The filing arrives thirty-four days after Judge John F. Walter signed the order certifying Pino v. Cardone Capital LLC as a class action under Rule 23(b)(3), and seventeen days after the class notice deadline we flagged it in our March 30 article on this site.

What we examine in this article is the first Cardone REIT I disclosure document filed after class certification. It is signed by Grant Cardone in his capacity as Chief Executive Officer of the Manager, and by Rey Valdez — a Rialto Capital alumnus who joined Cardone Capital in 2025 — as Principal Financial Officer.

The filing was audited by Kaufman, Rossin & Co., P.A. of Miami, the same firm that has audited Cardone REIT I since inception. The auditor issued a clean opinion. There is no going-concern modification. There is no reserve for the certified federal securities class action now in active discovery against the Manager and Mr. Cardone personally.

The 1-K confirms, extends, and in several places sharpens the thesis I developed across the March 30 class certification analysis and the March 23 companion piece on the Cardone clan’s digital asset infrastructure. It also resolves several of the priority watch items I named in the March 30 piece. The answers are not what Cardone Capital’s marketing apparatus would prefer them to be.

We will work through this filing the way we have read every Cardone Capital disclosure since 2021 — section by section, with the receipts in line. Readers who have followed this investigation will recognize the architecture. Readers arriving fresh should know that this is the third annual report for a Regulation A+ vehicle that Cardone Capital marketed aggressively to non-accredited retail investors at $1,000 per unit, raising approximately $74.9 million between 2021 and 2023.

The vehicle is now four years and four months into operation. It has deployed substantially all of its capital. It is no longer raising. The fundraising channel Grant Cardone used to reach the small investor — the demographic who responds to his social media presence, his books, his real estate seminars — is closed.

What the 2025 1-K Confirms from the March 30 Watch List

In our March 30 piece we named four priority watch items. The 2025 1-K answers two of them directly and is silent on the other two in ways that are themselves significant.

Going concern modification. We wrote on March 30: “The Cardone REIT I 1-K for year ended December 31, 2025… will be the first filing showing the Bitcoin loss impact on the REIT’s financials, the auditor’s going concern determination.”

The auditor issued a clean opinion with no going-concern paragraph and no emphasis-of-matter language. Kaufman Rossin signed the opinion on April 30, 2026 — the same date the filing was made. The technical correctness of this opinion is defensible at the REIT entity level, because the REIT itself has no debt and holds $891,265 in cash, and going-concern analysis under ASC 205-40 applies to the entity being audited rather than to the underlying portfolio it holds equity stakes in.

But as we show below, the underlying portfolio is in significant distress, three of eight investments have been written to zero, and the Manager has positioned itself through affiliated entities as a creditor of the property LLCs in the amount of $26.9 million in principal plus $1.84 million in accrued interest.

The clean audit opinion at the holding entity level coexists with negative members’ equity at three of the eight underlying properties and a certified securities class action against the holding entity’s Manager. None of those conditions, individually, requires modification of the holding entity’s audit opinion. Their cumulative existence is the substance of the investment risk that the audit opinion does not address and was not asked to address.

Bitcoin and Gary Cardone exposure in related-party disclosures. We wrote on March 30: “whether any Bitcoin hybrid fund vendors, including any Gary Cardone or NODE40 entity, appear in the related-party disclosures.”

The answer is zero. There is no reference anywhere in the 2025 Cardone REIT I 1-K to Gary Cardone, Card1Ventures, NODE40, Bitcoin, digital assets, tokenization, or any vendor associated with the Bitcoin hybrid fund infrastructure that Grant Cardone has been promoting on X. The Cardone REIT I vehicle is, on its face, walled off from the Bitcoin program. This is itself a material fact.

Grant Cardone announced on February 26, 2026 — two months before this filing — that Cardone Capital intends to tokenize its entire $5 billion real estate portfolio. That portfolio includes the eight properties held through Cardone REIT I. The 1-K describes a “hold period of seven (7) to ten (10) years” for the investments and says “We do not anticipate borrowing any additional funds or offering any additional debt or equity in conjunction with the Company’s current investments.” There is no mention that any of the underlying property interests are slated for inclusion in a tokenization offering. There is no disclosure of any contemplated transaction that would convert the existing equity structure into tokenized form. There is no mention of any tokenization-related vendor relationship.

This silence is consistent with one of two readings. Either the tokenization plan does not in fact contemplate the inclusion of Cardone REIT I’s underlying property interests — which would mean Cardone’s “$5 billion portfolio” tokenization marketing is excluding the non-accredited investor vehicle from the program entirely, raising its own set of disclosure questions for prospective tokenization investors — or the tokenization plan does contemplate inclusion, in which case the 1-K’s “Trends and Key Information Affecting our Performance” section ought to have said so.

