Sterling Real Estate Trust_December 31, 2024

 UNITED STATES
 SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-K

 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 000-54295
 Sterling Real Estate Trust
 d/b/a Sterling Multifamily Trust
 (Exact name of registrant as specified in its charter)

 North Dakota

 90-0115411

 (State or other jurisdiction of
incorporation or organization)

 (I.R.S. Employer
Identification Number)

 4340 18 th Ave South Ste. 200
 Fargo, North Dakota

 58103

 (Address of principal executive offices)

 (Zip Code)

 ( 701) 353-2720
 (Registrant's telephone number, including area code)
 Securities registered pursuant to Section 12(b) of the Act:

 Title of each class:

 Trading Symbol

 Name of each exchange on which registered:

 Common Shares of Beneficial Interest, par value $0.01 per share

 N/A

 N/A

 Securities registered pursuant to Section 12(g) of the Act: none
 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 Exchange 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 checkmark 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.

 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 public market for the registrant's shares of common stock.
 Indicate the number of shares outstanding of each of the issuer's classes of common shares, as of the latest practicable date.

 Class

 Outstanding at March 19, 2025

 Common Shares of Beneficial Interest, $0.01 par value per share

 12,891,389

 Documents Incorporated by Reference: Portions of Sterling's Proxy Statement for its 2024 Annual Meeting of Shareholders, which Sterling intends to file with the Securities and Exchange Commission within 120 days after the end of Sterling's fiscal year ended December 31, 2024, are incorporated by reference into Part III (Items 10, 11, 12, 13 and 14) of this Annual Report on Form 10-K to the extent described herein. If Sterling does not file its Proxy Statement on or before 120 days after the end of its 2024 fiscal year, Sterling will file the required information in an amendment to this Annual Report on Form 10-K.

 Sterling Real Estate Trust

 PAGE

 Item 1. Business

 Item 1A. Risk Factors

 Item 1B. Unresolved Staff Comments

 Item 1C. Cybersecurity

 Item 2. Properties

 Item 3. Legal Proceedings

 Item 4. Mine Safety Disclosures

 Item 5. Market for Registrant's Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities

 Item 6. [Reserved]

 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

 Item 7A. Quantitative and Qualitative Disclosures about Market Risk

 Item 8. Financial Statements and Supplementary Data

 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

 Item 9A. Controls and Procedures

 Item 9B. Other Information

 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

 Item 10. Trustees, Executive Officers and Corporate Governance

 Item 11. Executive Compensation

 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters

 Item 13. Certain Relationships and Related Transactions, and Trustee Independence

 Item 14. Principal Accountant Fees and Services

 Item 15. Exhibits and Financial Statement Schedules

 Item 16. Form 10-K Summary

 Report of Independent Registered Public Accounting Firm and Financial Statements

 Signatures

 NOTE REGARDING FORWARD-LOOKING STATEMENTS

 Certain statements included in this Annual Report on Form 10-K and the documents incorporated into this document by reference contain certain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Such forward-looking statements include statements regarding our plans and objectives, including, among other things, our future financial condition, anticipated capital expenditures, anticipated dividends and other matters. Forward-looking statements are typically identified by the use of terms such as "may," "will," "should," "expect," "intend," "plan," "anticipate," "estimate," "believe," "continue," "predict," "potential" or the negative of such terms and other comparable terminology. These statements are only predictions and are not historical facts. Actual events or results may differ materially.

 The forward-looking statements included herein are based on our current expectations, plans, estimates and beliefs that involve numerous risks and uncertainties. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond our control. Any of the assumptions underlying the forward-looking statements contained herein could be inaccurate. Although we believe the expectations reflected in such forward-looking statements are based on reasonable assumptions, we cannot assure readers that the forward-looking statements included in this filing will prove to be accurate. The accompanying information contained in this Annual Report on Form 10-K, including, without limitation, the information set forth under the section entitled "Risk Factors" in Item 1A, identifies important additional factors that could materially adversely affect actual results and performance. We undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of certain unanticipated events or changes to future operating results.

 All dollar amounts in this Form 10-K are stated in thousands, with the exception of share and per share amounts, unless otherwise indicated.

 ITEM 1. BUSINESS

 GENERAL

 Sterling Real Estate Trust ("we," "us," "our," "Company," "Trust" or "Sterling") is a real estate investment trust ("REIT"). Sterling was registered in North Dakota as an unincorporated business trust in December 2002. References in this Annual Report on Form 10-K to the "Company," "Sterling," "Trust," "we," "us," or "our" include consolidated subsidiaries, unless the context indicates otherwise. As a REIT, we are not subject to U.S. federal income taxation as long as we satisfy certain requirements, principally relating to the nature of our income, the level of our dividends and other factors. As of December 31, 2024, we owned directly or through our Operating Partnership, 177 properties in 12 states.

 UPREIT Structure

 The Trust operates as an Umbrella Partnership Real Estate Investment Trust ("UPREIT"), which is a REIT that holds all or substantially all of its assets through a partnership which the REIT controls as general partner. Therefore, the Trust conducts substantially all investment activities and holds substantially all of the Trust's assets through the Operating Partnership Sterling Properties, LLLP. The Trust controls the Operating Partnership as the general partner and owns approximately 40.80% of the Operating Partnership as of December 31, 2024. For purposes of satisfying the asset and income tests for qualification as a REIT for tax purposes, the proportionate shares of the assets and income of the Operating Partnership are deemed to be the assets and income of the Trust.

 The UPREIT structure is used to facilitate acquisitions of real estate properties. A sale of property directly to a REIT is generally a taxable transaction to the property seller. However, in an UPREIT structure, if a property seller exchanges the property for limited partnership units, the seller may defer taxation of gain in such exchange until the seller resells its limited partnership units or exchanges its limited partnership units for the REIT's common stock. By offering the ability

 to defer taxation, the Trust may gain a competitive advantage in acquiring desired properties over other buyers who cannot offer this benefit. In addition, investing in the Operating Partnership, rather than directly in the Trust, may be more attractive to certain institutional or other investors due to their business or tax structure. If an investor is interested in making a substantial investment in our Operating Partnership, the structure provides the Trust the flexibility to accommodate different terms for each investment, while applicable tax laws generally restrict a REIT from charging different fee rates among its shareholders. Finally, if the Trust's shares become publicly traded, the former property seller may be able to achieve liquidity for the investment in order to pay taxes.

 Operating Partnership

 Sterling Properties, LLLP was formed as a North Dakota limited liability limited partnership in April 2003 to acquire, own and operate properties on the Trust's behalf. The Operating Partnership holds a diversified portfolio of multifamily dwellings and commercial properties located principally in the upper and central Midwest United States.

 Since formation, the Trust's focus has consisted of owning and operating income-producing real estate properties. In 2006, the Trust held 23 total properties approximating $56,265 in total assets, in the Operating Partnership. Between 2007 and 2024, the Trust focused extensively on strengthening the multifamily component of the portfolio, acquiring properties directly or through UPREIT transactions. A majority of these multifamily properties are located in North Dakota. The portfolio has grown to 177 properties, approximating $940,912 in total assets, and book equity, including noncontrolling interests, of approximately $332,132 as of December 31, 2024. As of December 31, 2024, the portfolio contained approximately 11,955 apartment units and 1,187,000 square feet of leasable commercial space.

 OUR PEOPLE

 We do not have any employees. Instead, we rely on our external Advisor, Sterling Management LLC, to conduct our day-to-day affairs. The Company's employees are employees of Sterling Management LLC.

 Advisor to the Trust

 Sterling Management, LLC, a related party to the Trust, is a North Dakota limited liability company formed in November 2002, is the external Advisor to the Trust (the Advisor). The Advisor is responsible for managing our day-to-day affairs and for identifying, acquiring and disposing investments on our behalf. The Advisor is 100% owned by Trustmark Enterprises, Inc., formerly known as Alloy, a North Dakota corporation ("Trustmark"). Trustmark is owned in part by the Trust's Chief Executive Officer and Trustee Kenneth P. Regan, by Trustee James S. Wieland, by the Trust's President Megan E. Schreiner, by the Trust's Chief Financial Officer and Treasurer Elizabeth A. Reich, by the Trust's General Counsel and Secretary Michael P. Carlson, by the Trust's Chief Investment Officer Luke B. Swenson, and by the Trust's Vice President David F. Perkins. Messrs. Regan, Carlson, Swenson, and Perkins and Mmes. Schreiner and Reich all serve as officers of the Advisor. Messrs. Regan, Wieland, Carlson, Swenson, and Perkins and Mmes. Schreiner and Reich also all serve on the Advisor's Board of Governors. The Advisor's employee base has seen considerable growth, both in number and expertise, since its inception.

 Audit and Disclosure Committee

 The Audit and Disclosure Committee was established by the Board of Trustees to assist the Board in fulfilling its fiduciary duties and oversight responsibilities. The Audit and Disclosure Committee assists the Board by overseeing the integrity of the Trust's financial statements, financial reporting and disclosure processes, internal accounting and financial controls and the annual independent audit of the Trust's financial statements. The Audit and Disclosure Committee also oversees the establishment and maintenance of processes to assure the Trust's compliance with all applicable laws, regulations, and Trust policy, including compliance with filing requirements under the Exchange Act and the rules and regulations promulgated thereunder. In performing its work, it is the Audit and Disclosure Committee's responsibility to foster free and open means of communication between the Trustees, the independent auditors and the Trust's financial managers. Our Audit and Disclosure Committee is currently comprised of Trustees Timothy A. Hunt (Chair of the Committee), Gregory P. Hammes, Timothy L. Haugen, Michelle L. Korsmo, and Mark T. Polovitz.

 Board of Trustees and Executive Officers

 The Trust operates under the direction of our Board of Trustees, the members of which are accountable to both the Trust and its shareholders. The Trustees are elected annually by our shareholders. In addition, the Board has a duty to supervise our relationship with the Advisor and evaluate the performance of and fees paid to the Advisor on an annual basis. The Advisory Agreement was approved by the Board of Trustees (including all the independent trustees) on March 21, 2024, effective April 1, 2024 until December 31, 2024. The Board of Trustees has provided investment guidance for the Advisor to follow and must approve each investment recommended by the Advisor. Currently, the Advisor has eight members on the Board, six of whom are independent.

 Although the Trust has executive officers, it does not have any paid employees. The President, Chief Executive Officer, Chief Investment Officer, Chief Financial Officer and Treasurer, General Counsel and Secretary, and Vice President of the Trust, are also officers, employees, and governors of our Advisor. Among others, such executive officers oversee the Advisor's day-to-day operations with respect to the Trust. However, when doing so, such executive officers are acting on behalf of the Advisor in performing the Advisor's obligations under the Advisory Agreement. Generally, the only services performed by the Trust's executive officers are those required by law or regulation, such as executing documents as required by North Dakota law and providing certifications required by the federal securities laws.

 Organizational Structure

 On January 1, 2021, the Advisor was acquired by Trustmark Enterprises, Inc. in an equity transfer, and is now the wholly-owned subsidiary of Trustmark Enterprises, Inc.

 The following chart shows the relationship structure with the Advisor:

 (1)
 As of December 31, 2024, the Advisor was owned 100% by Trustmark Enterprises, Inc. Trustmark was owned in part by the Trust's Chief Executive Officer and Trustee Kenneth P. Regan (34.00%), by Trustee James S. Wieland (25.00%), by the Trust's President Megan E. Schreiner (8.00%), by the Trust's Chief Financial Officer and Treasurer Elizabeth A. Reich (5.00%), by the Trust's General Counsel and Secretary Michael P. Carlson (3.00%), by the Trust's Chief Investment Officer Luke B. Swenson (2.00%), and by the Trust's Vice President David F. Perkins (2.00%). Messrs. Regan, Carlson, Swenson, and Perkins and Mmes. Schreiner and Reich all serve as officers of the Advisor. Messrs. Regan, Wieland, Carlson, Swenson, and Perkins and Mmes. Schreiner and Reich also all serve on the Advisor's Board of Governors.

 (2)
 Sterling Management, LLC serves as Advisor to both the Trust and the Operating Partnership. The Advisor does not own any of our shares. Messrs. Regan and Wieland beneficially own approximately 1.49% and 1.86%, respectively, of our shares as of December 31, 2024.

 (3)
 The Trust controls the Operating Partnership as the general partner and owns approximately 40.80% of the Operating Partnership as of December 31, 2024. Messrs. Regan and Wieland beneficially owned and had voting power over approximately 17.26% and 5.90%, respectively, of the Operating Partnership as of December 31, 2024.

 CORE INVESTMENT OBJECTIVES AND STRATEGY

 Investment Objectives

 The Trust's primary investment objectives are to:

 Acquire quality real estate properties or interests in real estate properties that can provide stable cash flow for distribution to our shareholders, preservation of capital and realization of long-term capital appreciation upon the sale of such properties;

 Offer an investment option in which the value of the common shares is correlated to real estate as an asset class rather than traditional asset classes such as stocks and bonds; and

 Provide a hedge against inflation through use of month-to-month rentals or short-term and long-term lease arrangements with rental properties tenants.

 The Trust may change the investment objectives only with the approval of holders of a majority of the outstanding common shares.

 Investment Guidance

 The Board of Trustees has provided investment guidance to the Advisor to direct the investment strategy of the Trust. Changes to the investment guidance must be approved by the Board. The Advisor has been authorized to execute:

 Commercial and multifamily real estate property acquisitions and dispositions;

 Investments in other real estate related assets, in each case so long as such investments are approved by our Board;

 Acquisitions of property or land for the purposes of future development; and

 Capital investments in the portfolio's current properties through capital improvements.

 The Board will have ultimate oversight over the Trust's investments and may change from time to time the scope of authority delegated to the Advisor with respect to acquisition and disposition transactions.

 Investment Strategy

 Sterling's current investment strategy and focus is on multifamily properties. Our Advisor monitors industry trends and invests in property believed to provide the most favorable return balanced with risk. We attempt to manage our real estate portfolio by evaluating changes or trends in the industries in which our tenants operate, the creditworthiness of our tenants and changes or trends in the area demographics surrounding our properties for evidence that our properties will continue to meet our investment objectives of cash flow, preservation of capital and capital appreciation. There is no current plan for the existing commercial properties (industrial, medical, office and retail) regarding retention, acquisition, or disposition.

 The Trust will primarily invest in existing or newly developed real estate properties. The Trust may also invest in interests in real estate properties by acquiring direct ownership or ownership interests with other investors, including affiliates of the Advisor, through holding company structures or joint ventures, real estate partnerships, tenant-in-common deals, REITs, or other collective investment vehicles. The Trust may also invest in other real estate property types, including undeveloped land or other development opportunities if the land is acquired for the purpose of producing rental or other operating income in the future. The properties the Trust primarily invests in have existing rent and expense schedules, or the properties are newly constructed with predictable cash flows.

 Most current acquisitions are in or near metropolitan areas. However, there is no limitation on the geographic areas in which we may acquire targeted investments.

 The Trust may also acquire portfolios of real estate properties held by individual owners and real estate properties held by funds, including hedge funds. It is anticipated that such property owners will primarily sell the properties in exchange for limited partnership interests of the Operating Partnership.

 SEGMENT DATA
 Segment information is presented in accordance with a "management approach," which designates the internal reporting used by the Company's CODM for making decisions and assessing performance as the source of the Company's reportable segments. The Company's segments are organized in a manner consistent with which discrete financial information is available and evaluated regularly by the CODM in deciding how to allocate resources and assess performance.
 An operating segment is defined as a component of an enterprise that engages in business activities from which it may earn revenue and incur expenses, and about which separate financial information is regularly evaluated by the CODM. The CODM is the Company's chief executive officer.
 Each of the operating segments are directly responsible for revenue and expenses related to their operations, including direct segment general and administrative expenses. The CODM assesses the performance of each operating segment using information about operating income (loss) as the primary measure of performance but does not evaluate segments using discrete asset information. There were no material inter-segment transactions during the years ended December 31, 2024, 2023 and 2022, and the Company does not allocate depreciation and amortization, interest, administration of REIT, loss on impairment of property or other income (loss) to the operating segments. The accounting policies for segment reporting are the same as for the Company as a whole.

 We report our results in two reportable segments: residential and commercial properties. Our residential properties include multifamily properties. Our commercial properties include retail, office, industrial and medical properties. We assess and measure operating results based on the non-GAAP financial measurement of net operating income ("NOI"), which we define as total real estate segment revenues less real estate expenses (which consist of real estate taxes, property management fees, utilities, repairs and maintenance, insurance and direct administrative costs). Our management team believes that NOI, as a non-GAAP financial measurement, is an important metric of operating performance even though it should not be considered an alternative to net income or cash flow from operating activities. NOI is unaffected by financing, depreciation, amortization, legal and professional fees and certain general and administrative expenses.

 COMPETITION

 Our properties are located in highly competitive real estate markets. The number of competitive properties in a particular area could have a material adverse effect on our ability to lease space and the amount of rent we can charge at our properties. We compete with many property owners, such as corporations, limited partnerships, individual owners, other real estate investment trusts, insurance companies and pension funds.

 Our competition also consists of other owners and developers of multifamily and commercial properties who are trying to attract tenants to their properties. This competition influences our ability to acquire properties and the prices that we may pay for those properties. We believe, however, that the diversity of our investments, the experience and abilities of our management and the quality of our assets affords us some competitive advantages that have in the past, and should in the future, allow us to operate our business successfully despite the competitive nature of our business.

 Generally, there are multifamily and other similar commercial properties within relatively close proximity to each of our properties. Our retail properties primarily consist of restaurants, beauty and cosmetics, clothing and home furnishings department stores, and pharmacies. In addition to competitor retail properties with similar business models, we and our tenants face increasing competition from outlet malls, internet shopping websites, discount shopping clubs, catalog companies, direct mail and telemarketing.

 ENVIRONMENTAL MATTERS AND GOVERNMENT REGULATION

 As an owner of real estate, we are subject to various environmental laws, rules and regulations adopted by various governmental bodies or agencies. 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 hazardous materials, the remediation of contaminated property associated with the disposal of solid and hazardous materials and other health and safety-related concerns. Under these laws, a current or previous owner or operator of real estate may be liable for the costs of removal or remediation of certain hazardous or toxic substances released at a

 property and may be held liable to a governmental entity or to third parties for property damage or personal injuries and for investigation and clean-up costs incurred in connection with any contamination. We could be subject to liability in the form of fines or damages for noncompliance with these laws and regulations, and some environmental laws create a lien on a contaminated site in favor of the government for damages and costs it incurs in connection with the contamination. Some of these laws and regulations may impose joint and several liability on residents, owners, or operators for the costs of investigation or remediation of contaminated properties, regardless of fault or the legality of the original disposal. In addition, the presence of these substances, or the failure to properly remediate these substances, may adversely affect our ability to sell or rent the property or to use the property as collateral for future borrowing. Compliance with new or more stringent laws or regulations or stricter interpretation of existing laws may require material expenditures by us.

 In addition, we are subject to many other laws and governmental regulations applicable to our properties, and changes in the laws and regulations, or in their interpretation by agencies and the courts, occur frequently. Under the Americans with Disabilities Act of 1990 (the "ADA"), all places of public accommodation are required to meet certain federal requirements related to access and use by disabled persons. The Fair Housing Amendments Act of 1988 (the "FHAA") requires apartment communities first occupied after March 13, 1991, to be accessible to the handicapped and prohibits housing discrimination based upon familial status.

 The Housing for Older Persons Act ("HOPA") provides age-based discrimination exceptions for housing developments qualifying as housing for older persons. Non-compliance with ADA, FHAA or HOPA could result in the imposition of fines, awards of damages to private litigants, payment of attorneys' fees and other costs to plaintiffs, substantial litigation costs and substantial costs of remediation. We believe our properties which are subject to ADA, FHAA and/or HOPA are substantially in compliance with their present requirements.

 Compliance with these laws, rules, and regulations has not had a material adverse effect on our business, assets, or results of operations, financial condition, or ability to pay dividends. We do not believe our existing portfolio as of December 31, 2024 will require us to incur material expenditures to comply with these laws and regulations. However, we cannot assure that future laws, ordinances, or regulations will not impose any material liability, or that the current environmental condition of our properties will not be affected by the operations of tenants, by the existing condition of the land, by operations in the vicinity of the properties, such as the presence of underground storage tanks, or by the activities of unrelated third parties.

 AVAILABLE INFORMATION

 We electronically file our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, proxy and information statements and all amendments to these filings with the Securities and Exchange Commission ("SEC"). The public may read any materials filed by us with the SEC on the internet site maintained by the SEC at www.sec.gov. We also maintain an internet site at www.smftrust.com, which includes the reports and other documents we file with the SEC. These reports are available as soon as reasonably practicable after such material is electronically filed or furnished to the SEC. This reference to our website is not intended to incorporate information found on the website into this filing.

 ITEM 1A. RISK FACTORS

 Risks Related to Sterling Real Estate Trust

 Our results are dependent on amounts received from the leasing and resale of real estate investments, which are subject to market and economic changes. If income is insufficient to meet our capital needs, our ability to carry out our business plans could be adversely affected.

 Our purpose is to acquire and hold real estate investments as long-term investments. The primary income that will be generated by us will be the profits, if any, from the operation or holding of the real estate and upon the resale of the investments. If circumstances arise which cause an investment to become undesirable or remain at its current value or decrease in value, we may generate a loss.

 Our success is based on continuing to locate and hold suitable real estate investments, and failure of our Advisor to locate additional suitable properties or the unsuccessful operation of our existing real estate investments could adversely affect our operations and our ability to pay dividends.

 Our ability to achieve our investment objectives and to pay dividends to our shareholders and distributions to unitholders is dependent upon the performance of our Advisor in locating suitable investments and appropriate financing arrangements for us as well as on the successful management of our properties after acquisition. We currently own, through the Operating Partnership, the properties described under Item 2 — Properties. We cannot be sure our Advisor will be successful in locating suitable investments on financially attractive terms, or be certain that operation of the properties will avoid the risks attendant to real estate acquisitions, such as:

 The risk properties may not perform in accordance with expectations, including projected occupancy and rental rates.

 The risk we may have underestimated the cost of improvements or repairs required to bring or keep an acquired property up to or at standards established for its intended use or its intended market position.

 We may have to make expedited decisions on whether to invest in certain properties, including prior to receipt of detailed information.

 We may be required to make expedited decisions in order to effectively compete for the acquisition of desirable properties and other assets. In such cases, our Advisor and Board of Trustees may not have access to detailed information regarding real estate investments at the time of making an investment decision to pay a non-refundable deposit and to proceed with an acquisition. In addition, the actual time period during which our Advisor will be allowed to conduct due diligence may be limited. Therefore, there can be no assurance our Advisor and Board of Trustees will have knowledge of all circumstances that may adversely affect an investment.

 We may change our investment and operational policies without shareholder consent, and such changes could increase our exposure to additional risks.

 Generally, the Board of Trustees may change our investment and operational policies, including our policies with respect to investments, acquisitions, growth, operations, indebtedness, capitalization and distributions, at any time without the consent of our shareholders, which could result in our making investments different from, and possibly riskier than, investments made in the past. A change in our investment policies may, among other things, increase our exposure to interest rate risk, default risk and commercial real estate market fluctuations, all of which could materially affect our ability to achieve our investment objectives.

 There can be no assurance dividends or distributions will be paid or increase over time.

 There are many factors that can affect the availability and timing of cash dividends to our shareholders and distributions to unitholders. Dividends and distributions will be based principally on cash available from our real estate and other investments. The amount of cash available for dividends will be affected by many factors, such as our ability to acquire profitable real estate investments, successfully manage our real estate properties, our operating expenses, and general economic conditions. We can give no assurance we will be able to pay or maintain dividends or distributions or that dividends or distributions will increase over time.

 Dividends may include a return of capital, and shareholders may be required to recognize capital gain on distributions.

 Dividends payable to shareholders may include a return of capital. To the extent dividends exceed cash flow from operations, a shareholder's basis in our shares will be reduced and, to the extent dividends exceed a shareholder's basis, the shareholder may recognize capital gain and be required to make tax payments.

 We depend on certain executive officers and trustees, and the loss of such persons may delay or hinder our ability to carry out our investment strategies.

 Our future success substantially depends on the active participation of our executive management team, including Kenneth Regan (Chief Executive Officer and trustee), Megan Schreiner (President), Elizabeth Reich (Chief Financial Officer and Treasurer), Luke Swenson (Chief Investment Officer), Michael Carlson (General Counsel and Secretary), David Perkins (Vice President), and other members of the Advisors management team. These individuals hold extensive experience in the commercial real estate industry, and have been instrumental in setting our strategic direction, operating our business, locating desirable real estate investments, arranging necessary financing, and managing our properties. Losing the services of individuals without replacing their position with someone of the same competence and experience could have a material adverse effect on our ability to successfully carry out our investment strategies and achieve our investment objectives. There can be no guarantee they will remain affiliated with us. See "Risks Related to Conflicts of Interest."
 Cybersecurity risks and cyber incidents may adversely affect our business by causing a disruption to our operations, a compromise or corruption of our confidential information, and/or damage to our business relationships, all of which could negatively impact our financial results.

 A cyber incident is considered to be any adverse event that threatens the confidentiality, integrity or availability of our information resources. These incidents may be an intentional attack or an unintentional event and could involve gaining unauthorized access to our information systems for purposes of misappropriating assets, stealing confidential information, corrupting data, or causing operational disruption. The result of these incidents may include disrupted operations, misstated or unreliable financial data, liability for stolen assets or information, increased cybersecurity protection and insurance costs, litigation, and damage to our investor relationships. As our reliance on technology has increased, so have the risks posed to our information systems, both internal and those provided by the Advisor and service providers. Our and our Advisor's processes, procedures and internal controls that are designed to mitigate cybersecurity risks and cyber intrusions do not guarantee that a cyber incident will not occur or that our financial results, operations, or confidential information will not be negatively impacted by such an incident.
 We are not required to comply with certain reporting requirements, including those relating to auditor's attestation reports on the effectiveness of our system of internal control over financial reporting, accounting standards and disclosure about our executive compensation, that apply to other public companies.
 So long as our shares of common stock are not traded on a securities exchange, we will be deemed to be a "non-accelerated filer" under the Exchange Act, and as a non-accelerated filer, we will be exempt from compliance with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act. In addition, so long as we are externally managed by the Advisor and we do not directly compensate our executive officers, or reimburse the Advisor or its affiliates for salaries, bonuses, benefits and severance payments for persons who also serve as one of our executive officers or as an executive officer of the Advisor, we do not have any executive compensation.
 Many of our costs, such as operating and general and administrative expenses, real estate acquisition, and construction costs, could be adversely impacted by periods of heightened inflation.
 A sustained or further increase in inflation could have an adverse impact on our operating expenses incurred in connection with, among others, the property-related services such as repairs and maintenance, janitorial, utilities, security and insurance. Our operating expenses may be recoverable through commercial lease arrangements.

 Risks Related to Our Structure

 Our shareholders may experience dilution if we or our Operating Partnership issues additional securities.

 Our shareholders do not have preemptive rights to any shares issued by us in the future. If we sell or issue additional shares in the future to raise capital, pursuant to a dividend reinvestment plan or in exchange for limited partnership units pursuant to our Operating Partnership's Limited Liability Limited Partnership Agreement ("LLLP Agreement"), our shareholders will experience dilution of their equity investment. In addition, if our Operating Partnership sells additional securities or

 issues additional securities in connection with a property acquisition transaction, we would, and indirectly our shareholders would, experience dilution in their equity position.

 Our securityholders have limited control over our operation, and the Board of Trustees has the sole power to appoint and terminate the Advisor.

 Our Board of Trustees has the authority to determine our major policies, including our policies regarding financing, growth, investment strategies, debt capitalization, REIT qualification, distribution, and to take certain actions including acquiring or disposing of real estate and real estate related investments, dividend declaration and the election or removal of the Advisor. Our securityholders do not have the right to remove the Advisor but have the right to elect and remove trustees. Under our Third Amended and Restated Declaration of Trust, our trustees may not do the following without the approval of the holders of a majority of the outstanding common shares of beneficial interest:

 Amend the Third Amended and Restated Declaration of Trust, except for amendments which do not adversely affect the rights, preference and privileges of shareholders.

 Sell all or substantially all of our assets other than in the ordinary course of business or in connection with a liquidation and dissolution.

 Conduct a merger or other reorganization of the trust; or

 Dissolve or liquidate us.

 Our shareholders have the right, without the concurrence of the Board of Trustees, to terminate the trust and liquidate our assets or amend the Third Amended and Restated Declaration of Trust.

 Shareholders have no role in determining our investments and must rely on our Advisor and oversight by the Board of Trustees.

 For future acquisitions or dispositions, the Board of Trustees has the authority to approve investment acquisitions or dispositions without shareholder approval. Therefore, shareholders will not be able to evaluate the terms of future investment acquisitions or dispositions, their economic merit or other relevant financial data before we acquire or sell investments. Shareholders must rely entirely on the oversight of our Board of Trustees, the management ability of our Advisor and the performance of the property managers.

 We may issue securities with more favorable terms than the outstanding shares without shareholder approval.

 Under our Third Amended and Restated Declaration of Trust, our Board of Trustees has the authority to establish more than one class or series of shares and to fix the relative preferences and rights regarding conversion, voting powers, restrictions, limitations as to dividends and other distributions, and terms or conditions of redemption of such different classes or series without shareholder approval. Thus, our Board could authorize the issuance of a class or series of shares with terms and conditions that could have priority as to dividends and amounts payable upon liquidation over the rights of the holders of our outstanding common shares of beneficial interest. Such class or series of shares 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 otherwise provide a premium price to holders of our shares, even if it would be in the best interest of our shareholders.

 Shareholders could incur current tax liability on dividends they elect to reinvest in our shares, and may have to use separate funds to pay their tax liability.

 Shareholders that participate in our dividend reinvestment plan will be deemed to have received, and for income tax purposes will be taxed on, the amount reinvested in shares to the extent the amount reinvested was not a tax-free return of capital. In addition, our shareholders will be treated for tax purposes as having received an additional dividend to the extent the shares are purchased at a discount to fair market value. As a result, unless shareholders are a tax-exempt entity, they may have to use funds from other sources to pay their tax liability on the value of the shares received.

 There may be conflicts of interest between us and our shareholders on one side and our Operating Partnership and its limited partners on the other side.

 Our trustees and officers have duties to us and our shareholders in connection with their management of us. At the same time, we, as general partner will have duties to our Operating Partnership and its limited partners in connection with the management of the Operating Partnership. Our duties as general partner of the Operating Partnership may come into conflict with the duties of our trustees and officers to us and our shareholders. The LLLP Agreement of our Operating Partnership expressly limits our liability for monetary damages by providing we will not be liable for losses sustained, liabilities incurred or benefits not derived if we acted in good faith. In addition, our Operating Partnership is required to indemnify us and our trustees and officers from and against any and all claims arising from operations of our Operating Partnership, unless it is established: (1) the act or omission was material and committed in bad faith or was the result of active and deliberate dishonesty; (2) the indemnified party received an improper personal benefit in money, property or services; or (3) in the case of a criminal proceeding, the indemnified person had reasonable cause to believe the act or omission was unlawful. The LLLP Agreement also provides that we will not be held responsible for any misconduct or negligence on the part of any agent appointed by us in good faith.

 There is no public trading market for our shares, nor do we expect one to develop, which may negatively impact our shareholders' ability to sell their shares and the price at which shares may be sold.

 There is no public market for our shares and there is no assurance one may develop. In addition, the price shareholders may receive for the sale of their shares is likely to be less than the proportionate value of our investments. If our shareholders are able to find a buyer for their shares, they may have to sell them at a substantial discount from the price they purchased the shares. Consequently, shareholders may not be able to liquidate their investments in the event of emergency or for any other reason. Therefore, shareholders should consider our securities as illiquid and a long-term investment and should be prepared to hold their shares for an indefinite period of time.

