Business Context and Reporting Period
Company: Belpointe PREP, LLC (NYSE American: OZ)
Filing Type: Form 10-K (Annual Report)
Reporting Period: Fiscal year ended December 31, 2025
Business Overview: Belpointe PREP is the only publicly traded qualified opportunity fund (QOF) listed on a national securities exchange. It is externally managed by Belpointe PREP Manager, LLC, an affiliate of its Sponsor, Belpointe, LLC. The Company focuses on acquiring, developing, and managing commercial and mixed-use real estate within qualified opportunity zones. As of December 31, 2025, the Company reported two segments: Commercial and Mixed-use.
Key Financial Metrics
| Metric | 2025 | 2024 |
|---|---|---|
| Revenue (Rental) | $9.2 million | $2.7 million |
| Net Loss | $(40.1) million | $(23.9) million |
| Net Loss Per Unit (Basic & Diluted) | $(10.72) | $(6.56) |
| Segment NOI (Total) | $(2.5) million | $(1.5) million |
| Interest Expense | $17.4 million | $10.0 million |
| Depreciation & Amortization | $8.7 million | $4.2 million |
| Total Debt (Net) | $260.6 million | $177.0 million |
| Cash & Cash Equivalents | $24.3 million | $24.7 million |
| Net Asset Value (NAV) per Class A Unit | $116.17 (as of Dec 31, 2025) | Filing text does not provide a clear value for Dec 31, 2024 |
Material Changes vs. Prior Period
- Revenue Growth: Rental revenue increased by approximately 243% to $9.2 million, driven by the stabilization of the "Aster & Links" mixed-use project in Sarasota, Florida, and the commencement of leasing at "VIV" in St. Petersburg, Florida.
- Increased Net Loss: Net loss widened to $40.1 million from $23.9 million. This was primarily due to a $3.0 million loss on the extinguishment of debt related to the Aster & Links refinancing, higher interest expense ($17.4 million vs. $10.0 million), and increased depreciation and amortization as assets were placed in service.
- Debt Refinancing: In September 2025, the Company completed a $204.1 million post-construction refinancing for Aster & Links, replacing prior construction debt. This increased total debt but is expected to generate annual interest savings.
- Capitalization: The Company issued 172,523 Class A units in 2025, raising $11.2 million in net proceeds. Total aggregate gross offering proceeds raised since inception reached $368.6 million.
Guidance, Outlook, and Risks
Outlook and Management Commentary: Management expects market conditions for multifamily and mixed-use properties to remain strong despite broader economic uncertainty. The Company anticipates working up to a target annual distribution rate of 6-8% once investments generate sufficient operating cash flow. No distributions were paid in 2025. The Company believes its current cash, anticipated proceeds from its Follow-on Offering, and debt financing are sufficient to meet liquidity needs for the next 12 months.
Key Risks and Contingencies:
- Legislative Changes: The "One Big Beautiful Bill Act of 2025" (OBBBA) has extended and modified Opportunity Zone provisions. Uncertainty remains regarding new regulations and the designation of new zones.
- Interest Rate Risk: The Company holds significant variable-rate debt. While interest rate caps are in place (strikes at 6.0% and 6.25%), rising rates could increase financing costs.
- Development Risks: Significant capital is committed to ongoing developments (Aster & Links and VIV). Delays or cost overruns could impact financial performance.
- Legal Proceedings: The Company is defending against a $3.0 million foreclosure claim by Galinn Fund LLC regarding a property in Storrs, Connecticut. The Company disputes liability, alleging fraud by a former affiliate, and has filed counterclaims. Management does not believe the outcome will be material.
- Liquidity: The Company relies on its Follow-on Offering and debt markets for capital. Failure to raise sufficient capital could hinder project funding.
Investor Verification Checklist
- NAV Accuracy: Verify the calculation of the $116.17 NAV per unit, as management fees are based on this figure and it is not audited by an independent third party for GAAP compliance.
- Debt Covenants: Confirm continued compliance with net worth ($110 million) and liquid asset ($10 million) covenants required by the Aster & Links and VIV loan agreements.
- Lease-Up Progress: Monitor the lease-up rates for Aster & Links (reported >67% leased as of March 2026) and VIV (reported >37% leased as of March 2026) to assess future cash flow generation.
- Legal Status: Track the status of the Galinn Fund LLC litigation to ensure no unexpected liabilities materialize.
- Regulatory Compliance: Monitor the issuance of new regulations under the OBBBA to ensure the Company maintains its Qualified Opportunity Fund status.