☒ 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

(Former name, former address and former fiscal year, if changed since last report)

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 ~~August 7,~~November 13, 2023, there were approximately 11.6 million outstanding shares of Class A common stock, approximately 0.1 million outstanding shares of Class T common stock, approximately 0.1 million outstanding shares of Class W common stock, approximately 1.1 million outstanding shares of Class Y common stock, and approximately 0.2 million outstanding shares of Class Z common stock of the registrant.

Certain statements contained in this Form 10-Q of Strategic Student & Senior Housing Trust, Inc. (the "Company"), other than historical facts, may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We intend for all such forward-looking statements to be covered by the applicable safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act and Section 21E of the Exchange Act, as applicable. Such statements include, in particular, statements about our plans, strategies, and prospects and are subject to certain risks and uncertainties, including known and unknown risks, which could cause actual results to differ materially from those projected or anticipated. Therefore, such statements are not intended to be a guarantee of our performance in future periods. Such forward-looking statements can generally be identified by our use of forward-looking terminology such as “may,” “will,” “expect,” “intend,” “anticipate,” “estimate,” “believe,” “seek,” “continue,” or other similar words. Any such forward-looking statements are based on current expectations, estimates and projections about the industry and markets in which we operate, and beliefs of, and assumptions made by, our management and involve uncertainties that could significantly affect our financial results. Such statements include, but are not limited to: (i) statements about our plans, strategies, initiatives, and prospects; (ii) potential future outbreaks of infectious diseases or other health concerns, which could adversely affect the Company’s business and its tenants; and (iii) statements about our future results of operations, capital expenditures, and liquidity. Such statements are subject to known and unknown risks and uncertainties, which could cause actual results to differ materially from those projected or anticipated, including, without limitation: changes in economic conditions generally and the real estate market specifically; legislative and regulatory changes, including changes to laws governing the taxation of real estate investment trusts, or REITs; our ability to pay down, refinance, restructure or extend our indebtedness as it becomes due; our ability to maintain our qualification as a REIT for U.S. federal income tax purposes; our ability to retain our executives and key employees; and increased operating costs due to labor market challenges and macroeconomic factors such as inflation.

Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date this report is filed with the U.S. Securities and Exchange Commission (the "SEC") and are not intended to be a guarantee of our performance in future periods. We cannot guarantee the accuracy of any such forward-looking statements contained in this Form 10-Q, and we do not intend to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

For further information regarding risks and uncertainties associated with our business, and important factors that could cause our actual results to vary materially from those expressed or implied in such forward-looking statements, please refer to the factors listed and described under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the “Risk Factors” sections of the documents we file from time to time with the SEC, including, but not limited to, our Annual Report on Form 10-K for the year ended December 31, 2022, as filed with the SEC, as supplemented by the risk factors included in Part II, Item 1A of this Form 10-Q.

The information furnished in the accompanying unaudited consolidated balance sheets and related consolidated statements of operations, equity and temporary equity, and cash flows reflects all adjustments (consisting of normal and recurring adjustments) that are, in management’s opinion, necessary for a fair and consistent presentation of the aforementioned consolidated financial statements.

The accompanying consolidated financial statements should be read in conjunction with the notes to our consolidated financial statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in this report on Form 10-Q. The accompanying consolidated financial statements should also be read in conjunction with our consolidated financial statements and notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2022. Our results of operations for the three and ~~six~~nine months ended ~~June~~September 30, 2023 are not necessarily indicative of the operating results expected for the full year.


	June 30, 2023 (Unaudited)			December 31, 2022			September 30, 2023 (Unaudited)			December 31, 2022
ASSETS
Real estate facilities:
Land	$	16,908,000		$	16,908,000		$	16,908,000		$	16,908,000
Buildings		198,766,483			197,087,925			199,096,813			197,087,925
Site improvements		3,587,917			3,587,917			3,587,917			3,587,917
Furniture, fixtures and equipment		11,372,160			10,422,712			11,967,637			10,422,712
		230,634,560			228,006,554			231,560,367			228,006,554
Accumulated depreciation		(37,019,683	)		(33,485,918	)		(38,798,620	)		(33,485,918	)
		193,614,877			194,520,636			192,761,747			194,520,636
Construction in process		568,862			1,762,703			217,780			1,762,703
Total real estate facilities, net		194,183,739			196,283,339			192,979,527			196,283,339
Cash and cash equivalents		7,347,639			10,321,573			6,560,288			10,321,573
Restricted cash		2,941,341			2,223,036			3,233,764			2,223,036
Other assets		1,355,243			1,626,150			1,192,508			1,626,150
Total assets	$	205,827,962		$	210,454,098		$	203,966,087		$	210,454,098
LIABILITIES, TEMPORARY EQUITY, AND EQUITY
Debt, net	$	161,834,007		$	162,815,965		$	161,350,391		$	162,815,965
Accounts payable and accrued liabilities		3,737,041			3,676,672			4,154,745			3,676,672
Due to affiliates		14,301,755			13,084,087			14,986,070			13,084,087
Distributions payable		6,175,515			5,520,981			6,516,198			5,520,981
Total liabilities		186,048,318			185,097,705			187,007,404			185,097,705
Commitments and contingencies (Note 8)
Redeemable common stock		5,350,610			5,350,610			5,350,610			5,350,610
Preferred equity in our Operating Partnership		10,165,594			10,165,594			10,165,594			10,165,594
Equity:
Strategic Student & Senior Housing Trust, Inc. Equity:
Preferred stock, $0.001 par value; 200,000,000 shares authorized; none issued and outstanding at June 30, 2023 and December 31, 2022		—			—
Class A Common stock, $0.001 par value; 245,000,000 shares authorized; 11,632,930 and 11,630,430 shares issued and outstanding at June 30, 2023 and December 31, 2022 , respectively.		11,632			11,630
Class T Common stock, $0.001 par value; 115,000,000 shares authorized; 77,598 shares issued and outstanding at June 30, 2023 and December 31, 2022		78			78
Class W Common stock, $0.001 par value; 70,000,000 shares authorized; 85,548 shares issued and outstanding at June 30, 2023 and December 31, 2022		87			87
Class Y Common stock, $0.001 par value; 200,000,000 shares authorized; 1,123,349 shares issued and outstanding at June 30, 2023 and December 31, 2022		1,122			1,122
Class Z Common stock, $0.001 par value; 70,000,000 shares authorized; 166,494 shares issued and outstanding at June 30, 2023 and December 31, 2022		167			167
Preferred stock, $0.001 par value; 200,000,000 shares authorized; none issued and outstanding at September 30, 2023 and December 31, 2022								—			—
Class A Common stock, $0.001 par value; 245,000,000 shares authorized; 11,632,930 and 11,630,430 shares issued and outstanding at September 30, 2023 and December 31, 2022 , respectively.								11,632			11,630
Class T Common stock, $0.001 par value; 115,000,000 shares authorized; 77,598 shares issued and outstanding at September 30, 2023 and December 31, 2022								78			78
Class W Common stock, $0.001 par value; 70,000,000 shares authorized; 85,548 shares issued and outstanding at September 30, 2023 and December 31, 2022								87			87
Class Y Common stock, $0.001 par value; 200,000,000 shares authorized; 1,123,349 shares issued and outstanding at September 30, 2023 and December 31, 2022								1,122			1,122
Class Z Common stock, $0.001 par value; 70,000,000 shares authorized; 166,494 shares issued and outstanding at September 30, 2023 and December 31, 2022								167			167
Additional paid-in capital		97,721,391			97,715,025			97,725,291			97,715,025
Distributions		(17,722,288	)		(17,722,288	)		(17,722,288	)		(17,722,288	)
Accumulated deficit		(74,628,425	)		(69,056,360	)		(77,447,704	)		(69,056,360	)
Total Strategic Student & Senior Housing Trust, Inc. equity		5,383,764			10,949,461			2,568,385			10,949,461
Noncontrolling interests in our Operating Partnership		(1,120,324	)		(1,109,272	)		(1,125,906	)		(1,109,272	)
Total equity		4,263,440			9,840,189			1,442,479			9,840,189
Total liabilities, temporary equity, and equity	$	205,827,962		$	210,454,098		$	203,966,087		$	210,454,098


	Three Months Ended June 30,		Six Months Ended June 30,		Three Months Ended September 30,		Nine Months Ended September 30,
	2023	2022	2023	2022	2023	2022	2023	2022
Revenues:
Leasing and related revenues – student	$1,186,239	$1,055,296	$2,403,190	$2,253,206	$1,233,249	$1,066,139	$3,636,439	$3,319,345
Leasing and related revenues – senior	8,055,116	7,501,417	15,938,961	14,459,979	8,345,959	7,679,139	24,284,920	22,139,118
Total revenues	9,241,355	8,556,713	18,342,151	16,713,185	9,579,208	8,745,278	27,921,359	25,458,463
Operating expenses:
Property operating expenses – student	595,807	535,597	1,246,210	1,163,505	730,252	853,253	1,976,462	2,016,757
Property operating expenses – senior	5,714,029	5,276,026	11,452,572	10,489,220	6,073,124	5,457,439	17,525,697	15,946,660
Property operating expenses – affiliates	618,620	608,516	1,234,484	1,208,875	625,782	613,747	1,860,266	1,822,622
General and administrative	748,887	405,756	1,250,637	779,757	545,394	414,154	1,796,031	1,193,907
Depreciation	1,747,497	1,844,244	3,533,765	3,675,253	1,778,937	1,847,964	5,312,702	5,523,217
Total operating expenses	9,424,840	8,670,139	18,717,668	17,316,610	9,753,489	9,186,557	28,471,158	26,503,163
Gain on sale of real estate, net	—	—	—	12,101,937	—	—	—	12,101,937
Income (loss) from operations	(183,485)	(113,426)	(375,517)	11,498,512	(174,281)	(441,279)	(549,799)	11,057,237
Other income (expense):
Interest expense	(2,243,495)	(1,990,145)	(4,452,445)	(3,943,653)	(2,280,206)	(2,108,902)	(6,732,651)	(6,052,555)
Interest expense – debt issuance costs	(80,214)	(95,082)	(160,428)	(190,163)	(80,214)	(95,082)	(240,637)	(285,245)
Loss on extinguishment of debt	—	—	—	(1,985,602)	—	—	—	(1,985,602)
Other	58,861	12,001	59,808	581,469	50,523	37,095	110,327	618,561
Net income (loss)	(2,448,333)	(2,186,652)	(4,928,582)	5,960,563	(2,484,178)	(2,608,168)	(7,412,760)	3,352,396
Less: Distributions to preferred unitholders in our Operating Partnership	(331,681)	(310,577)	(654,534)	(612,558)	(340,683)	(319,348)	(995,217)	(931,906)
Net loss (income) attributable to the noncontrolling interests in our Operating Partnership	5,682	3,479	11,051	(10,477)	5,582	2,106	16,633	(8,372)
Net income (loss) attributable to Strategic Student & Senior Housing Trust, Inc. common stockholders	$(2,774,332)	$(2,493,750)	$(5,572,065)	$5,337,528	$(2,819,279)	$(2,925,410)	$(8,391,344)	$2,412,118
Net income (loss) per Class A share – basic	$(0.21)	$(0.19)	$(0.43)	$0.41	$(0.22)	$(0.22)	$(0.64)	$0.18
Net income (loss) per Class A share – diluted	$(0.21)	$(0.19)	$(0.43)	$0.41	$(0.22)	$(0.22)	$(0.64)	$0.18
Net income (loss) per Class T share – basic and diluted	$(0.21)	$(0.19)	$(0.43)	$0.41	$(0.22)	$(0.22)	$(0.64)	$0.18
Net income (loss) per Class W share – basic and diluted	$(0.21)	$(0.19)	$(0.43)	$0.41	$(0.22)	$(0.22)	$(0.64)	$0.18
Net income (loss) per Class Y share – basic and diluted	$(0.21)	$(0.19)	$(0.43)	$0.41	$(0.22)	$(0.22)	$(0.64)	$0.18
Net income (loss) per Class Z share – basic and diluted	$(0.21)	$(0.19)	$(0.43)	$0.41	$(0.22)	$(0.22)	$(0.64)	$0.18
Weighted average Class A shares outstanding – basic	11,624,757	11,621,295	11,624,470	11,620,865	11,626,680	11,624,180	11,625,215	11,621,982
Weighted average Class A shares outstanding – diluted	11,624,757	11,621,295	11,624,470	11,627,115	11,626,680	11,624,180	11,625,215	11,628,232
Weighted average Class T shares outstanding – basic and diluted	77,598	77,598	77,598	77,598	77,598	77,598	77,598	77,598
Weighted average Class W shares outstanding – basic and diluted	85,548	85,548	85,548	85,548	85,548	85,548	85,548	85,548
Weighted average Class Y shares outstanding – basic and diluted	1,123,349	1,123,349	1,123,349	1,123,349	1,123,349	1,123,349	1,123,349	1,123,349
Weighted average Class Z shares outstanding – basic and diluted	166,494	166,494	166,494	166,494	166,494	166,494	166,494	166,494


	Common Stock																		Common Stock
	Class A		Class T		Class W		Class Y		Class Z										Class A		Class T		Class W		Class Y		Class Z
	Number of Shares	Common Stock Par Value	Number of Shares	Common Stock Par Value	Number of Shares	Common Stock Par Value	Number of Shares	Common Stock Par Value	Number of Shares	Common Stock Par Value	Additional Paid-in Capital	Distributions	Accumulated Deficit	Total Strategic Student & Senior Housing Trust, Inc. Equity	Noncontrolling Interests in our Operating Partnership	Total Equity	Preferred Equity in our Operating Partnership	Redeemable Common Stock	Number of Shares	Common Stock Par Value	Number of Shares	Common Stock Par Value	Number of Shares	Common Stock Par Value	Number of Shares	Common Stock Par Value	Number of Shares	Common Stock Par Value	Additional Paid-in Capital	Distributions	Accumulated Deficit	Total Strategic Student & Senior Housing Trust, Inc. Equity	Noncontrolling Interests in our Operating Partnership	Total Equity	Preferred Equity in our Operating Partnership	Redeemable Common Stock
Balance as of December 31, 2021	11,627,930	$11,627	77,598	$78	85,548	$87	1,123,349	$1,122	166,494	$167	$97,700,779	$(17,199,735)	$(68,522,116)	$11,992,009	$(1,111,213)	$10,880,796	$10,165,594	$5,350,610	11,627,930	$11,627	77,598	$78	85,548	$87	1,123,349	$1,122	166,494	$167	$97,700,779	$(17,199,735)	$(68,522,116)	$11,992,009	$(1,111,213)	$10,880,796	$10,165,594	$5,350,610
Distributions to preferred unitholders in our Operating Partnership	—																(301,981)	—	—																(301,981)	—
Stock based compensation expense	—										2,966	—		2,966	—	2,966	—		—										2,966	—		2,966	—	2,966	—
Net income attributable to Strategic Student & Senior Housing Trust, Inc.	—												7,831,278		—	7,831,278	301,981	—	—												7,831,278		—	7,831,278	301,981	—
Net income attributable to the noncontrolling interests in our Operating Partnership	—														13,957		—		—														13,957		—
Balance as of March 31, 2022	11,627,930	11,627	77,598	78	85,548	87	1,123,349	1,122	166,494	167	97,703,745	(17,199,735)	(60,690,838)	19,826,253	(1,097,256)	18,728,997	10,165,594	5,350,610	11,627,930	11,627	77,598	78	85,548	87	1,123,349	1,122	166,494	167	97,703,745	(17,199,735)	(60,690,838)	19,826,253	(1,097,256)	18,728,997	10,165,594	5,350,610
Issuance of Restricted stock	2,500	3	—											3	—	3	—		2,500	3	—											3	—	3	—
Distributions to preferred unitholders in our Operating Partnership	—																(310,577)	—	—																(310,577)	—
Stock based compensation expense	—										3,535	—		3,535	—	3,535	—		—										3,535	—		3,535	—	3,535	—
Net loss attributable to Strategic Student & Senior Housing Trust, Inc.	—												(2,493,750)		—	(2,493,750)	310,577	—	—												(2,493,750)		—	(2,493,750)	310,577	—
Net loss attributable to the noncontrolling interests in our Operating Partnership	—														(3,479)		—		—														(3,479)		—
Balance as of June 30, 2022	11,630,430	$11,630	77,598	$78	85,548	$87	1,123,349	$1,122	166,494	$167	$97,707,280	$(17,199,735)	$(63,184,588)	$17,336,041	$(1,100,735)	$16,235,306	$10,165,594	$5,350,610	11,630,430	11,630	77,598	78	85,548	87	1,123,349	1,122	166,494	167	97,707,280	(17,199,735)	(63,184,588)	17,336,041	(1,100,735)	16,235,306	10,165,594	5,350,610
Distributions to preferred unitholders in our Operating Partnership																			—																(319,348)	—
Stock based compensation expense																			—										3,911	—		3,911	—	3,911	—
Net loss attributable to Strategic Student & Senior Housing Trust, Inc.																			—												(2,925,410)		—	(2,925,410)	319,348	—
Net loss attributable to the noncontrolling interests in our Operating Partnership																			—														(2,106)		—
Balance as of September 30, 2022																			11,630,430	$11,630	77,598	$78	85,548	$87	1,123,349	$1,122	166,494	$167	$97,711,191	$(17,199,735)	$(66,109,998)	$14,414,542	$(1,102,841)	$13,311,701	$10,165,594	$5,350,610


	Common Stock																		Common Stock
	Class A		Class T		Class W		Class Y		Class Z										Class A		Class T		Class W		Class Y		Class Z
	Number of Shares	Common Stock Par Value	Number of Shares	Common Stock Par Value	Number of Shares	Common Stock Par Value	Number of Shares	Common Stock Par Value	Number of Shares	Common Stock Par Value	Additional Paid-in Capital	Distributions	Accumulated Deficit	Total Strategic Student & Senior Housing Trust, Inc. Equity	Noncontrolling Interests in our Operating Partnership	Total Equity	Preferred Equity in our Operating Partnership	Redeemable Common Stock	Number of Shares	Common Stock Par Value	Number of Shares	Common Stock Par Value	Number of Shares	Common Stock Par Value	Number of Shares	Common Stock Par Value	Number of Shares	Common Stock Par Value	Additional Paid-in Capital	Distributions	Accumulated Deficit	Total Strategic Student & Senior Housing Trust, Inc. Equity	Noncontrolling Interests in our Operating Partnership	Total Equity	Preferred Equity in our Operating Partnership	Redeemable Common Stock
Balance as of December 31, 2022	11,630,430	$11,630	77,598	$78	85,548	$87	1,123,349	$1,122	166,494	$167	$97,715,025	$(17,722,288)	$(69,056,360)	$10,949,461	$(1,109,272)	$9,840,189	$10,165,594	$5,350,610	11,630,430	$11,630	77,598	$78	85,548	$87	1,123,349	$1,122	166,494	$167	$97,715,025	$(17,722,288)	$(69,056,360)	$10,949,461	$(1,109,272)	$9,840,189	$10,165,594	$5,350,610
Distributions to preferred unitholders in our Operating Partnership	—																(322,853)	—	—																(322,853)	—
Stock based compensation expense	—										2,835	—		2,835	—	2,835	—		—										2,835	—		2,835	—	2,835	—
Net loss attributable to Strategic Student & Senior Housing Trust, Inc.	—												(2,797,733)		—	(2,797,733)	322,853	—	—												(2,797,733)		—	(2,797,733)	322,853	—
Net loss attributable to the noncontrolling interests in our Operating Partnership	—														(5,370)		—		—														(5,370)		—
Balance as of March 31, 2023	11,630,430	11,630	77,598	78	85,548	87	1,123,349	1,122	166,494	167	97,717,860	(17,722,288)	(71,854,093)	8,154,563	(1,114,642)	7,039,921	10,165,594	5,350,610	11,630,430	11,630	77,598	78	85,548	87	1,123,349	1,122	166,494	167	97,717,860	(17,722,288)	(71,854,093)	8,154,563	(1,114,642)	7,039,921	10,165,594	5,350,610
Issuance of Restricted stock	2,500	2		—										2	—	2	—		2,500	2		—										2	—	2	—
Distributions to preferred unitholders in our Operating Partnership	—																(331,681)	—	—																(331,681)	—
Stock based compensation expense	—										3,531	—		3,531	—	3,531	—		—										3,531	—		3,531	—	3,531	—
Net loss attributable to Strategic Student & Senior Housing Trust, Inc.	—												(2,774,332)		—	(2,774,332)	331,681	—	—												(2,774,332)		—	(2,774,332)	331,681	—
Net loss attributable to the noncontrolling interests in our Operating Partnership	—														(5,682)		—		—														(5,682)		—
Balance as of June 30, 2023	11,632,930	$11,632	77,598	$78	85,548	$87	1,123,349	$1,122	166,494	$167	$97,721,391	$(17,722,288)	$(74,628,425)	$5,383,764	$(1,120,324)	$4,263,440	$10,165,594	$5,350,610	11,632,930	11,632	77,598	78	85,548	87	1,123,349	1,122	166,494	167	97,721,391	(17,722,288)	(74,628,425)	5,383,764	(1,120,324)	4,263,440	10,165,594	5,350,610
Distributions to preferred unitholders in our Operating Partnership																			—																(340,683)	—
Stock based compensation expense																			—										3,900	—		3,900	—	3,900	—
Net loss attributable to Strategic Student & Senior Housing Trust, Inc.																			—												(2,819,279)		—	(2,819,279)	340,683	—
Net loss attributable to the noncontrolling interests in our Operating Partnership																			—														(5,582)		—
Balance as of September 30, 2023																			11,632,930	$11,632	77,598	$78	85,548	$87	1,123,349	$1,122	166,494	$167	$97,725,291	$(17,722,288)	$(77,447,704)	$2,568,385	$(1,125,906)	$1,442,479	$10,165,594	$5,350,610


