of the Company’s real estate-related securities as of September 30, 2021 are as follows (in thousands):
Real estate-related securities
Amortized Cost Estimated Fair Value
Due within one year$63,490 $63,490 
Due after one year through five years79,882 79,882 
Due after five years through ten years— — 
Due after ten years40,137 41,875 
Total$183,509 $185,247 
Actual maturities of real estate-related securities can differ from contractual maturities because borrowers on certain corporate credit securities may have the right to prepay their respective debt obligations at any time. In addition, factors such as prepayments and interest rates may affect the yields on such securities.
In estimating credit losses related to real estate-related securities, management considers a variety of factors, including (1) whether the Company has the intent to sell the impaired security before the recovery of its amortized cost basis, (2) whether the Company expects to hold the investment for a period of time sufficient to allow for anticipated recovery in fair value, and (3) whether the Company expects to recover the entire amortized cost basis of the security. As of September 30, 2021, the Company had no credit losses related to real estate-related securities.
NOTE 7 — LOANS HELD-FOR-INVESTMENT
The Company’s loans held-for-investment consisted of the following as of September 30, 2021 and December 31, 2020 (dollar amounts in thousands):
As of September 30,As of December 31,
20212020
Mezzanine loans$— $147,475 
Senior loans890,804 341,546 
Total CRE loans held-for-investment and related receivables, net890,804 489,021 
Broadly syndicated loans571,488 473,603 
Loans held-for-investment and related receivables, net$1,462,292 $962,624 
Less: Allowance for credit losses$(11,219)$(70,358)
Total loans held-for-investment and related receivable, net$1,451,073 $892,266 
During the nine months ended September 30, 2021, the Company invested $267.0 million in broadly syndicated loans. During the same period, the Company received $188.1 million of principal payments on broadly syndicated loans and sold $55.5 million of broadly syndicated loans, resulting in proceeds of $55.2 million after closing costs and a gain of $254,000. The gain was recorded as a decrease to interest expense and other, net in the condensed consolidated statements of operations. As of September 30, 2021, the Company had $87.4 million of unsettled broadly syndicated loan purchases included in cash and cash equivalents in the accompanying condensed consolidated balance sheets.
As of September 30, 2021, the Company had $123.7 million of unfunded commitments related to CRE loans held-for-investment, the funding of which is subject to the satisfaction of borrower milestones. These commitments are not reflected in the accompanying condensed consolidated balance sheets.
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CIM REAL ESTATE FINANCE TRUST, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2021 (Unaudited) – (Continued)

The following table details overall statistics for the Company’s loans held-for-investment as of September 30, 2021 and December 31, 2020 (dollar amounts in thousands):
CRE Loans (1) (2)
Broadly Syndicated Loans
September 30, 2021December 31, 2020September 30, 2021December 31, 2020
Number of loans11 12 262 194 
Principal balance$900,533 $481,438 $574,787 $477,777 
Net book value$885,517 $428,393 $565,556 $463,873 
Weighted-average interest rate3.7 %7.5 %3.6 %3.8 %
Weighted-average maximum years to maturity
2.72.25.04.9

(1)    As of September 30, 2021, 100% of the Company’s CRE loans by principal balance earned a floating rate of interest, primarily indexed to U.S. dollar LIBOR.
(2)    Maximum maturity date assumes all extension options are exercised by the borrower; however, the Company’s CRE loans may be repaid prior to such date.
Activity relating to the Company’s loans held-for-investment portfolio was as follows (dollar amounts in thousands):
Principal Balance
Deferred Fees / Other Items (1)
Loan Fees ReceivableNet Book Value
Balance, January 1, 2021$959,215 $(74,116)$7,167 $892,266 
Loan originations and acquisitions993,841 — — 993,841 
Cure payments receivable (2)
— (7,351)— (7,351)
Sale of loans(55,498)528 — (54,970)
Principal repayments received (3)
(285,449)345 — (285,104)
Capitalized interest (2)
(9,469)— — (9,469)
Deferred fees and other items— (9,206)— (9,206)
Accretion and amortization of fees and other items— 2,583 — 2,583 
Foreclosure of assets (2)
(127,320)3,831 (7,167)(130,656)
Allowance for credit losses (4)
— 59,139 — 59,139 
Balance, September 30, 2021$1,475,320 $(24,247)$— $1,451,073 

(1)    Other items primarily consist of allowance for credit losses (as discussed below), purchase discounts or premiums, accretion of exit fees and deferred origination expenses.
(2)    During the nine months ended September 30, 2021, the Company completed foreclosure of the assets which previously secured its 8 mezzanine loans.
(3)    Includes the repayment of a $69.2 million senior loan prior to the maturity date.
(4)    Includes the reversal of the allowance for credit losses related to the mezzanine loans upon foreclosure of the assets which previously secured the loans, as further discussed below in “Allowance for Credit Losses,” partially offset by the increase in allowance for credit losses related to the Company’s loans held-for-investment during the nine months ended September 30, 2021.
Allowance for Credit Losses
The allowance for credit losses reflects the Company’s current estimate of potential credit losses related to the loans held-for-investment included in the Company’s condensed consolidated balance sheets. Refer to Note 2 — Summary of Significant Accounting Policies for further discussion of the Company’s allowance for credit losses.
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CIM REAL ESTATE FINANCE TRUST, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2021 (Unaudited) – (Continued)

The following table presents the activity in the Company’s allowance for credit losses by loan type for the nine months ended September 30, 2021 (dollar amounts in thousands):
Mezzanine LoansSenior LoansBroadly Syndicated LoansTotal
Allowance for credit losses as of January 1, 2021$58,038 $2,590 $9,730 $70,358 
Foreclosure of assets (1)
(58,038)— — (58,038)
Provision for (reversal of) credit losses— 1,295 (727)568 
Allowance for credit losses as of March 31, 2021$— $3,885 $9,003 $12,888 
Provision for (reversal of) credit losses— 2,581 (2,458)123 
Allowance for credit losses as of June 30, 2021$— $6,466 $6,545 $13,011 
Reversal of provision for credit losses— (1,179)(613)(1,792)
Allowance for credit losses as of September 30, 2021$— $5,287 $5,932 $11,219 

(1)    During the nine months ended September 30, 2021, the Company completed foreclosure of the assets which previously secured its 8 mezzanine loans.
Changes to the allowance for credit losses are recognized through net income (loss) on the Company’s condensed consolidated statements of operations.
Troubled Debt Restructuring
An individual financial instrument is classified as a troubled debt restructuring when there is a reasonable expectation that the financial instrument’s contractual terms will be modified in a manner that grants concessions to the borrower who is experiencing financial difficulties. Concessions could include term extensions, payment deferrals, interest rate reductions, principal forgiveness, forbearance, or other actions designed to maximize the Company’s collection on the financial instrument. The allowance for credit losses for financial instruments that are trouble debt restructurings are determined individually.
The Company also classifies a financial instrument as a troubled debt restructuring when receivables from third parties, real estate, or other assets are transferred from the debtor to the creditor in order to fully or partially satisfy a debt, such as in the event of a foreclosure or repossession. During the year ended December 31, 2019, the borrower on the Company’s 8  mezzanine loans became delinquent on certain required reserve payments. Throughout 2020, the borrower remained delinquent on the required reserve payments and became delinquent on principal and interest. As a result, the Company classified the loans as a troubled debt restructuring and commenced foreclosure proceedings during the year ended December 31, 2020. Upon completing foreclosure in January 2021, the Company took control of the assets which previously secured the loans, including 75 condominium units and 21 rental units across 4 buildings. As a result of the foreclosure, the Company recorded a $58.0 million decrease to its provision for credit losses related to its mezzanine loans during the three months ended March 31, 2021. During the nine months ended September 30, 2021, the Company recorded a $1.1 million net decrease to the provision for credit losses related to its senior loans and broadly syndicated loans to reflect the estimated fair value of such loans, bringing the total allowance for credit losses to $11.2 million as of September 30, 2021. The Company recorded a decrease in the provision for credit losses related to its senior loans and broadly syndicated loans during the three months ended September 30, 2021 due to the ongoing market recovery from COVID-19 and the resulting improvement in the performance of the collateral assets underlying the portfolio.
Risk Ratings
As further described in Note 2 — Summary of Significant Accounting Policies, the Company evaluates its loans held-for-investment portfolio on a quarterly basis. Each quarter, the Company assesses the risk factors of each loan, and assigns a risk rating based on several factors. Factors considered in the assessment include, but are not limited to, loan and credit structure, current LTV, debt yield, collateral performance, and the quality and condition of the sponsor, borrower, and guarantor(s). Loans are rated “1” (less risk) through “5” (greater risk), which ratings are defined in Note 2 — Summary of Significant Accounting Policies.
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CIM REAL ESTATE FINANCE TRUST, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2021 (Unaudited) – (Continued)

The Company’s primary credit quality indicator is its risk ratings, which are further discussed above. The following table presents the net book value of the Company’s loans held-for-investment portfolio as of September 30, 2021 by year of origination, loan type, and risk rating (dollar amounts in thousands):
Amortized Cost of Loans Held-For-Investment by Year of Origination (1)
As of September 30, 2021
Number of Loans202120202019Total
Senior loans by internal risk rating:
1—$— $— $— $— 
2—— — — — 
311705,930 137,544 47,330 890,804 
4—— — — — 
5—— — — — 
Total senior loans11705,930 137,544 47,330 890,804 
Broadly syndicated loans by internal risk rating:
1—— — — — 
23— 8,299 — 8,299 
3257227,648 326,614 3,044 557,306 
42— 5,883 — 5,883 
5—— — — — 
Total broadly syndicated loans262227,648 340,796 3,044 571,488 
Less: Allowance for credit losses(11,219)
Total loans held-for-investment and related receivables, net273$1,451,073 
Weighted Average Risk Rating (2)
3.0 

(1)    Date loan was originated or acquired by the Company. Origination dates are subsequently updated to reflect material loan modifications.
(2)    Weighted average risk rating calculated based on carrying value at period end.
NOTE 8 — DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
In the normal course of business, the Company uses certain types of derivative instruments for the purpose of managing or hedging its interest rate risk. As ofDuring the nine months ended September 30, 2017,2021, 3 of the Company’s interest rate swap agreements matured. Additionally, in connection with the origination of the Mortgage Loan (as defined below in Note 9 — Notes Payable, Repurchase Facilities and Credit Facilities), the Company had 12 executedterminated its 2 remaining interest rate swap agreements. The following table summarizesCompany also entered into 5 interest rate cap agreements during the termsnine months ended September 30, 2021. As of September 30, 2021, the Company’s 11Company had 5 non-designated interest rate cap agreements and no interest rate swap agreements designated as hedging instruments effective as of September 30, 2017 and December 31, 2016 (dollar amounts in thousands):instruments.
30
  
 Outstanding Notional
 
 
 
Fair Value of Assets and (Liabilities)

Balance Sheet
Amount as of
Interest
Effective
Maturity
September 30,
December 31,

Location
September 30, 2017
Rates (1)

Dates
Dates
2017
2016
Interest Rate SwapsPrepaid expenses, derivative assets, revenue bonds and other assets
$690,066

2.55% to 3.91%
6/30/2015 to 9/1/2016
8/15/2018 to 7/1/2021
$3,178

$2,327
Interest Rate SwapsDeferred rental income, derivative liabilities and other liabilities
$338,737

3.46% to 4.75%
6/24/2013 to 8/23/2013
6/24/2018 to 8/24/2020
$(923)
$(3,351)

(1)The interest rates consist of the underlying index swapped to a fixed rate and the applicable interest rate spread as of September 30, 2017.

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COLE CREDIT PROPERTYCIM REAL ESTATE FINANCE TRUST, IV, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 20172021 (Unaudited) – (Continued)



During the nine months ended September 30, 2017, the Company entered into one interest rate swap agreement associated with a $811.7 million notional amount, effective on August 15, 2018. The following table summarizes the terms of thisthe Company’s interest rate cap agreements and interest rate swap agreement designated as a hedging instrumentagreements as of September 30, 20172021 and December 31, 20162020 (dollar amounts in thousands):
   Outstanding Notional   Fair Value of Assets (Liabilities) as of
Balance SheetAmount as ofInterestEffectiveMaturitySeptember 30,December 31,
LocationSeptember 30, 2021
Rates (1)
DatesDates2021
2020 (2)
Interest Rate CapsPrepaid expenses and other assets$752,553 2.83% to 5.45%5/7/2021 to 7/15/20215/9/2022 to 7/15/2023$51 $— 
Interest Rate SwapsDeferred rental income and other liabilities$— —%—

—$— $(12,308)

    Outstanding Notional       Fair Value of Liability
 Balance Sheet Amount as of Interest Effective Maturity September 30, December 31,
 Location September 30, 2017 
Rate (1)
 Date Date 2017 2016
Interest Rate SwapDeferred rental income, derivative liabilities and other liabilities $811,666
 3.77% 8/15/2018 3/15/2021 $(2,517) $—
(1)The interest rate consists of the underlying index capped to a fixed rate as of September 30, 2021.

(1)The interest rate consists of the underlying index swapped to a fixed rate and the applicable interest rate spread as of September 30, 2017.
(2)As of December 31, 2020, the Company had 5 interest rate swap agreements designated as hedging instruments in a liability position with an aggregate outstanding notional amount of $1.1 billion and an aggregate fair value balance of $12.3 million included in deferred rental income and other liabilities in the accompanying condensed consolidated balance sheets.
Additional disclosures related to the fair value of the Company’s derivative instruments are included in Note 3 — Fair Value Measurements. The notional amount under the interest rate swap agreementsderivative instruments is an indication of the extent of the Company’s involvement in each instrument, but does not represent exposure to credit, interest rate or market risks.
Accounting for changes in the fair value of a derivative instrument depends on the intended use and designation of the derivative instrument. The Company designated thehad interest rate caps that are used to manage exposure to interest rate movements, but do not meet the requirements to be designated as hedging instruments. The change in fair value of the derivative instruments that are not designated as hedges is recorded directly to earnings in interest expense and other, net on the accompanying condensed consolidated statements of operations. During the three and nine months ended September 30, 2021, the Company had interest rate swaps designated as cash flow hedges in order to hedge the variability of the anticipated cash flows on its variable rate debt. The change in fair value of the effective portion of the derivative instruments that are designated as hedges is recorded in other comprehensive (loss) income, (loss), with a portion of the amount subsequently reclassified to interest expense as interest payments are made on the Company’s variable rate debt. For the three months ended September 30, 2017 and 2016,2021, the amountsamount of gain reclassified were $447,000 and $2.2 million, respectively, and forfrom other comprehensive (loss) income as a decrease to interest expense was $170,000. For the nine months ended September 30, 2017 and 2016,2021, the amounts reclassified were $2.9 million and $6.8 million, respectively. During the next 12 months, the Company estimates that an additional $180,000 will beamount of loss reclassified from other comprehensive (loss) income (loss) as an increase to interest expense.
Any ineffective portion ofexpense was $3.0 million. For the change in fair value of the derivative instruments is recorded in interest expense. During thethree and nine months ended September 30, 2017, $79,0002020, the amount of the change in the fair value of thelosses reclassified from other comprehensive (loss) income as an increase to interest expense was $4.0 million and $8.3 million, respectively. The total unrealized loss on interest rate swaps was considered ineffective. There were no portions$174,000 and $3.2 million as of the changeSeptember 30, 2021 and December 31, 2020, respectively, which are included in accumulated other comprehensive (loss) income in the fair valueaccompanying condensed consolidated statement of thestockholders’ equity. The Company includes cash flows from interest rate swaps that were considered ineffective duringswap agreements in net cash flows provided by operating activities on its condensed consolidated statements of cash flows, as the nine months ended September 30, 2016.Company’s accounting policy is to present cash flows from hedging instruments in the same category in its condensed consolidated statements of cash flows as the category for cash flows from the hedged items.
The Company has agreements with each of its derivative counterparties that contain provisions whereby if the Company defaults on certain of its unsecured indebtedness, the Company could also be declared in default on its derivative obligations, resulting in an acceleration of payment. If the Company had breached any of these provisions, it could have been required to settle its obligations under the agreements at their aggregate termination value, inclusive of interest payments and accrued interest. As of $3.7 million at September 30, 2017.2021, all derivatives were in an asset position. Therefore, there was no termination value as of September 30, 2021. In addition, the Company is exposed to credit risk in the event of non-performance by its derivative counterparties. The Company believes it mitigates its credit risk by entering into agreements with creditworthy counterparties. The Company records credit risk valuation adjustments on its interest rate swapscaps based on the credit quality of the Company and the respective counterparty. There were no termination events or events of default related to the interest rate swapscaps as of September 30, 2017.2021.
NOTE 79 — NOTES PAYABLE, REPURCHASE FACILITIES AND CREDIT FACILITYFACILITIES
As of September 30, 2017,2021, the Company had $2.5$2.8 billion of debt outstanding, including net deferred financing costs, with a weighted average years to maturity of 4.53.9 years and a weighted average interest rate of 3.5%2.8%. The weighted average years to
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CIM REAL ESTATE FINANCE TRUST, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2021 (Unaudited) – (Continued)

maturity is computed using the scheduled repayment date as specified in each loan agreement where applicable. The weighted average interest rate is computed using the interest rate in effect until the scheduled repayment date.
The following table summarizes the debt balances as of September 30, 2021 and December 31, 2020, and the debt activity for the nine months ended September 30, 2021 (in thousands):
During the Nine Months Ended September 30, 2021
 Balance as of December 31, 2020
Debt Issuances & Assumptions (1)
Repayments & Modifications (2)
Accretion and (Amortization)Balance as of
September 30, 2021
Notes payable – fixed rate debt$578,096 $— $(190,834)$— $387,262 
Notes payable – variable rate debt— 102,553 (19,710)— 82,843 
First lien mortgage loan— 650,000 — — 650,000 
Net-lease mortgage notes— 774,000 (1,290)— 772,710 
Credit facilities1,336,500 410,000 (1,340,000)— 406,500 
Repurchase facilities235,380 383,489 (111,615)— 507,254 
Total debt2,149,976 2,320,042 (1,663,449)— 2,806,569 
Net premiums (3)
149 — — (149)— 
Deferred costs – credit facility (4)
(3,543)— 1,955 1,588 — 
Deferred costs – fixed rate debt and first lien mortgage loan(1,589)(13,838)133 1,954 (13,340)
Deferred costs – variable rate debt— (1,347)— 893 (454)
Deferred costs – net-lease mortgage notes— (16,979)— 419 (16,560)
Total debt, net$2,144,993 $2,287,878 $(1,661,361)$4,705 $2,776,215 

(1)Includes deferred financing costs incurred during the period.
(2)In connection with the repayment of certain mortgage notes, the Company recognized a loss on extinguishment of debt of $4.7 million during the nine months ended September 30, 2021.
(3)Net premiums on mortgage notes payable were recorded upon the assumption of the respective debt instruments. Amortization of these net premiums is recorded as a reduction to interest expense over the remaining term of the respective debt instruments using the effective-interest method.
(4)Deferred costs related to the term portion of the CMFT Credit Facility (as defined below).
Notes Payable
As of September 30, 2021, the fixed rate debt outstanding was $387.3 million. The fixed rate debt has interest rates ranging from 3.6% to 4.6% per annum. The fixed rate debt outstanding matures on various dates from May 2022 to December 2024. Should a loan not be repaid by its scheduled repayment date, the applicable interest rate willmay increase as specified in the respective loan agreement. The following table summarizes the debt balances as of September 30, 2017 and December 31, 2016, and the debt activity for the nine months endedSeptember 30, 2017 (in thousands):

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   During the Nine Months Ended September 30, 2017  
 Balance as of December 31, 2016 
Debt Issuances & Assumptions (1)
 Repayments and Modifications Accretion and (Amortization) Balance as of
September 30, 2017
Fixed rate debt$1,164,622
 $53,206
 $(335) $—
 $1,217,493
Variable rate debt53,500
 —
 (33,000) —
 20,500
Credit facility1,039,666
 1,461,500
 (1,266,666) —
 1,234,500
Total debt2,257,788
 1,514,706
 (1,300,001) —
 2,472,493
Net premiums (2)
506
 —
 —
 (65) 441
Deferred costs (3)
(12,035) (10,078) 717
(4)2,744
 (18,652)
Total debt, net$2,246,259
 $1,504,628
 $(1,299,284) $2,679
 $2,454,282

