10-Q

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

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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.

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

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

As of May 10, 2024, the Registrant had 30,324,913 outstanding shares of common stock, consisting of 15,560,691 Class A-II shares, 12,622,236 Class A-I shares, 1,641,359 Class F-I shares, 288,717 Class I shares, 207,115 Class E shares and 4,795 Class S shares.

See accompanying notes to unaudited condensed consolidated financial statements.

Note 2 - Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") and include the accounts of the Company and the Operating Partnership. All intercompany balances and transactions are eliminated in consolidation.

These unaudited condensed consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2023, as filed with the SEC. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) necessary to present fairly the Company's financial position, results of operations and cash flows have been included. The Company's results of operations for the three months ended March 31, 2024 are not necessarily indicative of the results to be expected for the full year or any other future period.

Principles of Consolidation

The Company consolidates all entities that it controls through either majority ownership or voting rights. In addition, the Company consolidates all variable interest entities ("VIEs") of which it is considered the primary beneficiary. VIEs are defined as entities in which equity investors (i) do not have the characteristics of a controlling financial interest and/or (ii) do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties. The entity that consolidates a VIE is known as the primary beneficiary and is generally the entity with (i) the power to direct the activities that most significantly affect the VIE's economic performance, and (ii) the right to receive benefits from the VIE or the obligation to absorb losses of the VIE that could be significant to the VIE.

The Operating Partnership is considered to be a VIE. The Company consolidates this entity as it has the ability to direct the most significant activities of the entities such as purchases, dispositions, financings, budgets, and overall operating plans.

The accompanying condensed consolidated financial statements include the accounts of the Company and the Company's subsidiary partnerships. Third party unitholders of Operating Partnership's share of the assets, liabilities and operations of the Operating Partnership is included in non-controlling interest as equity of the Company. The noncontrolling interest is generally computed based on third party unit-holders ownership percentage.

Non-controlling interests in the Operating Partnership represent Operating Partnership units that are held by third parties, including the Adviser,and Operating Partnership units issued to the Adviser under an advisory agreement by and among the Company, the Operating Partnership and the Adviser (as amended, restated or otherwise modified from time to time, the "Advisory Agreement"). Operating Partnership units may be redeemed for cash, or at the Company's option, for shares of common stock of the Company on a one-for-one basis, unless those units are held by the Adviser or Special Limited Partner, in which case such Operating Partnership units shall be redeemed for shares of common stock of the Company or cash, at the holder's election. Since the number of shares of common stock outstanding is equal to the number of Operating Partnership units owned by the Company, the redemption value of each common unit of the Operating Partnership is equal to the market value of each share of common stock and distributions paid to each unitholder is equivalent to dividends paid to common stockholders, per respective share class.

Cash and Cash Equivalents

Cash and cash equivalents represent cash held in banks, cash on hand, and liquid investments with original maturities of three months or less. The Company may have bank balances in excess of federally insured amounts; however, the Company deposits its cash and cash equivalents with high credit-quality institutions to minimize credit risk exposure. As of March 31, 2024 and December 31, 2023, the Company held $46.5 million and $95.2 million of cash and cash equivalents, respectively.

Restricted Cash

Restricted cash represents cash held in a deposit account controlled by a third party. As of March 31, 2024, the Company held $11 thousand in restricted cash. The Company did not have any restricted cash as of December 31, 2023.

Fair Value Measurements

Under normal market conditions, the fair value of an investment is the amount that would be received to sell an asset or transfer a liability in an orderly transaction between market participants at the measurement date (i.e., the exit price). The Company uses a hierarchical framework that prioritizes and ranks the level of market price observability used in measuring investments at fair value. Market price observability is impacted by a number of factors, including the type of investment and the characteristics specific to the investment, and the state of the marketplace, including the existence and transparency of transactions between market participants. Investments with readily available actively quoted prices or for which fair value can be measured from actively quoted prices generally will have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value.

Investments measured and reported at fair value are classified and disclosed in one of the following levels within the fair value hierarchy:

Level 1 — quoted prices are available in active markets for identical investments as of the measurement date. The Company does not adjust the quoted price for these investments.

Level 2 — quoted prices are available in markets that are not active or model inputs are based on inputs that are either directly or indirectly observable as of the measurement date.

Level 3 — pricing inputs are unobservable and include instances where there is minimal, if any, market activity for the investment. These inputs require significant judgment or estimation by management or third parties when determining fair value and generally represent anything that does not meet the criteria of Levels 1 and 2. Due to the inherent uncertainty of these estimates, these values may differ materially from the values that would have been used had a ready market for these investments existed.

As of March 31, 2024, the Company's investments in real estate debt consisted of commercial mortgage loans secured by real estate assets and real estate-related securities. The Company has elected the fair value option ("FVO") for investments in commercial mortgage loans secured by real estate assets as the Company believes fair value provides a more accurate depiction of the value of these assets. During the three months ended March 31, 2024, real-estate related securities met the criteria to be classified as trading securities under ASC 320, "Investments". The Company generally determines the fair value of its investments in real estate debt by utilizing third-party pricing service providers whenever available.

The Company's investments in commercial mortgage loans are unlikely to have readily available market quotations. In such cases, the Company will generally determine the initial value based on the acquisition price of such investment if acquired by the Company or the par value of such investment if originated by the Company. Following the initial measurement, the Company will determine fair value by utilizing or reviewing certain of the following (i) market yield data, (ii) discounted cash flow modeling, (iii) collateral asset performance, (iv) local or macro real estate performance, (v) capital market conditions, (vi) debt yield or loan-to-value ratios, and (vii) borrower financial condition and performance. The inputs used in determining the fair value of the Company's investments in commercial mortgage loans are considered Level 3.

The fair value of real estate-related securities may be determined by using third-party pricing service providers or broker-dealer quotes, reported trades or valuation estimates from their internal pricing models to determine the reported price. The inputs used in determining the fair value of the Company's investments in real estate-related securities are considered Level 2.

The following table details the Company's assets measured at fair value on a recurring basis ($ in thousands):


	March 31, 2024								December 31, 2023
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets:
Investments in real estate debt	$	—	$	24,329	$	449,911	$	474,240	$	—	$	25,321	$	302,868	$	328,189
Total	$	—	$	24,329	$	449,911	$	474,240	$	—	$	25,321	$	302,868	$	328,189

The following table details the Company's assets measured at fair value on a recurring basis using Level 3 inputs ($ in thousands):


	Investments in Real Estate Debt
Balance as of December 31, 2023	$	302,868
Originations, acquisitions, and add on fundings		147,043
Amortization of discount/premium		67
Included in net income:
Unrealized gain/(loss) from investments in real estate debt		(67	)
Balance as of March 31, 2024	$	449,911

The following table contains the quantitative inputs and assumptions used for items categorized in Level 3 of the fair value hierarchy ($ in thousands):

           
          March 31, 2024

           
          Fair Value

          Valuation Technique

          Unobservable Inputs

          Rate Range

          Impact to Valuation from an Increase in Input

          Assets:

Investments in real estate debt

449,911

Discounted cash flow

Discount rate

8.00%-12.75%

Decrease

           
          December 31, 2023

           
          Fair Value

          Valuation Technique

          Unobservable Inputs

          Rate Range

          Impact to Valuation from an Increase in Input

          Assets:

Investments in real estate debt

302,868

Discounted cash flow

Discount rate

8.41%-10.00%

Decrease

Investment Property and Lease Intangibles

Acquisitions of properties are accounted for utilizing the acquisition method and, accordingly, the operations of acquired properties will be included in the Company's results of operations from their respective dates of acquisition. The Company will utilize a report from an independent appraiser to record the purchase of identifiable assets acquired and liabilities assumed such as land, buildings and improvements, equipment and identifiable intangible assets and liabilities such as amounts related to in-place leases, acquired above- and below-market leases, tenant relationships, asset retirement obligations and mortgage loans payable.

The fair value of the tangible assets of an acquired property considers the value of the property as if it were vacant. The Company also considers an allocation of purchase price of other acquired intangibles, including acquired in-place leases that may have a customer relationship intangible value, including (but not limited to) the nature and extent of the existing relationship with the tenants, the tenants’ credit quality and expectations of lease renewals.

The estimated fair value of acquired in-place leases is the costs the Company would have incurred to lease the properties to the occupancy level of the properties at the date of acquisition. Such estimates include the fair value of leasing commissions, legal costs, and other direct costs that would be incurred to lease the properties to such occupancy levels. Additionally, the Company evaluates the time period over which such occupancy levels would be achieved. Such evaluation includes an estimate of the net market-based rental revenues and net operating costs (primarily consisting of real estate taxes, insurance and utilities) that would be incurred during the lease-up period. Acquired in-place leases as of the date of acquisition are amortized over the remaining lease terms. The amortization of in-place lease intangibles is recorded in depreciation and amortization expense on the Company’s condensed consolidated statements of operations.

Acquired above- and below-market lease values are recorded based on the present value of the difference between the contractual amounts to be paid pursuant to the in-place leases and the Company's estimate of fair market value lease rates for the corresponding in-place leases. The capitalized above- and below-market lease values are amortized as adjustments to rental revenue over the remaining terms of the respective leases, which include periods covered by bargain renewal options, if applicable. Should a tenant terminate its lease, the unamortized portion of the in-place lease value will be charged to amortization expense and the unamortized portion of out-of-market lease value will be charged to rental revenue.

The Company's investments in real estate are stated at cost and are generally depreciated on a straight-line basis over the estimated useful lives of the assets as follows:


Description		Depreciable Life
Buildings		39 - 50 years
Buildings and land improvements		10 - 15 years
Lease intangibles and leasehold improvements		Lease term

Significant improvements to properties are capitalized, whereas, repairs and maintenance expenses at the Company's properties are expensed as incurred and included in real estate operating expense on the Company’s condensed consolidated statements of operations. When an asset is sold, the cost and related accumulated depreciation are removed from the accounts with the resulting gain or loss reflected in the Company's results of operations for the period.

Real estate assets will be evaluated for impairment on a quarterly basis. The Company will consider the following factors when performing its impairment analysis: (1) management, having the authority to approve the action, commits to a plan to sell the asset; (2) significant negative industry and economic outlook or trends; (3) expected material costs necessary to extend the life or operate the real estate asset; and (4) its ability to hold and dispose of the real estate asset in the ordinary course of business. A real estate asset is considered impaired when the sum of estimated future undiscounted cash flows to be generated by the real estate asset over the estimated remaining holding period is less than the carrying value of such real estate asset. An impairment charge is recorded equal to the excess of the carrying value of the real estate asset over the fair value. When determining the fair value of a real estate asset, the Company makes certain assumptions including, but not limited to, consideration of projected operating cash flows, comparable selling prices and projected cash flows from the eventual disposition of the real estate asset based upon its estimate of a capitalization rate and discount rate. As of March 31, 2024, the Company had not recorded any impairments on its investments in real estate.

