STRATEGIC REALTY TRUST, INC. MANAGEMENT REPORT AND ANALYSIS OF FINANCIAL POSITION AND OPERATING RESULTS (Form 10-K)

The following discussion and analysis should be read in conjunction with our
accompanying consolidated financial statements and the notes thereto included in
this Annual Report. Also refer to "Forward Looking Statements" preceding Part I.

As used herein, the terms "we," "our," "us," and "Company" refer to Strategic
Realty Trust, Inc., and, as required by context, Strategic Realty Operating
Partnership, L.P., a Delaware limited partnership, which we refer to as our
"operating partnership" or "OP", and to their respective subsidiaries.
References to "shares" and "our common stock" refer to the shares of our common
stock.

Overview

We are a Maryland corporation that was formed on September 18, 2008, to invest
in and manage a portfolio of income-producing retail properties, located in the
United States, real estate-owning entities and real estate-related assets,
including the investment in or origination of mortgage, mezzanine, bridge and
other loans related to commercial real estate. During the first quarter of 2016,
we also invested, through joint ventures, in two significant retail projects
under development, one of which was substantially completed during the year
ended December 31, 2020. We have elected to be taxed as a real estate investment
trust ("REIT") for federal income tax purposes, commencing with the taxable year
ended December 31, 2009, and we have operated and intend to continue to operate
in such a manner. We own substantially all of our assets and conduct our
operations through our operating partnership, of which we are the sole general
partner. We also own a majority of the outstanding limited partner interests in
the operating partnership.

Since our inception, our business has been managed by an external advisor. We do
not have direct employees and all management and administrative personnel
responsible for conducting our business are employed by our advisor. Currently
we are externally managed and advised by SRT Advisor, LLC, a Delaware limited
liability company (the "Advisor") pursuant to an advisory agreement with the
Advisor (the "Advisory Agreement") initially executed on August 10, 2013, and
subsequently renewed every year through 2022. The current term of the Advisory
Agreement terminates on August 9, 2022. Effective April 1, 2021, the Advisor
merged with PUR SRT Advisors LLC, an affiliate of PUR Management LLC, which is
an affiliate of L3 Capital, LLC. L3 Capital, LLC is a real estate investment
firm focused on institutional quality, value-add, prime urban retail and
mixed-use investment within first tier U.S. metropolitan markets. As a result of
this transaction, PUR SRT Advisors LLC, controls SRT Advisor, LLC.

Impact of COVID-19

Since March 2020, COVID-19 and the efforts to contain its spread have
significantly impacted the global economy, the U.S. economy, the economies of
the local markets throughout California in which our properties are
predominately located, and the broader financial markets. Nearly every industry
has been impacted directly or indirectly, and the U.S. retail market has come
under severe pressure due to numerous factors, including preventative measures
taken by local, state and federal authorities to alleviate the public health
crisis such as mandatory business closures, quarantines, restrictions on travel
and shelter-in-place or stay-at-home orders. California, where all of our
properties are located instituted various measures that required closure of
retail businesses or limited the ability of our tenants to operate their
businesses. As of June 30, 2021, due to declining new cases and
hospitalizations, the state of California lifted COVID-19 related restrictions.
However, there remains uncertainty as to the time, date and extent to which
these restrictions will be reinstated, businesses of tenants that have closed
will reopen or when customers will re-engage with tenants as they have in the
past. Due to this uncertainty, some of our tenants have been experiencing
hardships, as they were unable to operate at full capacity until the middle of
June 2021.

We believe that the COVID-19 outbreak has and could continue to negatively
impact our financial condition and results of operations, including but not
limited to, declines in real estate rental revenues, the inability to sell
certain properties at a favorable price, and a decrease in construction and
leasing activity. At the start of the pandemic and shelter-in-place orders, a
majority of our tenants requested rent deferral or rent abatement due to the
pandemic and government-mandated restrictions. These tenants initially totaled
94% of the leased square footage in our wholly-owned properties. We reviewed
these requests on a case-by-case basis and agreed to modifications to some of
the tenant leases, and other leases were not modified. In most cases, it is in
our best interest to help our tenants remain in business and reopen when
shelter-in-place orders or other mandated closures or restrictions are lifted.
If these tenants fail, finding replacement tenants may be costly and
time-consuming.

Of the total leased square footage in our wholly-owned properties, 47% of the
leases were either (i) not modified and the tenants were able to continue to
make their payments or (ii) the leases were modified to provide for a short-term
temporary rent deferral or abatement. The rent deferrals generally were one to
two months and were to be repaid within 12 months. Any rent abatement was
typically one to two months and in many cases also involved an extension of the
tenant's lease. Another 28% of the leases in our wholly-owned properties were
modified to provide ongoing rent relief to the tenant. These leases generally
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were with restaurants and salons that faced significant operating restrictions
limiting their ability to be open, open indoors, or open with anything but a
limited capacity. These lease modifications involved some combination of lease
extensions, application of security deposits, temporary rent deferrals, partial
rent forgiveness or abatement, and new percentage rent clauses to protect the
landlord in the event sales returned to prior levels during the period of the
lease modifications. These concessions lasted through the first and second
quarters of 2021 to allow these businesses to commit to new operating strategies
and costs for a pandemic environment. The tenants making up the remaining 25% of
our leased square footage requested lease concessions; however, we could not
agree with these tenants on lease changes acceptable to both parties. During the
year ended December 31, 2021, these tenants terminated their leases and were
replaced with new tenants.

To mitigate the impact of COVID-19 on our operations and liquidity, we have taken a number of proactive measures, including the following:

•We are in constant communication with our tenants and have assisted tenants in
identifying local, state and federal resources that may be available to support
their businesses and employees during the pandemic, including stimulus funds
that may be available under the Coronavirus Aid, Relief, and Economic Security
Act of 2020.

