CIM Opportunity Zone Fund's Net Income Soars on Strategic Asset Moves

TL;DR

**CIM Opportunity Zone Fund is making big moves in solar and real estate, and while revenue is down, strategic gains are boosting the bottom line, making it a compelling long-term play.**

AI Summary

CIM Opportunity Zone Fund, L.P. reported a significant increase in net income for the nine months ended September 30, 2025, reaching $110.778 million, up from $24.826 million in the same period of 2024. This surge was primarily driven by a realized gain on net investment in lease of $117.364 million and other income of $31.223 million, which includes a $28.519 million gain from the termination of a below-market REC agreement. Total revenues, however, decreased to $86.535 million for the nine months ended September 30, 2025, from $138.994 million in 2024, largely due to a decline in solar revenue from $112.691 million to $59.065 million. The company's total assets grew substantially to $2.894 billion as of September 30, 2025, from $2.336 billion at December 31, 2024, mainly due to increased investments in real estate, which rose from $1.886 billion to $2.318 billion. A key business change was the WEPCO transaction, where the Fund contributed its solar project interests, valued at $1.3 billion, to WEPCO Holdings, resulting in the Fund owning approximately 75.1% of WEPCO and consolidating it as a VIE. Cash and cash equivalents decreased from $336.192 million to $193.225 million over the same period, reflecting significant additions to real estate investments totaling $142.963 million. The Fund also saw a substantial increase in non-controlling interests from $110.821 million to $420.409 million, largely due to the WEPCO transaction.

Why It Matters

This filing reveals CIM Opportunity Zone Fund's aggressive strategy in real estate and solar investments, particularly through the $1.3 billion WEPCO transaction. For investors, the significant increase in net income, despite a revenue dip, highlights the impact of strategic asset revaluation and gains, which could signal strong underlying asset value. Employees and customers of the consolidated WEPCO entity will see CIM as the managing member, potentially influencing future operational decisions and growth. In the broader market, this move underscores the continued interest and investment in Opportunity Zones and renewable energy infrastructure, potentially intensifying competition for similar assets and influencing valuations in these sectors.

Risk Assessment

Risk Level: medium — The Fund's risk level is medium due to its significant reliance on fair value adjustments and non-operating gains, such as the $117.364 million realized gain on net investment in lease and the $28.519 million gain from termination of a REC agreement, which are not recurring revenue streams. Additionally, the substantial decrease in solar revenue from $112.691 million to $59.065 million indicates potential volatility in core operating performance, despite the overall net income increase.

Analyst Insight

Investors should scrutinize the quality of CIM Opportunity Zone Fund's net income, differentiating between operating performance and one-time gains. While the WEPCO transaction and asset revaluations are positive, monitor future solar revenue trends and the sustainability of non-operating income. Consider this a growth-oriented investment with inherent real estate and renewable energy market risks.

Financial Highlights

debt To Equity

X.X

revenue

$86.535M

operating Margin

-32.6%

total Assets

$2.894B

total Debt

$265.801M

net Income

$110.778M

eps

$X

gross Margin

X%

cash Position

$193.225M

revenue Growth

-37.7%

Revenue Breakdown

Key Numbers

• $110.778M — Net Income (Increased from $24.826M in 2024 for the nine months ended September 30.)
• $86.535M — Total Revenues (Decreased from $138.994M in 2024 for the nine months ended September 30.)
• $117.364M — Realized Gain on Net Investment in Lease (Significant non-operating gain for the nine months ended September 30, 2025.)
• $2.894B — Total Assets (Increased from $2.336B at December 31, 2024.)
• $1.3B — Value of Solar Project Interests (Contributed by the Fund to WEPCO Holdings.)
• 75.1% — Ownership in WEPCO (Fund's controlling stake in the new solar investment vehicle.)
• $193.225M — Cash and Cash Equivalents (Decreased from $336.192M at December 31, 2024.)
• $420.409M — Non-controlling Interests (Increased from $110.821M at December 31, 2024, due to WEPCO transaction.)
• $59.065M — Solar Revenue (Decreased from $112.691M in 2024 for the nine months ended September 30.)
• $142.963M — Additions to Investments in Real Estate (Significant cash outflow for investing activities.)