Investments in Real Estate Debt

The Company's investments in real estate debt consist of commercial mortgage loans secured by real estate and real estate-related securities. The Company has elected the FVO for its commercial mortgage loans secured by real estate. During the three months ended March 31, 2024, real-estate related securities met the criteria to be classified as trading securities under ASC 320, "Investments". The unrealized gain or loss associated with holding real estate debt investments at fair value are recorded as a component of income from investments in real estate debt on the Company's condensed consolidated statement of operations. For the three months ended March 31, 2024 the Company recorded $0.2 million of unrealized gain on its investments in real estate debt.

Interest income from the Company’s investments in real estate debt is recognized over the life of each investment using the effective interest method and is recorded on the accrual basis. Recognition of premiums and discounts associated with these investments is deferred and recorded over the term of the investment as an adjustment to yield. Upfront costs and fees related to items for which the FVO is elected are recognized in earnings as incurred and are not deferred. Interest income, upfront costs and fees are recorded as components of income from investments in real estate debt on the Company’s condensed consolidated statements of operations.

Deferred Financing Costs

Costs incurred in connection with financings are capitalized and amortized over the respective financing terms and are reflected on the accompanying condensed consolidated statement of operations as a component of interest expense.

Revenue Recognition

The Company's rental revenue consists of base rent and tenant reimbursement income arising from tenant leases at the Company's properties under operating leases. Base rent is recognized on a straight-line basis over the life of the lease, including any rent step ups or abatements. The Company accounts for base rental revenue (lease component) and common area expense reimbursement (non-lease component) as one lease component under Accounting Standards Codification ("ASC") 842, "Leases". Additionally, the Company also includes the non-components of its leases, such as the reimbursement of utilities, insurance and real estate taxes, within this lease component.

The Company evaluates the collectability of receivables related to rental revenue on an individual lease basis. Management exercises judgment in assessing collectability and considers the length of time a receivable has been outstanding, tenant creditworthiness, payment history, available information about the financial condition of the tenant, and current economic trends, among other factors. Tenant receivables that are deemed uncollectible are recognized as a reduction to rental revenue. However any future cash receipt on leases that are deemed uncollectible will be recorded as income on a cash basis.

Commercial mortgage loans that are significantly past due may be placed on non-accrual status if we determine it is probable that we will not collect all payments which are contractually due. When a loan is placed on non-accrual status, interest is only recorded as interest income when it is received. A loan may be placed back on accrual status if we determine it is probable that we will collect all payments which are contractually due.

Income Taxes

The Company intends to make an election to be taxed as a REIT under Sections 856 through 860 of the Code commencing with its taxable year ended December 31, 2023. If the Company qualifies for taxation as a REIT, the Company generally will not be subject to federal corporate income tax to the extent it distributes its taxable income to its stockholders. REITs are subject to a number of other organizational and

operational requirements. Even if the Company qualifies for taxation as a REIT, it may be subject to certain state and local taxes on its income and property, and U.S. federal income and excise taxes on its undistributed income.

Earnings per Share of Common Stock

Basic earnings per share of common stock is computed by dividing net income or loss for the period by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is computed by dividing net income or loss for the period by the weighted average number of shares of common stock and common stock equivalents outstanding (unless their effect is anti-dilutive) for the period. As there were no common stock equivalents outstanding during the three months ended March 31, 2024 and 2023, the calculation of basic and diluted earnings per share are equal.

Organization and Offering Expenses

The Adviser has agreed that it and/or its affiliates will advance organization and offering expenses on behalf of the Company (including legal, accounting, and other expenses attributable to the Company's organization, but excluding upfront selling commissions, dealer manager fees and stockholder servicing fees) through December 22, 2023, the first anniversary of the escrow break for the Offering. The Company will reimburse the Adviser and its affiliates for all such advanced expenses ratably over a 60-month period beginning on December 22, 2024.

Organization costs are expensed as incurred and recorded as expenses on the Company's condensed consolidated statement of operations and offering costs are charged to equity as such amounts are incurred. As of March 31, 2024 and December 31, 2023, the Adviser and its affiliates had incurred organization and offering costs on the Company's behalf of $7.9 million, consisting of offering costs of $6.4 million and organization costs of $1.5 million. Such costs became the Company's liability on December 22, 2022, the date on which the proceeds from the Offering were released from escrow. These organization and offering costs are recorded as a component of due to affiliates on the Company's condensed consolidated balance sheet.

Apollo Global Securities, LLC (the "Dealer Manager"), a registered broker-dealer affiliated with the Adviser, serves as the dealer manager for the Offering. The Dealer Manager is entitled to receive selling commissions and dealer manager fees based on the transaction price of each applicable class of shares sold in the primary offering. The Dealer Manager is also entitled to receive a stockholder servicing fee based on the aggregate NAV of the Company’s outstanding Class S shares, Class D shares, Class F-S shares and Class F-D shares.

The following table details the selling commissions, dealer manager fees, and stockholder servicing fees for each applicable share class as of March 31, 2024:


	Class S Shares	Class D Shares	Class I Shares		Class F-S Shares	Class F-D Shares	Class F-I Shares		Class A-I Shares		Class A-II Shares		Class A-III Shares
Selling commissions and dealer manager fees (% of transaction price)	up to 3.5%	up to 1.5%		—	up to 3.5%	up to 1.5%		—		—		—		—
Stockholder servicing fee (% of NAV)	0.85%	0.25%		—	0.85%	0.25%		—		—		—		—

For Class S shares and Class F-S shares sold in the primary offering, investors will pay upfront selling commissions of up to 3% and dealer manager fees of up to 0.5% of the transaction price; however, such amounts may vary at certain participating broker-dealers, provided that the sum will not exceed 3.5% of the transaction price. For Class D shares and Class F-D shares sold in the primary offering, investors will pay upfront selling commissions of up to 1.5% of the transaction price.

The Dealer Manager, as the dealer manager for the Offering, is entitled to receive stockholder servicing fees of 0.85% per annum of the aggregate NAV for Class S shares and Class F-S shares. For Class D shares and Class F-D shares, a charge of 0.25% per annum of the aggregate NAV will be charged for stockholder servicing fees.

The Dealer Manager has entered into agreements with selected dealers that agree to distribute the Company's shares in the Offering, which will provide, among other things, for the reallowance of the full amount of the selling commissions and stockholder servicing fees to such selected dealers. The Company will cease paying the stockholder servicing fee with respect to any Class S share, Class D share, Class F-S share, or Class F-D share held in a stockholder's account at the end of the month in which the total selling commissions, dealer manager fees and stockholder servicing fees paid with respect to such shares would exceed, in the aggregate, 8.75% of the gross proceeds from the sale of such share. There will not be a stockholder servicing fee, upfront selling commission or dealer manager fee with respect to Class I shares, Class F-I shares, Class A-I shares, Class A-II shares, and Class A-III shares. The Company will accrue the cost of the stockholder servicing fee as an offering cost at the time of each Class S share, Class D share, Class F-S share, and Class F-D share is sold during the primary offering. As of March 31, 2024, the Company had not sold any of those share classes and as such has not accrued for any stockholder servicing fees.

Share Based Payments

The Company accounts for share-based compensation to its independent directors, to the Adviser and to employees of the Adviser and its affiliates using the fair value-based methodology prescribed by GAAP. Compensation cost related to restricted common stock issued is measured at its fair value at the grant date and amortized into expense over the vesting period on a straight-line basis.

Recent Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board ("FASB") issued ASU 2023-07 "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures" ("ASU 2023-07"). ASU 2023-07 intends to improve reportable segment disclosure requirements, enhance interim disclosure requirements and provide new segment disclosure requirements for entities with a single reportable segment. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and for interim periods with fiscal years beginning after December 15, 2024. ASU 2023-07 is to be adopted retrospectively to all prior periods presented. The Company is currently assessing the impact this guidance will have on its consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09 "Improvements to Income Tax Disclosures" ("ASU 2023-09"). ASU 2023-09 intends to improve the transparency of income tax disclosures. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024 and is to be adopted on a prospective basis with the option to apply retrospectively. The Company is currently assessing the impact of this guidance, however, it does not expect a material impact to its consolidated financial statements.

Note 4 - Investments in Real Estate Debt

The following table details the Company's investments in real estate debt as of March 31, 2024 ($ in thousands):


	March 31, 2024
Type of Investment in Real Estate Debt	Number of Positions	Weighted Average Coupon(1)			Weighted Average Maturity Date (2)	Face Amount		Cost Basis		Fair Value
Commercial real estate loan	13		9.0	%	March 2028	$	399,911	$	399,777	$	399,911
Mezzanine loan	1		10.0	%	September 2026		50,000		50,000		50,000
Real estate-related securities	14		7.0	%	May 2037		24,457		24,104		24,329
Total investments in real estate debt	28		9.0	%	July 2028	$	474,368	$	473,881	$	474,240

	December 31, 2023
Type of Investment in Real Estate Debt	Number of Positions	Weighted Average Coupon(1)			Weighted Average Maturity Date (2)	Face Amount		Cost Basis		Fair Value
Commercial real estate loan	11		9.1	%	September 2027	$	252,868	$	252,668	$	252,868
Mezzanine loan	1		10.0	%	September 2026		50,000		50,000		50,000
Real estate-related securities	14		7.0	%	May 2037		25,811		25,314		25,321
Total investments in real estate debt	26		9.3	%	April 2028	$	328,679	$	327,983	$	328,189

____________

(1)

Based on applicable benchmark rates as of March 31, 2024.

(2)

Weighted average maturity date is based on fully extended maturity.

All of the Company's real estate-related securities have maturity dates greater than ten years from March 31, 2024.

The table below details the type of properties securing the loans in the Company's portfolio at the dates indicated ($ in thousands):


	March 31, 2024					December 31, 2023
Property Type	Fair Value		% of Portfolio			Fair Value		% of Portfolio
Multifamily	$	176,624		39.3	%	$	110,670		36.6	%
Industrial		96,056		21.3	%		91,292		30.1	%
Hotel		93,865		20.9	%		48,795		16.1	%
Data Center		63,131		14.0	%		40,651		13.4	%
Self-Storage		17,659		3.9	%		8,884		2.9	%
Other(1)		2,576		0.6	%		2,576		0.9	%
Total	$	449,911		100.0	%	$	302,868		100.0	%

(1)

Other property types represents productions studio.