•We believe we will be able to service our debts and pay for our ongoing general
and administrative expenses for the foreseeable future. As of December 31, 2021,
we have approximately $1.8 million in cash and cash equivalents. In addition, we
had approximately $0.6 million of restricted cash (funds held by the lenders for
property taxes, insurance, tenant improvements, leasing commissions, capital
expenditures, rollover reserves and other financing needs).
•On December 30, 2021, we obtained a $4.0 million unsecured loan (the "Unsecured
Loan") from PUR Holdings Lender, LLC, an affiliate of the Advisor. The Unsecured
Loan has a term of 12 months with an interest rate of 7.0% per annum,
compounding monthly with the ability to pay-off during the term of the loan. The
Unsecured Loan requires draw downs in increments of no less than approximately
$0.3 million. The Unsecured Loan will be due and payable upon the earlier of 12
months or the termination of the Advisory Agreement by us. On March 15, 2022, we
and PUR Holdings Lender, LLC, amended the loan agreement to allow for an
extension of the maturity date of the Unsecured Loan by six months, from
December 30, 2022 to June 30, 2023, if we provide PUR Holdings Lender, LLC, with
notice, pay an extension fee, and no event of default has occurred. The
Unsecured Loan is guaranteed by us. As of December 31, 2021 the Unsecured Loan
had an outstanding balance of $1.0 million.

•The SRT Loan is secured by six of our core urban properties in Los Angeles and
San Francisco. The SRT Loan does not have restrictive covenants and ongoing debt
coverage ratios that could trigger a default caused by tenants not paying rent
or seeking rent relief.

•We remain in compliance with all the terms of the Wilshire Construction Loan
(as defined below), which matures on May 10, 2022 with options to extend for two
additional twelve-month periods, subject to certain conditions. Similarly, we
remain in compliance with the Sunset & Gardner Loan (as defined below), which
matures on October 31, 2022.

•We are actively exploring options if operating cash flow does not improve sufficiently, such as selling one or more assets that are not generating positive cash flow.

•To further preserve cash and liquidity, we suspended the SRP effective on May
21, 2020. The SRP will remain suspended and no further redemptions will be made
unless and until our board of directors (the "Board") approves the resumption of
the SRP. In addition, on March 27, 2020, the board of directors decided to
suspend the payment of any dividend for the quarter ending March 31, 2020, and
will reconsider future dividend payments on a quarter-by-quarter basis as more
information becomes available on the impact of COVID-19. Dividend payments were
not reinstated as of December 31, 2021.

Given the uncertainty of the COVID-19 pandemic's impact on our business, the
full extent of the financial impact cannot be reasonably estimated at this time.
There remains uncertainty with respect to the variants of the virus, whether the
approved COVID-19 vaccines will be effective against the virus and new variants
of the virus, and whether local governments will mandate closures of our
tenants' businesses or implement other restrictive measures on their and our
operations in the future in response to a resurgence of the pandemic.

Market Insights – Real Estate and Real Estate Finance Markets

Data from the U.S. Department of Commerce showed total retail sales in 2021
increased 14.0% from 2020. Total e-commerce sales for 2021 were estimated at
$870.1 billion, an increase of 14.2% from 2020. E-commerce sales in 2021
accounted for approximately 20.0% of total sales, which was generally unchanged
from 2020. E-commerce sales in 2019 accounted for 11.0% of total sales.
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According to Digital Commerce 360, it was primarily in-store shopping that fueled most of the overall retail growth in 2021. As public health restrictions eased, vaccinations increased and shoppers wanted back to in-person shopping, retail has benefited. change in customer behavior.

Investment sales volumes of retail properties in the Americas increased 84% to
$74 billion across the Americas in 2021, demonstrating investors' belief that
the retail real estate market will continue to recover.

Retail real estate lending markets remained difficult with retail being among
the least favored property classes, and industrial and multifamily attracting
more lender attention. Volumes increased in the fourth quarter from very low
levels during the pandemic, however loan-to-value percentages were still
relatively low.

In 2022 and beyond, the retail market should benefit from muted supply growth in
2021. The 23.5 million square feet delivered in 2021 was down 36% to 2020
totals, and 49% from 2019 totals, according to CBRE. New supply growth should
continue to be dampened by rising costs for labor and materials across the
globe.

2021 Significant Events

Property Disposition

At April 27, 2021we consumed the store layout at Stream Turkeysituated in Knoxville, TNfor $4.0 million in liquid.

Loans secured by Properties in development

At July 21, 2021we extended the Sunset & Gardner Loan for an additional period of twelve months under the same conditions, with an interest rate of 7.9% per annum. The new due date is October 31, 2022.

Loan with Affiliate
On December 30, 2021, we obtained a $4.0 million Unsecured Loan from PUR
Holdings Lender, LLC, an affiliate of the Advisor. The Unsecured Loan has a term
of 12 months with an interest rate of 7.0% per annum, compounding monthly with
the ability to pay-off during the term of the loan. The Unsecured Loan matures
on December 30, 2022, but on March 15, 2022, we and PUR Holdings Lender, LLC
amended the loan agreement to allow us to extend the maturity date until June
30, 2023.

Review of our Policies

Our board of directors, including our independent directors, has reviewed our
policies described in this Annual Report and determined that they are in the
best interest of our stockholders because: (1) they increase the likelihood that
we will be able to successfully maintain and manage our current portfolio of
investments and acquire additional income-producing properties and other real
estate-related investments in the future; (2) our executive officers, directors
and affiliates of our Advisor have expertise with the type of properties in our
current portfolio; and (3) to the extent that we acquire additional real
properties or other real estate-related investments in the future, the use of
leverage should enable us to acquire assets and earn rental income more quickly,
thereby increasing the likelihood of generating income for our stockholders.

Significant Accounting Policies and Estimates

Below is a discussion of the accounting policies and estimates 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 affect the reported amounts of assets and
liabilities and our disclosure of contingent assets and liabilities at the dates
of the consolidated 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 consolidated 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.
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Revenue recognition

Revenues include minimum rents, expense recoveries and percentage rental
payments. Minimum rents are recognized on an accrual basis over the terms of the
related leases on a straight-line basis when collectability is reasonably
assured and the tenant has taken possession or controls the physical use of the
leased property. If the lease provides for tenant improvements, we determine
whether the tenant improvements, for accounting purposes, are owned by the
tenant or us. When we are 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 allowance that is funded is treated as a lease incentive and
amortized as a reduction of revenue over the lease term. Tenant improvement
ownership is determined based on various factors including, but not limited to:

• whether the lease stipulates how a leasehold improvement allowance may be spent;

•if the amount of a leasehold improvement allowance is higher than market rates;

• whether the tenant or landlord retains legal title to the improvements at the end of the lease term;

• whether the leasehold improvements are tenant-specific or general in nature; and

• whether the leasehold improvements are expected to have a residual value at the end of the lease term.