	Six Months Ended June 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Cash flows from operating activities:
Net income (loss)	$	(4,928,582	)	$	5,960,563
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
Net (loss) income							$	(7,412,760	)	$	3,352,396
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities:
Depreciation		3,533,765			3,675,253			5,312,702			5,523,217
Amortization of debt issuance costs		160,428			190,163			240,637			285,245
Stock based compensation expense related to issuance of restricted stock		6,366			6,501			10,266			10,412
Loss on extinguishment of debt		—			1,985,602			—			1,985,602
Gain on sale of real estate, net		—			(12,101,937	)		—			(12,101,937	)
Gain on equity method investment		—			(573,430	)		—			(573,430	)
Increase (decrease) in cash, cash equivalents, and restricted cash from changes in assets and liabilities:
Other assets		270,908			202,021			433,642			54,187
Accounts payable and accrued liabilities		667,769			344,327			868,142			493,293
Due to affiliates		1,217,667			178,090			1,901,983			791,228
Net cash provided by (used in) operating activities		928,321			(132,847	)		1,354,612			(179,787	)
Cash flows from investing activities:
Additions to real estate		(2,041,568	)		(905,447	)		(2,398,958	)		(1,984,200	)
Net proceeds from sale of real estate		—			48,503,131			—			48,503,131
Distributions of capital from equity method investment		—			979,131			—			979,131
Net cash (used in) provided by investing activities		(2,041,568	)		48,576,815			(2,398,958	)		47,498,062
Cash flows from financing activities:
Principal payments of KeyBank Bridge Loans		(300,000	)		(17,000,000	)		(450,000	)		(17,000,000	)
Repayment of Tallahassee Nationwide mortgage loan		—			(23,500,000	)		—			(23,500,000	)
Scheduled principal payments of mortgage loans		(842,382	)		(708,061	)		(1,256,211	)		(1,028,787	)
Net cash used in financing activities		(1,142,382	)		(41,208,061	)		(1,706,211	)		(41,528,787	)
Net change in cash, cash equivalents, and restricted cash		(2,255,629	)		7,235,907			(2,750,557	)		5,789,488
Cash, cash equivalents, and restricted cash, beginning of period		12,544,609			9,884,580			12,544,609			9,884,580
Cash, cash equivalents, and restricted cash, end of period	$	10,288,980		$	17,120,487		$	9,794,052		$	15,674,068
Supplemental disclosures and non-cash transactions:
Cash paid for interest	$	4,460,589		$	4,006,047		$	6,738,061		$	6,083,984
Additions to real estate facilities and construction in process included in accounts payable and accrued liabilities	$	236,062		$	15,433		$	18,727		$	28,983
Distributions payable to preferred unit holders in our Operating Partnership	$	654,534		$	612,558		$	995,217		$	931,906

Note 1. Organization

Strategic Student & Senior Housing Trust, Inc., a Maryland corporation, was formed on October 4, 2016 under the Maryland General Corporation Law for the purpose of engaging in the business of investing in student housing and senior housing real estate investments. The Company’s year-end is December 31. As used in these consolidated financial statements, “we,” “us,” “our,” and “Company” refer to Strategic Student & Senior Housing Trust, Inc. and each of our subsidiaries.

Offering Related

On October 4, 2016, our Advisor, as defined below, acquired 111.11 shares of our common stock for $1,000 and became our initial stockholder. On January 27, 2017, pursuant to a confidential private placement memorandum (the “Private Placement Memorandum”), we commenced a private offering of up to $100,000,000 in shares of our common stock (the “Primary Private Offering”) and 1,000,000 shares of common stock pursuant to our distribution reinvestment plan (collectively, the “Private Offering” and together with the Public Offering described below, the “Offerings”). The Private Offering required a minimum offering amount of $1,000,000. On August 4, 2017, we met such minimum offering requirement. Our Private Offering terminated on March 15, 2018. We raised offering proceeds of approximately $91.5 million from the issuance of approximately 10.7 million shares pursuant to the Private Offering.

On May 1, 2018, our registration statement on Form S-11 (File No. 333-220646) (the “Registration Statement”) was declared effective by the U.S. Securities and Exchange Commission (the “SEC”). The Registration Statement registered up to $1.0 billion in shares of common stock for sale to the public (the “Primary Offering”) consisting of three classes of shares — Class A shares, Class T shares, and Class W ~~shares—~~shares — and up to $95,000,000 in shares of common stock for sale pursuant to our distribution reinvestment plan (together with the Primary Offering, the “Public Offering”). Concurrently with our Registration Statement being declared effective, we filed articles of amendment to our charter and articles supplementary to our charter. As a result, all shares issued in our Private Offering were redesignated as Class A shares and the authorized shares under our charter were reclassified among Class A shares and two new classes of shares, Class T shares and Class W shares.

On June 21, 2019, we suspended the sale of Class A shares, Class T shares, and Class W shares in the Primary Offering and filed a post-effective amendment to our Registration Statement to register two new classes of common stock (Class Y shares and Class Z)Z shares) with the SEC. On July 10, 2019, the amendment to our Registration Statement was declared effective by the SEC. Also on July 10, 2019, we filed articles supplementary to our charter which reclassified certain authorized and unissued shares of our common stock into Class Y shares and Class Z shares. Effective as of July 10, 2019, we began offering Class Y shares (up to $700 million in shares) and Class Z shares (up to $300 million in shares) in our Primary Offering. The Class Y shares and Class Z shares have similar voting rights and rights upon liquidation to the Class A shares, Class T shares, and Class W shares, although distributions are expected to differ because of the stockholder servicing fee associated with the Class Y shares and the dealer manager servicing fee associated with the Class Z shares. Through our Primary Offering, we raised offering proceeds of approximately $17.1 million from the issuance of approximately 362,000 Class A shares, approximately 70,000 Class T shares, approximately 83,000 Class W shares, approximately 1.1 million Class Y shares, and approximately 165,000 Class Z shares. On March 30, 2020, our board of directors approved the suspension of our distributions which included the distribution reinvestment plan and no shares have been issued subsequently. Through our distribution reinvestment plan, we have issued approximately 610,000 Class A shares, approximately 8,000 Class T shares, approximately 3,000 Class W shares, approximately 10,000 Class Y shares, and approximately 1,000 Class Z shares for gross proceeds of approximately $5.7 million.

On March 30, 2020, our board of directors approved the suspension of the Primary Offering based upon various factors, including the uncertainty relating to the novel coronavirus (“COVID-19”) pandemic and its potential impact on us and our overall financial results. Our board of directors also approved the suspension of our share redemption program (see Note 8 – Commitments and Contingencies for additional detail) and the suspension of distributions to our stockholders both of which remain suspended as of ~~June~~September 30, 2023. The termination of our Primary Offering occurred on May 1, 2021. Primarily as a result of the termination of our Primary Offering, we currently do not have the equity capital needed to acquire additional properties at this time and we are focusing our efforts on managing our existing properties. Subsequent to March 31, 2020, no sales were made pursuant to the Primary Offering.

STRATEGIC STUDENT & SENIOR HOUSING TRUST, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023

(Unaudited)

shares, and Class Z shares based on the estimated value of our assets less the estimated value of our liabilities, or net asset value, divided by the number of shares outstanding on an adjusted fully diluted basis, calculated as of September 30, 2022.

~~STRATEGIC STUDENT & SENIOR HOUSING TRUST, INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~June 30, 2023~~

~~(Unaudited)~~

As of ~~June~~September 30, 2023, we owned one student housing property and four senior housing properties.

Our operating partnership, SSSHT Operating Partnership, L.P., a Delaware limited partnership (our “Operating Partnership”), was formed on October 5, 2016. On October 5, 2016, our Advisor acquired a limited partnership interest in our Operating Partnership for $1,000 (111.11 partnership units) and we contributed the initial $1,000 capital contribution to our Operating Partnership in exchange for the general partner interest. In addition, on September 28, 2017, our Advisor acquired additional limited partnership interests (25,447.57 partnership units) in our Operating Partnership for $199,000, resulting in total capital contributions of $200,000 by our Advisor in our Operating Partnership. Our Operating Partnership owns, directly or indirectly through one or more special purpose entities, all of our student housing and senior housing properties. As of ~~June~~September 30, 2023, we owned approximately 99.8% of the common units of limited partnership interest of our Operating Partnership. The remaining approximately 0.2% of the common units are owned by our Advisor. We will conduct certain activities directly or indirectly through our taxable REIT subsidiary, SSSHT TRS, Inc., a Delaware corporation (the “TRS”) which was formed on October 6, 2016, and is a wholly owned subsidiary of our Operating Partnership. See Note 5 – Preferred Equity in our Operating Partnership.

Other Corporate History

Strategic Asset Management I, LLC (f/k/a SmartStop Asset Management, LLC), a Delaware limited liability company organized in 2013 (our “Sponsor”), was the sponsor of our Offerings. Our Sponsor provides real estate advisory, asset management, and property management services. In June 2019, our Sponsor entered into a series of transactions with SmartStop Self Storage REIT, Inc. (f/k/a Strategic Storage Trust II, Inc.) (“SmartStop”) in which SmartStop acquired the self storage advisory, asset management, property management, investment management, and certain joint venture interests of our Sponsor. As a result of the transactions, our Sponsor and its subsidiaries own limited partnership units in the operating partnership of SmartStop, and our Sponsor is now focused primarily on student and senior housing. Our Sponsor owns approximately 97.5% of the economic interests (and 100% of the voting membership interests) of our Advisor and owns 100% of our Property Manager, each as defined below.

We have no employees. Our advisor is SSSHT Advisor, LLC, a Delaware limited liability company (our “Advisor”), which was formed on October 3, 2016. The majority of the officers of our Advisor are also officers of us and our Sponsor. Our Advisor is responsible for managing our affairs on a day-to-day basis and identifying and making acquisitions and investments on our behalf under the terms of the Advisory Agreement, as defined elsewhere herein. Please see Note 7 – Related Party Transactions for additional detail.

SSSHT Property Management, LLC, a Delaware limited liability company (our “Property Manager”), was formed on October 3, 2016. Our Property Manager derives substantially all of its income from the property management oversight services it performs for us. We have entered into property management agreements directly with third party property managers and our Property Manager provides oversight services with respect to such third party property managers. Please see Note 7 – Related Party Transactions for additional detail.

Our student housing property is managed by a third-party student housing property manager. Our senior housing properties are managed by third-party senior living operators. Please see Note 8 – Commitments and Contingencies for additional detail.

Our dealer manager was Select Capital Corporation, a California corporation (our “Former Dealer Manager”). We terminated the Dealer Management Agreement on June 16, 2020 in accordance with its provisions. Our Former Dealer Manager was responsible for marketing our shares offered pursuant to our offerings. Our Sponsor previously owned, through a wholly-owned limited liability company, a 15% non-voting equity interest in our Former Dealer Manager. Affiliates of our Former Dealer Manager own a 2.5% non-voting membership interest in our Advisor, which they acquired on January 1, 2018. Please see Note 7 – Related Party Transactions for additional detail.

Our Sponsor owns 100% of the membership interests of Strategic Transfer Agent Services, LLC, our transfer agent (our “Transfer Agent”). Our Transfer Agent provides transfer agent and registrar services to us that are substantially similar to what a third party transfer agent would provide in the ordinary course of performing its functions as a transfer agent. Please see Note 7 – Related Party Transactions for additional detail. Prior to May 1, 2018, our Advisor provided services on our behalf similar to those provided by our Transfer Agent.

STRATEGIC STUDENT & SENIOR HOUSING TRUST, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023

(Unaudited)

As we accepted subscriptions for shares of our common stock, we transferred all of the net offering proceeds to our Operating Partnership as capital contributions in exchange for additional limited partnership units in our Operating Partnership. However, we were deemed to have made capital contributions in the amount of gross proceeds received from

~~STRATEGIC STUDENT & SENIOR HOUSING TRUST, INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~June 30, 2023~~

~~(Unaudited)~~

investors, and our Operating Partnership was deemed to have simultaneously paid the sales commissions and other costs associated with the Offering. In addition, our Operating Partnership is structured to make distributions with respect to limited partnership units that are equivalent to the distributions we make to stockholders. Finally, a limited partner in our Operating Partnership may later exchange his or her limited partnership units in our Operating Partnership for shares of our common stock at any time after one year following the date of issuance of their limited partnership units, subject to certain restrictions outlined in the limited partnership agreement of our Operating Partnership (the “Operating Partnership Agreement”). Our Advisor is prohibited from exchanging or otherwise transferring its limited partnership units so long as it is acting as our Advisor pursuant to our Advisory Agreement.

Note 2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) as contained within the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) and the rules and regulations of the SEC.

Principles of Consolidation

Our financial statements, and the financial statements of our Operating Partnership, including its wholly-owned subsidiaries, are consolidated in the accompanying consolidated financial statements. The portion of these consolidated entities not wholly-owned by us is presented as noncontrolling interests. All intercompany accounts and transactions have been eliminated in consolidation.

Consolidation Considerations

Current accounting guidance provides a framework for identifying a variable interest entity (“VIE”) and determining when a company should include the assets, liabilities, noncontrolling interests, and results of activities of a VIE in its consolidated financial statements. In general, a VIE is an entity or other legal structure used to conduct activities or hold assets that either (1) has an insufficient amount of equity to carry out its principal activities without additional subordinated financial support, (2) has a group of equity owners that are unable to make significant decisions about its activities, or (3) has a group of equity owners that do not have the obligation to absorb losses or the right to receive returns generated by its operations. Generally, a VIE should be consolidated if a party with an ownership, contractual, or other financial interest in the VIE (a variable interest holder) has the power to direct the VIE’s most significant activities and the obligation to absorb losses or right to receive benefits of the VIE that could be significant to the VIE. A variable interest holder that consolidates the VIE is called the primary beneficiary. Upon consolidation, the primary beneficiary generally must initially record all of the VIE’s assets, liabilities, and noncontrolling interest at fair value and subsequently account for the VIE as if it were consolidated based on majority voting interest. Our Operating Partnership is deemed to be a VIE and is consolidated by the Company as the primary beneficiary. As of ~~June~~September 30, 2023, we had not entered into other contracts/interests that would be deemed to be variable interests in a VIE.

STRATEGIC STUDENT & SENIOR HOUSING TRUST, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~June~~September 30, 2023

(Unaudited)

Noncontrolling Interest in Consolidated Entities

We account for the noncontrolling interest in our Operating Partnership in accordance with the related accounting guidance. Due to our control through our general partnership interest in our Operating Partnership and the limited rights of the limited partners, our Operating Partnership, including its wholly-owned subsidiaries, is consolidated by the Company and the limited partner interest is reflected as a noncontrolling interest in the accompanying consolidated balance sheets. The noncontrolling interest shall be attributed its share of income and losses, even if that attribution results in a deficit noncontrolling interest balance.

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. The current economic environment has increased the degree of uncertainty inherent in these estimates and assumptions. Management will adjust such estimates when facts and circumstances dictate. Actual results could materially differ from those estimates. The most significant estimates made include the allocation of property purchase price to tangible and intangible assets acquired and liabilities assumed at relative fair value, the determination if certain entities should be consolidated, the evaluation of potential impairment of long-lived assets, and the estimated useful lives of real estate assets and intangibles.

Cash and Cash Equivalents

We consider all short-term, highly liquid investments that are readily convertible to cash with a maturity of three months or less at the time of purchase to be cash equivalents.

We may maintain cash and cash equivalents in financial institutions in excess of insured limits, but believe this risk will be mitigated by only investing in or through major financial institutions.

Restricted Cash

Restricted cash consists primarily of impound reserve accounts for property taxes, insurance, and capital improvements in connection with the requirements of certain of our loan agreements.

Real Estate Purchase Price Allocation

We account for acquisitions in accordance with GAAP which requires that we allocate the purchase price of a property to the tangible and intangible assets acquired and the liabilities assumed based on their relative fair values. This guidance requires us to make significant estimates and assumptions, including fair value estimates, which requires the use of significant unobservable inputs as of the acquisition date.

The value of the tangible assets, consisting of land and buildings, is determined as if vacant. Substantially all of the leases in place at acquired properties are at market rates, as the majority of the leases are one year or less. We also consider whether in-place, market leases represent an intangible asset. We do not expect to have intangible assets for the value of tenant relationships.

Acquisitions of portfolios of properties are allocated to the individual properties based upon an income approach or a cash flow analysis using appropriate risk adjusted capitalization rates which take into account the relative size, age, and location of the individual property along with current and projected occupancy and rental rate levels or appraised values, if available.

Acquisitions of integrated sets of assets and activities that do not meet the definition of a business, as defined under current GAAP, are accounted for as asset acquisitions. Accordingly, once an acquisition is deemed probable, transaction costs are capitalized rather than expensed.

During the ~~six~~nine months ended ~~June~~September 30, 2023 and 2022, we did not acquire any properties or incur any acquisition-related transaction costs.

STRATEGIC STUDENT & SENIOR HOUSING TRUST, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~June~~September 30, 2023

(Unaudited)

Real Estate Held for Sale

We consider real estate to be “held for sale” when the following criteria are met: (i) management commits to a plan to sell the property, (ii) the property is available for sale immediately, (iii) the property is actively being marketed for sale at a price that is reasonable in relation to its current fair value, (iv) the sale of the property within one year is considered probable and (v) significant changes to the plan to sell are not expected. Real estate that is held for sale and its related debt are classified as “real estate held for sale” and "debt related to real estate held for sale," respectively, in the period when all criteria are met in the accompanying consolidated financial statements. Real estate classified as held for sale is no longer depreciated and is reported at the lower of its carrying value or its estimated fair value less estimated costs to sell. Operating results and related gains (losses) on sale of properties that were disposed of or classified as held for sale in the ordinary course of business are included in continuing operations on the Company’s consolidated statements of operations, consistent with current accounting guidance.

Evaluation of Possible Impairment of Long-Lived Assets

Management monitors events and changes in circumstances that could indicate that the carrying amounts of our long-lived assets, including any that may be held through joint ventures, may not be recoverable. When indicators of potential impairment are present that indicate that the carrying amounts of the assets may not be recoverable, we will assess the recoverability of the assets by determining whether the carrying value of the long-lived assets will be recovered through the undiscounted future operating cash flows expected from the use of the asset and its eventual disposition. In the event that such expected undiscounted future cash flows do not exceed the carrying value, we will adjust the value of the long-lived assets to the fair value and recognize an impairment loss. During the ~~six~~nine months ended ~~June~~September 30, 2023 and 2022, no impairment losses were recognized.

