10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

__________________________________________________________________________________________

FORM 10-K

__________________________________________________________________________________________

(Mark One)

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

For the fiscal year ended December 31, 2024

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 000-54382

__________________________________________________________________________________________

PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC.

(Exact Name of Registrant as Specified in Its Charter)

__________________________________________________________________________________________

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

(866) 722-6257

(Registrant’s Telephone Number, Including Area Code)

__________________________________________________________________________________________

Securities registered pursuant to Section 12(b) of the Act:Title of each classTrading Symbol(s)Name of each exchange on which registeredNoneN/AN/A

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

Common Stock, $0.01 par value per share

__________________________________________________________________________________________

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  ☐  No  ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes  ☐  No  ☒

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

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

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

Large Accelerated Filer	☐	Accelerated Filer	☐
Non-Accelerated Filer	☒	Smaller reporting company	☐
		Emerging growth company	☐

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

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

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

There is no established market for the Registrant’s shares of common stock. On December 10, 2024, the board of directors of the Registrant approved an estimated value per share of the Registrant’s common stock of $5.72 based on the estimated value of the Registrant’s assets less the estimated value of the Registrant’s liabilities divided by the number of shares outstanding, as of September 30, 2024. For a full description of the methodologies used to value the Registrant’s assets and liabilities in connection with the calculation the estimated value per share as of December 10, 2024, see Part II, Item 5, “Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities - Market Information.” There were 99,612,005 shares of common stock held by non-affiliates as of June 30, 2024, the last business day of the Registrant’s most recently completed second fiscal quarter.

As of March 25, 2025, there were 102,951,395 outstanding shares of common stock of the Registrant.

Documents Incorporated by Reference:

Registrant incorporates by reference in Part III (Items 10, 11, 12, 13 and 14) of this Form 10-K portions of its Definitive Proxy Statement for its 2025 Annual Meeting of Stockholders.

TABLE OF CONTENTSPART I.5ITEM 1.BUSINESS5ITEM 1A.RISK FACTORS9ITEM 1B.UNRESOLVED STAFF COMMENTS39ITEM 1C.CYBERSECURITY39ITEM 2.PROPERTIES41ITEM 3.LEGAL PROCEEDINGS42ITEM 4.MINE SAFETY DISCLOSURES42PART II.42ITEM 5.MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES43ITEM 6.RESERVED52ITEM 7.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS53ITEM 7A.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK62ITEM 8.FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA64ITEM 9.CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE64ITEM 9A.CONTROLS AND PROCEDURES64ITEM 9B.OTHER INFORMATION65ITEM 9C.DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS65PART III.65ITEM 10.DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE66ITEM 11.EXECUTIVE COMPENSATION66ITEM 12.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS66ITEM 13.CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE66ITEM 14.PRINCIPAL ACCOUNTING FEES AND SERVICES66PART IV.67ITEM 15.EXHIBITS, FINANCIAL STATEMENT SCHEDULES67ITEM 16.FORM 10-K SUMMARY89INDEX TO CONSOLIDATED FINANCIAL STATEMENTSF-1

FORWARD-LOOKING STATEMENTS

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

For a discussion of some of the risks and uncertainties, although not all risks and uncertainties, that could cause our actual results to differ materially from those presented in our forward-looking statements, see the risks identified in “Summary Risk Factors” below and in Part I, Item 1A of this Annual Report on Form 10-K (the “Annual Report”).

SUMMARY RISK FACTORS

An investment in shares of our common stock involves significant risks. See “Risk Factors” beginning on page 8. These risks include, among others:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

ITEM 1.    BUSINESS

Overview

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

On January 8, 2009, we filed a registration statement on Form S-11 with the Securities and Exchange Commission (the “SEC”) to offer a minimum of 250,000 shares and a maximum of 140,000,000 shares of common stock for sale to the public, of which 100,000,000 shares were registered in our primary offering and 40,000,000 shares were registered under our dividend reinvestment plan. We sold 56,584,976 shares of common stock in the primary offering for gross offering proceeds of $561.7 million and ceased offering shares of common stock in our primary offering on November 14, 2012. On October 5, 2020, Pacific Oak Strategic Opportunity REIT II (“POSOR II”) merged with an indirect subsidiary of ours (the “Merger”). At the effective time of the Merger, each issued and outstanding share of POSOR II’s common stock converted into 0.9643 shares of our common stock or 28,973,906 shares. As of March 28, 2023, we indefinitely suspended offering shares of common stock under the dividend reinvestment plan to minimize administrative costs. On July 16, 2024, our board of directors indefinitely suspended our share redemption program, effective July 30, 2024 due to our liquidity position. As of December 31, 2024, we had redeemed 28,932,545 of the shares sold in our offering for $333.4 million and had issued 36,398,447 shares of common stock in connection with special dividends.

Objectives and Strategies

Our investment objectives aim to enhance shareholder value and provide consistent returns by increasing our income through rentals, redevelopment, and realizing growth across our portfolio. Additionally, we seek to strengthen our liquidity through timely transactions that maximize value, safeguarding the capital contributions of our stockholders.

We have sought to achieve these objectives by investing in and managing a portfolio of opportunistic real estate, real estate equity securities, and other real estate-related investments.

Our primary real estate strategies are:

•monetizing land sites available for future development;

•deriving rental revenue from tenants and stabilizing existing assets by leasing vacant space;

•optimizing returns from strategic dispositions;

•maintaining favorable leasing terms for our residential portfolio; and

•stabilizing dynamically located co-investment ventures by completing the build-out and leasing.

In pursuit of these strategies, we aim to explore ways to enhance the value of our current assets and strive for increased returns on our investments through strategic timing of asset sales to optimize their value. Additionally, we are committed to actively seeking new lending and investment prospects that we anticipate will deliver favorable risk-adjusted returns for our shareholders.

We own a significant amount of office properties. As of September 30, 2024, approximately 49.6% of the value of our property portfolio consisted of office properties. The office environment remains challenged, with cap rates and discount rates elevated relative to the low-rate environment from 2008 to 2022. As a result, lending and transaction volume for office properties remains depressed, making it difficult to refinance or sell office properties. Office properties have been underperforming as a consequence of remote work and in some cases illiquid since the onset of Covid-19. Because our strategy has been opportunistic, with short-hold periods, our financings have also been relatively short-term. This has caused a situation where our financial liabilities are coming due, when office properties are difficult to stabilize, refinance and sell at terms that are attractive. In the near term, we are focused on avoiding scenarios such as this by managing our liquidity situation through a combination of asset sales, issuing debt, and refinancings (whether through mortgage loans or corporate level financing) or letting properties go to the lender.

We do not currently anticipate having funds available for stockholder liquidity in the near term. We believe that the office sector will eventually stabilize, that occupancy, transaction activity and lending in the office sector will improve, and that our liquidity situation will improve at that time. As conditions improve we intend to revisit liquidity strategies for stockholders. Until that happens, we expect to continue to face risks with regard to our liquidity situation, along with downward pressure on our NAV from operating and interest expenses.

Real Estate and Real Estate-Related Investments

Our investments in commercial real estate focus on a range of asset types primarily including: office, residential homes, apartments, and land parcels, as well as other specialty property types. Our investments in commercial real estate also include joint ventures, which enable us to invest side-by-side with institutional investors into a diversified portfolio of high quality and stabilized commercial real estate with good fundamentals, and we also invest in other real estate-related assets, including stock of a publicly traded real estate company. As of December 31, 2024, we consolidated nine office complexes, encompassing, in the aggregate, 3.2 million rentable square feet and these properties were 67% occupied. In addition, we owned one residential home portfolio consisting of 2,093 residential homes, and one apartment property containing 317 units, which were 93% and 92% occupied, respectively, as of December 31, 2024. We also owned one hotel property with 196 rooms, three investments in undeveloped land with 247 developable acres, one office/retail development property, and held an interest in three investments in unconsolidated entities and one investment in real estate equity security.

We have attempted to diversify our tenant base in order to limit exposure to any one tenant or industry. As of December 31, 2024, we had no tenants that represented more than 10% of our total annualized base rent and our top ten tenants represented 26% of our total annualized base rent. For more information about our real estate investments, see Part I, Item 2 of this Annual Report on Form 10-K.

Financing Objectives

We have financed the majority of our real estate and real estate-related investments with a combination of the proceeds from the primary portion of our initial public offering, proceeds from our dividend reinvestment plan, proceeds from the sale of real estate and real estate-related investments, cash flow generated by our real estate and real estate-related investments, and debt financing, including bond offerings in Israel. We expect to use leverage to provide additional funds to support our investment activities and seek to increase potential returns to our stockholders.

Our financing objectives include (i) increasing our liquidity via opportunistic property sales and/or other transactions and (ii) continuing to manage our portfolio, including the related debt, so as to add value and maximize the total return despite the current challenges in the commercial real estate markets and credit markets. We have and will continue to focus on stabilizing our portfolio and managing debt maturities in 2025. Our managing of debt maturities may involve reworking portfolio allocations in order to better contend with the higher cost of capital.

Our decision to use leverage currently or in the future to finance our real estate and real estate-related investments will be based on our advisor’s assessment of a variety of factors, including, among others, the anticipated liquidity and price volatility of the assets in our investment portfolio, the potential for losses and extension risk in our portfolio, the availability of credit at favorable prices or at all, the credit quality of our portfolio and our outlook for borrowing costs. These decisions are subject to certain borrowing limits described below and are not subject to the approval of our stockholders. As a holder of floating-rate debt, we have already faced fluctuations in the credit markets and will continue to on a loan-by-loan basis or as loans mature with a focus on value. If we were to become further dependent on debt refinancing, there could be untimely asset dispositions.

We used debt financing to increase the amount available for investment and to potentially increase overall investment yields to us and our stockholders. As of December 31, 2024, the weighted-average interest rate on our debt was 6.60%.

We borrow funds at both fixed and variable rates; as of December 31, 2024, we had $519.5 million and $357.3 million of fixed and variable-rate debt outstanding, respectively. The weighted-average interest rates of our fixed-rate debt and variable-rate debt as of December 31, 2024 were 6.12% and 7.46%, respectively. The weighted-average interest rate represents the actual interest rate in effect as of December 31, 2024, using interest rate indices as of December 31, 2024, where applicable. As of December 31, 2024, we had entered into two separate interest rate caps with an aggregate notional amount of $78.2 million which effectively limits our exposure to increases in one-month Secured Overnight Finance Rate (“SOFR”) above certain thresholds.

As of December 31, 2024, we had bonds outstanding of 1.2 billion Israeli new shekels ($328.0 million as of December 31, 2024) (“Series Bonds”), of which 142.0 million Israeli new shekels ($39.0 million as of December 31, 2024) were collateralized by real estate (specified lands in Park Highlands and Richardson). The Series Bonds principal payments are due on dates ranging from January 2025 to February 2029 and have interest rates of 3.93% to 9.50%. During the year ended December 31, 2024, we issued 587.1 million Israeli new shekels ($161.4 million as of December 31, 2024) of Series D bonds to Israeli investors pursuant to a public offering registered with the Israel Securities Authority. During the year ended December 31, 2024, we repaid 700.9 million Israeli new shekels ($192.3 million as of December 31, 2024) of Series B bonds and also repaid 218.0 million Israeli new shekels ($59.8 million as of December 31, 2024) of Series C bonds collateralized by Park Highlands undeveloped land in connection with two real estate dispositions. On January 31, 2025, we made the remaining second principal installment payment of 75.3 million Israeli new shekels ($21.0 million as of January 31, 2025) in connection with the Series B bonds.

We have tried to spread the maturity dates of our debt to minimize maturity and refinance risk in our portfolio. In addition, a majority of our debt allows us to extend the maturity dates, subject to certain conditions. Although we may satisfy the conditions to extend the maturity of our debt obligations, we can give no assurance in this regard. The following table shows the current and fully extended maturities, including principal amortization payments, of our debt as of December 31, 2024 (in thousands):

	Current Maturity		Extended Maturity
2025	$	244,464	$	137,678
2026	470,867		310,832
2027	53,812		116,950
2028	53,812		216,773
2029	53,812		94,534
	$	876,767	$	876,767

There is no limitation on the amount we may borrow for any single investment. Our charter does not limit us from incurring debt until our aggregate borrowings would exceed 300% of our net assets, which approximates aggregate liabilities of 75% of the cost of our tangible assets (before deducting depreciation or other non-cash reserves), and we may exceed this limit with the approval of the conflicts committee of our board of directors. To the extent financing in excess of this limit is available on attractive terms, our conflicts committee may approve debt such that our total liabilities would exceed this limit. We would disclose such borrowing to our common stockholders in our next quarterly report with an explanation from the conflicts committee of the justification for the excess borrowing. As of December 31, 2024, our borrowings and other liabilities were within the limits stated in our charter.

We do not intend to exceed the leverage limit in our charter. High levels of debt could cause us to incur higher interest charges and higher debt service payments, which would decrease the amount of cash available for distribution to our investors and could also be accompanied by restrictive covenants. High levels of debt could also increase the risk of being unable to refinance when loans become due, or of being unable to refinance on favorable terms, and the risk of loss with respect to assets pledged as collateral for loans.

Except with respect to the borrowing limits contained in our charter, we may reevaluate and change our debt policy in the future without a stockholder vote. Factors that we would consider when reevaluating or changing our debt policy include: then-current economic conditions, the relative cost and availability of debt and equity capital, any investment opportunities, the ability of our investments to generate sufficient cash flow to cover debt service requirements and other similar factors. Further, we may increase or decrease our ratio of debt to book value in connection with any change of our borrowing policies.

Disposition Policies

The period that we will hold our investments will vary depending on the type of asset, interest rates and other factors. Our advisor has developed a well-defined exit strategy for each investment we have made and will continually perform a hold-sell analysis on each asset to determine the optimal time to hold the asset and generate a strong return for our stockholders. Economic and market conditions may influence us to hold our investments for different periods of time. We optimize returns from strategic dispositions, and we may dispose of an asset before the end of the expected holding period if we believe that market conditions have maximized its value to us, or the disposition of the asset would otherwise be in the best interests of our stockholders. During the year ended December 31, 2024, we sold one apartment property, 334 developable acres of undeveloped land, 89 residential homes and one investment in real estate equity security. The disposition strategy is consistent with our objectives of acquiring opportunistic investments, improving the investments, and timing asset sales to realize the growth in the value that was created during our hold period.

Economic Dependency

We are dependent on our advisor for certain services that are essential to us, including the identification, evaluation, negotiation, origination, acquisition, and disposition of investments; management of the daily operations and leasing of our investment portfolio; and other general and administrative responsibilities. We are dependent on the PORT Advisor for similar services relating to residential homes. If our advisor and the PORT Advisor are unable to provide the respective services, we will be required to obtain such services from other sources.

Competitive Market Factors

The U.S. real estate leasing markets remain competitive. We face competition from various entities for prospective tenants and to retain our current tenants, including other REITs, pension funds, insurance companies, investment funds and companies, partnerships, and developers. Many of these entities have substantially greater financial resources than we do and may be able to accept more risk than we can prudently manage, including risks with respect to the creditworthiness of a tenant. As a result of their greater resources, those entities may have more flexibility than we do in their ability to offer rental concessions to attract and retain tenants. This could put pressure on our ability to maintain or raise rents and could adversely affect our ability to attract or retain tenants. As a result, our financial condition, results of operations, cash flow, ability to satisfy our debt service obligations and ability to pay distributions to our stockholders may be adversely affected. We may also face competition from other entities that are selling assets. Competition from these entities may increase the supply of real estate investment opportunities or increase the bargaining power of real estate investors seeking to buy.

Although we believe that we are well-positioned to compete effectively in each facet of our business, there is enormous competition in our market sector and there can be no assurance that we will compete effectively or that we will not encounter increased competition in the future that could limit our ability to conduct our business effectively.

Compliance with Federal, State and Local Environmental Law

Under various federal, state and local environmental laws, ordinances and regulations, a current or previous real property owner or operator may be liable for the cost of removing or remediating hazardous or toxic substances on, under or in such property. These costs could be substantial. Such laws often impose liability whether or not the owner or operator knew of, or was responsible for, the presence of such hazardous or toxic substances. Environmental laws also may impose restrictions on the manner in which property may be used or businesses may be operated, and these restrictions may require substantial expenditures or prevent us from entering into leases with prospective tenants that may be impacted by such laws. Environmental laws provide for sanctions for noncompliance and may be enforced by governmental agencies or, in certain circumstances, by private parties. Certain environmental laws and common law principles could be used to impose liability for the release of and exposure to hazardous substances, including asbestos-containing materials. Third parties may seek recovery from real property owners or operators for personal injury or property damage associated with exposure to released hazardous substances. The cost of defending against claims of liability, of complying with environmental regulatory requirements, of remediating any contaminated property, or of paying personal injury claims could reduce the amounts available for distribution to our stockholders.

All of our real estate properties, other than properties acquired through foreclosure, were subject to Phase I environmental assessments at the time they were acquired. Some of the properties we have acquired are subject to potential environmental liabilities arising primarily from historic activities at or in the vicinity of the properties. Based on our environmental diligence and assessments of our properties and our purchase of pollution and remediation legal liability insurance with respect to some of our properties, we do not believe that environmental conditions at our properties are likely to have a material adverse effect on our operations.

Segments

We operate in three reportable business segments: strategic opportunistic properties and real estate-related investments, residential homes, and hotel, which is how our management manages the business. In general, we intend to hold our investments in opportunistic real estate and other real estate-related assets for capital appreciation. Traditional performance metrics of opportunistic real estate and other real estate-related assets may not be meaningful as these investments are generally non-stabilized and do not provide a consistent stream of interest income or rental revenue. These investments exhibit similar long-term financial performance and have similar economic characteristics. These investments typically involve a higher degree of risk and do not provide a constant stream of ongoing cash flows. As a result, our management views opportunistic real estate and other real estate-related assets as similar investments and aggregated into one reportable business segment. We own residential homes in 17 markets and are all aggregated into one reportable business segment due to the homes being stabilized, having high occupancy rates and have similar economic characteristics. Additionally, we own one hotel and is represented into one reportable business segment due to the nature of the hotel business with short-term stays.

Human Capital

We have no paid employees. The employees of our advisor or its affiliates provide management, acquisition, disposition, advisory and certain administrative services for us. The employees of the PORT Advisor or its affiliates provide similar services with respect to our residential homes portfolio held through PORT.

Principal Executive Office

Our principal executive offices are located at 11766 Wilshire Blvd., Suite 1670, Los Angeles, California 90025. Our telephone number and web address are (866) 722-6257 and http://www.sorinvinfo.com/.

Available Information

Access to copies of our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements and other filings with the SEC, including amendments to such filings, may be obtained free of charge from the following website, http://www.sorinvinfo.com/ or through a link to the SEC’s website, http://www.sec.gov. These filings are available promptly after we file them with, or furnish them to, the SEC.

ITEM 1A.    RISK FACTORS

The following are some of the risks and uncertainties that could cause our actual results to differ materially from those presented in our forward-looking statements. The risks and uncertainties described below are not the only ones we face but do represent those risks and uncertainties that we believe are material to us. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also harm our business.

Risks Related to an Investment in Us

Because no public trading market for our shares currently exists, it will be difficult for our stockholders to sell their shares and, if they are able to sell their shares, it will likely be at a substantial discount to the most recent estimated value per share.

Our charter does not require our directors to seek stockholder approval to liquidate our assets by a specified date, nor does our charter require our directors to list our shares for trading on a national securities exchange by a specified date. There is no public market for our shares and we currently have no plans to list our shares on a national securities exchange. Until our shares are listed, if ever, our stockholders may not sell their shares unless the buyer meets the applicable suitability and minimum purchase standards. In addition, our charter prohibits the ownership of more than 9.8% of our stock, unless exempted by our board of directors, which may inhibit large investors from purchasing our shares. Further, our share redemption program has been suspended and we have no current intention of reopening it in the near future due to our liquidity challenges. Therefore, it will be difficult for our stockholders to sell their shares promptly or at all. It is also likely that our shares would not be accepted as the primary collateral for a loan. Because of the illiquid nature of our shares, our stockholders should be prepared to hold our shares for an indefinite period of time.

Because of the concentration of our real estate investments in several property classes, our profitability may be vulnerable to a downturn in such sector.

Our investments are primarily categorized into three segments: strategic opportunistic real estate-related investments, residential homes, and hotel. As a result, we will be subject to risks inherent in investments in limited types of properties. If our investments are substantially in limited property classes, then the potential effects on our revenues, and as a result, on cash available for distribution to our stockholders, resulting from a downturn in the businesses conducted in those types of properties could be more pronounced than if we had more fully diversified our investments. As of December 31, 2024, our investments in strategic opportunistic real estate and related investments, our residential homes, and hotel segments represented 66.2%, 30.1% and 3.7% of our total assets, respectively.

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

As of December 31, 2024, our real estate held for investment in California and Georgia represented 11.4% and 11.3% of our total assets, respectively. As a result, the geographic concentration of our portfolio makes it particularly susceptible to adverse economic developments in the California and Georgia real estate markets. Any adverse economic or real estate developments in these markets, such as business layoffs or downsizing, industry slowdowns, relocations of businesses, changing demographics and other factors, or any decrease in demand for office space resulting from the local business climate, could adversely affect our operating results and our ability to make distributions to stockholders.

Disruptions in the financial markets and uncertain economic conditions could adversely affect market rental rates, commercial real estate values and our ability to secure debt financing, service debt obligations, or pay distributions to our stockholders.

Currently, both the investing and leasing environments are highly competitive and have made businesses reluctant to make long-term commitments or changes in their business plans. Possible future declines in rental rates, slower or potentially

negative net absorption of leased space and expectations of future rental concessions, including free rent to renew tenants early, to retain tenants who are up for renewal or to attract new tenants, may result in decreases in cash flows.

We have relied on debt financing to finance our real estate properties and we may have difficulty refinancing some of our debt obligations prior to or at maturity or we may not be able to refinance these obligations at terms as favorable as the terms of our existing indebtedness and we also may be unable to obtain additional debt financing on attractive terms or at all. If we are not able to refinance our existing indebtedness on attractive terms at the various maturity dates, we may be forced to dispose of some of our assets. Market conditions can change quickly, which could negatively impact the value of our assets.

Disruptions in the financial markets and continued uncertain economic conditions could adversely affect the values of our investments. It remains uncertain whether the capital markets can sustain the current transaction levels. Any disruption to the debt and capital markets could result in fewer buyers seeking to acquire commercial properties and possible increases in capitalization rates and lower property values. Furthermore, declining economic conditions could negatively impact commercial real estate fundamentals and result in lower occupancy, lower rental rates and declining values in our real estate portfolio and in the collateral securing our loan investments, which could have the following negative effects on us:

•the values of our investments in commercial properties could decrease below the amounts paid for such investments;

•the value of collateral securing any loan investments we may make could decrease below the outstanding principal amount of such loans; and/or

•revenues from our properties could decrease due to fewer tenants and/or lower rental rates, making it more difficult for us to pay distributions or meet our debt service obligations on debt financing.

All of these factors could impair our ability to make distributions to our investors and decrease the value of an investment in us.

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

Our business may be adversely affected by market and economic volatility experienced by the U.S. and global economies, the U.S. office market as a whole and/or the local economies in the markets in which our properties are located. Such adverse economic and geopolitical conditions may be due to, among other issues, increased labor market challenges impacting the recruitment and retention of employees; increasing or elevated inflation and interest rates; volatility in the public equity and debt markets; uncertainties regarding actual and potential shifts in U.S. and foreign policies on trade and other fiscal, monetary and regulatory policies, including with respect to treaties and tariffs; international economic and other conditions, including pandemics, geopolitical instability (such as ongoing hostilities between Russia and Ukraine and between Israel and Hamas and the international community’s response thereto), sanctions and other conditions beyond our control. These current conditions, or similar conditions existing in the future, may adversely affect our results of operations, financial condition, and ability to pay dividends and/or distributions as a result of one or more of the following, among other potential consequences:

•the financial condition of our tenants may be adversely affected, which may result in tenant defaults under leases due to bankruptcy, lack of liquidity, lack of funding, operational failures or for other reasons;

•potential changes in customer behavior, such as the continued social acceptance, desirability and perceived economic benefits of work-from-home arrangements, which could materially and negatively impact the future demand for office space, resulting in slower overall leasing and an adverse impact to our operations and the valuation of our investments;

•significant job losses may occur, which may decrease demand for our office space, causing market rental rates and property values to be negatively impacted;

•our ability to borrow on terms and conditions that we find acceptable, or at all, may be limited, which could reduce our ability to refinance existing debt and increase our future interest expense;

•reduced values of our properties may limit our ability to dispose of assets at attractive prices or to obtain debt financing secured by our properties and may reduce the availability of unsecured loans;

•the value and liquidity of our short-term investments and cash deposits could be reduced as a result of a deterioration of the financial condition of the institutions that hold our cash deposits or the institutions or assets in which we have made short-term investments, a dislocation of the markets for our short-term investments, increased volatility in market rates for such investments or other factors; and

•to the extent we enter into derivative financial instruments, one or more counterparties to our derivative financial instruments could default on their obligations to us, or could fail, increasing the risk that we may not realize the benefits of these instruments.

Inflation and increased interest rates may adversely affect our financial condition and results of operations.

Inflation has adversely impacted our operations in the recent past. Inflation reached a 40-year high in 2022 and remained elevated into 2024. It remains uncertain whether substantial inflation in the United States will be sustained over an extended period of time or have a significant effect on the United States or other economies. In response to increasing inflation, the Federal Reserve raised the federal funds rate in 2022 and 2023, and while it subsequently moderated its approach in 2024, borrowing costs remain elevated. Increased inflation and interest rates could have an adverse impact on our variable-rate debt, our ability to borrow money, and general and administrative expenses, as these costs could increase at a rate higher than our rental and other revenue. Increases in the costs of owning and operating our properties due to inflation could reduce our net operating income and the value of an investment in us to the extent such increases are not reimbursed or paid by our tenants. If we are materially impacted by increasing inflation because, for example, inflationary increases in costs are not sufficiently offset by the contractual rent increases and operating expense reimbursement provisions or escalations in the leases with our tenants, we may implement measures to conserve cash or preserve liquidity. In addition, due to rising interest rates, we may experience restrictions in our liquidity based on certain financial covenant requirements, our inability to refinance maturing debt in part or in full as it comes due and higher debt service costs and reduced yields relative to cost of debt. If we are unable to find alternative credit arrangements or other funding in a high interest environment, our business needs may not be adequately met.

In addition, tenants and potential tenants of our properties may be adversely impacted by inflation and rising interest rates, which could negatively impact our tenants’ ability to pay rent and the demand for our properties. Such adverse impacts on our tenants may cause increased vacancies, which may add pressure to lower rents and increase our expenditures for re-leasing.

Uncertainty and volatility in the credit markets could affect our ability to obtain debt financing on reasonable terms, or at all, which could reduce the number of properties we may be able to acquire and the amount of cash distributions we can make to our stockholders.

The U.S. and global credit markets have in the past experienced severe dislocations and liquidity disruptions, which caused volatility in the credit spreads on prospective debt financings and constrained the availability of debt financing due to the reluctance of lenders to offer financing at high leverage ratios. Similar conditions in the future could adversely impact our ability to access additional debt financing on reasonable terms or at all, which may adversely affect investment returns on future acquisitions or our ability to make acquisitions.

If mortgage debt or unsecured debt is unavailable on reasonable terms as a result of increased interest rates, increased credit spreads, decreased liquidity or other factors, we may not be able to finance the initial purchase of properties. In addition, when we incur mortgage debt or unsecured debt, we run the risk of being unable to refinance such debt upon maturity, or of being unable to refinance on favorable terms.

If interest rates are higher or other financing terms, such as principal amortization, the need for a corporate guaranty, or other terms are not as favorable when we refinance debt or issue new debt, our income could be reduced. To the extent we are unable to refinance debt on reasonable terms, at appropriate times or at all, we may be required to sell properties on terms that are not advantageous to us, or that could result in the foreclosure of such properties. If any of these events occur, our cash flow could be reduced. This, in turn, could reduce cash available for distribution to our stockholders and may hinder our ability to raise more capital by issuing securities or borrowing more money.

Because we depend upon our advisor to select, acquire, manage, and dispose of our real estate investments and to conduct our operations, any adverse changes in the financial health of our advisor or our relationship with it could cause our operations to suffer.

We depend on our advisor to select, acquire, manage, and dispose of our real estate investments and to conduct our operations. Our advisor depends upon the fees and other compensation that it receives from us and other Pacific Oak-sponsored programs that it advises in connection with the purchase, management, and sale of assets to conduct its operations. Any adverse changes to our relationship with, or the financial condition of, our advisor could hinder its ability to successfully manage our operations and our portfolio of investments.

Because we depend upon the PORT Advisor to select, acquire, manage, and dispose of our real estate investments and to conduct our operations with respect to our residential homes portfolio, any adverse changes in the financial health of the PORT Advisor or our relationship with it could cause our operations to suffer.

We depend on the PORT Advisor to select, acquire, manage, and dispose of our real estate investments and to conduct our operations. The PORT Advisor depends upon the fees and other compensation that it receives from us in connection with the purchase, management, and sale of assets to conduct its operations. Any adverse changes to our relationship with, or the financial condition of, the PORT Advisor could hinder its ability to successfully manage our operations and our portfolio of investments.

If we pay distributions from sources other than our cash flow from operations, we will have less funds available for investments and the overall return to our stockholders may be reduced.

We will declare distributions when our board of directors determines we have sufficient cash flow from operations, investment activities and/or strategic financings. We expect to fund distributions from interest and rental income on investments, the maturity, payoff, or settlement of those investments and from strategic sales of loans, properties and other assets. We may also fund distributions from debt financings.

As a REIT, we will generally have to hold our assets for two years for the production of rental income in order to meet the safe harbor to avoid a 100% prohibited transactions tax, unless such assets are held through a taxable REIT subsidiary (“TRS”) or other taxable corporation. At such time as we have assets that we have held for at least two years, we anticipate that we may authorize and declare distributions based on gains on asset sales, to the extent we close on the sale of one or more assets and the board of directors does not determine to reinvest the proceeds of such sales. Additionally, our board of directors intends to declare distributions quarterly based on cash flow from our investments.

To maintain our qualification as a REIT, we must make aggregate annual distributions to our stockholders of at least 90% of our REIT taxable income (which is computed without regard to the dividends paid deduction or net capital gain and which does not necessarily equal net income as calculated in accordance with U.S. generally accepted accounting principles (“GAAP”). If we meet the REIT qualification requirements, we generally will not be subject to federal income tax on the income that we distribute to our stockholders each year. In general, we anticipate making distributions to our stockholders of at least 100% of our REIT taxable income so that none of our income is subject to federal income tax. Our board of directors may authorize distributions in excess of those required for us to maintain REIT status depending on our financial condition and such other factors as our board of directors deems relevant.

Our distribution policy is not to pay distributions from sources other than cash flow from operations, investment activities and strategic financings. However, our organizational documents do not restrict us from paying distributions from any source and do not restrict the amount of distributions we may pay from any source, including proceeds from the issuance of securities, borrowings, advances from our advisor or sponsors or from our advisor’s deferral of its fees under the advisory agreement. Distributions paid from sources other than current or accumulated earnings and profits may constitute a return of capital. From time to time, we may generate taxable income greater than our taxable income for financial reporting purposes, or our taxable income may be greater than our cash flow available for distribution to stockholders. In these situations, we may make distributions in excess of our cash flow from operations, investment activities and strategic financings to satisfy the REIT distribution requirement described above. In such an event, we would look first to other third-party borrowings to fund these distributions. If we fund distributions from financings, the proceeds from issuances of securities or sources other than our cash flow from operations, we will have less funds available for investment in real estate-related loans, opportunistic real estate, real estate equity securities and other real estate-related investments and the overall return to our stockholders may be reduced.

In addition, to the extent distributions exceed cash flow from operations and gains realized from the dispositions of properties, a stockholder’s basis in our stock will be reduced and, to the extent distributions exceed a stockholder’s basis, the stockholder may recognize capital gain. There is no limit on the amount of distributions we may fund from sources other than from cash flows from operations or gains realized from the dispositions of properties. There were no distributions paid during the years ended December 31, 2024 and 2023. Our cash flow used in operations and net loss attributable to stockholders for the year ended December 31, 2024 were $30.4 million and $100.8 million, respectively. Our cash flow used in operations and net loss attributable to stockholders for the year ended December 31, 2023 were $24.3 million and $144.2 million, respectively. Our cash flow provided by operations and net loss attributable to stockholders for the year ended December 31, 2022 were $11.9 million and $43.2 million, respectively. From inception through December 31, 2024, we funded 9% of total distributions paid, which includes cash distributions and dividends reinvested by stockholders, with proceeds from debt financing, funded 46% of total distributions paid with the gains realized from the dispositions of properties and funded 45% of total distributions paid with cash provided by operations. Our cumulative distributions paid and net loss attributable to common stockholders from inception through December 31, 2024 was $740.8 million.

The loss of or the inability to retain or obtain key real estate and debt finance professionals at our advisor could delay or hinder implementation of our investment, management and disposition strategies, which could limit our ability to pay distributions and decrease the value of an investment in our shares.

Our success depends to a significant degree upon the contributions of Messrs. Hall and McMillan and the team of real estate and debt finance professionals at our advisor. Neither we nor our advisor have employment agreements with these individuals, and they may not remain associated with us or our advisor. If any of these persons were to cease their association with us or our advisor, we may be unable to find suitable replacements and our operating results could suffer as a result. We do not maintain key person life insurance on any person. We believe that our future success depends, in large part, upon our advisor’s ability to attract and retain highly skilled managerial, operational and marketing professionals. Competition for such professionals is intense, and our advisor may be unsuccessful in attracting and retaining such skilled professionals. Further, we have established strategic relationships with firms that have special expertise in certain services or detailed knowledge regarding real properties in certain geographic regions. Maintaining such relationships will be important for us to effectively compete in such regions. We may be unsuccessful in maintaining such relationships. If we lose or are unable to obtain the

services of highly skilled professionals or do not establish or maintain appropriate strategic relationships, our ability to implement our investment, management and disposition strategies could be delayed or hindered and the value of our stockholders’ investment in us could decline.

The termination or replacement of our advisor could trigger a repayment event under our mortgage loans for some of our properties and the credit agreement governing any line of credit we obtain.

Lenders for certain of our properties may request provisions in the mortgage loan documentation that would make the termination or replacement of our advisor an event requiring the immediate repayment of the full outstanding balance of the loan. Similarly, under any line of credit we obtain, the termination or replacement of our advisor could trigger repayment of outstanding amounts under the credit agreement governing our line of credit. If a repayment event occurs with respect to any of our properties, our results of operations and financial condition may be adversely affected.

Our rights and the rights of our stockholders to recover claims against our independent directors are limited, which could reduce our stockholders’ and our recovery against our independent directors if they negligently cause us to incur losses.

Maryland law provides that a director has no liability in that capacity if he performs his duties in good faith, in a manner he reasonably believes to be in our best interests and with the care that an ordinarily prudent person in a like position would use under similar circumstances. Our charter provides that no independent director shall be liable to us or our stockholders for monetary damages and that we will generally indemnify them for losses unless they are grossly negligent or engage in willful misconduct. As a result, our stockholders and we may have more limited rights against our independent directors than might otherwise exist under common law, which could reduce our stockholders’ and our recovery from these persons if they act in a negligent manner. In addition, we may be obligated to fund the defense costs incurred by our independent directors (as well as by our other directors, officers, employees (if we ever have employees) and agents) in some cases, which would decrease the cash otherwise available for distribution to our stockholders.

We may change our targeted investments without stockholder consent.

We may change our targeted investments and investment guidelines at any time without the consent of our stockholders, which could result in us making investments that are different from, and possibly riskier than, our targeted investments as described in Part I, Item 1 of this Annual Report on Form 10-K. For example, we modified our investment objectives and criteria in January 2012 and March 2024 and we may do so again in the future. A change in our targeted investments or investment guidelines may increase our exposure to interest rate risk, default risk and real estate market fluctuations, all of which could adversely affect the value of our common stock and our ability to make distributions to our stockholders.

We face risks associated with security breaches through cyber-attacks, cyber intrusions or otherwise, as well as other significant disruptions of our information technology (IT) networks and related systems.

We face risks associated with security breaches, whether through cyber-attacks or cyber intrusions over the Internet, malware, computer viruses, attachments to e-mails, persons inside our organization or persons with access to systems inside our organization, and other significant disruptions of our IT networks and related systems. The risk of a security breach or disruption, particularly through cyber-attack or cyber intrusion, including by computer hackers, foreign governments and cyber terrorists, has generally increased as the number, intensity and sophistication of attempted attacks and intrusions from around the world have increased. Our IT networks and related systems are essential to the operation of our business and our ability to perform day-to-day operations. Although we make efforts to maintain the security and integrity of these types of IT networks and related systems, and we have implemented various measures to manage the risk of a security breach or disruption, there can be no assurance that our security efforts and measures will be effective or that attempted security breaches or disruptions would not be successful or damaging. Even the most well protected information, networks, systems and facilities remain potentially vulnerable because the techniques used in such attempted security breaches evolve and generally are not recognized until launched against a target, and in some cases are designed not be detected and, in fact, may not be detected. Accordingly, we may be unable to anticipate these techniques or to implement adequate security barriers or other preventative measures, and thus it is impossible for us to entirely mitigate this risk.

A security breach or other significant disruption involving our IT networks and related systems could:

•disrupt the proper functioning of our networks and systems and therefore our operations;

•result in misstated financial reports, violations of loan covenants and/or missed reporting deadlines;

•result in our inability to properly monitor our compliance with the rules and regulations regarding our qualification as a REIT;

•result in the unauthorized access to, and destruction, loss, theft, misappropriation or release of, proprietary, confidential, sensitive or otherwise valuable information of ours or others, which others could use to compete against us or which could expose us to damage claims by third-parties for disruptive, destructive or otherwise harmful purposes and outcomes;

•require significant management attention and resources to remedy any damages that result;

•subject us to claims for breach of contract, damages, credits, penalties or termination of leases or other agreements; or

•damage our reputation among our stockholders.

Any or all of the foregoing could have a material adverse effect on our results of operations, financial condition and cash flows.

Our bylaws designate the Circuit Court for Baltimore City, Maryland as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.

Our bylaws provide that, unless we consent in writing to the selection of an alternative forum, the Circuit Court for Baltimore City, Maryland shall be the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders with respect to our company, our directors, our officers or our employees (we note we currently have no employees). This exclusive forum provision does not apply to claims under the Securities Act, the Exchange Act, or any other claim for which the federal courts have exclusive jurisdiction. This choice of forum provision may limit a stockholder’s ability to bring a claim in a judicial forum that the stockholder believes is favorable for disputes with us or our directors, officers or employees, which may discourage meritorious claims from being asserted against us and our directors, officers and employees. Alternatively, if a court were to find this provision of our bylaws inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business, financial condition or results of operations. We adopted this provision because we believe it makes it less likely that we will be forced to incur the expense of defending duplicative actions in multiple forums and less likely that plaintiffs’ attorneys will be able to employ such litigation to coerce us into otherwise unjustified settlements, and we believe the risk of a court declining to enforce this provision is remote, as the General Assembly of Maryland has specifically amended the Maryland General Corporation Law to authorize the adoption of such provisions.

Uncertain market conditions could cause us to sell our real estate investments or investments in unconsolidated entities at a loss in the future.

We intend to hold our real estate investments and investments in unconsolidated entities until such time as we determine that a sale or other disposition appears to be advantageous to achieve our investment objectives. We may exercise discretion as to whether and when to sell an investment, and we will have no obligation to sell at any particular time. We cannot predict with any certainty the various market conditions affecting real estate investments that will exist at any particular time in the future. Because of the uncertainty of market conditions that may affect the future disposition of our investments, we may not be able to sell our investments at a profit in the future or at all. In addition, if we are unable to access the capital markets for financing in the future, we may need to sell some of our investments to raise capital. We may incur prepayment penalties in the event that we sell a property subject to a mortgage earlier than we otherwise had planned. Additionally, we could be forced to sell our investments at inopportune times which could result in us selling the affected investment at a substantial loss. Any inability to sell a property could adversely impact our ability to make debt payments as they come due.

Risks Related to Conflicts of Interest

Our advisor and its affiliates, including all of our executive officers and some of our directors and other key real estate and debt finance professionals, face conflicts of interest caused by their compensation arrangements with us, which could result in actions that are not in the long-term best interests of our stockholders.

All of our executive officers and some of our directors and other key real estate and debt finance professionals are also officers, directors, managers, key professionals and/or holders of a direct or indirect controlling interest in our advisor, Pacific Oak Capital Markets, LLC (“POCM”) and other affiliated Pacific Oak entities. Our advisor receives substantial fees from us and these fees could influence their advice to us. Among other matters, these compensation arrangements could affect their judgment with respect to:

•the continuation, renewal or enforcement of our agreements with our advisor, including the advisory agreement;

•public offerings of equity by us, which may entitle POCM to dealer-manager fees and may entitle our advisor to asset management fees and certain other fees;

•sales of investments, which may entitle our advisor to disposition fees and possible subordinated incentive fees;

•acquisitions of investments and originations of loans, which may entitle our advisor to acquisition and origination fees and asset management fees and, in the case of acquisitions of investments from other Pacific Oak-sponsored programs, might entitle affiliates of our advisor to disposition fees and possible subordinated incentive fees in connection with its services for the seller;

•borrowings to acquire investments and to originate loans, which borrowings may increase the acquisition and origination fees and asset management fees payable to our advisor;

•whether to engage our advisor, which may receive fees in connection with the management of our properties regardless of the quality of the services provided to us, to manage our properties; and

•whether we pursue a liquidity event such as a listing of our shares of common stock on a national securities exchange, a sale of the company or a liquidation of our assets, which (i) may make it more likely for us to become self-managed or internalize our management, (ii) could positively or negatively affect the sales efforts for other Pacific Oak-sponsored programs, depending on the price at which our shares trade or the consideration received by our stockholders, and/or (iii) affect the advisory fees received by our advisor.

The fees our advisor may receive in connection with the acquisition, origination or management of assets are based on the cost of the investment, not on the quality of the investment or the quality of the services rendered to us. This may influence our advisor to recommend riskier transactions to us.

Our advisor faces conflicts of interest relating to the leasing of properties and such conflicts may not be resolved in our favor, meaning that we may obtain less credit-worthy or desirable tenants, which could limit our ability to make distributions and reduce our stockholders’ overall investment return.

We and other Pacific Oak-sponsored programs and Pacific Oak-advised investors rely on our sponsors and other key real estate professionals at our advisor, including Messrs. Hall and McMillan, to supervise the property management and leasing of properties. If the Pacific Oak team of real estate professionals directs credit-worthy prospective tenants to properties owned by another Pacific Oak-sponsored program or Pacific Oak-advised investor when they could direct such tenants to our properties, our tenant base may have more inherent risk and our properties’ occupancy may be lower than might otherwise be the case.

Further, Messrs. Hall and McMillan and existing and future Pacific Oak-sponsored programs and Pacific Oak-advised investors are generally not prohibited from engaging, directly or indirectly, in any business or from possessing interests in any other business venture or ventures, including businesses and ventures involved in the acquisition, development, ownership, leasing or sale of real estate investments.

Our advisor faces conflicts of interest relating to the acquisition of assets, the leasing of properties and the disposition of properties due to its relationship with other Pacific Oak-sponsored programs and/or Pacific Oak-advised investors, which could result in decisions that are not in our best interest or the best interests of our stockholders.

We rely on the key real estate and debt finance professionals of our advisor, including Messrs. Hall and McMillan, to identify suitable investments. Messrs. Hall and McMillan and other real estate professionals are also the key real estate professionals for other Pacific Oak-sponsored programs and Pacific Oak-advised investors. As such, other Pacific Oak-sponsored programs and Pacific Oak-advised investors that have funds available for investment rely on many of the same professionals, as will future programs and investors. Some investment opportunities that are suitable for us may also be suitable for other Pacific Oak-sponsored programs and Pacific Oak-advised investors. Although there may be some overlap of investment opportunities, we generally do not expect to be in direct competition with these programs due to their specific investment focus and timing of funds available for investment. When these real estate and debt finance professionals direct an investment opportunity to any Pacific Oak-sponsored program or Pacific Oak-advised investors, they, in their sole discretion, will have to determine the program or investor for which the investment opportunity is most suitable based on the investment objectives, portfolio and criteria of each program or investor. As a result, these Pacific Oak real estate and debt finance professionals could direct attractive investment opportunities to other programs or investors.

For so long as we are externally advised, our charter provides that it shall not be a proper purpose of the corporation for us to make any significant investment unless our advisor has recommended the investment to us. Thus, the real estate and debt finance professionals of our advisor could direct attractive investment opportunities to other Pacific Oak-sponsored programs or Pacific Oak-advised investors. Such events could result in us investing in properties that provide less attractive returns, which would reduce the level of distributions we may be able to pay our stockholders.

We and other Pacific Oak-sponsored programs and Pacific Oak-advised investors also rely on these real estate professionals to supervise the property management and leasing of properties. If the Pacific Oak team of real estate professionals directs creditworthy prospective tenants to properties owned by another Pacific Oak-sponsored program or Pacific Oak-advised investor when it could direct such tenants to our properties, our tenant base may have more inherent risk and our properties’ occupancy may be lower than might otherwise be the case.

In addition, we and other Pacific Oak-sponsored programs and Pacific Oak-advised investors rely on our sponsor and other key real estate professionals at our advisor to sell our properties. These Pacific Oak-sponsored programs and Pacific Oak-advised investors may possess properties in similar locations and/or of the same property types as ours and may be attempting to sell these properties at the same time we are attempting to sell some of our properties. If our advisor directs potential purchasers to properties owned by another Pacific Oak-sponsored program or Pacific Oak-advised investor when it could direct such purchasers to our properties, we may be unable to sell some or all of our properties at the time or at the price we otherwise would, which could limit our ability to pay distributions and reduce our stockholders’ overall investment return.

Further, existing and future Pacific Oak-sponsored programs and Pacific Oak-advised investors and Messrs. Hall and McMillan generally are not and will not be prohibited from engaging, directly or indirectly, in any business or from possessing interests in any other business venture or ventures, including businesses and ventures involved in the acquisition, origination, development, ownership, leasing or sale of real estate-related investments.

Our advisor will face conflicts of interest relating to joint ventures that we may form with affiliates of our advisor, which conflicts could result in a disproportionate benefit to the other venture partners at our expense.

If approved by both a majority of our board of directors and a majority of our independent directors, we may enter into joint venture agreements with other Pacific Oak-sponsored programs or affiliated entities for the acquisition, development or improvement of properties or other investments. Our advisor, the advisors to the other Pacific Oak-sponsored programs and the investment advisers to institutional investors in real estate and real estate-related assets, have some of the same executive officers, directors and other key real estate and debt finance professionals; and these persons will face conflicts of interest in determining which Pacific Oak program or investor should enter into any particular joint venture agreement. These persons may also face a conflict in structuring the terms of the relationship between our interests and the interests of the Pacific Oak-affiliated co-venturer and in managing the joint venture. Any joint venture agreement or transaction between us and a Pacific Oak-affiliated co-venturer will not have the benefit of arm’s-length negotiation of the type normally conducted between unrelated co-venturers. The Pacific Oak-affiliated co-venturer may have economic or business interests or goals that are or may become inconsistent with our business interests or goals. These co-venturers may thus benefit to our and stockholders’ detriment.

Our sponsor, our officers, our advisor and the real estate, debt finance, management and accounting professionals assembled by our advisor face competing demands on their time and this may cause our operations and our stockholders’ investment in us to suffer.

We rely on our sponsor, our officers, our advisor and the key real estate, debt finance, management and accounting professionals that our advisor has assembled for the day‑to‑day operation of our business. All of our executive officers, our affiliated directors and other key real estate and debt finance professionals of our advisor are also officers, affiliated directors, managers, key professionals and/or holders of a direct or indirect controlling interest in our advisor, our dealer manager and/or other Pacific Oak-affiliated entities. As a result of their interests in other Pacific Oak-sponsored programs, their obligations to Pacific Oak-advised investors and the fact that they engage in and they will continue to engage in other business activities on behalf of themselves and others, Messrs. Hall and McMillan and the key real estate, debt finance, management and accounting professionals at our advisor face conflicts of interest in allocating their time among us, other Pacific Oak-sponsored programs, Pacific Oak-advised investors and other business activities in which they are involved. Our executive officers and the key real estate, debt finance, management and accounting professionals affiliated with our sponsor who provide services to us are not obligated to devote a fixed amount of their time to us. In addition, our advisor shares many of the same key real estate, management and accounting professionals. During times of intense activity in other programs and ventures, these individuals may devote less time and fewer resources to our business than are necessary or appropriate to manage our business. Furthermore, some or all of these individuals may become employees of another Pacific Oak-sponsored program in an internalization transaction or, if we internalize our advisor, may not become our employees as a result of their relationship with other Pacific Oak-sponsored programs. If these events occur, the returns on our investments, and the value of our stockholders’ investment in us, may decline.

If we were to internalize our management or if another investment program, whether sponsored or advised by affiliates of our advisor or otherwise, conducts its own internalization transaction, we could incur significant costs and/or our business could be harmed.

At some point in the future, we may consider internalizing the functions performed for us by our advisor. Any internalization transaction could result in significant payments to the principals of our advisor, including in the form of our stock which could reduce the percentage ownership of our then existing stockholders and concentrate ownership in the owners of our advisor. In addition, we rely on persons employed by our advisor to manage our day-to-day operating and acquisition activities. If we were to effectuate an internalization of our advisor, we may not be able to retain all of the employees of our advisor or to maintain relationships with other entities sponsored or advised by affiliates of our advisor. In addition, some of the employees of our advisor or its affiliates may provide services to one or more other investment programs. These programs or third parties may decide to retain some or all of the key employees in the future. If this occurs, these programs could hire certain of the persons currently employed by our advisor who are most familiar with our business and operations, thereby potentially adversely impacting our business.

All of our executive officers, our affiliated directors and the key real estate and debt finance professionals assembled by our advisor face conflicts of interest related to their positions and/or interests in our advisor, which could hinder our ability to implement our business strategy and to generate returns to our stockholders.

All of our executive officers, our affiliated directors and the key real estate and debt finance professionals assembled by our advisor are also executive officers, affiliated directors, managers, key professionals and/or holders of a direct or indirect

controlling interest in our advisor, our dealer manager, and/or other Pacific Oak-affiliated investment advisors that are the sponsors of other Pacific Oak-sponsored programs or are the advisors of Pacific Oak-advised investors. As a result, they owe fiduciary duties to each of these entities, their stockholders, members and limited partners and these investors, which fiduciary duties may from time-to-time conflict with the fiduciary duties that they owe to us and our stockholders. Their loyalties to these other entities and investors could result in action or inaction that is detrimental to our business, which could harm the implementation of our business strategy and our investment and leasing opportunities. Further, Messrs. Hall and McMillan and existing and future Pacific Oak-sponsored programs and Pacific Oak-advised investors generally are not and will not be prohibited from engaging, directly or indirectly, in any business or from possessing interests in any other business venture or ventures, including businesses and ventures involved in the acquisition, development, ownership, leasing or sale of real estate investments. If we do not successfully implement our business strategy, we may be unable to generate the cash needed to pay distributions to our stockholders and to maintain or increase the value of our assets.

Risks Related to Our Corporate Structure

Our charter limits the number of shares a person may own, which may discourage a takeover that could otherwise result in a premium price to our stockholders.

Our charter, with certain exceptions, authorizes our directors to take such actions as are necessary and desirable to preserve our qualification as a REIT. To help us comply with the REIT ownership requirements of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), our charter prohibits a person from directly or constructively owning more than 9.8% of our outstanding shares, unless exempted by our board of directors. This restriction may have the effect of delaying, deferring or preventing a change in control of us, including an extraordinary transaction (such as a merger, tender offer or sale of all or substantially all of our assets) that might provide a premium price for holders of our common stock.

Our charter permits our board of directors to issue stock with terms that may subordinate the rights of our common stockholders or discourage a third party from acquiring us in a manner that could result in a premium price to our stockholders.

Our board of directors may classify or reclassify any unissued common stock or preferred stock and establish the preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends and other distributions, qualifications and terms or conditions of redemption of any such stock. Thus, our board of directors could authorize the issuance of preferred stock with priority as to distributions and amounts payable upon liquidation over the rights of the holders of our common stock. Such preferred stock could also have the effect of delaying, deferring or preventing a change in control of us, including an extraordinary transaction (such as a merger, tender offer or sale of all or substantially all of our assets) that might provide a premium price to holders of our common stock.

Our stockholders’ investment return may be reduced if we are required to register as an investment company under the Investment Company Act; if we or our subsidiaries become an unregistered investment company, we could not continue our business.

Neither we nor any of our subsidiaries intend to register as investment companies under the Investment Company Act of 1940, as amended (the “Investment Company Act”). If we or our subsidiaries were obligated to register as investment companies, we would have to comply with a variety of substantive requirements under the Investment Company Act that impose, among other things:

•limitations on capital structure;

•restrictions on specified investments;

•prohibitions on transactions with affiliates; and

•compliance with reporting, record keeping, voting, proxy disclosure and other rules and regulations that would significantly increase our operating expenses.

Under the relevant provisions of Section 3(a)(1) of the Investment Company Act, an investment company is any issuer that:

•pursuant to section 3(a)(1)(A), is or holds itself out as being engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting or trading in securities (the “primarily engaged test”); or

•pursuant to section 3(a)(1)(C), is engaged or proposes to engage in the business of investing, reinvesting, owning, holding or trading in securities and owns or proposes to acquire “investment securities” having a value exceeding 40% of the value of such issuer’s total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis (the “40% test”). “Investment securities” excludes U.S. government securities and securities of majority-owned subsidiaries that are not themselves investment companies and are not relying on the exception from the definition of investment company under Section 3(c)(1) or Section 3(c)(7) (relating to private investment companies).

With respect to the primarily engaged test, we and our Operating Partnership are holding companies and do not intend to invest or trade in securities ourselves. Rather, through the majority-owned subsidiaries of our Operating Partnership, we and our Operating Partnership will be primarily engaged in the non-investment company businesses of these subsidiaries, namely the business of purchasing or otherwise acquiring real estate and real estate-related assets.

If any of the subsidiaries of our Operating Partnership fail to meet the 40% test, we believe they will usually, if not always, be able to rely on Section 3(c)(5)(C) of the Investment Company Act for an exception from the definition of an investment company. Otherwise, they should be able to rely on the exceptions for private investment companies pursuant to Section 3(c)(1) and Section 3(c)(7) of the Investment Company Act. As reflected in no-action letters, the SEC staff’s position on Section 3(c)(5)(C) generally requires that an issuer maintain at least 55% of its assets in “mortgages and other liens on and interests in real estate,” or qualifying assets; at least 80% of its assets in qualifying assets plus real estate-related assets; and no more than 20% of the value of its assets in other than qualifying assets and real estate-related assets, which we refer to as miscellaneous assets. To constitute a qualifying asset under this 55% requirement, a real estate interest must meet various criteria based on no-action letters. We expect that any of the subsidiaries of our Operating Partnership relying on Section 3(c)(5)(C) will invest at least 55% of its assets in qualifying assets, and an additional 25% of its assets in other types of real estate-related assets. If any subsidiary relies on Section 3(c)(5)(C), we expect to rely on guidance published by the SEC staff or on our analyses of guidance published with respect to types of assets to determine which assets are qualifying real estate assets and real estate-related assets.

Rapid changes in the values of our assets may make it more difficult for us to maintain our qualification as a REIT or our exception from the definition of an investment company under the Investment Company Act.

If the market value or income potential of our qualifying real estate assets changes as compared to the market value or income potential of our non-qualifying assets, or if the market value or income potential of our assets that are considered “real estate-related assets” under the Investment Company Act or REIT qualification tests changes as compared to the market value or income potential of our assets that are not considered “real estate-related assets” under the Investment Company Act or REIT qualification tests, whether as a result of increased interest rates, prepayment rates or other factors, we may need to modify our investment portfolio in order to maintain our REIT qualification or exception from the definition of an investment company. If the decline in asset values or income occurs quickly, this may be especially difficult, if not impossible, to accomplish. This difficulty may be exacerbated by the illiquid nature of many of the assets that we may own. We may have to make investment decisions that we otherwise would not make absent REIT and Investment Company Act considerations.

Our stockholders will have limited control over changes in our policies and operations, which increases the uncertainty and risks our stockholders face.

Our board of directors determines our major policies, including our policies regarding financing, growth, debt capitalization, REIT qualification and distributions. Our board of directors may amend or revise these and other policies without a vote of the stockholders. Under Maryland General Corporation Law and our charter, our stockholders have a right to vote only on limited matters. Our board’s broad discretion in setting policies and our stockholders’ inability to exert control over those policies increases the uncertainty and risks our stockholders face.

We have indefinitely suspended our share redemption program due to our liquidity position.

On July 16, 2024, our board of directors indefinitely suspended our share redemption program, effective July 30, 2024. The board of directors has suspended the program due to our liquidity position. Our board of directors may reinstate the program, although there is no assurance as to if or when this will happen. Accordingly, stockholders’ options for liquidity are extremely limited.

The estimated value per share of our common stock may not reflect the value that stockholders will receive for their investment.

On December 10, 2024, our board of directors approved an estimated value per share of our common stock of $5.72 based on the estimated value of our assets less the estimated value of our liabilities, or net asset value, divided by the number of shares outstanding as of September 30, 2024. There were no material changes between September 30, 2024 and December 10, 2024 to the net values of our assets and liabilities that materially impacted the overall estimated value per share. We are providing this estimated value per share to assist broker-dealers that participated in our initial public offering in meeting their customer account statement reporting obligations under National Association of Securities Dealers Conduct Rule 2340 as required by the Financial Industry Regulatory Authority (“FINRA”). This valuation was performed in accordance with the provisions of and also to comply with Practice Guideline 2013–01, Valuations of Publicly Registered Non-Listed REITs, issued by the Investment Program Association (“IPA”) in April 2013. The estimated value per share was based upon the recommendation and valuation prepared by our advisor.

As with any valuation methodology, the methodologies used are based upon a number of estimates and assumptions that may not be accurate or complete. Different parties with different assumptions and estimates could derive a different estimated value per share, and these differences could be significant. The estimated value per share is not audited and does not represent

the fair value of our assets less our liabilities according to GAAP, nor does it represent a liquidation value of our assets and liabilities or the amount at which our shares of common stock would trade at on a national securities exchange. The estimated value per share does not reflect a discount for the fact that we are externally managed, nor does it reflect a real estate portfolio premium/discount versus the sum of the individual property values. The estimated value per share also does not take into account estimated disposition costs and fees for real estate properties that are not held for sale, debt prepayment penalties that could apply upon the prepayment of certain of our debt obligations or the impact of restrictions on the assumption of debt. The estimated value per share does consider any participation or incentive fees that would be due to our advisor based on our aggregate net asset value and that would be payable in our hypothetical liquidation as of the valuation date in accordance with the terms of our advisory agreement.

Accordingly, with respect to the estimated value per share, we can give no assurance that:

•a stockholder would be able to resell his or her shares at this estimated value per share;

•a stockholder would ultimately realize distributions per share equal to our estimated value per share upon liquidation of our assets and settlement of our liabilities or a sale of the company;

•our shares of common stock would trade at the estimated value per share on a national securities exchange;

•an independent third-party appraiser or other third-party valuation firm would agree with our estimated value per share; or

•the methodology used to estimate our value per share would be acceptable to FINRA or for compliance with ERISA reporting requirements.

For a full description of the methodologies and assumptions used to value our assets and liabilities in connection with the calculation of the estimated value per share, see Part II, Item 5, “Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities — Market Information.” We currently expect to utilize our advisor and/or an independent valuation firm to update the estimated value per share in December 2025.

Our investors’ interest in us will be diluted if we issue additional shares, which could reduce the overall value of their investment.

Our common stockholders do not have preemptive rights to any shares we issue in the future. Our charter authorizes us to issue 1,010,000,000 shares of capital stock, of which 1,000,000,000 shares are designated as common stock and 10,000,000 shares are designated as preferred stock. Our board of directors may increase the number of authorized shares of capital stock without stockholder approval. Our board may elect to (i) sell additional shares in our current or future public offerings, including through our dividend reinvestment plan if we elect to resume it, (ii) issue equity interests in private offerings, (iii) issue shares to our advisor, or its successors or assigns, in payment of an outstanding fee obligation or (iv) issue shares of our common stock to sellers of assets we acquire in connection with an exchange of limited partnership interests of the Operating Partnership. To the extent we issue additional equity interests, our stockholders’ percentage ownership interest in us will be diluted. In addition, depending upon the terms and pricing of any additional offerings, the use of the proceeds and the value of our investments, our stockholders may also experience dilution in the book value and fair value of their shares and in the earnings and distributions per share.

Payment of fees to our advisor and to the PORT Advisor reduces cash available for investment and distribution and increases the risk that our stockholders will not be able to recover the amount of their investment in our shares.

Our advisor and the PORT Advisor perform services for us in connection with the selection, acquisition, origination, management, and administration of our investments. We pay them substantial fees for these services, which results in immediate dilution to the value of our stockholders’ investment and reduces the amount of cash available for investment or distribution to stockholders. Compensation to be paid to our advisor may be increased subject to approval by our conflicts committee and the other limitations in our charter, which would further dilute our stockholders’ investment and reduce the amount of cash available for investment or distribution to stockholders.

We may also pay significant fees during our listing/liquidation stage. Although most of the fees payable during our listing/liquidation stage are contingent on our investors first enjoying agreed-upon investment returns, the investment-return thresholds may be reduced subject to approval by our conflicts committee and the other limitations in our charter.

Therefore, these fees increase the risk that the amount available for distribution to common stockholders upon a liquidation of our portfolio would be less than the price paid by our stockholders to purchase shares in our initial public offering. These substantial fees and other payments also increase the risk that our stockholders will not be able to resell their shares at a profit, even if our shares are listed on a national securities exchange.

Failure to procure adequate capital and funding would negatively impact our results and may, in turn, negatively affect our ability to make distributions to our stockholders.

We depend upon the availability of adequate funding and capital for our operations. The failure to secure acceptable financing could reduce our taxable income, as our investments would no longer generate the same level of net interest income due to the lack of funding or increase in funding costs. A reduction in our net income could reduce our liquidity and our ability to make distributions to our stockholders. We cannot assure our stockholders that any, or sufficient, funding or capital will be available to us in the future on terms that are acceptable to us. Therefore, in the event that we cannot obtain sufficient funding on acceptable terms, there may be a negative impact on our ability to make distributions.

Although we are not currently afforded the protection of the Maryland General Corporation Law relating to deterring or defending hostile takeovers, our board of directors could opt into these provisions of Maryland law in the future, which may discourage others from trying to acquire control of us and may prevent our stockholders from receiving a premium price for their stock in connection with a business combination.

Under Maryland law, “business combinations” between a Maryland corporation and certain interested stockholders or affiliates of interested stockholders are prohibited for five years after the most recent date on which the interested stockholder becomes an interested stockholder. These business combinations include a merger, consolidation, share exchange, or, in circumstances specified in the statute, an asset transfer or issuance or reclassification of equity securities. Also under Maryland law, control shares of a Maryland corporation acquired in a control share acquisition have no voting rights except to the extent approved by a vote of two-thirds of the votes entitled to be cast on the matter. Shares owned by the acquirer, an officer of the corporation or an employee of the corporation who is also a director of the corporation are excluded from the vote on whether to accord voting rights to the control shares. Should our board of directors opt into these provisions of Maryland law, it may discourage others from trying to acquire control of us and increase the difficulty of consummating any offer. Similarly, provisions of Title 3, Subtitle 8 of the Maryland General Corporation Law could provide similar anti-takeover protection.

Our charter includes an anti-takeover provision that may discourage a stockholder from launching a tender offer for our shares.

Our charter provides that any tender offer made by a stockholder, including any “mini-tender” offer, must comply with most provisions of Regulation 14D of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The offering stockholder must provide us with notice of such tender offer at least 10 business days before initiating the tender offer. If the offering stockholder does not comply with these requirements, we will have the right to redeem that stockholder’s shares and any shares acquired in such tender offer. In addition, the noncomplying stockholder shall be responsible for all of our expenses in connection with that stockholder’s noncompliance. This provision of our charter may discourage a stockholder from initiating a tender offer for our shares and prevent our stockholders from receiving a premium price for their shares in such a transaction.

General Risks Related to Investments

Our investments will be subject to the risks typically associated with real estate.

We have invested in and will continue to invest in a diverse portfolio of opportunistic real estate, real estate-related loans, real estate equity securities and other real estate-related investments. Each of these investments will be subject to the risks typically associated with real estate. Our potential investments in residential and commercial mortgage-backed securities, collateralized debt obligations and other real estate-related investments may be similarly affected by real estate property values. The value of real estate may be adversely affected by a number of risks, including:

•natural disasters such as hurricanes, earthquakes, floods and pandemics;

•acts of war or terrorism;

•adverse changes in national and local economic and real estate conditions;

•an oversupply of (or a reduction in demand for) space in the areas where particular properties are located and the attractiveness of particular properties to prospective tenants;

•changes in governmental laws and regulations, fiscal policies and zoning ordinances and the related costs of compliance therewith and the potential for liability under applicable laws;

•costs of remediation and liabilities associated with environmental conditions affecting properties; and

•the potential for uninsured or underinsured property losses.

The value of each property is affected significantly by its ability to generate cash flow and net income, which in turn depends on the amount of rental or other income that can be generated net of expenses required to be incurred with respect to the property. Many expenditures associated with properties (such as operating expenses and capital expenditures) cannot be reduced when there is a reduction in income from the properties. These factors may have a material adverse effect on the ability of our borrowers to pay their loans and our tenants to pay their rent, as well as on the value that we can realize from other real estate-related assets we originate, own or acquire.

We depend on tenants for revenue, and lease defaults or terminations could reduce our net income and limit our ability to make distributions to our stockholders.

The success of our real estate investments materially depends on the financial stability of our tenants. A default or termination by a significant tenant on its lease payments to us would cause us to lose the revenue associated with such lease and could require us to find an alternative source of revenue to meet mortgage payments and prevent a foreclosure, if the property is subject to a mortgage. In the event of a tenant default or bankruptcy, we may experience delays in enforcing our rights as landlord and may incur substantial costs in protecting our investment and re-leasing our property. If a tenant defaults on or terminates a significant lease, we may be unable to lease the property for the rent previously received or sell the property without incurring a loss. These events could cause us to reduce the amount of distributions to our stockholders.

We are dependent on the third-party manager of our hotel.

We currently own one hotel property. In order to qualify as a REIT, we are not able to operate any hotel properties or participate in the decisions affecting the daily operations of any such hotels. We will lease any hotels we acquire to a TRS in which we may own up to a 100% interest. Our TRS will enter into management agreements with eligible independent contractors that are not our subsidiaries or otherwise controlled by us to manage the hotel. Thus, independent hotel operators, under management agreements with our TRS, will control the daily operations of any hotels we own.

We depend on the independent management company to adequately operate our hotel as provided in the management agreements. We will not have the authority to require any hotel to be operated in a particular manner or to govern any particular aspect of the daily operations of any hotel (for instance, setting room rates). Thus, even if we believe our hotel is being operated inefficiently or in a manner that does not result in satisfactory occupancy rates, revenue per available room and average daily rates, we may not be able to force the management company to change its method of operation of our hotel. We can only seek redress if a management company violates the terms of the applicable management agreement with the TRS, and then only to the extent of the remedies provided for under the terms of the management agreement. In the event that we need to replace our management company, we may be required by the terms of the management agreement to pay substantial termination fees and may experience significant disruptions at our hotel.

Properties that have significant vacancies could be difficult to sell, which could diminish the return on these properties.

A property may incur vacancies either by the expiration of tenant leases or the continued default of tenants under their leases. If vacancies continue for a long period of time, we may suffer reduced revenues resulting in less cash available to distribute to our stockholders. In addition, because a property’s market value depends principally upon the value of the leases associated with that property, the resale value of a property with high or prolonged vacancies could suffer, which could further reduce our returns.

Our opportunistic property-acquisition strategy involves a higher risk of loss than would a strategy of investing in other properties.

A substantial portion of our portfolio consists of direct investments in opportunistic real estate. We consider opportunistic or enhanced-return properties to be properties with significant possibilities for short-term capital appreciation, such as non-stabilized properties, properties with moderate vacancies or near-term lease rollovers, poorly managed and positioned properties, properties owned by distressed sellers and built-to-suit properties. These properties may include, but are not limited to, office, industrial and retail properties, hospitality properties and undeveloped residential lots.

Traditional performance metrics of real estate assets may not be meaningful for opportunistic real estate. Non-stabilized properties, for example, do not have stabilized occupancy rates to provide a useful measure of revenue. Appraisals may provide a sense of the value of the investment, but any appraisal of the property will be based on numerous estimates, judgments and assumptions that significantly affect the appraised value of the underlying property. Further, an appraisal of a non-stabilized property, in particular, involves a high degree of subjectivity due to high vacancy levels and uncertainties with respect to future market rental rates and timing of lease-up and stabilization. Accordingly, different assumptions may materially change the appraised value of the property. In addition, the value of the property will change over time.

In addition, we may pursue more than one strategy to create value in an opportunistic real estate investment. These strategies may include development, redevelopment, or lease-up of such property. Our ability to generate a return on these investments will depend on numerous factors, some or all of which may be out of our control, such as (i) our ability to correctly price an asset that is not generating an optimal level of revenue or otherwise performing under its potential, (ii) our ability to choose and execute on a successful value-creating strategy, (iii) our ability to avoid delays, regulatory hurdles, and other potential impediments, (iv) local market conditions, and (v) competition for similar properties in the same market. The factors described above make it challenging to evaluate opportunistic real estate investments and make investments in such properties riskier than investments in other properties.

Investment in non-conforming and non-investment grade loans may involve increased risk of loss.

Loans we acquire or originate may not conform to conventional loan criteria applied by traditional lenders and may not be rated or may be rated as non-investment grade. Non-investment grade ratings for these loans typically result from the overall leverage of the loans, the lack of a strong operating history for the properties underlying the loans, the borrowers’ credit history, the properties’ underlying cash flow or other factors. As a result, non-conforming and non-investment grade loans we acquire or originate may have a higher risk of default and loss than conventional loans. Any loss we incur may reduce distributions to stockholders and adversely affect the value of our common stock.

Risks of cost overruns and non-completion of the construction or renovation of the properties underlying loans we make or acquire may materially and adversely affect our investment.

The renovation, refurbishment or expansion by a borrower under a mortgaged or leveraged property involves risks of cost overruns and non-completion. Costs of construction or improvements to bring a property up to standards established for the market position intended for that property may exceed original estimates, possibly making a project uneconomical. Other risks may include environmental risks and the possibility of construction, rehabilitation and subsequent leasing of the property not being completed on schedule. If such construction or renovation is not completed in a timely manner, or if it costs more than expected, the borrower may experience a prolonged impairment of net operating income and may not be able to make payments on our investment.

Investments that are not United States government insured involve risk of loss.

We may originate and acquire uninsured loans and assets as part of our investment strategy. Such loans and assets may include mortgage loans, mezzanine loans and bridge loans. While holding such interests, we are subject to risks of borrower defaults, bankruptcies, fraud, losses and special hazard losses that are not covered by standard hazard insurance. In the event of any default under loans, we bear the risk of loss of principal and nonpayment of interest and fees to the extent of any deficiency between the value of the collateral and the principal amount of the loan. To the extent we suffer such losses with respect to our investments in such loans, the value of our company and the price of our common stock may be adversely affected.

Prepayments can adversely affect the yields on our investments.

The yields of our assets may be affected by the rate of prepayments differing from our projections. Prepayments on debt instruments, where permitted under the debt documents, are influenced by changes in current interest rates and a variety of economic, geographic and other factors beyond our control, and consequently, such prepayment rates cannot be predicted with certainty. If we are unable to invest the proceeds of any prepayments, we receive in assets with at least an equivalent yield, the yield on our portfolio will decline. In addition, we may acquire assets at a discount or premium and if the asset does not repay when expected, our anticipated yield may be impacted. Under certain interest rate and prepayment scenarios we may fail to recoup fully our cost of acquisition of certain investments.

If credit spreads widen before we obtain long-term financing for our assets, the value of our assets may suffer.

We will price our assets based on our assumptions about future credit spreads for financing of those assets. We expect to obtain longer-term financing for our assets using structured financing techniques in the future. In such financings, interest rates are typically set at a spread over a certain benchmark, such as the yield on United States Treasury obligations, swaps, or SOFR. If the spread that borrowers will pay over the benchmark widens and the rates we charge on our assets to be securitized are not increased accordingly, our income may be reduced or we may suffer losses.

Hedging against interest rate and foreign currency exposure may adversely affect our earnings, limit our gains or result in losses, which could adversely affect cash available for distribution to our stockholders.

We have entered into, and may continue to enter into, interest rate swap agreements and other interest rate and foreign currency hedging strategies. Our hedging activity will vary in scope based on the level of interest rates, the type of portfolio investments held, the foreign currency held and other changing market conditions. Interest rate and foreign currency hedging may fail to protect or could adversely affect us because, among other things:

•interest rate and foreign currency hedging can be expensive, particularly during periods of rising and volatile interest rates or exchange rates, as applicable;

•available interest rate and foreign currency hedging products may not correspond directly with the risk for which protection is sought;

•the duration of the hedge may not match the duration of the related liability or asset;

•the amount of income that a REIT may earn from hedging transactions to offset losses due to fluctuations in interest rates is limited by federal tax provisions governing REITs;

•the credit quality of the party owing money on the hedge may be downgraded to such an extent that it impairs our ability to sell or assign our side of the hedging transaction;

•the party owing money in the hedging transaction may default on its obligation to pay; and

•we may purchase a hedge that turns out not to be necessary, i.e., a hedge that is out of the money.

Any hedging activity we engage in may adversely affect our earnings, which could adversely affect cash available for distribution to our stockholders. Therefore, while we may enter into such transactions to seek to reduce interest rate and foreign currency risks, unanticipated changes in interest rates or exchange rates, as applicable, may result in poorer overall investment performance than if we had not engaged in any such hedging transactions. In addition, the degree of correlation between price movements of the instruments used in a hedging strategy and price movements in the portfolio positions being hedged or liabilities being hedged may vary materially. Moreover, for a variety of reasons, we may not seek to establish a perfect correlation between such hedging instruments and the interest rate risk or exchange rate risk sought to be hedged. Any such imperfect correlation may prevent us from achieving the intended accounting treatment and may expose us to risk of loss.

Hedging instruments often are not traded on regulated exchanges, guaranteed by an exchange or its clearing house, or regulated by any U.S. or foreign governmental authorities and involve risks and costs.

The cost of using hedging instruments increases as the period covered by the instrument increases and during periods of rising and volatile interest rates. We may increase our hedging activity and thus increase our hedging costs during periods when interest rates are volatile or rising and hedging costs have increased. In addition, hedging instruments involve risk since they often are not traded on regulated exchanges, guaranteed by an exchange or its clearing house, or regulated by any U.S. or foreign governmental authorities. Consequently, there are no requirements with respect to record keeping, financial responsibility or segregation of customer funds and positions. Furthermore, the enforceability of agreements underlying derivative transactions may depend on compliance with applicable statutory, commodity and other regulatory requirements and, depending on the identity of the counterparty, applicable international requirements. The business failure of a hedging counterparty with whom we enter into a hedging transaction will most likely result in a default. Default by a party with whom we enter into a hedging transaction may result in the loss of unrealized profits and force us to cover our resale commitments, if any, at the then current market price. Although generally we will seek to reserve the right to terminate our hedging positions, it may not always be possible to dispose of or close out a hedging position without the consent of the hedging counterparty, and we may not be able to enter into an offsetting contract in order to cover our risk. We cannot be certain that a liquid secondary market will exist for hedging instruments purchased or sold, and we may be required to maintain a position until exercise or expiration, which could result in losses.

We will assume the credit risk of our counterparties with respect to derivative transactions.

We may enter into derivative contracts for risk management purposes to hedge our exposure to cash flow variability caused by changing interest rates on our variable-rate notes payable. These derivative contracts generally are entered into with bank counterparties and are not traded on an organized exchange or guaranteed by a central clearing organization. We would therefore assume the credit risk that our counterparties will fail to make periodic payments when due under these contracts or become insolvent. If a counterparty fails to make a required payment, becomes the subject of a bankruptcy case, or otherwise defaults under the applicable contract, we will have the right to terminate all outstanding derivative transactions with that counterparty and settle them based on their net market value or replacement cost. In such an event, we may be required to make a termination payment to the counterparty, or we may have the right to collect a termination payment from such counterparty. We assume the credit risk that the counterparty will not be able to make any termination payment owing to us. We may not receive any collateral from a counterparty, or we may receive collateral that is insufficient to satisfy the counterparty’s obligation to make a termination payment. If a counterparty is the subject of a bankruptcy case, we will be an unsecured creditor in such case unless the counterparty has pledged sufficient collateral to us to satisfy the counterparty’s obligations to us.

We will assume the risk that our derivative counterparty may terminate transactions early.

If we fail to make a required payment or otherwise default under the terms of a derivative contract, the counterparty will have the right to terminate all outstanding derivative transactions between us and that counterparty and settle them based on their net market value or replacement cost. In certain circumstances, the counterparty may have the right to terminate derivative transactions early even if we are not defaulting. If our derivative transactions are terminated early, it may not be possible for us to replace those transactions with another counterparty, on as favorable terms or at all.

We may be required to collateralize our derivative transactions.

We may be required to secure our obligations to our counterparties under our derivative contracts by pledging collateral to our counterparties. That collateral may be in the form of cash, securities, or other assets. If we default under a derivative contract with a counterparty, or if a counterparty otherwise terminates one or more derivative contracts early, that counterparty may apply such collateral toward our obligation to make a termination payment to the counterparty. If we have pledged securities or other assets, the counterparty may liquidate those assets in order to satisfy our obligations. If we are required to post cash or securities as collateral, such cash or securities will not be available for use in our business. Cash or securities pledged to counterparties may be repledged by counterparties and may not be held in segregated accounts. Therefore, in the event of a counterparty insolvency, we may not be entitled to recover some, or all collateral pledged to that counterparty, which could result in losses and have an adverse effect on our operations.