The table below details the geographic distribution of the properties securing the loans in the Company's portfolio at the dates indicated ($ in thousands):


	March 31, 2024					December 31, 2023
Geographic Location	Fair Value		% of Portfolio			Fair Value		% of Portfolio
Northeast	$	190,998		42.5	%	$	169,829		56.1	%
Mid-Atlantic		66,647		14.8	%		44,166		14.6	%
West		132,680		29.5	%		32,841		10.8	%
Southeast		27,582		6.1	%		27,582		9.1	%
Southwest		18,400		4.1	%		18,400		6.1	%
Midwest		13,604		3.0	%		10,050		3.3	%
Total	$	449,911		100.0	%	$	302,868		100.0	%

The total income from investments in real estate debt disclosed on the Company's condensed consolidated statement of operations relates to interest income, upfront fees recognized, and unrealized gain on these investments in real estate debt. For the three months ended March 31, 2024, the Company recorded $0.2 million unrealized gains on its investments in real estate debt. The Company did not have any unrealized gains or losses on its investments in real estate debt for the three months ended March 31, 2023.

Note 6 - Intangibles

The gross carrying amount and accumulated amortization of the Company's intangible assets consisted of the following as of the dates indicated ($ in thousands):


	March 31, 2024			December 31, 2023
Intangible assets:
In-place lease intangibles	$	26,363		$	26,363
Above-market lease intangibles		325			325
Total intangible assets		26,688			26,688
Accumulated amortization:
In-place lease amortization		(1,492	)		(937	)
Above-market lease amortization		(24	)		(17	)
Total real estate intangible assets, net	$	25,172		$	25,734
Intangible liabilities
Below-market lease intangibles	$	(10,855	)	$	(10,855	)
Total intangible liabilities		(10,855	)		(10,855	)
Accumulated amortization:
Below-market lease amortization		423			226
Total real estate intangible liabilities, net	$	(10,432	)	$	(10,629	)

The estimated future amortization on the Company's intangibles for each of the next five years and thereafter as of March 31, 2024, is as follows ($ in thousands):


	In-Place Lease Intangibles		Above-Market Intangibles		Below-Market Intangibles
2024 (remaining)		1,599		22		(578	)
2025		2,126		29		(775	)
2026		2,126		29		(775	)
2027		2,126		29		(775	)
2028		2,093		29		(756	)
Thereafter		14,801		163		(6,773	)
	$	24,871	$	301	$	(10,432	)

Note 11 - Related Party Transactions

Pursuant to the Advisory Agreement the Adviser is responsible for sourcing, evaluating and monitoring the Company's investment opportunities and making decisions related to the acquisition, management, financing and disposition of the Company's assets, in accordance with the Company's investment objectives, guidelines, policies and limitations, subject to oversight by the Company's board of directors.

The Special Limited Partner holds a performance participation interest in the Operating Partnership that entitles it to receive an allocation from the Operating Partnership on Class S shares, Class D shares, and Class I shares equal to 12.5% of the annual Total Return, subject to a 5% annual Hurdle Amount and a High Water Mark, with a Catch-Up (each term as defined in the limited partnership agreement of the Operating Partnership, by and among the Company, as general partner, the Special Limited Partner and the limited partners party thereto from time to time (as amended, restated or otherwise modified from time to time, the "Limited Partnership Agreement")). On Class F-S shares, Class F-D shares, and Class F-I shares, the Special Limited Partner is entitled to receive an allocation equal to 9.0% of the annual Total Return, subject to a 5% annual Hurdle Amount and a High Water Mark, with a Catch-Up (each term as defined in the Limited Partnership Agreement). Such allocation will accrue monthly and be paid annually. There will not be a performance participation interest with respect to Class A-I shares, Class A-II shares, Class A-III shares, and Class E shares. The performance participation interest will be paid, at the Adviser's election, in cash, Class E shares, Class E units of the Operating Partnership or any combination thereof. During the three months ended March 31, 2024, the Company accrued $0.2 million of performance participation allocation. There was no performance participation allocation during the three months ended March 31, 2023.

The Company may retain certain of the Adviser's affiliates for necessary services relating to the Company's investments or its operations, including but not limited to any accounting and audit services (including valuation support services), account management services, administrative services, data management services, information technology services, finance/budget services, legal services, operational services, risk management services, tax services, treasury services, construction, special servicing, leasing, development, coordinating closing and post-closing procedures, property oversight, statutory services, and other property management services, as well as services related to mortgage servicing, group purchasing, healthcare, consulting/brokerage, capital markets/credit origination, broker-dealer services, underwriting, placing, syndicating, structuring, arranging, debt advisory services and other similar services, loan servicing, property, title and/or other types of insurance, title agency services, management consulting and other similar operational matters. Any fees paid to the Adviser's affiliates for any such services will not reduce the management fee or performance participation allocation. Any such arrangements will be at market terms and rates.

The Company has engaged Nations Land Services, L.P. ("Nations"), a title agent company in which Apollo has a majority ownership. Nations acts as a title agent in facilitating and issuing title insurance in connection with investments by the Company, affiliates, and related parties, and third parties. Apollo receives distributions from Nations in connection with investments by the Company based on its equity interest in Nations. In each case, there will be no related offset to the Company. During the three months ended March 31, 2024, the Company did not incur any expenses related to Nations.

The Dealer Manager serves as the dealer manager for the Offering. The Dealer Manager is a registered broker-dealer affiliated with the Adviser. The Company entered into an agreement (the "Dealer Manager Agreement") with the Dealer Manager in connection with the Offering. Subject to the terms of the Dealer Manager Agreement, the Company's obligations to pay stockholder servicing fees with respect to the Class S shares, Class D shares, Class F-S shares, and Class F-D shares sold in the Offering shall survive until such shares are no longer outstanding (including because such shares have converted into Class I shares or Class F-I shares).

The Dealer Manager is entitled to receive selling commissions of up to 3.0%, and dealer manager fees of up to 0.5%, of the transaction price of each Class S share and Class F-S share sold in the primary offering; however, such amounts may vary at certain participating broker-dealers, provided that the sum will not exceed 3.5% of the transaction price. Participating broker-dealers are third-party broker-dealers engaged by the Dealer Manager to participate in the distribution of shares of the Company's common stock. The Dealer Manager is also entitled to receive selling commissions of up to 1.5% of the transaction price of each Class D share and Class F-D share sold in the primary offering. The Dealer Manager also receives a stockholder servicing fee of 0.85% and 0.25% per annum of the aggregate NAV of the Company's outstanding Class S and F-S shares and Class D and F-D shares, respectively. The Dealer Manager has entered into agreements with selected dealers that agree to distribute the Company's shares in the Offering, which will provide, among other things, for the reallowance of the full amount of the selling commissions and stockholder servicing fees to such selected dealers. The Company will cease paying the stockholder servicing fee with respect to any Class S share, Class D share, Class F-S share, or Class F-D share held in a stockholder's account at the end of the month in which the total selling commissions, dealer manager fees and stockholder servicing fees paid with respect to such shares would exceed, in the aggregate, 8.75% of the gross proceeds from the sale of such share. The Company will accrue the cost of the stockholder servicing fee as an offering cost at the time each Class S share, Class F-S share, Class D share, and Class F-D share is sold during the primary offering. There will not be a stockholder servicing fee, upfront selling commission or dealer manager fee with respect to Class I shares, Class F-I shares, Class A-I shares, Class A-II shares, and Class A-III shares.

From time to time, the Company makes co-investments in commercial mortgage loans alongside Apollo affiliates. As of March 31, 2024, all of the Company's investments in commercial mortgage loans were pari-passu co-investments with Apollo affiliates.

The Company may also offer Class E shares, which will only be available to certain of Apollo's affiliates and employees, in one or more private placements. These shares are not being offered to the public pursuant to the Offering and will not incur any upfront selling costs, ongoing servicing costs, management fee or performance participation allocation.

On February 18, 2022, the Company was capitalized with a $0.2 million investment by Apollo ARIS Holdings LLC, an indirect wholly-owned subsidiary of Apollo, in exchange for 10,000 shares of Class I common stock. On November 11, 2022, 10,000 shares of Class I common stock held by Apollo ARIS Holdings LLC were exchanged for 10,000 shares of Class F-I common stock. Apollo ARIS Holdings LLC has elected to reinvest the dividends declared on its shares, which has corresponded to the issuance of 115 additional Class F-I shares in lieu of cash for the dividends paid during the three months ended March 31, 2024.

On November 29, 2022, the Company and the Operating Partnership entered into a subscription agreement with an affiliate of Apollo to issue 5,000,000 Class A-I units of the Operating Partnership for the aggregate consideration of $100.0 million. In May 2023 such affiliate of Apollo elected to reinvest its dividends. In connection with such dividend reinvestment, the Company issued 56,702 Class A-I units of the Operating Partnership in lieu of cash for the dividends paid during the three months ended March 31, 2024.

Due to Affiliates

The following table details the Company's expenses that are due to its Adviser:


	March 31, 2024		December 31, 2023
Organization and offering	$	7,917	$	7,906
General and administrative		7,064		6,895
Management fee payable		529		468
Accrued performance participation allocation		203		562
Total	$	15,713	$	15,831

Organization and Offering Expenses

The Adviser has advanced $7.9 million of organization and offering expenses (including legal, accounting, and other expenses attributable to the Company's organization, but excluding upfront selling commissions, dealer manager fees and stockholder servicing fees) on behalf of the Company through March 31, 2024. The Adviser advanced the Company's organization and offering expenses on behalf of the Company through December 22, 2023, the first anniversary of the escrow break for the Offering. The Company will reimburse the Adviser for all such advanced costs ratably over a 60 month period beginning on December 22, 2024.

General and Administrative Expenses

The Adviser has agreed that it and/or its affiliates will advance certain general and administrative expenses on behalf of the Company through December 22, 2023, the first anniversary of the escrow break for the Offering. The Adviser has advanced $7.1 million of general and administrative expenses on the Company's behalf as of March 31, 2024. The Company will reimburse the Adviser for all such advanced costs ratably over a 60 month period beginning on December 22, 2024.