Revenue Recognition and Accounts Receivable

Our student housing property is typically leased by the bed with fixed terms on an individual lease basis, often with parental guarantees. Substantially all of our leases coincide with the university’s academic year but generally commence in August and terminate in July. We bill residents on a monthly basis, which is generally due at the beginning of the month. Residents have access to their units along with the property’s amenities (i.e. study rooms, exercise facilities, common areas, etc.). The units are generally fully equipped (i.e., kitchen facilities, washer/dryer, etc.). We do not provide any food or other similar services.

Our senior housing properties are generally leased by the unit, pursuant to a resident lease agreement with fixed terms. Such agreements generally have an initial term of no more than 12 months, but are cancellable with 30 days’ notice. Included in the base monthly lease fee are standard items (i.e., living accommodations, food services, activity programs, concierge services, care services, etc.). We bill on a monthly basis, which is generally due at the beginning of the month.

Additionally, at our senior housing properties our managers provide certain ancillary services to residents that are not contemplated in the lease agreement with each resident (primarily community fees and to a lesser extent guest meals, etc.). These services are provided and paid for in addition to the standard items included in each resident lease. Such items are billed on a monthly basis and are generally due at the beginning of the month.

The majority of our revenues are derived from lease and lease related revenues, and the majority of such revenue is not subject to the revenue recognition guidance (“ASC Topic 606”) under GAAP. The revenues derived from our leases are accounted for pursuant to ASU 2016-02, ~~“Leases (ASC~~“(Leases ASC Topic 842).”

STRATEGIC STUDENT & SENIOR HOUSING TRUST, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~June~~September 30, 2023

(Unaudited)

Additionally, we have elected to adopt a practical expedient not to separate lease and nonlease components, which can only be applied to leasing arrangements for which (i) the timing and pattern of transfer are the same for the lease and nonlease components and (ii) the lease component, if accounted for separately, would be classified as an operating lease. Under this practical expedient, contracts that are predominantly lease-based would be accounted for under ASC Topic 842, and contracts that are predominantly service-based would be accounted for under ASC Topic 606. Lease and nonlease revenue components that are accounted for within the scope of ASC Topic 842 are:

•

Student leasing revenues recognized on a straight-line basis over the term of the contract. Other lease related revenues recognized in the period earned.

•

Senior lease revenues are recorded monthly pursuant to the agreements with our residents. The majority of such revenue is attributable to the portion of the base monthly lease fee related to the non-service component of the lease. The service component of the base monthly lease fee is also recognized pursuant to ASC Topic 842 as they are not the predominate component, the service timing and pattern of the service components are the same as the lease component, and the lease component, if separately accounted for, would be classified as an operating lease.

Our revenues that are within the scope of ASC Topic 606 are:

•

The revenue from the ancillary services provided at our senior housing properties are recognized monthly as the performance obligation related to those services is completed. For ~~each of~~ the three ~~and six~~ months ended ~~June~~September 30, 2023 and 2022, revenues totaling approximately $0.1 million and $0.2 million, respectively, are included in "Leasing and related revenues - senior". For the nine months ended September 30, 2023 and 2022, revenues totaling approximately $0.5 million and $0.6 million, respectively, are included in "Leasing and related revenues - senior".

If we determine that a receivable is not probable of being substantially collected, we adjust the amount of leasing and related revenues recorded related to such tenant and recognize future revenues for such tenant on a cash basis.

STRATEGIC STUDENT & SENIOR HOUSING TRUST, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023

(Unaudited)

Allowance for Doubtful Accounts

Tenant accounts receivable is reported net of an allowance for doubtful accounts, in the accompanying consolidated balance sheets in other assets. Management records this general reserve estimate based upon a review of the current status of accounts receivable. It is reasonably possible that management’s estimate of the allowance will change in the future. As of ~~both June~~September 30, 2023 and December 31, 2022, approximately $~~0.1~~50,000 ~~million~~and $70,000, respectively was recorded to allowance for doubtful accounts.

Advertising Costs

Advertising costs are included in property operating expenses, in the accompanying consolidated statements of operations. These costs are expensed in the period in which the cost is incurred. The Company incurred advertising costs of approximately $~~0.4~~ ~~million and $0.5~~0.7 million during each of the ~~six~~nine months ended ~~June~~September 30, 2023 and ~~2022, respectively.~~2022.

Real Estate Properties

Real estate properties are recorded based upon relative fair values as of the date of acquisition. We capitalize costs incurred to renovate and improve properties, including interest and property taxes incurred during the construction period. The construction period begins when expenditures for the real estate assets have been made and activities that are necessary to prepare the asset for its intended use are in progress. The construction period ends when the asset is substantially complete and ready for its intended use. The costs of ordinary repairs and maintenance are charged to operations when incurred.

Depreciation of Real Property Assets

Our management is required to make subjective assessments as to the useful lives of our depreciable assets. We consider the period of future benefit of the asset to determine the appropriate useful lives.

Depreciation of our real property assets is charged to expense on a straight-line basis over the estimated useful lives as follows:


Description		Standard Depreciable Life
Land		Not Depreciated
Buildings		40 years
Site Improvements		7 to 10 years

~~STRATEGIC STUDENT & SENIOR HOUSING TRUST, INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~June 30, 2023~~

~~(Unaudited)~~

Depreciation of Furniture, Fixtures and Equipment

Furniture, fixtures and equipment are depreciated on a straight-line basis over the estimated useful lives generally ranging from 3 to 7 years.

Intangible Assets

We allocate a portion of our real estate purchase price to in-place leases. We amortize in-place lease intangibles on a straight-line basis over the estimated future benefit period. As of both ~~June~~September 30, 2023 and December 31, 2022, the gross amount allocated to in-place leases was approximately $19.6 million, and accumulated amortization of in-place lease intangibles totaled approximately $19.6 million for both periods.

Debt Issuance Costs

The net carrying value of costs incurred in connection with obtaining non-revolving financing are presented on the consolidated balance sheets as a deduction from the related debt and such amounts totaled approximately $~~0.9~~0.8 million as of ~~June~~September 30, 2023 and $1.0 million as of December 31, 2022.

STRATEGIC STUDENT & SENIOR HOUSING TRUST, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023

(Unaudited)

Organization and Offering Costs

Our Advisor funded organization and offering costs on our behalf. We are required to reimburse our Advisor for such organization and offering costs; provided, however, our Advisor funded, and was not reimbursed for 1.0% of the gross offering proceeds from the sale of Class W shares towards payment of organization and offering expenses, which we recognized as a capital contribution from our Advisor. Additionally, our Advisor funded, and was not reimbursed for organization and offering costs up to an amount equal to 1.0% of the gross offering proceeds from the sale of Class Y shares and Class Z shares sold in our Public Offering, which we recognized as a capital contribution from our Advisor.

Our Advisor must reimburse us within 60 days after the end of the month in which the Public Offering terminated to the extent organization and offering expenses incurred in good faith in connection with the sale of Class Y shares and Class Z shares exceed the 1.0% estimate being funded by the Advisor. Conversely, must reimburse our Advisor within 60 days after the end of the month in which the Public Offering terminated to the extent such organization and offering expenses are less than the 1.0% estimate being funded by the Advisor. If at any point in time we determine that the organization and offering costs incurred in connection with the sale of Class Y shares and Class Z shares are expected to exceed 1.0% of the gross proceeds anticipated to be received from the sale of such shares, we will recognize such excess as a receivable from our Advisor and a corresponding capital contribution from our Advisor. If we determine that the organization and offering costs incurred in connection with the sale of Class Y shares and Class Z shares are expected to be less than 1.0% of the gross proceeds anticipated to be received from the sale of such shares, we will recognize such difference as a payable to our Advisor and a reduction of additional paid-in capital. Offering costs associated with the Primary Offering were recorded as an offset to additional paid-in capital, and organization costs were recorded in general and administrative expenses. Subsequent to the termination of our Public Offering on May 1, 2021, no adjustment was required.

In connection with our Primary Offering, our Former Dealer Manager received an upfront sales commission and dealer manager fee based upon the share class sold under the terms of the Dealer Manager Agreement, which are recorded as a reduction to additional paid-in capital as an offering cost. Our Advisor agreed to fund the payment of the upfront 3.0% sales commission and the upfront 3.0% dealer manager fee for the sale of Class Y shares sold in the Primary Offering, which we recognized as a capital contribution from our Advisor.

In addition, our Former Dealer Manager also received an ongoing stockholder servicing fee and ongoing dealer manager fee for certain classes of our common stock, subject to certain limitations. We record a liability within due to affiliates and a reduction to additional paid-in capital at the time of sale of the Class T, Class W, Class Y, and Class Z shares for the future estimated ongoing stockholder and dealer manager servicing fees. Please see Note 7 – Related Party Transactions – Dealer Manager Agreements for additional details about such commissions and fees.

~~STRATEGIC STUDENT & SENIOR HOUSING TRUST, INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~June 30, 2023~~

~~(Unaudited)~~

Redeemable Common Stock

In connection with the Private Offering, we adopted a share redemption program (the “Private Offering Share Redemption Program”) that enabled stockholders to sell their shares to us in limited circumstances, and in connection with the Public Offering, we amended the Private Offering Share Redemption Program (the “Share Redemption Program”). On March 30, 2020, our board of directors approved the suspension of our Share Redemption Program. Please see Note 8 – Commitments and Contingencies – Share Redemption Program for additional details.

In general, we record amounts that are redeemable under the Share Redemption Program as redeemable common stock in the accompanying consolidated balance sheets since the shares are redeemable at the option of the holder and therefore their redemption is outside our control. The maximum amount redeemable under the Share Redemption Program will be limited to the number of shares we could repurchase with the amount of the net proceeds from the sale of shares under the Distribution Reinvestment Plan. However, accounting guidance states that determinable amounts that can become redeemable should be presented as redeemable when such amount is known. Therefore, the net proceeds from the Distribution Reinvestment Plan are considered to be temporary equity and are presented as redeemable common stock in our consolidated balance sheets. In addition, current accounting guidance requires, among other things, that financial instruments that represent a mandatory obligation of us to repurchase shares be classified as liabilities and reported at settlement value. Our redeemable common stock is contingently redeemable at the option of the holder. When we determine we have a mandatory obligation to repurchase shares under the Share Redemption Program, we reclassify such obligations from temporary equity to a liability based upon their respective settlement values.

STRATEGIC STUDENT & SENIOR HOUSING TRUST, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023

(Unaudited)

Accounting for Equity Awards

The cost of restricted stock is required to be measured based on the grant date fair value, the cost is recognized over the relevant service period, and we have elected to record forfeitures as they occur.

Fair Value Measurements

The accounting standard for fair value measurements and disclosures defines fair value, establishes a framework for measuring fair value, and provides for expanded disclosure about fair value measurements. Fair value is defined by the accounting standard for fair value measurements and disclosures as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. It also establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three levels. The following summarizes the three levels of inputs and hierarchy of fair value we use when measuring fair value:

•

Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to access;

•

Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as interest rates and yield curves that are observable at commonly quoted intervals; and

•

Level 3 inputs are unobservable inputs for the assets or liabilities that are typically based on an entity’s own assumptions as there is little, if any, related market activity.

In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the fair value measurement will fall within the lowest level that is significant to the fair value measurement in its entirety.

The accounting guidance for fair value measurements and disclosures provides a framework for measuring fair value and establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. In determining fair value, we will utilize valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as consider counterparty credit risk in our assessment of fair value. Considerable judgment will be necessary to interpret Level 2 and 3 inputs in determining fair value of our financial and non-financial assets and liabilities. Accordingly, there can be no assurance that the fair values we will present will be indicative of amounts that may ultimately be realized upon sale or other disposition of these assets.

~~STRATEGIC STUDENT & SENIOR HOUSING TRUST, INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~June 30, 2023~~

~~(Unaudited)~~

Financial and non-financial assets and liabilities measured at fair value on a non-recurring basis in our consolidated financial statements consist of real estate and related liabilities assumed related to our acquisitions. The fair values of these assets and liabilities were determined as of the acquisition dates using widely accepted valuation techniques, including (i) discounted cash flow analysis, which considers, among other things, leasing assumptions, growth rates, discount rates and terminal capitalization rates, (ii) income capitalization approach, which considers prevailing market capitalization rates, and (iii) comparable sales activity. In general, we consider multiple valuation techniques when measuring fair values. However, in certain circumstances, a single valuation technique may be appropriate. All of the fair values of the assets and liabilities as of the acquisition dates were derived using Level 3 inputs.

The carrying amounts of cash and cash equivalents, restricted cash, other assets, ~~variable-rate debt,~~ accounts payable and accrued liabilities, distributions payable and amounts due to affiliates approximate fair value because of the relatively short-term nature of these ~~instruments.~~instruments (categorized as level 1 within the fair value hierarchy).

The table below summarizes our fixed rate debt payable at ~~June~~September 30, 2023 and December 31, 2022. The estimated fair value of financial instruments is subjective in nature and is dependent on a number of important assumptions, including discount rates and relevant comparable market information associated with each financial instrument. The fair value of our fixed and variable rate notes payable were estimated by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. These assumptions are considered level 2 inputs within the fair value hierarchy. The use of different market assumptions and estimation methodologies may have a material effect on the reported estimated fair value amounts. Accordingly, the estimates presented below are not necessarily indicative of the amounts we would realize in a current market exchange.

June 30, 2023

December 31, 2022

Fair
Value

Carrying
Value

Fair
Value

Carrying
Value

Fixed Rate Secured Debt

$
128,480,000

$
136,671,112

$
129,350,000

$
137,513,494

STRATEGIC STUDENT & SENIOR HOUSING TRUST, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023

(Unaudited)


	September 30, 2023				December 31, 2022
	Fair Value		Carrying Value		Fair Value		Carrying Value
Fixed Rate Secured Debt	$	126,700,000	$	136,257,283	$	129,350,000	$	137,513,494

Income Taxes

We made an election to be taxed as a Real Estate Investment Trust (“REIT”), under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the “Code”), commencing with our taxable year ended December 31, 2017. To qualify as a REIT, we must meet certain organizational and operational requirements, including a requirement to currently distribute at least 90% of the REIT’s ordinary taxable income to stockholders. As a REIT, we generally will not be subject to federal income tax on taxable income that we distribute to our stockholders, other than taxable income earned by our TRS. If we fail to qualify as a REIT in any taxable year, we will then be subject to federal income taxes on our taxable income at regular corporate rates and will not be permitted to qualify for treatment as a REIT for federal income tax purposes for four years following the year during which qualification is lost unless the IRS grants us relief under certain statutory provisions. Such an event could materially adversely affect our net income and net cash available for distribution to stockholders. However, we believe that we are organized and operate in such a manner as to qualify for treatment as a REIT and intend to operate in the foreseeable future in such a manner that we will remain qualified as a REIT for federal income tax purposes.

Even if we continue to qualify for taxation as a REIT, we may be subject to certain state and local taxes on our income and property, and federal income and excise taxes on our undistributed income.

We filed an election to treat our TRS as a taxable REIT subsidiary. In general, the TRS performs additional services for our residents and generally engages in any real estate or non-real estate related business. We also utilize our TRS in connection with any structuring of our senior housing properties under the REIT Investment Diversification and Empowerment Act of 2007 (“RIDEA”). Under the RIDEA structure, the senior housing properties that we own are leased by a property owning entity to a subsidiary of our TRS. That TRS subsidiary then directly engages an “eligible independent contractor” to manage and operate the property. Currently, all of our senior housing properties utilize the RIDEA structure.

The TRS is subject to corporate federal and state income tax.

We account for deferred income taxes using the asset and liability method and recognize deferred tax assets and liabilities for the expected future tax consequences of events that have included in our financial statements or tax returns. Deferred tax assets and liabilities are determined based on differences between financial reporting and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse.

~~STRATEGIC STUDENT & SENIOR HOUSING TRUST, INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~June 30, 2023~~

~~(Unaudited)~~

Any increase or decrease in the deferred tax liability that results from a change in circumstances, and that causes a change in our judgement about expected future tax consequences of events, is included in the tax provision when such changes occur. Deferred income taxes also reflect the impact of operating loss and tax credit carryforwards. A valuation allowance is provided if we believe it is more likely than not that all or some portion of the deferred tax asset will not be realized. Any increase or decrease in the valuation allowance asset, is included in the tax provision when such changes occur.

As of ~~June~~September 30, 2023 and 2022, we had no current tax provision, and we had a deferred tax asset related to net operating losses of approximately $~~5.3~~5.8 million and $~~4.4~~4.9 million, respectively. Deferred tax assets related to other book temporary differences as of ~~June~~September 30, 2023, and 2022, were approximately $~~0.2~~0.1 million and $~~0.3~~0.1 million, respectively. In addition, as of ~~June~~September 30, 2023, and 2022, we had a deferred tax liability of approximately $0.1 million, and $~~0.3~~0.1 million, respectively, related to depreciation and other temporary book to tax differences. Net deferred tax assets as of ~~June~~September 30, 2023 and 2022, were approximately $~~5.4~~5.7 million and $~~4.4~~4.8 million, respectively, of which a full valuation allowance was applied as the recoverability of such net deferred tax assets was less than more likely than not. The valuation allowance is associated with the federal and state income tax net operating losses.

As of ~~June~~September 30, 2023, the gross federal net operating losses are approximately $2122.4 million. The gross state net operating losses are approximately $~~27.7~~31.6 million. The state net operating losses expire between 2033 and 2037. The tax years 2019 through 2022 remain open for the federal and state returns.

STRATEGIC STUDENT & SENIOR HOUSING TRUST, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023

(Unaudited)

Uncertain tax positions may arise where tax laws may allow for alternative interpretations or where the timing of recognition of income is subject to judgement. Under ASC Topic 740, tax positions are evaluated for recognition using a more-likely-than-not threshold and those tax positions requiring recognition are measured at the largest amount of tax benefit that is greater than 50 percent likely of being realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. Interest and penalties relating to uncertain tax positions will be recognized in income tax expense when incurred. As of ~~June~~September 30, 2023 and 2022, there were no uncertain tax positions, and the Company had no interest or penalties related to uncertain tax positions.

Concentration

No single student nor senior resident represents a significant concentration of our revenues. For the month of ~~June~~September 2023, approximately 4746%, 4140%, and 1214% of our rental income was concentrated in Oregon, Utah, and Arkansas, respectively.

Preferred Equity in our Operating Partnership

We classify our Preferred Units (as defined in Note 5 – Preferred Equity in our Operating Partnership) on our consolidated balance sheets using the guidance in ASC 480 10 S99. The Preferred Units are redeemable by our Operating Partnership, in whole or in part, at the option of our Operating Partnership at any time. Additionally, the holder can elect to redeem if any of the following events outside our control occur: i) change of control; ii) a breach of protective provisions; iii) upon the occurrence of monetary and other material defaults under secured property debt; and (iv) if we do not maintain our REIT status. As the shares are contingently redeemable, and under certain circumstances not solely within our control, we have classified our Preferred Stock as temporary equity.

~~STRATEGIC STUDENT & SENIOR HOUSING TRUST, INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~June 30, 2023~~

~~(Unaudited)~~

Per Share Data

Basic earnings per share attributable to our common stockholders for all periods presented are computed by dividing net income (loss) attributable to our common stockholders by the weighted average number of shares outstanding during the period, excluding unvested restricted stock. Diluted earnings per share is computed by including the dilutive effect of unvested restricted stock, utilizing the treasury stock method. The dilutive effect of unvested restricted stock was not included in the diluted weighted average shares for the three and ~~six~~nine months ended ~~June~~September 30, 2023, and for the three months ended ~~June~~September 30, 2022, as such shares were antidilutive. Such unvested shares totaled approximately 6,250 for the three and ~~six~~nine months ended ~~June~~September 30, 2023, and the three months ended ~~June~~September 30, 2022. For the ~~six~~nine months ended ~~June~~September 30, 2022, the dilutive effect of unvested restricted stock totaled 6,250 shares.