 The estimated value of our common stock is based on a number of assumptions and estimates that may not be accurate and is also subject to a number of limitations.

 The current estimated value of our common stock as of January 1, 2025, is $24.00 per share. The methodology used by our Board to determine this value was based on estimates of the value of our real estate investments, cash and other assets and debt and other liabilities as of a date certain and certain additional information. No formal valuation has been undertaken by us. Our valuation process involves a number of estimates, assumptions and subjective judgments that may not be accurate and complete. Further, different parties using different assumptions and estimates could derive a different estimated value per share, which could be significantly different from our estimated value per share. The estimated value per share may not represent current market values or fair values as determined in accordance with U.S. generally accepted accounting principles. A shareholder should not rely on the estimated value per share as being an accurate or precise measure of the then-current value of the shares of our common stock in making a decision to buy or sell shares of our common stock, including whether to reinvest dividends by participating in the dividend reinvestment plan and whether to request redemption pursuant to our share redemption program.

 Risks Related to Our Status as a REIT and Related Federal Income Tax Matters

 If we fail to continue to qualify as a REIT, we would incur additional tax liabilities that would adversely affect our operations and our ability to make distributions and could result in a number of other negative consequences.

 Although our management believes we are organized, have operated, and will be able to continue to be organized and to operate in such a manner to qualify as a real estate investment trust (REIT), as that term is defined under the Internal Revenue Code, we may not have been organized, may not have operated, or may not be able to continue to be organized or to operate in a manner to have qualified or remain qualified as a REIT. Qualification as a REIT involves the application of highly technical and complex Internal Revenue Code provisions for which there are only limited judicial or administrative interpretations. Even a technical or inadvertent mistake could endanger our REIT status.

 The determination that we qualify as a REIT requires an ongoing analysis of various factual matters and circumstances, some of which may not be within our control, regarding our organization and ownership, distributions of our income and the nature and diversification of our income and assets. The fact we hold substantially all of our assets through our Operating Partnership and our ongoing reliance on factual determinations, such as determinations related to the valuation of our assets, further complicates the application of the REIT requirements for us.

 If we lose our REIT qualification, we will face income tax consequences that will reduce substantially our available cash for dividends and investments for each of the years involved because:

 We would be subject to federal corporate income taxation on our taxable income, including any applicable alternative minimum tax, and could be subject to increased state and local taxes.

 We would not be allowed a deduction for dividends paid to shareholders in computing our taxable income; and

 Unless we are entitled to relief under applicable statutory provisions, we could not elect to be taxed as a REIT for four taxable years following the year during which we were disqualified.

 The increased taxes could reduce the value of the shares as well as cash available for dividends to shareholders and investments in additional assets. In addition, if we fail to continue to qualify as a REIT, we will not be required to pay dividends to shareholders. Our failure to continue to qualify as a REIT also could impair our ability to expand our business and to raise capital.

 As a REIT, we may be subject to tax liabilities that reduce our cash flow.

 Even if we continue to qualify as a REIT for federal income tax purposes, we may be subject to federal and state taxes on our income or property, including the following:

 To continue to qualify as a REIT, we must distribute annually at least 90% of our REIT taxable income (which is determined without regard to the dividends-paid deduction or net capital gains) to our shareholders. If we satisfy the distribution requirement but distribute less than 100% of our REIT taxable income, we will be subject to corporate income tax on the undistributed income. In such situation, shareholders will be treated as having received the undistributed income and having paid the tax directly, but tax-exempt shareholders, such as charities or qualified pension plans, will receive no benefit from any deemed tax payments.

 We may be subject to state and local taxes on our income or property, either directly or indirectly, because of the taxation of our Operating Partnership or of other entities through which we indirectly own our assets.

 If we have net income from the sale of foreclosure property we hold primarily for sale to customers in the ordinary course of business or other non-qualifying income from foreclosure property, we must pay a tax on that income at the highest corporate income tax rate.

 If we sell a property, other than foreclosure property, we hold primarily for sale to customers in the ordinary course of business, our gain will be subject to the 100% "prohibited transaction" tax.

 We will be subject to a 4% nondeductible excise tax on the amount, if any, by which the 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.

 We may be forced to borrow funds on a short-term basis, to sell assets or to issue securities to meet the REIT minimum distribution requirement or for working capital purposes.

 To qualify as a REIT, in general, we must distribute to our shareholders at least 90% of our net taxable income each year, excluding capital gains. However, we could be required to include earnings in our net taxable income before we actually receive the related cash. If we do not have sufficient cash to pay the necessary dividends to preserve our REIT status for any year or to avoid taxation, we may need to borrow funds, to sell assets or to issue additional securities even if the then-prevailing market conditions are not favorable for such actions. In addition, we will require a minimum amount of cash to fund our daily operations. Due to the REIT distribution requirements, we may be forced to make distributions when we otherwise would use the cash to fund our working capital needs. Therefore, we may be forced to borrow funds, to sell assets or to issue additional securities at certain times for our working capital needs.

 If our Operating Partnership does not qualify as a partnership, its income may be subject to taxation, and we would no longer qualify as a REIT.

 The Internal Revenue Code classifies "publicly traded partnerships" as associations taxable as corporations (rather than as partnerships), unless substantially all of their taxable income consists of specified types of passive income. We structured our Operating Partnership to be classified as a partnership for federal income tax purposes. However, no assurance can be given the IRS will not challenge our position or will classify our Operating Partnership as a "publicly traded partnership" for federal income tax purposes. To minimize this risk, we have placed certain restrictions on the transfer and/or redemption of partnership units in the LLLP Agreement. If the IRS would assert successfully our Operating Partnership should be treated as a "publicly traded partnership" and substantially all of the Operating Partnership's gross income did not consist of the specified types of passive income, the Internal Revenue Code would treat the Operating Partnership as an association taxable as a corporation. In such event, we would cease to qualify as a REIT. In addition, the imposition of a corporate tax on the Operating Partnership would reduce the amount of distributions the Operating Partnership could make to us and, in turn, reduce the amount of cash available to us to pay dividends to our shareholders.

 We have transfer restrictions on our shares that may limit offers to acquire substantial amounts of the Trust's shares at a premium.

 To qualify as a REIT, our shares must be beneficially owned by 100 or more persons and no more than 50% of the value of our issued and outstanding shares may be owned directly or indirectly by five or fewer individuals. Currently, Third Amended and Restated Declaration of Trust prohibits transfers of our shares that would result in: (1) our shares being beneficially owned by fewer than 100 persons, (2) five or fewer individuals, including natural persons, private foundations, specified employee benefit plans and trusts, and charitable trusts, owning more than 50% of our shares, applying broad attribution rules imposed by the federal income tax laws, or (3) before our shares qualify as a class of publicly-offered securities, 25% or more of our shares being owned by ERISA investors. If a shareholder acquires shares in excess of the ownership limits or in violation of the restrictions on transfer, we:

 May consider the transfer to be void ab initio.

 May not reflect the transaction on our books.

 May institute legal action to enjoin the transaction.

 May redeem such excess shares.

 Automatically transfer any excess shares to a charitable trust for the benefit of a charitable beneficiary.

 If such excess shares are transferred to a trust for the benefit of a charitable beneficiary, the charitable trustee shall sell the excess shares and the shareholder will be paid the net proceeds from the sale equal to the lesser of: (1) the price paid by the shareholder or the "market price" of our shares if no value was paid or (2) the price per share received by the charitable trustee.

 If shares are acquired in violation of the ownership limits or the restrictions on transfer described above:

 Transferee may lose its power to dispose of the shares; and

 Transferee may incur a loss from the sale of such shares if the fair market price decreases.

 These limitations may have the effect of preventing a change of control or takeover of us by a third party, even if the change in control or takeover would be in the best interest of our shareholders.

 Complying with REIT requirements may restrict our ability to operate in a way to maximize profits.

 To qualify as a REIT, we must continually satisfy tests concerning, among other things, the sources of our income, the nature and diversification of our assets, the amounts we distribute to our shareholders, and the ownership of our common shares. For example, we may be required to pay dividends to our shareholders at disadvantageous times, including when we do not have readily available funds. Thus, compliance with the REIT requirements may hinder our ability to operate solely on the basis of maximizing profits.

 Complying with REIT requirements may force us to forego or liquidate otherwise attractive investments which could negatively impact shareholder value.

 To qualify as a REIT, at the end of each calendar quarter, at least 75% of our assets must consist of cash, cash items, government securities and qualified real estate assets. The remainder of our investments in securities (other than government securities and qualified real estate assets), in general, cannot include more than 10% of the voting securities of any one issuer or more than 10% of the value of the outstanding securities of any one issuer. In addition, 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, and no more than 25% of the value of our assets may be represented by securities of one or more taxable REIT subsidiaries. Therefore, we may be required to liquidate otherwise attractive investments or may be forced to forego attractive investments to satisfy these requirements. Such action or inaction could be adverse to our shareholder interests.

 Gains from asset sales may be subject to a 100% prohibited transaction tax, which tax could reduce the Trust's available assets and reduce shareholder value.

 We may have to sell assets from time to time to satisfy our REIT distribution requirements and other REIT requirements or for other purposes. The IRS may posit one or more asset sales may be "prohibited transactions." If we are deemed to have engaged in a "prohibited transaction," our gain from such sale would be subject to a 100% tax. The Internal Revenue Code sets forth a safe harbor for REITs that wish to sell property without risking the imposition of the 100% tax, but we cannot assure you we will be able to qualify for the safe harbor. We will use reasonable efforts to avoid the 100% tax and we do not intend to hold assets in a manner to cause their dispositions to be treated as "prohibited transactions," but we cannot assure you the IRS will not challenge our position, especially if we make frequent sales or sales of assets in which we have short holding periods. Payment of a 100% tax would adversely affect our results of operations.

 Ordinary dividends payable by REITs generally are taxed at the higher ordinary income rate which could reduce the net cash received by shareholders.

 The maximum U.S. federal income tax rate for "qualified dividends" payable by U.S. corporations to individual U.S. shareholders currently is 20%. In addition, the 3.8% tax on net investment income may apply to such dividends. In general, ordinary dividends payable by REITs to its individual U.S. shareholders, however, are generally not eligible for the reduced rates and generally are taxed at ordinary income rates (for REIT dividends received after December 31, 2017, the maximum individual income tax rate currently is 37%, but the current maximum, effective federal income tax rate as to REIT dividends may be reduced to 29.6% because of a partial deduction that may apply with respect to REIT dividends; in addition, the 3.8% tax on net investment income may apply to REIT dividends). It is also possible tax legislation that has or may be enacted might increase this rate differential. The differing treatment of dividends received from REITs and other corporations might cause individual investors to view an investment in REITs as less attractive related to other corporations which might be detrimental to our ability to raise additional funds through the sale of our common shares.

 Changes in legislative or other actions affecting REITs may adversely affect our status as a REIT.

 The rules dealing with U.S. federal income taxation are constantly under review by the legislative process, the IRS and the U.S. Treasury Department. Changes to tax laws (which changes may apply retroactively) could adversely affect us or our shareholders. Furthermore, new legislation, regulations, administrative interpretations or court decisions could change the federal income tax laws with respect to our qualification as a REIT or the federal income tax consequences of our qualification. We cannot predict whether, when, in what forms, or with what effective dates, the laws applicable to us or our shareholders may be changed.

 Our Board of Trustees may revoke our REIT election without shareholder approval, and we would no longer be required to make distributions of our net income.

 Our Board of Trustees can revoke or otherwise terminate our REIT election without the approval of our shareholders if our Board determines it is not in our best interest to continue to qualify as a REIT. In such case, we would become subject to U.S. federal income tax on our taxable income, and we no longer would be required to distribute most of our net income to our shareholders, which may reduce the total return to our shareholders and affect the value of the shares.

 Risks Related to Tax-Exempt Investors

 Common shares may not be a suitable investment for tax-exempt investors.

 There are special considerations that apply to investing in common shares on behalf of a trust, pension, profit sharing or 401(k) plans, health or welfare plans, trusts, individual retirement accounts (IRAs), or Keogh plans. If you are investing the assets of any of the above in common shares, you should satisfy yourself:

 Your investment is consistent with your fiduciary obligations under applicable law, including common law, ERISA and the Internal Revenue Code.

 Your investment is made in accordance with the documents and instruments that govern the trust, plan or IRA, including any investment policy.

 Your 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 Internal Revenue Code.

 Your investment will not impair the liquidity of the trust, plan or IRA.

 Your investment will not produce "unrelated business taxable income" for the trust, plan or IRA.

 You will be able to value the assets of the trust, plan or IRA annually in accordance with ERISA requirements and applicable provisions of the trust, plan, or IRA; and

 Your investment will not constitute a prohibited transaction under Section 406 of ERISA or Section 4975 of the Internal Revenue Code.

 We have not evaluated, and will not evaluate, whether an investment in us is suitable for any particular trust, plan, or IRA.

 Under certain circumstances, tax-exempt shareholders may be subject to unrelated business taxable income, which could adversely affect such shareholders.

 Neither ordinary nor capital gain distributions with respect to our common shares nor gain from the sale of our common shares, in general, should constitute unrelated business taxable income to tax-exempt shareholders. The following, however, are some exceptions to this rule:

 Under certain circumstances, part of the income and gain recognized by certain qualified employee pension trusts with respect to our common shares may be treated as unrelated business taxable income if our common shares are held predominately by qualified employee pension trusts (which we do not expect to be the case).

 Part of the income and gain recognized by a tax-exempt shareholder with respect to common shares would constitute unrelated business taxable income if the tax-exempt shareholder incurs debt to acquire the common shares; and

 Part or all of the income or gain recognized with respect to our common shares held by social clubs, voluntary employee benefit associations, supplemental unemployment benefit trusts and qualified group legal services plans that are exempt from federal income taxation under Sections 501(c)(7), (9), (17), or (20) of the Internal Revenue Code may be treated as unrelated business taxable income.

 Therefore, tax-exempt shareholders are not assured all dividends received from the trust will be tax-exempt.

 Risks Related to Our Relationship with the Advisor and Its Affiliates

 We depend on our Advisor for the day-to-day management and successful operations of the REIT, and if required, we may not be able to find a suitable replacement advisor.

 Our ability to achieve our investment objectives is dependent upon the successful performance of our Advisor in locating attractive acquisitions, advising on dispositions of real estate properties and other real estate related assets, advising on any financing arrangements and other administrative tasks to operate our business. If the Advisor suffers or is distracted by adverse financial and operational problems in connection with its operations unrelated to us or for any reason, it may be unable to allocate a sufficient amount of time and resources to our operations. If this occurs, our ability to achieve our investment objectives or pay dividends to our shareholders may be adversely affected. Any adversity experienced by the

 Advisor or problems in our relationship with the Advisor could also adversely impact the operation of our properties and, consequently, our cash flow and ability to pay dividends to shareholders.

 Either we or the Advisor can terminate the Advisory Agreement upon 60 days written notice to the other party for any reason, or we can terminate the Advisory Agreement immediately for cause or material breach of the Advisory Agreement. In addition, the Board of Trustees may determine not to renew the Advisory Agreement in any year. If this occurs, we would need to find another advisor to provide us with day-to-day management services or engage employees to provide these services directly to us, which would likely be difficult to do and may be costly. There can be no assurances we would be able to find a suitable replacement advisor or suitable employees or enter into agreements for such services on acceptable terms.

 The termination or replacement of the Advisor could trigger a default or repayment event under financings.

 Lenders providing financing for our acquired properties may include provisions in the mortgage loan documentation that state the termination or replacement of the Advisor is an event of default or an event triggering acceleration of the repayment of the loan in full. Even though we will attempt to have such provisions excluded from the loan documents, the lenders may still require them to be included. In addition, the termination or replacement of the Advisor could trigger an event of default under any credit agreement governing a line of credit we may obtain. If an event of default or repayment event occurs with respect to any of our properties, our ability to achieve our investment objectives could be materially adversely affected.

 The Advisor may not be able to retain its key employees, which could adversely affect our ability to carry out our investment strategies.

 We depend on the Advisor's key officers, employees and governors. However, none of these individuals have an employment agreement with the Advisor and the loss of any or all of such person's services and the Advisor's inability to find, or any delay in finding, replacements with equivalent skills and experience, could adversely impact our ability to successfully carry out our investment strategies and achieve our investment objectives.

 Our future success also depends on the Advisor's and its affiliates' ability to identify, hire, train and retain highly qualified real estate, managerial, financial, marketing, and technical personnel to provide the services to us pursuant to the Advisory Agreement and any other written services agreement, including any property management agreements. Competition for such personnel is intense, and the Advisor or its affiliates may not be able to attract, assimilate or retain such personnel in the future. The inability to attract and retain the necessary personnel could have a material adverse effect on our business and results of operations.

 Risks Related to Investments in Real Estate

 Insufficient geographic diversity of our real estate investments could adversely affect our operating results if economic changes impact real estate markets where we own significant assets.

 Geographic concentration of our properties may expose us to economic downturns in those areas where our properties are located. A recession in any area where we own several properties or interests in properties could adversely affect our ability to generate or increase operating revenues, locate, and retain financially sound tenants or dispose of unproductive properties. In addition, it could have an adverse impact on our tenant's ability to meet their obligations to us. Likewise, we may be required to lower our rental rates to attract desirable tenants in such an environment. Currently, the majority of our properties are located in North Dakota and Minnesota, and we hold several properties in Fargo, North Dakota and Moorhead, Minnesota. To the extent weak economic or real estate conditions affect North Dakota, Minnesota, or other markets in which we own properties more severely than other areas of the country, our financial performance could be negatively impacted.

 We may invest in and develop undeveloped real property, which requires us to pay expenses prior to receiving any income on the property.

 Under our Third Amended and Restated Declaration of Trust, we have the discretion to invest up to 10% of our total assets in undeveloped property. When we invest in undeveloped property, such property does not generate operating revenue while costs are incurred to develop the property and may generate other expenses including property taxes and insurance. In addition, construction and development of such properties may not be completed within budget or as scheduled and projected rental levels may not be achieved. In addition to the risks of real estate investments in general, an investment in undeveloped property is subject to additional risks, including the expense and delay which may be associated with rezoning the land for a higher use and the development and environmental concerns of governmental entities and/or community groups. Therefore, we will not generate income on such property until development is completed and we begin leasing the property.

 We may acquire multiple properties in a single transaction, which may adversely affect our operations through the inclusion of less desirable investments or financing requirements greater than we would otherwise be willing to incur.

 Periodically, we may acquire multiple properties in a single transaction. Portfolio acquisitions are more complex and expensive than single property acquisitions, and the risk a multiple property acquisition does not close may be greater than in a single property acquisition. Portfolio acquisitions may also result in us owning investments in geographically dispersed markets, placing additional demands on our ability to manage the properties in the portfolio. In addition, a seller may require a group of properties be purchased as a package even though we may not want to purchase one or more properties in the portfolio. In these situations, if we are unable to identify another person or entity to acquire the unwanted properties, we may be required to operate or attempt to dispose of these properties. To acquire multiple properties in a single transaction we may be required to accumulate a large amount of cash. We would expect the returns we can earn on such cash to be less than the ultimate returns in real property and therefore, accumulating such cash could reduce the funds available for dividends. Any of the foregoing events may increase the risk of adverse business results and negatively affect our results of operations.

 We may invest in co-ventures, where our co-venture partners, co-tenants or other partners in co-ownership arrangements could take actions that decrease the value of a real estate investment and lower our overall return.

 We may enter into joint ventures, tenant-in-common investments or other co-ownership arrangements with our Advisor, its affiliates, our trustees, or third parties having investment objectives similar to ours in the acquisition of real estate investments. In such arrangements, we may be acquiring non-controlling interests in or sharing responsibility for managing the affairs of the investment. In such event, we would not be in a position to exercise sole decision-making authority. Investments such as these may, under certain circumstances, involve risks not present where another party is not involved, including the possibility that partners or co-investees might become bankrupt or fail to fund their required capital contributions. Co-investees may have economic or other business interests or goals which are inconsistent with our business interests or goals, and may be in a position to take actions contrary to our policies or objectives.

 Such investments may also have the potential risk of impasses on decisions, such as a sale, because neither we nor the co-investee would have full control over the joint venture. Disputes between us and co-investees may result in litigation or arbitration that would increase our expenses and prevent our management and the Advisor from focusing their time and effort on our business. Consequently, actions by or disputes with co-investees might result in subjecting additional risk to properties owned by the investment. In addition, we may in certain circumstances be liable for the actions of our co-investees. Any of these risks could subject us to liabilities in excess of those contemplated and reduce our returns on that investment.

 We could experience difficulties or delays renewing leases or re-leasing space, which will increase our costs to maintain such properties without receiving income.

 We derive a significant portion of our net income from rent received from our tenants. Our properties include both residential as well as commercial properties. If a tenant experiences a downturn in its business or other types of financial distress, it may be unable to make timely rental payments. If lease defaults occur, we may experience delays in enforcing

 our rights as landlord. Also, if our tenants decide not to renew their leases, terminate early or default on their lease, we may not be able to re-let the space or may experience delays in finding suitable replacement tenants. Even if tenants decide to renew or lease new space, the terms of renewals or new leases, including the cost of required renovations or concessions to tenants, particularly commercial tenants, may be less favorable to us than current lease terms. As a result, our net income and ability to pay dividends to shareholders could be materially adversely affected. Further, if one of our properties cannot be leased on terms and conditions favorable to us, the property may not be marketable at a suitable price without substantial capital improvements, alterations, or at all.

 We could face potential adverse effects if a commercial tenant is unable to make timely rental payments, declares bankruptcy or become insolvent.

 If a commercial tenant experiences a downturn in its business or other types of financial distress, it may be unable to make timely rental payments. Delayed rental payments could adversely affect cash flow available for dividends. If a commercial tenant declares bankruptcy or becomes insolvent, it may adversely affect the income produced by our properties. If a tenant defaults, we may experience delays and incur substantial costs in enforcing our rights as landlord. However, if a tenant files for bankruptcy, we cannot evict the tenant solely because of such bankruptcy. If a court authorizes the commercial tenant to reject and terminate its lease with us, our claim against the tenant for unpaid future rent would be subject to a statutory cap that might be substantially less than the remaining rent actually owed under the lease. In addition, it is unlikely a bankrupt tenant would pay in full amounts it owes us under a lease. Additionally, we may be required to incur additional costs in the form of tenant improvements and leasing commissions in our efforts to lease the space to a new tenant, as well as lower our rental rates to reflect any decline in market rents. This shortfall could adversely affect our cash flow and results of operations.

 Investments in real estate are illiquid, and we may not be able to resell a property on terms favorable to us.

 We intend to hold real estate properties until such time as our Advisor determines a sale or other disposition appears to be advantageous or when our shareholders approve our termination and liquidation. Because real estate investments are relatively illiquid, it could be difficult for us to promptly sell one or more of our real estate properties on favorable terms. This may be a result of economic conditions, availability of financing, interest rates and other factors beyond our control. This may limit our ability to change our portfolio promptly in response to adverse changes in the performance of any such property or economic or market trends. We cannot predict the length of time needed to find a willing purchaser and to close the sale of a property. Real estate investments by their nature are often difficult or time consuming to liquidate. In addition, federal tax laws imposing a 100% excise tax on gains from sales of certain types of property sales by a REIT (generally, property viewed as being purchased for resale, rather than investment) could limit our ability to sell properties and may affect our ability to sell properties without adversely affecting returns to our shareholders. These restrictions could adversely affect our ability to achieve our investment objectives.

 Valuations and appraisals of our investments may not necessarily correspond to realizable value.

 We value our real estate properties initially at cost, which we expect to represent fair value at that time. After acquisition, valuations may include appraisals of our properties periodically. The valuation methodologies used to value our real estate properties will involve subjective judgments regarding such factors as comparable sales, rental and operating expense data, the capitalization and/or discount rate and projections of future rent and expenses based on appropriate analysis. Although we believe our valuation procedures are designed to determine the accurate fair value of our assets, appraisals and valuations of our real estate properties and other investments assets will be only estimates of fair value and therefore may not correspond to realizable value upon a sale of those assets.

 Uninsured losses related to real estate investments may adversely affect our results of operation.

 We purchase, and we may be required by lenders of mortgage loans or other financings to obtain, certain insurance coverage on our real estate investments. Either the property manager or the Advisor selects policy specifications and insured limits which it believes to be appropriate and adequate given the risk of loss, the cost of the coverage and industry practice. The nature of the tenants at the properties we hold may expose us and our operations to an increase in liability for personal injuries or other losses. There can be no assurance that such insurance will be sufficient to cover potential

 liabilities. Some of our policies may be subject to limitations involving large deductibles or co-payments and policy limits which may not be sufficient to cover losses. Furthermore, insurance against certain risks, such as terrorism, flood, and toxic mold, may be unavailable or available at commercially unreasonable rates or in amounts less than the full market value or replacement cost of the properties. There can be no assurance particular risks that are currently insurable, will continue to be insurable on an economical basis or current levels of coverage will continue to be available. If a loss occurs that is partially or completely uninsured, we may lose all or part of our investment in a property as well as the anticipated future cash flows from such properties. In addition, if the damaged properties are subject to recourse indebtedness, we would continue to be liable for the indebtedness, even if these properties were irreparably damaged. We may also be liable for any uninsured or underinsured personal injury, death, or property damage claims, which could result in decreased dividends to shareholders.

 We may acquire a property or properties "AS IS," which increases the risk of an investment that requires us to remedy defects or costs without recourse to the prior owner.

 We may acquire real estate properties "as is" with only limited representations and warranties from the property seller regarding matters affecting the condition, use and ownership of the property. As a result, if defects in the property (including any building on the property) or other matters adversely affecting the property are discovered, we may not be able to pursue a claim for any or all damage against the property seller. Such a situation could negatively affect our results of operations.

 We rely on affiliated and outside property managers to properly manage and lease our properties.

 The Advisor and an affiliate of the Advisor serve as our principal property managers, and the Advisor has hired and intends to hire other affiliates and/or third parties to serve as additional property managers, to manage our properties and act as leasing agents to lease vacancies in our real estate properties. These property managers will have significant decision-making authority with respect to the management of our properties. Our ability to direct and control how our properties are managed may be limited. We will not, and the Advisor will not as to its affiliates and third-party property managers, supervise any of the property managers or any of their respective personnel on a day-to-day basis. Thus, the success of our business may depend in large part on the ability of our property managers to manage the day-to-day operations and their ability to lease vacancies in our properties. Any adversity experienced by our property managers could adversely impact the operation and profitability of our properties and, consequently, our ability to achieve our investment objectives.

 Risks Related with Our Indebtedness and Financing

 Market conditions could adversely affect our ability to obtain financing.

 As a REIT, we are required to distribute at least 90% of our taxable income (excluding net capital gains) to our shareholders in each taxable year, and thus our ability to retain internally generated cash is limited. Accordingly, our ability to acquire properties or to make capital improvements to or remodel properties can depend on our ability to obtain debt or equity financing from third parties or the sellers of properties or to sell other properties. Market fluctuations and disruptions in the credit markets could significantly affect our ability to access capital. Reductions in our available borrowing capacity, or inability to establish a credit facility when required or when business conditions warrant, could then limit the number, size and quality of properties we could acquire or the amount of improvements we could make on acquired properties, which could materially affect our ability to achieve our investment objectives and may result in price or value decreases of our real estate assets.

 Derivatives and hedging activity could adversely affect cash flow.

 In the normal course of business, we use derivatives to manage our exposure to interest rate volatility on debt instruments, including hedging for future debt issuances. At other times we may utilize derivatives to decrease our exposure to floating interest rates. There can be no assurance that these hedging arrangements will have the desired beneficial impact. These arrangements, which can include a number of counterparties, may expose us to additional risks, including failure of any of

 our counterparties to perform under these contracts, and may involve extensive costs, such as transaction fees or breakage costs, if we terminate them. No strategy can completely insulate us from the risks associated with interest rate volatility.

 We could face difficulties in refinancing loans involving balloon payment obligations.

 Some of our mortgage loans require us to make a lump-sum or "balloon" payment at maturity. Our ability to make a balloon payment at maturity could be uncertain and may depend upon our ability to obtain additional financing, to refinance the debt or our ability to sell the particular property. If we try and refinance the debt, we may not be able to obtain terms as favorable as the original loan. Based on current market interest rates, the interest rate obtained upon refinancing in subsequent years may be higher than the original loan. If we are not able to refinance the debt, or obtain acceptable terms, we may be required to sell the mortgaged property at a time which may not permit realization of the maximum return on such property. The effect of a refinancing or sale could affect the rate of return to shareholders and the projected time of disposition of our assets.
 Lenders may require restrictive covenants relating to our operations, which may adversely affect our flexibility and our ability to achieve our investment objectives.

 Mortgage loans obtained by us could impose restrictions that affect our distribution and operating policies, our ability to incur additional debt and our ability to resell interests in the property. Loan documents may contain covenants that limit our ability to further mortgage the property, discontinue insurance coverage, replace the Advisor or the property manager, or terminate certain operating or lease agreements related to the property. Such restrictions may limit our ability to achieve our investment objectives.

 Increases in interest rates on variable rate debt incurred and new financings by us will reduce cash available for dividends.

 Increases in interest rates on any variable rate debt incurred or new financings would increase our interest costs, which could reduce our cash flows and our ability to pay dividends to our shareholders. 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 in properties at times which may not permit realization of the maximum return on such investments.

 Complying with REIT requirements may limit our ability to hedge liabilities through tax-efficient means, which may adversely affect our results of operations.

 We have entered into a number of hedging transactions and may enter into additional such transactions. Hedging transactions could take a variety of forms, including interest rate swaps or cap agreements, options, futures contracts, forward rate agreements, or similar financial instruments. The REIT provisions of the Code substantially limit our ability to hedge liabilities. Because we conduct substantially all of our operations through our Operating Partnership, any income from a hedging transaction entered into to manage risk of interest rate changes with respect to borrowings made or to be made to acquire or carry real estate assets will not constitute gross income to us for purposes of the 75% or 95% gross income test. As a result, we may be required to limit the Operating Partnership's use of advantageous hedging techniques or to implement hedges through certain taxable corporations. This could increase the costs and risks of hedging activities. We intend to structure any hedging transaction in a manner that does not jeopardize our ability to qualify as a REIT.

 Risks Related to Other Investments

 Investments in other real estate related investments could involve higher risks than investment in real estate properties, which could adversely affect our operations and ability to make dividend payments.

 We are permitted to invest in other real estate assets. We can invest in real estate equity, debt, and derivative securities. These assets can be quite risky, illiquid, and volatile and the value of these assets could cause the value of our shares to fluctuate and could result in losses that materially adversely affect our results of operations.

 Risks Related to Conflicts of Interest

 We are subject to several conflicts of interest arising out of our relationships with our affiliates, including our Advisor and its affiliates.

 There are conflicts of interest in our relationship with the Advisor and its affiliates and several trustees, which could adversely affect our operations and business operations.

 We are subject to potential conflicts of interest arising out of our relationships with the Advisor, its affiliates, and certain trustees. Conflicts of interest may arise among a trustee or the Advisor and its respective affiliates, on the one hand, and us and our shareholders, on the other hand. As a result of these conflicts, the trustee or Advisor may favor its own interests or the interests of its affiliates over the interest of our shareholders or Operating Partnership.