For leases with minimum scheduled rent increases, we recognize income on a
straight-line basis over the lease term when collectability is reasonably
assured. Recognizing rental income on a straight-line basis for leases results
in reported revenue amounts which differ from those that are contractually due
from tenants. If we determine that collectability of straight-line rents is not
reasonably assured, we limit future recognition to amounts contractually owed
and paid, and, when appropriate, establish an allowance for estimated losses.

We maintain an allowance for doubtful accounts, including an allowance for
straight-line rent receivables, for estimated losses resulting from tenant
defaults or the inability of tenants to make contractual rent and tenant
recovery payments. We monitor the liquidity and creditworthiness of our tenants
on an ongoing basis. For straight-line rent amounts, our assessment is based on
amounts estimated to be recoverable over the term of the lease.

Certain leases contain provisions that require the payment of additional rents
based on the respective tenants' sales volume (contingent or percentage rent)
and substantially all contain provisions that require reimbursement of the
tenants' allocable real estate taxes, insurance and common area maintenance
costs ("CAM"). Revenue based on percentage of tenants' sales is recognized only
after the tenant exceeds its sales breakpoint. Revenue from tenant
reimbursements of taxes, CAM and insurance is recognized in the period that the
applicable costs are incurred in accordance with the lease agreement.

In May 2014, the Financial Accounting Standards Board issued ASU 2014-09. ASU
2014-09 outlines a single comprehensive model for entities to use in accounting
for revenues arising from contracts with customers. As our revenues are
primarily generated through leasing arrangements, our revenues fall out of the
scope of this standard. Effective January 1, 2018, we applied the provisions of
Accounting Standards Codification 610-20, Gains and Losses From the
Derecognition of Nonfinancial Assets ("ASC 610-20"), for gains on sale of real
estate, and recognize any gains at the time control of a property is
transferred and when it is probable that substantially all of the related
consideration will be collected.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) ("ASU
2016-02"). ASU 2016-02 requires entities to recognize lease assets and lease
liabilities on the consolidated balance sheet and disclose key information about
leasing arrangements. The guidance retains a distinction between finance leases
and operating leases. The recognition, measurement and presentation of expenses
and cash flows arising from a lease by a lessee have not significantly changed
from previous guidance. However, the principal difference from previous guidance
is that the lease assets and lease liabilities arising from operating leases
should be recognized in the statement of financial position. The accounting
applied by a lessor is largely unchanged from that applied under ASC Topic 840,
Leases ("ASC 840"). Lessees and lessors are required to recognize and measure
leases at the beginning of the earliest period presented using the modified
retrospective approach. The modified retrospective approach includes a number of
optional practical expedients that entities may elect to apply under ASC Topic
842, Leases ("ASC 842"). The amendments in this guidance are effective for
fiscal years beginning after December 15, 2018, including interim periods within
those fiscal years. We adopted ASU 2016-02 (as amended by subsequent ASUs)
effective January 1, 2019, utilizing the practical expedients described in ASU
2018-11. We elected the lessor practical expedient to not separate common area
maintenance and reimbursement of real estate taxes from the associated lease for
all existing and new leases as the timing and pattern of payments and associated
lease payments are the same. The timing of revenue recognition remains the same
for our existing leases and new leases. Revenues related to our leases continue
to be reported on one line in the presentation within the statement of
operations as a result of electing this lessor practical expedient. We continue
to
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capitalize our direct rental costs. These costs are incurred as a result of obtaining new leases and renewing leases, and are paid to our consultant. Additionally, we are not tenants of real estate or equipment, as we are externally managed by our advisor.

Investments in real estate

We evaluate our acquisitions in accordance with ASU No. 2017-01, Business
Combinations (Topic 805): Clarifying the Definition of a Business ("ASU
2017-01") that clarifies the framework for determining whether an integrated set
of assets and activities meets the definition of a business. The revised
framework establishes a screen for determining whether an integrated set of
assets and activities is a business and narrows the definition of a business,
which is expected to result in fewer transactions being accounted for as
business combinations. Acquisitions of integrated sets of assets and activities
that do not meet the definition of a business are accounted for as asset
acquisitions.

Starting with January 1, 2017the acquisitions were considered asset acquisitions because they did not meet the definition of a business.

Assessment of business combination or asset acquisition:

We evaluate each acquisition of real estate to determine if the integrated set
of assets and activities acquired meet the definition of a business and need to
be accounted for as a business combination. If either of the following criteria
is met, the integrated set of assets and activities acquired would not qualify
as a business:

• Substantially all of the fair value of the gross assets acquired is concentrated either in a single identifiable asset or in a group of similar identifiable assets; Where

•  The integrated set of assets and activities is lacking, at a minimum, an
input and a substantive process that together significantly contribute to the
ability to create outputs (i.e. revenue generated before and after the
transaction).

A learned process is considered substantial if:

•  The process includes an organized workforce (or includes an acquired contract
that provides access to an organized workforce), that is skilled, knowledgeable,
and experienced in performing the process;

• The process cannot be replaced without significant cost, effort or delay; Where

• The process is considered unique or rare.

Generally, we expect that acquisitions of real estate will not meet the revised
definition of a business because substantially all of the fair value is
concentrated in a single identifiable asset or group of similar identifiable
assets (i.e. land, buildings, and related intangible assets), or because the
acquisition does not include a substantive process in the form of an acquired
workforce or an acquired contract that cannot be replaced without significant
cost, effort or delay.

In asset acquisitions, the purchase consideration, including acquisition costs,
is allocated to the individual assets acquired and liabilities assumed on a
relative fair value basis. As a result, asset acquisitions do not result in the
recognition of goodwill or a bargain purchase gain.

Depreciation is calculated using the straight-line method over the estimated useful life of the assets as follows:

                                                      Years
                     Buildings and improvements    5 - 30 years
                     Tenant improvements           1 - 15 years


Tenant improvement costs recorded as capital assets are depreciated over the
tenant's remaining lease term, which we determined approximates the useful life
of the improvement. Expenditures for ordinary maintenance and repairs are
expensed to operations as incurred. Significant renovations and improvements
that improve or extend the useful lives of assets are capitalized. Acquisition
costs related to asset acquisitions are capitalized in the consolidated balance
sheets.