~~Recently Issued Accounting Guidance~~

In March 2020, the FASB issued ASU 2020-04, "Reference Rate Reform (Topic 848)." ASU 2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur. We continue to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur.

Segment Reporting

Our real estate portfolio is comprised of two reportable segments: (i) student housing and (ii) senior housing. Please see Note 6 – Segment Disclosures for additional detail.

Note 3. Real Estate Facilities

The following summarizes the activity in the real estate facilities during the ~~six~~nine months ended ~~June~~September 30, 2023:


Real estate facilities
Balance at December 31, 2022	$	228,006,554		$	228,006,554
Additions - Student		38,656			426,723
Additions - Senior		2,589,350			3,127,090
Balance at June 30, 2023	$	230,634,560
Balance at September 30, 2023				$	231,560,367
Accumulated depreciation
Balance at December 31, 2022	$	(33,485,918	)	$	(33,485,918	)
Depreciation expense		(3,533,765	)		(5,312,702	)
Balance at June 30, 2023	$	(37,019,683	)
Balance at September 30, 2023				$	(38,798,620	)

STRATEGIC STUDENT & SENIOR HOUSING TRUST, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023

(Unaudited)

Real Estate Disposition

The results of operations for the Tallahassee student housing property, which was classified as held for sale as of December 31, 2021, is included in continuing operations on the Company's consolidated statements of operations. The Tallahassee property was sold on January 6, 2022. For each of the three months ended ~~June~~September 30, 2023 and 2022, no revenues are included in "Leasing and related revenues - student" and no expenses are included in "Property operating expenses - student". For the ~~six~~nine months ended ~~June~~September 30, 2023 and 2022, revenues totaling none and $0.2 million, respectively, are included in "Leasing and related revenues - student". Expenses totaling none and approximately $0.1 million are included in "Property operating expenses - student" for the ~~six~~nine months ended ~~June~~September 30, 2023 and 2022, respectively

On January 6, 2022, we completed the sale of the Tallahassee property to an unaffiliated third party. The sale price for the Tallahassee Property was $50 million in cash plus the amount of any yield maintenance fees owed by the Company upon repayment of the Tallahassee Nationwide mortgage loan. In connection with the sale, a $0.25 million disposition fee was paid to our Sponsor in accordance with our Second AA Amendment (as defined below). The mortgage loan encumbering the Tallahassee property of approximately $23.5 million and yield maintenance fees of approximately $1.9 million were paid at close. The yield maintenance fees are included in "loss on extinguishment of debt" in the accompanying consolidated statements of operations.

Note 4. Debt

The Company’s outstanding debt is summarized as follows:


Loan	June 30, 2023			December 31, 2022			Interest Rate			Maturity Date	September 30, 2023			December 31, 2022			Interest Rate			Maturity Date
Fayetteville JPM mortgage loan (1)	$	29,500,000		$	29,500,000			4.20	%	7/1/2024	$	29,500,000		$	29,500,000			4.20	%	7/1/2024
Freddie Mac Utah loans (2)		44,666,773			45,039,660			5.06	%	2/23/2028		44,479,164			45,039,660			5.06	%	2/23/2028
Freddie Mac Courtyard loan (3)		62,504,339			62,973,834			4.86	%	9/1/2028		62,278,119			62,973,834			4.86	%	9/1/2028
Courtyard Bridge Loans (4)		26,016,550			26,316,550			9.19	%	4/30/2024		25,866,550			26,316,550			9.42	%	4/30/2024
Debt issuance costs, net		(853,655	)		(1,014,079	)						(773,442	)		(1,014,079	)
Total debt, net	$	161,834,007		$	162,815,965						$	161,350,391		$	162,815,965

(1)

Fixed rate debt with interest only payments due monthly and the principal balance due upon maturity.

(2)

Represents the aggregate of three separate mortgage loans for the three senior housing properties acquired in Utah. Fixed rate debt with interest only payments due monthly for the first two years, then principal and interest on a 30-year amortization schedule beginning March 2020.

(3)

Fixed rate debt with interest only payments due monthly for the first four years, then principal and interest on a 30-year amortization schedule beginning September 2022.

(4)

The variable rate reflected in the table was the rate in effect as of ~~June~~September 30, 2023.

Fayetteville JPM Mortgage Loan

On June 28, 2017, we, through our Operating Partnership and a property-owning special purpose entity (the “JPM Borrower”) wholly-owned by our Operating Partnership, entered into a $29.5 million mortgage loan (the “JPM Mortgage Loan”) with Insurance Strategy Funding IX, LLC (the “JPM Lender”) for the purpose of funding a portion of the purchase price for the Fayetteville Property.

The JPM Mortgage Loan has a term of seven years and requires payments of interest only for such period, with the principal balance due upon maturity (July 1, 2024). The JPM Mortgage Loan bears interest at a fixed rate of 4.20%. The JPM Mortgage Loan may be prepaid at any time, upon 30 days’ written notice, in whole but not in part, subject to payment of a prepayment penalty. If the prepayment occurs during the last 90 days of the term of the loan, no prepayment penalty will be required.

We and H. Michael Schwartz, our Chairman of the ~~board~~Board and a director (our “Chairman”), serve as non-recourse guarantors pursuant to the terms and conditions of the JPM Mortgage Loan. The non-recourse guaranty of our Chairman will expire, upon request, and be of no further force and effect at such time as we have: (1) a net worth (as defined in the agreement) equal to or greater than $40 million; and (2) liquidity (as defined in the agreement) equal to or greater than $3 million. Once the non-recourse guaranty of our Chairman expires, the net worth and liquidity standards under the JPM

STRATEGIC STUDENT & SENIOR HOUSING TRUST, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023

(Unaudited)

Mortgage Loan will be ongoing for the remainder of the term of the JPM Mortgage Loan.

The JPM Mortgage Loan contains a number of other customary terms and covenants. The JPM Borrower maintains separate books and records and its separate assets and credit (including the Fayetteville Property) are not available to pay our other debts. As of ~~June~~September 30, 2023, we were in compliance with these covenants.

Freddie Mac Utah Loans

On February 23, 2018, we, through three property-owning special purpose entities wholly-owned by us (the “Freddie Mac Borrowers”), entered into three separate mortgage loans for an aggregate amount of $46.9 million (the “Freddie Mac Utah Loans”) with KeyBank National Association as a Freddie Mac Multifamily Approved Seller/Servicer (the “Freddie Mac Lender”) for the purpose of funding a portion of the aggregate purchase price for the three properties we acquired (Wellington, Cottonwood Creek, and Charleston).

The Freddie Mac Utah Loans have a term of 10 years, with the first two years being interest only and a 30-year amortization schedule thereafter, and bear interest at a fixed rate of 5.06%. The Freddie Mac Utah Loans are

~~STRATEGIC STUDENT & SENIOR HOUSING TRUST, INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~June 30, 2023~~

~~(Unaudited)~~

cross-collateralized and cross-defaulted with each other such that a default under one loan would cause a default under the other Freddie Mac Utah Loans.

The loans also contain a number of other customary representations, warranties, borrowing conditions, events of default, affirmative, negative and financial covenants, reserve requirements and other agreements, such as restrictions on our ability to prepay or defease the loans. The Freddie Mac Borrowers maintain separate books and records and their separate assets and credit (including the Wellington, Cottonwood Creek, and Charleston properties) are not available to pay our other debts.

Each Freddie Mac Utah Loan is secured under a multifamily deed of trust, assignment of rents and security agreement from the respective Freddie Mac Borrower in favor of the Freddie Mac Lender, granting a first priority mortgage on the respective property in favor of the Freddie Mac Lender.

We serve as non-recourse guarantors pursuant to the terms and conditions of the Freddie Mac Utah Loans. During the term of the Freddie Mac Utah Loans, we are required to maintain a net worth equal to or greater than $15 million and an initial liquidity requirement equal to or greater than $4.8 million. ~~Once the Utah Bridge Loan (defined below) is paid in full, the liquidity requirement will be reduced to $~~3 ~~million.~~On January 6, 2022, in conjunction with the sale of the Tallahassee property, the Utah Bridge Loan was paid in full and the liquidity requirement on the Freddie Mac Utah Loan was reduced to $3 ~~million.~~

~~One~~million in accordance with the terms of the ~~property-owning special purpose entities noted above that owns Cottonwood Creek (the “Cottonwood Borrower”), entered into a mortgage~~ loan ~~in the principal amount of approximately $9.3~~ ~~million (the “Freddie Mac Cottonwood Loan”) which is included in the Freddie Mac Utah Loans.~~agreement.

Freddie Mac Courtyard Loan

On August 31, 2018, we, through a property-owning special purpose entity (the “Freddie Mac Courtyard Borrower”) wholly owned by our Operating Partnership, entered into a mortgage loan of $63.2 million (the “Freddie Mac Courtyard Loan”) with KeyBank as a Freddie Mac Lender for the purpose of funding a portion of the purchase price of the senior housing property (the “Courtyard Property”) we acquired.

The Freddie Mac Courtyard Loan has a term of 10 years, with the first four years being interest only and a 30-year amortization schedule thereafter, and bears interest at a fixed rate of 4.86%. The Freddie Mac Courtyard Loan contains a number of customary representations, warranties, borrowing conditions, events of default, affirmative, negative and financial covenants, reserve requirements and other agreements, such as restrictions on our ability to prepay or defease the loans.

The Freddie Mac Courtyard Borrower maintains separate books and records and its separate assets and credit (including the Courtyard Property) is not available to pay our other debts. The Freddie Mac Courtyard Loan is secured under a multifamily deed of trust, assignment of rents and security agreement from the Freddie Mac Courtyard Borrower in favor of the Freddie Mac Lender, granting a first priority mortgage in favor of the Freddie Mac Lender.

STRATEGIC STUDENT & SENIOR HOUSING TRUST, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023

(Unaudited)

We serve as non-recourse guarantor pursuant to the terms and conditions of the Freddie Mac Courtyard Loan. During the term of the Freddie Mac Courtyard Loan, we are required to maintain a net worth equal to or greater than $18.96 million and an initial liquidity requirement equal to or greater than $6.32 million. Once the Courtyard Bridge Loans are paid in full, the liquidity requirement will be reduced to $4.8 million. We are able to reduce each of the foregoing liquidity requirements by an additional amount equal to the amount of the 12-month trailing cash flows of all our properties, up to a maximum reduction of $1.5 million. ~~On July 22, 2020, we executed amendments to our guaranty on the Freddie Mac Courtyard Loan to reduce our minimum liquidity requirement to $3.0~~ ~~million through December 31, 2021. On March 17, 2022, we further extended the reduced liquidity requirement through December 31, 2022.~~

~~STRATEGIC STUDENT & SENIOR HOUSING TRUST, INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~June 30, 2023~~

~~(Unaudited)~~

KeyBank Bridge Loans

Beginning with our acquisition of the Fayetteville Property, we have entered into various loans with KeyBank National Association (“KeyBank”) in order to fund a portion of the purchase price for our acquisitions. Such loans are in addition to the particular mortgage loan used to acquire the property, and such loans are with us, through our Operating Partnership, along with our Chairman and an entity controlled by him (the “Initial KeyBank Bridge Borrowers”). As described below, on March 29, 2019, our Sponsor was added as an additional borrower under the Utah Bridge Loan and the Courtyard Bridge Loans (collectively with the Initial KeyBank Bridge Borrowers, the “KeyBank Bridge Borrowers”). See below for a description of the various loans with KeyBank (the “KeyBank Bridge Loans”).

Courtyard Bridge Loans

Concurrent with our entry into the Freddie Mac Courtyard Loan, the Initial KeyBank Bridge Borrowers and KeyBank entered into a first credit agreement supplement and amendment (the “Courtyard Bridge Loans”) to the Utah Bridge Loan in order to add additional tranches. Accordingly, each of the Courtyard Bridge Loans and the Utah Bridge Loan are separate loans with separate maturity dates, but they are secured by the same pool of collateral and subject to the same general restrictions, each as described above under the heading “Utah Bridge Loan” and within this section.

Pursuant to the terms of the Courtyard Bridge Loans, the Utah Bridge Loan was amended to add two additional tranches: (i) an initial loan of $27 million (the “Courtyard Initial Bridge Loan”) and (ii) a delayed draw commitment of up to $14 million (the “Courtyard Delayed Draw Commitment”). The KeyBank Bridge Borrowers utilized the Courtyard Initial Bridge Loan for the purpose of funding a portion of the purchase price for the Courtyard Property. The Courtyard Delayed Draw Commitment was utilized primarily to fund the costs and expenses associated with the Memory Care Expansion. The Courtyard Property contained developable land in which construction of an additional 23 units of memory care (the “Memory Care Expansion”) was completed in November 2019.

Pursuant to the Courtyard Bridge Loans, the security for the Utah Bridge Loan was amended such that both loans are secured by the same pool of collateral, which now includes a pledge of distributions and other rights with respect to the equity interests in the subsidiaries that have a fee or leasehold interest in the Courtyard Property. In addition, on March 29, 2019, we executed an amendment such that (i) our Sponsor became an additional borrower, (ii) the collateral was amended such that it is additionally comprised of a pledge of equity interests owned by subsidiaries of our Sponsor in certain entities, as set forth in separate pledge agreements and (iii) certain of the covenants and restrictions were revised accordingly. Upon the repayment of the Utah Bridge Loan, the KeyBank Bridge Borrowers must continue to apply 100% of the net proceeds from certain capital events and we are required to apply the net proceeds from the issuance of equity interests in us, including the net proceeds from our Primary Offering, to the outstanding Courtyard Bridge Loans. Unless KeyBank otherwise consents, until the Courtyard Bridge Loans are repaid, we are required to defer payment of (i) acquisition fees otherwise payable to our Advisor and Sponsor in connection with the acquisition of the Courtyard Property and (ii) in the event of a default, asset management fees otherwise payable to our Advisor with respect to the Courtyard Property. The Courtyard Bridge Loans impose certain covenant requirements on us and the other parties to the Courtyard Bridge Loans, which, if breached, could result in an event of default under the Courtyard Bridge Loans. In connection with the foregoing, we also amended the previously executed note with KeyBank in order to evidence the Courtyard Bridge Loans, and we also entered into an Omnibus Amendment and Reaffirmation of Loan Documents, as amended on March 29, 2019 (the “Omnibus Amendment”). As a result of the Omnibus Amendment, we continue to serve as a guarantor pursuant to the terms and conditions of the Courtyard Initial Bridge Loans.

The Courtyard Bridge Loans were scheduled to mature on August 31, 2019, but were extended, based on their terms to April 30, 2020 upon the payment of a fee equal to 0.50% of the outstanding principal balance of the loans at the time of the extension. On February 27, 2020, we amended the Courtyard Bridge Loans such that the loan maturity date was extended to April 30, 2021 and certain of the covenants were revised accordingly. On November 13, 2020, we entered into the Fifth Amendment, pursuant to which the loan maturity date was further extended to April 30, 2022 and certain covenants were

STRATEGIC STUDENT & SENIOR HOUSING TRUST, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023

(Unaudited)

revised. We were required to pay $1.0 million of the balance of the loan at signing of the Fifth Amendment, along with a fee equal to 0.50% of the then-outstanding principal balance of the loan. Beginning in May 2021, since the balance of the KeyBank Bridge Loans had not been reduced to $20 million, we were required to start paying a monthly fee of 0.05% of the loan balance above $20 million until such reduction is reached. Additionally, since the balance of the KeyBank Bridge Loans had not been reduced to $20 million by October 31, 2021, we were required to start making principal payments of $50,000 per month until such reduction is reached. Pursuant to the Fifth Amendment, we were also required to fund a reserve comprised of six months of interest payments, which may be utilized but must generally be replenished. If the KeyBank Bridge Borrowers are unable to satisfy the Courtyard Bridge Loans through the required payments or to refinance the loans prior to maturity, the Company would be obligated to repay the Courtyard Bridge Loans pursuant to its guaranty. If the Company is unable to satisfy its guaranty, KeyBank would have the right to sell or dispose of the collateral and/or enforce and collect the collateral securing the Courtyard Bridge Loans, as discussed below.

On November 9, 2021, we amended the KeyBank Bridge Loans such that the maturity date was further extended to April 30, 2023. On January 6, 2022, in conjunction with the sale of the Tallahassee property, we repaid all of the outstanding principal balance of approximately $12.0 million on the Courtyard Delayed Draw Commitment.

On October 28, 2022, the KeyBank Bridge Borrowers entered into the Seventh Amendment to the KeyBank Bridge Loans (the “Seventh Amendment”) that extended the maturity date of the KeyBank Bridge Loans from April 30, 2023 to April 30, 2024. In connection with the Seventh Amendment, the Company paid KeyBank an extension fee equal to 0.35% of the outstanding principal balance of the KeyBank Bridge Loans as of October 28, 2022.

The Seventh Amendment (i) modifies certain collateral securing the KeyBank Bridge Loans and certain terms related thereto, and (ii) replaces LIBOR with ~~SOFR~~the Secured Overnight Financing Rate ("SOFR") as the interest rate benchmark. The Seventh Amendment requires the KeyBank Bridge Borrowers (or an affiliate) to maintain a Total Collateral Ratio (as defined in the Seventh Amendment) of not less than 1.20 to 1.00, and an EXR Collateral Ratio (as defined in the Seventh Amendment) of not less than 1.00 to 1.00, each as

~~STRATEGIC STUDENT & SENIOR HOUSING TRUST, INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~June 30, 2023~~

~~(Unaudited)~~

of the close of each calendar quarter. If either collateral ratio is not met as of the end of a given calendar quarter, the KeyBank Bridge Borrowers (or an affiliate) will be required to pledge additional collateral within ten business days of the end of such calendar quarter in order to bring the ratio into compliance. In connection with the Seventh Amendment, the parties also entered into a partial release of certain equity interests previously serving as collateral for the KeyBank Bridge Loans.

The Courtyard Bridge Loans bear interest at a rate of 1-month SOFR plus 400 basis points which totaled approximately ~~9.19~~9.42% as of ~~June~~September 30, 2023. Pursuant to the Courtyard Bridge Loans, the security for the Utah Bridge Loan was amended such that both loans are secured by the same pool of collateral, which now includes a pledge of distributions and other rights with respect to the equity interests in the subsidiaries that have a fee or leasehold interest in the Courtyard Property. In addition, on March 29, 2019, we executed an amendment such that (i) our Sponsor became an additional borrower, (ii) the collateral was amended such that it is additionally comprised of a pledge of equity interests owned by subsidiaries of our Sponsor in certain entities, as set forth in separate pledge agreements and (iii) certain of the covenants and restrictions were revised accordingly. Upon the repayment of the Utah Bridge Loan, the KeyBank Bridge Borrowers must continue to apply ~~100~~% of the net proceeds from certain capital events and we are required to apply the net proceeds from the issuance of equity interests in us, including the net proceeds from our Primary Offering, to the outstanding Courtyard Bridge Loans. Unless KeyBank otherwise consents, until the Courtyard Bridge Loans are repaid, we are required to defer payment of (i) acquisition fees otherwise payable to our Advisor and Sponsor in connection with the acquisition of the Courtyard Property and (ii) in the event of a default, asset management fees otherwise payable to our Advisor with respect to the Courtyard Property. The Courtyard Bridge Loans impose certain covenant requirements on us and the other parties to the Courtyard Bridge Loans, which, if breached, could result in an event of default under the Courtyard Bridge Loans. In connection with the foregoing, we also amended the previously executed note with KeyBank in order to evidence the Courtyard Bridge Loans, and we also entered into an Omnibus Amendment and Reaffirmation of Loan Documents, as amended on March 29, 2019 (the “Omnibus Amendment”). As a result of the Omnibus Amendment, we continue to serve as a guarantor pursuant to the terms and conditions of the Courtyard Initial Bridge Loans. As of ~~June~~September 30, 2023, we were in compliance with these covenants.