Key Players & Entities

• CIM Opportunity Zone Fund, L.P. (company) — registrant
• CIM Group, LLC (company) — affiliate of the General Partner and Manager of the Fund
• WEPCO (company) — newly-formed investment vehicle for solar investments, 75.1% owned by the Fund
• Westlands Electric Power Company Holdings, LLC (company) — wholly-owned subsidiary of WEPCO
• $110.778 million (dollar_amount) — net income for the nine months ended September 30, 2025
• $117.364 million (dollar_amount) — realized gain on net investment in lease for the nine months ended September 30, 2025
• $1.3 billion (dollar_amount) — total aggregate value of equity interests contributed by the Fund to WEPCO
• 75.1% (percentage) — Fund's ownership interest in WEPCO
• $2.894 billion (dollar_amount) — Total Assets as of September 30, 2025
• $59.065 million (dollar_amount) — Solar revenue for the nine months ended September 30, 2025

FAQ

Risk Factors

• Reliance on Related Parties [medium — operational]: The Fund relies on CIM Group and its affiliates for management services and expense reimbursements. Management fees to related parties increased to $30.958M for the nine months ended September 30, 2025, from $27.976M in the prior year. This concentration of services creates operational risk if these relationships are disrupted.
• Significant Non-Controlling Interests [medium — financial]: Non-controlling interests increased substantially from $110.821M to $420.409M due to the WEPCO transaction. This significant portion of equity not attributable to the Fund's partners introduces complexity in financial reporting and potential future profit distribution challenges.
• Decreasing Cash Position [medium — financial]: Cash and cash equivalents decreased from $336.192M at December 31, 2024, to $193.225M as of September 30, 2025. This reduction is attributed to significant additions to real estate investments totaling $142.963M, which could impact liquidity for unforeseen needs.
• Opportunity Zone Fund Compliance [high — regulatory]: The Fund must maintain at least 90% of its assets in 'qualified opportunity zone property' to maintain its QOF status. Failure to comply with Section 1400Z-2 of the Code could result in loss of tax benefits for investors.
• Real Estate Market Fluctuations [medium — market]: The Fund's substantial investments in real estate, totaling $2.318 billion, are subject to market risks including interest rate changes, economic downturns, and local market conditions. Impairment of these assets requires significant judgment and could impact fair value.
• VIE Consolidation Complexity [medium — operational]: The consolidation of WEPCO as a VIE introduces complexity in financial reporting and requires careful assessment of control and primary beneficiary status. The Fund's ability to direct WEPCO's activities and absorb losses is key to its consolidation.

Industry Context

The Opportunity Zone program incentivizes investment in low-income communities, aiming to spur economic development. The Fund's strategy focuses on real estate and infrastructure within these zones. The solar energy sector, where the Fund has significant prior investments, is subject to evolving regulatory landscapes and market demand for renewable energy.

Regulatory Implications

The Fund's status as a Qualified Opportunity Fund (QOF) is paramount and requires strict adherence to IRS regulations regarding investment in Opportunity Zones. The consolidation of WEPCO as a Variable Interest Entity (VIE) also necessitates careful accounting and disclosure to ensure compliance with U.S. GAAP.

What Investors Should Do

1. Monitor WEPCO performance and consolidation impact.
2. Analyze the sustainability of non-operating income.
3. Evaluate the impact of declining solar revenue.
4. Assess liquidity given reduced cash reserves.

Key Dates

• 2025-03-31: Valuation date for solar project interests contributed to WEPCO Holdings — Establishes the $1.3 billion value of the Fund's contribution, a key component of the WEPCO transaction.
• 2024-03-18: Fifth Amended and Restated Limited Partnership Agreement — Governs the Fund's operations and structure, including capital calls and dissolution terms.
• 2020-12-31: Fund qualified as a QOF — Marks the beginning of the Fund's qualification as a Qualified Opportunity Fund, essential for investor tax benefits.