Impairment of long-lived assets

We continually monitor events and changes in circumstances that could indicate
that the carrying amounts of our investments in real estate and related
intangible assets may not be recoverable. When indicators of potential
impairment suggest that the carrying value of real estate and related intangible
assets may not be recoverable, we assess the recoverability by estimating
whether we will recover the carrying value of the real estate and related
intangible assets through its undiscounted future cash flows (excluding
interest) 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 intangible assets and liabilities, we would record an impairment
loss to the extent that the carrying value exceeds the estimated fair value of
the investments in real estate and related intangible
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assets. Key inputs that we estimate in this analysis include projected rental
rates, capital expenditures, property sales capitalization rates and expected
holding period of the property.

We evaluate our equity investments for impairment in accordance with ASC Topic
320, Investments - Debt and Securities ("ASC 320"). ASC 320 provides guidance
for determining when an investment is considered impaired, whether impairment is
other-than-temporary, and measurement of an impairment loss.

We recorded an impairment loss during the year ended December 31, 2021 of
approximately $6.9 million related to the operating property and the development
property we own through joint ventures, which was included in our consolidated
statement of operations in this Annual Report. For the operating property we
recorded a $5.6 million non-cash impairment charge as a result of changes in
cash flow estimates including a change in lease projections, which triggered the
future estimated undiscounted cash flows to be lower than the net carrying value
of the property. The decrease in cash flow projections was primarily due to
reduced demand for the retail space at the properties, including potential
tenants backing out of their leases, resulting in longer lease-up periods and a
decrease in projected rental rates. Estimates were also impacted by the COVID-19
pandemic which we believe will result in additional challenges to lease the
vacant space. The non-cash impairment related to the operating property is
included in building and improvements in our consolidated balance sheets in this
Annual Report. For the development property we recorded a $1.3 million non-cash
impairment charge related to development costs incurred to date. We recorded the
non-cash impairment charge as a result of changes in cash flow estimates, which
triggered the future estimated undiscounted cash flows to be lower than the net
carrying value of the property. The decrease in cash flow projections was
primarily due to an adverse change in legal factors including an expiration of
entitlements resulting in higher costs to re-entitle the property and proposed
zoning changes. Estimates were also impacted by the COVID-19 pandemic, which we
believe will result in higher costs to construct the property due to supply
chain issues and higher building material costs. We recorded an impairment loss
during the year ended December 31, 2020 of approximately $13.4 million related
to the development project and the operating property we own through joint
ventures, which was included in our consolidated statement of operations in this
Annual Report. Refer to Part II, Item 5. "Market for Registrant's Common Equity,
Related Stockholder Matters and Issuer Purchases of Equity Securities" for more
information regarding the methodologies used to estimate fair value of the
investments in real estate.

Assets held for sale

When certain criteria are met, long-lived assets are classified as held for sale
and are reported at the lower of their carrying value or their fair value less
costs to sell and are no longer depreciated. With the adoption of Accounting
Standards Update No. 2014-08, Presentation of Financial Statements and Property,
Plant, and Equipment on April 30, 2014, only disposed properties that represent
a strategic shift that has (or will have) a major effect on our operations and
financial results are reported as discontinued operations.

Fair value measurements

Under generally accepted accounting principles ("GAAP"), we are required to
measure or disclose certain financial instruments at fair value on a recurring
basis. In addition, we are required to measure other financial instruments and
balances at fair value on a non-recurring basis (e.g., carrying value of
impaired real estate loans receivable and long-lived assets). 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 are classified and disclosed in one of the
following three categories:

• Level 1: unadjusted quoted prices in accessible active markets on the valuation 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 valuations derived from models in which important inputs and important drivers of value are observable in active markets; and

•Level 3: prices or valuation techniques for which little or no market data is available for the data important for the measurement of fair value.

When available, we utilize quoted market prices or other observable inputs
(Level 2 inputs), such as interest rates or yield curves, from independent
third-party sources to determine fair value and classify such items in Level 1
or Level 2. In instances where the market for a financial instrument is not
active, regardless of the availability of a non-binding quoted market price,
observable inputs might not be relevant and could require us to use significant
judgment 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 we determine the market for an asset owned by us to be
illiquid or when market transactions for similar instruments do not appear
orderly, we use several valuation sources (including internal valuations,
discounted cash flow analysis and quoted market prices) and establish a fair
value by assigning
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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, we measure 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) a present value technique that considers the future cash flows
based on contractual obligations discounted by an observed or estimated market
rates of comparable liabilities. The use of contractual cash flows with regard
to amount and timing significantly reduces the judgment applied in arriving at
fair value.

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.

We consider the following factors to be indicators of an inactive market
(1) there are few recent transactions; (2) price quotations are not based on
current information; (3) price quotations vary substantially either over time or
among market makers (for example, some brokered markets); (4) 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; (5) 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
our estimate of expected cash flows, considering all available market data about
credit and other nonperformance risk for the asset or liability; (6) there is a
wide bid-ask spread or significant increase in the bid-ask spread; (7) 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
(8) little information is released publicly (for example, a
principal-to-principal market).

We consider the following factors to be indicators of non-orderly transactions
(1) 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; (2) there was a usual and customary marketing period, but the seller
marketed the asset or liability to a single market participant; (3) 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 (4) the transaction price is an outlier when compared with other recent
transactions for the same or similar assets or liabilities.

Income taxes

We have elected to be taxed as a REIT under the Internal Revenue Code. To
qualify as a REIT, we must meet certain organizational and operational
requirements, including a requirement to distribute at least 90% of our annual
REIT taxable income to stockholders (which is computed without regard to the
dividends paid deduction or net capital gain and which does not necessarily
equal results of operations as calculated in accordance with GAAP). As a REIT,
we generally will not be subject to federal income tax on income that we
distribute as dividends to our stockholders. If we fail to qualify as a REIT in
any taxable year, we will be subject to federal income tax on our 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 us relief under certain statutory provisions.
Such an event could materially and adversely affect our net income and net cash
available for distribution to stockholders. However, we believe that we are
organized and operate in such a manner as to qualify for treatment as a REIT.
Even if we qualify as a REIT, we may be subject to certain state or local income
taxes and to U.S. Federal income and excise taxes on our undistributed income.