The Courtyard Bridge Loans mature in April 2024. We are currently evaluating multiple options, which include extending the maturity date of the loans, refinancing with a different lender or related party, or the sale of one or more of the properties we currently own, to satisfy these loans.

Future Principal Requirements

The following table presents the future principal payment requirements on outstanding debt as of ~~June~~September 30, 2023:


2023	$	1,138,210		$	574,381
2024		56,968,257			56,968,257
2025		1,799,440			1,799,440
2026		1,900,615			1,900,615
2027		1,998,274			1,998,274
2028		98,882,866			98,882,866
Total payments		162,687,662			162,123,833
Debt issuance costs, net		(853,655	)		(773,442	)
Total	$	161,834,007		$	161,350,391

STRATEGIC STUDENT & SENIOR HOUSING TRUST, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023

(Unaudited)

Note 6. Segment Disclosures

We operate in two reportable business segments: (i) student housing and (ii) senior housing.

Management evaluates performance based upon property net operating income (“NOI”). NOI is defined as leasing and related revenues, less property level operating expenses.

STRATEGIC STUDENT & SENIOR HOUSING TRUST, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~June~~September 30, 2023

(Unaudited)

The following tables summarize information for the reportable segments for the three and ~~six~~nine months ended ~~June~~September 30, 2023, and 2022:


	Three Months Ended June 30,								Three Months Ended September 30,
	Student Housing		Senior Housing		Corporate and Other		Total		Student Housing		Senior Housing		Corporate and Other		Total
	2023	2022	2023	2022	2023	2022	2023	2022	2023	2022	2023	2022	2023	2022	2023	2022
Leasing and leasing related revenues	$1,186,238	$1,055,296	$7,934,945	$7,293,605	$—	$—	$9,121,183	$8,348,901	$1,233,249	$1,066,139	$8,201,149	$7,469,824	$—	$—	$9,434,398	$8,535,963
Other revenues	—	—	120,172	207,812	—	—	120,172	207,812	—	—	144,810	209,315	—	—	144,810	209,315
Property operating expenses	(595,807)	(535,597)	(5,714,029)	(5,276,026)	—	—	(6,309,836)	(5,811,623)	(730,252)	(853,253)	(6,073,124)	(5,457,439)	—	—	(6,803,376)	(6,310,692)
Net operating income	590,431	519,699	2,341,088	2,225,391	—	—	2,931,519	2,745,090	502,997	212,886	2,272,835	2,221,700	—	—	2,775,832	2,434,586
Property operating expenses - affiliates	123,593	122,442	495,027	486,074	—	—	618,620	608,516	126,616	124,802	499,166	488,945	—	—	625,782	613,747
General and administrative	—	—	—	—	748,887	405,756	748,887	405,756	—	—	—	—	545,394	414,154	545,394	414,154
Depreciation	344,741	457,378	1,398,651	1,382,986	4,105	3,880	1,747,497	1,844,244	355,550	458,429	1,419,875	1,385,530	3,512	4,005	1,778,937	1,847,964
Interest expense	309,750	309,750	1,933,745	1,680,395	—	—	2,243,495	1,990,145	309,750	309,750	1,970,456	1,799,152	—	—	2,280,206	2,108,902
Interest expense – debt issuance costs	14,140	14,139	66,074	80,943	—	—	80,214	95,082	14,141	14,139	66,073	80,943	—	—	80,214	95,082
Other income (loss)	—	—	—	251	(58,861)	(12,252)	(58,861)	(12,001)	—	—	—	677	(50,523)	(37,772)	(50,523)	(37,095)
Net income (loss)	$(201,793)	$(384,010)	$(1,552,409)	$(1,405,258)	$(694,131)	$(397,384)	$(2,448,333)	$(2,186,652)	$(303,060)	$(694,234)	$(1,682,735)	$(1,533,547)	$(498,383)	$(380,387)	$(2,484,178)	$(2,608,168)


	Six Months Ended June 30,								Nine Months Ended September 30,
	Student Housing		Senior Housing		Corporate and Other		Total		Student Housing		Senior Housing		Corporate and Other		Total
	2023	2022	2023	2022	2023	2022	2023	2022	2023	2022	2023	2022	2023	2022	2023	2022
Leasing and leasing related revenues	$2,403,189	$2,253,206	$15,602,866	$14,087,051	$—	$—	$18,006,055	$16,340,257	$3,636,439	$3,319,345	$23,804,014	$21,556,875	$—	$—	$27,440,453	$24,876,220
Other revenues	—	—	336,096	372,928	—	—	336,096	372,928	—	—	480,906	582,243	—	—	480,906	582,243
Property operating expenses	(1,246,210)	(1,163,505)	(11,452,572)	(10,489,220)	—	—	(12,698,782)	(11,652,725)	(1,976,462)	(2,016,757)	(17,525,697)	(15,946,660)	—	—	(19,502,159)	(17,963,417)
Net operating income	1,156,979	1,089,701	4,486,390	3,970,759	—	—	5,643,369	5,060,460	1,659,977	1,302,588	6,759,223	6,192,458	—	—	8,419,200	7,495,046
Property operating expenses - affiliates	247,689	244,823	986,795	964,052	—	—	1,234,484	1,208,875	374,305	369,625	1,485,961	1,452,997	—	—	1,860,266	1,822,622
General and administrative	—	—	—	—	1,250,637	779,757	1,250,637	779,757	—	—	—	—	1,796,031	1,193,907	1,796,031	1,193,907
Depreciation	688,981	913,125	2,835,322	2,754,369	9,462	7,759	3,533,765	3,675,253	1,044,531	1,371,554	4,255,197	4,139,899	12,974	11,764	5,312,702	5,523,217
Interest expense	619,500	619,501	3,832,945	3,324,152	—	—	4,452,445	3,943,653	929,250	929,251	5,803,401	5,123,304	—	—	6,732,651	6,052,555
Interest expense – debt issuance costs	28,280	28,278	132,148	161,885	—	—	160,428	190,163	42,421	42,417	198,216	242,828	—	—	240,637	285,245
Loss on extinguishment of debt	—	1,985,602	—	—	—	—	—	1,985,602	—	1,985,602	—	—	—	—	—	1,985,602
Gain on sale of real estate, net	—	(12,101,937)	—	—	—	—	—	(12,101,937)	—	(12,101,937)	—	—	—	—	—	(12,101,937)
Other income (loss)	—	—	(446)	331	(59,362)	(581,800)	(59,808)	(581,469)	—	—	(446)	1,008	(109,881)	(619,569)	(110,327)	(618,561)
Net income (loss)	$(427,471)	$9,400,309	$(3,300,374)	$(3,234,030)	$(1,200,737)	$(205,716)	$(4,928,582)	$5,960,563	$(730,530)	$8,706,076	$(4,983,106)	$(4,767,578)	$(1,699,124)	$(586,102)	$(7,412,760)	$3,352,396

The following table summarizes our total assets by segment:


Segments	June 30, 2023		December 31, 2022		September 30, 2023		December 31, 2022
Student housing	$	45,002,121	$	45,184,980	$	44,738,566	$	45,184,980
Senior housing		153,959,234		155,404,239		153,295,576		155,404,239
Corporate and Other		6,866,607		9,864,879		5,931,945		9,864,879
Total assets	$	205,827,962	$	210,454,098	$	203,966,087	$	210,454,098

Note 7. Related Party Transactions

Fees to Affiliates

In connection with our Public Offering, we entered into an advisory agreement with our Advisor (as amended, the “Advisory Agreement”) and a dealer manager agreement with our Former Dealer Manager (as amended, the “Dealer Manager Agreement”) which entitle our Advisor and our Former Dealer Manager to specified fees upon the provision of certain services with regard to the Public Offering and investment of funds in real estate properties, among other services, as well as reimbursement for organization and offering costs incurred by our Advisor on our behalf and reimbursement of certain costs and expenses incurred by our Advisor in providing services to us. On April 17, 2020, in accordance with provisions of the Dealer Manager Agreement, we provided a 60-day termination notice to our Former Dealer Manager and pursuant to such notice, the Dealer Manager Agreement was terminated on June 16, 2020.

The Advisory Agreement, Dealer Manager Agreement, and transfer agent agreement (the “Transfer Agent Agreement”) entitle our Advisor, our Former Dealer Manager and our Transfer Agent to specified fees upon the provision of certain services with regard to the Public Offering and investment of funds in real estate properties, among other services, as well as reimbursement for organizational and offering costs incurred by our Advisor on our behalf and reimbursement of certain costs and expenses incurred by our Advisor and our Transfer Agent in providing services to us.

STRATEGIC STUDENT & SENIOR HOUSING TRUST, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~June~~September 30, 2023

(Unaudited)

Organization and Offering Costs

Organization and offering costs of the Public Offering were paid by our Advisor on our behalf and were reimbursed to our Advisor from the proceeds of our Primary Offering, provided, however, that our Advisor agreed to fund, and was not reimbursed for, 1.0% of the gross offering proceeds from the sale of Class W shares. Organization and offering costs consisted of all expenses (other than sales commissions, dealer manager fees, stockholder servicing fees, and dealer manager servicing fees) paid by us in connection with the Public Offering, including our legal, accounting, printing, mailing and filing fees and other accountable organization and offering expenses, including, but not limited to, (i) amounts to reimburse our Advisor for all marketing related costs and expenses such as salaries and direct expenses of employees of our Advisor and its affiliates in connection with registering and marketing our shares; (ii) technology costs associated with the Public Offering; (iii) our costs of conducting our training and education meetings; (iv) our costs of attending retail seminars conducted by participating broker-dealers; and (v) payment or reimbursement of bona fide due diligence expenses. We also incurred similar organization and offering costs in connection with our Primary Private Offering. Pursuant to an Advisor Funding Agreement (the “Advisor Funding Agreement”), our Advisor also agreed to fund, and not be reimbursed for, 1.0% of the gross offering proceeds from the sale of Class Y shares and Class Z shares. Our Advisor must reimburse us within 60 days after the end of the month in which the Public Offering terminated to the extent organization and offering expenses incurred in good faith exceed the 1.0% estimate being funded by the Advisor. Conversely, we must reimburse our Advisor within 60 days after the end of the month in which the Public Offering terminates to the extent such organization and offering expenses are less than the 1.0% estimate being funded by the Advisor pursuant to the Advisor Funding Agreement. During the year ended December 31, 2020, as a result of the suspension of our Primary Offering and termination of our Former Dealer Manager, we expected that the organization and offering expenses incurred on the sale of Class Y shares and Class Z shares would exceed 1% at the termination of the Public Offering. Accordingly, during the year ended December 31, 2020, we recorded a receivable from our Advisor for organization and offering expenses incurred in excess of the 1% limitation, which resulted in a $0.6 million reduction in due to affiliates and an increase in additional paid in ~~capital in the accompanying consolidated balance sheet.~~capital. Subsequent to the termination of our Public Offering on May 1, 2021, we determined no additional adjustment was required.

Advisory Agreement

We do not have any employees. Our Advisor is primarily responsible for managing our business affairs and carrying out the directives of our board of directors. Our Advisor receives various fees and expenses under the terms of our Advisory Agreement. As discussed above, we are required to reimburse our Advisor for certain organization and offering costs from the Offerings; provided, however, pursuant to the Advisory Agreement, our Advisor funded, and was not reimbursed for, 1.0% of the gross offering proceeds from the sale of Class W shares in the Primary Offering.

The Advisory Agreement also requires our Advisor to reimburse us to the extent that offering expenses, including sales commissions, dealer manager fees, stockholder servicing fees and dealer manager servicing fees, are in excess of 15% of gross proceeds from the Primary Offering.

Prior to the amendment of the Advisory Agreement on September 6, 2018 (the “AA Amendment”), our Advisor received acquisition fees equal to 1.75% of the contract purchase price of each property we acquired. The AA Amendment eliminated such acquisition fees. On July 10, 2019, we entered into another amendment to the Advisory Agreement (the “Second AA Amendment”). Pursuant to the Second AA Amendment, our Advisor may be entitled to an acquisition fee (the “Contingent Acquisition Fee”) with respect to acquisitions made subsequent to July 10, 2019, subject to us satisfying certain stockholder return thresholds or if the Advisory Agreement is terminated for any reason other than our Advisor’s fraud, willful misconduct or gross negligence before July 10, 2029. After we pay stockholders total distributions equal to their invested capital, plus a 6% cumulative, non-compounded annual return on invested capital, we will pay our Advisor a contingent acquisition fee equal to 1% of the Contract Purchase Price (as defined in the Second AA Amendment) of each property or other real estate investment we acquire after July 10, 2019; and after we pay stockholders total distributions equal to their invested capital, plus a 13% cumulative, non-compounded annual return on invested capital, we will pay our Advisor an additional contingent acquisition fee equal to 2% of the Contract Purchase Price of each property or other real estate investment we acquire after July 10, 2019. Our Advisor also receives reimbursement of any acquisition expenses our Advisor incurs pursuant to the Advisory Agreement.

Pursuant to the Advisory Agreement, effective May 1, 2018, our Advisor is entitled to receive a monthly asset management fee. This fee was initially equal to 0.05208% (which is one twelfth of 0.625%) of our average invested assets, as defined by the Advisory Agreement, but the AA Amendment later increased this fee to 0.066667% (which is one twelfth of 0.8%) of our average invested assets. Our Advisor will not receive financing fees pursuant to the Advisory Agreement.

STRATEGIC STUDENT & SENIOR HOUSING TRUST, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~June~~September 30, 2023

(Unaudited)

Pursuant to the Second AA Amendment, our Advisor may be entitled to disposition fees generally equal to the lesser of (a) 1% of the Contract Sales Price or (b) 50% of the Competitive Real Estate Commission (as defined in the Second AA Amendment). In conjunction with the sale of the Tallahassee property in January 2022, a $0.25 million disposition fee was paid to our Sponsor in accordance with the Second AA Amendment.

Our Advisor may also be entitled to various subordinated distributions under our operating partnership agreement if we (1) list our shares of common stock on a national exchange, (2) do not renew or terminate the Advisory Agreement, (3) liquidate our portfolio or (4) effect a merger or other corporate reorganization.

The Advisory Agreement provides for reimbursement of our Advisor’s direct and indirect costs of providing administrative and management services to us. Beginning four fiscal quarters after commencement of the Public Offering, pursuant to our Advisory Agreement, our Advisor is required to pay or reimburse us the amount by which our aggregate annual operating expenses, as defined, exceed the greater of 2% of our average invested assets or 25% of our net income, as defined, unless a majority of our independent directors determine that such excess expenses were justified based on unusual and non-recurring factors. For any fiscal quarter for which total operating expenses for the 12 months then ended exceed the limitation, we will disclose this fact in our next quarterly report or within 60 days of the end of that quarter and send a written disclosure of this fact to our stockholders. In each case the disclosure will include an explanation of the factors that the independent directors considered in arriving at the conclusion that the excess expenses were justified. As of ~~June~~September 30, 2023, our aggregate annual operating expenses, as defined, did not exceed the thresholds described above.

Advisor Funding Agreement

Concurrent with the execution of the Second AA Amendment (as described above), we entered into the Advisor Funding Agreement by and among us, our Operating Partnership, our Advisor and our Sponsor, pursuant to which our Advisor agreed to fund the payment of the upfront 3% sales commission for the sale of Class Y shares, the upfront 3% dealer manager fee for the sale of Class Y shares, and the estimated 1% organization and offering expenses for the sale of the Class Y shares and Class Z shares in the Primary Offering. Our Advisor’s obligation to fund the upfront sales commissions, upfront dealer manager fees, and organization and offering expenses was expressly limited to us raising $250 million in gross offering proceeds from the sale of Class Y shares pursuant to the Primary Offering. Our Advisor may terminate the Advisor Funding Agreement at any time in its sole discretion after we have raised $250 million in gross offering proceeds from the sale of Class Y shares pursuant to the Primary Offering. At the termination of the Primary Offering, our Advisor was required to reimburse us within 60 days after the end of the month in which the Primary Offering terminated if the organization and offering expenses exceed the 1% estimate being funded by our Advisor pursuant to the Advisor Funding Agreement. Conversely, we were required to reimburse our Advisor within 60 days after the end of the month in which the Primary Offering terminated to the extent the organization and offering expenses were less than the 1% estimate being funded by our Advisor pursuant to the Advisor Funding Agreement. As of March 31, 2020, prior to the suspension of our Primary Offering, we raised approximately $11.9 million in gross offering proceeds from the sale of Class Y and Z shares, and received funding from our Advisor of approximately $0.8 million for the payment of sales commissions and dealer manager fees for the sale of Class Y shares, and organization and offering expenses for the sale of Class Y and Z shares. Subsequent to March 31, 2020, no sales have been made pursuant to the Primary Offering. During the year ended December 31, 2020, as a result of the suspension of our Primary Offering and termination of our Former Dealer Manager, we expected that the organization and offering expenses incurred on the sale of Class Y shares and Class Z shares would exceed 1% at the termination of the Public Offering. Accordingly, during the year ended December 31, 2020, we recorded a receivable from our Advisor for organization and offering expenses incurred in excess of the 1% limitation, which resulted in a $0.6 million reduction in due to affiliates and an increase in additional paid in ~~capital in the accompanying consolidated balance sheet.~~capital. Subsequent to the termination of our Public Offering on May 1, 2021, we determined no additional adjustment was required.

Dealer Manager Agreement

In connection with our Public Offering, our Former Dealer Manager received a sales commission of up to 6.0% of gross proceeds from sales of Class A shares and up to 3.0% of gross proceeds from the sales of Class T shares in the Primary Offering and a dealer manager fee of up to 3.0% of gross proceeds from sales of both Class A and Class T shares in the Primary Offering under the terms of the Dealer Manager Agreement. Our Former Dealer Manager did not receive an upfront sales commission or dealer manager fee from sales of Class W shares in the Primary Offering.

As of June 21, 2019, we ceased offering Class A shares, Class T shares and Class W shares in our Primary Offering, and on July 10, 2019, we commenced offering Class Y shares and Class Z shares. On March 30, 2020, our board of directors approved the suspension of our Primary Offering and on May 1, 2021, our Public Offering terminated. On April 17, 2020, in

STRATEGIC STUDENT & SENIOR HOUSING TRUST, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~June~~September 30, 2023

(Unaudited)

accordance with provisions of the Dealer Manager Agreement, we provided a 60-day termination notice to our Dealer Manager and pursuant to such notice, the Dealer Manager Agreement was terminated on June 16, 2020. Pursuant to the Dealer Manager Agreement, we paid our Former Dealer Manager upfront sales commissions in the amount of 3.0% of the gross proceeds of the Class Y shares sold and dealer manager fees in the amount of 3.0% of the gross proceeds of the Class Y shares sold in the primary portion of the offering. However, as described above, our Advisor agreed to fund the payment of all upfront sales commissions and dealer manager fees on Class Y shares sold, subject to certain limitations. In addition, our Former Dealer Manager received an ongoing stockholder servicing fee that was payable monthly and accrued daily in an amount equal to 1/365th of 1% of the purchase price per share of the Class T shares and Class Y shares sold in the Primary Offering, subject to certain limitations described below. Our Former Dealer Manager received an ongoing dealer manager servicing fee that was payable monthly and accrued daily in an amount equal to 1/365th of 0.5% of the purchase price per share of the Class W shares and Class Z shares sold in the Primary Offering.