Our investments in preferred and common equity securities will be subject to the specific risks relating to the particular issuer of the securities and may involve greater risk of loss than secured debt financings.

We may make equity investments in funds or corporate entities with a primary focus on the commercial real estate and real estate finance industries or with significant exposure to real estate, such as REITs, hotels and gaming companies. We may purchase the common or preferred stock of these entities or purchase or write options with respect to their stock. We may eventually seek to acquire or gain a controlling interest in the companies that we target. We do not expect our non-controlling equity investments in other public companies to represent a substantial portion of our assets at any one time. We may also invest in preferred equity securities issued by funds or corporate entities with a primary focus on the commercial real estate and real estate finance industries or with significant exposure to real estate. Our investments in preferred and common equity securities will involve special risks relating to the particular issuer of the securities, including the financial condition and business outlook of the issuer. Issuers that are REITs and other real estate companies are subject to the inherent risks associated with real estate investments. Furthermore, preferred and common equity securities may involve greater risk of loss than secured debt financings due to a variety of factors, including that such investments are generally unsecured and may also be subordinated to other obligations of the issuer. As a result, investments in preferred and common equity securities are subject to risks of (i) limited liquidity in the secondary trading market, (ii) substantial market price volatility resulting from changes in prevailing interest rates, (iii) subordination to the claims of banks and senior lenders to the issuer, (iv) the operation of mandatory sinking fund or call/redemption provisions during periods of declining interest rates that could cause the issuer to reinvest redemption proceeds in lower yielding assets, (v) the possibility that earnings of the issuer may be insufficient to meet its debt service and distribution obligations, and (vi) the declining creditworthiness and potential for insolvency of the issuer during periods of rising interest rates and economic downturn. These risks may adversely affect the value of outstanding preferred and common equity securities and the ability of the issuers thereof to make principal, interest and/or distribution payments to us.

Declines in the market values of our investments may adversely affect periodic reported results of operations and credit availability, which may reduce earnings and, in turn, cash available for distribution to our stockholders.

Our investments in equity securities are carried at estimated fair value and temporary changes in the market values of those assets will be directly charged or credited to the income statement.

A decline in the market value of our assets may adversely affect us, particularly in instances where we have borrowed money based on the market value of those assets. If the market value of those assets declines, the lender may require us to post additional collateral to support the loan. If we were unable to post the additional collateral, we may have to sell assets at a time when we might not otherwise choose to do so. A reduction in credit available may reduce our earnings and, in turn, cash available for distribution to stockholders.

Further, credit facility providers may require us to maintain a certain amount of cash reserves or to set aside unlevered assets sufficient to maintain a specified liquidity position, which would allow us to satisfy our collateral obligations. As a result, we may not be able to leverage our assets as fully as we would choose, which could reduce our return on equity. In the event that we are unable to meet these contractual obligations, our financial condition could deteriorate rapidly.

Market values of our investments may decline for a number of reasons, such as changes in prevailing interest rates, increases in defaults, increases in voluntary prepayments for our investments that are subject to prepayment risk, widening of credit spreads, downgrades of ratings of the securities by ratings agencies and global recession or significant declines in the overall economy.

Our joint venture partners could take actions that decrease the value of an investment to us and lower our stockholders’ overall return.

We have entered into, and may continue to enter into, joint ventures with third parties to make investments. We may also make investments in partnerships or other co-ownership arrangements or participations. Such investments may involve risks not otherwise present with other methods of investment, including, for example, the following risks:

•that our co-venturer or partner in an investment could become insolvent or bankrupt;

•that such co-venturer or partner may at any time have economic or business interests or goals that are or that become inconsistent with our business interests or goals; or

•that such co-venturer or partner may be in a position to take action contrary to our instructions or requests or contrary to our policies or objectives.

Any of the above might subject us to liabilities and thus reduce our returns on our investment with that co-venturer or partner.

We depend on debtors for our revenue, and, accordingly, our revenue and our ability to make distributions to our stockholders will be dependent upon the success and economic viability of such debtors.

The success of our investments in real estate-related loans and other real estate-related investments materially depend on the financial stability of the debtors underlying such investments. The inability of a single major debtor or a number of smaller debtors to meet their payment obligations could result in reduced revenue or losses for us.

Our inability to sell a property at the time and on the terms we want could limit our ability to pay cash distributions to our stockholders.

Many factors that are beyond our control affect the real estate market and could affect our ability to sell properties for the price, on the terms or within the time frame that we desire. These factors include general economic conditions, the availability of financing, interest rates and other factors, including supply and demand. Because real estate investments are relatively illiquid, we have a limited ability to vary our portfolio in response to changes in economic or other conditions. Further, before we can sell a property on the terms we want, it may be necessary to expend funds to correct defects or to make improvements. However, we can give no assurance that we will have the funds available to correct such defects or to make such improvements. We may be unable to sell our properties at a profit. Our inability to sell properties at the time and on the terms we want could reduce our cash flow and limit our ability to make distributions to our stockholders and could reduce the value of our shares.

Potential development and construction delays and resultant increased costs and risks may hinder our operating results and decrease our net income.

From time to time, we may acquire real property or properties that are under development or construction. Investments in such properties will be subject to the uncertainties associated with the development and construction of real property, including those related to re-zoning land for development, environmental concerns of governmental entities and/or community groups and our builders’ ability to build in conformity with plans, specifications, budgeted costs and timetables. If a builder fails to perform, we may resort to legal action to rescind the purchase or the construction contract or to compel performance. A builder’s performance may also be affected or delayed by conditions beyond the builder’s control. Delays in completing construction could also give tenants the right to terminate preconstruction leases. We may incur additional risks when we make periodic progress payments or other advances to builders before they complete construction. These and other factors can result in increased costs of a project or loss of our investment. In addition, we will be subject to normal lease-up risks relating to newly constructed projects. We also must rely on rental income and expense projections and estimates of the fair market value of property upon completion of construction when agreeing upon a purchase price at the time we acquire the property. If our projections are inaccurate, we may pay too much for a property, and the return on our investment could suffer.

Costs imposed pursuant to governmental laws and regulations may reduce our net income and the cash available for distributions to our stockholders.

Real property and the operations conducted on real property are subject to federal, state and local laws and regulations relating to protection of the environment and human health. We could be subject to liability in the form of fines, penalties or damages for noncompliance with these laws and regulations. These laws and regulations generally govern wastewater discharges, air emissions, the operation and removal of underground and above-ground storage tanks, the use, storage, treatment, transportation and disposal of solid and hazardous materials, the remediation of contamination associated with the release or disposal of solid and hazardous materials, the presence of toxic building materials, and other health and safety-related concerns.

Some of these laws and regulations may impose joint and several liability on the tenants, owners or operators of real property for the costs to investigate or remediate contaminated properties, regardless of fault, whether the contamination occurred prior to purchase, or whether the acts causing the contamination were legal. Activities of our tenants, the condition of properties at the time we buy them, operations in the vicinity of our properties, such as the presence of underground storage tanks, or activities of unrelated third parties may affect our properties.

The presence of hazardous substances, or the failure to properly manage or remediate these substances, may hinder our ability to sell, rent or pledge such property as collateral for future borrowings. Any material expenditures, fines, penalties, or damages we must pay will reduce our ability to make distributions and may reduce the value of our shares.

The costs of defending against claims of environmental liability, of complying with environmental regulatory requirements, of remediating any contaminated property, or of paying personal injury claims could reduce the amounts available for distribution to our stockholders.

Under various federal, state and local environmental laws, ordinances and regulations, a current or previous real property owner or operator may be liable for the cost of removing or remediating hazardous or toxic substances on, under or in such property. These costs could be substantial. Such laws often impose liability whether or not the owner or operator knew of, or was responsible for, the presence of such hazardous or toxic substances. Environmental laws also may impose liens on property or restrictions on the manner in which property may be used or businesses may be operated, and these restrictions may require substantial expenditures or prevent us from entering into leases with prospective tenants that may be impacted by such laws. Environmental laws provide for sanctions for noncompliance and may be enforced by governmental agencies or, in certain circumstances, by private parties. Certain environmental laws and common law principles could be used to impose liability for

the release of and exposure to hazardous substances, including asbestos-containing materials and lead-based paint. Third parties may seek recovery from real property owners or operators for personal injury or property damage associated with exposure to released hazardous substances. The costs of defending against claims of environmental liability, of complying with environmental regulatory requirements, of remediating any contaminated property, or of paying personal injury claims could reduce the amounts available for distribution to our stockholders.

Costs associated with complying with the Americans with Disabilities Act may decrease cash available for distributions.

Our properties may be subject to the Americans with Disabilities Act of 1990, as amended, or the Disabilities Act. Under the Disabilities Act, all places of public accommodation are required to comply with federal requirements related to access and use by disabled persons. The Disabilities Act has separate compliance requirements for “public accommodations” and “commercial facilities” that generally require that buildings and services be made accessible and available to people with disabilities. The Disabilities Act’s requirements could require removal of access barriers and could result in the imposition of injunctive relief, monetary penalties or, in some cases, an award of damages. Any funds used for Disabilities Act compliance will reduce our net income and the amount of cash available for distributions to our stockholders.

Uninsured losses relating to real property or excessively expensive premiums for insurance coverage could reduce our cash flows and the return on our stockholders’ investment.

There are types of losses, generally catastrophic in nature, such as losses due to wars, acts of terrorism, earthquakes, floods, hurricanes, pollution or environmental matters, that are uninsurable or not economically insurable, or may be insured subject to limitations, such as large deductibles or co-payments. Insurance risks associated with potential acts of terrorism could sharply increase the premiums we pay for coverage against property and casualty claims. Additionally, mortgage lenders in some cases have begun to insist that commercial property owners purchase coverage against terrorism as a condition for providing mortgage loans. Such insurance policies may not be available at reasonable costs, if at all, which could inhibit our ability to finance or refinance our properties. In such instances, we may be required to provide other financial support, either through financial assurances or self-insurance, to cover potential losses. We may not have adequate coverage for such losses. If any of our properties incurs a casualty loss that is not fully insured, the value of our assets will be reduced by any such uninsured loss, which may reduce the value of our shares. In addition, other than any working capital reserve or other reserves we may establish, we have no source of funding to repair or reconstruct any uninsured property. Also, to the extent we must pay unexpectedly large amounts for insurance, we could suffer reduced earnings that would result in lower distributions to our stockholders.

Terrorist attacks and other acts of violence or war may affect the markets in which we plan to operate, which could delay or hinder our ability to meet our investment objectives and reduce our stockholders’ overall return.

Terrorist attacks or armed conflicts may directly impact the value of our properties through damage, destruction, loss or increased security costs. Certain of our investments are located in major metropolitan areas. Insurance risks associated with potential acts of terrorism against office and other properties in major metropolitan areas could sharply increase the premiums we pay for coverage against property and casualty claims. Additionally, mortgage lenders in some cases have begun to insist that specific coverage against terrorism be purchased by commercial owners as a condition for providing loans. We may not be able to obtain insurance against the risk of terrorism because it may not be available or may not be available on terms that are economically feasible. The terrorism insurance that we obtain may not be sufficient to cover loss for damages to our properties as a result of terrorist attacks. In addition, certain losses resulting from these types of events are uninsurable and others may not be covered by our terrorism insurance. The costs of obtaining terrorism insurance and any uninsured losses we may suffer as a result of terrorist attacks could reduce the returns on our investments and limit our ability to make distributions to our stockholders.

Properties acquired as part of portfolios or in bulk may subject us to a variety of risks.

We expect that a substantial portion of future residential home property acquisitions will be purchased as portfolios in bulk from owners of portfolios of residential homes. To the extent the management and leasing of such properties have not been consistent with our property management and leasing standards, we may be subject to a variety of risks, including risks relating to the condition of the properties, the credit quality and employment stability of the tenants and compliance with applicable laws, among others. In addition, financial and other information provided to us regarding such portfolios during our due diligence may not be accurate, and we may not discover such inaccuracies until it is too late to seek remedies against such sellers. To the extent we timely pursue such remedies, we may not be able to successfully prevail against the seller in an action seeking damages for such inaccuracies.

A number of our residential home properties are part of homeowners associations (HOAs), and we and tenants of such properties are subject to the rules and regulations of such HOAs, which may be arbitrary or restrictive. Violations of such rules may subject us to additional fees, penalties, and litigation with such HOAs which would be costly.

A number of our residential home properties are located within HOAs, which are private entities that regulate the activities of owners and occupants of, and levy assessments on, properties in a residential subdivision. We pay all HOA fees

and assessments directly. The majority of the HOA fees due on our properties are billed annually. The fees are paid when due by our property managers and are included in our property and operating expenses. HOAs in which we own properties may have or may enact onerous or arbitrary rules that restrict our ability to restore, market or lease our properties or require us to restore or maintain such properties at standards or costs that are in excess of our planned budgets. Such rules may include requirements for landscaping, limitations on signage promoting a property for lease or sale or the requirement that specific construction materials be used in restorations. Some HOAs also impose limits on the number of property owners who may rent their homes, which, if met or exceeded, would cause us to incur additional costs to sell the property and opportunity costs of lost rental revenue. Furthermore, many HOAs impose restrictions on the conduct of occupants of homes and the use of common areas, and we may have tenants who violate HOA rules and for which we may be liable as the property owner. Additionally, the boards of directors of the HOAs in which we own property may not make important disclosures about the properties or may block our access to HOA records, initiate litigation, restrict our ability to sell our properties, impose assessments or arbitrarily change the HOA rules. We may be unaware of or unable to review or comply with HOA rules before purchasing a property, and any such excessively restrictive or arbitrary regulations may cause us to sell such property at a loss, prevent us from renting such property or otherwise reduce our cash flow from such property, which would have an adverse effect on our returns on these properties.

We are subject to tenant relief laws and may be subject to rent control laws, which could negatively impact our rental revenue.

As an owner of residential home rental properties, we expect that we will regularly be seeking to evict tenants who are not paying their rent or are otherwise in material violation of the terms of their lease. Eviction activities will result in additional legal costs and require the time and attention of our management. The eviction process is typically subject to numerous legal requirements and mandatory “cure” policies, which may increase our costs and delay our ability to gain possession of and stabilize a property. Additionally, state and local landlord-tenant laws may impose legal duties on us to assist tenants in relocating to new housing or restrict our ability to recover certain costs or charge tenants for damage tenants cause to our property. Because such laws vary by state and locality, we will need to be familiar with and take appropriate steps to comply with applicable landlord-tenant laws in the jurisdictions in which we operate, and we will need to incur supervisory and legal expenses to ensure such compliance. To the extent that we do not comply with state or local laws, we may be subjected to civil litigation filed by individuals, a class of plaintiffs or by state or local law enforcement. We may be required to pay our adversaries’ litigation fees and expenses if judgment is entered against us in such litigation or if we settle such litigation.

Furthermore, rent control laws may affect our rental revenue. Especially in times of recession and economic slowdown, rent control initiatives can receive significant political support. If rent control becomes applicable to certain of our properties, the effects on both our rental revenue and the value of such properties could be material and adverse.

Class action, tenants’ rights and consumer rights litigation may result in increased expenses and harm our results.

There are numerous tenants’ rights and consumer rights organizations that operate in our residential home property markets, and, as we grow in scale, we may attract attention from some of these organizations and become a target of legal demands or litigation. With the increased market for residential rentals arising from former homeowners who may have lost their properties, some of these organizations may shift their litigation, lobbying, fundraising and grass roots organizing activities to focus on landlord-tenant issues, including issues relating to the Fair Housing Act, or FHA, and its state law counterparts. While we intend to conduct our business lawfully and in compliance with applicable landlord-tenant and consumer laws, such organizations might work in conjunction with trial and pro bono lawyers in one state or multiple states to attempt to bring claims against us on a class action basis for damages or injunctive relief. We cannot anticipate what form such legal actions might take if initiated or what remedies they may seek. Additionally, these organizations may lobby local county and municipal attorneys or state attorneys general to pursue enforcement or litigation against us or may lobby state and local legislatures to pass new laws and regulations to constrain our business operations. If they are successful in any such endeavors, they could limit our business operations and may impose on us significant litigation expenses, including settlements to avoid continued litigation or judgments for damages or injunctions.

Poor tenant selection and defaults by our tenants may negatively affect our financial performance and reputation.

Our success with residential home rentals will depend, in large part, upon our ability to attract and retain qualified tenants for our residential home properties. This will depend, in turn, upon our ability to screen applicants, identify good tenants and avoid tenants who may default. We will inevitably make mistakes in our selection of tenants, and we may rent to tenants whose default on our leases or failure to comply with the terms of the lease or HOA regulations negatively affect our financial performance, reputation and the quality and value of our properties. For example, tenants may default on payment of rent, make unreasonable and repeated demands for service or improvements, make unsupported or unjustified complaints to regulatory or political authorities, make use of our properties for illegal purposes, damage or make unauthorized structural changes to our properties which may not be fully covered by security deposits, refuse to leave the property when the lease is terminated, engage in domestic violence or similar disturbances, disturb nearby residents with noise, trash, odors or eyesores, fail to comply with HOA regulations, sub-let to less desirable individuals in violation of our leases or permit unauthorized persons to live with

them. In addition, defaulting tenants will often be effectively judgment-proof. The process of evicting a defaulting tenant from a family residence can be adversarial, protracted, and costly. Furthermore, some tenants facing eviction may damage or destroy the property. Damage to our properties may significantly delay re-leasing after eviction, necessitate expensive repairs or impair the rental revenue or value of the property, resulting in a lower-than-expected rate of return. In addition, we will incur turnover costs associated with re-leasing the properties, such as marketing expense and brokerage commissions, and will not collect revenue while the property is vacant. Although we will attempt to work with tenants to prevent such damage or destruction, there can be no assurance that we will be successful in all or most cases. Such tenants will not only cause us not to achieve our financial objectives for the properties in which they live, but may subject us to liability, and may damage our reputation with our other tenants and in the communities where we do business.

Risks Related to Our Financing Strategy

We use leverage in connection with our investments, which increases the risk of loss associated with our investments.

We have financed the acquisition and origination of a portion of our investments with mortgages and other borrowings. Although the use of leverage may enhance returns and increase the number of investments that we can make, it may also substantially increase the risk of loss. Our ability to execute this strategy depends on various conditions in the financing markets that are beyond our control, including liquidity and credit spreads. There can be no assurance that leveraged financing will be available to us on favorable terms or that, among other factors, the terms of such financing will parallel the maturities of the underlying assets acquired. If our strategy is not viable, we will have to find alternative forms of long-term financing for our assets, as secured revolving credit facilities and repurchase facilities may not accommodate long-term financing. This could subject us to more restrictive recourse indebtedness and the risk that debt service on less efficient forms of financing would require a larger portion of our cash flows, thereby reducing cash available for distribution to our stockholders, for our operations and for future business opportunities. If alternative financing is not available, we may have to liquidate assets at unfavorable prices to pay off such financing. The return on our investments and cash available for distribution to our stockholders may be reduced to the extent that changes in market conditions cause the cost of our financing to increase relative to the income that we can derive from the assets we acquire.

We may use leverage in connection with any real estate investments we make, which increases the risk of loss associated with this type of investment.

We may finance the acquisition and origination of certain real estate-related investments with warehouse lines of credit and repurchase agreements. In addition, we may engage in various types of securitizations in order to finance our loan originations. Although the use of leverage may enhance returns and increase the number of investments that we can make, it may also substantially increase the risk of loss. There can be no assurance that leveraged financing will be available to us on favorable terms or that, among other factors, the terms of such financing will parallel the maturities of the underlying assets acquired. If alternative financing is not available, we may have to liquidate assets at unfavorable prices to pay off such financing. The return on our investments and cash available for distribution to our stockholders may be reduced to the extent that changes in market conditions cause the cost of our financing to increase relative to the income that we can derive from the assets we acquire.

Our debt service payments will reduce our cash available for distribution. We may not be able to meet our debt service obligations and, to the extent that we cannot, we risk the loss of some or all of our assets to foreclosure or sale to satisfy our debt obligations. If we utilize repurchase agreement financing and if the market value of the assets subject to a repurchase agreement declines, we may be required to provide additional collateral or make cash payments to maintain the loan to collateral value ratio. If we are unable to provide such collateral or cash repayments, we may lose our economic interest in the underlying assets. Further, credit facility providers and warehouse facility providers may require us to maintain a certain amount of cash reserves or to set aside unleveraged assets sufficient to maintain a specified liquidity position that would allow us to satisfy our collateral obligations. As a result, we may not be able to leverage our assets as fully as we would choose, which could reduce our return on investment. In the event that we are unable to meet these collateral obligations, our financial condition could deteriorate rapidly.

We may not be able to access financing sources on attractive terms, which could adversely affect our ability to execute our business plan.

We may finance our assets over the long-term through a variety of means, including repurchase agreements, credit facilities, issuances of commercial mortgage-backed securities and other structured financings. Our ability to execute this strategy will depend on various conditions in the markets for financing in this manner that are beyond our control, including lack of liquidity and greater credit spreads. We cannot be certain that these markets will remain an efficient source of long-term financing for our assets. If our strategy is not viable, we will have to find alternative forms of long-term financing for our assets, as secured revolving credit facilities and repurchase agreements may not accommodate long-term financing. This could subject us to more recourse indebtedness and the risk that debt service on less efficient forms of financing would require a larger portion of our cash flow, thereby reducing cash available for distribution to our stockholders and funds available for operations as well as for future business opportunities.

High mortgage rates or changes in underwriting standards may make it difficult for us to finance or refinance properties, which could reduce our cash flows from operations and the amount of cash distributions we can make.

If mortgage debt is unavailable at reasonable rates, we may not be able to finance our properties. If we place mortgage debt on a property, we run the risk of being unable to refinance part or all of the property subject to the mortgage debt when it becomes due or of being unable to refinance on favorable terms. If interest rates are higher when we refinance properties subject to mortgage debt, our income could be reduced. We may be unable to refinance or may only be able to partly refinance properties if underwriting standards, including loan to value ratios and yield requirements, among other requirements, are stricter than when we originally financed the properties. If any of these events occur, our cash flow could be reduced and/or we might have to pay down existing mortgages. This, in turn, would reduce cash available for distribution to our stockholders, could cause us to require additional capital and may hinder our ability to raise capital by issuing more stock or by borrowing more money.

Lenders may require us to enter into restrictive covenants relating to our operations, which could limit our ability to make distributions to our stockholders.

When providing financing, a lender may impose restrictions on us that affect our distribution and operating policies and our ability to incur additional debt. Loan agreements into which we enter may contain covenants that limit our ability to further mortgage a property or that prohibit us from discontinuing insurance coverage or replacing our advisor. These or other limitations would decrease our operating flexibility and our ability to achieve our operating objectives.

Increases in interest rates would increase the amount of our debt payments and limit our ability to pay distributions to our stockholders.

We have incurred significant amounts of variable-rate debt. Increases in interest rates will increase the cost of that debt, which could reduce our cash flows from operations and the cash we have available to pay distributions to our stockholders. In addition, if we need to repay existing debt during periods of rising interest rates, we could be required to liquidate one or more of our investments at times that may not permit realization of the maximum return on such investments.

In a period of rising interest rates, our interest expense could increase while the interest we earn on our fixed-rate assets would not change, which would adversely affect our profitability.

Our operating results will depend in large part on differences between the income from our assets, net of credit losses and financing costs. Income from our assets may respond more slowly to interest rate fluctuations than the cost of our borrowings. Consequently, changes in interest rates, particularly short-term interest rates, may significantly influence our net income. Increases in these rates will tend to decrease our net income and market value of our assets. Interest rate fluctuations resulting in our interest expense exceeding our interest income would result in operating losses for us and may limit our ability to make distributions to our stockholders. We have incurred debt and increases in interest rates will increase the cost of that debt, which could reduce our cash flow from operations and the cash we have available for distribution to our stockholders. In addition, if we need to repay existing debt during periods of rising interest rates, we could be required to liquidate one or more of our investments at times that may not permit realization of the maximum return on such investments.

Risks related to variable‑rate indebtedness could increase the amount of our debt payments and therefore negatively impact our operating results.

Our debt may be subject to the fluctuation of market interest rates such as SOFR, Prime rate, and other benchmark rates. Should such interest rates increase, our variable-rate debt service payments may also increase, reducing cash available for distributions. Furthermore, if we need to refinance existing debt during periods of rising interest rates, we could be required to liquidate one or more of our investments at times given the property may not support the same level of loan proceeds which may not permit realization of the maximum return on such investments. Additionally, as it relates to any real estate assets that we may own, an increase in interest rates may negatively impact activity in the consumer market and reduce consumer purchases, which could adversely affect us.

We have broad authority to incur debt and high debt levels could hinder our ability to make distributions and decrease the value of our stockholders’ investment.

Our charter limits our total liabilities to 75% of the cost (before deducting depreciation or other noncash reserves) of our tangible assets; however, we may exceed that limit if the majority of the conflicts committee of our board of directors approves each borrowing in excess of our charter limitation and we disclose such borrowings to our stockholders in our next quarterly report with an explanation from the conflicts committee of the justification for the excess borrowing. As of December 31, 2024, our borrowings and other liabilities were within the limits stated in our charter. High debt levels would cause us to incur higher interest charges and higher debt service payments and may also be accompanied by restrictive covenants. These factors could limit the amount of cash we have available to distribute and could result in a decline in the value of our stockholders’ investment.

Changes in the value of Israeli currency may materially and adversely affect our results of operations and financial condition.

As of December 31, 2024, we had bonds outstanding of 1.2 billion Israeli new shekels ($328.0 million as of December 31, 2024), of which 142.0 million Israeli new shekels ($39.0 million as of December 31, 2024) were collateralized by real estate (specified lands in Park Highlands and Richardson). The Series Bonds principal payments are due on dates ranging from January 2025 to February 2029 with interest rates of 3.93% to 9.50%. During the year ended December 31, 2024, we issued 587.1 million Israeli new shekels ($161.4 million as of December 31, 2024) of Series D bonds to Israeli investors pursuant to a public offering registered with the Israel Securities Authority. During the year ended December 31, 2024, we repaid 700.9 million Israeli new shekels ($192.3 million as of December 31, 2024) of Series B bonds and also repaid 218.0 million Israeli new shekels ($59.8 million as of December 31, 2024) of Series C bonds collateralized by Park Highlands undeveloped land in connection with two real estate dispositions.

As a result, we are subject to foreign currency risk due to potential fluctuations in exchange rates between Israeli new shekels and U.S. Dollars. More specifically, a significant change in the value of the Israeli new shekels may have an adverse effect on our results of operations and financial condition. We may attempt to mitigate this foreign currency risk by using derivative contracts.

The deeds of trust that govern the bonds issued to Israeli investors include restrictive covenants that may adversely affect our operations, which could limit our ability to make distributions to our stockholders or fund redemptions.

The deeds of trust that govern the terms of the bonds issued to Israeli investors contain various restrictive covenants. Such restrictive covenants may prohibit us from making certain investments, selling properties or taking certain other actions that our board of directors otherwise believes to be in our best interests. Such restrictions may adversely affect our operations and limit our ability to make distributions to our stockholders or fund redemptions. Under the deed of trust that governs the Series B bonds, Pacific Oak SOR (BVI) Holdings, Ltd. (“Pacific Oak SOR BVI”) must meet financial covenants such as (i) a minimum equity of $475 million; (ii) a maximum debt to capital of 75%; (iii) a minimum adjusted net operating income of $35.0 million for the trailing twelve months and (iv) the volume of development projects should not exceed 10% of the total adjusted balance sheet. Under the deed of trust that governs the Series C bonds, Pacific Oak SOR BVI must meet financial covenants such as (i) a minimum equity of $450 million; (ii) a maximum debt to capital of 75%; and (iii) a maximum loan to collateral ratio of 75%. A violation of any of the foregoing financial covenants constitutes an event of default, result in an increase of the interest rate of the bonds and cause the bonds to become immediately due and payable. Additionally, under the deed of trust that governs the Series D bonds, Pacific Oak SOR BVI must meet financial covenants such as (i) a minimum equity of $450 million; (ii) a maximum debt to capital of 75%; and (iii) a minimum adjusted net operating income of $35.0 million for the trailing twelve months. A violation of any of the foregoing financial covenants constitute an event of default, result in an increase of the interest rate of the bonds and cause the bonds to become immediately due and payable.

The board of directors of Pacific Oak SOR BVI, a separate legal entity, may not always agree with our board of directors..

All of our assets are held through Pacific Oak SOR BVI, of which we are the sole shareholder. Generally, if we want to sell an asset or make other changes to our portfolio, borrow money, or distribute cash to our stockholders (including through the form of redemptions), the Pacific Oak SOR BVI board of directors must agree. Pacific Oak SOR BVI has a seven-member board of directors, three of whom are members of our board of directors and four of whom are Israeli residents unaffiliated with us. As the sole shareholder of Pacific Oak SOR BVI, our interests are generally aligned with those of Pacific Oak SOR BVI. However, the board of directors of Pacific Oak SOR BVI may not agree with our board of directors, even when our interests are aligned. Accordingly, we are subject to the risk that the board of directors of Pacific Oak SOR BVI may prevent us from taking certain actions that our board of directors believes to be in our best interests.

To the extent we refinance mortgage loans or borrow additional funds through the issuance of corporate bonds or mezzanine financing, we expect to incur high interest rates, which may adversely affect our performance, and our current leverage levels may make it challenging to borrow additional funds.

One way we may address our liquidity needs is through refinancing mortgage loans or issuing additional corporate bonds or mezzanine financing. Tighter financial conditions, higher interest rates and lower asset values may make it more difficult to refinance our loans or issue additional bonds on favorable terms. Currently, lending conditions are tight and interest rates elevated. If we incur new borrowings at higher interest rates than our current financings, that will have a negative effect on our operating results. In addition, given our current leverage levels, there are limits to how much we can use additional borrowings to address our liquidity needs. Borrowing additional funds will likely exacerbate these risks and make it even more challenging to use leverage to address our liquidity needs.

The amount and timing of future liquidity to stockholders will be significantly impacted by the office sector.

We own a significant amount of office properties. As of September 30, 2024, approximately 49.6% of the value of our property portfolio consisted of office properties. The office environment remains challenged, with cap rates and discount rates elevated relative to the low-rate environment from 2008 to 2022. As a result, lending and transaction volume for office properties remains depressed, making it difficult to refinance or sell office properties. Office properties have been underperforming as a consequence of remote work and in some cases illiquid since the onset of Covid-19. Because our strategy has been opportunistic, with short-hold periods, our financings have also been relatively short-term. This has caused a situation where our financial liabilities are coming due, when office properties are difficult to stabilize, refinance and sell at terms that are attractive. If we are unable to make a mortgage payment when due, it may go into default and we may lose a property. If we are unable to make a bond payment when due, that could trigger full repayment under the bonds. In the near term, we are focused on avoiding scenarios such as this by managing our liquidity situation through a combination of asset sales, issuing debt, and refinancings (whether through mortgage loans or corporate level financing) or letting properties go to the lender. All of these approaches and alternative approaches involve risk. Selling assets in these circumstances involves risks that they may be sold at unfavorable prices. Refinancings present risk because interest rates are high, often times refinanced rates are higher than relinquished rates; refinancing at higher interest rates will increase interest expense which will hurt our financial condition and NAV. If we were to forfeit properties through default we would lose potential future appreciation in that property and, in certain cases, potentially being liable for payment guarantees on the mortgage loans.

We do not currently anticipate having funds available for stockholder liquidity in the near term. We believe that the office sector will eventually stabilize, that occupancy, transaction activity and lending in the office sector will improve, and that our liquidity situation will improve at that time. As conditions improve we intend to revisit liquidity strategies for stockholders. Until that happens, we expect to continue to face risks with regard to our liquidity situation, along with downward pressure on our NAV from operating and interest expenses.

In certain cases, financings for our investments may be recourse to us.

Generally, commercial real estate financings are structured as nonrecourse to the borrower. However, lenders customarily will require that a creditworthy parent entity enter so-called “recourse carveout” guarantees. For example, a lender might require guarantees from the guarantors for the completion of tenant improvements, payment of the guarantor’s obligation, or against certain bad acts. In addition, certain guarantees typically provide that the loan will be a full personal recourse obligation of the guarantor, for certain actions.

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

As of December 31, 2024, we had $244.5 million of debt obligations scheduled to mature over the period from January 1, 2025 through December 31, 2025. Certain of these debt obligations have extension options if we comply with certain debt covenants that may include one or a combination of the following ratios: debt-to-value, debt yield and debt service coverage. In order to satisfy obligations as they mature, we plan to utilize extension options available in the respective loan agreements, may seek to refinance certain debt instruments, may market one or more properties for sale or may negotiate a turnover of one or more secured properties back to the related mortgage lender. We believe that with these options we have sufficient cash on hand and availability to address our debt maturities and capital needs scheduled to mature over the period January 1, 2025 through December 31, 2025. However, tighter financial conditions, higher interest rates and lower asset values may make it more difficult to refinance our loans or to sell assets on favorable terms. In recent years, we have accessed debt capital through the Israeli capital markets, but that source of debt capital may not be available in the future because of changing conditions, such as the ongoing conflict between Israel and Hamas. We will decide on a case by case basis whether to repay or refinance each of these loans, based on factors such as our available liquidity and when the loan is due, the terms offered, if any, for refinancing, and the value of our equity in the property relative to the outstanding debt balance. It is possible we may choose not to repay or refinance some of the maturing loans, which would ultimately result in losing possession of the underlying property. Because of our limited liquidity relative to our needs, we may be limited in our ability to retain certain investments and to make new investments, which may have an adverse impact on our financial performance, our ability to make distributions and the value of our shares of common stock. We may be forced to sell an asset on unfavorable terms to improve our liquidity situation and meet our future liquidity needs.

Federal Income Tax Risks

Failure to qualify as a REIT would reduce our net earnings available for investment or distribution.

Our qualification as a REIT will depend upon our ability to meet requirements regarding our organization and ownership, distributions of our income, the nature and diversification of our income and assets and other tests imposed by the Internal Revenue Code. If we fail to qualify as a REIT for any taxable year after electing REIT status, we will be subject to U.S. federal income tax on our taxable income at corporate rates (currently, 21% rate) and distributions to our stockholders would not be deductible by us in determining our taxable income. In addition, we would generally be disqualified from treatment as a REIT for the four taxable years following the year in which we lost our REIT status. Losing our REIT status would reduce our net earnings available for investment or distribution to stockholders because of the additional tax liability. In addition, distributions to stockholders would no longer qualify for the dividends-paid deduction and we would no longer be required to pay distributions. If this occurs, we might be required to borrow funds or liquidate some investments in order to pay the applicable tax.

Failure to qualify as a REIT would subject us to U.S. federal income tax, which would reduce the cash available for distribution to our stockholders.

We believe that we have operated and will continue to operate in a manner that will allow us to continue to qualify as a REIT for federal income tax purposes, commencing with the taxable year ended December 31, 2010. However, the U.S. federal income tax laws governing REITs are extremely complex, and interpretations of the U.S. federal income tax laws governing qualification as a REIT are limited. Qualifying as a REIT requires us to meet various tests regarding the nature of our assets and our income, the ownership of our outstanding stock, and the amount of our distributions on an ongoing basis. Accordingly, we cannot be certain that we will be successful in operating so we can remain qualified as a REIT. While we intend to continue to operate so that we will qualify as a REIT, given the highly complex nature of the rules governing REITs, the ongoing importance of factual determinations, including the tax treatment of certain investments we may make, and the possibility of future changes in our circumstances, no assurance can be given that we will so qualify for any particular year. If we fail to qualify as a REIT in any calendar year and we do not qualify for certain statutory relief provisions, we would be required to pay U.S. federal income tax on our taxable income at regular corporate rates, and distributions to our stockholders would not be deductible by us in determining our taxable income. In such a case, we might need to borrow money or sell assets to pay that tax. Our payment of income tax would decrease the amount of our income available for distribution to our stockholders. Furthermore, if we fail to maintain our qualification as a REIT and we do not qualify for certain statutory relief provisions, we no longer would be required to distribute substantially all of our REIT taxable income to our stockholders. Unless our failure to qualify as a REIT were excused under federal tax laws, we would be disqualified from taxation as a REIT for the four taxable years following the year during which qualification was lost.

Our stockholders may have current tax liability on distributions they elect to reinvest in our common stock.

If our stockholders participated in our dividend reinvestment plan, prior to its suspension as of March 28, 2023, they will be deemed to have received, and for U.S. federal income tax purposes will be taxed on, the amount reinvested in shares of our common stock to the extent the amount reinvested was not a tax-free return of capital. In addition, our stockholders will be treated for U.S. federal income tax purposes as having received an additional distribution to the extent the shares are purchased at a discount to fair market value, if any. As a result, unless our stockholders are tax-exempt entities, they may have to use funds from other sources to pay their tax liability on the value of the shares of common stock received.

Even if we qualify as a REIT for U.S. federal income tax purposes, we may be subject to federal, state, local or other tax liabilities that reduce our cash flow and our ability to pay distributions to our stockholders.

Even if we qualify as a REIT for U.S. federal income tax purposes, we may be subject to some federal, state and local taxes on our income or property. For example:

•In order to qualify as a REIT, we must distribute annually at least 90% of our REIT taxable income to our stockholders (which is determined without regard to the dividends-paid deduction or net capital gain). To the extent that we satisfy the 90% distribution requirement but distribute less than 100% of our REIT taxable income and our net capital gain, we will be subject to U.S. federal corporate income tax on the undistributed income.

•We will be subject to a 4% nondeductible excise tax on the amount, if any, by which distributions we pay in any calendar year are less than the sum of 85% of our ordinary income, 95% of our capital gain net income and 100% of our undistributed income from prior years.

•If we elect to treat property that we acquire in connection with a foreclosure of a mortgage loan or certain leasehold terminations as “foreclosure property,” we may avoid the 100% tax on the gain from a resale of that property, but the income from the sale or operation of that property may be subject to corporate income tax at the highest applicable rate.

•If we sell an asset, other than foreclosure property, that we hold primarily for sale to customers in the ordinary course of business, our gain would be subject to the 100% “prohibited transaction” tax unless such sale were made by one of our TRS or the sale met certain “safe harbor” requirements under the Internal Revenue Code.

•Any domestic TRS of ours will be subject to U.S. federal corporate income tax on its income, and on any non-arm’s-length transactions between us and any TRS, for instance, excessive rents charged to a TRS could be subject to a 100% tax. We may be subject to tax on income from certain activities conducted as a result of taking title to collateral.

•We may be subject to state or local income, property and transfer taxes, such as mortgage recording taxes.

REIT distribution requirements could adversely affect our ability to execute our business plan.

We generally must distribute annually at least 90% of our REIT taxable income, subject to certain adjustments and excluding any net capital gain, in order for U.S. federal corporate income tax not to apply to earnings that we distribute. To the extent that we satisfy this distribution requirement but distribute less than 100% of our REIT taxable income (and any net capital gain), we will be subject to U.S. federal corporate income tax on undistributed amounts. In addition, we will be subject to a 4% nondeductible excise tax if the actual amount that we pay out to our stockholders in a calendar year is less than a minimum amount specified under U.S. federal tax laws. We also may decide to retain net capital gain we earn from the sale or other disposition of our property and pay U.S. federal income tax directly on such income. In that event, our stockholders would be treated as if they earned that income and paid the tax on it directly. However, stockholders that are tax-exempt, such as charities or qualified pension plans, would have no benefit from their deemed payment of such tax liability unless they file U.S. federal income tax returns and thereon seek a refund of such tax. We also will be subject to corporate tax on any undistributed taxable income. We intend to make distributions to our stockholders to comply with the REIT requirements of the Internal Revenue Code.

From time to time, we may generate taxable income greater than our income for financial reporting purposes, or our taxable income may be greater than our cash flow available for distribution to stockholders (for example, where a borrower defers the payment of interest in cash pursuant to a contractual right or otherwise). If we do not have other funds available in these situations, we could be required to borrow funds, sell investments at disadvantageous prices or find another alternative source of funds to pay distributions sufficient to enable us to pay out enough of our taxable income to satisfy the REIT distribution requirements and to avoid corporate income tax and the 4% excise tax in a particular year. These alternatives could increase our costs or reduce our equity. Thus, compliance with the REIT requirements may hinder our ability to operate solely on the basis of maximizing profits.

To maintain our REIT status, we may be forced to forego otherwise attractive business or investment opportunities, which may delay or hinder our ability to meet our investment objectives and reduce our stockholders’ overall return.

To qualify as a REIT, we must satisfy certain tests on an ongoing basis concerning, among other things, the sources of our income, nature of our assets and the amounts we distribute to our stockholders. We may be required to pay distributions to stockholders at times when it would be more advantageous to reinvest cash in our business or when we do not have funds readily available for distribution. Compliance with the REIT requirements may hinder our ability to operate solely on the basis of maximizing profits and reduce the value of our stockholders’ investment.

If our operating partnership fails to maintain its status as a partnership or a disregarded entity for U.S. federal income tax purposes, its income would be subject to taxation and our REIT status would be terminated.

We currently intend to maintain the status of our operating partnership as a disregarded entity or a partnership for U.S. federal income tax purposes. During periods in which our operating partnership is treated as a disregarded entity, our operating partnership will not be subject to U.S. federal income tax on its income. Rather, its income will be attributed to us as the sole owner for U.S. federal income tax purposes of the operating partnership. However, during periods in which our operating partnership has more than one owner, if the Internal Revenue Service (“IRS”) were to successfully challenge the status of our operating partnership as a partnership, it would potentially be taxable as a corporation. In such event, this would reduce the amount of distributions that our operating partnership could make to us. This would also result in our losing REIT status and becoming subject to a corporate level tax on our own income. This would substantially reduce our cash available to pay distributions and the return on a stockholder’s investment. In addition, if any of the entities through which our operating partnership owns its properties, in whole or in part, loses its characterization as a partnership for U.S. federal income tax purposes, the underlying entity would become subject to taxation as a corporation, thereby reducing distributions to our operating partnership and jeopardizing our ability to maintain REIT status.

Potential characterization of distributions or gain on sale may be treated as unrelated business taxable income to tax-exempt investors.

If (i) all or a portion of our assets are subject to the rules relating to taxable mortgage pools, (ii) we are a “pension-held REIT,” (iii) a tax-exempt stockholder has incurred debt to purchase or hold our common stock, or (iv) the residual Real Estate Mortgage Investment Conduit interests, or REMICs, we buy (if any) generate “excess inclusion income,” then a portion of the

distributions to and, in the case of a stockholder described in clause (iii), gains realized on the sale of common stock by such tax-exempt stockholder may be subject to U.S. federal income tax as unrelated business taxable income under the Internal Revenue Code.

The tax on prohibited transactions will limit our ability to engage in transactions that would be treated as sales for U.S. federal income tax purposes.

A REIT’s net income from prohibited transactions is subject to a 100% tax unless a safe harbor exception applies. In general, prohibited transactions are sales or other dispositions of assets, other than foreclosure property, deemed held primarily for sale to customers in the ordinary course of business. We might be subject to this tax if we were to dispose of loans in a manner that was treated as a sale of the loans for U.S. federal income tax purposes. Therefore, in order to avoid the prohibited transactions tax, we may choose not to engage in certain sales of loans at the REIT level and may limit the structures we utilize for our securitization transactions, even though the sales or structures might otherwise be beneficial to us.

It may be possible to reduce the impact of the prohibited transaction tax by conducting certain activities through a TRS. However, to the extent that we engage in such activities through a TRS, the income associated with such activities may be subject to full corporate income tax.

Complying with REIT requirements may force us to liquidate otherwise attractive investments.

To qualify as a REIT, we must ensure that at the end of each calendar quarter, at least 75% of the value of our total assets consists of cash, cash items, government securities and qualified REIT real estate assets, including certain mortgage loans and residential and commercial mortgage-backed securities, as well as shares of another REIT. The remainder of our investment in securities (other than government securities and qualified real estate assets) generally cannot include more than 10% of the outstanding voting securities of any one issuer or more than 10% of the total value of the outstanding securities of any one issuer. In addition, in general, no more than 5% of the value of our assets (other than government securities and qualified real estate assets) can consist of the securities of any one issuer, no more than 20% (25% for taxable years before 2018) of the value of our total assets can be represented by securities of one or more TRS and no more than 25% of the value of our total assets can be represented by “non-qualified publicly offered REIT debt instruments.” If we fail to comply with these requirements at the end of any calendar quarter, we must correct the failure within 30 days after the end of the calendar quarter or qualify for certain statutory relief provisions to avoid losing our REIT qualification and suffering adverse tax consequences. As a result, we may be required to liquidate from our portfolio otherwise attractive investments. These actions could have the effect of reducing our income and amounts available for distribution to our stockholders.

Liquidation of assets may jeopardize our REIT qualification.

To qualify as a REIT, we must comply with requirements regarding our assets and our sources of income. If we are compelled to liquidate our investments to repay obligations to our lenders, we may be unable to comply with these requirements, ultimately jeopardizing our qualification as a REIT, or we may be subject to a 100% tax on any resultant gain if we sell assets that are treated as dealer property or inventory.

Complying with REIT requirements may limit our ability to hedge effectively.

The REIT provisions of the Internal Revenue Code may limit our ability to hedge our assets and operations. Under these provisions, any income that we generate from transactions intended to hedge our interest rate, inflation and/or currency risks will be excluded from gross income for purposes of the REIT 75% and 95% gross income tests if the purpose of the instrument is to (i) hedge interest rate risk on liabilities incurred to carry or acquire real estate, (ii) hedge risk of currency fluctuations with respect to any item of income or gain that would be qualifying income under the REIT 75% or 95% gross income tests, or (iii) manage risk with respect to the termination of certain prior hedging transactions described in (i) and/or (ii) above and, in each case, such instrument is properly identified under applicable Treasury Regulations. Income from hedging transactions that do not meet these requirements will generally constitute nonqualifying income for purposes of both the REIT 75% and 95% gross income tests. As a result of these rules, we may have to limit our use of hedging techniques that might otherwise be advantageous, which could result in greater risks associated with interest rate or other changes than we would otherwise incur.

Our ownership of and relationship with our TRS will be limited and a failure to comply with the limits would jeopardize our REIT status and may result in the application of a 100% excise tax.

A REIT may own up to 100% of the stock of one or more TRS. A TRS may earn income that would not be qualifying income if earned directly by the parent REIT. Both the subsidiary and the REIT must jointly elect to treat the subsidiary as a TRS. A corporation of which a TRS directly or indirectly owns more than 35% of the voting power or value of the stock will automatically be treated as a TRS. Overall, no more than 20% (25% for taxable years before 2018) of the value of a REIT’s assets may consist of stock or securities of one or more TRS. A domestic TRS will pay federal, state and local income tax at regular corporate rates on any income that it earns. In addition, the TRS rules limit the deductibility of interest paid or accrued by a TRS to its parent REIT to assure that the TRS is subject to an appropriate level of corporate taxation. The rules also impose a 100% excise tax on certain transactions between a TRS and its parent REIT that are not conducted on an arm’s-length basis.

We cannot assure our stockholders that we will be able to comply with the 20% value limitation on ownership of TRS stock and securities on an ongoing basis so as to maintain REIT status or to avoid application of the 100% excise tax imposed on certain non-arm’s length transactions.

If any hotel managers that we may engage do not qualify as “eligible independent contractors,” or if our hotel is not a “qualified lodging facility,” we will fail to qualify as a REIT.

Rent paid by a lessee that is a “related party tenant” of ours generally will not be qualifying income for purposes of the two gross income tests applicable to REITs, but an exception is provided for leases of “qualified lodging facilities” to a TRS so long as the hotel is managed by an “eligible independent contractor” and certain other requirements are satisfied. We expect to lease all or substantially all hotels to the TRS lessee, which is a disregarded subsidiary that is intended to qualify as a TRS. We expect that the TRS lessee will engage hotel managers, including our affiliated property manager and third-party property managers that are intended to qualify as “eligible independent contractors.” Among other requirements, in order to qualify as an eligible independent contractor, the hotel manager must not own, directly or through its equity owners, more than 35% of our outstanding stock, and no person or group of persons can own more than 35% of our outstanding stock and the equity interests of the hotel manager, taking into account certain ownership attribution rules. The ownership attribution rules that apply for purposes of these 35% thresholds are complex and monitoring actual and constructive ownership of our stock by our hotel managers and their owners may not be practical. Accordingly, there can be no assurance that these ownership levels will not be exceeded.

In addition, for a hotel management company to qualify as an eligible independent contractor, such company or a related person must be actively engaged in the trade or business of operating “qualified lodging facilities” (as defined below) for one or more persons not related to the REIT or its TRS at each time that such company enters into a hotel management contract with a TRS or its TRS lessee. No assurances can be provided that any hotel managers that we may engage will in fact comply with this requirement in the future. Failure to comply with this requirement would require us to find other managers for future contracts, and if we hired a management company without knowledge of the failure, it could jeopardize our status as a REIT.

Finally, each property that we lease to our TRS lessee must be a “qualified lodging facility.” A “qualified lodging facility” is a hotel, motel, or other establishment more than one-half of the dwelling units in which are used on a transient basis, including customary amenities and facilities, provided that no wagering activities are conducted at or in connection with such facility by any person who is engaged in the business of accepting wagers and who is legally authorized to engage in such business at or in connection with such facility. The REIT provisions of the Code provide only limited guidance for making determinations under the requirements for qualified lodging facilities, and there can be no assurance that these requirements will be satisfied.

The ability of our board of directors to revoke our REIT qualification without stockholder approval may subject us to U.S. federal income tax and reduce distributions to our stockholders.

Our charter provides that our board of directors may revoke or otherwise terminate our REIT election, without the approval of our stockholders, if it determines that it is no longer in our best interest to continue to qualify as a REIT. While we intend to elect and qualify to be taxed as a REIT, we may not elect to be treated as a REIT or may terminate our REIT election if we determine that qualifying as a REIT is no longer in our best interests. If we cease to be a REIT, we would become subject to U.S. federal income tax on our taxable income and would no longer be required to distribute most of our taxable income to our stockholders, which may have adverse consequences on our total return to our stockholders and on the market price of our common stock.

Dividends payable by REITs do not qualify for the reduced tax rates.

In general, the maximum tax rate for dividends payable to domestic stockholders that are individuals, trusts and estates is 20%. Dividends payable by REITs, however, are generally not eligible for this reduced rate; provided under current law, individuals may be able to deduct 20% of income received as ordinary REIT dividends until 2026, thus reducing the maximum effective U.S. federal income tax rate on such dividend to 29.6%. In addition, Treasury Regulations impose a minimum holding period for the 20% deduction that was not set forth in the Internal Revenue Code. Under the Treasury Regulations, in order for a REIT dividend with respect to a share of REIT stock to be treated as a qualified REIT dividend, the U.S. stockholder (i) must have held the share for more than 45 days during the 91-day period beginning on the date which is 45 days before the date on which such share becomes ex-dividend with respect to such dividend and (ii) cannot have been under an obligation to make related payments with respect to positions in substantially similar or related property, e.g., pursuant to a short sale. While this tax treatment does not adversely affect the taxation of REITs or dividends paid by REITs, the more favorable rates applicable to regular corporate dividends could cause investors who are individuals, trusts or estates to perceive investments in REITs to be relatively less attractive than investments in stock of non-REIT corporations that pay dividends, which could adversely affect the value of the stock of REITs, including our common stock.

If the IRS were to successfully recast our Israeli bond offerings as equity issuances rather than borrowings, our REIT qualification could be threatened.

We have structured our Israeli bond offerings to be viewed for U.S. federal income tax purposes as a borrowing by us via disregarded entities. If the IRS were to successfully recast our Israeli bond offerings as equity issuances rather than borrowings, our REIT qualification could be threatened.

Qualifying as a REIT involves highly technical and complex provisions of the Internal Revenue Code.

Qualification as a REIT involves the application of highly technical and complex Internal Revenue Code provisions for which only limited judicial and administrative authorities exist. Even a technical or inadvertent violation could jeopardize our REIT qualification. Our continued qualification as a REIT will depend on our satisfaction of certain asset, income, organizational, distribution, stockholder ownership and other requirements on a continuing basis. In addition, our ability to satisfy the requirements to qualify as a REIT depends in part on the actions of third parties over which we have no control or only limited influence, including in cases where we own an equity interest in an entity that is classified as a partnership for U.S. federal income tax purposes. Furthermore, new tax legislation, administrative guidance or court decisions, in each instance potentially with retroactive effect, could make it more difficult or impossible for us to qualify as a REIT.

The taxation of distributions to our stockholders can be complex; however, distributions that we make to our stockholders generally will be taxable as ordinary income, which may reduce their anticipated returns from an investment in us.

Distributions that we make to our taxable stockholders to the extent of our current and accumulated earnings and profits (and not designated as capital gain dividends or qualified dividend income) generally will be taxable as ordinary income. However, a portion of our distributions may (i) be designated by us as capital gain dividends generally taxable as long-term capital gain to the extent that they are attributable to net capital gain recognized by us, (ii) be designated by us as qualified dividend income generally to the extent they are attributable to dividends we receive from non-REIT corporations, such as our TRS, or (iii) constitute a return of capital generally to the extent that they exceed our current and accumulated earnings and profits as determined for U.S. federal income tax purposes. A return of capital distribution is not taxable but has the effect of reducing the basis of a stockholder’s investment in our common stock.

We may be required to pay some taxes due to actions of a TRS which would reduce our cash available for distribution to stockholders.

Any net taxable income earned directly by a TRS, or through entities that are disregarded for U.S. federal income tax purposes as entities separate from our TRS, will be subject to federal and possibly state corporate income tax. In this regard, several provisions of the laws applicable to REITs and their subsidiaries ensure that a TRS will be subject to an appropriate level of U.S. federal income taxation. For example, a TRS may be limited in its ability to deduct certain interest payments made to an affiliated REIT. In addition, the REIT has to pay a 100% penalty tax on some payments that it receives or on some deductions taken by a TRS if the economic arrangements between the REIT, the REIT's customers, and the TRS are not comparable to similar arrangements between unrelated parties. Finally, some state and local jurisdictions may tax some of our income even though as a REIT we are not subject to U.S. federal income tax on that income because not all states and localities follow the U.S. federal income tax treatment of REITs. To the extent that we and our affiliates are required to pay federal, state and local taxes, we will have less cash available for distributions to stockholders.

We may distribute our common stock in a taxable distribution, in which case stockholders may sell shares of our common stock to pay tax on such distributions, and stockholders may receive less in cash than the amount of the dividend that is taxable.

We may make taxable distributions that are payable in cash and common stock. The IRS has issued private letter rulings to other REITs treating certain distributions that are paid partly in cash and partly in stock as taxable distributions that would satisfy the REIT annual distribution requirement and qualify for the dividends paid deduction for U.S. federal income tax purposes. Those rulings may be relied upon only by taxpayers to whom they were issued, but we could request a similar ruling from the IRS. Accordingly, it is unclear whether and to what extent we will be able to make taxable distributions payable in cash and common stock. If we made a taxable dividend payable in cash and common stock, taxable stockholders receiving such distributions will be required to include the dividend as taxable income to the extent of our current and accumulated earnings and profits, as determined for U.S. federal income tax purposes. As a result, stockholders may be required to pay income tax with respect to such distributions in excess of the cash distributions received. If a U.S. stockholder sells the common stock that it receives as a dividend in order to pay this tax, the sales proceeds may be less than the amount recorded in earnings with respect to the dividend, depending on the market price of our common stock at the time of the sale. Furthermore, with respect to certain non-U.S. stockholders, we may be required to withhold U.S. federal income tax with respect to such dividends, including in respect of all or a portion of such dividend that is payable in common stock.

Investments in other REITs and real estate partnerships could subject us to the tax risks associated with the tax status of such entities.

We may invest in the securities of other REITs and real estate partnerships. Such investments are subject to the risk that any such REIT or partnership may fail to satisfy the requirements to qualify as a REIT or a partnership, as the case may be, in any given taxable year. In the case of a REIT, such failure would subject such entity to taxation as a corporation, may require

such REIT to incur indebtedness to pay its tax liabilities, may reduce its ability to make distributions to us, and may render it ineligible to elect REIT status prior to the fifth taxable year following the year in which it fails to so qualify. In the case of a partnership, such failure could subject such partnership to an entity level tax and reduce the entity’s ability to make distributions to us. In addition, such failures could, depending on the circumstances, jeopardize our ability to qualify as a REIT.

Non-U.S. stockholders will be subject to U.S. federal withholding tax and may be subject to U.S. federal income tax on distributions received from us and upon the disposition of our shares.

Subject to certain exceptions, distributions received from us will be treated as dividends of ordinary income to the extent of our current or accumulated earnings and profits. Such dividends ordinarily will be subject to U.S. withholding tax at a 30% rate, or such lower rate as may be specified by an applicable income tax treaty, unless the distributions are treated as “effectively connected” with the conduct by the non-U.S. stockholder of a U.S. trade or business. Pursuant to the Foreign Investment in Real Property Tax Act of 1980, or FIRPTA, capital gain distributions attributable to sales or exchanges of “U.S. real property interests,” or USRPIs, generally (subject to certain exceptions for “qualified foreign pension funds” and certain “qualified shareholders”) will be taxed to a non-U.S. stockholder (other than a qualified foreign pension plan, entities wholly owned by a qualified foreign pension plan and certain publicly traded foreign entities) as if such gain were effectively connected with a U.S. trade or business unless FIRPTA provides an exemption. However, a capital gain dividend will not be treated as effectively connected income if (i) the distribution is received with respect to a class of stock that is regularly traded on an established securities market located in the United States and (ii) the non-U.S. stockholder does not own more than 10% of the class of our stock at any time during the one-year period ending on the date the distribution is received. We do not anticipate that our shares will be “regularly traded” on an established securities market for the foreseeable future, and therefore, this exception is not expected to apply.

Gain recognized by a non-U.S. stockholder upon the sale or exchange of our common stock generally will not be subject to U.S. federal income taxation unless such stock constitutes a USRPI under FIRPTA (subject to specific FIRPTA exemptions for certain non-U.S. stockholders). Our common stock will not constitute a USRPI so long as we are a “domestically-controlled qualified investment entity.” A domestically-controlled qualified investment entity includes a REIT if at all times during a specified testing period, less than 50% in value of such REIT’s stock is held directly or indirectly by non-U.S. stockholders. Final Treasury regulations effective April 25, 2024 (the “Final Regulations”) modify the existing prior tax guidance relating to the manner in which we determine whether we are a domestically controlled REIT. These regulations provide a look through rule for our stockholders that are non-publicly traded partnerships, non-public REITs, non-public regulated investment companies, or domestic “C” corporations owned 50% or more directly or indirectly by foreign persons (“foreign-controlled domestic corporations”) and treat “qualified foreign pension funds” and “international organizations” as foreign persons for this purpose.

The look-through rule in the Final Regulations applicable to foreign-controlled domestic corporations will not apply to a REIT for a period of up to ten years if the REIT is able to satisfy certain requirements during that time, including not undergoing a significant change in its ownership and not acquiring a significant amount of new U.S. real property interests, in each case since April 24, 2024, the date the Final Regulations were issued. If a REIT fails to satisfy such requirements during the ten-year period, the look-through rule in the Final Regulations applicable to foreign-controlled domestic corporations will apply to such REIT beginning on the day immediately following the date of such failure. We cannot predict when we will commence being subject to such look-through rule in the Final Regulations and we may not be able to satisfy the applicable requirements for the duration of the ten-year period. Prospective investors are urged to consult with their tax advisors regarding the application and impact of these rules.

Even if we do not qualify as a domestically-controlled qualified investment entity at the time a non-U.S. stockholder sells or exchanges our common stock, gain arising from such a sale or exchange would not be subject to U.S. taxation under FIRPTA as a sale of a USRPI if: (a) our common stock is “regularly traded,” as defined by applicable Treasury Regulations, on an established securities market, and (b) such non-U.S. stockholder owned, actually and constructively, 10% or less of our common stock at any time during the five-year period ending on the date of the sale. However, it is not anticipated that our common stock will be “regularly traded” on an established market. We encourage stockholders to consult their tax advisors to determine the tax consequences applicable to them if they are non-U.S. stockholders.

Our charter limits the number of shares a person may own, which may discourage a takeover that could otherwise result in a premium price paid to stockholders.

Our charter, with certain exceptions, authorizes our board of directors to take such actions as are necessary and desirable to preserve our qualification as a REIT. To help us comply with the REIT ownership requirements of the Internal Revenue Code, among other purposes, our charter prohibits a person from directly or constructively owning more than 9.8% in value of the aggregate of the outstanding shares of our stock of any class or series or more than 9.8% in value or number of shares, whichever is more restrictive, of the aggregate of the outstanding shares of our common stock, unless exempted (prospectively or retroactively) by our board of directors. This restriction may have the effect of delaying, deferring or preventing a change in

control of us, including an extraordinary transaction (such as a merger, tender offer or sale of all or substantially all of our assets) that might otherwise provide a premium price for holders of our shares of common stock.

We may be subject to adverse legislative or regulatory tax changes.

At any time, the U.S. federal income tax laws or regulations governing REITs or the administrative interpretations of those laws or regulations may be amended. We anticipate that legislative and regulatory changes, including tax reform, may be likely in the 119th Congress, which convened in January 2025. We cannot predict when or if any new U.S. federal income tax law, regulation or administrative interpretation, or any amendment to any existing U.S. federal income tax law, regulation or administrative interpretation, will be adopted, promulgated or become effective and any such law, regulation or interpretation may take effect retroactively. We and our stockholders could be adversely affected by any such change in, or any new, U.S. federal income tax law, regulation or administrative interpretation. You are urged to consult with your tax advisor regarding the effect of potential future changes to the federal tax laws on an investment in our shares of common stock.

Retirement Plan Risks

If stockholders fail to meet the fiduciary and other standards under the Employee Retirement Income Security Act of 1974, as amended, or “ERISA,” or the Code as a result of an investment in our stock, they could be subject to criminal and civil penalties.

There are special considerations that apply to employee benefit plans subject to ERISA (such as profit-sharing, section 401(k) or pension plans) and other retirement plans or accounts subject to Section 4975 of the Code (such as an IRA) or any entity whose assets include such assets (each a “Benefit Plan”) that are investing in our shares. If stockholders are investing the assets of such a plan or account in our common stock, they should satisfy themselves that:

•the investment is consistent with their fiduciary and other obligations under ERISA and the Code;

•the investment is made in accordance with the documents and instruments governing the plan or IRA, including the plan’s or account’s investment policy;

•the investment satisfies the prudence and diversification requirements of Sections 404(a)(1)(B) and 404(a)(1)(C) of ERISA and other applicable provisions of ERISA and the Code;

•the investment in our shares, for which no trading market may exist, is consistent with the liquidity needs of the plan or IRA;

•the investment will not produce an unacceptable amount of “unrelated business taxable income” for the plan or IRA;

•the stockholders will be able to comply with the requirements under ERISA and the Code to value the assets of the plan or IRA annually; and

•the investment will not constitute a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code.

With respect to the annual valuation requirements described above, we expect to provide an estimated value of our net assets per share annually to those fiduciaries (including IRA trustees and custodians) who request it. Although this estimate will be based upon determinations of the NAV of our shares in accordance with our valuation procedures, no assurance can be given that such estimated value will satisfy the applicable annual valuation requirements under ERISA and the Code. The Department of Labor or the Internal Revenue Service may determine that a plan fiduciary or a fiduciary acting for an IRA is required to take further steps to determine the value of our common shares. In the absence of an appropriate determination of value, a plan fiduciary or a fiduciary acting for an IRA may be subject to damages, penalties or other sanctions.

Failure to satisfy the fiduciary standards of conduct and other applicable requirements of ERISA and the Code may result in the imposition of civil and criminal penalties and can subject the fiduciary to claims for damages or for equitable remedies, including liability for investment losses. In addition, if an investment in our shares constitutes a non-exempt prohibited transaction under ERISA or the Code, the fiduciary or IRA owner who authorized or directed the investment may be subject to the imposition of excise taxes with respect to the amount invested. Additionally, the investment transaction may have to be undone. In the case of a prohibited transaction involving an IRA owner, the IRA may be disqualified as a tax-exempt account and all of the assets of the IRA may be deemed distributed and subjected to tax. ERISA plan fiduciaries and IRA owners should consult with counsel before making an investment in our shares.

If our assets are deemed to be plan assets, our advisor and we may be exposed to liabilities under Title I of ERISA and the Code.

In some circumstances where an ERISA plan holds an interest in an entity, the assets of the entity are deemed to be ERISA plan assets unless an exception applies. This is known as the “look-through rule.” Under those circumstances, the obligations and other responsibilities of plan sponsors, plan fiduciaries and plan administrators, and of parties in interest and disqualified persons, under Title I of ERISA and Section 4975 of the Code, as applicable, may be applicable, and there may be liability under these and other provisions of ERISA and the Code. We believe that our assets should not be treated as plan assets

because the shares should qualify as “publicly-offered securities” that are exempt from the look-through rules under applicable Treasury Regulations. We note, however, that because certain limitations are imposed upon the transferability of shares so that we may qualify as a REIT, and perhaps for other reasons, it is possible that this exemption may not apply. If that is the case, and if our advisor or we are exposed to liability under ERISA or the Code, our performance and results of operations could be adversely affected. Prior to making an investment in us, stockholders should consult with their legal and other advisors concerning the impact of ERISA and the Code on this investment and our performance.

We do not intend to provide investment advice to any potential investor for a fee. However, we, our advisor and our respective affiliates receive certain fees and other consideration disclosed herein in connection with an investment. If it were determined we provided a Benefit Plan investor with investment advice for a fee, it could give rise to a determination that we constitute an investment advice fiduciary under ERISA. Such a determination could give rise to claims that our fee arrangements constitute non-exempt prohibited transactions under ERISA or the Code and/or claims that we have breached a fiduciary duty to a Benefit Plan investor. Adverse determinations with respect to ERISA fiduciary status or non-exempt prohibited transactions could result in significant civil penalties and excise taxes.

ITEM 1B.    UNRESOLVED STAFF COMMENTS

None.

ITEM 1C.    CYBERSECURITY

Risk Management and Strategy

We and our advisor have processes for assessing, identifying, and managing material risks from cybersecurity threats. These processes are integrated into our overall risk management systems as they have been designed to fit within and complement the enterprise-wide risk assessment framework as implemented by our management and our advisor and as overseen by our board of directors. These processes also include overseeing and identifying risks from cybersecurity threats associated with the use of third-party service providers.

Our management and our advisor are responsible for establishing and monitoring the integrity and effectiveness of our controls and other procedures, which are designed to ensure that all information required to be disclosed is recorded, processed, summarized and reported accurately and on a timely basis, and all such information is accumulated and communicated to management and the audit committee, as appropriate, to allow for timely decisions regarding such disclosures. The controls and procedures subject to the board’s oversight include processes related to managing material risks from cybersecurity threats. Accordingly, our cybersecurity processes have been integrated into our overall processes.

In the last three fiscal years, cybersecurity threats have not materially affected us, including our business strategy, results of operations or financial condition. See also, Item 1A, “Risk Factors—Risks Related to an Investment in Us—We face risks associated with security breaches through cyber-attacks, cyber intrusions or otherwise, as well as other significant disruptions of our information technology (IT) networks and related systems.”

Governance

The audit committee oversees, among other things, a system of internal controls, including internal controls designed to assess, identify, and manage material risks from cybersecurity threats. The audit committee is composed of all of our independent directors.

Our advisor utilizes a team of dedicated external IT professionals, which leads enterprise-wide cybersecurity strategy, policy, standards, architecture, and processes. The IT professionals provide periodic reports to our board of directors, our advisor, as well as our Chief Executive Officer and other members of our senior management as appropriate. These reports include updates on our cybersecurity risks and threats, the status of projects to strengthen our information security systems, assessments of the information security program, and the emerging threat landscape. Our program is regularly evaluated by our advisor and external experts with the results of those reviews reported to senior management and the board of directors. We also actively engage with key vendors, industry participants, and intelligence and law enforcement communities as part of our continuing efforts to evaluate and enhance the effectiveness of our information security policies and procedures.

ITEM 2.    PROPERTIES

As of December 31, 2024, we consolidated nine office complexes, encompassing, in the aggregate, 3.2 million rentable square feet, one residential home portfolio consisting of 2,093 residential homes, one apartment property containing 317 units, one hotel property with 196 rooms, three investments in undeveloped land with 247 developable acres, one office/retail development property and held an interest in three investments in unconsolidated entities. The following table provides summary information regarding our properties and investments in unconsolidated entities as of December 31, 2024:

Property<br>Location of Property	Date Acquired	Property Type	Rentable Square Feet	Occupancy	Ownership %
Richardson Office<br><br>Richardson, TX	11/23/2011	Office	429,839	62.2%	100.0%
Park Centre<br><br>Austin, TX	03/28/2013	Office	205,096	53.9%	100.0%
Crown Pointe<br><br>Dunwoody, GA	02/14/2017	Office	509,792	62.9%	100.0%
The Marq<br><br>Minneapolis, MN	03/01/2018	Office	522,656	83.5%	100.0%
Eight & Nine Corporate Centre<br><br>Franklin, TN	06/08/2018	Office	315,299	83.5%	100.0%
Georgia 400 Center<br><br>Alpharetta, GA	05/23/2019	Office	429,771	67.7%	100.0%
Lincoln Court<br><br>Campbell, CA	10/05/2020	Office	123,849	65.0%	100.0%
Oakland City Center<br><br>Oakland, CA	10/05/2020	Office	368,059	56.3%	100.0%
Madison Square<br><br>Phoenix, AZ	10/05/2020	Office	281,916	63.1%	90.0%
Residential Homes Portfolio<br><br>Multiple Locations	Multiple	Residential	3,025,740	93.5%	100.0%
1180 Raymond<br><br>Newark, NJ	08/20/2013	Apartment	268,462	92.1%	100.0%
Q&C Hotel<br><br>New Orleans, LA	10/05/2020	Hotel	—	N/A	90.0%
Richardson Land I<br><br>Richardson, TX	11/23/2011	Undeveloped Land	—	N/A	100.0%
Richardson Land II<br><br>Richardson, TX	09/04/2014	Undeveloped Land	—	N/A	100.0%
Park Highlands Land II<br><br>North Las Vegas, NV	12/10/2013	Undeveloped Land	—	N/A	100.0%
210 West 31st Street<br><br>New York, NY	10/05/2020	Office/Retail	—	N/A	80.0%
110 William Street (Unconsolidated)<br><br>New York, NY	N/A	Office	928,157	29.4%	(1)
353 Sacramento Street (Unconsolidated)<br><br>San Francisco, CA	N/A	Office	284,751	46.3%	55.0%
Pacific Oak Opportunity Zone Fund I (Unconsolidated)<br><br>Multiple Locations	N/A	Apartment	310,218	93.4%	47.0%
Total			8,003,605

_____________________

(1) As of December 31, 2024, we held 100% of common and 77.5% of preferred interests in the 110 William Joint Venture and are entitled to profit participation interests based on a tiered waterfall calculation which may not be reflective of our economic interest in the entity.

Portfolio Lease Expiration

The following table reflects the lease expiration of our consolidated office complexes as of December 31, 2024:

Year of Expiration	Number of Leases<br>Expiring	Annualized Base Rent<br><br>(in thousands) (1)		% of Portfolio Annualized Base Rent<br>Expiring		Leased Rentable Square Feet <br>Expiring	% of Portfolio Rentable Square Feet<br>Expiring
2025	76	$	12,417	20.4	%	370,117	14.5	%
2026	66	11,327		18.6	%	358,155	15.3	%
2027	59	7,510		12.3	%	254,432	10.9	%
2028	35	5,749		9.4	%	239,558	10.4	%
2029	40	6,878		11.3	%	302,262	12.9	%
2030	20	6,930		11.4	%	204,850	20.3	%
2031	9	1,526		2.5	%	67,086	2.9	%
2032	6	2,250		3.7	%	107,841	4.6	%
Thereafter	54	6,309		10.4	%	250,470	8.2	%
Total	365	$	60,896	100	%	2,154,771	100	%

_____________________

(1) Annualized base rent represents annualized contractual base rental income as of December 31, 2024, adjusted to straight-line any contractual tenant concessions (including free rent), rent increases and rent decreases from the lease’s inception through the balance of the lease term.

ITEM 3.    LEGAL PROCEEDINGS

From time to time, we are party to legal proceedings that arise in the ordinary course of our business. Management is not aware of any legal proceedings of which the outcome is reasonably likely to have a material adverse effect on our results of operations or financial condition, nor are we aware of any such legal proceedings contemplated by government agencies.

ITEM 4.    MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5.    MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Stockholder Information

As of March 25, 2025, we had 103.0 million shares of common stock outstanding held by a total of 17,000 stockholders. The number of stockholders is based on the records of SS&C GIDS, Inc., who serves as our transfer agent.

Market Information

No public market currently exists for our shares of common stock, and we currently have no plans to list our shares on a national securities exchange. Until our shares are listed, if ever, our stockholders may not sell their shares unless the buyer meets applicable suitability and minimum purchase requirements. In addition, our charter prohibits the ownership of more than 9.8% of our stock, unless exempted by our board of directors. Consequently, there is the risk that our stockholders may not be able to sell their shares at a time or price acceptable to them.

On December 10, 2024, our board of directors approved an estimated value per share of our common stock of $5.72 based on the estimated value of our assets less the estimated value of our liabilities, or net asset value, divided by the number of shares outstanding, all as of September 30, 2024. There have been no material changes between September 30, 2024 and December 10, 2024 to the net values of our assets and liabilities that materially impacted the overall estimated value per share. We are providing this estimated value per share to assist broker-dealers that participated in our initial public offering in meeting their customer account statement reporting obligations under National Association of Securities Dealers Conduct Rule 2340 as required by the Financial Industry Regulatory Authority (“FINRA”). This valuation was performed in accordance with the provisions of and also to comply with Practice Guideline 2013–01, Valuations of Publicly Registered Non-Listed REITs, issued by the Institute for Portfolio Alternatives (“IPA”) in April 2013.

December 10, 2024 Valuation

Our conflicts committee of the board of directors, composed of all our independent directors, is responsible for the oversight of the valuation process, including the review and approval of the valuation process and methodologies used to determine our estimated value per share, the consistency of the valuation and appraisal methodologies with real estate industry standards and practices and the reasonableness of the assumptions used in the valuations and appraisals. The estimated value per share was based upon the recommendation and valuation prepared by our advisor. Our advisor’s valuation of our consolidated real estate properties and 110 William Street, a property we own via an unconsolidated entity, was based on valuations performed by third-party valuation firms. The valuation of our two other unconsolidated entity investments and certain other assets and liabilities were based our advisor’s estimates. The third-party valuations represent appraisals for 110 William Street and our consolidated real estate properties, except for our consolidated residential home portfolio consisting of 2,145 homes, which was valued at the total of the individual home values generated by the third-party valuation firm’s proprietary automated valuation models. The appraisals were performed by Kroll, LLC (“Kroll”), except for the undeveloped land which was appraised by Colliers International Valuation & Advisory Services, LLC (“Colliers”). Valuation of the residential home portfolio was performed by HouseCanary, Inc. (“HouseCanary”). Kroll, Colliers, and HouseCanary, each an independent third-party valuation firm, also prepared appraisal/valuation reports, summarizing key inputs and assumptions, for each of the real estate properties they respectively valued. In arriving at its recommendation, the conflicts committee of the board of directors relied in part on valuation and appraisal methodologies that the independent third-party valuation firms and our advisor believe are standard and acceptable in the real estate and non-listed REIT industries for the types of assets and liabilities held by us. The methodologies and assumptions used to determine the estimated value of our assets and liabilities are described further below.

Our advisor used the valuations from the third-party valuation firms, and our advisor’s estimated values for other assets and liabilities to calculate and recommend an estimated value per share of our common stock. Upon (i) the conflicts committee’s receipt and review of our advisor’s valuation report, including our advisor’s summary of the appraisal/valuation reports prepared by Kroll, Colliers, and HouseCanary, and (ii) the conflicts committee’s review of the reasonableness of our estimated value per share resulting from our advisor’s valuation process, and (iii) in light of other factors considered by the conflicts committee and the conflicts committee’s own extensive knowledge of our assets and liabilities, the conflicts committee concluded that the estimated value per share proposed by our advisor was reasonable and recommended to the board of directors that it adopt $5.72 as the estimated value per share of our common stock. At the special meeting of the board of directors, the board of directors unanimously approved the recommendation of the conflicts committee and approved $5.72 as the estimated value of our common stock, which determination is ultimately and solely the responsibility of the board of directors.

The table below sets forth the calculation of our estimated value per share as of December 10, 2024, as well as the calculation of our prior estimated value per share as of November 30, 2023:

	December 10, 2024<br>Estimated Value per Share		November 30, 2023<br><br>Estimated Value per Share (1)		Change in Estimated Value per Share
Real estate properties (2)	$	13.15	$	15.66	$	(2.51)
Real estate equity securities (3)	0.17		0.26		(0.09)
Cash	0.18		0.75		(0.57)
Investments in unconsolidated entities (4)	1.71		1.44		0.27
Other assets (5)	0.33		0.61		(0.28)
Mortgage debt (6)	(5.41)		(6.19)		0.78
Series Bonds (7)	(3.65)		(3.54)		(0.11)
Advisor participation fee liability (8)	(0.07)		(0.07)		—
Other liabilities	(0.64)		(0.78)		0.14
Non-controlling interest (9)	(0.05)		(0.11)		0.06
Estimated value per share	$	5.72	$	8.03	$	(2.31)
Estimated enterprise value premium	None assumed		None assumed		None assumed
Total estimated value per share	$	5.72	$	8.03	$	(2.31)

_____________________

(1) The November 30, 2023 estimated value per share was approved by the board of directors; for more information, see our Current Report on Form 8-K filed with the SEC on December 6, 2023.

(2) The decrease in real estate properties was primarily due to decreases in property fair values and property dispositions.

(3) The decrease in real estate equity securities was primarily due to decreases in securities values and securities dispositions.

(4) The increase in investments in unconsolidated entities was primarily due to additional contributions made.

(5) The decrease in other assets was primarily due to restricted cash used for repayments on the Series B bonds.

(6) The decrease in mortgage debt was primarily due to repayments including those upon asset sales.

(7) The increase in bonds was primarily due to the issuance of Series D bonds and partially offset by repayments on the Series B bonds.

(8) Represents the potential participation fee payable to the PORT Advisor as it relates to the operations or assets of PORT.