(1)Includes deferred financing costs incurred during the period.
(2)Net premiums on mortgage notes payable were recorded upon the assumption of the respective debt instruments. Amortization of these net premiums is recorded as a reduction to interest expense over the remaining term of the respective debt instruments using the effective-interest method.
(3)Deferred costs relate to mortgage notes payable and the term portion of the Credit Facility (as defined below).
(4)Includes $503,000 of deferred financing costs of the term portion of the Credit Facility written off during the period resulting from the Second Amended and Restated Credit Agreement, as defined below.
As of September 30, 2017, the fixed rate debt outstanding of $1.2 billion included $217.1 million of variable rate debt that is fixed through interest rate swap agreements, which has the effect of fixing the variable interest rates per annum through the maturity date of the variable rate debt. The fixed rate debt has interest rates ranging from 2.6% to 5.0% per annum. The fixed rate debt outstanding matures on various dates from June 2018 through October 2025. The aggregate balance of gross real estate assets, net of gross intangible lease liabilities, securing the fixed rate debt outstanding was $2.2 billion$656.6 million as of September 30, 2017.2021. Each of the mortgage notes payable comprising the fixed rate debt is secured by the respective properties on which the debt was placed.
Upon completing foreclosure to take control of the assets which previously secured the Company’s mezzanine loans in January 2021, the Company assumed $102.6 million in variable rate debt related to the underlying properties. As of September 30, 2017,2021, the variable rate debt outstanding of $20.5$82.8 million had a weighted average interest rate of 4.5%. The5.5%.The variable rate debt outstanding matures on February 26, 2020. With respectMay 9, 2022.
First Lien Mortgage Loan
On July 15, 2021, JPMorgan Chase Bank, N.A., as administrative agent (“JPMorgan Chase”), and DBR Investments Co. Limited originated a $650.0 million first lien mortgage loan (the “Mortgage Loan”) to 114 single purpose entities (the “Borrowers”), each of which is an affiliate of the Company and are managed on a day-to-day basis by affiliates of CIM. The Mortgage Loan is secured by, among other things, cross-collateralized and cross-defaulted first priority mortgages, deeds of trust, security agreements or other similar security instruments on the Borrowers’ fee simple interests in 113 properties, comprised of 50 anchored shopping centers, 61 single-tenant retail properties, 1 office property and 1 industrial property.
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As of September 30, 2021, the aggregate balance of gross real estate assets, net of gross intangible lease liabilities, securing the notes was $1.3 billion. Amounts outstanding on the Mortgage Loan totaled $650.0 million with a weighted average interest rate of 2.8% as of September 30, 2021. The Mortgage Loan is a floating-rate, interest-only, non-recourse loan with a two-year initial term ending on August 9, 2023, with 3 one-year extension options, subject to certain conditions.
Net-Lease Mortgage Notes
On July 28, 2021, the Company issued $774.0 million aggregate principal amount of Net-Lease Mortgage Notes, Series 2021-1 (the “Class A Notes”) in six classes, as shown below:
Class of NotesInitial Principal BalanceNote RateAnticipated Repayment DateRated Final Payment Date
Credit Rating(1)
A-1 (AAA)$146,400,000 2.09%July 2028July 2051AAA (sf)
A-2 (AAA)$219,600,000 2.57%July 2031July 2051AAA (sf)
A-3 (AA)$39,200,000 2.51%July 2028July 2051AA (sf)
A-4 (AA)$58,800,000 3.04%July 2031July 2051AA (sf)
A-5 (A)$124,000,000 2.91%July 2028July 2051A (sf)
A-6 (A)$186,000,000 3.44%July 2031July 2051A (sf)
____________________________________
(1)Reflects credit rating from Standard & Poor’s Financial Services LLC (“Standard & Poor’s”).
The collateral pool for the Class A Notes is comprised of 170 of the Company’s $24.2 million of debt maturing withindouble- and triple-net leased single tenant properties, together with the next year, the Company expects to use borrowings available under the Credit Facility or enter into new financing arrangements in order to meet its debt obligations.related leases and certain other rights and interests. The aggregate balance of gross real estate assets, net of gross intangible lease liabilities, securing the variable rate debt outstandingClass A Notes was $40.8 million as$1.0 billion. As of September 30, 2017.2021, amounts outstanding on the Class A Notes totaled $772.7 million with a weighted average interest rate of 2.8%. The Company may prepay the Class A Notes in full on or after the payment date beginning in July 2026 for the Class A-1 (AAA) Notes, the Class A-3 (AA) Notes and the Class A-5 (A) Notes, and on or after the payment date in July 2028 for the Class A-2 (AAA) Notes, the Class A-4 (AA) Notes and the Class A-6 (A) Notes.
During the nine months ended September 30, 2017, theCredit Facilities
The Company entered intohad a second amended and restated unsecured credit agreement (the “Second“CMFT Second Amended and Restated Credit Agreement”) with JPMorgan Chase, Bank, N.A. as administrative agent, (“JPMorgan Chase”), and the other lenders party thereto that providesprovided for borrowings of up to $1.40$1.24 billion which includes(the “CMFT Credit Facility”).
On December 21, 2020, as a $1.05 billion unsecured term loanresult of CCPT V’s merger with the Company, a subsidiary of the Company assumed CCPT V’s obligations pursuant to the credit agreement by and among Cole Operating Partnership V, LP, the operating partnership of CCPT V (“CCPT V OP”), JPMorgan Chase, as administrative agent, and the lender parties thereto (the “Term Loan”“CCPT V Credit Agreement”) and. The CCPT V Credit Agreement allowed for borrowings of up to $350.0 million in unsecured revolving loans (the “Revolving Loans”“CCPT V Credit Facility”).
The CMFT Credit Facility and collectively,the CCPT V Credit Facility (collectively, the “Credit Facilities”) were set to mature on March 15, 2022. During the nine months ended September 30, 2021, and with the Termproceeds from the Mortgage Loan the “Credit Facility”). The Term Loan matures on March 15, 2022 and the Revolving Loans mature on March 15, 2021; however,sale of the Class A Notes, the Company haspaid down the right to extend$1.11 billion outstanding balance under the maturity dateCredit Facilities and terminated the Credit Facilities.
On December 31, 2019 (the “Closing Date”), CMFT Corporate Credit Securities, LLC, an indirect wholly-owned, bankruptcy-remote subsidiary of the Revolving LoansCompany, entered into a revolving credit and security agreement (the “Credit and Security Agreement”) with the lenders from time to March 15, 2022.
Depending upontime parties thereto, Citibank, N.A. (“Citibank”), as administrative agent, CMFT Securities Investments, LLC, a wholly-owned subsidiary of the type of loan specifiedCompany (“CMFT Securities”), as equityholder and overall leverage ratio,as collateral manager, Citibank (acting through its Agency & Trust division), as both a collateral agent and as a collateral custodian, and Virtus Group, LP, as collateral administrator. The Credit and Security Agreement provides for borrowings in an aggregate principal amount up to $500.0 million (the “Credit Securities Revolver”), which may be increased from time to time pursuant to the Credit Facility bears interest at (i) the one-month, two-month, three-month or six-month London Interbank Offered Rate (“LIBOR”) multiplied by the statutory reserve rate (the “Eurodollar Rate”) plus an interest rate spread ranging from 1.65% to 2.25% or (ii) a base rate, ranging from 0.65% to 1.25%, plus the greater of: (a) JPMorgan Chase’s Prime Rate; (b) the Federal Funds Effective Rate (as defined in the Second Amended and Restated Credit Agreement) plus 0.50%; or (c) the one-month LIBOR multiplied by the statutory reserve rate plus 1.00%.Security Agreement. As of September 30, 2017,2021, the Revolving Loansamounts borrowed and outstanding under the Credit Securities Revolver totaled $184.5$406.5 million at a weighted average interest rate of 3.0%1.8%. As ofSubsequent to September 30, 2017, the Term Loan outstanding totaled $1.05 billion, $811.7 million of which is subject to interest rate swap agreements (the “Swapped Term Loan”). The interest rate swap agreements had the effect of fixing the Eurodollar Rate per annum of the Swapped Term Loan. As of September 30, 2017, the weighted average all-in rate for the Swapped Term Loan was 3.2%. As of September 30, 2017,2021, the Company had $1.23 billion outstandingamended the Credit and Security Agreement by increasing available borrowings under the Credit Facility at a weighted average interest rate of 3.1% and $164.9Securities Revolver up to $550.0 million, as discussed in unused capacity, subject to borrowing availability.
The Second Amended and Restated Credit Agreement contains provisions with respect to covenants, events of default and remedies customary for facilities of this nature. In particular, the Second Amended and Restated Credit Agreement requires the Company to maintain a minimum consolidated net worth greater than or equal to the sum of (i) $2.0 billion plus (ii) 75% of the equity issued minus (iii) the aggregate amount of any redemptions or similar transaction from the date of the Second Amended

Note 16 — Subsequent Events.
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Borrowings under the Credit and RestatedSecurity Agreement will bear interest equal to the three-month LIBOR for the relevant interest period, plus an applicable rate. The applicable rate is 1.70% per annum during the reinvestment period and 2.00% per annum during the amortization period (and, in each case, an additional 2.00% per annum following an event of default under the Credit Agreement, a leverage ratioand Security Agreement). The reinvestment period begins on the Closing Date and concludes on the earlier of (i) the date that is three years after the Closing Date, (ii) the final maturity date and (iii) the date on which the total assets under management of the Company and its wholly-owned subsidiaries is less than or equal$1.25 billion (the “Reinvestment Period”). The final maturity date is the earliest to 60%, a fixed charge coverage ratio greater than 1.50, an unsecured debtoccur of: (i) the date that the Credit Securities Revolver is paid down and (ii) the second anniversary after the Reinvestment Period concludes. Borrowings under the Credit and Security Agreement are secured by substantially all of the assets held by CMFT Corporate Credit Securities, LLC, which shall primarily consist of broadly-syndicated senior secured loans subject to unencumbered asset value ratio equal to or less than 60%, an unsecured debt service coverage ratio greater than 1.75, a secured debt ratio equal to or less than 40%certain eligibility criteria under the Credit and the amount of secured debt that is recourse debt at no greater than 15% of total asset value. Security Agreement.
The Company believes it was in compliance with the financial covenants under the Second Amended and Restated Credit Agreement, as well as the financial covenants under the Company’s various fixed and variable rate debt agreements, as of September 30, 2017.2021.
Repurchase Facilities
As of September 30, 2021, indirect wholly-owned subsidiaries of the Company (collectively, the “CMFT Lending Subs”), had Master Repurchase Agreements with Citibank, Barclays Bank PLC (“Barclays”) and Wells Fargo Bank, N.A. (“Wells Fargo”) (collectively, the “Repurchase Agreements”) to provide financing primarily through each bank’s purchase of the Company’s CRE mortgage loans and future funding advances (the “Repurchase Facilities”).
The following table is a summary of the Repurchase Facilities as of September 30, 2021 (dollar amounts in thousands):
Repurchase FacilityDate of Agreement
Maturity Date(1)
Maximum Facility Size(2)
Weighted Average Interest RateCarrying Value of Loans Financed under Repurchase FacilityAmount Financed
Citibank6/4/20208/17/2024$400,000 2.2%$291,855 $199,216 
Barclays9/21/20209/21/2024500,000 2.5%249,334 184,400 
Wells Fargo5/20/20215/19/2024250,000 1.8%171,578 123,638 
Total$1,150,000 $712,767 $507,254 

(1)The Repurchase Facilities were set to mature on various dates between June 2023 and May 2024, with up to 2 one-year extension options, subject to certain conditions set forth in the Repurchase Agreements. During the nine months ended September 30, 2021, the Company extended the maturity dates of the repurchase facility with Citibank (the “Citibank Repurchase Facility”) and the repurchase facility with Barclays (the “Barclays Repurchase Facility”).
(2)During the nine months ended September 30, 2021, the Company increased the Citibank Repurchase Facility to provide up to $400.0 million in financing. Subsequent to September 30, 2021, the Company increased the repurchase facility with Wells Fargo (the “Wells Fargo Repurchase Facility”) to $580.0 million, as discussed in Note 16 — Subsequent Events.
The Repurchase Agreements provide for simultaneous agreements by Citibank, Barclays and Wells Fargo to re-sell such purchased CRE mortgage loans back to CMFT Lending Subs at a certain future date or upon demand. Advances under the Repurchase Agreements accrue interest at per annum rates based on the one-month LIBOR, plus a spread ranging from 1.40% to 4.60% to be determined on a case-by-case basis between Citibank, Barclays or Wells Fargo and the CMFT Lending Subs.
In connection with the Repurchase Agreements, the Company (as the guarantor) entered into guaranties with Citibank, Barclays and Wells Fargo (the “Guaranties”), under which the Company agreed to guarantee up to 25% of the CMFT Lending Subs’ obligations under the Repurchase Agreements.
The Repurchase Agreements and the Guaranties contain representations, warranties, covenants, conditions precedent to funding, events of default and indemnities that are customary for agreements of these types. In addition, the Guaranties contain financial covenants that require the Company to maintain: (i) minimum liquidity of not less than the lower of (a) $50.0 million and (b) the greater of (A) $10.0 million and (B) 5% of the Company’s recourse indebtedness, as defined in the Guaranties; (ii) minimum consolidated net worth greater than or equal to $1.0 billion plus (a) 75% of the equity issued by the Company following the respective closing dates of the Repurchase Agreements (the “Repurchase Closing Dates”) minus (b) the aggregate amount of any redemptions or similar transaction by the Company from the Repurchase Closing Dates; (iii) maximum leverage ratio of total indebtedness to total equity less than or equal to 80%; and (iv) minimum interest coverage ratio of EBITDA (as
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September 30, 2021 (Unaudited) – (Continued)

defined in the Guaranties) to interest expense equal to or greater than 1.40. The Company believes it was in compliance with the financial covenants under the Repurchase Agreements as of September 30, 2021.
Maturities
Liquidity and Financial Condition— As of September 30, 2021, the Company had $88.0 million of debt maturing within the next 12 months following the date these financial statements are issued. The Company expects to enter into new financing arrangements or refinance existing arrangements to meet its obligations as they become due, which management believes is probable based on the current loan-to-value ratios, the occupancy of the Company’s properties and assessment of the current lending environment. The Company believes cash on hand, proceeds from real estate asset dispositions, net cash provided by operations, borrowings available under the credit facilities or the entry into new financing arrangements will be sufficient to meet its obligations as they become due in the ordinary course of business for at least 12 months following the date these financial statements are issued.
The following table summarizes the scheduled aggregate principal repayments for the Company’s outstanding debt subsequent to September 30, 2017 for each of the five succeeding fiscal years and the period thereafter2021 (in thousands):
Principal Repayments
Remainder of 2021$2,607 
202298,479 
20231,246,984 
2024699,979 
2025— 
Thereafter758,520 
Total$2,806,569 
  Principal Repayments
Remainder of 2017$116
201824,211
201949,799
2020333,215
2021285,102
Thereafter1,780,050
Total$2,472,493
NOTE 8 — INTANGIBLE LEASE LIABILITIES
Intangible lease liabilities of the Company consisted of the following as of September 30, 2017 and December 31, 2016 (in thousands, except weighted average life):
 September 30, 2017 December 31, 2016
Acquired below-market liabilities, net of accumulated amortization of $29,396 and $23,241, respectively (with a weighted average life remaining of 7.6 and 7.8 years, respectively)
   
$47,607
 $49,075
Amortization of below-market leases is recorded as an increase to rental revenue in the accompanying condensed consolidated statements of operations. The following table summarizes the amortization of intangible lease liabilities for the three and nine months ended September 30, 2017 and September 30, 2016 (in thousands):
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
Amortization of below-market leases$2,898
 $2,012
 $7,469
 $5,788
As of September 30, 2017, the estimated amortization of the intangible lease liabilities for each of the five succeeding fiscal years is as follows (in thousands):
  Amortization of Below-Market Leases
Remainder of 2017 $2,329
2018 $8,372
2019 $7,508
2020 $6,703
2021 $4,573

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2017 (Unaudited) – (Continued)


NOTE 9 — SUPPLEMENTAL CASH FLOW DISCLOSURES
Supplemental cash flow disclosures for the nine months endedSeptember 30, 2017 and 2016 are as follows (in thousands):
 Nine Months Ended September 30,
 2017 2016
Supplemental Disclosures of Non-Cash Investing and Financing Activities:   
Distributions declared and unpaid$16,001
 $15,969
Accrued capital expenditures$535
 $1,115
Accrued deferred financing costs$—
 $4
Common stock issued through distribution reinvestment plan$76,851
 $82,383
Change in fair value of interest rate swaps$682
 $(6,767)
Contingent consideration recorded upon property acquisitions$—
 $332
Consolidation of real estate joint venture$—
 $18,300
Supplemental Cash Flow Disclosures:   
Interest paid$63,045
 $54,401
NOTE 10 — COMMITMENTS AND CONTINGENCIES
Litigation
In the ordinary course of business, the Company may become subject to litigation and claims. The Company is not aware of any material pending legal proceedings, other than ordinary routine litigation incidental to the Company’s business, to which the Company is a party or of which the Company’s properties are the subject.
Unfunded Commitments
As of September 30, 2021, the Company had $123.7 million of unfunded commitments related to its existing CRE loans held-for-investment. These commitments are not reflected in the accompanying condensed consolidated balance sheets.
Unsettled Broadly Syndicated Loans
As of September 30, 2021, the Company had $87.4 million of unsettled broadly syndicated loan acquisitions, $63.1 million of which settled subsequent to September 30, 2021. Additionally, the Company had $4.4 million of unsettled broadly syndicated loan sales, $3.4 million of which settled subsequent to September 30, 2021. Unsettled acquisitions are included in cash and cash equivalents in the accompanying condensed consolidated balance sheets.
Environmental Matters
In connection with the ownership and operation of real estate, the Company may potentially be liable for costs and damages related to environmental matters. In addition, the Company may own or acquire certain properties that are subject to environmental remediation. Generally, the seller of the property, the tenant of the property and/or another third party is responsible for environmental remediation costs related to a property. Additionally, in connection with the purchase of certain properties, the respective sellers and/or tenants may agree to indemnify the Company against future remediation costs. The Company also carries environmental liability insurance on its properties that provides limited coverage for any remediation liability and/or pollution liability for third-party bodily injury and/or property damage claims for which the Company may be liable. The Company is not aware of any environmental matters which it believes are reasonably likely to have a material effect on its results of operations, financial condition or liquidity.
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Merger Agreement
On September 21, 2021, the Company announced it had entered into the Merger Agreement. In the event the Merger Agreement is terminated in connection with CIM Income NAV’s acceptance of a Superior Proposal or an Adverse Recommendation Change, then CIM Income NAV must pay to the Company a termination payment of $14.78 million, and up to $2.68 million as reimbursement for CMFT’s Expenses, subject to certain exceptions set forth in the Merger Agreement. However, the termination payment payable by CIM Income NAV to the Company will be $6.72 million if the Merger Agreement is terminated before the end of the Window Period End Time (as defined in the Merger Agreement) by (i) CIM Income NAV in order for CIM Income NAV to accept a Superior Proposal from a Qualified Bidder (as defined in the Merger Agreement) or (ii) the Company in response to an Adverse Recommendation Change with respect to or as a result of a Superior Proposal by a Qualified Bidder. If the Merger Agreement is terminated because the CIM Income NAV Merger was not consummated before the Outside Date or because the Stockholder Approval was not obtained, and (i) an Acquisition Proposal has been publicly announced or otherwise communicated to CIM Income NAV’s stockholders prior to the Stockholders Meeting and (ii) within 12 months after the date of such termination (A) CIM Income NAV consummates or enters into an agreement (that is thereafter consummated) in respect of an Acquisition Proposal for 50% or more of CIM Income NAV’s equity or 75% or more of CIM Income NAV’s assets or (B) the board of directors of CIM Income NAV recommends or fails to recommend against an Acquisition Proposal structured as a tender or exchange offer for 75% or more of CIM Income NAV’s equity and such Acquisition Proposal is actually consummated, then CIM Income NAV must pay to the Company a termination payment of $14.78 million, and up to $2.68 million as reimbursement for CMFT’s Expenses. No such fees were paid as of September 30, 2021.
NOTE 11 — RELATED-PARTY TRANSACTIONS AND ARRANGEMENTS
The Company has incurred commissions, fees and expenses payable to CR IV AdvisorsCMFT Management and certain of its affiliates in connection with the Offerings and the acquisition, management and disposition of its assets. On August 20, 2019, the Company and CMFT Management entered into an Amended and Restated Management Agreement (the “Management Agreement”), which amended and restated that certain Advisory Agreement between the parties dated January 24, 2012, as amended (the “Prior Advisory Agreement”).
AcquisitionManagement and investment advisory fees and expenses
The Company pays CR IV Advisors orCMFT Management a management fee, payable quarterly in arrears, equal to the greater of (a) $250,000 per annum ($62,500 per quarter) and (b) 1.50% per annum (0.375% per quarter) of the Company’s Equity (as defined in the Management Agreement).
CMFT Securities has an investment advisory and management agreement dated December 6, 2019 (the “Investment Advisory and Management Agreement”) with the Investment Advisor. CMFT Securities was formed for the purpose of holding any securities investments made by the Company. The Investment Advisor, a wholly-owned subsidiary of CIM, is registered as an investment advisor under the Investment Advisers Act of 1940, as amended (the “Advisers Act”). Pursuant to the Investment Advisory and Management Agreement, the Investment Advisor manages the day-to-day business affairs of CMFT Securities and its affiliates acquisitioninvestments in corporate credit and real estate-related securities (collectively, the “Managed Assets”), subject to the supervision of the Board. In connection with the services provided by the Investment Advisor, CMFT Securities pays the Investment Advisor an investment advisory fee (the “Investment Advisory Fee”), payable quarterly in arrears, equal to 1.50% per annum (0.375% per quarter) of CMFT Securities’ Equity (as defined in the Investment Advisory and Management Agreement). Because the Managed Assets are excluded from the calculation of management fees of up to 2.0% of: (1) the contract purchase price of each property or assetpayable by the Company acquires; (2)to CMFT Management pursuant to the amount paid in respectManagement Agreement, the total management and advisory fees payable by the Company to its external advisors are not increased as a result of the development, construction or improvement of each asset the Company acquires; (3) the purchase price of any loan the Company acquires;Investment Advisory and (4) the principal amount of any loan the Company originates. Management Agreement.
In addition, the Company reimburses CR IV Advisors or its affiliatesInvestment Advisor has a sub-advisory agreement dated December 6, 2019 (the “Sub-Advisory Agreement”) with OFS Capital Management, LLC (the “Sub-Advisor”) to act as an investment sub-advisor to CMFT Securities. The Sub-Advisor is registered as an investment adviser under the Advisers Act and is an affiliate of the Investment Advisor. The Sub-Advisor is responsible for acquisition-related expenses incurredproviding investment management services with respect to the corporate credit-related securities held by CMFT Securities. On a quarterly basis, the Investment Advisor designates 50% of the sum of the Investment Advisory Fee and incentive compensation attributable to the assets for which Sub-Advisor has provided investment management services payable to the Investment Advisor as sub-advisory fees.
Incentive compensation
CMFT Management is entitled to receive incentive compensation, payable with respect to each quarter, which is generally equal to the excess of (a) the product of (i) 20% and (ii) the excess of (A) Core Earnings (as defined in the process of acquiring properties, so long as the total acquisition fees and expenses relating to the transaction do not exceed 6.0% of the contract purchase price, unless otherwise approved by a majority of the Board, including a majority of the Company’s independent directors, as commercially competitive, fair and reasonable to the Company.
Advisory fees and expenses
The Company pays CR IV Advisors a monthly advisory fee based upon the Company’s monthly average invested assets, which, effective January 1, 2017, is based on the estimated market value of such assets used to determine the Company’s estimated per share NAV as of December 31, 2016, as discussed in Note 1 — Organization and Business, and for those assets