 Division of Loyalty/Allocation of time and effort

 Several of our officers and/or trustees serve as officers, governors, and owners of one or more entities (certain of which are affiliated with our Advisor or trustees), property managers, tenants of our properties, brokerage companies and other real estate entities owning real estate investments. As a result, these individuals owe duties to these other entities and their investors, which may conflict with the duties that they owe to us and our shareholders. Their loyalties to these other entities and investors could result in action or inaction detrimental to our business or result in conflicts relating to the allocation of their time and services, which could harm implementation of our business strategy and investment and leasing opportunities.
 Allocation of investment opportunities

 The Advisor and its affiliates are or may become committed to the management of other business ventures. Accordingly, there may be conflicts of interest between our investments and other investments or business ventures in which the Advisor and its affiliates are participants. In addition, the Advisor and its officers will advise other investment programs that invest in commercial real estate properties and real estate related assets in which we may be interested. Therefore, the Advisor could face conflicts of interest in allocating and determining which programs will have the opportunity to acquire and participate in such investments as they become available. As a result, other investment programs advised by the Advisor may compete with us with respect to investors and certain investments we may want to acquire.

 ITEM 1B. UNRESOLVED STAFF COMMENTS

 None.

 ITEM 1C. CYBERSECURITY
 With oversight from the Board of Trustees, the Advisor is responsible for managing all cyber risks and overseeing our security programs. Cybersecurity risk management has been delegated to the Advisor's executive officers, with day-to-day management carried out by the Advisor's Chief Financial Officer (CFO), Elizabeth Reich.

 The Advisor 's cybersecurity risk oversight includes: (i) reviewing and approving technology security policies and internal cybersecurity controls, (ii) monitoring cybersecurity and information security exposures, (iii) confirming the Advisor has adequate procedures in place to not only control and limit these exposures but also to timely respond to any cyber incident, and (iv) mandatory cyber security trainings for all Advisor personnel.

 The Advisor partners with several third-party technology providers to monitor and protect internal IT infrastructure and data. The Advisor has hired Marco Technologies as the organization's Managed IT provider with tools that systematically update hardware and software while also monitoring uptime to ensure seamless business operations. Marco Technologies also provides cyber security trainings, which all Advisor personnel are required to complete on a monthly basis. The Advisor utilizes Red Canary to provide 24/7 monitoring on all end points with triggers to isolate and mitigate any suspicious cyber activity. Finally, High Point Networks provides physical and cloud-based network data backup solutions for the Advisor. In collaboration with the Advisor, an extensive data back-up plan is in place with Return to Operations objectives of less than 24 hours. Although our CFO does not come from an information technology background, she relies on her extensive organization and project management experience to coordinate and manage the third-party providers who perform our cybersecurity function and to implement our cybersecurity incident response plan described below.

 The Board of Trustees and Advisor are aware that preventive measures cannot prevent all cyber incidents. When a cyber incident occurs, our actions are guided by an incident response plan decision tree to (i) detect, contain and eradicate any threats, (ii) assess materiality, (iii) notify internal parties, (iv) recover any compromised data and information systems, (v) limit impacts of any such incident on the Trust's operations, and (vi) report any such incident as required by law or as otherwise necessary.

 Our business strategy, results of operations or financial condition have not been materially impacted by cybersecurity threats, including as a result of any previous cybersecurity incidents. Although we cannot predict the cybersecurity incidents we may face in the future, we believe we have implemented reasonable cybersecurity protections and do not have reason to believe our business strategy, results of operations or financial condition will be materially impacted by cybersecurity incidents in the future.

 For a discussion of risks from cybersecurity threats, please see "Item 1A. Risk Factors."

 ITEM 2. PROPERTIES

 General

 Our policy is to acquire assets with an intention to hold these assets as long-term investments seeking income and capital appreciation through an increase in value of our real estate portfolio, as well as increased revenue as a result of higher rent. These types of investments are the core of our strategy of creating shareholder value. We currently own and maintain a portfolio of real estate diversified by geographical location and by type and size.

 The majority of our real estate investments are managed by a third party. Property management firms usually receive between 2% and 5% of gross rent collection for their services. Substantially all of our commercial revenues consist of base rents received under leases having terms ranging from month-to-month to over 25 years. Additionally, commercial revenue may also include the reimbursement of operating costs such as common area maintenance expenses, utilities, insurance and real estate taxes. More than half of our existing commercial property leases as of December 31, 2024 contain "step up" rental clauses providing for annual increases in the base rental payments of approximately 1.0% to 3.0% each year during the term of the lease.

 Properties

 As of December 31, 2024, we owned 177 properties located in 12 states, containing approximately 11,955 apartment units and 1,187,000 square feet of leasable commercial space. The residential and commercial portfolio of properties includes a diversified mixture of multifamily, single, and multi-tenant retail and office buildings as well as industrial and medical facility properties. The majority of the properties are located in the largest cities in the states of North Dakota and Minnesota.

 As of December 31, 2024, approximately 82.7% (based on cost) of the properties were apartment communities. Most multifamily dwelling properties are leased to a variety of tenants under short-term leases of less than a year.

 As of December 31, 2024, approximately 17.3% (based on cost) of the properties were comprised of industrial, office, retail and medical commercial properties. Most commercial properties are leased to a variety of tenants under long-term leases.

 The following information applies to all of our operating properties:

 We believe all of our properties are adequately covered by insurance and suitable for their intended purposes.

 Our properties are located in markets where we are subject to competition in attracting new tenants and retaining current tenants; and

 Depreciation is provided on a straight-line basis over the estimated useful lives of the buildings.

 The below table sets forth certain information regarding each of our properties owned, including unconsolidated affiliates, as of December 31, 2024 (in thousands, except units or leasable sq. ft.).

 # of

 Physical

 Units or

 Occupancy

 Year

 Leasable

 Total

 at December

 Acquired

 Sq. Ft

 Investment

 31, 2024

 Amberwood Court

 2016

 $

 4,300

 98.96

 %

 Arbor

 2013

 %

 Arbor II

 2013

 %

 Arbor III

 2013

 91.67

 %

 Ashbury

 2013 & 2016

 4,139

 96.72

 %

 Auburn II

 2007

 1,111

 95.83

 %

 Autumn Ridge

 2004

 10,418

 93.75

 %

 Barrett Arms

 Crookston, MN

 2014

 1,281

 95.83

 %

 Bayview

 2007

 6,151

 94.00

 %

 Bell Plaza* (FKA Northland Plaza)

 Bloomington, MN

 2015

 299,671

 46,908

 79.00

 %

 Belmont

 2020

 1,601

 92.31

 %

 Berkshire

 2008

 83.33

 %

 Betty Ann

 2009

 1,056

 87.50

 %

 2008

 11,737

 2,695

 %

 2008

 13,165

 2,847

 %

 Janesville, WI

 2008

 12,225

 2,230

 %

 Mankato, MN

 2008

 12,965

 3,935

 %

 Marquette, MI

 2008

 11,737

 3,128

 %

 Onalaska, WI

 2008

 12,180

 2,384

 %

 Oshkosh, WI

 2008

 12,191

 2,143

 %

 Sheboygan, WI

 2008

 12,965

 2,482

 %

 Stevens Point, WI

 2008

 13,190

 2,425

 %

 Birchwood I

 2017

 75.00

 %

 Birchwood II

 2017

 3,014

 90.74

 %

 Bluemont Lakes Financial Center

 2004

 31,307

 5,321

 88.51

 %

 Bradbury

 2018

 6,170

 95.83

 %

 Briar Pointe

 2021

 1,935

 93.33

 %

 Bridgeport

 2016

 8,561

 88.33

 %

 Bristol Park

 2016

 5,959

 93.75

 %

 Brookfield

 2008

 2,680

 87.50

 %

 Brownstone

 2021

 4,458

 90.28

 %

 Cambridge (FKA 44th Street)

 2013

 2,575

 95.24

 %

 Candlelight

 2012

 2,452

 90.91

 %

 Carling Manor

 2008

 83.33

 %

 Carlton Place

 2008

 9,441

 86.85

 %

 Carr

 2017

 88.89

 %

 Cedars 4

 2018

 1,294

 72.22

 %

 Chandler 1802

 2014

 1,434

 95.83

 %

 Chandler 1834

 2018

 83.33

 %

 Chandler 1866

 2005

 %

 Chandler 1898

 2022

 %

 Cherry Creek (FKA Village)

 2008

 2,282

 94.29

 %

 Cobalt Apartments

 Fort Worth, TX

 2022

 54,955

 92.96

 %

 Columbia West

 2008

 4,512

 98.57

 %

 Country Club

 2011

 1,843

 90.00

 %

 Countryside

 2011

 1,072

 91.67

 %

 Courtyard

 St. Louis Park, MN

 2013

 9,303

 88.16

 %

 Dickinson, ND

 2012

 2,811

 %

 Moorhead, MN

 2011

 2,712

 1,033

 %

 Dakota Manor

 2014

 3,251

 96.30

 %

 Danbury

 2007

 8,042

 90.30

 %

 Deer Park

 2022

 14,879

 91.30

 %

 Dellwood Estates

 Anoka, MN

 2013

 12,416

 90.15

 %

 Desoto Estates

 2022

 5,992

 94.12

 %

 Desoto Townhomes

 2022

 3,292

 %

 Diamond Bend

 2022

 10,751

 94.87

 %

 Eagle Run

 2010

 7,354

 90.97

 %

 Eagle Sky I

 2016

 1,643

 %

 Eagle Sky II

 2016

 1,719

 %

 East Bridge

 2017

 6,490

 94.83

 %

 Eastbrook

 2020

 1,500

 91.67

 %

 Echo Manor

 2014

 1,198

 %

 Eide Bailly Building***

 2007

 74,646

 11,839

 %

 Emerald Court

 2008

 1,188

 79.17

 %

 Emory North Liberty***

 North Liberty, IA

 2024

 33,017

 49.32

 %

 Evergreen Terrace

 2020

 9,515

 90.28

 %

 Fairview

 2008

 5,499

 98.81

 %

 Family Dollar Store

 2010

 9,100

 %

 Flagstone

 2021

 7,795

 90.91

 %

 Flickertail

 2008

 8,480

 89.44

 %

 Forest Avenue

 2013

 90.00

 %

 Four Points Office Building

 2007

 12,681

 1,494

 %

 Foxtail Creek Townhomes

 2020

 1,488

 %

 Galleria III

 2010

 1,210

 88.89

 %

 Garden Grove

 2016

 7,274

 96.84

 %

 Georgetown

 Fridley, MN

 2014

 37,479

 92.09

 %

 Glen Pond

 Eagan, MN

 2011

 44,859

 93.18

 %

 Goldmark Office Park

 2007

 127,238

 23,479

 %

 Grand Forks Marketplace**

 2003

 182,588

 28,603

 %

 Granger Court

 2013

 4,595

 91.53

 %

 Great American Insurance Building

 2005

 14,796

 2,270

 %

 Guardian Building Products

 2012

 100,600

 3,340

 %

 Hannifin

 2013

 %

 Harrison Richfield

 2007

 8,564

 %

 Hartford

 2018

 1,421

 86.67

 %

 Hawn

 2020

 2,929

 89.58

 %

 Highland Meadows

 2011

 10,865

 96.53

 %

 Hunter's Run I

 2007

 91.67

 %

 Hunter's Run II

 2008

 %

 Huntington

 2015

 90.00

 %

 Islander

 2011

 1,419

 91.67

 %

 Kennedy

 2013

 75.00

 %

 Lexington Lofts 1****

 Circle Pines, MN

 2024

 42,705

 92.83

 %

 Lexington Lofts 2****

 Circle Pines, MN

 2024

 27,104

 84.85

 %

 Library Lane

 2007

 3,024

 95.00

 %

 Madison (FKA Columbine)

 2015

 %

 Maple Ridge

 2008

 11,018

 87.36

 %

 Maplewood

 Maplewood, MN

 2014

 18,312

 94.17

 %

 Maplewood Bend

 2009 and 2010

 7,764

 91.80

 %

 Martha Alice

 2009

 1,102

 95.83

 %

 Mayfair (FKA Colony Manor)

 2008

 1,511

 87.50

 %

 Midtown Plaza

 Minot, ND

 2004

 17,808

 1,342

 64.98

 %

 Monticello

 2013

 77.78

 %

 Montreal Courts

 Little Canada, MN

 2013

 31,270

 91.89

 %

 Morningside

 2018

 88.24

 %

 Newgate

 2022

 2,480

 97.83

 %

 Oak Court

 2008

 3,321

 91.36

 %

 Oakview Townhomes (FKA Arrowhead)

 2017

 6,442

 96.34

 %

 O'Reilly Auto Store

 2010

 6,300

 %

 Oxford

 2021

 10,374

 91.03

 %

 Pacific Park I

 2013

 1,064

 80.00

 %

 Pacific Park II

 2013

 1,182

 92.31

 %

 Pacific South

 2013

 80.00

 %

 Park Circle

 2017

 94.44

 %

 Parkview Arms

 2015

 4,904

 88.71

 %

 Parkway Office (FKA Echelon Building)

 2006

 16,937

 1,893

 -

 %

 Parkwest Gardens

 2014

 8,548

 90.28

 %

 Parkwood

 2008

 1,587

 87.50

 %

 Pebble Creek

 2008

 2,881

 97.14

 %

 Pinehurst

 2021

 15,077

 89.05

 %

 Plumtree

 2017

 94.44

 %

 Prairiewood Court I & II

 2006 and 2007

 2,526

 95.00

 %

 Prairiewood Meadows

 2012

 6,361

 93.18

 %

 Quail Creek

 Springfield, MO

 2015

 11,283

 91.38

 %

 Robinwood

 Coon Rapids, MN

 2014

 8,399

 94.17

 %

 Rosedale Estates

 Roseville, MN

 2014

 35,074

 95.00

 %

 Rosegate

 2008

 4,026

 85.56

 %

 Rosser

 2020

 1,515

 95.83

 %

 Roughrider

 2016

 91.67

 %

 Saddlebrook

 2008

 1,804

 86.67

 %

 Sage Park (FKA Brighton Village)

 New Brighton, MN

 2014

 18,050

 93.33

 %

 Sargent

 2017

 1,801

 94.44

 %

 Schrock

 2013

 88.89

 %

 SE Brooklyn Park****

 Brooklyn Park MN

 2022

 30,933

 96.60

 %

 SE Maple Grove, LLC****

 Maple Grove, MN

 2021

 32,101

 95.70

 %

 SE Rogers, LLC****

 Rogers, MN

 2022

 32,504

 95.20

 %

 SE Savage, LLC****

 Savage, MN

 2021

 36,823

 95.30

 %

 Sheridan Pointe

 2013

 2,969

 93.75

 %

 Sierra Ridge

 2006 and 2011

 11,257

 95.59

 %

 Somerset

 2008

 4,340

 89.33

 %

 Southgate

 2007

 6,667

 91.36

 %

 Southview III

 2011

 94.44

 %

 Southview Village

 2007

 3,805

 94.44

 %

 Spring

 2013

 1,053

 80.00

 %

 ST Fossil Creek*

 Fort Worth, TX

 2023

 49,977

 84.65

 %

 ST Oak Cliff*

 Dallas, TX

 2023

 49,102

 95.91

 %

 Stanford Court

 2013

 5,040

 96.88

 %

 Stonefield

 2014

 29,079

 90.10

 %

 Stony Brook

 2009

 12,048

 90.54

 %

 Summerfield

 2015

 88.89

 %

 Summit Point

 2015

 6,983

 97.70

 %

 Sunchase

 2017

 1,974

 94.44

 %

 Sunset Ridge

 2008 and 2010

 12,485

 95.51

 %

 Sunview

 2008

 2,085

 %

 Sunwood Estates

 2007

 4,667

 91.25

 %

 Thunder Creek

 2018

 5,476

 94.74

 %

 2015

 22,293

 2,376

 %

 Dickinson, ND

 2012

 17,760

 1,850

 %

 2012

 29,800

 3,243

 %

 Marshall, MN

 2011

 67,600

 4,029

 %

 Minot, ND

 2012

 23,690

 2,272

 %

 North Platte, NE

 2016

 18,910

 1,593

 %

 Sioux City, IA

 2013

 36,332

 2,787

 %

 Trustmark

 2020

 43,253

 13,560

 %

 Twin Oaks

 2014

 4,476

 96.25

 %

 Twin Parks

 2008

 2,625

 96.97

 %

 Urban Plains

 2024

 44,021

 94.70

 %

 Valley Home Duplexes

 2015

 2,621

 91.67

 %

 Valley View

 Golden Valley, MN

 2014

 7,831

 95.83

 %

 Village Park

 2008

 2,582

 95.00

 %

 Village West

 2008

 3,024

 86.25

 %

 Alexandria, LA

 2009

 14,560

 4,063

 %

 Batesville, AR

 2009

 14,820

 6,877

 %

 Denver, CO

 2011

 17,228

 4,706

 %

 Fayetteville, AR

 2009

 13,650

 5,368

 %

 Laurel, MS

 2010

 14,820

 4,264

 %

 Washington

 2016

 93.75

 %

 Wells Fargo Building

 Duluth, MN

 2007

 98,068

 6,035

 74.09

 %

 West Oak

 2017

 88.89

 %

 Westcourt

 2014

 4,112

 89.06

 %

 Westwood Estates

 2008

 9,027

 90.50

 %

 Willow Park

 2008

 6,897

 90.20

 %

 Wolf Creek

 2020

 5,364

 85.19

 %

 Woodland Pines (FKA Fredericksburg)

 2018

 14,128

 94.22

 %

 * 70.00% ownership interest

 ** 66.67% ownership interest

 *** 50.00% ownership interest

 **** 60% ownership interest

 Geography

 Of our 177 properties, 137 are located in North Dakota, with 83 being located in the greater Fargo, North Dakota and Moorhead, Minnesota metropolitan statistical area. The North Dakota region generated approximately 52.2% of our rental revenue for the year ended December 31, 2024.

 The following table presents the total real estate investment amount by state and annual rental revenue by state, as of the year ended December 31, 2024 (in thousands):

 Real Estate

 Rental

 State

 Investment

 %

 Revenue

 %

 North Dakota

 $

 558,681

 51.0

 %

 $

 83,415

 52.4

 %

 Minnesota

 378,665

 34.6

 %

 56,710

 35.6

 %

 Other

 158,069

 14.4

 %

 19,181

 12.0

 %

 $

 1,095,415

 100.0

 %

 $

 159,306

 100.0

 %

 Economy

 The North Dakota workforce is concentrated in agricultural, energy, information technology, aerospace sciences and medical sciences. According to the U.S. Census Bureau, the 2024 estimated combined population of the Fargo, West Fargo and Moorhead metro area was 218,790 people.

 The following chart depicts the difference in unemployment rates between North Dakota and the national average for 2024:

 Jan

 Feb

 Mar

 Apr

 May

 Jun

 Jul

 Aug

 Sep

 Oct

 Nov

 Dec

 National (1)

 3.7

 %

 3.9

 3.9

 %

 3.9

 %

 4.0

 %

 4.1

 %

 4.2

 %

 4.2

 %

 4.1

 %

 4.1

 %

 4.2

 %

 4.1

 %

 North Dakota (1)

 1.9

 %

 2.0

 %

 2.0

 %

 2.0

 %

 2.0

 %

 2.1

 %

 2.2

 %

 2.3

 %

 2.3

 %

 2.4

 %

 2.4

 %

 2.5

 %

 (1)
 Seasonally adjusted

 Source: Bureau of Labor Statistics

 Acquisitions and Dispositions

 We had two acquisitions, entered into one transaction with an unconsolidated affiliate, and had nine dispositions of property during the year ended December 31, 2024. We had no acquisitions and two dispositions of property during the year ended December 31, 2023. We had eight acquisitions and five dispositions of property during the year ended December 31, 2022.

 Capitalization rates are a key decision-making item used by the Board. In making acquisitions, the Board currently targets capitalization rates between 6.0 to 10.0%, depending on the amount of risk involved. For those properties with greater risk, the Board targets higher capitalization rates (9.0% or greater). For those properties exhibiting less risk, a lower capitalization risk is acceptable. For potential acquisitions, the Board also requires an adequate spread between the financing on the property and the capitalization rate. Capitalization rates for acquisitions are calculated using projected net operating income divided by the investment. Net operating income is calculated by taking GAAP net income and adding back depreciation, amortization, and interest expense. Capitalization rates for dispositions are calculated in the same way with the exception of using historical, rather than projected, net operating income. The market has seen an increase in investors, driving up overall acquisition prices, thus lowering capitalization rates below the target thresholds set by the Board.

 We use historical occupancy, rental income, and expenses to calculate projected net operating income for potential real estate investments. For residential properties, we make various assumptions about future rents, occupancy levels, and expenses based on historical financial information and our assessment of the property's future potential. The projected NOI for residential acquisitions is typically based on historical occupancy and expenses over a three-to-five year period. When historical information is unavailable, market vacancy and credit loss factors are estimated.
 For commercial and residential properties, assumptions regarding rental income and expenses are based on the terms of the in-place leases and available historical financial information which is then used to generate projected net operating income.

 Numerous estimates and assumptions are necessary to generate projected net operating income for potential commercial and residential acquisitions, and there is no guarantee actual net operating income will equal projected net operating income.

 Tenants

 Our tenants are varied and consist of individuals and national, regional, and local businesses. Our commercial properties generally attract a mix of tenants. In each of 2024, 2023 and 2022, no single tenant represented more than 10% of our revenues. We have investments in several types of real estate, including multifamily, retail, office, industrial, and medical. Within our office, retail, and industrial properties, we have over 100 tenants who operate in various industries, including restaurants, pharmacy, medical, financing, banking, insurance, professional services, technology, wholesale and direct retail.

 Lease Expirations

 The vast majority of residential leases are for one-year periods. The following table lists a summary, as of December 31, 2024, of lease expirations on non-residential properties scheduled to occur during each of the ten calendar years from 2024 to 2034 and thereafter, assuming that tenants exercise no renewal options or early termination rights. Base rents do not include CAM (common area maintenance).

 The table is based on leases on December 31, 2024 for our non-residential properties including our unconsolidated affiliates (in thousands, except leasable area data).

 # of Leases

 Gross

 % of Gross

 Expiring

 % of Total

 Lease Expiration Year

 Expiring

 Leasable Area

 Leasable Area

 Base Rent

 Base Rent

 Month-to-Month

 8,743

 0.82

 %

 $

 24,068

 0.21

 %

 2025

 51,638

 4.82

 %

 649,122

 5.71

 %

 2026

 151,630

 14.14

 %

 1,092,588

 9.61

 %

 2027

 84,556

 7.89

 %

 638,192

 5.61

 %

 2028

 91,680

 8.55

 %

 1,026,502

 9.03

 %

 2029

 97,226

 9.07

 %

 1,142,534

 10.05

 %

 2030

 145,343

 13.56

 %

 2,156,624

 18.97

 %

 2031

 94,907

 8.85

 %

 1,456,597

 12.82

 %

 2032

 253,641

 23.66

 %

 2,457,157

 21.63

 %

 2033

 25,365

 2.37

 %

 380,102

 3.34

 %

 2034

 32,048

 2.99

 %

 343,733

 3.02

 %

 35,202

 3.28

 %

 —

 0.00

 %

 Total

 1,071,979

 %

 $

 11,367,219

 %

 Mortgage Notes Secured by the Properties

 On December 31, 2024, we had $566,627 in mortgage notes payable with respect to our properties. Principal payments on these notes are payable as follows (in thousands):

 Years ending December 31,

 2025

 $

 62,228

 2026

 71,332

 2027

 78,971

 2028

 42,581

 2029

 85,597

 225,918

 $

 566,627

 Insurance

 We believe we have adequate property damage, fire loss and liability insurance on all of our properties with reputable, commercially rated companies. We also believe our insurance policies contain commercially reasonable deductibles and limits, adequate to cover our properties. We expect to maintain this type of insurance coverage and to obtain similar coverage with respect to any additional properties we acquire in the near future. Further, we have title insurance relating to our properties in an aggregate amount we believe to be adequate.

 Regulations

 Our properties, as well as any other properties we may acquire in the future, are subject to various federal, state, and local laws, ordinances and regulations. They include, among other things, zoning regulations, land use controls, environmental controls relating to air and water quality, noise pollution and indirect environmental impacts such as increased motor vehicle activity. We believe we have all permits and approvals necessary under current law to operate our properties.

 ITEM 3. LEGAL PROCEEDINGS

 The Company is subject, from time to time, to various legal proceedings and claims that arise in the ordinary course of business. While the resolution of such matters cannot be predicted with certainty, management believes, based on currently available information, that the final outcome of such matters will not have a material effect on the financial statements of the Company.

 ITEM 4. MINE SAFETY DISCLOSURES

 Not applicable.

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

 Market Information

 Our common shares of beneficial interest are not listed on any national exchange or over-the-counter market or quoted on any national securities market, and we currently do not have plans to list or have our common shares quoted.

 Shareholders and Unit Holders

 As of March 19, 2025, we had 12,891,389, common shares of beneficial interests outstanding, held by a total of 1,146 common shareholders and no outstanding options or warrants to purchase our common shares.

 In addition, as of March 19, 2025, there were approximately 18,548,420 limited partnership units of our Operating Partnership outstanding held by approximately 519 limited partners. Pursuant to the exchange rights under the LLLP Agreement of the Operating Partnership, we have the option, upon redemption requests by the holders of the limited partnership units, to acquire the limited partnership units by paying the holders with our common shares of beneficial interest in lieu of delivering cash. The numbers of common shareholders and limited partners is based on the Company's records. There is no public trading market for our common shares or the limited partnership units of our Operating Partnership.

 Quarterly Dividend Data

 We have declared and intend to continue to declare regular quarterly dividends to our common shareholders. Because all of our operations are conducted through our Operating Partnership, our ability to pay dividends depends on the Operating Partnership's ability to make distributions to us and its other limited partners. We pay declared dividends quarterly, whereby the dividend attributable to a calendar quarter would be paid during the first month of the next quarter. Dividends will be paid to common shareholders as of the record dates selected by the Board of Trustees. We intend to make dividends sufficient to satisfy the requirements for qualification as a REIT for federal tax purposes.

 The following tables show the dividends we have declared (including the total amount paid on a per share basis, paid in cash, reinvested in shares of our common stock pursuant to the Dividend Reinvestment Plan, and the total amount paid) during the last two fiscal years (in thousands, except per share data).

 Dividends Per

 Reinvested

 2024 Quarter Ended

 Common Share

 Cash

 via DRP

 Total Dividends

 December 31

 $

 $

 1,622

 $

 2,066

 $

 3,688

 (a)

 September 30

 $

 1,458

 1,906

 3,364

 June 30

 $

 1,407

 1,844

 3,251

 March 31

 $

 1,419

 1,838

 3,257

 $

 5,906

 $

 7,654

 $

 13,560

 Dividends Per

 Reinvested

 2023 Quarter Ended

 Common Share

 Cash

 via DRP

 Total Dividends

 December 31

 $

 $

 1,337

 $

 1,899

 $

 3,236

 (a)

 September 30

 $

 1,323

 1,884

 3,207

 June 30

 $

 1,283

 1,890

 3,173

 March 31

 $

 1,151

 1,996

 3,147

 $

 5,094

 $

 7,669

 $

 12,763

 (a)
 Fourth quarter dividends paid on January 15 th of the following year, for the year ended December 31, 2024. Fourth Quarter dividends were paid on January 16 th of the following year, for the year ended December 31, 2023.

 The Trust expects that future dividends will be maintained at least at the present rate, unless there are changes in our results of operations, our general financial condition, general economic conditions, or the Board determines other action prudent.

 Sale of Securities

 During the year ended December 31, 2024, the Trust issued approximately 322,000 limited partnership units of the Operating Partnership valued at $23.00 per unit for an aggregate consideration of $7,396, for the purchase of real estate investments. At the sole and absolute discretion of the Operating Partnership, and so long as our redemption plans exist, and applicable holding periods are met, limited partners may request the Operating Partnership to redeem their limited partnership units for common shares in lieu of cash for the redemption on a basis of one limited partnership unit for one Sterling common share. The units were sold to accredited investors unaffiliated with the Operating Partnership in private placement transactions exempt from the registration requirements of the Securities Act of 1933 pursuant to Section 4(a)(2) of such Act.

 Other Sales

 During each of the years ended December 31, 2024, 2023 and 2022, there were no common shares of the Trust issued in exchange for limited partnership units of the Operating Partnership.

 Redemptions of Securities

 Set forth below is information regarding common shares and limited partnership units redeemed during the year ended December 31, 2024.

 Average

 Total Number of

 Total Number of

 Approximate Dollar Value of

 Total Number

 Total Number

 Price

 Shares Redeemed

 Units Redeemed

 Shares (or Units) that May

 of Common

 of Limited

 Paid per

 as Part of

 as Part of

 Yet Be Redeemed Under

 Shares

 Partner Units

 Common

 Publicly Announced

 Publicly Announced

 Publicly Announced

 Period

 Redeemed

 Redeemed

 Share/Unit

 Plans or Programs

 Plans or Programs

 Plans or Programs

 January 1-31, 2024

 31,000

 3,000

 $

 21.85

 1,610,000

 1,300,000

 $

 8,937

 February 1-29, 2024

 14,000

 8,000

 $

 21.85

 1,624,000

 1,308,000

 $

 8,452

 March 1-31, 2024

 6,000

 8,000

 $

 21.85

 1,630,000

 1,316,000

 $

 8,170

 Total

 51,000

 19,000

 April 1-30, 2024

 22,000

 6,000

 $

 21.85

 1,652,000

 1,322,000

 $

 7,558

 May 1-31, 2024

 76,000

 94,000

 $

 21.85

 1,728,000

 1,416,000

 $

 3,833

 June 1-30, 2024

 34,000

 33,000

 $

 21.85

 1,762,000

 1,449,000

 $

 2,374

 Total

 132,000

 133,000

 July 1-31, 2024

 17,000

 58,000

 $

 21.85

 1,779,000

 1,507,000

 $

 20,726

 August 1-31, 2024

 9,000

 24,000

 $

 21.85

 1,788,000

 1,531,000

 $

 20,010

 September 1-30, 2024

 3,000

 2,000

 $

 21.85

 1,791,000

 1,533,000

 $

 19,920

 Total

 29,000

 84,000

 October 1-31, 2024

 24,000

 46,000

 $

 21.85

 1,815,000

 1,579,000

 $

 18,392

 November 1-30, 2024

 12,000

 1,000

 $

 21.85

 1,827,000

 1,580,000

 $

 18,126

 December 1-31, 2024

 4,000

 12,000

 $

 21.85

 1,831,000

 1,592,000

 $

 17,774

 Total

 40,000

 59,000

 For the year ended December 31, 2024, the Trust redeemed all shares or units for which we received redemption requests. In addition, for the year ended December 31, 2024, all common shares and units redeemed were redeemed as part of the publicly announced plans.

 The Amended and Restated Share Redemption Plan, effective June 20, 2024, permits us to repurchase common shares held by our shareholders and limited partnership units held by partners of our Operating Partnership, up to an aggregate amount of $75,000 worth of shares and units, upon request by the holders after they have held them for at least one year and subject to other conditions and limitations described in the plan. The amount remaining to be redeemed as of December 31, 2024, was $17,774. The redemption price for such shares and units redeemed under the plan was fixed at $22.80 per share or unit, which became effective January 1, 2025. The redemption plan will terminate in the event the shares become listed on any national securities exchange, the subject of bona fide quotes on any inter-dealer quotation system or electronic communications network or are the subject of bona fide quotes in the pink sheets. Additionally, the Board, in its sole discretion, may terminate, amend or suspend the redemption plan at any time if it determines to do so is in our best interest.