Management Fee Payable

The Adviser is entitled to a management fee equal to 1.25% of NAV per annum, payable monthly on Class S shares, Class D shares, and Class I shares. The Adviser will be paid a management fee equal to 1.0% of NAV per annum, payable monthly on Class F-S shares, Class F-D shares, Class F-I shares, and Class A-I shares. The Adviser will be paid a management fee equal to 1.0% of NAV for Class A-II shares per annum payable monthly; and provided that, for the period of April 1, 2023 through September 1, 2026, this management fee will be reduced to 0.92% of NAV for Class A-II shares per annum payable monthly. The Adviser will be paid a management fee equal to 1.0% of NAV for Class A-III shares per annum payable monthly; and provided that, for the period of April 1, 2023 through January 2, 2027, this management fee will be reduced to 0.85% of NAV for Class A-III shares per annum payable monthly. The management fee will be paid, at the Adviser's election, in cash, Class E shares, Class E units of the Operating Partnership or any combination thereof. During the three months ended March 31, 2024, the Company incurred $1.5 million of management fees.

During the three months ended March 31, 2024, the Company issued 56,577 Class E shares and 12,885 Class E units to the Adviser as payment for its management fee. The shares and units issued to the Adviser for payment of the management fee were issued at the applicable NAV per share/unit at the end of each month for which the fee was earned, in reliance upon the exemption from registration set forth in Section 4(a)(2) of the Securities Act of 1933, as amended (the "Securities Act"). The Adviser did not submit any repurchase requests for any shares or units of the Operating Partnership previously issued as payment for the management fee during the three months ended March 31, 2024.

The Adviser has elected to reinvest the dividends declared on the shares and units of the Operating Partnership issued for its management fee. In connection with such dividend reinvestment, the Company issued (i) 1,621 Class E shares and (ii) 690 Class E units to the Adviser in lieu of cash for the dividends paid during the three months ended March 31, 2024. There were no dividends declared during the three months ended March 31, 2023.

Note 14 - Equity

Authorized Capital

The Company is authorized to issue preferred stock and ten classes of common stock consisting of Class S shares, Class D shares, Class I shares, Class F-S shares, Class F-D shares, Class F-I shares, Class A-I shares, Class A-II shares, Class A-III shares, and Class E shares. The differences among the classes of common stock relate to upfront selling commissions, dealer manager fees, and ongoing stockholder servicing fees, as well as varying management and performance participation allocations. See "Note 11 - Related Party Transactions" for additional information.

As of March 31, 2024 and December 31, 2023, the Company had the following classes of common stock authorized, issued and outstanding:


	March 31, 2024				December 31, 2023
Classification	Shares Authorized		Shares Issued and Outstanding		Shares Authorized		Shares Issued and Outstanding
Preferred Stock, $0.01 par value per share		100,000,000		—		100,000,000		—
Class S Shares, $0.01 par value per share		100,000,000		—		100,000,000		—
Class D Shares, $0.01 par value per share		100,000,000		—		100,000,000		—
Class I Shares, $0.01 par value per share		100,000,000		201,777		100,000,000		—
Class F-S Shares, $0.01 par value per share		100,000,000		—		100,000,000		—
Class F-D Shares, $0.01 par value per share		100,000,000		—		100,000,000		—
Class F-I Shares, $0.01 par value per share		100,000,000		5,415,954		100,000,000		4,820,377
Class A-I Shares, $0.01 par value per share		100,000,000		6,363,747		100,000,000		17,016,652
Class A-II Shares, $0.01 par value per share		100,000,000		14,171,864		100,000,000		—
Class A-III Shares, $0.01 par value per share		100,000,000		—		100,000,000		—
Class E Shares, $0.01 par value per share		100,000,000		180,693		100,000,000		105,707
Total		1,100,000,000		26,334,035		1,100,000,000		21,942,736

Common Stock

The following table details the movement in the Company's outstanding shares of common stock:


	Class I		Class F-I			Class A-I			Class A-II			Class E
Beginning balance, December 31, 2023		—		4,820,377			17,016,652			—			105,707
Common stock issued		201,505		594,229			1,787,026			1,671,686			73,366
Repurchase of common stock		—		(2,476	)		—			(5,000	)		—
Dividend reinvestment		272		3,824			37,473			2,189			1,620
Share class transfer		—		—			(12,477,404	)		12,502,989			—
Ending balance, March 31, 2024		201,777		5,415,954			6,363,747			14,171,864			180,693

On January 3, 2024 (the "Exchange Date"), approximately 12,477,404 Class A-I shares were exchanged for 12,502,989 Class A-II shares at an exchange rate based on the NAV per share for the Company's Class A-I shares and the Company's total NAV per share as of the Exchange Date.

Distributions

The Company generally intends to distribute substantially all of its taxable income to its stockholders each year to comply with the REIT provisions of the Code, as amended. Taxable income does not necessarily equal net income calculated in accordance with GAAP.

Each class of common stock receives the same gross distribution per share. The net distribution per share varies for each share class based on differing fee structures. Additionally net distributions will vary based on the applicable stockholder servicing fee, which is deducted from the monthly distribution per share and paid directly to the applicable distributor.

The following table details the aggregate distributions declared for each applicable class of common stock:


	Three Months Ended March 31, 2024
	Class I			Class F-I			Class A-I			Class A-II			Class E
Aggregate gross distribution declared per share of common stock	$	0.2041		$	0.3013		$	0.3013		$	0.3013		$	0.3013
Management fee per share of common stock		(0.0436	)		(0.0518	)		(0.0524	)		(0.0482	)		—
Net distribution declared per share of common stock	$	0.1605		$	0.2495		$	0.2489		$	0.2531		$	0.3013

There were no distributions for the three months ended March 31, 2023.

Repurchases

During the three months ended March 31, 2024 the Company repurchased 5,000 Class A-II shares and 2,476 Class F-I shares pursuant to the Company's share repurchase plan for an aggregate amount of $0.2 million. The Company had no unfulfilled repurchase requests as of March 31, 2024.

Redeemable Non-Controlling Interest

In connection with its management fee, the Adviser has elected to receive Class E units. See Note 11 - Related Party Transactions for additional information on the Advisers interest. In November 2023, the Limited Partnership Agreement was updated to enable the Adviser to redeem their Class E units for Class E shares or cash at its election. As of that date the Company has classified these Class E units as redeemable non-controlling interest in mezzanine equity on the Company's consolidated balance sheet. The redeemable non-controlling interest is recorded at the greater of the carrying amount, adjusted for its share of the allocation of income or loss and dividends, or the redemption value, which is equivalent to fair value, of such Operating Partnership units at the end of each measurement period.

The following table details the redeemable non-controlling interest activity related to the Adviser for the three months ended March 31, 2024 ($ in thousands):


	Adviser
Balance at December 31, 2023	$	967
Settlement of management fees		269
Settlement of performance participation allocation		562
GAAP income allocation		31
Distributions		(25	)
Reinvestment of distributions		20
Fair value allocation		-
Balance at March 31, 2024	$	1,824

As of March 31, 2024 the carrying value of the redeemable non-controlling interest approximated the fair value.

Non-Controlling Interests - Operating Partnership Unitholders

Operating Partnership units are subject to the same fees as the corresponding classes of common stock and do not have any preferential rights relative to the Company's interest in the Operating Partnership.

On December 22, 2022, the Company issued 5,000,000 Class A-I units of the Operating Partnership to an affiliate of Apollo for the aggregate consideration of $100.0 million in a private placement.

During the three months ended March 31, 2024, the Company issued 12,885 Class E units to the Adviser for the management fee earned on the Operating Partnership units issued to an affiliate of Apollo, mentioned above.

During the three months ended March 31, 2024, the Company issued 26,977 Class E units to the Special Limited Partner for performance participation allocation earned in 2023.

Currently all Operating Partnership unitholders have elected to reinvest their dividends. In connection with such dividend reinvestment, the Company issued 56,702 Class A-I and 942 Class E units of the Operating Partnership in lieu of cash for the dividends paid during the three months ended March 31, 2024.

Non-Controlling Interests Attributable to Preferred Shareholders

A subsidiary of the Company intends to elect to be taxed as a REIT for U.S. federal income tax purposes. This subsidiary has issued preferred non-voting shares to be held by investors to ensure compliance with the Code requirement that REITs have at least 100 shareholders. The preferred shares have a face amount of $1,000 and carry a 12.0% annual dividend payable annually. As of March 31, 2024, this subsidiary had $125,000 of preferred non-voting shares outstanding.

Note 17 - Segment Reporting

The Company operates in two reportable segments: Real Estate and Real Estate Debt. The Company allocates resources and evaluates results based off of the performance of each segment individually. The Company believes that Segment Net Operating Income is the key performance metric that captures the unique operating characteristics of each segment.

The following table sets forth the total assets by segment as of March 31, 2024 and December 31, 2023 ($ in thousands):


	March 31, 2024		December 31, 2023
Real Estate	$	182,382	$	183,492
Real Estate Debt		477,035		330,974
Other Corporate		46,477		95,205
Total Assets	$	705,894	$	609,671

The following table sets forth the financial results by segment for the three months ended March 31, 2024 ($ in thousands):


	Real Estate			Real Estate Debt			Other Corporate		Total
Revenue										—
Rental revenue	$	3,663		$	—		$	—	$	3,663
Total revenues		3,663			—			—		3,663
Expenses
Rental property operating		(573	)		—			—		(573	)
Interest expense, net		(567	)		(203	)		—		(770	)
Total segment expenses		(1,140	)		(203	)		—		(1,343	)
Income from investments in real estate debt		—			11,114			—		11,114
Segment net operating income	$	2,523		$	10,911		$	—	$	13,434
Depreciation and amortization	$	(1,455	)	$	—		$	—	$	(1,455	)
General and administrative										(1,537	)
Management fee										(1,511	)
Performance participation allocation										(203	)
Other income										908
Net income									$	9,636
Net income attributable to non-controlling interests in the Operating Partnership									$	1,697
Net income attributable to ARIS stockholders									$	7,939

The following table sets forth the financial results by segment for the three months ended March 31, 2023 ($ in thousands):


	Real Estate			Real Estate Debt		Other Corporate		Total
Revenue									—
Rental revenue	$	993		$	—	$	—	$	993
Total revenues		993			—		—		993
Expenses
Rental property operating		(92	)		—		—		(92	)
Total segment expenses		(92	)		—		—		(92	)
Income from investments in real estate debt		—			735		—		735
Segment net operating income	$	901		$	735	$	—	$	1,636
Depreciation and amortization	$	(283	)	$	—	$	—	$	(283	)
General and administrative									(1,105	)
Management fee									(399	)
Other income, net									834
Net income								$	683
Net income attributable to non-controlling interests in the Operating Partnership								$	348
Net income attributable to ARIS stockholders								$	335

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

References herein to "Apollo Realty Income Solutions," "ARIS," "Company," "we," "us," or "our" refer to Apollo Realty Income Solutions, Inc. and its subsidiaries unless the context specifically requires otherwise.