Management
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September 30, 20172021 (Unaudited) – (Continued)



acquired subsequentAgreement) of the Company for the previous 12-month period, over (B) the product of (1) the Company’s Consolidated Equity (as defined in the Management Agreement) in the previous 12-month period, and (2) 7% per annum, over (b) the sum of any incentive compensation paid to December 31, 2016, is based on the purchase price. The monthly advisory fee is equalCMFT Management with respect to the following amounts: (1) an annualized ratefirst three calendar quarters of 0.75% paidsuch previous 12-month period (or such lesser number of completed calendar quarters preceding the applicable period, if applicable). During the three and nine months ended September 30, 2021 and 2020, no incentive compensation fees were incurred.
In addition, the Investment Advisor is eligible to receive a portion of the incentive compensation payable to CMFT Management pursuant to the Management Agreement. In the event that the incentive compensation is earned and payable with respect to any quarter, CMFT Management calculates the portion of the incentive compensation that was attributable to the Managed Assets and payable to the Investment Advisor. Pursuant to the Investment Advisory and Management Agreement, CMFT Securities reimburses the Investment Advisor for costs and expenses incurred by the Investment Advisor on the Company’s average invested assets that are between $0 and $2.0 billion; (2) an annualized rate of 0.70% paid on the Company’s average invested assets that are between $2.0 billion and $4.0 billion; and (3) an annualized rate of 0.65% paid on the Company’s average invested assets that are over $4.0 billion.its behalf.
Operating expensesExpense reimbursements to related parties
The Company reimburses CR IV AdvisorsCMFT Management or its affiliates for certain expenses CR IV AdvisorsCMFT Management or its affiliates paid or incurred in connection with the services provided to the Company, subject to the limitation that theCompany. The Company will not reimburse CR IV AdvisorsCMFT Management or its affiliates for any amount by which the operating expenses (including the advisory fee) at the end of the four preceding fiscal quarters exceed the greater of: (1) 2.0% of average invested assets, or (2) 25.0% of net income excluding any additions to reserves for depreciation, bad debts or other similar non-cash reserves and excluding any gain from the sale of assets for that period. The Company will not reimburse CR IV Advisors or its affiliates for the salaries and benefits paid to personnel in connection with thewho provide services for which CR IV Advisors receives acquisition fees, andto the Company will not reimburse CR IV Advisors for salaries and benefits paid toincluding the Company’s executive officers.officers and any portfolio management, acquisitions or investment professionals.
Disposition fees
If CR IV AdvisorsPursuant to the Prior Advisory Agreement, through August 20, 2019, if CMFT Management or its affiliates provideprovided a substantial amount of services (as determined by a majority of the Company’s independent directors) in connection with the sale of one or more properties (or the Company’s entire portfolio), the Company will pay CR IV Advisorspaid CMFT Management or its affiliates a disposition fee in an amount equal to up to one-half of the real estate or brokerage commission paid by the Company to third parties on the sale of such property, not to exceed 1.0% of the contract price of the property sold; provided, however, in no event maywould the total disposition fees paid to CR IV Advisors,CMFT Management, its affiliates and unaffiliated third parties exceed the lesser of the customary competitive real estate commission or an amount equal to 6.0% of the contract sales price. DuringFor the three and nine months ended September 30, 2017 and 2016, no disposition fees were incurred for any such services provided by CR IV Advisors or its affiliates.
Subordinated performance fees
If the Company isCompany’s properties under contract to be sold or its assets are liquidated, CR IV Advisors will bespecifically identified in a broker agreement as being marketed for sale as of August 20, 2019, CMFT Management was entitled to receive a subordinated performancedisposition fee equal to 15.0%in accordance with the terms of the net sale proceeds remaining after investors have received, from regular distributions plus special distributions paid from proceeds of such sale, a return of their net capital invested and an 8.0% annual cumulative, non-compounded return. Alternatively, if the Company’s shares are listed on a national securities exchange, CR IV Advisors will be entitled to a subordinated performance fee equal to 15.0% of the amount by which the market value of the Company’s outstanding stock plus all distributions paid by the Company prior to listing, exceeds the sum of the total amount of capital raised from investors and the amount of distributions necessary to generate an 8.0% annual cumulative, non-compounded return to investors. As an additional alternative, upon termination of the advisory agreement, CR IV Advisors may be entitled to a subordinated performance fee similar to the fee to which CR IV Advisors would have been entitled had the portfolio been liquidated (based on an independent appraised value of the portfolio) on the date of termination. During the three and nine months ended September 30, 2017 and 2016, no subordinated performance fees were incurred related to any such events.Prior Advisory Agreement.
The Company recorded fees and expense reimbursements as shown in the table below for services provided by CR IV AdvisorsCMFT Management or its affiliates related to the services described above during the periods indicated (in thousands):
 Three Months Ended September 30,Nine Months Ended September 30,
 2021202020212020
Management fees$11,703 $10,139 $35,035 $29,739 
Disposition fees$— $93 $— $434 
Expense reimbursements to related parties$2,516 $1,439 $8,387 $6,674 
 Three Months Ended September 30, Nine Months Ended September 30,
 2017 2016 2017 2016
        
Acquisition fees and expenses$2,338
 $2,087
 $6,336
 $4,442
Advisory fees and expenses$11,149
 $10,587
 $32,863
 $31,100
Operating expenses$1,072
 $1,121
 $3,495
 $3,135
Of the amounts shown above, $3.8$15.1 million and $5.5$13.8 million had been incurred, but not yet paid, for services provided by CR IV AdvisorsCMFT Management or its affiliates in connection with the acquisitionmanagement and operationsoperating activities during the nine months ended September 30, 20172021 and 2016,2020, respectively, and such amounts were recorded as liabilities of the Company as of such dates.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2017 (Unaudited) – (Continued)


Due to/fromto Affiliates
As of September 30, 20172021 and December 31, 2016, $3.82020, $15.1 million and $5.3$14.7 million, respectively, had been incurred primarily for advisorymanagement fees and operating expenses by CR IV AdvisorsCMFT Management or its affiliates, but had not yet been reimbursed by the Company. These amounts were included in due to affiliates in the condensed consolidated balance sheets for such periods.
AsDevelopment Management Agreements
On January 7, 2021, the Company completed foreclosure proceedings to take control of the assets which previously secured its mezzanine loans, including 75 condominium units and 21 rental units across 4 buildings in New York. Upon foreclosure, and with the approval of the valuation, compensation and affiliate transactions committee of the Board, CIM NY Management, LLC, an affiliate of the Company’s manager CMFT Management, entered into a Development Management
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2017 and December 31, 2016, $4,000 and $58,000, respectively, were due from CR IV Advisors or its affiliates related to amounts received by affiliates2021 (Unaudited) – (Continued)

Agreement with the indirect wholly owned subsidiaries of the advisor which were dueCompany that own each of the 4 buildings (the “Building Owners”), wherein CIM NY Management, LLC will act as project manager in overseeing the development and construction of property improvements in accordance with each respective Development Management Agreement (the “Development Services”). In consideration for the Development Services, CIM NY Management, LLC will receive a development management fee from the Building Owners equal to 4% of the aggregate gross project costs expended during the term of the Development Management Agreement, subject to the Company.conditions in each respective Development Management Agreement. Additionally, CIM NY Management, LLC is reimbursed by the Building Owners for expenses incurred in connection with the Development Services, including services provided that are incidental to but not part thereof the Development Services. The Development Management Agreement shall remain in effect until the project completion date, and is terminable by either party with fifteen days prior notice to the other party, with or without cause.
NOTE 12 — ECONOMIC DEPENDENCY
Under various agreements, the Company has engaged and may in the future engage CR IV AdvisorsCMFT Management or its affiliates to provide certain services that are essential to the Company, including asset management services, supervision of the management and leasing of properties owned by the Company, asset acquisition and disposition decisions, as well as other administrative responsibilities for the Company including accounting services and investorstockholder relations. As a result of these relationships, the Company is dependent upon CR IV AdvisorsCMFT Management or its affiliates. In the event that these companies are unable to provide the Company with these services, the Company would be required to find alternative providers of these services.
NOTE 13 — OPERATINGSTOCKHOLDERS’ EQUITY
Equity-Based Compensation
On August 10, 2018, the Board approved the adoption of the Company’s 2018 Equity Incentive Plan (the “Plan”), under which 400,000 of the Company’s shares of common stock were reserved for issuance and awards of approximately 341,000 shares of common stock are available for future grant at September 30, 2021. Under the Plan, the Board or a committee designated by the Board has the authority to grant restricted stock awards or deferred stock awards to non-employee directors of the Company, which will further align such directors’ interests with the interests of the Company’s stockholders. The Board or a committee designated by the Board also has the authority to determine the terms of any award granted pursuant to the Plan, including vesting schedules, restrictions and acceleration of any restrictions. The Plan may be amended or terminated by the Board at any time. The Plan expires on August 9, 2028.
As of September 30, 2021, the Company has granted awards of approximately 58,700 restricted shares to the independent members of the Board under the Plan. As of September 30, 2021, 32,500 of the restricted shares had vested based on one year of continuous service, and on October 1, 2021, 22,100 of the restricted shares vested based on one year of continuous service. The remaining 4,100 restricted shares issued had not vested or been forfeited as of September 30, 2021. The fair value of the Company’s share awards is determined using the Company’s per share NAV on the date of grant. Compensation expense related to the restricted shares is recognized over the vesting period. The Company recorded compensation expense of $62,000 and $151,000 for the three and nine months ended September 30, 2021, respectively, and $40,000 and $120,000 for the three and nine months ended September 30, 2020, respectively, related to the restricted shares, which is included in general and administrative expenses in the accompanying condensed consolidated statements of operations. All compensation expense related to these restricted shares was recognized ratably over the period of service prior to September 30, 2021.
NOTE 14 — LEASES
The Company’s real estate assets are leased to tenants under operating leases for which the terms, expirations and expirationsextension options vary. The Company’s operating leases do not convey to the lessee the right to purchase the underlying asset upon expiration of the lease period. To determine whether a contract contains a lease, the Company reviews contracts to determine if the agreement conveys the right to control the use of an asset. The Company accounts for lease and non-lease components as a single, combined operating lease component. Non-lease components primarily consist of maintenance services, including CAM, real estate taxes, insurance and utilities paid for by the lessor but consumed by the lessee. Non-lease components are considered to be variable rental and other property income and are recognized in the period incurred.
As of September 30, 2017,2021, the Company’s leases had a weighted-average remaining term of 9.88.3 years. Certain leases include provisions to extend the lease agreements, options for early termination after paying a specified penalty, rights of first refusal to purchase the property at competitive market rates, and other negotiated terms and conditions. The Company retains substantially all of the risks and benefits of ownership of the real estate assets leased to tenants. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2021 (Unaudited) – (Continued)

As of September 30, 2017,2021, the future minimum rental income from the Company’s investment in real estate assets under non-cancelable operating leases, assuming no exercise of renewal options for the succeeding five fiscal years and thereafter, was as follows (in thousands):
Future Minimum Rental Income
Remainder of 2021$56,316 
2022224,208 
2023209,844 
2024192,953 
2025176,377 
Thereafter1,111,469 
Total$1,971,167 
  Future Minimum Rental Income
Remainder of 2017$92,490
2018358,539
2019343,351
2020330,829
2021314,676
Thereafter2,242,089
Total$3,681,974
A certain amount of the Company’s rental and other property income is from tenants with leases which are subject to contingent rent provisions. These contingent rents are subject to the tenant achieving periodic revenues in excess of specified levels. For the three and nine months ended September 30, 2021 and 2020, the amount of the contingent rent earned by the Company was not significant.
Rental and other property income during the three and nine months ended September 30, 2021 and 2020 consisted of the following (in thousands):
Three Months Ended September 30,Nine Months Ended September 30,
 2021202020212020
Fixed rental and other property income (1)
$60,031 $56,300 $190,632 $164,396 
Variable rental and other property income (2)
10,763 9,711 32,394 30,154 
Total rental and other property income$70,794 $66,011 $223,026 $194,550 

(1)Consists primarily of fixed contractual payments from operating leases with tenants recognized on a straight-line basis over the lease term, including amortization of acquired above- and below-market leases, and is net of uncollectible lease-related receivables.
(2)Consists primarily of tenant reimbursements for recoverable real estate taxes and property operating expenses, and percentage rent.
The Company has 1 property subject to a non-cancelable operating ground lease with a remaining term of 11.9 years, with a lease liability (in deferred rental income, derivative liabilities and other liabilities) and a related ROU asset (in prepaid expenses and other assets) of $2.4 million in the condensed consolidated balance sheets. The lease liability and ROU asset were initially measured at the present value of the future minimum lease payments using a discount rate of 4.3%. This reflects the Company’s incremental borrowing rate, which was calculated based on the interest rate the Company would incur to borrow on a fully collateralized basis over a term similar to the lease.
The Company recognized $63,000 and $188,000 of ground lease expense during the three and nine months ended September 30, 2021, respectively, of which $61,000 and $182,000 was paid in cash during the period it was recognized. As of September 30, 2021, the Company’s scheduled future minimum rental payments related to its operating ground lease is approximately $63,000 for the remainder of 2021, $250,000 annually for 2022 through 2026, and $1.7 million thereafter through the maturity date of the lease in August 2033.
NOTE 1415 — SEGMENT REPORTING
The Company has 2 reportable segments: real estate and credit. Corporate/other represents all corporate level and unallocated items and includes the Company’s other asset management activities and operating expenses. There were no changes in the structure of the Company’s internal organization that prompted the change in reportable segments. Prior period amounts have been revised to conform to the current year presentation shown below.
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2021 (Unaudited) – (Continued)

The following tables present segment reporting for the three and nine months ended September 30, 2021 and 2020(in thousands):
Real EstateCredit
Corporate/Other (1)
Company Total
Three Months Ended September 30, 2021
Rental and other property income$70,694 $— $100 $70,794 
Interest income— 19,755 — 19,755 
Total revenues70,694 19,755 100 90,549 
General and administrative86 265 2,725 3,076 
Property operating7,555 — 3,602 11,157 
Real estate tax7,325 — 266 7,591 
Expense reimbursements to related parties— — 2,516 2,516 
Management fees8,713 2,990 — 11,703 
Transaction-related6 — — 6 
Depreciation and amortization22,801 — — 22,801 
Real estate impairment891 — — 891 
Decrease in provision for credit losses— (1,792)— (1,792)
Total operating expenses47,377 1,463 9,109 57,949 
Gain on disposition of real estate and condominium developments, net30,657 — 3,376 34,033 
Merger-related expenses, net— — (398)(398)
Operating income (loss)53,974 18,292 (6,031)66,235 
Other expense:
Interest expense and other, net(12,820)(5,117)(2,444)(20,381)
Loss on extinguishment of debt(249)— (3,002)(3,251)
Segment net income (loss)$40,905 $13,175 $(11,477)$42,603 
Total assets as of September 30, 2021$2,947,031 $1,866,913 $266,915 $5,080,859 
__________________________________
(1)Includes condominium and rental units acquired via foreclosure during the nine months ended September 30, 2021. During the year ended December 31, 2019, the borrower on the Company’s 8 mezzanine loans became delinquent on certain required reserve payments. Throughout 2020, the borrower remained delinquent on the required reserve payments and became delinquent on principal and interest. As a result, the Company classified the loans as a troubled debt restructuring and commenced foreclosure proceedings. Upon completing foreclosure in January 2021, the Company took control of the assets which previously secured its mezzanine loans.
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2021 (Unaudited) – (Continued)

Real EstateCredit
Corporate/Other (1)
Company Total
Nine Months Ended September 30, 2021
Rental and other property income$222,691 $— $335 $223,026 
Interest income— 48,168 — 48,168 
Total revenues222,691 48,168 335 271,194 
General and administrative204 978 9,927 11,109 
Property operating22,297 — 10,335 32,632 
Real estate tax22,390 — 5,126 27,516 
Expense reimbursements to related parties— — 8,387 8,387 
Management fees26,577 8,458 — 35,035 
Transaction-related37 — — 37 
Depreciation and amortization73,186 — — 73,186 
Real estate impairment5,268 — — 5,268 
Decrease in provision for credit losses— (1,101)— (1,101)
Total operating expenses149,959 8,335 33,775 192,069 
Gain on disposition of real estate and condominium developments, net75,633 — 4,869 80,502 
Merger-related expenses, net— — (398)(398)
Operating income (loss)148,365 39,833 (28,969)159,229 
Other expense:
Interest expense and other, net(20,649)(12,005)(24,209)(56,863)
Loss on extinguishment of debt(1,621)— (3,108)(4,729)
Segment net income (loss)$126,095 $27,828 $(56,286)$97,637 
Total assets as of September 30, 2021$2,947,031 $1,866,913 $266,915 $5,080,859 
__________________________________
(1)Includes condominium and rental units acquired via foreclosure during the nine months ended September 30, 2021. During the year ended December 31, 2019, the borrower on the Company’s 8 mezzanine loans became delinquent on certain required reserve payments. Throughout 2020, the borrower remained delinquent on the required reserve payments and became delinquent on principal and interest. As a result, the Company classified the loans as a troubled debt restructuring and commenced foreclosure proceedings. Upon completing foreclosure in January 2021, the Company took control of the assets which previously secured its mezzanine loans.
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2021 (Unaudited) – (Continued)

Real EstateCreditCorporate/OtherCompany Total
Three Months Ended September 30, 2020
Rental and other property income$66,011 $— $— $66,011 
Interest income— 6,631 — 6,631 
Total revenues66,011 6,631 — 72,642 
General and administrative147 522 2,539 3,208 
Property operating5,214 — — 5,214 
Real estate tax6,566 — — 6,566 
Expense reimbursements to related parties— — 1,439 1,439 
Management fees9,113 1,026 — 10,139 
Transaction-related55 3 — 58 
Depreciation and amortization19,967 — — 19,967 
Real estate impairment476 — — 476 
Increase in provision for credit losses— 7,355 — 7,355 
Total operating expenses41,538 8,906 3,978 54,422 
Gain on disposition of real estate, net3,219 — — 3,219 
Merger-related expenses, net— — (1,207)(1,207)
Operating income (loss)27,692 (2,275)(5,185)20,232 
Other expense:
Interest expense and other, net(4,596)(2,134)(9,234)(15,964)
Loss on extinguishment of debt— — (89)(89)
Segment net income (loss)$23,096 $(4,409)$(14,508)$4,179 
Total assets as of September 30, 2020$2,673,887 $946,827 $163,254 $3,783,968 
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2021 (Unaudited) – (Continued)