We evaluate tax positions taken in the consolidated financial statements under
the interpretation for accounting for uncertainty in income taxes. As a result
of this evaluation, we may recognize a tax benefit from an uncertain tax
position only if it is "more-likely-than-not" that the tax position will be
sustained on examination by taxing authorities.

When necessary, deferred income taxes are recognized in certain taxable
entities. Deferred income tax is generally a function of the period's temporary
differences (items that are treated differently for tax purposes than for
financial reporting purposes). A valuation allowance for deferred income tax
assets is provided if all or some portion of the deferred income tax asset may
not be realized. Any increase or decrease in the valuation allowance is
generally included in deferred income tax expense.

Our tax filings remain subject to review and therefore the taxation of our distributions is subject to change.

Portfolio investments

From December 31, 2021our portfolio included:

•Investments in two consolidated joint ventures, which hold:

• a commercial building comprising approximately 12,000 square feet of multi-tenant commercial space in the Los Angeles, California region.

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•a property in the pre-development phase in the Los Angeles, California region.

•Six retail properties, excluding a land parcel, comprising an aggregate of
approximately 27,000 square feet of single- and multi-tenant, commercial retail
space located in one state.

Results of Operations

As of December 31, 2021 and 2020, approximately 86% and 79% of our portfolio was
leased (based on rentable square footage), respectively, with a weighted-average
remaining lease term of approximately 6.3 years for both years, respectively. In
each of 2021 and 2020, there was one property disposition.

Rental Information

There were three new leases added in our retail properties during the year ended
December 31, 2021. The following table provides information regarding our
leasing activity for the year ended December 31, 2021 for properties we held as
of December 31, 2021.

     Total Vacant                                                                                                            Total Vacant
       Rentable                  Lease Expirations              New Leases                                                     Rentable
      Sq. Feet at                     in 2021                     in 2021               Lease Renewals in 2021                Sq. Feet at             

Tenant retention rate in

   December 31, 2020                (Sq. Feet)                  (Sq. Feet)                    (Sq. Feet)                   December 31, 2021                     2021
         2,519                        10,658                       9,383                           -                             3,794                            n/a

Comparison of the year ended December 31, 2021compared to the year ended December 31, 2020.

The following table provides summary information about our results of operations for the years ended December 31, 2021 and 2020 (amounts in thousands):

                                                     Year Ended
                                                    December 31,
                                                2021           2020         

$ Change % Change

Rental income and refunds $2,495 $2,632 $(137) (5.2)%

    Operating and maintenance expenses           2,082          1,841      

241 13.1%

General and administrative expenses 1,335 1,697

(362) (21.3)%

Depreciation and amortization 2,085 1,381

704 51.0%

    Interest expense                             1,265            785      

480 61.1%

    Loss on impairment of real estate            6,897         13,383      

 (6,486)       (48.5) %
    Operating loss                             (11,169)       (16,455)        5,286        (32.1) %
    Other income, net                              422            947          (525)       (55.4) %

    Net loss                                 $ (10,747)     $ (15,508)     $  4,761        (30.7) %

Our operating results for the year ended December 31, 2021are not necessarily indicative of those expected for future periods.

Income

The decrease in revenue during the year ended December 31, 2021, compared to the
same period in 2020, was primarily due to the sale of Shops at Turkey Creek and
rent concessions provided to replacement tenants. Partially offset by the
expiration of COVID-19 pandemic-related rent concessions and higher rental
income from replacement tenants.

Operating and maintenance expenses

Operating and maintenance expenses increased during the year ended December 31,
2021, compared to the same period in 2020, primarily due to higher security
costs, consulting fees and real estate taxes. Additionally, placement of the
Wilshire Property in service in August 2020, contributed to the increase in
operating and maintenance expenses. This was partially offset by the sale of
Shops at Turkey Creek and a decrease in bad debt reserves.

General and administrative expenses

General and administrative expenses decreased during the year December 31, 2021compared to the same period in 2020, mainly due to lower asset management fees and legal fees.

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Depreciation and amortization

Depreciation and amortization expenses increased during the year ended December
31, 2021, compared to the same period in 2020, primarily due to the disposal of
assets related to terminated leases and placement of the Wilshire Property in
service in August 2020.

Interest expense

Interest expense increased during the year ended December 31, 2021, compared to
the same period in 2020, due to the placement of the Wilshire Property in
service. Capitalization of interest expense related to the Wilshire Property
construction loan ceased in August 2020.

Loss on depreciation of real estate

Impairment loss during the years ended December 31, 2021 and 2020, approximately $6.9 million and $13.4 millionrespectively, related to Wilshire and Sunset and Gardner joint ventures.

Other income, net

Other income, net for year ended December 31, 2021, consisted of a gain on sale
of Shops at Turkey Creek of approximately $0.4 million. Other income, net for
the year ended December 31, 2020, consisted of a gain on sale of Topaz
Marketplace of approximately $0.9 million.

Cash and capital resources

Since our inception, our principal demand for funds has been for the acquisition
of real estate, the payment of operating expenses and interest on our
outstanding indebtedness, the payment of distributions to our stockholders and
investments in unconsolidated joint ventures and development properties. Prior
to the termination of our initial public offering in February 2013 we used
offering proceeds to fund our acquisition activities and our other cash needs.
Currently we have used and expect to continue to use debt financing, net sales
proceeds and cash flow from operations to fund our cash needs.

As of December 31, 2021, our cash and cash equivalents were approximately $1.8
million and we had $0.6 million of restricted cash (funds held by the lenders
for property taxes, insurance, tenant improvements, leasing commissions, capital
expenditures, rollover reserves and other financing needs).

Our aggregate borrowings, secured and unsecured, are reviewed by our board of
directors at least quarterly. Under our Articles of Amendment and Restatement,
as amended, which we refer to as our "charter," we are prohibited from borrowing
in excess of 300% of the value of our net assets. Net assets for purposes of
this calculation is defined to be our total assets (other than intangibles),
valued at cost prior to deducting depreciation, reserves for bad debts and other
non-cash reserves, less total liabilities. However, we may temporarily borrow in
excess of these amounts if such excess is approved by a majority of the
independent directors and disclosed to stockholders in our next quarterly
report, along with an explanation for such excess. As of December 31, 2021 and
2020, our borrowings were approximately 120.2% and 90.1%, respectively, of the
carrying value of our net assets.