The following discussion should be read in conjunction with the unaudited condensed consolidated financial statements and accompanying notes thereto appearing elsewhere in this Quarterly Report on Form 10-Q. In addition to historical data, this discussion contains forward-looking statements about our business, operations, and financial performance based on current expectations that involve risks, uncertainties and assumptions. Our actual results may differ materially from those in this discussion as a result of various factors, including but not limited to those discussed in Part I. Item 1A - "Risk Factors" in our Annual Report on Form 10-K filed with the SEC on March 11, 2024.

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the federal securities laws and the Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by the use of forward-looking terminology such as "believe", "expect", "anticipate", "estimate", "plan", "continue", "intend", "should", "may" or similar expressions, or the negatives thereof. These may include our financial projections and estimates and their underlying assumptions, statements about plans, objectives and expectations with respect to future operations, statements with respect to acquisitions, statements regarding future performance and statements regarding identified but not yet closed acquisitions. Such forward-looking statements are inherently uncertain and there are or may be important factors that could cause actual outcomes or results to differ materially from those indicated in such statements. We believe these factors also include but are not limited to those described under the section entitled "Risk Factors" in our Annual Report on Form 10-K filed with the SEC on March 11, 2024, and any such updated factors included in our periodic filings with the SEC, which are accessible on the SEC’s website at www.sec.gov. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this document (or our prospectus and other filings). Except as otherwise required by federal securities laws, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future developments or otherwise.

We are a Maryland corporation formed on September 8, 2021. We were formed to invest primarily in a portfolio of diversified income-oriented commercial real estate in the United States. We are an externally advised, perpetual-life corporation that intends to qualify as a REIT for U.S. federal income tax purposes. We were formed to directly and indirectly acquire real estate and real estate-related assets and, to a lesser extent, commercial real estate debt. Our investment objectives are to invest in assets that will enable us to:

There can be no assurance that we will achieve our investment objectives. Our investments in primarily a portfolio of diversified institutional quality, income-oriented commercial real estate primarily in the United States will focus on a range of asset types. These may include office, hotel, industrial, multifamily and retail assets, as well as others, including, without limitation, healthcare, student housing, life sciences, hospitality, senior living, data centers, manufactured housing and storage properties. Our real estate debt or real estate-related debt securities investments will focus on non-distressed public and private real estate debt, including, but not limited to, commercial mortgage-backed securities, mortgages, loans, mezzanine and other forms of debt, and may also include preferred equity.

We intend to qualify as a REIT for U.S. federal income tax purposes beginning with our taxable year ended December 31, 2023. We plan to own all or substantially all of our assets through the Operating Partnership.

Our board of directors will, at all times, have ultimate oversight and policy-making authority over us, including responsibility for governance, financial controls, compliance and disclosure. However, pursuant to the Advisory Agreement, we have delegated to the Adviser the authority to source, evaluate and monitor our investment opportunities and make decisions related to the acquisition, management, financing and disposition of our assets, in accordance with our investment objectives, guidelines, policies and limitations, subject to oversight by our board of directors.

We have registered with the SEC the Offering of up to $5.0 billion in shares of common stock, consisting of up to $4.0 billion in shares in our primary offering and up to $1.0 billion in shares pursuant to our distribution reinvestment plan. The share classes have different upfront selling commissions and ongoing stockholder servicing fees, as well as varying management and performance participation fees. See "Note 11 - Related Party Transactions" to our condensed consolidated financial statements for additional information. As of December 22, 2022, we had satisfied the minimum offering requirement and our board of directors authorized the release of proceeds from escrow. We intend to continue selling shares in the Offering on a monthly basis.

As of May 10, 2024, we have issued (i) 30,051,804 shares of our common stock (consisting of 15,583,004 Class A-II shares, 12,560,151 Class A-I shares, 1,615,954 Class F-I shares, 287,900 Class I shares, and 4,795 Class S shares) in our primary offering for total proceeds of $614.2 million and (ii) 114,258 shares of our common stock (consisting of 69,474 Class A-I shares, 40,357 Class F-I shares, 3,610 Class A-II shares, and 817 Class I shares) pursuant to our distribution reinvestment plan for a total value of $2.4 million. We have contributed the net proceeds from the sale of our Class S shares, Class I shares, Class F-I shares, Class A-I shares, Class A-II shares to the Operating Partnership in exchange for a corresponding number of Class S units, Class I units, Class F-I units, Class A-I units, and Class A-II units. The Operating Partnership has primarily used the net proceeds to make investments in real estate, real estate debt and real estate-related securities, as further described below under "Portfolio". We intend to continue selling shares of our common stock on a monthly basis through the Offering and private offerings.

We are not aware of any material trends or uncertainties, favorable or unfavorable, other than national economic conditions affecting real estate generally, that may be reasonably anticipated to have a material impact on either capital resources or the revenues or income to be derived from acquiring properties or real estate debt.

The following table provides information regarding our portfolio of real estate properties as of March 31, 2024 ($ in thousands) :

The following table summarizes our investments in real estate debt as of March 31, 2024 ($ in thousands):

The following table summarizes our investments in commercial real estate loans as of March 31, 2024 ($ in thousands):

The following table sets forth information regarding our consolidated results of operations ($ in thousands):

Rental revenue primarily consists of base rent arising from tenant leases at our properties. Rental revenue is recognized on a straight-line basis over the life of the lease. During the three months ended March 31, 2024 and 2023, rental revenue was $3.7 million and $1.0 million, respectively. The increase in rental revenue was due to the acquisition of two additional properties, 16000 Pines and Hallmark, subsequent to March 31, 2023.

Rental property operating expenses consist of the costs of ownership and operation of our real estate investments. Examples of property operating expenses include real estate taxes, insurance, utilities and repair and maintenance expenses. During the three months ended March 31, 2024 and 2023, rental property operating expenses were $0.6 million and $0.1 million, respectively. The increase in rental property operating expenses was due to the acquisition of two additional properties, 16000 Pines and Hallmark, subsequent to March 31, 2023.

General and administrative expenses consist primarily of legal fees, accounting fees and other professional services. During the three months ended March 31, 2024 and 2023, general and administrative expenses were $1.5 million and $1.1 million, respectively. The increase was due to an increase in transaction activity.

Management fees are earned by our Adviser for providing services pursuant to the Advisory Agreement and are based on the month end NAV for the respective share classes. During the three months ended March 31, 2024 and 2023, management fees were $1.5 million and $0.4 million, respectively. The increase was due to the increase in our average NAV from March 31, 2023 to March 31, 2024 which was primarily driven by our capital raise activity.

The performance participation allocation relates to allocations from the Operating Partnership to the Special Limited Partner based on the total return of the Operating Partnership. Total return is defined as distributions paid or accrued plus the change in NAV. During the three months ended March 31, 2023, there was no performance participation allocation as the return hurdle was not achieved. During the three months ended March 31, 2024, the performance participation allocation was $0.2 million as a result of the hurdle amount being achieved in the share classes subject to the expense.

Depreciation and amortization expenses are impacted by the values assigned to buildings and in-place lease assets as part of the initial purchase price allocation. During the three months ended March 31, 2024 and 2023, depreciation and amortization expenses were $1.5 million and $0.3 million respectively. The increase was due to the acquisition of two additional properties, 16000 Pines and Hallmark, subsequent to March 31, 2023.

Income from investments in real estate debt consist of interest income, fees revenue, realized gains and losses and unrealized gains and losses resulting from the changes in fair value of our real estate debt investments and real-estate related securities. During the three months ended March 31, 2024 and 2023, income from investments in real estate debt was $11.1 million and $0.7 million, respectively. The increase is due to to acquisition activity over the last twelve months resulting in higher interest income and origination fees. As of March 31, 2024, we owned 28 positions in real estate-related loans and securities, compared to two positions as of March 31, 2023, and the balance of our investments in real estate debt, at fair value increased from $58.7 million to $474.2 million during the same time period.

Other income primarily consists of interest earned on our cash and cash equivalents balance. During the three months ended March 31, 2024 and 2023, other income was $0.9 million and $0.8 million, respectively. The increase was a result of cash being maintained in higher yielding deposit accounts during the three months ended March 31, 2024 as compared to the three months ended March 31, 2023.

Interest expense consists of interest expenses incurred on our mortgage note and amortization of deferred financing costs related to our mortgage note and secured financings on investments in real estate debt. During the three months ended March 31, 2024, interest expense was $0.8 million. There was no interest expense during the three months ended March 31, 2023 as we did not have any debt obligations.

Our primary needs for liquidity and capital resources are to fund our investments, to make distributions to our stockholders, to repurchase shares of our common stock pursuant to our share repurchase plan, to pay our offering costs, operating fees and expenses and to pay interest on any outstanding indebtedness we may incur. We anticipate our offering and operating fees and expenses will include, among other things, the management fee we will pay to the Adviser, the performance participation allocation that the Operating Partnership will pay to the Special Limited Partner, stockholder servicing fees we will pay to the Dealer Manager, legal, audit and valuation expenses, federal and state filing fees, printing expenses, administrative fees, transfer agent fees, marketing and distribution expenses and fees related to acquiring, financing, appraising and managing our properties. We do not have any office or personnel expenses as we do not have any employees.

The Adviser has advanced on our behalf organization and offering costs of $7.9 million and general and administrative expenses of $7.1 million as of March 31, 2024. We will reimburse the Adviser ratably over a 60-month period beginning on December 22, 2024.

Over time, we generally intend to fund our cash needs for items other than asset acquisitions from operations. We expect our cash needs for acquisitions will be funded primarily from the sale of shares of our common stock and through the assumption or incurrence of debt.

We may decide to incur indebtedness to fund acquisitions, to repurchase shares pursuant to our share repurchase plan and for any other corporate purpose. If we decide to incur indebtedness, we expect that it would afford us borrowing availability to fund repurchases. As our assets increase, however, it may not be commercially feasible, or we may not be able to secure adequate borrowings to fund share repurchases.

Other potential future sources of capital include secured or unsecured financings from banks or other lenders and proceeds from the sale of assets or equity issuances by the Operating Partnership or the sale of beneficial interests in specific Delaware statutory trusts holding real properties, including properties placed by the Operating Partnership or affiliates of Apollo. If necessary, we may use financings or other sources of capital to fund share repurchases or in the event of unforeseen significant capital expenditures.

