RREEF Property Trust Swings to Profit on Real Estate Sales

TL;DR

**RREEF Property Trust's Q3 profit surge is a one-time win from asset sales, not sustainable operational growth; proceed with caution.**

AI Summary

RREEF Property Trust, Inc. reported a significant turnaround, achieving a net income of $22.128 million for the three months ended September 30, 2025, a substantial improvement from a net loss of $3.573 million in the same period of 2024. For the nine months ended September 30, 2025, net income was $21.073 million, compared to a net loss of $3.519 million in 2024. This positive shift was primarily driven by a net realized gain upon sale of real estate of $22.515 million in Q3 2025 and $22.424 million for the nine months ended September 30, 2025. Total revenues increased to $10.222 million in Q3 2025 from $8.873 million in Q3 2024, and to $30.742 million for the nine months ended September 30, 2025, up from $29.205 million in 2024. Operating expenses decreased to $7.106 million in Q3 2025 from $9.497 million in Q3 2024, largely due to the absence of a $2.201 million provision for impairment of real estate seen in 2024. The company's total assets decreased from $397.986 million as of December 31, 2024, to $374.626 million as of September 30, 2025, mainly due to a reduction in investment in real estate assets, net, from $378.531 million to $354.636 million. Stockholders' equity also declined from $95.113 million to $83.510 million over the same period, influenced by common stock redemptions totaling $35.123 million for the nine months ended September 30, 2025.

Why It Matters

This filing reveals RREEF Property Trust's strategic shift towards asset disposition, generating significant realized gains that propelled the company into profitability. For investors, the substantial net income of $22.128 million in Q3 2025, driven by real estate sales, indicates a potential deleveraging or capital reallocation strategy, which could impact future dividend policies and share value. The decrease in total assets and stockholders' equity, alongside significant common stock redemptions, suggests a contraction in the company's overall footprint, potentially affecting employees through portfolio adjustments and customers through property sales. In a competitive real estate market, this move could signal a focus on optimizing a smaller, higher-performing portfolio or returning capital to shareholders, distinguishing RREEF from peers focused on aggressive expansion.

Risk Assessment

Risk Level: medium — The company's net income of $22.128 million for Q3 2025 is heavily reliant on a $22.515 million net realized gain from the sale of real estate, indicating that core operational profitability remains a concern. Furthermore, the significant redemption of common stock totaling $35.123 million for the nine months ended September 30, 2025, coupled with a decline in total assets from $397.986 million to $374.626 million, suggests a shrinking asset base and potential investor outflows, which could impact future growth and liquidity.

Analyst Insight

Investors should scrutinize the sustainability of RREEF Property Trust's earnings, distinguishing between one-time gains from asset sales and recurring operational income. Evaluate the company's long-term strategy for asset management and capital deployment, considering the ongoing redemptions and declining asset base. Await further clarity on how proceeds from asset sales will be reinvested or returned to shareholders beyond current redemptions.

Financial Highlights

debt To Equity

3.49

revenue

$30.742M

operating Margin

29.6%

total Assets

$374.626M

total Debt

$252.655M

net Income

$21.073M

eps

N/A

gross Margin

N/A

cash Position

$7.116M

revenue Growth

+5.3%

Revenue Breakdown

Key Numbers

• $22.128M — Net Income (Q3 2025) (Significant turnaround from a $3.573M net loss in Q3 2024.)
• $22.515M — Net Realized Gain on Real Estate Sale (Q3 2025) (Primary driver of the net income for the quarter.)
• $30.742M — Total Revenues (9 Months 2025) (Increased from $29.205M in the prior year period.)
• $21.725M — Total Operating Expenses (9 Months 2025) (Decreased from $24.131M in the prior year period, partly due to no impairment.)
• $374.626M — Total Assets (Sept 30, 2025) (Decreased from $397.986M as of December 31, 2024.)
• $83.510M — Total Stockholders' Equity (Sept 30, 2025) (Decreased from $95.113M as of December 31, 2024.)
• $35.123M — Redemption of Common Stock (9 Months 2025) (Significant capital outflow to shareholders.)
• $354.636M — Investment in Real Estate Assets, Net (Sept 30, 2025) (Decreased from $378.531M as of December 31, 2024, reflecting asset sales.)
• $10.195M — Property Related Income (Q3 2025) (Increased from $8.815M in Q3 2024.)
• $10,367M — Interest Expense (9 Months 2025) (Increased from $9,457M in the prior year period.)