(9) The decrease in non-controlling interests was primarily due to non-controlling interest distributions and a decline in non-controlling interest values related to property value declines.

The change in our estimated value per share from the previous estimate was primarily due to the items listed below. The changes are not equal to the change in values of each asset and liability group presented in the table above due to real estate property acquisitions, dispositions, debt financings and other factors, which caused the value of certain asset or liability groups to change with no impact to our fair value of equity or the overall estimated value per share.

	Change in Estimated Value per Share
November 30, 2023 estimated value per share	$	8.03
Changes to estimated value per share
Investments
Real estate	(0.79)
Investments in unconsolidated entities	(0.07)
Investments in equity securities	0.07
Leasing costs & capital expenditures on real estate	(0.25)
Total change related to investments	(1.04)
Operating cash flows (1)	(0.69)
Foreign currency loss	(0.07)
Property selling and financing costs (2)	(0.19)
Advisor disposition fees (3)	(0.01)
Mortgage debt	(0.10)
Series Bonds	(0.18)
Other	(0.03)
Total change in estimated value per share	$	(2.31)
December 10, 2024 estimated value per share	$	5.72

_____________________

(1) Operating cash flow reflects modified funds from operations (“MFFO”) attributable to common stockholders, adjusted for our share of (i) deductions for capitalized interest expense, real estate taxes and insurance and (ii) add backs for deferred financing cost amortization. We compute MFFO in accordance with the definition included in the practice guideline issued by the IPA in November 2010.

(2) Property selling and financing costs include (i) $8.9 million, or $0.09 per share, for selling costs, (ii) $6.8 million, or $0.07 per share, for financing costs including the issuance costs related to Series D bonds issued in April 2024, and (iii) $2.9 million, or $0.03 per share, for income tax payable related to land sales out of a taxable REIT subsidiary in the year ending September 30, 2024.

(3) Advisor disposition fees were $1.3 million or $0.01 per share.

As with any valuation methodology, the methodologies used are based upon a number of estimates and assumptions that may not be accurate or complete. Different parties using different assumptions and estimates could derive a different estimated value per share, and these differences could be significant. The estimated value per share is not audited and does not represent the fair value of our assets less the fair value of our liabilities according to U.S. generally accepted accounting principles, nor does it represent a liquidation value of our assets and liabilities or the price at which our shares of common stock would trade at on a national securities exchange. The estimated value per share does not reflect a discount for the fact that we are externally managed, nor does it reflect a real estate portfolio premium/discount versus the sum of the individual property values. The estimated value per share also does not take into account estimated disposition costs and fees for real estate properties that are not under contract to sell, debt prepayment penalties that could apply upon the prepayment of certain of our debt obligations, the impact of restrictions on the assumption of debt or hedging costs which may be incurred upon the termination of certain of our hedges prior to expiration. The estimated value per share also does not consider characteristics of our working capital, leverage and other financial structures where some buyers may ascribe different values.

Methodology

Our goal for the valuation was to arrive at a reasonable and supportable estimated value per share, using a process that was designed to be in compliance with the IPA Valuation Guidelines and using what we and our advisor deemed to be appropriate valuation methodologies and assumptions. The following is a summary of the real estate valuation engagements as well as the methodologies, assumptions and estimates used to value our assets and liabilities:

Real Estate

Independent Valuation Firm

Kroll(1) was selected by our advisor and approved by our conflicts committee to appraise all of our consolidated real estate properties and 110 William Street, but excluding our investments in undeveloped land and the residential home portfolio. Colliers(2) was selected by our advisor and approved by our conflicts committee to appraise our investments in undeveloped land (hereinafter the properties appraised by Kroll and Colliers are the “Appraised Properties”). HouseCanary(3) was selected by our advisor and approved by our conflicts committee to provide a value for our residential home portfolio using its proprietary automated valuation models. HouseCanary’s values were not appraisals and should not be construed as appraisals. Kroll and Colliers are engaged in the business of appraising commercial real estate properties, and HouseCanary is engaged in the business of real estate valuations, data, and analytics and none are affiliated with us or our advisor. The compensation we pay to Kroll, Colliers, and HouseCanary is based on the scope of work and not on the values of our real estate properties. In preparing their valuation reports, Kroll, Colliers, and HouseCanary did not, and were not requested to, inspect or otherwise evaluate the physical conditions of our properties or solicit third-party indications of interest for our properties or common stock in connection with possible purchases thereof or the acquisition of all or any part of us.

_____________________

(1) Kroll is actively engaged in the business of appraising commercial real estate properties similar to those owned by us in connection with public securities offerings, private placements, business combinations and similar transactions. We engaged Kroll to deliver appraisal reports for all of our consolidated investments in real estate properties and 110 William Street, but excluding our investments in undeveloped land and the residential home portfolio, and Kroll received fees upon the delivery of such reports. In addition, we have agreed to indemnify Kroll against certain liabilities arising out of this engagement. In the seven years prior to the date of this filing, Kroll and its affiliates have provided a number of commercial real estate, appraisal and valuation services for us and/or its affiliates and have received fees in connection with such services. Kroll and its affiliates may from time to time in the future perform other commercial real estate, appraisal and valuation services for us and our affiliates in transactions related to the properties that are the subjects of the appraisals, so long as such other services do not adversely affect the independence of the applicable Kroll appraiser as certified in the applicable appraisal reports.

(2) Colliers is actively engaged in the business of appraising commercial real estate properties similar to those owned by us in connection with public securities offerings, private placements, business combinations and similar transactions. We engaged Colliers to deliver appraisal reports for certain of our investments in undeveloped land and Colliers received fees upon the delivery of such reports. In addition, we have agreed to indemnify Colliers against certain liabilities arising out of this engagement. Colliers and its affiliates are engaged in the ordinary course of business in many areas related to commercial real estate and related services. Colliers and its affiliates may from time to time in the future perform other commercial real estate, appraisal, valuation and financial advisory services for us and our affiliates in transactions related to the properties that are the subjects of the appraisals, so long as such other services do not adversely affect the independence of the applicable Colliers appraiser as certified in the applicable appraisal reports.

(3) HouseCanary is actively engaged in the business of real estate valuation, data, and analytics related to homes similar to those owned by us. We engaged HouseCanary to provide a valuation for each of the residential homes in our portfolio, and HouseCanary received fees upon the delivery of its valuation report. HouseCanary’s proprietary automated valuation models generate value estimates based on multiple factors, but are not guarantees of property value, characteristics or condition. HouseCanary’s valuations were provided to assist our advisor in calculating the estimated value per share of our common stock. HouseCanary did not make an independent determination as to whether its valuation methodology was suitable for such purpose or calculate or participate in the calculation of the estimated value per share. In addition, we have agreed to indemnify HouseCanary against certain liabilities arising out of this engagement. HouseCanary is engaged in the ordinary course of business in many areas related to real estate and related services. HouseCanary and its affiliates may from time to time in the future perform other valuation and advisory services for us related to the properties that are the subjects of the valuation report, so long as such other services do not adversely affect the independence of HouseCanary.

Kroll, Colliers, and HouseCanary collected all reasonably available material information that each deemed relevant and took into account customary real estate valuation and financial considerations and procedures as each deemed relevant in valuing our real estate properties. Kroll relied in part on property-level information provided by our advisor, including (i) property historical and projected operating revenues and expenses; (ii) property lease agreements; and (iii) information regarding recent or planned capital expenditures. Colliers was provided with land surveys and development plans and relied in part on such information. HouseCanary was provided with property addresses, purchase prices and dates, and certain characteristics for each of our homes and relied in part on such information. Kroll, Colliers, and HouseCanary relied on the information supplied or otherwise made available by us and our advisor to be accurate and complete, prepared in good faith, and to reflect the best currently available estimates and judgments of ours and our advisor, and did not independently verify any such information. In addition, Kroll, Colliers, and HouseCanary relied on us or our advisor to inform them if any information previously provided became inaccurate or needed updating during the course of their engagements or if there were any exceptions to the typical assumptions that we have clear and marketable title to each real estate property, that no title defects exist, that any improvements were made in accordance with law, that no hazardous materials are present or were present previously, that no deed restrictions exist, and that no changes to zoning ordinances or regulations governing use, density or shape are pending or being considered. Kroll, Colliers, and HouseCanary did not independently verify any such information.

For the appraisals, Kroll and Colliers performed the appraisals in accordance with the Code of Ethics and the Uniform Standards of Professional Appraisal Practice, or USPAP, the real estate appraisal industry standards created by The Appraisal Foundation, as well as the requirements of the state where each real property is located. Each appraisal was reviewed, approved and signed by an individual with the professional designation of MAI (Member of the Appraisal Institute). The use of the appraisal reports is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives. In the appraisals, and as outlined in the appraisal reports, Kroll and Colliers necessarily made numerous assumptions as of various points in time and with respect to general business, economic, and regulatory conditions, industry performance, and other matters, many of which are beyond Kroll’s and Colliers’ control and our control.

For the residential home portfolio valuation, HouseCanary generated an estimated value for each individual home using its proprietary automated valuation models built to leverage machine learning algorithms and an extensive database that may include MLS information, county assessor records, mortgage and other public records, sales history for a subject property and its surrounding neighborhood, real estate market trends, and macro and local economic and housing data. Each individual home was assigned the HouseCanary value, an estimated value generated by HouseCanary’s proprietary automated valuation model, unless the dataset available did not meet specified criteria. In those cases, the individual home was assigned an indexed value, an estimated value calculated by multiplying a property's last third-party valuation by a price change factor from HouseCanary’s Home Price Index. For our residential home portfolio valuation by HouseCanary, 80% of the individual homes were assigned the automated valuation model value and 20% were assigned the indexed value as of September 30, 2024. HouseCanary’s valuations were not appraisals and should not be construed as appraisals and were based on computer models developed by HouseCanary which utilize data believed to be reliable but there can be no guarantee that the data is reliable, accurate, or complete.

Although Kroll, Colliers, and HouseCanary considered any comments received from us or our advisor to their valuations, ultimately the valuations were determined by Kroll, Colliers, and HouseCanary. The valuations were necessarily estimates, and the price at which our properties may actually be sold could differ materially from the valuations. The valuations were necessarily based on assumptions, analyses, opinions, and conclusions reflecting the general business, economic, financial and other circumstances and conditions, and data in existence as of or prior to the date of the valuations. Material change in assumptions, circumstances, conditions, matters, or data after the date of the valuations, or discovery after the date of the valuations that data which had been considered reliable and which had been utilized was in fact unreliable, inaccurate, or incomplete, may affect such valuations. The Kroll, Colliers, and HouseCanary engagement letters and the valuation reports contain qualifications and limitations that qualify the analyses, opinions, and conclusions reflected in the valuations. The valuations are addressed solely to us to assist our advisor in calculating and recommending an updated estimated value per share of our common stock, and Kroll, Colliers, and HouseCanary have not made independent determinations as to whether the valuations are suitable for such a purpose. The valuations are not addressed to the public and may not be relied upon by any other person to establish an estimated value per share of our common stock and do not constitute a recommendation to any person to purchase or sell any shares of our common stock. Kroll, Colliers, and HouseCanary were responsible only for the

valuation services outlined in their engagement letters, and were not responsible for, did not calculate, and did not participate in the determination of the estimated value per share of our common stock.

The foregoing is a summary description of the engagements, standard assumptions, qualifications and limitations that generally apply to the Kroll, Colliers, and HouseCanary valuations.

Real Estate Valuation

As of September 30, 2024, we owned nine office properties, encompassing, in the aggregate, 3.2 million rentable square feet and these properties were 66% occupied. In addition, we owned one residential home portfolio consisting of 2,145 residential homes and one apartment property, containing 317 units, which were 94% and 95% occupied, respectively. We also owned one hotel property with 196 rooms, four investments in undeveloped land with 581 developable acres and one office/retail development property. We consolidated real estate properties had a total estimated value of $1.4 billion as of September 30, 2024. These properties had a total cost basis of $1.3 billion as of September 30, 2024, which is the total of acquisition prices of $1.1 billion, $13.4 million for the acquisition of minority interests in entities, $144.7 million in capital expenditures, leasing commissions and tenant improvements since inception and $10.8 million of acquisition fees and expenses. We consolidated real estate value compared to this cost basis represents an increase of 5.6%.

We obtained appraisals for each of the consolidated real estate properties except for the residential home portfolio which was valued as described above. Our consolidated Appraised Properties had a total appraised value of $946.9 million, and our consolidated residential home portfolio had a total estimated value of $406.4 million.

For the appraisals, Kroll and Colliers used various methodologies, as appropriate, such as the direct capitalization approach, discounted cash flow analyses and sales comparison approach. Kroll relied primarily on 10-year discounted cash flow analyses for the final valuations of each of the real estate properties (which exclude undeveloped land) and Colliers relied primarily on the sales comparison approach for the final valuations of the undeveloped land that it appraised. Kroll calculated the discounted cash flow value of our real estate properties (which exclude undeveloped land) using property-level cash flow estimates, terminal capitalization rates and discount rates that fall within ranges they believe would be used by similar investors to value the properties we own based on recent comparable market transactions adjusted for unique property and market-specific factors. Colliers relied primarily on the sales comparison approach and estimated the value of the undeveloped land based on the most applicable recent comparable market transactions. For the valuation of the residential home portfolio as described above, the HouseCanary valuations were the individual home values using its proprietary automated valuation models.

The following table summarizes the key assumptions that were used to value the consolidated Appraised Properties and residential homes:

	Range in Values	Weighted-Average Basis
Consolidated Appraised Properties (Excluding Undeveloped Land and Office/Retail Development Property)
Terminal capitalization rate	5.50% to 9.00%	8.00%
Discount rate	6.75% to 10.32%	9.33%
Net operating income compounded annual (decline) growth rate (1)	(0.70%) to 13.84%	7.34%
Undeveloped Land
Price per acre (2)	$493,000 to $1,016,000	$510,000
Office/Retail Development Property
Price per FAR (Floor area ratio) (3)	$575 to $600	$600
Residential Homes
Price per square foot	$22 to $318	$131

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(1) The net operating income compounded annual growth rates (“CAGRs”) reflect both the contractual and market rents and reimbursements (in cases where the contractual lease period is less than the valuation period) net of expenses over the valuation period. The range of CAGRs shown is the constant annual rate at which the net operating income is projected to grow to reach the net operating income in the final year of the hold period for each of the properties.

(2) The weighted-average price per acre was primarily driven by our investments in undeveloped land with 581 developable acres located in North Las Vegas, Nevada.

(3) Price per FAR is before deducting for the ground lease liability and estimated demolition costs, and the range in values reflects different development scenarios.

While we believe that Kroll’s, Colliers’, and HouseCanary’s assumptions and inputs are reasonable, a change in these assumptions and inputs would significantly impact the estimated values of our real estate properties and, thus, its estimated value per share. As of September 30, 2024, certain of our real estate assets have non-stabilized occupancies. Appraisals may provide a sense of the value of the investment, but any appraisal of the property will be based on numerous estimates, judgments and assumptions that significantly affect the appraised value of the underlying property. An appraisal of a non-stabilized property, in particular, involves a high degree of subjectivity due to high vacancy levels and uncertainties with respect to future market rental rates and timing of lease-up and stabilization. Accordingly, different assumptions may materially change the appraised value of the property. The table below illustrates the impact on the estimated value per share if the terminal capitalization rates or discount rates were adjusted by 25 basis points, and assuming all other factors remain unchanged, with respect to the consolidated Appraised Properties referenced in the table above (excluding undeveloped land and the office/retail development property). Additionally, the table below illustrates the impact on the estimated value per share if the terminal capitalization rates or discount rates for these properties were adjusted by 5% in accordance with the IPA guidance:

	Increase (Decrease) on the Estimated Value per Share due to
	Decrease of 25 basis points		Increase of 25 basis points		Decrease of 5%		Increase of 5%
Terminal capitalization rates	$	0.12	$	(0.11)	$	0.22	$	(0.20)
Discount rates	0.19		(0.12)		0.21		(0.20)

The table below illustrates the impact on the estimated value per share if the price per acre of the investments in undeveloped land was adjusted by 5%:

	Increase (Decrease) on the Estimated Value per Share due to
	Decrease of 5%		Increase of 5%
Price per acre	$	(0.13)	$	0.13

The table below illustrates the impact on the estimated value per share if the price per FAR of the investment in the office/retail development property was adjusted by 5%:

	Increase (Decrease) on the Estimated Value per Share due to
	Decrease of 5%		Increase of 5%
Price per FAR	$	(0.01)	$	0.01

The table below illustrates the impact on the estimated value per share if the price per square foot of the residential home portfolio was adjusted by 5%:

	Increase (Decrease) on the Estimated Value per Share due to
	Decrease of 5%		Increase of 5%
Price per square foot	$	(0.20)	$	0.20

Investments in Unconsolidated Entities

As of September 30, 2024, we held three investments in unconsolidated entities including: 110 William Street, 353 Sacramento, and Pacific Oak Opportunity Zone Fund I.

110 William Street is an office property containing 928,157 rentable square feet located in New York, New York. We hold a 77.5% preferred equity interest and a 100% common equity interest in a joint venture that owns 110 William Street. The appraised value of 110 William Street as provided by Kroll was $403.6 million. Our advisor used the appraised value provided by Kroll and our advisor’s estimated fair values of other assets and liabilities, to calculate the amount that we would receive in a hypothetical liquidation of the real estate and the other assets and liabilities based on the profit participation thresholds contained in the joint venture agreement. The resulting amount was the fair value assigned to our interests in this unconsolidated joint venture. As of September 30, 2024, the carrying value and estimated fair value of our investment in this unconsolidated joint venture were $60.3 million and $140.6 million, respectively.

Kroll relied on a 10-year discounted cash flow analysis for the final valuation of 110 William Street. The terminal capitalization rate, discount rate and CAGR used in the discounted cash flow model to arrive at the appraised value were 5.50%, 6.50% and 15.12%, respectively.

The table below illustrates the impact on the estimated value per share if the terminal capitalization rates or discount rates were adjusted by 25 basis points, and assuming all other factors remain unchanged, with respect to 110 William Street. Additionally, the table below illustrates the impact on the estimated value per share if the terminal capitalization rates or discount rates for 110 William Street were adjusted by 5% in accordance with the IPA guidance:

	Increase (Decrease) on the Estimated Value per Share due to
	Decrease of 25 basis points		Increase of 25 basis points		Decrease of 5%		Increase of 5%
Terminal capitalization rates	$	0.13	$	(0.12)	$	0.27	$	(0.22)
Discount rates	0.10		(0.10)		0.21		(0.20)

We also hold 124 Class A Units of Pacific Oak Opportunity Zone Fund I, LLC, 47%, and the units were valued by our advisor based on our advisor’s estimated unit value for the fund. As of September 30, 2024, the carrying value and estimated fair value of our investment in this unconsolidated entity were $20.6 million and $35.2 million, respectively, with the latter equal to $0.34 per share. If the per-unit price were adjusted by 5%, it would impact the estimated value per share value by $0.02.

353 Sacramento is an office building containing 284,751 rentable square feet located in San Francisco, California and we hold a 55% interest in a joint venture that owns 353 Sacramento. The estimated fair values of 353 Sacramento and related other assets and liabilities were valued by our advisor and used to calculate the amount that we would receive in a hypothetical liquidation of the real estate and the other assets and liabilities based on the profit participation thresholds contained in the joint venture agreement. The resulting amount was the fair value assigned to our 55% interest in this unconsolidated joint venture. As of September 30, 2024, the carrying value and estimated fair value of our investment in this unconsolidated joint venture were $0 and $1.4 million, respectively. The carrying value is $0 due to us suspending the equity method of accounting for this unconsolidated joint venture.

Real Estate Equity Securities

As of September 30, 2024, we owned an investment in one real estate equity security: 64,165,352 shares of common units of Keppel Pacific Oak US REIT. The fair value of these real estate equity securities was based on quoted prices in an active market on a major stock exchange. The fair value and carrying value of our real estate equity securities was $17.3 million.

Notes Payable

The estimated fair values of our notes payable are calculated using a discounted cash flow analysis, but they do not equal the book value in accordance with GAAP. For the discounted cash flow analysis, the contractual cash flows were discounted by estimated market interest rates for instruments with similar characteristics, including remaining loan term, loan-to-value ratio and type of collateral.

As of September 30, 2024 the GAAP fair value and carrying value of our notes payable were $557.6 million and $561.1 million, respectively. The weighted-average discount rate applied to the future estimated debt payments, which have a weighted-average remaining term of 1.27 years, was 6.52%. The table below illustrates the impact on our estimated value per share if the discount rates were adjusted by 25 basis points, and assuming all other factors remain unchanged, with respect to our notes payable. Additionally, the table below illustrates the impact on the estimated value per share if the discount rates were adjusted by 5% in accordance with the IPA guidance:

	Increase (Decrease) on the Estimated Value per Share due to
	Decrease of 25 basis points		Increase of 25 basis points		Decrease of 5%		Increase of 5%
Discount rates	$	(0.01)	$	0.01	$	(0.02)	$	0.02

Series Bonds

Our Series Bonds are publicly traded on the Tel Aviv Stock Exchange. The estimated values of our Series B, C and D bonds are based on the quoted bond prices, as a percentage of face value as of September 30, 2024 on the Tel Aviv Stock Exchange of 96.46% for Series B, 105.21% for Series C and 100.91% for Series D, and foreign currency exchange rates as of September 30, 2024. As of September 30, 2024, the fair value and GAAP carrying value of our Series Bonds were $376.1 million and $365.8 million, respectively.

Non-controlling Interests

We have ownership interests in three consolidated entities as of September 30, 2024. As we consolidate these entities, the entire amount of the underlying assets and liabilities are reflected at their fair values in the corresponding line items of the estimated value per share calculation. Given this and the September 30, 2024 appraisal date for the real estate properties, we also must consider the fair value of any non-controlling interest liability as of September 30, 2024. In determining this fair

value, we considered the various profit participation thresholds in each of the entities that must be measured in determining the fair value of our non-controlling interest liability. We used the real estate valuations provided by Kroll and calculated the amount that the non-controlling interests would receive in a hypothetical liquidation of the underlying real estate properties (including all current assets and liabilities) at their current estimated values and the payoff of any related debt at its fair value, based on agreements. The estimated payment to the non-controlling interests were then reflected as the non-controlling interest liability in our calculation of its estimated value per share.

Participation Fee Potential Liability Calculation

Our potential incentive fee payable to our advisor is estimated to be $0 in the estimated share value as of December 10, 2024. Our advisor is entitled to receive an incentive fee in an amount equal to the amount by which (A) 15.0% of our net cash flows, whether from continuing operations, net sale proceeds or otherwise, which remain after our stockholders have received, together as a collective group, aggregate distributions (including distributions that may constitute a return of capital for federal income tax purposes) sufficient to provide (i) a return of their net invested capital, or the amount calculated by multiplying the total number of shares purchased by stockholders by the issue price (except that all shares issued to stockholders of POSOR II in connection with the Merger are deemed to have been purchased by such stockholders at the effective time of the Merger and at a price of $10.63 per share), reduced by any amounts to repurchase shares pursuant to our share redemption program, and (ii) a 7.0% per year cumulative, non-compounded return on such net invested capital from our inception, exceeds (B) $33.8 million which equals (i) the estimated share value effective November 12, 2018 and used in the determination of the number of restricted stock units originally issued, times (ii) the number of restricted stock units originally issued, to our former advisor, in connection with its termination on October 31, 2019. Net sales proceeds means the net cash proceeds realized by us after deduction of all expenses incurred in connection with a sale, including disposition fees paid to our advisor. The 7.0% per year cumulative, noncompounded return on net invested capital from our inception is calculated on a daily basis. In making this calculation, the net invested capital is reduced to the extent distributions in excess of a cumulative, noncompounded, annual return of 7.0% are paid (from whatever source), except to the extent such distributions would be required to supplement prior distributions paid in order to achieve a cumulative, noncompounded, annual return of 7.0% (invested capital is only reduced as described in this sentence; it is not reduced simply because a distribution constitutes a return of capital for federal income tax purposes). The 7.0% per year cumulative, noncompounded return is not based on the return provided to any individual stockholder. Accordingly, it is not necessary for each of our stockholders to have received any minimum return in order for our advisor to participate in our net cash flows. In fact, if our advisor is entitled to participate in our net cash flows, the returns of our stockholders will differ, and some may be less than a 7.0% per year cumulative, noncompounded return. This fee is payable only if we are not listed on an exchange. For purposes of determining the estimated value per share, our advisor calculated the potential liability related to this incentive fee based on a hypothetical liquidation of the assets and liabilities at their estimated fair values, after considering the impact of any potential closing costs and fees related to the disposition of real estate properties.

Our potential incentive fee payable to the PORT Advisor as it relates to the operations or assets of PORT is estimated to be $7.0 million in the estimated share value as of December 10, 2024. If a triggering event occurs, the incentive fee due to the PORT Advisor is based on our invested capital, which is measured from our initial investment in PORT in November 2019. If the total return on our invested capital in PORT exceeds a 5% cumulative, non-compounded, annual return on invested capital (the “Legacy Hurdle Amount”), then the incentive fee equals 48% of the following: (i) the amount by which the total return on our invested capital exceeds the Legacy Hurdle Amount (any such excess, the “Legacy Excess Profits”) until the total amount allocated to the PORT Advisor hereunder equals 12.5% of the sum of (x) the Legacy Hurdle Amount and (y) any amount due to the PORT Advisor pursuant to this clause and (ii) to the extent there are remaining Legacy Excess Profits, 12.5% of such remaining Legacy Excess Profits.

Other Assets and Liabilities

The carrying values of a majority of our other assets and liabilities are considered to equal their fair value due to their short maturities or liquid nature. Certain balances, such as straight-line rent receivables, lease intangible assets and liabilities, accrued capital expenditures, deferred financing costs, unamortized lease commissions and unamortized lease incentives, have been eliminated for the purpose of the valuation because the value of those balances was already considered in the valuation of the related asset or liability. Our advisor has also excluded redeemable common stock as temporary equity does not represent a true liability to us and the shares that this amount represents are included in our total outstanding shares of common stock for purposes of calculating the estimated value per share of our common stock.

Different parties using different assumptions and estimates could derive a different estimated value per share, and these differences could be significant. The value of our shares will fluctuate over time in response to developments related to individual assets in our portfolio and the management of those assets and in response to the real estate and finance markets.

Limitations of Estimated Value Per Share

As mentioned above, we are providing this estimated value per share to assist broker dealers that participated in our initial public offering in meeting their customer account statement reporting obligations. This valuation was performed in accordance with the provisions of and also to comply with IPA valuation guidelines. The estimated value per share set forth above first appeared on the December 31, 2024 customer account statements that were mailed in January 2025. As with any valuation methodology, the methodologies used are based upon a number of estimates and assumptions that may not be accurate or complete. Different parties with different assumptions and estimates could derive a different estimated value per share. The estimated value per share is not audited and does not represent the fair value of our assets less the fair value of our liabilities according to GAAP.

Accordingly, with respect to the estimated value per share, we can give no assurance that:

•a stockholder would be able to resell his or her shares at this estimated value per share;

•a stockholder would ultimately realize distributions per share equal to our estimated value per share upon liquidation of our assets and settlement of our liabilities or a sale of our company;

•our shares of common stock would trade at the estimated value per share on a national securities exchange;

•an independent third-party appraiser or other third-party valuation firm would agree with our estimated value per share; or

•the methodology used to calculate our estimated value per share would be acceptable to FINRA or for compliance with ERISA reporting requirements.

Further, the estimated value per share as of December 10, 2024 is based on the estimated value of our assets less the estimated value of our liabilities divided by the number of shares outstanding, all as of September 30, 2024. As of September 30, 2024, there were 102,951,395 shares issued and outstanding. The value of our shares will fluctuate over time in response to developments related to individual assets in our portfolio and the management of those assets and in response to the real estate and finance markets. Currently, U.S. commercial real estate values are impacted by a lack of transaction volume and general uncertainty in the real estate capital markets, increasing the uncertainty of current valuations. The estimated value per share does not reflect a discount for the fact that we are externally managed, nor does it reflect a real estate portfolio premium/discount versus the sum of the individual property values. The estimated value per share does not take into account estimated disposition costs and fees, debt prepayment penalties that could apply upon the prepayment of certain of our debt obligations or the impact of restrictions on the assumption of debt. The estimated value per share does consider any participation or incentive fees that would be due to our advisor based on the aggregate net asset value of ours which would be payable in a hypothetical liquidation of us as of the valuation date in accordance with the terms of our advisory agreement. We currently expect to utilize our advisor and/or an independent valuation firm to update the estimated value per share no later than December 2025 and that such value will be included in a report filed with the Securities and Exchange Commission.

Historical Estimated Values per Share

The historical reported estimated values per share of our common stock approved by our board of directors are set forth below:

Estimated Value per Share	Effective Date of Valuation	Filing with the Securities and Exchange Commission
$8.03	November 30, 2023	Current Report on Form 8-K, filed December 7, 2023
$10.50	December 2, 2022	Current Report on Form 8-K, filed December 8, 2022
$10.68	December 2, 2021	Current Report on Form 8-K, filed December 8, 2021
$9.68	December 4, 2020	Current Report on Form 8-K, filed December 10, 2020
$10.63	December 17, 2019	Current Report on Form 8-K, filed December 19, 2019
$9.91	November 12, 2018	Current Report on Form 8-K, filed November 15, 2018
$11.50	December 7, 2017	Current Report on Form 8-K, filed December 13, 2017
$14.81	December 8, 2016	Current Report on Form 8-K, filed December 15, 2016
$13.44	December 8, 2015	Current Report on Form 8-K, filed December 10, 2015
$12.24	December 9, 2014	Current Report on Form 8-K, filed December 11, 2014
$11.27	March 25, 2014	Current Report on Form 8-K, filed March 27, 2014

Distribution Information

We declare distributions when our board of directors determines we have sufficient cash flow from operations, investment activities and/or strategic financings. We expect to fund distributions from interest and rental income on investments, the maturity, payoff or settlement of those investments and from strategic sales of loans, properties and other assets.

As a REIT, we will generally have to hold our assets for two years in order to meet the safe harbor to avoid a 100% prohibited transactions tax, unless such assets are held through a TRS or other taxable corporation. In certain instances, we may sell properties outside of the safe harbor period and still be exempt from the 100% prohibited transaction tax because such properties were not held as “inventory.” Our board of directors intends to declare distributions quarterly depending on cash flow from our investments. Our board of directors may also declare distributions to the extent we have asset sales.

To maintain our qualification as a REIT, we must make aggregate annual distributions to our stockholders of at least 90% of our REIT taxable income (which is computed without regard to the dividends paid deduction or net capital gain and which does not necessarily equal net income as calculated in accordance with GAAP). If we meet the REIT qualification requirements, we generally will not be subject to federal income tax on the income that we distribute to our stockholders each year. In general, we anticipate making distributions to our stockholders of at least 100% of our REIT taxable income so that none of our income is subject to federal income tax. Our board of directors may authorize distributions in excess of those required for us to maintain REIT status depending on our financial condition and such other factors as our board of directors deems relevant.

Our distribution policy is not to pay distributions from sources other than cash flow from operations, investment activities and strategic financings. However, our organizational documents do not restrict us from paying distributions from any source and do not restrict the amount of distributions we may pay from any source, including proceeds from the issuance of securities, third-party borrowings, advances from our advisor or sponsors or from our advisor’s deferral of its fees under the advisory agreements. Distributions paid from sources other than current or accumulated earnings and profits may constitute a return of capital. From time to time, we may generate taxable income greater than our taxable income for financial reporting purposes, or our taxable income may be greater than our cash flow available for distribution to stockholders. In these situations, we may make distributions in excess of our cash flow from operations, investment activities and strategic financings to satisfy the REIT distribution requirement described above. In such an event, we would look first to other third-party borrowings to fund these distributions.

We have not established a minimum distribution level, and our charter does not require that we make distributions to our stockholders. There were no distributions declared during the years ended December 31, 2024 and 2023.

Unregistered Sales of Equity Securities

During the year ended December 31, 2024, we did not sell any equity securities that were not registered under the Securities Act of 1933, as amended.

Share Redemption Program

On July 16, 2024, our board of directors indefinitely suspended our share redemption program, effective July 30, 2024, due to our liquidity position. Our board of directors may reinstate the program, although there is no assurance as to if or when this will happen.

During the year ended December 31, 2024, we fulfilled redemption requests eligible for redemption under our share redemption program and received in good order and funded redemptions under our share redemption program with the net proceeds from our dividend reinvestment plan and cash on hand. We redeemed shares pursuant to our share redemption program as follows:

Month	Total Number<br><br>of Shares Redeemed	Average Price<br><br>Paid Per Share (1)		Approximate Dollar Value of Shares Available<br>That May Yet Be Redeemed Under the Program
January 2024	24,373	$	8.03	(2)
February 2024	28,416	$	8.03	(2)
March 2024	43,052	$	8.03	(2)
April 2024	55,492	$	8.03	(2)
May 2024	121,273	$	8.03	(2)
June 2024	21,074	$	8.03	(2)
Total	293,680

_____________________

(1) The redemption price of $8.03 was effective beginning with the January 2024 redemption date.

(2) During the year ended December 31, 2024, we redeemed $1.9 million of common stock under the program, which represented shares in connection with redemption requests made upon a stockholder’s death, “qualifying disability” or “determination of incompetence”.

In addition to the redemptions under the share redemption program described above, between July 24, 2024 and July 29, 2024, we repurchased an additional 65,573 shares of our common stock at a price of $8.03 per share for an aggregate price of $0.5 million.

ITEM 6.    [RESERVED]

ITEM 7.    MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with our accompanying consolidated financial statements and the notes thereto. Also, see “Forward-Looking Statements” preceding Part I of this Annual Report on Form 10-K.

Overview

We were formed on October 8, 2008 as a Maryland corporation, elected to be taxed as a REIT beginning with the taxable year ended December 31, 2010 and intend to operate in such manner. The advisory agreement with our advisor is currently effective through November 1, 2025; however, we or our advisor may terminate the advisory agreement without cause or penalty upon providing 60 days’ written notice.

Our advisor manages our day-to-day operations and our portfolio of investments and has the authority to make all of the decisions regarding our investments, except for our residential home portfolio. Our residential home portfolio, held through PORT is managed by the PORT Advisor. The advisory duties are subject to the limitations in our charter and the direction and oversight of our board of directors. Our advisor also provides asset-management, marketing, investor-relations and other administrative services on our behalf. We have sought to invest in and manage a diverse portfolio of real estate-related loans, opportunistic real estate, real estate-related debt and equity securities, and other real estate-related investments. We conduct our business primarily through our operating partnership, of which we are the sole general partner.

On January 8, 2009, we filed a registration statement on Form S-11 with the SEC to offer a minimum of 250,000 shares and a maximum of 140,000,000 shares of common stock for sale to the public, of which 100,000,000 shares were registered in our primary offering and 40,000,000 shares were registered under our dividend reinvestment plan. We ceased offering shares of common stock in our primary offering on November 14, 2012. We sold 56,584,976 shares of common stock in the primary offering for gross offering proceeds of $561.7 million. On October 5, 2020, Pacific Oak Strategic Opportunity REIT II, Inc. (“POSOR II”) merged with an indirect subsidiary of ours (the “Merger”). At the effective time of the Merger, each issued and outstanding share of POSOR II’s common stock converted into 0.9643 shares of our common stock or 28,973,906 shares. As of March 28, 2023 we indefinitely suspended offering shares of common stock under the dividend reinvestment plan to minimize administrative costs. On July 16, 2024, our board of directors indefinitely suspended our share redemption program, effective July 30, 2024, due to our liquidity position. As of December 31, 2024, we had redeemed 28,932,545 of the shares sold in our offering for $333.4 million and had issued 36,398,447 shares of common stock in connection with special dividends. Additionally, on December 29, 2011 and October 23, 2012, we issued 220,994 shares and 55,249 shares of common stock, respectively, for $2.0 million and $0.5 million, respectively, in private transactions exempt from the registration requirements pursuant to Section 4(2) of the Securities Act of 1933, as amended.

As of December 31, 2024, we had bonds outstanding of 1.2 billion Israeli new shekels ($328.0 million as of December 31, 2024), of which 142.0 million Israeli new shekels ($39.0 million as of December 31, 2024) were collateralized by real estate (specified lands in Park Highlands and Richardson). The Series Bonds principal payments ranging from January 2025 to February 2029 with interest rates of 3.93% to 9.50%. During the year ended December 31, 2024, we issued 587.1 million Israeli new shekels ($161.4 million as of December 31, 2024) of Series D bonds to Israeli investors pursuant to a public offering registered with the Israel Securities Authority. During the year ended December 31, 2024, we repaid 700.9 million Israeli new shekels ($192.3 million as of December 31, 2024) of Series B bonds and also repaid 218.0 million Israeli new shekels ($59.8 million as of December 31, 2024) of Series C bonds collateralized by Park Highlands undeveloped land in connection with two real estate dispositions. On January 31, 2025, we made the remaining second principal installment payment of 75.3 million Israeli new shekels ($21.0 million as of January 31, 2025) in connection with the Series B bonds.

As of December 31, 2024, we consolidated nine office complexes, encompassing, in the aggregate, 3.2 million rentable square feet and these properties were 67% occupied. In addition, we owned one residential home portfolio consisting of 2,093 residential homes, and one apartment property containing 317 units, which were 93% and 92% occupied, respectively. We also owned one hotel property with 196 rooms, three investments in undeveloped land with 247 developable acres, and one office/retail development property, and held an interest in three investments in unconsolidated entities and one investment in real estate equity securities.

Market Outlook - Real Estate and Real Estate Finance Markets

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

Liquidity and Capital Resources

Our principal demand for funds during the short and long-term is and will be for the acquisition of real estate and real estate-related investments, payment of operating expenses, capital expenditures and general and administrative expenses, and payments under debt obligations. As of December 31, 2024, we have had five primary sources of capital for meeting our cash requirements:

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

•Proceeds from our dividend reinvestment plan;

•Debt financing, including bond offerings in Israel;

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

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

We sold 56,584,976 shares of common stock in the primary portion of our initial public offering for gross offering proceeds of $561.7 million. We ceased offering shares in the primary portion of our initial public offering on November 14, 2012. To date, we have invested all of the net proceeds from our initial public offering in real estate and real estate-related investments. We intend to use our cash on hand, proceeds from asset sales, proceeds from debt financing, cash flow generated by our real estate operations and real estate-related investments as our primary sources of immediate and long-term liquidity.

Our investments in real estate generate cash flow in the form of rental revenues and tenant reimbursements, which are reduced by operating expenditures and corporate general and administrative expenses. Operational cash flow from our real estate investments is primarily dependent upon the occupancy levels of our properties, the net effective rental rates on our leases, the collectibility of rent and operating recoveries from our tenants and how well we manage our expenditures. As of December 31, 2024, our office complexes were collectively 67% occupied, our residential home portfolio was 93% occupied and our apartment property was 92% occupied.

As of December 31, 2024, we had one investment in real estate equity securities outstanding with a total carrying value of $13.2 million.

Under our charter, we are required to limit our total operating expenses to the greater of 2% of our average invested assets or 25% of our net income for the four most recently completed fiscal quarters, as these terms are defined in our charter, unless the conflicts committee has determined that such excess expenses were justified based on unusual and non-recurring factors. Operating expenses for the four fiscal quarters ended December 31, 2024 did not exceed the charter-imposed limitation.

For the year ended December 31, 2024, our cash needs for capital expenditures, additional strategic investment ventures, redemptions of common stock and debt servicing were met with proceeds from dispositions of real estate and real estate-related investments, proceeds from debt financing, and cash on hand. Operating cash needs during the same period were met through cash flow generated by our real estate and real estate-related investments and cash on hand. As of December 31, 2024, we had outstanding debt obligations in the aggregate principal amount of $876.8 million, with a weighted-average remaining term of 1.7 years. As of December 31, 2024, we had $244.5 million of debt obligations scheduled to mature over the period from January 1, 2025 through December 31, 2025. We also have a $106.8 million principal payment on the Series B bonds due on January 31, 2026. On January 31, 2025, we used proceeds to repay the remaining Series B bonds second principal installment payment of 75.3 million Israeli new shekels ($21.0 million as of January 31, 2025). Of the remaining debt obligations that are scheduled to mature over the period from January 1, 2025 through December 31, 2025, certain of our notes payable have extension options if we comply with certain debt covenants that may include one or a combination of the following ratios: debt-to-value, debt yield and debt service coverage. In order to satisfy obligations as they mature, we plan to utilize extension options available in the respective loan agreements, may seek to refinance or issue new debt instruments, may market one or more properties for sale or may negotiate a turnover of one or more secured properties back to the related mortgage lender. In order to utilize extension options, we may be subject to debt covenant requirements that may include one or a combination of the following ratios: debt-to-value, debt yield, minimum equity requirements, and debt service coverage. Based upon these plans, we believe we will have sufficient liquidity to continue as a going concern. There can be no assurance as to the certainty or timing of any of our plans. Timing mismatches between cash inflows from asset sales and financings and outflows due to capital expenditures, interest payments and debt maturities are creating a challenge from a liquidity perspective.

We believe that with these options we have sufficient cash on hand and availability to address our debt maturities and capital needs scheduled to mature over the period January 1, 2025 through December 31, 2025. However, tighter financial conditions, higher interest rates and lower asset values may make it more difficult to refinance our loans or to sell assets on favorable terms. In recent years, we have accessed debt capital through the Israeli capital markets, but that source of debt capital may be limited in the future because of changing geopolitical conditions. Our mortgage loans are primarily non-recourse to us, meaning the lender’s recourse is to take possession of the underlying property. It is possible we may choose not to repay or refinance some of the maturing loans, which would ultimately result in losing possession of the underlying property.

As of December 31, 2024, we have deferred the payment of $12.0 million of asset management fees to our advisor to provide us with an additional source of short-term liquidity. On February 26, 2025, we borrowed $8.0 million from our advisor pursuant to a 90-day bridge loan.

We have elected to be taxed as a REIT and intend to operate as a REIT. To maintain our qualification as a REIT, we are required to make aggregate annual distributions to our stockholders of at least 90% of our REIT taxable income (computed without regard to the dividends paid deduction and excluding net capital gain). Our board of directors may authorize distributions in excess of those required for us to maintain REIT status depending on our financial condition and such other factors as our board of directors deems relevant. We have not established a minimum distribution level.

Guarantee Agreements

As of December 31, 2024, and as part of the 110 William Joint Venture debt and restructuring agreements, we guaranteed the completion of the construction and the development of the building expenditures and tenant improvements. We also guaranteed all debt servicing costs and timely debt payments by the 110 William Joint Venture. The guaranteed amounts are due upon occurrence of a triggering event, such as default for nonpayment or failure to perform based on the conditions defined in the agreement. As of December 31, 2024, the maximum potential amount of future payments under our guarantees is not estimable as it is dependent on various factors including the 110 William Joint Venture’s future operating performance level, potential completion cost overages, future levels of variable-rate debt and related interest, and the amount of future contributions by us. Due to uncertainties surrounding these factors, we were unable to estimate the maximum amounts payable under the guarantees. As of December 31, 2024, no triggering events had occurred, the likelihood of loss was determined to be remote, and no liability related to the guarantees was recognized.

As of December 31, 2024 and 2023, the 110 William Joint Venture had $248.7 million of variable-rate debt outstanding that was subject to our guarantee. Additionally, the 110 William Joint Venture met funding conditions with an aggregate available borrowing capacity of $56.7 million, subject to our guarantee. As of December 31, 2024, $29.0 million was drawn under the $56.7 million funding facility. The debt was collateralized by the underlying real estate and has an initial maturity date of July 5, 2026, although the maturity date may be extended under certain circumstances. Debt and interest payments were current as of December 31, 2024.

As of December 31, 2024, and as part of guarantee agreements on mortgage loans, we guaranteed the payment of $204.0 million, whereby we would be required to make guaranteed payments in the event that we turned the property over to the lender.

Cash Flows used in Operating Activities

As of December 31, 2024, we consolidated nine office complexes, encompassing, in the aggregate, 3.2 million rentable square feet and these properties were 67% occupied. In addition, we owned one residential home portfolio consisting of 2,093 residential homes, and one apartment property containing 317 units, which were 93% and 92% occupied, respectively. We also owned one hotel property with 196 rooms, three investments in undeveloped land with 247 developable acres, and one office/retail development property, and held an interest in three investments in unconsolidated entities and one investment in real estate equity securities. During the year ended December 31, 2024, net cash used in operating activities was $30.4 million. The increase in net cash used in operating activities during the year ended December 31, 2024, as compared to the year ended December 31, 2023 was primarily due to increases in interest paid, decreases in dividend income and decreases in net operating income for our real estate investments. We expect that our cash flows from operating activities will increase in future periods as a result of leasing additional space that is currently unoccupied and anticipated future acquisitions of real estate and real estate-related investments. However, our cash flows from operating activities may decrease to the extent that we dispose of additional assets.

In addition to making investments in accordance with our investment objectives, we use or have used our capital resources to make certain payments to our advisor and our dealer manager. During our offering stage, these payments included payments to our dealer manager for selling commissions and dealer manager fees related to sales in our primary offering and payments to our dealer manager and our advisor for reimbursement of certain organization and other offering expenses related both to the primary offering and the dividend reinvestment plan. During our acquisition and development stage, we have continued to make payments to our advisor in connection with the selection and origination or purchase of investments, the management of our assets and costs incurred by our advisor in providing services to us as well as for any dispositions of assets (including the discounted payoff of non-performing loans).

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

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

Cash Flows from Investing Activities

Net cash provided by investing activities was $156.2 million for the year ended December 31, 2024 and primarily consisted of the following:

•Proceeds from sale of real estate, net of $232.3 million related to the sale of the Lofts at NoHo Commons, 334 acres of Park Highlands undeveloped land, and 89 residential homes;

•Contributions to an unconsolidated entity of $79.5 million as part of the 110 William Joint Venture restructuring agreements and capital commitment;

•Improvements to real estate of $27.5 million;

•Proceeds for development obligations of $16.5 million;

•Proceeds from the sale of real estate equity securities of $16.4 million; and

•Payments on development obligations of $11.5 million.

Cash Flows used in Financing Activities

Net cash used in financing activities was $183.6 million for the year ended December 31, 2024 and consisted primarily of the following:

•Payments on notes and bonds payable of $348.7 million, primarily related to the Series B and C bond redemption payments of $249.9 million, payoff of the Lofts at NoHo Commons Mortgage Loan of $68.5 million and partial principal repayment of the Bank of America Mortgage Loan of $18.4 million; and

•Proceeds from notes and bonds payable of $179.8 million, primarily related to proceeds received from the Series D bonds of $156.8 million and the Eight & Nine Corporate Centre Mortgage Loan of $20.0 million.

In order to execute our investment strategy, we utilize secured debt and we may, to the extent available, utilize unsecured debt, to finance a portion of our investment portfolio. Management remains vigilant in monitoring the risks inherent with the use of debt in our portfolio and is taking actions to ensure that these risks, including refinancing and interest risks, are properly balanced with the benefit of using leverage. There is no limitation on the amount we may borrow for any single investment. Our charter does not limit us from incurring debt until our aggregate borrowings would exceed 300% of our net assets, which approximates aggregate liabilities of 75% of the cost of our tangible assets (before deducting depreciation or other non-cash reserves); however, we may exceed that limit if a majority of the conflicts committee approves each borrowing in excess of our charter limitation and we disclose such borrowing to our common stockholders in our next quarterly report with an explanation from the conflicts committee of the justification for the excess borrowing. As of December 31, 2024, our borrowings and other liabilities were within the limits stated in our charter.

Contractual Commitments and Contingencies

The following is a summary of our contractual obligations as of December 31, 2024 (in thousands):

			Payments Due During the Years Ending December 31,
Contractual Obligations	Total		2025		2026-2027		2028-2029		Thereafter
Outstanding debt obligations (1)	$	876,767	$	244,464	$	524,679	$	107,624	$	—
Interest payments on outstanding debt obligations (2)	91,829		47,630		37,383		6,816		—
Finance lease obligations (3)	52,956		393		792		792		50,979
Development obligations (4)	12,135		11,367		768		—		—

_____________________

(1) Amounts include principal payments based on the outstanding principal amounts, maturity dates and foreign currency rates in effect at December 31, 2024.

(2) Projected interest payments are based on the outstanding principal amounts, maturity dates, foreign currency rates and interest rates in effect at December 31, 2024.

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

(4) Amounts are development obligations related to sold Park Highlands undeveloped land.

Results of Operations

Overview

As of December 31, 2024, we consolidated nine office complexes, encompassing, in the aggregate, 3.2 million rentable square feet and these properties were 67% occupied. In addition, we owned one residential home portfolio consisting of 2,093 residential homes, and one apartment property containing 317 units, which were 93% and 92% occupied, respectively. We also owned one hotel property with 196 rooms, three investments in undeveloped land with 247 developable acres, and one office/retail development property, held an interest in three investments in unconsolidated entities and one investment in real estate equity securities.

Our results of operations for the year ended December 31, 2024 may not be indicative of those in future periods due to acquisition and disposition activities. Additionally, the occupancy in our office complexes has not been stabilized. As of December 31, 2024, our office complexes were collectively 67% occupied, our residential home portfolio was 93% occupied and our apartment property was 92% occupied. However, due to the amount of near-term lease expirations, we do not put significant emphasis on annual changes in occupancy (positive or negative) in the short run. Our underwriting and valuations are generally more sensitive to “terminal values” that may be realized upon the disposition of the assets in the portfolio and less sensitive to ongoing cash flows generated by the portfolio in the years leading up to an eventual sale. There are no guarantees the occupancy of our assets will increase or remain constant, or that we will recognize a gain on the sale of our assets. In general, we expect that our income and expenses related to our portfolio will change in future periods as a result of leasing activity and due to acquisition or disposition activity.

Comparison of the year ended December 31, 2024 versus the year ended December 31, 2023 (dollars in thousands):

	For the Years Ended December 31,				Increase (Decrease)		Percentage Change		$ Change Due to Acquisitions/Dispositions (1)	Change Due to Investments Held Throughout Both Periods (2)
	2024		2023
Rental income	$	120,495	$	128,068	$	(7,573)	(6)	%	(6,420)
Hotel revenues	9,061		9,153		(92)		(1)	%	—	(92)
Other operating income	3,969		8,195		(4,226)		(52)	%	(765)	(3,461)
Operating, maintenance, and management costs	45,967		45,699		268		1	%	(1,812)	2,080
Real estate taxes and insurance	23,410		28,300		(4,890)		(17)	%	(4,047)	(843)
Hotel expenses	6,874		6,944		(70)		(1)	%	—	(70)
Asset management fees to affiliates	15,551		15,415		136		1	%	(597)	733
General and administrative expenses	11,665		10,476		1,189		11	%	n/a	n/a
Foreign currency transaction loss (gain), net	3,156		18,712		(15,556)		(83)	%	n/a	n/a
Depreciation and amortization	41,069		47,868		(6,799)		(14)	%	(2,084)	(4,715)
Interest expense, net	71,892		68,216		3,676		5	%	(2,894)	6,570
Impairment charges on real estate and related intangibles	76,090		64,849		11,241		17	%	n/a	n/a
Impairment charges on goodwill	—		4,488		(4,488)		(100)	%	n/a	n/a
Loss from unconsolidated entities, net	(35,397)		(54,758)		19,361		(35)	%	—	19,361
Other income	1,765		2,907		(1,142)		(39)	%	n/a	n/a
Loss on real estate equity securities, net	(12,076)		(4,598)		(7,478)		(163)	%	(37,163)	29,685
Gain on sale of real estate, net	119,018		82,099		36,919		(45)	%	36,919	n/a
Loss on extinguishment of debt	(6,033)		—		(6,033)		100	%	n/a	n/a
Income tax provision	(10,000)		(6,576)		(3,424)		52	%	(3,424)	n/a

All values are in US Dollars.

_____________________

(1) Represents the dollar amount increase (decrease) for the year ended December 31, 2024 compared to the year ended December 31, 2023 attributable to the real estate and real estate-related investments acquired, repaid or disposed on or after January 1, 2023.

(2) Represents the dollar amount increase (decrease) for the year ended December 31, 2024 compared to the year ended December 31, 2023 with respect to real estate and real estate-related investments owned by us during the entirety of both periods presented.

Rental income decreased to $120.5 million for the year ended December 31, 2024 from $128.1 million for the year ended December 31, 2023, primarily due to the disposition of 89 residential homes and one apartment property, which resulted in a decrease in rental income of $6.4 million. The occupancy rates and income within the residential homes segments remained consistent for the year ended December 31, 2024 and December 31, 2023; however, there was a slight decrease in occupancy rates for the strategic opportunistic properties, primarily as a result of the one apartment property sale. Additionally, the average rental income per square foot for our strategic opportunistic properties remained consistent for the year ended December 31, 2024 and December 31, 2023. We expect rental income to increase in future periods as a result of new lease activity and to the extent we acquire additional properties, but to decrease to the extent we dispose of properties or from naturally expiring leases.

Foreign currency transaction loss, net decreased to $3.2 million for the year ended December 31, 2024, from $18.7 million for the year ended December 31, 2023, primarily due to the outstanding Series Bonds being denominated in Israeli new shekels and more favorable exchange rates during the year ended December 31, 2024. We expect to recognize foreign transaction gains and losses due to changes in the value of the U.S. dollar relative to the Israeli new shekel, which may be offset with foreign currency derivative hedges in future periods, and changes in the levels of foreign currency exposure.

Interest expense, net increased to $71.9 million for the year ended December 31, 2024, from $68.2 million for the year ended December 31, 2023, primarily due to the increase in weighted-average fixed rate of 6.1% as of December 31, 2024, from 4.8% as of December 31, 2023, primarily due to the issuance of Series D bonds of $156.8 million with a fixed interest rate of 9.5% and partially offset by the paydown of Series B and C bonds of $249.9 million. The increase in interest expense, net was partially offset by a slight decrease in the weighted-average variable-rate of 7.5% as of December 31, 2024, from 7.9% as of December 31, 2023, primarily due to the payoff of the Lofts at NoHo Commons Mortgage Loan of $68.5 million and decreases in benchmark rates. Additionally, we anticipate interest expense will remain elevated in 2025 as a result of higher average market interest rates on our variable-rate debt and the challenges of receiving more favorable financing terms. Interest rates on our existing variable-rate debt are expected to gradually decrease in 2025 compared to the levels throughout 2024. Our interest expense in future periods will vary based on interest rates on variable and fixed rate debt, the amount of interest capitalized, level of future borrowings, interest rate derivative instruments, and the impact of refinancing efforts.

Impairment charges on real estate and related intangibles increased to $76.1 million for the year ended December 31, 2024 from $64.8 million for the year ended December 31, 2023. We impaired five strategic opportunistic properties and one hotel during the year ended December 31, 2024 due to declines in market conditions and projected cash flows, changes in sales comparisons, and also based on a quoted price. We impaired three strategic opportunistic properties during the year ended December 31, 2023 due to increases in discount and cap rate assumptions, decreases in projected cash flows and changes in sales comparisons.

Loss from unconsolidated entities of $35.4 million for year ended December 31, 2024 primarily consists of a loss of $33.4 million from the 110 William Joint Venture and no income or loss was recognized related to the 353 Sacramento Joint Venture due to the suspension of the equity method of accounting. The loss from unconsolidated entities, net of $54.8 million for the year ended December 31, 2023 consisted of a loss of $44.0 million for the 353 Sacramento Joint Venture, primarily due to impairment charge on the 353 Sacramento Joint Venture of $14.8 million and increases in our share of interest expense and impairment charges on real estate of $3.5 million and $22.7 million, respectively and loss of $9.1 million for the 110 William Joint Venture. We expect income from the 110 William Joint Venture to vary based on future investing, leasing, profit or loss allocations, borrowing, and disposition activities.

Loss on real estate equity securities, net increased to $12.1 million for the year ended December 31, 2024, from $4.6 million for the year ended December 31, 2023, primarily related to the change in the fair value of our real estate equity securities held and sold during these periods. We expect gains and losses on real estate equity securities to fluctuate in future periods as a result of changes in share prices and level of our investments in real estate equity securities.

Gain on sale of real estate, net increased to $119.0 million for the year ended December 31, 2024 from $82.1 million for the year ended December 31, 2023. We disposed of 334 developable acres of Park Highlands undeveloped land and the Lofts at NoHo Commons, both strategic opportunistic properties and 89 residential homes for a gain on sale of real estate, net of $119.0 million during the year ended December 31, 2024. We disposed of 115 developable acres of Park Highlands undeveloped land, 274 residential homes and Madison Square School for a gain on sale of real estate, net for $82.1 million during the year ended December 31, 2023.

For a discussion of the year ended December 31, 2023 compared to the year ended December 31, 2022, please refer to Item 7 of Part II, "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, which was filed with the SEC on April 1, 2024 and is incorporated herein by reference.

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

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

Changes in accounting rules have resulted in a substantial increase in the number of non-operating and non-cash items included in the calculation of FFO. As a result, our management also uses modified funds from operations (“MFFO”) as an indicator of our ongoing performance as well as our dividend availability. MFFO excludes from FFO: amounts relating to straight-line rent and amortization of above- and below-market intangible lease assets and liabilities; amortization of discounts and premiums on bonds and notes payable; unrealized gain or loss from interest rate caps; and mark-to-market foreign currency transaction adjustments. We compute MFFO in accordance with the definition of MFFO included in the practice guideline issued by the Institute for Portfolio Alternatives (“IPA”) in November 2010 as interpreted by management. Our computation of MFFO may not be comparable to other REITs that do not compute MFFO in accordance with the current IPA definition or that interpret the current IPA definition differently than we do.

In addition, our management uses an adjusted MFFO (“Adjusted MFFO”) as an indicator of our ongoing performance, as well as our dividend sustainability. Adjusted MFFO provides adjustments to reduce MFFO related to operating expenses that are capitalized with respect to certain of our investments in undeveloped land and to increase MFFO related to subordinated performance fee due upon termination to affiliate.

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

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

Although MFFO includes other adjustments, the exclusion of straight-line rent, the amortization of above- and below-market leases, the amortization of discounts and closing costs, acquisition fees and expenses (as applicable), mark to market foreign currency transaction adjustments, extinguishment of debt, and gains from consolidation of unconsolidated entities are the most significant adjustments for the periods presented. We have excluded these items based on the following economic considerations:

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

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

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

•Loss or gain on extinguishment of debt. A loss or gain on extinguishment of debt, which includes prepayment fees related to the extinguishment of debt, represents the difference between the carrying value of any consideration transferred to the lender in return for the extinguishment of a debt and the net carrying value of the debt at the time of settlement. We have excluded the loss or gain from extinguishment of debt in our calculation of MFFO because these losses or gains do not impact the current operating performance of our investments and do not provide an indication of future operating performance;

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

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

•Gain from consolidation of previously unconsolidated entity. The gain was recognized as part of a consolidation process of a previously unconsolidated entity, where we became the primary beneficiary. We excluded the gain from MFFO to more appropriately present the ongoing operating performance of our real estate investments on a comparative basis.

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

Our calculation of FFO, which we believe is consistent with the calculation of FFO as defined by NAREIT, is presented in the following table, along with our calculations of MFFO and Adjusted MFFO, for the years ended December 31, 2024, 2023 and 2022 (in thousands). No conclusions or comparisons should be made from the presentation of these periods.

	For the Year Ended December 31,
	2024		2023		2022
Net loss attributable to common stockholders	$	(100,837)	$	(144,151)	$	(43,242)
Depreciation and amortization	41,069		47,868		51,930
Impairment charges on real estate and related intangibles	76,090		64,849		18,493
Gain on sale of real estate, net (1)	(119,036)		(82,099)		(46,513)
Loss on real estate equity securities	12,076		4,598		51,943
Adjustments for noncontrolling interests - consolidated entities (2)	(3,811)		(1,194)		(2,375)
Adjustments for investments in unconsolidated entities (3)	3,999		59,560		(5,460)
FFO attributable to common stockholders	(90,450)		(50,569)		24,776
Straight-line rent and amortization of above- and below-market leases	(1,156)		(767)		(3,590)
Amortization of net premium/discount on bonds and notes payable	3,466		4,354		4,784
Loss (gain) on extinguishment of debt	6,033		—		(2,367)
Unrealized gain on interest rate caps	(223)		(165)		(1,530)
Foreign currency transaction loss (gain), net	3,156		18,712		(29,038)
Gain from consolidation of previously unconsolidated entity	—		—		(18,742)
Adjustments for noncontrolling interests - consolidated entities (2)	19		(14)		(108)
Adjustments for investments in unconsolidated entities (3)	929		(5,322)		3,135
MFFO attributable to common stockholders	(78,226)		(33,771)		(22,680)
Other capitalized operating expenses (4)	(5,562)		(4,611)		(3,128)
Impairment charges on goodwill	—		4,488		8,098
Income tax provision	10,000		6,576		4,924
Adjusted MFFO attributable to common stockholders	$	(73,788)	$	(27,318)	$	(12,786)

_____________________

(1) Reflects an adjustment to eliminate loss or gain on sale of real estate, which includes Park Highlands undeveloped land sales.

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

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

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

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

Critical Accounting Policies and Estimates

Below is a discussion of the accounting policies that management considers critical in that they involve significant management judgments and assumptions, require estimates about matters that are inherently uncertain and because they are important for understanding and evaluating our reported financial results. These judgments will affect the reported amounts of assets and liabilities and our disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. With different estimates or assumptions, materially different amounts could be reported in our financial statements. Additionally, other companies may utilize different estimates that may impact the comparability of our results of operations to those of companies in similar businesses.

Real Estate

Impairment of Real Estate and Related Intangibles

We continually monitor events and changes in circumstances that could indicate that the carrying amounts of our real estate and related intangibles may not be recoverable or realized. When indicators of potential impairment suggest that the carrying value of real estate and related intangibles may not be recoverable, we assess the recoverability by estimating whether we will recover the carrying value of the real estate and related intangibles through its undiscounted future cash flows and its eventual disposition. If, based on this analysis, we do not believe that we will be able to recover the carrying value of the real estate and related intangibles, we would record an impairment loss to the extent that the carrying value exceeds the estimated fair value of the real estate and related intangibles. Consequently, we recognized impairment charges of $76.1 million during the year ended December 31, 2024 for changes to the fair value of the real estate and related intangibles impairment testing purposes.

Projecting future cash flows involves estimating expected future operating income and expenses related to the real estate and its related intangibles as well as market and other trends. Using inappropriate assumptions to estimate cash flows could result in incorrect fair values of the real estate and its related intangibles and could result in the overstatement of the carrying values of our real estate and related intangibles and an overstatement of our net income.

Impairment of Investment in Unconsolidated Entities

We evaluate quarterly whether the current carrying value of investments accounted for using the equity method has an other-than-temporary impairment (“OTTI”). An OTTI occurs when the estimated fair value of an investment is below the carrying value and the difference is determined to not be recoverable in the near term. First, we consider both qualitative and quantitative evidence of whether there may be indicators of a loss in investment value below carrying value. After considering the weight of available evidence, if it is determined that there is an indication of loss in investment value, we would perform a fair value analysis. If the resulting fair value is less than the carrying value, we would determine if this loss in value is OTTI, and we would recognize any OTTI in the income statement as an impairment. Our exposure to OTTI in these investments is limited to the amount of our equity investment. This evaluation requires significant judgment regarding, but not limited to, the severity and duration of the impairment; the ability and intent to hold the investment until recovery; financial condition, liquidity, specific events, and other factors. During the year ended December 31, 2024, we concluded that the estimated fair value for our investment in unconsolidated entities substantially exceeded their related carrying values and no further impairment was necessary.

Subsequent Events

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

Series B Bonds Payment

On January 31, 2025, we made the remaining second principal installment payment of 75.3 million Israeli new shekels ($21.0 million as of January 31, 2025) in connection with the Series B bonds. Subsequent to the second installment payment, one installment payment remains and is due on January 31, 2026.

Loan Agreement

On February 26, 2025, we entered into an unsecured loan agreement with our advisor. Under the agreement, our advisor has agreed to lend us the principal amount of $8.0 million.

ITEM 7A.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Overview

Our profitability and the value of our investment portfolio may be adversely affected during any period as a result of interest rate changes, foreign currency changes, and financial market changes. In order to limit the effects of changes in interest

rates and foreign currency on our operations, we may utilize a variety of foreign currency hedging strategies such as cross currency swaps, collars, forward contracts, puts or calls. Additionally, certain of these strategies may cause us to fund a margin account periodically to offset changes in interest and foreign currency rates which may also reduce the funds available for payments to holders of our common stock.

Interest Rate Risk

We are exposed to the effects of interest rate changes as a result of borrowings used to maintain liquidity, fund distributions and to fund the refinancing of our real estate investment portfolio and operations. We may also be exposed to the effects of changes in interest rates as a result of the acquisition and origination of mortgage, mezzanine, bridge and other loans. Our interest rate risk management objectives are to limit the impact of interest rate changes on earnings, prepayment penalties and cash flows and to lower overall borrowing costs. We may manage interest rate risk by maintaining a ratio of fixed rate, long-term debt such that floating rate exposure is kept at an acceptable level. In addition, we may utilize a variety of financial instruments, including interest rate caps, floors, and swap agreements, in order to limit the effects of changes in interest rates on our operations.

When we use these types of derivatives to hedge the risk of interest-earning assets or interest-bearing liabilities, we may be subject to certain risks, including the risk that losses on a hedge position will reduce the funds available for payments to holders of our common stock and that the losses may exceed the amount we invested in the instruments.

Conversely, movements in interest rates on variable-rate debt would change our future earnings and cash flows but would not significantly affect the fair value of those instruments. However, changes in required risk premiums would result in changes in the fair value of floating rate instruments. Based on interest rates as of December 31, 2024, if interest rates were 100 basis points higher or lower during the 12 months ending December 31, 2024, interest expense on our variable-rate debt would increase or decrease by $2.8 million and $3.1 million, respectively.

The table below summarizes the notional amounts and average strike rates derivative instruments and outstanding principal balance and the weighted average interest rates for our notes and bonds payable for each category based on the maturity dates as of December 31, 2024 (dollars in thousands):

	Maturity Date																		Total Value
	2025			2026			2027			2028			2029			Thereafter						Fair Value
Liabilities
Notes and Bonds Payable, principal outstanding
Fixed rate - notes payable	$	34,967		$	156,562		$	—		$	—		$	—		$	—		$	191,529			$	183,562
Average interest rate (1)	4.7		%	4.0		%	—		%	—		%	—		%	—		%	4.3		%
Fixed rate - Series Bonds	$	20,665		$	145,870		$	53,812		$	53,812		$	53,812		$	—		$	327,971			$	329,141
Average interest rate	4.2		%	4.2% to 9.0%			9.8		%	9.8		%	9.8		%	—		%	4.2% to 9.8%
Variable rate - notes payable	$	188,831		$	168,436		$	—		$	—		$	—		$	—		$	357,267			$	356,629
Average interest rate (1)	7.4		%	7.5		%	—		%	—		%	—		%	—		%	7.5		%

_____________________

(1) Average interest rate is the weighted-average interest rate. Weighted-average interest rate as of December 31, 2024 is calculated as the actual interest rate in effect at December 31, 2024 (consisting of the contractual interest rate and the effect of contractual floor rates, if applicable), using interest rate indices at December 31, 2024, where applicable.

Foreign Currency Exchange Risk

We are also exposed to the effects of foreign currency changes, primarily the Israeli new shekels, with respect to the Series Bonds. Accordingly, changes in exchange rates, and in particular a strengthening of the Israeli new shekels, have in the past, and may in the future, negatively affect parts of our debt, interest, and foreign currency results as expressed in U.S. dollars.

As of December 31, 2024, we held 39.0 million Israeli new shekels ($10.7 million as of December 31, 2024) and 10.9 million Israeli new shekels ($3.0 million as of December 31, 2024) in cash and restricted cash, respectively. In addition, as of December 31, 2024, we had bonds outstanding and the related interest payable in the amounts of 1.2 billion Israeli new shekels ($328.0 million as of December 31, 2024) and 27.5 million Israeli new shekels ($7.6 million as of December 31, 2024), respectively. Foreign currency exchange rate risk is the possibility that our financial results could be better or worse than planned because of changes in foreign currency exchange rates. Based solely on the remeasurement for the year ended December 31, 2024, if foreign currency exchange rates were to increase or decrease by 10%, our net income would increase or decrease by $32.7 million.

We have experienced and will continue to experience fluctuations in our net income as a result of transaction gains or losses related to remeasuring debt and financial instrument balances. As of December 31, 2024, we have not entered into, but in the future, we may enter into, derivatives or other financial instruments in an attempt to hedge our foreign currency exchange risk. It is difficult to predict the effect hedging activities would have on our results of operations. Foreign currency exchange loss, net of $3.2 million and $18.7 million were recognized during the years ended December 31, 2024 and 2023, respectively. Foreign currency exchange gain, net of $29.0 million was recognized during the year ended December 31, 2022. We may manage foreign currency exchange risk by maintaining a ratio of foreign rate denominated cash and restricted cash such that foreign currency rate exposure is kept at an acceptable level.

Financial Market Risk

We are exposed to financial market risk with respect to our real estate equity securities. Financial market risk is the risk that we will incur economic losses due to adverse changes in our real estate equity security prices. Our exposure to changes in real estate equity security prices is a result of our investment in these types of securities. Market prices are subject to fluctuation and, therefore, the amount realized in the subsequent sale of an investment may significantly differ from the reported market value. Fluctuation in the market prices of a real estate equity security may result from any number of factors, including perceived changes in the underlying fundamental characteristics of the issuer, the relative price of alternative investments, interest rates, default rates and general market conditions. In addition, amounts realized in the sale of a particular security may be affected by the relative quantity of the real estate equity security being sold. We do not currently engage in derivative or other hedging transactions to manage our real estate equity security price risk. As of December 31, 2024, we owned real estate equity securities with a book value of $13.2 million. Based solely on the prices of real estate equity securities for the twelve months ended December 31, 2024, if prices were to increase or decrease by 10%, our net income would increase or decrease, respectively, by $1.3 million.

For a discussion of the interest rate risks related to the current capital and credit markets, see Part I, Item 1A, “Risk Factors.”

ITEM 8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

See the Index to Financial Statements at page F-1 of this Annual Report on Form 10-K.

ITEM 9.    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A.    CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to provide reasonable assurance that information we are required to disclose in reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer (CEO) and Chief Financial Officer (CFO), as appropriate, to allow timely decisions regarding required disclosure.

Our management, with the participation of our CEO and our CFO, who are our principal executive officer and principal financial officer, respectively, evaluated the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15 under the Exchange Act, as of the end of the period covered by this Annual Report on Form 10-K. Based on this evaluation, our CEO and CFO concluded that, as of December 31, 2024, our disclosure controls and procedures were effective.

Limitations on Effectiveness of Controls and Procedures

In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute, assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and management is required to apply its judgment in evaluating the benefits of possible controls and procedures relative to their costs. The design of any disclosure controls and procedures is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

Management’s Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate ICFR (as defined in Rule 13a-15(f) and 15d-15(f) of the Exchange Act). Our management assessed the effectiveness of our ICFR as of December 31, 2024, using the

criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control—Integrated Framework (2013 framework). Based on our assessment under this framework, our management concluded that our ICFR was effective as of December 31, 2024, due to the material weakness remediation described below. A material weakness is a deficiency, or a combination of deficiencies, in ICFR, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

During the year ended December 31, 2023, our management identified a material weakness in the design and operation of our management review controls and the completeness and accuracy of information used in the execution of those controls, related to the accounting treatment for complex capital structures involving non-pro rata profit or loss allocations for our investments in unconsolidated entities, under generally accepted accounting principles in the United States.

This material weakness did not result in any material misstatements to our consolidated financial statements or any changes to previously filed financial statements.

Remediation of Material Weakness

Our management has concluded that the material weakness described above was fully remediated as of December 31, 2024, due to the implementation and enhancement of specific processes and controls to identify reporting requirements for non-routine complex transactions. These controls were tested and determined to be operating effectively as of December 31, 2024. The remediation efforts are complete and address the previously identified deficiencies and enhance our overall internal control environment.

This Annual Report on Form 10-K does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to the attestation by our independent registered public accounting firm because we are exempt from this requirement.

Changes in Internal Control Over Financial Reporting

Except for the material weakness and remediation described above, there were no changes in our ICFR during the quarter ended December 31, 2024 that materially affected, or which are reasonably likely to materially affect, our ICFR.

ITEM 9B.    OTHER INFORMATION

(a)    On March 25, 2025, we amended our Code of Conduct and Ethics to adopt insider trading policies and                             procedures governing the purchase, sale and/or other dispositions of our securities by our directors and officers and the managers, officers and employees of our advisor and its affiliates who provide services to us, which policies and procedures are reasonably designed to promote compliance with insider trading laws, rules and regulations, and any listing standards applicable to us.

(b)    During the quarterly period ended December 31, 2024, none of our directors or officers (as defined in Rule      16a-1(f) promulgated under the Exchange Act) adopted or terminated any “Rule 10b5-1 trading arrangement” or any “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408 of Regulation S-K.

ITEM 9C.    DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

Not applicable.

We will file a definitive Proxy Statement for our 2025 Annual Meeting of Stockholders (the “2025 Proxy Statement”) with the SEC, pursuant to Regulation 14A, not later than 120 days after the end of our fiscal year. Accordingly, certain information required by Part III has been omitted under General Instruction G(3) to Form 10-K. Only those sections of the 2025 Proxy Statement that specifically address the items required to be set forth herein are incorporated by reference.

ITEM 10.    DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Code of Conduct and Ethics

We have adopted a Code of Conduct and Ethics that applies to all of our executive officers and directors, including but not limited to, our principal executive officer, principal financial officer and principal accounting officer. Our Code of Conduct and Ethics can be found at https://pacificoakcapital.com/capital-markets/offerings/reit and is filed as an exhibit to this Annual Report on Form 10-K.

The other information required by this Item is incorporated by reference to our 2025 Proxy Statement.

ITEM 11.    EXECUTIVE COMPENSATION

The information required by this Item is incorporated by reference to our 2025 Proxy Statement.

ITEM 12.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information required by this Item is incorporated by reference to our 2025 Proxy Statement.

ITEM 13.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

The information required by this Item is incorporated by reference to our 2025 Proxy Statement.

ITEM 14.    PRINCIPAL ACCOUNTING FEES AND SERVICES

The information required by this Item is incorporated by reference to our 2025 Proxy Statement.

ITEM 15.    EXHIBITS, FINANCIAL STATEMENT SCHEDULES

(a)    Financial Statement Schedules

See the Index to the Consolidated Financial Statements at page F-1 of this report.