In October 2023, the Sellers entered into the JPM Repurchase Agreement with the Buyer. The JPM Repurchase Agreement provides for a maximum aggregate purchase price of $250.0 million and has a three-year term plus two one-year extension options. Subject to the terms and conditions thereof, the JPM Repurchase Agreement provides for the purchase, sale and repurchase of senior mortgage loans and participation interests in performing senior mortgage loans satisfying certain conditions set forth in the JPM Repurchase Agreement. The Operating Partnership has agreed to provide a limited guarantee of the obligations of the Sellers under the JPM Repurchase Agreement.

As of March 31, 2024, we had $46.5 million of cash on hand and up to $250.0 million of undrawn capacity on our JPM Repurchase Agreement. Additionally, as of March 31, 2024, we had a $36.0 million mortgage secured by one of our equity properties.

We believe funds from operations (“FFO”) is a meaningful non-GAAP supplemental measure of our operating results. Our condensed consolidated financial statements are presented , among other things, requires depreciation of real estate investments to be calculated on a straight-line basis. As a result, our operating results imply that the value of our real estate investments has decreased evenly over time. However, we believe that the value of our real estate investments will fluctuate over time based on market conditions and, as such, depreciation under historical cost accounting may be less informative as a measure of our performance. FFO is an operating measure defined by the National Association of Real Estate Investment Trusts (“NAREIT”) that is broadly used in the REIT industry. FFO, as defined by NAREIT and presented below, is calculated as net income or loss (computed in accordance with GAAP), excluding (i) depreciation and amortization, (ii) impairment of investments in real estate, (iii) net gains or losses from sales of real estate, and (iv) consolidated and unconsolidated joint ventures.

We also believe that adjusted FFO (“AFFO”) is a meaningful supplemental non-GAAP disclosure of our operating results. AFFO further adjusts FFO in order for our operating results to reflect the specific characteristics of our business by adjusting for items we believe are not related to our core operations. Our adjustments to FFO to arrive at AFFO include removing the impact of (i) straight-line rental income and expense, (ii) unrealized gains or losses from changes in the fair value of real estate debt and other financial instruments, (iii) non-cash performance participation allocation, even if repurchased by us, (iv) amortization of restricted stock awards, (v) amortization of above- and below-market lease intangibles, and (vi) similar adjustments for unconsolidated joint ventures. AFFO is not defined by NAREIT and our calculation of AFFO may not be comparable to disclosures made by other REITs.

FFO and AFFO should not be considered to be more relevant or accurate than the GAAP methodology in calculating net income or in evaluating our operating performance. In addition, FFO and AFFO should not be considered as alternatives to net income as indications of our performance or as alternatives to cash flows from operating activities as indications of our liquidity, but rather should be reviewed in conjunction with these and other GAAP measurements. Further, FFO and AFFO are not intended to be used as liquidity measures indicative of cash flow available to fund our cash needs, including our ability to make distributions to our stockholders.

NAV per share is calculated in accordance with the valuation guidelines approved by our board of directors. Our total NAV presented in the following tables includes the NAV of our Class I shares, Class F-I shares, Class A-I, Class A-II and Class E shares and units of the Operating Partnership held by parties other than the Company. The following table provides a breakdown of the major components of our total NAV as of March 31, 2024 ($ and shares/units in thousands):

The following table provides a breakdown of our total NAV and NAV per share/unit by class as of March 31, 2024 ($ and shares/units in thousands, except per share/unit data):

Consistent with our disclosure in the Prospectus regarding our NAV calculation, our investments in real estate and real estate debt are initially valued at cost. Once we establish new values for our real estate investments, we provide information on key assumptions used in the discounted cash flow methodology and a sensitivity analysis related thereto. The valuations of our real properties as of March 31, 2024 , excluding certain newly acquired properties that are held at cost which we believe reflects the fair value of such properties, were provided by the independent valuation advisor in accordance with our valuation procedures. Certain key assumptions that were used by the independent valuation advisor in the discounted cash flow analysis are set forth in the following table based on weighted-averages by property types where we have multiple real estate investments. Once we own more than one retail property, we will include the key assumptions for such property type.

A change in these assumptions or factors would impact the calculation of the value of our property investments. For example, assuming all other factors remain unchanged, the changes listed below would result in the following effects on our investment values:

The following table reconciles stockholders' equity and the Operating Partnership unitholders' capital per our condensed consolidated balance sheet to our NAV ($ in thousands):

The following details the adjustments to reconcile GAAP stockholders' equity to our NAV:

Beginning in April 2023, we have declared monthly distributions for each class of our common stock, which are generally paid 20 days after month-end. Each class of our common stock received the same aggregate gross distribution per share, however, the net distribution varies for each class based on the applicable fees. The table below details the net per share distribution for each of our share classes for the three months ended March 31, 2024:

The following tables summarize our distributions declared during the three months ended March 31, 2024 ($ in thousands):

The following table provides a breakdown of the net change in our cash and cash equivalents ($ in thousands):

Cash flows provided by operating activities were $13.3 million for the three months ended March 31, 2024, primarily as a result of income generated on our investments.

Cash flows used in investing activities were $145.8 million for the three months ended March 31, 2024. This was comprised of $147.0 million of investments in commercial mortgage loans, net of $1.2 million for repayments of real estate-related securities.

Cash flows provided by financing activities were $83.8 million for the three months ended March 31, 2024, primarily due to $88.4 million of proceeds from the issuance of our common stock net of offering costs. This was offset by the payment of $4.5 million in cash distributions and $0.2 million of share repurchases during the three months ended March 31, 2024. Cash flows provided by financing activities also includes $0.1 million from the issuance of preferred stock in a subsidiary REIT.

Our discussion and analysis of our financial condition and results of operations is based upon our condensed consolidated financial statements, which have been prepared in accordance with GAAP. There have been no material changes to our Critical Accounting Policies described in our Annual Report on Form 10-K filed with the SEC on March 11, 2024.

See Note 2 - Summary of Significant Accounting Policies to our condensed consolidated financial statements in this Quarterly Report on Form 10-Q for a discussion concerning recent accounting pronouncements.

We may be exposed to interest rate changes primarily as a result of long-term debt we may use to maintain liquidity, fund capital expenditures, repurchase shares of our common stock and expand our investment portfolio and operations. Market fluctuations in real estate financing may affect the availability and cost of funds needed to expand our investment portfolio. In addition, restrictions upon the availability of real estate financing or high interest rates for real estate loans could adversely affect our ability to dispose of real estate in the future. We will seek to limit the impact of interest rate changes on earnings and cash flows and to lower our overall borrowing costs. We may use derivative financial instruments to hedge exposures to changes in interest rates on loans secured by our assets. Also, we will be exposed to both credit risk and market risk.

As of March 31, 2024, we held $474.2 million of investments in real estate debt, including real estate debt securities. Our investments in real estate debt are primarily floating-rate and indexed to SOFR, thereby exposing us to interest rate risk resulting in increases or decreases to net income depending on interest rate movements. While we cannot predict factors that may or may not affect interest rates, a 50bps increase or decrease in the SOFR would have resulted in an increase or decrease to income from investments in real estate debt of $0.6 million for the three months ended March 31, 2024.

We are subject to varying degrees of credit risk in connection with our other target assets. We seek to mitigate this risk by seeking to acquire high quality assets, at appropriate prices given anticipated and unanticipated losses, and by deploying a value-driven approach to underwriting and diligence, consistent with the Adviser’s historical investment strategy, with a focus on current cash flows and potential risks to cash flow. The Adviser seeks to enhance its due diligence and underwriting efforts by accessing the Adviser’s knowledge base and industry contacts. Nevertheless, unanticipated credit losses could occur, which could adversely impact our operating results.

Our investments in real estate debt are subject to volatility and may be affected adversely by a number of factors, including, but not limited to, national, regional and local economic conditions (which may be adversely affected by industry slowdowns and other factors); local real estate conditions; changes or continued weakness in specific industry segments; construction quality, age and design; demographic factors; retroactive changes to building or similar codes; pandemics; natural disasters and other acts of god. In addition, decreases in property values reduce the value of the collateral and the potential proceeds available to a borrower to repay the underlying loans or loans, as the case may be, which could also cause us to suffer losses.

The Company maintains disclosure controls and procedures (as that term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) that are designed to ensure that information required to be disclosed in the Company’s reports under the Exchange Act is recorded, processed, and summarized and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to the Company's management, including its Co-Chief Executive Officers ("Co-CEOs") and Interim Chief Financial Officer ("CFO"), as appropriate, to allow timely decisions regarding required disclosures. Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. An evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this Quarterly Report on Form 10-Q was made under the supervision and with the participation of our management, including our Co-CEOs and CFO. Based upon this evaluation, our Co-CEOs and CFO have concluded that our disclosure controls and procedures (a) are effective to ensure that information required to be disclosed by us in reports filed or submitted under the Exchange Act is timely recorded, processed, summarized and reported and (b) include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our Co-CEOs and Interim CFO, as appropriate to allow timely decisions regarding required disclosure.

There have been no changes in our internal control over financial reporting (as that term is defined in Rule 13a-15(f) of the Exchange Act) that occurred during the period covered by this Quarterly Report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

From time to time, we may be involved in various claims and legal action arising in the ordinary course of business. As of March 31, 2024, we were not involved in any material legal proceedings.

There have been no material changes to the risk factors previously disclosed under Part I, Item 1A. "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2023.

During the three months ended March 31, 2024, we sold equity securities that were not registered under the Securities Act. As described in Note 11 - Related Party Transactions to our condensed consolidated financial statements, the Adviser is entitled to an annual management fee payable monthly in cash, shares of common stock, or units of the Operating Partnership, in each case at the Adviser's election. For the three months ended March 31, 2024, the Adviser elected to receive its management fee in Class E shares and Class E units of the Operating Partnership. In connection with the Adviser's election, we issued 56,577 Class E shares and 12,885 Class E units of the Operating Partnership to the Adviser during the three months ended March 31, 2024 in satisfaction of the management fee from December 2023 to February 2024.

The Special Limited Partner is entitled to an annual performance participation allocation payable annually in cash or units of the Operating Partnership, in each case at the Special Limited Partner's election. For the three months ended March 31, 2024, the Special Limited Partner elected to receive its performance participation allocation in Class E units of the Operating Partnership. In connection with the Special Limited Partner's election, we issued 26,977 Class E units of the Operating Partnership to the Special Limited Partner during the three months ended March 31, 2024 in satisfaction of the performance participation allocation for year ended December 31, 2023.