Real EstateCreditCorporate/OtherCompany Total
Nine Months Ended September 30, 2020
Rental and other property income$194,550 $— $— $194,550 
Interest income— 19,395 — 19,395 
Total revenues194,550 19,395 — 213,945 
General and administrative263 1,047 7,800 9,110 
Property operating16,890 — — 16,890 
Real estate tax20,292 — — 20,292 
Expense reimbursements to related parties— — 6,674 6,674 
Management fees26,636 3,103 — 29,739 
Transaction-related300 8 — 308 
Depreciation and amortization60,486 — — 60,486 
Real estate impairment15,983 — — 15,983 
Increase in provision for credit losses— 33,037 — 33,037 
Total operating expenses140,850 37,195 14,474 192,519 
Gain on disposition of real estate, net20,120 — — 20,120 
Merger-related expenses, net— — (1,207)(1,207)
Operating income (loss)73,820 (17,800)(15,681)40,339 
Other expense:
Interest expense and other, net(16,492)(2,696)(28,052)(47,240)
Loss on extinguishment of debt(4,394)— (447)(4,841)
Segment net income (loss)$52,934 $(20,496)$(44,180)$(11,742)
Total assets as of September 30, 2020$2,673,887 $946,827 $163,254 $3,783,968 
NOTE 16 — SUBSEQUENT EVENTS
The following events occurred subsequent to September 30, 2017:2021:
RedemptionRedemptions of Shares of Common Stock
Subsequent to September 30, 2017,2021, the Company redeemed approximately 2.51.3 million shares pursuant to the Company’s share redemption program for $25.0$9.4 million (at an averagea redemption price of $7.20 per share of $10.08)share). Management, in its discretion, limited the amount of shares redeemed forThe remaining redemption requests received during the three months ended September 30, 2017 to shares issued in the DRIP Offerings during the respective period. The remaining redemption requests2021 totaling approximately 9.827.7 million shares went unfulfilled.
Investment in Real Estate AssetsProperty Dispositions
Subsequent to September 30, 2017,2021, the Company disposed of 2 properties for an aggregate gross sales price of $2.5 million, resulting in net proceeds of $2.4 million after closing costs and a net gain of approximately $29,000. The Company has no continuing involvement with these properties. Additionally, the Company disposed of condominium units for an aggregate gross sales price of $10.4 million and a net gain of $1.1 million.
CRE Loans
Subsequent to September 30, 2021, the Company acquired one commercial real estate property for a purchase price3 senior loans with an aggregate principal balance of $3.2 million. The$345.0 million and unfunded commitments of $11.9 million, the funding of which is subject to the satisfaction of borrower milestones.
Broadly Syndicated Loans
Subsequent to September 30, 2021, the Company has not completed its initial purchase price allocation with respect to this property and therefore cannot provide similar disclosures to those included in Note 4 — Real Estate Investments in these condensed consolidated financial statements for this property.

settled $75.2 million of broadly syndicated loan transactions, $59.7 million of which were traded as of September 30, 2021.
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 20172021 (Unaudited) – (Continued)



CMBS Purchases
Property Disposition
As of September 30, 2017, one property was classified as held for sale, as discussed in Note 2 — Summary of Significant Accounting Policies. Subsequent to September 30, 2017,2021, the Company disposedpurchased $61.0 million of this propertyCMBS.
Credit and Security Agreement
Subsequent to September 30, 2021, the Company entered into an amendment to the Credit and Security Agreement, pursuant to which available borrowings on the Credit Security Revolver were increased up to $550.0 million. The Company also borrowed an additional $50.0 million under the Credit Security Revolver.
Repurchase Facilities
Subsequent to September 30, 2021, the Company entered into an amendment to the Wells Fargo Repurchase Agreement to increase the maximum financing amount from $250.0 million to $580.0 million. The Company also borrowed an additional $431.6 million on its Repurchase Facilities.
Deutsche Bank Repurchase Agreement
Subsequent to September 30, 2021, CMFT RE Lending RF Sub DB, LLC, an indirect wholly-owned subsidiary of the Company, entered into a Master Repurchase Agreement with Deutsche Bank AG, New York Branch (“Deutsche Bank”) (the “Deutsche Bank Repurchase Agreement”), which provides up to $300.0 million of financing primarily through Deutsche Bank’s purchase of certain eligible assets from the Company (the “Deutsche Bank Repurchase Facility”). The Deutsche Bank Repurchase Agreement provides for a gross sales price of $1.9 million, resultingsimultaneous agreement by Deutsche Bank to re-sell such assets back to the lending subsidiary at a certain future date or upon demand. The Deutsche Bank Repurchase Facility matures on October 8, 2022, with 4 one-year extension options, subject to certain conditions set forth in proceeds of $1.9 million after closing costs and a gain of $242,000. No disposition fees were paid to CR IV Advisors or its affiliates inthe Deutsche Bank Repurchase Agreement. In connection with the saleDeutsche Bank Repurchase Agreement, the Company (as the guarantor) entered into a guaranty with the buyer, under which the Company agreed to guarantee CMFT RE Lending RF Sub DB, LLC’s obligations under the Deutsche Bank Repurchase Agreement. Subject to certain exceptions, the maximum aggregate liability under the guaranty will not exceed 25% of the property andthen aggregate repurchase price of all purchased assets.
Registration Statements on Form S-4
In connection with the CIM Income NAV Merger, the Company has no continuing involvement with this property.filed a registration statement on Form S-4 (File No. 333-260358), which was declared effective by the SEC on November 4, 2021, that contains a prospectus of the Company. The CIM Income NAV Merger is currently anticipated to close by year end 2021 or shortly thereafter.
Sale of Cole CapitalBoard Compensation
On November 13, 20178, 2021, the parentBoard approved the acceleration of the Company’s sponsor entered into a purchase and sale agreementvesting of all restricted shares for all non-returning independent directors to sell its ownership interest inthe date on which the Company’s sponsor. The completion2021 annual meeting (the “Annual Meeting”) is held. In addition, the Board approved the payment of this sale is subjectcash compensation to each of the non-returning independent directors, payable in one lump sum following the Annual Meeting, equal to the receipt of regulatory approvals and other customary closing conditions and is expectedcash compensation each non-returning independent director would have received if they had continued to occur at the endserve as a member of the fourth quarter of 2017 or during the first quarter of 2018.Board through September 30, 2022.



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Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations
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 condensed consolidated financial statements and notes thereto appearing elsewhere in this Quarterly Report on Form 10-Q. 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 of this Quarterly Report on Form 10-Q and the Company’s Annual Report on Form 10-K for the year ended December 31, 2016.2020. Capitalized terms used herein, but not otherwise defined, shall have the meaning ascribed to those terms in “Part I — Financial Information” of this Quarterly Report on Form 10-Q, including the notes to the condensed consolidated financial statements contained therein, and the terms “we,” “us,” “our” and the “Company” refer to Cole Credit PropertyCIM Real Estate Finance Trust, IV, Inc.
Forward-Looking Statements
This Quarterly Report on Form 10-Q includes “forward-looking statements” (within the meaning of the federal securities laws, Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) that reflect our expectations and projections about our future results, performance, prospects and opportunities. We have attempted to identify these forward-looking statements by the use of words such as “may,” “will,” “seek,” “expects,” “anticipates,” “believes,” “targets,” “intends,” “should,” “estimates,” “could,” “continue,” “assume,” “projects,” “plans” or similar expressions. These forward-looking statements are based on information currently available to us and are subject to a number of known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. These factors include, among other things, those discussed below. In addition, these risks and uncertainties include those associated with (i) the scope, severity and duration of the current pandemic of COVID-19 and actions taken to contain the pandemic or mitigate its impact, (ii) the potential adverse effect of the COVID-19 pandemic on the financial condition, results of operations, cash flows and performance of the Company and its tenants, the real estate market and the global economy and financial markets, among others, and (iii) general economic, market and other conditions. We intend for all such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act and Section 21E of the Exchange Act, as applicable by law. We do not undertake to publicly update or revise any forward-looking statements, whether as a result of changes in underlying assumptions or new information, future events or otherwise, except as may be required to satisfy our obligations under federal securities law. The forward-looking statements should be read in light of the risk factors identified in Item 1A — Risk Factors of this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the year ended December 31, 2016.2020.
The following are some, but not all, of the assumptions, risks, uncertainties and other factors that could cause our actual results to differ materially from those presented in our forward-looking statements:
•We may be unable to renew leases, lease vacant space or re-lease space as leases expire on favorable terms or at all.
•We are subject to risks associated with tenant, geographic and industry concentrations with respect to our properties.
•Our properties, intangible assets and other assets may be subject to impairment charges.
•We could be subject to unexpected costs or unexpected liabilities that may arise from potential dispositions of properties.dispositions.
•We are subject to competition in the acquisition and disposition of properties and in the leasing of our properties, and we may suffer delays or be unable to acquire, dispose of, or lease properties on advantageous terms.
•We could beare subject to risks associated with bankruptcies or insolvencies of tenants or from tenant defaults generally.
•We have substantial indebtedness, which may affect our ability to pay distributions and expose us to interest rate fluctuation risk and the risk of default under our debt obligations.
•We may be affected byare subject to risks associated with the incurrence of additional secured or unsecured debt.
•We may not be able to maintain profitability.
•We may not generate cash flows sufficient to pay our distributions to stockholders or meet our debt service obligations.
•Our continued compliance with debt covenants depends on many factors and could be impacted by current or future economic conditions associated with the COVID-19 pandemic.
•We may be affected by risks resulting from losses in excess of insured limits.
•We may fail to remain qualified as a REIT for U.S. federal income tax purposes.
Our advisor has•We may be unable to successfully reposition our portfolio or list our shares on a national securities exchange in the right to terminate the advisory agreement upon 60 days’ written notice without causetimeframe we expect or penalty.

at all.
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•We may be unable to achieve the cost synergies anticipated to result from the CCIT III and CCPT V Mergers and the CIM Income NAV Merger.
Definitions
We use certain defined terms throughout this Quarterly Report on Form 10-Q that have the following meanings:
The phrase “annualized rental income” refers to the straight-line rental revenue under our leases on operating properties owned as of the respective reporting date, which includes the effect of rent escalations and any tenant concessions, such as free rent, and excludes any bad debt allowances and any contingent rent, such as percentage rent. Management uses annualized rental income as a basis for tenant, industry and geographic concentrations and other metrics within the portfolio. Annualized rental income is not indicative of future performance.
Under a “net lease,” the tenant occupying the leased property (usually as a single tenant) does so in much the same manner as if the tenant were the owner of the property. There are various forms of net leases, most typically classified as triple-net or double-net. Triple-net leases typically require theThe tenant to pay all expenses associated with the property (e.g., real estate taxes, insurance, maintenance and repairs). Double-net leases typically require that the tenant pay all operating expenses associated with the property (e.g., real estate taxes, insurance and maintenance), but excludes some or all major repairs (e.g., roof, structure and parking lot). Accordingly, the owner receives the rent “net” of these expenses, rendering the cash flow associated with the lease predictable for the term of the lease. Under a net lease, the tenant generally agrees to lease the property for a significant term and agrees that it will either have no ability or only limited ability to terminate the lease or abate rent prior to the expiration of the term of the lease as a result of real estate driven events such as casualty, condemnation or failure by the landlord to fulfill its obligations under the lease. There are various forms of net leases, most typically classified as either triple-net or double-net. Triple-net leases typically require the tenant to pay all expenses associated with the property (e.g., real estate taxes, insurance, maintenance and repairs, including roof, structure and parking lot). Double-net leases typically hold the landlord responsible for the capital expenditures for the roof and structure, while the tenant is responsible for all lease payments and remaining operating expenses associated with the property (e.g., real estate taxes, insurance and maintenance).
Overview
We were formed on July 27, 2010, and we elected to be taxed, and currently qualify, as a REIT for U.S. federal income tax purposes commencing with our taxable year ended December 31, 2012. We commenced our principal operations on April 13, 2012, when we satisfied the conditions of our escrow agreement regarding the minimum offering and issued approximately 308,000 shares of our common stock. We have no paid employees and are externally advised and managed by CR IV Advisors. VEREITCMFT Management and, with respect to investments in securities, our Investment Advisor. CIM indirectly owns and/or controls CMFT Management; our external advisor, CR IV Advisors, the dealer manager, for the Offering, CCC,CCO Capital; our property manager, CREI Advisors,Advisors; and our sponsor, Cole Capital.CCO Group.
We ceased issuing shares in our Offering on April 4, 2014 and in the Initial DRIP Offering effective as of June 30, 2016, but will continue to issue shares of common stock under the Secondary DRIP Offering until acertain liquidity event occurs,events occur, such as the listing of our shares on a national securities exchange or the sale of our company, or the Secondary DRIP Offering is otherwise terminated by theour Board. We expect that property acquisitionssuspended issuing shares of common stock under our Secondary DRIP Offering on August 30, 2020 in 2017connection with our entry into the merger agreements with CCIT III and future periods will be fundedCCPT V. On March 25, 2021, the Board approved reinstating the DRIP effective April 1, 2021.
We intend to continue to pursue a diversified investment strategy across the capital structure by proceeds from financingbalancing our existing portfolio of the acquired properties, cash flows from operations and the strategic sale of propertiescore commercial real estate assets with investments in commercial mortgage loans and other investments.
On September 27, 2015,real estate-related credit investments in which our sponsor and its affiliates have expertise. We expect to adapt our investment strategy over time in order to respond to evolving market conditions and to capitalize on investment opportunities that may arise at different points in the Board established an estimated valueeconomic and real estate investment cycle. Assuming the successful repositioning of our portfolio, we then expect to pursue a listing of our common stock as of August 31, 2015, of $9.70 per share for purposes of assisting broker-dealerson a national securities exchange in 2022, though we can provide no assurances that participated in the Offering in meeting their customer account statement reporting obligations under National Association of Securities Dealers Conduct Rule 2340. On November 10, 2016, the Board established an updated estimated per share NAV of our common stock, as of September 30, 2016, of $9.92 per share. On March 24, 2017, the Board established an updated estimated per share NAV of our common stock, as of December 31, 2016, of $10.08 per share.a listing will happen on that timeframe or at all.
Our operating results and cash flows are primarily influenced by rental and other property income from our commercial properties, interest income from our credit investments, interest expense on our indebtedness and acquisitioninvestment and operating expenses. Rental and other property income accounted for 88% of our total revenue for both the three and nine months ended September 30, 2017 and 2016. As 97.5%94.2% of our rentable square feet was under lease, including any month-to-month agreements, as of September 30, 20172021, with a weighted average remaining lease term of 9.88.3 years, we believe our exposure to changes in commercial rental rates on our portfolio is substantially mitigated, except for vacancies caused by tenant bankruptcies or other factors. CR IV AdvisorsOur manager regularly monitors the creditworthiness of our tenants by reviewing each tenant’s financial results, any available credit rating agency reports when available, on the tenant or guarantor, the operating history of the property with such tenant, the tenant’s market share and track record within its industry segment, the general health and outlook of the tenant’s industry segment and other information for changes and possible trends. If CR IV AdvisorsCMFT Management identifies significant changes or trends that may adversely affect the creditworthiness of a tenant, it will gather a more in-depth knowledge of the tenant’s financial condition and, if necessary, attempt to mitigate the tenant credit risk by evaluating the possible sale of the property or identifying a possible replacement tenant should the current tenant fail to perform on the lease.

In addition, our manager reviews our investment portfolios and in certain instances is in regular contact with our borrowers, monitoring performance of the collateral and enforcing our rights as necessary.
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As of September 30, 2021, we owned 403 properties, which consisted of 346 retail properties, 53 anchored shopping centers, three industrial properties and one office property, representing 36 industry sectors and comprising 17.6 million rentable square feet of commercial space located in 40 states. In addition, during the nine months ended September 30, 2021, we completed foreclosure proceedings and took control of the assets which previously secured our mezzanine loans. As of September 30, 2021, we owned $189.3 million of condominium developments.
As of September 30, 2021, our loan portfolio consisted of 273 loans with a net book value of $1.5 billion. As of September 30, 2021, we had $87.4 million of unsettled broadly syndicated loan purchases included in cash and cash equivalents, and investments in real estate-related securities of $185.2 million.
COVID-19
We are closely monitoring the negative impacts that the COVID-19 pandemic and the efforts to mitigate its spread are having on the economy, our tenants and our business. The extent to which the COVID-19 pandemic continues to impact our operations and those of our tenants will depend on future developments, including, among other factors, the duration, spread and resurgences of the virus, including certain variants thereof, along with related travel advisories and restrictions, the recovery time of the disrupted supply chains and industries, the impact of labor market interruptions, the impact of government interventions, the pace, scope and efficacy of vaccination programs, and general uncertainty as to the impact of COVID-19, including related variants, on the global economy.
During the three and nine months ended September 30, 2021, the majority of lease concessions provided were in the form of rent abatements to certain tenants in response to the impact of the COVID-19 pandemic on those tenants.
As of November 8, 2021, we have collected approximately 99.3% of rental payments billed to tenants during the three months ended September 30, 2021, and as of November 8, 2021, we collected $6.4 million of deferred rent, representing approximately 97% of amounts due through September 30, 2021.
Pending Merger
On September 21, 2021, we entered into the Merger Agreement. Subject to the terms and conditions of the Merger Agreements, CIM Income NAV will merge with and into Merger Sub with Merger Sub surviving the CIM Income NAV Merger, such that following the CIM Income NAV Merger, the surviving entity will continue as our wholly owned subsidiary. In accordance with the applicable provisions of the Maryland General Corporation Law, the separate existence of CIM Income NAV shall cease.
At the effective time of the CIM Income NAV Merger and subject to the terms and conditions of the Merger Agreement, each issued and outstanding share of the Class D Common Stock will be converted into the right to receive 2.574 shares of CMFT Common Stock, each issued and outstanding share of the Class T Common Stock will be converted into the right to receive 2.510 shares of CMFT Common Stock, each issued and outstanding share of the Class S Common Stock will be converted into the right to receive 2.508 shares of CMFT Common Stock, and each issued and outstanding share of the Class I Common Stock will be converted into the right to receive 2.622 shares of CMFT Common Stock, in each case, subject to the treatment of fractional shares in accordance with the Merger Agreement.
The combined company after the Merger will retain the name CIM Real Estate Finance Trust, Inc. The Merger is intended to qualify as a “reorganization” under, and within the meaning of, Section 368(a) of the Internal Revenue Code of 1986, as amended (the “Code”).
For additional information on the Merger, see Note 1 — Organization and Business to our condensed consolidated financial statements in this Quarterly Report on Form 10-Q and our Current Reports on Form 8-K filed with the SEC on September 22, 2021.
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Operating Highlights and Key Performance Indicators
2017 Activity through September 30, 2021
Acquired 40 commercial properties•Invested $720.1 million in senior loans and received principal repayments of $285.1 million.
•Invested $267.0 million in broadly syndicated loans and sold broadly syndicated loans for an aggregate purchasegross sales price of $300.5$55.5 million.
•Invested $171.9 million in CMBS and preferred units and sold CMBS for an aggregate gross sales price of $27.0 million.
•Disposed of 14 retail113 properties and one outparcel of land for an aggregate sales price of $98.6$484.4 million.
Entered into•Completed foreclosure to take control of the Second Amendedassets which previously secured our mezzanine loans, including 75 condominium units and Restated Credit Agreement that increased the allowable borrowings and extended the maturity dates associated with the original amended and restated unsecured credit facility.21 rental units across four buildings.
Total•Increased total debt increased by $214.7$656.6 million, from $2.26$2.1 billion to $2.47$2.8 billion.
Portfolio Information
The following table shows the carrying value of our portfolio by investment type as of September 30, 2021 and 2020 (dollar amounts in thousands):
 As of September 30,
20212020
Asset CountCarrying ValueAsset CountCarrying Value
Loan Held-For-Investment
Mezzanine loans—$— — %8$146,516 4.2 %
Senior loans11890,804 19.2 %4327,244 9.3 %
Broadly syndicated loans262571,488 12.3 %161419,135 12.0 %
Less: Allowance for credit losses(11,219)(0.2)%(35,039)(1.0)%
Total loans held-for-investment and related receivable, net2731,451,073 31.2 %173857,856 24.5 %
Real Estate-Related Securities
CMBS15121,757 2.6 %575,212 2.1 %
Preferred units163,490 1.4 %—— — %
Real Estate
Total real estate assets and intangible lease liabilities, net4033,011,599 64.8 %3802,568,842 73.4 %
Total Investment Portfolio691$4,647,919 100.0 %558$3,501,910 100.0 %
The following table details overall statistics of our credit portfolio as of September 30, 2021 (dollar amounts in thousands):
Senior Loans (1) (2)
Broadly Syndicated LoansCMBSPreferred Units
Number of loans11 262 15 1 
Net book value$885,517 $565,556 $121,757 $63,490 
Weighted-average interest rate3.7 %3.6 %2.8 %8.9 %
Weighted-average maximum years to maturity2.75.012.4 0.7 

(1)As of September 30, 2021, 100% of our loans by principal balance earned a floating rate of interest, primarily indexed to U.S. dollar LIBOR.
(2)Maximum maturity date assumes all extension options are exercised by the borrowers; however, our CRE loans may be repaid prior to such date.
Real Estate Portfolio Information
As of September 30, 2017,2021, we owned 908403 properties located in 4540 states, the gross rentable square feet of which was 97.5%94.2% leased, including any month-to-month agreements, with a weighted average lease term remaining of 9.88.3 years. During the nine months ended As of
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September 30, 2017, we disposed of 14 properties for an aggregate sales price of $98.6 million. As of September 30, 2017,2021, no single tenant accounted for greater than 10% of our 20172021 annualized rental income. As of September 30, 2017,2021, we had certain geographic and industry concentrations in our property holdings. In particular, as of September 30, 2017, 7746 of our properties were located in California, which accounted for 10%11% of our 20172021 annualized rental income. In addition, we had tenants in the discount storesporting goods, hobby and pharmacymusical instruments stores and health and personal care stores industries, which accounted for 14%13% and 10%11%, respectively, of our 20172021 annualized rental income.
The following table shows the property statistics of our real estate assets which exclude uncompleted development projects and any properties owned through unconsolidated joint ventures, as of September 30, 20172021 and 2016:2020:
  September 30,
  2017 2016
Number of commercial properties908
 882
Rentable square feet (in thousands) (1)
26,837
 26,454
Percentage of rentable square feet leased97.5% 98.5%
Percentage of investment-grade tenants (2)
34.0% 36.2%
     
     
(1) Includes square feet of the buildings on land parcels subject to ground leases.  
(2) Investment-grade tenants are those with a credit rating of BBB- or higher by Standard & Poor’s Financial Services LLC (“Standard & Poor’s”) or a credit rating of Baa3 or higher by Moody’s Investor Service, Inc. (“Moody’s”). The ratings may reflect those assigned by Standard & Poor’s or Moody’s to the lease guarantor or the parent company, as applicable.
The following table summarizes our real estate investment activity during the three and nine months ended September 30, 2017 and 2016:
  
  Three Months Ended September 30, Nine Months Ended September 30,
   2017 2016 2017 2016
Commercial properties acquired (1)
 13
 6
 40
 14
Purchase price of acquired properties (in thousands) $113,857
 $97,086
 $300,524
 $197,026
Rentable square feet (in thousands) (2)
 516
 592
 1,352
 1,175
 As of September 30,
 20212020
Number of commercial properties403380
Rentable square feet (in thousands) (1)
17,62317,938
Percentage of rentable square feet leased94.2 %94.3 %
Percentage of investment-grade tenants (2)
36.9 %37.9 %

(1) Excludes a property owned through the Unconsolidated Joint Venture that was consolidated during the nine months ended September 30, 2016.
(2)     Includes square feet of buildings on land parcels subject to ground leases.