The following financial statement schedule is included herein at pages F-34 through F-36 of this report:

Schedule III - Real Estate Properties and Accumulated Depreciation and Amortization

(b)    Exhibits

Ex.	Description
3.1	Second Articles of Amendment and Restatement, incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed February 4, 2010
3.2	Articles of Amendment, incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed November 1, 2019
3.3	Articles of Amendment, incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed December 23, 2019
3.4	Fourth Amended and Restated Bylaws, incorporated by reference to Exhibit 3.4 to the Company's Annual Report on Form 10-K for the year ended December 31, 2022, filed March 30, 2023
4.1	Statement regarding restrictions on transferability of shares of common stock (to appear on stock certificate or to be sent upon request and without charge to stockholders issued shares without certificates), incorporated by reference to Exhibit 4.2 to Pre-Effective Amendment No. 1 to the Company’s Registration Statement on Form S-11, Commission File No. 333-156633, filed February 25, 2009
4.2	Fifth Amended and Restated Dividend Reinvestment Plan, incorporated by reference to Exhibit 4.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2015, filed May 14, 2015
4.3	Description of Capital Stock, incorporated by reference to Exhibit 4.3 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, filed March 26, 2020
10.1.1	Advisory Agreement by and between the Company and Pacific Oak Capital Advisors, LLC, effective as of November 1, 2024
10.1.2	First Amendment to Pacific Oak Strategic Opportunity REIT, Inc. Advisory Agreement, by and among the Company and Pacific Oak Capital Advisors, LLC, effective December 19, 2024
10.2.1	Advisory Agreement by and among Pacific Oak Residential Trust, Inc., PORT OP LP, Pacific Oak Residential Advisors, LLC, Pacific Oak Capital Advisors, LLC, Keith D. Hall, and Peter McMillan III, dated September 1, 2024, incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed September 5, 2024
10.2.2	First Amendment to Advisory Agreement by and among Pacific Oak Residential Trust, Inc., PORT OP LP, Pacific Oak Capital Advisors, LLC, and Pacific Oak Residential Advisors, LLC, dated as of December 19, 2024
10.3.1	Second Amended and Restated Management Agreement by and between Pacific Oak Residential Trust, Inc. and DMH Realty, LLC, dated April 2, 2024, incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K, filed April 8, 2024
10.3.2	First Amendment to Second Amended and Restated Management Agreement by and between Pacific Oak Residential Trust, Inc. and DMH Realty, LLC, dated December 19, 2024
10.4.1	Restricted Stock Agreement by and among the Company, KBS Capital Advisors LLC, and Pacific Oak Capital Advisors, LLC, incorporated by reference to Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, filed May 22, 2020
10.4.2	Amendment No. 1 to Restricted Stock Agreement by and among the Company, KBS Capital Advisors LLC, and Pacific Oak Capital Advisors, LLC, dated September 1, 2021, incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2021, filedNovember 15, 2021
10.5.1	Purchase and Sale Agreement and Joint Escrow Instructions by and among Pacific Oak SOR Tule Springs Owner TRS, LLC, Pacific Oak SOR Tule Springs Village 2 Parcels Owner, LLC, KB Home Las Vegas Inc., and Tri Pointe Homes Nevada, Inc., dated March 10, 2024, incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, filed May 10, 2024
Ex.	Description
---	---
10.5.2	First Amendment to Purchase and Sale Agreement and Joint Escrow Instructions by and among Pacific Oak SOR Tule Springs Owner TRS, LLC, Pacific Oak SOR Tule Springs Village 2 Parcels Owner, LLC, KB Home Las Vegas Inc., and Tri Pointe Homes Nevada, Inc., dated June 17, 2024, incorporated by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2024, filed August 9, 2024
10.5.3	Second Amendment to Purchase and Sale Agreement and Joint Escrow Instructions by and among Pacific Oak SOR Tule Springs Owner TRS, LLC, Pacific Oak SOR Tule Springs Village 2 Parcels Owner, LLC, and KB Home Las Vegas Inc., dated June 21, 2024, incorporated by reference to Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2024, filed August 9, 2024
10.5.4	Third Amendment to Purchase and Sale Agreement and Joint Escrow Instructions by and among Pacific Oak SOR Tule Springs Owner TRS, LLC, Pacific Oak SOR Tule Springs Village 2 Parcels Owner, LLC, and KB Home Las Vegas Inc., dated August 16, 2024, incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2024, filed November 14, 2024
10.5.5	Fourth Amendment to Purchase and Sale Agreement and Joint Escrow Instructions by and among Pacific Oak SOR Tule Springs Owner TRS, LLC, Pacific Oak SOR Tule Springs Village 2 Parcels Owner, LLC, and KB Home Las Vegas Inc., dated September 17, 2024, incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2024, filed November 14, 2024
10.5.6	Fifth Amendment to Purchase and Sale Agreement and Joint Escrow Instructions by and among Pacific Oak SOR Tule Springs Owner TRS, LLC, Pacific Oak SOR Tule Springs Village 2 Parcels Owner, LLC, and KB Home Las Vegas Inc., dated September 30, 2024, incorporated by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2024, filed November 14, 2024
10.5.7	Sixth Amendment to Purchase and Sale Agreement and Joint Escrow Instructions by and among Pacific Oak SOR Tule Springs Owner TRS, LLC, Pacific Oak SOR Tule Springs Village 2 Parcels Owner, LLC, and KB Home Las Vegas Inc., dated October 14, 2024, incorporated by reference to Exhibit 10.5 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2024, filed November 14, 2024
10.5.8	Seventh Amendment to Purchase and Sale Agreement and Joint Escrow Instructions by and among Pacific Oak SOR Tule Springs Owner TRS, LLC, Pacific Oak SOR Tule Springs Village 2 Parcels Owner, LLC, and KB Home Las Vegas Inc., dated October 18, 2024, incorporated by reference to Exhibit 10.6 to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2024, filed November 14, 2024
10.5.9	Eighth Amendment to Purchase and Sale Agreement and Joint Escrow Instructions by and among Pacific Oak SOR Tule Springs Owner TRS, LLC, Pacific Oak SOR Tule Springs Village 2 Parcels Owner, LLC, and KB Home Las Vegas Inc., dated December 12, 2024
10.6.1	Deed of Trust by and between Pacific Oak SOR (BVI) Holdings Ltd. and Reznik Paz Nevo Trusts Ltd. (Series B), dated February 12, 2020, incorporated by reference to Exhibit 10.17 to the Company's Annual Report on Form 10-K for the year ended December 31, 2023, filed April 1, 2024
10.6.2	Amendment No. 1 to the Deed of Trust by and between Pacific Oak SOR (BVI) Holdings Ltd. and Reznik Paz Nevo Trusts Ltd. (Series B), dated September 2, 2024, incorporated by reference to Exhibit 10.8 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2024, filed November 14, 2024
10.7	Deed of Trust by and between Pacific Oak SOR (BVI) Holdings Ltd. and Reznik Paz Nevo Trusts Ltd. (Series C), dated July 6, 2023
10.8	Deed of Trust by and between Pacific Oak SOR (BVI) Holdings Ltd. and Reznik Paz Nevo Trusts Ltd. (Series D), dated April 21, 2024, incorporated by reference to Exhibit 10.7 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2024, filed November 14, 2024
10.9	Agreement of Lease between the City of New York Department of Citywide Administrative Services, 1 Center Street, 20th Floor North, New York, New York 10007 & 110 William Property Investors III, LLC c/o Savanna, 430 Park Avenue, 12th Floor, New York, NY 10022, dated June 27, 2023, incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2023, filed August 14, 2023
10.10	Supplemental Building Loan Agreement between 110 William Property Investors III, LLC, as Borrower, Lenders Signatory Hereto from Time to Time, as Lenders, and Deutsche Pfandbriefbank AG as Administrative Agent and Lender, dated July 5, 2023, Agreement of Lease between the City of New York Department of Citywide Administrative Services, 1 Center Street, 20th Floor North, New York, New York 10007 & 110 William Property Investors III, LLC c/o Savanna, 430 Park Avenue, 12th Floor, New York, NY 10022, dated June 27, 2023, incorporated by reference to Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2023, filed August 14, 2023
10.11	Amended and Restated Limited Liability Company Agreement of Pacific Oak SOR SREF III 110 William, LLC (f/k/a KBS SOR SREF III 110 William, LLC), effective as of July 5, 2023, incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2023, filed August 14, 2023
Ex.	Description
---	---
10.12	Amended and Restated Senior Loan Agreement dated as of July 5, 2023, between 110 William Property Investors III, LLC, as Borrower, Lenders Signatory Hereto from Time to Time, as Lenders, and Deutsche Pfandbriefbank AG, as Administrative Agent and Lender, incorporated by reference to Exhibit 10.4 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2023 filed August 14, 2023
10.13	Guaranty of Interest and Carry Costs as of July 5, 2023, by Pacific Oak SOR Properties, LLC, incorporated by reference to Exhibit 10.5 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2023, filed August 14, 2023
10.14	Completion Guaranty as of July 5, 2023, by Pacific Oak SOR Properties, LLC, incorporated by reference to Exhibit 10.6 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2023, filed August 14, 2023
10.15	Funding Guaranty as of July 5, 2023, by Pacific Oak SOR Properties, LLC, incorporated by reference to Exhibit 10.7 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2023, filed August 14, 2023
10.16	Guaranty of Recourse Obligations as of July 5, 2023, by Pacific Oak SOR Properties, LLC, incorporated by reference to Exhibit 10.8 to the Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 2023, filed August 14, 2023
10.17	Membership Interest Purchase Agreement as of July 5, 2023 by and between Pacific Oak SOR 110 William JV, LLC (f/k/a KBS SOR 110 William JV, LLC), SREF III 110 William JV, LLC, and Pacific Oak SOR SREF III 110 William, LLC (f/k/a KBS SOR SREF III 110 William, LLC), incorporated by reference to Exhibit 10.9 to the Company's Quarterly Report on Form 10-Q for the three months ended June 30, 2023 for the quarter ended June 30, 2023 filed August 14, 2023
10.18	Amended and Restated Guaranty Agreement as of August 28, 2023, by Pacific Oak SOR Properties, LLC, incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2023, filed November 14, 2023
10.19	Amended and Restated Loan Agreement by and among 1180 Raymond Urban Renewal, LLC, Pacific Oak SOR Austin Suburban Portfolio, LLC, Pacific Oak SOR II Oakland City Center, LLC, Pacific Oak SOR Marquette Plaza, LLC, as Borrower, Bank of America, N.A., as Administrative Agent, and the Other Financial Institutions Party Hereto, dated August 28, 2023, incorporated by reference to Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2023 filed November 14, 2023
14.1	Code of Conduct and Ethics
21.1	Subsidiaries of the Company
23.1	Consent of Ernst & Young LLP
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. 1350, as Adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. 1350, as Adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
99.1	Twelfth Amended and Restated Share Redemption Program, incorporated by reference to Exhibit 99.5 to the Company's Current Report on Form 8-K filed December 4, 2020
99.2	Amendment No. 1 to the Twelfth Amended and Restated Share Redemption Program, incorporated by reference to Exhibit 99.1 to the Company's Current Report on Form 8-K filed August 6, 2021
99.3	Consent of Colliers International Valuation of Advisory Services, LLC
99.4	Consent of Kroll, LLC
99.5	Consent of HouseCanary, Inc.
101.INS	Inline XBRL Instance Document
101.SCH	Inline XBRL Taxonomy Extension Schema
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase
Ex.	Description
---	---
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase
104	Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Financial Statements
Report of Independent Registered Public Accounting Firm (PCAOB ID:42)	F-2
Consolidated Balance Sheets as of December 31, 2024 and 2023	F-4
Consolidated Statements of Operations for the Years Ended December 31, 2024, 2023 and 2022	F-5
Consolidated Statements of Equity for the Years Ended December 31, 2024, 2023 and 2022	F-6
Consolidated Statements of Cash Flows for the Years Ended December 31, 2024, 2023 and 2022	F-7
Notes to Consolidated Financial Statements	F-8
Financial Statement Schedule
Schedule III - Real Estate Assets and Accumulated Depreciation and Amortization	F-34

All other schedules are omitted because they are not applicable or the required information is shown in the financial statements or notes thereto.

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and the Board of Directors of

Pacific Oak Strategic Opportunity REIT, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Pacific Oak Strategic Opportunity REIT, Inc. (the Company) as of December 31, 2024 and 2023, the related consolidated statements of operations, equity and cash flows for each of the three years in the period ended December 31, 2024, and the related notes and financial statement schedule listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

F-2

	Real estate impairment
Description of the Matter	The Company’s real estate held for investment and related intangibles totaled $882 million as of December 31, 2024. As more fully described in Note 2 to the consolidated financial statements, the Company monitors events and changes in circumstances that could indicate the carrying value of real estate and related intangibles may not be recoverable. If indicators of potential impairment are present, the Company assesses the recoverability by estimating whether the Company will recover the carrying value of the real estate and related intangibles through future undiscounted cash flows and eventual disposition. If, based on this analysis, the Company does not believe that it will be able to recover the carrying value of the real estate and related intangibles, an impairment loss is recognized for the difference between the estimated fair value and the carrying value. For the year ended December 31, 2024, the Company recorded $76.1 million of impairment related to its real estate held for investment and related intangibles.<br><br><br><br>Auditing the Company’s real estate impairment assessment was challenging due to the high degree of subjectivity in evaluating management’s identification of indicators of potential impairment and the resulting estimated fair value when the investment is not deemed recoverable. In particular, the impairment indicators were based on qualitative and quantitative factors for the specific real estate investments. Such factors include, but were not limited to, assessment of management’s intended hold period and disposition strategy, a significant decrease in market price, a significant decline in expected future undiscounted cash flows, and/or current industry and market trends. Management’s fair value measurement is sensitive to significant assumptions such as market comparables, discount rates, capitalization rates, and/or revenue growth rates, all of which are affected by expectations about future market or economic conditions.
How We Addressed the Matter in Our Audit	We performed audit procedures to test management’s identification of events or changes in circumstances that might indicate that the carrying amount of the Company’s real estate and related intangibles may not be recoverable. Such procedures include, among others, obtained evidence to corroborate management’s judgments and searched for contrary evidence such as significant declines in operating results, market and economic trends, disposition strategies, natural disasters, or market effects. To test management’s assessment of fair value of the real estate and related intangibles determined to be impaired, we performed audit procedures that included, among others, testing the significant assumptions discussed above and the underlying data used by the Company in the analysis by comparing the significant assumptions used by management to current industry and economic trends and other relevant factors. As part of our procedures, we involved our valuation specialists to assist in evaluating management’s judgments as compared to market support. We also performed a sensitivity analysis of certain significant assumptions to evaluate the change in the fair value of the real estate and related intangibles resulting from changes in the assumptions.

/s/ Ernst & Young LLP

We have served as the Company’s auditor since 2008.

Irvine, California

March 28, 2025

F-3

PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

	December 31,
	2024		2023
Assets
Real estate held for investment, net	$	881,991	$	970,821
Real estate held for sale, net	2,088		123,933
Real estate equity securities	13,154		41,609
Total real estate and real estate-related investments, net	897,233		1,136,363
Cash and cash equivalents	56,000		99,160
Restricted cash	42,376		56,049
Investments in unconsolidated entities	88,087		45,901
Rents and other receivables, net	22,084		22,500
Prepaid expenses and other assets	19,176		26,292
Assets related to real estate held for sale, net	—		1,878
Total assets	$	1,124,956	$	1,388,143
Liabilities and equity
Notes and bonds payable related to real estate held for investment, net	$	864,251	$	949,701
Notes payable related to real estate held for sale, net	1,041		78,982
Notes and bonds payable, net	865,292		1,028,683
Accounts payable and accrued liabilities	31,233		30,409
Due to affiliate	12,660		7,902
Other liabilities	59,968		57,785
Total liabilities	969,153		1,124,779
Commitments, contingencies and guarantees (Note 10)
Equity
Stockholders’ equity
Preferred stock, $.01 par value; 10,000,000 shares authorized, no shares issued and outstanding	—		—
Common stock, $.01 par value; 1,000,000,000 shares authorized, 102,951,395 and 103,310,648 shares issued and outstanding as of December 31, 2024 and 2023, respectively	1,030		1,033
Additional paid-in capital	898,682		901,049
Cumulative distributions and net loss	(740,770)		(639,933)
Total stockholders’ equity	158,942		262,149
Noncontrolling interests	(3,139)		1,215
Total equity	155,803		263,364
Total liabilities and equity	$	1,124,956	$	1,388,143

See accompanying notes to consolidated financial statements.

F-4

PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except share data)

	Years Ended December 31,
	2024			2023			2022
Revenues:
Rental income	$	120,495		$	128,068		$	121,859
Hotel revenues	9,061			9,153			30,749
Other operating income	3,969			8,195			9,450
Total revenues	133,525			145,416			162,058
Expenses:
Operating, maintenance, and management	45,967			45,699			44,317
Real estate taxes and insurance	23,410			28,300			21,132
Hotel expenses	6,874			6,944			19,252
Asset management fees to affiliates	15,551			15,415			13,678
General and administrative expenses	11,665			10,476			10,700
Foreign currency transaction loss (gain), net	3,156			18,712			(29,038)
Depreciation and amortization	41,069			47,868			51,930
Interest expense, net	71,892			68,216			48,130
Impairment charges on real estate and related intangibles	76,090			64,849			18,493
Impairment charges on goodwill	—			4,488			8,098
Total expenses	295,674			310,967			206,692
Other income (loss):
Loss from unconsolidated entities, net	(35,397)			(54,758)			(8,019)
Other income	1,765			2,907			228
Loss on real estate equity securities, net	(12,076)			(4,598)			(51,943)
Gain on sale of real estate, net	119,018			82,099			46,513
(Loss) gain on extinguishment of debt	(6,033)			—			2,367
Gain from consolidation of previously unconsolidated entity	—			—			18,742
Total other income, net	67,277			25,650			7,888
Net loss before income taxes	(94,872)			(139,901)			(36,746)
Income tax provision	(10,000)			(6,576)			(4,924)
Net loss	(104,872)			(146,477)			(41,670)
Net loss (income) attributable to noncontrolling interests	4,035			2,326			(530)
Net loss attributable to redeemable noncontrolling interest	—			—			81
Preferred stock dividends	—			—			(1,123)
Net loss attributable to common stockholders	$	(100,837)	,	$	(144,151)	,	$	(43,242)
Net loss per common share, basic and diluted	$	(0.98)		$	(1.39)		$	(0.44)
Weighted-average number of common shares outstanding, basic and diluted	103,083,547			103,642,866			103,522,696

See accompanying notes to consolidated financial statements.

F-5

PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC.

CONSOLIDATED STATEMENTS OF EQUITY

(dollars in thousands, except share amounts)

				Additional Paid-in Capital		Cumulative Distributions and Net Loss		Total Stockholders’ Equity		Noncontrolling Interests		Total Equity
	Common Stock
	Shares	Amounts
Balance, December 31, 2021	94,141,251	$	941	$	818,440	$	(347,691)	$	471,690	$	10,369	$	482,059
Net (loss) income	—	—		—		(43,242)		(43,242)		530		(42,712)
Stock distribution issued	10,421,149	104		98,999		(99,103)		—		—		—
Adjustment to redemption value of redeemable noncontrolling interest	—	—		—		(3,946)		(3,946)		—		(3,946)
Adjustment to redemption value of noncontrolling cumulative convertible redeemable preferred stock	—	—		—		(1,800)		(1,800)		—		(1,800)
Transfers to redeemable common stock payable, net	—	—		(1,954)		—		(1,954)		—		(1,954)
Redemptions of common stock	(630,317)	(6)		(6,010)		—		(6,016)		—		(6,016)
Acquisition of noncontrolling interest	—	—		—		—		—		1,125		1,125
Noncontrolling interest contributions	—	—		—		—		—		300		300
Noncontrolling interests distributions	—	—		(2,431)		—		(2,431)		(8,232)		(10,663)
Balance, December 31, 2022	103,932,083	$	1,039	$	907,044	$	(495,782)	$	412,301	$	4,092	$	416,393
Net loss	—	—		—		(144,151)		(144,151)		(2,326)		(146,477)
Transfers from redeemable common stock, net	—	—		424		—		424		—		424
Redemptions of common stock	(621,435)	(6)		(6,419)		—		(6,425)		—		(6,425)
Noncontrolling interests distributions	—	—		—		—		—		(1,094)		(1,094)
Noncontrolling interests contributions	—	—		—		—		—		543		543
Balance, December 31, 2023	103,310,648	$	1,033	$	901,049	$	(639,933)	$	262,149	$	1,215	$	263,364
Net loss	—	—		—		(100,837)		(100,837)		(4,035)		(104,872)
Transfers from redeemable common stock payable, net	—	—		2,217		—		2,217		—		2,217
Noncontrolling interest contributions	—	—		—		—		—		584		584
Noncontrolling interest distributions	—	—		(1,705)		—		(1,705)		(903)		(2,608)
Redemptions of common stock	(359,253)	(3)		(2,879)		—		(2,882)		—		(2,882)
Balance, December 31, 2024	102,951,395	$	1,030	$	898,682	$	(740,770)	$	158,942	$	(3,139)	$	155,803

See accompanying notes to consolidated financial statements.

F-6

PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

	Years Ended December 31,
	2024		2023		2022
Cash Flows from Operating Activities:
Net loss	$	(104,872)	$	(146,477)	$	(41,670)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
Impairment charges on real estate and related intangibles	76,090		64,849		18,493
Loss from unconsolidated entities, net	35,397		54,758		8,019
Depreciation and amortization	41,069		47,868		51,930
Loss on real estate equity securities	12,076		4,598		51,943
Gain on sale of real estate, net	(119,018)		(82,099)		(46,513)
Deferred rent	(859)		(176)		(2,582)
Amortization of deferred financing costs and debt discount and premium, net	9,444		9,572		8,511
Foreign currency transaction loss (gain), net	3,156		18,712		(29,038)
Impairment charges on goodwill	—		4,488		8,098
Gain from consolidation of previously unconsolidated entity	—		—		(18,742)
Loss (gain) on extinguishment of debt	6,033		—		(2,367)
Changes in assets and liabilities:
Rents and other receivables, net	1,169		(830)		1,582
Prepaid expenses and other assets	1,146		(3,436)		(3,599)
Accounts payable and accrued liabilities	663		3,807		(3,159)
Due to affiliate	4,758		4,622		198
Other liabilities	3,391		(4,601)		10,748
Net cash (used in) provided by operating activities	(30,357)		(24,345)		11,852
Cash Flows from Investing Activities:
Improvements to real estate	(27,512)		(24,081)		(31,110)
Proceeds from sales of real estate, net	232,347		116,318		151,178
Purchase of interest rate caps	(1,447)		(1,236)		(556)
Contributions to unconsolidated entities	(79,530)		(31,428)		(23,780)
Distribution of capital from an unconsolidated entity	1,497		1,144		569
Payments on foreign currency derivatives, net	(478)		(30,209)		(984)
Proceeds from the sale of real estate equity securities	16,379		13,946		—
Proceeds for development obligations	16,461		12,005		—
Payments on development obligations	(11,540)		(8,689)		(7,934)
Escrow deposits for pending real estate sales	10,000		—		17,000
Acquisitions of real estate, net of cash acquired	—		—		(6,689)
Cash and restricted cash received upon consolidation of previously unconsolidated entity	—		—		1,834
Advances to affiliate	—		—		(1,200)
Proceeds from advances due from affiliates	—		—		8,239
Net cash provided by investing activities	156,177		47,770		106,567
Cash Flows from Financing Activities:
Proceeds from notes and bonds payable	179,787		98,502		188,106
Principal payments on notes and bonds payable	(348,666)		(111,243)		(192,268)
Payments on deferred financing costs and extinguishment of debt	(9,814)		(5,416)		(4,770)
Redemptions of common stock	(2,882)		(6,425)		(6,007)
Noncontrolling interests contributions	584		543		300
Noncontrolling interests distributions	(2,608)		(1,094)		(9,538)
Payment for redeemable noncontrolling interests	—		—		(6,687)
Distributions paid	—		—		(11,016)
Preferred dividends paid	—		—		(1,123)
Acquisition of noncontrolling interest	—		—		(1,125)
Payments to redeem noncontrolling cumulative convertible redeemable preferred stock	—		—		(16,934)
Net cash used in financing activities	(183,599)		(25,133)		(61,062)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	946		(2,127)		(3,744)
Net (decrease) increase in cash, cash equivalents and restricted cash	(56,833)		(3,835)		53,613
Cash, cash equivalents and restricted cash, beginning of period	155,209		159,044		105,431
Cash, cash equivalents and restricted cash, end of period	$	98,376	$	155,209	$	159,044

See accompanying notes to consolidated financial statements.

F-7

PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

(in thousands)

Reconciliation of cash, cash equivalents and restricted cash were as follows:

	Years Ended December 31,
	2024		2023		2022
Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents	$	56,000	$	99,160	$	97,931
Restricted cash	42,376		56,049		61,113
Total cash, cash equivalents and restricted cash	$	98,376	$	155,209	$	159,044

Supplemental cash flow and significant noncash transactions disclosures were as follows:

	Years Ended December 31,
	2024		2023		2022
Supplemental Disclosure of Cash Flow Information:
Interest paid, net of capitalized interest of $4,519, $3,748 and $2,529 for the years ended December 31, 2024, 2023, and 2022, respectively	$	60,399	$	58,884	$	38,663
Income taxes paid	10,000		11,500		—
Supplemental Disclosure of Significant Noncash Transactions:
Accrued improvements to real estate	1,975		4,108		3,827
Accrued development obligations	12,135		11,213		7,896
Deposit applied to sale of real estate	9,472		7,528		—
Adjustment to redemption value of redeemable noncontrolling interest	—		—		3,946
Assets acquired in the consolidation of PORT II	—		—		137,569
Liabilities assumed in the consolidation of PORT II	—		—		85,096

See accompanying notes to consolidated financial statements.

F-8

PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2024

1.    ORGANIZATION

Pacific Oak Strategic Opportunity REIT, Inc. (the “Company”) was formed on October 8, 2008 as a Maryland corporation and elected to be taxed as a real estate investment trust (“REIT”) beginning with the taxable year ended December 31, 2010. The Company conducts its business primarily through Pacific Oak SOR (BVI) Holdings, Ltd. (“Pacific Oak SOR BVI”), a private company limited by shares according to the British Virgin Islands Business Companies Act, 2004, which was incorporated on December 18, 2015 and is authorized to issue a maximum of 50,000 common shares with no par value. Upon incorporation, Pacific Oak SOR BVI issued one certificate containing 10,000 common shares with no par value to Pacific Oak Strategic Opportunity Limited Partnership (the “Operating Partnership”), a Delaware limited partnership formed on December 10, 2008. The Company is the sole general partner of, and owns a 0.1% partnership interest in, the Operating Partnership. Pacific Oak Strategic Opportunity Holdings, LLC (“REIT Holdings”), a Delaware limited liability company formed on December 9, 2008, owns the remaining 99.9% interest in the Operating Partnership and is its sole limited partner. The Company is the sole member and manager of REIT Holdings.

Subject to certain restrictions and limitations, the business of the Company is externally managed by Pacific Oak Capital Advisors, LLC (the “Advisor”), an affiliate of the Company, pursuant to an advisory agreement (the “Advisory Agreement”) which is currently effective through November 1, 2025; however, the Company or the Advisor may terminate the Advisory Agreement without cause or penalty upon providing 60 days’ written notice. The Advisor conducts the Company’s operations and manages its portfolio of real estate and other real estate-related investments, with the exception of the Company’s residential home portfolio. The Company’s residential home portfolio, held through its subsidiary Pacific Oak Residential Trust, Inc. (“PORT”), is managed by an unaffiliated advisor, refer to Note 7 for additional details.

On January 8, 2009, the Company filed a registration statement on Form S-11 with the Securities and Exchange Commission (the “SEC”) to offer a minimum of 250,000 shares and a maximum of 140,000,000 shares of common stock for sale to the public, of which 100,000,000 shares were registered in a primary offering and 40,000,000 shares were registered to be sold under the Company’s dividend reinvestment plan. The SEC declared the Company’s registration statement effective on November 20, 2009. The Company ceased offering shares of common stock in its primary offering on November 14, 2012 and suspended offering shares under its dividend reinvestment plan as of March 28, 2023.

The Company sold 56,584,976 shares of common stock in its primary offering for gross offering proceeds of $561.7 million. As of March 28, 2023, the Company indefinitely suspended offering shares of common stock under the dividend reinvestment plan to minimize administrative costs. On July 16, 2024, the Company’s board of directors indefinitely suspended the Company’s share redemption program, effective July 30, 2024, due to the Company’s liquidity position. On October 5, 2020, Pacific Oak Strategic Opportunity REIT II, Inc. ("POSOR II") merged with an indirect subsidiary of the Company (the “Merger”). At the effective time of the Merger, each issued and outstanding share of POSOR II’s common stock converted into 0.9643 shares of the Company’s common stock or 28,973,906 shares. As of December 31, 2024, the Company had redeemed 28,932,545 shares for $333.4 million and had issued 36,398,447 shares of common stock in connection with special dividends.

As of December 31, 2024, the Company consolidated nine office complexes, one residential home portfolio consisting of 2,093 residential homes, one apartment property containing 317 units, one hotel property with 196 rooms, three investments in undeveloped land with 247 developable acres, one office/retail development property, held an interest in three investments in unconsolidated entities and held one investment in real estate equity securities.

2.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation and Basis of Presentation

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

The consolidated financial statements were prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) as contained within the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification and the rules and regulations of the SEC.

F-9

PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

December 31, 2024

Liquidity

The Company generally finances its real estate investments using notes payable that are typically structured as non-recourse secured mortgages with original maturities of three to five years, with short term extension options available upon the Company meeting certain debt extension covenants. Additionally, the Company has issued bonds in Israel to finance its real estate investments and has original maturities of three to six years. Each reporting period, management evaluates the Company’s ability to continue as a going concern by evaluating conditions and events, including assessing the liquidity needs to satisfy upcoming debt obligations and the ability to satisfy debt covenant requirements. The Company has $361.0 million of debt obligations coming due within one year following the report issuance date, which includes 388.2 million Israeli new shekels ($106.8 million as of December 31, 2024) of Series B bonds due on January 31, 2026. On January 31, 2025, the Company made the remaining second principal installment payment of 75.3 million Israeli new shekels ($21.0 million as of January 31, 2025) in connection with the Series B bonds.

In order to satisfy obligations as they mature, management will evaluate its options and may seek to utilize extension options (if available) in the respective loan agreements, may make partial loan repayments to meet debt covenant requirements, may seek to refinance certain debt instruments, may sell real estate equity securities to convert to cash to make principal payments, may market one or more properties for sale or may negotiate a turnover of one or more secured properties back to the related mortgage lender and remit payment for any associated loan guarantee. Historically, the Company has successfully issued new debt, refinanced maturing debt instruments or utilized extension options in order to satisfy obligations as they come due and has not negotiated a turnover of a property back to a lender, though the Company may utilize such option if necessary.

Use of Estimates

The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions, including fair value estimates for real estate, which affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could materially differ from those estimates.

Reclassifications

Certain amounts in the accompanying consolidated balance sheets have been reclassified to conform to the current period presentation. These reclassifications have not changed the results of operations of the prior period. During the year ended December 31, 2024, the Company sold 89 residential homes and one strategic opportunistic property and, as of December 31, 2024, 16 residential homes met the held for sale criteria. As a result, certain assets and liabilities were reclassified to held for sale in the accompanying consolidated balance sheets for all periods presented. The reclassifications have not changed the results of operations of the prior period.

Revenue Recognition

Lessor Accounting

The Company recognizes minimum rent, including rental abatements, lease incentives and contractual fixed increases attributable to operating leases, on a straight-line basis over the term of the related leases when collectibility is determined to be probable and records amounts expected to be received in later years as deferred rent receivable. In accordance with Topic 842, tenant reimbursements for property taxes and insurance are included in the single lease component of the lease contract (the right of the lessee to use the leased space) and therefore are accounted for as variable lease payments and are recorded as rental income in the accompanying consolidated statements of operations. In addition, the Company adopted the practical expedient available under Topic 842 to not separate nonlease components from the associated lease component and instead to account for those components as a single component if the nonlease components otherwise would be accounted for under the revenue recognition standard (Topic 606) and if certain conditions are met, specifically related to tenant reimbursements for common area maintenance which would otherwise be accounted for under the revenue recognition standard. The Company believes the two conditions have been met for tenant reimbursements for common area maintenance as (i) the timing and pattern of transfer of the nonlease components and associated lease components are the same and (ii) the lease component would be classified as an operating lease. Accordingly, tenant reimbursements for common area maintenance are also accounted for as variable lease payments and recorded as rental income in the accompanying consolidated statements of operations.

If the lease provides for tenant improvements, the Company determines whether the tenant improvements, for accounting purposes, are owned by the tenant or the Company. When the Company is the owner of the tenant improvements, the tenant is not considered to have taken physical possession or have control of the physical use of the leased asset until the tenant improvements are substantially completed. When the tenant is the owner of the tenant improvements, any tenant improvement

F-10

PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

December 31, 2024

allowance (including amounts that can be taken in the form of cash or a credit against the tenant’s rent) that is funded is treated as a lease incentive and amortized as a reduction of revenue over the lease term.

The Company leases apartment units and residential homes under operating leases with terms generally for one year or less. Generally, credit investigations will be performed for prospective residents and security deposits will be obtained. The Company recognizes rental revenue, net of concessions, on a straight-line basis over the term of the lease, when collectibility is determined to be probable.

The Company makes a determination of whether the collectibility of the lease payments in an operating lease is probable. If the Company determines the lease payments are not probable of collection, the Company would fully reserve for any contractual lease payments, deferred rent receivable, and variable lease payments and would recognize rental income at the lesser of (1) on a straight-line basis or (2) cash received. These changes to the Company’s collectibility assessment are reflected as an adjustment to rental income.

The Company, as a lessor, records costs to negotiate or arrange a lease that would have been incurred regardless of whether the lease was obtained, such as legal costs incurred to negotiate an operating lease, as an expense and classify such costs as operating, maintenance, and management expense in the accompanying consolidated statements of operations.

Hotel Revenues

The Company recognizes hotel revenue when earned. Revenues are recorded net of any sales or occupancy tax collected from the Company’s guests. Additionally, some of the Company’s hotel rooms are booked through independent internet travel intermediaries. If the guest pays the independent internet travel intermediary directly, revenue for the room is booked by the Company at the price the Company sold the room to the independent internet travel intermediary, less any discount or commission paid. If the guest pays the Company directly, revenue for the room is booked by the Company on a gross basis. The Company participates in frequent guest programs sponsored by the brand owners of the Company’s hotel and the Company expenses the charges associated with those programs, as incurred. Hotel operating revenues are disaggregated in Note 3 into room revenue and other revenue.

Room revenue is generated through contracts with customers whereby the customer agrees to pay a daily rate for the right to use a hotel room. The Company’s contract performance obligations are fulfilled at the end of the day that the customer is provided the room and revenue is recognized daily at the contract rate. The Company records contract liabilities in the form of advanced deposits when a customer or group of customers provides a deposit for a future stay at the Company’s hotels. Advanced deposits for room revenue are included in the balance of other liabilities on the consolidated balance sheets and are recognized as revenue at the time of the guest’s stay.

Real Estate Investments

Depreciation and Amortization

Real estate costs related to the acquisition and improvement of properties are capitalized and depreciated over the expected useful life of the asset on a straight-line basis. Repair and maintenance costs are charged to expense as incurred and significant replacements and betterment are capitalized. Repair and maintenance costs include all costs that do not extend the useful life of the real estate asset. The Company considers the period of future benefit of an asset to determine its appropriate useful life. Expenditures for tenant improvements are capitalized and amortized over the shorter of the tenant’s lease term or expected useful life. The Company anticipates the estimated useful lives of its assets by class to be generally as follows:

Buildings	25-40 years
Building improvements	10-40 years
Tenant improvements	Shorter of lease term or expected useful life
Tenant origination and absorption costs	Remaining term of related leases, including below-market renewal periods
Furniture, fixtures & equipment	3-12 years

F-11

PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

December 31, 2024

Impairment Charges on Real Estate and Related Intangibles

The Company continually monitors events and changes in circumstances that could indicate that the carrying amounts of its real estate and related intangibles may not be recoverable or realized. Such indicators of potential impairment may include an assessment of management's intended hold period and disposition strategy, a significant decrease in market price, a significant decline in expected future undiscounted cash flows, current industry and market trends and other factors including bona fide purchase offers received from third parties in making this assessment. When indicators of potential impairment suggest that the carrying value of real estate and related intangibles may not be recoverable, the Company assesses the recoverability by estimating whether the Company will recover the carrying value of the real estate and related intangibles through its undiscounted future cash flows and its eventual disposition. If, based on this analysis, the Company does not believe that it will be able to recover the carrying value of the real estate and related intangibles, the Company would record an impairment loss to the extent that the carrying value exceeds the estimated fair value of the real estate and related intangibles. The Company recorded an impairment loss of $76.1 million, $64.8 million and $18.5 million on its real estate and related intangibles during the years ended December 31, 2024, 2023, and 2022, respectively. Refer to Note 6 for additional details.

Projecting future cash flows involves estimating expected future operating income and expenses, market comparables, discount rates, capitalization rates and/or market lease and average daily rates, revenue growth rates, and occupancy related to the real estate and its related intangibles as well as market and other trends. Using inappropriate assumptions to estimate cash flows could result in incorrect fair values of the real estate and its related intangibles and could result in the overstatement of the carrying values of the Company’s real estate and related intangibles and an overstatement of its net income.

Real Estate Held for Sale

The Company generally considers real estate to be “held for sale” when the following criteria are met: (i) management commits to a plan to sell the property, (ii) the property is available for sale immediately, (iii) the property is actively being marketed for sale at a price that is reasonable in relation to its current fair value, (iv) the sale of the property within one year is considered probable and (v) significant changes to the plan to sell are not expected. Real estate that is held for sale and its related assets are classified as real estate held for sale and assets related to real estate held for sale, respectively, for all periods presented in the accompanying consolidated balance sheets. Notes payable and other liabilities related to real estate held for sale are classified as notes payable related to real estate held for sale and liabilities related to real estate held for sale, respectively, for all periods presented in the accompanying consolidated balance sheets. Real estate classified as held for sale is no longer depreciated and is reported at the lower of its carrying value or its estimated fair value less estimated costs to sell. Operating results and related gains on sale of properties that were disposed of or classified as held for sale in the ordinary course of business are included in continuing operations in the accompanying consolidated statements of operations.

Sale of Real Estate

The Company’s sales of real estate would be considered a sale of a nonfinancial asset. If the Company determines it does not have a controlling financial interest in the entity that holds the asset and the arrangement meets the criteria to be accounted for as a contract, the Company would derecognize the asset and recognize a gain or loss on the sale of the real estate when control of the underlying asset transfers to the buyer. Refer to Note 4 for additional details.

Real Estate Equity Securities

The Company’s investment in real estate equity securities are carried at their estimated fair value based on quoted market prices for the security. Transaction costs that are directly attributable to the acquisition of real estate equity securities are capitalized to its cost basis.

For the year ended December 31, 2024, the Company recognized a realized loss on real estate equity securities of $31.7 million and an unrealized gain on real estate equity securities of $19.6 million. For the year ended December 31, 2023, the Company recognized a realized gain on real estate equity securities of $5.5 million and an unrealized loss on real estate equity securities of $10.1 million. For the year ended December 31, 2022, the Company did not recognize realized gains or losses on real estate equity securities and recognized an unrealized loss on real estate equity securities of $51.9 million.

Investments in Unconsolidated Entities

F-12

PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

December 31, 2024

The Company uses the equity method of accounting for investments in unconsolidated entities that qualify as VIEs where the Company is not the primary beneficiary and other entities that the Company does not control, but has the ability to exercise significant influence over the operating and financial policies of the investee. The Company recognizes its share of the ongoing income or loss from the unconsolidated entities as equity in income or loss from unconsolidated entities in the consolidated statements of operations, unless otherwise suspended.

The Company evaluates the investments for both qualitative and quantitative events or changes in circumstances that indicate there may be an other-than-temporary impairment. The amount of loss recognized is the excess of the investment’s carrying amount over its estimated fair value. The aforementioned factors are taken into consideration as a whole by management in determining the valuation of our equity method investments.

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Cash equivalents may include cash and short-term investments. Cash and cash equivalents were stated at cost, which approximates fair value. There were no restrictions on the use of the Company’s cash and cash equivalents as of December 31, 2024 and 2023.

The Company’s cash and cash equivalents balance exceeded federally insurable limits as of December 31, 2024. The Company monitors the cash balances in its operating accounts and adjusts the cash balances as appropriate; however, these cash balances could be impacted if the underlying financial institutions fail or are subject to other adverse conditions in the financial markets. To date, the Company has experienced no loss or lack of access to cash in its operating accounts.

Restricted Cash

Restricted cash is comprised of lender impound reserve accounts on the Company’s borrowings for security deposits, property taxes, insurance, debt service obligations, capital improvements and replacements, and escrow deposits for future real estate sales.

Deferred Financing Costs

Deferred financing costs represent commitment fees, loan fees, legal fees and other third-party costs associated with obtaining financing and are presented on the balance sheets as a direct deduction from the carrying value of the associated debt liability. These costs are amortized over the terms of the respective financing agreements using the effective interest method. Unamortized deferred financing costs are generally expensed when the associated debt is refinanced or repaid before maturity, unless specific rules are met that would allow for the carryover of such costs to the refinanced debt. Deferred financing costs incurred before an associated debt liability is recognized are included in prepaid and other assets on the balance sheets. Costs incurred in seeking financing transactions that do not close are expensed in the period in which it is determined that the financing will not close.

Fair Value Measurements

The Company measures certain assets and liabilities at fair value on a recurring basis. In addition, the Company measures other assets and liabilities at fair value on a non-recurring basis. Fair value is defined as the price that would be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The GAAP fair value framework uses a three-tiered approach. Fair value measurements were classified and disclosed in one of the following three categories:

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

•Level 2: quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-derived valuations in which significant inputs and significant value drivers are observable in active markets; and

•Level 3: prices or valuation techniques where little or no market data is available that requires inputs that are both significant to the fair value measurement and unobservable.

When available, the Company utilizes quoted market prices from an independent third-party source to determine fair value and classifies such items in Level 1 or Level 2.

F-13

PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

December 31, 2024

The Company would classify items as Level 3 in instances where the market for a financial instrument is not active, regardless of the availability of a nonbinding quoted market price, observable inputs might not be relevant and could require the Company to make a significant adjustment to derive a fair value measurement. Additionally, in an inactive market, a market price quoted from an independent third party may rely more on models with inputs based on information available only to that independent third party. When the Company determines that the market for a financial instrument owned by the Company is illiquid or when market transactions for similar instruments do not appear orderly, the Company uses several valuation sources (including internal valuations, discounted cash flow analysis and quoted market prices) and establishes a fair value by assigning weights to the various valuation sources. Additionally, when determining the fair value of liabilities in circumstances in which a quoted price in an active market for an identical liability is not available, the Company measures fair value using (i) a valuation technique that uses the quoted price of the identical liability when traded as an asset or quoted prices for similar liabilities when traded as assets or (ii) another valuation technique that is consistent with the principles of fair value measurement, such as the income approach or the market approach.

Changes in assumptions or estimation methodologies can have a material effect on these estimated fair values. In this regard, the derived fair value estimates cannot be substantiated by comparison to independent markets and, in many cases, may not be realized in an immediate settlement of the instrument.

The Company considers the following factors to be indicators of an inactive market: (i) there are few recent transactions, (ii) price quotations are not based on current information, (iii) price quotations vary substantially either over time or among market makers (for example, some brokered markets), (iv) indexes that previously were highly correlated with the fair values of the asset or liability are demonstrably uncorrelated with recent indications of fair value for that asset or liability, (v) there is a significant increase in implied liquidity risk premiums, yields, or performance indicators (such as delinquency rates or loss severities) for observed transactions or quoted prices when compared with the Company’s estimate of expected cash flows, considering all available market data about credit and other nonperformance risk for the asset or liability, (vi) there is a wide bid-ask spread or significant increase in the bid-ask spread, (vii) there is a significant decline or absence of a market for new issuances (that is, a primary market) for the asset or liability or similar assets or liabilities, and (viii) little information is released publicly (for example, a principal-to-principal market).

The Company considers the following factors to be indicators of non-orderly transactions: (i) there was not adequate exposure to the market for a period before the measurement date to allow for marketing activities that are usual and customary for transactions involving such assets or liabilities under current market conditions, (ii) there was a usual and customary marketing period, but the seller marketed the asset or liability to a single market participant, (iii) the seller is in or near bankruptcy or receivership (that is, distressed), or the seller was required to sell to meet regulatory or legal requirements (that is, forced), and (iv) the transaction price is an outlier when compared with other recent transactions for the same or similar assets or liabilities.

Related Party Transactions

Pursuant to the Advisory Agreement, the Company is obligated to pay the Advisor specified fees upon the provision of certain services related to the investment of funds in real estate and real estate-related investments, management of the Company’s investments and for other services (including, but not limited to, the disposition of investments). Refer to Note 7 for additional details.

The Company records all related party fees as incurred, subject to any limitations described in the advisory agreement. The Company had not incurred any subordinated participation in net cash flows or subordinated incentive listing fees payable to the Advisor through December 31, 2024.

Foreign Currency Transactions

The U.S. Dollar is the Company’s functional currency. Transactions denominated in currency other than the Company’s functional currency were recorded upon initial recognition at the exchange rate on the date of the transaction. After initial recognition, monetary assets and liabilities denominated in foreign currency were remeasured at each reporting date into the foreign currency at the exchange rate on that date. Exchange rate differences were recognized as foreign currency transaction gain or loss in the accompanying consolidated statements of operations.

Income Taxes

The Company has elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended. To qualify as a REIT, the Company must meet certain organizational and operational requirements, including a requirement to distribute at least 90% of the Company’s annual REIT taxable income to its stockholders (which is computed without regard to the

F-14

PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

December 31, 2024

dividends paid deduction or net capital gain and which does not necessarily equal net income as calculated in accordance with GAAP). As a REIT, the Company generally will not be subject to federal income tax to the extent it distributes qualifying dividends to its stockholders. The Company conducts certain business activities through taxable REIT subsidiaries (“TRS”). If the Company fails to qualify as a REIT in any taxable year, it will be subject to federal income tax on its taxable income at regular corporate income tax rates and generally will not be permitted to qualify for treatment as a REIT for federal income tax purposes for the four taxable years following the year during which qualification is lost unless the Internal Revenue Service grants the Company relief under certain statutory provisions. Such an event could materially and adversely affect the Company’s net income or loss and net cash available for distribution to stockholders. However, the Company intends to organize and operate in such a manner as to qualify for treatment as a REIT.

The Company accounts for income taxes using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to the differences between the financial statement carrying amounts of existing assets and liabilities and their respective income tax bases, and for net operating loss, capital loss and tax credit carryforwards. The deferred tax assets and liabilities are measured using the enacted income tax rates in effect for the year in which those temporary differences are expected to be realized or settled. The effect on the deferred tax assets and liabilities from a change in tax rates is recognized in earnings in the period when the new rate is enacted. However, deferred tax assets are recognized only to the extent that it is more likely than not that they will be realized based on consideration of all available evidence, including the future reversals of existing taxable temporary differences, future projected taxable income and tax planning strategies. Valuation allowances are provided if, based upon the weight of the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

The Company has concluded that there are no significant uncertain tax positions requiring recognition in its financial statements. Neither the Company nor its subsidiaries have been assessed interest or penalties by any major tax jurisdictions. The Company’s evaluations were performed for all open tax years through December 31, 2024. As of December 31, 2024, returns for the calendar year 2020 through 2023 remain subject to examination by major tax jurisdictions.

The Company’s hotel property is leased to a wholly-owned TRS, which in turn contracts with an independent hotel management company that manages the day-to-day operations of the Company’s hotel.

Segments

The Company operates in three reportable business segments: opportunistic real estate and real estate-related investments, residential homes, and hotel, which is how the Company's management manages the business. In general, the Company intends to hold its investments in opportunistic real estate and other real estate-related assets for capital appreciation. Traditional performance metrics of opportunistic real estate and other real estate-related assets may not be meaningful as these investments are generally non-stabilized and do not provide a consistent stream of interest income or rental revenue. These investments exhibit similar long-term financial performance and have similar economic characteristics. These investments typically involve a higher degree of risk and do not provide a constant stream of ongoing cash flows. As a result, the Company’s management views opportunistic real estate and other real estate-related assets as similar investments and aggregated into one reportable business segment. The Company owns residential homes in 17 markets and are all aggregated into one reportable business segment due to the homes being stabilized, having high occupancy rates and have similar economic characteristics. Additionally, the Company owned one hotel as of December 31, 2024 and is a separate reportable business segment due to the nature of the hotel business with short-term stays.

Per Share Data

The Company applies the two-class method when computing its basic and diluted earnings per share. Net loss is allocated to the unvested restricted stock payable outstanding during each year, as the restricted stock contains non-forfeitable rights to distributions and is therefore considered a participating security. The Company's unvested restricted stock payable have been included in the calculation of basic and diluted earnings per share for the years ended December 31, 2024, 2023 and 2022, as the restriction is not contingent on any conditions except the passage of time. Potential common shares consist of unvested restricted stock, using the more dilutive of either the two-class method or the treasury stock method.

Basic and diluted loss per share of common stock is calculated by dividing net loss attributable to common stockholders by the weighted-average number of shares of common stock issued and outstanding during such period. Diluted loss per share of common stock is computed based on the weighted-average number of shares of common stock outstanding during each period, plus potential common shares considered outstanding during the period, as long as the inclusion of such awards is not anti-dilutive.

F-15

PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

December 31, 2024

The following table summarizes the computation of basic and diluted net loss per common share for the years ended December 31, 2024, 2023 and 2022 (in thousands, except per share data):

	Year Ended December 31,
	2024		2023		2022
Numerator:
Net loss	$	(104,872)	$	(146,477)	$	(41,670)
Net loss (income) attributable to noncontrolling interests	4,035		2,326		(530)
Net loss attributable to redeemable noncontrolling interest	—		—		81
Preferred stock dividends	—		—		(1,123)
Adjustment to redemptions value of noncontrolling cumulative convertible redeemable preferred stock	—		—		(1,800)
Net loss attributable to common stockholders (for net loss per common share, basic and diluted)	$	(100,837)	$	(144,151)	$	(45,042)
Denominator:
Weighted-average number of common shares outstanding, basic and diluted	103,083,547		103,642,866		103,522,696
Net loss per common share, basic and diluted	$	(0.98)	$	(1.39)	$	(0.44)

Square Footage, Occupancy and Other Measures

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

New Accounting Standards and Accounting Changes

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

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The guidance is to be applied retrospectively to all periods presented in the financial statements. The guidance is effective on an annual basis in 2024 and will be effective for interim periods beginning in the first quarter of 2025. The Company’s adoption of ASU 2023-07 in December 2024 had no effect on its financial statements; however, ASU 2023-07’s additional disclosure requirements are included in Note 9.

F-16

PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

December 31, 2024

3.     REAL ESTATE HELD FOR INVESTMENT

As of December 31, 2024, the Company consolidated nine office complexes, encompassing, in the aggregate, 3.2 million rentable square feet and these properties were 67% occupied. In addition, the Company owned one residential home portfolio consisting of 2,093 residential homes, and one apartment property containing 317 units, which were 93% and 92% occupied, respectively. The Company also owned one hotel property with 196 rooms, three investments in undeveloped land with 247 developable acres, and one office/retail development property. The following table summarizes the Company’s real estate held for investment as of December 31, 2024 and 2023, respectively (in thousands):

	December 31, 2024		December 31, 2023
Land	$	197,644	$	228,087
Buildings and improvements	834,848		881,924
Tenant origination and absorption costs	11,394		15,423
Total real estate, cost	1,043,886		1,125,434
Accumulated depreciation and amortization	(161,895)		(154,613)
Total real estate, net	$	881,991	$	970,821

Operating Leases

Certain of the Company’s real estate properties are leased to tenants under operating leases for which the terms and expirations vary. As of December 31, 2024, the leases, excluding options to extend apartment leases and residential home leases, which have terms that are generally one year or less, had remaining terms of up to 15.7 years with a weighted-average remaining term of 3.5 years. Some of the leases have provisions to extend the lease agreements, options for early termination after paying a specified penalty and other terms and conditions as negotiated. The Company retains substantially all of the risks and benefits of ownership of the real estate assets leased to tenants. Generally, upon the execution of a lease, the Company requires a security deposit from tenants in the form of a cash deposit and/or a letter of credit. The amount required as a security deposit varies depending upon the terms of the respective leases and the creditworthiness of the tenant, but generally are not significant amounts. Therefore, exposure to credit risk exists to the extent that a receivable from a tenant exceeds the amount of its security deposit. Security deposits received in cash and assumed in real estate acquisitions related to tenant leases are included in other liabilities in the accompanying consolidated balance sheets and totaled $5.9 million as of both December 31, 2024 and 2023.

During the years ended December 31, 2024, 2023 and 2022, the Company recognized deferred rent from tenants of $0.9 million, $0.2 million and $2.6 million, respectively, net of lease incentive amortization. As of December 31, 2024 and 2023, the cumulative deferred rent receivable balance, including unamortized lease incentive receivables, was $19.7 million and $19.1 million, respectively, and is included in rents and other receivables, net in the accompanying consolidated balance sheets. The cumulative deferred rent receivable balance included $2.2 million and $2.5 million of unamortized lease incentives as of December 31, 2024 and 2023, respectively.

As of December 31, 2024, the future minimum rental income from the Company’s office complexes, under non-cancelable operating leases was as follows (in thousands):

2025	$	57,846
2026	47,370
2027	39,135
2028	31,510
2029	25,422
Thereafter	46,006
	$	247,289

F-17

PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

December 31, 2024

Hotel

The following table provides detailed information regarding the Company’s hotel revenues for its hotel properties for the years ended December 31, 2024, 2023 and 2022 (in thousands):

	Year Ended December 31,
	2024		2023		2022
Hotel revenues:
Room	$	7,886	$	7,981	$	23,834
Other	1,175		1,172		6,915
Hotel revenues	$	9,061	$	9,153	$	30,749

Contract Liabilities

The following table summarizes the Company’s contract liabilities, which are comprised of: hotel advanced deposits, deferred proceeds received from the buyers of the Park Highlands undeveloped land sales, and value of Park Highlands undeveloped land that was contributed to a master association, which are included in other liabilities in the accompanying consolidated balance sheets, as of December 31, 2024 and 2023 (in thousands):

	December 31, 2024		December 31, 2023
Contract liabilities	$	25,700	$	23,783
Revenue and other income recognized in the period from:
Amounts included in contract liabilities at the beginning of the period	$	9,758	$	16,192

Geographic Concentration Risk

As of December 31, 2024, the Company’s real estate investments in California and Georgia represented 11.4% and 11.3%, respectively, of the Company’s total assets. As a result, the geographic concentration of the Company’s portfolio makes it particularly susceptible to adverse economic developments in the California and Georgia real estate markets. Any adverse economic or real estate developments in these markets, such as business layoffs or downsizing, industry slowdowns, relocations of businesses, changing demographics and other factors, or any decrease in demand for office space resulting from the local business climate, could adversely affect the Company’s operating results and its ability to make distributions to stockholders.

Impairment of Real Estate

During the year ended December 31, 2024, the Company recorded impairment charges on real estate in the aggregate of $76.1 million, to write down the carrying value of five strategic opportunistic properties and one hotel to their estimated fair values due to declines in market conditions and projected cash flows, changes in sales comparisons, and also based on a quoted price.

During the year ended December 31, 2023, the Company recorded impairment charges on real estate in the aggregate of $64.8 million, to write down the carrying value of three strategic opportunistic properties to their estimated fair values due to increases in the discount and terminal cap rate assumptions, decreases in projected cash flows, and changes in sales comparisons.

During the year ended December 31, 2022, the Company recorded impairment charges on real estate in the aggregate of $18.5 million, to write down the carrying value of two strategic opportunistic properties to their estimated fair value due to a change in the projected hold period and related decrease in projected cash flows. Additionally, the Company determined that based on the amended sale price of one hotel, the book value was not recoverable and the Company wrote down the carrying value of the hotel by $2.5 million.

F-18

PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

December 31, 2024

Tenant Origination and Absorption Costs

As of December 31, 2024 and 2023, the Company’s tenant origination and absorption costs (included in real estate held for investment, net) were as follows (in thousands):

	Tenant Origination and<br>Absorption Costs
	December 31, 2024		December 31, 2023
Cost	$	11,394	$	15,423
Accumulated Amortization	(7,587)		(8,392)
Net Amount	$	3,807	$	7,031

During the years ended December 31, 2024, 2023 and 2022, the Company recognized tenant origination and absorption cost amortization expense of $2.6 million, $5.0 million and $9.9 million, respectively.

The remaining unamortized balance for these outstanding intangible assets and liabilities as of December 31, 2024 will be amortized for the years ending December 31 as follows (in thousands):

	Tenant Origination and <br>Absorption Costs
2025	$	(1,638)
2026	(751)
2027	(305)
2028	(216)
2029	(205)
Thereafter	(692)
	$	(3,807)
Weighted-Average Remaining Amortization Period	3.0 years

4.    REAL ESTATE DISPOSITIONS

During the year ended December 31, 2024, the Company disposed of an apartment property, 334 developable acres of undeveloped land and 89 residential homes. During the year ended December 31, 2023, the Company disposed of one school property, 186 developable acres of undeveloped land and 274 residential homes. During the year ended December 31, 2022, the Company disposed of two office buildings, one hotel and 67 developable acres of undeveloped land. The purchasers were not affiliated with the Company nor the Advisor.

In September 2024, the Company sold the Lofts at NoHo Commons, an apartment property from the Company’s strategic opportunistic properties segment, for proceeds of $92.5 million, before closing costs and credits of $6.3 million. The Company repaid $68.5 million of the outstanding principal balance due under the secured mortgage loan.

During the year ended December 31, 2024, the Company sold 334 developable acres of Park Highlands undeveloped land, from the Company’s strategic opportunistic properties segment, for proceeds of $147.8 million, net of closing costs and credits of $20.7 million for future development obligations and before deposits of $9.5 million. The Company recognized a pre-tax gain on sale of real estate, net of $116.6 million related to the disposition. A portion of the Park Highlands undeveloped land was collateral for the Series C bonds and in connection with the sales, the Company repaid 218.0 million Israeli new shekels ($59.8 million as of December 31, 2024) of Series C bonds. Previously, the land was contributed to a TRS, which increased its tax basis. For the year ended December 31, 2024, the land sold resulted in a $10.0 million income tax provision. The income tax provision is based on the U.S. federal statutory rate of 21% applied to the taxable gain realized from the date of contribution of land into the TRS through the date of sale. There were no state taxes related to this disposition.

During the year ended December 31, 2024, the Company sold 89 residential homes, from the Company’s residential homes segment, for proceeds of $13.8 million, net of closing costs and adjustments. The Company recognized a gain on sale of real estate, net of $3.8 million related to the disposition and repaid $6.4 million of the outstanding principal balance due under secured mortgage loans.

F-19

PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

December 31, 2024

During the year ended December 31, 2023, the Company sold 274 residential homes, from the Company’s residential homes segment, for proceeds of $37.2 million, net of closing costs and adjustments. The Company recognized a gain on sale of real estate, net of $5.6 million related to the disposition and also repaid $17.6 million of the outstanding principal balance due under secured mortgage loans.

During the year ended December 31, 2023, the Company sold 186 developable acres of Park Highlands undeveloped land, from the Company’s strategic opportunistic properties segment, for proceeds of $81.2 million, net of closing costs and credits of $11.2 million for future development obligations and before deposits of $7.5 million. The Company recognized a pre-tax gain on sale of real estate, net of $73.2 million related to the disposition. Previously, the land was contributed to a TRS, which increased its tax basis. For the year ended December 31, 2023, the land sold resulted in a $6.6 million income tax provision. The income tax provision is based on the U.S. federal statutory rate of 21% applied to the taxable gain realized from the date of contribution of land into the TRS through the date of sale. There were no state taxes related to this disposition.

In May 2023, the Company sold the Madison Square School, from the Company’s strategic opportunistic properties segment, for proceeds of $6.4 million, before closing costs and credits of $0.3 million. The Company recognized a gain on sale of real estate, net of $3.3 million related to the disposition. Subsequent to the sale, the Madison Square office complex had three office buildings remaining.

In November 2022, the Company sold 67 developable acres of Park Highlands undeveloped land, from the Company’s strategic opportunistic properties segment, for $55.0 million, before closing costs and credits. The Company recognized a pre-tax gain on sale of $42.8 million related to the disposition. Previously, the land was contributed to a TRS, which increased its tax basis. The land sale resulted in a $4.9 million income tax provision. The income tax provision is based on the U.S. federal statutory rate of 21% applied to the taxable gain realized from the date of contribution of land into the TRS through the date of sale. There were no state taxes related to this disposition.

In September 2022, the Company sold the Springmaid Beach Resort, from the Company’s hotel segment for $91.0 million, before closing costs and credits. The carrying value of the Springmaid Beach Resort as of the disposition date was $87.2 million, which was net of $3.4 million of accumulated depreciation and amortization and $2.5 million of impairment charges. In connection with the sale of the Springmaid Beach Resort, the Company repaid $53.0 million of the outstanding principal balance due under the mortgage loan secured by the Springmaid Beach Resort and $1.3 million of the proceeds were held for contingent repairs related to the property.

In January 2022, the Company sold two office buildings related to the Richardson Office portfolio, from the Company’s strategic opportunistic properties segment and containing 141,950 rentable square feet in Richardson, Texas (“Greenway Buildings”) for $11.0 million, before closing costs and credits. The carrying value of the Greenway Buildings as of the disposition date was $5.6 million, which was net of $3.2 million of accumulated depreciation and amortization. In connection with the sale of the Greenway Buildings, the Company repaid $9.1 million of the outstanding principal balance due under the mortgage loan secured by the Greenway Buildings. The Company recognized a gain on sale of $3.6 million related to the disposition of the Greenway Buildings, net of closing costs and adjustments.

The following table reconciles the U.S. federal statutory income tax rate to our effective income tax rate for the transaction’s taxable gain:

	Year Ended December 31,
	2024		2023		2022
U.S. federal statutory income tax rate	21	%	21	%	21	%
Net capital loss carryforwards utilized	—	%	—	%	(3)	%
Change in valuation allowance	—	%	—	%	(1)	%
Effective rate	21	%	21	%	17	%

F-20

PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

December 31, 2024

The operations of real estate properties sold and gain or losses on sales are included in continuing operations in the accompanying consolidated statements of operations. The following table summarizes certain revenues and expenses related to these properties for the years ended December 31, 2024, 2023 and 2022 (in thousands):

	Years Ended December 31,
	2024		2023		2022
Revenues
Rental income	$	7,403	$	13,822	$	19,186
Hotel revenues	—		—		20,983
Other operating income	287		631		621
Total revenues	$	7,690	$	14,453	$	40,790
Expenses
Operating, maintenance, and management	$	1,999	$	3,812	$	6,017
Real estate taxes and insurance	1,505		5,552		5,270
Hotel expenses	—		—		12,669
Asset management fees to affiliates	945		1,542		1,823
Depreciation and amortization	2,475		4,559		5,607
Interest expense, net	4,196		7,091		8,519
Total expenses	$	11,120	$	22,556	$	39,905

F-21

PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

December 31, 2024

5.     NOTES AND BONDS PAYABLE

As of December 31, 2024 and 2023, the Company’s notes and bonds payable, including notes payable related to real estate held for sale, consisted of the following (dollars in thousands):

	Book Value as of <br>December 31, 2024		Book Value as of <br>December 31, 2023		Contractual Interest Rate as of December 31, 2024 (1)	Interest Rate at December 31, 2024 (1)	Payment Type (2)	Maturity Date (3)
Series B Bonds (4)	$	127,486	$	321,724	4.18%	4.18%	(4)	01/31/2026
Series C Bonds (4)	39,049		99,461		9.00%	9.00%	(4)	06/30/2026
Series D Bonds (4)	161,436		—		9.75%	9.75%	(4)	02/28/2029
Crown Pointe Mortgage Loan	54,738		54,738		SOFR + 2.30%	6.83%	Interest Only	04/1/2025 (5)
Georgia 400 Center Mortgage Loan (6)	39,662		40,184		SOFR + 2.75%	7.28%	Principal & Interest	03/22/2025 (5)
PORT Mortgage Loan 1	34,967		34,967		4.74%	4.74%	Interest Only	10/01/2025
PORT Mortgage Loan 2	10,523		10,523		4.72%	4.72%	Interest Only	03/01/2026
PORT MetLife Loan 1 (6)	56,368		59,091		3.90%	3.90%	Interest Only	04/10/2026
PORT MetLife Loan 2 (6)	89,671		93,388		3.99%	3.99%	Interest Only	04/10/2026
Lincoln Court Mortgage Loan (6)	31,325		33,310		SOFR + 3.25%	7.78%	Interest Only	08/07/2025 (5)
Madison Square Mortgage Loan (6)	20,722		17,962		SOFR + 3.00%	7.53%	Interest Only	01/07/2025 (5)
Bank of America Mortgage Loan (7)	156,836		175,234		SOFR + 2.75%	7.28%	Principal & Interest	09/01/2026 (5)
Richardson Office Mortgage Loan (8)	12,018		12,209		SOFR +3.50% (8)	8.03%	Principal & Interest	04/30/2025 (5)
Q&C Hotel Mortgage Loan (8)	21,966		24,579		SOFR +3.50% (8)	8.03%	Principal & Interest	04/30/2025 (5)
Eight and Nine Corporate Centre Mortgage Loan	20,000		—		SOFR + 4.90% (9)	9.43%	Interest Only	02/09/2026 (5)
Lofts at NoHo Commons Mortgage Loan	—		68,451		(10)	(10)	(10)	(10)
Total Notes and Bonds Payable principal outstanding	876,767		1,045,821
Deferred financing costs and debt discount and premium, net (11)	(11,475)		(17,138)
Total Notes and Bonds Payable, net	$	865,292	$	1,028,683

_____________________

(1) Contractual interest rate represents the interest rate in effect under the loan as of December 31, 2024. Effective interest rate was calculated as the actual interest rate in effect as of December 31, 2024 (consisting of the contractual interest rate and contractual floor rates), using Secured Overnight Financing Rate (“SOFR”) as of December 31, 2024, where applicable.

(2) Represents the payment type required under these loans as of December 31, 2024. Certain future monthly payments due under these loans also include amortizing principal payments.

(3) Represents the initial maturity date or the maturity date as extended as of December 31, 2024. For more information of the Company’s contractual obligations under its notes and bonds payable, see five-year maturity table, below.

(4) See “Israeli Bond Financings” below for additional details on the Company’s bonds.

(5) Subject to certain conditions, the maturity dates of certain loans may be extended beyond the date shown. Subsequent to December 31, 2024, the Company extended the Madison Square Mortgage Loan to April 8, 2025. As of the filing date of this Annual Report on Form 10-K, the Company was in refinancing negotiations with the lender for the Georgia 400 Center Mortgage Loan.

(6) The Company’s notes and bonds payable are generally non-recourse. These mortgage loans have guarantees over certain balances whereby the Company would be required to make the remaining payments in the event that the Company turned the property over to the lender. As of December 31, 2024, the guaranteed amount in the aggregate was $204.0 million.

(7) This loan was cross-collateralized by the associated properties: Park Centre, 1180 Raymond, The Marq, and Oakland City Center and the Company made a principal repayment of $10.0 million on this loan on December 1, 2024.

(8) During the year ended December 31, 2024, the Company refinanced these loans and are cross-collateralized by the Richardson Office and Q&C Hotel properties. The effective interest rate is at the higher of one-month SOFR plus 3.50% or 7.50%.

(9) The effective interest rate is at the higher of one-month SOFR plus 4.90% or 8.90%.

(10) In September 2024, in connection with the disposition of the Lofts at NoHo Commons, the Company repaid the $68.5 million outstanding principal balance due under the Lofts at NoHo Commons Mortgage Loan.

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

During the years ended December 31, 2024, 2023 and 2022, the Company incurred $71.9 million, $68.2 million and $48.1 million of interest expense, net, respectively. Included in interest expense, net for the years ended December 31, 2024, 2023 and 2022, was $9.4 million, $9.6 million and $8.5 million, respectively of amortization of deferred financing costs and debt discount and premium, net.

F-22

PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

December 31, 2024

As of December 31, 2024 and 2023, the Company’s interest payable was $11.0 million and $9.0 million, respectively.

The following is a schedule of maturities, including principal amortization payments, for all notes and bonds payable outstanding as of December 31, 2024 (in thousands):

2025	$	244,464
2026	470,867
2027	53,812
2028	53,812
2029	53,812
	$	876,767

As of December 31, 2024, the Company had $244.5 million of debt obligations scheduled to mature over the period from January 1, 2025 through December 31, 2025. The Company has extension options with respect to $106.8 million of the debt obligations outstanding that are scheduled to mature over the next 12 months; however, the Company cannot exercise these options if not then in compliance with certain financial covenants in the loans without making a cash payment and there is no assurance that the Company will be able to meet these requirements. All of the Company’s debt obligations are generally non-recourse, subject to certain limited guaranty payments, as outlined in the table above, except for the Series Bonds. The Company plans to utilize available extension options or seek to refinance the notes and bonds payable. The Company may also choose to market the properties for sale or may negotiate a turnover of the secured properties back to the related mortgage lender.

Debt Covenant Compliance

The Company’s notes payable contain various financial debt covenants, including debt-to-value, debt yield, minimum equity requirements, and debt service coverage ratios. As of December 31, 2024, the Company was in compliance with all of these debt covenants with the exception that the Lincoln Court Mortgage Loan was not in compliance with the debt service coverage requirement. As a result of such non-compliance, the Company is required to provide a cash sweep for the Lincoln Court Mortgage Loan, and the remaining loans are at-risk of cash sweeps and/or principal pay downs if in non-compliance.

Israeli Bond Financings

As of December 31, 2024, the Company had bonds outstanding of 1.2 billion Israeli new shekels ($328.0 million as of December 31, 2024) (“Series Bonds”), of which 142.0 million Israeli new shekels ($39.0 million as of December 31, 2024) were collateralized by real estate (specified lands in Park Highlands and Richardson). The Series Bonds principal payments range from January 2025 to February 2029 with interest rates of 3.93% to 9.50%. During the year ended December 31, 2024, the Company issued 587.1 million Israeli new shekels ($161.4 million as of December 31, 2024) of Series D bonds to Israeli investors pursuant to a public offering registered with the Israel Securities Authority. During the year ended December 31, 2024, the Company repaid 700.9 million Israeli new shekels ($192.3 million as of December 31, 2024) of Series B bonds and also repaid 218.0 million Israeli new shekels ($59.8 million as of December 31, 2024) of Series C bonds collateralized by Park Highlands undeveloped land in connection with two real estate dispositions. The deeds of trust that govern the terms of the Series Bonds contain various financial covenants. As of December 31, 2024, the Company was in compliance with all of these financial debt covenants.

6.     FAIR VALUE DISCLOSURES

The following were the face values, carrying amounts and fair values of the Company’s financial liabilities as of December 31, 2024 and 2023, (in thousands):

	December 31, 2024				December 31, 2023
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Financial liabilities (Level 3):
Notes payable	$	545,906	$	540,191	$	620,262	$	611,725
Financial liabilities (Level 1):
Series Bonds	$	319,386	$	329,141	$	408,421	$	399,044

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

F-23

PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

December 31, 2024

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

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

_____________________

(1) Amount represents the fair value for a real estate asset impacted by impairment charges during the year ended December 31, 2024, as of the date that the fair value measurement was made. The carrying value for the real estate asset may have subsequently increased or decreased from the fair value reflected due to activity that has occurred since the measurement date.

During the year ended December 31, 2024, five of the Company’s strategic opportunistic properties and one hotel were impaired and written down to their estimated fair values due to declines in market conditions and projected cash flows. Three of the Company’s strategic opportunistic properties and one hotel were measured based on an income approach with the significant unobservable inputs used in evaluating the estimated fair value of the properties, with discount rates between 8.25% to 9.50% and terminal cap rates between 7.25% to 8.00%. One strategic opportunistic property was measured based on a quoted price and another based on a sales comparison approach.

The fair value of the Company's real estate was measured using significant unobservable inputs (Level 3) for the year ended December 31, 2024, which included terminal capitalization rates and discount rates.

As of December 31, 2023, the Company measured the following assets and liabilities at fair value (in thousands):

			Fair Value Measurements Using
	Total		Quoted Prices in Active Markets <br>for Identical Assets<br>(Level 1)		Significant Other Observable Inputs<br>(Level 2)		Significant Unobservable Inputs<br>(Level 3)
Recurring Basis:
Real estate equity securities	$	41,609	$	41,609	$	—	$	—
Asset derivative - interest rate caps (1)	$	1,236	$	—	$	1,236	$	—
Asset derivative - foreign currency collar (1)	$	3,655	$	—	$	3,655	$	—
Nonrecurring Basis:
Impaired real estate (2)	$	193,529	$	—	$	—	$	193,529

_____________________

(1) Interest rate caps and foreign currency collars are included in prepaid expenses and other assets, respectively, in the accompanying consolidated balance sheets.

(2) Amount represents the fair value for a real estate asset impacted by impairment charges during the year ended December 31, 2023, as of the date that the fair value measurement was made. The carrying value for the real estate asset may have subsequently increased or decreased from the fair value reflected due to activity that has occurred since the measurement date.

During the year ended December 31, 2023, three of the Company’s real estate properties were impaired and written down to their estimated fair value. Two of the real estate properties were measured based on an income approach with the significant unobservable inputs used in evaluating the estimated fair value of these properties, which are discount rates between 8.75% to 9.0% and terminal cap rates between 8.0% to 8.25%, and one real estate property was measured at its estimated value based on a sales comparison approach.

The fair value of the Company's real estate was measured using significant unobservable inputs (Level 3) for the year ended December 31, 2023, which included terminal capitalization rates and discount rates.

7.     RELATED PARTY TRANSACTIONS

Pacific Oak Capital Advisors, LLC

F-24

PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

December 31, 2024

As described further below, the Company has entered into agreements with certain affiliates pursuant to which they provide services to the Company. Keith D. Hall and Peter McMillan III control and indirectly own Pacific Oak Holding Group, LLC (“Pacific Oak Holding”), the Company’s sponsor since November 1, 2019. Pacific Oak Holding is the sole owner of the Advisor, the Company’s advisor since November 1, 2019. Messrs. Hall and McMillan are also two of the Company’s executive officers and directors.

Subject to certain restrictions and limitations, the business of the Company is externally managed by the Advisor pursuant to the Advisory Agreement. The Advisory Agreement is effective through November 1, 2025; however, the Company or the Advisor may terminate the Advisory Agreement without cause or penalty upon providing 60 days’ written notice. The Advisor conducts the Company’s operations and manages its portfolio of real estate and other real estate-related investments, except with respect to the Company’s residential home portfolio.

Acquisition and Origination Fees

The Company records acquisition and origination fees equal to 1.0% of the cost of investments acquired, or the amount funded by the Company to acquire or originate mortgage, mezzanine, bridge or other loans, including any acquisition and origination expenses related to such investments and any debt attributable to such investments.

Asset Management Fee

With respect to investments in loans and any investments other than real estate, the Company records the asset management fee, each month, calculated as one-twelfth of 1.0%, of the lesser of (i) the amount paid or allocated to acquire or fund the loan or other investment, inclusive of acquisition and origination fees and expenses related thereto and the amount of any debt associated with or used to acquire or fund such investment and (ii) the outstanding principal amount of such loan or other investment, plus the acquisition and origination fees and expenses related to the acquisition or funding of such investment, as of the time of calculation.

With respect to investments in real estate, the Company records the monthly asset management fee equal to one-twelfth of 1.0%, of the amount paid or allocated to acquire the investment, including the cost of subsequent capital improvements, inclusive of acquisition fees and expenses related thereto and the amount of any debt associated with or used to acquire such investment.

In the case of investments made through joint ventures, the asset management fee is determined based on the Company’s proportionate share of the underlying investment, inclusive of the Company’s proportionate share of any fees and expenses related thereto.

Disposition Fee

For substantial assistance in connection with the sale of properties or other investments, excluding investments in PORT or made through PORT, the Company calculates the fee to the Advisor or its affiliates as 1.0% of the contract sales price of each property or other investment sold; provided, however, in no event may the disposition fees paid to the Advisor, its affiliates and unaffiliated third parties exceed 6.0% of the contract sales price.

Subordinated Participation in Net Cash Flows (payable only if the Company is not listed on a national exchange)

After investors in the Company’s offerings have received, together as a collective group, aggregate distributions (including distributions that may constitute a return of capital for federal income tax purposes) sufficient to provide (i) a return of their net invested capital, or the amount calculated by multiplying the total number of shares purchased by stockholders by the issue price, reduced by any amounts to repurchase shares pursuant to the Company’s share redemption program, (ii) a 7.0% per year cumulative, noncompounded return on such net invested capital, and (iii) $36.3 million, which is the grant date value of the restricted stock issued to the Company’s former advisor, in connection with its termination on October 31, 2019 (the “KBS Termination Fee Payout”), the Advisor is entitled to receive 15.0% of the Company’s net cash flows, whether from continuing operations, net sale proceeds or otherwise. Net sales proceeds means the net cash proceeds realized by the Company after deduction of all expenses incurred in connection with a sale, including disposition fees paid to the Advisor. The 7.0% per year cumulative, noncompounded return on net invested capital is calculated on a daily basis. In making this calculation, the net invested capital is reduced to the extent distributions in excess of a cumulative, noncompounded, annual return of 7.0% are paid (from whatever source), except to the extent such distributions would be required to supplement prior distributions paid in order to achieve a cumulative, noncompounded, annual return of 7.0% (invested capital is only reduced as described in this sentence; it is not reduced simply because a distribution constitutes a return of capital for federal income tax purposes). The 7.0% per year cumulative, noncompounded return is not based on the return provided to any individual stockholder. Accordingly, it is not

F-25

PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

December 31, 2024

necessary for each of the Company’s stockholders to have received any minimum return in order for the Advisor to participate in the Company’s net cash flows. In fact, if the Advisor is entitled to participate in the Company’s net cash flows, the returns of the Company’s stockholders will differ, and some may be less than a 7.0% per year cumulative, noncompounded return. This fee is payable only if the Company is not listed on an exchange.

Subordinated Incentive Listing Fee (payable only if the Company is listed on a national exchange)

Upon listing the Company’s common stock on a national securities exchange, the Advisor is entitled to a fee equal to 15.0% of the amount by which the market value of the Company’s outstanding stock plus distributions paid by the Company (including distributions that may constitute a return of capital for federal income tax purposes) prior to listing exceeds the aggregate of (i) the sum of the Company’s stockholders’ net invested capital, or the amount calculated by multiplying the total number of shares purchased by stockholders by the issue price, reduced by any amounts to repurchase shares pursuant to the Company’s share redemption program, and the amount of cash flow necessary to generate a 7.0% per year cumulative, noncompounded return on such amount and (ii) the KBS Termination Fee Payout. The 7.0% per year cumulative, noncompounded return on net invested capital is calculated on a daily basis. In making this calculation, the net invested capital is reduced to the extent distributions in excess of a cumulative, noncompounded, annual return of 7.0% are paid (from whatever source), except to the extent such distributions would be required to supplement prior distributions paid in order to achieve a cumulative, noncompounded, annual return of 7.0% (invested capital is only reduced as described in this sentence; it is not reduced simply because a distribution constitutes a return of capital for federal income tax purposes). The 7.0% per year cumulative, noncompounded return is not based on the return provided to any individual stockholder. Accordingly, it is not necessary for each of the Company’s stockholders to have received any minimum return in order for the Advisor to receive the listing fee. In fact, if the Advisor is entitled to the listing fee, the returns of the Company’s stockholders will differ, and some may be less than a 7.0% per year cumulative, noncompounded return.

Subordinated Performance Fee Due Upon Termination

If the Advisory Agreement is terminated or not renewed, other than for cause, the Advisor is entitled to receive a participation fee equal to (A) 15.0% of the Company’s net cash flows, whether from continuing operations, net sale proceeds or otherwise, after the Company’s stockholders have received, together as a collective group, aggregate distributions (including distributions that may constitute a return of capital for federal income tax purposes) sufficient to provide (i) a return of their net invested capital, or the amount calculated by multiplying the total number of shares purchased by stockholders by the issue price, reduced by any amounts to repurchase shares pursuant to the Company’s share redemption program, and (ii) a 7.0% per year cumulative, noncompounded return on such net invested capital from the Company’s inception, less (B) the KBS Termination Fee Payout. Net sales proceeds means the net cash proceeds realized by the Company after deduction of all expenses incurred in connection with a sale, including disposition fees paid to the Advisor. The 7.0% per year cumulative, noncompounded return on net invested capital from the Company’s inception is calculated on a daily basis. In making this calculation, the net invested capital is reduced to the extent distributions in excess of a cumulative, noncompounded, annual return of 7.0% are paid (from whatever source), except to the extent such distributions would be required to supplement prior distributions paid in order to achieve a cumulative, noncompounded, annual return of 7.0% (invested capital is only reduced as described in this sentence; it is not reduced simply because a distribution constitutes a return of capital for federal income tax purposes). The 7.0% per year cumulative, noncompounded return is not based on the return provided to any individual stockholder. Accordingly, it is not necessary for each of the Company’s stockholders to have received any minimum return in order for the Advisor to participate in the Company’s net cash flows. In fact, if the Advisor is entitled to participate in the Company’s net cash flows, the returns of the Company’s stockholders will differ, and some may be less than a 7.0% per year cumulative, noncompounded return. This fee is payable only if the Company is not listed on an exchange.