Key Players & Entities

• RREEF Property Trust, Inc. (company) — registrant and primary entity in the filing
• RREEF Property Operating Partnership, LP (company) — Company's operating partnership
• RREEF America L.L.C. (company) — Company's sponsor and advisor
• DWS Distributors, Inc. (company) — Dealer Manager for public offerings
• $22.128 million (dollar_amount) — Net income for the three months ended September 30, 2025
• $3.573 million (dollar_amount) — Net loss for the three months ended September 30, 2024
• $22.515 million (dollar_amount) — Net realized gain upon sale of real estate for the three months ended September 30, 2025
• $374.626 million (dollar_amount) — Total assets as of September 30, 2025
• $397.986 million (dollar_amount) — Total assets as of December 31, 2024
• $35.123 million (dollar_amount) — Redemption of common stock for the nine months ended September 30, 2025

FAQ

Risk Factors

• Real Estate Market Fluctuations [high — financial]: The value of the Company's primary assets, real estate properties, is subject to market fluctuations. A decline in real estate values could negatively impact the Company's net asset value and its ability to generate income or realize gains from sales. For instance, investment in real estate assets, net, decreased from $378.531 million as of December 31, 2024, to $354.636 million as of September 30, 2025.
• Leverage and Debt Obligations [medium — financial]: The Company utilizes debt financing, including line of credit and mortgage loans, which exposes it to interest rate risk and the risk of default. As of September 30, 2025, total liabilities were $291.116 million, with $188.378 million in mortgage loans payable and $64.277 million in line of credit.
• Reliance on Sponsor and Advisors [medium — operational]: The Company's operations and investment strategies are heavily influenced by its sponsor and advisor, RREEF America L.L.C. Any adverse changes in the relationship or performance of RREEF America could impact the Company's business. Advisory fees were $1,724M for the nine months ended September 30, 2025.
• Common Stock Redemptions [medium — financial]: Significant redemptions of common stock can impact the Company's liquidity and capital structure. For the nine months ended September 30, 2025, redemptions of common stock totaled $35.123 million, contributing to a decrease in stockholders' equity from $95.113 million to $83.510 million.
• REIT Qualification [medium — regulatory]: As a Real Estate Investment Trust (REIT), the Company must comply with specific tax regulations. Failure to maintain REIT status could result in significant tax liabilities and negatively affect shareholder returns. The Company elected to qualify as a REIT for federal income tax purposes.
• Impairment of Real Estate Assets [medium — financial]: The Company is subject to potential impairment charges on its real estate investments if their carrying values are not recoverable. While no provision for impairment was recorded in the nine months ended September 30, 2025, a $2.201 million provision was recorded in the same period of 2024, highlighting the potential for such charges.

Industry Context

RREEF Property Trust operates within the diversified commercial real estate sector, focusing on income-producing properties. The industry is characterized by its sensitivity to economic cycles, interest rates, and local market conditions. Trends include a continued demand for well-located, modern industrial and residential properties, while office and retail sectors face evolving dynamics due to remote work and e-commerce. The sector relies heavily on debt financing and is influenced by investor appetite for real estate as an asset class.

Regulatory Implications

As a REIT, RREEF Property Trust must adhere to strict IRS regulations regarding income distribution and asset composition to maintain its tax-advantaged status. Changes in real estate investment regulations or tax laws could impact its profitability and operational flexibility. Compliance with securities laws is also critical, especially given its ongoing public offerings.