The Dealer Manager Agreement provided that we would cease paying the stockholder servicing fee with respect to the Class T shares and Class Y shares sold in the Primary Offering at the earlier of (i) the date we list our shares on a national securities exchange, merge or consolidate with or into another entity, or sell or dispose of all or substantially all of our assets, (ii) the date at which the aggregate underwriting compensation from all sources equals 10% of the gross proceeds from the sale of Class A shares, Class T shares, Class W shares, Class Y shares, and Class Z shares in our Primary Offering (i.e., excluding proceeds from sales pursuant to our Distribution Reinvestment Plan), which calculation shall be made commencing after the termination of our Primary Offering; (iii) with respect to a particular Class T share and Class Y share, the third anniversary of the issuance of the share; and (iv) the date that such Class T share or Class Y share is redeemed or is no longer outstanding. The Dealer Manager Agreement provided that we would cease paying the dealer manager servicing fee with respect to the Class W shares and Class Z shares sold in the Primary Offering at the earlier of (i) the date we list our shares on a national securities exchange, merge or consolidate with or into another entity, or sell or dispose of all or substantially all of our assets, (ii) the date at which the aggregate underwriting compensation from all sources equals 10% of the gross proceeds from the sale of Class A shares, Class T shares, Class W shares, Class Y shares, and Class Z shares in our Primary Offering (i.e., excluding proceeds from sales pursuant to our Distribution Reinvestment Plan), which calculation shall be made commencing after the termination of our Primary Offering; (iii) the end of the month in which the aggregate dealer manager servicing fees paid in our Primary Offering with respect to Class W shares or Class Z shares equals 9.0% of the gross proceeds from the sale of Class W shares or Class Z shares, respectively, in our Primary Offering (i.e., excluding proceeds from sales pursuant to our Distribution Reinvestment Plan), which calculation shall be made commencing after the termination of our Primary Offering, and (iv) the date that such Class W share or Class Z share is redeemed or is no longer outstanding. As a result of the suspension of our Primary Offering and termination of our Former Dealer Manager, we expected that the aggregate underwriting compensation from all sources would exceed 10% at the termination of the Public Offering. Accordingly, we ceased paying stockholder servicing fees and dealer manager servicing fees in April 2020, pursuant to the terms of the Dealer Manager Agreement. Additionally, as of ~~June~~September 30, 2023, we have not recorded a liability for the future payment of the stockholder servicing fees and dealer manager servicing fees.

~~STRATEGIC STUDENT & SENIOR HOUSING TRUST, INC. AND SUBSIDIARIES~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~June 30, 2023~~

~~(Unaudited)~~

In connection with our Public Offering, our Former Dealer Manager entered into participating dealer agreements with certain other broker-dealers which authorized them to sell our shares. Upon sale of our shares by such broker-dealers, our Former Dealer Manager allowed all of the sales commissions paid in connection with sales made by these broker-dealers. Our Former Dealer Manager was also permitted to allow these broker-dealers a portion of their dealer manager fee as marketing fees, reimbursement of certain costs and expenses of attending training and education meetings sponsored by our Former Dealer Manager, payment of attendance fees required for employees of our Former Dealer Manager or other affiliates to attend retail seminars and public seminars sponsored by these broker-dealers, or to defray other distribution-related expenses. Our Former Dealer Manager also received reimbursement of bona fide due diligence expenses; however, to the extent these due diligence expenses cannot be justified, any excess over actual due diligence expenses will be considered underwriting compensation subject to a 10% FINRA limitation and, when aggregated with all other non-accountable expenses in connection with our Public Offering, may not exceed 3% of gross offering proceeds from sales in the Public Offering.

STRATEGIC STUDENT & SENIOR HOUSING TRUST, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2023

(Unaudited)

Affiliated Former Dealer Manager

Our Sponsor previously owned, through a wholly-owned limited liability company, a 15% non-voting equity interest in our Former Dealer Manager. Affiliates of our Former Dealer Manager own a 2.5% non-voting membership interest in our Advisor, which they acquired on January 1, 2018.

Transfer Agent Agreement

Our Sponsor is the owner and manager of our Transfer Agent, which is a registered transfer agent with the SEC. Effective in May 2018, our Transfer Agent processes subscription agreements and certain other forms directly, as well as provides customer service to our stockholders. These services include, among other things, processing payment of any sales commission and dealer manager fees associated with a particular purchase, as well as processing the distributions and any servicing fees with respect to our shares. Additionally, our Transfer Agent may retain and supervise third party vendors in its efforts to administer certain services. Our Transfer Agent also conducts transfer agent and registrar services for other non-traded REITs sponsored by an affiliate of our Sponsor.

Fees paid to our Transfer Agent are based on a fixed quarterly fee, one-time account setup fees, monthly open account fees, one time transfer fees, monthly portal fees, and investor telephone call fees. In addition, we will reimburse our Transfer Agent for all reasonable expenses or other changes incurred by it in connection with the provision of its services to us, and we will pay our Transfer Agent fees for any additional services we may request from time to time, in accordance with its rates then in effect. Upon the request of our Transfer Agent, we may also advance payment for substantial reasonable out-of-pocket expenditures to be incurred by it.

The initial term of the Transfer Agent Agreement was three years, which term will be automatically renewed for one year successive terms, but either party may terminate the Transfer Agent Agreement upon 90 days’ prior written notice. In the event that we terminate the Transfer Agent Agreement, other than for cause, we will pay our Transfer Agent all amounts that would have otherwise accrued during the remaining term of the Transfer Agent Agreement; provided, however, that when calculating the remaining months in the term for such purposes, such term is deemed to be a 12 month period starting from the date of the most recent annual anniversary date.

Property Managers

Pursuant to our Advisory Agreement, our Advisor is responsible for overseeing any third party property managers or operators and may delegate such responsibility to its affiliates. Our Advisor has assigned such oversight responsibilities to our Property Manager. Currently, we expect to rely on third party property managers and senior living operators to manage and operate our properties. We pay our Property Manager an oversight fee equal to 1% of the gross revenues attributable to such properties; provided, however, that our Property Manager will receive an oversight fee equal to 1.5% of the gross revenues attributable to any senior housing property other than such properties that are leased to third party tenants under triple-net or similar lease structures. In the event any of our properties are managed directly by our Property Manager, we will pay our Property Manager a property management fee that is approved by a majority of our board of directors, including a majority of our independent directors not otherwise interested in such transaction, as being fair and reasonable to us and on terms and conditions not less favorable to us than those available from unaffiliated third parties.

STRATEGIC STUDENT & SENIOR HOUSING TRUST, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~June~~September 30, 2023

(Unaudited)

Pursuant to the terms of the agreements described above, the following table summarizes related party costs incurred and paid by us for the year ended December 31, 2022 and the ~~six~~nine months ended ~~June~~September 30, 2023, as well as any related amounts payable as of December 31, 2022 and ~~June~~September 30, 2023:


	Year Ended December 31, 2022						Six Months Ended June 30, 2023						Year Ended December 31, 2022						Nine Months Ended September 30, 2023
	Incurred		Paid		Payable		Incurred		Paid		Payable		Incurred		Paid		Payable		Incurred		Paid		Payable
Expensed:
Operating expenses (including organizational costs)	$	453,432	$	453,432	$	—	$	274,156	$	136,589	$	137,567	$	453,432	$	453,432	$	—	$	405,352	$	180,530	$	224,822
Transfer Agent expenses		103,782		103,782		—		59,028		30,306		28,722		103,782		103,782		—		86,365		86,365		—
Asset management fees		1,942,698		1,033,266		8,833,418		972,009		183,105		9,622,322		1,942,698		1,033,266		8,833,418		1,457,791		183,105		10,108,104
Property management oversight fees		493,956		—		2,103,788		262,475		—		2,366,263		493,956		—		2,103,788		402,475		—		2,506,263
Disposition fee		250,000		250,000		—		—		—		—		250,000		250,000		—		—		—		—
Capitalized:
Acquisition expenses - Affiliates		—		—		1,980,000		—		—		1,980,000		—		—		1,980,000		—		—		1,980,000
Additional Paid-In Capital:
Offering costs		—		—		166,881		—		—		166,881		—		—		166,881		—		—		166,881
Total	$	3,243,868	$	1,840,480	$	13,084,087	$	1,567,668	$	350,000	$	14,301,755	$	3,243,868	$	1,840,480	$	13,084,087	$	2,351,983	$	450,000	$	14,986,070

Please see Note 4 – Debt and Note 5 – Preferred Equity in our Operating Partnership for detail regarding additional related party transactions.

Investment in Power 5 Conference Student Housing I, DST

In October 2018, we invested approximately $0.8 million in a private placement offering by Power 5 Conference Student Housing I, DST (“Power 5 Conference Student Housing”) using proceeds from the issuance of Preferred Units in our Operating Partnership for an approximately 1.4% beneficial interest. Power 5 Conference Student Housing was a Delaware statutory trust and an affiliate of our Sponsor. Power 5 Conference Student Housing owned two student housing properties located in Ann Arbor, Michigan and Columbia, South Carolina. We determined that Power 5 Conference Student Housing was a VIE of which we ~~are~~were not the primary beneficiary, as we did not have the power to direct the most significant activities of the entity nor did we have the obligation to absorb losses or the rights to receive benefits of the entity that could be significant to the entity. As such, our investment in Power 5 Conference Student Housing was accounted for under the equity method of accounting. On February 9, 2022, Power 5 Conference Student Housing sold the two student housing assets that the DST owned and made a final distribution to us totaling approximately $1.0 million. As a result, we recognized a gain of approximately $0.6 million which is included in other income in the accompanying consolidated statement of operations during the ~~six~~nine months ended ~~June~~September 30, 2022.

Note 8. Commitments and Contingencies

Property Management

Our student housing property is managed by a third-party student housing manager. Pursuant to our property management agreements, we pay a monthly management fee, plus reimbursement of amounts reasonably incurred in managing the property, such as employee compensation, marketing costs and certain third-party administrative costs. In certain instances, we pay a construction management fee for certain construction management services. The property management agreement has a one year term and automatically renews for successive one year periods thereafter, unless we or the third-party student housing manager provides prior written notice at least 30 days prior to the expiration of the term. The agreement is also subject to other customary termination provisions.

Our senior housing properties are managed by third-party senior living operators. Pursuant to the respective property management agreements, we pay a monthly management fee plus reimbursement of amounts reasonably incurred in managing the properties, such as employee compensation, marketing costs and certain third-party administrative costs. In certain instances, we may pay a construction management fee for certain construction management services. Additionally, such operators may be entitled to a performance based incentive fee, based on the performance of the property. The property management agreements have an original term of three to five years and automatically renew for successive one year periods thereafter, unless we or the operator provide prior written notice at least 180 days prior to the expiration of the term. The agreements are also subject to customary termination provisions including a termination fee if the agreement is terminated in certain circumstances.

Distribution Reinvestment Plans

We adopted a distribution reinvestment plan in connection with the Private Offering (the “Private Offering Distribution Reinvestment Plan”) that allowed our stockholders to have distributions otherwise distributable to them invested in additional shares of our common stock. On May 1, 2018, we amended and restated the Private Offering Distribution Reinvestment Plan in connection with the Public Offering to establish the purchase price per share under the distribution reinvestment plan of our Class A, Class T, and Class W shares. On June 21, 2019, our board of directors further amended and restated the distribution reinvestment plan (the “Distribution Reinvestment Plan”), effective as of July 13, 2019, to include, as eligible participants, stockholders holding Class Y shares of our common stock and stockholders holding Class Z shares of our common stock, and to state that the purchase price for shares pursuant to the Distribution Reinvestment Plan shall be $9.30 per share for all classes of shares. No sales commissions or dealer manager fees are paid with respect to the sale of such shares. On September 28, 2020, our board of directors further amended the Distribution Reinvestment Plan, effective as of October 10, 2020, to state that the purchase price for shares pursuant to the Distribution Reinvestment Plan shall be equal to the estimated value per share of each class of shares. We may amend or terminate the Distribution Reinvestment Plan for any reason at any time upon 10 days’ prior written notice to stockholders. On March 30, 2020, our board of directors approved the suspension of our distributions; during such suspension, no distributions will be reinvested pursuant to the Distribution Reinvestment Plan.

Share Redemption Program

We adopted a share redemption program that enables stockholders to sell their shares to us in limited circumstances. As long as our common stock is not listed on a national securities exchange or over-the-counter market, our stockholders who have held their stock for at least one year may be able to have all or any portion of their shares of stock redeemed by us. We may redeem the shares of stock presented for redemption for cash to the extent that we have sufficient funds available to fund such redemption.

Our board of directors may amend, suspend or terminate the Share Redemption Program with 30 days’ notice to our stockholders. We may provide this notice by including such information in a Current Report on Form 8-K or in our annual or quarterly reports, all publicly filed with the SEC, or by a separate mailing to our stockholders.

In order to preserve cash in light of the uncertainty relating to COVID-19 and its potential impact on our overall financial results, on March 30, 2020, our board of directors approved the suspension of our share redemption program, effective May 3, 2020. Our share redemption program remains suspended as of ~~June~~September 30, 2023.

STRATEGIC STUDENT & SENIOR HOUSING TRUST, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~June~~September 30, 2023

(Unaudited)

As a result of our board of directors approving an estimated net asset value per share on January 17, 2023, the per share price for the repurchase of a given class of shares is equal to the then-current estimated net asset value per share for such class of shares; however, as noted elsewhere our share redemption program is currently suspended.

If we recommence our share redemption program, there will be several limitations on our ability to redeem shares under the Share Redemption Program including, but not limited to:

•

Unless the shares are being redeemed in connection with a stockholder’s death, “qualifying disability” (as defined under the Share Redemption Program) or bankruptcy, we may not redeem shares until the stockholder has held his or her shares for one year.

•

During any calendar year, we will not redeem in excess of 5% of the weighted-average number of shares outstanding during the prior calendar year.

•

The cash available for redemption is limited to the proceeds from the sale of shares pursuant to our distribution reinvestment plan.

•

We have no obligation to redeem shares if the redemption would violate the restrictions on distributions under Maryland law, which prohibits distributions that would cause a corporation to fail to meet statutory tests of solvency.

For the year ended December 31, 2022 and the ~~six~~nine months ended ~~June~~September 30, 2023, we did not receive any redemption requests.

Operating Partnership Redemption Rights

The limited partners of our Operating Partnership will have the right to cause our Operating Partnership to redeem their limited partnership units for cash equal to the value of an equivalent number of our shares, or, at our option, we may redeem their limited partnership units by issuing one share of our common stock for each limited partnership unit redeemed. These rights may not be exercised under certain circumstances that could cause us to lose our REIT election. Furthermore, limited partners may exercise their redemption rights only after their limited partnership units have been outstanding for one year. Our Advisor is prohibited from exchanging or otherwise transferring its limited partnership units so long as it is acting as our advisor pursuant to the Advisory Agreement.

Other Contingencies

From time to time, we are party to legal proceedings that arise in the ordinary course of our business. We are not aware of any legal proceedings of which the outcome is reasonably likely to have a material adverse effect on our results of operations or financial condition, nor are we aware of any such legal proceedings contemplated by governmental authorities.

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

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read in conjunction with our financial statements and notes thereto contained elsewhere in this report, as well as with our Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended December 31, 2022. See also “Cautionary Note Regarding Forward Looking Statements” preceding Part I.

Strategic Student & Senior Housing Trust, Inc. was formed on October 4, 2016 and commenced formal operations on June 28, 2017, as discussed below. We were formed under the MGCL for the purpose of engaging in the business of investing in student housing and senior housing properties and related real estate investments. We elected to be treated as a REIT under the Internal Revenue Code for federal income tax purposes beginning with our taxable year ended December 31, 2017.

On January 27, 2017, pursuant to a confidential private placement memorandum, we commenced a private offering of up to $100,000,000 in shares of our common stock (the “Primary Private Offering”) and 1,000,000 shares of common stock pursuant to our distribution reinvestment plan (together with the Primary Private Offering, the “Private Offering”). The Private Offering required a minimum offering amount of $1,000,000, which we met on August 4, 2017. Our Private Offering terminated on March 15, 2018. We raised offering proceeds of approximately $91.5 million from the issuance of approximately 10.7 million shares pursuant to the Private Offering. Please see the Notes to the Consolidated Financial Statements contained elsewhere in this report for additional information. Upon the commencement of our Public Offering, discussed below, and the filing of the articles of amendment to our charter, all outstanding common stock was redesignated as Class A common stock.

On May 1, 2018, we commenced a public offering of a maximum of $1.0 billion in common shares for sale to the public (the “Primary Offering”) and $95.0 million in common shares for sale pursuant to our distribution reinvestment plan (together with the Primary Offering, the “Public Offering,” and collectively with the Private Offering, the “Offerings”), consisting of three classes of shares: Class A shares for $10.33 per share (up to $450 million in shares), Class T shares for $10.00 per share (up to $450 million in shares), and Class W shares for $9.40 per share (up to $100 million in shares).

On March 30, 2020, our board of directors approved the suspension of the Primary Offering based upon various factors, including the uncertainty relating to the novel coronavirus (“COVID-19”) pandemic and its potential impact on us and our overall financial results. Our board of directors also approved the suspension of our share redemption program (see Note 8 – Commitments and Contingencies for additional detail) and the suspension of distributions to our stockholders. Primarily as a result of the suspension and subsequent termination of our Public Offering, we currently do not have the equity capital needed to acquire additional properties and, consequently, we are focusing our efforts on managing our existing properties.

Subsequent to March 31, 2020, no sales were made pursuant to the Primary Offering. As of ~~June~~September 30, 2023, we had sold approximately 362,000 Class A shares, approximately 70,000 Class T shares, approximately 83,000 Class W shares, approximately 1.1 million Class Y shares, and approximately 165,000 Class Z shares for gross offering proceeds of approximately $17.1 million in our Primary Offering.

On January 17, 2023, our board of directors, upon recommendation of our nominating and corporate governance committee, approved an estimated value per share of $6.24 for our Class A shares, Class T shares, Class W shares, Class Y shares, and Class Z shares based on the estimated value of our assets less the estimated value of our liabilities, or net asset value, divided by the number of shares outstanding on an adjusted fully diluted basis, calculated as of September 30, 2022.

As of ~~June~~September 30, 2023 we owned one student housing property and four senior housing properties.

As of ~~June~~September 30, 2023, our student housing property portfolio was comprised as follows:

As of ~~June~~September 30, 2023, our senior housing property portfolio was comprised as follows:

We have established accounting policies which conform to generally accepted accounting principles (“GAAP”). Preparing financial statements in conformity with GAAP requires management to use judgment in the application of accounting policies, including making estimates and assumptions. Following is a discussion of the estimates and assumptions used in setting accounting policies that we consider critical in the presentation of our consolidated financial statements. Many estimates and assumptions involved in the application of GAAP may have a material impact on our financial condition or operating performance, or on the comparability of such information to amounts reported for other periods, because of the subjectivity and judgment required to account for highly uncertain items or the susceptibility of such items to change. These estimates and assumptions affect our reported amounts of assets and liabilities, our disclosure of contingent assets and liabilities at the dates of the financial statements and our reported amounts of revenues and expenses during the periods covered by this report. If management’s judgment or interpretation of the facts and circumstances relating to various transactions had been different, it is possible that different accounting policies would have been applied or different amounts of assets, liabilities, revenues and expenses would have been recorded, thus resulting in a materially different presentation of the financial statements or materially different amounts being reported in the financial statements. Additionally, other companies may use different estimates and assumptions that may impact the comparability of our financial condition and results of operations to those companies.

We believe that our critical accounting policies include the following: real estate purchase price allocations; the evaluation of whether any of our long-lived assets have been impaired; the determination of the useful lives of our long-lived assets; and the evaluation of the consolidation of our interests in joint ventures. The following discussion of these policies supplements, but does not supplant the description of our significant accounting policies, as contained in Note 2 of the Notes

to the Consolidated Financial Statements contained in this report, and is intended to present our analysis of the uncertainties involved in arriving upon and applying each policy.

The value of the tangible assets, consisting of land and buildings, is determined as if vacant. Because we believe that substantially all of the leases in place at properties we will acquire will be at market rates, as the majority of the leases are one year or less, we do not expect to allocate any portion of the purchase prices to above or below market leases. Acquisitions of portfolios of properties are allocated to the individual properties based upon an income approach or a cash flow analysis using appropriate risk adjusted capitalization rates which take into account the relative size, age, and location of the individual property along with current and projected occupancy and rental rate levels or appraised values, if available.

Our allocations of purchase prices are based on certain significant estimates and assumptions, variations in such estimates and assumptions could result in a materially different presentation of the consolidated financial statements or materially different amounts being reported in the consolidated financial statements.