Pacific Oak Residential Advisors, LLC

F-26

PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

December 31, 2024

Effective September 1, 2022, the Company entered into an advisory agreement (as subsequently amended and renewed, the “PORT Advisory Agreement”) with Pacific Oak Residential Advisors, LLC (“PORT Advisor”), then an affiliate, pursuant to which the PORT Advisor acts as a product specialist with respect to the Company’s residential home portfolio, held through a wholly owned subsidiary. Pursuant to the PORT Advisory Agreement, the Company pays the PORT Advisor: (1) an acquisition fee equal to 1.0% of the cost of each asset which consists of the price paid for the asset plus any amounts funded or budgeted at the time of acquisition for capital expenditures; (2) a quarterly asset management fee equal to 0.25% (1.0% annually) on the aggregate value of the Company’s residential home portfolio assets, as determined in accordance with the Company’s valuation guidelines, as of the end of each quarter; and (3) a disposition fee equal to 1.0% of the contract sales price of the residential homes sold, provided, however, in no event may the disposition fees paid to the PORT Advisor, its affiliates and unaffiliated third parties exceed 6.0% of the contract sales price. In the case of investments made through a joint venture, the acquisition fee will be based on the Company’s proportionate share of the joint venture. On December 19, 2024, the PORT Advisory Agreement was amended and due to a change in ownership, the PORT Advisor was no longer an affiliate of the Company. The amendment extends the agreement term to December 19, 2026, with one-year renewals available upon the agreement of both parties.

DMH Realty, LLC

Effective September 1, 2022, PORT entered into a property management agreement with DMH Realty, LLC (“DMH Realty”), then an affiliate of the Advisor, for the Company’s residential home portfolio (as amended and renewed, the “PORT Property Management Agreement”). Pursuant to the PORT Property Management Agreement, the Company will pay DMH Realty a property management fee equal to the following: (a) 8% of Collected Rental Revenues, as defined below, up to $50.0 million per annum; (b) 7% of Collected Rental Revenues in excess of $50.0 million per annum, but less than or equal to $75.0 million per annum; and (c) 6% of Collected Rental Revenues in excess of $75.0 million per annum, “Collected Rental Revenues” means the amount of rental revenue actually collected for each property per the terms of the lease pertaining to each property (including lease breakage fees) or pursuant to any early termination buyouts, but excluding other income items, fees or revenue collected by DMH Realty, including but not limited to: application fees, insufficient funds fees, late fees, move-in fees, pet fees, and security deposits (except to the extent applied to rent per the terms of the lease pertaining to any property). On December 19, 2024, the PORT Property Management Agreement was amended and due to a change in ownership, DMH Realty was no longer an affiliate of the Company. The amendment extends the agreement term to December 19, 2026, with automatic one-year renewals.

Pacific Oak Capital Markets, LLC

On September 9, 2022, the Company, through PORT, commenced a private offering of up to $500 million of common stock in a primary offering and up to $50 million of common stock under its distribution reinvestment plan (the “Private Offering”). PORT engaged Pacific Oak Capital Markets, LLC (“POCM”), an affiliate of the Advisor, to be the dealer manager for the Private Offering, pursuant to a dealer manager agreement effective as of September 9, 2022, which was subsequently amended and restated as of January 13, 2023 to reflect the creation of a $5.0 million escrow arrangement (the “PORT Dealer Manager Agreement”). Pursuant to the PORT Dealer Manager Agreement, with respect to Class A shares, PORT was to generally pay POCM: (1) selling commissions equal to up to 6.0% of the net asset value (“NAV”) of each share sold in the primary offering, which POCM may reallow in part or in full to participating broker-dealers; (2) a dealer manager fee equal to up to 1.5% of the NAV of each share sold in the primary offering, which POCM could reallow in part or in full to participating broker-dealers; and (3) a placement agent fee equal to up to 1.5% of the NAV of each share sold in the primary offering. With respect to Class T shares, PORT was to generally pay POCM: (1) selling commissions equal to up to 3.0% of the NAV of each share sold in the primary offering, which POCM could reallow in part or in full to participating broker-dealers; (2) a dealer manager fee equal to up to 0.75% of the NAV of each share sold in the primary offering, which POCM could reallow in part or in full to participating broker-dealers; and (3) a placement agent fee equal to up to 0.75% of the NAV of each share sold in the primary offering. PORT would not pay any selling commissions, dealer manager or placement agent fees in connection with the sale of shares under the distribution reinvestment plan. PORT was to incur an organization and offering expense fee equal to 0.5% of the NAV of each share sold in the Private Offering to help fund the reimbursement to the sponsor. The Private Offering and PORT Dealer Manager Agreement were terminated on April 2, 2024 and no fees were incurred related to this arrangement with POCM.

F-27

PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

December 31, 2024

Pursuant to the terms of these agreements, summarized below are the related-party costs incurred by the Company for the years ended December 31, 2024, 2023 and 2022, respectively, and any related amounts payable as of December 31, 2024 and 2023 (in thousands):

	Incurred During the Year Ended December 31,						Payable as of <br>December 31,
	2024		2023		2022		2024		2023
Expensed
Asset management fees to affiliate	$	15,551	$	15,415	$	13,678	$	12,006	$	6,855
Property management fees (1)	2,717		2,883		1,267		—		153
Disposition fees (2)	1,932		1,255		1,294		—		—
Capitalized
Acquisition fees on real estate	—		—		67		—		—
Reimbursable offering costs (3)	—		894		—		654		894
	$	20,200	$	20,447	$	16,306	$	12,660	$	7,902

_____________________

(1) Property management fees paid to DMH Realty pursuant to the property management agreement between DMH Realty and PORT are recorded as operating, maintenance, and management expenses in the accompanying consolidated statements of operations.

(2) Disposition fees with respect to real estate properties sold are recorded as a component of the gain or loss on sale of real estate in the accompanying consolidated statements of operations.

(3) Reimbursable offering costs to Pacific Oak Capital Advisors related to the terminated PORT private offering.

Pacific Oak Opportunity Zone Fund I

The Advisor is entitled to certain fees in connection with the fund. Pacific Oak Opportunity Zone Fund I will pay an acquisition fee equal to 1.5% of the purchase price of each asset (including any debt incurred or assumed and significant capital improvement costs budgeted as of the date of acquisition) with a purchase price less than or equal to $25.0 million plus 1.0% of the purchase price in excess of $25.0 million; a quarterly asset management fee equal to 0.25% of the total purchase price of all assets (including any debt incurred or assumed and significant capital improvement costs budgeted as of the date of acquisition) as of the end of the applicable quarter; and a financing fee equal to 0.5% of the original principal amount of any indebtedness they incur (reduced by any financing fee previously paid with respect to indebtedness being refinanced). In the case of investments made through joint ventures, the fees above will be determined based on the Company’s proportionate share of the investment. During the year ended December 31, 2024, the Company received a distribution of capital of $1.5 million, and there were no distributions during the years ended December 31, 2023 and 2022.

PORT II

On July 1, 2022, the Company, through PORT OP, made a tender offer to purchase 76,735 shares of Pacific Oak Residential Trust II, Inc. (“PORT II”) common stock held by unrelated parties for a price of $14.66 per share. As a result, the Company determined that it became the primary beneficiary of PORT II, which resulted in the consolidation of PORT II into the Company’s consolidated financial statements. On July 29, 2022, the Company consummated the transactions with the unrelated parties and owned 100% of PORT II. Effective September 1, 2022, the PORT II Advisory Agreement and the PORT II property management agreement were terminated.

PORT OP LP Share Redemption

On June 24, 2022, the Company’s board of directors authorized and approved the redemption of the 510,816 Special Common Units of PORT OP LP, a consolidated subsidiary of the Company (“PORT OP”), representing 3.20% interest, held by BPT Holdings, LLC (“BPT Holdings”), a subsidiary of the Advisor, for a price of $13.09 per unit. In July 2022, the Company redeemed the Special Common Units of PORT OP for $6.7 million. Following the redemption, the Company owned 100% of PORT OP.

8.     INVESTMENTS IN UNCONSOLIDATED ENTITIES

F-28

PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

December 31, 2024

As of December 31, 2024 and 2023, the Company’s investments in unconsolidated entities were composed of the following (dollars in thousands):

	Number of Properties at December 31, 2024						December 31,
Joint Venture		Location		Ownership %		2024			2023
110 William Joint Venture	1		New York, New York		(1)		$	68,467		$	22,314
Pacific Oak Opportunity Zone Fund I (2)	4		Various		47.0%		19,620			23,587
353 Sacramento Joint Venture (3)	1		San Francisco, California		55.0%		—			—
							$	88,087		$	45,901

_____________________

(1) As of December 31, 2024, the Company owned 77.5% of preferred interest and 100% of common interest in the 110 William Joint Venture.

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

(3) The Company suspended the equity method of accounting, and will not record the Company's share of losses and any subsequent income for the 353 Sacramento Joint Venture, until the Company’s share of net gain recorded exceeds net losses not recognized during the period the equity method was suspended.

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

	December 31,
	2024		2023
Assets:
Real estate, net	$	486,177	$	411,028
Total assets	558,371		468,002
Liabilities:
Notes payable, net (1)	446,843		410,563
Total liabilities	484,040		427,794
Total equity	$	74,331	$	40,208

_____________________

(1) The Company guaranteed all debt servicing costs and timely debt payments by the 110 William Joint Venture. As of December 31, 2024 and 2023, the 110 William Joint Venture had $248.7 million of variable-rate debt outstanding that was subject to the Company’s guarantee. Additionally, the 110 William Joint Venture met funding conditions with an aggregate available borrowing capacity of $56.7 million, subject to the Company’s guarantee. As of December 31, 2024, $29.0 million was drawn under the $56.7 million funding facility. The debt was collateralized by the underlying real estate and has an initial maturity date of July 5, 2026, although the maturity date may be extended under certain circumstances. Debt and interest payments were current as of December 31, 2024. Refer to Note 10 for additional details.

	For the Years Ended December 31,
	2024		2023		2022
Total revenues	$	36,029	$	42,002	$	46,518
Operating loss	(47,523)		(123,045)		(41,923)
Net loss	$	(49,503)	$	(51,401)	$	(41,664)

9.    REPORTING SEGMENTS

F-29

PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

December 31, 2024

The Company recognizes three reporting segments for the years ended December 31, 2024, 2023, and 2022, which consists of strategic opportunistic properties and real estate-related investments (“strategic opportunistic properties”), residential homes, and hotel. The Company's Chief Executive Officer and President, who are also the chief operating decision makers (the “CODM”), measure the property-level operating performance on an unlevered basis, using net operating income, to make decisions about resource allocations. The following tables summarize information for the reporting segments (in thousands):

	As of or for the Year Ended December 31, 2024
	Strategic Opportunistic Properties		Residential Homes		Hotel		Total
Total revenues	$	89,264	$	35,200	$	9,061	$	133,525
Less (1):
Operating, maintenance and management	(35,554)		(10,413)		—		(45,967)
Hotel expenses	—		—		(6,874)		(6,874)
Real estate taxes and insurance	(14,042)		(8,646)		(722)		(23,410)
Reportable segment total rental operating expenses	(49,596)		(19,059)		(7,596)		(76,251)
Reportable segment net operating income	39,668		16,141		1,465		57,274
Interest expense	(60,157)		(9,371)		(2,364)		(71,892)
Other segment items (2)	(125,647)		(14,617)		(7,267)		(147,531)
Total expenses	(235,400)		(43,047)		(17,227)		(295,674)
Loss from unconsolidated entities, net							(35,397)
Other income							1,765
Loss on real estate equity securities, net							(12,076)
Gain on sale of real estate, net							119,018
Loss on extinguishment of debt							(6,033)
Total other income, net							67,277
Net loss before income taxes							(94,872)
Income tax provision							(10,000)
Net loss							$	(104,872)
Total assets	$	800,597	$	288,908	$	35,451	$	1,124,956

F-30

PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

December 31, 2024

	As of or for the Year Ended December 31, 2023
	Strategic Opportunistic Properties		Residential Homes		Hotel		Total
Total revenues	$	98,463	$	37,800	$	9,153	$	145,416
Less (1):
Operating, maintenance and management	(35,769)		(9,930)		—		(45,699)
Hotel expenses	—		—		(6,944)		(6,944)
Real estate taxes and insurance	(16,236)		(11,586)		(478)		(28,300)
Reportable segment total rental operating expenses	(52,005)		(21,516)		(7,422)		(80,943)
Reportable segment net operating income	46,458		16,284		1,731		64,473
Interest expense	(55,590)		(10,279)		(2,347)		(68,216)
Other segment items (2)	(144,206)		(16,148)		(1,454)		(161,808)
Total expenses	(251,801)		(47,943)		(11,223)		(310,967)
Loss from unconsolidated entities, net							(54,758)
Other income							2,907
Loss on real estate equity securities, net							(4,598)
Gain on sale of real estate, net							82,099
Total other income, net							25,650
Net loss before income taxes							(139,901)
Income tax provision							(6,576)
Net loss							$	(146,477)
Total assets	$	1,024,555	$	315,957	$	47,631	$	1,388,143
	Year Ended December 31, 2022
---	---	---	---	---	---	---	---	---
	Strategic Opportunistic Properties		Residential Homes		Hotel		Total
Total revenues	$	102,179	$	29,130	$	30,749	$	162,058
Less (1):
Operating, maintenance and management	(35,124)		(9,193)		—		(44,317)
Hotel expenses	—		—		(19,252)		(19,252)
Real estate taxes and insurance	(14,421)		(6,296)		(415)		(21,132)
Reportable segment total rental operating expenses	(49,545)		(15,489)		(19,667)		(84,701)
Reportable segment net operating income	52,634		13,641		11,082		77,357
Interest expense	(38,665)		(7,912)		(1,553)		(48,130)
Other segment items (2)	(51,952)		(11,621)		(10,288)		(73,861)
Total expenses	(140,162)		(35,022)		(31,508)		(206,692)
Loss from unconsolidated entities, net							(8,019)
Other income							228
Loss on real estate equity securities, net							(51,943)
Gain on sale of real estate, net							46,513
Gain on extinguishment of debt							2,367
Gain from consolidation of previously unconsolidated entity							18,742
Total other income, net							7,888
Net loss before income taxes							(36,746)
Income tax provision							(4,924)
Net loss							$	(41,670)

_____________________

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

F-31

PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

December 31, 2024

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

10.    COMMITMENTS AND CONTINGENCIES

Lease Obligations

As of December 31, 2024 and 2023, the Company’s lease and rights to a leasehold interest with respect to 210 West 31st Street, which was accounted for as a finance lease, are included in the accompanying consolidated balance sheets as follows:

	December 31,
	2024			2023
Right-of-use asset (included in real estate held for investment, net, in thousands)	$	6,014		$	6,391
Lease obligation (included in other liabilities, in thousands)	9,632			9,537
Remaining lease term	89.0 years			90.0 years
Discount rate	4.8		%	4.8		%

As of December 31, 2024, the Company had a leasehold interest expiring on 2114. Future minimum lease payments owed by the Company under the finance lease as of December 31, 2024 are as follows (in thousands):

2025	$	393
2026	396
2027	396
2028	396
2029	396
Thereafter	50,979
Total expected minimum lease obligations	52,956
Less: Amount representing interest (1)	(43,324)
Present value of net minimum lease payments	$	9,632

_____________________

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

Guarantee Agreements

As of December 31, 2024, and as part of the 110 William Joint Venture debt and restructuring agreements, the Company guaranteed the completion of the construction and the development of the building expenditures and tenant improvements. The Company also guaranteed all debt servicing costs and timely debt payments by the 110 William Joint Venture. The guaranteed amounts are due upon occurrence of a triggering event, such as default for nonpayment or failure to perform based on the conditions defined in the agreement. As of December 31, 2024, the maximum potential amount of future payments under the Company’s guarantees is not estimable as it is dependent on various factors including the 110 William Joint Venture’s future operating performance level, potential completion cost overages, future levels of variable-rate debt and related interest, and the amount of future contributions by the Company. Due to uncertainties surrounding these factors, the Company was unable to estimate the maximum amounts payable under the guarantees. As of December 31, 2024, no triggering events had occurred, the likelihood of loss was determined to be remote, and no liability related to the guarantees was recognized.

As of December 31, 2024 and as part of the guarantee agreements on mortgage loans, the Company guaranteed the payment of $204.0 million, whereby the Company would be required to make guaranteed payments in the event that the Company turned the property over to the lender.

Economic Dependency

The Company is dependent on the advisors for certain services that are essential to the Company, including the identification, evaluation, negotiation, origination, acquisition and disposition of investments; management of the daily operations of the Company’s investment portfolio; and other general and administrative responsibilities. In the event that the advisors are unable to provide these services, the Company will be required to obtain such services from other sources.

Environmental

F-32

PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

December 31, 2024

As an owner of real estate, the Company is subject to various environmental laws of federal, state and local governments. Although there can be no assurance, the Company is not aware of any environmental liability that could have a material adverse effect on its financial condition or results of operations as of December 31, 2024. However, changes in applicable environmental laws and regulations, the uses and conditions of properties in the vicinity of the Company’s properties, the activities of its tenants and other environmental conditions of which the Company is unaware with respect to the properties could result in future environmental liabilities.

Legal Matters

From time to time, the Company is a party to legal proceedings that arise in the ordinary course of its business. Management is not aware of any legal proceedings of which the outcome is probable or reasonably possible to have a material adverse effect on the Company’s results of operations or financial condition, which would require accrual or disclosure of the contingency and the possible range of loss. Additionally, the Company has not recorded any loss contingencies related to legal proceedings in which the potential loss is deemed to be remote.

11.     SUBSEQUENT EVENTS

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

Series B Bonds Payment

On January 31, 2025, the Company made the remaining second principal installment payment of 75.3 million Israeli new shekels ($21.0 million as of January 31, 2025) in connection with the Company’s Series B Bonds. Subsequent to the second installment payment, one installment payment remains and is due on January 31, 2026.

Loan Agreement

On February 26, 2025, the Company entered into an unsecured loan agreement with the Advisor. Under the agreement, the Advisor has agreed to lend the Company the principal amount of $8.0 million.

F-33

PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC.

SCHEDULE III

REAL ESTATE PROPERTIES AND ACCUMULATED DEPRECIATION AND AMORTIZATION

December 31, 2024

(dollar amounts in thousands)

					Initial Cost to Company								Gross Amount at which Carried at Close of Period
Property	Property Type	Location	Ownership Percent	Encumbrances	Land		Building and Improvements (1)		Total		Cost Capitalized Subsequent to Acquisition (2)		Land		Building and Improvements (1)		Total (3)		Accumulated Depreciation and Amortization		Original Date of Construction	Date <br>Acquired or Foreclosed on
Richardson Office	Office	Richardson, TX	100.0%	(4)	$	1,847	$	25,745	$	27,592	$	14,877	$	2,034	$	40,435	$	42,469	$	(19,436)	1980/1985	11/23/2011
Madison Square	Office	Phoenix, AZ	90.0%	20,722	9,827		21,545		31,372		4,809		9,827		26,354		36,181		(6,926)		2003/2007/2008	10/05/2020
Park Centre	Office	Austin, TX	100.0%	(5)	3,251		27,941		31,192		7,411		3,251		35,352		38,603		(15,530)		2000	03/28/2013
Crown Pointe	Office	Dunwoody, GA	100.0%	54,738	22,590		62,610		85,200		15,925		22,590		78,535		101,125		(27,489)		1985/1989	02/14/2017
The Marq	Office	Minneapolis, MN	100.0%	(5)	10,387		75,878		86,265		14,188		10,387		90,066		100,453		(24,029)		1972	03/01/2018
Eight & Nine Corporate Centre	Office	Franklin, TN	100.0%	20,000	17,401		58,794		76,195		7,420		17,401		66,214		83,615		(18,345)		2007	06/08/2018
Georgia 400 Center	Office	Alpharetta, GA	100.0%	39,662	11,400		72,000		83,400		(27,792)		8,245		47,363		55,608		(1,811)		2001	05/23/2019
Lincoln Court	Office	Campbell, CA	100.0%	31,325	16,610		43,083		59,693		(19,010)		12,475		28,208		40,683		(310)		1985	10/05/2020
Oakland City Center	Office	Oakland, CA	100.0%	(5)	24,063		180,973		205,036		(114,900)		12,336		77,800		90,136		(1,849)		1985/1990	10/05/2020
1180 Raymond	Apartment	Newark, NJ	100.0%	(5)	8,292		37,651		45,943		5,895		8,292		43,546		51,838		(13,902)		1929	08/20/2013
Q&C Hotel	Hotel	New Orleans, LA	90.0%	(4)	2,669		41,431		44,100		(10,210)		2,243		31,647		33,890		(271)		1913	10/05/2020
Richardson Land I	Undeveloped Land	Richardson, TX	100.0%	(6)	1,997		—		1,997		4,258		6,255		—		6,255		—		N/A	11/23/2011
Richardson Land II	Undeveloped Land	Richardson, TX	100.0%	(6)	3,096		—		3,096		322		3,418		—		3,418		—		N/A	09/04/2014
Park Highlands Land II	Undeveloped Land	North Las Vegas, NV	100.0%	(6)	9,504		—		9,504		13,594		23,098		—		23,098		—		N/A	12/10/2013
210 West 31st Street (7)	Office/Retail	New York, NY	80.0%	—	—		51,358		51,358		(17,858)		—		33,500		33,500		—		(6)	10/05/2020

F-34

PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC.

SCHEDULE III

REAL ESTATE PROPERTIES AND ACCUMULATED DEPRECIATION AND AMORTIZATION (CONTINUED)

December 31, 2024

(dollar amounts in thousands)

				Initial Cost to Company								Gross Amount at which Carried at Close of Period
Description	Number of Homes	Ownership Percent	Encumbrances	Land		Building and Improvements (1)		Total		Cost Capitalized Subsequent to Acquisition (2)		Land		Building and Improvements (1)		Total (3)		Accumulated Depreciation and Amortization		Original Date of Construction	Date <br>Acquired or Foreclosed on
Residential Homes Portfolio:
Alabama Homes	184	100.0%	(8)	$	3,144	$	12,331	$	15,475	$	2,245	$	3,263	$	14,457	$	17,720	$	(1,871)	Various	Various
Arkansas Homes	21	100.0%	(8)	447		1,868		2,315		(62)		415		1,838		2,253		(238)		Various	Various
Delaware Homes	3	100.0%	(8)	134		562		696		12		130		578		708		(75)		Various	Various
Georgia Homes	25	100.0%	(8)	386		1,944		2,330		627		544		2,413		2,957		(312)		Various	Various
Iowa Homes	5	100.0%	(8)	75		311		386		66		83		369		452		(48)		Various	Various
Illinois Homes	297	100.0%	(8)	5,296		21,303		26,599		14,515		7,570		33,544		41,114		(4,342)		Various	Various
Indiana Homes	90	100.0%	(8)	1,841		7,684		9,525		386		1,825		8,086		9,911		(1,047)		Various	Various
Michigan Homes	325	100.0%	(8)	15,319		61,313		76,632		765		14,251		63,146		77,397		(8,173)		Various	Various
Mississippi Homes	25	100.0%	(8)	381		1,509		1,890		(124)		325		1,441		1,766		(186)		Various	Various
Missouri Homes	18	100.0%	(8)	293		1,221		1,514		3,248		877		3,885		4,762		(503)		Various	Various
North Carolina Homes	74	100.0%	(8)	1,805		7,550		9,355		872		1,883		8,344		10,227		(1,080)		Various	Various
Ohio Homes	221	100.0%	(8)	5,410		22,011		27,421		(117)		5,027		22,277		27,304		(2,883)		Various	Various
Oklahoma Homes	128	100.0%	(8)	2,564		13,906		16,470		3,227		3,627		16,070		19,697		(2,080)		Various	Various
South Carolina Homes	22	100.0%	(8)	640		2,682		3,322		289		665		2,946		3,611		(381)		Various	Various
Tennessee Homes	298	100.0%	(8)	8,262		34,004		42,266		(11,159)		5,728		25,379		31,107		(3,285)		Various	Various
Texas Homes	340	100.0%	(8)	9,835		38,568		48,403		3,849		9,621		42,631		52,252		(5,518)		Various	Various
Wisconsin Homes	17	100.0%	(8)	390		1,627		2,017		93		388		1,722		2,110		(221)		Various	Various
Total Residential Home Portfolio	2093		191,529	56,222		230,394		286,616		18,732		56,222		249,126		305,348		(32,243)
		Total Properties		$	199,156	$	929,403	$	1,128,559	$	(82,339)	$	198,074	$	848,146	$	1,046,220	$	(162,141)

____________________

(1) Building and improvements includes tenant origination and absorption costs.

(2) Costs capitalized subsequent to acquisition is net of write-offs of fully depreciated/amortized assets and impairment charges on real estate and related intangibles.

(3) The aggregate cost of real estate for federal income tax purposes was $1.6 billion as of December 31, 2024.

(4) These real estate investments, in aggregate, were under encumbrances of $34.0 million.

(5) These real estate investments, in aggregate, were under encumbrances of $156.8 million.

(6) As of December 31, 2024, specified lands in Park Highlands and Richardson serve as collateral for the Series C bonds.

(7) 210 West 31st Street is a development office/retail property. The Company acquired the rights to a leasehold interest with respect to this property and the leasehold interest expires on January 31, 2114.

(8) The residential home portfolio, in aggregate, was under encumbrances of $191.5 million.

F-35

PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC.

SCHEDULE III

REAL ESTATE PROPERTIES AND ACCUMULATED DEPRECIATION AND AMORTIZATION (CONTINUED)

December 31, 2024

(dollar amounts in thousands)

	2024		2023		2022
Real Estate Properties (1):
Balance at the beginning of the year	$	1,262,089	$	1,361,154	$	1,345,240
Acquisitions	—		—		142,118
Improvements	25,163		24,359		31,407
Write-off of fully depreciated and fully amortized assets	(1,408)		(5,332)		(9,454)
Dispositions	(125,630)		(43,303)		(111,186)
Impairments	(113,994)		(74,789)		(36,971)
Balance at the end of the year	$	1,046,220	$	1,262,089	$	1,361,154
Accumulated depreciation and amortization (1):
Balance at the beginning of the year	$	167,335	$	141,750	$	130,441
Depreciation and amortization expense	37,759		44,258		49,190
Write-off of fully depreciated and fully amortized assets	(1,408)		(5,332)		(10,442)
Dispositions	(3,641)		(3,545)		(6,531)
Impairments	(37,904)		(9,796)		(20,908)
Balance at the end of the year	$	162,141	$	167,335	$	141,750

____________________

(1) Amounts include real estate properties held for sale.

F-36

ITEM 16.    FORM 10-K SUMMARY

None.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Los Angeles, State of California, on March 28, 2025.

PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC.
By:	/s/ Keith D. Hall
	Keith D. Hall
	Chief Executive Officer and Director<br>(principal executive officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:

Name	Title	Date
/s/ KEITH D. HALL	Chief Executive Officer and Director<br>(principal executive officer)	March 28, 2025
Keith D. Hall
/s/ PETER MCMILLAN III	Chairman of the Board, President and Director	March 28, 2025
Peter McMillan III
/s/ MICHAEL A. BENDER	Chief Financial Officer<br>(principal financial officer)	March 28, 2025
Michael A. Bender
/s/ WILLIAM M. PETAK	Director	March 28, 2025
William M. Petak
/s/ LAURENT DEGRYSE	Director	March 28, 2025
Laurent Degryse
/s/ KENNETH G. YEE	Director	March 28, 2025
Kenneth G. Yee

90

exhibit1011-posoradvisor

Exhibit 10.1.1 ADVISORY AGREEMENT between PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC. and PACIFIC OAK CAPITAL ADVISORS, LLC November 1, 2024 i TABLE OF CONTENTS Page ARTICLE 1 - DEFINITIONS ........................................................................................................ 1 ARTICLE 2 - APPOINTMENT ..................................................................................................... 9 ARTICLE 3 - DUTIES OF THE ADVISOR ................................................................................. 9 3.01 Organizational and Offering Services ................................................................................. 9 3.02 Acquisition Services ........................................................................................................... 9 3.03 Asset Management Services ............................................................................................. 10 3.04 Stockholder Services ......................................................................................................... 13 3.05 Other Services .................................................................................................................. 13 ARTICLE 4 - AUTHORITY OF ADVISOR ............................................................................... 13 4.01 General .............................................................................................................................. 13 4.02 Powers of the Advisor ....................................................................................................... 13 4.03 Approval by the Board ...................................................................................................... 13 4.04 Modification or Revocation of Authority of Advisor ....................................................... 14 ARTICLE 5 - BANK ACCOUNTS ............................................................................................. 14 ARTICLE 6 – RECORDS AND FINANCIAL STATEMENTS ................................................. 14 ARTICLE 7 - LIMITATION ON ACTIVITIES .......................................................................... 14 ARTICLE 8 - FEES ...................................................................................................................... 15 8.01 Acquisition Fees................................................................................................................ 15 8.02 Asset Management Fees ................................................................................................... 15 8.03 Disposition Fees ................................................................................................................ 16 8.04 Subordinated Share of Cash Flows ................................................................................... 17 8.05 Subordinated Incentive Fee............................................................................................... 17 8.06 Changes to Fee Structure .................................................................................................. 18 ARTICLE 9 - EXPENSES............................................................................................................ 18 9.01 General .............................................................................................................................. 18 9.02 Timing of and Limitations on Reimbursements ............................................................... 19 ARTICLE 10 – VOTING AGREEMENT .................................................................................... 20 ARTICLE 11 - RELATIONSHIP OF ADVISOR AND COMPANY; OTHER ACTIVITIES OF THE ADVISOR ............................................................................................................................ 20 11.01 Relationship .................................................................................................................... 20 11.02 Time Commitment .......................................................................................................... 21 11.03 Investment Opportunities and Allocation ....................................................................... 21 ARTICLE 12 - THE PACIFIC OAK NAME ............................................................................... 21 ARTICLE 13 - TERM AND TERMINATION OF THE AGREEMENT ................................... 21 13.01 Term ................................................................................................................................ 21 13.02 Termination by Either Party............................................................................................ 21 13.03 Payments on Termination and Survival of Certain Rights and Obligations ................... 22 ARTICLE 14 - ASSIGNMENT.................................................................................................... 22 ARTICLE 15 - INDEMNIFICATION AND LIMITATION OF LIABILITY ............................ 23 15.01 Indemnification ............................................................................................................... 23 15.02 Limitation on Indemnification ........................................................................................ 23 15.03 Limitation on Payment of Expenses ............................................................................... 23 ARTICLE 16 - MISCELLANEOUS ............................................................................................ 24 ii 16.01 Notices ............................................................................................................................ 24 16.02 Modification .................................................................................................................... 24 16.03 Severability ..................................................................................................................... 24 16.04 Construction .................................................................................................................... 24 16.05 Entire Agreement ............................................................................................................ 24 16.06 Waiver ............................................................................................................................. 25 16.07 Gender ............................................................................................................................. 25 16.08 Titles Not to Affect Interpretation .................................................................................. 25 16.09 Counterparts .................................................................................................................... 25 ARTICLE 17 – PORT PROVISIONS .......................................................................................... 25 17.01 Management of PORT Operations and Assets ............................................................... 25 1 ADVISORY AGREEMENT This Advisory Agreement, entered into on December 12, 2024 and effective as of November 1, 2024 (the “Agreement”), is between Pacific Oak Strategic Opportunity REIT, Inc., a Maryland corporation (the “Company”), and Pacific Oak Capital Advisors, LLC, a Delaware limited liability company (the “Advisor”). W I T N E S S E T H WHEREAS, the Company desires to avail itself of the knowledge, experience, sources of information, advice, assistance and certain facilities available to the Advisor and to have the Advisor undertake the duties and responsibilities hereinafter set forth, on behalf of, and subject to the supervision of, the board of directors of the Company (the “Board”), all as provided herein; WHEREAS, the Advisor is willing to undertake to render such services, subject to the supervision of the Board, on the terms and conditions hereinafter set forth. NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements contained herein, the parties hereto agree as follows: ARTICLE 1 DEFINITIONS The following defined terms used in this Agreement shall have the meanings specified below: “Acquisition Expenses” means any and all expenses, excluding the fee payable to the Advisor pursuant to Section 8.01, incurred by the Company, the Advisor or any Affiliate of either in connection with the selection, acquisition or development of any property, loan or other potential investment, whether or not acquired or originated, as applicable, including, without limitation, legal fees and expenses, travel and communications expenses, costs of appraisals, nonrefundable option payments on properties or other investments not acquired, accounting fees and expenses, title insurance premiums and miscellaneous expenses related to the selection, acquisition or development of any property, loan or other potential investment. “Acquisition Fees” means the fee payable to the Advisor pursuant to Section 8.01 plus all other fees and commissions, excluding Acquisition Expenses, paid by any Person to any Person in connection with making or investing in any Property, Loan or other Permitted Investment or the purchase, development or construction of any Property by the Company. Included in the computation of such fees or commissions shall be any real estate commission, selection fee, Development Fee, Construction Fee, nonrecurring management fee, loan fees or points or any fee of a similar nature, however designated. Excluded shall be Development Fees and Construction Fees paid to Persons not Affiliated with the Advisor in connection with the actual development and construction of a Property. “Advisor” means (i) Pacific Oak Capital Advisors, LLC, a Delaware limited liability company, or (ii) any successor advisor to the Company.

---

2 “Affiliate” or “Affiliated” An Affiliate of another Person includes any of the following: (i) any Person directly or indirectly controlling, controlled by, or under common control with such other Person; (ii) any Person directly or indirectly owning, controlling, or holding with the power to vote 10% or more of the outstanding voting securities of such other Person; (iii) any legal entity for which such Person acts as an executive officer, director, trustee, or general partner; (iv) any Person 10% or more of whose outstanding voting securities are directly or indirectly owned, controlled, or held, with power to vote, by such other Person; and (v) any executive officer, director, trustee, or general partner of such other Person. An entity shall not be deemed to control or be under common control with an Advisor-sponsored program unless (i) the entity owns 10% or more of the voting equity interests of such program or (ii) a majority of the board of directors (or equivalent governing body) of such program is composed of Affiliates of the entity. “Appraised Value” means the value according to an appraisal made by an Independent Appraiser. “Asset Management Fee” shall have the meaning set forth in Section 8.02. “Average Invested Assets” means, for a specified period, the average of the aggregate book value of the assets of the Company invested, directly or indirectly, in Properties, Loans and other Permitted Investments secured by real estate before reserves for depreciation or bad debts or other similar non-cash reserves, computed by taking the average of such values at the end of each month during such period. “Board” means the board of directors of the Company, as of any particular time. “Bylaws” means the bylaws of the Company, as amended from time to time. “Cash from Financings” means the net cash proceeds realized by the Company from the financing of Properties, Loans or other Permitted Investments or from the refinancing of any Company indebtedness (after deduction of all expenses incurred in connection therewith). “Cash from Sales and Settlements” means the net cash proceeds realized by the Company (i) from the sale, exchange or other disposition of any of its assets or any portion thereof after deduction of all expenses incurred in connection therewith and (ii) from the prepayment, maturity, workout or other settlement of any Loan or Permitted Investment or portion thereof after deduction of all expenses incurred in connection therewith. In the case of a transaction described in clause (i) (C) of the definition of “Sale” and (i)(B) of the definition of “Settlement,” Cash from Sales and Settlements means the proceeds of any such transaction actually distributed to the Company from the Joint Venture or partnership. Cash from Sales and Settlements shall not include Cash from Financings. “Cash from Sales, Settlements and Financings” means the total sum of Cash from Sales and Settlements and Cash from Financings. “Charter” means the articles of incorporation of the Company, as amended from time to time. 3 “Code” means the Internal Revenue Code of 1986, as amended from time to time, or any successor statute thereto. Reference to any provision of the Code shall mean such provision as in effect from time to time, as the same may be amended, and any successor provision thereto, as interpreted by any applicable regulations as in effect from time to time. “Company” means Pacific Oak Strategic Opportunity REIT, Inc., a corporation organized under the laws of the State of Maryland. “Competitive Real Estate Commission” means a real estate or brokerage commission for the purchase or sale of property that is reasonable, customary, and competitive in light of the size, type, and location of the property. “Conflicts Committee” shall have the meaning set forth in the Company’s Charter. “Construction Fee” means a fee or other remuneration for acting as general contractor and/or construction manager to construct improvements, supervise and coordinate projects or to provide major repairs or rehabilitation on a Property. “Contract Sales Price” means the total consideration received by the Company for the sale of a Property, Loan or other Permitted Investment. “Cost of Loans and other Permitted Investments” means the sum of the cost of all Loans and Permitted Investments held, directly or indirectly, by the Company, calculated each month on an ongoing basis, and calculated as follows for each investment: the lesser of (i) the amount actually paid or allocated to acquire or fund the Loan or Permitted Investment (inclusive of fees and expenses related thereto and the amount of any debt associated with or used to acquire or fund such investment) and (ii) the outstanding principal amount of such Loan or Permitted Investment (plus the fees and expenses related to the acquisition or funding of such investment), as of the time of calculation. With respect to any Loan or Permitted Investment held by the Company through a Joint Venture or partnership of which it is, directly or indirectly, a partner, such amount shall be the Company’s proportionate share thereof. “Cost of Real Estate Investments” means the sum of (i) with respect to Properties wholly owned, directly or indirectly, by the Company, the amount actually paid or allocated to the purchase, development, construction or improvement of Properties, inclusive of fees and expenses related thereto, plus the amount of any outstanding debt attributable to such Properties and (ii) in the case of Properties owned by any Joint Venture or partnership in which the Company or the Partnership is, directly or indirectly, a partner, the portion of the amount actually paid or allocated to the purchase, development, construction or improvement of Properties, inclusive of fees and expenses related thereto, plus the amount of any outstanding debt associated with such Properties that is attributable to the Company’s investment in the Joint Venture or partnership. “Dealer Manager” means (i) Pacific Oak Capital Markets Group, LLC, a Delaware limited liability company, or (ii) any successor dealer manager to the Company. 4 “Development Fee” means a fee for the packaging of a Property, including negotiating and approving plans, and undertaking to assist in obtaining zoning and necessary variances and necessary financing for the Property, either initially or at a later date. “Director” means a member of the board of directors of the Company. “Disposition Fee” shall have the meaning set forth in Section 8.03. “Distributions” means any distributions of money or other property by the Company to owners of Shares, including distributions that may constitute a return of capital for federal income tax purposes. “GAAP” means accounting principles generally accepted in the United States. “Gross Proceeds” means the aggregate purchase price of all Shares sold for the account of the Company through an Offering, without deduction for Organization and Offering Expenses. “KBS Advisory Agreement” means the advisory agreement between the Company and its prior advisor, KBS Capital Advisors LLC, dated October 7, 2019, which agreement terminated on October 31, 2019. “Independent Appraiser” means a person or entity with no material current or prior business or personal relationship with the Advisor or the Directors, who is engaged to a substantial extent in the business of rendering opinions regarding the value of assets of the type held by the Company, and who is a qualified appraiser of real estate as determined by the Board. Membership in a nationally recognized appraisal society such as the American Institute of Real Estate Appraisers (M.A.I.) or the Society of Real Estate Appraisers (S.R.E.A.) shall be conclusive evidence of such qualification. “Invested Capital” means the amount calculated by multiplying the total number of Shares purchased by Stockholders since Company inception by the issue price, reduced by any amounts paid by the Company to repurchase Shares since Company inception. For purposes of this definition, all Shares issued to stockholders of Pacific Oak Strategic Opportunity REIT II, Inc. (“SOR II”), in connection with the merger (the “Merger”) of SOR II with Pacific Oak SOR II, LLC (“Merger Sub”) pursuant to that certain Agreement and Plan of Merger among the Company, Merger Sub and SOR II, dated as of February 19, 2020, shall be deemed to have been purchased by Stockholders at the effective time of the Merger and at a price of $10.63 per Share. “Joint Venture” means any joint venture, limited liability company or other Affiliate of the Company that owns, in whole or in part, on behalf of the Company any Properties, Loans or other Permitted Investments. “Listed” or “Listing” shall have the meaning set forth in the Company’s Charter. “Loans” means mortgage loans and other types of debt financing investments made by the Company or the Partnership, either directly or indirectly, including through ownership interests in a Joint Venture or partnership, including, without limitation, mezzanine loans, B- 5 notes, bridge loans, convertible mortgages, wraparound mortgage loans, construction mortgage loans, loans on leasehold interests, and participations in such loans. “Market Value” shall have the meaning set forth in Section 8.05. “Merger” shall have the meaning set forth in the definition of “Invested Capital.” “NASAA Guidelines” means the NASAA Statement of Policy Regarding Real Estate Investment Trusts as in effect on the date hereof. “Net Income” means, for any period, the total revenues applicable to such period, less the total expenses applicable to such period excluding additions to reserves for depreciation, bad debts or other similar non-cash reserves; provided, however, Net Income for purposes of calculating total allowable Operating Expenses (as defined herein) shall exclude the gain from the sale of the Company’s assets. “Offering” means any offering of Shares that is registered with the SEC, excluding Shares offered under any employee benefit plan. “Operating Cash Flow” means Operating Revenue Cash Flows minus the sum of (i) Operating Expenses, (ii) all principal and interest payments on indebtedness and other sums paid to lenders, (iii) the expenses of raising capital such as Organization and Offering Expenses, legal, audit, accounting, underwriting, brokerage, listing, registration, and other fees, printing and other such expenses and tax incurred in connection with the issuance, distribution, transfer, registration and Listing of the Shares, (iv) taxes, (v) incentive fees paid in compliance with Section IV.F. of the NASAA Guidelines and (vi) Acquisition Fees, Acquisition Expenses, real estate commissions on the resale of real property, and other expenses connected with the acquisition, disposition, and ownership of real estate interests, loans or other property (other than commissions on the sale of assets other than real property), such as the costs of foreclosure, insurance premiums, legal services, maintenance, repair and improvement of property. “Operating Expenses” means all costs and expenses incurred by the Company, as determined under GAAP, that in any way are related to the operation of the Company or to Company business, including fees paid to the Advisor, but excluding (i) the expenses of raising capital such as Organization and Offering Expenses, legal, audit, accounting, underwriting, brokerage, listing, registration, and other fees, printing and other such expenses and tax incurred in connection with the issuance, distribution, transfer, registration and Listing of the Shares, (ii) interest payments, (iii) taxes, (iv) non-cash expenditures such as depreciation, amortization and bad loan reserves, (v) incentive fees paid in compliance with Section IV.F. of the NASAA Guidelines and (vi) Acquisition Fees, Acquisition Expenses, real estate commissions on the resale of real property, and other expenses connected with the acquisition, disposition, and ownership of real estate interests, loans or other property (other than commissions on the sale of assets other than real property), such as the costs of foreclosure, insurance premiums, legal services, maintenance, repair and improvement of property. “Operating Revenue Cash Flows” means the Company’s cash flow from ownership and/or operation of (i) Properties, (ii) Loans, (iii) Permitted Investments, (iv) short-term investments, and (v) interests in Properties, Loans and Permitted Investments owned by any Joint

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6 Venture or any partnership in which the Company or the Partnership is, directly or indirectly, a partner. “Organization and Offering Expenses” means all expenses incurred by or on behalf of the Company in connection with or preparing the Company for registration of and subsequently offering and distributing its Shares to the public, whether incurred before or after the date of this Agreement, which may include but are not limited to, total underwriting and brokerage discounts and commissions (including fees of the underwriters’ attorneys); any expense allowance granted by the Company to the underwriter or any reimbursement of expenses of the underwriter by the Company; expenses for printing, engraving and mailing; compensation of employees while engaged in sales activity; charges of transfer agents, registrars, trustees, escrow holders, depositaries and experts; and expenses of qualification of the sale of the securities under Federal and State laws, including taxes and fees, accountants’ and attorneys’ fees. “PORA” means Pacific Oak Residential Advisors, LLC, a Delaware limited liability company. “PORT” means Pacific Oak Residential Trust, Inc., a Maryland corporation. “Partnership” means Pacific Oak Strategic Opportunity Limited Partnership, a Delaware limited partnership formed to own and operate Properties, Loans and other Permitted Investments on behalf of the Company. “Permitted Investments” means all investments (other than Properties and Loans) in which the Company may acquire an interest, either directly or indirectly, including through ownership interests in a Joint Venture or partnership, pursuant to its Charter, Bylaws and the investment objectives and policies adopted by the Board from time to time, other than short-term investments acquired for purposes of cash management. “Person” means an individual, corporation, partnership, estate, trust (including a trust qualified under Section 401(a) or 501(c) (17) of the Code), a portion of a trust permanently set aside for or to be used exclusively for the purposes described in Section 642(c) of the Code, association, private foundation within the meaning of Section 509(a) of the Code, joint stock company or other entity, or any government or any agency or political subdivision thereof, and also includes a group as that term is used for purposes of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended. “Prior Advisor Performance Fee Value” means the value of the Subordinated Share of Cash Flows (as defined in the KBS Advisory Agreement) based on a hypothetical liquidation of the Company’s assets and liabilities at their then-current estimated values used in the 2018 NAV (as defined in the KBS Advisory Agreement) calculation, less any potential amounts to be paid as closing costs and fees related to the disposition of real property, all as determined and used in calculating the number of RSUs (as defined in the KBS Advisory Agreement) to be issued to KBS Capital Advisors LLC in connection with the termination of the KBS Advisory Agreement. “Property” means any real property or properties transferred or conveyed to the Company or the Partnership, either directly or indirectly, including through ownership interests in a Joint Venture or partnership. 7 “Property Manager” means an entity that has been retained to perform and carry out at one or more of the Properties property-management services, excluding persons, entities or independent contractors retained or hired to perform facility management or other services or tasks at a particular Property, the costs for which are passed through to and ultimately paid by the tenant at such Property. “REIT” means a “real estate investment trust” under Sections 856 through 860 of the Code. “Sale” means any transaction or series of transactions whereby: (A) the Company or the Partnership sells, grants, transfers, conveys, or relinquishes its ownership of any Property, Loan or other Permitted Investment or portion thereof, including the transfer of any Property that is the subject of a ground lease, including any event with respect to any Property, Loan or other Permitted Investment that gives rise to a significant amount of insurance proceeds or condemnation awards, and including the issuance by one of the Company’s subsidiaries of any asset-backed securities or collateralized debt obligations as part of a securitization transaction; (B) the Company or the Partnership sells, grants, transfers, conveys, or relinquishes its ownership of all or substantially all of the interest of the Company or the Partnership in any Joint Venture or any partnership in which it is a partner; or (C) any Joint Venture or any partnership in which the Company or the Partnership is a partner, sells, grants, transfers, conveys, or relinquishes its ownership of any Property, Loan or other Permitted Investment or portion thereof, including any event with respect to any Property, Loan or other Permitted Investment that gives rise to insurance claims or condemnation awards, and including the issuance by such Joint Venture or any partnership or one of its subsidiaries of any asset-backed securities or collateralized debt obligations as part of a securitization transaction. “SEC” means the United States Securities and Exchange Commission. “Settlement” means the prepayment, maturity, workout or other settlement of any Loan or other Permitted Investment or portion thereof owned, directly or indirectly, by (A) the Company or the Partnership or (B) any Joint Venture or any partnership in which the Company or the Partnership is, directly or indirectly, a partner. “Shares” means shares of common stock of the Company, par value $.01 per share. “Stockholders” means the registered holders of the Shares. “Stockholders’ 7% Return” means, as of any date, an aggregate amount equal to a 7% cumulative, non-compounded, annual return on Invested Capital (calculated like simple interest on a daily basis based on a three hundred sixty-five day year) since Company inception. For purposes of calculating the Stockholders’ 7% Return, Invested Capital shall be determined for each day during the period for which the Stockholders’ 7% Return is being calculated (i.e. although the calculation is performed since Company inception, it will take into account the specific dates that Shares were purchased by Stockholders or repurchased by the Company) and shall be calculated net of (1) Distributions of Operating Cash Flow since Company inception to the extent such Distributions of Operating Cash Flow provide a cumulative, non-compounded, annual return in excess of 7% since Company inception, as such amounts are computed on a daily basis based on a three hundred sixty-five day year and (2) Distributions of Cash from Sales, 8 Settlements and Financings since Company inception, except to the extent such Distributions would be required to supplement Distributions of Operating Cash Flow in order to achieve a cumulative, non-compounded, annual return of 7% since Company inception, as such amounts are computed on a daily basis based on a three hundred sixty-five day year. “Subordinated Incentive Fee” means the fee payable to the Advisor under certain circumstances if the Shares are Listed, as calculated in Section 8.05. “Subordinated Incentive Fee Threshold” has the meaning set forth in Section 8.05. “Subordinated Performance Fee Due Upon Termination” means a fee payable in the form of an interest bearing promissory note (the “Performance Fee Note”) in a principal amount equal to the amount, if any, by which (I) (1) 15% of the amount, if any, by which (a) the Appraised Value of the Company’s Properties at the Termination Date, less amounts of all indebtedness secured by the Company’s Properties, plus the fair market value of all other Loans, Permitted Investments and other assets of the Company at the Termination Date, less amounts of indebtedness related to such Loans and Permitted Investments, less any other secured or unsecured indebtedness or known liabilities at the Termination Date, plus total Distributions (excluding any stock dividend) from Company inception through the Termination Date exceeds (b) the sum of Invested Capital plus total Distributions required to be made to the stockholders in order to pay the Stockholders’ 7% Return from Company inception through the Termination Date less (2) any prior payment to the Advisor of a Subordinated Share of Cash Flows (the amount calculated under (b) is the “Termination Fee Threshold”) exceeds (II) the Prior Advisor Performance Fee. Interest on the Performance Fee Note will accrue beginning on the Termination Date at a rate deemed fair and reasonable by the Conflicts Committee. The Company shall repay the Performance Fee Note at such time as the Company completes the first Sale or Settlement after the Termination Date using Cash from Sales and Settlements. If the Cash from Sales and Settlements from the first Sale or Settlement after the Termination Date is insufficient to pay the Performance Fee Note in full, including accrued interest, then the Performance Fee Note shall be paid in part from the Cash from Sales and Settlements from the first Sale or Settlement, and in part from the Cash from Sales and Settlements from each successive Sale or Settlement until the Performance Fee Note is repaid in full, with interest. If the Performance Fee Note has not been paid in full within five years from the Termination Date, then the Advisor, its successors or assigns, may elect to convert the balance of the fee, including accrued but unpaid interest, into Shares at a price per Share equal to the average closing price of the Shares over the ten trading days immediately preceding the date of such election if the Shares are Listed at such time. If the Shares are not Listed at such time, the Advisor, its successors or assigns, may elect to convert the balance of the fee, including accrued but unpaid interest, into Shares at a price per Share equal to the fair market value for the Shares as determined by the Board based upon the Appraised Value of Company’s Properties on the date of election plus the fair market value of all other Loans and Permitted Investments of the Company on the date of election. “Subordinated Share of Cash Flows” has the meaning set forth in Section 8.04. “Subordinated Share of Cash Flows Threshold” has the meaning set forth in Section 8.04. 9 “Termination Date” means the date of termination of the Agreement determined in accordance with Article 13 hereof. “Termination Fee Threshold” has the meaning set forth in the definition of Subordinated Performance Fee Due Upon Termination. “2%/25% Guidelines” means the requirement pursuant to the NASAA Guidelines that, in any period of four consecutive fiscal quarters, total Operating Expenses not exceed the greater of 2% of the Company’s Average Invested Assets during such 12-month period or 25% of the Company’s Net Income over the same 12-month period. ARTICLE 2 APPOINTMENT The Company hereby appoints the Advisor to serve as its advisor and asset manager on the terms and conditions set forth in this Agreement, and the Advisor hereby accepts such appointment. ARTICLE 3 DUTIES OF THE ADVISOR The Advisor is responsible for managing, operating, directing and supervising the operations and administration of the Company and its assets. The Advisor undertakes to use its best efforts to present to the Company potential investment opportunities, to make investment decisions on behalf of the Company subject to the limitations in the Company’s Charter, the direction and oversight of the Board and Section 4.03 hereof, and to provide the Company with a continuing and suitable investment program consistent with the investment objectives and policies of the Company as determined and adopted from time to time by the Board. Subject to the limitations set forth in this Agreement, including Article 4 hereof, and the continuing and exclusive authority of the Board over the management of the Company, the Advisor shall, either directly or by engaging an Affiliate or third party, perform the following duties: 3.01 Organizational and Offering Services. The Advisor shall perform all services related to the organization of the Company or any Offering or private sale of the Company’s securities, other than services that (i) are to be performed by the Dealer Manager, (ii) the Company elects to perform directly or (iii) would require the Advisor to register as a broker- dealer with the SEC or any state. 3.02 Acquisition Services. (i) Serve as the Company’s investment and financial advisor and provide relevant market research and economic and statistical data in connection with the Company’s assets and investment objectives and policies; (ii) Subject to Section 4 hereof and the investment objectives and policies of the Company: (a) locate, analyze and select potential investments; (b) structure and negotiate the terms and conditions of transactions pursuant to which investments in Properties, Loans and other Permitted Investments will be made; (c) acquire, originate and dispose of

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10 Properties, Loans and other Permitted Investments on behalf of the Company; (d) arrange for financing and refinancing and make other changes in the asset or capital structure of investments in Properties, Loans and other Permitted Investments; and (e) enter into leases, service contracts and other agreements for Properties, Loans and other Permitted Investments; (iii) Perform due diligence on prospective investments and create due diligence reports summarizing the results of such work; (iv) With respect to prospective investments presented to the Board, prepare reports regarding such prospective investments that include recommendations and supporting documentation necessary for the Directors to evaluate the proposed investments; (v) Obtain reports (which may be prepared by the Advisor or its Affiliates), where appropriate, concerning the value of contemplated investments of the Company; (vi) Deliver to or maintain on behalf of the Company copies of all appraisals obtained in connection with the Company’s investments; and (vii) Negotiate and execute approved investments and other transactions, including prepayments, maturities, workouts and other settlements of Loans and other Permitted Investments. 3.03 Asset Management Services. (i) Real Estate and Related Services: (a) Investigate, select and, on behalf of the Company, engage and conduct business with (including enter contracts with) such Persons as the Advisor deems necessary to the proper performance of its obligations as set forth in this Agreement, including but not limited to consultants, accountants, lenders, technical advisors, attorneys, brokers, underwriters, corporate fiduciaries, escrow agents, depositaries, custodians, agents for collection, insurers, insurance agents, developers, construction companies, Property Managers and any and all Persons acting in any other capacity deemed by the Advisor necessary or desirable for the performance of any of the foregoing services; (b) Negotiate and service the Company’s debt facilities and other financings; (c) Monitor applicable markets and obtain reports (which may be prepared by the Advisor or its Affiliates) where appropriate, concerning the value of investments of the Company; (d) Monitor and evaluate the performance of each asset of the Company and the Company’s overall portfolio of assets, provide daily management services 11 to the Company and perform and supervise the various management and operational functions related to the Company’s investments; (e) Formulate and oversee the implementation of strategies for the administration, promotion, management, operation, maintenance, improvement, financing and refinancing, marketing, leasing and disposition of Properties, Loans and other Permitted Investments on an overall portfolio basis; (f) Consult with the Company’s officers and the Board and assist the Board in the formulation and implementation of the Company’s financial policies, and, as necessary with respect to investment and borrowing opportunities presented to the Board, furnish the Board with advice and recommendations with respect to the making of investments consistent with the investment objectives and policies of the Company and in connection with any borrowings proposed to be undertaken by the Company; (g) Oversee the performance by the Property Managers of their duties, including collection and proper deposits of rental payments and payment of Property expenses and maintenance; (h) Conduct periodic on-site property visits to some or all (as the Advisor deems reasonably necessary) of the Properties to inspect the physical condition of the Properties and to evaluate the performance of the Property Managers; (i) Review, analyze and comment upon the operating budgets, capital budgets and leasing plans prepared and submitted by each Property Manager and aggregate these property budgets into the Company’s overall budget; (j) Coordinate and manage relationships between the Company and any Joint Venture partners; and (k) Consult with the Company’s officers and the Board and provide assistance with the evaluation and approval of potential asset disposition, sale and refinancing opportunities that are presented to the Board. (ii) Accounting and Other Administrative Services: (a) Provide the day-to-day management of the Company and perform and supervise the various administrative functions reasonably necessary for the management of the Company; (b) From time to time, or at any time reasonably requested by the Board, make reports to the Board on the Advisor’s performance of services to the Company under this Agreement; (c) Make reports to the Conflicts Committee each quarter of the investments that have been made by other programs sponsored by the Advisor or 12 any of its Affiliates as well as any investments that have been made by the Advisor or any of its Affiliates directly; (d) Provide or arrange for any administrative services and items, legal and other services, office space, office furnishings, personnel and other overhead items necessary and incidental to the Company’s business and operations; (e) Provide financial and operational planning services; (f) Maintain accounting and other record-keeping functions at the Company and investment levels, including information concerning the activities of the Company as shall be required to prepare and to file all periodic financial reports, tax returns and any other information required to be filed with the SEC, the Internal Revenue Service and any other regulatory agency; (g) Maintain and preserve all appropriate books and records of the Company; (h) Provide tax and compliance services and coordinate with appropriate third parties, including the Company’s independent auditors and other consultants, on related tax matters; (i) Provide the Company with all necessary cash management services; (j) Manage and coordinate with the transfer agent the dividend process and payments to Stockholders; (k) Consult with the Company’s officers and the Board and assist the Board in evaluating and obtaining adequate insurance coverage based upon risk management determinations; (l) Provide the Company’s officers and the Board with timely updates related to the overall regulatory environment affecting the Company, as well as managing compliance with such matters, including but not limited to compliance with the Sarbanes-Oxley Act of 2002; (m) Consult with the Company’s officers and the Board relating to the corporate governance structure and appropriate policies and procedures related thereto; (n) Perform all reporting, record keeping, internal controls and similar matters in a manner to allow the Company to comply with applicable law, including federal and state securities laws and the Sarbanes-Oxley Act of 2002; (o) Notify the Board of all proposed material transactions before they are completed; and (p) Do all things necessary to assure its ability to render the services described in this Agreement. 13 3.04 Stockholder Services. (i) Manage services for and communications with Stockholders, including answering phone calls, preparing and sending written and electronic reports and other communications; (ii) Oversee the performance of the transfer agent and registrar; (iii) Establish technology infrastructure to assist in providing Stockholder support and service; and (iv) Consistent with Section 3.01, the Advisor shall perform the various subscription processing services reasonably necessary for the admission of new Stockholders. 3.05 Other Services. Except as provided in Article 7, the Advisor shall perform any other services reasonably requested by the Company (acting through the Conflicts Committee). ARTICLE 4 AUTHORITY OF ADVISOR 4.01 General. All rights and powers to manage and control the day-to-day business and affairs of the Company shall be vested in the Advisor. The Advisor shall have the power to delegate all or any part of its rights and powers to manage and control the business and affairs of the Company to such officers, employees, Affiliates, agents and representatives of the Advisor or the Company as it may deem appropriate. Any authority delegated by the Advisor to any other Person shall be subject to the limitations on the rights and powers of the Advisor specifically set forth in this Agreement or the Charter. 4.02 Powers of the Advisor. Subject to the express limitations set forth in this Agreement and the continuing and exclusive authority of the Board over the management of the Company, the power to direct the management, operation and policies of the Company, including making, financing and disposing of investments, shall be vested in the Advisor, which shall have the power by itself and shall be authorized and empowered on behalf and in the name of the Company to carry out any and all of the objectives and purposes of the Company and to perform all acts and enter into and perform all contracts and other undertakings that it may in its sole discretion deem necessary, advisable or incidental thereto to perform its obligations under this Agreement. 4.03 Approval by the Board. Notwithstanding the foregoing, the Advisor may not take any action on behalf of the Company without the prior approval of the Board or duly authorized committees thereof if the Charter or Maryland General Corporation Law require the prior approval of the Board. If the Board or a committee of the Board must approve a proposed investment, financing or disposition or chooses to do so, the Advisor will deliver to the Board or committee, as applicable, all documents required by it to evaluate such investment, financing or disposition.

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14 4.04 Modification or Revocation of Authority of Advisor. The Board may, at any time upon the giving of notice to the Advisor, modify or revoke the authority or approvals set forth in Article 3 and this Article 4 hereof; provided, however, that such modification or revocation shall be effective upon receipt by the Advisor and shall not be applicable to investment transactions to which the Advisor has committed the Company prior to the date of receipt by the Advisor of such notification. ARTICLE 5 BANK ACCOUNTS The Advisor may establish and maintain one or more bank accounts in its own name for the account of the Company or in the name of the Company and may collect and deposit into any such account or accounts, and disburse from any such account or accounts, any money on behalf of the Company, under such terms and conditions as the Board may approve, provided that no funds shall be commingled with the funds of the Advisor. The Advisor shall from time to time render appropriate accountings of such collections and payments to the Board and the independent auditors of the Company. ARTICLE 6 RECORDS AND FINANCIAL STATEMENTS The Advisor, in the conduct of its responsibilities to the Company, shall maintain adequate and separate books and records for the Company’s operations in accordance with GAAP, which shall be supported by sufficient documentation to ascertain that such books and records are properly and accurately recorded. Such books and records shall be the property of the Company and shall be available for inspection by the Board and by counsel, auditors and other authorized agents of the Company, at any time or from time to time during normal business hours. Such books and records shall include all information necessary to calculate and audit the fees or reimbursements paid under this Agreement. The Advisor shall utilize procedures to attempt to ensure such control over accounting and financial transactions as is reasonably required to protect the Company’s assets from theft, error or fraudulent activity. All financial statements that the Advisor delivers to the Company shall be prepared on an accrual basis in accordance with GAAP, except for special financial reports that by their nature require a deviation from GAAP. The Advisor shall liaise with the Company’s officers and independent auditors and shall provide such officers and auditors with the reports and other information that the Company so requests. ARTICLE 7 LIMITATION ON ACTIVITIES Notwithstanding any provision in this Agreement to the contrary, the Advisor shall not take any action that, in its sole judgment made in good faith, would (i) adversely affect the ability of the Company to qualify or continue to qualify as a REIT under the Code, (ii) subject the Company to regulation under the Investment Company Act of 1940, as amended, (iii) violate any law, rule, regulation or statement of policy of any governmental body or agency having jurisdiction over the Company, its Shares or its other securities, (iv) require the Advisor to register as a broker-dealer with the SEC or any state, or (v) violate the Charter or Bylaws. In the event an action that would violate (i) through (v) of the preceding sentence but such action has 15 been ordered by the Board, the Advisor shall notify the Board of the Advisor’s judgment of the potential impact of such action and shall refrain from taking such action until it receives further clarification or instructions from the Board. In such event, the Advisor shall have no liability for acting in accordance with the specific instructions of the Board so given. ARTICLE 8 FEES 8.01 Acquisition Fees. As compensation for the investigation, selection, sourcing and acquisition or origination (by purchase, investment or exchange) of Properties, Loans and other Permitted Investments, the Company shall pay an Acquisition Fee to the Advisor for each such investment (whether an acquisition or origination), excluding investments in PORT or made through PORT. With respect to the acquisition or origination of a Property, Loan or other Permitted Investment to be wholly owned, directly or indirectly, by the Company, the Acquisition Fee payable to the Advisor shall equal 1.0% of the sum of the amount actually paid or allocated to fund the acquisition, origination, development, construction or improvement of the Property, Loan or other Permitted Investment, inclusive of the Acquisition Expenses associated with such Property, Loan or other Permitted Investment and the amount of any debt associated with, or used to fund the investment in, such Property, Loan or other Permitted Investment. With respect to the acquisition or origination of a Property, Loan or other Permitted Investment through any Joint Venture or any partnership in which the Company or the Partnership is, directly or indirectly, a partner, the Acquisition Fee payable to the Advisor shall equal 1.0% of the portion of the amount actually paid or allocated to fund the acquisition, origination, development, construction or improvement of the Property, Loan or other Permitted Investment, inclusive of the Acquisition Expenses associated with such Property, Loan or other Permitted Investment, plus the amount of any debt associated with, or used to fund the investment in, such Property, Loan or other Permitted Investment that is attributable to the Company’s investment in such Joint Venture or partnership. Notwithstanding anything herein to the contrary, the payment of Acquisition Fees by the Company shall be subject to the limitations on Acquisition Fees contained in (and defined in) the Company’s Charter, and no Acquisition Fee shall be paid in connection with the Merger. The Advisor shall submit an invoice to the Company following the closing or closings of each acquisition or origination, accompanied by a computation of the Acquisition Fee. Generally, the Acquisition Fee payable to the Advisor shall be paid at the closing of the transaction upon receipt of the invoice by the Company. However, the Acquisition Fee may or may not be taken, in whole or in part, as to any year in the sole discretion of the Advisor. All or any portion of the Acquisition Fees not taken as to any fiscal year shall be deferred without interest and may be paid in such other fiscal year as the Advisor shall determine. 8.02 Asset Management Fees. (i) Except as provided in Section 8.02(ii) hereof, the Company shall pay the Advisor as compensation for the services described in Section 3.03 hereof a monthly fee (the “Asset Management Fee”) in an amount equal to one-twelfth of 1.0% of the sum of the Cost of Real Estate Investments and the Cost of Loans and other Permitted Investments, excluding investments in PORT or made through PORT. The Advisor shall submit a monthly invoice to the Company, accompanied by a computation of the Asset Management Fee for the applicable period. Generally, the Asset Management Fee 16 payable to the Advisor shall be paid on the last day of such month, or the first business day following the last day of such month. However, the Asset Management Fee may or may not be taken, in whole or in part, as to any year in the sole discretion of the Advisor. All or any portion of the Asset Management Fees not taken as to any fiscal year shall be deferred without interest and may be paid in such other fiscal year as the Advisor shall determine. (ii) Notwithstanding anything contained in Section 8.02(i) to the contrary, a Property, Loan or other Permitted Investment that has suffered an impairment in value, reduction in cash flow or other negative circumstances may either be excluded from the calculation of the Cost of Real Estate Investments or the Cost of Loans and other Permitted Investments or included in such calculation at a reduced value that is recommended by the Advisor and the Company’s management and then approved by a majority of the Company’s independent directors, and the resulting change in the Asset Management Fee with respect to such an investment will be applicable upon the earlier to occur of the date on which (i) such investment is sold, (ii) such investment is surrendered to a Person other than the Company, its direct or indirect wholly owned subsidiary or a Joint Venture or partnership in which the Company has an interest, (iii) the Advisor determines that it will no longer pursue collection or other remedies related to such investment, or (iv) the Advisor recommends a revised fee arrangement with respect to such investment. 8.03 Disposition Fees. If the Advisor or any of its Affiliates provide a substantial amount of services (as determined by the Conflicts Committee) in connection with a Sale, excluding investments in PORT or made through PORT, the Advisor or such Affiliate shall receive a fee at the closing (the “Disposition Fee”) equal to 1% of the Contract Sales Price; provided, however, that if in connection with such Sale commissions are paid to third parties other than the Advisor or its Affiliates, the fee paid to the Advisor or any of its Affiliates may not exceed the commissions paid to such unaffiliated third parties; and provided further that no Disposition Fee shall be payable to the Advisor for any Sale if such Sale involves the Company selling all or substantially all of its assets in one or more transactions designed to effectuate a business combination transaction (as opposed to a Company liquidation, in which case the Disposition Fee would be payable if the Advisor or an Affiliate provides a substantial amount of services as provided above). The payment of any Disposition Fees by the Company shall be subject to the limitations contained in the Company’s Charter. Any Disposition Fee payable under this Section 8.03 may be paid in addition to commissions paid to non-Affiliates, provided that the total commissions (including such Disposition Fee) paid to all Persons by the Company for each Sale shall not exceed an amount equal to the lesser of (i) 6% of the aggregate Contract Sales Price of each Property, Loan or other Permitted Investment or (ii) the Competitive Real Estate Commission for each Property, Loan or other Permitted Investment. The Advisor shall submit an invoice to the Company following the closing or closings of each disposition, accompanied by a computation of the Disposition Fee. Generally, the Disposition Fee payable to the Advisor shall be paid at the closing of the transaction upon receipt of the invoice by the Company. However, the Disposition Fee may or may not be taken, in whole or in part, as to any year in the sole discretion of the Advisor. All or any portion of the Disposition Fees not taken as to any fiscal year shall be deferred without interest and may be paid in such other fiscal year as the Advisor shall determine. 17 8.04 Subordinated Share of Cash Flows. The Subordinated Share of Cash Flows shall be payable to the Advisor in an amount equal to the amount, if any, by which (I) 15% of Operating Cash Flow and Cash from Sales, Settlements and Financings remaining after the Stockholders have received Distributions of Operating Cash Flow and of Cash from Sales, Settlements and Financings since Company inception such that the owners of all outstanding Shares have received Distributions since Company inception in an aggregate amount equal to the sum of the Stockholders’ 7% Return and Invested Capital, exceeds (II) the Prior Advisor Performance Fee Value. When determining whether the above threshold (the “Subordinated Share of Cash Flows Threshold”) has been met: (A) Any stock dividend since Company inception shall not be included as a Distribution; and (B) Distributions since Company inception paid on Shares redeemed by the Company (and thus no longer included in the determination of Invested Capital), shall not be included as a Distribution. Following Listing, no Subordinated Share of Cash Flows will be paid to the Advisor. If the Subordinated Share of Cash Flows is payable to the Advisor, the Advisor shall submit a monthly invoice to the Company, accompanied by a computation of the total amount of the Subordinated Share of Cash Flows for the applicable period. Generally, the Subordinated Share of Cash Flows payable to the Advisor shall be paid on the last day of such month, or the first business day following the last day of such month. However, the Subordinated Share of Cash Flows may or may not be taken, in whole or in part, as to any year in the sole discretion of the Advisor. All or any portion of the Subordinated Share of Cash Flows not taken as to any fiscal year shall be deferred without interest and may be paid in such other fiscal year as the Advisor shall determine. 8.05 Subordinated Incentive Fee. Upon Listing, the Advisor shall be entitled to the Subordinated Incentive Fee in an amount equal to the amount, if any, by which (I) 15% of the amount by which (i) the market value of the outstanding Shares of the Company, measured by taking the average closing price or the average of the bid and asked price, as the case may be, over a period of 30 days during which the Shares are traded, with such period beginning 180 days after Listing (the “Market Value”), plus the total of all Distributions paid to Stockholders (excluding any stock dividends) from Company inception until the date that Market Value is determined, exceeds (ii) the sum of (A) 100% of Invested Capital and (B) the total Distributions required to be paid to the Stockholders in order to pay the Stockholders’ 7% Return from Company inception through the date Market Value is determined (the sum of (A) and (B) is the “Subordinated Incentive Fee Threshold”) exceeds (II) the Prior Advisor Performance Fee Value. The Company shall have the option to pay such fee in the form of cash, Shares, a promissory note or any combination of the foregoing. The Subordinated Incentive Fee will be reduced by the amount of any prior payment to the Advisor of a Subordinated Share of Cash Flows. In the event the Subordinated Incentive Fee is paid to the Advisor following Listing, no other performance fee will be paid to the Advisor. In addition, the Subordinated Incentive Fee may or may not be taken, in whole or in part, as to any year in the sole discretion of the Advisor. All or any portion

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18 of the Subordinated Incentive Fee not taken as to any fiscal year shall be deferred without interest and may be paid in such other fiscal year as the Advisor shall determine. 8.06 Changes to Fee Structure. The Advisor and the Company shall not agree to reduce the Subordinated Share of Cash Flows Threshold, the Subordinated Incentive Fee Threshold or the Termination Fee Threshold without (a) the approval of the Conflicts Committee or (b) the approval of Stockholders holding a majority of the Shares. In the event of Listing, the Company and the Advisor shall negotiate in good faith to establish a fee structure appropriate for a perpetual-life entity. ARTICLE 9 EXPENSES 9.01 General. In addition to the compensation paid to the Advisor pursuant to Article 8 hereof, the Company shall pay directly or reimburse the Advisor for all of the expenses paid or incurred by the Advisor or its Affiliates on behalf of the Company or in connection with the services provided to the Company pursuant to this Agreement, including, but not limited to: (i) All Organization and Offering Expenses; provided, however, that the Company shall not reimburse the Advisor to the extent such reimbursement would cause the total amount spent by the Company on Organization and Offering Expenses to exceed 15% of the Gross Proceeds raised as of the date of the reimbursement and provided further that within 60 days after the end of the month in which an Offering terminates, the Advisor shall reimburse the Company to the extent the Company incurred Organization and Offering Expenses exceeding 15% of the Gross Proceeds raised in the completed Offering; the Company shall not reimburse the Advisor for any Organization and Offering Expenses that are not fair and commercially reasonable to the Company, and the Advisor shall reimburse the Company for any Organization and Offering Expenses that are not fair and commercially reasonable to the Company; (ii) Acquisition Fees and Acquisition Expenses incurred in connection with the selection and acquisition of Properties, Loans and other Permitted Investments, including such expenses incurred related to assets pursued or considered but not ultimately acquired by the Company, provided that, notwithstanding anything herein to the contrary, the payment of Acquisition Fees and Acquisition Expenses by the Company shall be subject to the limitations contained in the Company’s Charter; (iii) The actual out-of-pocket cost of goods and services used by the Company and obtained from entities not Affiliated with the Advisor; (iv) Interest and other costs for borrowed money, including discounts, points and other similar fees; (v) Taxes and assessments on income or Properties, taxes as an expense of doing business and any other taxes otherwise imposed on the Company and its business, assets or income; 19 (vi) Out-of-pocket costs associated with insurance required in connection with the business of the Company or by its officers and Directors; (vii) Expenses of managing, improving, developing, operating and selling Properties, Loans and other Permitted Investments owned, directly or indirectly, by the Company, as well as expenses of other transactions relating to such Properties, Loans and other Permitted Investments, including but not limited to prepayments, maturities, workouts and other settlements of Loans and other Permitted Investments; (viii) All out-of-pocket expenses in connection with payments to the Board and meetings of the Board and Stockholders; (ix) Personnel and related employment costs incurred by the Advisor or its Affiliates in performing the services described in Article 3 hereof, including but not limited to reasonable salaries and wages, benefits and overhead of all employees directly involved in the performance of such services, provided that, other than reimbursement of travel and communications expenses, no reimbursement shall be made for compensation of such employees of the Advisor or its Affiliates to the extent that such employees perform services for which the Advisor receives Acquisition Fees or Disposition Fees; (x) Out-of-pocket expenses of providing services for and maintaining communications with Stockholders, including the cost of preparation, printing, and mailing annual reports and other Stockholder reports, proxy statements and other reports required by governmental entities; (xi) Audit, accounting and legal fees, and other fees for professional services relating to the operations of the Company and all such fees incurred at the request, or on behalf of, the Board, the Conflicts Committee or any other committee of the Board; (xii) Out-of-pocket costs for the Company to comply with all applicable laws, regulations and ordinances; (xiii) Expenses connected with payments of Distributions made or caused to be made by the Company to the Stockholders; (xiv) Expenses of organizing, redomesticating, merging, liquidating or dissolving the Company or of amending the Charter or the Bylaws; and (xv) All other out-of-pocket costs incurred by the Advisor in performing its duties hereunder. 9.02 Timing of and Additional Limitations on Reimbursements. (i) Expenses incurred by the Advisor on behalf of the Company and reimbursable pursuant to this Article 9 shall be reimbursed no less than monthly to the Advisor. The Advisor shall prepare a statement documenting the expenses of the Company during each quarter and shall deliver such statement to the Company within 45 days after the end of each quarter. 20 (ii) The Company shall not reimburse the Advisor at the end of any fiscal quarter for Operating Expenses that in the four consecutive fiscal quarters then ended (the “Expense Year”) exceed (the “Excess Amount”) the greater of 2% of Average Invested Assets or 25% of Net Income (the “2%/25% Guidelines”) for such year unless the Conflicts Committee determines that such excess was justified, based on unusual and nonrecurring factors that the Conflicts Committee deems sufficient. If the Conflicts Committee does not approve such excess as being so justified, any Excess Amount paid to the Advisor during a fiscal quarter shall be repaid to the Company. If the Conflicts Committee determines such excess was justified, then, within 60 days after the end of any fiscal quarter of the Company for which total reimbursed Operating Expenses for the Expense Year exceed the 2%/25% Guidelines, the Advisor, at the direction of the Conflicts Committee, shall cause such fact to be disclosed to the Stockholders in writing (or the Company shall disclose such fact to the Stockholders in the next quarterly report of the Company or by filing a Current Report on Form 8-K with the SEC within 60 days of such quarter end), together with an explanation of the factors the Conflicts Committee considered in determining that such excess expenses were justified. The Company will ensure that such determination will be reflected in the minutes of the meetings of the Board. All figures used in the foregoing computation shall be determined in accordance with GAAP applied on a consistent basis. ARTICLE 10 VOTING AGREEMENT The Advisor agrees that, with respect to any Shares now or hereinafter owned by it, the Advisor will not vote or consent on matters submitted to the stockholders of the Company regarding (i) the removal of the Advisor or any Affiliate of the Advisor, (ii) any transaction between the Company and the Advisor or any of its Affiliates, (iii) the election of directors of the Company or (iv) the approval or termination of any contract with the Advisor or any Affiliate of the Advisor. This voting restriction shall survive until such time that the Advisor is both no longer serving as such and is no longer an Affiliate of the Company. ARTICLE 11 RELATIONSHIP OF ADVISOR AND COMPANY; OTHER ACTIVITIES OF THE ADVISOR 11.01 Relationship. The Company and the Advisor are not partners or joint venturers with each other, and nothing in this Agreement shall be construed to make them such partners or joint venturers. Nothing herein contained shall prevent the Advisor from engaging in other activities, including, without limitation, the rendering of advice to other Persons (including other REITs) and the management of other programs advised, sponsored or organized by the Advisor or its Affiliates. Nor shall this Agreement limit or restrict the right of any manager, director, officer, employee or equityholder of the Advisor or its Affiliates to engage in any other business or to render services of any kind to any other Person. The Advisor may, with respect to any investment in which the Company is a participant, also render advice and service to each and every other participant therein. The Advisor shall promptly disclose to the Board the existence of any condition or circumstance, existing or anticipated, of which it has knowledge, that creates or could create a conflict of interest between the Advisor’s obligations to the Company and its obligations to or its interest in any other Person. 21 11.02 Time Commitment. The Advisor shall, and shall cause its Affiliates and their respective employees, officers and agents to, devote to the Company such time as shall be reasonably necessary to conduct the business and affairs of the Company in an appropriate manner consistent with the terms of this Agreement. The Company acknowledges that the Advisor and its Affiliates and their respective employees, officers and agents may also engage in activities unrelated to the Company and may provide services to Persons other than the Company or any of its Affiliates. 11.03 Investment Opportunities and Allocation. The Advisor shall be required to use commercially reasonable efforts to present a continuing and suitable investment program to the Company that is consistent with the investment policies and objectives of the Company, but neither the Advisor nor any Affiliate of the Advisor shall be obligated generally to present any particular investment opportunity to the Company even if the opportunity is of character that, if presented to the Company, could be taken by the Company. ARTICLE 12 THE PACIFIC OAK NAME The Advisor and its Affiliates have a proprietary interest in the name “Pacific Oak.” The Advisor hereby grants to the Company a non-transferable, non-assignable, non-exclusive royalty-free right and license to use the name “Pacific Oak” during the term of this Agreement. Accordingly, and in recognition of this right, if at any time the Company ceases to retain the Advisor or one of its Affiliates to perform advisory services for the Company, the Company will, promptly after receipt of written request from the Advisor, cease to conduct business under or use the name “Pacific Oak” or any derivative thereof and the Company shall change its name and the names of any of its subsidiaries to a name that does not contain the name “Pacific Oak” or any other word or words that might, in the reasonable discretion of the Advisor, be susceptible of indication of some form of relationship between the Company and the Advisor or any its Affiliates. At such time, the Company will also make any changes to any trademarks, servicemarks or other marks necessary to remove any references to the word “Pacific Oak.” Consistent with the foregoing, it is specifically recognized that the Advisor or one or more of its Affiliates has in the past and may in the future organize, sponsor or otherwise permit to exist other investment vehicles (including vehicles for investment in real estate) and financial and service organizations having “Pacific Oak” as a part of their name, all without the need for any consent (and without the right to object thereto) by the Company. ARTICLE 13 TERM AND TERMINATION OF THE AGREEMENT 13.01 Term. This Agreement shall have an initial term of one year from November 1, 2024 and may be renewed for an unlimited number of successive one-year terms upon mutual consent of the parties. The Company (acting through the Conflicts Committee) will evaluate the performance of the Advisor annually before renewing this Agreement, and each such renewal shall be for a term of no more than one year. Any such renewal must be approved by the Conflicts Committee. 13.02 Termination by Either Party. This Agreement may be terminated upon 60 days written notice without cause or penalty by either the Company (acting in sole discretion and

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22 authority of the Conflicts Committee) or the Advisor. The provisions of Articles 1, 10, 12, 13, 15 and 16 shall survive termination of this Agreement. 13.03 Payments on Termination and Survival of Certain Rights and Obligations. Payments to the Advisor pursuant to this Section 13.03 shall be subject to the 2%/25% Guidelines to the extent applicable. (i) After the Termination Date, the Advisor shall not be entitled to compensation for further services hereunder except it shall be entitled to receive from the Company within 30 days after the effective date of such termination (A) all unpaid reimbursements of expenses and all earned but unpaid fees payable to the Advisor prior to termination of this Agreement and (B) the Subordinated Performance Fee Due Upon Termination, provided that (1) no Subordinated Performance Fee Due Upon Termination will be due or paid if the Company has paid or is obligated to pay the Subordinated Incentive Fee (2) no Subordinated Performance Fee Due Upon Termination will be due or paid if this Agreement is terminated by the Company for cause. (ii) The Advisor shall promptly upon termination: (a) pay over to the Company all money collected pursuant to this Agreement, if any, after deducting any accrued compensation and reimbursement for its expenses to which it is then entitled; (b) deliver to the Board a full accounting, including a statement showing all payments collected by it and a statement of all money held by it, covering the period following the date of the last accounting furnished to the Board; (c) deliver to the Board all assets and documents of the Company then in the custody of the Advisor; and (d) cooperate with the Company to provide an orderly transition of advisory functions. ARTICLE 14 ASSIGNMENT This Agreement may be assigned by the Advisor to an Affiliate with the consent of the Conflicts Committee. The Advisor may assign any rights to receive fees or other payments under this Agreement without obtaining the approval of the Board. This Agreement shall not be assigned by the Company without the consent of the Advisor, except in the case of an assignment by the Company to a corporation or other organization that is a successor to all of the assets, rights and obligations of the Company, in which case such successor organization shall be bound hereunder and by the terms of said assignment in the same manner as the Company is bound by this Agreement. 23 ARTICLE 15 INDEMNIFICATION AND LIMITATION OF LIABILITY 15.01 Indemnification. Except as prohibited by the restrictions provided in this Section 15.01, Section 15.02 and Section 15.03, the Company shall indemnify, defend and hold harmless the Advisor and its Affiliates, including their respective officers, directors, equity holders, partners and employees, from all liability, claims, damages or losses arising in the performance of their duties hereunder, and related expenses, including reasonable attorneys’ fees, to the extent such liability, claims, damages or losses and related expenses are not fully reimbursed by insurance. Any indemnification of the Advisor may be made only out of the net assets of the Company and not from Stockholders. Notwithstanding the foregoing, the Company shall not indemnify the Advisor or its Affiliates for any loss, liability or expense arising from or out of an alleged violation of federal or state securities laws by such party unless one or more of the following conditions are met: (i) there has been a successful adjudication on the merits of each count involving alleged material securities law violations as to the particular indemnitee; (ii) such claims have been dismissed with prejudice on the merits by a court of competent jurisdiction as to the particular indemnitee; or (iii) a court of competent jurisdiction approves a settlement of the claims against a particular indemnitee and finds that indemnification of the settlement and the related costs should be made, and the court considering the request for indemnification has been advised of the position of the SEC and of the published position of any state securities regulatory authority in which securities of the Company were offered or sold as to indemnification for violations of securities laws. 15.02 Limitation on Indemnification. Notwithstanding the foregoing, the Company shall not provide for indemnification of the Advisor or its Affiliates for any liability or loss suffered by any of them, nor shall any of them be held harmless for any loss or liability suffered by the Company, unless all of the following conditions are met: (i) The Advisor or its Affiliates have determined, in good faith, that the course of conduct that caused the loss or liability was in the best interests of the Company. (ii) The Advisor or its Affiliates were acting on behalf of or performing services for the Company. (iii) Such liability or loss was not the result of negligence or misconduct by the Advisor or its Affiliates. 15.03 Limitation on Payment of Expenses. The Company shall pay or reimburse reasonable legal expenses and other costs incurred by the Advisor or its Affiliates in advance of the final disposition of a proceeding only if (in addition to the procedures required by the Maryland General Corporation Law, as amended from time to time) all of the following are satisfied: (a) the proceeding relates to acts or omissions with respect to the performance of duties or services on behalf of the Company, (b) the legal proceeding was initiated by a third party who is not a stockholder or, if by a stockholder acting in his or her capacity as such, a court of competent jurisdiction approves such advancement and (c) the Advisor or its Affiliates undertake to repay the amount paid or reimbursed by the Company, together with the applicable 24 legal rate of interest thereon, if it is ultimately determined that the particular indemnitee is not entitled to indemnification. ARTICLE 16 MISCELLANEOUS 16.01 Notices. Any notice, report or other communication required or permitted to be given hereunder shall be in writing unless some other method of giving such notice, report or other communication is required by the Charter, the Bylaws or is accepted by the party to whom it is given, and shall be given by being delivered by hand or by overnight mail or other overnight delivery service to the addresses set forth herein: To the Company or the Board: Pacific Oak Strategic Opportunity REIT, Inc. 11766 Wilshire Blvd., Suite 1670 Los Angeles, CA 90025 To the Advisor: Pacific Oak Capital Advisors, LLC 11766 Wilshire Blvd., Suite 1670 Los Angeles, CA 90025 Either party may at any time give notice in writing to the other party of a change in its address for the purposes of this Section 16.01. 16.02 Modification. This Agreement shall not be changed, modified, terminated or discharged, in whole or in part, except by an instrument in writing signed by both parties hereto, or their respective successors or permitted assigns, and any change or modification to this Agreement must be in accordance with Section 8.06 hereof, to the extent applicable. 16.03 Severability. The provisions of this Agreement are independent of and severable from each other, and no provision shall be affected or rendered invalid or unenforceable by virtue of the fact that for any reason any other or others of them may be invalid or unenforceable in whole or in part. 16.04 Construction. The provisions of this Agreement shall be construed and interpreted in accordance with the laws of the State of Delaware. 16.05 Entire Agreement. This Agreement contains the entire agreement and understanding between the parties hereto with respect to the subject matter hereof, and supersedes all prior and contemporaneous agreements, understandings, inducements and conditions, express or implied, oral or written, of any nature whatsoever with respect to the subject matter hereof. The express terms hereof control and supersede any course of performance and/or usage of the trade inconsistent with any of the terms hereof. This Agreement may not be modified or amended other than by an agreement in writing. 25 16.06 Waiver. Neither the failure nor any delay on the part of a party to exercise any right, remedy, power or privilege under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege preclude any other or further exercise of the same or of any other right, remedy, power or privilege, nor shall any waiver of any right, remedy, power or privilege with respect to any occurrence be construed as a waiver of such right, remedy, power or privilege with respect to any other occurrence. No waiver shall be effective unless it is in writing and is signed by the party asserted to have granted such waiver. 16.07 Gender. Words used herein regardless of the number and gender specifically used, shall be deemed and construed to include any other number, singular or plural, and any other gender, masculine, feminine or neuter, as the context requires. 16.08 Titles Not to Affect Interpretation. The titles of Articles and Sections contained in this Agreement are for convenience only, and they neither form a part of this Agreement nor are they to be used in the construction or interpretation hereof. 16.09 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original as against any party whose signature appears thereon, and all of which shall together constitute one and the same instrument. This Agreement shall become binding when one or more counterparts hereof, individually or taken together, shall bear the signatures of all of the parties reflected hereon as the signatories. ARTICLE 17 PORT PROVISIONS 17.01 Management of PORT Operations and Assets. Notwithstanding anything to the contrary in this Agreement, the Advisor will not be responsible for managing the operations or assets of PORT. PORA, an affiliate of the Advisor, will manage the operations and assets of PORT pursuant to the advisory agreement under which PORT has hired PORA as its external advisor. All references to the power, authority, responsibility and duties of the Advisor with respect to the Company in this Agreement shall be deemed to exclude PORT, its operations and its assets. [The remainder of this page is intentionally left blank. Signature page follows.]