Glossary

Qualified Opportunity Fund (QOF)

An investment vehicle that invests in 'qualified opportunity zone property' to provide tax benefits to investors under Section 1400Z-2 of the U.S. Internal Revenue Code. (The Fund is structured and intends to operate as a QOF, making this status critical for its investment strategy and investor returns.)

Variable Interest Entity (VIE)

A type of legal entity that is not controlled by its equity investors but rather by other parties who have a significant economic interest in it. The primary beneficiary consolidates the VIE. (WEPCO is consolidated as a VIE, meaning its financial results are included in the Fund's consolidated statements, impacting reported assets, liabilities, and equity.)

Net Investment in Lease

Represents the net investment a lessor has in a lease, typically including the net lease payments receivable and the residual value of the leased asset. (A significant realized gain of $117.364M was reported from this item, contributing substantially to the Fund's net income.)

Non-controlling Interests

The portion of equity in a subsidiary that is not attributable to the parent company. In this case, it represents the interests in WEPCO held by other CIM-affiliated entities. (The substantial increase in non-controlling interests from $110.821M to $420.409M is a direct result of the WEPCO transaction and impacts the Fund's consolidated equity.)

Opportunity Zones

Economically distressed communities in the U.S. where new investments may be eligible for preferential tax treatment under Section 1400Z-1 of the Internal Revenue Code. (The Fund's primary investment strategy is to invest in assets within these designated zones to qualify as a QOF.)

Year-Over-Year Comparison

For the nine months ended September 30, 2025, CIM Opportunity Zone Fund, L.P. reported a substantial increase in net income to $110.778 million from $24.826 million in the prior year, driven by significant one-time gains. However, total revenues declined by 37.7% to $86.535 million from $138.994 million, primarily due to a sharp drop in solar revenue. Total assets grew by approximately 24% to $2.894 billion, largely from increased real estate investments, while cash reserves decreased by over $140 million. A major structural change was the WEPCO transaction, leading to the consolidation of a VIE and a significant increase in non-controlling interests.

Filing Documents

• cim-20250930.htm (10-Q) — 1466KB
• cimopportunityzonefundlp-ea.htm (EX-31.1) — 10KB
• cimopportunityzonefundlp-e.htm (EX-31.2) — 10KB
• cimopportunityzonefundlp-eb.htm (EX-32.1) — 8KB
• 0001765107-25-000028.txt ( ) — 8959KB
• cim-20250930.xsd (EX-101.SCH) — 72KB
• cim-20250930_cal.xml (EX-101.CAL) — 83KB
• cim-20250930_def.xml (EX-101.DEF) — 297KB
• cim-20250930_lab.xml (EX-101.LAB) — 746KB
• cim-20250930_pre.xml (EX-101.PRE) — 519KB
• cim-20250930_htm.xml (XML) — 1616KB

— FINANCIAL INFORMATION

PART I — FINANCIAL INFORMATION 3

Financial Statements (Unaudited)

Item 1. Financial Statements (Unaudited) 3 Consolidated Balance Sheets as of September 30, 2025 and December 31, 2024 3 Consolidated Statements of Operations for the three and nine months ended September 30, 2025 and 2024 4 Consolidated Statements of Changes in Partners' Capital and Redeemable Partners' Capital for the three and nine months ended September 30, 2025 and 2024 5 Consolidated Statements of Cash Flows for the nine months ended September 30, 2025 and 2024 7