The following table summarizes, for the periods indicated, certain elements of our consolidated statements of cash flows (amounts in thousands):

                                                                Year Ended
                                                               December 31,
                                                          2021               2020             $ Change
Net cash provided by (used in):
Operating activities                                  $  (2,290)         $  (1,295)         $     (995)
Investing activities                                      1,220              2,105                (885)
Financing activities                                        855             (5,429)              6,284

Net decrease in cash, cash equivalents and restricted cash

                                                  $    (215)         $  

(4,619)

Cash flow from operating activities

Cash used in operating activities during the year ended December 31, 2021
increased primarily due to higher operating and maintenance expenses and lower
revenues. Additional increases were the result of increased accounts receivable
from delinquent tenants.
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Cash used in operating activities during the year ended December 31, 2020, was
primarily due to lower operating income, which resulted from sale of Topaz
Marketplace during the three months ended March 31, 2020, as well as increased
accounts receivable and rent deferral balances due to the COVID-19 pandemic.

Cash flow from investing activities

Cash flows provided by investing activities during the year ended December 31,
2021, primarily consisted of approximately $3.8 million in proceeds from the
sale of Shops at Turkey Creek, partially offset by $1.8 million of additional
investment in the Sunset and Gardner Joint Venture.

Cash flows provided by investing activities during the year ended December 31,
2020 primarily consisted of approximately $9.9 million of proceeds from sale of
Topaz Marketplace, which were partially offset by our aggregate additional $6.9
million investment in the Wilshire and Sunset and Gardner Joint Ventures.

Cash flow from financing activities

Cash flows provided by financing activities during the year ended December 31,
2021, primarily consisted of proceeds of $1.0 million from the draw down on the
Unsecured Loan (as defined below) from PUR Holdings Lender, LLC, an affiliate of
the Advisor. Partially offset by payment of financing costs related to the
extension of the Sunset & Gardner loan and loan fees associated with Unsecured
Loan (as defined below).

Cash flows used by financing activities during the year ended December 31, 2020,
primarily consisted of approximately $8.9 million in repayments of our line of
credit. This was partially offset by approximately $4.0 million from
construction loan proceeds.

Short-term liquidity and capital resources

Our principal short-term demand for funds is for the payment of operating
expenses and the payment on our outstanding indebtedness. To date, our cash
needs for operations have been funded by cash provided by property operations,
the sales of properties, debt refinancing and the sale of shares of our common
stock. We expect to fund our short-term operating cash needs from operations,
from the sales of properties and from debt.

On December 30, 2021, in order to fund our short-term liquidity needs we
obtained a $4.0 million unsecured loan (the "Unsecured Loan") from PUR Holdings
Lender, LLC, an affiliate of the Advisor. The Unsecured Loan has a term of 12
months with an interest rate of 7.0% per annum, compounding monthly with the
ability to pay-off during the term of the loan. The Unsecured Loan requires draw
downs in increments of no less than approximately $0.3 million. The Unsecured
Loan will be due and payable upon the earlier of 12 months or the termination of
the Advisory Agreement by us. On March 15, 2022, we and PUR Holdings Lender,
LLC, amended the loan agreement to allow for an extension of the maturity date
of the Unsecured Loan by six months, from December 30, 2022 to June 30, 2023, if
we provide PUR Holdings Lender, LLC, with notice, pay an extension fee, and no
event of default has occurred. The Unsecured Loan is guaranteed by us.

Long-term liquidity and capital resources

On a long-term basis, our principal demand for funds will be for real estate and
real estate-related investments, additional investment in our development
projects and the payment of acquisition-related expenses, operating expenses,
distributions to stockholders, future redemptions of shares and interest and
principal payments on current and future indebtedness. Generally, we intend to
meet cash needs for items other than acquisitions and acquisition-related
expenses from our cash flow from operations, debt and sales of properties. On a
long-term basis, we expect that substantially all cash generated from operations
will be used to pay distributions to our stockholders after satisfying our
operating expenses including interest and principal payments. We may consider
future public offerings or private placements of equity. Refer to Note 8. "Notes
Payable, Net" to our consolidated financial statements included in this Annual
Report on Form 10-K for additional information on the maturity dates and terms
of our outstanding indebtedness.

Our ability to access capital on favorable terms as well as to use cash from
operations to continue to meet our liquidity needs could be affected by the
effects of the COVID-19 pandemic. The full impact of the COVID-19 pandemic on
our rental revenue and, as a result, future cash from operations cannot be
determined at present.

We believe that our cash on hand, along with other potential aforementioned
sources of liquidity that we may be able to obtain, will be sufficient to fund
our working capital needs, as well as our capital lease and debt obligations for
at least the next twelve months and beyond. However, this forward-looking
statement is subject to a number of uncertainties, including with respect to the
duration of the COVID-19 pandemic, and there can be no guarantee that we will be
successful with our plan. Moreover, over the long term, if our cash flow from
operations does not increase from current levels, we may have to address a
liquidity deficiency. We are actively exploring options should cash flow from
operations not sufficiently improve, such as a sale of one or more assets that
are not generating positive cash flow or the sale of equity to an institutional
investor.
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Recent financing transactions

Multi-property secure financing

At December 24, 2019we have entered into a loan agreement (the “TRS Loan Agreement”) with PFP Holding Company, LLC (the “SRT Lender”) for a non-recourse secured loan (the “SRT Loan”).

The SRT Loan is secured by first deeds of trust on our five San Francisco assets
(Fulton Shops, 8 Octavia, 400 Grove, 450 Hayes and 388 Fulton Street) as well as
our Silverlake Collection located in Los Angeles. The SRT Loan matures on
January 9, 2023. We have an option to extend the term of the loan for two
additional twelve-month periods, subject to the satisfaction of certain
covenants and conditions contained in the SRT Loan Agreement. We have the right
to prepay the SRT Loan in whole at any time or in part from time to time,
subject to the payment of yield maintenance payments if such prepayment occurs
in the first 18 months of the loan term, calculated through the 18th monthly
payment date, as well as certain expenses, costs or liabilities potentially
incurred by the SRT Lender as a result of the prepayment and subject to certain
other conditions contained in the loan documents. Individual properties may be
released from the SRT Loan collateral in connection with bona fide third-party
sales, subject to compliance with certain covenants and conditions contained in
the SRT Loan Agreement. Any prepayment or repayment on or before the first 12
months of the loan term in connection with a bona fide third-party sale of a
property securing the SRT Loan shall only require the payment of yield
maintenance payments calculated through the 12th monthly payment date.