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective as of the date and year first above written. PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC. By: _/s/ Keith D. Hall____________________________ Keith D. Hall, Chief Executive Officer PACIFIC OAK CAPITAL ADVISORS, LLC By: Pacific Oak Holding Group, LLC, sole Member By: _/s/ Peter McMillan______________________ Peter McMillan III, Member By: _/s/ Keith D. Hall_______________________ Keith D. Hall, Member

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exhibit1012firstamendmen

Exhibit 10.1.2 1 FIRST AMENDMENT TO PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC. ADVISORY AGREEMENT THIS FIRST AMENDMENT TO PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC. ADVISORY AGREEMENT (this “SOR Advisory Agreement Amendment”) is entered into effective as of December 19, 2024, by and among Pacific Oak Strategic Opportunity REIT, Inc., and Pacific Oak Capital Advisors, LLC (collectively, the “Parties”). WHEREAS, the Parties previously entered into that certain Advisory Agreement effective as of November 1, 2024 (the “Advisory Agreement”). All capitalized terms not defined herein shall have the same meanings as set forth in such agreement; WHEREAS, the Parties desire to amend the Advisory Agreement as detailed below. NOW THEREFORE, the Advisory Agreement is hereby amended as follows: AMENDMENT 1. Management of PORT Operations and Assets. Section 17.01 of the Advisory Agreement is hereby deleted in its entirety and replaced with the following: 17.01 Management of PORT Operations and Assets. Notwithstanding anything to the contrary in this Agreement, the Advisor will not be responsible for managing the operations or assets of PORT. PORA will manage the operations and assets of PORT pursuant to the advisory agreement between PORT and PORA. All references to the power, authority, responsibility and duties of the Advisor with respect to the Company in this Agreement shall be deemed to exclude PORT, its operations and its assets. 2. Counterparts. This SOR Advisory Agreement Amendment may be executed in any number of counterparts, each of which shall be deemed to be an original as against any party whose signature appears thereon, and all of which shall together constitute one and the same instrument. Signature Page to SOR Advisory Agreement Amendment IN WITNESS WHEREOF, the parties hereto have executed this SOR Advisory Agreement Amendment effective as of the date and year first above written. PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC. By: /s/ Keith D. Hall_________________ Keith D. Hall, Chief Executive Officer PACIFIC OAK CAPITAL ADVISORS, LLC By: Pacific Oak Holding Group, LLC, sole Member By: /s/ Peter McMillan III_________ Peter McMillan III, Member By: /s/ Keith D. Hall_____________ Keith D. Hall, Member

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exhibit1022firstamendmen

Exhibit 10.2.2 1 FIRST AMENDMENT TO ADVISORY AGREEMENT THIS FIRST AMENDMENT TO ADVISORY AGREEMENT (this "Amendment"), dated as of December 19, 2024 (the "Amendment Date"), is made by and among Pacific Oak Residential Trust, Inc., a Maryland corporation (the "Company"), Port OP LP, a Delaware limited partnership (the "Partnership"), Pacific Oak Capital Advisors, LLC, a Delaware limited liability company (the "Sponsor"), and Pacific Oak Residential Advisors, LLC, a Delaware limited liability company (the "Advisor"). RECITALS A. WHEREAS, the Company previously engaged the Advisor to undertake and render certain services pursuant to that certain Advisory Agreement entered into as of September 1, 2024 (the "Existing Agreement"); B. WHEREAS, as of the Amendment Date, Residential Homes For Rent LLC (d/b/a Second Avenue), a Delaware limited liability company ("SAG"), acquired one hundred percent (100%) of the outstanding capital stock of Pacific Oak Residential, Inc., a Florida corporation ("Parent") (the "Transaction"); C. WHEREAS, the Advisor is wholly owned by Parent; and D. WHEREAS, the parties hereto desire to amend the Existing Agreement as provided herein. E. NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements contained herein, the parties hereto agree as follows: AGREEMENT 1. Interpretation. Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Existing Agreement. 2. Amendments. (a) The following shall be added to the end of the definition of “Triggering Event”: “and (4) if this Agreement is terminated by the Company pursuant to Section 12.01.” (b) Section 13.01 of the Existing Agreement is hereby deleted in its entirety and replaced with the following: "13.01 Term. The term of this Agreement is through December 19, 2026 and may be renewed for an unlimited number of successive one-year terms upon mutual consent of the parties. Each such renewal shall be for a term of no more than one 2 1618185206.2 year. Any such renewal must be approved by the Board of Directors and the Advisor." (c) Section 16.01 of the Existing Agreement is hereby amending by deleting the Advisor’s notice block in its entirety and replacing it with the following: Pacific Oak Residential Advisors, LLC 13901 Sutton Park Dr S., Suite B 160 Jacksonville, FL 32224 Attention: Michael S. Gough Email: MGough@Pac-Oak.com with a copy (which shall not constitute notice or service of process) to: Residential Homes for Rent LLC 401 East Jackson Street #3000 Tampa, Florida 33602 Attention: Michael Rothman E-mail: mike@secondavenue.com 3. Consent. Without limiting or altering any of the terms of the Existing Agreement, the Company hereby consents to the Transaction (including the indirect change of control of the Advisor) and represents and warrants that it has no rights or remedies against the Advisor and/or any of its affiliates, nor SAG and/or any of its affiliates, as a result of, or arising out of, the Transaction (including as a result of the indirect change of control of the Advisor), pursuant to the terms of the Existing Agreement or otherwise. 4. No Defaults. The Company represents and warrants to the Advisor that, as of the Amendment Date, there exists no default, violation, breach or event of default, nor any event, occurrence, condition or act (including the consummation of the Transaction) which, with the giving of notice, the lapse of time or the happening of any other event or condition, would become a default, violation, breach or event of default thereunder with respect to the Existing Agreement. All of the covenants to be performed by the Company (or any of its affiliates) to the Existing Agreement have been fully performed in all material respects, and there have been no disputes under the Existing Agreement. No facts or circumstances exist as of the Amendment Date that would reasonably be expected to lead to the Company's (or any of its affiliates') inability to fulfill any of its material obligations under the Existing Agreement. 5. Release. The parties hereto each completely release and forever discharge each other and each of their respective former, present and/or future parents, subsidiaries, divisions, controlling persons, associates, related entities and affiliates and each and all of their respective present and former employees, members, partners, principals, officers, directors, controlling shareholders, agents, attorneys, advisors (including financial or investment advisors), accountants, auditors, consultants, underwriters, investment bankers, commercial bankers, general or limited partners or partnerships, limited liability companies, members, joint ventures and insurers and reinsurers of each of them, in their capacities as such; and the predecessors, successors, assigns, 3 1618185206.2 estates, immediate family, heirs, executors, trusts, trustees, administrators, agents, legal representatives, and assignees of each of them, in their capacities as such, from any and all demands, obligations, actions, causes of action, rights, damages, costs, losses of services, expenses and any compensation of any nature whatsoever, whether known or unknown, arising out of or related to the Existing Agreement as in effect prior to the Amendment Date; provided, that, notwithstanding the foregoing, the release set forth in this Section 5 shall not constitute a release by the Advisor of any obligation of PORT which has accrued or otherwise arisen to date under any of Article 5, Article 8, Article 9 or Article 15 of the Existing Agreement. 6. Entire Agreement; Full Force and Effect. Except as amended or modified hereby, each term and provision of the Existing Agreement is hereby ratified and confirmed and will and does remain in full force and effect. 7. Counterparts. This Amendment may be executed by pdf signature and in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. All signatures to this Amendment may be provided or executed by manual, or electronic signatures, which shall expressly include images of manually executed signatures transmitted by electronic format (including, without limitation, "pdf", "tif", or "jpg") and other electronic signatures (including, without limitation, DocuSign and AdobeSign), which will, for all purposes, be deemed to be the original signature of such party whose signature it reproduces and will be binding upon such party. Neither this Amendment, nor any part or provision of this Amendment, shall be challenged or denied any legal effect, validity and/or enforceability solely on the grounds that it is in the form of an electronic record. 8. Governing Law/Jurisdiction. This Amendment shall be governed by and construed in accordance with the internal laws of State of Delaware, without regard to the conflicts of laws principles thereof. [Remainder of this page is intentionally left blank. Signature page(s) follow.] IN WITNESS WHEREOF, the parties hereto have executed this Amendment effective as of the Amendment Date. COMPANY: PACIFIC OAK RESIDENTIAL TRUST, INC. By: /s/Michael Gough_______________ Name: Michael Gough Title: Chief Executive Officer and President PARTNERSHIP: PORT OP LP By: Pacific Oak Residential Trust, Inc., its general partner By: /s/Michael Gough_____________ Name: Michael Gough Title: Chief Executive Officer and President SPONSOR: PACIFIC OAK CAPITAL ADVISORS, LLC By: Pacific Oak Holding Group, LLC, sole Member By: /s/Peter McMillan III___________ Name: Peter McMillan III Title: Member By: /s/Keith D. Hall________________ Name: Keith D. Hall Title: Member [signatures continue]

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IN WITNESS WHEREOF, the parties hereto have executed this Amendment effective as of the Amendment Date. ADVISOR: PACIFIC OAK RESIDENTIAL ADVISORS, LLC By: Pacific Oak Residential, Inc., sole Member By: /s/Michael Gough_______________ Name: Michael Gough Title: President

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exhibit1032-firstamendme

Exhibit 10.3.2 1 FIRST AMENDMENT TO SECOND AMENDED AND RESTATED MANAGEMENT AGREEMENT THIS FIRST AMENDMENT TO SECOND AMENDED AND RESTATED MANAGEMENT AGREEMENT (this "Amendment"), dated as of December 19, 2024 (the "Amendment Date"), is made by and among Pacific Oak Residential Trust, Inc., a Maryland corporation (“PORT”) and DMH Realty, LLC a Florida limited liability company (“Property Manager”). RECITALS A. WHEREAS, PORT previously engaged the Property Manager to undertake and render certain services pursuant to that certain Second Amended and Restated Management Agreement entered into as of April 2, 2024 (the "Existing Agreement"); B. WHEREAS, as of the Amendment Date, Residential Homes For Rent LLC (d/b/a Second Avenue), a Delaware limited liability company ("SAG"), acquired one hundred percent (100%) of the outstanding capital stock of Pacific Oak Residential, Inc., a Florida corporation ("Parent") (the "Transaction"); C. WHEREAS, Property Manager is wholly owned by Parent; and D. WHEREAS, the parties hereto desire to amend the Existing Agreement as provided herein. E. NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements contained herein, the parties hereto agree as follows: AGREEMENT 1. Interpretation. Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Existing Agreement. 2. Amendments. (a) Section 2.01 of the Existing Agreement is hereby deleted in its entirety and replaced with the following: "Section 2.01 Term of Agreement. The term of this Agreement shall continue until December 19, 2026 (the “Term”). Upon expiration of the Term, this Agreement will automatically renew for additional one-year periods until terminated as provided in Article VIII." (b) Section 11.01 of the Existing Agreement is hereby amending by deleting Property Manager’s notice block in its entirety and replacing it with the following: DMH Realty LLC 13901 Sutton Park Dr S., Suite B 160 Jacksonville, FL 32224 Attention: Michael S. Gough Email: MGough@Pac-Oak.com with a copy (which shall not constitute notice or service of process) to: Residential Homes for Rent LLC 401 East Jackson Street #3000 Tampa, Florida 33602 Attention: Michael Rothman E-mail: mike@secondavenue.com (c) The second sentence of Section 11.08 of the Existing Agreement is hereby deleted in its entirety and replaced with the following: "The rights of PORT hereunder are transferable to any of its respective Affiliates upon no less than ten (10) days’ prior written notice to Property Manager; provided, for the avoidance of doubt, no such assignment by PORT shall relieve PORT from any of its obligations or responsibilities hereunder." 3. Consent. Without limiting or altering any of the terms of the Existing Agreement, PORT hereby consents to the Transaction (including the indirect change of control of Property Manager) and represents and warrants that it has no rights or remedies against Property Manager and/or any of its affiliates, nor SAG and/or any of its affiliates, as a result of, or arising out of, the Transaction (including as a result of the indirect change of control of Property Manager), pursuant to the terms of the Existing Agreement or otherwise. 4. No Defaults. PORT represents and warrants to Property Manager that, as of the Amendment Date, there exists no default, violation, breach or event of default, nor any event, occurrence, condition or act (including the consummation of the Transaction) which, with the giving of notice, the lapse of time or the happening of any other event or condition, would become a default, violation, breach or event of default thereunder with respect to the Existing Agreement. All of the covenants to be performed by PORT (or any of its affiliates) to the Existing Agreement have been fully performed in all material respects, and there have been no disputes under the Existing Agreement. No facts or circumstances exist as of the Amendment Date that would reasonably be expected to lead to PORT's (or any of its affiliates') inability to fulfill any of its material obligations under the Existing Agreement. 5. Release. The parties hereto each completely release and forever discharge each other and each of their respective former, present and/or future parents, subsidiaries, divisions, controlling persons, associates, related entities and affiliates and each and all of their respective present and former employees, members, partners, principals, officers, directors, controlling shareholders, agents, attorneys, advisors (including financial or investment advisors), accountants, auditors, consultants, underwriters, investment bankers, commercial bankers, general or limited partners or partnerships, limited liability companies, members, joint ventures and insurers and reinsurers of each of them, in their capacities as such; and the predecessors, successors, assigns, estates, immediate family, heirs, executors, trusts, trustees, administrators, agents, legal representatives, and assignees of each of them, in their capacities as such, from any and all demands, obligations, actions, causes of action, rights, damages, costs, losses of services, expenses and any compensation of any nature whatsoever, whether known or unknown, arising out of or related to the Existing Agreement as in effect prior to the Amendment Date; provided, that, notwithstanding the foregoing, the release set forth in this Section 5 shall not constitute a release by Property Manager of any obligation of PORT which has accrued or otherwise arisen to date under any of Article V, Article VI or Article VII of the Existing Agreement. 6. Entire Agreement; Full Force and Effect. Except as amended or modified hereby, each term and provision of the Existing Agreement is hereby ratified and confirmed and will and does remain in full force and effect. 7. Counterparts. This Amendment may be executed by pdf signature and in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. All signatures to this Amendment may be provided or executed by manual, or electronic signatures, which shall expressly include images of manually executed signatures transmitted by electronic format (including, without limitation, "pdf", "tif", or "jpg") and other electronic signatures (including, without limitation, DocuSign and AdobeSign), which will, for all purposes, be deemed to be the original signature of such party whose signature it reproduces and will be binding upon such party. Neither this Amendment, nor any part or provision of this Amendment, shall be challenged or denied any legal effect, validity and/or enforceability solely on the grounds that it is in the form of an electronic record. 8. Governing Law/Jurisdiction. This Amendment shall be governed by and construed in accordance with the internal laws of State of Florida, without regard to the conflicts of laws principles thereof. [Remainder of this page is intentionally left blank. Signature page(s) follow.] IN WITNESS WHEREOF, the parties hereto have executed this Amendment effective as of the Amendment Date. PORT: PACIFIC OAK RESIDENTIAL TRUST, INC. By: _/s/ Michael Gough_____________________ Name: Michael Gough Title: Chief Executive Officer and President PROPERTY MANAGER: DMH REALTY, LLC By: __/s/ Michael Gough ____________________ Name: Michael Gough Title: Manager

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exhibit1059eighthamendme

Exhibit 10.5.9 -1- EIGHTH AMENDMENT TO PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS (454.31 Acres +/- in Village 2 of Tule Springs) THIS EIGHTH AMENDMENT TO PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS (this “Amendment”) is made and entered into as of December 12, 2024 (the “Amendment Effective Date”), by and among PACIFIC OAK SOR TULE SPRINGS OWNER TRS, LLC, a Delaware limited liability company (“Parcel 2.09A Seller”), and PACIFIC OAK SOR TULE SPRINGS VILLAGE 2 PARCELS OWNER, LLC, a Delaware limited liability company (“Remainder Seller”, and together with Parcel 2.09A Seller, individually or collectively as context requires, “Seller”), and KB HOME LAS VEGAS INC., a Nevada corporation (“KB Home” or “Buyer”), with respect to the transactions contemplated by this Amendment. RECITALS A. Seller, KB Home, and Tri Pointe Homes Nevada, Inc., a Nevada corporation (“Tri Pointe”) entered into that certain Purchase and Sale Agreement and Joint Escrow Instructions dated as of March 10, 2024 (the “Original Purchase Agreement”), as amended by that certain First Amendment to Purchase and Sale Agreement and Joint Escrow Instructions dated as of June 17, 2024 (the “First Amendment”), as further amended by that certain Second Amendment to Purchase and Sale Agreement and Joint Escrow Instructions dated as of June 21, 2024 (the “Second Amendment”), as further amended by that certain Third Amendment to Purchase and Sale Agreement and Joint Escrow Instructions dated as of August 16, 2024 (“Third Amendment”), as further amended by that certain Fourth Amendment to Purchase and Sale Agreement and Joint Escrow Instructions dated as of September 17, 2024 (the “Fourth Amendment”), as further amended by that certain Fifth Amendment to Purchase and Sale Agreement and Joint Escrow Instructions dated as of September 30, 2024 (the “Fifth Amendment”), as further amended by that certain Sixth Amendment dated as of October 14, 2024 (the “Sixth Amendment”), and as further amended by that certain Seventh Amendment dated as of October 18, 2024 (the “Seventh Amendment”, and together with the Original Purchase Agreement, First Amendment, Second Amendment, Third Amendment, Fourth Amendment, Fifth Amendment, and Sixth Amendment, collectively, the “Purchase Agreement”). All capitalized terms used herein and not otherwise defined shall have the meanings ascribed to such terms in the Purchase Agreement. B. Seller and Buyer desire to further modify the terms of the Purchase Agreement as more particularly set forth in this Amendment. AGREEMENTS NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intended to be legally bound, Seller and Buyer hereby agree as follows: 1. Recitals. The Recitals set forth above are hereby incorporated herein by reference as if the same were fully set forth herein. -2- 2. Transfer of Title and Escrow Services. The parties desire to transfer title and escrow services from the California office of First American Title Insurance Company to the Nevada office of First American Title Insurance Company. Notwithstanding anything to the contrary in the Purchase Agreement, including Section 14.4 thereof, Buyer and Seller agree that the contact information and notice address of the Escrow Holder and the Title Company shall be hereby amended to First American Title Insurance Company, 8311 W. Sunset, Suite 100, Las Vegas, NV 89113, Attention: Julie Skinner, Telephone: (702) 855-0867, Email: jskinner@firstam.com; Anastasia Dion, Telephone: (702) 266-8980 and (702) 855-0878, Email: adion@firstam.com. 3. Miscellaneous. Except as specifically amended hereby, the Purchase Agreement shall remain and continue in full force and effect. In the event of any conflict between the terms of the Purchase Agreement and the terms of this Amendment, the terms of this Amendment shall control. This Amendment may be executed in as many counterparts as may be deemed necessary and convenient, and by the different parties hereto on separate counterparts, each of which, when so executed, shall be deemed an original, but all such counterparts shall constitute one and the same instrument. To facilitate execution of this Amendment, the parties may execute and exchange by telephone facsimile or by electronic mail in a “PDF” format counterparts of the signature pages. This Amendment may be signed by either Party by electronic signature using Authentisign, DocuSign or similar technology provided that the Party using such technology must submit an original, handwritten signature to the other Party promptly upon request. (Remainder of page intentionally left blank; signature pages follow.) -3- IN WITNESS WHEREOF, the undersigned parties have executed this Amendment to be effective as of the Amendment Effective Date. SELLER: PACIFIC OAK SOR TULE SPRINGS OWNER TRS, LLC, PACIFIC OAK SOR TULE SPRINGS VILLAGE 2 PARCELS OWNER, LLC, each, a Delaware limited liability company By: /s/Brian Ragsdale_______________ Name: Brian Ragsdale Title: President (Signatures continue on following page.) -4- BUYER: KB HOME LAS VEGAS INC., a Nevada corporation By: /s/Jim McDade____________ Name: Jim McDade Title: Division President (End of signatures.)

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exhibit107pacificoak-dee

Exhibit 10.7 Deed of Trust Prepared and signed on July 6, 2023 Between Pacific Oak SOR (BVI) Holdings Ltd. A foreign company from the British Virgin Islands whose registered office in the Virgin Islands is care of: Trident Trust Company (B.V.I.) Limited of Trident Chambers, P.O. Box 146, Road Town, Tortola, British Virgin Islands1 And its address in Israel for the purpose of this Deed of Trust and for the purpose of service of judicial documents is: c/o US Real Estate Representation LTD. 4 Ariel Sharon St., Givatayim Tel: 03-6123939; Fax: 03-6125030 (Hereinafter: the "Company") Of the first part; And Reznik Paz Nevo Trusts Ltd. Of 14 Yad Harutzim Street, Tel Aviv 67778 Tel: 03-6389200 Fax: 03-6289222 (Hereinafter, the "Trustee") Of the second part; 1 Formerly Hauteville Trust (BVI) Limited. 2 Section Subject Page Deed of Trust 1. Preamble, interpretation, and definitions 5 2. Issuance of the Debentures; Terms of issuance; Pari Passu Debentures 9 3. Acquisition of Debentures by the Company and/or the Partnership and/or the REIT Fund and/or a related person and distribution of dividends 10 4. Issuance of additional Debentures 11 5. The Company’s undertakings 15 6. Securing the Debentures 32 7. Early redemption 37 7.1 Early redemption at the discretion of the TASE 37 7.2 Early redemption at the discretion of the Company 38 8. The right to declare the Debentures due and payable 40 9. Claims and proceedings by the Trustee 46 10. Receipts held in Trust 47 11. Power to demand payment to the holders through the Trustee 48 12 Power to withhold distribution of funds 49 13. Notice of distribution 49 14. Failure to pay for reasons out of the Company’s control 49 15. Receipt from the Debenture Holders and from the Trustee 51 16. Presentation of a Debenture to the Trustee; Registration with respect to partial payment 51 17. Investment of Funds 52 18. The Company’s undertakings to the Trustee 52 19. Additional undertakings 58 20. Agents 58 21. Other Agreements 59 22. Trusteeship reports 59 23. Remuneration of the Trustee and reimbursement of its expenses 60 24. Special powers 60 25. The Trustee’s power to engage agents 61 26. Indemnification of the Trustee 61 27. Notices 65 28. Waiver, settlement and alterations to the Deed of Trust 66 29. Register of Debenture Holders 67 30. Release 67 31. Appointment of Trustee; Trustee's Duties; Trustee's Powers; Termination of Trustee's Office 68 32. Meetings of Debenture Holders 70 33. Governing Law 70 34. Exclusive Jurisdiction 70 35. General 70 36. Trustee's Liability 70 37. Addresses 71 3 38. Magna Authorization 71 Section Subject Page First Schedule Terms Overleaf 1. General 75 2. The Debentures 75 3. Terms of the Debentures (Series C) 75 4. Principal and Interest Payments on the Debentures (Series C) 77 5. Deferral of Dates 77 6. Securing of Debentures 78 7. Nonpayment for a Reason out of the Company's Control 78 8. Register of Debenture Holders 78 9. Splitting of Debenture Certificates 78 10. Transfer of Debentures 78 11. Early Redemption 79 12. Purchase of Debentures by the Company and/or a Related Person 79 13. Waiver, Settlement, and Changes to Deed of Trust 79 14. Meetings of Debenture Holders 79 15. Receipt from Debenture Holders 79 16. Immediate Repayment 79 17. Notices 79 18. Governing Law and Jurisdiction 79 19. Priority 80 Second Schedule Third Schedule Appendix 23 4 Whereas the Board of Directors of the Company decided to approve the issuance of Debentures (Series C), under the terms of the Shelf Offering Report, as such term is defined in Section 1.5.5 below; And whereas on July 6, 2023 a Deed of Trust between the Company and the Trustee was signed in regard with Debentures (Series C); And whereas on March 15, 2023, S&P Global Ratings Maalot Ltd. (hereinafter: “Maalot”) announced the determination of a rating of ilAA, for a new Debentures series to be issued by the Company in the amount of up to NIS 260 million par value; And on July 2, 2023, Maalot announced that further to the debentures' rating report dated March 15, 2023 (as specified above), a rating of ilAA for the Debentures (Series C) to be issued by the Company is applicable to an amount of up to the NIS 347 million par value (in lieu of NIS 260 million par value); And whereas the Company declares that as of the date of signing this Deed of Trust the Company is in compliance with all the terms of the Rating Agency (as such term is defined in Section 1.5.25 below) for the purpose of assigning the abovementioned rating to the Debentures (Series C); And whereas the Trustee declares that it is a private company limited in shares that was incorporated in Israel pursuant to the Companies Law, 1999, whose main purpose is to engage in Trusteeship activities; And whereas the Trustee has declared that there is no impediment under the Securities Law, 1968, or any other law, to prevent it from entering into this Deed of Trust with the Company and that it complies with the requirements and qualifications stipulated in the Securities Law to serve as trustee for holders of the Debentures (Series C) offered under the Shelf Offering Report; And whereas the Trustee declares that it has no personal interest in the Company and the Company declares that it has no personal interest in the Trustee; And whereas the Company declares that there is no impediment under any law (whether in Israel and/or outside Israel), and/or agreement to perform issuance of debentures and/or to enter into this Deed of Trust with the Trustee; And whereas the Company has received all the approvals by law and/or agreement to perform issuance of Debentures (Series C); And whereas the Debentures (Series C) will be listed for trade on the Tel Aviv Stock Exchange Ltd; And whereas the Company has applied to the Trustee to serve as Trustee for the holders of the Debentures (Series C) and the Trustee has agreed to sign this Deed of Trust and to act as the Trustee of the Debenture

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5 Holders (as they are defined above), all subject to and in accordance with the terms of this Deed of Trust; Now, therefore, it is agreed, declared and stipulated between the Parties as follows: 6 1. Preamble, Interpretation, and Definitions 1.1. The preamble to this Deed of Trust, the appendixes and schedules attached hereto constitute an integral part hereof. 1.2. The division of this Deed of Trust into sections as well as the section headings herein is for purposes of convenience and easement of reference only and shall not be used for the purpose of interpretation. 1.3. In this Deed of Trust, where the context so admits, the plural shall include the singular and vice versa, the masculine gender shall implicitly also refer to the feminine gender and vice versa, and any reference in the context to a person shall include a corporate body, all insofar as there is no other explicit. 1.4. With respect to any matter not mentioned in this Deed of Trust and in the event of a conflict between the provision of the Law that cannot be subject to contingency, and this Deed of Trust, the provisions of the Israeli Law that cannot be subject to contingency shall prevail. In any case of a contradiction between the provisions set forth in the Shelf Offering Report with regard to this Deed and/or the Debentures, the provisions of this Deed shall supersede. The Company confirms that as of the date of this Deed, there is no conflict between the Deed of Trust and its associated documents and the provisions set forth in the First Offering Report as pertains to this deed as well as concerning the Debentures. 1.5. In this Deed of Trust and in the Debentures, the following terms shall have the meaning set out opposite them, unless otherwise explicitly stated: 1.5.1. “This Deed” or the “Deed of Trust” – this Deed of Trust, with all the amendment that will be inserted from time to time, including the appendices and schedules attached thereto that constitute an integral part thereof; 1.5.2. “Tender” – the tender on the fixed annual interest rate on the Debentures (Series C) to be issued by the Company subject to the First Offering Report; 1.5.3. “The Debentures” or “Debentures (Series C)” or “The Debentures Series” – Debentures (Series C) to be issued by the Company pursuant to the initial Shelf Offering Report, if any, which the terms of them are detailed in this Deed of Trust and in the Bond Certificate; 1.5.4. “Prospectus” or “Shelf Prospectus” – Company’s Shelf Prospectus bearing the date of November 30, 2022, published on November 29, 2022 (Reference Number: 2022-01-144649); 7 1.5.5. "The Shelf Offering Report" – shelf offering report(s) which will be published pursuant to the shelf-prospectus, in accordance with the provisions of Article 23A (F) of the Securities Law, 1968, in which all the particular details for the debentures offering (Series C) will be completed; 1.5.6. "First Offering Report" – a shelf offering report by virtue of which the Debentures (Series C) will be first issued; 1.5.7. "2022 Report" – the Company's Periodic Report as of December 31, 2022, published on March 31, 2023; 1.5.8. “The Trustee” – Reznik Paz Nevo Trusts Ltd. and/or anyone serving from time to time as Trustee for the Debenture Holders pursuant to this Deed; 1.5.9. “Register of Debenture Holders” and/or “the Register” – the register of Debenture Holders as set forth in Section 29 of this Deed; 1.5.10. “Holder” and/or “Debenture Holder” – as the terms Holder or Warrant Holder are defined in the Securities Law; 1.5.11. "Debenture Certificate" – a debenture certificate the certification and wording of which appears in the First Schedule to this Deed; 1.5.12. “The Law” or “the Securities Law” – The Securities Law, 1968 and the regulations promulgated thereunder, as shall be in effect from time to time; 1.5.13. “The Companies Law” – the Companies Law, 1999 and the regulations promulgated thereunder, as shall be in effect from time to time; 1.5.14. “Business Day” or “Bank Business Day” – Any day on which the TASE Clearing House most of the banks in Israel are open for transactions; 1.5.15. “Trading Day” – a trading day in the TASE; 1.5.16. "Nominee Company" – the nominee company of Mizrahi Tefahot Bank. or a substitute nominee company provided that all the Company's securities will be registered under its name. 1.5.17. "Amount of the Principal" – the nominal value of the outstanding debentures; 1.5.18. "Stock Exchange" – the Tel Aviv Stock Exchange Ltd.; 1.5.19. "Dollar" – United States Dollar (USD); 1.5.20. “Special Resolution” – 8 A resolution adopted at a general meeting of the holders of the Debentures (Series C), at which at least two holders of at least fifty (50%) of the nominal value of the outstanding Debentures (Series C) were present, in person or by proxy, or at an adjourned meeting, at which at least two Debenture Holders were present, in person or by proxy, holding at least twenty percent (20%) of such outstanding balance, and which was adopted (whether at the original meeting or at the adjourned meeting) by a majority of at least two thirds (2/3) of the nominal value of the outstanding Debentures (Series C), which is represented in the vote (except for the addressees). 1.5.21. “Ordinary Resolution” – A resolution adopted at a general meeting of the holders of the Debentures (Series C), at which two holders of at least 25% of the nominal value of the outstanding Debentures (Series C) were present in person or by proxy, or at an adjourned meeting at which all the number of participants attended, and which was adopted (whether at the original meeting or at the adjourned meeting) by a majority of at least fifty percent (50%) of the nominal value of the outstanding Debentures (Series C) which is represented in the vote (except for the abstentions). It is clarified that in this Deed, unless specified otherwise, the resolution of the Bondholders meeting shall be accepted as an ordinary resolution. 1.5.22. "Consolidated Circular" – the Circular of the Supervisor of the Capital Market, Insurance and Savings for Institutional Bodies, as may be valid from time to time2; 1.5.23. “Rating” – rating by a rating agency, as it is defined below; 1.5.24. In this Deed of Trust and in the Debentures, the rating shall have the meaning set forth in the table below: “AA“ ilAA as rated by Maalot or Aa2 as rated by Midroog or a rating equivalent to these ratings, which will be assigned by another Rating Agency which is rating or will rate the Debentures (Series C). “AA-“ ilAA- as rated by Maalot or Aa3 as rated by Midroog or a rating equivalent to these ratings, which will be assigned by another Rating Agency which is rating or will rate the Debentures (Series C). 2 http://mof.gov.il/hon/Information-entities/Pages/Codex.aspx

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9 “A+” ilA+ as rated by Maalot or A1 as rated by Midroog or a rating equivalent to these ratings, which will be assigned by another Rating Agency which is rating or will rate the Debentures (Series C). "A" ilA as rated by Maalot or A2 as rated by Midroog or a rating equivalent to these ratings, which will be assigned by another Rating Agency which is rating or will rate the Debentures (Series C). “A-“ ilA- as rated by Maalot or A3 as rated by Midroog or a rating equivalent to these ratings, which will be assigned by another Rating Agency which is rating or will rate the Debentures (Series C). "BBB+ " ilBBB+ as rated by Maalot or Baa1 as rated by Midroog or a rating equivalent to these ratings, which will be assigned by another Rating Agency which is rating or will rate the Debentures (Series C). "BBB" ilBBB when rated by Maalot or Baa2 when rated by Midroog or a rating parallel to these ratings, determined by another rating company that rates the Debentures (Series C). “BBB-“ ilBBB- as rated by Maalot or Baa3 as rated by Midroog or a rating equivalent to these ratings, which will be assigned by another Rating Agency which is rating or will rate the Debentures (Series C). 1.5.25. “The Rating Agency” – Standard and Poor’s Maalot Ltd. (above and below: “Maalot”) and/or Midroog Ltd. (above and below: “Midroog”), as applicable, or another Rating Agency, as defined in the Law for the Regulation of the activity of Credit Rating Companies -2014. 1.5.26. “Reporting Corporation” – as it is defined in the Securities Law. 1.5.27. “Reports Regulations” – The Securities Regulations (Periodic and Immediate Reports), 5730-1970. 1.5.28. “Financial Statements” – Annual or quarterly financial statements, audited or reviewed, of the Company which will be published in accordance with Securities Law and the regulations thereunder. 1.5.29. "Company Share Holder" or "Partnership" – Pacific Oak Strategic Opportunity Limited Partnership. A Limited Partnership incorporated in Delaware State and is held under a chain of holdings in full ownership of the REIT, in which there is no controlling shareholder, as specified in Chapter 3 of the Shelf Prospectus. The Partnership directly holds the full (100%) issued and prepaid share capital of the Company. In the Company's opinion, there is no controlling shareholder in the 10 Company, as such term is defined in the Securities Law. For further details, see Chapter 3 of the Shelf Prospectus. 1.5.30. "REIT Fund" – Pacific Oak Strategy Opportunity REIT, Inc., a corporation that incorporated in the State of Maryland and chose to be classified as a REIT fund (Real Estate Investment Trust) in accordance with the Internal Revenue Code of 1986). As specified in Chapter 3 of the Shelf Prospectus, there is no controlling shareholder in the REIT. 1.5.31. “Exchange Bylaws” – the provisions of the exchange bylaws, guidelines derived from it, and the bylaws of the exchange clearing house (as applies), in the versions as they are from time to time. 1.6. As long as the Debentures are listed for trading in the Stock Exchange, where the Exchange Bylaws apply or will apply to any act pursuant to this Deed of Trust, the dates of the act and the manner of its execution shall be set in accordance with the TASE rules. It is hereby clarified that the execution of the said acts (including in the event of a change to the provisions of the Exchange) shall not derogate from the agreements of the parties, in accordance with this Deed. 1.7. In the event of any conflict between the provisions of this Deed of Trust and the documents attached thereto, the provisions of the Deed of Trust shall prevail. Note that in any case of a contradiction between the provisions set forth in the Shelf Offering Report with regard to the Deed and/or the Debentures, the provisions of this Deed shall supersede, and all subject to the Exchange bylaws and guidelines. The Company confirms and hereby declares that as of the date of this Deed, there is no conflict between the Deed of Trust and its related documents, and the provisions described in the First Offering Report in connection with this Deed, as well as in connection with the Debentures. 1.8. In the event that the debentures issuance is cancelled, for any reason, the validity of this Deed of Trust will expire. 1.9. Any reference made in this Deed to a number of Sections in the Law will be adjusted, mutatis mutandis, to the changes applicable by law, should there be any. 1.10. The actions of the Trustee are valid even if any flaw/defect has been found in its appointment or competence. 1.11. By signing the Deed of Trust, the Trustee is not expressing an opinion concerning the quality of the securities being offered or whether they are a worthwhile investment. 11 2. Issuance of the Debentures; Terms of Issuance; Pari Passu Debentures 2.1. The Company undertakes that it will issue the Debentures (Series C) as described in the preamble to this Deed, and that the Debentures (Series C), which will be issued within the First Offering Report, will be listed for trade on the TASE, and the Company undertakes that the Debentures (Series C) will be traded during their lifetime on TASE. 2.2. The Company may issue the Debentures (Series C) including the following terms under the Shelf Prospectus, and subject to the publication of a shelf offering report, and at the Company's sole discretion: The Debentures (Series C) (hereinafter: the “Debentures”) will be registered by name, assigned a nominal value of NIS 1, and payable in a single payment scheduled for June 30, 2026, which shall constitute 100% of the total nominal value of the Debentures (Series C). The Debentures shall bear a fixed annual (unlinked) interest at a rate to be determined by tender (but subject to adjustments in the event of change in the rating of the Debentures (Series C) and/or non-compliance with the Financial Covenants as set forth in Sections 5.2 and 5.3 below, as well as subject to adjustments due to interest arrears (if any). The interest on the unpaid balance of the principal of the Debentures (Series C) shall be paid twice per year, on June 30 and December 31, starting December 31, 2023 and ending June 30, 2026 (inclusive). Except for the first interest period (as it is defined below), any interest rate payment will be for the six-month period that ended on the day prior to the date of payment (hereinafter: the “Interest Period”). The interest rate payable in respect of a specific interest period (except for the first interest period) (i.e. the period commencing on the date of payment of the previous interest period prior to it and ending on the last day before the date of payment following commencement thereof) shall be calculated as the annual interest rate divided by two. The first interest payment is payable on December 31, 2023 for the period starting on the first trading day after the date of the tender on the Debentures (Series C), and ending December 30, 2023 (hereinafter: the “First Interest Period”), calculated on the basis of 365 days a year and based on the actual days in this period. The final interest payment will be paid on June 30, 2026, upon the final maturity of the Debentures (Series C). Company shall announce the initial, annual and semi-annual interest rates in an immediate report published with the results of the issuance. The Debentures (Series C) will not be linked (principal and interest) to any linkage basis. 12 2.3. The Company reserves the right to early redemption of the Debentures provided the terms set forth in Section 7 of this Deed are met. 2.4. The Debentures (Series C) shall rank pari passu among themselves, without any preference or priority of one over the other. 2.5. Company undertakes that as part of the initial issuance of the Debentures (Series C) as well as an expansion of a series, should it be expanded, the Loan to Collateral Ratio (as defined in Section 10.2 of Appendix 6.1 to this Deed) shall not exceed the Required Ratio for Issuance (as defined in Section 2a of Appendix 6.1 to this Deed), and the nominal value of Series C Debentures shall not exceed NIS 360 million. 3. Acquisition of Debentures by the Company and/or the Partnership and/or the REIT Fund and/or a related person and distribution of dividends 3.1. The Company reserves its right, subject to the Law, to acquire the Debentures (Series C) at any time and from time to time, without prejudice to the duty to repay the outstanding Debentures (Series C). In the event of said acquisition, the Company shall notify the Trustee in writing, without derogating from the duty to submit an immediate report applicable thereto. In the event of acquisition by the Company as mentioned above, the acquired Debentures (Series C) will expire immediately, will be cancelled and delisted from trading and the Company may not re-issue these Debentures. In the event that the Debentures (Series C) are acquired by the Company, Company shall apply to the TASE Clearing House to withdraw the Debentures so acquired, and all, unless otherwise determined by the provisions of the law prevailing at the time. Nothing in the foregoing shall derogate from the Company’s right to make an early redemption of the Debentures (Series C) as stated in Section 7 below. 3.2. The REIT Fund (directly or indirectly) and/or the Partnership3 (directly or indirectly) and/or a subsidiary of the Company and/or a related company of the Company and/or an associate of the Company and/or a company controlled by one of them (directly or indirectly) (except for 3 As stated in Section 1.5.29 above (the Definitions Section), it shall be noted in this respect that the Company's direct Controlling Shareholder is the Partnership which holds 100% of the Company's equity. The Partnership is held in an indirect and final chain of holding by the REIT Fund, which holds 100% (under indirect holding through additional companies) of the Partnership units. As specified in Chapter 3 of the Shelf Prospectus, there is no controlling shareholder in the REIT In the Company's opinion, there is no controlling interest in the Company, as the term is defined in the Securities Law. For further details, see Chapter 3 of the Shelf Prospectus.

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13 the Company itself with respect to which the provisions of Section 3.1 above shall apply) (hereinafter: “Related Entity”) may acquire and/or sell Debentures (Series C) at their discretion (and subject to any law), at any time and from time to time, including by means of an issuance by the Company, Debentures (Series C) that will be issued under the Deed of Trust. In the event of acquisition and/or sale as aforesaid by a subsidiary of the Related Entity, the Company shall file an immediate report to that effect. In accordance with the provisions of the law, the Debentures (Series C) that will be held by a Related Entity, as above, shall be deemed an asset of the Related Entity, and if they are listed for trading, they shall not be delisted from the TASE, and shall be transferrable as the other Debentures (Series C). The Debentures (Series C) owned by a Related Entity shall not confer on such Entity voting rights at a meeting of the holders of the Debentures (Series C) and may not be counted for purposes of determining the existence of a quorum at such meetings. The meetings of the holders will be conducted in accordance with the Second Schedule to the Deed of the Trust. A Related Entity will report to the Company, in as much as it is obligated by law to do so, on the acquisition of the Debentures (Series C). Regarding the obligation of the Company to provide the Trustee with certifications in connection with this section, see Section 18.21 below. 3.3. Nothing in the foregoing section shall bind the Company and/or a Related Entity or the holders of the Debentures (Series C) to acquire Debentures and/or sell the Debentures (Series C) in their possession. 3.4. As of the date of signing this Deed, the Company is not subject to any restriction with respect to the distribution of dividends or the buyback of its shares, except as specified in Section 5.9 below and in Section 5.9 of Company’s Deed of Trust4. 4. Issuance of additional Debentures 4.1. Subject to receipt of approval from TASE for the listing for trading, the Company may, from time to time, without requiring the approval of the Trustee and/or the Holders existing at that time, to issue additional Debentures (Series C) (whether by way of a private placement, or under a shelf offering report, or in any other way), including to a Related Entity (as it is defined in Section 3.2 above), on such terms as it sees fit (the terms of the additional issued Debentures shall be identical to the terms of the outstanding Debentures (Series C)) in circulation, (hereinafter: 4 Signed between the Company and the Trustee of Company’s Debentures (Series C) on February 12, 2020. 14 "Expansion of the Series"). However, in this case, the Trustee shall have the right to request an increase in the annual fees pro-rata to the expansion of the debenture series, and pursuant and subject to the contents of Section 1.1 of Appendix 23 to the Deed of Trust, in the manner set out until the end of the Trust period, and the Company gives its consent, in advance, by signing on this Deed to the increase of the Trustee fees, as mentioned above. The outstanding Debentures (Series C) on the date of Expansion of the Series of the additional Debentures (Series C) (from the date of issuance thereof) shall constitute one series for all intents and purposes. The Company shall apply to the TASE to list the additional Debentures (Series C) for trading as aforesaid, once they are issued. 4.2. Notwithstanding the aforesaid, the Expansion of the Debentures (Series C) shall be carried out no later than October 1, 2024, provided all the terms set forth below are fulfilled: (a) the said Expansion of the Series does not adversely affect the rating of the Debentures (Series C), as it shall be at that time (namely, the rating preceding the Expansion of the Series); In this respect, it is clarified that so long as Debentures (Series C) are rated by more than one rating agency, then the review of the rating for this section shall be carried out at any time, according to the higher rate; (b) in accordance with the latest financial statements published prior to the date of the Expansion of the Series, the Company is in compliance with all the financial covenants set forth in Section 6.3 of this Deed and this is without taking into consideration the cure and waiting periods listed in Section 8.1 below; (c) on the Date of the Expansion of the Series, in accordance with the latest financial statements published prior to the expansion, and after prior consideration of the said expansion, the Company will be in compliance with all of the financial covenants as forth in the above Subsection (b) following Expansion of the Series, and this without factoring in the remedy and waiting periods set forth in the below Section 8.1; (d) Following the series expansion (on the Examination Date, as such is defined in Appendix 6.1 of this Deed, which is relevant to the series expansion), the Loan to Collateral Ratio (as the term is defined in Section 10.4 of Appendix 6.1 to this Deed) does not exceed 50%, and the total nominal value of the series shall not exceed NIS 360 million (to clarify, Company may put forward a Permitted Property pursuant to the provisions of Section 7 of Appendix 6.1 to the Deed of Trust, including the proceeds of the expansion, all or parts of it, in order to comply with the aforementioned Loan to Collateral ratio, and in such event, the expansion's consideration shall be deposited in the Trust Account and the provisions of Section 5 of Appendix 6.1 of this Deed shall apply, mutatis mutandis, with regard to the release of the expansion's 15 consideration); (e) the Company has not violated any of its material undertakings to the holders of the Debentures (Series C), there is no cause for immediate repayment, as detailed in Section 8.1 below, and there is concern that such cause will exist, without factoring in the remedy and waiting periods set forth in the below Section 8.1; and (f) the Expansion of the Series does not impair the ability of the Company to repay the Debentures (Series C). 4.3. The Company will submit to the Trustee, at least three business days before making a tender for early commitments from classified investors (as the Company may choose to hold said tender in its sole discretion), and in any case at least three business days before the actual Expansion of the Series, written certification signed by the chief financial officer of the Company, worded to satisfaction of the Trustee, on (1) the fulfillment of their terms specified in Section 4.2, together with the relevant calculations on its compliance with the said provisions which are detailed in Subsections (b) through (d) above; and (2) confirmation that such an expansion would not impair Series C Debentures Holders and that the Board of Directors of the Company has examined the effect of the aforesaid Expansion of the Series and the ability of the Company to meet its obligations to the holders of the Debentures (Series C) prior to performing the series expansion, and concluded that there is no concern that it shall be impaired. In any event of an Expansion of the Series, the Expansion of the Series will be subject to receipt of prior certification from the Rating Agency that the Expansion of the Series will not affect the rating of the Debentures (Series C) in effect at that time. The certification of the Rating Agency will be published by the Company prior to the Expansion of the Series. In addition, the Company shall publish an immediate report, prior to the series expansion stating whether the series expansion meets (or does not meet, as the case may be) the aforesaid terms. 4.4. This right of the Company does not exempt the Trustee from examining the said issuance, to the extent that such duty is imposed on the Trustee by law, and does not derogate from the rights of the Trustee and the Debenture Holders pursuant to this Deed, including their right to declare the Debentures due and payable as stated in Section 8 below. 4.5. The Debentures (Series C), including those that will be issued as part such an aforementioned expansion of the Series, shall rank pari passu among themselves, with respect to the Company’s obligations pursuant to the Debentures, without any preference or priority of one over the other. 4.6. If the discount rate set for the additional Debentures (Series C), if any, differs from the discount rate of the outstanding Debentures (Series C) 16 at that time (including lack of discount, if relevant), the Company shall apply to the tax authority, prior to the expansion of the series, in order to obtain its approval that, for purposes of deducting withholding tax from the discount fees in respect of the Debentures (Series C), a uniform discount rate be determined for the Debentures (Series C) based on a formula that weighs the different discount rates in the series, if any (hereinafter – the “Weighted Discount Rate”). 4.7. In the event that such approval is obtained, the Company will calculate the Weighted Discount Rate in respect of all the Debentures (Series C), before the series expansion, and will publish an immediate report on the results of the issuance the uniform Weighted Discount Rate for the entire series, prior to the Expansion of the Series, and tax will be deducted on the dates of repayment of the Debentures (Series C), according to the Weighted Discount Rate and in accordance with the provisions of the law. In such a case, all other provisions of the law relating to the taxation of discount fees shall apply. If such approval is not obtained, the Company will publish an immediate report, immediately prior to the issuance of the additional Debentures (Series C) as part of said series expansion, regarding the failure to obtain such approval and stating the highest discount rate in respect of that series. Withholding tax will be deducted upon the repayment of the Debentures (Series C), in line with the discount rate reported as aforesaid. 4.8. Therefore, there may be cases where tax would be withheld due to discount rate at a rate higher than the discount rate set for the holders of Series C Debentures before the Expansion of the Series (hereinafter: “Excess Discount Fees”), and this will affect them unfavorably whether or not the tax authority approved a uniform discount rate for the Debenture (Series C). In this case, an assessee that held Debentures (Series C) prior to the aforesaid Expansion of the Series, up to the redemption of these Debentures (Series C), will be entitled to file a tax report with the tax authority and receive a tax return in the amount of the tax that was deducted from the Excess Discount Fees, provided he is entitled to such return under the law. 4.9. The Company may issue at any time, whether by way of a public issuance under a prospectus, or by any other way, and without requiring the approval of the Trustee and/or the Bondholders of the Debentures, other debenture series beyond the Debenture series and/or other debt- type bonds (hereinafter: the "Other Series" or the "Other Issuance"), including to a Related Entity (as it is defined in Section 3.2 above), under repayment terms, interest, linkage, repayment rate in case of dissolution and other terms, as the Company sees fit, and whether they are superior to the terms of Debentures (Series C), equal to them, or fall short of them.

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17 Despite the abovementioned, in the event that the Company will issue other series not secured by any collateral, said other non-secured series shall not have priority over the Debentures (Series C) in the event of dissolution process involving the Company. In addition, if the Company issues additional series secured by collateral, the Company shall not state in the relevant Deed of Trust or the terms of other such bonds that these debenture series have priority over the Debentures (Series C), except in the matter of assets which are secured by liens, and will deliver to the Trustee certification to that effect, as mentioned above, mutatis mutandis, prior to executing the issuance of the other series. 4.10. Notwithstanding the abovementioned, the Other Issuance shall be subject to the authorization of the Exchange for listing for trading and the fulfillment of all of the following terms: (a) The Other Issuance shall not impair the rating of Debentures (Series C), as such rating shall be on that date (i.e., the rating on the eve of the Other Issuance); for the purpose of this section is shall be clarified that if the Debentures (Series C) shall be rated by more than one rating company, the examination of the rating for this section shall be done at any time, according to the higher rating of those rated; (b) according to the most recently published financial statements prior to the date of the Other Issuance, as of the date of the Other Issuance, the Company is in compliance with the Financial Covenants detailed in Section 6.3 of this Deed, without taking into account the remedy period and the waiting period listed in Section 8.1 below; (c) Upon the Other Issuance, in accordance with its most recently published financial statements prior to the date of the Other Issuance, and upon the retroactive consideration of the Other Issuance, Company is in compliance with all of its financial covenants as set forth in Section 6.3 to this Deed, and this excluding the remedy and waiting periods set forth in the below Section 8.1; (d) Company is not in violation of any of its material undertakings towards holders of Debentures (Series C), and no grounds have materialized for immediate repayment, as specified in Section 8.1 below, and this excluding the remedy and waiting periods set forth in the below Section 8.1; and (e) The Other Issuance shall not jeopardize the Company's ability to repay the Debentures (Series C). Prior to any issuance of other series of debentures, the Company shall provide the following certificates and publish the following: A. The Company shall provide the Trustee with a written certificate signed by the Company's senior financial officer in regard to the fulfillment of all the terms listed above in Section 4.10, including a relevant calculation regarding the terms set forth in the above Subsections (b) and (c), no later than 4 days prior to the execution of the Other Issuance, as well as a confirmation that the Other 18 Issuance is not preferable to the terms of Debentures (Series C) in dissolution, as specified in Section 4.9 above, and all using a version that is satisfactory to the Trustee. B. Company shall publish a confirmation from any rating firms rating the Company as they are at the time, according to which such Other Issuance shall not damage the rating of Debentures (Series C) issued first according to this Deed, as such rating shall be on that date. Without derogating the aforementioned, the said rights of the Company shall not diminish the Trustee’s right to examine the consequences of the Other Issuance, and shall not damage the rights of the Trustee and/or the Debentures Holders according to this Deed, including their right to call for immediate repayment of Debentures (Series C) as aforesaid in Section 8 above. Subject to the provisions of any law, the Company shall inform the Trustee of such Other Issuance a reasonable time before the issuance and shall provide the Trustee with any report it published in connection therewith pursuant to any law. 5. The Company’s undertakings 5.1. The Company hereby undertakes to pay, on the dates for payment specified in the Deed of Trust, all the principal and interest amounts (including arrears interest, if any, and additional interest in respect of a rating change and/or in respect of a breach of financial covenants, if applicable) payable under the terms of the Debentures (Series C), and to comply with all the other terms and obligations imposed on it, pursuant to the terms of the Debentures (Series C) and under the terms of this Deed. 5.2. Adjustment of the interest rate to changes in the rating of Debentures (Series C): For the purpose of this section below it is clarified that in the event that the Debentures (Series C) are rated by more than one Rating Agency, the examination of the rating for the purpose of adjusting the interest rate for the change in rating (if any) will be made, at all times, in accordance with the lower rating. The interest rate to be borne by the Debentures (Series C) shall be adjusted in respect of change in the rating of the Debentures (Series C), as specified below in this section: It should be clarified that if and to the extent that an adjustment of interest is required in accordance with the mechanism specified in this section above and in accordance with the mechanism specified in 19 Section 5.3 below, then, in each event the maximum additional interest rate shall not exceed 1.75% above the interest rate which will be determined in the Tender (hereinafter: “The Total Maximum Additional Interest Rate”). Arrears interest (if any), in accordance with Section 4 (A) of the Terms Overleaf, shall be added to the abovementioned rate and will not constitute part of it. Pursuant to this Section 5.2: The ratings as such are defined in the table in Section 1.5.24 above. "Base rating": Rating of AA- (AA minus). For the avoidance of any doubt, it is clarified that the Base Rating is one notch below the AA rating given to the Company's Debentures (Series C) by the Rating Agency on the date of the Debentures (Series C) Issuance. "The Additional Interest Rate": an additional interest granted to the Debenture holders at a rate of 0.5% per annum for a downgrade of one notch below the Base Rating (i.e., due to a downgrade from the Base Rating to a rating of A+), additional interest at a rate of 0.25% per annum for one notch below a rating of A+, up to a maximum additional interest of 1.25% per annum(hereinafter: “Maximum Additional Interest Rate Due to a Rating Downgrade”). A. If the rating of the Debentures (Series C) be revised by the Rating Agency (in the event of the replacement of a Rating Agency, the Company will provide the Trustee with a comparison between the rating scale of the Rating Agency being replaced and the rating scale of the new Rating Agency) during any interest period whatsoever, such that the rating determined for the Debentures (Series C) shall be one notch lower or more from the Base Rating, (hereinafter in this current Section 5.2: the “Downgraded Rating”), the annual interest rate to be borne by the balance of the unpaid principal of the Debentures (Series C) shall be increased by the additional interest rate or part thereof (as mentioned above) in accordance with the notches set forth above, and this in respect of the period commencing from the date of publication of the new rating by the new Rating Agency until the full repayment of the balance of the outstanding principal of the Debentures (Series C) or until the date of the upgraded rating in accordance with Section 5.2(E) below. If the interest rate was raised previously in respect of deviations from the aforesaid financial covenants in Section 5.3 below, then the increase in the interest rate in respect of the aforesaid rating downgrade shall be limited such that the overall additional annual interest (except in the event that there is entitlement to arrears) shall in no event exceed the Total Maximum Additional Interest Rate. 20 B. No later than one business day, from receipt of the notice of the Rating Agency with respect to the downgrading of the rating of the Debentures (Series C) to the downgraded rating as such is specified in Subsection A above, the Company shall publish an Immediate Report, in which the Company shall specify: (a) the downgrading of the rating, the downgraded rating, the rating report and the date of the start of the downgraded rating of the Debentures (Series C) (hereinafter in this current Section 5.2: the “Date of the Rating Downgrade”); (b) the compliance/non-compliance thereof with the financial covenants specified in Section 5.3 below, in accordance with the latest reviewed or audited consolidated financial statement published prior to the date of the Immediate Report, and whether there has been a change in the interest in respect of the compliance/non-compliance thereof with the aforesaid financial covenants; (c) the exact interest rate to be borne by the principal balance of the Debentures (Series C) for the period from the start of the current interest period up to the Date of the Rating Downgrade (the interest rate will be calculated based on the number of days in this period in relative to 365 days a year) (hereinafter in this current Section 5.2: the "Original Interest"); (d) the interest rate to be borne by the principal balance of the Debentures (Series C) starting from Date of the Rating Downgrade up to the date of the actual payment of the next interest payment, namely, the Original Interest plus the additional interest rate per annum (the interest rate will be calculated based on the number of days in this period in relative to 365 days per year) (hereinafter in this current Section 5.2: the “Amended Interest”), if the interest rate was not raised previously, if raised at all, in respect of deviations, if any, from the aforesaid financial covenants in Section 5.3 below, then the increase in the interest rate with respect to the aforesaid downgrade shall be limited such that the overall additional annual interest (except if entitlement to interest on arrears is established) with respect to a decline in rating and failure to comply with the financial covenants will not exceed the Total Maximum Additional Interest Rate; (e) the weighted interest rate to be paid by the Company to the holders of the Debentures (Series C) on the next interest payment date, deriving from the provisions of Subsections (C) and (D) above ; (f) the annual interest rate reflected in the weighted interest rate; (g) the annual interest rate and the semiannual interest rate (the semiannual interest rate shall be calculated as the annual interest divided by divided by two) for the forthcoming periods. C. If the date of the start of the downgraded rating of the Debentures (Series C) falls during the four trading days prior to the effective

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21 date for any interest payment and the termination thereof is on the date of the next interest payment and this effective date (hereinafter in this current Section 5.2: the "Deferral Period"), Company shall pay holders of the Debentures (Series C) on the date of the next interest payment, the Original Interest rate, prior to the change only, wherein, if the interest rate was not raised previously in respect of deviations from the aforesaid financial covenants in Section 5.3 below, while the rate of interest derived from the additional interest at a rate equal to the additional interest rate for a year during the Deferral Period, will be paid at the next interest payment date. The Company will announce in the Immediate Report detailed in the above Subsection B the exact interest rate payable on the next interest payment date as well as the annual and semiannual interest rates for subsequent interest periods. D. In the event of an amendment of the rating of the Debentures (Series C) by the Rating Agency such that it affects the interest rate to be borne by the Debentures (Series C) specified in Section 5.2 (A) above, or 5.2 (E) above, the Company will advise the Trustee of such in writing within one business day from the date of publication of the aforesaid Immediate Report. E. In the event that following the downgrading of the rating such that it affects the interest rate to be borne by the Debentures (Series C) specified in 5.2 (A) above, the Rating Agency will update the rating of the Debentures (Series C) with an upgraded rating and if the interest rate has not been increased previously with respect to deviations from the aforesaid financial covenants in Section 5.3 below, the interest rate will be reduced by notches of 0.25% per annum for each notch up to the Base Rating. If the Rating Agency upgrades the rating for the Debentures (Series C) to a rating which is equal to or higher than the Base Rating (hereinafter in this current Section 5.2: the "High Rating"), and if the interest rate was not raised previously due to deviation with respect to the aforesaid financial covenants in Section 5.3 below, then the rate of interest to be paid by the Company to the holders of the Debentures (Series C) shall be decrease, on the date of the relevant payment of the interest, in respect of the period in which the Debentures (Series C) were rated with a High Rating only, such that the interest rate to be borne by the outstanding balance of the principal of the Debentures (Series C) will be the (partially) added interest rate or the interest rate which the Company will publish in an Immediate Report with regard to the results of the issuance, without any addition in respect of the downgrading specified in this 22 Section 5.2 (and in any event, the interest to be borne by the Debentures will not be less than the interest rate which will be determined in the Tender), as applicable. In such a case, the Company shall act in accordance with the provisions of Subsections (B) to (D) above, mutatis mutandis, deriving from the High Rating instead of the Downgraded Rating. It is clarified that the adjustment of the interest rate in respect of a change in the rating or as a result of non-compliance with financial covenants will be examined separately, without the one affecting the other, subject to the effect that the maximum accumulated interest in respect of the downgrading and in respect of non-compliance with financial covenants shall not exceed the Total Maximum Additional Interest Rate. The additional interest for non-compliance, if there was such non-compliance, in accordance with Section 5.3 below, shall continue to apply even in the event of an upgrade in rating. It is clarified that arrears interest, if any, shall be added to the interest rates stated above. F. If the Debentures (Series C) shall cease to be rated for a reason dependent on the Company (for example, but not only, due to non- compliance with the undertakings of the Company to the Rating Agency, including due to the non-payment of payments and/or reports which the Company has undertaken to provide to the Rating Agency) for a period exceeding 21 days prior to the final repayment thereof, a suspension of the rating will be considered a downgrading of the rating of the Debentures (Series C) in a manner by which the annual interest rate borne by the remaining outstanding principal balance of Debentures (Series C) shall be increased by 1.25% as of the date in which the rating no longer applies, subject to the Total Maximum Additional Interest Rate and the provisions of Subsections (B) - (E) shall apply accordingly and the matter shall not derogate from the rights of Debentures Holders to call the Debentures for immediate repayment, as set forth in the below Section 8.1.21. For the avoidance of doubt, it is clarified that if the Debentures (Series C) cease to be rated prior to the final payment thereof, for a reason not dependent on the Company, this shall not affect the aforesaid interest rate in Subsection (A) above and the provisions of this Section 5.2 shall not apply. G. In the event that the Rating Agency will be replaced (even in the event where there is more than one Rating Agency) or that the Debentures (Series C) cease to be rated by the Rating Agency (even if the case of more than one rating company), the Company shall publish and Immediate Report, within one trading day from the date 23 of the change, in which the Company shall inform of the circumstances of replacing the rating agency or suspending the rating, respectively. For the avoidance of doubt, it is clarified that: (1) a change in the rating outlook of the Debentures (Series C) or the addition of Debentures (Series C) to a watchlist, or any similar action on the part of the rating agency shall not entail a change in the interest rate on the Debentures (Series C) as stated in this section above; (2) as long as the Debentures (Series C) are rated by two Rating Agencies, Subsection (F) above will not apply unless the two rating companies cease to rate the Debentures (Series C). H. In the event of downgrading, the Company shall act in accordance with Sections 5.2 (A) - (C) above. If before the date of rate downgrading, there has been an increase in the interest rate in respect of a deviation from one or more than one financial covenant, based on the mechanism specified in Section 5.3 below, the change applicable to the interest rate in respect of the adjustment mechanism specified in this Section 5.2 will be restricted so that in any case the increase in the interest rate (if there is such increase) will not in the aggregate exceed the Total Maximum Additional Interest Rate. Arrears interest, if applicable, will be added to the abovementioned interest. I. The Company undertakes to act, in as much as it is under its control, so that the Debentures (Series C) will be rated by a Rating Agency for the entire term of the Debentures (Series C) and for this purpose the Company undertakes to pay the Rating Agency the payments it has undertaken to pay the Rating Agency and to provide the Rating Agency with reasonable reports and information required thereby as part of the agreement between the Company and the Rating Agency. For this purpose, non-implementation of the payments the Company has undertaken to pay the Rating Agency and non-provision of the reports and information required by the Rating Agency as part of the agreement between the Company and the Rating Agency will be regarded as causes and circumstances which are under the control of the Company. The Company does not undertake not to replace the Rating Agency or not to terminate the agreement therewith during the period of the Debentures (Series C). In the event that the Company will replace the Rating Agency which at the time of the replacement is the sole Rating Agency rating the Debentures (Series C) and/or ceases the work of the Rating Agency (if it is not the sole Rating Agency), the Company undertakes that it shall notify the Trustee and the holders 24 of Debentures of such within one trading day and shall state in its announcement the reasons for replacing the Rating Agency, and all of this no later than one trading day from the date of the said replacement and/or the date of the decision to cease the work of the rating agency, whichever is earlier. It should be clarified that the foregoing does not derogate from the right of the Company to replace the Rating Agency at any time or cease the work of the Rating Agency (if it is not the sole Rating Agency), at its sole discretion and for any reason it deems necessary. 5.3. Interest rate adjustment as a result of failure to comply with a Financial Covenant: The interest rate on the Debentures (Series C) will be adjusted due to one breach or more than one of the Financial Covenants as set forth below: 1. The Consolidated Equity Capital of the Company (as this term is defined in Section 6.3 (1) below) (excluding minority rights) shall not be less than USD 500 million; 2. The Net Adjusted Financial Debt to net CAP (as these terms are defined in Section 6.3 (2) below) shall not exceed 70%; 3. The Loan to Collateral Ratio, as defined in Section 11.4 of Appendix 6.1 to this Deed, shall not exceed 65% (hereinafter: "Maximum Loan to Collateral Ratio Pertaining to Interest Adjustments"). 4. Adjusted NOI (as the term is defined below) shall total no less than USD 40 million. "Adjusted NOI”: the Company's income from rent (in the recent four quarters), including interest revenues stemming from providing loans by the Company in consolidation (including revenues stemming from purchased loans), and incomes, including distributions, stemming to the Company from investments in REIT funds or other corporations, net of property rental costs (in the recent four quarters), plus the share of the Company in the Adjusted NOI of affiliated companies and jointly controlled companies (proportionate consolidation). It is clarified that upon purchasing one or more rental property and/or consummation of a property in construction and/or property donation during the period and/or the provision of loans by the Company in a consolidated manner (including revenues stemming from loans purchased by the Company) and/or additional investment in REIT funds or other corporations, the Adjusted NOI of the property or properties or loan(s) or investment(s) shall be in accordance with the extent of the adjusted NOI from the date of acquisition and/or completion of an property in construction and/or contribution of the property and/or

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25 the provision or purchase of the loan and/or the performance of the investment and until the date of the relevant financial report in the annual articles of association. For the avoidance of doubt, it should be clarified that upon the sale or subtraction of one or more properties the aforesaid articles of association will not be performed for the adjusted NOI for the period prior to the sale date. The financial covenants set forth in Subsections 1 to 4 above shall be referred to in this Section 5.3 above and below only collectively as the "Financial Covenants" and each of the aforementioned financial covenants shall be named: "the Financial Covenant". It is hereby clarified that if an adjustment of the interest rate is required in accordance with the mechanism described in this section above, and also in accordance with the mechanism specified in Section 5.2 above, then, in any case, the maximum additional interest rate will not be more than 1.75% above the interest rate determined in the Tender (hereinafter: "The Total Maximum Additional Interest Rate"). Arrears interest, if applicable pursuant to Section 4(a) of the terms overleaf, will be added to the abovementioned interest and will not constitute part of it. “The Additional Interest Rate” – addition of interest in the rate of 0.25% for each breach of a financial covenant (separately and increase in the accumulated interest of up to 1%); the interest rate will only be raised once due to the breach of any of the financial covenant, if any, and the interest rate will not be raised again if a breach of the same financial covenant continues. It is emphasized that in the event of downgrading the rating of the Debentures the annual interest rate has been raised pursuant to Section 5.2 above, then, in any case, the additional interest rate by virtue of that section, together with the additional interest rate by virtue of this Section 5.3, for breach of the financial covenants shall not exceed the Total Maximum Additional Interest Rate. “The Breach Date” – the date of publication of the financial statements that point to the breach. A. If the Company breaches any of the financial covenants pursuant to the latest published audited and reviewed financial reports of the Company (hereinafter in this current Section 5.3: “the Breach”), the annual interest on the outstanding principal amount of the Debentures (Series C) will increase by the Additional Interest Rate in respect of the Breach, above the interest rate in effect at the time, prior to the change, in respect of the period from the date of the Breach until the date of repayment of the outstanding principal amount of the Debentures (Series C) or until the date of publication 26 of the Company’s financial statements pursuant to which the Company is in compliance with that financial covenant, whichever is earlier. If the interest rate was increased before that due to a rating downgrade due to as stated in Section 5.2 above, then the interest rate increase due to the breach of a financial covenant as provided in this subsection, will be limited so that the total annual additional interest (except when there is entitlement to arrears) due to the rating downgrade and breach of financial covenants will not exceed the Total Maximum Additional Interest Rate in any case. B. In the event of said breach, no later than one business day from the publication of the Company’s audited or reviewed financial statements (as applicable), the Company shall publish an immediate report stating the following: (a) failure to comply with the said undertaking and detailing the financial covenants on the date of publication of the financial statements; (b) the current rating of the Debentures (Series C) based on the last rating report that was published prior to the immediate report and whether the interest was adjusted, as per Section 5.2 above; (c) the accurate interest rate on the Debentures (Series C) for the period from the current interest rate period until the Date of the Breach (the interest will be calculated based on 365 days a year) (hereinafter in this current Section 5.3: the “Original Interest Rate”), respectively); (d) the interest rate on the outstanding Debentures (Series C) from the Date of the Breach until the date of the nearest interest payment, that is, the Original Interest Rate plus the Additional Interest Rate per year (the interest rate will be calculated based on 365 days a year) (hereinafter in this current Section 5.3: the “Current Interest Rate”). If the interest rate was increased before that due to a rating downgrade as stated in Section 5.2 above, then the increase to the interest rate at the subject of this current Subsection shall be limited so that the total annual interest rate increase (excluding entitlement for interest arrears) in no case exceeds the Total Maximum Additional Interest Rate; (e) the weighted interest rate payable by the Company to the holders of the Debentures (Series C) on the nearest interest payment date, which arises from the provisions of Subsection (c) and (d) above; (f) the annual interest rate arising from the weighted interest rate; (g) the annual interest rate and the semi- annual interest rate (the semi-annual interest rate will be calculated as the annual interest rate divided two) for the upcoming periods. C. If the Date of the Breach occurs during the period commencing four trading days prior to the record date for the payment of any interest and ending on the interest payment date that is nearest to the record date (hereinafter in this subsection: the “Deferral Period”), the 27 Company shall pay the holders of the Debentures (Series C), on the nearest interest payment date, the Original Interest Rate (prior to the change) only, while the interest rate resulting from an increase at a rate equal to the Additional Interest Rate per year during the Deferral Period, will be paid on the next interest payment. The Company shall announce in the immediate report detailed in the above Subsection B the stating the accurate interest rate payable on the next interest payment date as well as the annual and semiannual interest rates pertaining to subsequent interest periods. D. In the event of a breach of a Financial Covenant which affects the interest rate on the Debentures (Series C) as stated above in Section 5.3(A) above or in Section 5.3(E) below, the Company shall notify the Trustee in writing within one business day from the date of publication of the financial statements, as aforesaid. For the avoidance of doubt, it is clarified that if after the breach, the Company will publish its audited or reviewed financial statements (as applicable), pursuant to which the Company will be in compliance with that financial covenant, then the interest rate paid by the Company to the holders of the Debentures (Series C), on the relevant interest payment date, will decrease, in respect of the period commencing on the date of publication of the financial statements that point to its compliance with that financial covenant, so that the interest rate on the outstanding principal amount of the Debentures (Series C), provided the interest rate was not raised before that due to a rating downgrade of Debentures (Series C) as stated in Section 5.2 above, and/or due to breach of another financial covenant, will be the interest rate that shall be determined in the tender or another interest rate determined due to a downgrade in the rating of Debentures (Series C) as stated in Section 5.2 above, and/or due to breach of another financial covenant (and in any case, the interest rate on the Debentures will not be lower than the interest rate that will be determined in the Tender). In such case, the Company shall act in accordance with Subsections (B) to (D) above, mutatis mutandis, as the case may be, arising from the Company’s compliance with that financial covenant. It is clarified that the adjustment of the interest rate due to a change in the rating or due to breach of financial covenants will be examined separately without the one affecting the other, subject to the effect that the maximum accumulated interest in respect of the downgrading and in respect of non-compliance with financial covenants shall not exceed the Total Maximum Additional Interest Rate. The additional interest for non- 28 compliance, if there was such non-compliance, in accordance with Section 5.3 below, shall continue to apply even in the event of an upgrade in rating. It is clarified that arrears interest, if any, shall be added to the interest rates stated above. E. The examination as to whether the Company is in compliance with the financial covenants will be conducted on the date of publication of the Company’s financial statements and as long as the Debentures (Series C) are outstanding, in relation to the quarterly/annual financial statements which the Company published until that date. With respect to the undertaking of the Company for disclosure in connection with this section, see Section 5.10 below. 5.4. For the avoidance of any doubt it is clarified that, subject to the aforesaid, the incremental interest rate payments arising from the rating downgrade as stated in Sections 5.2 above and/or as a result of the Company's failure to comply with the Financial Covenants as stated in Section 5.3 above are cumulative. Therefore, in the event of a rating downgrade and a breach of any of the financial covenants by the Company, the holders of the Debentures (Series C) will be entitled to an additional interest as aforesaid provided the annual interest rate increase due to rate downgrade and breach of financial covenants does not exceed the Total Maximum Additional Interest Rate . It is further clarified that the arrears interest, if any, will be added to the interest rates stated above. The Company undertakes that, in as much as it is within its power, it shall not carry out any actions that are likely to lead to disqualifying the REIT Fund as a real estate investment fund, as per the Internal Revenue Code of 1986. 5.5. Expenses Cushion: A. Without derogating from the provisions of Section 26 of the Deed of Trust, an amount equal to USD 500 thousand out of the net proceeds of the offering shall remain in the Trust Account (as defined in Section 1.11 of Appendix 6.1), which will be used for the payment of current and administrative expenses of the Trustee in the event that Debentures (Series C) are put up for immediate repayment and/or if the Company has violated the provisions of the Deed of Trust (hereinafter and above: the "Expense Cushion"). The Expense Cushion may be deposited by way of cash deposit out of the said proceeds of the offering, all or some thereof, or by a bank guarantee, as specified hereunder, according to the Company's own discretion and subject to its notification to the Trustee, provided a sum of USD 100 thousand shall be maintained in this expense cushion, at any time.