 Exempt Offering of Securities

 On August 1, 2024, we commenced an offering (the "Offering") of up to $30,000 in shares of our common stock, which amount was increased to $33,000 in shares of our common stock on December 12, 2024. The securities offering was facilitated in reliance upon safe harbor exemptions from the registration requirements provided by Section 4(a)(2) of the Securities Act and Regulation D under the Securities Act relating to sales not involving any public offering. The securities were offered and sold only to purchasers who are "accredited investors," as defined in Rule 501 of Regulation D of the Securities Act, and without the use of general solicitation, as that concept is embodied in Regulation D. In addition to sales of common stock for cash, we have adopted a dividend reinvestment plan, which permits stockholders to reinvest their distributions back into the Company.

 ITEM 6. [RESERVED]

 None.

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

 Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995

 Certain statements contained in this section and elsewhere in this Form 10-K constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve a number of known and unknown risks, uncertainties and other factors which may cause our actual results, performance, or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Please see "Note Regarding Forward-Looking Statements" and "Risk Factors" for more information. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statements were made and are not guarantees of future performance.

 Introduction

 The following discussion should be read in conjunction with the financial statements and related notes included under Part II, Item 8 of this Annual Report on Form 10-K.

 Our Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") within this section is focused on the years ended December 31, 2024 and 2023, including year-to-year comparisons between these years. Our MD&A for the year ended December 31, 2022, including year-to-year comparisons between 2023 and 2022, can be found in Part II, Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations in the Company's Annual Report on Form 10-K for the year ended December 31, 2023.

 Overview

 Sterling Real Estate Trust d/b/a Sterling Multifamily Trust ("Sterling", "the Trust" or "the Company") is a registered, but unincorporated business trust organized in North Dakota in December 2002. Sterling has elected to be taxed as a Real Estate Investment Trust ("REIT") under Sections 856-860 of the Internal Revenue Code, which requires that 75% of the assets of a REIT must consist of real estate assets and that 75% of its gross income must be derived from real estate. The net income of the REIT is allocated in accordance with the stock ownership in the same fashion as a regular corporation. Our real estate portfolio consisted of 177 properties containing 11,955 apartment units and approximately 1,187,000 square feet of leasable commercial space as of December 31, 2024. The portfolio has a net book value of real estate investments (cost less accumulated depreciation) of approximately $857,999, which includes construction in progress. Sterling's current acquisition strategy and focus is on multifamily apartment properties.

 Critical Accounting Policies and Estimates

 Below are the accounting policies and estimates that management believe are critical to the preparation of the audited consolidated financial statements included in this Report. Certain accounting policies used in the preparation of these consolidated financial statements are particularly important for an understanding of the financial position and results of operations presented in the historical consolidated financial statements included in this Report. A summary of significant accounting policies is also provided in the aforementioned notes to our consolidated financial statements (see note 2 to the audited consolidated financial statements). These policies require the application of judgment and assumptions by management and, as a result, are subject to a degree of uncertainty. Due to this uncertainty, actual results could differ materially from estimates calculated and utilized by management.

 Impairment of Real Estate Investments

 The Trust's investment properties are reviewed for potential impairment at the end of each reporting period or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. To assess potential impairment of the real estate portfolio, the Trust initially performs a screen test and reviews the net book value (NBV) of each property, compares the trailing twelve months (T12) net operating income (NOI) against the prior year's T12 NOI, and evaluates key assumptions, including the anticipated hold period and applicable capitalization rates, to determine whether any indicators of impairment exist.

 Examples of situations considered to be impairment indicators include, but are not limited to:

 o
 A substantial decline or negative cash flows;

 o
 Continued low occupancy rates;

 o
 Continued difficulty in leasing space;

 o
 Significant financially troubled tenants;

 o
 A change in plan to sell a property prior to the end of its useful life or holding period;

 o
 A significant decrease in market price not in line with general market trends; and

 o
 Any other quantitative or qualitative events or factors deemed significant by the Trust's management or Board of Trustees.

 If the presence of one or more impairment indicators as described above is identified with respect to an investment property, the asset is tested for recoverability by comparing its carrying value to the estimated future undiscounted cash flows. An investment property is considered to be impaired when the estimated future undiscounted cash flows are less than its current carrying value. When performing a test for recoverability or estimating the fair value of an impaired investment property, the Trust makes complex or subjective assumptions which include, but are not limited to:

 o
 Projected operating cash flows considering factors such as vacancy rates, rental rates, lease terms, tenant financial strength, demographics, holding period and property location;

 o
 Projected capital expenditures;

 o
 Projected cash flows from the eventual disposition of an operating property using a property specific capitalization rate;

 o
 Comparable selling prices; and

 o
 Property specific discount rates for fair value estimates as necessary.

 To the extent impairment has occurred, the Trust will record an impairment charge calculated as the excess of the carrying value of the asset over its fair value. Based on evaluation, there was no impairment recorded during the year ended December 31, 2024. There was one impairment loss of $2,603 and $561 during the years ended December 31, 2023 and December 31, 2022, respectively.

 Acquisition of Real Estate Investments

 The Company allocates the purchase price of properties that meet the definition of an asset acquisition to net tangible and identified intangible assets acquired based on their relative fair values. In making estimates of relative fair values for purposes of allocating purchase price, the Company utilizes a number of sources, including independent appraisals that may be obtained in connection with the acquisition or financing of the respective property, our own analysis of recently acquired and existing comparable properties in our portfolio, and other market data. The Company also considers information obtained about each property as a result of its pre-acquisition due diligence, marketing, and leasing activities in estimating the relative fair value of the tangible and intangible assets acquired.

 REIT Status

 We operate in a manner intended to enable us to continue to qualify as a REIT under Sections 856-860 of the Internal Revenue Code. Under those sections, a REIT which distributes at least 90% of its REIT taxable income, excluding net capital gains, as a distribution to its shareholders each year and which meets certain other conditions will not be taxed on

 that portion of its taxable income which is distributed to its shareholders. We intend to distribute to our shareholders 100% of our taxable income. Therefore, no provision for Federal income taxes is required. If we fail to distribute the required amount of income to our shareholders, we would fail to qualify as a REIT and substantial adverse tax consequences may result.

 There have been no material changes in our Critical Accounting Policies as disclosed in Note 2 to our financial statements for the year ended December 31, 2024 included elsewhere in this report.

 Principal Business Activity

 The Operating Partnership currently directly owns 177 properties. Of these, 140 residential properties located in North Dakota, Minnesota, Missouri, Nebraska and Texas and are principally multifamily apartment buildings. The remaining 37 are commercial properties primarily located in North Dakota with others located in Arkansas, Colorado, Iowa, Louisiana, Michigan, Minnesota, Mississippi, Nebraska and Wisconsin. The commercial properties include retail, office, industrial, and medical properties. The Trust's mix of properties is 82.7% residential and 17.3% commercial (based on cost) with a total carrying value of $857,999 at December 31, 2024. The Trust has no properties held for sale at December 31, 2024. The carrying value of assets held for sale at December 31, 2023 is $1,563. Currently our focus is limited to multifamily apartment properties. We will consider unsolicited offers for purchase of commercial properties on a case-by-case basis.

 The following table represents the number of properties the Trust owns in each state as of December 31, 2024:

 Residential Property

 No. of Properties

 Units

 North Dakota

 7,499

 Minnesota

 3,383

 Missouri

 Nebraska

 Texas

 11,955

 Commercial Property

 No. of Properties

 Sq. Ft

 North Dakota

 501,000

 Arkansas

 28,000

 Colorado

 17,000

 Iowa

 36,000

 Louisiana

 15,000

 Michigan

 12,000

 Minnesota

 481,000

 Mississippi

 15,000

 Nebraska

 19,000

 Wisconsin

 63,000

 1,187,000

 Management Highlights

 Increased revenues from rental operations by $15,675 or 10.9% for the year ended December 31, 2024, compared to the year ended December 31, 2023.

 Two multifamily properties were acquired during the year ended December 31, 2024.

 One unconsolidated affiliate transaction entered into during the year ended December 31, 2024.

 Disposed of six residential and three commercial properties during the year ended December 31, 2024.

 Declared dividends aggregating $1.1500 per common share for the year ended December 31, 2024.

 Results of Operations for the Years Year Ended December 31, 2024 and 2023

 Year ended December 31, 2024

 Year ended December 31, 2023

 Total

 Total

 Real Estate Revenues

 $

 139,230

 $

 20,076

 $

 159,306

 $

 123,202

 $

 20,429

 $

 143,631

 Real Estate Expenses

 Real Estate Taxes

 14,590

 1,834

 16,424

 14,025

 2,178

 16,203

 Property Management

 18,759

 19,660

 16,038

 16,861

 Utilities

 11,525

 1,015

 12,540

 11,350

 1,154

 12,504

 Repairs and Maintenance

 27,505

 1,746

 29,251

 30,900

 2,038

 32,938

 Insurance

 6,401

 6,543

 5,437

 5,543

 Real Estate Expenses

 78,780

 5,638

 84,418

 77,750

 6,299

 84,049

 Net Operating Income

 $

 60,450

 $

 14,438

 74,888

 $

 45,452

 $

 14,130

 59,582

 24,463

 21,435

 Depreciation and amortization

 27,488

 25,004

 Administration of REIT

 5,446

 5,430

 Loss on impairment of property

 —

 2,603

 Other income

 (852)

 (2,546)

 Net Income

 $

 $

 7,656

 Net Income Attributed to:

 Noncontrolling Interest

 $

 11,088

 $

 4,763

 Sterling Real Estate Trust

 $

 7,255

 $

 2,893

 Dividends per share (1)

 $

 $

 Earnings per share

 $

 0.6200

 $

 0.2600

 Weighted average number of common shares

 11,648

 11,104

 (1)
 Does not take into consideration the amounts distributed by the Operating Partnership to limited partners.

 Revenues

 Property revenues totaled approximately $159,306 for the year ended December 31, 2024, which constituted an increase of approximately $15,675 or 10.9% compared to the same period in 2023. Residential property revenues increased approximately $16,028 and commercial property revenues decreased approximately $353.

 The following table illustrates the occupancy percentage for the periods ended indicated:

 2024

 2023

 Residential occupancy

 92.5

 %

 90.5

 %

 Commercial occupancy

 90.1

 %

 89.6

 %

 Residential revenues for the year ended December 31, 2024, increased $16,028 or 13.0%, in comparison to the same period in 2023. Residential properties acquired during the year ended December 31, 2024, contributed approximately $7,521 to the increase in total residential revenues. The remaining increase is due to decreased vacancies caused by increased renewals and general market rent increases at our stabilized properties. Residential revenues comprised 87.4% of total revenues for the year ended December 31, 2024, compared to 85.8% of total revenues for the year ended December 31, 2023. Residential economic occupancy year-over-year increased 2.0%, during the year ended December 31, 2024.
 For the year ended December 31, 2024, total commercial revenues decreased $353 or 1.7%, in comparison to the same period in 2023. The decrease was primarily attributed to the disposition of three commercial properties which accounts for $341 of the decrease during the year ended December 31, 2024.

 Expenses

 Residential expenses from operations of $78,780 during the year ended December 31, 2024 increased $1,030 or 1.3% in comparison to the same period in 2023. The increase is attributed to an increase in property management fees of $2,721 or 17.0%, as well as an increase in real estate taxes and property insurance of $565 or 4.0% and $964 or 1.3% respectively. These increases are partially offset by a decrease of $3,395 or 11.0% in repairs and maintenance. This decrease is due to 2022 deferred projects being completed in 2023 due to COVID-19 restrictions, and those expenses did not recur in 2024.

 Commercial expenses from operations of $5,638 during the year ended December 31, 2024 decreased $661 or 10.5% in comparison to the same period in 2023. For the year ended December 31, 2024 the decrease is attributed by the following: a decrease of real estate taxes of $344 or 15.8%, a decrease in repairs and maintenance of $292 or 14.3%.

 Interest expense of $24,463 during the year ended December 31, 2024 increased $3,028 or 12.7% in comparison to the same period in 2023. Interest expense related to an increase in outstanding indebtedness increased by $2,698 during 2024.

 Depreciation and amortization expense of $27,488 during the year ended December 31, 2024 increased $2,484 or 9.9% in comparison to the same period in 2023. Amortization expense will continue to decrease as lease intangibles become fully amortized but will increase upon acquisitions of intangible assets. Depreciation and amortization expense as a percentage of rental income for the years ended December 31, 2024 and 2023 were consistent at 17.3% and 17.4%, respectively.

 REIT administration expenses of $5,446 for the year ended December 31, 2024, increased $16 or 0.4% in comparison to the same period in 2023, which is attributed to an increase in REIT advisory fees paid and audit fees of $220 and $126, respectively. This is partially offset by a decrease of development fees and legal fees of $250 and $86, respectively.

 Other income of $852 for the year ended December 31, 2024 decreased $1,694 or 66.5% in comparison to the same period in 2023. The decrease is primarily due to an increased loss in the Company's nine joint ventures in 2024 of $1,000 when compared to 2023. The decrease can also be attributed to $585 settlement proceeds in 2023.

 Construction in Progress and Development Projects

 The Trust capitalizes direct and certain indirect project costs incurred during the development period such as construction, insurance, architectural, legal, interest and other financing costs, and real estate taxes. At such time as the development is considered substantially complete, the capitalization of certain indirect costs such as real estate taxes, interest, and financing costs cease, all project-related costs included in construction in process are reclassified to land and building and other improvements.

 Construction in progress as of December 31, 2024, consists primarily of construction at several residential properties located in North Dakota and Minnesota. The Rosedale Estates has a project for a parking structure and parking lot. The parking structure is budgeted at $2,550, of which $2,258 has been incurred. The parking lot is budgeted at $5,032, of which $4,172 has been incurred. Remaining construction in progress projects are primarily related to building and roof system, roof replacements on multiple residential properties, residential exterior window systems, and new deck systems on multiple residential properties.

 The Trust has one on-going development through ventures in unconsolidated affiliates.
 Emory North Liberty, currently being developed in North Liberty, Iowa is expected to be complete in the first quarter of 2027. As of December 31, 2024, the phase II construction budget is currently being developed and will be reviewed by the Board of Trustees.
 The development of Kessler Apartments in Fort Worth, Texas was completed in the fourth quarter of 2024 with a total project cost of $48,136.

 Funds From Operations (FFO)

 Funds From Operations (FFO) applicable to common shares and limited partnership units means net income (computed in accordance with GAAP), excluding gains (or losses) from sales of property, plus depreciation and amortization from continuing operations, plus pro rata share of unconsolidated affiliate depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures will be calculated to reflect funds from operations on the same basis.
 Historical cost accounting for real estate assets implicitly assumes 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 have considered presentations of operating results for real estate companies that use historical cost accounting to be insufficient by themselves. The term Funds From Operations (FFO) was created to address this problem. It was intended to be a standard supplemental measure of REIT operating performance that excluded historical cost depreciation from — or "added back" to — GAAP net income.

 Our management believes this non-GAAP measure is useful to investors because it provides supplemental information that facilitates comparisons to prior periods and for the evaluation of financial results. Management uses this non-GAAP measure to evaluate our financial results, develop budgets and manage expenditures. The method used to produce non-GAAP results is not computed according to GAAP, is likely to differ from the methods used by other companies and should not be regarded as a replacement for corresponding GAAP measures. Management encourages the review of the reconciliation of this non-GAAP financial measure to the comparable GAAP results.

 Since the introduction of the definition of FFO, the term has come to be widely used by REITs. In the view of National Association of Real Estate Investment Trusts ("NAREIT"), the use of the definition of FFO (combined with the primary GAAP presentations required by the Securities and Exchange Commission) has been fundamentally beneficial, improving the understanding of operating results of REITs among the investing public and making it easier than before to compare the results of one REIT with another.

 While FFO applicable to common shares and limited partnership units are widely used by REITs as performance metrics, all REITs do not use the same definition of FFO or calculate FFO in the same way. The FFO reconciliation presented here is not necessarily comparable to FFO presented by other real estate investment trusts. FFO should also not be considered as an alternative to net income as determined in accordance with GAAP as a measure of a real estate investment trust's performance, but rather should be considered as an additional, supplemental measure, and should be viewed in conjunction with net income as presented in the consolidated financial statements included in this report. FFO applicable to common shares and limited partnership units does not represent cash generated from operating activities in accordance with GAAP and is not necessarily indicative of sufficient cash flow to fund a real estate investment trust's needs or its ability to service indebtedness or to pay dividends to shareholders.

 The following tables include calculations of FFO, and the reconciliations from net income, for the years ended December 31, 2024, 2023 and 2022, respectively. We believe these calculations are the most comparable GAAP financial measure (in thousands):

 Reconciliation of Net Income Attributable to Sterling to FFO Applicable to Common Shares and Limited Partnership Units

 Year ended December 31, 2024

 Year ended December 31, 2023

 Year ended December 31, 2022

 Weighted Avg

 Weighted Avg

 Weighted Avg

 Shares and

 Shares and

 Shares and

 Units

 Units

 Units

 (in thousands, except per share data)

 Net Income attributable to Sterling Real Estate Trust

 $

 7,255

 11,648

 $

 2,893

 11,104

 $

 8,921

 10,632

 Adjustments:

 Noncontrolling Interest - Operating Partnership Units

 11,531

 18,670

 4,848

 18,619

 15,628

 18,626

 Depreciation & Amortization from continuing operations (1)

 26,075

 24,396

 24,044

 Pro rata share of unconsolidated affiliate depreciation and amortization

 7,491

 5,960

 3,312

 Loss on impairment of real estate investments

 —

 2,603

 Gain on sale of depreciable real estate

 (3,069)

 (2,597)

 (11,090)

 Funds from operations applicable to common shares and limited partnership units (FFO)

 $

 49,283

 30,318

 $

 38,103

 29,723

 $

 41,376

 29,258

 (1)
 Excludes the portion allocated to noncontrolling interest in the amount of $1,413, $608, and $635 the years ended December 31, 2024, 2023 and 2022, respectively.

 Liquidity and Capital Resources

 Evaluation of Liquidity

 We continually evaluate our liquidity and ability to fund future operations, debt obligations, and any repurchase requests. As part of our analysis, we consider among other items, the credit quality of tenants and lease expirations.

 Our principal demands for funds will be for the: (i) acquisition of real estate and real estate-related investments, (ii) payment of acquisition related expenses and operating expenses, (iii) payment of dividends/distributions, (iv) payment of principal and interest on current and any future outstanding indebtedness, (v) redemptions of our securities under our redemption plans and (vi) capital improvements, development projects, and property related expenditures. Generally, we expect to meet cash needs for the payment of operating expenses and interest on outstanding indebtedness from cash flow from operations. We expect to pay dividends/distributions and any repurchase requests to our shareholders and the unit holders of our Operating Partnership from cash flow from operations; however, we may use other sources to fund dividends/distributions and repurchases, as necessary.

 At December 31, 2024, our unrestricted cash resources consisted of cash and cash equivalents totaling $4,798. Our unrestricted cash reserves can be used for working capital needs and other commitments. In addition, we had unencumbered properties with a gross book value of $73,459, which could potentially be used as collateral to secure additional financing in future periods.

 The Trust maintains a $4,915 variable rate (floating SOFR plus 2.00%) line of credit agreement with Bremer Bank, which expires in December 2026; and a $3,500 variable rate (floating SOFR plus 2.00%) line of credit agreement with Bremer Bank, which expires December 2026. We also have a $14,800 variable rate (Prime minus 1.50%) line of credit agreement with Gate City Bank, which expires in July 2029. The lines of credit are secured by specific properties. The sale of our securities and issuance of limited partnership units of the Operating Partnership in exchange for property acquisitions and sale of additional common or preferred shares is also expected to be a source of long-term capital for us.

 During the year ended December 31, 2024, we sold 1,356 common shares, which raised gross proceeds of $31,186 in private placements. During the year ended December 31, 2024, we issued 343,000 and 121,000 common shares under the dividend reinvestment plan and optional share purchases, respectively which raised gross proceeds of $10,267. During the year ended December 31, 2023, we did not sell any common shares in private placements. During the year ended December 31, 2023, we issued 353,000 and 173,000 common shares under the dividend reinvestment plan and as optional share purchases, respectively which raised gross proceeds of $11,714.

 Additionally, to reduce our cash investment and liquidity needs, the Trust utilizes the UPREIT structure whereby we can acquire property in whole or in part by issuing partnership units in lieu of cash payments. During the year ended December 31, 2024, the Operating Partnership issued approximately 321,000 limited partnership units of the Operating Partnership valued at $23.00 per unit for an aggregate consideration of approximately $7,396 for the purchase of real estate investments. During the year ended December 31, 2023, there was no Operating Partnership issued for the purchase of real estate investments.

 The Board of Trustees, acting as general partner for the Operating Partnership, determined an estimate of fair value for the limited partnership units exchanged through the UPREIT structure. In determining this value, the Board relied upon their experience with, and knowledge about, the Trust's real estate portfolio and debt obligations. The Board typically determines the fair value on an annual basis. The Trustees determine the fair value, in their sole discretion and use data points to guide their determination which is typically based on a consensus of opinion. Thus, the Trust does not employ any specific valuation methodology or formula. Rather, the Board looks to available data and information, which is often adjusted and weighted to comport more closely with the assets held by the Trust at the time of valuation. The principal valuation methodology utilized is the NAV calculation/direct capitalization method. The information made available to the Board is assembled by the Trust's Advisor. In addition, the Board considers how the price chosen will affect existing share and unit values, redemption prices, dividend coverage ratios, yield percentages, dividend reinvestment factors, and future UPREIT transactions, among other considerations and information. The fair value was not determined based on, nor intended to comply with, fair value standards under US GAAP and the value may not be indicative of the price we would get for selling our assets in their current condition. At this time, no shares are held in street name accounts and the Trust is not subject to FINRA's specific pricing requirements set out in Rule 2340 or otherwise.

 As with any valuation methodology, the methodologies utilized by the Board in reaching an estimate of the value of the shares and limited partnership units are based upon a number of estimates, assumptions, judgments or opinions that may, or may not, prove to be correct. The use of different estimates, assumptions, judgments, or opinions would likely have resulted in significantly different estimates of the value of the shares and limited partnership units. In addition, the Board's estimate of share and limited partnership unit value is not based on the book values of our real estate, as determined by GAAP, as our book value for most real estate is based on the amortized cost of the property, subject to certain adjustments.

 Cash on hand, together with cash from operations and access to the lines of credit is expected to provide sufficient capital to meet the Company's needs for at least the next 12 months and, we will use cash flows from operations, net proceeds from share offerings, debt proceeds, and proceeds from the disposition of real estate investments to meet long term liquidity demands.

 Credit Quality of Tenants

 We are exposed to credit risk within our tenant portfolio, which can reduce our results of operations and cash flow from operations if our tenants are unable to pay their rent. Tenants experiencing financial difficulties may become delinquent on their rent or default on their leases and, if they file for bankruptcy protection, may reject our lease in bankruptcy court, resulting in reduced cash flow. This may negatively impact net asset values and require us to incur impairment charges. Even if a default has not occurred and a tenant is continuing to make the required lease payments, we may restructure or renew leases on less favorable terms, or the tenant's credit profile may deteriorate, which could affect the value of the leased asset and could in turn require us to incur impairment charges.

 To mitigate credit risk on commercial properties, we have historically looked to invest in assets that we believe are critically important to our tenant's operations and have attempted to diversify our portfolio by tenant, tenant industry and geography. We also monitor all of our properties' performance through review of rent delinquencies as a precursor to a potential

 default, meetings with tenant management and review of tenants' financial statements and compliance with financial covenants. When necessary, our asset management process includes restructuring transactions to meet the evolving needs of tenants, refinancing debt and selling properties, as well as protecting our rights when tenants default or enter into bankruptcy.

 Lease Expirations and Occupancy

 Our residential leases are for a term of one year or less. The Advisor, with the assistance of our property managers, actively manages our real estate portfolio and begins discussing options with tenants in advance of scheduled lease expirations. In certain cases, we may obtain lease renewals from our tenants; however, tenants may elect to move out at the end of their term. In the cases where tenants elect not to renew, we may seek replacement tenants or try to sell the property.

 Cash Flow Analysis

 Our objectives are to generate sufficient cash flow over time to provide shareholders with increasing dividends and to seek investments with potential for strong returns and capital appreciation throughout varying economic cycles. We have funded 100% of dividends paid with operating cash flows. In setting a dividend rate, we focus primarily on expected returns from investments we have already made to assess the sustainability of a particular dividend rate over time.

 Twelve Months Ended

 2024

 2023

 Net cash flows provided by operating activities

 $

 46,559

 $

 48,546

 Net cash flows (used in) provided by investing activities

 $

 (40,841)

 $

 16,745

 Net cash flows (used in) financing activities

 $

 (27,854)

 $

 (40,810)

 Operating Activities

 Our real estate properties generate cash flow in the form of rental revenues, which is reduced by interest payments, direct lease costs and property-level operating expenses. Property-level operating expenses consist primarily of property management fees including salaries and wages of property management personnel, utilities, cleaning, repairs, insurance, security and building maintenance cost, and real estate taxes. Additionally, we incur general and administrative expenses, advisory fees, acquisition and disposition expenses and financing fees. As of the year ended December 31, 2024 and 2023, salaries and wages of property management personnel with a related party was $9,971 and $9,936, respectively.

 Net cash provided by operating activities was $46,559 and $48,546 for the years ended December 31, 2024 and 2023, respectively, which consists primarily of net income from property operations, adjusted for non-cash depreciation and amortization.

 Investing Activities

 Our investing activities generally consist of real estate-related transactions (purchases and sales of properties) and payments of capitalized property-related costs such as intangible assets.

 Net cash (used in) provided by investing activities was ($40,841) and $16,745 for the years ended the year ended December 31, 2024 and 2023, respectively (this does not include the value of UPREIT units issued in connection with investing activities). For the years ended December 31, 2024 and 2023, cash flows used in investing activities related specifically to the acquisition of properties and capital expenditures was ($46,955) and ($12,200), respectively. Proceeds received from the sale of real estate investments during the year ended December 31, 2024 and 2023, offset this amount by $9,057 and $5,068, respectively.

 Financing Activities

 Our financing activities generally consist of funding property purchases by raising proceeds and securing mortgage notes payable as well as paying dividends, paying syndication costs, and making principal payments on mortgage notes payable.

 Net cash (used in) financing activities was ($27,854) and ($40,810), respectively, for the years ended December 31, 2024 and 2023. During the year ended December 31, 2024, we paid $27,104 in dividends and distributions, redeemed $11,915 of shares and units, received $30,803 from new mortgage notes payable, and made mortgage principal payments of $62,689. For the year ended December 31, 2023, we paid $26,356 in dividends and distributions, redeemed $4,995 of shares and units, received $67,911 from new mortgage notes payable, and made mortgage principal payments of $53,246.

 Dividends and Distributions

 Common Stock

 We declared cash dividends to our shareholders during the period from January 1, 2024 to December 31, 2024 totaling $13,561 or $1.1500 per share, of which $5,907 was cash dividends and $7,654 were reinvested through the dividend reinvestment plan. The cash dividends were paid from our $46,559 of cash flows from operations.

 We declared cash dividends to our shareholders during the period from January 1, 2023 to December 31, 2023 totaling $12,763 or $1.1500 per share, of which $5,095 was cash dividends and $7,669 were reinvested through the dividend reinvestment plan. The cash dividends were paid from our $48,546 of cash flows from operations.

 We continue to provide cash dividends to our shareholders from cash generated by our operations. The following chart summarizes the sources of our cash used to pay dividends. Our primary source of cash is cash flow provided by operating activities from our investments as presented in our cash flow statement. We also include distributions from unconsolidated affiliates to the extent that the underlying real estate operations in these entities generate these cash flows and the gain on sale of properties relates to net profits from the sale of certain properties. Our presentation is not intended to be an alternative to our consolidated statement of cash flows and does not present all sources and uses of our cash.

 The following table presents certain information regarding our dividend coverage:

 Year Ended

 2024

 2023

 Cash flows provided by operations (net income of $18,343 and $7,656, respectively)

 $

 46,559

 $

 48,546

 Distributions in excess of earnings received from unconsolidated affiliates

 2,372

 2,483

 Proceeds from sale of real estate investments and non-real estate investments

 9,057

 5,068

 Dividends declared

 (13,560)

 (12,763)

 Excess

 $

 44,428

 $

 43,334

 Limited Partnership Units

 The Operating Partnership agreement provides that our Operating Partnership will distribute to the partners (subject to certain limitations) cash from operations on a quarterly basis (or more frequently, if we so elect) in accordance with the percentage interests of the partners. We determine the amounts of such distributions in our sole discretion.

 For the year ended December 31, 2024, we declared quarterly distributions totaling $21,448 to holders of limited partnership units in our Operating Partnership, which we paid on April 15, July 15, and October 15, 2024, and January 15, 2025. Distributions were paid at a rate of $0.2875 per unit per quarter, which is equal to the per share distribution rate paid to the common shareholders.

 For the year ended December 31, 2023, we declared quarterly distributions totaling $21,407 to holders of limited partnership units in our Operating Partnership, which we paid on April 17, July 17, October 16, 2023, and January 16,

 2024. Distributions were paid at a rate of $0.2875 per unit per quarter, which is equal to the per share distribution rate paid to the common shareholders.

 Sources of Dividends and Distributions

 For the year ended December 31, 2024, we paid aggregate dividends of $13,109, which were paid with cash flows provided by operating activities. Our funds from operations, or FFO, was $49,283, therefore, our management believes our distribution policy is sustainable over time. For the year ended December 31, 2023, we paid aggregate dividends of $12,635 which were paid with cash flows provided by operating activities. Our FFO was $38,103 for the year ended December 31, 2023. For a further discussion of FFO, including a reconciliation of FFO to net income, see "Funds from Operations" above.

 Recently Issued Accounting Pronouncements

 For a discussion of recently issued accounting pronouncements, see Note 2, Principal Activity and Significant Accounting Policies— Recently Issued Accounting Pronouncements, to the consolidated financial statements that are a part of this Annual Report on Form 10-K.

 Recent Developments

 On January 15, 2025, we paid a dividend or distribution of $0.2875 per share on our common shares of beneficial interest or limited partnership units, to common shareholders and limited unit holders of record on December 31, 2024.

 We have evaluated subsequent events through the date of this filing. We are not aware of any other subsequent events which would require recognition or disclosure in the consolidated financial statements.

 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 The Trust is exposed to certain risk arising from both its business operations and economic conditions and principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Trust manages economic risks, liquidity, and credit risk primarily by managing the amount, sources, and duration of its assets and liabilities. The principal material financial market risk to which we are exposed, is interest-rate risk, which the Trust manages through the use of derivative financial instruments. Specifically, the Trust enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. During the year ended December 31, 2024, the Trust used 15 interest rate swaps to hedge the variable cash flows associated with market interest rate risk. These swaps have an aggregated notional amount of $127,050 for the year ended December 31, 2024. We do not enter into derivative instruments for trading or speculative purposes. The interest rate swaps expose us to credit risk in the event of non-performance by the counterparty under the terms of the agreement.

 As of December 31, 2024, The Trust had $127,050 of variable-rate borrowings, with the total outstanding balance fixed through interest rate swaps. Even though our goal is to maintain a fairly low exposure to interest rate risk, we may become vulnerable to significant fluctuations in interest rates on any future repricing or refinancing of our fixed or variable rate debt or future debt. The sensitivity analysis is not included as it is negated by the interest rate swaps.

 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

 Our consolidated financial statements included in this Annual Report are listed in Item 15 and begin immediately after the signature pages.

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

 None.

 ITEM 9A. CONTROLS AND PROCEDURES

 Disclosure Controls and Procedures

 Sterling Real Estate Trust's Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of Sterling Real Estate Trust's disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934) as of the end of the period covered by this Report. Based on the evaluation, Sterling Real Estate Trust's Chief Executive Officer and Chief Financial Officer have concluded that Sterling Real Estate Trust's disclosure controls and procedures were not effective as of such date due to a material weakness in internal control over financial reporting, described below.