As of December 31, 2021, the SRT Loan had a principal balance of approximately
$18.0 million. The SRT Loan is a floating LIBOR rate loan which bears interest
at 30-day LIBOR (with a floor of 1.50%) plus 2.80%. The default rate is equal to
5% above the rate that otherwise would be in effect. Monthly payments are
interest-only with the entire principal balance and all outstanding interest due
at maturity.

Pursuant to the SRT Loan, we must comply with certain matters contained in the
loan documents including but not limited to, (i) requirements to deliver audited
and unaudited financial statements, SEC filings, tax returns, pro forma budgets,
and quarterly compliance certificates, and (ii) minimum limits on our liquidity
and tangible net worth. The SRT Loan contains customary covenants, including,
without limitation, covenants with respect to maintenance of properties and
insurance, compliance with laws and environmental matters, covenants limiting or
prohibiting the creation of liens, and transactions with affiliates.

As part of the SRT loan, we executed the usual non-recourse non-recourse and environmental guarantees, as well as limited additional insurance on the condominium structures of the San Francisco assets.

Loans secured by properties

On May 7, 2019, we refinanced and repaid our financing with Loan Oak Fund, LLC
with a new construction loan from ReadyCap Commercial, LLC (the "Lender") (the
"Wilshire Construction Loan"). As of December 31, 2021, the Wilshire
Construction Loan had a principal balance of approximately $12.6 million, with
future funding available up to a total of approximately $13.9 million, and bears
an interest rate of 1-month LIBOR (with a floor of 2.467%) plus an interest
margin of 4.25% per annum, payable monthly. The Wilshire Construction Loan is
scheduled to mature on May 10, 2022, with options to extend for two additional
twelve-month periods, subject to certain conditions as stated in the loan
agreement. The Wilshire Construction Loan is secured by a first Deed of Trust on
the Wilshire Property. We executed a guaranty that guaranties that the loan
interest reserve amounts are kept in compliance with the terms of the loan
agreement. The Lender also required that a principal in the upstream owner of
our joint venture partner in the Wilshire Joint Venture (the "Guarantor"),
guarantees performance of borrower's obligations under the loan agreement with
respect to the completion of capital improvements to the property. We executed
an Indemnity Agreement in favor of the Guarantor against liability under that
completion guaranty except to the extent caused by gross negligence or willful
misconduct, as well as for liabilities incurred under the Environmental
Indemnity Agreement executed by the Guarantor in favor of the Lender. We used
working capital funds of approximately $3.1 million to repay the difference
between the Wilshire Construction Loan initial advance and the prior loan, to
pay transaction costs, as well as to fund certain required interest and
construction reserves.

Loans secured by Properties in development

On October 29, 2018, we entered into a loan agreement with Lone Oak Fund, LLC
(the "Sunset & Gardner Loan"). The Sunset & Gardner Loan has a principal balance
of approximately $8.7 million, and had an interest rate of 6.9% per annum. The
original Sunset & Gardner Loan agreement matured on October 31, 2019. We
extended the Sunset & Gardner Loan for an additional twelve-month period under
the same terms, with an interest rate of 6.5% per annum. On July 31, 2020, we
extended the Sunset & Gardner Loan for an additional twelve-month period under
the same terms, with an interest rate of 7.3% per annum. On July 21, 2021, we
extended the Sunset & Gardner Loan for an additional twelve-month period under
the same terms, with an interest rate of 7.9% per annum. The new maturity date
is October 31, 2022. The Sunset & Gardner Loan is secured by a first Deed of
Trust on the Sunset & Gardner Property.
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Loan with Affiliate

On December 30, 2021, we obtained a $4.0 million unsecured loan (the "Unsecured
Loan") from PUR Holdings Lender, LLC, an affiliate of the Advisor. The Unsecured
Loan has a term of 12 months with an interest rate of 7.0% per annum,
compounding monthly with the ability to pay-off during the term of the loan. The
Unsecured Loan requires draw downs in increments of no less than approximately
$0.3 million. The Unsecured Loan will be due and payable upon the earlier of 12
months or the termination of the Advisory Agreement by us. The Unsecured Loan is
guaranteed by us. On March 15, 2022, we and PUR Holdings Lender, LLC, amended
the loan agreement to allow for an extension of the maturity date of the
Unsecured Loan by six months, from December 30, 2022 to June 30, 2023, if we
provide PUR Holdings Lender, LLC, with notice, pay an extension fee, and no
event of default has occurred. As of December 31, 2021 the Unsecured Loan had an
outstanding balance of $1.0 million.

Credit line

On February 10, 2020, we used proceeds from the sale of Topaz Marketplace to
repay the line of credit in its entirety. The line of credit expired of its own
accord on February 15, 2020, with no balance outstanding. As part of the payoff,
Shops at Turkey Creek was released from the line of credit.

Total Operating Expenditure Guidelines

We reimburse our Advisor for some expenses paid or incurred by our Advisor in
connection with the services provided to us, except that we will not reimburse
our Advisor for any amount by which our total operating expenses at the end of
the four preceding fiscal quarters exceed the greater of (1) 2% of our average
invested assets, as defined in our charter; and (2) 25% of our net income, as
defined in our charter, or the "2%/25% Guidelines" unless a majority of our
independent directors determines that such excess expenses are justified based
on unusual and non-recurring factors. For the years ended December 31, 2021 and
2020, our total operating expenses did not exceed the 2%/25% Guidelines.

Our Advisory Agreement Amendment provides that the Advisor shall not be required
to reimburse to us any operating expenses incurred during a given period that
exceed the applicable limit on "Total Operating Expenses" (as defined in the
Advisory Agreement) to the extent that such excess operating expenses are
incurred as a result of certain unusual and non-recurring factors approved by
our board of directors, including some related to the execution of our
investment strategy as directed by our board of directors.

Inflation

The majority of our leases at our properties contain inflation protection
provisions applicable to reimbursement billings for common area maintenance
charges, real estate tax and insurance reimbursements on a per square foot
basis, or in some cases, annual reimbursement of operating expenses above a
certain per square foot allowance. We expect to include similar provisions in
our future tenant leases designed to protect us from the impact of inflation.
Due to the generally long-term nature of these leases, annual rent increases, as
well as rents received from acquired leases, may not be sufficient to cover
inflation and rent may be below market rates.