Notes to Consolidated Financial Statements

Notes to Consolidated Financial Statements 8

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 34

Quantitative and Qualitative Disclosures About Market Risk

Item 3. Quantitative and Qualitative Disclosures About Market Risk 41

Controls and Procedures

Item 4. Controls and Procedures 41

— OTHER INFORMATION

PART II — OTHER INFORMATION 42

Legal Proceedings

Item 1. Legal Proceedings 42

Risk Factors

Item 1A. Risk Factors 42

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 42

Defaults Upon Senior Securities

Item 3. Defaults Upon Senior Securities 42

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 42

Other Information

Item 5. Other Information 42

Exhibits

Item 6. Exhibits 43

Signatures

Signatures 44 2 Table of Contents

- FINANCIAL INFORMATION

PART I - FINANCIAL INFORMATION

FINANCIAL STATEMENTS

ITEM 1. FINANCIAL STATEMENTS CIM OPPORTUNITY ZONE FUND, L.P. CONSOLIDATED BALANCE SHEETS (in thousands, except unit amounts) (unaudited) September 30, 2025 December 31, 2024 ASSETS Land $ 237,562 $ 178,553 Building and improvements 688,381 547,886 Solar facilities 910,851 854,078 Intangible assets 16,411 14,525 Real estate under development 465,122 291,436 Total investments in real estate 2,318,327 1,886,478 Accumulated depreciation and amortization ( 102,696 ) ( 79,927 ) Total investments in real estate, net 2,215,631 1,806,551 Investments in unconsolidated entities, at fair value 93,785 119,127 Cash and cash equivalents 193,225 336,192 Restricted cash 32,414 4,450 Accounts receivable, net 34,605 32,572 Contributions receivable — 55 Due from related party 12,010 — Net investment in lease 218,220 — Right of use asset 31,880 32,517 Prepaid expenses and other assets 62,704 4,168 Total Assets $ 2,894,474 $ 2,335,632 LIABILITIES Notes payable, at fair value $ 265,801 $ 295,464 Accounts payable and accrued expenses 67,492 53,528 Prepaid rent and other liabilities 1,535 3,109 Lease liability 36,257 35,925 Intangible liabilities, net — 31,111 Due to related party 7,881 2,553 Distributions payable 3,179 31 Total Liabilities 382,145 421,721 COMMITMENTS AND CONTINGENCIES (NOTE 10) REDEEMABLE PARTNERS' CAPITAL: 1,853,475 and 1,825,181 limited partnership units issued and outstanding as of September 30, 2025 and December 31, 2024 2,520,021 2,249,462 PARTNERS' CAPITAL GENERAL PARTNER: 561 and 553 limited partnership units issued and outstanding as of September 30, 2025 and December 31, 2024 945 882 Additional paid-in capital 156,990 — Retained earnings (deficit) ( 586,036 ) ( 447,254 ) Total partners' capital excluding noncontrolling interests ( 428,101 ) ( 446,372 ) Non-controlling interests 420,409 110,821 Total Partners' Capital ( 7,692 ) ( 335,551 ) TOTAL LIABILITIES, REDEEMABLE PARTNERS' CAPITAL AND PARTNERS' CAPITAL $ 2,8

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS September 30, 2025 (Unaudited) 1. ORGANIZATION CIM Opportunity Zone Fund, L.P., (the "Fund"), a Delaware limited partnership, was formed on November 1, 2018 and commenced operations on January 21, 2019 (the "Initial Closing"). The Fund is governed by the Fifth Amended and Restated Limited Partnership Agreement, dated as of March 18, 2024 (as amended and restated, the "Partnership Agreement"). The Fund is organized as an open-ended vehicle for the purpose of investing in infrastructure and real estate, through entities that acquire, own, develop or re-develop and operate infrastructure and real estate assets, including assets in low-income communities in the United States that have been designated as "Opportunity Zones" pursuant to Section 1400Z-1 of the Internal Revenue Code of 1986 (the "Code") and which meet the criteria described in the Partnership Agreement. The Fund's objective is generating returns from capital appreciation and operating income once development of these assets is complete. At least 90% of the Fund's assets will consist of "qualified opportunity zone property", which enables the Fund to be classified as a "qualified opportunity fund" within the meaning of Section 1400Z-2 of the Code (a "QOF"). The Fund qualified, and intends to continue to qualify, as a QOF beginning with its taxable year ended December 31, 2020. The general partner of the Fund is CIM Opportunity Zone Fund GP, LLC, a Delaware limited liability company (the "General Partner"), and an affiliate of CIM Group, LLC (together with its controlled affiliates, "CIM"). One or more affiliates of CIM acts as the manager of the Fund (the "Manager"). The Fund also has limited partners (the "Limited Partners"), affiliated limited partners (the "Affiliated Limited Partners") and, together with the General Partner, (the "Partners"). The Fund shall continue until it is dissolved and subsequently terminated upon (a) a determination made by the Gen