 Report of Management on Internal Control Over Financial Reporting

 Our management is responsible for establishing and maintaining a comprehensive system of internal control over financial reporting to provide reasonable assurance of the proper authorization of transactions, the safeguarding of assets and the reliability of the financial records. Our internal control system was designed to provide reasonable assurance to our management and Board of Trustees regarding the preparation and fair presentation of published financial statements. The system of internal control over financial reporting provides for appropriate division of responsibility and is documented by written policies and procedures that are communicated to employees. The framework upon which management relied in evaluating the effectiveness of our internal control over financial reporting was set forth in Internal Controls – Integrated Framework (2013) published by the Committee of Sponsoring Organization of the Treadway Commission.

 Our internal control system was designed 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 in the U.S. Our internal control over financial reporting includes those policies and procedures that:

 i.
 pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and disposition of our assets,

 ii.
 provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the U.S., and that our receipts and expenditures are being made only in accordance with authorization of our management and trustees; and

 iii.
 provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the consolidated financial statements.

 Based on the results of our evaluation, our management concluded that our internal control over financial reporting was not effective as of December 31, 2024. However, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in our business or other conditions, or that the degree of compliance with our policies or procedures may deteriorate.

 Material Weakness in Internal Control Over Financial Reporting

 A material weakness, as defined in Rule 12b-2 under the Exchange Act, is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of a company's annual or interim financial statements will not be prevented or detected on a timely basis.

 During our annual financial statement audit for the year ended December 31, 2024, we discovered that we had failed to properly record a journal entry for an assumed interest rate swap associated with the purchase accounting allocation for a real estate investment acquisition completed in April of 2024 in the amount of approximately $3.3 million which resulted in an overstatement of investments in real estate and other comprehensive income. This error did not, however, necessitate the restating of our financial statements as of and for the three and six months ended June 30, 2024, nor as of and for the three and nine months ended September 30, 2024. We determined that our review control to evaluate the accounting and disclosure of purchase accounting allocations for acquisitions of real estate investments did not operate effectively. The error has been adjusted for in the financial statements on Form 10-K as of and for the year ended December 31, 2024.

 Inherent Limitations of Disclosure Controls and Procedures and Internal Control over Financial Reporting

 There are inherent limitations to the effectiveness of any control system. A control system, no matter how well conceived and operated, can provide only reasonable assurance that its objectives are met. No evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within us have been detected. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or because the degree of compliance with the policies and procedures may deteriorate.

 Changes in Internal Control Over Financial Reporting

 During the year ended December 31, 2024, except for the material weakness noted above, no changes in our internal control over financial reporting occurred that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. The remediation plan described above was implemented subsequent to December 31, 2024.

 Remediation of Material Weaknesses

 We are committed to maintaining a strong internal control environment. Our management, with oversight from our Audit Committee, has initiated a plan to remediate the material weakness. Such plan includes enhancements to the design of the control activity over the review of the accounting and disclosure of purchase price allocations for acquisitions of real estate investments that may, from time to time, be associated with acquisitions we complete. The material weakness cannot be considered remediated, however, until after the applicable control operates for a sufficient period of time, and management has concluded, through testing, that the control is operating effectively.

 ITEM 9B. OTHER INFORMATION

 None.

 ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

 Not applicable.

 The information required in Item 10 (Directors, Executive Officers and Corporate Governance), Item 11 (Executive Compensation), Item 12 (Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters), Item 13 (Certain Relationships and Related Transactions, and Director Independence), and Item 14 (Principal Accountant Fees and Services) is incorporated by reference to our definitive proxy statement for the 2024 Annual Meeting of Shareholders to be filed with the SEC or filed by amendment to this Annual Report on or before April 30, 2025.

 ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
 (a)(1) The financial statements listed below are included in this report

 Report of Independent Registered Public Accounting Firm (PCAOB ID Number 49)

 Consolidated Financial Statements

 Consolidated Balance Sheets at December 31, 2024 and 2023

 Consolidated Statements of Operations and Other Comprehensive Income for the years ended December 31, 2024, 2023 and 2022

 Consolidated Statements of Stockholders' Equity for the years ended December 31, 2024, 2023 and 2022

 Consolidated Statements of Cash Flows for the years ended December 31, 2024, 2023 and 2022

 Notes to Consolidated Financial Statements

 Real Estate and Accumulated Depreciation (Schedule III)

 (a)(3) Exhibits

 See the Exhibit Index filed as part of this Annual Report on Form 10-K.

 ITEM 16. FORM 10-K SUMMARY

 Not applicable.

 CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2024 AND 2023,
 AND THE RELATED CONSOLIDATED STATEMENTS OF OPERATIONS AND
 OTHER COMPREHENSIVE INCOME, SHAREHOLDERS' EQUITY AND CASH FLOWS
 FOR THE YEARS ENDED
 DECEMBER 31, 2024, 2023 AND 2022,
 INCLUDING NOTES
 and
 REPORT OF INDEPENDENT REGISTERED
 PUBLIC ACCOUNTING FIRM

 PAGE

 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 CONSOLIDATED FINANCIAL STATEMENTS

 Consolidated Balance Sheets

 Consolidated Statements of Operations and Other Comprehensive Income

 Consolidated Statements of Shareholders' Equity

 Consolidated Statements of Cash Flows

 Notes to Consolidated Financial Statements

 Real Estate and Accumulated Depreciation (Schedule III)

 Mortgage Loans on Real Estate (Schedule IV)

 Report of Independent Registered Public Accounting Firm

 To the Shareholders and the Board of Directors of Sterling Real Estate Trust

 Opinion on the Financial Statements
 We have audited the accompanying consolidated balance sheets of Sterling Real Estate Trust and its subsidiaries (the Trust) as of December 31, 2024 and 2023, the related consolidated statements of operations and other comprehensive income, shareholders' equity and cash flows for each of the three years in the period ended December 31, 2024, and the related notes to the consolidated financial statements and schedules (collectively, the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Trust as of 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 accounting principles generally accepted in the United States of America.

 Basis for Opinion
 These financial statements are the responsibility of the Trust's management. Our responsibility is to express an opinion on the Trust'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 Trust in accordance with 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 Trust 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 Trust'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 Matter
 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 and disclosure 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 a critical audit matter does not alter in any way our opinion on the 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.

 Evaluation of real estate investments for impairment
 The Trust's real estate investments and related intangible assets were $858.0 million and $2.5 million, respectively, as of December 31, 2024. As described in Note 2, the Trust performs impairment testing on a quarterly basis or whenever events or changes in circumstances indicate the carrying amount of its real estate investments may not be recoverable. As part of the Trust's initial screen test, management reviews the net book value of each property by comparing the trailing twelve months net operating income against the prior year trailing twelve months net operating income and evaluates key assumptions to determine whether any indicators of impairment exist. These indicators could include a substantial decline in or negative cash flows, continued low occupancy rate, continued difficulty in leasing space, significant financially troubled tenants, a change in plan to sell a property prior to the end of its useful life or holding period, a significant decrease in market price not in line with general market trends, and any other quantitative or qualitative events or factors deemed significant by the Trust's management or board of trustees. The Trust identified indicators of impairment for certain real estate investments and, in such cases, further assessed the assets for recoverability by comparing the net carrying value to estimated future cash flows on an undiscounted basis.

 We identified the determination of the existence of impairment indicators and when applicable, the analysis of undiscounted cash flows for the Trust's real estate investments and related intangible assets as a critical audit matter because of the significant judgements made by management, including the evaluation of the impact of the factors described above. Auditing management's judgments used in the determination of impairment indicators involved a high degree of auditor judgment and increased audit effort. Further, auditing the Trust's undiscounted cash flow required a high degree of auditor judgment and increased audit effort as estimates underlying the calculation, including terminal capitalization rates, forecasted net operating income and estimated hold periods were based on assumptions affected by expected current market and economic conditions.

 Our audit procedures related the Trust's evaluation of real estate investments for impairment included the following, among others;

 We tested the underlying data used in management's analysis for completeness and accuracy, agreed such data to source documents and the underlying accounting records and evaluated management's conclusions around potential indicators of impairment by reviewing management's evaluation on a property-by-property basis, considering information such as historical trends, current year property level operating performance, and changes in expected hold periods, among other information.

 For properties where there was an indicator of impairment, we assessed the reasonableness of management's conclusions regarding recoverability of the assets by evaluating the undiscounted cash flow analyses on a property-by-property basis and assessing the reasonableness of certain assumptions such as terminal capitalization rates, forecasted net operating income and estimated hold periods, among others.

 /s/ RSM US LLP

 We have served as the Trust's auditor since 2021.

 Minneapolis, Minnesota

 PART I – FINANCIAL INFORMATION

 Item 1. Financial Statements

 CONSOLIDATED BALANCE SHEETS
 as of December 31, 2024 and 2023

 2024

 2023

 ASSETS

 Land and land improvements

 $

 139,491

 $

 127,204

 Buildings and improvements

 905,504

 803,424

 Furniture, fixtures and equipment

 35,721

 32,127

 Construction in progress

 14,699

 8,049

 1,095,415

 970,804

 Less accumulated depreciation

 ( 237,416)

 ( 214,584)

 Real estate investments, net

 857,999

 756,220

 4,798

 26,919

 10,127

 10,142

 28,345

 26,601

 1,539

 Notes receivable, affiliates

 7,945

 8,821

 Assets held for sale

 —

 1,568

 Lease intangible assets, less accumulated amortization

 2,541

 2,983

 24,416

 21,515

 $

 937,710

 $

 854,833

 LIABILITIES

 Mortgage notes payable, net

 $

 506,735

 $

 457,857

 Mortgage notes payable, net, affiliates

 57,983

 60,262

 Lines of credit

 4,992

 —

 Dividends payable

 9,039

 8,579

 Tenant security deposits payable

 8,291

 7,104

 Lease intangible liabilities, less accumulated amortization

 Liabilities related to assets held for sale

 —

 Accrued expenses and other liabilities

 21,408

 19,239

 Total Liabilities

 608,772

 553,513

 COMMITMENTS and CONTINGENCIES - Note 17

 SHAREHOLDERS' EQUITY

 Beneficial interest

 153,834

 124,095

 Noncontrolling interest

 Operating partnership

 154,353

 163,308

 Partially owned properties

 9,290

 2,555

 Accumulated other comprehensive income

 11,461

 Total Shareholders' Equity

 328,938

 301,320

 $

 937,710

 $

 854,833

 See Notes to Consolidated Financial Statements

 CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE INCOME
 FOR THE YEARS ENDED DECEMBER 31, 2024, 2023 and 2022

 Year Ended

 2024

 2023

 2022

 (in thousands, except per share data)

 Income from rental operations

 Real estate rental income

 $

 159,306

 $

 143,631

 $

 135,060

 Expenses

 Expenses from rental operations

 Operating expenses

 67,994

 67,846

 56,893

 Real estate taxes

 16,424

 16,203

 14,245

 Depreciation and amortization

 27,488

 25,004

 24,679

 24,463

 21,435

 19,994

 136,369

 130,488

 115,811

 Loss on impairment of property

 —

 2,603

 Administration of REIT

 5,446

 5,430

 5,247

 Total expenses

 141,815

 138,521

 121,619

 Income from operations

 17,491

 5,110

 13,441

 Other (loss) income

 Equity in losses of unconsolidated affiliates

 ( 3,937)

 ( 2,959)

 ( 2,339)

 Other income

 1,619

 2,214

 1,293

 Gain on sale or conversion of real estate investments

 3,069

 2,597

 11,090

 Gain on involuntary conversion

 1,047

 Total other income

 2,546

 11,091

 $

 $

 7,656

 $

 Net income (loss) attributable to noncontrolling interest:

 Operating partnership

 11,531

 4,848

 15,628

 Partially owned properties

 ( 443)

 ( 85)

 ( 17)

 Net income attributable to Sterling Real Estate Trust

 $

 7,255

 $

 2,893

 $

 8,921

 Net income attributable to Sterling Real Estate Trust per common share, basic and diluted

 $

 0.62

 $

 0.26

 $

 0.84

 Comprehensive income

 $

 $

 7,656

 $

 Other comprehensive income - change in fair value of interest rate swaps

 ( 2,420)

 14,732

 Other comprehensive income

 18,442

 5,236

 39,264

 Comprehensive income attributable to noncontrolling interest

 11,149

 3,247

 24,989

 Comprehensive income attributable to Sterling Real Estate Trust

 $

 7,293

 $

 1,989

 $

 14,275

 Weighted average common shares outstanding, basic and diluted

 11,648

 11,104

 10,632

 See Notes to Consolidated Financial Statements

 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
 FOR THE YEARS ENDED DECEMBER 31, 2024, 2023 AND 2022

 Noncontrolling

 Distributions

 Total

 Common

 Paid-in

 in Excess of

 Beneficial

 Operating

 Partially Owned

 Comprehensive

 Shares

 Capital

 Earnings

 Partnership

 Properties

 Income (Loss)

 Total

 BALANCE AT DECEMBER 31, 2021

 10,342

 $

 148,562

 $

 ( 31,706)

 $

 116,856

 $

 176,954

 $

 2,657

 $

 ( 950)

 $

 295,517

 Shares issued under trustee compensation plan

 —

 —

 —

 —

 Contribution of assets in exchange for the issuance of noncontrolling interest shares

 —

 —

 —

 —

 12,870

 —

 —

 12,870

 Shares/units redeemed

 ( 53)

 ( 1,155)

 —

 ( 1,155)

 ( 923)

 —

 —

 ( 2,078)

 Dividends and distributions declared

 —

 —

 ( 12,222)

 ( 12,222)

 ( 21,482)

 —

 —

 ( 33,704)

 Dividends reinvested - stock dividend

 7,468

 —

 7,468

 —

 —

 —

 7,468

 Issuance of shares under optional purchase plan

 4,062

 —

 4,062

 —

 —

 —

 4,062

 Change in fair value of interest rate swaps

 —

 —

 —

 —

 —

 —

 14,732

 14,732

 Net income (loss)

 —

 —

 8,921

 8,921

 15,628

 ( 17)

 —

 BALANCE AT DECEMBER 31, 2022

 10,811

 $

 159,002

 $

 ( 35,007)

 $

 123,995

 $

 183,047

 $

 2,640

 $

 13,782

 $

 323,464

 Shares issued pursuant to trustee compensation plan

 —

 —

 —

 —

 Shares/units redeemed

 ( 83)

 ( 1,813)

 —

 ( 1,813)

 ( 3,180)

 —

 —

 ( 4,993)

 Dividends and distributions declared

 —

 —

 ( 12,766)

 ( 12,766)

 ( 21,407)

 —

 —

 ( 34,173)

 Dividends reinvested - stock dividend

 7,731

 —

 7,731

 —

 —

 —

 7,731

 Issuance of shares under optional purchase plan

 3,983

 —

 3,983

 —

 —

 —

 3,983

 Change in fair value of interest rate swaps

 —

 —

 —

 —

 —

 —

 ( 2,420)

 ( 2,420)

 Net income (loss)

 —

 —

 2,893

 2,893

 4,848

 ( 85)

 —

 7,656

 BALANCE AT DECEMBER 31, 2023

 11,257

 $

 168,975

 $

 ( 44,880)

 $

 124,095

 $

 163,308

 $

 2,555

 $

 $

 301,320

 Issuance of common shares

 1,356

 31,187

 31,187

 31,187

 Shares issued pursuant to trustee compensation plan

 —

 —

 —

 —

 Contribution of assets in exchange for the issuance of noncontrolling interest shares

 —

 —

 —

 —

 7,395

 —

 —

 7,395

 Shares/units redeemed

 ( 251)

 ( 5,482)

 —

 ( 5,482)

 ( 6,433)

 —

 —

 ( 11,915)

 Dividends and distributions declared

 —

 —

 ( 13,561)

 ( 13,561)

 ( 21,448)

 —

 —

 ( 35,009)

 Dividends reinvested - stock dividend

 7,487

 —

 7,487

 —

 —

 —

 7,487

 Issuance of shares under optional purchase plan

 2,781

 —

 2,781

 —

 —

 —

 2,781

 Change in fair value of interest rate swaps

 —

 —

 —

 —

 —

 —

 Contributions from consolidated real estate entity noncontrolling interests

 —

 —

 —

 —

 —

 7,219

 —

 7,219

 Distributions paid to consolidated real estate entity noncontrolling interests

 —

 ( 41)

 ( 41)

 Net income (loss)

 —

 —

 7,255

 7,255

 11,531

 ( 443)

 —

 BALANCE AT DECEMBER 31, 2024

 12,829

 $

 205,020

 $

 ( 51,186)

 $

 153,834

 $

 154,353

 $

 9,290

 $

 11,461

 $

 328,938

 See Notes to Consolidated Financial Statements

 CONSOLIDATED STATEMENTS OF CASH FLOWS
 FOR THE YEARS ENDED DECEMBER 31, 2024, 2023 and 2022

 Year Ended

 2024

 2023

 2022

 OPERATING ACTIVITIES

 $

 $

 7,656

 $

 Adjustments to reconcile net income to net cash provided by operating activities

 Gain on sale of real estate investments

 ( 3,069)

 ( 2,597)

 ( 11,090)

 Loss on impairment of property

 —

 2,603

 Gain on involuntary conversion

 ( 101)

 ( 694)

 ( 1,047)

 Change in fair value of securities

 —

 5,002

 ( 322)

 Equity in loss of unconsolidated affiliates

 3,937

 2,959

 2,339

 Distributions of earnings of unconsolidated affiliates

 —

 —

 Allowance for (recovery of) uncollectible accounts receivable

 ( 203)

 ( 281)

 24,580

 23,257

 22,161

 Amortization

 2,908

 1,747

 2,518

 Amortization of debt issuance costs

 Effects on operating cash flows due to changes in

 Other assets

 5,126

 ( 209)

 Tenant security deposits payable

 1,143

 Accrued expenses and other liabilities

 ( 1,673)

 2,327

 ( 471)

 NET CASH PROVIDED BY OPERATING ACTIVITIES

 46,559

 48,546

 40,770

 INVESTING ACTIVITIES

 Gross purchase of securities

 —

 —

 ( 29,130)

 Proceeds from maturity of securities

 —

 24,369

 Purchase of real estate investment properties

 ( 28,510)

 —

 ( 81,974)

 Capital expenditures and tenant improvements

 ( 18,445)

 ( 12,180)

 ( 9,623)

 Proceeds from sale of real estate investments and non-real estate investments

 12,388

 5,068

 25,463

 Proceeds from involuntary conversion

 1,579

 ( 8,053)

 ( 2,621)

 ( 13,869)

 Distributions in excess of earnings received from unconsolidated affiliates

 2,372

 2,483

 Notes receivable issued net of payments received

 ( 599)

 ( 437)

 ( 991)

 NET CASH (USED IN) PROVIDED BY PROVIDED BY INVESTING ACTIVITIES

 ( 40,841)

 16,745

 ( 107,960)

 FINANCING ACTIVITIES

 Payments for financing, debt issuance

 —

 ( 525)

 ( 408)

 Principal payments on special assessments payable

 ( 140)

 ( 74)

 —

 Proceeds from issuance of mortgage notes payable

 30,803

 67,911

 37,569

 Principal payments on mortgage notes payable

 ( 65,677)

 ( 53,246)

 ( 22,231)

 Advances on lines of credit

 —

 —

 1,008

 Draws (payments) on lines of credit

 4,992

 ( 1,008)

 —

 Proceeds from contributions received from noncontrolling interest - partially owned properties

 7,219

 —

 —

 Proceeds (payments) on notes payable

 —

 ( 26,500)

 26,500

 Proceeds from issuance of common shares

 31,187

 —

 —

 Proceeds from issuance of shares under optional purchase plan

 2,781

 3,983

 4,063

 Shares/units redeemed

 ( 11,915)

 ( 4,995)

 ( 2,077)

 Dividends/distributions paid

 ( 27,104)

 ( 26,356)

 ( 25,310)

 NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES

 ( 27,854)

 ( 40,810)

 19,114

 NET CHANGE IN CASH AND CASH EQUIVALENTS AND RESTRICTED DEPOSITS

 ( 22,136)

 24,481

 ( 48,076)

 CASH AND CASH EQUIVALENTS AND RESTRICTED DEPOSITS AT BEGINNING OF PERIOD

 37,061

 12,580

 60,656

 CASH AND CASH EQUIVALENTS AND RESTRICTED DEPOSITS AT END OF PERIOD

 $

 14,925

 $

 37,061

 $

 12,580

 CASH AND CASH EQUIVALENTS AND RESTRICTED DEPOSITS AT END OF PERIOD

 $

 4,798

 $

 26,919

 $

 3,257

 10,127

 10,142

 9,323

 TOTAL CASH AND CASH EQUIVALENTS AND RESTRICTED DEPOSITS, END OF PERIOD

 $

 14,925

 $

 37,061

 $

 12,580

 See Notes to Consolidated Financial Statements

 CONSOLIDATED STATEMENTS OF CASH FLOWS
 FOR THE YEARS ENDED DECEMBER 31, 2024, 2023 and 2022 (Continued)

 Year Ended

 2024

 2023

 2022

 SCHEDULE OF CASH FLOW INFORMATION

 Cash paid during the period for interest

 $

 23,494

 $

 20,593

 $

 19,305

 SUPPLEMENTARY SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES

 Dividends reinvested

 $

 7,487

 $

 7,732

 $

 7,468

 Dividends declared and not paid

 3,689

 3,363

 3,108

 UPREIT distributions declared and not paid

 5,352

 5,342

 5,385

 Shares issued pursuant to trustee compensation plan

 Acquisition of assets in exchange for the issuance of noncontrolling interest units in UPREIT

 7,396

 —

 12,870

 Assumed loans

 80,774

 —

 —

 Increase in land improvements due to increase in special assessments payable

 1,030

 Accrued capital expenditures

 2,120

 —

 —

 Unrealized gain (loss) on interest rate swaps

 ( 2,420)

 14,732

 Acquisition of assets through assumption of debt and liabilities

 —

 Capitalized interest and real estate taxes related to construction in progress

 See Notes to Consolidated Financial Statement s

 Note 1 – Organization

 Sterling Real Estate Trust, d/b/a Sterling Multifamily Trust ("Sterling", "the Trust" or "the Company") is a registered, but unincorporated business trust organized in North Dakota in December 2002. Sterling has elected to be taxed as a Real Estate Investment Trust ("REIT") under Sections 856-860 of the Internal Revenue Code.

 Sterling previously established an Operating Partnership ("Sterling Properties, LLLP") and transferred all of its assets and liabilities to the Operating Partnership in exchange for general partnership units. As the general partner, Sterling has management responsibility for all activities of the Operating Partnership. As of December 31, 2024 and 2023, Sterling owned approximately 40.80 % and 37.72 %, respectively, of the Operating Partnership.

 NOTE 2 – PRINCIPAL ACTIVITY AND SIGNIFICANT ACCOUNTING POLICIES

 Basis of Presentation

 The accompanying consolidated financial statements include the accounts of Sterling and all subsidiaries for which we maintain a controlling interest.

 The accompanying consolidated financial statements have been prepared in accordance with United States Generally Accepted Accounting Principles ("U.S. GAAP").

 Principles of Consolidation

 The consolidated financial statements include the accounts of Sterling, Sterling Properties, LLLP, and wholly owned limited liability companies and partially-owned limited liability companies. All significant intercompany transactions and balances have been eliminated in consolidation.

 As of December 31, 2024, the Trust owned approximately 40.80 % of the partnership interests ("OP Units") of the Operating Partnership. The remaining OP Units, consisting exclusively of limited partner interests, are held by persons who contributed their interests in properties to the Operating Partnership in exchange for OP Units. Under the LLLP Agreement and the redemptions plans, these persons have the right to request the Operating Partnership redeem their OP Units following a specified restricted period. All redemptions are at the sole discretion of the Trust, acting for itself or in its capacity as General Partner of the Operating Partnership, and further subject to the conditions and limitations of the LLLP Agreement and redemption plans, as the same may be amended or modified from time to time. If the Trust accepts a redemption request, the redemption of OP Units shall be made in cash in an amount equal to the fair value of an equivalent number of common shares of the Trust. In lieu of delivering cash, however, the Trust, as the Operating Partnership's general partner, may, at its option and in its sole and absolute discretion, choose to acquire any OP Units so tendered by issuing common shares in exchange for the tendered OP Units. If the Trust so chooses, its common shares will be exchanged for OP Units on a one-for-one basis. This one-for-one exchange ratio is subject to adjustment to prevent dilution. With each such exchange or redemption, the Trust's percentage ownership in the Operating Partnership will increase. In addition, whenever the Trust issues common or other classes of its shares, it contributes the net proceeds it receives from the issuance to the Operating Partnership and the Operating Partnership issues to the Trust an equal number of OP Units or other partnership interests having preferences and rights that mirror the preferences and rights of the shares issued. This structure is commonly referred to as an umbrella partnership REIT or "UPREIT."

 Additionally, we evaluate the need to consolidate affiliates based on standards set forth in the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 810, Consolidation ("ASC 810"). In determining whether we have a requirement to consolidate the accounts of an entity, management considers factors such as our ownership interest, our authority to make decisions and contractual and substantive participating rights of the limited partners and shareholders, as well as whether the entity is a variable interest entity ("VIE") for which we have both: a) the power to direct the activities of the VIE that most significantly impact the entity's economic performance, and b) the obligation to absorb losses or the right to receive benefits from the VIE that could be potentially significant to the VIE.

 In instances where the Trust determines that it is not the primary beneficiary of a VIE or the Trust does not control the joint venture but can exercise influence over the entity with respect to its operations and major decisions, the Trust will use the equity method of accounting. Under the equity method, the operations of a joint venture will not be consolidated with the Trust's operations but instead its share of operations will be reflected as equity in earnings (loss) of unconsolidated entity on its consolidated statements of operations and comprehensive loss. Additionally, the Trust's net investment in the joint venture will be reflected as investment in unconsolidated entity on the consolidated balance sheets. See Note 5 for additional details regarding variable interest entities where the Trust uses the equity method of investing.

 The Operating Partnership meets the criteria as a variable interest entity ("VIE"). The Trust's sole significant asset is its investment in the Operating Partnership. The Trust is the primary beneficiary of the Operating Partnership and accordingly consolidated the Operating Partnership. As a result, substantially all of the Trust's assets and liabilities represent those assets and liabilities of the Operating Partnership. All of the Trust's debt is an obligation of the Operating Partnership, and the Trust guarantees the unsecured debt obligations of the Operating Partnership. The Trust may acquire property using a reverse like-kind exchange structure (a "Reverse 1031 Like-Kind Exchange") under the Code to defer taxable gains on the subsequent sale of real estate property. As such, the acquired property (the "Parked Property") remains in the possession of a VIE whose legal equity interests are owned by a qualified intermediary engaged to execute the Reverse 1031 Like-Kind Exchange until the subsequent sale transaction and the Reverse 1031 Like-Kind Exchange are completed. Although the VIE is legally owned by the qualified intermediary, the Trust retains essentially all of the legal and economic benefits and obligations related to the VIE (which holds the legal title to the Parked Property prior to the completion of the Reverse 1031 Like-Kind Exchange) and, as its designated manager, has the key decision-making power over the Parked Property. The VIE (including the Parked Property) is included in the Trust's consolidated financial statements as a consolidated VIE until legal title is transferred to the Trust upon completion of the Reverse 1031 Like-Kind Exchange.

 Concentration of Credit Risk

 Financial instruments that potentially subject us to a concentration of credit risk are cash and cash equivalents, restricted deposits, and notes receivable.

 Our cash balances are maintained in various bank deposit accounts. The bank deposit amounts in these accounts may exceed federally insured limits at various times throughout the year.

 We consider the concentration of risk for restricted deposits to be minimal due the majority of the balance being composed of tenant security deposits.

 We consider the concentration of risk for notes receivable to be minimal due to the payment histories and general financial condition of our borrowers.

 Use of Estimates

 The preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

 Administration of REIT Expenses

 Administration of REIT expenses includes advisory fees, development fees, accounting expenses, legal expenses, and administrative expenses. Administrative expenses include bank charges, business owner insurance, SEC filing fees, shareholder transfer fees, and software subscription expenses.

 Real Estate Investments

 Real estate investments are recorded at cost less accumulated depreciation. Ordinary repairs and maintenance are expensed as incurred.
 The Trust allocates the purchase price of each acquired investment property accounted for as an asset acquisition based upon the relative acquisition date fair value of the individual assets acquired and liabilities assumed, which generally include (i) land, (ii) building and other improvements, (iii) in-place lease value intangibles, (iv) acquired above and below market lease intangibles, and (v) assumed financing that is determined to be above or below market, if any. Transaction costs related to acquisitions accounted for as asset acquisitions are capitalized as incurred and included as a cost of the building in the accompanying balance sheet.

 The Trust expects that its real estate acquisitions will be accounted for as asset acquisitions. Accounting for asset acquisitions requires an allocation of purchase price (inclusive of capitalized transaction costs) to the assets acquired and liabilities assumed, based on the relative fair value of the respective assets and liabilities.

 Typical assets acquired and liabilities assumed include land, building, furniture, fixtures and equipment, debt and identified intangible assets and liabilities, consisting of the value of above or below market leases and in-place leases. The Trust utilizes various sources to determine fair value. The purchase price allocation to tangible assets is reflected in real estate assets and depreciated over their estimated useful lives. Any purchase price allocation to intangible assets, other than in-place lease intangibles, is included in prepaid expenses and other assets on the accompanying balance sheet and amortized over the term of the acquired intangible asset. The Trust values land based on a market approach, looking to recent sales of similar properties, adjusting for differences due to location, the state of entitlement as well as the shape and size of the parcel. Improvements to land are valued using a replacement cost approach and consider the structures and amenities included for the communities and is reduced by estimated depreciation. The value for furniture, fixtures and equipment is also determined based on a replacement cost approach, considering costs for both items in the apartment homes as well as common areas and is adjusted for estimated depreciation. The fair value of buildings is estimated using the replacement cost approach, assuming the buildings were vacant at acquisition. The replacement cost approach considers the composition of structures acquired, adjusted for estimated depreciation which considers industry standard information for economic life and estimated effective age of the acquired property. The value of the lease-related intangibles considers the value of the lost revenues during a prospective lease-up period as if the acquired building(s) were vacant. The in-place lease value is determined using an average total lease-up time, the number of apartment homes and market rent based on market comparables. Consider for acquisitions is typically in the form of cash unless otherwise disclosed.

 In addition to the cost approach, the income approach is also calculated to value building improvements. The "as if vacant" value of the building improvements via the income approach is calculated as the go-dark value of the property, assuming lease-up at prevailing market rental rates over a market-based lease-up period, including deductions for lost-rent during lease-up and leasing costs. Included in this go-dark value is land value and site improvements value (the income-producing potential of the property is partially based on its location and on-site amenities). Therefore, a residual calculation of depreciated building value, "as if vacant", can be calculated by subtracting these additional value elements (land and site improvements, particularly, and furniture, fixtures and equipment if applicable) from the go-dark value. While the go-dark income approach is technically a residual approach to valuing the building improvements as if vacant, it serves as a relevant check against the depreciated replacement cost calculated via the cost approach.

 Real estate investments are stated at cost less accumulated depreciation. Expenditures for renewals and improvements that significantly add to the productive capacity or extend the useful life of an asset are capitalized. Expenditures for routine maintenance and repairs, which do not add to the value or extend useful lives, are charged to expense as incurred.