The majority of our assets, other than cash and cash equivalents, restricted cash, and other assets consist of long-lived real estate assets as well as intangible assets related to our acquisitions. We will evaluate such assets for impairment based on events and changes in circumstances that may arise in the future and that may impact the carrying amounts of our long-lived assets. When indicators of potential impairment are present, we will assess the recoverability of the particular asset by determining whether the carrying value of the asset will be recovered, through an evaluation of the undiscounted future operating cash flows expected from the use of the asset and its eventual disposition. This evaluation is based on a number of estimates and assumptions. Based on this evaluation, if the expected undiscounted future cash flows do not exceed the carrying value, we will adjust the value of the long-lived asset and recognize an impairment loss. Our evaluation of the impairment of long-lived assets could result in a materially different presentation of the financial statements or materially different amounts being reported in the financial statements, as the amount of impairment loss recognized, if any, may vary based on the estimates and assumptions we use.

We assess the useful lives of the assets underlying our properties based upon a subjective determination of the period of future benefit for each asset. We record depreciation expense with respect to these assets based upon the estimated useful lives we determine. Our determinations of the useful lives of the assets could result in a materially different presentation of the consolidated financial statements or materially different amounts being reported in the consolidated financial statements, as such determinations, and the corresponding amount of depreciation expense, may vary dramatically based on the estimates and assumptions we use.

We evaluate the consolidation of our investments in joint ventures in accordance with relevant accounting guidance. This evaluation requires us to determine whether we have a controlling interest in a joint venture through a means other than voting rights, and, if so, such joint venture may be required to be consolidated in our financial statements. Our evaluation of our joint ventures under such accounting guidance could result in a materially different presentation of the financial statements or materially different amounts being reported in the consolidated financial statements, as the joint venture entities included in our consolidated financial statements may vary based on the estimates and assumptions we use.

We made an election to be taxed as a REIT, under Sections 856 through 860 of the Code, commencing with our taxable year ended December 31, 2017. To continue to qualify as a REIT, we must meet certain organizational and operational requirements, including a requirement to currently distribute at least 90% of the REIT’s ordinary taxable income to stockholders. As a REIT, we generally will not be subject to federal income tax on taxable income that we distribute to our stockholders. If we fail to qualify as a REIT in any taxable year, we will then be subject to federal income taxes on our taxable income at regular corporate rates and will not be permitted to qualify for treatment as a REIT for federal income tax purposes for four years following the year during which qualification is lost unless the IRS grants us relief under certain

statutory provisions. Such an event could materially adversely affect our net income and net cash available for distribution to stockholders. However, we believe that we are organized and operate in such a manner as to qualify for treatment as a REIT and intend to operate in the foreseeable future in such a manner that we will remain qualified as a REIT for federal income tax purposes.

During the ~~three~~nine months ended ~~June~~September 30, 2023 and 2022, we have derived revenues principally from rents and related fees received from residents of our student housing and senior housing properties and to a lesser extent from other services provided at our senior housing properties. Our operating results depend significantly on our ability to retain our existing residents and lease our available units to new residents, while maintaining and, where possible, increasing rates. Additionally, our operating results depend on our residents making their required payments to us.

Competition in the markets in which we operate is significant and affects the occupancy levels, rental rates, rental revenues, fees and operating expenses of our student housing and senior housing properties. Development of any new student housing or senior housing properties would intensify competition in the markets in which we operate and could negatively impact our results.

On March 11, 2020, the World Health Organization declared COVID-19, a respiratory illness caused by the novel coronavirus, a pandemic, and on March 13, 2020, the United States declared a national emergency with respect to COVID-19. The COVID-19 pandemic caused state and local governments to institute quarantines, "shelter in place" rules and restrictions on travel, the types of business that were allowed to continue to operate, and the types of construction projects that were allowed to continue. We have implemented precautionary and protective measures intended to help ensure the well-being of our residents and staff at our student and senior housing properties. The Public Health Emergency expired in May 2023 and we expect the adverse effect the COVID-19 pandemic has had on our financial condition and results of operations to continue to mitigate. We expect revenues and expenses to continue to fluctuate, as we remain cognizant of the current economic risk factors that could negatively impact the financial performance of our portfolio in future periods.

During the quarters ended ~~June~~September 30, 2023 and 2022, there was limited COVID-19 impact at our Fayetteville property. In August 2022, both universities reopened and instruction platforms primarily returned back to an on-campus format. On January 6, 2022, we sold the Tallahassee property to an unaffiliated third party. Occupancy at our Fayetteville property was over ~~96%~~99% as of ~~June~~September 30, 2023. Our pre-leasing for academic year ~~2023/2024~~2024/2025 is currently at approximately ~~100%~~75% at our Fayetteville property serving the University of Arkansas. Due to increased ~~freshmen~~ enrollment over the last two years coupled with minimal new development in Fayetteville, we ~~anticipate~~are experiencing more favorable supply and demand conditions, ~~and a potential opportunity~~which has allowed us to ~~grow rents further~~continue to increase rental rates during the preleasing for academic year 2024/2025.

At our senior housing properties, during the majority of 2020, we limited visitors to our properties to essential visitors, including employees, care providers and medical personnel and family members. Also, in-person prospective resident property tours were either restricted or very limited. The protective measures implemented at our properties and the local government “stay at home” mandates limited our ability to accept new residents and influenced care givers and prospective residents to delay move-ins to our properties when there is not a medical necessity. Subsequent to the success of vaccination clinics in the spring of 2021 and the easing of local government COVID restrictions, we expanded in-person prospective resident tours and resumed certain community activities. During the second half of 2021, however, COVID-19 variant breakthrough infections had a negative impact on operations at our senior housing properties. These breakthrough infections resulted in resident hospitalizations, temporary community lockdowns, restricted family visitations, and staffing shortages. During 2022 and 2023, we have experienced increased move in ~~activity;~~activity and occupancies; however, we continue to incur incremental, COVID-19 related expenses. In addition, historically low unemployment and ~~new~~ competitors, have negatively affected the ability of our senior housing properties to maintain necessary staffing levels resulting in the need to use third party contract services and overtime.

Leasing and related revenues - student for the three months ended ~~June~~September 30, 2023 were approximately $1.2 million, as compared to approximately $1.1 million for the three months ended ~~June~~September 30, 2022, an increase of ~~approximately $0.1~~

approximately $0.1 million. The increase is primarily attributable to an increase in rates. We expect leasing and related revenues – student to fluctuate in future periods for the Fayetteville property commensurate with our leasing activity.

Leasing and related revenues - senior for the three months ended ~~June~~September 30, 2023 were approximately ~~$8.1~~$8.3 million, as compared to approximately ~~$7.5~~$7.7 million for the three months ended ~~June~~September 30, 2022, an increase of approximately $0.6 million. The increase is primarily attributable to an increase in both occupancies and rates at our senior housing properties. We expect leasing and related revenues to fluctuate in future periods commensurate with our leasing activity.

Property operating expenses - student for the three months ended ~~June~~September 30, 2023 were approximately ~~$0.6~~$0.7 million, as compared to approximately ~~$0.5~~$0.9 million for the three months ended ~~June~~September 30, 2022, ~~an increase~~a decrease of approximately ~~$0.1~~$0.2 million. Such expenses include the cost to operate our student housing properties including payroll, utilities, insurance, real estate taxes, repairs and maintenance, marketing, and third-party property management fees. Expenses at our Fayetteville property ~~increased~~decreased primarily due to ~~an increase~~cost savings in ~~property taxes~~turnover, marketing, and ~~insurance.~~utilities.

Property operating expenses - senior for the three months ended ~~June~~September 30, 2023 were approximately ~~$5.7~~$6.1 million, as compared to approximately ~~$5.3~~$5.5 million for the three months ended ~~June~~September 30, 2022, an increase of approximately $0.6 million. Such property operating expenses include the cost to operate our senior housing properties including payroll, food service costs, utilities, insurance, real estate taxes, repairs and maintenance, marketing, and third-party property management fees. The increase is primarily due to occupancy related costs, including an increase in payroll, due to an increase in employee headcount, the use of contract services, and turnover costs to fill vacancies. To a lesser extent, inflationary pressures impacted overall property expenses, not limited to payroll, utilities, repairs and maintenance, and insurance.

Property operating expenses - affiliates for each of the three months ended September 30, 2023 and 2022 were approximately $0.6 million. Property operating expenses - affiliates consists of asset management and property management oversight fees due to our Advisor.

General and administrative expenses for the three months ended September 30, 2023 were approximately $0.5 million, as compared to approximately $0.4 million for the three months ended September 30, 2022, an increase of approximately $0.1 million. General and administrative expenses consist primarily of legal expenses, directors’ and officers’ insurance expense, transfer agent expenses, an allocation of a portion of payroll related costs attributable to our Advisor and its affiliates, accounting expenses and professional services. The increase was primarily due to an increase in professional services, legal, and accounting expenses. We expect general and administrative expenses to fluctuate in future periods commensurate with our operational activity.

Depreciation expense for both of the three months ended September 30, 2023 and 2022 were approximately $1.8 million. Depreciation expense consists primarily of depreciation on the buildings, site improvements, and furniture, fixtures and equipment at our properties.

Interest expense for the three months ended September 30, 2023 was approximately $2.3 million, as compared to approximately $2.1 million for the three months ended September 30, 2022, an increase of approximately $0.2 million. The increase is primarily attributable to the increased rate on our variable rate Courtyard Bridge Loans. We expect interest expense to fluctuate in future periods commensurate with our future debt level and interest rates.

Interest expense - debt issuance costs for both of the three months ended September 30, 2023 and 2022 were approximately $0.1 million. Interest expense - debt issuance costs reflects the amortization of costs incurred in connection with obtaining debt related to the acquisition of our properties. We expect interest expense - debt issuance costs to fluctuate commensurate with our future financing activity.

Leasing and related revenues - student for the nine months ended September 30, 2023 were approximately $3.6 million, as compared to approximately $3.3 million for the nine months ended September 30, 2022, an increase of approximately $0.3 million. Approximately $0.2 million of the prior year revenue was attributable to the Tallahassee property that was sold in January 2022. Revenue at our Fayetteville property increased approximately $0.5 million primarily due to an increase in rates and other rental fees. We expect leasing and related revenues – student to fluctuate in future periods for the Fayetteville property commensurate with our leasing activity.

Leasing and related revenues - senior for the nine months ended September 30, 2023 were approximately $24.3 million, as compared to approximately $22.1 million for the nine months ended September 30, 2022, an increase of approximately $2.2 million. The increase is primarily attributable to an increase in both occupancies and rates at our senior housing properties. We expect leasing and related revenues to fluctuate in future periods commensurate with our leasing activity.

Property operating expenses - student for each of the nine months ended September 30, 2023 and 2022 were approximately $2.0 million. Such expenses include the cost to operate our student housing properties including payroll, utilities, insurance, real estate taxes, repairs and maintenance, marketing, and third-party property management fees. Approximately $0.1 million of the prior year expense was attributable to the Tallahassee property that was sold in January 2022. Expenses at our Fayetteville property increased approximately $50,000 primarily due to increases in insurance, and payroll.

Property operating expenses - senior for the nine months ended September 30, 2023 were approximately $17.5 million, as compared to approximately $15.9 million for the nine months ended September 30, 2022, an increase of approximately $1.6 million. Such property operating expenses include the cost to operate our senior housing properties including payroll, food service costs, utilities, insurance, real estate taxes, repairs and maintenance, marketing, and third-party property management fees. The increase is primarily due to occupancy related costs, including an increase in payroll, due to an increase in employee headcount and turnover costs to fill vacancies. To a lesser extent, inflationary pressures impacted overall property expenses, not limited to payroll, utilities, repairs and maintenance, and insurance.

Property operating expenses - affiliates for each of the ~~three~~nine months ended ~~June~~September 30, 2023 and 2022 were approximately ~~$0.6~~$1.8 million. Property operating expenses - affiliates consists of asset management and property management oversight fees due to our Advisor.

General and administrative expenses for the ~~three~~nine months ended ~~June~~September 30, 2023 were approximately ~~$0.7~~$1.8 million, as compared to approximately ~~$0.4~~$1.2 million for the ~~three~~nine months ended ~~June~~September 30, 2022, an increase of approximately ~~$0.3~~$0.6 million. General and administrative expenses consist primarily of legal expenses, directors’ and officers’ insurance expense, transfer agent expenses, an allocation of a portion of payroll related costs attributable to our Advisor and its affiliates, accounting expenses and professional services. The increase was primarily due to an increase in professional services, legal, and accounting expenses. We expect general and administrative expenses to fluctuate in future periods commensurate with our operational activity.

Depreciation expense for the ~~three~~nine months ended ~~June~~September 30, 2023 was approximately ~~$1.7~~$5.3 million, as compared to approximately ~~$1.8~~$5.5 million for the ~~three~~nine months ended ~~June~~September 30, 2022, a decrease of approximately ~~$0.1~~$0.2 million. Depreciation expense consists primarily of depreciation on the buildings, site improvements, and furniture, fixtures and equipment at our properties.

Gain on the sale of real estate, net for the nine months ended September 30, 2023 and 2022 was none and approximately $12.1 million, respectively. The net gain was related to the sale of the Tallahassee property in January 2022.

Interest expense for the ~~three~~nine months ended ~~June~~September 30, 2023 was approximately ~~$2.2~~$6.7 million, as compared to approximately ~~$2.0~~$6.1 million for the ~~three~~nine months ended ~~June~~September 30, 2022, an increase of approximately ~~$0.2~~$0.6 million. The increase is primarily attributable to the increased rate on our variable rate Courtyard Bridge Loans. We expect interest expense to fluctuate in future periods commensurate with our future debt level and interest rates.

Interest expense - debt issuance costs for ~~both of~~ the ~~three~~nine months ended June 30, 2023 and 2022 were approximately $0.1 million. Interest expense - debt issuance costs reflects the amortization of costs incurred in connection with obtaining debt related to the acquisition of our properties. We expect interest expense - debt issuance costs to fluctuate commensurate with our future financing activity.

~~Leasing and related revenues - student for the six months ended June~~September 30, 2023 were approximately ~~$2.4~~$0.2 million, as compared to approximately ~~$2.3~~$0.3 million for the ~~six~~nine months ended June 30, 2022, an increase of approximately $0.1 million. Approximately $0.2 million of the prior year revenue was attributable to the Tallahassee property that was sold in January 2022. Revenue at our Fayetteville property increased approximately $0.3 million primarily due to an increase in rates. We expect leasing and related revenues – student to fluctuate in future periods for the Fayetteville property commensurate with our leasing activity.

Leasing and related revenues - senior for the six months ended June 30, 2023 were approximately $15.9 million, as compared to approximately $14.5 million for the six months ended June 30, 2022, an increase of approximately $1.4 million. The increase is primarily attributable to an increase in both occupancies and rates at our senior housing properties. We expect leasing and related revenues to fluctuate in future periods commensurate with our leasing activity.

Property operating expenses - student for the six months ended June 30, 2023 were approximately $1.3 million, as compared to approximately $1.2 million for the six months ended June 30, 2022, an increase of approximately $0.1 million. Such expenses include the cost to operate our student housing properties including payroll, utilities, insurance, real estate taxes, repairs and maintenance, marketing, and third-party property management fees. Approximately $80,000 of the prior year expense was attributable to the Tallahassee property that was sold in January 2022. Expenses at our Fayetteville property increased approximately $160,000 primarily due to an increase in real estate taxes, insurance, and repairs and maintenance.

Property operating expenses - senior for the six months ended June 30, 2023 were approximately $11.5 million, as compared to approximately $10.5 million for the six months ended June 30, 2022, an increase of approximately $1.0 million. Such property operating expenses include the cost to operate our senior housing properties including payroll, food service costs, utilities, insurance, real estate taxes, repairs and maintenance, marketing, and third-party property management fees. The increase is primarily due to occupancy related costs, including an increase in payroll, due to an increase in employee headcount and turnover costs to fill vacancies. To a lesser extent, inflationary pressures impacted overall property expenses, not limited to payroll, utilities, repairs and maintenance, and insurance.

Property operating expenses - affiliates for each of the six months ended June 30, 2023 and 2022 were approximately $1.2 million. Property operating expenses - affiliates consists of asset management and property management oversight fees due to our Advisor.

General and administrative expenses for the six months ended June 30, 2023 were approximately $1.3 million, as compared to approximately $0.8 million for the six months ended June 30, 2022, an increase of approximately $0.5 million. General and administrative expenses consist primarily of legal expenses, directors’ and officers’ insurance expense, transfer agent expenses, an allocation of a portion of payroll related costs attributable to our Advisor and its affiliates, accounting expenses and professional services. The increase was primarily due to an increase in professional services, legal, and accounting expenses. We expect general and administrative expenses to fluctuate in future periods commensurate with our operational activity.

~~Depreciation expense for the six months ended June 30, 2023 was approximately $3.5 million, as compared to approximately $3.7 million for the six months ended June~~September 30, 2022, a decrease of approximately ~~$0.2 million. Depreciation expense consists primarily of depreciation on the buildings, site improvements, and furniture, fixtures and equipment at our properties.~~

Gain on the sale of real estate, net for the six months ended June 30, 2023 and 2022 was none and approximately $12.1 million, respectively. The net gain was related to the sale of the Tallahassee property in January 2022.

Interest expense for the six months ended June 30, 2023 was approximately $4.5 million, as compared to approximately $4.0 million for the six months ended June 30, 2022, an increase of approximately $0.5 million. The increase is primarily attributable to the increased rate on our variable rate Courtyard Bridge Loans. We expect interest expense to fluctuate in future periods commensurate with our future debt level and interest rates.

~~Interest expense - debt issuance costs for both of the six months ended June 30, 2023 and 2022 were approximately $0.2~~$0.1 million. Interest expense - debt issuance costs reflects the amortization of costs incurred in connection with obtaining debt related to the acquisition of our properties. We expect interest expense - debt issuance costs to fluctuate commensurate with our future financing activity.

Loss on extinguishment of debt for the ~~six~~nine months ended ~~June~~September 30, 2023 and 2022 was none and approximately $2.0 million, respectively. The loss was primarily attributable to approximately $1.9 million in yield maintenance fees, and the write-off of unamortized debt issuance costs related to the Tallahassee Nationwide mortgage loan paid off in connection with the sale of the Tallahassee property in January 2022.

Other income for the ~~six~~nine months ended ~~June~~September 30, 2023 was approximately ~~$60,000~~$0.1 million as compared to approximately ~~$580,000~~$0.6 million for the ~~six~~nine months ended ~~June~~September 30, 2022, a decrease of approximately ~~$520,000.~~$0.5 million. During the ~~six~~nine months ended ~~June~~September 30, 2022, other income primarily related to our equity method investment in Power 5 Conference Student Housing, which sold its two remaining student housing assets that the DST owned, and ~~making~~made a final distribution to us totaling approximately $1.0 million, resulting in a gain of approximately ~~$600,000.~~$0.6 million.

A comparison of our cash flows for operating, investing and financing activities for the ~~six~~nine months ended ~~June~~September 30, 2023 and 2022, is as follows:

Cash flows provided by (used in) operating activities for the ~~six~~nine months ended ~~June~~September 30, 2023 and 2022 were approximately ~~$0.9~~$1.3 million and ($~~0.1)~~0.2) million, respectively, a change of approximately ~~$1.0~~$1.5 million. The increase in cash provided by operating activities was primarily the result of an increase in cash provided by operating assets and liabilities.

Cash flows (used in) provided by investing activities for the ~~six~~nine months ended ~~June~~September 30, 2023 and 2022 were approximately ($~~2.0)~~2.4) million and ~~$48.6~~$47.5 million, respectively, a change of approximately ($~~50.6)~~49.9) million. The decrease in cash provided by investing activities is primarily the result of the net proceeds from the sale of the Tallahassee property in January 2022.