The disclosure regime under Regulation A requires the issuer to discuss known trends or uncertainties that the registrant reasonably expects will have a material effect. A tokenization announcement made by the Manager’s principal two months before the filing date, encompassing the assets the filing describes, qualifies on any reasonable reading.

The Pino litigation disclosure. We wrote on March 30 that “any undisclosed arrangement with Gary Cardone’s NODE40 — whether for the hybrid funds or for the tokenization program — is exactly the kind of self-dealing that the Pino litigation was designed to expose,” and that plaintiff’s counsel now has broad discovery rights.

The 2025 1-K disclosure on Pino is exactly one paragraph long. It recites the procedural history accurately, including the June 10, 2025 Ninth Circuit reversal, the August 1, 2025 denial of rehearing en banc, and the March 27, 2026 class certification order. It then concludes: “The Company’s Manager and Mr. Cardone do not believe that this case will interfere with their ability to manage the affairs of the Company.”

That sentence, read in isolation, is corporate boilerplate. Read against what the Ninth Circuit actually held in June 2025 — that Cardone’s return projections likely lacked a reasonable basis, that he likely did not believe them, that his eleven-word silent compliance with the SEC comment letter was evidence of subjective falsity — it is a statement that the Manager’s principal continues to maintain a confidence in his own conduct that the federal appellate court has explicitly rejected.

The sentence is also a representation made in a sworn filing, by Grant Cardone, signed eleven days after the class notice deadline we flagged in the March 30 piece. Plaintiff’s counsel at Susman Godfrey now has a freshly-sworn statement from the defendant about his own confidence in his fund management, made while the certified class action proceeds in discovery. This statement will be useful in deposition.

The Bitcoin loss impact on REIT financials. This was the fourth watch item from March 30. The 1-K confirms there is no Bitcoin held by Cardone REIT I and no Bitcoin-related impact on the REIT’s financials. Cardone’s Bitcoin program runs through the separate hybrid funds, not through the Reg A+ vehicle. This means the approximately $101 million in unrealized Bitcoin losses we documented across the Cardone Capital fund family in the March 23 article does not flow through Cardone REIT I’s books. It also means that Cardone REIT I investors are insulated from one set of problems while remaining fully exposed to a different set of problems that the 1-K, on careful reading, describes in detail.

The Capital Stack and the Eight Investments

Cardone REIT I deployed $73,419,479 across eight investments between December 2021 and March 2024. The portfolio is heavily concentrated in South Florida — six of the eight investments — with one Arizona office complex (Cardone Corporate Center in Scottsdale) and one Fort Myers multifamily asset (The Edison) providing the only geographic diversification. The South Florida concentration is itself a notable risk in a portfolio that was sold to investors as institutional-grade real estate exposure. South Florida has experienced significant insurance cost escalation, property tax revaluations, and condominium-conversion competitive pressure since the original underwriting in 2021 and 2022.

 The eight investments, with the Company’s reported acquisition cost and current ownership interest as of April 30, 2026:

1. 10X Living at Las Olas — Fort Lauderdale, Florida. 456 units, built 2020. Acquired December 2021 for $12,580,000 representing a 20% interest in Cardone Las Olas LP, LLC.
   x
2. 10X Living at Riverwalk — Fort Lauderdale, Florida. 260 units, built 2020. Acquired December 2021 for $7,040,000 representing a 20% interest in Cardone Riverwalk Member, LLC.
   X
3. 10X Living at Sunrise — Sunrise, Florida. 390 garden-style units, built 1996. Acquired December 2021 for $4,930,000 representing a 20% interest in Cardone Sunrise Member, LLC, with $450,000 in additional capital contributions for value-add work.
   X
4. 10X Living Miami River — Miami, Florida. 346 units, built 2020. Acquired March 2022 for $7,050,000 representing a 15% interest, reduced to 10.82% by an August 2025 dilution transaction we describe in detail below.
   X
5. Cardone Corporate Center — Scottsdale, Arizona. Two office towers totaling 262,187 square feet, built 2004 and 2006. Acquired November 2022 for $14,600,000 representing a 20% interest in Cardone Corporate Member, LLC.
   X
6. The Edison — Fort Myers, Florida. 327 multifamily units. Acquired August 2023 for $10,440,000 representing a 20% interest in Cardone Edison Member, LLC.
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7. Icaria 236 — Tarpon Springs, Florida. 236 multifamily units. Acquired December 2023 for $5,639,633 representing a 10% interest in Cardone Icaria Member, LLC.
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8. The Forum at Coral Pointe — 252 multifamily units, built 2017. Acquired March 2024 for $10,689,846 representing an 18.27% interest in Coral Pointe 252 LLC.