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Table(2)     Investment-grade tenants are those with a credit rating of Contents


ResultsBBB- or higher by Standard & Poor’s or a credit rating of OperationsBaa3 or higher by Moody’s Investor Service, Inc. (“Moody’s”). The ratings may reflect those assigned by Standard & Poor’s or Moody’s to the lease guarantor or the parent company, as applicable. The weighted average credit rating is weighted based on annualized rental income and is for only those tenants rated by Standard & Poor’s.
The following table provides summary information aboutsummarizes our results of operations for the three and nine months ended September 30, 2017 and 2016 (in thousands):
  Three Months Ended September 30, 2017 vs. 2016 Increase (Decrease) Nine Months Ended September 30, 2017 vs. 2016 Increase (Decrease)
  2017 2016  2017 2016 
Total revenues $107,024
 $101,796
 $5,228
 $316,308
 $302,940
 $13,368
General and administrative expenses $3,270
 $3,246
 $24
 $10,301
 $9,735
 $566
Property operating expenses $7,345
 $5,738
 $1,607
 $20,881
 $16,603
 $4,278
Real estate tax expenses $9,276
 $8,612
 $664
 $27,646
 $25,939
 $1,707
Advisory fees and expenses $11,149
 $10,587
 $562
 $32,863
 $31,100
 $1,763
Acquisition-related expenses $110
 $1,417
 $(1,307) $1,520
 $3,592
 $(2,072)
Depreciation and amortization $36,461
 $33,452
 $3,009
 $106,145
 $100,399
 $5,746
Operating income $37,755
 $37,314
 $441
 $115,294
 $114,142
 $1,152
Interest expense and other, net $23,335
 $20,473
 $2,862
 $67,968
 $58,416
 $9,552
Net income attributable to the Company $29,736
 $18,096
 $11,640
 $64,028
 $57,028
 $7,000
Revenue
Our revenues consist primarily of rental and other property income from net leased commercial properties. We also incur certain operating expenses that are subject to reimbursement by our tenants, which results in tenant reimbursement income.
The increase in revenue of $5.2 million and $13.4 million during the three and nine months ended September 30, 2017, respectively, as compared to the same periods in 2016, was primarily due to the acquisition of 41 rental income-producing properties subsequent to September 30, 2016. Rental income from net leased commercial properties accounted for 88% of our total revenue for both the three and nine months ended September 30, 2017 and 2016. We also incurred certain operating expenses subject to reimbursement by our tenants, which resulted in $12.9 million and $38.0 million of tenant reimbursement income during the three and nine months ended September 30, 2017, respectively, compared to $12.4 million and $37.6 million, respectively, during the same periods in 2016.
General and Administrative Expenses
The primary general and administrative expense items are operating expense reimbursements to our advisor, escrow and trustee fees, state franchise and income taxes, office expenses and accounting fees.
The increase in general and administrative expenses of $24,000 and $566,000 during the three and nine months ended September 30, 2017, respectively, as compared to the same periods in 2016, was primarily due to increases in operating expense reimbursements to our advisor during the three and nine months ended September 30, 2017, primarily as a result of the acquisition of 41 additional rental income-producing properties subsequent to September 30, 2016.
Property Operating Expenses
Property operating expenses such as property repairs, maintenance and property-related insurance include both reimbursable and non-reimbursable property expenses. We are reimbursed by tenants for certain property operating expenses in accordance with the respective lease agreements.
The increase in property operating expenses of $1.6 million and $4.3 million during the three and nine months ended September 30, 2017, respectively, as compared to the same periods in 2016, was primarily due to the acquisition and management of 41 additional rental income-producing properties subsequent to September 30, 2016, as well as recognizing a full period of property operating expenses on six and 14 properties acquired during the three and nine months ended September 30, 2016, respectively.

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Real Estate Tax Expenses
The increase in real estate tax expenses of $664,000 and $1.7 million during the three and nine months ended September 30, 2017, respectively, as compared to the same periods in 2016, was primarily due to the acquisition of 41 additional rental income-producing properties subsequent to September 30, 2016, as well as recognizing a full period of real estate tax expenses on six and 14 properties acquired during the three and nine months ended September 30, 2016, respectively.
Advisory Fees and Expenses
Pursuant to the advisory agreement with CR IV Advisors and based upon the amount of our current invested assets, we are required to pay to CR IV Advisors a monthly advisory fee equal to one-twelfth of 0.75% of the average invested assets up to $2.0 billion, one-twelfth of 0.70% of the average invested assets over $2.0 billion up to $4.0 billion and one-twelfth of 0.65% of assets over $4.0 billion. Additionally, we may be required to reimburse certain expenses incurred by CR IV Advisors in providing such advisory services, subject to limitations as set forth in the advisory agreement.
The increase in advisory fees and expenses of $562,000 during the three months ended September 30, 2017, as compared to the same period in 2016, was due to an increase in our average invested assets to $5.6 billion over the three months ended September 30, 2017, compared to $5.2 billion over the three months ended September 30, 2016.
The increase in advisory fees and expenses of $1.8 millionactivity during the nine months ended September 30, 2017, as compared2021 and 2020:
  
Three Months Ended September 30,Nine Months Ended September 30,
 2021202020212020
Commercial properties acquired— 2 — 3 
Purchase price of acquired properties (in thousands)$— $9,851 $— $14,510 
Rentable square feet (in thousands) (1)
— 37 — 56 

(1)     Includes square feet of buildings on land parcels subject to ground leases.
Results of Operations
Overview
We are not aware of any material trends or uncertainties, other than those listed in the same periodrisk factors set forth in 2016, wasour Annual Report on Form 10-K for the year ended December 31, 2020 and this Quarterly Report on Form 10-Q, the effects of the COVID-19 pandemic, and national economic conditions affecting real estate in general that may reasonably be expected to have a material impact on our results from the acquisition, management and operation of properties. Currently, we are unable to predict the impact that the COVID-19 pandemic will have on our financial condition, results of operations and cash flows in future periods due to an increase in our average invested assets to $5.5 billion over the nine months ended September 30, 2017, compared to $5.2 billion over the nine months ended September 30, 2016.
Acquisition-Related Expenses
We reimburse CR IV Advisors or its affiliates for acquisition-related expenses incurred in the process of acquiring a property or the origination or acquisition of a loan, so long as the total acquisition fees and expenses relating to the transaction do not exceed 6.0% of the contract purchase price, unless otherwise approved by a majority of our board of directors, including a majority of our independent directors, as commercially competitive, fair and reasonable to us. In April 2017, we early adopted ASU 2017-01, which clarifies the definition of a business by adding guidance to assist entities in evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. Beginning in April 2017, our acquisitions qualify as asset acquisitions, and as such, acquisition-related fees and certain acquisition-related expenses related to these asset acquisitions are capitalized. Prior to the adoption of ASU 2017-01 in April 2017, costs related to property acquisitions, including acquisition fees described below, were expensed as incurred, and all of our acquisitions were accounted for as business combinations. Prior to April 2017, acquisition-related expenses primarily consisted of legal, deed transfer and other costs related to real estate purchase transactions, including costs incurred for deals that were not consummated. We also pay CR IV Advisors or its affiliates acquisition fees of up to 2.0% of: (1) the contract purchase price of each property or asset we acquire; (2) the amount paid in respect of the development, construction or improvement of each asset we acquire; (3) the purchase price of any loan we acquire; and (4) the principal amount of any loan we originate.
The decrease in acquisition-related expenses of $1.3 million during the three months ended September 30, 2017, as compared to the same period in 2016, was primarily due to the early adoption of ASU 2017-01, and as such, acquisition costs related to asset acquisitions were capitalized during the three months ended September 30, 2017. During the three months ended September 30, 2016, acquisition-related costs related to future property acquisitions were expensed as incurred.
The decrease in acquisition-related expenses of $2.1 million during the nine months ended September 30, 2017, as compared to the same period in 2016, was primarily due to the acquisition of four commercial properties prior to the adoption of ASU 2017-01, for an aggregate purchase price of $55.4 million during the nine months ended September 30, 2017, compared to the acquisition of fourteen commercial properties for an aggregate purchase price of $197.0 million during the nine months ended September 30, 2016. During the nine months ended September 30, 2016, acquisition-related costs related to property acquisitions were expensed as incurred.
Depreciation and Amortization
The increase in depreciation and amortization expenses of $3.0 million and $5.7 million during the three and nine months ended September 30, 2017, respectively, as compared to the same periods in 2016, was primarily due to the acquisition of 41 additional rental income-producing properties subsequent to September 30, 2016, as well as recognizing a full period of depreciation and amortization expenses on six and 14 properties acquired during the three and nine months ended September 30, 2016, respectively.

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Interest Expense and Other, Net
Interest expense and other, net also includes amortization of deferred financing costs.
The increase in interest expense and other, net of $2.9 million during the three months endedSeptember 30, 2017, as compared to the same period in 2016, was primarily due to an increase in the average aggregate amount of debt outstanding to $2.5 billion during the three months ended September 30, 2017 from $2.2 billion during the three months ended September 30, 2016.
The increase in interest expense and other, net of $9.6 million during the nine months ended September 30, 2017, as compared to the same period in 2016, was primarily due to an increase in the average aggregate amount of debt outstanding to $2.4 billion during the nine months ended September 30, 2017 from $2.2 billion during the nine months ended September 30, 2016.numerous uncertainties.
Same Store PropertiesAnalysis
Our results of operations are influenced by the timing of acquisitions and the operating performance of our real estate assets. We review our stabilized operating results, measured by contract rental revenue,net operating income, from properties that we owned for the entirety of both the current and prior year reporting periods, referred to as “same store” properties. Contract rental revenueproperties, and we believe that the presentation of operating results for same store properties provides useful information to stockholders. Net operating income is a supplemental non-GAAP financial measure of a real estate companies’company’s operating performance. Contract rental revenueNet operating income is considered by management to be a helpful supplemental performance measure, as it enables management to evaluate the impact of occupancy, rents, leasing activity, and other controllable property operating results at our real estate properties, and it provides a consistent method for the comparison of our properties. We define net operating income as operating revenues less operating expenses, which exclude (i) depreciation and amortization, (ii) interest expense and other non-property related revenue and expense items such as (a) general and administrative expenses, (b) expense reimbursements to related parties, (c) management fees, (d) transaction-related expenses, (e) real estate impairment, (f) provision for credit losses, (g) gain on disposition of real estate and condominium developments, net, (h) merger-related expenses, net and (i) interest income. Our net
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operating income may not be comparable to that of other REITs and should not be considered to be more relevant or accurate in evaluating our operating performance than the current GAAP methodology used in calculating net income (loss). In determining the same store property pool, we include all properties that were owned for the entirety of both the current and prior reporting periods, except for properties during the current or prior year that were under development or redevelopment.
“Non-sameComparison of the Three Months Ended September 30, 2021 and 2020
The following table reconciles net loss, calculated in accordance with GAAP, to net operating income (dollar amounts in thousands):
For the Three Months Ended September 30,
20212020Change
Net income$42,603 $4,179 $38,424 
Loss on extinguishment of debt3,251 89 3,162 
Interest expense and other, net20,381 15,964 4,417 
Operating income66,235 20,232 46,003 
Merger-related expenses, net398 1,207 (809)
Gain on disposition of real estate and condominium developments, net(34,033)(3,219)(30,814)
(Decrease) increase in provision for credit losses(1,792)7,355 (9,147)
Real estate impairment891 476 415 
Depreciation and amortization22,801 19,967 2,834 
Transaction-related expenses6 58 (52)
Management fees11,703 10,139 1,564 
Expense reimbursements to related parties2,516 1,439 1,077 
General and administrative expenses3,076 3,208 (132)
Interest income(19,755)(6,631)(13,124)
Net operating income$52,046 $54,231 $(2,185)
Our operating segments include credit and real estate. Refer to Note 15 — Segment Reporting to our condensed consolidated financial statements in this Quarterly Report on Form 10-Q for further discussion of our operating segments.
Real Estate Segment
A total of 295 properties were acquired before July 1, 2020 and represent our “same store” properties as reflected induring the three months ended September 30, 2021 and 2020. “Non-same store” properties, for purposes of the table below, includes properties acquired or disposed of on or after July 1, 2016 and any properties under development or redevelopment. As shown in2020.
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The following table details the table below, contract rental revenue on the 860components of net operating income broken out between same store and non-same store properties for the three months ended September 30, 2017 decreased $686,000 to $83.0 million, compared to $83.7(dollar amounts in thousands):
TotalSame StoreNon-Same Store
For the Three Months Ended September 30,For the Three Months Ended September 30,For the Three Months Ended September 30,
20212020Change20212020Change20212020Change
Rental and other property income$70,794 $66,011 $4,783 $55,202 $55,490 $(288)$15,592 $10,521 $5,071 
Property operating expenses11,157 5,214 5,943 5,534 4,556 978 5,623 658 4,965 
Real estate tax expenses7,591 6,566 1,025 6,095 5,924 171 1,496 642 854 
Total property operating expenses18,748 11,780 6,968 11,629 10,480 1,149 7,119 1,300 5,819 
Net operating income$52,046 $54,231 $(2,185)$43,573 $45,010 $(1,437)$8,473 $9,221 $(748)
Loss on Extinguishment of Debt
The increase in loss on extinguishment of debt of $3.2 million for the three months ended September 30, 2017. The2021, as compared to the same store properties were 97.4% occupied asperiod in 2020, was primarily due to the extinguishment of September 30, 2017five mortgage loans with an aggregate carrying value of $89.4 million and 98.5% occupied as of September 30, 2016. The following table shows the contract rental revenue from properties owned for bothrepayment and termination of the entireCredit Facilities.
Interest Expense and Other, Net
Interest expense and other, net also includes amortization of deferred financing costs.
The increase in interest expense and other, net, of $4.4 million for the three months ended September 30, 20172021, as compared to the same period in 2020, was primarily due to an increase in the average aggregate amount of debt outstanding from $1.8 billion as of September 30, 2020 to $2.8 billion as of September 30, 2021 as a result of entering into and 2016, alongupsizing additional repurchase agreements, originating the Mortgage Loan and Class A Notes, and assuming the CCPT V Credit Facility as part of the CCIT III and CCPT V Mergers subsequent to September 30, 2020. This increase was partially offset by a decrease in the weighted average interest rate from 3.3% as of September 30, 2020 to 2.8% as of September 30, 2021.
Merger-Related Expenses, Net
The decrease in merger-related expenses, net of $809,000 during the three months ended September 30, 2021, as compared to the same period in 2020, was primarily due to incurring expenses related to the CIM Income NAV Merger of $398,000 during the three months ended September 30, 2021, compared to incurring expenses related to the CCIT III and CCPT V Mergers of $1.2 million during the three months ended September 30, 2020.
Gain on Disposition of Real Estate and Condominium Developments, Net
The increase in gain on disposition of real estate and condominium developments, net, of $30.8 million during the three months ended September 30, 2021, as compared to the same period in 2020, was primarily due to the disposition of 66 properties and one outparcel of land for a gain of $30.7 million during the three months ended September 30, 2021 compared to the disposition of three properties for a gain of $3.2 million during the three months ended September 30, 2020.
Real Estate Impairment
The increase in real estate impairments of $415,000 during the three months ended September 30, 2021, as compared to the same period in 2020, was due to six properties that was deemed to be impaired, resulting in impairment charges of $891,000 during the three months ended September 30, 2021, compared to one property that was deemed to be impaired, resulting in impairment charges of $476,000 during the three months ended September 30, 2020.
Depreciation and Amortization
The increase in depreciation and amortization of $2.8 million during the three months ended September 30, 2021, as compared to the same period in 2020, was primarily due to the acquisition of 146 properties in connection with the CCIT III and CCPT V Mergers that closed in December 2020, partially offset by the disposition of 124 properties subsequent to September 30, 2020.
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Transaction-Related Expenses
Transaction-related expenses include abandoned deal costs for acquisition and disposition activity.
Transaction-related expenses remained generally consistent during the three months ended September 30, 2021, as compared to the same period in 2020.
Management Fees
We pay CMFT Management a reconciliationmanagement fee pursuant to rentalthe Management Agreement, payable quarterly in arrears, equal to the greater of (a) $250,000 per annum ($62,500 per quarter) and (b) 1.50% per annum (0.375% per quarter) of the Company’s Equity (as defined in the Management Agreement). Furthermore, as discussed in Note 11 — Related-Party Transactions and Arrangements to our condensed consolidated financial statements in this Quarterly Report on Form 10-Q, pursuant to the Investment Advisory and Management Agreement, for management of investments in the Managed Assets (as defined in the Investment Advisory and Management Agreement), CMFT Securities pays the Investment Advisor the Investment Advisory Fee, payable quarterly in arrears, equal to 1.50% per annum (0.375% per quarter) of CMFT Securities’ Equity (as defined in the Investment Advisory and Management Agreement). Because the Managed Assets are excluded from the calculation of management fees payable by the Company to CMFT Management pursuant to the Management Agreement, the total management and advisory fees payable by the Company to its external advisors are not increased as a result of the Investment Advisory and Management Agreement. In addition, pursuant to the Sub-Advisory Agreement, in connection with providing investment management services with respect to the corporate credit-related securities held by CMFT Securities, on a quarterly basis, the Investment Advisor designates 50% of the sum of the Investment Advisory Fee payable to the Investment Advisor as sub-advisory fees.
The increase in management fees of $1.6 million during the three months ended September 30, 2021, as compared to the same period in 2020, was primarily due to increased equity from the issuance of common stock in connection with the CCIT III and CCPT V Mergers that closed in December 2020.
Expense Reimbursements to Related Parties
Pursuant to the Investment Advisory and Management Agreement, CMFT Securities reimburses the Investment Advisor for costs and expenses incurred by the Investment Advisor on its behalf. Additionally, we may be required to reimburse certain expenses incurred by CMFT Management in providing management services, subject to limitations as set forth in the Management Agreement (as discussed in Note 11 — Related-Party Transactions and Arrangements to our condensed consolidated financial statements in this Quarterly Report on Form 10-Q).
The increase in expense reimbursements to related parties of $1.1 million during the three months ended September 30, 2021, as compared to the same period in 2020, was primarily due to acquiring 146 properties as part of the CCIT III and CCPT V Mergers that closed in December 2020.
General and Administrative Expenses
The primary general and administrative expense items are transfer agency costs and banking fees.
The decrease in general and administrative expenses of $132,000 for the three months ended September 30, 2021, as compared to the same period in 2020, was primarily due to a decrease in fees related to the unused portion of our line of credit due to the pay down and termination of the Credit Facilities during the three months ended September 30, 2021. This decrease was partially offset by increased expenses related to the CCIT III and CCPT V Mergers completed in December 2020 and the foreclosure completed in January 2021 to take control of the assets which previously secured the Company’s mezzanine loans, as discussed in Note 7 — Loans Held-For-Investment to our condensed consolidated financial statements in this Quarterly Report on Form 10-Q.
Net Operating Income
Same store property net operating income decreased $1.4 million during the three months ended September 30, 2021, as compared to the same period in 2020. The change was primarily due to a decrease in occupancy from 94.3% as of September 30, 2020 to 93.8% as of September 30, 2021.
Non-same store property net operating income decreased $748,000 during the three months ended September 30, 2021, as compared to the same period in 2020. The increase was primarily due to the acquisition of 146 properties in connection with the CCIT III and CCPT V Mergers that closed December 2020, offset by the disposition of 124 properties subsequent to September 30, 2020.
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Credit Segment
(Decrease ) Increase in Provision for Credit Losses
The decrease in provision for credit losses of $9.1 million during the three months ended September 30, 2021, as compared to the same period in 2020, was primarily due to the Company’s foreclosure of the assets which previously secured the Company’s mezzanine loans. During the three months ended September 30, 2020, the borrower on the Company’s eight mezzanine loans remained delinquent on the required reserve payments and became delinquent on principal and interest, resulting in the Company recording $3.6 million in credit losses related to the mezzanine loans. Upon completing foreclosure in January 2021, the Company took control of the assets which previously secured the loans, and as such, a provision for credit losses related to the mezzanine loans was not recorded for the three months ended September 30, 2021. During the three months ended September 30, 2021, a decrease in the provision for credit losses was recorded related to its senior loans and broadly syndicated loans due to the ongoing market recovery from COVID-19.
Interest Income
The increase in interest income of $13.1 million for the three months ended September 30, 2021, compared to the same period in 2020, was due to an increase in credit investments. As of September 30, 2021, we held investments in CRE loans held-for-investment of $890.8 million, broadly syndicated loans of $571.5 million, and CMBS of $121.8 million. As of September 30, 2020, we held investments in CRE loans held-for-investment of $473.8 million, broadly syndicated loans of $419.1 million, and CMBS of $75.2 million.
Comparison of the Nine Months Ended September 30, 2021 and 2020
The following table reconciles net income, calculated in accordance with GAAP, to net operating income (dollar amounts in thousands):
For the Nine Months Ended September 30,
20212020Change
Net income (loss)$97,637 $(11,742)$109,379 
Loss on extinguishment of debt4,729 4,841 (112)
Interest expense and other, net56,863 47,240 9,623 
Operating income159,229 40,339 118,890 
Merger-related expenses, net398 1,207 (809)
Gain on disposition of real estate and condominium developments, net(80,502)(20,120)(60,382)
(Decrease) increase in provision for credit losses(1,101)33,037 (34,138)
Real estate impairment5,268 15,983 (10,715)
Depreciation and amortization73,186 60,486 12,700 
Transaction-related expenses37 308 (271)
Management fees35,035 29,739 5,296 
Expense reimbursements to related parties8,387 6,674 1,713 
General and administrative expenses11,109 9,110 1,999 
Interest income(48,168)(19,395)(28,773)
Net operating income$162,878 $157,368 $5,510 
   Number of Properties Three Months Ended September 30, Increase (Decrease)
   2017 2016 $ Change % Change
Rental income – as reported   $94,103
 $89,370
 $4,733
 5 %
Less: Amortization (1)
   1,008
 289
 719
 249 %
Less: Straight-line rental income   2,912
 2,984
 (72) (2)%
Total contract rental revenue   90,183
 86,097
 4,086
 5 %
           