What Investors Should Do

1. Monitor real estate asset sales and gains
2. Evaluate the impact of common stock redemptions
3. Analyze operating expense trends
4. Assess debt levels and interest expense
5. Review property portfolio performance

Key Dates

• 2025-09-30: Quarterly Financial Reporting — Reported net income of $22.128 million for Q3 2025, a significant turnaround from a net loss in Q3 2024, driven by real estate sales.
• 2025-09-30: Balance Sheet Date — Total assets decreased to $374.626 million from $397.986 million at year-end 2024, reflecting asset sales and capital redemptions.
• 2025-09-30: Nine Months Ended — Net income of $21.073 million compared to a net loss in the prior year, with $22.424 million in realized gains from real estate sales.
• 2024-12-31: Previous Year-End Balance Sheet — Total assets were $397.986 million and total stockholders' equity was $95.113 million.
• 2024-09-30: Prior Year Quarter Comparison — Reported a net loss of $3.573 million for Q3 2024, with a $2.201 million provision for impairment of real estate.
• 2023-08-10: Commencement of Fourth Public Offering — The ongoing offering aims to raise capital through various classes of common stock.

Glossary

REIT

Real Estate Investment Trust. A company that owns, operates, or finances income-generating real estate. REITs are required to distribute at least 90% of their taxable income to shareholders annually in the form of dividends. (RREEF Property Trust, Inc. has elected to qualify as a REIT, which dictates its tax structure and operational requirements.)

Provision for impairment of real estate

An accounting charge recognized when the carrying value of a real estate asset is deemed unrecoverable, reflecting a decrease in its fair value or expected future cash flows. (The absence of this charge in Q3 2025 compared to $2.201 million in Q3 2024 significantly contributed to the improved net income.)

Net realized gain upon sale of real estate

The profit recognized when a real estate property is sold for more than its carrying value (book value). (This was the primary driver of the Company's net income in Q3 2025, with $22.515 million recognized.)

Stockholders' Equity

The residual interest in the assets of an entity after deducting liabilities. It represents the net worth of the company belonging to its shareholders. (Stockholders' equity decreased from $95.113 million to $83.510 million, largely due to common stock redemptions.)

Line of credit

A flexible loan that allows a borrower to draw funds up to a certain limit, repay them, and then borrow them again. It is typically used for short-term financing needs. (The Company had a line of credit balance of $64.277 million as of September 30, 2025, indicating ongoing use of this financing tool.)

Variable Interest Entity (VIE)

A legal entity that is not controlled by its equity investors due to its capital structure or contractual arrangements. The primary beneficiary of a VIE, who absorbs losses or receives benefits, must consolidate its financial statements. (The Company uses VIE analysis to determine consolidation requirements, as noted in its accounting policies.)

Year-Over-Year Comparison

RREEF Property Trust, Inc. has demonstrated a significant financial recovery compared to the prior year. Total revenues for the nine months ended September 30, 2025, increased to $30.742 million from $29.205 million in 2024, while total operating expenses decreased to $21.725 million from $24.131 million. This improved operational performance, coupled with a substantial $22.424 million net realized gain on real estate sales, transformed a net loss of $3.519 million for the nine months of 2024 into a net income of $21.073 million for the same period in 2025. However, total assets and stockholders' equity have declined, reflecting strategic asset sales and significant common stock redemptions.

Filing Documents

• rpt-20250930.htm (10-Q) — 2129KB
• rpt-2025q3xex31x1.htm (EX-31.1) — 11KB
• rpt-2025q3xex31x2.htm (EX-31.2) — 11KB
• rpt-2025q3xex32x1.htm (EX-32.1) — 7KB
• 0001542447-25-000126.txt ( ) — 10947KB
• rpt-20250930.xsd (EX-101.SCH) — 73KB
• rpt-20250930_cal.xml (EX-101.CAL) — 70KB
• rpt-20250930_def.xml (EX-101.DEF) — 380KB
• rpt-20250930_lab.xml (EX-101.LAB) — 731KB
• rpt-20250930_pre.xml (EX-101.PRE) — 557KB
• rpt-20250930_htm.xml (XML) — 2153KB