During the three months ended March 31, 2024, all unitholders of the Operating Partnership elected to reinvest their dividends. In connection with such dividend reinvestment, we issued 56,702 and 942 Class A-I units and Class E units of the Operating Partnership, respectively, in lieu of cash for the dividends paid during the three months ended March 31, 2024. These issuances were made in reliance upon the exemption from registration set forth in Section 4(a)(2) of the Securities Act.

On June 29, 2022, the Registration Statement on Form S-11 (File No. 333-264456) for the Offering was declared effective under the Securities Act. The offering price for each class of our common stock is determined monthly and is made available on our website and in prospectus supplement filings.

As of March 31, 2024, we received net proceeds of $533.7 million from the Offering. The following table summarizes certain information about the Offering proceeds therefrom (in thousands):

We primarily used the net proceeds of the Offering along with the unregistered sales towards the acquisition of $172.0 million in real estate, $449.9 million in commercial real estate loans, and $25.3 million in real estate-related securities. During the three months ended March 31, 2024, we repurchased 5,000 Class A-II shares and 2,476 of Class F-I shares pursuant to our share repurchase plan for $0.2 million.

We have adopted a share repurchase plan, whereby on a monthly basis, stockholders may request that we repurchase all or any portion of their shares. We may choose to repurchase all, some or none of the shares that have been requested to be repurchased at the end of any particular month, in our discretion, subject to any limitations in the share repurchase plan. The aggregate NAV of total repurchases of Class S shares, Class D shares, Class I shares, Class F-S shares, Class F-D shares, Class F-I shares, Class A-I shares, Class A-II shares, Class A-III shares and Class E shares is limited to 2% of the aggregate NAV per month and 5% of the aggregate NAV per calendar quarter. Shares are repurchased at a price equal to the transaction price on the applicable repurchase date. Due to the illiquid nature of investments in real estate, we may not have sufficient liquid resources to fund repurchase requests and have established limitations on the amount of funds we may use for repurchases during any calendar month and quarter. Further, our board of directors may modify or suspend the share repurchase plan.

During the three months ended March 31, 2024, we repurchased Class A-II shares and Class F-I shares in January and February in the following amounts:

On May 8, 2024, we entered into a Third Amended and Restated Advisory Agreement (the "Third Amended and Restated Advisory Agreement") by and among us, the Operating Partnership and the Adviser to, among others, make certain revisions as requested by a state securities regulator clarifying the Adviser's fiduciary responsibility and certain of our expenses.

The foregoing description of the Third Amended and Restated Advisory Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Third Amended and Restated Advisory Agreement, a copy of which is filed as Exhibit 10.1 hereto and incorporated by reference herein.

The agreements and other documents filed as exhibits to this report are not intended to provide factual information or other disclosure other than with respect to the terms of the agreements or other documents themselves, and you should not rely on them for that purpose. In particular, any representations and warranties made by us in these agreements or other documents were made solely within the specific context of the relevant agreement or document and may not describe the actual state of affairs as of the date they were made or at any other time.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on


Maryland	87-2557571
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
9 West 57th Street, 42nd Floor, New York, NY	10019
(Address of principal executive offices)	(Zip Code)


		Page
PART I	Financial Information	1
Item 1.	Financial Statements	1
	Condensed Consolidated Financial Statements (Unaudited):
	Condensed Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023	1
	Condensed Consolidated Statement of Operations for the Three Months Ended March 31, 2024 and 2023	2
	Condensed Consolidated Statement of Changes in Equity for the Three Months Ended March 31, 2024 a nd 2023	3
	Condensed Consolidated Statement of Cash Flows for the Three Months Ended March 31, 2024 and 2023	4
	Notes to Condensed Consolidated Financial Statements	6
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	29
Item 4.	Controls and Procedures	30

PART II	Other Information	30
Item 1.	Legal Proceedings	30
Item 1A.	Risk Factors	30
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	31
Item 3.	Defaults Upon Senior Securities	32
Item 4.	Mine Safety Disclosure	32
Item 5.	Other Information	32
Item 6.	Exhibits	32
	Signatures	34


	March 31, 2024		December 31, 2023
Assets
Investments in real estate, net	$	153,614	$	154,513
Investments in real estate debt, at fair value		474,240		328,189
Cash and cash equivalents		46,466		95,205
Restricted cash		11		—
Other assets		31,563		31,764
Total assets(1)	$	705,894	$	609,671
Liabilities and Equity
Mortgage notes, net	$	35,612	$	35,591
Due to affiliates		15,713		15,831
Other liabilities		16,498		14,406
Total liabilities(1)		67,823		65,828
Commitments and contingencies (See Note 16)
Redeemable non-controlling interest		1,824		967
Equity
Preferred stock, $0.01 par value per share, 100,000,000 shares authorized at March 31, 2024 and December 31, 2023, and none issued and outstanding		—		—
Common stock, $0.01 par value per share (See Note 14 - Equity)		264		220
Additional paid-in capital		528,416		438,432
Retained earnings (accumulated deficit)		4,337		2,681
Total stockholders' equity		533,017		441,333
Non-controlling interest attributable to the Operating Partnership		103,105		101,543
Non-controlling interest attributable to preferred stockholders		125		—
Total equity		636,247		542,876
Total liabilities and equity	$	705,894	$	609,671


	Three Months Ended March 31, 2024			Three Months Ended March 31, 2023
Cash flows from operating activities
Net income	$	9,636		$	683
Adjustments to reconcile net income to net cash provided by operating activities:
Management fee		1,511			234
Performance participation allocation		203			—
Depreciation and amortization		1,455			283
Straight line rent amortization		(388	)		(651	)
Above- and below- market lease amortization, net		(190	)		—
Amortization of discount/premium		(67	)		—
Amortization of deferred financing costs		21			—
Amortization of restricted stock awards		25			—
Unrealized gain on fair value of investments in real estate debt and real estate related securities		(152	)		—
Realized gain on repayments of real-estate related securities		(20	)		—
Changes in assets and liabilities:
Other assets		25			(266	)
Due to affiliates		169			1,270
Other liabilities		1,095			102
Net cash provided by operating activities		13,323			1,655
Cash flows from investing activities:
Acquisitions of real estate		—			(44,214	)
Origination and acquisition of real estate debt		(65,397	)		(58,675	)
Add-on fundings of commercial mortgage loans		(81,646	)		—
Repayments from real-estate related securities		1,230			—
Net cash used in investing activities		(145,813	)		(102,889	)
Cash flows from financing activities:
Proceeds from issuance of common stock		88,385			60,150
Contributions from non-controlling preferred shareholders		125			—
Distributions paid		(4,500	)		—
Repurchase of common stock		(154	)		—
Offering costs paid		(94	)		(18	)
Net cash provided by financing activities		83,762			60,132
Net change in cash, cash equivalents and restricted cash		(48,728	)		(41,102	)
Cash, cash equivalents and restricted cash, beginning of period		95,205			131,589
Cash, cash equivalents and restricted cash, end of period	$	46,477		$	90,487


Reconciliation of cash, cash equivalents and restricted cash to the condensed consolidated balance sheets:
Cash and cash equivalents		46,466		90,487
Restricted cash		11		—
Total cash, cash equivalents and restricted cash	$	46,477	$	90,487
Supplemental disclosure of cash flow information:
Cash paid for interest	$	363	$	—
Non-cash investing and financing activities:
Accrued offering costs due to affiliate	$	261	$	(65	)
Distribution reinvestments	$	2,144	$	—
Distributions accrued and not paid	$	2,846	$	—
Issuance of Class E shares for payment of management fee	$	1,181	$	—
Redeemable non-controlling interest issuance as Class E units of the Operating Partnership for payment of management fee	$	269	$	—
Redeemable non-controlling interest issuance as Class E units of the Operating Partnership for payment of performance participation allocation	$	562	$	—
Allocation to redeemable non-controlling interests	$	31	$	—

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company


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


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


	Three Months Ended March 31,
	2024			2023
Revenues
Rental revenue	$	3,663		$	993
Total revenues		3,663			993
Expenses
Rental property operating	$	573		$	92
General and administrative		1,537			1,105
Management fee		1,511			399
Performance participation allocation		203			—
Depreciation and amortization		1,455			283
Total expenses	$	5,279		$	1,879
Other income
Income from investments in real estate debt		11,114			735
Other income		908			834
Interest expense		(770	)		—
Total other income		11,252			1,569
Net income (loss)	$	9,636		$	683
Net income (loss) attributable to non-controlling interests in the ARIS Operating Partnership	$	1,697		$	348
Net income (loss) attributable to ARIS stockholders	$	7,939		$	335
Net income (loss) per share of common stock, basic and diluted	$	0.32		$	0.10
Weighted-average shares of common stock outstanding, basic and diluted		24,902,305			3,248,791


	Common Stock
	Shares			Amount		Additional Paid-In Capital			Retained Earnings (Accumulated Deficit)			Total Stockholders' Equity			Non-Controlling Interest			Total Equity			Redeemable non-controlling interest

Balance at December 31, 2023		21,943		$	220	$	438,432		$	2,681		$	441,333		$	101,543		$	542,876		$	967
Common stock issued		4,328			43		89,523			—			89,566			—			89,566			831
Preferred equity issued		—			—		—			—			—			125			125			—
Amortization of restricted stock grants		—			—		25			—			25			—			25			—
Offering costs		—			—		(355	)		—			(355	)		—			(355	)		—
Distribution reinvestments		45			—		944			—			944			1,180			2,124			20
Net income		—			—		—			7,939			7,939			1,666			9,605			31
Share class transfer		25			—		—			—			—			—			—			—
Repurchase of common stock		(7	)		—		(154	)		—			(154	)		—			(154	)		—
Distributions to non-controlling interest		—			—		—			—			—			(1,284	)		(1,284	)		(25	)
Distributions declared on common stock		—			—		—			(6,281	)		(6,281	)		—			(6,281	)		—
Balance at March 31, 2024		26,334		$	263	$	528,415		$	4,339		$	533,017		$	103,230		$	636,247		$	1,824


	March 31, 2024			December 31, 2023
Building and building improvements	$	132,792		$	132,792
Land and land improvements		22,707			22,707
Tenant improvements		621			621
Total		156,120			156,120
Accumulated depreciation		(2,506	)		(1,607	)
Investment in real estate, net	$	153,614		$	154,513