Total capital deployed: $73,419,479 against gross offering proceeds of approximately $74.9 million.

Total capital deployed: $73,419,479 against gross offering proceeds of approximately $74.9 million. The remaining roughly $1.5 million has been consumed by offering and syndication costs ($792,025) and operating expenses net of property-level distributions over four years.

The fund is controlled, in every operational and economic sense, by Grant Cardone. The Operating Agreement vests the Manager, Cardone Capital LLC, with full authority to direct the Company. Cardone Capital LLC is wholly owned by Grant Cardone. Class A units are non-voting on any matter.

The 1,000 Class B units, issued to Cardone Capital LLC at formation for no consideration, carry one vote per unit on all matters on which the members have voting rights — which under the Operating Agreement amounts to almost nothing material. The Members may not remove the Manager. The terms of the Operating Agreement, in the Manager’s own disclosure, were not negotiated at arm’s length.

The day-to-day operations of the Manager are conducted through Cardone Real Estate Acquisitions, LLC (“CREA”), which is also wholly owned by Grant Cardone. All fees the Operating Agreement entitles the Manager to receive have been assigned to CREA. This is the structure within which the disclosure that “Mr. Cardone does not currently receive any compensation for his services” must be read. He owns both sides of the fee assignment.

The Income Statement Argument Collapses on Page F-8

The Company’s reported net loss for 2025 was $5,255,548, following a 2024 net loss of $9,752,794. Cumulative net losses from inception through December 31, 2025 reach $33,905,400, which is the accumulated deficit on the balance sheet. Total members’ equity has fallen from $74,936,000 in contributed capital (less $792,025 in offering costs and $8,522,301 in cumulative distributions) to $31,714,274, a paper decline of approximately 57.7% from contributed capital.

Management’s explanation, repeated multiple times in the Management’s Discussion and Analysis, is the standard real estate sponsor talking point. The GAAP losses are driven primarily by non-cash depreciation and amortization recognized at the property level. Depreciation is a tax and accounting construct. Real estate values typically appreciate over a hold period. The equity method requires the Company to flow through book losses regardless of the actual market value trajectory of the properties. This argument is, in some circumstances, legitimate. It is not legitimate here.

The condensed statements of operations for the eight underlying properties, disclosed in Note 3 of the financial statements, allow the reader to test the depreciation argument directly by examining whether the properties generate positive cash flow before non-cash charges. They do not.

For the year ended December 31, 2025, aggregated across all eight properties:

Total revenue was $76,054,544.

Total operating expenses were $84,580,384.

Operating loss before financing was negative $8,525,840.

Other income and expenses, almost entirely interest expense, came to negative $37,606,320. Aggregate net loss across the eight properties was negative $46,132,160.

The $84.6 million operating expense figure includes the $9.0 million of property-level depreciation and amortization that management invokes as the explanation for the losses. Even if you back out the depreciation entirely, the properties still produce only modestly positive cash flow before debt service — and they collectively owe $37.6 million in annual interest expense.

The properties cannot service their debt out of operations.

This is not a depreciation phenomenon.

This is a leveraged real estate portfolio in which the underwriting assumed an interest rate environment that did not materialize, and the properties are being held together by the financing maneuvers we will describe below.

A property-by-property look at 2025 operating performance is more revealing than the aggregate. Five of the eight properties posted operating losses for the year.

1. Las Olas posted $17.15M revenue against $19.79M operating expenses, an operating loss of $2.64M.

2. Riverwalk posted $10.66M revenue against $11.96M operating expenses, an operating loss of $1.29M.

3. Sunrise posted $11.26M revenue against $11.65M operating expenses, an operating loss of $394K.

4. Miami River posted $11.50M revenue against $12.57M operating expenses, an operating loss of $1.07M.

5. The Edison posted $7.31M revenue against $8.66M operating expenses, an operating loss of $1.35M.

6. Coral Pointe posted $5.41M revenue against $6.77M operating expenses, an operating loss of $1.36M.

Only two assets produced operating profits.

7. The Scottsdale Corporate Center posted $7.28M revenue against $7.09M operating expenses, an operating profit of $184K — on a 21-year-old commercial office complex whose occupancy declined from 86% to 82% during 2025 in a market that remains under structural pressure.

8. Icaria posted $5.48M revenue against $6.08M operating expenses, which is technically an operating loss of $602K, though modest other income gets it close to break-even.

The multifamily portfolio that was the centerpiece of the offering — the South Florida 10X Living properties Cardone marketed as the institutional-grade core of the fund — is collectively running an operating deficit before debt service. The “non-cash depreciation” defense does not survive the second page of Note 3.