 Depreciation is provided for over the estimated useful lives of the individual assets using the straight-line method over the following estimated useful lives:

 Buildings and improvements

 40 years

 Land Improvements

 20 years

 Furniture, fixtures and equipment

 5 - 9 years

 During the third quarter of 2023, the Company completed a reassessment of the capitalization policy and determined that the Company would remove a stipulation for certain tangible assets to pass an additional percentage test of an amount of an entire property as well as add a new category related to Renovations and Improvement Projects that improve or extend the life of real estate assets. This reassessment was accounted for as a change in accounting estimate and was made on a prospective basis effective July 1, 2023. The change on policy did not have a significant impact on depreciation expense.

 The Trust's investment properties are reviewed for potential impairment at the end of each reporting period or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. To assess potential impairment of the real estate portfolio, the Trust initially performs a screen test and reviews the net book value (NBV) of each property, compares the trailing twelve months (T12) net operating income (NOI) against the prior year's T12 NOI, and evaluates key assumptions, including the anticipated hold period and applicable capitalization rates, to determine whether any indicators of impairment exist.
 Examples of situations considered to be impairment indicators include, but are not limited to:

 o
 a substantial decline or negative cash flows;

 o
 continued low occupancy rates;

 o
 continued difficulty in leasing space;

 o
 significant financially troubled tenants;

 o
 a change in plan to sell a property prior to the end of its useful life or holding period;

 o
 a significant decrease in market price not in line with general market trends; and

 o
 any other quantitative or qualitative events or factors deemed significant by the Trust's management or Board of Trustees.

 If the presence of one or more impairment indicators as described above is identified with respect to an investment property, the asset is tested for recoverability by comparing its carrying value to the estimated future undiscounted cash flows. An investment property is considered to be impaired when the estimated future undiscounted cash flows are less than its current carrying value. When performing a test for recoverability or estimating the fair value of an impaired investment property, the Trust makes complex or subjective assumptions which include, but are not limited to:

 o
 projected operating cash flows considering factors such as vacancy rates, rental rates, lease terms, tenant financial strength, demographics, holding period and property location;

 o
 projected capital expenditures;

 o
 projected cash flows from the eventual disposition of an operating property using a property specific capitalization rate;

 o
 comparable selling prices; and

 o
 property specific discount rates for fair value estimates as necessary.

 To the extent impairment has occurred, the Trust will record an impairment charge calculated as the excess of the carrying value of the asset over its fair value for impairment of real estate investments.

 Based on management's evaluation, there was no impairment loss during the year ended December 31, 2024. There was one impairment loss of $ 2,603 during the year ended December 31, 2023, and one impairment loss of $ 561 during the year ended December 31, 2022.

 Properties Held for Sale

 We account for our properties held for sale in accordance with ASC 360, Property, Plant and Equipment ("ASC 360"), which addresses financial accounting and reporting in a period in which a component or group of components of an entity either has been disposed or is classified as held for sale.

 In accordance with ASC 360, at such time as a property is held for sale, such property is carried at the lower of (1) its carrying amount or (2) fair value less costs to sell. In addition, a property being held for sale ceases to be depreciated. We classify operating properties as properties held for sale in the period in which all of the following criteria are met:

 management, having the authority to approve the action, commits to a plan to sell the asset;

 the asset is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets;

 an active program to locate a buyer and other actions required to complete the plan to sell the asset have been initiated;

 the sale of the asset is probable and the transfer of the asset is expected to qualify for recognition as a completed sale within one year;

 the asset is being actively marketed for sale at a price that is reasonable in relation to its current fair value; and

 given the actions required to complete the plan to sell the asset, it is unlikely that significant changes to the plan would be made or that the plan would be withdrawn.

 The results of operations of a component of an entity that either has been disposed of or is classified as held-for-sale under the requirements of ASC 360 is reported in discontinued operations in accordance with ASC 205, Presentation of Financial Statements if such disposal or classification represents a strategic shift that has (or will have) a major effect on our operations and financial results.

 There were no properties held for sale as of December 31, 2024. The Trust had one property held for sale as of December 31, 2023. See Note 18.

 Cash and Cash Equivalents and Restricted Deposits

 We classify highly liquid investments with a maturity of three months or less when purchased as cash equivalents. Restricted deposits include funds escrowed for tenant security deposits, real estate tax, insurance and mortgage escrows and escrow deposits required by lenders on certain properties to be used for future building renovations or tenant improvements.

 Investment in Unconsolidated Affiliates

 We account for unconsolidated affiliates using the equity method of accounting per guidance established under ASC 323, Investments – Equity Method and Joint Ventures ("ASC 323"). The equity method of accounting requires the investment to be initially recorded at cost and subsequently adjusted for our share of equity in the affiliates' earnings (losses), contributions and distributions. We evaluate the carrying amount of the investments for impairment in accordance with ASC 323. Unconsolidated affiliates are reviewed for potential impairment if the carrying amount of the investment exceeds its fair value. An impairment charge is recorded when an impairment is deemed to be other-than-temporary. To determine whether impairment is other-than-temporary, we consider whether we have the ability and intent to hold the investment until the carrying amount is fully recovered. The evaluation of an investment in an affiliate for potential impairment can require our management to exercise significant judgments. No impairment losses were recorded related to the unconsolidated affiliates for the years ended December 31, 2024, 2023 and 2022.

 Other Assets

 Other assets are comprised of the following as of December 31, 2024 and 2023:

 Due from related party

 $

 $

 Accounts receivable, net

 6,085

 6,225

 Insurance claim receivable

 —

 Fair value of interest rate swap

 Other assets

 Financing fees, less accumulated amortization

 Lease costs, less accumulated amortization

 1,410

 1,542

 Prepaid expenses

 1,404

 1,588

 Total other assets, net

 $

 24,416

 $

 21,515

 Note receivable

 Notes receivable are issued periodically and are secured and interest bearing. The Trust has one note receivable from a commercial tenant bearing a 6.5 % per annum interest rate which matures in 2025 and one note receivable with a limited liability company bearing a 12.0 % per annum interest rate which matures in 2027. The Trust also has three note receivables with unconsolidated affiliates, as disclosed in note 15.

 Accrued Expenses and Other liabilities

 Accrued Expenses and other liabilities are comprised of the following as of December 31, 2024 and 2023:

2024

 Special assessments payable

 $

 1,842

 $

 Due to related party

 Accounts payable - trade

 4,816

 3,385

 Retainage payable

 —

 Deferred insurance proceeds

 —

 Accrued interest expense

 1,516

 1,413

 Accrued real estate taxes

 9,406

 9,296

 Accrued unearned rent

 3,415

 3,344

 Other liabilities

 Total accrued expenses and other liabilities

 $

 21,408

 $

 19,239

 Debt Issuance Costs

 We amortize external debt issuance costs related to notes and mortgage notes using the effective interest rate method, over the life term of the related debt. We record debt issuance costs net of amortization, on our consolidated balance sheets as an offset to their related debt. We record debt issuance costs related to revolving lines of credit as financing fees in other assets, regardless of whether a balance on the line of credit is outstanding. We record the amortization of all debt issuance costs as interest expense.

 Noncontrolling Interest

 A noncontrolling interest in a subsidiary (minority interest) is in most cases an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements and separate from the parent company's equity. In addition, consolidated net income is required to be reported at amounts that include the amounts attributable to both the parent and the noncontrolling interest, and the amount of consolidated net income attributable to the parent and the noncontrolling interest are required to be disclosed on the face of the consolidated statements of operations and other comprehensive income.

 Operating Partnership: Interests in the Operating Partnership held by limited partners are represented by Operating Partnership units. The Operating Partnership's income is allocated to holders of units based upon the ratio of their holdings to the total units outstanding during the period. Capital contributions, distributions, syndication costs, and profits and losses are allocated to noncontrolling interests in accordance with the terms of the Operating Partnership agreement.

 Partially Owned Properties: The Trust reflects noncontrolling interests in partially owned properties on the balance sheet for the portion of properties consolidated by the Trust that are not wholly owned by the Trust. The earnings or losses from those properties attributable to the noncontrolling interests are reflected as noncontrolling interest in partially owned properties in the consolidated statements of operations and other comprehensive income.

 Federal Income Taxes

 We have elected to be taxed as a REIT under the Internal Revenue Code, as amended. A REIT calculates taxable income like other domestic corporations, with the major difference being a REIT is entitled to a deduction for dividends paid. A REIT is generally required to distribute each year at least 90 % of its taxable income. If it chooses to retain the remaining 10 % of taxable income, it may do so, but it will be subject to a corporate tax on such income. REIT shareholders are taxed on REIT distributions similar to corporate distributions.

 A summary of the tax characterization of the dividends paid to shareholders of the Company's common stock for the years ended December 31, 2024, 2023 and 2022 follows:

 Tax Year Ended December 31,

 Dividend

 %

 Dividend

 %

 Dividend

 %

 2024

 2024

 2023

 2023

 2022

 2022

 Tax status

 Ordinary income

 $

 0.7745

 67.35

 %

 $

 0.6226

 54.14

 %

 $

 0.6374

 55.43

 %

 Capital gain

 —

 —

 %

 —

 —

 %

 —

 —

 %

 Return of capital

 0.3755

 32.65

 %

 0.5274

 45.86

 %

 0.5126

 44.57

 %

 $

 %

 $

 %

 $

 %

 We intend to continue to qualify as a REIT and, provided we maintain such status, will not be taxed on the portion of the income that is distributed to shareholders. In addition, we intend to distribute all our taxable income; therefore, no provisions or liabilities for income taxes have been recorded in the consolidated financial statements.

 Sterling conducts its business activity as an UPREIT through its Operating Partnership – Sterling Properties, LLLP. The Operating Partnership is organized as a limited liability limited partnership. Income or loss is allocated to the partners in accordance with the provisions of the Internal Revenue Code 704(b) and 704(c). UPREIT status allows non-recognition of gain by an owner of appreciated real estate if that owner contributes the real estate to a partnership in exchange for a partnership interest. The conversion of a partnership interest to shares of beneficial interest in the REIT will be a taxable event to the limited partner.

 We follow ASC Topic 740, Income Taxes, to recognize, measure, present and disclose in our consolidated financial statements uncertain tax positions that we have taken or expect to take on a tax return. As of December 31, 2024 and 2023 we did not have any liabilities for uncertain tax positions that we believe should be recognized in our consolidated financial statements. We are no longer subject to Federal and State tax examinations by tax authorities for years before 2021.

 The Operating Partnership has elected to record related interest and penalties, if any, as income tax expense on the consolidated statements of operations and other comprehensive income.

 Revenue Recognition

 We record base rents on a straight-line basis. The monthly base rent income according to the terms of our leases is adjusted with the purpose that average monthly rent is recorded for each tenant over the term of its lease. The straight-line rent adjustment increased revenue by $ 8 and $ 291 for the year ended December 31, 2024 and 2023, respectively. The straight-line receivable balance included in accounts receivable within other assets on the consolidated balance sheets as of December 31, 2024 and 2023, was $ 3,694 and $ 3,686, respectively. We receive payments for expense reimbursements from substantially all our multi-tenant commercial tenants throughout the year based on estimated expenses. The Trust is the lessor for its residential and commercial leases. Leases are analyzed on an individual basis to determine lease classification. As of December 31, 2024, all leases analyzed under the Trust's lease classification process were determined to be operating leases.

 The Trust receives ancillary income for storage, community rooms, and laundry that is not accounted for under the lease standard.

 Earnings per Common Share

 Basic earnings per common share is computed by dividing net income available to common shareholders (the "numerator") by the weighted average number of common shares outstanding (the "denominator") during the period. Sterling had no dilutive potential common shares as of December 31, 2024, 2023 and 2022 and, therefore, basic earnings per common share was equal to diluted earnings per common share for both periods. As the calculation does not include net income attributable to the Operating Partnership, Operating Partnership Units are not included in the calculation, and do not have any impact on earnings per share.

 For the years ended December 31, 2024, 2023 and 2022, Sterling's denominators for the basic and diluted earnings per common share were approximately 11,648,000, 11,104,000, and 10,632,000, respectively.

 Recent Accounting Pronouncements

 Segment Reporting. In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures ("ASU 2023-07"), to improve reportable segment disclosure requirements so that investors can better understand an entity's overall performance and assess potential future cash flows. The amendments in ASU 2023-07 include, but are not limited to: (i) disclosure of, on an annual basis, significant segment expenses that are regularly provided to the chief operating decision maker ("CODM") and included within each reported measure of segment profit or loss; (ii) disclosure of, on an annual and interim basis, an amount for other segment items by reportable segment and a description of its composition (the other segment items category is the difference between segment revenue less the significant expenses disclosed and each reported measure of segment profit or loss); (iii) disclosure of, on an interim basis, all currently required annual disclosures about a reportable segment's profit (loss) and assets; (iv) clarification that if the CODM uses more than one measure of a segment's profit or loss in assessing segment performance and deciding how to allocate resources, an entity may report one or more of those additional measures of segment profit; and (v) disclosure of the title and position of the CODM and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources. During the year ended December 31, 2024, the amendments in ASU 2023-07 were adopted retrospectively and did not have a significant impact on the Company's consolidated financial position, results of operations, or cash flows.

 In November 2024, the FASB issued ASU 2024-03, Income Statement- Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires new tabular disclosures in the notes to consolidated financial statements, disaggregating certain cost and expense categories within relevant captions on the Consolidated Statements of Operations. The prescribed cost and expense categories requiring disaggregated disclosures include purchases of inventory, employee compensation, depreciation and intangible asset amortization, along with certain other expense disclosures already required by U.S. GAAP that would need to be integrated within the new tabular disaggregated expense disclosures. Additionally, the amendments also require the disclosure of total selling expenses and an entity's definition of those expenses. The amendments in ASU 2024-03 are effective for annual periods beginning after December 15, 2026, which for the Company would be applicable to fiscal year 2027, and for subsequent interim periods. Early adoption is permitted and the amendments should be applied on a prospective basis. Retrospective application is permitted. The Trust is currently evaluating the impact the new accounting standard will have on its expense disclosures in the notes to the consolidated financial statements

 NOTE 3 – segment reporting
 Segment information is presented in accordance with a "management approach," which designates the internal reporting used by the Company's CODM for making decisions and assessing performance as the source of the Company's reportable segments. The Company's segments are organized in a manner consistent with which discrete financial information is available and evaluated regularly by the CODM in deciding how to allocate resources and assess performance.
 An operating segment is defined as a component of an enterprise that engages in business activities from which it may earn revenue and incur expenses, and about which separate financial information is regularly evaluated by the CODM. The CODM is the Company's chief executive officer.
 Each of the operating segments are directly responsible for revenue and expenses related to their operations, including direct segment general and administrative expenses. The CODM assesses the performance of each operating segment using information about operating income (loss) as the primary measure of performance but does not evaluate segments using discrete asset information. There were no material inter-segment transactions during the years ended December 31, 2024, 2023 and 2022, and the Company does not allocate depreciation and amortization, interest, administration of REIT, loss on impairment of property or other income (loss) to the operating segments. The accounting policies for segment reporting are the same as for the Company as a whole.

 We report our results in two reportable segments: residential and commercial properties. Our residential properties include multifamily properties. Our commercial properties include retail, office, industrial, and medical properties. We assess and measure operating results based on net operating income ("NOI"), which we define as total real estate revenues less real estate expenses (which consist of real estate taxes, property management fees, utilities, repairs and maintenance, insurance and direct administrative costs). We believe NOI is an important measure of operating performance even though it should not be considered an alternative to net income or cash flow from operating activities.

 Segment Revenues and Net Operating Income

 The revenues and net operating income for the reportable segments (residential and commercial) are summarized as follows for the years ended December 31, 2024, 2023 and 2022, along with reconciliations to the consolidated financial statements. Segment assets are also reconciled to Total Assets as reported in the consolidated financial statements for the years ended December 31, 2024 and 2023.

 Year ended December 31, 2024

 Year ended December 31, 2023

 Year ended December 31, 2022

 Total

 Total

 Total

 Income from rental operations

 $

 139,230

 $

 20,076

 $

 159,306

 $

 123,202

 $

 20,429

 $

 143,631

 $

 113,968

 $

 21,092

 $

 135,060

 Real Estate Expenses

 Real Estate Taxes

 14,590

 1,834

 16,424

 14,025

 2,178

 16,203

 11,734

 2,511

 14,245

 Property Management

 18,759

 19,660

 16,038

 16,861

 13,780

 14,571

 Utilities

 11,525

 1,015

 12,540

 11,350

 1,154

 12,504

 10,901

 1,274

 12,175

 Repairs and Maintenance

 27,505

 1,746

 29,251

 30,900

 2,038

 32,938

 24,478

 1,810

 26,288

 Insurance

 6,401

 6,543

 5,437

 5,543

 3,754

 3,859

 Expenses from rental operations

 78,780

 5,638

 84,418

 77,750

 6,299

 84,049

 64,647

 6,491

 71,138

 Net operating income

 $

 60,450

 $

 14,438

 $

 74,888

 $

 45,452

 $

 14,130

 $

 59,582

 $

 49,321

 $

 14,601

 $

 63,922

 Depreciation and amortization 1

 27,488

 25,004

 24,679

 Interest 1

 24,463

 21,435

 19,994

 Administration of REIT 1

 5,446

 5,430

 5,247

 Loss on impairment of property 1

 —

 2,603

 Other income 1

 ( 852)

 ( 2,546)

 ( 11,091)

 $

 $

 7,656

 $

 1 The financial information provided to the CODM for these expense categories are not reflected by segment to evaluate performance of our reportable segments.

 Segment Assets and Accumulated Depreciation

 As of December 31, 2024

 Total

 $

 916,559

 $

 178,856

 $

 1,095,415

 Accumulated depreciation

 ( 183,753)

 ( 53,663)

 ( 237,416)

 Total real estate investments, net

 $

 732,806

 $

 125,193

 $

 857,999

 Lease intangible assets, less accumulated amortization

 2,342

 2,541

 4,798

 10,127

 28,345

 1,539

 Notes receivable, affiliates

 7,945

 24,416

 $

 937,710

 As of December 31, 2023

 Total

 $

 789,249

 $

 181,555

 $

 970,804

 Accumulated depreciation

 ( 164,793)

 ( 49,791)

 ( 214,584)

 Total real estate investments, net

 $

 624,456

 $

 131,764

 $

 756,220

 Lease intangible assets, less accumulated amortization

 —

 2,983

 2,983

 26,919

 10,142

 26,601

 Notes receivable, affiliates

 8,821

 Assets held for sale

 1,568

 21,515

 $

 854,833

 NOTE 4 - RESTRICTED DEPOSITS AND FUNDED RESERVES

 As of December 31,

 As of December 31,

 2024

 2023

 Tenant security deposits

 $

 7,838

 $

 6,945

 Real estate tax and insurance escrows

 1,041

 Replacement reserves

 1,443

 Other funded reserves

 1,121

 1,078

 $

 10,127

 $

 10,142

 NOTE 5 – Investment in unconsolidated affiliates

 Total Investment in Unconsolidated Affiliates at

 Total Assets in Unconsolidated Affiliates at

 Total Liabilities of Unconsolidated Affiliates at

 Unconsolidated Affiliates

 Date Acquired

 Trust Ownership Interest

2023

 Banner Building

 2007

 66.67 %

 $

 1,276

 $

 ( 478)

 $

 8,561

 $

 6,172

 $

 6,704

 $

 6,889

 Grand Forks INREIT, LLC

 2003

 50 %

 5,684

 5,193

 20,839

 20,020

 9,472

 9,635

 SE Savage, LLC

 2019

 60 %

 30,375

 32,567

 30,298

 30,980

 SE Maple Grove, LLC

 2019

 60 %

 ( 62)

 27,754

 29,659

 27,938

 28,534

 SE Rogers, LLC

 2020

 60 %

 1,419

 29,314

 30,576

 27,975

 28,064

 ST Oak Cliff, LLC

 2021

 70 %

 6,821

 7,920

 47,577

 48,738

 37,806

 37,423

 SE Brooklyn Park, LLC

 2021

 60 %

 1,748

 28,121

 30,325

 26,877

 27,411

 ST Fossil Creek, LLC

 2022

 70 %

 7,038

 9,110

 48,229

 43,517

 38,175

 30,502

 Emory North Liberty, LC

 2024

 50 %

 5,494

 -

 33,281

 -

 22,294

 -

 SHG Emory North Liberty, LLC

 2024

 99 %

 -

 6,244

 -

 -

 $

 28,345

 $

 26,601

 $

 280,295

 $

 241,574

 $

 227,807

 $

 199,438

 Banner Building - the Operating Partnership owns a 66.67 % interest as tenant in common in an office building in Fargo, North Dakota. The property is encumbered by a first mortgage, with the Trust acting as a guarantor on the outstanding indebtedness.

 Grand Forks INREIT, LLC - the Operating Partnership is a 50 % owner of a tenant in common through 100 % ownership in a limited liability company. The property is located in Grand Forks, North Dakota. The property is encumbered by a non-recourse first mortgage, with the Trust acting as a guarantor on the outstanding indebtedness.

 SE Savage, LLC - the Operating Partnership owns a 60 % interest in a limited liability company that holds a multifamily property. The entity is located in Savage, Minnesota. The property is encumbered by a first mortgage, with the Trust acting as a guarantor on the outstanding indebtedness. Additionally, SE Savage, LLC has a Promissory Note with Sterling Properties, LLLP, for $ 0 and $ 468 as of December 31, 2024 and December 31, 2023, respectively, and is an unsecured obligation of SE Savage, LLC. The note is included in Notes receivable, affiliates on the consolidated balance sheet at December 31, 2024 and December 31, 2023.

 SE Maple Grove, LLC - the Operating Partnership owns a 60 % interest in a limited liability company that holds a multifamily property. The entity is located in Maple Grove, Minnesota. The property is encumbered by a first mortgage, with the Trust acting as a guarantor on the outstanding indebtedness. The property is also encumbered by a second mortgage to Sterling Properties, LLLP with a balance of $ 3,428 and $ 3,643 at December 31, 2024 and December 31, 2023, respectively. The note is included in Notes receivable, affiliates on the consolidated balance sheet at December 31, 2024 and December 31, 2023.

 SE Rogers, LLC - the Operating Partnership owns a 60 % interest in a limited liability company that is currently developing a multifamily property. The entity is located in Rogers, Minnesota. The property is encumbered by a first mortgage, with the Trust acting as a guarantor on the outstanding indebtedness. The property is also encumbered by a second mortgage to Sterling Properties, LLLP with a balance of $ 2,100 and $ 2,117 at December 31, 2024 and December 31, 2023, respectively. The note is included in Notes receivable, affiliates on the consolidated balance sheet at December 31, 2024 and December 31, 2023.

 ST Oak Cliff, LLC - the Operating Partnership owns a 70 % interest in a limited liability company, with a related party multifamily property. The entity is located in Dallas, Texas. The property is encumbered by a first mortgage, with the Trust acting as a guarantor on the outstanding indebtedness.

 SE Brooklyn Park, LLC - the Operating Partnership owns a 60 % interest in a limited liability company that holds a multifamily property. The entity is located in Brooklyn Park, Minnesota. The property is encumbered by a first mortgage, with the Trust acting as a guarantor on the outstanding indebtedness. The property is also encumbered by a second mortgage to Sterling Properties, LLLP with a balance of $ 2,294 and $ 2,538 at December 31, 2024 and December 31, 2023, respectively. The note is included in Notes receivable, affiliates on the consolidated balance sheet at December 31, 2024 and December 31, 2023.

 ST Fossil Creek, LLC - the Operating Partnership owns a 70 % interest in a limited liability company, with a related party. The entity is currently developing a multifamily property located in Fort Worth, Texas. The property is encumbered by a construction mortgage, with the Trust acting as a guarantor on the outstanding indebtedness.

 Emory North Liberty, LC – the Operating Partnership owns a 50 % interest in a limited company. The entity is currently developing a multifamily property located in North Liberty, Iowa. For the acquisition of Emory North Liberty, LC, Sterling determined that it does not control the key decision-making rights and is not the primary beneficiary related to Emory North Liberty, LC from the respective date it was acquired. The VIE that owned legal title to Emory North Liberty, LC was not included in Sterling's consolidated financial statements, but rather as an unconsolidated affiliate, from the date it was acquired.

 SHG Emory North Liberty, LLC – the Operating Partnership owns a 99 % interest in a limited liability company. For the acquisition of SHG Emory North Liberty, LLC, Sterling determined that it does not control the key decision-making rights and is not the primary beneficiary related to SHG Emory North Liberty, LLC from the respective date it was acquired. The VIE that owned legal title to SHG Emory North Liberty, LLC was not included in Sterling's consolidated financial statements, but rather as an unconsolidated affiliate, from the date it was acquired.
 The following is a summary of the financial position of the unconsolidated affiliates at December 31, 2024 and 2023.

 ASSETS

 $

 305,398

 $

 261,901

 Accumulated depreciation

 ( 38,078)

 ( 26,191)

 Total Real Estate Investments, net

 267,320

 235,710

 4,147

 3,388

 1,263

 5,744

 —

 Financing and lease costs, net

 1,025

 $

 280,295

 $

 241,574

 LIABILITIES

 Mortgage notes payable, net

 $

 221,819

 $

 191,890

 Tenant security deposits payable

 Accrued expenses and other liabilities

 5,501

 7,208

 Total Liabilities

 $

 227,807

 $

 199,438

 SHAREHOLDERS' EQUITY

 Total Shareholders' Equity

 $

 52,488

 $

 42,136

 Total liabilities and shareholders' equity

 $

 280,295

 $

 241,574

 The following is a summary of unconsolidated affiliates net mortgage note payable for the years ended December 31, 2024 and 2023.

 Unconsolidated Affiliates

 Banner Building

 $

 6,513

 $

 6,698

 Grand Forks INREIT, LLC

 8,692

 8,948

 SE Savage, LLC

 29,786

 30,590

 SE Maple Grove, LLC

 27,554

 28,188

 SE Rogers, LLC

 27,322

 27,762

 ST Oak Cliff, LLC

 36,380

 36,152

 SE Brooklyn Park, LLC

 26,483

 27,054

 ST Fossil Creek, LLC

 37,089

 26,498

 Emory North Liberty, LC

 22,000

 —

 Total Unconsolidated Affiliates mortgage note payable, net

 $

 221,819

 $

 191,890

 The following is a summary of results of operations of the unconsolidated affiliates for the years ended the years ended December 31, 2024, 2023 and 2022.

 The year ended December 31,

 2024

 2023

 2022

 Income from rental operations

 $

 25,649

 $

 19,202

 $

 9,545

 Expenses from rental operations

 12,563

 7,687

 3,668

 Net operating income

 13,086

 11,515

 5,877

 Depreciation and Amortization

 12,050

 9,784

 5,678

 7,010

 6,180

 4,148

 Other (Loss) Income

 ( 56)

 ( 91)

 Net loss

 $

 ( 5,918)

 $

 ( 4,462)

 $

 ( 3,858)

 NOTE 6 - Lease intangibles

 The following table summarizes the net value of other intangible assets and liabilities and the accumulated amortization for each class of intangible:

 Lease

 Lease

 As of December 31, 2024

 Intangibles

 Amortization

 Intangibles, net

 Lease Intangible Assets

 In-place leases

 $

 16,188

 $

 ( 14,047)

 $

 2,141

 Above-market leases

 1,415

 ( 1,015)

 $

 17,603

 $

 ( 15,062)

 $

 2,541

 Lease Intangible Liabilities

 Below-market leases

 $

 ( 2,315)

 $

 1,991

 $

 ( 324)

 Lease

 Lease

 As of December 31, 2023

 Intangibles

 Amortization

 Intangibles, net

 Lease Intangible Assets

 In-place leases

 $

 13,927

 $

 ( 11,434)

 $

 2,493

 Above-market leases

 1,415

 ( 925)

 $

 15,342

 $

 ( 12,359)

 $

 2,983

 Lease Intangible Liabilities

 Below-market leases

 $

 ( 2,314)

 $

 1,844

 $

 ( 470)

 The estimated aggregate amortization expense for each of the five succeeding fiscal years and thereafter is as follows:

 Intangible

 Intangible

 Years ending December 31,

 Assets

 Liabilities

 2025

 $

 $

 2026

 2027

 2028

 2029

 $

 2,541

 $

 The weighted average amortization period for the intangible assets (in-place leases, above-market leases) and intangible liabilities (below-market leases) acquired as of December 31, 2024 was 1.7 years.

 The portion of the purchase price allocated to acquire above and below market lease intangibles is amortized on a straight-line basis over the life of the related lease as an adjustment to rental income. Amortization pertaining to above market lease intangibles of $ 90, $ 100, and $ 145 for the years ended December 31, 2024, 2023 and 2022, respectively, was recorded as a reduction to income from rental operations. Amortization pertaining to below market lease intangibles of $ 147, $ 148, and $ 164 for the years ended December 31, 2024, 2023 and 2022, respectively, was recorded as an increase to income from rental operations.

 NOTE 7 – LINES OF CREDIT

 We have a $ 4,915 variable rate (floating SOFR plus 2.00 %) line of credit agreement with Bremer Bank, which expires in December 2026, and a $ 3,500 variable rate (floating SOFR plus 2.00 %) line of credit agreement with Bremer Bank, which expires December 2026. We also have a $ 14,800 variable rate (Prime minus 1.50 %) line of credit agreement with Gate City Bank, which expires in July 2029. The lines of credit are secured by specific properties. At December 31, 2024, the lines of credit have $ 23,215 available and an unused balance of $ 18,223 under the agreements. At December 31, 2023, there was no balance on the line of credit. The Trust anticipates it will hold it as a cash resource to the Trust.

 Certain lines of credit agreements include covenants that, in part, impose maintenance of certain debt service coverage, debt to net worth ratios, and debt yield ratios. As of December 31, 2024, no covenants were out of compliance.

 NOTE 8 - NOTES PAYABLE

 As of December 31, 2024 and 2023, the Trust had no outstanding balance on notes payable.

 The following table summarizes the Company's mortgage notes payable.

 Principal Balance At

 2024

 2023

 Mortgage notes payable, net (a)

 $

 508,644

 $

 459,892

 Mortgage notes payable, net, affiliates

 57,983

 60,262

 Less unamortized debt issuance costs

 1,909

 2,035

 $

 564,718

 $

 518,119

 (a)
 Includes $ 127,050 and $ 103,246 of variable rate mortgage debt that was swapped to a fixed rate as of December 31, 2024 and 2023, respectively.

 As of December 31, 2024, we had 106 fixed rate mortgage loans with effective interest rates ranging from 2.43 % to 7.00 % per annum, and a weighted average effective interest rate of 4.17 % per annum.

 As of December 31, 2023, we had 111 fixed rate mortgage loans with effective interest rates ranging from 2.43 % to 6.85 % per annum, and a weighted average effective interest rate of 3.93 % per annum.
 Northland, SRENOR – As of December 31, 2024 and 2023, the Trust had full payment guarantees on $ 82,535 and $ 29,852, respectively, of outstanding mortgage indebtedness.
 The majority of the Company's mortgages payable require monthly payments of principal and interest. Certain mortgages require reserves for real estate taxes and certain other costs. Mortgages are secured by the respective properties, assignment of rents, business assets, deeds to secure debt, deeds of trust and/or cash deposits with the lender. Additionally, certain mortgage note agreements include covenants that, in part, impose maintenance of certain debt service coverage and debt to worth ratios. As of December 31, 2024, seven loans were out of compliance due to increased repair and maintenance costs related to unit renovations. The loans were secured by various properties with a total outstanding balance of $ 5,239. Annual waivers were received in 2025 from the lenders on all loans out of compliance as of December 31, 2024. As of December 31, 2023, ten loans were out of compliance due increased repair and

 maintenance costs related to unit renovations, and increased utility costs. The loans were secured by various properties with a total outstanding balance of $ 17,687. Annual waivers were received from the lenders on all loans out of compliance as of December 31, 2023.