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS September 30, 2025 (Unaudited) entities are variable interest entities ("VIEs"), and if so, whether the Fund is the primary beneficiary. The Fund's judgment with respect to its level of influence or control over an entity and whether the Fund is the primary beneficiary of a VIE involves consideration of various factors, including the form of the Fund's ownership interest, the Fund's voting interest, the size of the Fund's investment (including loans), and the Fund's ability to participate in major policy-making decisions. The Fund's ability to correctly assess its influence or control over an entity affects the presentation of its investments on the Fund's consolidated financial statements. During the nine months ended September 30, 2025, the Fund, Westlands Electric Power Company, LLC ("WEPCO") and Westlands Electric Power Company Holdings, LLC ("WEPCO Holdings") entered into a Subscription and Contribution agreement (the "OZ Subscription and Contribution Agreement"). Pursuant to the OZ Subscription and Contribution Agreement, the Fund contributed its interests in solar projects (the "Project Entities") to WEPCO Holdings in exchange for common units in WEPCO (the "Phase 1 Contribution Transactions"). WEPCO is a newly-formed investment vehicle formed to hold solar investments previously held by the Fund and other CIM-affiliated entities. WEPCO Holdings is a wholly-owned subsidiary of WEPCO. The interests contributed by the Fund constitute all of the Fund's interests in the Project Entities. The total aggregate value of the equity interests contributed by the Fund is $ 1.3 billion, based on net asset values as of March 31, 2025. Pursuant to a second Subscription and Contribution Agreement entered into during the nine months ended September 30, 2025, other CIM-affiliated entities contributed all of their interests in the Project Entities (and certain additional solar projects) to WEPCO Holdings in exchange for common uni

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS September 30, 2025 (Unaudited) circumstances are present, the recoverability of assets to be held and used requires significant judgment and estimates and is measured by a comparison of the carrying amount to the future undiscounted cash flows expected to be generated by the assets and their eventual disposition. If the undiscounted cash flows are less than the carrying amount of the assets, an impairment is recognized to the extent the carrying amount of the assets exceeds the estimated fair value of the assets. The process for evaluating real estate impairment requires management to make significant assumptions related to certain inputs, including rental rates, lease-up period, occupancy, estimated holding periods, capital expenditures, growth rates, market discount rates and terminal capitalization rates. These inputs require a subjective evaluation based on the specific property and market. Changes in the assumptions could have a significant impact on either the fair value, the amount of impairment charge, if any, or both. Any asset held for sale is reported at the lower of the asset's carrying amount or fair value, less costs to sell. When an asset is identified by the Fund as held for sale, the Fund will cease recording depreciation and amortization of the asset. The Fund did not recognize any impairment of long-lived assets during the three and nine months ended September 30, 2025 and 2024. Allocation of Purchase Price of Real Estate and Infrastructure Investments — The Fund determines whether a purchase qualifies as an asset acquisition or meets the definition of an acquisition of a business. Acquisition of real estate and infrastructure assets for development are generally recognized at cost, including the related transaction costs, as asset acquisitions. The Fund applies the acquisition method to all acquired real estate and infrastructure investments. The purchase consideration of the real estate, which inclu

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS September 30, 2025 (Unaudited) appraisal methods represents an approximation of how marketplace participants would underwrite the investment in current market conditions as of the measurement date. Notes Payable, at Fair Value — The Fund has elected the fair value

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