REIT Compliance

To qualify as a REIT for tax purposes, we are required to annually distribute at
least 90% of our REIT taxable income, subject to certain adjustments, to our
stockholders. We must also meet certain asset and income tests, as well as other
requirements. If we fail to qualify as a REIT in any taxable year, we will be
subject to federal income tax (including any applicable alternative minimum tax)
on our taxable income at regular corporate 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 our REIT qualification is
lost unless the IRS grants us relief under certain statutory provisions. Such an
event could materially adversely affect our net income and net cash available
for distribution to our stockholders.

Quarterly distributions

As set forth above, in order to qualify as a REIT, we are required to distribute
at least 90% of our annual REIT taxable income, subject to certain adjustments,
to our stockholders. Our board of directors will continue to evaluate the amount
of future quarterly distributions based on our operational cash needs.

Some or all of our distributions have been paid, and may continue to be paid in the future, from sources other than operating cash flow.

In light of the COVID-19 pandemic, its impact on the economy and the related
future uncertainty, on March 27, 2020, our board of directors decided to suspend
the payment of any dividend for the quarters ending March 31, 2020, and to
reconsider future dividend payments on a quarter by quarter basis as more
information becomes available on the impact of COVID-19 and related impact to
the Company. Dividend payments were not reinstated as of December 31, 2021.
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Funds from operations

Funds from operations ("FFO") is a supplemental non-GAAP financial measure of a
real estate company's operating performance. The National Association of Real
Estate Investment Trusts, or "NAREIT", an industry trade group, has promulgated
this supplemental performance measure and defines FFO as net income, computed in
accordance with GAAP, plus real estate related depreciation and amortization and
excluding extraordinary items and gains and losses on the sale of real estate,
and after adjustments for unconsolidated joint ventures (adjustments for
unconsolidated partnerships and joint ventures are calculated to reflect FFO.)
It is important to note that not only is FFO not equivalent to our net income or
loss as determined under GAAP, it also does not represent cash flows from
operating activities in accordance with GAAP. FFO should not be considered an
alternative to net income as an indication of our performance, nor is FFO
necessarily indicative of cash flow as a measure of liquidity or our ability to
fund cash needs, including the payment of distributions.

We consider FFO to be a meaningful, additional measure of operating performance
and one that is an appropriate supplemental disclosure for an equity REIT due to
its widespread acceptance and use within the REIT and analyst communities.
Comparison of our presentation of FFO to similarly titled measures for other
REITs may not necessarily be meaningful due to possible differences in the
application of the NAREIT definition used by such REITs.

Our calculation of FFO attributable to common shares and Common Units and the
reconciliation of net loss to FFO is as follows (amounts in thousands, except
shares and per share amounts):

                                                                                     Year Ended
                                                                                    December 31,
FFO                                                                                         2021                  2020
Net loss                                                                               $    (10,747)         $    (15,508)
Adjustments:

Gain on disposal of assets                                                                     (422)                 (947)

Depreciation of real estate                                                                   1,436                 1,154
Amortization of in-place leases and leasing costs                                               649                   227
Loss on impairment of real estate                                                             6,897                13,383
FFO attributable to common shares and Common Units (1)                                 $     (2,187)         $     (1,691)

FFO per share and Common Unit (1)                                                      $      (0.20)         $      (0.15)

Weighted average common shares and units outstanding (1)                                 10,957,204            10,962,045


(1)Our common units have the right to convert a unit into common stock for a
one-to-one conversion. Therefore, we are including the related non-controlling
interest income/loss attributable to common units in the computation of FFO and
including the common units together with weighted average shares outstanding for
the computation of FFO per share and common unit.

Transactions and agreements with related parties

We are currently party to the Advisory Agreement, pursuant to which the Advisor
manages our business in exchange for specified fees paid for services related to
the investment of funds in real estate and real estate-related investments,
management of our investments and for other services. Refer to Note 12. "Related
Party Transactions" to our consolidated financial statements included in this
Annual Report on Form 10-K for a discussion of the Advisory Agreement and other
related party transactions, agreements and fees.

Subsequent events

Other events

Effective February 2, 2022, Glenborough, has entered into an assignment and assumption agreement to assign its interest in various property and asset management agreements (the “Management Agreements”) to PUR. The Company’s subsidiaries are parties to the management agreements and have consented to the transfer.

In all other material respects, the terms of the Management Agreements remain unchanged.

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Change of officers

Effective February 2, 2022, Andrew Batinovich notified us of his resignation as
Chief Executive Officer, Corporate Secretary, and a director, effective
immediately. Effective February 2, 2022, the Board of Directors appointed
Matthew Schreiber, 41, to serve as Chief Executive Officer. Mr. Schreiber was
also elected to serve as a director to fill the vacancy created by Mr.
Batinovich's resignation. He continues to serve as Assistant Secretary, a role
he has held since May 2021. Prior to his appointment as Chief Executive Officer,
Mr. Schreiber served as Chief Operating Officer and Senior Vice President,
positions he had held since May 2021.

Effective February 2, 2022, the Board of Directors appointed Domenic Lanni, 51,
to serve as Chief Operating Officer. As Chief Operating Officer, Mr. Lanni will
be the principal operating officer and will assume the responsibilities that
were previously performed by Mr. Schreiber, who acted as the principal operating
officer since May 2021.

Amendment to the loan agreement with PUR Lender Holdings, LLC

On March 15, 2022, the Company and PUR Holdings Lender, LLC entered into an
amendment to allow for the extension of the maturity date of the loan agreement,
dated as of December 30, 2021, between us and PUR Holdings Lender, LLC. On
December 30, 2021, the Company obtained a $4.0 million unsecured loan (the
"Unsecured Loan") from PUR Holdings Lender, LLC, an affiliate of the Advisor.
The Unsecured Loan has a term of 12 months with an interest rate of 7.0% per
annum, compounding monthly with the ability to pay-off during the term of the
loan. The amendment provides the Company with the option to extend the maturity
date of the Unsecured Loan by six months, from December 30, 2022 to June 30,
2023, if the Company provides PUR Holdings Lender, LLC with notice, pays an
extension fee, and no event of default has occurred.

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