Less: “Non-same store” properties 48 6,231
 837
 5,394
 644 %
Less: Disposed properties (2)
 19 959
 1,581
 (622) (39)%
“Same store” properties 860 $82,993
 $83,679
 $(686) (0.8)%
Real Estate Segment

(1) Includes amortizationA total of above-294 properties were acquired before January 1, 2020 and below-market lease intangibles and deferred lease incentives.
(2) We disposed of five properties during the year ended December 31, 2016 and 14represent our “same store” properties during the nine months ended September 30, 2017.
“Non-same2021 and 2020. “Non-same store” properties, as reflected infor purposes of the table below, includes properties acquired or disposed of on or after January 1, 2016 and any properties under development or redevelopment. As shown in2020.
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The following table details the table below, contract rental revenue on the 851components of net operating income broken out between same store and non-same store properties (dollar amounts in thousands):
TotalSame StoreNon-Same Store
For the Nine Months Ended September 30,For the Nine Months Ended September 30,For the Nine Months Ended September 30,
20212020Change20212020Change20212020Change
Rental and other property income$223,026 $194,550 $28,476 $163,049 $161,609 $1,440 $59,977 $32,941 $27,036 
Property operating expenses32,632 16,890 15,742 17,237 14,547 2,690 15,395 2,343 13,052 
Real estate tax expenses27,516 20,292 7,224 18,183 17,926 257 9,333 2,366 6,967 
Total property operating expenses60,148 37,182 22,966 35,420 32,473 2,947 24,728 4,709 20,019 
Net operating income$162,878 $157,368 $5,510 $127,629 $129,136 $(1,507)$35,249 $28,232 $7,017 
Loss on Extinguishment of Debt
The decrease in loss on extinguishment of debt of $112,000 for the nine months ended September 30, 2017 decreased $1.4 million to $244.0 million,2021, as compared to $245.4the same period in 2020, was primarily due to the extinguishment of five mortgage note with an aggregate carrying value of $89.4.0 million and the pay down and termination of the Credit Facilities during the nine months ended September 30, 2021, as compared the extinguishment of two mortgage notes with an aggregate carrying value of $97.0 million during the nine months ended September 30, 2020.
Interest Expense and Other, Net
The increase in interest expense and other, net, of $9.6 million for the nine months ended September 30, 2016. The2021, as compared to the same store properties were 97.4% occupiedperiod in 2020, was primarily due to an increase in the average aggregate amount of debt outstanding from $1.7 billion as of September 30, 2017 and 98.6% occupied2020 to $2.5 billion as of September 30, 2016. The following table shows2021 as a result of entering into additional repurchase agreements, originating the contract rental revenue from properties owned for bothMortgage Loan and Class A Notes, and assuming the CCPT V Credit Facility as part of the entire nine months endedCCIT III and CCPT V Mergers subsequent to September 30, 2017 and 2016, along with2020. This increase was partially offset by a reconciliationdecrease in the weighted average interest rate from 3.3% as of September 30, 2020 to rental income, calculated2.8% as of September 30, 2021.
Merger-Related Expenses, Net
The decrease in accordance with GAAP (dollar amounts in thousands):

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   Number of Properties Nine Months Ended September 30, Increase (Decrease)
   2017 2016 $ Change % Change
Rental income – as reported   $278,354
 $265,341
 $13,013
 5 %
Less: Amortization (1)
   1,926
 844
 1,082
 128 %
Less: Straight-line rental income   7,651
 8,888
 (1,237) (14)%
Total contract rental revenue   268,777
 255,609
 13,168
 5 %
           
Less: “Non-same store” properties 57 21,172
 4,798
 16,374
 341 %
Less: Disposed properties (2)
 19 3,588
 5,380
 (1,792) (33)%
“Same store” properties 851 $244,017
 $245,431
 $(1,414) (0.6)%

(1) Includes amortization of above- and below-market lease intangibles and deferred lease incentives.
(2) We disposed of five properties during the year ended December 31, 2016 and 14 properties$809,000 during the nine months ended September 30, 2017.2021, as compared to the same period in 2020, was primarily due to incurring expenses related to the CIM Income NAV Merger of $398,000 during the nine months ended September 30, 2021, compared to incurring expenses related to the CCIT III and CCPT V Mergers of $1.2 million during the nine months ended September 30, 2020.
Gain on Disposition of Real Estate and Condominium Developments, Net
The increase in gain on disposition of real estate and condominium developments, net, of $60.4 million during the nine months ended September 30, 2021, as compared to the same period in 2020, was primarily due to the disposition of 113 properties and one outparcel of land for a gain of $75.6 million during the nine months ended September 30, 2021, compared to the disposition of 19 properties for a gain of $20.1 million during the nine months ended September 30, 2020.
Real Estate Impairment
The decrease in impairments of $10.7 million during the nine months ended September 30, 2021, as compared to the same period in 2020, was due to 11 properties that were deemed to be impaired, resulting in impairment charges of $5.3 million during the nine months ended September 30, 2021, compared to 11 properties that were deemed to be impaired, resulting in impairment charges of $16.0 million during the nine months ended September 30, 2020.
Depreciation and Amortization
The increase in depreciation and amortization of $12.7 million during the nine months ended September 30, 2021, as compared to the same period in 2020, was primarily due to the acquisition of 146 properties in connection with the CCIT III and CCPT V Mergers that closed in December 2020, partially offset by the disposition of 124 properties subsequent to September 30, 2020.
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Transaction-Related Expenses
The decrease in transaction-related expenses of $271,000 during the nine months ended September 30, 2021, as compared to the same period in 2020, was due to a decrease in abandoned deal costs for the nine months ended September 30, 2021.
Management Fees
The increase in management fees of $5.3 million during the nine months ended September 30, 2021, as compared to the same period in 2020, was primarily due to increased equity from the issuance of common stock in connection with the CCIT III and CCPT V Mergers that closed in December 2020.
Expense Reimbursements to Related Parties
The increase in expense reimbursements to related parties of $1.7 million during the nine months ended September 30, 2021, as compared to the same period in 2020, was primarily due to increased operating expense reimbursements due to CMFT Management as a result of acquiring 146 properties as part of the CCIT III and CCPT V Mergers that closed in December 2020.
General and Administrative Expenses
The increase in general and administrative expenses of $2.0 million for the nine months ended September 30, 2021, compared to the same period in 2020, was primarily due to increased expenses resulting from board members added to our Board and the acquisition of 146 properties in connection with the CCIT III and CCPT V Mergers that closed in December 2020. The increase was also due to increases in appraisal fees related to the foreclosure completed in January 2021 to take control of the assets which previously secured the Company’s mezzanine loans, as discussed in Note 7 — Loans Held-For-Investment to our condensed consolidated financial statements in this Quarterly Report on Form 10-Q.
Net Operating Income
Same store property net operating income decreased $1.5 million during the nine months ended September 30, 2021, as compared to the same period in 2020. The decrease was primarily due to increases in property operating expenses relating to parking lot repairs, partially offset by an increase in rental income as a result of the impact of COVID-19 leading to a temporary reduction in rental income during the nine months ended September 30, 2020 for certain tenants.
Non-same store property net operating income increased $7.0 million during the nine months ended September 30, 2021, as compared to the same period in 2020. The increase is due to the acquisition of 146 properties in connection with the CCIT III and CCPT V Mergers that closed in December 2020, partially offset by the disposition of 124 properties subsequent to September 30, 2020.
Credit Segment
(Decrease ) Increase in Provision for Credit Losses
The decrease in provision for credit losses of $34.1 million during the nine months ended September 30, 2021, as compared to the same period in 2020, was primarily due to the Company recording $23.4 million in credit losses related to the mezzanine loans. The mezzanine loans and underlying assets were foreclosed on in January 2021, and as such a provision for credit losses was not recorded during the nine months ended September 30, 2021 related to these loans.
Interest Income
The increase in interest income of $28.8 million for the nine months ended September 30, 2021, as compared to the same period in 2020, was due to an increase in credit investments. As of September 30, 2021, we held investments in CRE loans held-for-investment of $890.8 million, broadly syndicated loans of $571.5 million, and CMBS of $121.8 million. As of September 30, 2020, we held investments in CRE loans held-for-investment of $473.8 million, broadly syndicated loans of $419.1 million, and CMBS of $75.2 million.
Distributions
ThePrior to April 1, 2020, on a quarterly basis, our Board authorized a daily distribution based on 365 days infor the calendar year, of $0.001711452succeeding quarter. Our Board authorized the following daily distribution amounts per share for stockholdersthe periods indicated below:
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Period CommencingPeriod EndingDaily Distribution Amount
April 14, 2012December 31, 2012$0.001707848
January 1, 2013December 31, 2015$0.001712523
January 1, 2016December 31, 2016$0.001706776
January 1, 2017December 31, 2019$0.001711452
January 1, 2020March 31, 2020$0.001706776
On April 20, 2020, our Board decided to make a determination as to the amount and timing of distributions on a monthly, instead of a quarterly, basis until such time that we had greater visibility into the close of businessimpact that the COVID-19 pandemic would have on each day ofour tenants’ ability to continue to pay rent on their leases on a timely basis or at all, the period commencingdegree to which federal, state or local governmental authorities grant rent relief or other relief or amnesty programs applicable to our tenants, our ability to access the capital markets, and on January 1, 2017the United States and endingworldwide financial markets and economy. On March 25, 2021, the Board resumed declaring distributions on March 31, 2018. a quarterly basis.
Since April 2020, our Board authorized the following monthly distribution amounts per share for the periods indicated below:
Record DateDistribution Amount
April 30, 2020$0.0130
May 31, 2020$0.0130
June 30, 2020$0.0161
July 30, 2020$0.0304
August 28, 2020$0.0303
September 29, 2020$0.0303
October 29, 2020$0.0303
November 27, 2020$0.0303
December 30, 2020$0.0303
January 28, 2021$0.0303
February 25, 2021$0.0303
March 29, 2021$0.0303
April 29, 2021$0.0303
May 28, 2021$0.0303
June 29, 2021$0.0303
July 29, 2021$0.0303
August 30, 2021$0.0303
September 29, 2021$0.0303
October 28, 2021$0.0303
November 29, 2021$0.0303
December 30, 2021$0.0303
As of September 30, 2017,2021, we had distributions payable of $16.0$11.0 million.
During
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The following table presents distributions and sources of distributions for the nine months endedSeptember 30, 2017 and 2016, we paid distributions of $146.1 million and $146.5 million, respectively, including $76.9 million and $82.4 million, respectively, through the issuance of shares pursuant to the DRIP Offerings. periods indicated below (dollar amounts in thousands):
Nine Months Ended September 30,
20212020
AmountPercentAmountPercent
Distributions paid in cash$82,541 84 %$62,529 65 %
Distributions reinvested16,264 16 %34,191 35 %
Total distributions$98,805 100 %$96,720 100 %
Sources of distributions:
Net cash provided by operating activities (1)
$97,518 99 %$81,390 (2)84 %
Proceeds from the issuance of debt (3)
1,287 1 %7,022 7 %
Proceeds from the issuance of common stock— — %8,308 (4)9 %
Total sources$98,805 100 %$96,720 100 %

(1)Net cash provided by operating activities for the nine months endedSeptember 30, 20172021 and 2020 was $158.2$97.5 million and reflected a reduction$71.8 million, respectively.
(2)Our distributions covered by cash flows from operating activities for real-estate acquisition-related expenses incurred of $1.5 million in accordance with GAAP. For the nine months ended September 30, 2016, net2020 include cash provided byflows from operating activities was $155.5in excess of distributions from prior periods of $9.6 million.
(3)Net proceeds on the credit facilities and notes payable for the nine months ended September 30, 2021 and 2020 were $584.1 million and reflected a reduction for$237.8 million, respectively.
(4)In accordance with GAAP, certain real estate acquisition-related fees and expenses, such as expenses and fees incurred in connection with property acquisitions accounted for as business combinations, are expensed, and therefore reduce net cash flows from operating activities. Therefore, for consistency, proceeds from the issuance of $3.6 million in accordance with GAAP. Ourcommon stock used as a source of distributions paid duringfor the nine months ended September 30, 20172020 include the amount by which real estate acquisition-related fees and 2016, including shares issued pursuant to the DRIP Offerings, were fully funded byexpenses have reduced net cash provided byflows from operating activities.activities in those prior periods.
Share Redemptions
Our amended and restated share redemption program (the “Amended Share Redemption Program”) permits our stockholders to sell their shares of common stock back to us, subject to certain conditions and limitations. We will not redeem in excess of 5.0% of the weighted average number of shares outstanding during the trailing 12 months prior to the end of the fiscal quarter for which the redemptions are being paid. Funding for the redemption of shares will be limited to the cumulative net proceeds we receive from the sale of shares under the Secondary DRIP Offering, net of shares redeemed to date. In addition, we will generally limit quarterly redemptions to approximately 1.25% of the weighted average number of shares outstanding during the trailing 12-month period ending on the last day of the fiscal quarter for which the redemptions are being paid, and to the net proceeds we receive from the sale of shares in the respective quarter under the Secondary DRIP Offering. Any of the foregoing limits might prevent us from accommodating all redemption requests made in any fiscal quarter or in any 12-month period. We received redemption requestsIn addition, our Board may choose to amend the terms of, approximately 9.8 million shares for $98.7 millionsuspend or terminate our Amended Share Redemption Program at any time in excessits sole discretion if it believes that such action is in the best interest of us and our stockholders. Any material modifications or suspension of the net proceeds we receivedAmended Share Redemption Program will be disclosed to our stockholders as promptly as practicable in our reports filed with the SEC and via our website. In connection with the CCIT III and CCPT V Mergers, our Board suspended our Amended Share Redemption Program on August 30, 2020, and therefore, no shares were redeemed from our stockholders after that date until March 25, 2021, when our Board reinstated the issuance of shares under the Secondary DRIP Offering during the three months ended September 30, 2017. Management, in its discretion, limited the amount of shares redeemed for the three months ended September 30, 2017 to shares issued pursuant to the Secondary DRIP Offering during the respective period.Amended Share Redemption Program, effective April 1, 2021. During the nine months ended September 30, 2017,2021, we received valid redemption requests under our share redemption program totaling approximately 30.761.8 million shares, of which we redeemed approximately 5.11.7 million shares as of September 30, 20172021 for $51.5 million (at an average redemption price of $10.08 per share) and approximately 2.5 million shares subsequent to September 30, 2017 for $25.0$12.0 million at an average redemption price of $10.08$7.20 per share.share, and 1.3 million shares subsequent to September 30, 2021 for $9.4 million (at a redemption price of $7.20 per share). The remaining redemption requests relating to approximately 23.158.8 million shares went unfulfilled. A valid redemption request is one that complies with the applicable requirements and guidelines of our current share redemption program.program then in effect. The share redemptions were funded with proceeds from the Secondary DRIP Offering.Offering and available borrowings.

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Liquidity and Capital Resources
General
We expect to utilize fundsproceeds from real estate dispositions, sales proceeds and principal payments received on credit investments, cash flowflows from operations and future proceeds from secured or unsecured financing to complete future property
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acquisitions and loan originations, repayment of certain indebtedness and for general corporate uses. The sources of our operating cash flows will primarily be provided by the rental and other property income received from current and future leased properties.properties and interest income from our portfolio of credit investments.
Our Credit Facility provides for borrowings of up to $1.40 billion, which includes a $1.05 billion unsecured TermDuring the nine months ended September 30, 2021, and with the proceeds from the Mortgage Loan and up to $350.0 million in unsecured Revolving Loans.the sale of the Class A Notes, the Company paid down the $1.11 billion outstanding balance under the Credit Facilities and terminated the Credit Facilities. As of September 30, 2017,2021, we had $164.9 million in unused capacity under the Credit Facility, subject to borrowing availability. As of September 30, 2017, we also had cash and cash equivalents of $4.2$289.8 million, which included $87.4 million of unsettled broadly syndicated loan purchases.
As of September 30, 2021, the Credit and Security Agreement provided for borrowings in an aggregate principal amount up to $500.0 million under the Credit Securities Revolver, which may be increased from time to time pursuant to the Credit and Security Agreement. Borrowings under the Credit and Security Agreement are secured by substantially all of the assets held by CMFT Corporate Credit Securities, LLC, which shall primarily consist of broadly-syndicated senior secured loans subject to certain eligibility criteria under the Credit and Security Agreement. As of September 30, 2021, the amounts borrowed and outstanding under the Credit Securities Revolver totaled $406.5 million. Subsequent to September 30, 2021, the Company amended the Credit and Security Agreement by increasing available borrowings under the Credit Securities Revolver up to $550.0 million, as discussed in Note 16 — Subsequent Events to our condensed consolidated financial statements in this Quarterly Report on Form 10-Q.
As of September 30, 2021, the Repurchase Agreements provided up to an aggregate of $1.2 billion of financing under the Repurchase Facilities. The Repurchase Agreements provide for simultaneous agreements by the banks to re-sell purchased CRE mortgage loans back to the CMFT Lending Subs at a certain future date or upon demand. As of September 30, 2021, we had nine senior loans with an aggregate carrying value of $712.8 million financed with $507.3 million under the Repurchase Facilities, $184.4 million of which was financed under the Barclays Repurchase Facility, $199.2 million of which was financed under the Citibank Repurchase Facility and $123.6 million of which was financed under the Wells Fargo Repurchase Facility.
As of September 30, 2021, we believe that we were in compliance with the financial covenants of the Mortgage Loan, the Class A Notes, and the Repurchase Agreements, as well as the financial covenants under our various fixed and variable rate debt agreements, as further discussed in Note 9 — Notes Payable, Repurchase Facilities and Credit Facilities to our condensed consolidated financial statements in this Quarterly Report on Form 10-Q.
Short-term Liquidity and Capital Resources
On a short-term basis, our principal demands for funds will be for the acquisition of real estate-related securities, real estate and real estate-related investmentsassets and the payment of acquisition-related fees and expenses, operating expenses, distributions, redemptions and interest and principal on current and any future debt financings, including principal repayments of $24.2$98.5 million within the next 12 months.
We expect to meet our short-term liquidity requirements through cash proceeds from real estate asset dispositions, net cash provided by operations and proceeds from the Secondary DRIP Offering, as well as secured or unsecured borrowings from banks and other lenders to finance our future acquisitions.acquisitions and loan originations. Operating cash flows are expected to increase as additional properties are added to our portfolio. With respect to our debt maturing within the next year, we expect to use borrowings available under the Credit Facility or to enter into new financing arrangements in order to meet our debt obligations.complete future acquisitions. We believe that the resources stated above will be sufficient to satisfy our operating requirements for the foreseeable future, and we do not anticipate a need to raise funds from sources other than those described above within the next 12 months. Management intends to use the proceeds from the disposition of properties to, among other things, acquire additional high-quality net-lease properties and credit investments in furtherance of our investment objectives and for other general corporate purposes.
Long-term Liquidity and Capital Resources
On a long-term basis, our principal demands for funds will be for the acquisition of real estate-related securities, real estate and real estate-related credit investments and the payment of tenant improvements, acquisition-related fees and expenses, operating expenses, distributions and redemptions to stockholders and interest and principal on any current and future indebtedness. Generally, we expect to meet our long-term liquidity requirements through proceeds from cash flowflows from operations, borrowings on the Credit Facility, proceeds from secured or unsecured borrowings from banks and other lenders, and proceeds raised pursuant to the Secondary DRIP Offering.
We expect that substantially all net cash flows from operations will be used to pay distributions to our stockholders after certain capital expenditures, including tenant improvements and leasing commissions, are paid; however, we have used, and may continue to use, other sources to fund distributions, as necessary, including borrowings on the Credit Facility and/or future borrowings on our unencumbered assets. To the extent that cash flows from operations are lower, due to fewer properties being acquired or lower than expected returns on the properties, distributions paid to our stockholders may be lower. We expect that
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substantially all net cash flows from the Offerings or debt financings will be used to fund acquisitions, loan originations, certain capital expenditures, repayments of outstanding debt or distributions and redemptions to our stockholders.