 We are required to make the following principal payments on our outstanding mortgage notes payable for each of the five succeeding fiscal years and thereafter as follows:

 Years ending December 31,

 2025

 $

 62,228

 2026

 71,332

 2027

 78,971

 2028

 42,581

 2029

 85,597

 225,918

 Total payments

 $

 566,627

 NOTE 9 – DERIVATIVES AND HEDGING ACTIVITIES

 As part of our interest rate risk management strategy, we have used interest rate derivatives to manage our exposure to interest rate movements and add stability to interest expense. Interest rate swaps designated as cash flow hedges involve the receipt of variable rate amounts from a counterparty in exchange for the Trust making fixed rate payments over the life of the agreement without exchange of the underlying notional amount.

 As of December 31, 2024, the Trust used 15 interest rate swaps to hedge the variable cash flows associated with variable rate debt. Changes in fair value of the derivatives that are designated and that qualify as cash flow hedges are recorded in "Accumulated other comprehensive income" and are reclassified into interest expense as interest payments are made on the Company's variable rate debt. During the next 12 months, the Trust estimates that an additional $ 2,780 will be reclassified as a decrease to interest expense.

 The following table summarizes the Trust's interest rate swaps designated as cash flow hedges as of December 31, 2024:

 Fixed

 Effective Date

 Notional

 Interest Rate

 Maturity Date

 November 1, 2019

 $

 6,148

 3.15 %

 November 1, 2029

 November 1, 2019

 $

 4,278

 3.28 %

 November 1, 2029

 January 10, 2020

 $

 2,794

 3.39 %

 January 10, 2030

 December 2, 2020

 $

 11,630

 2.91 %

 December 2, 2027

 July 1, 2021

 $

 24,314

 2.99 %

 July 1, 2031

 November 10, 2021

 $

 26,877

 3.54 %

 August 1, 2029

 December 1, 2021

 $

 10,210

 3.32 %

 December 1, 2031

 August 15, 2022

 $

 1,396

 3.07 %

 June 15, 2030

 August 15, 2022

 $

 2,705

 3.07 %

 June 15, 2030

 August 15, 2022

 $

 1,510

 2.94 %

 June 15, 2030

 August 15, 2022

 $

 3,996

 2.94 %

 June 15, 2030

 May 10, 2023

 $

 4,517

 2.79 %

 June 10, 2030

 April 15, 2024

 $

 9,598

 3.57 %

 May 15, 2032

 April 15, 2024

 $

 3,747

 3.57 %

 May 15, 2032

 April 15, 2024

 $

 13,330

 3.57 %

 May 15, 2032

 The following table summarizes the Company's interest rate swaps that were designated as cash flow hedges of interest rate risk:

 Number of Instruments

 Notional

 Interest Rate Derivatives

 Interest rate swaps

 $

 127,050

 $

 103,246

 The table below presents the estimated fair value of the Company's derivative financial instruments as well as their classification in the accompanying consolidated balance sheets. The valuation techniques are described in Note 10 to the consolidated financial statements.

 Derivatives designated as

 cash flow hedges:

 Balance Sheet Location

 Fair Value

 Balance Sheet Location

 Fair Value

 Interest rate swaps

 $

 $

 The following table presents the effect of the Company's derivative financial instruments on the accompanying consolidated statements of operations and other comprehensive income (loss) for the years ended December 31, 2024 and 2023:

 Location of Gain

 Amount of Gain

 Reclassified from

 Derivatives in

 Recognized in Other

 Accumulated other

 Amount of (Gain)/Loss

 Cash Flow Hedging

 Comprehensive Income

 Comprehensive Income

 Reclassified from

 Relationships

 on Derivatives

 (AOCI) into Income

 AOCI into Income

 2024

 2024

 Interest rate swaps

 $

 Interest expense

 $

 4,434

 2023

 2023

 Interest rate swaps

 $

 2,420

 Interest expense

 $

 ( 3,743)

 Credit-risk-related Contingent Features

 The Trust has agreements with each of its derivative counterparties that contain a provision whereby if the Trust defaults on the related indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then the Trust could also be declared in default on its corresponding derivative obligation. As of December 31, 2024, the termination value of derivatives in a liability position was $ 0 and the termination value of derivatives in an asset position was $ 14,449. As December 31, 2024, the Trust has pledged the properties related to the loans which are hedged as collateral.

 NOTE 10 - FAIR VALUE MEASUREMENT

 The following table presents the carrying value and estimated fair value of the Company's financial instruments:

 Carrying

 Carrying

 Value

 Fair Value

 Value

 Fair Value

 Financial assets:

 $

 1,539

 $

 1,534

 $

 $

 Notes receivable, affiliates

 $

 7,945

 $

 7,559

 $

 8,766

 $

 11,538

 Derivative assets

 $

 $

 $

 $

 Financial liabilities:

 Lines of Credit

 $

 4,992

 $

 4,992

 $

 —

 $

 —

 Mortgage notes payable

 $

 508,644

 $

 483,630

 $

 459,892

 $

 420,986

 Mortgage notes payable, affiliates

 $

 57,983

 $

 55,594

 $

 60,262

 $

 56,358

 The fair value of derivative assets are included in other assets on the consolidated balance sheets under the captions indicated in Note 10. ASC 820-10 established a three-level valuation hierarchy for fair value measurement. Management uses these valuation techniques to establish the fair value of the assets at the measurement date. These valuation techniques are based upon observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect management's assumptions.

 These two types of inputs create the following fair value hierarchy:

 Level 1 – Quoted prices for identical instruments in active markets.

 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 whose significant inputs are observable.

 Level 3 – Instruments whose significant inputs are unobservable.

 The guidance requires the use of observable market data, when available, in making fair value measurements. When inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement.

 Recurring Fair Value Measurements

 The following table presents the Trust's financial instruments, which are measured at fair value on a recurring basis, by the level in the fair value hierarchy within which those measurements fall. Methods and assumptions used to estimate the fair value of these instruments are described after the table.

 Level 1

 Level 2

 Level 3

 Total

 Derivative assets

 $

 —

 $

 $

 —

 $

 Derivative assets

 $

 —

 $

 $

 —

 $

 Derivatives: The fair value of interest rate swaps is determined using a discounted cash flow analysis on the expected future cash flows of the derivative.

 The Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy. In adjusting the fair value of its derivative contracts for the effect of nonperformance risk, the Company has considered any applicable credit enhancements.

 Fair Value Disclosures

 The following table presents the Company's financial assets and liabilities, which are measured at fair value for disclosure purposes, by the level in the fair value hierarchy within which they fall. Methods and assumptions used to estimate the fair value of these instruments are described after the table.

 Level 1

 Level 2

 Level 3

 Total

 Lines of Credit

 $

 —

 $

 —

 $

 4,992

 $

 4,992

 Mortgage notes payable

 $

 —

 $

 —

 $

 483,630

 $

 483,630

 Mortgage notes payable, affiliate

 $

 —

 $

 —

 $

 55,594

 $

 55,594

 $

 —

 $

 —

 $

 1,534

 $

 1,534

 Notes receivable, affiliate

 $

 —

 $

 —

 $

 7,559

 $

 7,559

 Mortgage notes payable

 $

 —

 $

 —

 $

 420,986

 $

 420,986

 Mortgage notes payable, affiliate

 $

 —

 $

 —

 $

 56,358

 $

 56,358

 $

 —

 $

 —

 $

 $

 Notes receivable, affiliate

 $

 —

 $

 —

 $

 11,538

 $

 11,538

 Mortgage notes payable: The Trust estimates the fair value of its mortgage notes payable by discounting the future cash flows of each instrument at rates currently offered to the Trust for similar debt instruments of comparable maturities by the Trust's lenders. The rates used range from 5.87 % to 5.87 % and from 5.85 % to 6.00 % at December 31, 2024 and 2023, respectively.

 Notes receivable: The Trust estimates the fair value of its notes receivable by discounting future cash flows of each instrument at rates currently offered to the Trust for similar note instruments of comparable maturities by the Trust's lenders. The fair value rate was 12.00 % at December 31, 2024, and 7.25 % December 31, 2023.

 NOTE 11 – NONCONTROLLING INTEREST OF UNITHOLDERS IN OPERATING PARTNERSHIP

 As of December 31, 2024 and 2023, outstanding limited partnership units totaled 18,611,000 and 18,584,000, respectively. Total aggregate distributions per unit for the years ended December 31, 2024, 2023 and 2022 were $ 1.1500, $ 1.1500 and $ 1.1500, respectively. The Operating Partnership declared fourth quarter distributions of $ 5,352 and $ 5,342, to limited partners payable in January 2025 and 2024, respectively.

 During the year ended December 31, 2024, there were no limited partnership units of the Operating Partnership exchanged for common shares of the trust.

 Provided the Trust's redemption plan exists, and subject to the conditions and limitations contained in such redemption plan (including, without limitation, applicable holding periods and ownership limitations), and further subject to the conditions and limitations set forth in the LLLP Agreement of the Operating Partnership, a Limited Partner may request the redemption of its limited partnership units for cash (a "Redemption Request") or the exchange of its limited partnership units for Sterling common shares (an "Exchange Request"). Such request must be made in accordance with the redemption plan. Upon receipt of any Redemption or Exchange Request, as the case may be, the Trust may, at its sole and absolute discretion, acting for itself or as General Partner of the Operating Partnership, elect to redeem or exchange such limited partnership units. The Trust may, in its sole discretion, terminate, amend or suspend the redemption plan if such action is determined to be in the best interest of the Operating Partnership.

 NOTE 12 – REDEMPTION PLANS

 Our Board of Trustees has approved redemption plans that enable our shareholders to sell their common shares and the partners of our Operating Partnership to sell their limited partnership units to us, after they have held the securities for at least one year and subject to other conditions and limitations described in the plans.

 Our redemption plans currently provide that the maximum amount that can be redeemed under the plan is $ 75,000 worth of securities. As of December 31, 2024, there were $ 17,774 worth of securities left to be redeemed under the redemption plan. As of December 31, 2024, the fixed redemption price is $ 21.85 per share or unit under the plans which price became effective January 1, 2022. Prior to January 1, 2022, the redemption price was $ 19.00 per share or unit under the plan. Prior to January 1, 2021, the redemption price was $ 18.25 per share or unit under the plan.

 We may redeem securities under the plans provided the aggregate total has not been exceeded if we have sufficient funds to do so. The plans will terminate in the event the shares become listed on any national securities exchange, the subject of bona fide quotes on any inter-dealer quotation system or electronic communications network or are the subject of bona fide quotes in the pink sheets. Additionally, the Board, in its sole discretion, may terminate, amend or suspend the redemption plans, either or both of them, if it determines to do so in its sole discretion.

 During the years ended December 31, 2024, 2023 and 2022, the Company redeemed 252,000, 83,000 and 53,000 common shares valued at $ 5,482, $ 1,813 and $ 1,155, respectively. In addition, during the years ended December 31, 2024, 2023 and 2022, the Company redeemed 294,000, 144,000 and 42,000 units valued at $ 6,433, $ 3,181 and $ 923, respectively.

 NOTE 13 – BENEFICIAL INTEREST

 We are authorized to issue 100,000,000 common shares of beneficial interest with $ 0.01 par value and 50,000,000 preferred shares with $ 0.01 par value, which collectively represent the beneficial interest of Sterling. As of December 31, 2024 and 2023, there were 12,829,000 and 11,257,000 common shares outstanding. We had no preferred shares outstanding as of either date.

 Dividends paid to holders of common shares were $ 1.1500 per share, $ 1.1500 per share and $ 1.1500 per share for the years ended December 31, 2024, 2023 and 2022, respectively.

 NOTE 14 – DIVIDEND REINVESTMENT PLAN

 Our Board of Trustees approved a dividend reinvestment plan to provide existing holders of our common shares with a convenient method to purchase additional common shares without payment of brokerage commissions, fees or service charges. On July 20, 2012, we registered with the Securities Exchange Commission 2,000,000 common shares to be issued under the plan on Form S-3D, which automatically became effective on July 20, 2012. On July 11, 2017, we registered with the Securities Exchange Commission an additional 2,000,000 common shares to be issued under the plan on Form S-3D, which automatically became effective on July 11, 2017. On November 3, 2020, we registered with the Securities Exchange Commission an additional 2,000,000 common shares to be issued under the plan on Form S-3D, which automatically became effective on November 3, 2020.

 Under this plan, eligible shareholders may elect to have all or a portion (but not less than 25 %) of the cash dividends they receive automatically reinvested in our common shares. If an eligible shareholder elects to reinvest cash dividends under the plan, the shareholder may also make additional optional cash purchases of our common shares, not to exceed $ 10 per fiscal quarter without our prior approval. The purchase price per common share under the plan equals 95 % of the estimated value per common share for dividend reinvestments and equals 100 % of the estimated value per common share for additional optional cash purchases, as determined by our Board of Trustees. In addition, eligible shareholders may not in any calendar year purchase or receive via transfer more than $ 40 additional optional cash purchases of Common Shares.

 The estimated value per common share was $ 23.00 and $ 23.00 at December 31, 2024 and 2023, respectively.

 Therefore, the purchase price per common share for dividend reinvestments was $ 21.85 and $ 21.85 and for additional optional cash purchases was $ 23.00 and $ 23.00 at December 31, 2024 and 2023, respectively. The Board, in its sole discretion, may amend, suspend or terminate the plan at any time, without the consent of shareholders, upon a ten-day notice to participants.

 In the year ended December 31, 2024, 343,000 shares were issued pursuant to dividend reinvestments and 121,000 shares were issued pursuant to additional optional cash purchases under the plan. In the year ended December 31, 2023, 353,000 shares were issued pursuant to dividend reinvestments and 173,000 shares were issued pursuant to additional optional cash purchases under the plan. In the year ended December 31, 2022, 342,000 shares were issued pursuant to dividend reinvestments and 177,000 shares were issued pursuant to additional optional cash purchases under the plan.

 NOTE 15 – RELATED PARTY TRANSACTIONS

 Effective January 1, 2021, Trustmark Enterprises, Inc. was formed to act as the holding company for Sterling Management, LLC and GOLDMARK Property Management, Inc. In connection with this restructuring transaction, the owners of Trustmark Enterprises, Inc. indirectly own Sterling Management, LLC and GOLDMARK Property Management, Inc. Trustmark Enterprises, Inc. is owned in part by the Trust's Chief Executive Officer and Trustee Kenneth P. Regan, by Trustee James S. Wieland, by the Trust's President Megan E. Schreiner, by the Trust's Chief Financial Officer and Treasurer Elizabeth A. Reich, by the Trust's General Counsel and Secretary Michael P. Carlson, by the Trust's Chief Investment Officer Luke B. Swenson, and by the Trust's Vice President David F. Perkins. Messrs. Regan, Carlson, Swenson, and Perkins and Mmes. Schreiner and Reich all serve as officers of the Advisor. Messrs. Regan, Wieland, Carlson, Swenson, and Perkins and Mmes. Schreiner and Reich also all serve on the Advisor's Board of Governors and the Board of Directors of GOLDMARK Property Management, Inc.

 Sterling Management, LLC (the "Advisor"), is a North Dakota limited liability company formed in November 2002. The Advisor is responsible for managing day-to-day affairs, overseeing capital projects, and identifying, acquiring, and disposing investments on behalf of the Trust.

 GOLDMARK Property Management, Inc., is a North Dakota corporation formed in 1981. GOLDMARK Property Management, Inc. provides property management services to the Trust for numerous multifamily properties within its portfolio.

 We have a historical and ongoing relationship with Bell Bank. Bell Bank has provided the Trust certain financial services throughout the relationship. Mr. Wieland, a Trustee, also serves as a Board Member of Bell Bank. Mr. Wieland could have an indirect material interest in any such engagement and related transactions.

 The Trust has a historical and ongoing relationship with Trumont Group and Trumont Construction. Trumont Group provides development services for current joint venture projects in which the Operating Partnership is an investor. Trumont Construction has been engaged to construct the properties associated with these joint ventures. Mr. Regan, Chief Executive Officer and trustee, is a partner in both Trumont Group and Trumont Construction and has a direct material interest in any engagement or related transaction, the Trust enters into, with these entities.

 Property Management Fee

 We paid fees to GOLDMARK Property Management, Inc. related to the management of various properties, including on-site staff costs and other miscellaneous fees required to manage such properties. Management fees paid approximated 5 % of net collected rent. In addition, we paid repair and maintenance expenses, and payroll related expenses to GOLDMARK Property Management, Inc.

 Year Ended December 31,

 2024

 2023

 2022

 Onsite staff costs, and other misc.

 $

 17,690

 $

 15,069

 $

 13,833

 Goldmark Management fees

 $

 6,322

 $

 5,755

 $

 5,499

 R&M related payroll and payroll related expenses

 $

 9,040

 $

 9,936

 $

 7,744

 Sterling Management fees

 $

 $

 $

 Advisory Agreement
 We are an externally managed trust and as such, although we have a Board of Trustees and executive officers responsible for our management, we have no paid employees. The Advisor may receive fees related to management of the Trust, acquiring, disposing, or developing real estate property, project management fees, and financing fees related to lending relationships, under the Advisory Agreement, which must be renewed on an annual basis and approved by a majority of the independent trustees. The Thirteenth Amended and Restated Advisory Agreement was approved by the Board of Trustees (including all the independent Trustees) on March 21, 2024, and is effective until December 31, 2024. The Fourteenth Amended and Restated Advisory Agreement was approved by the Board of Trustees (including all the independent Trustees) on December 17, 2024, and is effective on January 1, 2025.
 The below table summarizes the fees incurred to our Advisor.

 Year Ended December 31,

 2024

 2023

 2022

 Fee:

 Advisory

 $

 4,027

 $

 3,807

 $

 3,683

 $

 1,125

 $

 -

 $

 1,321

 Disposition

 $

 $

 $

 Financing

 $

 $

 $

 Development

 $

 $

 $

 Project Management

 $

 $

 $

 The below table summarizes the fees payable to our Advisor.

 Payable at

 2024

 2023

 Fee:

 Advisory

 $

 $

 Project Management

 $

 $

 -

 Operating Partnership Units Issued in Connection with Acquisitions

 During the year ended December 31, 2024, 322,000 Operating Partnership units were issued to an entity affiliated with Messrs. Regan and Wieland, two of our trustees, in connection with the acquisition of various properties. The aggregate value of these units was $ 7,396.

 During the year ended December 31, 2023, there were no Operating Partnership units issued directly or indirectly, to affiliated entities.

 During the year ended December 31, 2022, 510,000 Operating Partnership units were issued to an entity affiliated with Messrs. Regan and Wieland, two of our trustees, in connection with the acquisition of various properties. The aggregate value of these units was $ 11,741.

 Commissions

 During the years ended December 31, 2024, 2023 and 2022, we incurred real estate commissions of $ 655, $ 0, and $ 567, respectively, to GOLDMARK Commercial Real Estate, Inc., in which Messrs. Regan and Wieland jointly own a controlling interest. As of December 31, 2024, and 2023, there were no commissions payable to GOLDMARK Commercial Real Estate.

 During the years ended December 31, 2024, 2023 and 2022, we incurred real estate commissions of $ 39, $ 0, and $ 418, respectively to GOLDMARK Property Management. As of December 31, 2024, and 2023, there were no commission payable to GOLDMARK Property Management.

 Due to Related Parties

 As of December 31, 2024 and 2023, the Trust had $ 160, and $ 670, respectively, for other related party payables.

 Rental Income

 The Trust leases office space to certain affiliates pursuant to operating lease agreements. The table below summarizes rental income earned from affiliates.

 Year Ended December 31,

 2024

 2023

 2022

 Rental Income:

 Goldmark Property Management, Inc.

 $

 $

 $

 Operating lease agreement with our Advisor

 $

 $

 $

 Bell Bank

 $

 1,171

 $

 1,005

 $

 Debt Financing

 As of December 31, 2024 and 2023, the Trust had $ 57,983, $ 60,262, respectively, of outstanding principal on loans entered into with Bell Bank. During the years ended December 31, 2024, 2023 and 2022, the Trust incurred interest expense on debt held with Bell Bank of $ 2,340, $ 2,398, and $ 2,480, respectively. Accrued interest at the years ended December 31, 2024 and 2023, related to this debt was $ 135, and $ 128, respectively.

 Mezzanine Financing

 The Trust offers mezzanine financing to joint ventures, see note 5 for investment in unconsolidated affiliates.

 Sterling issued second mortgage financing to certain investments in unconsolidated affiliates as follows: On August 18, 2020, financing was secured with SE Maple Grove, LLC for $ 3,305 at a rate of 7.25 % with the full amount of principal and accrued interest due on September 10, 2025. On December 17, 2020, financing was secured with SE Rogers, LLC for $ 2,932 at a rate of 7.25 % with the full amount of principal and accrued interest due on January 10, 2026. On November 5, 2021, financing was secured with SE Brooklyn Park, LLC for $ 3,127 at a rate of 7.25 % with the full amount of principal and accrued interest due on December 10, 2026. As of the years ended December 31, 2024 and 2023, Sterling issued $ 7,821, and $ 8,766 respectively, in second mortgage financing to investments in unconsolidated affiliates.

 During the years ended December 31, 2024 and 2023, the Trust earned interest income of $ 581, and $ 671, respectively, related to the second mortgage financing.

 Insurance Services

 The Trust retains insurance services from Bell Insurance. Policies provided by these services provide insurance coverage for the Trust's Commercial segment as well as Director and Officer general and liability coverage. For the years ended December 31, 2024, 2023 and 2022, total premiums incurred for this policy were $ 145, $ 165, and $ 48, respectively.

 Tenant Improvement Arrangements

 During the years ended December 31, 2024, 2023 and 2022, there were no tenant improvement costs incurred for related parties.

 Development Arrangements

 Effective May 16, 2022, The Trust purchased a 70 % interest in ST Fossil Creek Fort Worth, LLC. The purpose of the entity is to develop and construct a 228-unit multifamily property located in Fort Worth, Texas. The partnering investee, TG Fossil Creek Fort Worth, LLC is owned in part by Kenneth P. Regan, the Trust's Chief Executive Officer and Trustee. Mr. Regan is also a partner in Trumont Group, the developer engaged by ST Fossil Creek Fort Worth, LLC to oversee the development of the property. Further, Mr. Regan is also a partner in Trumont Construction, the company who was engaged to oversee the day-to-day construction operations of the property.

 During the year ended December 31, 2024 and 2023, the Trust paid no development fees to Trumont Group. As of December 31, 2024 and 2023, no development fees were owed to Trumont Construction.

 During the years ended December 31, 2024 and 2023, the Trust incurred and paid $ 91, and $ 459, respectively, in construction fees to Trumont Construction. At the years ended December 31, 2024 and 2023, the Trust owed $ 0, and $ 37, respectively, in construction fees to Trumont Construction.

 During the years ended December 31, 2024 and 2023, the Trust incurred and paid $ 378, and $ 344, respectively, in general construction costs to Trumont Construction. At the years ended December 31, 2024 and 2023, no general construction costs were owed to Trumont Construction.

 NOTE 16 - RENTALS UNDER OPERATING LEASES / RENTAL INCOME

 Residential apartment units are rented to individual tenants with lease terms of one year or less.

 Commercial properties are leased to tenants under terms expiring at various dates through 2039. Lease terms often include renewal options.

 As of December 31, 2024, we derived 87.4 % of our revenues from residential leases that are generally for terms of one-year or less. The residential leases may include lease income related to such items as parking, storage and non-refundable deposits that we treat as a single lease component because amenities cannot be leased on their own and the timing and pattern of revenue recognition are the same. The collection of lease payments at lease commencement is probable and therefore we subsequently recognize lease income over the lease term on a straight-line basis. Residential leases are renewable upon consent of both parties on an annual or monthly basis.

 As of December 31, 2024, we derived 12.6 % of our revenues from commercial leases primarily under long-term lease agreements. Substantially all commercial leases contain fixed escalations, or, in some instances, changes based on the Consumer Price Index, which occur at specified times during the term of the lease. In certain commercial leases, variable lease income, such as percentage rent, is recognized when rents are earned. We recognize rental income and rental abatements from our commercial leases on a straight-line basis over the lease term. Recognition of rental income commences when control of the leased space has been transferred to the tenant.

 We recognize variable income from pass-through expenses on an accrual basis over the periods in which the expenses were incurred. Pass-through expenses are comprised of real estate taxes, operating expenses and common area maintenance costs which are reimbursed by tenants in accordance with specific allowable costs per tenant lease agreements. When we pay pass-through expenses, subject to reimbursement by the tenant, they are included within operating expenses, excluding real estate taxes, and reimbursements are included within "real estate rental income" along with the associated base rent in the accompanying consolidated financial statements.

 We record base rents on a straight-line basis. The monthly base rent income according to the terms of our leases is adjusted so that an average monthly rent is recorded for each tenant over the term of its lease. The straight-line rent adjustment increased revenue by $ 8 for the year ended December 31, 2024, and increased revenue by $ 291 for the year ended December 31, 2023. The straight-line receivable balance included in other assets on the consolidated balance sheets as of the year ended December 31, 2024 and 2023 was $ 3,694 and $ 3,686 respectively. We receive payments for expense reimbursements from substantially all our multi-tenant commercial tenants throughout the year based on estimates.

 Lease income related to the Trust's operating leases is comprised of the following:

 Year ended December 31, 2024

 Total

 Lease income related to fixed lease payments

 $

 132,750

 $

 15,531

 $

 148,281

 Lease income related to variable lease payments

 4,546

 4,547

 Other (a)

 ( 1,543)

 ( 201)

 ( 1,744)

 Lease Income (b)

 $

 131,208

 $

 19,876

 $

 151,084

 (a)
 For the year ended December 31, 2024, "Other" is comprised of revenue adjustments related to changes in collectability and amortization of above and below market lease intangibles and lease inducements.

 (b)
 Excludes other rental income for the year ended December 31, 2024, of $ 8,222, which is accounted for under the revenue recognition standard.

 Year ended December 31, 2023

 Total

 Lease income related to fixed lease payments

 $

 118,323

 $

 15,672

 $

 133,995

 Lease income related to variable lease payments

 —

 4,430

 4,430

 Other (a)

 ( 1,113)

 ( 947)

 Lease Income (b)

 $

 117,210

 $

 20,268

 $

 137,478

 (c)
 For the year ended December 31, 2023, "Other" is comprised of revenue adjustments related to changes in collectability and amortization of above and below market lease intangibles and lease inducements.

 (d)
 Excludes other rental income for the year ended December 31, 2023, of $ 6,153, which is accounted for under the revenue recognition standard.

 Commercial space is rented under long-term agreements. Minimum future rentals on non-cancelable operating leases as of December 31, 2024 are as follows:

 Years ending December 31,

 2025

 $

 15,087

 2026

 14,299

 2027

 12,937

 2028

 11,939

 2029

 10,551

 25,092

 $

 89,905

 NOTE 17 - COMMITMENTS AND CONTINGENCIES

 Environmental Matters

 Federal law (and the laws of some states in which we own or may acquire properties) imposes liability on a landowner for the presence on the premises of hazardous substances or wastes (as defined by present and future federal and state laws and regulations). This liability is without regard to fault or knowledge of the presence of such substances and may be imposed jointly and severally upon all succeeding landowners. If such hazardous substance is discovered on a property acquired by us, we could incur liability for the removal of the substances and the cleanup of the property.

 There can be no assurance that we would have effective remedies against prior owners of the property. In addition, we may be liable to tenants and may find it difficult or impossible to sell the property either prior to or following such a cleanup.

 Risk of Uninsured Property Losses

 We maintain property damage, fire loss, and liability insurance. However, there are certain types of losses (generally of a catastrophic nature) which may be either uninsurable or not economically insurable. Such excluded risks may include war, earthquakes, tornados, certain environmental hazards, and floods. Should such events occur, (i) we might suffer a loss of capital invested, (ii) tenants may suffer losses and may be unable to pay rent for the spaces, and (iii) we may suffer a loss of profits which might be anticipated from one or more properties.

 Litigation

 The Company is subject, from time to time, to various legal proceedings and claims that arise in the ordinary course of business. While the resolution of such matters cannot be predicted with certainty, management believes, based on currently available information, that the outcome of such matters will not have a material effect on the consolidated financial statements of the Trust.

 NOTE 18 – DISPOSITIONS

 During the year ended December 31, 2024, the Operating Partnership sold nine properties.

 Date

 Units/ Square Footage/ Acres (Unaudited)

 Total Disposition Cost

 Gain/(Loss) on Sale

 1/25/24

 Apple Valley, MN

 5,348 square feet

 $

 1,607

 $

 ( 68)

 3/1/24

 Westwind

 18 units

 3/8/24

 Westside

 Hawley, MN

 14 units

 4/3/24

 Columbia Park Village

 12 units

 5/1/24

 Gate City Bank

 17,407 square feet

 2,950

 5/21/24

 First International Bank & Trust

 Moorhead, MN

 3,510 square feet

 1,516

 6/14/24

 Jadestone

 18 units

 1,039

 6/14/24

 Essex

 18 units

 1,039

 7/25/24

 Cityside

 36 units

 1,500

 $

 12,063

 $

 3,069

 During the year ended December 31, 2023, the Operating Partnership sold two properties.

 Date

 Units/ Square Footage/ Acres (Unaudited)

 Total Disposition Cost

 Gain on Sale

 5/11/23

 Applebee's Coon Rapids

 Coon Rapids, MN

 5,576 square feet

 $

 3,448

 $

 1,531

 5/24/23

 Redpath

 White Bear Lake, MN

 25,817 square feet

 4,710

 1,066

 $

 8,158

 $

 2,597

 During the year ended December 31, 2022, the Operating Partnership sold five properties.

 Date

 Units/ Square Footage/ Acres (Unaudited)

 Total Disposition Cost

 Gain on Sale

 3/7/22

 Applebee's Savage

 Savage, MN

 4,936 square feet

 $

 2,700

 $

 1,328

 Griffin Court

 Moorhead, MN

 128 units

 6,400

 2,012

 8/30/22

 Regis

 Edina, MN

 102,448 square feet

 15,320

 6,728

 9/1/22

 Desoto Apartments

 East Grand Forks, MN

 24 units

 1,200

 ( 171)

 12/6/22

 Applebee's Bloomington

 Bloomington, MN

 5,043 square feet

 2,888

 1,193

 $

 28,508

 $

 11,090

 As of December 31, 2024, the Company did not have any assets that qualified for the held for sale accounting treatment. As of December 31, 2023, the Company entered into a purchase agreement to sell one retail property located in Apple Valley, Minnesota. The property qualified for held for sale accounting treatment on or prior to December 31, 2023, at which time depreciation and amortization ceased. As such, the assets and liabilities associated with this property were separately classified as held for sale in the consolidated balance sheet as of December 31, 2023. The property was sold in the first quarter of 2024. The following table shows the net book value of assets held for sale.

 2024

 2023

 ASSETS

 Land and land improvements

 $

 —

 $

 Building and improvements

 —

 —

 1,673

 Less accumulated depreciation

 —

 ( 110)

 Real estate investments, net

 —

 1,563

 —

 $

 —

 $

 1,568

 LIABILITIES

 Accrued expenses and other liabilities

 $

 —

 $

 Total Liabilities

 $

 —

 $

 NOTE 19 –ACQUISITIONS

 The Company acquired the following properties during the year ended December 31, 2024.

 Date

 Units/ Square Footage/ Acres

 Total Net Assets Acquired

 4/15/24

 Urban Plains

 415 units

 $

 17,527

 6/26/24

 Lexington Lofts

 Forest Lake, MN

 355 units

 18,379

 $

 35,906

 Total consideration given for acquisitions for the year ended December 31, 2024 was completed through issuing approximately 322,000 limited partnership units of the Operating Partnership valued at $ 23.00 per unit for an aggregate consideration of approximately $ 7,396. The value of units issued in exchange for property is determined through a value established annually by our Board of Trustees and reflects the fair value at the time of issuance. Ken Regan and Jim Wieland had part ownership in an entity which had a 50 % interest in Urban Plains prior to the acquisition.