	March 31, 2024		December 31, 2023
Real estate intangibles, net	$	25,172	$	25,734
Straight-line rent receivable		1,812		1,425
Interest receivable		2,794		1,727
Deferred financing costs, net		853		1,057
Other		932		1,821
Total	$	31,563	$	31,764


Year	Future Minimum Rents
2024	$	8,117
2025		10,951
2026		11,214
2027		11,531
2028		11,802
Thereafter		84,314
Total	$	137,929


	March 31, 2024		December 31, 2023
Below market lease intangibles, net	$	10,432	$	10,629
Distribution payable		2,846		1,900
Accounts payable and accrued expenses		2,935		1,816
Real estate taxes payable		285		61
Total	$	16,498	$	14,406


Type	Restricted Stock		Grant Date Fair Value ($ in thousands)
Outstanding as of December 31, 2023		4,948	$	100
Granted		—		—
Vested		—		—
Forfeiture		—		—
Outstanding as of March 31, 2024		4,948		100


	March 31, 2024
Investment	Number of Properties		Property Type	Location	Acquisition Date	Sq. Feet (in thousands)		Occupancy	Gross Asset Value (1)
Rickenbacker		1	Industrial	Columbus, Ohio	January 2023		165	100%	$	52,300
16000 Pines		1	Retail	Pembroke Pines, Florida	August 2023		118	100%	$	57,800
Hallmark		1	Industrial	Liberty, Missouri	October 2023		847	100%	$	66,000
Total investments in Real Estate:							1,131		$	176,100


Basic and Diluted Net Loss per Share Attributable to ARIS Stockholders	Three Months Ended March 31,
	2024		2023
Numerator:
Net income (loss) attributable to ARIS stockholders	$	7,939	$	335
Denominator:
Basic and diluted weighted average shares of common stock outstanding		24,902		3,249
Basic and diluted net income (loss) per share of common stock	$	0.32	$	0.10


Commercial Real Estate Loan Portfolio
		March 31, 2024
#	Type	Property Type	Geography	Coupon(1)	Maturity Date(2)	Commitment		Cost Basis		Fair Value
1	First Mortgage	Industrial	Northeast	9.3%	March 2028	$	50,000	$	46,056	$	46,056
2	First Mortgage	Multifamily	Northeast	9.7%	October 2025		50,000		36,935		37,070
3	First Mortgage	Data Center	Mid-Atlantic	9.4%	June 2028		50,000		42,806		42,806
4	First Mortgage	Hotel	Various	9.5%	August 2026		25,000		25,000		25,000
5	First Mortgage	Hotel	Various	9.1%	July 2028		25,000		23,795		23,795
6	Mezzanine	Industrial	Various	10.0%	September 2026		50,000		50,000		50,000
7	First Mortgage	Other (3)	West	9.3%	September 2028		100,000		2,576		2,576
8	First Mortgage	Multifamily	Northeast	8.9%	June 2025		26,000		26,000		26,000
9	First Mortgage	Self-Storage	Various	8.6%	December 2028		50,000		17,659		17,659
10	First Mortgage	Multifamily	Midwest	9.6%	December 2028		25,000		3,554		3,554
11	First Mortgage	Multifamily	Northeast	8.3%	January 2029		50,000		50,000		50,000
12	First Mortgage	Multifamily	West	8.3%	February 2029		60,000		60,000		60,000
13	First Mortgage	Hotel	West	9.1%	February 2029		50,000		45,070		45,070
14	First Mortgage	Data Center	Mid-Atlantic	9.2%	April 2029		85,000		20,326		20,325
	Total/Weighted Average			9.1%	January 2028	$	696,000	$	449,777	$	449,911


	Three Months Ended March 31,					Change
	2024			2023		$
Revenues
Rental revenue	$	3,663		$	993	$	2,670
Total revenues		3,663			993		2,670
Expenses
Rental property operating	$	573		$	92	$	481
General and administrative		1,537			1,105		432
Management fee		1,511			399		1,112
Performance participation allocation		203			—		203
Depreciation and amortization		1,455			283		1,172
Total expenses	$	5,279		$	1,879	$	3,400
Other income
Income from investments in real estate debt		11,114			735		10,379
Other income		908			834		74
Interest expense		(770	)		—		(770	)
Total other income		11,252			1,569		9,683
Net income (loss)	$	9,636		$	683	$	8,953


	For the Three Months Ended March 31, 2024
Net income	$	9,636
Adjustments to arrive at FFO:
Depreciation and amortization		1,455
FFO	$	11,091
Adjustments to arrive at AFFO:
Straight-line rental income		(388	)
Unrealized (gain)/loss from change in fair value of real estate debt and real estate related securities		(152	)
Non-cash performance participation allocation		203
Amortization of restricted stock awards		25
Amortization of above- and below-market leases, net		(190	)
AFFO	$	10,589


Components of NAV	March 31, 2024
Investments in real estate	$	176,100
Investments in real estate debt		474,240
Cash		46,466
Restricted cash		11
Other assets		4,579
Mortgage notes at fair value, net of deferred financing costs		(35,554	)
Other liabilities		(6,066	)
Accrued performance participation allocation		(203	)
Management fee payable		(529	)
Net asset value	$	659,044
Number of outstanding shares/units		31,599


NAV Per Share/Unit	Class I Shares		Class F-I Shares		Class A-I Shares		Class A-II Shares		Class E Shares(1)		Third-party Operating Partnership Class A-I Units(2)		Third-party Operating Partnership Class E Units(2)		Total
Net asset value	$	4,195	$	111,837	$	133,158	$	295,892	$	3,793	$	108,336	$	1,833	$	659,044
Number of outstanding shares/units		202		5,416		6,364		14,172		181		5,177		87		31,599
NAV per share/unit as of March 31, 2024	$	20.7895	$	20.6496	$	20.9244	$	20.8789	$	20.9890	$	20.9244	$	20.9890	$	20.8566


Property Type	Discount Rate	Exit Capitalization Rate
Industrial	8.0%	6.5%


Input	Hypothetical Change	Industrial Investment Values
Discount rate	0.25% Decrease	+2.08%
(weighted average)	0.25% Increase	(2.02)%
Exit Capitalization Rate	0.25% Decrease	+2.09%
(weighted average)	0.25% Increase	(1.93)%


Reconciliation of Stockholders' Equity to NAV	March 31, 2024
Stockholders' equity under U.S. GAAP	$	533,017
Non-controlling interests attributable to the Operating Partnership and preferred shareholders		103,230
Redeemable non-controlling interests		1,824
Total stockholders' equity, redeemable non-controlling interests and the Operating Partnership partners' capital under GAAP	$	638,071
Adjustments:
Advanced organization and offering costs and advanced operating expenses		14,981
Accumulated depreciation and amortization		1,788
Unrealized net real estate appreciation		4,204
NAV	$	659,044


Record Date	Class I		Class F-I		Class A-I		Class A-II		Class E
January 31, 2024	$	—	$	0.0800	$	0.0798	$	0.0811	$	0.0972
February 29,2024		0.0755		0.0800		0.0798		0.0813		0.0973
March 31, 2024		0.0850		0.0895		0.0893		0.0907		0.1068
Total	$	0.1605	$	0.2495	$	0.2489	$	0.2531	$	0.3013


	Three Months Ended March 31, 2024
	Amount		Percentage
Distributions
Payable in cash	$	6,074		80	%
Reinvested in shares		1,516		20	%
Total distribution	$	7,590		100	%
Sources of distributions
Cash flows from operating activities(1)	$	7,590		100	%
Total sources of distributions	$	7,590		100	%

AFFO	$	10,589


	Class I Shares		Class F-I Shares		Class E Shares		Class A-I Shares		Class A-II Shares		Total
Offering proceeds:
Shares sold		201,505		15,564,999		177,723		8,669,205		1,671,686		26,285,118
Gross offering proceeds	$	4,176	$	314,055	$	3,671	$	177,185	$	34,660	$	533,747
Selling commissions and dealer manager fees		—		—		—		—		—		—
Accrued stockholder servicing fees		—		—		—		—		—		—
Net offering proceeds	$	4,176	$	314,055	$	3,671	$	177,185	$	34,660	$	533,747


Month of	Total Number of Shares Repurchased		Average Price Paid per Share		Total Number of Shares Repurchased as Part of Publicly Announced Plans or Programs		Repurchases as Percentage of NAV(1)			Maximum Number of Shares Pending Repurchase Pursuant to Publicly Announced Plans or Programs
January 2024		5,000	$	20.73		5,000		0.02	%		—
February 2024		2,476		20.54		2,476		0.01	%		—
March 2024		—		—		—		—			—
Total		7,477	$	20.63		7,477		0.03	%		—


Exhibit Number		Description
3.1		Third Articles of Amendment and Restatement (incorporated by reference to Exhibit 3.1 to the Registrant's Quarterly Current Report on Form 8-K filed on December 23, 2022)
3.2		Amended and Restated Bylaws (incorporated by reference to Exhibit 3.2 to the Pre-Effective Amendment No. 1 to the Registrant's Registration Statement on Form S-11 as filed by the Registrant with the Securities and Exchange Commission on June 7, 2022)
4.1		Amended and Restated Share Repurchase Plan (incorporated by reference to Exhibit 4.1 to the Registrant's Current Report on Form 8-K filed on November 29, 2022)
4.2		Amended and Restated Distribution Reinvestment Plan (incorporated by reference to Exhibit 4.2 to the Registrant's Post-Effective Amendment No. 2 to the Registrant's Registration Statement on Form S-11, as Filed by the Registrant with the Securities and Exchange Commission on April 7, 2023)
4.3		Form of Subscription Agreements
10.1*		Third Amended and Restated Advisory Agreement
31.1*		Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*		Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.3*		Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*		Certification of Principal Executive Officers and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS*		Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH*		Inline XBRL Taxonomy Extension Schema


101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase
101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase
101.LAB*		Inline XBRL Taxonomy Extension Label Linkbase
101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase
104*		Cover Page Interactive Data File (embedded with the Inline XBRL document)

*		Filed herewith


	Apollo Realty Income Solutions, Inc.

May 10, 2024	By:	/s/ Philip Mintz
		Philip Mintz
		Co-President, Co-Chief Executive Officer and Director
		(Co-Principal Executive Officer)

May 10, 2024	By:	/s/Randy Anderson
		Randy Anderson
		Co-President, Co-Chief Executive Officer and Director
		(Co-Principal Executive Officer)

May 10, 2024	By:	/s/ Anastasia Mironova
		Anastasia Mironova Interim Chief Financial Officer, Treasurer and Secretary
		(Principal Financial Officer and Principal Accounting Officer)