— FINANCIAL INFORMATION

PART I — FINANCIAL INFORMATION

Unaudited Financial Statements

Item 1. Unaudited Financial Statements 3 Consolidated Balance Sheets 3 Consolidated Statements of Operations 4 Consolidated Statements of Stockholders' Equity 5 Consolidated Statements of Cash Flows 7

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 9

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 41

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 62

Controls and Procedures

Item 4. Controls and Procedures 63

— OTHER INFORMATION

PART II — OTHER INFORMATION

Legal Proceedings

Item 1. Legal Proceedings 64

Risk Factors

Item 1A. Risk Factors 64

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 64

Defaults Upon Senior Securities

Item 3. Defaults Upon Senior Securities 65

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 65

Other Information

Item 5. Other Information 65

Exhibits

Item 6. Exhibits 66

Signatures

Signatures 67 2 Table of Contents PART I FINANCIAL INFORMATION

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS RREEF PROPERTY TRUST, INC. CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share data) September 30, 2025 (unaudited) December 31, 2024 ASSETS Investment in real estate assets, net $ 354,636 $ 378,531 Investment in marketable securities 125 122 Cash and cash equivalents 7,116 7,157 Restricted cash 125 1,349 Receivables, net of allowance for doubtful accounts of $ 131 and $ 75 , respectively 7,850 6,513 Deferred leasing costs, net of amortization of $ 1,807 and $ 2,866 , respectively 2,155 1,870 Prepaid and other assets 2,619 2,444 Total assets $ 374,626 $ 397,986 LIABILITIES AND STOCKHOLDERS' EQUITY Line of credit, net $ 64,277 $ 74,705 Mortgage loans payable, net 188,378 188,628 Accounts payable and accrued expenses 7,287 7,363 Due to affiliates 16,790 17,383 Note to affiliate, net of unamortized discount of zero and $ 79 , respectively 5,383 5,304 Acquired below market lease intangibles, less accumulated amortization of $ 10,748 and $ 10,851 , respectively 7,134 7,484 Other liabilities 1,867 2,006 Total liabilities 291,116 302,873 Stockholders' Equity: Class A common stock, 3,274,909 and 3,892,473 issued and outstanding, respectively 32 39 Class D common stock, 1,721,019 and 2,074,126 issued and outstanding, respectively 17 21 Class I common stock, 9,201,036 and 9,864,714 issued and outstanding, respectively 92 99 Class M-I common stock, 512,785 and 505,917 issued and outstanding, respectively 5 5 Class N common stock, 589,280 and 600,293 issued and outstanding, respectively 6 6 Class T common stock, 34,620 and 51,236 issued and outstanding, respectively 1 1 Class T2 common stock, 712,157 and 690,528 issued and outstanding, respectively 7 7 Class Z common stock, 149,944 and 75,000 issued and outstanding, respectively 1 1 Additional paid in capital 184,816 206,837 Deficit ( 101,467 ) ( 111,903 ) Total stockholders' equity 83,510 95,113 Total liabilities and stockho

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS September 30, 2025 (Unaudited) (in thousands except share and per share data) NOTE 1 — ORGANIZATION RREEF Property Trust, Inc. (the "Company") was formed on February 7, 2012 as a Maryland corporation and has elected to qualify as a real estate investment trust ("REIT") for federal income tax purposes. Substantially all of the Company's business is conducted through RREEF Property Operating Partnership, LP, the Company's operating partnership (the "Operating Partnership"). The Company is the sole general partner of the Operating Partnership. RREEF Property OP Holder, LLC, a wholly-owned subsidiary of the Company, is the limited partner of the Operating Partnership. The Company's sponsor and advisor is RREEF America L.L.C. ("RREEF America"). The Company invests in a diversified portfolio consisting primarily of high-quality, income-producing commercial real estate located in the United States, including, without limitation, office, industrial, retail and residential properties ("Real Estate Properties"). The Company also invests in common and preferred stock of REITs and other real estate companies ("Real Estate Equity Securities") and in debt investments backed principally by real estate ("Real Estate Loans" and, together with Real Estate Equity Securities, "Real Estate-Related Assets"). The Company raises capital through a combination of public and private offerings of its shares of common stock. On January 3, 2013, the Company commenced its initial public offering, which continued until June 30, 2016 (the "Initial Public Offering"). On July 12, 2016, the Company commenced its second public offering, which continued until January 8, 2020 (the "Second Public Offering"). On January 8, 2020, the Company commenced its third public offering, which continued until August 10, 2023 (the "Third Public Offering"). On August 10, 2023, the Company commenced its fourth public offering, which is currently ongoing (the "Fourt