 During the quarter ended December 31, 2024 the Trust determined that when allocating the purchase price for the Urban Plains acquisition, no value was assigned to an assumed interest rate derivative which resulted in an error in the purchase price allocation. The error has been corrected during the quarter and properly reflected in the financial statements as of and for the year ended December 31, 2024. The impact of this error to the previously reported amounts for the three months ended June 30, 2024 and three and nine months ended September 30, 2024 is as follows:

 Quarter Ending

 Quarter Ending

 YTD

 June 30, 2024

 September 30, 2024

 September 30, 2024

 Real estate investments, net

 Increase/(Decrease)

 $

 ( 3,313)

 $

 $

 ( 3,295)

 Other assets, net - interest income receivable

 Increase/(Decrease)

 $

 $

 ( 3)

 $

 Other assets, net - fair value of interest rate swap

 Increase/(Decrease)

 $

 ( 106)

 $

 $

 ( 79)

 Other comprehensive income

 Decrease/(Increase)

 $

 3,335

 $

 ( 147)

 $

 3,188

 Decrease/(Increase)

 $

 $

 $

 The Company did no t acquire any properties during the year ended December 31, 2023.

 The Company acquired the following properties during the year ended December 31, 2022.

 Date

 Units/ Square Footage/ Acres

 Total Net Assets Acquired

 2/28/22

 Deer Park

 138 units

 $

 15,073

 Desoto Estates

 68 units

 5,863

 Desoto Townhomes

 Townhomes

 24 units

 3,226

 Desoto Apartments

 East Grand Forks, MN

 24 units

 1,230

 6/10/22

 Diamond Bend

 78 units

 10,919

 9/13/22

 Newgate Apartments

 46 units

 2,444

 12/1/22

 Chandler 1898

 12 units

 12/29/22

 Prose Fossil Creek

 Fort Worth, TX

 270 units

 55,591

 $

 94,844

 The acquisition of Prose Fossil Creek was made utilizing a Reverse 1031 Like-Kind Exchange that was entered into at closing. As such, as of December 29, 2022, Prose Fossil Creek is in the possession of a qualified intermediary engaged to execute the Reverse 1031 Like-Kind Exchange until the sale transaction and the Reverse 1031 Like-Kind Exchange are completed. The Trust retains essentially all of the legal and economic benefits and obligations related to Prose Fossil Creek prior to the completion of the Reverse 1031 Like-Kind Exchange. Accordingly, Prose Fossil Creek is included in the Trust's consolidated financial statements as a consolidated VIE until legal title is transferred to the Trust upon completion of the Reverse 1031 Like-Kind Exchange.

 Total consideration given for acquisitions for the year ended December 31, 2022 was completed through issuing approximately 560,000 limited partnership units of the Operating Partnership valued at $ 23.00 per unit for an aggregate consideration of approximately $ 12,870. The value of units issued in exchange for property is determined through a value established annually by our Board of Trustees and reflects the fair value at the time of issuance.

 The following table summarizes the allocation of the purchase price, before prorations, the Company recorded in conjunction with the acquisitions discussed above:

 2024

 2023

 2022

 Real estate investment acquired

 $

 111,290

 $

 -

 $

 93,515

 Assumed interest rate derivative

 3,331

 -

 -

 Acquired lease intangible assets

 2,261

 -

 1,732

 Assumed assets

 -

 Total Assets Acquired

 $

 117,333

 $

 -

 $

 95,250

 Assumed loans

 ( 80,774)

 -

 -

 Other liabilities

 ( 653)

 -

 ( 406)

 Net assets acquired

 35,906

 -

 94,844

 Equity/limited partnership unit consideration

 ( 7,396)

 -

 ( 12,870)

 Net cash consideration

 $

 28,510

 $

 -

 $

 81,974

 NOTE 20 - SUBSEQUENT EVENTS

 On January 15, 2025 we paid a dividend or distribution of $ 0.2875 per share on our common shares of beneficial interest or limited partnership units, to common shareholders and limited unit holders of record on December 31, 2024 which was declared on December 17, 2024.

 On December 17, 2024 the Board of Trustees approved an increase in the common share price from $ 23.00 per share to $ 24.00 per share and an increase in redemption price from $ 21.85 to $ 22.80 effective January 1, 2025.

 On February 26, 2025, we entered into a $ 10,000,000 revolving promissory note bearing an interest rate of 5.25 % as the borrower with an affiliate, Sterling Office and Industrial Properties, LLLP.

 Pending acquisitions and dispositions are subject to numerous conditions and contingencies and there are no assurances that the transactions will be completed.

 which

 Costs

 Industrial

 or

 Land

 Land

 Land

 Total

 Guardian Building Products

 $

 —

 $

 $

 2,554

 $

 $

 ( 94)

 $

 $

 2,460

 $

 3,340

 $

 08/29/2012

 1,939

 1,395

 —

 1,395

 2,377

 01/28/2015

 Dickinson, ND

 1,705

 1,096

 —

 1,096

 1,850

 07/30/2012

 2,262

 1,947

 —

 1,296

 1,947

 3,243

 10/30/2012

 Marshall, MN

 4,390

 3,648

 —

 3,648

 4,029

 1,208

 11/01/2011

 Minot, ND

 —

 1,654

 —

 —

 1,654

 2,272

 08/01/2012

 North Platte, NE

 —

 1,269

 —

 —

 1,269

 1,594

 01/29/2016

 Sioux City, IA

 3,474

 2,472

 —

 —

 2,472

 2,787

 10/25/2013

 Total

 $

 13,770

 $

 4,463

 $

 16,035

 $

 1,088

 $

 ( 94)

 $

 5,551

 $

 15,941

 $

 21,492

 $

 4,763

 which

 Costs

 Land

 or

 Land

 Land

 Land

 Total

 Taco Bell

 Denver, CO

 $

 $

 $

 —

 $

 —

 $

 —

 $

 $

 —

 $

 $

 —

 06/14/2011

 Rochester Development Land

 Rochester, MN

 —

 1,364

 —

 —

 —

 1,364

 —

 1,364

 —

 08/29/2016

 Total

 $

 $

 2,033

 $

 —

 $

 —

 $

 —

 $

 2,033

 $

 —

 $

 2,033

 $

 —

 which

 Costs

 Medical

 or

 Land

 Land

 Land

 Total

 $

 1,969

 $

 $

 2,255

 $

 $

 $

 $

 2,378

 $

 2,695

 $

 1,081

 -

 2,024

 2,230

 2,388

 2,846

 1,106

 -

 Janesville, WI

 1,682

 1,857

 —

 1,980

 2,230

 -

 Mankato, MN

 2,138

 2,111

 1,154

 3,265

 3,935

 1,450

 -

 Marquette, MI

 —

 2,793

 —

 2,916

 3,129

 1,309

 -

 Onalaska, WI

 1,624

 1,853

 —

 2,176

 2,384

 -

 Oshkosh, WI

 1,670

 1,705

 —

 1,851

 2,144

 -

 Sheboygan, WI

 1,905

 1,611

 —

 1,859

 2,482

 -

 Stevens Point, WI

 1,822

 2,184

 —

 2,307

 2,426

 1,050

 -

 Total

 $

 14,834

 $

 2,859

 $

 18,599

 $

 $

 2,521

 $

 3,151

 $

 21,120

 $

 24,271

 $

 9,619

 which

 Costs

 or

 Land

 Land

 Land

 Total

 Amberwood

 $

 2,170

 $

 $

 3,304

 $

 $

 $

 $

 3,635

 $

 4,064

 $

 09/13/2016

 -

 Arbor I/400

 06/04/2013

 Arbor II/404

 11/01/2013

 Arbor III/406

 11/01/2013

 Ashbury

 2,139

 3,774

 3,799

 4,139

 12/19/2016

 Auburn II

 1,087

 03/23/2007

 -

 Autumn Ridge

 4,878

 1,072

 8,875

 1,116

 8,942

 10,058

 4,134

 08/16/2004

 -

 Barrett Arms

 Crookston, MN

 1,001

 —

 1,178

 1,215

 01/02/2014

 Bayview

 2,000

 3,447

 2,036

 5,483

 5,879

 1,799

 12/31/2007

 -

 Belmont East and West

 1,424

 1,432

 1,601

 03/1/2020

 —

 —

 Berkshire

 03/31/2008

 -

 Betty Ann

 1,001

 08/31/2009

 Birchwood 1

 12/01/2017

 Birchwood 2

 1,252

 2,099

 2,711

 2,997

 12/01/2017

 Bradbury Apartments

 1,665

 1,049

 4,922

 —

 1,049

 5,080

 6,129

 10/24/18

 Briar Pointe

 1,214

 1,551

 —

 1,551

 1,936

 06/01/2021

 Bridgeport

 4,618

 7,676

 7,912

 8,540

 1,568

 12/19/2016

 Bristol Park

 2,626

 3,976

 —

 4,861

 5,846

 1,054

 02/01/2016

 Brookfield

 1,828

 1,958

 2,276

 2,534

 08/01/2008

 -

 Brownstone

 2,737

 3,610

 3,616

 4,398

 06/01/2021

 —

 —

 Cambridge (FKA 44th Street)

 1,510

 1,845

 2,091

 2,428

 Candlelight

 1,380

 1,221

 ( 202)

 1,924

 2,335

 11/30/2012

 Carling Manor

 03/31/2008

 Carlton Place

 5,363

 7,070

 1,002

 8,072

 8,871

 2,970

 09/01/2008

 -

 Carr

 01/17/2017

 Cedars 4

 —

 1,068

 1,144

 1,280

 12/31/18

 Chandler 1802

 1,114

 —

 1,222

 1,355

 01/02/2014

 Chandler 1834

 —

 9/1/18

 Chandler 1866

 —

 01/03/2005

 -

 Chandler 1898

 —

 12/1/22

 Cherry Creek (FKA Village)

 —

 1,435

 2,007

 2,181

 11/01/2008

 Columbia West

 2,056

 3,367

 3,982

 4,277

 1,500

 09/01/2008

 -

 Country Club

 1,252

 1,492

 1,746

 05/02/2011

 -

 Countryside

 1,020

 05/02/2011

 Courtyard

 St. Louis Park, MN

 2,423

 2,270

 5,681

 —

 2,270

 6,521

 8,791

 1,800

 09/03/2013

 -

 Dakota Manor

 1,221

 2,236

 2,823

 3,092

 08/07/2014

 Danbury

 4,278

 5,869

 1,023

 6,892

 7,609

 2,673

 12/31/2007

 -

 Dellwood Estates

 Anoka, MN

 5,619

 9,924

 —

 10,785

 11,629

 3,015

 05/31/2013

 Deer Park

 8,382

 1,784

 12,545

 —

 1,784

 12,592

 14,376

 2/28/22

 Desoto Estates

 3,985

 4,869

 —

 —

 4,869

 5,824

 Desoto Townhomes

 1,524

 2,767

 —

 —

 2,767

 3,231

 Diamond Bend

 6,554

 9,789

 —

 9,789

 10,538

 6/10/22

 Eagle Run

 3,399

 5,787

 6,000

 6,957

 2,083

 08/12/2010

 Eagle Sky I

 —

 1,292

 —

 1,421

 1,536

 03/01/2016

 Eagle Sky II

 —

 1,279

 —

 1,476

 1,611

 03/01/2016

 East Bridge

 2,951

 5,396

 5,697

 6,490

 1,059

 07/03/2017

 Eastbrook

 1,233

 —

 1,351

 1,496

 01/31/2020

 —

 —

 Echo Manor

 —

 1,134

 01/02/2014

 -

 Emerald Court

 —

 1,048

 1,132

 03/31/2008

 -

 Evergreen Terrace

 4,699

 7,573

 —

 8,477

 9,297

 12/17/20

 —

 —

 Fairview

 2,335

 3,978

 4,928

 5,234

 1,775

 -

 Flagstone

 4,839

 1,535

 6,258

 —

 1,538

 6,258

 7,796

 06/01/2021

 —

 —

 Flickertail

 5,843

 5,590

 1,818

 7,408

 8,095

 2,554

 Forest Avenue

 Foxtail Creek Townhomes

 —

 1,221

 —

 —

 1,221

 1,488

 09/15/2020

 —

 —

 Galleria III

 1,016

 1,137

 11/09/2010

 Garden Grove

 3,873

 6,073

 —

 6,241

 6,847

 1,365

 05/04/2016

 -

 Georgetown on the River

 Fridley, MN

 15,551

 4,620

 23,833

 7,262

 4,628

 31,095

 35,723

 6,968

 -

 Glen Pond

 Eagan, MN

 33,931

 3,761

 20,569

 1,358

 3,799

 21,927

 25,726

 6,938

 12/02/2011

 -

 Glen Pond Addition

 Eagan, MN

 5,803

 15,408

 —

 15,414

 16,290

 1,669

 09/30/2020

 —

 —

 Granger Court I

 1,707

 1,926

 2,163

 4,089

 4,393

 06/04/2013

 -

 Hannifin

 11/01/2013

 Harrison and Richfield

 —

 6,346

 7,316

 8,080

 2,931

 07/01/2007

 -

 Hartford Apartments

 1,233

 —

 1,247

 1,401

 10/1/18

 Hawn

 1,396

 2,277

 2,566

 2,857

 03/01/2020

 —

 —

 Highland Meadows

 5,231

 1,532

 8,513

 —

 1,532

 9,188

 10,720

 1,742

 05/01/2017

 -

 Hunters Run I

 ( 2)

 03/23/2007

 Hunters Run II

 —

 07/01/2008

 Huntington

 08/04/2015

 Islander

 1,210

 1,357

 07/01/2011

 Kennedy

 -

 Lexington Lofts 1

 Lexington, MN

 30,955

 4,214

 37,004

 —

 —

 4,214

 37,004

 41,218

 6/26/24

 -

 Lexington Lofts 2

 Lexington, MN

 22,575

 2,674

 23,486

 —

 —

 2,674

 23,486

 26,160

 6/26/24

 -

 Sterling - Lexington

 Lexington, MN

 —

 —

 —

 —

 —

 6/26/24

 -

 Library Lane

 1,869

 2,332

 2,521

 2,842

 1,066

 10/01/2007

 -

 Madison

 —

 09/01/2015

 Maple Ridge

 7,412

 5,608

 3,937

 9,545

 10,370

 3,073

 08/01/2008

 -

 Maplewood

 Maplewood, MN

 8,053

 3,120

 11,655

 —

 3,259

 3,120

 14,914

 18,034

 3,281

 -

 Maplewood Bend I, II, III. IV, V, VI, VII, VIII & Royale

 3,853

 5,839

 6,535

 7,333

 2,233

 01/01/2009

 -

 Martha Alice

 1,048

 08/31/2009

 -

 Mayfair

 —

 1,043

 1,349

 1,434

 07/01/2008

 -

 Monticello

 11/08/2013

 -

 Montreal Courts

 Little Canada, MN

 26,661

 5,808

 19,565

 3,618

 5,823

 23,183

 29,006

 6,144

 10/02/2013

 -

 Morningside Apartments

 —

 11/30/18

 Newgate

 1,430

 1,755

 1,803

 2,360

 9/13/22

 Oak Court

 2,338

 2,210

 2,682

 3,147

 1,034

 04/30/2008

 -

 Oakview Townhomes

 3,229

 4,698

 5,574

 6,430

 1,036

 01/11/2017

 Oxford

 6,324

 1,655

 8,563

 —

 1,655

 8,661

 10,316

 07/01/2021

 Pacific Park I

 1,005

 Pacific Park II

 1,005

 1,120

 Pacific South

 Park Circle

 06/01/2017

 Parkview Arms

 —

 3,845

 —

 4,263

 4,636

 05/13/2015

 -

 Parkwest Gardens

 2,611

 5,712

 1,649

 7,361

 8,113

 1,765

 06/30/2014

 -

 Parkwood

 —

 1,143

 1,346

 1,490

 08/01/2008

 Pebble Creek

 —

 2,818

 ( 578)

 2,240

 2,531

 03/19/2008

 -

 Pinehurst

 9,200

 2,368

 12,614

 2,430

 12,646

 15,076

 1,104

 07/01/2021

 —

 —

 Plumtree

 05/01/2017

 Prairiewood Courts

 —

 1,730

 1,942

 2,279

 09/01/2006

 -

 Prairiewood Meadows

 3,566

 4,064

 4,916

 5,664

 09/30/2012

 Cobalt Apartments

 Fort Worth, TX

 27,500

 5,451

 46,811

 —

 5,451

 47,036

 52,487

 2,444

 12/29/22

 Quail Creek

 Springfield, MO

 4,605

 1,529

 7,396

 —

 1,704

 1,529

 9,100

 10,629

 1,990

 02/03/2015

 -

 Robinwood

 Coon Rapids, MN

 3,887

 1,380

 6,133

 —

 1,380

 6,844

 8,224

 1,685

 Rosedale Estates

 Roseville, MN

 —

 4,680

 20,591

 —

 1,632

 4,680

 22,223

 26,903

 5,395

 -

 Rosegate

 2,705

 2,978

 3,459

 3,812

 1,294

 04/30/2008

 -

 Rosser

 1,216

 —

 1,325

 1,481

 03/01/2020

 —

 —

 Roughrider

 —

 08/01/2016

 -

 Saddlebrook

 1,195

 1,262

 1,367

 1,718

 Sage Park

 New Brighton, MN

 8,761

 2,520

 13,985

 —

 1,230

 2,520

 15,215

 17,735

 3,812

 -

 Sargent

 1,529

 1,546

 1,714

 01/10/2017

 Schrock

 06/04/2013

 Sheridan Pointe

 1,850

 2,387

 2,483

 2,797

 10/01/2013

 Sierra Ridge

 6,148

 8,795

 9,750

 10,655

 3,483

 09/01/2006

 Somerset

 —

 3,400

 3,770

 4,113

 1,416

 07/01/2008

 Southgate

 4,517

 5,267

 5,386

 6,209

 2,285

 07/01/2007

 -

 Southview III

 —

 08/01/2011

 Southview Villages

 2,214

 2,483

 3,350

 3,634

 1,193

 10/01/2007

 -

 Spring

 -

 Stanford Court

 —

 3,866

 —

 4,484

 4,775

 1,219

 -

 Stonefield

 6,913

 2,804

 11,060

 ( 215)

 3,031

 10,845

 13,876

 2,611

 08/01/2014

 -

 Stonefield Townhomes

 4,564

 1,201

 3,678

 5,754

 1,687

 9,432

 11,119

 1,818

 10/23/2014

 Stonefield-Phase III

 —

 1,079

 —

 —

 1,317

 —

 1,317

 —

 10/23/2014

 n/a

 Stonybrook

 5,601

 1,439

 8,003

 —

 2,032

 1,439

 10,035

 11,474

 3,586

 01/20/2009

 -

 Summerfield

 08/04/2015

 Summit Point

 3,034

 5,434

 5,884

 6,587

 1,318

 10/01/2015

 -

 Sunchase

 1,563

 1,733

 1,928

 05/01/2017

 Sunset Ridge

 10,202

 1,759

 9,560

 1,795

 9,720

 11,515

 3,712

 06/06/2008

 -

 Sunview

 —

 1,578

 1,819

 1,965

 -

 Sunwood

 2,659

 3,252

 3,940

 4,336

 1,498

 07/01/2007

 -

 Thunder Creek

 2,486

 4,063

 4,777

 5,411

 03/1/2018

 -

 Twin Oaks

 4,842

 3,245

 —

 3,401

 4,217

 10/01/2014

 Twin Parks

 1,739

 2,072

 2,299

 2,461

 10/01/2008

 -

 Urban Plains

 26,674

 5,801

 33,907

 —

 —

 5,801

 33,907

 39,708

 4/15/25

 -

 Valley Homes Duplexes

 1,027

 1,668

 2,099

 2,456

 01/22/2015

 Valley View

 Golden Valley, MN

 3,863

 1,190

 6,076

 —

 1,190

 6,550

 7,740

 1,604

 -

 Village Park

 1,932

 2,021

 2,291

 04/30/2008

 Village West

 1,980

 2,274

 2,439

 2,857

 04/30/2008

 Washington

 —

 05/04/2016

 Westcourt

 2,147

 2,914

 3,458

 3,902

 01/02/2014

 -

 West Oak

 01/17/2017

 Westwood

 2,613

 6,341

 1,424

 7,765

 8,453

 2,747

 06/05/2008

 -

 Willow Park

 4,770

 5,286

 6,202

 6,529

 2,250

 Wolf Creek

 2,794

 1,082

 4,210

 —

 1,082

 4,238

 5,320

 01/12/2020

 —

 —

 Woodland Pines

 5,788

 10,596

 —

 1,785

 12,381

 13,223

 1,807

 11/30/18

 Total

 $

 472,556

 $

 105,317

 $

 679,523

 $

 4,326

 $

 78,363

 $

 109,643

 $

 757,886

 $

 867,529

 $

 155,637

 which

 Costs

 or

 Land

 Land

 Land

 Total

 Bluemont Lakes Financial Center

 $

 4,495

 $

 $

 3,298

 $

 $

 1,285

 $

 $

 4,583

 $

 5,322

 $

 1,986

 03/16/2004

 -

 Bell Plaza

 Bloomington, MN

 29,006

 6,912

 34,674

 —

 5,278

 6,912

 39,952

 46,864

 14,606

 08/13/2015

 -

 Trustmark

 6,572

 2,089

 4,718

 6,738

 2,103

 11,456

 13,559

 1,854

 08/28/2020

 —

 —

 Four Points

 —

 1,238

 1,413

 1,494

 10/18/2007

 -

 Goldmark Office Park

 11,630

 1,160

 11,788

 9,119

 1,225

 20,907

 22,132

 6,335

 07/01/2007

 -

 Great American Bldg

 1,290

 1,737

 2,270

 02/01/2005

 -

 Midtown Plaza

 Minot, ND

 1,045

 1,213

 —

 1,310

 1,340

 01/01/2004

 -

 Parkway office building (FKA Echelon)

 1,523

 1,491

 1,573

 1,893

 05/15/2007

 -

 Wells Fargo Center

 Duluth, MN

 —

 7,195

 ( 115)

 ( 1,645)

 5,550

 6,035

 2,168

 07/11/2007

 -

 Total

 $

 55,242

 $

 12,285

 $

 66,905

 $

 $

 21,576

 $

 12,428

 $

 88,481

 $

 100,909

 $

 29,736

 which

 Costs

 or

 Land

 Land

 Land

 Total

 Dickinson, ND

 —

 —

 01/19/2012

 Moorhead, MN

 —

 —

 1,032

 05/13/2011

 Family Dollar

 —

 —

 12/14/2010

 OReilly

 —

 —

 12/14/2010

 Alexandria, LA

 —

 1,090

 2,973

 —

 —

 1,090

 2,973

 4,063

 1,118

 12/18/2009

 -

 Batesville, AR

 4,038

 6,405

 —

 —

 6,405

 6,878

 2,482

 07/09/2009

 Denver, CO

 2,820

 2,349

 2,358

 —

 —

 2,349

 2,358

 4,707

 06/14/2011

 Fayetteville, AR

 3,000

 4,732

 —

 —

 4,732

 5,368

 1,834

 07/09/2009

 Laurel, MS

 —

 1,280

 2,984

 —

 —

 1,280

 2,984

 4,264

 1,082

 07/30/2010

 Total

 $

 9,858

 $

 6,682

 $

 21,995

 $

 $

 $

 6,685

 $

 22,076

 $

 28,761

 $

 8,197

 Grand Totals

 $

 566,627

 $

 133,639

 $

 803,057

 $

 5,852

 $

 102,447

 $

 139,491

 $

 905,504

 $

 1,044,995

 $

 207,952

 Notes:

 (a)
 The costs capitalized subsequent to acquisition is net of dispositions.

 (b)
 The changes in total real estate investments for the years ended December 31, 2024, 2023 and 2022 are as follows (in thousands):

 2024

 2023

 2022

 Balance at January 1,

 $

 970,804

 $

 971,148

 $

 896,702

 Purchase of real estate investments

 126,524

 11,875

 103,252

 Sale and disposal of real estate investment

 ( 10,236)

 ( 8,882)

 ( 26,960)

 Property held for sale

 1,673

 ( 1,673)

 —

 Provision for asset impairment

 —

 ( 2,603)

 ( 561)

 Construction in progress not yet placed in service

 6,650

 ( 1,285)

 Balance at December 31,

 $

 1,095,415

 $

 970,804

 $

 971,148

 (c)
 The changes in accumulated depreciation for the years ended December 31, 2024, 2023 and 2022 are as follows (in thousands):

 2024

 2023

 2022

 Balance at January 1,

 $

 214,584

 $

 194,849

 $

 179,155

 Depreciation expense

 24,580

 23,257

 22,161

 Property held for sale

 ( 110)

 —

 Sale and disposal of real estate investment

 ( 1,858)

 ( 3,412)

 ( 6,467)

 Balance at December 31,

 $

 237,416

 $

 214,584

 $

 194,849

 (d)
 The aggregate cost of our real estate for federal income tax purposes is $ 840,190.

 SCHEDULE IV – REAL ESTATE AND ACCUMULATED DEPRECIATION

 Sterling Real Estate Trust

 Schedule IV - Mortgage Loans on Real Estate

 Interest Rate

 Final Maturity Date

 Periodic Payment Terms

 Prior Liens

 Face Amount of Mortgages

 Carrying Amount of Mortgages

 Principal Amount of Loans Subject
to Delinquent Principal or Interest

 United States - MN

 7.25 %

 2026

 Principal and interest until maturity

 $

 —

 $

 7,869

 $

 7,869

 $

 —

 United States - MN

 12.00 %

 2027

 Interest only until maturity

 —

 1,539

 1,539

 —

 Other

 N/A

 N/A

 N/A

 —

 —

 Totals

 $

 —

 $

 9,484

 $

 9,484

 $

 —

 Year Ended December 31,

 2024

 2023

 2022

 Reconciliation of mortgage loans:

 Balance at beginning of year

 $

 8,885

 $

 8,448

 $

 7,457

 Additions:

 Advances on loans

 1,515

 2,991

 9,247

 Deductions:

 Collection of principal

 ( 916)

 ( 2,554)

 ( 8,256)

 Balance at end of year

 $

 9,484

 $

 8,885

 $

 8,448

 Exhibit Index

 Filed

 Incorporated by reference

 Exhibit

 here

 Period

 Filing

 number

 Exhibit Description

 with

 Form

 ending

 Exhibit

 Date

 3.1

 Articles of Organization of Sterling Real Estate Trust filed December 3, 2002

 10-12G

 3.1

 03/10/11

 3.2

 Amendment to Articles of Organization of Sterling Real Estate Trust dated August 1, 2014

 5.02

 06/24/14

 3.3

 Amended and Restated Bylaws dated June 2, 2020

 3.1

 06/03/20

 4.1

 Sterling Third Amended and Restated Declaration of Trust dated June 23, 2016

 4.1

 06/29/16

 4.2

 Amended and Restated Share Redemption Plan effective June 20, 202 4

 10.1

 07/11/24

 4.3

 Amended and Restated Unit Repurchase Plan effective June 20, 2024

 10.2

 07/11/24

 4.4

 Description of Registrant's Securities

 12/31/2019

 4.11

 03/13/20

 10.1

 Third Amended and Restated Agreement of Limited Liability Limited Partnership of Sterling Properties, LLLP dated January 1, 2014

 5.04

 06/24/14

 10.2

 Amended and Restated Dividend Reinvestment Plan effective January 1, 2025

 10.3

 07/11/24

 10.3

 Amendment to Certificate of Limited Liability Partnership of Sterling Properties, LLLP dated August 1, 2014

 5.03

 06/24/14

 10.4

 Form of Secured Promissory Note (15-Year Note) dated as of December 19, 2014

 10.3

 10.5

 Form of Secured Promissory Note (10-Year Note) dated as of December 19, 2014

 10.4

 10.6

 Form of Mortgage, Security Agreement and Fixture Filing dated as of December 19, 2014

 10.5

 10.7

 Form of Promissory Note dated as of December 19, 2014

 10.6

 10.8

 Form of Mortgage dated as of December 19, 2014

 10.7

 10.9

 Form of Commercial Security Agreement dated as of December 19, 2014

 10.8

 10.10

 Amended and Restated Sterling Real Estate Trust Independent Trustee Common Shares Plan approved June 18, 2015

 10.1

 06/23/15

 10.11

 Form of Promissory Note dated as of August 13, 2015

 10.2

 08/18/15

 10.12

 Form of Mortgage, Security Agreement and Fixture Filing dated as of August 13, 2015

 10.3

 08/18/15

 10.13

 Amendment No. 1 to Amended and Restated Independent Trustee Stock Plan

 99.3

 04/04/18

 10.14

 Amended and Restated Sterling Real Estate Trust Independent Trustee Common Shares Plan dated March 25, 2021

 10.1

 03/31/21

 10.15

 Fourteenth Amended and Restated Advisory Agreement effective January 1, 2025

 10.1

 12/19/24

 10.16

 Bell Bank Promissory Note, dated December 29, 2022 between Bell Bank and Sterling Properties, LLLP, together with commercial Guaranty of Sterling Real Estate Trust, dated December 29, 2022

 10.1

 01/04/23

 10.17

 Bell Bank Promissory Note, dated June 25, 2024, between Bell Bank and Sterling Properties, LLLP, together with Commercial Guaranty of Sterling Real Estate Trust, dated June 25, 2024

 8 - K

 10.1

 07/03/24

 10.18

 Credit Agreement, dated July 12, 2024, between Gate City Bank and Sterling Properties, LLLP, together with Commercial Guaranty of Sterling Real Estate Trust, dated July 12, 2024

 10.1

 07/18/24

 10.19

 Guaranty Agreement, dated July 12, 2024, between Gate City Bank and Sterling Properties, LLLP, together with Commercial Guaranty of Sterling Real Estate Trust, dated July 12, 2024

 10.2

 07/18/24

 16.1

 Letter of Baker Tilly US, LLP dated March 31, 2021 to the SEC regarding statements in Item 4.01(a)

 16.1

 03/31/21

 21.1

 Subsidiaries of Registrant

 X

 23.1

 Consent of Independent Registered Public Accounting Firm - RSM, LLP

 X

 31.1

 Section 302 Certification of Chief Executive Officer

 X

 31.2

 Section 302 Certification of Chief Financial Officer

 X

 32.1

 Section 906 Certification of Chief Executive Officer and Chief Financial Officer

 X

 X

 X

 SIGNATURES
 Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused the report to be signed on its behalf by the undersigned, thereunto duly authorized.
 Dated: March 19, 2025

 STERLING REAL ESTATE TRUST

 By:

 /s/ Kenneth P. Regan

 Kenneth P. Regan

 Chief Executive Officer
 (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.

 Signature

 Title

 Date

 /s/ Kenneth P. Regan
 (Kenneth P. Regan)

 Chief Executive Officer and Trustee
(Principal Executive Officer)

 /s/ Elizabeth A. Reich
 (Elizabeth A. Reich)

 Chief Financial Officer and Treasurer
(Principal Financial Officer)

 /s/ Lance R. Wolf
 (Lance R. Wolf)

 Chairman of the Board of Trustees

 /s/ Timothy L. Haugen
 (Timothy L. Haugen)

 /s/ Timothy A. Hunt
 (Timothy A. Hunt)

 /s/ Michelle L. Korsmo
 (Michelle L. Korsmo)

 /s/ Mark T. Polovitz
 (Mark T. Polovitz)

 /s/ James S. Wieland
 (James S. Wieland)