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29 Bank guarantee to be deposited as aforesaid (if deposited) shall be an autonomous unconditioned irrevocable bank guarantee received from an Israeli bank rated at least AA, shall be effective up at least 30 days after the final repayment date of the debentures, or shall be effective for one year and renewed annually such that with regard to the final period it shall be effective up at least 30 days after the final repayment date of the debentures (hereinafter: "Bank Guarantee"). If the Company deposited an annually renewing Bank Guarantee as aforesaid, insofar as the Company failed to provide an extension of the Bank Guarantee or a new Bank Guarantee for a period of one additional year, up to 14 days prior to the expiration date of the Bank Guarantee, the Trustee shall forfeit the Bank Guarantee. B. The representative US Dollar/ New Israeli Shekel exchange rate for this purpose will be the representative exchange rate of the Central Israeli Bank as determined on the day of the Public Tender for the initial issuance of Debentures (Series C). The amount of the Expense Cushion will be held until and including the full and final repayment of Debentures (Series C). After receiving approval from the chief financial officer of the Company regarding the full repayment of Debentures (Series C), worded in a way that satisfies the Trustee's request, the Expense Cushion, whatever has not been used (plus any accrued earnings thereto), will be transferred to the Company in accordance with the details provided thereby. C. In the event that the amount of the Expense Cushion is insufficient to cover the expenses of the Trustee in connection with the immediate repayment of Debentures (Series C) and/or breach of the provisions of the Deed of Trust by the Company, the Trustee shall act in accordance with the provisions of Section 26 below. D. If the Expense Cushion is used, in whole or in part, the Company undertakes to complement the amount of the Expense Cushion up to the amount specified in Section 5.6 and this within 10 business days from the date on which the Company was requested to complement the said Expense Cushion. 5.6. Appointment of representative of the Company in Israel A. As long as there are outstanding Debentures (Series C), the Company undertakes that a representative of the Company in Israel will be appointed (hereinafter: the “Representative of the Company in Israel”) to which it will be possible to deliver court notices to the Company and/or to the officers thereof. Delivery of court notices to the Representative of the Company in Israel shall be considered as valid and binding in connection with any claim and/or 30 request by the Trustee and/or the holders of the Debentures (Series C) under this Deed of Trust. The Company shall be entitled to replace the Representative of the Company in Israel and the registered address from time to time, subject to Subsections B and C below. B. On the date of appointing/replacing the Company's Representative in Israel, the Company shall report the details thereof in an Immediate Report and will also deliver a notice to the Trustee with the details of the Company's Representative in Israel. In the event of appointing a new Representative, the Immediate Report and the Notice to Trustee shall also include the effective date of the appointment thereof. C. The Company undertakes that in the event of the replacement of the Representative of the Company in Israel, including resignation from office, the Company will appoint a Representative of the Company in Israel within a period not exceeding thirty (30) days. Until the appointment of the new representative as specified above, the address of the Company in Israel for the purpose of this Deed and for the purpose of the furnishing of court documents shall be the address of the replaced representative. D. The Company undertakes that a Representative of the Company in Israel shall serve until subsequent to the full, final and exact settlement of the Debentures (Series C). E. As at the signing date of this Deed of Trust, the Company’s representative in Israel is U.S. Real Estate Representation Ltd. 5.7. Undertakings of the Company, Pacific Oak SOR Properties LLC, the REIT Fund5, and the officers of the Company The Company, Pacific Oak SOR Properties LLC, REIT Fund, and officers of the Company and of Pacific Oak SOR Properties LLC, present or future irrevocably undertakes and will irrevocably undertake (as applicable), the following: A. Not to raise claims against the application, validity or manner of implementation of Section 39A of the Securities Law; B. Not to raise any claims against the local authority of the Court in Israel with regard to proceedings launched by the Trustee and/or holders of the Debentures (Series C) of the Company. 5 The REIT Fund undertook that if the control in the Company is sold, it undertakes that the sale will be conditioned upon the new Controlling Shareholder taking its place in connection with the liabilities listed under this section, in connection with the REIT Fund. 31 C. Not to raise any claims against the right of the holders of the Debentures (Series C) to file a derivative suit as well as a class action. D. In addition, in any agreement in which the Company engages indirectly with a third party, including its employees, it shall be determined that Israeli law will apply to the said agreements, including that insolvency proceedings against the Company will only be filed in a court in Israel, and under the Israeli law. In this regard it is clarified that this obligation does not apply to engagements of the Company with third parties, related with engagements of affiliated companies of the Company, (as this term is defined in the Securities Regulations (Annual Financial Reports), 5770 – 2010) and shall not apply to hedging agreements in which the Company contracted with a third party, should such engagement occur. E. Not to object to any motion by the Trustee and/or holders of the Debentures (Series C) to be filed with a Court of Law in Israel to apply Israeli law with regard to any settlement, arrangement and insolvency, if filed, not to apply to any Court of Law outside Israel for protection against any proceeding launched by the Trustee and/or holders of the Debentures (Series C), not to object should a Court of Law in Israel seek to apply Israeli law with regard to any settlement, arrangement, and insolvency. F. Not to initiate bankruptcy proceedings under foreign law and not in non-Israeli jurisdiction Regarding this matter, it should be noted that if an insolvency process will be commenced upon, not according to the Israeli law, and in a foreign court, deriving from a foreign creditor, and Company will do its best to claim for an "improper forum", subject to any law, and further – to refrain from making claims against the application, force, or manner of implementation of the applicable provisions of the Insolvency and Financial Recovery Act, 2018, pertaining to compromises and settlements, which include, inter alia, provisions replacing certain provisions of the Companies Act pertaining to compromises and settlements (Title C of Part F in Section II, concerning financial recovery, as well as Part C of Section X. concerning a material debt settlement involving a Debentures Company. G. Not to raise claims against the authority of the Securities Authority and/or the Administrative Enforcement Committee in Israel in connection with monetary fines and/or administrative enforcement measures imposed thereon by the Securities Authority and/or the Administrative Enforcement Committee in Israel, under Chapter H3 32 and/or H4 of the Securities Law, and to uphold all of the resolutions of the Securities Authority and/or the Administrative Enforcement Committee in Israel, including, without derogating from the generality of the above, to pay any monetary fine and/or payments to injured parties from a breach imposed thereon (if any) and to take measures to remedy the breach and prevent its recurrence. H. Not to amend the articles of association of the Company with respect to those articles which have been applied to the articles of association of the Company in order to reflect the Securities Order (Replacing the Fourth Schedule to the Law), 5776-2016; I. As long as there are outstanding Debentures (Series C) of the Company, and subject to the current tax laws, the Company and its investee corporations, as at the date of the Shelf Offering Report, will not choose to be considered as corporations, but will continue to be considered transparent for US tax purposes6. With respect to the undertaking of the Company for disclosure in connection with this section, see Section 5.11 below. J. It is hereby clarified that the undertakings in Sections a., b., c., e., f., and g. above will be assumed by each of the Company, Pacific Oak SOR Properties LLC, the REIT Fund, and the officers of the Company, while the rest of the undertakings shall be assumed as follows: 1. Undertakings in Section d. above – shall be assumed by the Company and Pacific Oak SOR Properties LLC only. 2. Undertakings in Section h. above – shall be assumed by the REIT Fund only. 3. Undertakings in Section i. above – shall be assumed by the Company, Pacific Oak SOR Properties LLC and the REIT Fund only K. The Company shall cause Pacific Oak SOR Properties LLC, the REIT Fund and the officers of the Company, as of the date of the signing of this Deed, to sign irrevocable undertakings as set forth in this Section 5.8 above and to publish these undertakings within 5 business days from the date of completion of the first issuance of the Debentures (Series C). In addition, the Company undertakes that no later than 5 business days following the appointment of a new officer of the Company and/or the date of change in control of the Company, the said undertakings shall be signed and published by a 6 Except for with regard to entities which are not transparent entities for tax purposed at the time.

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33 new officer of the Company or the new controlling shareholder, as applicable. 5.8. Operating Segment: A. The Company undertakes that all the real estate properties held by the Company, directly and/or indirectly, through companies held thereby, will be in the United States; B. The Company undertakes that it will not change its main business activity during the life of the Debentures (Series C). It should be noted in this regard, that the main business activity of the Company and companies under its control on the date of the issuance is as specified in Section 1.F in Chapter A of the 2022 Report (as part of the income tax tests applicable to the REIT Fund so that it will be classified as a REIT fund). 5.8A An undertaking with respect to Pledge Property Number 1 and Pledge Property Number 2 The Company undertakes will not conduct construction works in Pledge Property Number 1 and Pledge Property Number 2 (as defined in appendix A to Appendix 6.1 to the Deed of Trust) 5.9. Distribution Restrictions: 5.9.1. The Company undertakes not to make any distribution (as such term is defined in the Companies Law) and not to declare, pay or distribute any dividend unless all the terms set forth below are met: A. The Consolidated Equity Capital of the Company (as this term is defined in Section 6.3(1) below) (excluding minority interests), according to the Company’s consolidated financial statements, which were published prior to the distribution date, less the distributed divided, shall not be less than USD 500 million (this amount will not be index-linked); B. The ratio of net Adjusted Financial Debt to net CAP (as such terms are defined in Section 6.3(2) below), shall not exceed 70%; C. Adjusted NOI (as the term is defined in the above Section 5.3) shall total no less than USD 40 million. D. LTV ratio, as defined in section 11.4 to appendix 6.1 to this Deed of Trust, will not exceed 70%; E. There are no grounds for an immediate declaration that the Debentures (Series C) due and payable. 34 F. On the date of the Board of Directors' decision on the distribution, there are no “Warning Signs” as the terms are defined below: "Warning Signs"7: (1) deficit in equity capital; (2) opinion or review by the independent auditor, as at the date of the financial statements, which draws attention to the Company's financial position; (3) deficit in the working capital, or deficit in the working capital during a period of twelve months coupled with an ongoing negative cash flow from current operations; (4) deficit in the working capital or deficit in the working capital during a period of twelve months, coupled with an ongoing negative cash flow from current operation, and the Company's Board of Directors has not determined that these do not indicate a liquidity problem in the Company; (5) opinion or review by the independent auditor, as at the date of the financial statements, which draws attention to significant doubts as to the Company’s ability to continue as a going concern; G. The Company is in compliance with all the financial undertakings stated in Section 6.3 below, as per the Company's consolidated financial statements, which were published before the date of distribution and the Company does not breach any of its undertakings to the Debenture holders (Series C). (the terms set forth in Sections (A) to (E) above shall be referred to collectively as: "the Distribution Restrictions"). 5.9.2. The Company will submit to the Trustee within two (2) business days after the distribution is approved by the Company’s Board of Directors and prior to the actual distribution, certification by the chief financial officer of the Company that the Company is in compliance with the Distribution Restrictions (as the term is defined in Section 5.9.1 above), including the relevant calculation (regarding the restrictions set forth in Section 5.9.1 (A) to (F) above), (worded in a manner that will satisfy the Trustee), as well as regarding the fulfillment of the following conditions: (1) the Company is in compliance with its obligations to the holders of the Debentures (Series C) in accordance with the provisions of the 7 The abovementioned definition is taken from Regulation 10(b)(14) to the Securities Regulations (Periodic and Immediate Reports), 1970. It should be noted that if the definition is altered as part of legislative amendments of any kind, the abovementioned definition will be revised accordingly, mutatis mutandis. 35 Deed of Trust; (2) the distribution does not impair the ability of the Company to repay the Company's Debentures (Series C); (3) no cause for immediate repayment as per Section 8.1 below has been created. It should be clarified that the dividend restrictions will also be checked prior to the distribution, based on the Company's consolidated financial reports which were published prior to the performance of the distribution, and also under the assumption that the distribution was implemented. 5.9.3. Despite the above mentioned in this Section 5.9, it should be noted and emphasized that the REIT Fund should meet the regulatory restriction of dividend distribution in the U.S., according to which the fund must distribute up to 100% of its taxable income to its shareholders, in order to be classified as such (as a REIT fund) and not pay tax at the level a REIT fund is entitled to and enjoy tax reliefs granted to REIT funds in the US, as specified in Appendix A to Chapter A of the 2022 Report (hereinafter: the "Distribution Obligation of a REIT Fund"). Further to the foregoing, it should be emphasized that in order to maintain the Distribution Obligation of a REIT Fund, dividend distributions in a Company intended to serve Distribution Obligation of a REIT Fund, will not be subject to the aforesaid dividend restriction and these distributions will be implemented as required to maintain the status of the REIT Fund and to comply with the Distribution Obligation of a REIT Fund. Shortly before distribution as per this Subsection 5.9.3, the Company shall deliver to the Trustee a confirmation from the senior financial officer of the Company to the effect that the said distribution complies with this Subsection 5.9.3. 5.10. Dedicated Disclosure: The Company undertakes to specify and/or approve and/or include in each of the Board of Directors' Reports attached to the Company's financial statements thereof, dedicated disclosures to the holders of the Debentures of the Company, including stating the numerical figures and providing the calculation to the Trustee, in a wording to its satisfaction and as applicable (unless explicitly specified differently), as follows: 5.10.1. For the purpose of Section 5.3 above: The Company shall specify the compliance or non-compliance thereof with each of the financial covenants (as specified in section 5.3 above). 36 5.10.2. For the purposes of Section 5.7(i) above, the Company shall include a disclosure on its compliance and the compliance of all its held corporations with the provisions of Section 5.7(i) above. It should be clarified that the Trustee does not have data which will enable it to verify that the Company and the said corporations comply with these undertakings and therefore, the Trustee will rely for that matter on disclosure in the reports of the Company and shall not perform any examination thereof. 5.10.3. For the purposes of Section 5.8 above, the Company shall include a disclosure on its compliance/non-compliance with the provisions of Section 5.8 above. 5.10.4. For the purposes of Section 5.8 A above, the Company shall include a disclosure on its compliance/non-compliance with the provisions of Section 5.8A above. 5.10.5. For the purposes of section 5.9 above: the Company will specify the compliance or non-compliance with the provisions of section 5.9 above. 5.10.6. For the purposes of Section 6.2.2 below: The Company shall specify the compliance or non-compliance thereof with the said undertaking in Section 6.2.2 below of not creating a floating charge. It is clarified that the Trustee does not have data which will enable it to verify that the Company complies with these undertakings and therefore, the Trustee will rely for that matter on disclosure in the reports of the Company and the certifications detailed in this section above and shall not be requested to verify the correctness thereof. 5.10.7. For the purposes of Section 6.3 below: The Company shall detail in the notes for the financial statements, its compliance or non-compliance with any of the financial covenants (as defined in Section 6.3 below), including the numerical value of each of the financial covenants. 5.10.8. For the purpose of Section 6.5 below: The Company shall include disclosure regarding its compliance with the provisions of Section 6.4 below. 5.10.9. In this regard, the said disclosure standard shall remain the same from the execution date of this Deed and throughout the life of the Debentures (Series C), even if more lenient guidelines are publicized with regard to the standard existing at the time this Deed is signed.

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37 6. Securing the Debentures 6.1. Company’s undertaking towards Debentures Holders (Series C) is guaranteed by the collateral specified in Appendix 6.1 to the Deed of Trust. Transfer of proceeds to the Company shall be completed in accordance with the provisions set forth in Section 5 of Appendix 6.1 to the Deed of Trust. By entering into this Deed of Trust, and by agreeing to act as Trustee for the Debenture Holders, the Trustee is not conveying his opinion, explicitly or implicitly, as to the Company’s ability to fulfill its obligations towards the Debenture Holders. For the avoidance of any doubt, it is clarified that the Trustee is under no obligation to examine, and the Trustee did not and will not examine, the need for providing collateral for securing payments to the Debenture Holders. The Trustee was not asked, and de facto did not and will not, conduct financial, accounting, or legal due diligence, as to the business circumstances of the Company or its Subsidiaries. The above shall not derogate from the Trustee’s obligations under any law and/or the Deed of Trust, and likewise shall not derogate from the Trustee’s obligation (to the extent that such an obligation exists by any law) to examine the effects of changes in the Company from the issuance date onwards, to the extent that they may have a detrimental effect on the Company’s ability to fulfill its commitments to the Holders of the Debenture (Series C). 6.2. Undertaking not to create floating charge: 6.2.1. The Company undertakes not to pledge all of its current or future properties and assets (held thereby directly only) to a general floating charge, without the prior approval of the meeting of holders of the Debentures (Series C) by special resolution. It should be emphasized that the Company shall be permitted to pledge its property, in whole or in part, in specific pledges (including a floating charge on specific property/properties), without obtaining the consent of the holders of the Debentures (Series C) thereto. The Company clarifies that as of the date of the signing of this Deed, the Company has not created and has not undertaken to create a general floating charge as stated above. 6.2.2. For the avoidance of doubt, it is hereby clarified that Subsidiaries of the Company, which are not the Pledged Property Companies or the companies controlling the Pledged Property Entities (as such terms are defined in Appendix 6.1 to this Deed of Trust) are entitled to pledge the properties thereof, 38 in whole or in part, under any charge (including a floating charge on their entire property) and in any manner, without the need to obtain the consent of the meeting of the holders of the Debentures (Series C). 6.2.3. Each of the Pledged Property Entities and each of the Companies Controlled the Pledged Property Entities (as this term is defined in Section 1.4 of Appendix 6.1 to this Deed of Trust) may not pledge its assets and rights, current and future, and also undertakes to cause entities in its control to refrain from pledging their assets and rights, all or some of them, under the terms of a general floating charge and/or specific pledges (including floating charges on specific assets) without first obtaining the approval of an Assembly of Debentures Holders (Series C) for the matter by way of a special resolution. 6.2.4. The Company will furnish to the Trustee no later than 30 days after the signing of this Deed an opinion from an attorney specializing in the laws of the British Virgin Islands applicable to the Company as well as from an attorney specializing in the law applicable to the Pledged Properties Companies and each the companies holding the Pledged Properties Companies, in accordance with which there is no legal obligation under the applicable law to record a negative lien as specified in Section 6.2 above in any registry conducted under the applicable law. The Company shall furnish the Trustee each January 31 of each year with authorizations of an attorney specializing in the relevant law applicable to the Company as well as from an attorney specializing in the law applicable to the Pledged Properties Companies and each the companies holding the Pledged Properties Companies, whereby as at December 31 of prior calendar year, the Company, the Pledged Properties Companies, and each the companies holding the Pledged Properties Companies, did not register in their registers and/or in any other registry conducted under the relevant law any charge contrary to the provisions of Section 6.2 above in favor of any party contrary to their undertakings under Section 6.2 above, as applicable. A certification from the register conducted under the relevant law applicable to the Company, the Pledged Properties Companies, and each the companies holding the Pledged Properties Companies will be enclosed with such authorizations. In addition, the Company shall furnish the Trustee on the January 31 of every year, a confirmation signed by a senior officer of the Company, the Pledged Properties Companies, and each the companies holding the Pledged 39 Properties Companies to the effect that the Company (and in case that in one of these entities there are no acting officers, that the said confirmation will be signed by the controlling shareholder of the said entity), the Pledged Properties Companies, and each the companies holding the Pledged Properties Companies have not created nor committed to create a charge in favor of any party contrary to the undertaking in Section 6.2 above. The Company shall be entitled to sell, lease, assign, give or transfer in any way whatsoever, all or part of the assets thereof, to any person it deems fit, without requiring the approval of the Trustee and/or the Debenture Holders (Series C), as the case may be, subject to the provisions of section 8.1.15 below and to the provisions of Appendix 6.1. 6.2.5. With respect to the undertakings of the Company for disclosure in connection with this section, see Section 5.10 above. 6.2.6. It is clarified that the Trustee does not have data which will enable it to verify the compliance of the Company, the Pledged Property Entities and each of the Companies Controlling the Pledged Properties with the undertakings thereof detailed in this Section 6.2, and therefore, the in order to examine the compliance of the Company with the provisions of this Section 6.2, Trustee will rely for that matter on the Company's reports and the certifications detailed in this section above and shall not be requested to verify the correctness thereof. 6.3. Financial covenants Until subsequent to the full and final payment of the debt pursuant to the terms of the Debentures (Series C) and fulfillment of all the Company’s other obligations to the holders of the Debentures (Series C) pursuant to this Deed and the terms of the Debentures (Series C), the Company shall comply at any time with the financial covenants set forth below (hereinafter and above "the Financial Covenants"): (1) The Consolidated Equity Capital of the Company (excluding minority interests) will not be less than USD 450 million (this amount will not be index-linked) (hereinafter: the “Equity Covenant” or the “Minimum Equity”). "Consolidated Equity of the Company": The Company's equity according to the consolidated Financial Statements of the Company, including the principal of shareholder loans subordinate to the Debentures, if any. i.e., owners’ loans meeting all of the following conditions: (a) their maturity date (principal and interest) is 40 scheduled for after the final payment of the debentures; (b) the loans (principal and interest) are inferior in their maturity compared to the debentures, including in the event of dissolution. (2) The Net Adjusted Financial Debt ratio to the net CAP shall not exceed 75% (hereinafter: "Ratio of Debt to CAP Covenant" or "Ratio of Debt to Maximum CAP"). "Net Adjusted Financial Debt" – shall mean a debt carrying short and long term interest from banks and financial institutions, as well as from institutions the main activity of which is granting loans, plus debt carrying interest in favor of the holders of debentures issued by the Company, net of cash and cash equivalents and net of short-term investments and loans provided, the repayable date of which shall not exceed three years from the date of the relevant balance sheet, marketable securities and deposits (including properties with restrictions, except for pledged deposits provided against guarantees), all based on the consolidated financial statements of the Company, plus the proportionate consolidation of the net financial debt in affiliated companies and in the Company’s jointly controlled companies. "Net CAP" – shall mean adjusted net financial debt in addition to the Consolidated Equity Capital of the Company (including minority rights). (3) The Loan to Collateral Ratio, as the term is defined in Section 11.4 of Appendix 6.1 to this Deed, shall not exceed 75% (hereinafter: The Loan to Collateral Ratio Covenant or The Maximum Loan to Collateral Ratio, as applies). The examination regarding the Company’s compliance with each of the Financial Covenants in Subsections (1) to (3) above will be conducted on the date of publication of the Company’s financial statements and as long as there are outstanding Debentures (Series C), in relation to the quarterly/annual financial statements which the Company would have published until that date (in this Section 6.3 below: "Examination Date"). With respect to the undertaking of the Company for disclosure in connection with this section, see Section 5.11 above. With respect to the undertaking of the Company to provide authorizations to the Trustee in connection with this section, see Section 18.20 below. If the Company’s equity drops below the Minimum Equity and/or the ratio of the debt to the CAP exceeds the ratio of the debt to the maximum CAP and/or the Loan to Collateral Ratio exceeds the Maximum Loan to Collateral Ratio on any examination date, as applicable, the Company

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41 shall notify the Trustee of such in writing and report this data and the meaning of this data by means of an immediate report via the Magna system, no later than one business day after the publication of the financial statements (quarterly and annual). For purposes of this section, reporting via the Magna system will not be considered reporting to the Trustee. Failure to comply with the Equity Covenant for two consecutive quarters and/or failure to comply with the debt to CAP ratio covenant for two consecutive quarters and/or the Loan to Collateral Ratio exceeds the Maximum Loan to Collateral Ratio for two consecutive quarters (i.e., on two consecutive Examination Dates), shall constitute grounds for declaring the outstanding balance of the Debentures (Series C) due and payable, as specified in Section 8.1.12 below. It is clarified that, for the purpose of this Deed, in the event of a change in the accounting standards applied to the Company, as opposed to those applied to the Company on the date of signing this Deed (hereinafter: the “Existing Standards" and the "New Standards", respectively) in such a manner as to affect the results of the calculation of any of the financial covenants specified in this Deed, the Company’s compliance with the financial standards set forth in this Deed shall be examined only in accordance with the existing accounting standards. Company shall, in such a case, detail in the footnotes to its quarterly or annual financial statements, the manner of its compliance with the Financial Covenants according to existing accounting standards, and if there are any disparities between the aforementioned calculation and a calculation in accordance with the New Standards, the material items, from which the above-mentioned disparities arise, shall be specified. 6.4. The Company undertakes that as long as the Company does not comply with any of the financial covenants set forth in Section 6.3 above, it will not assume any financial debt with a right of recourse to the Company, except for a financial debt from the partnership or the REIT which will be subordinate to the Debentures (Series C) of the Company, both in terms of the Company’s insolvency and in terms of the repayment date (namely, if the repayment date is after the final repayment date of the debentures and it is not permitted to place them for immediate repayment prior to the full and final repayment of the debentures). Furthermore, so long as the Company does not comply with the financial covenants set forth in Section 6.3 above, the Company shall not assume any financial debt with a right of recourse to the Company (non-recourse), unless the debt was made for the purpose of remedying the failure to comply with the financial covenants or for the purpose of repayment on account of a principal or interest of the Debentures (Series C), in whole or in part. 42 The undertaking stated in this Section 6.4 shall not derogate from the undertaking in Section 6.5 below and subject thereto. If the Company does not comply with any of the financial covenants and in the period during which the Company does not comply with any of the financial covenants as stated above, the Company shall include a disclosure in the financial reports, as applicable, as part of the dedicated disclosure to the debenture holders, regarding its compliance with the obligations in Section 6.3 above. Additionally, throughout the aforementioned period, of the Company were to assume such a financial debt, the Company shall deliver an approval, signed by the senior financial officer, worded to the satisfaction of the Trustee, according to which: (1) if it is a recourse debt to the Company – that the debt is to the REIT or the partners in the Company and that it is subordinate to the Debentures, as stated above; or (2) if the debt is non-recourse to the Company – that the debt was made for the purpose of remedying the failure to comply with the financial covenants or for the purpose of repayment of the aforementioned Debentures. The Trustee shall rely on the office holder’s approval and on the Company’s disclosure in the aforementioned statements and shall not be required to conduct any further inspections. 6.5. The Company undertakes that it will not take credit from non-Israeli financial institutions and will not grant pledges to non-Israeli financial institutions, except for credit facilities (non-recourse) that may be provided by US financial institutions for the purpose of implementing hedging transactions on the exchange rate of the shekel against the dollar in relation to the Debentures to be issued by the Company and this will be done by granting specific pledges to secure such credit facilities. With respect to the undertaking of the Company for disclosure in connection with this section, see Section 5.10 above. With respect to the undertaking of the Company to provide authorizations to the Trustee in connection with this section, see Section 18.20.5 below. 7. Early redemption 7.1. Early redemption at the discretion of the TASE If the Tel Aviv Stock Exchange decides to delist the Debentures from trading because the value of the Debentures series falls below the amount prescribed in the TASE Regulations regarding delisting, the Company shall act as follows: 43 A. Within 45 days from the date of the TASE Board of Directors resolution to delist the Debentures, the Company will announce an early redemption date on which the holder may redeem the Debentures. B. The early redemption date with regard to the Debentures will not take place no less than seventeen (17) days from the date of publication of the announcement and no later than forty-five (45) days from said date, but not during the period between the Effective Date for the payment of Interest and the actual date of payment thereof. C. On the early redemption date, the Company will redeem the Debentures of the Holders of which requested the redemption thereof and the amount paid to Debentures Holders in the case of such an early repayment shall be the higher from among the alternatives listed in the below Section 7.2.9. The aforementioned early repayment amount shall be no less than the collateral value of the debentures (that is, the nominal value of the debentures with the addition of interest that has accrued on the principal until the actual redemption date). The interest will be calculated on the basis of 365 days per year. D. The setting of an early redemption date as aforesaid is without prejudice to the rights of redemption as stipulated in the Debentures, for those Holders of the Debentures who do not redeem them on the early redemption date as aforesaid, but the Debentures will be delisted from the TASE, and the resulting tax implications will apply thereto. Early redemption of the Debentures as aforesaid, will not grant to a Debenture Holder who redeems the same as stated the right to the payment of interest in respect of the period after the redemption date. The Company will publish notice of the earliest redemption date in an immediate report. The said notice will also detail the proceeds of the early redemption. 7.2. Early redemption at the discretion of the Company 7.2.1. The Company may, at its sole discretion, to perform early redemption, fully or partially, of the Debentures (Series C), commencing 60 days have passed after the date of the listing thereof on the TASE in which case the following provisions shall apply, all subject to the guidelines of the Securities Authority and the provisions of the TASE Rules and Regulations as shall be in effect on the relevant date: 44 7.2.2. The frequency of early redemptions shall be limited to one per quarter. 7.2.3. If a partial early redemption is scheduled for a quarter with a pre-scheduled interest payment, or partial redemption payment or final redemption payment, the partial early redemption will occur on the date designated for such payment. Notwithstanding the aforementioned, a full redemption may be completed also in a quarter in which an interest payment has been made or a partial redemption completed. For purposes of this section, “quarter” shall mean any of the following periods: January–March, April–June, July– September, October–December. 7.2.4. The minimum amount of early redemption of Debentures shall not be less than NIS 1 million. Notwithstanding the aforesaid, the Company may make an early redemption of Debentures totaling less than NIS 1 million provided the frequency of the redemptions a year will be limited to one. 7.2.5. Any early redemption amount will be paid on a pro-rata basis to the holders of the Debentures (Series C) at the par value of the Debentures (Series C) held. 7.2.6. Upon the Company’s Board of Directors’ resolution to make an early redemption as aforesaid, the Company shall publish an immediate report with a copy to the Trustee no less than seventeen (17) days and no more than forty-five (45) days prior to the early redemption date. In said immediate report, the Company will publish the early redemption amount of the principal and the interest accrued on the principal until the early redemption date, in accordance with the following provisions. The early redemption date shall not occur in the period between the record date for interest payment in respect of the Debentures (Series C) and the actual interest payment date. 7.2.7. Early redemption will not be made for a portion of the Debentures (Series C) if the last redemption amount is less than NIS 3.2 million 7.2.8. On the date of partial early redemption, as the case may be, the Company will pay to the Debenture Holders (Series C), the interest accrued only on the part of the partial early redemption, and not for the entire outstanding balance. If an additional interest is paid due to early redemption, the additional interest will be paid on the par value that was redeemed on the early redemption only.

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45 On the date of a partial early redemption, should there be one, the Company shall give notice in an immediate report of: (1) the percentage of the partial redemption in terms of the unpaid balance; (2) the percentage of the full redemption in terms of the original series; (3) the interest rate of the full redemption on the redeemed part; (4) the percentage of the interest rate that will be paid in the partial redemption, calculated in respect of the unpaid balance; (5) an update of the percentage of the partial redemptions that remain, in terms of the original series; (6) the record date for eligibility to receive an early redemption of the debenture principal that shall be twelve days (12) prior to the date set for the early redemption. 7.2.9. The amount paid to the holders of the Debentures (Series C) in the event of early redemption, shall be the higher of: (1) the market value of the Debentures (Series C), offered for early redemption, which will be determined based on the average closing price of the Debentures (Series C) in the thirty (30) trading days prior to the date of the Board of Directors’ resolution regarding an early redemption ("Market Value of Debentures Balance" and "Sample Period", respectively) multiplied by the early redemption rate of debentures in circulation. Notwithstanding the aforementioned, should the partial or full early repayment be scheduled for a quarter in which an interest payment date is also scheduled, and the early repayment is undertaken in that same quarter (together with the interest), then in such a case, for the purpose of calculating the market value of debentures to be paid to holders in accordance with this current Section, the amount being remitted on that date shall be deducted from the Market Value of the Debentures Balance, solely against the interest payment, and the balance of the amount, after deducting the interest to be paid on the payment date, shall be multiplied by the early redemption share. It shall further be clarified that should an interest payment be remitted over the course of the Sample Period, than the amount paid solely against the interest shall be deducted from the closing price established during the trading days included in the Sample Period and which occurred prior to the aforementioned determining date for the interest payment.; (2) the liability value of the outstanding Debentures (Series C) called for early redemption, that is, the principal plus interest, until the actual early redemption date; (3) the balance of cash flow of the Debentures (Series C) called for early redemption (principal plus interest), discounted at the government bond yield (as 46 defined below and no lower than 0%) plus 1.75% per annum. The discounting of the Debentures (Series C) that are called for early redemption will be calculated from the early redemption date to the last repayment date scheduled for the Debentures (Series C) which are called for early redemption. For purposes of this section – “Government Bond Yield” means the average yield to maturity (gross) in the seven business day period that ends two business days before the date of the notice of early redemption notice, of three unlinked series of government bonds in Shekels, bearing a fixed interest rate, whose average life is the closest to the average life of the Debentures on the relevant date, i.e. one series with the nearest high average duration of the Debentures (Series C) on the relevant date, and one series below the average duration of the Debentures (Series C) on the relevant date whose weight will reflect the average duration of the Debentures on the relevant. For example: if the average duration of the Government A Debentures is four years, the average duration of Government B Debentures is two years and the average duration of the loan balance is 3.5 years, the yield will be calculated as follows: 4x + 2(1-x) = 3.5 X = the yield weight of the Government A Bonds. X = the yield weight of the Government B Bonds. According to the calculation, the annual return of the Government A Debentures will be weighted at a rate of seventy-five percent (75%) of the “return” and the annual rate of the Government B Debentures will be weighted at a rate of twenty-five percent (25%) of the “return.” Should no government debentures series with shorter maturities than Debentures (Series C) remain in circulation, then the government bond yields shall be calculated using the average yield of two government bond series with attributes as detailed in the definition of the term Government Bond Yield, above, with an average duration closest to the average lifetime of Debentures (Series C) on the applicable date. To avoid doubt it shall be clarified that the government bond yield shall be no lower than zero, i.e., should calculation set forth in the definition of the Government Bond Yield result in a negative total, then in the calculation the capitalization interest rate for the purpose of substitution (3) in this current Section, above, the rate pertaining to the Government Bond 47 Yield shall be 0% (i.e., the capitalization interest rate in this case shall total 1.75%). In the case of an additional interest payment due to the early repayment, the additional interest shall be paid solely on nominal value being redeemed under the terms of the early repayment. 7.2.9.a. Notwithstanding the aforementioned the above Section 7.2.9 and the provisions of this current Section 7.2, in the case of an early redemption initiated by the Company in order to comply with the Loan to Collateral Ratio in accordance with the provisions of Section 12.5 of Appendix 6.1 to the Deed of Trust, shall be the amount paid to Debentures Holders (Series C) under the terms of the aforementioned early repayment, the higher amount of the following: (1) the market value of Debentures (Series C) in accordance with Subsection (1) in Section 7.2.9 above; or (2) the liability value of the Debentures (Series C) in circulation called for early repayment, i.e., principal with the addition of interest through the effective early repayment date, in accordance with Subsection (2) in Section 7.2.9 above. 7.2.9.b Notwithstanding the contents of the above Section 7.2.9, and pursuant to the provisions of this current Section 7.2, in the case of a full or partial early repayment due to a sale of Pledged Properties in accordance with the provisions of Section 6 of Appendix 6.1 to the Deed of Trust, the amount paid to Series C Debentures Holders upon such early repayment shall be the higher of the following: (1) market value of Serious C Debentures pursuant to the contents of Subsection (1) in the above Section 7.2.9; (2) the par value of Series C Debentures in circulation being called for early repayment, i.e., principal with the addition of interest up to the effective early repayment date, pursuant to the provisions of Subsection (2) in the above Subsection 7.2.9; or (3) if the Board decision for such full or partial early repayment will be made until June 30, 2024 (including), the balance of cash flows associated with Series C Debentures called for early repayment (principal and interest), capitalized in accordance with the Government Bond Yield (as defined above, no less than 0%) with the addition of 3.4% per annum, pursuant to the provisions of Subsection (3) in the above Subsection 7.2.9; if the Board decision for such full or partial early repayment will be made after July 1 2024, the balance of cash flows associated with Series C Debentures called for early repayment (principal and interest), capitalized 48 in accordance with the Government Bond Yield (as defined above, no less than 0%) with the addition of 2.4% per annum, pursuant to the provisions of Subsection (3) in the above Subsection 7.2.9 7.2.10. The Company shall furnish to the Trustee, within five business days from the date of the resolution of the Board of Directors regarding the early repayment in accordance with any of the options set for in this current Section 7.2, above, a certification by the Company's' auditing CPA regarding the calculation of the early repayment amount, worded in a manner that will satisfy the Trustee. 8. The right to declare the Debentures due and payable 8.1. Upon the occurrence of one or more of the cases listed in this section below, the provisions of Section 8.2 below will apply, as relevant: 8.1.1. If the Company does not repay any payment it will receive pursuant to the Debentures or under the Deed of Trust or will not comply with any of the other material undertakings made to the holders, and the Company has not cured such default within 5 business days. 8.1.2. If the Company applies for initiation of proceedings, as it is defined in the Insolvency Law and Rehabilitation Law, 2018 (hereinafter: "The Insolvency Law") or any similar order in accordance with the provisions of the Insolvency Law, or if the Company files a request for a settlement or arrangement with the creditors of the Company under Article 350 of the Companies Law, 1999, or in accordance with the provisions of the Insolvency Law, or if such an order is granted against the Company or if the Company offers its creditors in another manner a settlement or arrangement as aforesaid, due to its inability to meet its obligations on time, or a similar procedure has been conducted by the Company or towards the Company by the law applicable to the Company. With respect to this section, the abovementioned orders which were filed by any third party with the consent of the Company shall be deemed as orders filed by the Company. 8.1.3. If an application pursuant to the Insolvency Law or an application under Article 350 of the Companies Law is submitted against the Company (not with the Company's consent), or a similar proceeding pursuant to the foreign law applicable to the Company, against the Company (not with the

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49 Company’s consent) which was not dismissed or canceled within 45 days from the date of submission thereof if filed in Israel (hereinafter solely in this current Subsection: "The Remedy Period"), or a similar procedure has been conducted by the Company or towards the Company by the law applicable to the Company. It shall be clarified that the Remedy Period pertaining to such a request filed outside of Israel shall be 45 days from its filing date. 8.1.4. If the Company adopts a valid resolution for the liquidation thereof (other than liquidation for the purpose of a merger with another company as specified in Section 8.1.17 below), or a final liquidation order has been made by the court and/or if a trustee has been appointed for the Company, as defined in the Insolvency Law, or another office holder of similar characteristics, or a similar resolution has been made or a similar office holder has been appointed by the Company and/or towards the Company, in accordance with the Insolvency Law, or by the law applicable to the Company. 8.1.5. If a temporary liquidation order or a similar order per the applicable law has been granted or a similar order per the applicable law, and/or a temporary trustee has been appointed, as this term is defined in the Insolvency Law, or a similar office holder who will be appointed by the applicable law, and/or any judicial decision of a similar nature has been rendered, and such order or decision were not dismissed or canceled within 45 days of the date of issuing the order or rendering the decision, as the case may be. Notwithstanding the aforesaid, the Company will not be provided any remedy period with respect to applications made or orders issued, as the case may be, by the Company or with its consent. 8.1.6. If an application has been filed for receivership or the appointment of a receiver (temporary or permanent) or any similar office holder who will be appointed by the applicable law for the Company or for a Material Property of the Company (as the term is defined below), or if an order has been issued for the appointment of a temporary receiver or a similar office holder who will be appointed by the applicable law, which was not dismissed or canceled within 45 days of the date of filing the application or issuing the order, as the case may be; or – if an order has been filed for a permanent receiver for the Company or for a Material Property of the Company (as the term is defined below) a similar order as per the applicable law. 50 Notwithstanding the foregoing, the Company will not receive any cure period with respect to the requests or orders submitted or given, as the case may be, by the Company or with its consent. In this Deed: “Material Property of the Company” is a property or a number of cumulative properties of the Company or corporations held by the Company (according to the Company’s holdings percentage), the value of which, in accordance with the Company’s latest consolidated financial statements (audited or reviewed), on the date of an event, exceeds 40% of the total consolidated assets of the Company under these financial statements. 8.1.7. If an attachment is imposed or if an act of execution is carried out or a similar procedure as per the applicable law, in connection with a Material Property of the Company (as this term is defined in Section 8.1.6 above), and the attachment is not rescinded, or the action is not cancelled, as the case may be, within 45 (forty-five) days following the imposition or execution thereof, as the case may be. Notwithstanding the foregoing, the Company will not be granted any remedy period in relation to the applications filed or orders issued, as the case may be, by the Company or with its consent. 8.1.8. If there is a real concern that the Company will not meet its material obligations toward the holders of the Debentures (Series C). It is clarified that among the material obligations of the Company are included among other things the amounts of payments to the holders and the dates of the payments. 8.1.9. If the Company terminated or announced its intent to terminate the payment of its debts or ceased or announced its intent to cease to manage its business affairs, as they shall be from time to time. 8.1.10. If there was material deterioration in the Company’s business compared to its condition on the date of the initial offering of the Debentures (Series C) and there is a real concern that the Company would not be able to repay the Debentures (Series C) on time. 8.1.11. If an actual immediate repayment arose in another series of Debentures issued by the Company, which is listed for trading on a stock exchange (hereinafter in this section: “the Other Series”), or in another debt of the Company, the liability value of which exceeds 15% of the Company's total property listed in 51 the consolidated balance sheet according to the recently published financial statements (audited or unaudited), or a debt of an affiliated company, in which the product of the holdings (in the final chain) in the said company of the value of the liability exceeds 15% of the Company's total property listed in the consolidated balance sheet according to the recently published financial statements (audited or unaudited) (hereinafter: “the Other Debt”). A non-recourse loan to a borrower, or a part thereof, shall for this purpose not be considered as Other Debt, as stated above. In a loan which is a non-recourse loan to a borrower that includes a part that is with a recourse to the borrower, than only such part out of the total loan will be considered as said above Another Debt. In this respect, it should be noted that in connection with another debt, for which the Company's liability was a result of a guarantee provided for the repayment of the said debt, the cause mentioned in Section 8.1.11 will be created only if the following conditions exist: (1) The Company's guarantee for debt repayment is not limited in amount or it is limited to an amount which is higher than the amount of the other debt (as defined above); and (2) the Company was requested to repay at least an amount which is higher than or equal to the said debt; if the above-mentioned conditions exist then the said cause shall apply, and this is from the date the Company was requested to pay the other debt in effect rather than from the date of requesting immediate repayment, if these dates differ. 8.1.12. If the Company has not met any of the financial covenants in Sections 6.3 (1) until (3) (inclusive) above during two consecutive quarters. 8.1.13. If the Company performs a distribution contrary to the dividend limitation provisions, as set forth in Section 5.9 above; 8.1.14. If the rating of the Debentures (Series C) by the Rating Agency will be reduced to a rating that is lower than BBB or a parallel rating. In the event that the Rating Agency is replaced, the Company shall submit to the Trustee a comparison between the rating scale of the replaced Rating Agency and the rating scale of the new Rating Agency. For purposes of this section below, it is emphasized that in the event that the Debentures (Series C) would be rated by more than one Rating Agency, the review of the rating with respect to the grounds for immediate repayment shall be conducted, any time, based on the lower rating. 52 8.1.15. If the Company sells to another / others the Bulk of the Company’s assets during two consecutive calendar quarters, and the prior consent of the Debentures (Series C) holders to the said sale is not received in a special resolution. For the purpose of this subsection – “Sale to Another” – sale to any third party, excluding a sale to corporations fully held by the Company, as well as excluding a sale the majority of the revenues thereof shall be used by the Company, within a period of six months after the date of completing the sale transaction, for the purchase of other property/properties characterized appropriately to the Company's field of business, as such shall be on the date of said sale; “Bulk of the Company’s Properties” – a property or a combination of several properties, the value and/or aggregate value of which (as applicable) in the last consolidated financial statements published prior to the occurrence of the relevant event exceeds 50% of the value of its properties in the consolidated balance sheet, based on the said financial statements. 8.1.16. If the Company breaches any of its undertakings in Section 5.10 above. 8.1.17. If a merger of the Company was performed without the prior approval of the holders of the Debentures (Series C) by a special resolution, unless the recipient entity (as applicable) warrants to the holders of the Debentures (Series C), including by means of the Trustee, at least 10 business days before the date of the merger, that there is no reasonable concern that because of the merger the recipient entity will not be able to meet its obligations to the holders of the Debentures (Series C). Nothing in this section shall derogate from the other grounds for immediate repayment that are granted to the Debenture Holders pursuant to Section 8.1 above and below. In addition, commencing a period of 30 days prior to the date of the planned merger, all the grounds enumerated in Section 8.1 shall also apply to the recipient entity as if it were the Company. With regard to sections the provisions of which arise from the Company’s financial statements, the review shall be conducted in relation to the financial statements of the recipient entity as these will be following the merger. 8.1.18. If trading in the Debentures (Series C) on the TASE was suspended by the TASE, except for suspension on the grounds of ambiguity as stated in the fourth part of the TASE

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53 Regulations, and 60 days have elapsed from the date of suspension during which the suspension was not cancelled. 8.1.19. If the Company is wound up or liquidated for any reason whatsoever. 8.1.20. If the Company commits a fundamental breach of the terms of the Debentures (Series C) or the Deed of Trust, and if it turns out that a material representation of the Company’s representations in the Debentures or the Deed of Trust is incorrect or incomplete, and the Company has failed to remedy such breach within 7 business days of the date of receiving the notice. 8.1.21. If the Debentures (Series C) will cease to be rated for a period exceeding 60 days following reasons or circumstances under the control of the Company (in this regard, the non-performance of payments that the Company undertook to pay the Rating agency and the failure to provide reports and information reasonably required by the Rating agency within the engagement between the Company and Rating agency will be considered to be reasons and circumstances under the Company’s control). 8.1.22. If the Company expands the series of Debentures (Series C) or issues an additional debenture series, in violation of the provisions of Section 4 of the Deed of Trust. 8.1.23. If the Company ceases to be a Reporting Corporation, as it is defined in Section 1 of the Securities Law. 8.1.24. If the Company does not publish a financial statement as is it required to publish under any law or under the provisions of the Deed, within 30 days of the final date for the publication thereof as required or from the time an extension is granted by an authorized agency. 8.1.25. If the Debentures (Series C) are delisted from the TASE. 8.1.26. If the Company breaches its commitment not to pledge all of its assets with a general floating pledge as stated in Section 6.2 above. 8.1.27. If the Company is no longer 100% held (indirectly, by chain) by the REIT Fund. 8.1.28. Upon the occurrence of any other event that constitutes a material breach and/or may cause material harm to the rights of the debenture holders. 54 8.1.29. If the Company takes a financial debt or credit contrary to the stated in Section 6 above, as applicable. 8.1.30. If a “Going Concern” comment is registered in the financial statements of the Company for a period of two consecutive quarters. 8.1.31. If any of the events specified in section 8.1.2 to 8.1.5 above occurred with respect to the Partnership and/or the REIT Fund. 8.1.32. If the REIT Fund acts in the Company operating segment (as described in Section 5.8 above) not through the Company, and without the consent of the Debenture Holders (Series C) granted by Special Resolution. 8.1.33. If the Company does not meet its undertaking specified in Section 5.4 above; 8.1.34. If the Company does not comply with the undertakings specified in section 5.6 above; 8.1.35. If the Company breaches any of its undertakings detailed in Section 5.5 above, in connection with the expense cushion. 8.1.36. If the Pledged Property Companies or the Company Holding the Pledged Property Companies, breaches Appendix 6.1 and/or the Collateral Documents, and such breach is a fundamental breach, including if it turns out that a material representation from the presentations of the Pledged Property Companies or the Company Holding the Pledged Property Companies, in Appendix 6.1 and/or in the Collateral Documents is incorrect or incomplete and any of the Pledged Property Companies or the Company Holding the Pledged Property Companies, respectively, has not cured the aforementioned violation within 30 business days from the date of the violation of since it became aware of the violation, as the case may be.. 8.1.37. Should any of the Concerning Events as defined in Section 12.1.40 of Appendix 6.1 to this Deed which have not been remedied withing the Remedy Period set forth in the aforementioned Section 12.1.40. 8.2. In the event of one of the instances set out in Sections 8.1.1 above the following provisions shall apply, as applicable: 8.2.1. Upon the occurrence of any of the events specified in Section 8.1 above, the Trustee shall be obligated to convene a general meeting of the holders of the Debentures (Series C), the date of which shall be 21 days after the date of invitation thereof (or a 55 shorter date in accordance with the provisions of Section 8.2.5 below), and whose agenda will include a resolution regarding the immediate repayment of the outstanding balance of the Debentures (Series C) upon the occurrence of any of the events specified in Section 8.1 above, as applicable. The convening notice will specify that if the Company shall act in a manner that will eliminate and/or put an end to the event specified in Section 8.1 above for which the general meeting was convened, until the date of the general meeting, the convening of the general meeting of debenture holder will be canceled. 8.2.2. The holders’ resolution to declare the Debentures (Series C) due and payable shall be adopted at a meeting attended by holders of at least fifty percent (50%) of the nominal value of the outstanding Debentures (Series C), by a majority of holders of the outstanding par value of the Debentures participating in the vote or such majority at an adjourned meeting attended by holders of at least twenty (20%) of the aforesaid outstanding nominal value. 8.2.3. If as of the date of the meeting, any of the events specified in Section 8.1 above has not been cancelled or removed, and a resolution in the meeting of the Debentures (Series C) has been adopted in the manner stipulated in Section 8.2.2 above, the Trustee will be obligated, within a reasonable period of time and no later than two business days, to declare the outstanding balance of the Debentures (Series C) for immediate repayment. 8.2.4. A copy of the notice for convening the said meeting will be sent by the Trustee to the Company and the notice of a meeting shall constitute a prior written warning to the Company of the Trustee's intent to declare the Debentures due and payable as aforesaid and/or exercise collateral. 8.2.5. The Trustee may, at its discretion, reduce the period of 21 days specified in Section 8.2.1 above if he deems it necessary to protect the rights of the holders 8.2.6. The Trustee and/or the Holders will not call the Debentures for immediate repayment and/or shall not act to exercise collateral, until after the Company is provided within notice of its intention to do so; however, they will be entitled not to provide the Company with any notice if there is a concern that furnishing the notice will harm the possibility of calling the Debentures for immediate repayment. 56 8.2.7. If any of the subsections of Section 8.1 above stipulate a reasonable period in which the Company may take action or make a decision that will remove the grounds for immediate repayment, the Trustee or the holders may declare the Debentures due and payable as stated in Section 8, only if the period stipulated as aforesaid has elapsed and the grounds have not been removed; however, the Trustee may reduce the said period if it is of the opinion that it could materially prejudice the rights of the Holders. 8.2.8. For the avoidance of doubt, nothing in Section 8.2 above shall derogate from the powers of the Trustee to declare the Debentures (Series C) due and payable, at its discretion and/or to act to exercise collateral. 8.2.9. If the Company acts, at its sole discretion, to appoint an urgent representation of Bondholders (Series C) in the event of foreseen non-compliance with one or more of the financial covenants, the provisions stipulated in the Third Schedule to the Deed of Trust must be followed. 8.2.10. For the avoidance of doubt, it is clarified that the immediate repayment shall be based on the nominal value of the outstanding Debentures (Series C), including interest accrued on the principal amount, (and arrears interest, if applicable) while the interest will be calculated for the period beginning after the final day in respect of which interest was paid and ending on the immediate repayment date (the calculation of the interest for a portion of the year will be based on 365 days a year). 8.2.11. For the avoidance of doubt, it is clarified that the right of immediate repayment as aforesaid and/or declaring the Debentures due and payable shall not impair or prejudice any other or additional remedy available to the holders of the Debentures (Series C) or to the Trustee under the terms of the Debentures (Series C) and the provisions of this Deed or pursuant to any law and the decision not to call the Debentures due and payable upon the occurrence of any of the events listed in Section 8.1 above, shall not constitute a waiver of the rights of the Debenture Holders or the Trustee, as stated. 9. Claims and proceedings by the Trustee 9.1. In addition to any provision herein and as an independent authority, the Trustee may, at its discretion and without giving notice, adopt all such

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57 proceedings, including legal proceedings and applications for orders, as it finds fit and subject to the provisions of any law, to protect the rights of the holders of the Debentures (Series C) and enforce the Company’s duty to meet another obligation under the Deed of Trust. Nothing in the foregoing shall prejudice and/or derogate from the Trustee’s right to institute legal and/or other proceedings, even if the Debentures (Series C) have not been declared due and payable, all with a view to protecting the holders of the Debentures (Series C) and/or for purposes of issuing any order with regard to Trusteeship matters and subject to the provisions of any law. Notwithstanding the provisions of this section, it is clarified that the right to declare the Debentures due and payable will arise only in accordance with the provisions of Section 8 above and not by virtue of this section. 9.2. Subject to the provisions of the Deed of Trust, the Trustee is entitled, but not obliged, to convene at any time, a general meeting of the holders of Debentures (Series C) in order to discuss and/or receive its instructions on any matter relating to the Deed of Trust. 9.3. Any time the Trustee is obligated under the terms of the Deed of Trust to take any action, including instituting proceedings or filing claims at the request of the holders of Debentures (Series C) as stated in this section, the Trustee is entitled, at its sole discretion, to delay the execution of any said action until such time as it receives instructions from the general meeting of the Debentures (Series C) holders in an ordinary resolution and/or instructions from the court how to act provided that the convening of the meeting or petition to the court takes place at the first possible date. For the avoidance of doubt, it is clarified that the Trustee is not entitled to delay the taking of actions or proceedings as stated in the case in which the delay may harm the rights of the Debentures (Series C) holders. 9.4. The Trustee may, subject to the provisions of Section 28 below, waive the same terms that it sees fit for upholding all or part of the undertakings of the Company. 9.5. The Trustee may, before taking any legal proceedings, convene a meeting of Bondholders (Series C) in order for the Holders to decide which proceedings to take to exercise their rights under this Deed, in an ordinary decision. Additionally, the Trustee may also again convene meetings of the Bondholders (Series C) for the receipt of instructions with respect to managing the proceedings as stated, in an ordinary resolution, provided that convening the meeting takes place on the first possible date under the provisions of the Second Schedule of the Deed of Trust and the delay of proceedings does not risk the rights of the Holders 58 10. Receipts held in Trust All the funds held by the Trustee, except for its fees, expenses, and repayment of any debt to it, in any way whatsoever, including but not only in consequence of declaring the Debentures due and payable, and/or as a result of proceedings instituted by it, if any, against the Company, shall be held by the Trustee in trust and shall be used for such purposes and according to the order of priorities as follows: First – for the settlement of all expenses, payments, levies, and obligations incurred by the Trustee, imposed on it, or caused in the course or in consequence of acts to execute the trust or otherwise, with respect to the terms of the Deed of Trust, including its fee (provided the Trustee does not receive its fee from the Company or from the Debenture Holders). Second – for the payment of any other amount pursuant to the “undertaking to indemnify” (as this term is defined in Section 26.1.6 below); Third – for the payment to the holders of the Debentures from Series C who incurred payments pursuant to Section 26.4.2 below (first to holders bearing payments as set forth in Section 26.4.2 of the Deed beyond their proportional share in the Debentures, and then to holders bearing payments in proportion to their holdings); The balance will be used, unless decided otherwise, in advance, and in a special resolution of a meeting of the holders of the Debentures (Series C) concerning Section (a) and (b) only, for such purposes and according to the following priorities: (a) First – to pay to the Debenture Holders the arrears of the interest due to them under the terms of the Debentures (Series C), pari passu and pro rata to the sums of principal payable to each of them, without preference or priority with respect to any of them; (b) Second - to pay to the holders of the Debentures (Series C) the arrears of the principal under the terms of the Debentures pari passu and pro rata to the amount of the principal in arrears payable to each of them, under the terms of the debentures, pari passu and pro rata to the sums of the principal in arrears, owed to them, without preference or priority with respect to any of them; (c) Third – to pay to the holders of the Debentures (Series C) the amounts of the interest owed to them under the terms of the Debentures held by them pari passu, whose payment date has not yet occurred, and pro rata to the sums payable to each of them, without preference as to the time priority of the issuance of the Debentures (Series C) by the Company or otherwise; (d) Fourth – to pay to the holders of the Debentures (Series C) the amounts of the principal owed to them under the terms of the Debentures they hold, pari passu, which are not yet due, and pro rata to the sums owed to them, without any preference as to the time priority of the issuance of the Debentures (Series C) by the Company or otherwise; (e) The surplus, if any, shall be paid by the Trustee to the Company or its successors, as applicable. 59 Withholding tax will be deducted from the payments to the holders of the Debentures (Series C), to the extent that there is a requirement to deduct withholding tax under any law. It is clarified that if the Company was required to incur any of the expenses but failed to do so, the Trustee shall act to collect said amounts from the Company and if it succeeds in obtaining them, they will be held by it in trust and will be used for the purposes and according to the order of priorities specified in this section. 11. Power to demand payment to the holders through the Trustee The Trustee may instruct the Company to transfer to the Trustee some of the payment which the Company is required to pay the Holders (hereinafter in this section: the "Relevant Payment") for the purpose of financing the proceedings and/or expenses and/or the Trustee’s fees pursuant to this Deed (hereinafter in this section: the "Sum of Financing") provided that Company did not bear the Sum of Financing itself and/or deposited the Sum of Financing with the Trustee in advance. The Company shall transfer the Sum of Financing to the Trustee no later than the date of the execution of the Relevant Payment. The Company is not entitled to refuse to act in accordance with said notice and it shall be deemed to have fulfilled its obligations to the Holders if it proves that it has transferred the full Sum of Financing to the Trustee as aforesaid. It should be noted that the financing amount shall only be deducted from the interest payments (and not deducted from the principal). Until no later than four trading days before the record date to perform the Relevant Payment of which the Sum of Financing will be deducted an Immediate Report will be published, detailing the Sum of Financing, its designation, and the updated interest sums and rates that will be paid to the holders in accordance with the Relevant Payment. In addition, the Company shall specify in the said Immediate Report that the Sum of Financing that will be transferred to the Trustee will be considered as a payment to the Debenture Holders, for all intents and purposes. The Sum of Financing that the Trustee will be allowed to instruct the Company to give over as aforementioned in this section, and provided that there was not prior holders decision with this regard (including decision regarding commencing proceedings and/or taking action for which the Sum of Financing is needed) will be limited at NIS 500,000 (VAT added). Nothing in the foregoing shall relieve the Company of its obligation to incur the expenses and fees as aforesaid where it is required to incur them under this Deed or pursuant to any law. In addition, nothing in the foregoing shall derogate from the Trustee’s duty to act reasonably to obtain the Sum of Financing due to the Holders from the Company. 60 12. Power to withhold distribution of funds Notwithstanding the provisions of Section 10 above, in the event that the monetary sum obtained in consequence of the institution of proceedings as aforesaid, which at any time is available for distribution, as set out in Section 10 above, is less than NIS 1 million, the Trustee shall not be obligated to distribute same, and it may invest such sum, in whole or in part, in such investments as are permitted. Where such investments, including accruals thereon, together with other funds received by the Trustee, total such amount as is sufficient to pay the aforementioned amount, the Trustee shall pay the same to the Holders in accordance with the order of priorities set out in Section 10 above. In the event that by the earlier of either the date of payment of the interest and/or principal or a reasonable period of time after receipt of the monetary amount, the Trustee does not have a sufficient sum to pay at least NIS 1 million, the Trustee may distribute the funds held by it to the Debenture Holders. Notwithstanding the foregoing in this Section 12 above, the holders of the Debentures (Series C), according to the resolution adopted by them, may instruct the Trustee to pay them the distributable funds obtained by the Trustee as set forth in Section 10 above, even if the sum total is less than NIS 1 million even if the time for payment of principal and/or interest has not arrived under the terms of the Debentures, subject to the provisions of the TASE Regulations and its guidelines as shall be in effect at the time. Notwithstanding the foregoing, the Trustee’s fees and the Trustee’s expenses will paid from the said funds when they become due (with respect to the expenses already paid to the Trustee, the Trustee will be reimbursed for said expenses immediately when the funds are obtained by the Trustee) even if the amounts obtained by the Trustee are less than NIS 1 million. 13. Notice of distribution The Trustee shall give notice to the holders of the Debentures (Series C) of the date and the place of effecting any payment of the installments set out in Sections 10 and 12 above, in a prior 14 days' notice to be delivered to them in the manner designated in Section 27 below. After the date designated in the notice, the holders of the Debentures (Series C) shall be entitled to interest thereon at the rate designated in the Debentures, only in respect of the outstanding balance of the principal (if any), after deduction of the amount paid, as aforesaid. 14. Failure to pay for reasons out of the Company’s control 14.1. Any amount due to the holders of the Debentures (Series C) which was not paid on the date prescribed for its payment, for a reason that is out of

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61 the Company’s control, while the Company was willing and able to pay said amount in full and on time (hereinafter: the "Impediment", shall cease to bear interest from the date designated for its payment and the holders of the Debentures (Series C) will only be entitled to the amount he was entitled to on the date prescribed for repayment thereof on account of the principal or the interest. 14.2. The Company shall deposit with the Trustee, on the earliest possible date after the date designated for payment and no later than 14 days of the date designated for payment, the sum of the installment not paid in a timely fashion, as set out in Section 14.1 above, and shall give notice in writing according to the addresses available to it, if any, to the holders of the Debentures (Series C), of such deposit, and such deposit shall be deemed as settlement of such installment, and, in the event of settlement of everything owing for the Debenture, also as redemption of the Debentures (Series C) by the Company. The above will not derogate from the Company’s obligations to bear the fees and expenses of the Trustee, all in accordance with the provisions of this Deed. 14.3. Any amount held by the Trustee in trust for the holders shall be deposited by the Trustee in a bank and held by it, in its name or on its behalf, at its discretion, in permitted investments as set forth in Section 17 below. If the Trustee did same it will owe the holders, in respect of said amounts, only the proceeds from the disposal of the investments less the expenses related to said investments, including for the management of the Trust Account and less its fees and mandatory payments, and it shall pay same to the holders against such certifications as shall be required by it to its satisfaction. Once the Trustee receives notice from the holder that such Impediment has been lifted, the Trustee shall transfer to the holder all the funds accumulated in the deposit as a result of the disposal of the investment, net of all the reasonable expenses including the Trust Account management fees and net of its fees and any applicable tax under the law. Payment shall be effected against the presentation of certifications, which are acceptable by the Trustee, regarding the holder’s right to receipt thereof. 14.4. The Trustee shall hold such funds and shall invest them according to the provisions of Section 17 below, up to the end of one year from the final settlement date of the Debentures (Series C). After such date, the Trustee shall return such amounts to the Company, including profits arising from their investment, less its reasonable expenses and less its fees and other expenses which were expended in accordance with the provisions of this Deed (such as payment to service providers, etc.), and the Company shall hold such amounts in trust for the holders of the Debentures (Series C) that are entitled to such sum for a period of up to seven (7) years from 62 the date of final repayment of the Debentures (Series C), and with respect to the sums transferred to it by the Trustee, as aforesaid, the provisions of Subsection 14.3 above shall apply to it, mutatis mutandis. Funds that are not claimed from the Company by the holders of the Debentures (Series C) at the end of seven years (7) from the date of final repayment of Debentures (Series C), shall be transferred to the Company’s possession, after 30 days from the date of delivering a written notice to the said holders by the Company, according to the addresses in its possession, if any, and it may use the remaining funds for any purpose whatsoever, all in accordance with the statutes of limitation. As soon as the amounts as returned to the Company the Trustee will not owe the holders of the Debentures (Series C) any payment in respect of the amounts held by it as aforesaid. 14.5. The Company shall confirm to the Trustee, in writing, the return of the amounts as stated in Section 14.4 above and the receipt thereof on behalf of the holders of the Debentures (Series C), and shall indemnify the Trustee for any claim and/or expense and/or damage of any type whatsoever incurred by it, in consequence of, and due to, the transfer of the funds as aforesaid, unless the Trustee has acted negligently, in bad faith or maliciously. 15. Receipt from the Debenture Holders and from the Trustee 15.1. A receipt from a holder of the Debentures (Series C) or written confirmation by the TASE member of the transfer or a transfer via the Exchange’s clearinghouse of amounts due for the principal and the interest paid to him by the Trustee, in connection with the Debenture, shall serve as absolute exemption of the Trustee in connection with the performance of the payment of the sums designated in the receipt. 15.2. A receipt from the Trustee as to the deposit of the amounts of the principal and the interest with it, for the benefit of the holders of the Debentures (Series C), shall be deemed as a receipt from the holders of the Debentures (Series C) for purposes of the provisions of Section 15.1 above, with respect to the exemption of the Company in connection with the performance of the payment of the sums designated in the receipt. 15.3. Funds distributed as aforesaid in Sections 10 and 12 above, shall be deemed as payment on account of the repayment of the Debentures (Series C). 16. Presentation of a Debenture to the Trustee; Registration with respect to partial payment 63 16.1. The Trustee is entitled to request the holders of the Debentures (Series C) to present, to the Trustee, upon the payment of any interest or partial payment of principal and interest, the Debenture certificates (Series C) in respect of which the payments are made. The holder of the Debenture (Series C) will be required to present said Debenture certificate provided this will not obligate the holders of the Debentures (Series C) to incur any payment and/or expenses and/or impose any responsibility and/or liability on the holders of the Debentures (Series C). 16.2. The Trustee may register, in the Debenture (Series C) certificate, a note with respect to the sums paid as aforesaid and as to the date of payment thereof. 16.3. The Trustee may, in any special case, at its discretion, waive the presentation of a debenture certificate (Series C), after an indemnity undertaking and/or sufficient security, to its satisfaction, has been given to it by the holders of the Debentures (Series C), for damages liable to be caused due to failure to register such note, all as it deems fit. 16.4. Notwithstanding the aforesaid, the Trustee may, at its discretion, keep records in any other manner, with respect to such partial payments. 17. Investment of Funds All funds which the Trustee may invest under this Deed of Trust, shall be invested by it, in accounts of one of the four leading banks in Israel, provided the bank’s rating does not drop below AA, in its name or to its order, provided it invests the funds in bank deposits, treasury bills issued by the Bank of Israel and/or government bonds issued by the Bank of Israel. If the Trustee did same it will owe the holders, in respect of said amounts, only the proceeds from the disposal of the investments less its fees and expenses, less the fees and expenses related to the said investment and the management of the trust accounts and less the mandatory payments that apply to the Trust Account, and with respect to the remainder of said funds, the Trustee shall act in accordance with the provisions of Sections 12 and/or 14 above, as the case may be. 18. The Company’s undertakings to the Trustee The Company hereby undertakes to the Trustee, and the Debenture Holders so long as the Debentures (Series C) have not been repaid in full, as follows: 18.1. To continue to conduct the Company’s business in an efficient and appropriate manner. 18.2. To maintain orderly books of account in accordance with accepted accounting principles, to maintain the books and documents used as their 64 references (including deeds of pledge, mortgage, accounts, and receipts) in its offices, and to allow the Trustee and any authorized representative of the Trustee to review, no later than 5 business days from the date of request of the Trustee, to be coordinated in advance with the Company, any book and/or document, as aforesaid, which the Trustee requests to review. In this context, an authorized representative of the Trustee means a person designated by the Trustee for the purpose of such review, by means of a written notice on the part of the Trustee, to be given to the Company prior to the review as aforesaid, subject to an undertaking of confidentiality as specified in the provisions of Section 31.12 below. To the extent possible, considering the nature and circumstances of the matter, the Company shall act to enable the right of inspection, as stated in this section above, in Israel, including the transfer of materials via any medium 18.3. To notify the Trustee in writing, as soon as reasonably possible, and no later than one business day after learning, of any event of imposition of an attachment and/or an execution action carried out on a Material Property of the Company(as this term is defined in Section 8.1 above), and in the event of appointment of a receiver, a special administrator and/or temporary or permanent liquidator and/or a Trustee for a Material Property of the Company (as this term is defined in Section 8.1 above), a, who were appointed as part of a motion for suspension of proceedings pursuant to Section 350 of the Companies Law and/or any other similar office holder against the Company, and to take, at its expense, all measures required to remove such attachment or to cancel the receivership, liquidation or administration, as the case may be. 18.4. To advise the Trustee in writing, immediately upon the Company learning of, no later than one trading day: (1) the occurrence of any of the events set out in the subsections of Section 8.1 above; (2) probable concern by the Company that one or more of the cases enumerated in the subsections of Section 8.1 above may occur. The provisions of this section and all of its subsections shall be implemented by the Company without taking into account the securities treatment and waiting period set forth in Section 8.1 above, if any. 18.5. To deliver to the Trustee a signed written notice by the chief financial officer of the Company, no later than 5 business days from the date of the Trustee's request, of the performance of any payment to the Debenture Holders and the remaining amounts which the Company owes, on that date, to the Debenture Holders, after the performance of the above payment. 18.6. To deliver to the Trustee, immediately upon receipt thereof, any report that it is required to submit to the Securities Authority, an immediate

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65 report via the Magna system and any report or information that will be published (in full) by the Company on the Magna system shall be deemed to have been delivered to the Trustee. Notwithstanding the aforesaid, at the Trustee’s request, the Company shall deliver to the Trustee a printed copy of the report or information as aforesaid. 18.7. To deliver to the Trustee copies of notices and invitations issued by the Company to Debenture Holders, as stated in Section 27 of this Deed. 18.8. To cause the chief financial officer of the Company to provide the Trustee and/or such persons as he may instruct, not later than 10 business days of the demand of the Trustee, any explanation, document, calculation or information regarding the Company, its business and/or assets, which shall be reasonably required, at the Trustee’s discretion, for the purpose of reviews conducted by the Trustee to protect the Debenture Holders. 18.9. To invite the Trustee to attend general meetings (whether annual general meetings or extraordinary general meetings of shareholders of the Company) of shareholders of the Company (with no participation or voting rights) that shall take place in Israel (if at all). The publication of an invitation to a general meeting of shareholders of the Company via the Magna system shall be deemed as invitation of the Trustee for purposes of this section. For as long as the Company is a debenture company as defined in the Companies Law - to provide the Trustee with signed minutes of shareholders meetings within one business day of the date of signing said minutes. 18.10. As long as the Debentures (Series C) have not been repaid in full, to provide the Trustee with the following reports: 18.10.1.1. Audited annual financial statements of the Company, and reviewed quarterly financial statements of the Company, no later than the dates designated therefor in accordance with the Securities Law, even if the Company ceased to be a Reporting Corporation. 18.10.1.2. If and as long as the Company is a public company, as it is defined in the Companies Law – a copy of each document transmitted by the Company to its shareholders or to the Debentures Holders and details of any information transmitted to them by the Company by other means, including any report submitted by law to the Securities Authority (immediate reports), immediately upon its publication. As long as the Company is a private company that is a debenture company – to provide the Trustee with a copy of each document transmitted by the Company to the 66 Debentures Holders and details of any information transmitted to them by the Company by other means, including any report submitted by law to the Securities Authority (immediate reports), immediately upon its publication. 18.10.1.3. To provide the Trustee, at its first written request, with written confirmation signed by an accountant that the payments to the debenture holders were made on time, and the balance of the par value of the Debentures in circulation. 18.10.1.4. If the Company ceased to be a Reporting Corporation, the Company shall provide with the Trustee, in addition to the provisions of Sections 18.3 to 18.10 above and Section 18.11 below, annual, quarterly and immediate reports, as specified below, signed by the CEO and the Chief Financial Officer of the Company, as well as additional reports as such are required in accordance with the provisions of the Consolidated Circular, as the case may be: (a) An annual report that includes the information specified in Appendix 5.2.4.8 to Chapter 4 of Part II (Management of Investment Assets and Provision of Credit) Title 5 (Principles of Business Management) of the Consolidated Circular, no later than 60 days from the date in which the Company would have been required to publish its financial statements had it been a Reporting Corporation; (b) A quarterly report that includes the information specified in Appendix 5.2.4.9 to Chapter 4 of Part II (Management of Investment Assets and Provision of Credit) Title 5 (Principles of Business Management) of the Consolidated Circular no later than 30 days from the date in which the Company would have been required to publish its financial statements had it been a Reporting Corporation; (c) An immediate report upon the occurrence of any of the events specified in Appendix 5.2.4.10 to Chapter 4 of Part II (Management of Investment Assets and Provision of Credit) Title 5 (Principles of Business Management) of the Consolidated Circular. The report will be published on the date in which the Company would have been required to report the event pursuant to Regulation 30(B) of the Reports Regulations or any regulation that replaces it. 67 18.11. To deliver to the Trustee, upon his request, a declaration and/or declarations and/or documents and/or details and/or additional information on the Company (including explanations, documents, and calculations regarding the Company, its business or assets) and to instruct its accountant and its legal consultants to do same, upon reasonable request in writing by the Trustee, and this - no later than 10 business days from the date of request by the Trustee, if, in the Trustee’s reasonable opinion, the information is required by the Trustee to exercise the powers and authority of the Trustee and/or his representative under the Deed of Trust, including information that could be essential in protecting the rights of the Debenture Holders provided the Trustee acted in good faith, and subject to the confidentiality undertaking, as stated in Section 31.12 below. 18.12. To deliver to the Trustee all the reports or notices as specified in Section 35J of the Law. 18.13. No later than 7 business days after the publication of the Company’s annual or quarterly financial statements, as the case may be, the Company shall furnish to the Trustee a written detailed confirmation, worded in a manner that will satisfy his request, signed by the chief financial officer, with the addition of an active Excel file, regarding the Company’s compliance or noncompliance with any of the Financial Covenants set forth in Section 6.4 of this Deed, together, with the detailed relevant calculation in connection with each financial covenant. 18.14. No later than 7 business days after the publication of the Company’s quarterly financial statements, and as long as this Deed of Trust is in effect, the Company shall furnish to the Trustee, a written confirmation by the Company, signed by authorized signatories on its behalf as well as its Chairman of the Board of Directors and/or general manager, that during the period from the date of the Deed and/or the date of the previous confirmation delivered to the Trustee, whichever is later, and until the date of the confirmation, the Company was not in violation of this Deed and the terms of the Debentures (Series C), unless it expressly states otherwise. 18.15. On April 10 of each year, for the previous calendar year, and as long as this Deed of Trust is in effect, the Company shall deliver to the Trustee, a written confirmation signed by the chief financial officer of the Company with regard to interest payments and/or payments on account of the principal, in connection with the Debentures (Series C), which became due prior to the date of confirmation, and the date of payment, and the balance of nominal value of outstanding Debentures (Series C) as of the date of confirmation; as well as confirmation by a director of the Company and by its general manager, that on the year ended 68 December 31 the Company was not in breach of the terms and restrictions stipulated in the Deed of Trust (including specific terms and restrictions in the Deed and in the Debentures, which the Trustee shall ask the Company to address in the confirmation), unless expressly stated otherwise in the said confirmation. 18.16. Inform the Trustee in writing of any change in its name or address, no later than two trading days from date of the implementation of the change. It is clarified that reporting via MAGNA system will constitute a reporting to the Trustee, for the purposes of this section. 18.17. The Trustee may instruct the Company to report forthwith on the Magna system, in the Trustee’s name, any report the wording of which shall be delivered in writing by the Trustee to the Company, and the Company shall be obligated to report the same forthwith. 18.18. The Trustee will keep in confidence all information provided thereto under this section, will not disclose it to another and will not make any use thereof, unless its disclosure or use is required for the purpose of fulfilling its role as Trustee according to the Law, according to the Deed of Trust, or according to a court order, or for protection of the rights of the Debenture Holders 18.19. The Company shall notify the Trustee of non-compliance with any foreign covenant as soon as possible and no later than 2 business days from the day in which the Company’s non-compliance with the foreign covenant began or within 2 business days from the date on which it was notified by an associate of the non-compliance with any foreign covenant, as the case may be, and the expected repercussions of such non-compliance pursuant to the Company’s agreements with such entity. It is clarified that if the Company fails to comply with a foreign covenant and a grace period is provided for the purpose of compliance with the foreign covenant, such grace period shall not be deemed, for purposes of this section only, as compliance with the covenant and the Company shall notify the Trustee of non-compliance with the foreign covenant as aforesaid. For purposes of this section – “Foreign covenant” – a material financial covenant of the Company and of an affiliated company of the Company, pursuant to an agreement with a financial institution or with another entity that provided material credit to the Company, and to the affiliated company. “Material financial covenant” – a financial covenant in respect of which non-compliance constitutes grounds for declaring the debt due and payable.