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued September 30, 2025 (Unaudited) (in thousands, except share and per share data) ZRPTIX, ZRPTTX, ZRPTDX, ZRPTMX, ZRPTUX, and ZRPTNX, respectively. The Company's NAV per share for its Class S shares will be available on the Company's website and via NASDAQ's Mutual Fund Quotation System once the first sale of shares for the share class has occurred. NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements have been prepared in accordance with the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC"), the authoritative reference for U.S. generally accepted accounting principles ("GAAP"). There have been no significant changes to the Company's significant accounting policies during the nine months ended September 30, 2025. The interim financial data as of September 30, 2025 and for the three and nine months ended September 30, 2025 and 2024 is unaudited. In the Company's opinion, the interim data includes all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the results for the interim periods. Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Principles of Consolidation The Company consolidates all entities in which it has a controlling financial interest through majority ownership or voting rights and variable interest entities whereby the Company is the primary beneficiary. In determining whether the Company has a controlling financial interest in a partially owned entity and the requirement to consolidate the accounts of that entity, the Company considers whether the entity

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued September 30, 2025 (Unaudited) (in thousands, except share and per share data) Generally, a real estate asset and its related leases will be considered a single identifiable asset and therefore will not meet the definition of a business. If the real estate and related leases in an acquisition are determined to be an asset and not a business, then the acquisition related costs would be capitalized onto the consolidated balance sheets. Otherwise, such costs will be expensed upon completion of the transaction. The Company assesses the carrying values of real estate investments whenever events or changes in circumstances indicate that the carrying amount of these assets may not be fully recoverable, such as a reduction in the expected holding period of a property. A real estate investment is potentially impaired if the undiscounted cash flows to be realized over the expected hold period are less than the real estate investment's carrying amount. In this case, an impairment loss will be recorded to the extent that the estimated fair value is lower than the real estate investment's carrying amount. The estimated fair value is determined primarily using information contained within independent appraisals obtained quarterly by the Company from its independent valuation agent. Real estate investments that are expected to be disposed of are valued at the lower of carrying amount or estimated fair value less costs to sell. During the nine months ended September 30, 2025 and 2024, the Company recorded zero and $ 2,201 for provision for impairment of real estate investments, respectively. CMBS Trust In October 2022, the Company purchased all of the Class D certificates and certain interest-only certificates of commercial mortgage backed securities ("CMBS") securitized through a trust (the "CMBS Trust") sponsored by the Federal Home Loan Mortgage Corporation ("Freddie Mac"). The Class D certificates purchased by th

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued September 30, 2025 (Unaudited) (in thousands, except share and per share data) organization and offering costs) which would cause the Company's total underwriting compensation to exceed 10 % of the gross proceeds from the primary portion of each public offering. Included in offering costs are (1) distribution fees paid on a trailing basis at the rate of (a) 0.50 % per annum on the NAV of the outstanding Class A Shares, (b) 1.00 % per annum on the NAV of the outstanding Class T Shares, and (c) 0.85 % per annum on the NAV of the outstanding Class S and Class T2 Shares, and (2) dealer manager fees paid on a trailing basis at the rate of 0.55 % per annum on the NAV of the outstanding Class A and Class I Shares (collectively, the "Trailing Fees"). The Trailing Fees are computed daily based on the respective NAV of each share class as of the beginning of each day and paid monthly. However, at each reporting date, the Company accrues an estimate for the amount of Trailing Fees that ultimately may be paid on the

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