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Contractual Obligations
As of September 30, 2017,2021, we had $2.5 billion of debt outstanding with a carrying value of $2.8 billion and a weighted average interest rate of 3.5%2.8%. See Note 79 — Notes Payable, Repurchase Facilities and Credit FacilityFacilities to our condensed consolidated financial statements in this Quarterly Report on Form 10-Q for certain terms of our debt outstanding.
Our contractual obligations as of September 30, 20172021 were as follows (in thousands):
Payments due by period (1)
TotalLess Than 1
Year		1-3 Years3-5 YearsMore Than
5 Years
Principal payments — fixed rate debt (2)
$387,262 $7,870 $356,411 $22,981 $— 
Interest payments — fixed rate debt (3)
29,488 15,279 14,022 187 — 
Principal payments — variable rate debt82,844 82,844 — — — 
Interest payments — variable rate debt (4)
2,759 2,759 — — — 
Principal payments — first lien mortgage loan (5)
650,000 — 650,000 — — 
Interest payments — first lien mortgage loan (5)
33,857 18,200 15,657 — — 
Principal payments — net-lease mortgage notes (6)
772,710 7,740 6,450 — 758,520 
Interest payments — net-lease mortgage notes (6)
186,543 21,636 43,450 43,390 78,067 
Principal payments — credit facilities406,500 — — 406,500 — 
Interest payments — credit facilities23,815 7,317 14,654 1,844 — 
Principal payments — repurchase facilities (7)
507,253 — 507,253 — — 
Interest payments — repurchase facilities (7)
28,094 10,650 17,444 — — 
Total$3,111,125 $174,295 $1,625,341 $474,902 $836,587 

(1)The table does not include amounts due to CMFT Management or its affiliates pursuant to our Management Agreement because such amounts are not fixed and determinable. The table also does not include $123.7 million of unfunded commitments related to our existing CRE loans held-for-investment which are subject to the satisfaction of borrower milestones.
(2)Principal payment amounts reflect actual payments based on the face amount of notes payable secured by our wholly-owned properties, which excludes the fair value adjustment, net of amortization, of mortgage notes assumed.
(3)As of September 30, 2021, we had variable rate debt outstanding of $82.8 million with a weighted average interest rate of 5.5%. We used the weighted average interest rate to calculate the debt payment obligations in future periods.
(4)As of September 30, 2021, the amounts outstanding under the Credit Securities Revolver totaled $406.5 million and had a weighted average interest rate of 1.8%.
(5)As of September 30, 2021, the amounts outstanding under the Mortgage Loan totaled $650.0 million and had a weighted average interest rate of 2.8%.
(6)As of September 30, 2021, the amounts outstanding under the Class A Notes totaled $772.7 million and had a weighted average interest rate of 2.8%.
(7)As of September 30, 2021, the amount outstanding under the Citibank Repurchase Facility was $199.2 million at a weighted average interest rate of 2.1%, the amount outstanding under the Barclays Repurchase Facility was $184.4 million at a weighted average interest rate of 2.3%, and the amount outstanding under the Wells Fargo Repurchase Facility was $123.6 million at a weighted average interest rate of 1.8%.
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Payments due by period (1)
 
  
Total 
Less Than 1
Year
 1-3 Years 3-5 Years 
More Than
5 Years
Principal payments — fixed rate debt (2)
$1,217,493
 $24,205
 $311,935
 $192,398
 $688,955
Interest payments — fixed rate debt (3)
228,085
 47,646
 88,178
 61,891
 30,370
Principal payments — variable rate debt20,500
 —
 20,500
 —
 —
Interest payments — variable rate debt (4)
2,220
 923
 1,297
 —
 —
Principal payments — credit facility1,234,500
 —
 —
 1,234,500
 —
Interest payments — credit facility (5)
166,680
 38,658
 77,423
 50,599
 —
Total$2,869,478
 $111,432
 $499,333
 $1,539,388
 $719,325
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(1)The table does not include amounts due to CR IV Advisors or its affiliates pursuant to our advisory agreement because such amounts are not fixed and determinable.
(2)Principal payment amounts reflect actual payments based on the face amount of notes payable secured by our wholly-owned properties, which excludes the fair value adjustment, net of amortization, of mortgage notes assumed of $441,000 as of September 30, 2017.
(3)As of September 30, 2017, we had $217.1 million of variable rate debt effectively fixed through the use of interest rate swap agreements. We used the effective interest rates fixed under our interest rate swap agreements to calculate the debt payment obligations in future periods.
(4)As of September 30, 2017, we had variable rate debt outstanding of $20.5 million with a weighted average interest rate of 4.5%. We used the weighted average interest rate to calculate the debt payment obligations in future periods.
(5)As of September 30, 2017, the Term Loan outstanding totaled $1.05 billion, $811.7 million of which is subject to interest rate swap agreements. As of September 30, 2017 the weighted average all-in interest rate for the Swapped Term Loan was 3.2%. The remaining $422.8 million outstanding under the Credit Facility had a weighted average interest rate of 3.0% as of September 30, 2017.

We expect to incur additional borrowings in the future to acquire additional properties and make other real estate-relatedcredit investments. There is no limitation on the amount we may borrow against any single improved property. Our borrowings will not exceed 75%As of the costSeptember 30, 2021, our ratio of ourdebt to total gross assets (or 300%net of net assets) asgross intangible lease liabilities was 55.0% and our ratio of the date of any borrowing, which is the maximum level of indebtedness permitted under the North American Securities Administrators Association Statement of Policy Regarding Real Estate Investment Trusts; however, we may exceed that limit if approved by a majority of our independent directors and discloseddebt to our stockholders in the next quarterly report along with justification for such excess borrowing. The Board has adopted a policy to further limit our borrowings to 60% of the greater of cost (before deducting depreciation or other non-cash reserves) or fair market value of our gross assets unless excess borrowing is approved by a majoritynet of our independent directors and disclosed to our stockholders in the next quarterly report along with the justification for such excess borrowing. Our advisor has set a target leverage ratio of 40% to 50% of the greater of cost (before deducting depreciation or other non-cash reserves) or fair market value of our gross assets.intangible lease liabilities was 57.1%. Fair market value is based on the estimated market value of our real estate assets as of December 31, 2016September 30, 2020 that were used to determine our estimated per share NAV, and for those assets acquired from JanuaryJuly 1, 20172020 through September 30, 20172021 is based on the purchase price. As of September 30, 2017, our ratio of debt to the cost (before deducting depreciation or other non-cash reserves) of our gross assets was 48.8% and our ratio of debt to the fair market value of our gross assets was 44.1%.
Our management reviews net debt as part of its management of our overall liquidity, financial flexibility, capital structure and leverage, and we therefore believe that the presentation of net debt provides useful information to investors.stockholders. Net debt is a non-GAAP measure used to show our outstanding principal debt balance, excluding certain GAAP adjustments, such as premiums or discounts, financing and issuance costs, and related accumulated amortization, less all cash and cash equivalents. As of September 30, 2017,2021, our net debt leverage ratio, which is the ratio of net debt to total gross real estate and related assets net of gross intangible lease liabilities, was 48.7%49.3%.
The following table provides a reconciliation of the notes payable and credit facility, net balance, as reported on our condensed consolidated balance sheet, to net debt as of September 30, 20172021 (dollar amounts in thousands):

Balance as of
September 30, 2021
Notes payable, repurchase facilities and credit facilities, net$2,776,215 
Deferred costs and net premiums (1)
30,354 
Less: Cash and cash equivalents(289,840)
Net debt$2,516,729 
Gross real estate and related assets, net (2)
$5,107,228 
Net debt leverage ratio49.3 %
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Balance as of
September 30, 2017
Notes payable and credit facility, net $2,454,282
Deferred costs and net premiums (1)
 18,211
Less: Cash and cash equivalents (4,231)
Net debt $2,468,262
   
Gross real estate assets, net (2)
 $5,069,802
Net debt leverage ratio 48.7%
______________________

(1) Deferred costs relate to mortgage notes payable and the term portion of the Credit Facility.Facilities.
(2) Net of gross intangible lease liabilities. Includes gross assets held for sale, as well as real estate-related securities and loans held-for-investment principal balance, net of allowance for credit losses, of $1.7 billion.
Cash Flow Analysis
Operating Activities. During the nine months ended September 30, 2017, net Net cash provided by operating activities increased $2.7by $25.8 million to $158.2 million,for the nine months ended September 30, 2021, as compared to $155.5 million of net cash provided by operating activities for the nine months endedSeptember 30, 2016.same period in 2020. The changeincrease was primarily due to the acquisition of 41 additional rental income-producing146 properties in connection with the CCIT III and CCPT V Mergers that closed in December 2020 along with increases in credit investments driving higher interest income, partially offset by the disposition of 124 properties and one outparcel of land subsequent to September 30, 2016, resulting in an increase in net income after non-cash adjustments for depreciation and amortization, net, of $11.7 million. Additionally, net cash provided by operating activities increased due to an increase in a contingent consideration fair value adjustment of $2.3 million, an increase in bad debt expense of $1.6 million, a decrease in straight-line rental income of $1.2 million and a net increase in working capital accounts of $355,000, offset by an increase in gain on dispositions of real estate assets, net, of $14.7 million.2020. See “— Results of Operations” for a more complete discussion of the factors impacting our operating performance.
Investing Activities. Net cash used in investing activities increased $44.7decreased $141.6 million to $217.1 million for the nine months endedSeptember 30, 2017, compared to $172.4 million for the nine months endedSeptember 30, 2016. The increase was primarily due to the acquisition of 40 commercial properties for an aggregate purchase price of $300.5 million during the nine months ended September 30, 2017,2021, as compared to the acquisitionsame period in 2020. The change was primarily due to a decrease in the net investment in broadly syndicated loans of 14 commercial properties$237.4 million, and an increase in proceeds from disposition of real estate assets of $265.0 million. The change was partially offset by an increase in the net investment in loans held-for-investment of $287.6 million and an increase in the net investment of real estate-related securities of $67.6 million.
Financing Activities. Net cash provided by financing activities increased $323.1 million for an aggregate purchase price of $197.0 million during the nine months ended September 30, 2016,2021, as well as a decrease in the change in restricted cash of $1.2 million, offset by the disposal of 14 properties for an aggregate gross sales price of $98.6 million during the nine months ended September 30, 2017 compared to the disposal of four properties for an aggregate gross sales price of $26.6 million during the nine months ended September 30, 2016.
Financing Activities. During the nine months ended September 30, 2017, net cash provided by financing activities was $53.4 million, compared to net cash provided by financing activities of $9.0 million for the nine months endedSeptember 30, 2016.same period in 2020. The change was primarily due to an increase in net borrowingsproceeds on the credit facilities, notes payable and repurchase facilities of $346.2 million as a result of entering into and upsizing the Credit FacilityRepurchase Facilities, the Mortgage Loan and the Class A Notes, coupled with a decrease in redemptions of $52.6common stock of $35.7 million as a result of the Board’s suspension of the Amended Share Redemption Program from August 30, 2020 through March 31, 2021. The change was offset by an increase inincreased deferred financing costs paid as a result of $9.9 million and an increase in distributions to investorsentering into new debt agreements as described above.
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Election as a REIT
We elected to be taxed, and currently qualify, as a REIT for federal income tax purposes commencing with our taxable year ended December 31, 2012. To maintain our qualification as a REIT, we must continue to meet certain requirements relating to our organization, sources of income, nature of assets, distributions of income to our stockholders and recordkeeping. As a REIT, we generally are not subject to federal income tax on taxable income that we distribute to our stockholders so long as we distribute at least 90% of our annual taxable income (computed without regard to the dividends paid deduction and excluding net capital gains).
If we fail to maintain our qualification as a REIT for any reason in a taxable year and applicable relief provisions do not apply, we will be subject to tax including any applicable alternative minimum tax, on our taxable income at regular corporate rates. We will not be able to deduct distributions paid to our stockholders in any year in which we fail to maintain our qualification as a REIT. We also will be disqualified for the four taxable years following the year during which qualification was lost, unless we are entitled to relief under specific statutory provisions. Such an event could materially adversely affect our net income and net cash available for distribution to stockholders. However, we believe that we are organized and operate in such a manner as to maintain our qualification as a REIT for federal income tax purposes. No provision for federal income taxes has been made in our accompanying condensed consolidated financial statements. We are subject to certain state and local

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taxes related to the operations of properties in certain locations, which have been provided for in our accompanying condensed consolidated financial statements.
Critical Accounting Policies and Significant Accounting Estimates
Our accounting policies have been established to conform with GAAP. The preparation of financial statements in conformity with GAAP requires us to use judgment in the application of accounting policies, including making estimates and assumptions. These judgments affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Management believes that we have made these estimates and assumptions in an appropriate manner and in a way that accurately reflects our financial condition. We continually test and evaluate these estimates and assumptions using our historical knowledge of the business, as well as other factors, to ensure that they are reasonable for reporting purposes. However, actual results may differ from these estimates and assumptions. If our judgment or interpretation of the facts and circumstances relating to various transactions had been different, it is possible that different accounting policies would have been applied, thus resulting in a different presentation of the financial statements. Additionally, other companies may utilize different estimates that may impact comparability of our results of operations to those of companies in similar businesses. We believe the following critical accounting policies govern the significant judgments and estimates used in the preparation of our financial statements, which should be read in conjunction with the more complete discussion of our accounting policies and procedures included in Note 2 — Summary of Significant Accounting Policies to our audited consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2016.2020. We consider our critical accounting policies to be the following:
•Recoverability of Real Estate Assets; and
•Allocation of Purchase Price of Real Estate Assets.Assets; and
•Allowance for Credit Losses.
A complete description of such policies and our considerations is contained in our Annual Report on Form 10-K for the year ended December 31, 2016.2020. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with our audited consolidated financial statements as of and for the periodyear ended December 31, 20162020 and related notes thereto.
We continually monitor events and changes in circumstances that could indicate that the carrying amounts of our real estate assets may not be recoverable. Impairment indicators that we consider include, but are not limited to: bankruptcy or other credit concerns of a property’s major tenant, such as a history of late payments, lease concessions and other factors; a significant decrease in a property’s revenues due to lease terminations; vacancies; co-tenancy clauses; reduced lease rates; or changes in anticipated holding periods. We continue to evaluate our portfolio to determine if anticipated holding periods for certain properties may materially differ from the initial intended holding periods for such properties, which could result in an impairment charge in the future.
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Related-Party Transactions and Agreements
We have entered into agreements with CR IV AdvisorsCMFT Management or its affiliates whereby we agree to pay certain fees to, or reimburse certain expenses of, CR IV AdvisorsCMFT Management or its affiliates such as acquisitionmanagement and advisory fees and expenses, organization and offering costs, leasing fees and reimbursement of certain operating costs. See Note 11 — Related-Party Transactions and Arrangementsto our condensed consolidated financial statements in this Quarterly Report on Form 10-Q for a discussion of the various related-party transactions, agreements and fees.
Conflicts of Interest
AffiliatesRichard S. Ressler, the chairman of CR IV Advisorsour Board, chief executive officer and president, who is also a founder and principal of CIM and is an officer/director of certain of its affiliates including CMFT Management, is the chairman of the board, chief executive officer and president of CIM Income NAV. One of our directors, Avraham Shemesh, who is also a founder and principal of CIM and is an officer/director of certain of its affiliates including CMFT Management, serves as a director of CIM Income NAV. One of our directors, Elaine Y. Wong, also serves as a director of CIM Income NAV. One of our independent directors, W. Brian Kretzmer, also serves as an independent director of CIM Income NAV. Nathan D. DeBacker, our chief financial officer and treasurer, who is also the chief financial officer and treasurer of CIM Income NAV, is a vice president of CMFT Management and is an officer of certain of its affiliates. In addition, affiliates of CMFT Management act as an advisor to and our chief financial officer and one of our directors act as executive officers and/or a director of, Cole Credit Property Trust V, Inc., Cole Office & Industrial REIT (CCIT II), Inc., Cole Real EstateCIM Income Strategy (Daily NAV), Inc., Cole Office & Industrial REIT (CCIT III), Inc., and/or other real estate offerings in registration, all of which are or intend to be public, non-listed REITs offered, distributed and/or managed by affiliates of CR IV Advisors.NAV. As such, there aremay be conflicts of interest where CR IV AdvisorsCMFT Management or its affiliates, while serving in the capacity as sponsor, general partner, officer, director, key personnel and/or advisor for VEREITCIM or another real estate program sponsored or operated by Cole Capital,CIM or CCO Group, including other real estate offerings in registration, may be in conflict with us in connection with providing services to other real estate-related programs related to property acquisitions propertyand loan investments (and the allocation thereof), dispositions, and property management, among others. The compensation arrangements between affiliates of CR IV Advisors and VEREITCMFT Management and these other real estate programs sponsored or operated by Cole CapitalCIM and CCO Group could influence the advice provided to us. See Part I, Item 1. Business — Conflicts of Interest in our Annual Report on Form 10-K for the year ended December 31, 2016.2020.
Off-Balance Sheet Arrangements
As of September 30, 20172021 and December 31, 2016,2020, we had no material off-balance sheet arrangements that had or are reasonably likely to have a current or future effect on our financial condition, results of operations, liquidity or capital resources.

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Item 3.Quantitative and Qualitative Disclosures About Market Risk
Item 3.Quantitative and Qualitative Disclosures About Market Risk
Market Risk
The market risk associated with financial instruments and derivative financial instruments is the risk of loss from adverse changes in market prices or interest rates. Our market risk arises primarily from interest rate risk relating to variable-rate borrowings. To meet our short and long-term liquidity requirements, we borrow funds at a combination of fixed and variable rates. Our interest rate risk management objectives are to limit the impact of interest rate changes on earnings and cash flows and to manage our overall borrowing costs. To achieve these objectives, from time to time, we may enter into interest rate hedge contracts such as swaps, collars and treasury lock agreements in order to mitigate our interest rate risk with respect to various debt instruments. We do not intend to hold or issue these derivative contracts for trading or speculative purposes. We do not have any foreign operations and thus we are not exposed to foreign currency fluctuations.
Interest Rate Risk
Interest rates are highly sensitive to many factors, including fiscal and monetary policies and domestic and international economic and political considerations, as well as other factors beyond our control. We are subject to interest rate risk in connection with our investments and the related financing obligations. In general, we seek to match the interest rate characteristics of our investments with the interest rate characteristics of any related financing obligations such as repurchase agreements, bank credit facilities, term loans, revolving facilities and securitizations.
As of September 30, 2017,2021, we had an aggregate of $1.6 billion of variable rate debt, of $443.3 million, excluding any debt subject to interest rate swap agreements, and therefore, we are exposed to interest rate changes in LIBOR. As of September 30, 2017,2021, an increase or decrease of 50 basis points in interest rates would result in an increase or decrease in interest expense of $2.2$8.2 million per year.
As of September 30, 2017,2021, we had 12five interest rate swapcap agreements outstanding, which mature on various dates from June 2018May 2022 through July 2021,2023, with an aggregate notional amount of $1.0 billion$752.6 million and an aggregate fair value of the net derivative liabilityasset of $262,000.$51,000. The fair value of these interest rate swapcap agreements is dependent upon existing market interest rates and swap spreads.rates. As of September 30, 2017,2021, an increase of 50 basis points in interest rates would result in a change of $15.7 million$166,000 to the fair value of the
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net derivative liability,asset, resulting in a net derivative asset of $15.4 million.$217,000. A decrease of 50 basis points in interest rates would result in a $16.0 million$45,000 change to the fair value of the net derivative liability,asset, resulting in a net derivative liabilityasset of $16.2 million.$6,000.
As the information presented above includes only those exposures that existed as of September 30, 2017,2021, it does not consider exposures or positions arising after that date. The information presented herein has limited predictive value. Future actual realized gains or losses with respect to interest rate fluctuations will depend on cumulative exposures, hedging strategies employed and the magnitude of the fluctuations.
These amounts were determined by considering the impact of hypothetical interest rate changes on our borrowing costs and assume no other changes in our capital structure.
In July 2017, the Financial Conduct Authority (“FCA”) that regulates LIBOR announced it intends to stop compelling banks to submit rates for the calculation of LIBOR after 2021. As a result, the Federal Reserve Board and the Federal Reserve Bank of New York organized the Alternative Reference Rates Committee which identified the Secured Overnight Financing Rate (“SOFR”) as its preferred alternative to U.S. dollar LIBOR in derivatives and other financial contracts. In March 2021, the FCA confirmed its intention to cease publishing one week and two-month LIBOR after December 31, 2021 and all remaining LIBOR after June 30, 2023. This announcement has several implications, including setting the spread that may be used to automatically convert contracts from LIBOR to SOFR. Additionally, banking regulators are encouraging banks to discontinue new LIBOR debt issuances by December 31, 2021. The Company anticipates that LIBOR will continue to be available at least until June 30, 2023. Any changes adopted by FCA or other governing bodies in the method used for determining LIBOR may result in a sudden or prolonged increase or decrease in reported LIBOR. If that were to occur, our interest payments could change. In addition, uncertainty about the extent and manner of future changes may result in interest rates and/or payments that are higher or lower than if LIBOR were to remain available in its current form.
We have interest rate cap agreements maturing on various dates from May 2022 through July 2023, as further discussed above, that are indexed to LIBOR. As such, we are monitoring and evaluating the related risks, which include interest on loans or amounts received and paid on derivative instruments. These risks arise in connection with transitioning contracts to a new alternative rate, including any resulting value transfer that may occur. The value of loans or derivative instruments tied to LIBOR could also be impacted if LIBOR is limited or discontinued. For some instruments, the method of transitioning to an alternative reference rate may be challenging, especially if we cannot agree with the respective counterparty about how to make the transition.
If a contract is not transitioned to an alternative rate and LIBOR is discontinued, the impact on our contracts is likely to vary by contract. If LIBOR is discontinued or if the methods of calculating LIBOR change from their current form, interest rates on our current or future indebtedness may be adversely affected.
While we expect LIBOR to be available in substantially its current form until at least the end of June 30, 2023, it is possible that LIBOR will become unavailable prior to that point. This could result, for example, if sufficient banks decline to make submissions to the LIBOR administrator. In that case, the risks associated with the transition to an alternative reference rate will be accelerated and magnified.
Alternative rates and other market changes related to the replacement of LIBOR, including the introduction of financial products and changes in market practices, may lead to risk modeling and valuation challenges, such as adjusting interest rate accrual calculations and building a term structure for an alternative rate.
The introduction of an alternative rate also may create additional basis risk and increased volatility as alternative rates are phased in and utilized in parallel with LIBOR.
Adjustments to systems and mathematical models to properly process and account for alternative rates will be required, which may strain the model risk management and information technology functions and result in substantial incremental costs for the Company.
Credit Risk
Concentrations of credit risk arise when a number of tenants are engaged in similar business activities, or activities in the same geographic region, or have similar economic features that would cause their ability to meet contractual obligations, including those to us, to be similarly affected by changes in economic conditions. We are subject to tenant, geographic and industry concentrations. Any downturn of the economic conditions in one or more of these tenants, states or industries could result in a material reduction of our cash flows or material losses to us.
The factors considered in determining the credit risk of our tenants include, but are not limited to: payment history; credit status and change in status, including the impact of the COVID-19 pandemic (credit ratings for public companies are used as a
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primary metric); change in tenant space needs (i.e., expansion/downsize); tenant financial performance; economic conditions in a specific geographic region; and industry specific credit considerations. We believe that the credit risk of our portfolio is reduced by the high quality of our existing tenant base, reviews of prospective tenants’ risk profiles prior to lease execution and consistent monitoring of our portfolio to identify potential problem tenants and mitigation options.
Our loans and investments are also subject to credit risk. The performance and value of our loans and investments depend upon the owners’ ability to operate the properties that serve as our collateral so that they produce cash flows adequate to pay interest and principal due to us. To monitor this risk, our manager reviews our investment portfolios and in certain instances is in regular contact with our borrowers, monitoring performance of the collateral and enforcing our rights as necessary.
Item 4.Controls and Procedures
Item 4.Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to provide reasonable assurance that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms, and that such information is accumulated and communicated to us, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, we recognize that no controls and procedures, no matter how well designed and operated, can provide absolute assurance of achieving the desired control objectives.