Cash flows used in financing activities for the ~~six~~nine months ended ~~June~~September 30, 2023 and 2022 were approximately ~~$1.1~~$1.7 million and ~~$41.2~~$41.5 million, respectively, a change of approximately ~~$40.1~~$39.8 million. The decrease in cash used in financing activities is primarily the result of the repayment of the entire principal balance of the Tallahassee Nationwide Loan, totaling $23.5 million and the principal payment of the KeyBank Bridge Loans of approximately $17.0 million, which were made in conjunction with the sale of the Tallahassee property in January 2022.

Our liquidity needs consist primarily of our property operating expenses, general and administrative expenses, regularly scheduled debt service payments, and capital expenditures. Currently, we generally expect that we will meet our

short-term operating liquidity requirements from the combination of our cash on hand, proceeds from net cash provided by

property operations, proceeds from secured or unsecured financing from banks or other lenders, issuance of preferred units in our Operating Partnership, and advances from our Advisor, which will be repaid, without interest, as funds are available after meeting our current liquidity requirements, subject to the limitations on reimbursement set forth in our Advisory Agreement.

We believe we have access to adequate resources to meet the needs of our existing operations, mandatory capital expenditures, and working capital, to the extent not funded by cash provided by operating activities. However, volatility in the debt and equity markets and continued and/or further impact of COVID-19, inflation and other economic events will depend on future developments, which are highly uncertain. While we do not expect such events to have a material impact upon our liquidity in the short-term, continued uncertainty or deterioration in the debt and equity markets over an extended period of time could potentially impact our liquidity over the long-term.

The Courtyard Bridge Loans and the Fayetteville JPM Mortgage Loan mature in April 2024 and July 2024, respectively. We are currently evaluating multiple options, which include extending the maturity date of the loans, refinancing with a different lender or related party, or the sale of one or more of the properties we currently own, to satisfy these loans.

In order to retain cash and preserve financial flexibility in light of the impact that COVID-19 has had and could continue to have on our business and the uncertainty as to the ultimate severity, duration, and effects of the outbreak, on March 30, 2020, our board of directors approved the suspension of all distributions to our stockholders.

Historically, we have made distributions to our stockholders using a combination of cash flows from operations and the proceeds from the Public Offering in anticipation of additional future cash flow. As such, this reduces the amount of capital we ultimately invested in properties. Because substantially all of our operations are performed indirectly through our Operating Partnership, our ability to pay distributions depends in large part on our Operating Partnership’s ability to pay distributions to its partners, including to us. In the event we do not have enough cash from operations to fund cash distributions, we may borrow, issue additional securities or sell assets in order to fund the distributions or make the distributions out of net proceeds from our Public Offering, if any. Though we have previously only paid cash distributions and may pay stock distributions in the future, we are authorized by our charter to pay in-kind distributions of readily marketable securities, distributions of beneficial interests in a liquidating trust established for our dissolution and the liquidation of our assets in accordance with the terms of the charter or distributions that meet all of the following conditions: (a) our board of directors advises each stockholder of the risks associated with direct ownership of the property; (b) our board of directors offers each stockholder the election of receiving such in-kind distributions; and (c) in-kind distributions are only made to those stockholders who accept such offer.

Distributions are paid to our stockholders based on the record date selected by our board of directors. Prior to the suspension of our distributions, we paid distributions monthly based on daily declaration and record dates so that investors may be entitled to distributions immediately upon purchasing our shares. Distributions are authorized at the discretion of our board of directors, which are directed, in substantial part, by its obligation to cause us to comply with the REIT requirements of the Code. Our board of directors may increase, decrease or eliminate the distribution rate that is being paid at any time. Distributions are made on all classes of our common stock at the same time. The per share amount of distributions on different classes of shares will likely differ because of different allocations of class-specific expenses. Specifically, distributions on Class T shares, Class W shares, Class Y shares, and Class Z shares will likely be lower than distributions on Class A shares because Class T shares and Class Y shares are subject to ongoing stockholder servicing fees and Class W shares and Class Z shares are subject to ongoing dealer manager servicing fees. The funds we receive from operations that are available for distribution may be affected by a number of factors, including the following:

~~We did not declare or pay any distributions during the three months ended June 30, 2023 and 2022.~~

We commenced paying distributions in September 2017. From our inception through ~~June~~September 30, 2023, we paid cumulative distributions of approximately $17.3 million including approximately $0.2 million related to our preferred unitholders, as compared to cumulative net loss attributable to our common stockholders of approximately ~~$74.6~~$77.4 million which includes acquisition related expenses of approximately $3.4 million and non-cash depreciation and amortization of approximately ~~$65.8~~$67.6 million.

For the three and ~~six~~nine months ended ~~June~~September 30, 2023, we did not declare or pay any distributions and had a net loss attributable to our common stockholders of approximately $2.8 million and ~~$5.6~~$8.4 million, respectively. For the three and nine months ended September 30, 2022, we did not declare or pay any distributions and had a net (loss) gain attributable to our common stockholders of approximately ($2.9) million and $2.4 million, respectively.

We must distribute to our stockholders at least 90% of our taxable income each year in order to meet the requirements for being treated as a REIT under the Code. Our directors may authorize distributions in excess of this percentage as they deem appropriate. Because we may receive income from interest or rents at various times during our fiscal year, distributions may not reflect our income earned in that particular distribution period, but may be made in anticipation of cash flow that we expect to receive during a later period and may be made in advance of actual receipt of funds in an attempt to make distributions relatively uniform. To allow for such differences in timing between the receipt of income and the payment of expenses, and the effect of required debt payments, among other things, we could be required to borrow funds from third parties on a short-term basis, issue new securities, or sell assets to meet the distribution requirements that are necessary to achieve the tax benefits associated with qualifying as a REIT. We are not prohibited from undertaking such activities by our charter, bylaws or investment policies, and we may use an unlimited amount from any source to pay our distributions. These methods of obtaining funding could affect future distributions by increasing operating costs and decreasing available cash, which could reduce the value of our stockholders’ investment in our shares. In addition, such distributions may constitute a return of investors’ capital. In the future, we may decide to make stock distributions or to make distributions using a combination of stock and cash in order to meet the REIT distribution requirements under the Code or otherwise.

We have not been able to, and may not be able to, pay distributions, solely from our cash flows from operations, in which case distributions may be paid in part from debt financing. The payment of distributions from sources other than cash flows from operations may reduce the amount of proceeds available for investment and operations or cause us to incur additional interest expense as a result of borrowed funds.

As of ~~June~~September 30, 2023, our total indebtedness was approximately ~~$162.7~~$162.1 million, which included approximately ~~$136.7~~$136.2 million in fixed rate debt and approximately ~~$26.0~~$25.9 million in variable rate debt. See Note 4 of the Notes to the Consolidated Financial Statements for more information about our indebtedness.

On November 13, 2020, we entered into an amendment to the KeyBank Bridge Loans (the “Fifth Amendment”), pursuant to which the loan maturity date was further extended to April 30, 2022 and certain covenants were revised. We were required to pay $1.0 million of the balance of the loan at signing of the Fifth Amendment, along with a fee equal to 0.50% of the then-outstanding principal balance of the loan. Beginning in May 2021, since the balance of the KeyBank Bridge Loans had not been reduced to $20 million, we were required start paying a monthly fee of 0.05% of the loan balance above $20 million until such reduction is reached. Additionally, since the balance of the KeyBank Bridge Loans had not been reduced to $20 million by October 31, 2021, we were required to start making principal payments of $50,000 per month until such reduction is reached. The interest rate on the KeyBank Bridge Loans is also now subject to a minimum SOFR of 0.25%. Pursuant to the Fifth Amendment, we are also required to fund a reserve comprised of six months of interest payments, which may be utilized to pay interest but must generally be replenished. See Note 4 of the Notes to the Consolidated Financial Statements for more information about the required payments. On November 9, 2021, we amended the KeyBank Bridge Loans such that the loan maturity date was further extended to April 30, 2023. In connection with the sale of the Tallahassee property, we paid $17 million toward the principal of the KeyBank Bridge Loans. On October 28, 2022, we amended the KeyBank Bridge Loans such that the loan maturity date was further extended to April 30, 2024.

If necessary, we will request that our lender, KeyBank, grant covenant relief, as well as extend the maturity date of the loans. If we are unable to extend the maturity date of the loans, we plan to seek other sources of financing with a different lender. Alternatively, we could also sell one or more of the properties we currently own to generate proceeds that could be used to satisfy these loans. If the KeyBank Bridge Borrowers are unable to refinance or satisfy the loans as described above

and the Company was unable to satisfy its guaranty, KeyBank will have the right to sell or dispose of the collateral and/or enforce and collect the collateral securing the loans.

On a long-term basis, our principal demands for funds will be for the payment of interest and principal on our outstanding indebtedness, for the payment of operating expenses and distributions, if resumed in the future, and for property acquisitions, either directly or through entity interests, if any.

Long-term potential future sources of capital include secured or unsecured financings from banks or other lenders, issuance of equity securities including private offerings, undistributed funds from operations, and potential sales of remaining properties. To the extent we are not able to secure requisite financing in the form of a credit facility or other debt, we will be dependent upon proceeds from the issuance of equity securities, cash flows from operating activities in order to meet our long-term liquidity requirements and to fund our distributions, if any.

The following table summarizes our contractual obligations as of ~~June~~September 30, 2023:

Our investment in the private placement offering by the Power 5 Conference Student Housing I, DST was accounted for under the equity method of accounting. For more information please see Note 7 of the Notes to the Consolidated Financial Statements contained in this report. Other than that, we do not have any relationships with unconsolidated entities or financial partnerships. Such entities are often referred to as structured finance or special purposes entities, which typically are established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. Further, we have not guaranteed any obligations of unconsolidated entities nor do we have any commitments or intent to provide funding to any such entities.

Market risk includes risks that arise from changes in interest rates, commodity prices, equity prices and other market changes that affect market sensitive instruments. In pursuing our business plan, we expect that the primary market risk to which we will be exposed is interest rate risk. We may be exposed to the effects of interest rate changes primarily as a result of borrowings used to maintain liquidity and fund acquisition, expansion, and financing of our real estate investment portfolio and operations. Our interest rate risk management objectives are to limit the impact of interest rate changes on earnings and cash flows and to lower overall borrowing costs. To achieve our objectives, we may borrow at fixed rates or variable rates. We may also enter into derivative financial instruments such as interest rate swaps and caps in order to mitigate our interest rate risk on a related financial instrument. We will not enter into derivative or interest rate transactions for speculative purposes.

As of ~~June~~September 30, 2023, our debt consisted of approximately ~~$162.7~~$162.1 million, which included approximately ~~$136.7~~$136.2 million in fixed rate debt and approximately ~~$26.0~~$25.9 million in variable rate debt. Our debt instruments were entered into for other than trading purposes. Changes in interest rates have different impacts on fixed and variable debt. A change in interest rates on fixed rate debt impacts its fair value but has no impact on interest incurred or cash flows. A change in interest rates on the variable debt could impact the interest incurred and cash flows and its fair value. If the underlying rate of the related index on our variable rate debt were to increase or decrease by 100 basis points, the increase or decrease in interest would increase or decrease future earnings and cash flows by approximately $0.3 million annually.

The following table summarizes annual debt maturities and average interest rates on our outstanding debt as of ~~June~~September 30, 2023:


	Year Ending December 31,																					Year Ending December 31,
	2023			2024			2025			2026			2027			Thereafter			Total			2023			2024			2025			2026			2027			Thereafter			Total
Fixed rate debt	$	838,210		$	31,251,707		$	1,799,440		$	1,900,615		$	1,998,274		$	98,882,866		$	136,671,112		$	424,381		$	31,251,707		$	1,799,440		$	1,900,615		$	1,998,274		$	98,882,866		$	136,257,283
Average interest rate		4.79	%		4.94	%		4.94	%		4.94	%		4.94	%		4.94	%		4.92	%		4.79	%		4.94	%		4.94	%		4.94	%		4.94	%		4.94	%		4.92	%
Variable rate debt	$	300,000		$	25,716,550			—			—			—			—		$	26,016,550		$	150,000		$	25,716,550			—			—			—			—		$	25,866,550
Average interest rate(1)		9.19	%		9.19	%		—			—			—			—			9.19	%		9.42	%		9.42	%		—			—			—			—			9.42	%

As of the end of the period covered by this report, management, including our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures. Based upon this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures were effective as of the end of the period covered by this report to ensure that information required to be disclosed in the reports we file and submit under the Exchange Act is recorded, processed, summarized and reported as and when required. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports we file and submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and our Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

There have been no changes in our internal control over financial reporting that occurred during the quarter ended ~~June~~September 30, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

The following should be read in conjunction with the risk factors set forth in the “Risk Factors” section of our Annual Report on Form 10-K for the year ended December 31, 2022.

We have incurred net losses to date, have an accumulated deficit and our operations may not be profitable in 2023.

We incurred a net loss attributable to common stockholders of approximately ~~$5.6~~$8.4 million for the ~~six~~nine months ended ~~June~~September 30, 2023. Our accumulated deficit was approximately ~~$74.6~~$77.4 million as of ~~June~~September 30, 2023. Given that (i) we are in our operational stage and (ii) due to COVID-19 we terminated our Public Offering, we currently have no plans to acquire any additional properties, and our operations will likely not be profitable in 2023.

The exhibits required to be filed with this report are set forth on the Exhibit Index hereto and incorporated by reference herein.

The following exhibits are included in this report on Form 10-Q for the period ended ~~June~~September 30, 2023 (and are numbered in accordance with Item 601 of Regulation S-K).

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
None	None	None


Large accelerated filer		Accelerated filer	
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒


		Page No.
	Cautionary Note Regarding Forward-Looking Statements	3

PART I.	FINANCIAL INFORMATION

Item 1.	Consolidated Financial Statements:	4

	Consolidated Balance Sheets as of ~~June~~September 30, 2023 (unaudited) and December 31, 2022	5

	Consolidated Statements of Operations for the Three and ~~Six~~Nine Months Ended ~~June~~September 30, 2023 and 2022 (unaudited)	6

	Consolidated Statements of Equity and Temporary Equity for the Three Months Ended March 31, 2022, June 30, 2022, and ~~June~~September 30, 2022 (unaudited)	7

	Consolidated Statements of Equity and Temporary Equity for the Three Months Ended March 31, 2023, June 30, 2023, and ~~June~~September 30, 2023 (unaudited)	7
	Consolidated Statements of Cash Flows for the ~~Six~~Nine Months Ended ~~June~~September 30, 2023 and 2022 (unaudited)	8

	Notes to Consolidated Financial Statements (unaudited)	9

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	33

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	42

Item 4.	Controls and Procedures	43

PART II.	OTHER INFORMATION

Item 1.	Legal Proceedings	44

Item 1A.	Risk Factors	44

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	44

Item 3.	Defaults Upon Senior Securities	44

Item 4.	Mine Safety Disclosures	44

Item 5.	Other Information	44

Item 6.	Exhibits	44


Property	Date Acquired	Year Built	Primary University Served	Average Monthly Revenue / Bed(1)		# of Units		# of Beds		Occupancy%(2)			Date Acquired	Year Built	Primary University Served	Average Monthly Revenue / Bed(1)		# of Units		# of Beds		Occupancy%(2)
Fayetteville	June 28, 2017	2016	University of Arkansas	$	621		198		589		96.6	%	June 28, 2017	2016	University of Arkansas	$	624		198		589		99.0	%


Property		Date Acquired	Year Built	City, State	Average Monthly Revenue / Unit(1)		# of Units		Occupancy%(2)				Date Acquired	Year Built	City, State	Average Monthly Revenue / Unit(1)		# of Units		Occupancy%(2)
Wellington		February 23, 2018	1999	Millcreek, Utah	$	5,048		119		92.8	%		February 23, 2018	1999	Millcreek, Utah	$	5,063		119		95.0	%
Cottonwood Creek		February 23, 2018	1982	Millcreek, Utah		4,129		112		87.7	%		February 23, 2018	1982	Millcreek, Utah		4,173		112		84.8	%
Charleston		February 23, 2018	2005	Cedar Hills, Utah		4,758		64		92.0	%		February 23, 2018	2005	Cedar Hills, Utah		4,800		64		100.0	%
Courtyard		August 31, 2018	1992-2019	Portland, Oregon		5,141		309		92.0	%		August 31, 2018	1992-2019	Portland, Oregon		5,145		309		94.8	%
Total	Total				$	4,898		604		91.4	%	Total				$	4,917		604		93.5	%


	Six Months Ended									Nine Months Ended
	June 30, 2023			June 30, 2022			Change			September 30, 2023			September 30, 2022			Change
Net cash flow provided by (used in):
Operating activities	$	928,321		$	(132,847	)	$	1,061,168		$	1,354,612		$	(179,787	)	$	1,534,399
Investing activities		(2,041,568	)		48,576,815			(50,618,383	)		(2,398,958	)		47,498,062			(49,897,020	)
Financing activities		(1,142,382	)		(41,208,061	)		40,065,679			(1,706,211	)		(41,528,787	)		39,822,576


	Payments due during the years ending December 31:										Payments due during the years ending December 31:
	Total		2023		2024-2025		2026-2027		Thereafter		Total		2023		2024-2025		2026-2027		Thereafter
Debt interest(1)	$	28,834,762	$	4,507,134	$	11,998,819	$	10,092,991	$	2,235,818	$	26,611,207	$	2,263,985	$	12,018,413	$	10,092,991	$	2,235,818
Debt principal(2)		162,687,662		1,138,210		58,767,697		3,898,889		98,882,866		162,123,833		574,381		58,767,697		3,898,889		98,882,866
Total contractual obligations	$	191,522,424	$	5,645,344	$	70,766,516	$	13,991,880	$	101,118,684	$	188,735,040	$	2,838,366	$	70,786,110	$	13,991,880	$	101,118,684


Exhibit No.	Description

3.1	Amended and Restated Bylaws of Strategic Student & Senior Housing Trust, Inc., incorporated by reference to Exhibit 3.3 to Pre-Effective Amendment No. 3 to the Company’s Registration Statement on Form S-11, filed on April 26, 2018, Commission File No. 333-220646

3.2	Second Articles of Amendment and Restatement of Strategic Student & Senior Housing Trust, Inc., incorporated by reference to Exhibit 3.1 to the Company’s Form 8-K, filed on June 15, 2018, Commission File No. 333-220646

3.3	Articles of Amendment to Second Articles of Amendment and Restatement of Strategic Student & Senior Housing Trust, Inc., incorporated by reference to Exhibit 3.2 to the Company’s Form 8-K, filed on June 15, 2018, Commission File No. 333-220646

3.4	Second Articles of Amendment to Second Articles of Amendment and Restatement of Strategic Student & Senior Housing Trust, Inc., incorporated by reference to Exhibit 3.1 to the Company’s Form 8-K, filed on June 14, 2019, Commission File No. 333-220646

3.5	Articles Supplementary to Second Articles of Amendment and Restatement of Strategic Student & Senior Housing Trust, Inc., incorporated by reference to Exhibit 3.1 to Post-Effective Amendment No. 4 to the Company’s Registration Statement on Form S-11, filed on July 10, 2019, Commission File No. 333-220646

31.1*	Certification of Principal Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2*	Certification of Principal Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1*	Certification of Principal Executive Officer, pursuant to 18 U.S.C. Section 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002

32.2*	Certification of Principal Financial Officer, pursuant to 18 U.S.C. Section 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002

101*	The following Strategic Student & Senior Housing Trust, Inc. financial information for the Three Months Ended ~~June~~September 30, 2023, formatted in Inline XBRL: (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Consolidated Statements of Equity and Temporary Equity, (iv) Consolidated Statements of Cash Flows and (v) the Notes to Consolidated Financial Statements. The instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.

104*	The cover page from the Strategic Student & Senior Housing Trust, Inc.’s Quarterly Report on Form 10-Q for the quarter ended ~~June~~September 30, 2023, has been formatted in Inline XBRL.


	STRATEGIC STUDENT & SENIOR HOUSING TRUST, INC.
	(Registrant)

Dated: ~~August 7,~~November 13, 2023	By:	/s/ Matt F. Lopez
		Matt F. Lopez
		Chief Financial Officer, Treasurer, and Secretary
		(Principal Financial and Accounting Officer)