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69 “Material credit” – credit that constitutes at least 10% of the total of the Equity Capital of the Company (including minority interest). For the purposes of an affiliated company – credit, the amount of which multiplied by the Company’s percentage holding (through a chain of holdings) constitutes at least 10% of the Company’s consolidated Equity Capital (including minority interests). Notwithstanding the provisions of Section 27 below, the Company shall give the Trustee written notice of non-compliance with the foreign covenant in addition to any immediate report that the Company will publish on the matter, if any. 18.20. The Company undertakes to provide to the Trustee the following authorizations, as applicable: 18.20.1 Regarding Section 3.2 above: If an Associated Person (as defined in Section 3.2 above) should purchase and/or sell Company debentures, the Company shall deliver to the Trustee, on demand, the list of Associated Persons and the quantities held thereby on the date on which the Trustee requests it, in accordance with the reports received, as mentioned above, from Associated Persons, and that have been reported in the MAGNA system by the Company. It is clarified that reporting in the MAGNA system shall constitute a report to the Trustee, for the purpose of this Section. 18.20.2 With respect to the authorizations required for the Expansion of a Series or the issuance of a new series, see Section 4.3 and 4.11 above. 18.20.3 No later than 15 days after the date of issuance of Debenture (Series C) in accordance with the Shelf Prospectus report and/or after the date of Series Expansion, the Company shall provide the Trustee with a true certified copy of the Debenture Certificate. 18.20.4 With respect to the authorizations required to make a distribution, see Section 5.9 above. 18.20.5 For the purpose of Section 6.2.4 above: the Company will provide the Trustee no later than 5 days after signing this Deed with the opinion of an attorney specializing in the laws of the British Virgin Islands applicable to the Company, in accordance with which there is no legal obligation in the British Virgin Islands to record a negative pledge as specified in Section 6.2 above in accordance with the laws of the British Virgin Islands. the Company will provide the Trustee, on January 31 of each year, with an authorization from an attorney 70 specializing in the relevant law applicable to the Company, in accordance with which as at the date of December 31 of the ending calendar year, the Company did not record in the registers thereof and/or any other registry conducted under the relevant law, any pledge in favor of a party contrary to its undertaking thereof in Section 6.2.1 above. To the authorization of the attorney shall be attached a certificate from the register conducted in this matter in accordance with the law applicable to the Company. 18.20.6 With respect to Section 6.5 above: the Company will provide the Trustee with approval from the senior office holder in the Company’s financial department, at the end of April of each year, that the Company has complied with its liabilities under Section 6.5 above regarding taking credit from non-Israeli financial institutes. 18.20.7 With respect to Section 6.3 above: the Company shall provide the Trustee with authorization from the senior financial officer in the Company, together with the relevant calculations in an active Excel file, with respect to the compliance with the financial covenants in Section 6.3 above, no later than 7 business days from the date of publication of the financial statements of the Company. The Company undertakes to inform the Trustee and the holders of the Company’s Debentures (Series C) regarding any breach of liability to any financial creditor, and it shall not constitute grounds for immediate repayment, without derogating from the provisions of Section 8.1 above. 19. Additional undertakings 19.1. To the extent that the Debentures are declared due and payable, as defined in Section 8 above, the Company shall perform, from time to time and any time it is required by the Trustee, all the reasonable acts to enable the exercise of the powers vested in the Trustee, and in particular, the Company shall take the following actions, no later than seven business days from the date of request by the Trustee: 19.1.1. To pay the Debenture Holders and the Trustee all of the amounts owed to them under the terms of the Deed of Trust, whether the charge date for them has transpired or otherwise (“acceleration”), within seven days from the date of notice of the Trustee to the Company., subject to coordination with 71 TASE of timetables for payments to Company’s Series C Debentures Holders. 19.1.2. Make the statements and/or sign all the documents and/or execute and/or cause the execution of all the necessary or required actions by law, in order to validate the exercise of the powers and authority of the Trustee and/or its representative under this Deed of Trust. 19.1.3. Give all the notices, instructions and orders that the Trustee considers beneficial and requires the same for the purpose of implementing the provisions of the Deed of Trust. 19.2. For purposes of this section – a signed written notice by the Trustee, confirming that an action required by it, within its powers, is a reasonable action, shall constitute prima facie evidence. 20. Agents 20.1. The Company hereby irrevocably appoints the Trustee as its agent, to execute and carry out in its name and in its stead, all the actions that it will be required to carry out under the terms of this Deed, and in general to act in its name in relation to the actions that the Company is obligated to carry out under this Deed and has not carried out or to exercise some of the powers it holds, and to appoint any other person as the Trustee deems fit to perform its duties under this Deed, provided the Company has not carried out the actions it is required to carry out under the terms of this Deed within a reasonable period of time as determined by the Trustee, as of the date of the Trustee’s instruction, and provided it acted reasonably. 20.2. An appointment as stated in Section 20.1 above shall not obligate the Trustee to take any action and the Company hereby exempts the Trustee and its representatives in the event that they do not take any action, and the Company hereby waives any claim toward the Trustee and its representatives in respect of any damage that was incurred or may be incurred to the Company directly or indirectly, in respect of that, on the basis of any action that was not taken by the Trustee and its representatives as aforesaid. 21. Other Agreements Subject to the provisions of the Law and the restrictions imposed on the Trustee under the law, the fulfillment of its role as Trustee, under this Deed, or its very status as Trustee, shall not prevent the Trustee from entering into various agreements with the Company, or entering into transactions with the Company in 72 the ordinary course of its business. It should be noted that the Trustee will not be able to enter into an agreement with the Company as aforesaid if this creates a conflict of interest with its tenure as Trustee for the Debenture (Series C) Holders. 22. Trusteeship reports 22.1. The Trustee shall be required to submit a report with regard to the acts performed by it in accordance with the provisions of Section 35H (1) of the Securities Law. 22.2. Until June 30 of each year the Trustee shall prepare an annual report on trust affairs (hereinafter: “the Annual Reports”). The annual report shall include a report of irregular events in connection with the Trusteeship that occurred in the past year. 22.3. The Trustee will publish (itself or through the Company at the Trustee’s request) the annual report on the Magna system. 22.4. If the Trustee learns of a material breach of the terms of this Deed and/or the terms of the Debentures (Series C) of the Company, on the part of the Company, as from public reports issued by the Company or the Company’s notice to the Trustee pursuant to Section 18.4 above, it will notify the holders of the Debentures (Series C) of such breach and the steps taken by the Trustee to prevent it or to enforce the Company’s compliance with the obligations, as the case may be. Such duty shall not apply if this is an event that was published by the Company under the law. Such duty of the Trustee is subject to its knowledge of the said breach. 22.5. Upon the request of the Holders of over five percent (5%) of the balance of the par value of the Debentures (Series C), the Trustee will deliver to the Holders data and details with respect to the expenses thereof in connection with the trust at the subject of the Deed of Trust. 22.6. The Trustee will be obliged to submit a report of the activities it has performed under the provisions of Chapter E1 of the law by a reasonable request of the holders of at least ten percent (10%) of the outstanding nominal balance of the Debentures within a reasonable time from the date of the request, subject to the confidentiality undertakings of the Trustee to the Company as specified in Article 35j (D) of the Law. 22.7. As of the signing of this Deed, the Trustee declares that it is insured with professional liability insurance in the amount of USD 10 million8 for the period (hereinafter: the “Coverage Amount”). If before the full payment of the Debentures (Series C), the coverage amount is reduced from the 8 As of the policy renewal date.

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73 amount of USD 8 million8 for any reason, the Trustee will update the Company no later than seven business days from the date on which it was made aware of the said reduction from the insurer in order to publish an immediate report on the matter. The provisions of this section will apply by the date of the entry into force of the Regulations to the Securities Law that address the obligation for the Trustee’s insurance coverage. After the entry to force of the Regulations as stated, the Trustee will be required to update the Company only in the case in which the Trustee does not meet the requirements of the Regulations. 22.8. The Trustee will update the Company of any report submitted under this Section 22, inasmuch as this does not harm the holders' rights. 23. Remuneration of the Trustee and reimbursement of its expenses The Company shall pay the Trustee a fee as specified in Appendix 23 of this Deed. 24. Special powers 24.1. The Trustee will be entitled to deposit all the deeds and documents which evidence, represent and/or specify its right under this Deed including in connection with any asset held by it at the time, in a safe and/or at another place it may choose, with any banker and/or bank and/or with an attorney. 24.2. The Trustee may, as part of the execution of the Trust affairs under this Deed, to enlist the opinion and/or advice of any attorney, accountant, appraiser, assessor, surveyor, mediator or other specialist (hereinafter: “the Consultants”) and to act in accordance with its conclusions, whether such opinion or advice has been prepared at the request of the Trustee and/or at the Company, and the Trustee shall not be responsible for any loss or damage caused in consequence of any act and/or omission performed by it, on the basis of such advice or opinion, unless a peremptory judgment has determined that the Trustee has acted with gross negligence and/or in bad faith and/or maliciously. The Company shall incur the expenses of employing the Consultants who are appointed as aforesaid, provided, insofar as necessary under the circumstances of the matter and to the extent that this shall not prejudice the rights of the holders, that the Trustee gives the Company prior notice of its intent to obtain such expert opinion or advice. 24.3. Any such advice and/or opinion may be given, forwarded or received by means of a letter, telegram, facsimile and/or any other electronic means for transmission of information, and the Trustee shall not be responsible 74 for any acts performed by it on the basis of any advice and/or opinion and/or information transmitted in one of the aforesaid manners, notwithstanding that it contained errors and/or was not authentic, unless such errors could have been detected under a reasonable examination. 24.4. Subject to any law, the Trustee shall not be obligated to inform any party of the signing of the Deed of Trust and may not intervene in any way whatsoever in the management of the Company or its affairs, unless it is pursuant to the authority vested in the Trustee under this Deed. Nothing stated in this section shall limit the Trustee in the actions it is required to perform under the Deed of Trust. 24.5. The Trustee shall use the trust, powers, authorizations, and authorities conferred on it under this Deed, at its absolute discretion and subject to the other provisions of this Deed. In doing so, it shall not be responsible for any damage and/or loss and/or expense caused to the Company and/or the Debenture Holders and/or which they will have to incur in consequence of any act and/or omission performed by the Trustee, including as a result of errors in judgment, unless a peremptory judgment has determined that the Trustee has acted with negligence or in bad faith or maliciously or in violation of the provisions of this Deed, all subject to and in accordance with the statutory provisions. 24.6. Unless explicitly set forth otherwise in the Law or the provisions of this Deed of Trust, the Trustee is not required to act in a manner which is not expressly detailed in this Deed of Trust so that any information, including about the Company and/or in connection with the Company's ability to meet its obligations to Bondholders, comes to its attention, and this is not its role. 25. The Trustee’s power to engage agents The Trustee may, as part of the management of trust affairs, appoint an attorney or other agent/s to act in its stead, inasmuch it shall not harm the rights of the Debentures (Series C) Holders, in order to perform or participate in the performance of special acts to be performed with respect to the trust and pay a fee to any such agent, and, without derogating from the generality of the foregoing, institution of legal proceedings. The Trustee shall also be entitled to pay, at the Company’s expense, the fees of any such agent including by deducting the payment from the funds received by it and the Company shall reimburse the Trustee immediately upon its first request for any such expense, all provided the Trustee gave the Company advance notice regarding the appointment of agents as aforesaid insofar as it is possible under the circumstances and to the extent that this will not prejudice the rights of the holders. 75 It is clarified that the appointment of said agent shall not release the Trustee from any responsibility for its actions and for the actions of its agents. 26. Indemnification of the Trustee 26.1. The Company and the debenture holders (on the relevant effective date as provided in Section 26.6 of the Deed of Trust, each in respect of their undertaking as provided in Section 26.4 of the Deed of Trust) hereby undertake to indemnify the Trustee and all its officers, employees and any proxy or expert who appoints or will be appointed by the Trustee as per the provisions of this Deed of Trust and/or per resolution made in the meeting of the Debentures (Series C) holders, based on the provisions of this Deed of Trust (hereinafter: "parties entitled to indemnification"): 26.1.1. For any damage and/or loss and/or for any monetary charge under any judgment (for which no stay of execution was granted) or under any completed settlement (and insofar as the settlement relates to the Company, the Company gave its agreement thereto), arising from actions that were performed by the parties entitled to indemnification or which they are required to perform under the provisions of this Deed and/or by law and/or by order of a competent authority and/or in accordance with any statute and/or upon the demand of the holders of Debentures (Series C) and/or upon the Company's demand and/or under their role according to this Deed; and 26.1.2. For the fee of the parties entitled to indemnification and expenses which they incurred and/or are about to incur, and for any damage and/or loss caused to them due to actions which they performed or are required to perform under the provisions of this Deed and/or by law and/or by order of a competent authority and/or in accordance with any statute and/or upon the demand of the holders of Debentures (Series C) and/or upon the Company's demand and/or in connection with the exercise of powers and authorizations conferred by this Deed and in connection with all kinds of legal proceedings, opinions of lawyers and other experts, negotiations, discussions, expenses, claims and demands relating to any matter and/or thing done and/or not done in any way in connection with the subject matter hereof and/or under their role according to this Deed. All the above on condition that: 76 26.1.3. The parties entitled to indemnification do not demand to be indemnified in advance in a matter that cannot be delayed (without prejudice to their right to retroactive indemnification); 26.1.4. It was not determined in a peremptory rule that the parties entitled to indemnification acted in bad faith and the action was done outside the framework of their duties, not in accordance with the statutory provisions and/or not in accordance with this Deed of Trust; 26.1.5. It was not determined in a peremptory rule that the parties entitled to indemnification were negligent; 26.1.6. It was not determined in a peremptory rule that the parties entitled to indemnification acted maliciously; The indemnification rights under this Section 26.1 are hereinafter referred to as the "Indemnification Right" Or the “Indemnification Undertaking”. It is agreed that in the event it is alleged against the parties entitled to indemnification that they are for any reason whatsoever not entitled to indemnification, those entitled to indemnification would be due, immediately upon their initial demand, payment of the amount due to them with regard to the indemnification undertaking. Should a final judicial ruling find that no right to indemnification has developed for those entitled for indemnification, the latter shall reimburse the indemnification funds paid to them. 26.2. Without derogating from the compensation rights granted to the Trustee by law and subject to the provisions of this Deed and/or the Company's obligations under this Deed, the parties entitled to indemnification may be indemnified out of the monies received by the Trustee from proceedings instituted by it, with respect to obligations which they assumed, with respect to reasonable expenses which they incurred in connection with the performance of the trust or in connection with such actions as in their opinion were required for said performance and/or in connection with the exercise of the powers and authorizations conferred by this Deed and in connection with all kinds of legal proceedings, opinions of lawyers and other experts, negotiations, discussions, claims and demands relating to any matter and/or thing done and/or not done in any way in connection with the subject matter hereof, and the Trustee may withhold the monies held by it and pay out of them the amounts necessary for the payment of such indemnification. All the above amounts shall have priority over the rights of the holders of Debentures (Series C), subject to any statutory provisions and provided that the

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77 Trustee acted in good faith and in accordance with the duties imposed on it by any statute and by this Deed. For purposes of this section, an action of the Trustee that was approved by the Company and/or the debenture holders shall be deemed an action that was reasonably required. 26.3. Without derogating from the validity of the indemnification undertaking in Section 26.1 above, where the Trustee is obligated by the terms of the Deed of Trust and/or by law and/or by order of a competent authority and/or in accordance with any statute and/or upon the demand of the holders of Debentures (Series C) and/or upon the Company's demand to do any action, including but not limited to the institution of proceedings or the filing of claims upon the demand of the holders of Debentures (Series C), the Trustee may abstain from taking any such action until it receives from the Company, to its satisfaction, a monetary deposit in the amount required to cover the indemnification undertaking (hereinafter: "the financing cushion"), with first priority, and in the event that the Company does not deposit the full amount of the financing cushion within the time it was required to do so by the Trustee, the Trustee shall address to the holders of Debentures (Series C) which held Debentures (Series C) on the effective date (as provided in Section 26.6 below) a request to deposit the financing cushion with it, each according to their proportionate share (as this term is defined hereinafter). If the holders of Debentures (Series C) do not actually deposit the full amount of the required financing cushion, the Trustee shall not be obligated to take the relevant action or institute the relevant proceedings. The foregoing shall not exempt the Trustee from taking any urgent action required to prevent material harm to the rights of the holders of Debentures (Series C). The Trustee is authorized to determine the amount of the financing cushion, and it shall be entitled to act again to create an additional financing cushion, from time to time, in an amount to be determined by it. It is clarified that the payment by the holders under this section will not release the Company from its obligation to bear the aforesaid payment. The Trustee, at its sole discretion, may make use of the funds deposited in the Financing Cushion for the execution of actions or use of relevant proceedings. 26.4. The indemnification undertaking: 26.4.1. Shall apply to the Company in case of: (1) actions that were performed according to the Trustee's judgment and/or in accordance with any statute and/or that were required to be performed under the terms of this Deed of Trust or for protecting the rights of the debenture holders (including due to 78 a holder's demand required for such protection) and/or if the indemnification right arose by virtue of this Deed; and (2) actions that were performed and/or that were required to be performed upon the Company's demand. 26.4.2. Shall apply to holders on the effective date (as provided in Section 26.6 of the Deed of Trust) in case of: (1) the indemnification right arose as per the demand of the Debenture Holders (excluding an indemnification right arising from the demand of the Holders for the protection of the Debenture Holders' rights); and (2) nonpayment by the Company of the amount of the indemnification right due from it under Section 26.3 of the Deed of Trust (subject to the provisions of Section 26.6 of the Deed of Trust) provided the persons entitled to indemnification have taken the reasonable steps given the circumstances required for the collection of the said amounts from the Company. It is clarified that payment in accordance with this subsection (2) above shall not derogate from the Company's obligation to bear the indemnification undertaking in accordance with the provisions of Section 26.4.1. 26.5. If the Company fails to pay the full amount required to cover the indemnification undertaking, and/or does not deposit the full amount of the financing cushion, as the case may be, and/or if the indemnification obligation applies to the holders by virtue of the provisions of Section 26.4.2 above, and/or if the holders were called upon to deposit the amount of the financing cushion under Section 26.3 above, provided the persons entitled to indemnification have taken the reasonable steps given the circumstances required for the collection of the said amounts from the Company, the following provisions shall apply: 26.5.1. The monies shall be collected in the following manner: 26.5.1.1 First – The amount shall be financed out of the amounts of interest and if the funds of the interest from the principal which the Company is required to pay to the holders of Debentures (Series C) after the date of the required action will not be sufficient, and the provisions of Section 11 above shall apply (where should the amount also be financed using the principal funds, then as part of disclosing the financing amount, as defined above, Company shall also announce the amount due for each NIS 1, nominal value, net of the financing amount); 26.5.1.2 Second – If in the Trustee's opinion the amounts deposited in the financing cushion are not enough 79 to cover the indemnification undertaking, the holders on the effective date (as provided in Section 26.6 above) shall deposit, each according to their proportionate share (as this term is defined) the missing amount with the Trustee. "Proportionate share" means: The proportion of the Debentures (Series C) held by the holder on the relevant effective date as provided in Section 26.6 above out of the nominal amount in circulation on that date. It is clarified that the calculation of the proportionate share shall remain fixed even if after that date there is a change in the par value of the Debentures held by the holder. It is clarified that the debenture holders who are liable to cover expenses as provided in this section above, may bear expenses as provided in this section above, beyond their proportionate share, and in such case, the order of priorities as provided in Section 10 of this Deed shall apply to the reimbursement of the amounts. 26.6. The effective date for determining the obligation of a holder in respect of the indemnification undertaking and/or payment of the financing cushion is as follows: 26.6.1. If the indemnification undertaking and/or payment of the financing cushion is required pursuant to a resolution or an urgent action necessary to prevent material harm to the rights of the holders of Debentures (Series C), without a prior resolution of the meeting of holders of Debentures (Series C) – the effective date for the obligation shall be the end of the trading day on the day when the action was taken or the resolution was adopted, and if that day is not a trading day, then the previous trading day. 26.6.2. If the indemnification undertaking and/or payment of the financing cushion are required pursuant to a resolution of a meeting of holders of Debentures (Series C) – the effective date for the obligation shall be the effective date for participation in the meeting (as such date was specified in the notice of invitation) and shall also apply to a Holder who has not participated in the meeting. 26.7. The payment by the holders in place of the Company of any amount that is due from the Company under this Section 26, shall not release the Company from its obligation to bear such payment. The Trustee will act 80 to refund such monies as stated that were paid by the Holders in place of the Company, from the Company. 26.8. Regarding priority in reimbursing holders who bore payments under this section out of the receipts held by the Trustee, see Section 10 above. 27. Notices Any notice by the Company and/or the Trustee to the debenture holders shall be given as follows: 27.1. By reporting on the Magna system of the Securities Authority (the Trustee may instruct the Company and the Company shall be obligated to make immediately on the Magna system, on the Trustee's behalf, any report in the wording provided in writing by the Trustee to the Company); and solely in the cases specified below, in addition, by the publication of a notice in two daily newspapers with a wide distribution published in Hebrew in Israel: (a) any arrangement or settlement under Section 350 of the Companies Law; (b) any merger. Any notice published or sent as stated, shall be deemed to have been delivered to the debenture holders on the day of its publication as stated (on the Magna system or in the press, as the case may be). 27.2. Any notice or demand by the Trustee to the Company or by the Company to the Trustee may be delivered by a letter sent by registered mail to the address specified in the Deed of Trust, or to another address of which one party has notified the other in writing (including an email address), or by sending by fax or by messenger, and any such notice or demand shall be deemed to have been received by the other party: (1) if sent by registered mail – at the end of three business days from the date of its delivery to the Trustee as per the postal records; (2) if sent by fax (together with a telephone verification of receipt) – at the end of one business day from the day of its sending; (3) if sent by messenger – upon its delivery by the messenger at the address or upon its presentation to the addressee for acceptance, as the case may be; (4) and if sent by email – at the end of one business day from the day of its sending. 28. Waiver, settlement and alterations to the Deed of Trust Subject to any statutory provisions, including the articles and instructions of TASE, except with respect to the payments dates and rates pursuant to the terms of the Debentures, the interest rate (including arrears interest), adjustments of interest arising from non-compliance with the financial covenants and a change in rating, undertakings of the Company in connection with the Financial Covenants and their breach, undertakings of the Company in connection with a

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81 distribution, undertakings of the Company related to failure to create a floating charge, provisions related to the expansion of a series, provisions related to the law applicable to this Deed, provisions related to the Expenses Cushion, provisions related to pledges, undertaking to appoint a representative in Israel, provisions regarding limitations of executing transactions with controlling shareholders, grounds for calling for immediate repayment, undertaking of a negative pledge, provisions regarding the Expense Cushion, provisions regarding the appointment of a representative in Israel and reports that the Company must provide the Trustee (hereinafter jointly: “Undertakings of the Company that Cannot be Conditioned Upon”), the Trustee may, from time to time and at any time, when the same, in its opinion, does not harm the rights of the debenture holders (Series C), to waive any breach or non-fulfillment of any of the terms of the Debentures or non-fulfillment of any of the terms of the Deed of Trust by the Company. Subject to any statutory provisions, including the articles and instructions of TASE, and with the prior approval of the debenture holders in a special resolution, the Trustee may, whether before or after the principal of the Debentures (Series C) has come due, settle with the Company regarding any right or claim of the holders of Debentures (Series C), waive any right or claim of the holders of Debentures (Series C) or any of them against the Company under the Deed of Trust and the Debentures (Series C), and agree with the Company on any arrangement with respect to their rights, including waiving any right or claim of the holders of the Debentures (Series C), against the Company pursuant to this Deed. If the Trustee settled with the Company, waived any right or claim of the holders of Debentures (Series C) or agreed with the Company on any arrangement with respect to the rights of the holders of Debentures (Series C), after it received the prior approval of the meeting of holders of Debentures (Series C) as provided above, the Trustee shall be exempt from liability in respect of such action, as it was approved by the general meeting, provided the Trustee did not breach its fiduciary duty and did not act in bad faith or willfully or in negligence in the implementation of the resolution of the general meeting. Without derogating from the foregoing, subject to any statutory provisions, including the articles and instructions of TASE, the Company and the Trustee may, whether before or after the principal of the Debentures has come due, modify the Deed of Trust including its appendices (including an alteration to the terms of the Debentures (Series C), if either of the following is fulfilled: (a) If the Trustee is convinced that the alteration does not harm the debenture holders (except for the Undertakings of the Company that Cannot be Conditioned Upon, as defined in this section above and excluding a change of the identity of the Trustee or its fees in the Deed of Trust, for the appointment of a Trustee in the place of the Trustee 82 whose services has ended – for which the Trustee cannot agree to any changes and/or waive them. (b) The alteration was approved by the holders of Debentures (Series C) in a special resolution. The Company shall deliver to the debenture holders a notice by means of an immediate report via the Securities Authority’s Internet site (the Magna system), regarding any alteration as above, immediately after it was made. Whenever the Trustee exercises its right under this section, it may require the holders of Debentures (Series C) to deliver the debenture certificates to it or to the Company for recording therein a caveat regarding any settlement, waiver, alteration or amendment as stated, and the Company shall record such a caveat at the Trustee's request. If the Trustee exercises its right under this section, it shall give the holders of Debentures (Series C) written notice to that effect within a reasonable time. Without derogating from the aforementioned, the terms of the debentures may also be revised as part of a settlement or compromise, approved by a court, pursuant to the Insolvency or Companies Acts. 29. Register of Debenture Holders 29.1. The Company shall maintain and manage at its registered office a register of holders of Debentures (Series C), in accordance with the Securities Law, which shall be open to inspection by any person. 29.2. The Company shall not be obligated to record in the register of holders of Debentures (Series C) any notice concerning an explicit, implicit or presumed trust, or a pledge or charge of any nature and kind, or any equitable right, claim or offset or any other right, in connection with the Debentures (Series C). The Company shall only recognize the title of the person in whose name the Debentures were registered. The legal heirs, administrators of the estate or executors of the will of the registered owner and any person becoming entitled to Debentures due to the bankruptcy of any registered owner (and in the case of a corporation – due to its liquidation) shall be entitled to be registered as the holder, after producing proofs which in the opinion of the Company's managers suffice to establish his right to be registered as a debenture holder. 30. Release Upon proof to the Trustee's satisfaction that all the Debentures (Series C) were paid or redeemed or upon the Company's depositing in trust with the Trustee amounts sufficient for the full and final redemption of the Debentures in 83 accordance with the provisions of this Deed, and upon proof to the Trustee's satisfaction that its entire fee and all the expenses incurred by the Trustee and/or its proxies in connection with its activity under the Deed of Trust and in accordance with its instructions were fully paid to it, the Trustee shall be obligated, upon the Company's first demand, to act with the monies deposited with it in respect of Debentures (Series C) whose redemption was not demanded in accordance with the terms of this Deed. 31. Appointment of Trustee; Trustee's Duties; Trustee's Powers; Termination of Trustee's Office 31.1. The Company hereby appoints the Trustee as Trustee for the holders of Debentures (Series C) only, pursuant to the provisions of Section 35B of the Securities Law. 31.2. The term of the appointment of the Trustee shall be until the date of convening of a holders' meeting in accordance with the provisions of Section 35B (a1) of the Securities Law. 31.3. From the effective date of this Deed of Trust, the Trustee's duties shall be in accordance with any statute and this Deed. 31.4. The Trustee shall act in accordance with the provisions of the Securities Law. 31.5. The Trustee shall represent the holders of Debentures (Series C) in any matter arising from the Company's obligations towards them, and for this purpose, it may act to realize the rights vested in the holders by law or by the Deed of Trust. 31.6. The Trustee may institute any proceeding to protect the holders' rights in accordance with any statute and the provisions set forth in this Deed of Trust. 31.7. The Trustee may appoint agents as set forth in Section 25 of this Deed. 31.8. The Trustee's actions shall be valid even if a defect is discovered in its appointment or capacity. 31.9. The Trustee's signature on this Deed of Trust does not constitute an expression of its opinion regarding the quality of the offered securities or the profitability of investing in them. 31.10. The Trustee is not obligated to notify any party of the signing of this Deed. The Trustee may not intervene in any way in the management of the Company's business or interests, and this is not included among its duties. Nothing stated in this section shall restrict the Trustee in any action it is required to perform in accordance with the provisions of this Deed. 84 31.11. Subject to any statutory provisions, the Trustee is not obligated and does not have a responsibility to act in a manner not provided for explicitly in this Deed of Trust, so that any information, including about the Company and/or in connection with the Company's ability to meet its obligations towards the debenture holders, comes to its attention. 31.12. Subject to any statutory provisions and the provisions of this Deed of Trust, by signing this Deed the Trustee undertakes to keep confidential any information provided to it by the Company, not to disclose it to another and not to use it in any way, unless such disclosure or use is required for the fulfillment of its function in accordance with the Securities Law, the Deed of Trust or a court order. Said duty of confidentiality shall also apply to any proxy of the Trustee (including any consultant, representative, etc.). It is clarified that the transfer of information to the debenture holders for the purpose of reaching a decision relating to their rights under the debenture or for the purpose of reporting on the Company's condition does not constitute a violation of said confidentiality undertaking. 31.13. The Trustee is entitled to rely on the framework of its Trusteeship with respect to any written document, including any letter of instruction, notice, request, consent or approval, purporting to be signed or issued by any person or entity who the Trustee believes in good faith to have signed or issued it. 31.14. The provisions of the Securities Law shall apply to the termination of the office of the Trustee. 31.15. Upon the expiration of the office of the Trustee, a new Trustee shall be appointed in its place in the holders' meeting. 31.16. Notwithstanding the foregoing, a holders' resolution to terminate the office of the Trustee and replace it with another Trustee shall be passed at a meeting at which holders of 50% of the nominal value of outstanding Debentures from Series C, or at an adjourned meeting at which holders of at least 10% of such balance are present, by a majority of 75%. 31.17. Subject to any statutory provisions, the Trustee whose office has expired shall continue in office up to the appointment of another Trustee. The Trustee shall transfer to the new Trustee all the documents and amounts that accumulated with it in connection with the trust under the Deed of Trust for Series C and shall sign any document required for this purpose. Any new Trustee shall have the same powers, duties, and authorities and shall be able to act in all respects as if it had been appointed as the Trustee from the outset. 31.18. The Company shall issue an immediate report in the event of the Trustee's resignation and/or the appointment of another Trustee.

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85 31.A. It is hereby clarified that the end of the Trustee's term of office does not derogate from the rights, claims or demands that the Company and/or the bondholders (Series C) will have towards the Trustee, if any, the cause of which is prior to the date of termination of his tenure as trustee, and this does not relieve the Trustee of any liability under any law. Furthermore, the end of the Trustee’s term shall not derogate from its rights, claims or assertions that the Trustee may have towards the Company and/or the debenture holders, if any, insofar as the cause thereof occurred prior to the date of termination of the end of his term of office as a Trustee, and this does not release the Company and/or the debenture holders of any liability by virtue of any law. 32. Meetings of Debenture Holders Meetings of holders of Debentures (Series C) shall be conducted as provided in the Second Schedule to this Deed. 33. Governing Law The law governing the Deed of Trust, its additions and its appendices, including the Debentures (and excluding the collateral documents specified in Appendix 6.1 of the Deed of Trust which are generated under foreign law), is the Israeli law. In any matter not referred to in this Deed and in case of a contradiction between the statutory provisions that cannot be conditioned upon and this Deed, the parties shall act in accordance with the provisions of the Israeli law only. 34. Exclusive Jurisdiction The sole court with jurisdiction to consider matters related to this Deed, its schedules and its appendices and the debenture appended hereto shall be the competent court in Tel Aviv-Jaffa. It shall be clarified that in order to exercise the collateral, the Trustee shall initiate proceedings in U.S. courts and in accordance with the law applicable to the Collateral Documents and/or the Pledged Properties, as the case may be. For details of the undertakings of the Company, Pacific Oak SOR Properties LLC, the REIT Fund, and officers of the Company, see Section 5.7 above. 35. General Without derogating from the other provisions of this Deed and the Debentures (Series C), any waiver, time extension, relaxation, silence or inaction ("waiver") on the part of the Trustee with respect to the non-fulfillment or partial or incorrect fulfillment of any of the undertakings towards the Trustee under this Deed and the Debentures (Series C), shall not be deemed as the Trustee's waiver of any 86 right but only as consent limited to the particular occasion on which it was given. Without derogating from the other provisions of this Deed and the Debentures (Series C), any change in the undertakings towards the Trustee requires the Trustee's prior written consent. Any other consent, whether verbal or by way of waiver and inaction or other than in writing, shall not be deemed consent at all. The Trustee's rights under this agreement are autonomous and independent of each other and are in addition to any existing and/or future right of the Trustee by law and/or agreement (including this Deed and the Debenture (Series C)). 36. Trustee's Liability 36.1. Notwithstanding any statutory provision and any provision of the Deed of Trust, if the Trustee acted for the fulfillment of its duties in good faith and within a reasonable time and clarified the facts which a reasonable Trustee would have clarified in the circumstances of the case, then it shall not be responsible for the damage caused, unless a peremptory judgment has determined that the Trustee acted with gross negligence. It is clarified that if a contradiction arises between the provision of this section and any other provision of the Deed of Trust, the provision of this section shall prevail. 36.2. If the Trustee acted in good faith and without negligence in accordance with the provisions of Section 35H (d2) or 35H (d3) of the Law, it shall not be liable for the performance of such action. 37. Addresses The parties' addresses shall be as set out in the preamble to this Deed, or any other address regarding which a suitable written notice is given to the other party. 38. Magna Authorization In accordance with the provisions of the Securities Regulations (Electronic Signature and Reporting), 5763-2003, the Trustee hereby authorizes the person authorized for that purpose by the Company to report electronically to the Securities Authority regarding this Deed of Trust. 87 In witness whereof the parties have hereunto set their hands: /s/ Reznik Paz Nevo Trusts Ltd. /s/ Michael A. Bender Reznik Paz Nevo Trusts Ltd. Pacific Oak SOR (BVI) Holdings Ltd. The undersigned affirm the statements set forth in the Deed of Trust and Appendix 6.1 as applies and as applicable and further undertake to fulfill all of the obligations pertaining to them, as applies. /s/ Michael A. Bender /s/ Michael A. Bender PACIFIC OAK SOR Acquisition XXXVI, LLC PACIFIC OAK SOR Acquisition XXXVII, LLC /s/ Michael A. Bender /s/ Michael A. Bender Pacific Oak SOR Richardson Holdings, LLC Pacific Oak SOR Richardson Holdings II, LLC /s/ Michael A. Bender /s/ Michael A. Bender Pacific Oak SOR Tule Springs Village 1 Phase 4 Remainder Parcels Owner, LLC Pacific Oak SOR Tule Springs Village 2 Parcels Owner, LLC /s/ Michael A. Bender /s/ Michael A. Bender Pacific Oak Sor Palisades III, LLC Pacific Oak Sor Palisades IV, LLC I, the undersigned, Laurie Selwitz, Notary, certify that this Deed of Trust has been duly signed by the signatories of Pacific Oak SOR (BVI) Holdings Ltd., PACIFIC OAK SOR Acquisition XXXVI, LLC, PACIFIC OAK SOR Acquisition XXXVII, LLC, Pacific Oak SOR Richardson Holdings, LLC, Pacific Oak SOR Richardson Holdings II, LLC, Pacific Oak SOR Tule Springs Village 1 Phase 4 Remainder Parcels Owner, LLC , Pacific Oak SOR Tule Springs Village 2 Parcels Owner, LLC, Pacific Oak Sor Palisades III, LLC and Pacific Oak Sor Palisades 88 IV, LLC through Mr Laurie Selwitz and his signature thereof binds the said Company in connection with this Deed of Trust. /s/ Laurie Selwitz Laurie Selwitz, Notary

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89 Pacific Oak SOR (BVI) Holdings LLC First Schedule Certificate of Debenture (Series C) Registered Debentures (Series C), bearing fixed annual interest at a rate to be determined in a tender (hereinafter: "the Interest") are repayable in a single payment on June 30, 2026, constituting 100% of the total par value of the Debentures (Series C) Interest on the outstanding balance of the principal of the Debentures (Series C) shall be paid twice per year, on June 30 and on December 31, starting December 31, 2023 and ending June 30, 2026 (inclusive). Except for the first interest period (as it is defined in the terms overleaf), any interest rate payment will be for the six-month period ended on the day prior to the date of payment. Registered Debenture (Series C) No. 1 Par value NIS __________ Fixed annual interest at a rate of __%. 1. This certificate attests that Pacific Oak SOR (BVI) Holdings LTD. ("the Company") shall remit principal and interest payments to the Mizrahi Tefahot Bank Nominee Company LTD or to whomever is the registered owner of this Debenture (Series C Debenture Holder), all pursuant to the remaining terms set forth in the Deed of Trust and terms overleaf. 2. The Debentures (Series C) are issued in accordance with a deed of trust ("Deed of Trust") dated July 6, 2023 signed between the Company and Reznik Paz Nevo Trusts Ltd. ("the Trustee"). 3. All the Debentures (Series C) will rank pari passu with one another with respect to the Company's obligations as per Debentures (Series C), without one having a preferred right or priority over another. 4. This Debenture (Series C) is issued subject to the terms set out overleaf, the terms set out in the Deed of Trust and the Shelf Offering Report. Signed under the Company's affixed seal on ___________ By: Authorized signatory ____________________ Authorized signatory ____________________ 90 I, the undersigned, Adv. ____, certify that this debenture certificate has been duly signed by Pacific Oak SOR (BVI) Holdings Ltd., in accordance with its articles, through Mr. ___________ and its signature thereof binds on the Company for the purposes of this debenture. ____, Adv. 91 Terms Overleaf 1. General In this Debenture (Series C), the terms below shall have the meaning set out next to them, and terms for which no meaning is provided below shall have the meaning given to them in the Deed of Trust, unless explicitly noted otherwise: "Business Day" or "Bank Business Day" Any day on which the TASE Clearing House and most banks in Israel are open for the execution of transactions. "Debenture Series" Registered Debentures of NIS1 par value each, the terms of which shall be in accordance with the Deed of Trust, the Debenture (Series C) certificate and the Shelf Offering Report, as such are defined in the Deed of Trust, pursuant to which they shall be issued. "Principal" The par value of the outstanding Debentures (Series C). "Special Resolution" A resolution adopted in a general meeting of holders of Debentures (Series C) at which at least two debenture holders holding at least 50% of the par value of the outstanding Debentures (Series C) are present in person or by proxy, or in an adjourned meeting at which at least two debenture holders holding at least 20% of the balance of said par value are present in person or by proxy, by a majority (whether in the original meeting or in the adjourned meeting) of at least two thirds (2/3) of the par value of the outstanding Debentures (Series C) represented in the vote. "Nominee Company" The Mizrahi Tefahot Bank nominee Company Ltd, or a nominee company replacing it, provided that all the securities of the Company listed for trading will be registered under its name. "Trading Day" A day on which transactions are executed on the Tel Aviv Stock Exchange Ltd. "TASE Clearing House" The Tel Aviv Stock Exchange Clearing House Ltd. 2. The Debentures 92 For details regarding the Debentures (Series C), see Section 2 of the Deed of Trust. 3. Terms of the Debentures (Series C) Offered under the Prospectus A. Registered Debentures (Series C) of NIS 1 par value each. The Debentures (Series C) shall be repayable in one (1) payment on June 30, 2026, which shall constitute 100% of the total nominal value of Debentures (Series C). B. The outstanding balance of the principal of the Debentures (Series C) shall bear fixed annual interest at a rate to be determined in a tender (subject to adjustments in the event of a change in the rating of the Debentures (Series C)9 and/or noncompliance with a financial covenant as set forth in Sections 5.2 and 5.3 of the Deed of Trust and/or arrears interest, if any). C. The Debentures (Series C) shall not be linked to any index or any linkage basis. D. The interest on the Debentures (Series C) shall be paid twice per year, on June 30 and December 31, starting December 31, 2023, and ending June 30, 2026 (inclusive). Except for the first interest period (as it is defined below), any interest rate payment will be for the six-month period ended on the day prior to the date of payment (hereinafter: "the Interest Period"). E. The first payment of interest on the Debentures (Series C) shall be made on December 31, 2023, for the period commencing on the first trading day after the tender date of the Debentures (Series C), and ending on the last day before the first interest payment date (namely, December 30, 2023) (hereinafter: "the First Interest Period"), calculated according to the actual days in that period based on 365 days in a year. The interest rate payable for a particular interest period (excluding the first interest period) (i.e. the period commencing on the payment day of the previous interest period and ending on the last day before the next payment date after the commencement thereof) shall be calculated at the annual interest rate divided by two (hereinafter: "the Semiannual Interest Rate"). The Company shall publish in an immediate report regarding the results of the issuance, the first interest rate, the annual interest rate, and the semiannual interest rate. F. Payments pertaining to the interest due from Debentures Series C shall be paid to holders of the Debentures (Series C) on June 18 (for payments due June 30) and December 19 (for payments due December 31), starting December 31, 2023 and ending June 30, 2026 (inclusive), except for the 9 It is clarified that as long as the Debentures (Series C) are rated by more than one rating agency, the examination of the rating for the purpose of adjusting the interest rate to a change in the rating (should there be any such change) shall be done, at all times, whichever rating is lower.

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93 final payment due on June 30, 2026 (to clarify, the initial interest payment shall be remitted on December 31, 2023). The sole principal payment and the final interest payment shall be paid to those individuals whose names are recorded in the registrar upon the payment date and shall be remitted against the delivery of Series C Debentures to the Company upon the final payment date (June 30, 2026), in Company’s registered office or any other location announced by the Company. Company’s aforementioned announcement shall be published no later than five (5) working days prior to the final payment date. G. It is hereby clarified that anyone who is not counted among the debenture holders on any of the payment dates specified in Subsection (f) above shall not be entitled to payment for the period commencing before that date. 4. Principal and Interest Payments on the Debentures (Series C) A. Any payment on account of principal and/or interest delayed more than seven (7) days after the date set for payment thereof under the terms of the debenture, for a reason within the Company's control, shall bear arrears interest, as hereinafter defined, from the date set for payment to the date of actual payment thereof. In this regard, the rate of arrears interest shall be the debentures interest rate as set forth in the above Section 3(B), with the addition of 3%, all on an annual basis (hereinafter: "arrears interest"). The Company shall give notice of the arrears interest rate that accumulated (if at all), the precise interest rate for the period which includes the semiannual interest rate (subject to adjustments due to changes in the rating of the Debentures (Series C) and/or failure to comply with a Financial Covenant as set forth in Sections 5.2 and 5.3 to the Deed of Trust) and the interest arrears as well as the payment date in an immediate report, two (2) trading days before the date of actual payment. In this regard, payment on account of principal and/or interest that was not deposited with the Trustee in accordance with Section 14.2 of the Deed Trust, will be deemed as an unmade payment for a reason dependent on the Company. B. The payment to the entitled persons shall be made by check or by a bank transfer and/or through the TASE Clearing House to the credit of the bank account of the holders of Debentures (Series C). If the Company is unable, for any reason beyond its control, to pay any amount to the persons entitled thereto, the provisions of Section 7 below shall apply. C. Any holder of a Debenture (Series C) who so wishes, may notify the Company of the details of the bank account for crediting the payments to that holder under the Debentures (Series C) as stated, or of a change in the details of said account or in his address, as the case may be, in a notice sent 94 by registered mail to the Company. The Company shall be required to act in accordance with the holder's notice of change after the expiration of 15 business days from the day on which the Company received such notice. D. If a debenture holder who is registered in the register of holders failed to give the Company timely notice of the details of the bank account to which payments under the debenture should be transferred to him, any such payment shall be made in a check sent by registered mail to his last address recorded in the register of holders. The sending of a check to an entitled person by registered mail as stated shall be deemed in all respects as payment of the amount specified thereon on the date of mailing thereof, subject to the check being deposited in the bank and actually cashed. 5. Deferral of Dates If the date specified for making any payment of principal and/or interest falls on a day that is not a business day, the payment date shall be deferred to the business day immediately following that day, with no additional payment, and the "effective date" for determining entitlement to redemption and interest shall not be changed by reason thereof. 6. Securing of Debentures See Section 6 of the Deed of Trust. 7. Nonpayment for a Reason out of the Company's Control As to nonpayment for a reason out of the Company's control, see the provisions of Section 14 of the Deed of Trust. 8. Register of Debenture Holders As to the register of holders of Debentures (Series C), see Section 29 of the Deed of Trust. 9. Splitting of Debenture Certificates A. In respect of Debentures (Series C) registered in the name of one holder, one certificate shall be issued to the holder or, at his request several certificates shall be issued to him in a reasonable quantity (the certificates discussed in this section are hereinafter referred to as "the certificates"). B. Any debenture certificate may be split into several debenture certificates with a total par value equal to the nominal amount of the certificate it is 95 proposed to split, provided such certificates are only issued in a reasonable quantity and in full New Shekels. The split shall be made against delivery of the relevant debenture certificate to the Company at its registered office for the performance of the split, together with a written request to make the split, signed by the registered holder. All the costs entailed in the split, including taxes and levies, if any, shall be borne by the party requesting the split. 10. Transfer of Debentures The Debentures are transferrable with respect to the full amount of the nominal principal, and also a part thereof, provided it is in whole shekels. Any transfer of the Debentures shall be made by a deed of transfer drawn up in the accepted form, duly signed by the registered holder or his legal representatives and by the transferee or his legal representatives, which shall be delivered to the Company at its registered office together with the certificates of the Debentures which are being transferred on the basis thereof as well as any other reasonable proof as requested by the Company in evidence of the transferor's right to transfer them. If any tax or other mandatory payment applies to the deed of transfer of the Debentures, the Company shall be given reasonable proof of the payment thereof. The Company's articles as relating to the transfer and endorsement of fully paid- up shares shall apply, mutatis mutandis, as the case may be, to the transfer and endorsement of the Debentures. If only a part of the amount of the nominal principal in a debenture certificate is transferred, the debenture certificate shall first be split, as provided in Section 9 below, into the number of debenture certificates necessitated thereby, such that the total of the amounts of the nominal principal in those debenture certificates is equal to the amount of the nominal principal of such debenture certificate. Following the fulfillment of all the above stated conditions, the transfer shall be recorded in the Register, and the Company may demand that a caveat regarding such transfer be recorded on the transferred debenture certificate that is to be transferred to the transferee, or that a new debenture certificate be issued to him in its stead, and the transferee shall be subject to all the conditions set forth in the transferred debenture certificate, such that the term "holder" where it appears shall be deemed to refer to the "transferee," and the transferee shall be regarded as the "holder" for purposes of the Deed of Trust. 11. Early Redemption As to early redemption of the Debentures at the initiative of the TASE and as to early redemption at the Company's initiative, see Section 7 of the Deed of Trust. With regard to an involuntary early repayment, see Section 5.8 of Appendix 6.1 to the Deed of Trust. 96 12. Purchase of Debentures by the Company and/or a Related Person As to the purchase of the Debentures, see Section 3 of the Deed of Trust. 13. Waiver, Settlement, and Changes to Deed of Trust As to waiver, settlement, and changes to the Deed of Trust see Section 28 of the Deed of Trust. 14. Meetings of Debenture Holders General meetings of the holders of Debentures (Series C) shall convene and be conducted in the manner provided in the Second Schedule to the Deed of Trust. 15. Receipt from Debenture Holders As to receipts from the debenture holders, see Section 15 of the Deed of Trust. 16. Immediate Repayment As to immediate repayment of the Debentures, see Section 8 of the Deed of Trust. 17. Notices As to notices, see Section 27 of the Deed of Trust. 18. Governing Law and Jurisdiction As to the governing law and jurisdiction, see Sections 33 and 34 of the Deed of Trust. 19. Priority In case of a contradiction between this schedule and the Deed of Trust, the provisions of the Deed of Trust shall prevail. It is hereby clarified that as of the date of signing the Deed, there is no contradiction between the provisions described in this Schedule and the provisions described in the Deed of Trust ***

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exhibit141pacificoaksorc

Exhibit 14.1 PACIFIC OAK STRATEGIC OPPORTUNITY REIT, INC. CODE OF CONDUCT AND ETHICS Pacific Oak Strategic Opportunity REIT, Inc. (the “Company”) has established this Code of Conduct and Ethics (the “Code”) that applies to (i) the Company’s officers and directors and (ii) the managers, officers, employees and independent contractors of Pacific Oak Capital Advisors, LLC (the “Advisor”) and Pacific Oak Capital Markets, LLC (the “Dealer Manager”) who regularly provide services to or for the benefit of the Company (collectively, the Advisor and Dealer Manager are “Pacific Oak Entities”). The persons set forth under (i) and (ii) above are “Covered Persons” under the Code. The Code does not address every issue that may arise, but it sets out basic principles and a methodology to help guide the Covered Persons in the attainment of their common goal of compliance with the law and the performance of their responsibilities in an ethical manner. 1. COMPLIANCE OFFICER The Company’s Compliance Officer will be responsible for ensuring that the Code is established and effectively communicated to all Covered Persons and will handle the Company’s day-to-day compliance matters. The Compliance Officer will be the Company’s Chief Financial Officer. Among the responsibilities of the Compliance Officer are: • Receiving, reviewing, investigating and resolving concerns and reports on the matters described in the Code; • Providing guidance on the meaning and application of the Code; and • Reporting periodically and as matters arise (if deemed necessary by the Compliance Officer) on the implementation and effectiveness of the Code and other compliance matters and recommending any updates or amendments to the Code that the Compliance Officer deems necessary to (i) management of the Company and (ii) the Company’s Audit Committee. The Compliance Officer is the “go to” person for questions and concerns relating to the Code, especially in the event of a potential violation. The Compliance Officer will, with the assistance and cooperation of the Company’s officers and directors, foster an atmosphere where Covered Persons are comfortable communicating and/or reporting concerns and possible violations of the Code. 2. REPORTING VIOLATIONS, INVESTIGATIONS, ENFORCEMENT AND WHISTLEBLOWER/NON-RETALIATION POLICY The Company’s efforts to ensure observance of, and adherence to, the goals and policies outlined in the Code mandate that Covered Persons promptly report material transactions, relationships, acts, failures to act, occurrences or practices that such Covered Person believes, in good faith, are inconsistent with, in violation of or reasonably could be expected to give rise to a violation of the Code. Covered Persons should report any suspected violations of the Company’s financial reporting obligations or any complaints or concerns about questionable accounting or auditing practices in accordance with the procedures of the Code. Covered Persons should note that persons outside the Company may report complaints or concerns about suspected violations or concerns regarding internal accounting controls, accounting or auditing matters. Covered Persons should report these concerns and complaints immediately upon receipt. Covered Persons are expected to become familiar with and to understand the requirements of the Code. If a Covered Person becomes aware of a suspected violation, he or she should not try to investigate it or resolve it on his or her own. Prompt disclosure to the appropriate parties is vital to ensuring a thorough and timely investigation and resolution. The circumstances should be reviewed by appropriate personnel as promptly as possible, as delay may affect the results of any investigation. A violation of the Code, or of applicable laws and/or governmental regulations, is a serious matter and could have legal implications. Allegations of such behavior are not taken lightly and should not be made to embarrass anyone or put such person in a false light. Reports of suspected violations should always be made in good faith. Reporting Violations Generally Approaches Covered Persons may use to handle their reporting obligations are: In the event a Covered Person believes a violation of the Code, or a violation of applicable laws and/or governmental regulations has occurred or a Covered Person has observed or becomes aware of conduct that appears to be contrary to the Code, he or she should immediately report the situation to the Compliance Officer, or if the Compliance Officer is the individual responsible for the violation or suspected violation of the Code or if confidentiality and anonymity are needed, then such Covered Person should immediately report the situation to the Ethics Hotline. If a Covered Person has or receives notice of a complaint or concern regarding the Company’s financial disclosure, accounting practices, internal accounting controls, auditing, or questionable accounting or auditing matters, such Covered Person must immediately advise an internal audit representative or, if confidentiality and anonymity are needed, then he or she should immediately report the complaint or concern to the Ethics Hotline or the Audit Committee Chair. Anonymous Reporting If a Covered Person wishes to report any such matters anonymously or confidentially, he or she should report the suspected violation or other complaint or concern by using the Company’s Ethics Hotline or by sending a letter to the Audit Committee Chair. All Covered Persons may submit a report by any of the following: • Via the internet at https://safehotline.com/ (Company ID: 6421442834) or • By calling the toll free hotline at 1-855-662-7233 (Company ID: 6421442834) or • By mailing a description of the suspected violation or concern to: Audit Committee Chair c/o Pacific Oak Strategic Opportunity REIT, Inc. 11766 Wilshire Blvd., Suite 1670 Los Angeles, CA 90025 Reports made via the Ethics Hotline will be sent to an internal audit representative and the Audit Committee Chair, provided that no person named in the report will receive the report directly. Non-Retaliation Policy It is a federal crime for anyone to retaliate intentionally against any person who provides truthful information to a law enforcement official concerning a possible violation of any federal law. Moreover, the Company will not permit any form of intimidation or retaliation against any reporting Covered Person because of any lawful act done by that person to: • provide information or assist in an investigation regarding any conduct that the reporting person reasonably believes constitutes a violation of laws, rules, regulations, the Code, or any Company policies; or • file, testify, participate in, or otherwise assist in a proceeding relating to a violation of any law, rule or regulation. Any act of intimidation or retaliation against a Covered Person for reporting alleged violations of the Code while acting in good faith is a violation of Company policy and should be reported immediately under the Code. In cases in which a Covered Person reports a suspected violation in good faith and is not engaged in the questionable conduct, the Company will attempt to keep its discussions with the Covered Person confidential to the extent reasonably possible. In the course of its investigation, the Company may find it necessary to share information with others on a “need to know” basis or may be required by law to disclose information. Internal Investigation When an alleged violation of the Code is reported, the Company shall take prompt and appropriate action in accordance with the law and regulations and otherwise consistent with good business practice. If the suspected violation appears to involve either a possible violation of law or an issue of significant corporate interest or if the report involves a complaint or concern regarding the Company’s financial disclosure, internal accounting controls, questionable auditing or accounting matters or practices or other issues relating to the Company’s accounting or auditing, the Compliance Officer or other person receiving the report, as appropriate, shall notify the Audit Committee within two business days and a preliminary investigation of the report will be performed and the outcome presented to the Audit Committee within a reasonable time from the date the complaint was submitted. If a suspected violation (including any fraud, whether or not material) involves any Covered Person, any person who received such report should immediately report the alleged violation to the Company’s Ethics Hotline or Internal Audit Department. The Chair of the Audit Committee shall assess the situation and determine the appropriate course of action. At a point in the process consistent with the need not to compromise the investigation, a person who is suspected of a violation shall be apprised of the alleged violation and shall have an opportunity to provide a response to the investigator. Disciplinary Actions Subject to the following sentence, the Compliance Officer shall be responsible for implementing the appropriate disciplinary action in accordance with the Company’s policies and procedures for any person who is found to have violated the Code. If the Compliance Officer is the individual responsible for the violation or suspected violation of the Code, then the Chair of the Audit Committee will be responsible for implementing the appropriate disciplinary action. Corrective Action Subject to the following sentence, in the event of a violation of the Code, the Compliance Officer should assess the situation to determine whether the violation demonstrates a problem that requires remedial action as to the Company’s policies and procedures. If a violation has been reported to the Chair of the Audit Committee, the Audit Committee shall be responsible for determining appropriate remedial or corrective actions. Such corrective action shall be documented, as appropriate. Retention of Reports and Complaints All notices or reports of suspected violations, complaints or concerns pursuant to this Code shall be considered confidential and shall be recorded in a log, indicating the description of the matter reported, the date of the report and the disposition thereof. The log shall be retained for five years and shall be maintained by the Compliance Officer. Cooperation by Pacific Oak The Code is designed to cover reports of suspected violations, complaints or concerns that directly or indirectly affect the Company as a public company. Since the Company does not currently have any employees and its day-to-day operations and asset management are performed by officers and employees of Pacific Oak Entities pursuant to an advisory agreement between the Company and the Advisor and a dealer manager agreement between the Company and the Dealer Manager, this Code shall be formally adopted by each Pacific Oak Entity with respect to the Covered Persons, and each such Pacific Oak Entity shall fully cooperate with the Company in enforcing the provisions of this Code. 3. STANDARDS OF CONDUCT AND ETHICS Compliance with Laws and Regulations The Company is committed to compliance with the laws and regulations of the jurisdictions in which it operates. Numerous federal, state and local laws and regulations define and establish obligations to which Covered Persons are subject. Covered Persons must comply with applicable laws, rules and regulations in performing their duties and services for the Company. Covered Persons should consult the Compliance Officer with any questions about the legality of conduct affecting the Company. If a Covered Person violates these laws or regulations in performing his or her duties or services for the Company, the individual not only risks indictment, prosecution and penalties, and civil actions, such person also subjects the Company to similar risks and penalties. Insider Trading U.S. securities laws prohibit abuses of material, non-public information (i.e., insider trading). Covered Persons who have access to material, nonpublic information, regardless of its source, are not permitted to use or share that information for their personal benefit for securities trading purposes or for any other purpose except the conduct of the Company’s business. All material, non-public information about the Company should be considered confidential information. It is always illegal to trade in the Company’s securities while in possession of material, nonpublic information, and it is also generally illegal to communicate or “tip” such information to others who do not have a legitimate business need for acquiring information. Full, Fair, Accurate, Timely and Understandable Disclosure The rules and regulations of the Securities and Exchange Commission require that all disclosure in reports and documents that the Company files with, or submits to, the Securities and Exchange Commission,

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and in other public communications made by the Company is full, fair, accurate, timely and understandable. Covered Persons are responsible for these disclosures and must act to ensure compliance with these disclosure requirements by taking the steps available to them, consistent with their role within the Company, to assist the Company in meeting its reporting obligations. In particular, Covered Persons should provide prompt and accurate answers to all inquiries made to them in connection with the Company’s preparation of its public reports and disclosure. Ethical Obligations It is important that the Covered Persons promote integrity throughout the Company and foster a culture throughout the Company as a whole that ensures the fair and timely reporting of the Company’s results of operations and financial condition and other financial information. Each Covered Person agrees that he or she will: • Perform his or her duties in an honest and ethical manner; • Handle actual or apparent conflicts of interest between his or her personal and professional relationships in an ethical manner; and • Proactively promote and be an example of ethical behavior in the work environment. Conflicts of Interest and Corporate Opportunities Covered Persons should be conscientious of actual and potential conflicts of interest with respect to the interests of the Company and seek to avoid such conflicts or handle such conflicts in an ethical manner at all times consistent with applicable law. A “conflict of interest” occurs when a Covered Person’s private interest in any material respect interferes with the interests of, or his or her service to, the Company. For example, a conflict of interest would arise if a Covered Person, or a member of his or her family, receives improper personal benefits as a result of his position with or relationship to the Company. Although typically not presenting an opportunity for improper personal benefit, conflicts arise from, or as a result of, the contractual relationships between the Company and the Pacific Oak Entities, including any advisory agreement with the Advisor and any dealer manager agreement with the Dealer Manager. As a result, the Code recognizes that the Covered Persons will, in the normal course of their duties (whether formally for the Company or for Pacific Oak Entities or both), be involved in establishing policies and implementing decisions that may have different effects on Pacific Oak Entities and the Company. The participation of the Covered Persons in such activities is inherent in the contractual relationship among the Company and the Pacific Oak Entities and is consistent with the performance of their duties as officers and directors of the Company and/ or as managers, officers, employees and independent contractors of the Pacific Oak Entities. The following list provides examples of prohibited conflicts of interest under this Code, but Covered Persons should keep in mind that these examples are not exhaustive. The overarching principle is that the personal interest of a Covered Person should not be placed improperly before the interest of the Company. Each Covered Person must: • not use his or her personal influence or personal relationships improperly to influence business decisions or financial reporting by the Company whereby the Covered Person would benefit personally to the detriment of the Company; • not cause the Company to take action, or fail to take action, for the individual personal benefit of the Covered Person to the detriment of the Company; and • report at least annually any affiliations or other relationships related to conflicts of interest. Additionally, federal securities laws prohibit personal loans to directors and executive officers by the Company. In order to avoid situations in which a conflict of interest involving a Covered Person may result in an improper benefit, all transactions involving a conflict of interest must be approved by a majority of the Company’s Independent Directors not otherwise interested in the transaction as fair and reasonable to the Company and on terms no less favorable to the Company than those available from unaffiliated third parties. Conflicts of interest may not always be clear-cut, so if a Covered Person has a question, he or she shall promptly bring it to the attention of the Compliance Officer or, if the Compliance Officer is affected by the conflict of interest, then to the Chair of the Conflicts Committee. Confidentiality Policy For Complaints and Reports of Violations The Company will, to the extent reasonably possible, keep confidential both the information and concerns reported under the Code, and its discussions and actions in response to these reports and concerns. In the course of its investigation, however, the Company may find it necessary to share information with others on a “need to know” basis or may be required by law to disclose information. For Company Information All confidential information concerning the Company obtained by Covered Persons is the property of the Company and must be protected. Confidential information includes all nonpublic information that could be of use to competitors, be harmful to the Company, or impair the value of any asset, if disclosed. Covered Persons must maintain the confidentiality of such information entrusted to them by the Company, except when disclosure is authorized by the Company or required by law. Whenever feasible, Covered Persons should consult with the Compliance Officer or, if the Compliance Officer would be affected by the disclosure, the designated human resources representative or internal audit representative, if they believe they have a legal obligation to disclose confidential information. Examples of confidential information include, but are not limited to: information that could be of use to the Company’s competitors; business trends identified by the Company; projections; information about financial performance; new marketing plans; information about potential acquisitions, divestitures and investments; public or private securities offerings or changes in dividend policies or amounts; significant personnel changes; and existing or potential major contracts or finance sources or the loss thereof. This obligation with respect to confidential information extends beyond the workplace. It applies to communications among Covered Persons and their family members and continues to apply even after their affiliation with the Company terminates. Fair Dealing The Company’s goal is to conduct its business with integrity. Covered Persons should endeavor to deal honestly with the Company’s competitors, investors, employees, consultants and those with whom the Company conducts its business. Under federal and state laws, the Company is prohibited from engaging in unfair methods of competition, and unfair or deceptive acts and practices. Covered Persons should not take unfair advantage of anyone through manipulation, concealment, abuse of privileged information, misrepresentation of material facts, or any other unfair dealing. The Company will not seek competitive advantages through unethical or illegal business practices. Examples of prohibited conduct include, but are not limited to: • bribery or payoffs to induce business or breaches of contracts by others; or • making false or deceptive claims or comparisons about competitors or their products or services. Each Covered Person must disclose prior to or at the time of his or her hire or election as a director the existence of any employment agreement, non-compete or non-solicitation agreement, confidentiality agreement or similar agreement with a former employer that in any way restricts or prohibits the performance of any duties or responsibilities of his or her positions with the Company. Recordkeeping All of the Company’s books, records, accounts and financial statements must be maintained in reasonable detail, must appropriately reflect the Company’s transactions and must conform both to applicable legal requirements and to the Company’s system of internal controls. Unrecorded or “off the books” funds or assets should not be maintained unless permitted by applicable law or regulation and authorized by the Audit Committee. Records should always be retained or destroyed according to the Company’s document retention policy. 4. ACCOUNTABILITY Each Covered Person must: • upon adoption of the Code (or thereafter, as applicable, upon becoming a Covered Person), affirm to the Company that he or she has received, read and understands the Code; • annually thereafter affirm to the Company that he or she has complied with the requirements of the Code; • not retaliate against any other Covered Person or employee of the Company or any Pacific Oak Entity for reports of potential violations that are made in good faith; and • follow the notification procedures set forth in the Code promptly if he or she knows of any violation of the Code. 5. WAIVER OR AMENDMENT Any waiver or amendment of this Code that applies to any Covered Person must be approved by the Conflicts Committee and, with respect to the Company’s principal executive officer, principal financial officer, principal accounting office or controller or persons performing similar functions, disclosed as required by federal securities law. The Code is not intended to create, nor does it create, any contractual rights related to employment.

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exhibit211subsidiariesof

Exhibit 21.1 Pacific Oak Strategic Opportunity REIT, Inc. List of Subsidiaries as of March 28, 2025 110 William Junior Mezz III, LLC Pacific Oak SOR Acquisition XXV, LLC 110 William Mezz III, LLC Pacific Oak SOR Acquisition XXVII, LLC 110 William Property Investors III, LLC Pacific Oak SOR Acquisition XXIX, LLC 1180 Raymond Urban Renewal, LLC Pacific Oak SOR Acquisition XXX, LLC CA Capital Management Services III, LLC Pacific Oak SOR Acquisition XXXII, LLC Pacific Oak SOR II Finance LLC Pacific Oak SOR Acquisition XXXIII, LLC Pacific Oak SOR Greenway I, LLC Pacific Oak SOR Acquisition XXXIV, LLC Pacific Oak SOR Greenway III, LLC Pacific Oak SOR Acquisition XXXV, LLC Pacific Oak SOR Richardson Acquisition I, LLC Pacific Oak SOR Acquisition XXXVI, LLC Pacific Oak SOR Richardson Holdings II, LLC Pacific Oak SOR Acquisition XXXVII, LLC Pacific Oak SOR Richardson Holdings, LLC Pacific Oak SOR Austin Suburban Portfolio, LLC Pacific Oak SOR Palisades I, LLC Pacific Oak SOR Battery Point, LLC Pacific Oak SOR Palisades II, LLC Pacific Oak SOR CMBS Owner, LLC Pacific Oak SOR Palisades III, LLC Pacific Oak SOR City Tower, LLC Pacific Oak SOR Palisades IV, LLC Pacific Oak SOR Crown Pointe, LLC Pacific Oak SOR Georgia 400 Center, LLC Pacific Oak SOR Debt Holdings II LLC Pacific Oak Finance LLC Pacific Oak SOR Equity Holdings X LLC Pacific Oak Strategic Opportunity Holdings LLC Pacific Oak SOR Marquette Plaza, LLC Pacific Oak Strategic Opportunity Limited Partnership Pacific Oak SOR Park Highlands, LLC Pacific Oak SOR 110 William JV, LLC Pacific Oak SOR Park Highlands JV, LLC Pacific Oak SOR 353 Sacramento Street, LLC Pacific Oak SOR Park Highlands II, LLC Pacific Oak SOR 8 and 9 Corporate Centre, Inc. Pacific Oak SOR Park Highlands II JV, LLC Pacific Oak SOR Acquisition VII, LLC Pacific Oak SOR Park Highlands TRS, LLC Pacific Oak SOR Acquisition VIII, LLC Pacific Oak SOR Properties, LLC Pacific Oak SOR Acquisition X, LLC Pacific Oak SOR Richardson Land JV, LLC Pacific Oak SOR Acquisition XI, LLC Pacific Oak SOR Richardson Portfolio JV, LLC Pacific Oak SOR Acquisition XVIII, LLC Pacific Oak SOR SREF III 110 William, LLC Pacific Oak SOR Acquisition XXII, LLC Pacific Oak SOR TRS Services, LLC Pacific Oak SOR X Acquisition II, LLC Pacific Oak SOR X Acquisition I, LLC Pacific Oak SOR Pac Oak Opp Zone Fund I, LLC Pacific Oak SOR (BVI) Holdings, Ltd. PORT OP GP LLC SOR X Acquisition III, LLC PORT OP LP Pacific Oak Residential Trust, Inc. Reven Housing Funding Manager 2, LLC SOR Port Holdings, LLC Reven Housing Funding 2, LLC Pacific Oak SOR II Holdings, LLC Reven Housing Funding Manager, LLC Pacific Oak SOR II, LLC Reven Housing Funding 1, LLC BPDM Owner 2018-1 LLC BPPO Owner 2020-1 LLC BPDM Owner 2018-2 LLC BPPO Properties 2020-1 LLC BPDM Properties 2018-1 LLC 210 West 31st Street Owner, LLC BPDM Properties 2018-2 LLC IC Myrtle Beach LLC Pacific Oak Residential Trust II, Inc. IC Myrtle Beach Mezz, LLC PORT II OP LP IC Myrtle Beach Operations LLC PORT II Owner 2020-1 LLC IC Myrtle Beach Operations Mezz, LLC PORT II Properties 2020-1 LLC Pacific Oak SOR II 210 West 31st Street, LLC BPDM Owner 2020-1 LLC Pacific Oak SOR II 210 West 31st Street JV, LLC POTN Owner 2020-1 LLC Pacific Oak SOR II Acquisition I, LLC BPDM Properties 2020-1 LLC Pacific Oak SOR II Acquisition II, LLC POTN Properties 2020-1 LLC Pacific Oak SOR II Acquisition IV, LLC Pacific Oak SOR Tule Springs Owner TRS, LLC Pacific Oak SOR II Acquisition V, LLC Pacific Oak SOR Tule Springs Village 1 Phase 4 Remainder Parcels Owner, LLC Pacific Oak SOR II Acquisition VI, LLC Pacific Oak SOR Tule Springs Village 2 Parcels Owner, LLC Pacific Oak SOR II Acquisition VII, LLC Pacific Oak SOR II Investam LLC Pacific Oak SOR II Acquisition VIII, LLC Pacific Oak SOR II Investam II LLC Pacific Oak SOR II Debt Holdings II, LLC Pacific Oak SOR II Lincoln Court, LLC Pacific Oak SOR II Debt Holdings II X, LLC Pacific Oak SOR II Lofts at NoHo Commons, LLC Pacific Oak SOR II Grace Court JV, LLC Pacific Oak SOR II Lofts at NoHo Commons JV, LLC Pacific Oak SOR/VERUS 800 Adams, LLC Pacific Oak SOR II Myrtle Beach JV, LLC Pacific Oak SOR II IC Myrtle Beach Operations LLC Pacific Oak SOR II Myrtle Beach TRS JV, LLC Pacific Oak SOR II IC Myrtle Beach Property LLC Pacific Oak SOR II Non-US Debt X LLC Pacific Oak Opportunity Zone Fund I, LLC Pacific Oak SOR II Oakland City Center, LLC Pacific Oak SOR II Q&C JV, LLC Pacific Oak SOR II Q&C Operations, LLC Pacific Oak SOR II Q&C Operations JV, LLC Pacific Oak SOR II Q&C Property, LLC Pacific Oak SOR II Q&C Property JV, LLC Pacific Oak SOR II Q&C TRS JV, LLC Pacific Oak SOR II TRS Holdings, LLC Pacific Oak SOR II/Verus Grace Court, LLC Pacific Oak SOR Non-US Properties II LLC Pacific Oak SOR US Properties II LLC Pacific Oak Strategic Opportunity Limited Partnership II Pacific Oak Strategic Opportunity Holdings II LLC Pacific Oak/VERUS Armory and Land, LLC Pacific Oak/VERUS GC Phoenix, LLC NoHo Commons Pacific Owner LLC

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Document

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in the Registration Statement (Post-Effective Amendment No. 12 to Form S-11 on Form S-3 No. 333-156633) of Pacific Oak Strategic Opportunity REIT, Inc. and in the related Prospectus of our report dated March 28, 2025, with respect to the consolidated financial statements and schedule of Pacific Oak Strategic Opportunity REIT, Inc., included in this Annual Report (Form 10-K) for the year ended December 31, 2024.

/s/ Ernst & Young LLP

Irvine, California

March 28, 2025

Document

Exhibit 31.1

Certification of Chief Executive Officer pursuant to

Section 302 of the Sarbanes-Oxley Act of 2002

I, Keith D. Hall, certify that:

1.I have reviewed this annual report on Form 10-K of Pacific Oak Strategic Opportunity REIT, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)     Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)     Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)     Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)     Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)     All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)     Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	March 28, 2025	By:	/s/ Keith D. Hall
			Keith D. Hall
			Chief Executive Officer and Director
			(principal executive officer)

Document

Exhibit 31.2

Certification of Chief Financial Officer pursuant to

Section 302 of the Sarbanes-Oxley Act of 2002

I, Michael A. Bender, certify that:

1.I have reviewed this annual report on Form 10-K of Pacific Oak Strategic Opportunity REIT, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)     Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)     Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)     Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)     Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)     All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)     Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	March 28, 2025	By:	/s/ Michael A. Bender
			Michael A. Bender
			Chief Financial Officer
			(principal financial officer)

Document

Exhibit 32.1

Certification pursuant to 18 U.S.C. Section 1350,

as Adopted pursuant to Section 906 of the

Sarbanes-Oxley Act of 2002

In connection with the Annual Report on Form 10-K of Pacific Oak Strategic Opportunity REIT, Inc. (the “Registrant”) for the year ended December 31, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, Keith D. Hall, Chief Executive Officer and Director of the Registrant, hereby certifies, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to the best of his knowledge and belief:

1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

Date:	March 28, 2025	By:	/s/ Keith D. Hall
			Keith D. Hall
			Chief Executive Officer and Director
			(principal executive officer)

Document

Exhibit 32.2

Certification pursuant to 18 U.S.C. Section 1350,

as Adopted pursuant to Section 906 of the

Sarbanes-Oxley Act of 2002

In connection with the Annual Report on Form 10-K of Pacific Oak Strategic Opportunity REIT, Inc. (the “Registrant”) for the year ended December 31, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, Michael A. Bender, the Chief Financial Officer of the Registrant, hereby certifies, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to the best of his knowledge and belief:

1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

Date:	March 28, 2025	By:	/s/ Michael A. Bender
			Michael A. Bender
			Chief Financial Officer
			(principal financial officer)

Document

Exhibit 99.3

CONSENT OF INDEPENDENT VALUATION EXPERT

We hereby consent to the reference to our name and description of our role in the valuation process of certain commercial real estate assets of Pacific Oak Strategic Opportunity REIT, Inc. (the “Company”) being included or incorporated by reference into the Company’s Registration Statement on Form S-3 (File No. 333-156633) and the related prospectus, included therein, by being filed on an Annual Report on Form 10-K for the fiscal year ended December 31, 2024. In giving this consent, we do not admit that we are within the category of persons whose consent is required by Section 7 of the Securities Act of 1933, as amended.

March 28, 2025	/s/ Colliers International Valuation of Advisory Services, LLC
	Colliers International Valuation of Advisory Services, LLC

Document

Exhibit 99.4

CONSENT OF INDEPENDENT VALUATION EXPERT

We hereby consent to the reference to our name and description of our role in the valuation process of certain commercial real estate assets of Pacific Oak Strategic Opportunity REIT, Inc. (the “Company”) being included or incorporated by reference into the Company’s Registration Statement on Form S-3 (File No. 333-156633) and the related prospectus, included therein, by being filed on an Annual Report on Form 10-K for the fiscal year ended December 31, 2024. In giving this consent, we do not admit that we are within the category of persons whose consent is required by Section 7 of the Securities Act of 1933, as amended.

March 28, 2025	/s/ Kroll, LLC
	Kroll, LLC

Document

Exhibit 99.5

CONSENT OF INDEPENDENT VALUATION EXPERT

We hereby consent to the reference to our name and description of our role in the valuation process of certain residential real estate assets of Pacific Oak Strategic Opportunity REIT, Inc. (the “Company”) being included or incorporated by reference into the Company’s Registration Statement on Form S-3 (File No. 333-156633) and the related prospectus, included therein, by being filed on an Annual Report on Form 10-K for the fiscal year ended December 31, 2024. In giving this consent, we do not admit that we are within the category of persons whose consent is required by Section 7 of the Securities Act of 1933, as amended; nor do we consent to, adopt or otherwise express any views as to the accuracy or completeness of any other representations in the referenced documents.

March 28, 2025	/s/ HouseCanary, Inc.
	HouseCanary, Inc.