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As required by Rules 13a-15(b) and 15d-15(b) of the Exchange Act, an evaluation as of September 30, 20172021 was conducted under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on this evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures, as of September 30, 2017,2021, were effective at a reasonable assurance level.
Changes in Internal Control Over Financial Reporting
No change occurred in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the three months endedSeptember 30, 20172021 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II — OTHER INFORMATION
Item 1.Legal Proceedings
Item 1.Legal Proceedings
In the ordinary course of business, we may become subject to litigation or claims. We are not aware of any material pending legal proceedings, other than ordinary routine litigation incidental to our business, to which we are a party or to which our properties are the subject.
Item 1A.Risk Factors
Item 1A.Risk Factors
Except as set forth below, there have been no material changes from the risk factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2016.2020.
Risks Related to Real Estate Assets
We have paid, and may continue to pay, some of our distributions from sources other than cash flows from operations, including borrowings and proceeds from asset sales, or the sale of our securities in the Offerings or future offerings, which may reduce the amount of capital we ultimately investdeploy in our real estate operations and may negatively impact the value of our stockholders’ investmentcommon stock. Additionally, distributions at any point in time may not reflect the current performance of our common stock.properties or our current operating cash flows.
To the extent that cash flowflows from operations hashave been or isare insufficient to fully cover our distributions to our stockholders, we have paid, and may continue to pay, some of our distributions from sources other than cash flowflows from operations. Such sources may include borrowings, proceeds from asset sales or the sale of our securities in the Offerings or future offerings.securities. We have no limits on the amounts we may use to pay distributions from sources other than cash flowflows from operations. The payment of distributions from sources other than cash provided by operating activities mayreduce the amount of proceeds available for investmentacquisitions and operations or cause us to incur additional interest expense as a result of borrowed funds, and may cause investorssubsequent holders of our common stock to experience dilution. This may negatively impact the value of our common stock.
Because the amount we pay in distributions may exceed our earnings and our cash flows from operations, distributions may not reflect the current performance of our properties or our current operating cash flows. To the extent distributions exceed cash flows from operations, distributions may be treated as a return of our stockholders’ investment and could reduce their basis in our common stock. A reduction in a stockholder’s basis in our common stock could result in the stockholder recognizing more gain upon the disposition of his or her shares, which, in turn, could result in greater taxable income to such stockholder.
DuringThe following table presents distributions and the nine months ended September 30, 2017, we paidsource of distributions of $146.1 million, including $76.9 million throughfor the issuance of shares pursuant to the Secondary DRIP Offering. periods indicated below (dollar amounts in thousands):
Nine Months Ended
September 30, 2021
Year Ended
December 31, 2020
AmountPercentAmountPercent
Distributions paid in cash$82,541 84 %$90,655 73 %
Distributions reinvested16,264 16 %34,191 27 %
Total distributions$98,805 100 %$124,846 100 %
Sources of distributions:
Net cash provided by operating activities (1)
$97,518 99 %$115,985 (2)93 %
Proceeds from the issuance of debt (3)
1,287 1 %553 — %
Proceeds from the issuance of common stock— — %8,308 (4)7 %
Total sources$98,805 100 %$124,846 100 %

(1)Net cash provided by operating activities for the nine months ended September 30, 2017 was $158.2 million2021 and reflected a reduction for real-estate acquisition-related expenses incurred of $1.5 million in accordance with GAAP. Our distributions for the nine months ended September 30, 2017, including shares issued pursuant to the Secondary DRIP Offering, were fully funded by net cash provided by operating activities.
During the year ended December 31, 2016, we paid2020 was $97.5 million and $106.4 million, respectively.
(2)Our distributions of $194.9 million, including $109.2 million through the issuance of shares pursuant to the DRIP Offerings. Netcovered by cash provided byflows from operating activities for the year ended December 31, 2016 was $193.72020 include cash flows from operating activities in excess of distributions from prior periods of $9.6 million.
(3)Net proceeds on the credit facilities, notes payable and repurchase facilities for the nine months ended September 30, 2021 and the year ended December 31, 2020 were $584.1 million and reflected a reduction for$159.0 million, respectively.
(4)In accordance with GAAP, certain real estate acquisition-related fees and expenses, such as expenses and fees incurred in connection with property acquisitions accounted for as business combinations, are expensed, and therefore reduce net cash flows from operating activities. Therefore, for consistency, proceeds from the issuance of $4.2 million, in accordance with GAAP. Thecommon stock used as a source
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of distributions paid duringfor the year ended December 31, 2016 were covered2020 include the amount by which real estate acquisition-related fees and expenses have reduced net cash flows from operating activities in those prior periods.
Risks Related to the CIM Income NAV Merger
Failure to complete the CIM Income NAV Merger could negatively impact our future business and financial results.
If the CIM Income NAV Merger is not completed, our ongoing business could be materially adversely affected and we will be subject to a variety of risks associated with the failure to complete the CIM Income NAV Merger, including the following:
•CIM Income NAV may be unable to pay us the termination payment of either $6,720,000 or $14,780,000, depending upon the date of such termination and certain other factors, and may not be able to reimburse us for expenses incurred by us in connection with the CIM Income NAV Merger of up to $2,675,000;
•We may have to bear certain costs incurred by us relating to the CIM Income NAV Merger, such as legal, accounting, financial advisor, filing, printing and mailing fees; and
•the diversion of our management’s focus and resources from operational matters and other strategic opportunities while working to implement the CIM Income NAV Merger.
If the CIM Income NAV Merger is not completed, these risks could materially affect our business and financial results.
The pendency of the CIM Income NAV Merger, including as a result of the restrictions on the operation of our business and CIM Income NAV’s business during the period between signing the Merger Agreement and the completion of the CIM Income NAV Merger, as well as the suspension of CIM Income NAV’s public offering of securities, could adversely affect the business and operations of $193.7 million,us, CIM Income NAV, or 99%,both.
In connection with the pending CIM Income NAV Merger, some business partners or vendors of each of us and proceedsCIM Income NAV may delay or defer decisions, which could negatively impact the revenues, earnings, cash flows and expenses of us and CIM Income NAV, regardless of whether the CIM Income NAV Merger is completed. In addition, due to operating covenants in the Merger Agreement, each of us and CIM Income NAV may be unable, during the pendency of the CIM Income NAV Merger, to pursue certain strategic transactions, undertake certain significant capital projects, undertake certain significant financing transactions and otherwise pursue other actions that are not in the ordinary course of business, even if such actions would prove beneficial. Furthermore, CIM Income NAV has suspended its public offering of securities in connection with the pending CIM Income NAV Merger, which may reduce the cash available to CIM Income NAV to fund its ongoing business and operations.
In certain circumstances, either we or CIM Income NAV may terminate the Merger Agreement.
Either we or CIM Income NAV may terminate the Merger Agreement if the CIM Income NAV Merger has not been consummated by the Outside Date. Also, the Merger Agreement may be terminated in certain circumstances if a final and non-appealable order is entered prohibiting the transactions contemplated by the Merger Agreement, upon a material uncured breach by the other party that would cause the closing conditions not to be satisfied, or if CIM Income NAV stockholders fail to approve the CIM Income NAV Merger or the amendment to the CIM Income NAV charter that is required to consummate the CIM Income NAV Merger (the “Charter Amendment Proposal”). In addition, at any time prior to the time CIM Income NAV stockholders approve the CIM Income NAV Merger and the Charter Amendment Proposal, CIM Income NAV has the right to terminate the Merger Agreement in order to enter into an Alternative Acquisition Agreement with respect to a Superior Proposal (as such terms are defined in the Merger Agreement). Finally, at any time prior to the time CIM Income NAV stockholders approve the Merger Proposal and the Charter Amendment Proposal, we have the right to terminate the Merger Agreement upon an Adverse Recommendation Change, upon the commencement of a tender offer or exchange offer for any shares of CIM Income NAV Common Stock that constitutes an Acquisition Proposal if the CIM Income NAV board of directors fails to recommend against acceptance of such tender offer or exchange offer or to publicly reaffirm the CIM Income NAV board of directors recommendation after being requested to do so by us or if CIM Income NAV breaches or fails to comply in any material respect with certain of its obligations regarding the solicitation of and response to Acquisition Proposals.
We and CIM Income NAV each expect to incur substantial expenses related to the CIM Income NAV Merger.
We and CIM Income NAV each expect to incur substantial expenses in connection with completing the CIM Income NAV Merger and integrating the properties and operations of CIM Income NAV with ours. While we and CIM Income NAV each has assumed that a certain level of transaction expenses would be incurred, there are a number of factors beyond the control of each company that could affect the total amount or the timing of such expenses. Many of the expenses that will be incurred, by their nature, are difficult to estimate accurately at the present time. As a result, the transaction expenses associated with the CIM Income NAV Merger could, particularly in the near term, exceed the savings that we expect to achieve from the issuanceelimination of notes payable
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duplicative expenses and the realization of economies of scale and cost savings following the completion of the CIM Income NAV Merger.
The CIM Income NAV Merger may be dilutive to estimated net income for our stockholders.
The CIM Income NAV Merger may be dilutive to estimated net income for our stockholders, which would potentially decrease the amount of funds available to distribute to our stockholders as stockholders of the combined company following the CIM Income NAV Merger (the “Combined Company”). For instance, on a pro forma basis, assuming the CIM Income NAV Merger had been consummated on January 1, 2020, the net income per share of the Combined Company for the year ended December 31, 2020 and the six months ended June 30, 2021 would have been less than the actual net income per share of our common stock during the same periods.
In approving and recommending the CIM Income NAV Merger, our Board considered, among other things, the most recent estimated per share NAV of our common stock and CIM Income NAV Common Stock as determined by our Board and the CIM Income NAV board of directors, respectively, with the assistance of their respective third-party valuation experts. The estimated per share NAV of CIM Income NAV Common Stock may not be immediately determined following the consummation of the CIM Income NAV Merger. In the event that the Combined Company completes a liquidity event after consummation of the CIM Income NAV Merger, such as a listing of its shares on a national securities exchange, a merger in which stockholders of the Combined Company receive securities that are listed on a national securities exchange, or 1%.a sale of the Combined Company for cash, the market value of the shares of the Combined Company upon consummation of such liquidity event may be significantly lower than the current estimated value considered by our Board and the estimated per share NAV that may be reflected on the account statements of stockholders of the Combined Company after consummation of the CIM Income NAV Merger.
If the CIM Income NAV Merger does not qualify as a tax-free reorganization, there may be adverse tax consequences.
The CIM Income NAV Merger is intended to qualify as a tax-free reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1896, as amended (the “Code”). The closing of the CIM Income NAV Merger is conditioned on the receipt by each of us and CIM Income NAV of an opinion of counsel to the effect that the CIM Income NAV Merger will qualify as a tax-free reorganization within the meaning of Section 368(a) of the Code. However, these legal opinions will not be binding on the Internal Revenue Service or on the courts. If, for any reason, the CIM Income NAV Merger were to fail to qualify as a tax-free reorganization, then each stockholder generally would recognize gain or loss, as applicable, equal to the difference between (1) the merger consideration (i.e. the fair market value of the shares of our common stock) received by such stockholder in the CIM Income NAV Merger; and (2) such stockholder’s adjusted tax basis in our common stock.
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Item 2.
Item 2.Unregistered Sales of Equity Securities and Use of Proceeds
We registered $247.0 million of sharesEquity Securities and Use of common stock under the Initial DRIP Offering, which was filed with the SEC on December 19, 2013 and automatically became effective with the SEC upon filing. We ceased issuing shares under the Initial DRIP Offering effective as of June 30, 2016.Proceeds
In addition, we registered $600.0 million of shares of common stock under the Secondary DRIP Offering, which was filed with the SEC on August 2, 2016 and automatically became effective with the SEC upon filing. We will continue to issue shares of common stock in the Secondary DRIP Offering.
As of September 30, 2017, we had issued approximately 336.8 million shares of our common stock in the Offerings for gross proceeds of $3.3 billion, out of which we paid $256.5 million in selling commissions and dealer manager fees and $49.5 million in organization and offering costs to CR IV Advisors or its affiliates. With the net offering proceeds and indebtedness, we have acquired $5.2 billion in real estate and related assets and incurred acquisition costs of $141.6 million, including $108.5 million in acquisition fees and expense reimbursements to CR IV Advisors.
Our share redemption programAmended Share Redemption Program permits our stockholders to sell their shares of common stock back to us, subject to significant conditions and limitations. Under our share redemption program, we will not redeem in excess of 5.0% of the weighted average number of shares outstanding during the trailing 12 months prior to the end of the fiscal quarter for which the redemptions are being paid. Funding for the redemption of shares will be limited to the cumulative net proceeds we receive from the sale of shares under the Secondary DRIP Offering, net of shares redeemed to date. In addition, generally we will limit quarterly redemptions to approximately 1.25% of the weighted average number of shares outstanding during the trailing 12-month period ending on the last day of the fiscal quarter for which the redemptions are being paid, and to the net proceeds we receive from the sale of shares in the respective quarter under the Secondary DRIP Offering. Any of the foregoing limits might prevent us from accommodatingaccommodating all redemption requests made in any fiscal quarter or in any 12-month period. We received

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TableIn connection with the CCIT III and CCPT V Mergers, our Board suspended our Amended Share Redemption Program on August 30, 2020, and therefore, no shares were redeemed from our stockholders until our Board reinstated the Amended Share Redemption Program effective April 1, 2021. As of Contents


redemption requests of approximately 9.8 million shares for $98.7 million in excess of the net proceeds we received from the issuance of shares under the Secondary DRIP Offering during the three months ended September 30, 2017. Management, in its discretion, limited2021, the amount of shares redeemed for the three months ended September 30, 2017 to shares received from the Secondary DRIP Offering during the period. The estimated per share NAV of $10.08was $7.20, which was determined by the Board ason May 25, 2021 using a valuation date of DecemberMarch 31, 20162021. This estimated per share NAV serves as the most recent estimated value for purposes of the share redemption program,Amended Share Redemption Program, effective March 28, 2017,May 26, 2021, until such time as the Board determines a new estimated per share NAV.
In general, we redeem shares on a quarterly basis. During the three months ended September 30, 2017,2021, we redeemed shares, including those redeemable due to death, as follows:
Period 
Total Number
of Shares
Redeemed
 
Average Price
Paid per Share
 
Total Number of Shares
Purchased as Part of
Publicly Announced
Plans or Programs
 
Maximum Number of
Shares that May Yet Be
Purchased Under the
Plans or Programs
July 1, 2017 - July 31, 2017 2,489
 $10.08
 2,489
 (1)
August 1, 2017 - August 31, 2017 2,539,426
 $10.08
 2,539,426
 (1)
September 1, 2017 - September 30, 2017 2,874
 $10.08
 2,874
 (1)
Total 2,544,789
   2,544,789
 (1)
PeriodTotal Number
of Shares
Redeemed		Average Price
Paid per Share		Total Number of Shares
Purchased as Part of
Publicly Announced
Plans or Programs		Maximum Number of
Shares that May Yet Be
Purchased Under the
Plans or Programs
July 1, 2021 - July 31, 2021— $— — (1)
August 1, 2021 - August 31, 20211,699,924 $7.20 1,699,924 (1)
September 1, 2021 - September 30, 202112,872 $7.20 12,872 (1)
Total1,712,796 1,712,796 (1)

(1)A description of the maximum number of shares that may be purchased under our share redemption program is included in the narrative preceding this table.
(1)A description of the maximum number of shares that may be purchased under our Amended Share Redemption Program is included in the narrative preceding this table.
Unregistered Sales of Equity Securities
None.
Item 3.Defaults Upon Senior Securities
Item 3.Defaults Upon Senior Securities
None.
Item 4.Mine Safety Disclosures
Item 4.Mine Safety Disclosures
Not applicable.
Item 5.Other Information
Item 5.Other Information
None.


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Item 6.Exhibits
Item 6.Exhibits
The following exhibits are included, or incorporated by reference, in this Quarterly Report on Form 10-Q for the quarterly period ended September 30, 20172021 (and are numbered in accordance with Item 601 of Regulation S-K).
Exhibit No.Description
Exhibit No.Description
3.1
2.1*
3.2
Certificate of Correction to the First Articles of Amendment and Restatement of Cole Credit Property Trust IV, Inc. (Incorporated by reference to Exhibit 3.6 to the Company’s Pre-Effective Amendment No. 5 to Form S-11 (File No. 333-169533), filed January 24, 2012).
3.3
Articles of Amendment to First Articles of Amendment and Restatement of Cole Credit Property Trust IV, Inc. (Incorporated by reference to Exhibit 3.12.1 to the Company’s Current Report on Form 8-K (File No. 333-169533)000-54939), filed February 27, 2012)September 22, 2021).
3.43.1
3.5
Second Articles of Amendment to First Articles of Amendment and Restatement of Cole Credit PropertyCIM Real Estate Finance Trust, IV, Inc. (Incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K (File No. 000-54939), filed June 2, 2014)August 20, 2019).
3.63.2
3.7
First Amendment to the Bylaws of Cole Credit Property Trust IV, Inc. (Incorporated by reference to Exhibit 3.13.2 to the Company’s Current Report on Form 8-K (File No. 333-169533)000-54939), filed June 27, 2012)August 20, 2019).
4.1
4.2
4.3
10.1
10.2
10.3
10.4
10.5
10.6
10.7
31.1*10.8
10.9
10.10
10.11
31.1**
31.2**
32.1***
101.INS**XBRL Instance Document.
101.SCH**XBRL Taxonomy Extension Schema Document.
101.CAL**XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF**XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB**XBRL Taxonomy Extension Label Linkbase Document.
101.PRE**XBRL Taxonomy Extension Presentation Linkbase Document.
104**Cover Page Interactive Data File (formatted as InLine XBRL and contained in Exhibit 101).
*Filed herewith.Schedules omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company agrees to furnish a supplemental copy of any omitted schedule to the SEC upon request.
**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.


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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
Cole Credit PropertyCIM Real Estate Finance Trust, IV, Inc.
(Registrant)
By:/s/ Nathan D. DeBacker
Name:Nathan D. DeBacker
Title:
Chief Financial Officer and Treasurer
(Principal Financial Officer)
Date: November 13, 201715, 2021



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