Three Properties at Zero, $5.4 Million in Suspended Losses

The most consequential disclosure in the entire document is footnote 1 to the investment roll-forward in Note 3. I quote it in full:

“As of December 31, 2025, the Company’s investments balance in Las Olas, Riverwalk, and Sunrise were reduced to zero. The Company will resume recognizing its proportionate share of earnings or losses only after these assets generate net income sufficient to recover the Company’s share of previously unrecognized losses. As of 12/31/2025, the Company had cumulative unrecognized losses of $5,367,950 from these three assets.”

Under the equity method of accounting, an investor in a partnership recognizes its proportionate share of the partnership’s losses against the carrying value of the investment until the carrying value reaches zero. Once it reaches zero, the investor stops recognizing further losses unless it has guaranteed the partnership’s obligations or committed additional funding. The losses do not stop occurring. They simply stop showing up on the investor’s income statement.

For Cardone REIT I, this means that the actual proportionate share of losses generated by Las Olas, Riverwalk, and Sunrise in 2025 is approximately $5.4 million higher than what flows through the Company’s reported net loss. The reported $5,255,548 net loss for 2025 understates the economic loss by roughly the amount of the suspended losses on these three properties. The true proportionate loss for 2025 is closer to $10.6 million — which is to say, more than 14% of the original capital raise, in a single year, four years into an investment marketed as a stable income-producing real estate vehicle.

The investments now at zero include two of the original three properties that constituted the entire portfolio when the fund commenced operations on December 10, 2021. Las Olas and Riverwalk were the foundational acquisitions of the offering. Sunrise was the third. These three deals consumed $24,550,000 of investor capital — approximately one-third of the entire raise — and they are all now valued at zero on the books.

The condensed balance sheet data for these three properties confirms that this is not an accounting artifact.

As of December 31, 2025, Las Olas had total assets of $176,335,182 against total liabilities of $184,880,515, leaving a members’ equity deficit of negative $8,545,333.

Riverwalk had total assets of $106,329,971 against total liabilities of $109,976,279, a members’ equity deficit of negative $3,646,308.

Sunrise had total assets of $88,055,570 against total liabilities of $103,329,147, a members’ equity deficit of negative $15,273,577.

These properties owe more than they own — and this perhaps Grant Cardone has recently began calling real estate “clunky” and praising Bitcoin; crypto has no operating expenses other than accounting. 

This is what insolvency looks like on a GAAP balance sheet.

The combined members’ equity deficit at these three properties is $27.5 million. Cardone REIT I’s pro rata share of that combined deficit, at its 20% interests, is approximately $5.5 million — which corresponds, within a rounding margin, to the $5.4 million in suspended losses disclosed.

There is no offsetting unrealized appreciation argument that rescues this. The market values would have to exceed not just the carrying basis but the entire mortgage stack including the related-party affiliate debt we describe below for the equity to be worth recovering.

Given that the senior loans on these properties were underwritten in 2020-2021 at acquisition prices that already capitalized peak rents at peak cap rates, and given that the portfolios are now operating at occupancy levels of 82-97% with operating expenses growing faster than rents, the path to recovery requires either a major rate cut cycle that materially compresses cap rates again, or a sustained period of double-digit rent growth that the South Florida market is no longer producing.

The Refinancing Architecture

The Liquidity and Capital Resources section, written in the opaque style typical of sponsor disclosure but containing the most operationally significant information in the document, describes the structure that explains how the portfolio reached this position.

Five of the eight SPEs financed their respective properties with non-recourse debt. The aggregate debt-to-tangible-asset-cost ratio across the portfolio is approximately 60%, but this aggregate masks substantial variation. The leveraged SPEs run from 71% to 92% loan-to-cost ratios — from aggressive to extremely aggressive.

Two of the leveraged SPEs carry fixed-rate loans: one at 2.85% maturing January 2028, one at 4.90% maturing September 2030. These are the relatively benign portion of the capital stack.

The other three leveraged SPEs carry two-layer financing — a senior loan plus a mezzanine loan. Senior debt represents approximately 80% of each property’s total financing. Mezzanine debt represents the remaining 20%.

During 2025, all-in variable interest rates on these borrowings ranged from approximately 5.80% to 8.81%.

The senior loans on these three SPEs are subject to interest rate caps that limit the effective rate to between 5.10% and 5.75%.

The mezzanine loans are subject to caps at 7.50%.

These caps are not free. They were purchased at origination for a fixed term and must be renewed — “extended” in the lender’s documentation — to remain in force. The cost of extending an interest rate cap is a function of where forward rates sit at the time of extension and how long the extension period runs. In 2024 and 2025, with the front end of the curve sitting between 4.5% and 5.5%, cap extensions on multifamily senior loans were running into the millions of dollars per property.

The original loan terms on these three variable-rate SPEs were two-year initial maturities with two one-year extension options.

All three have now exercised both extensions.

The first extensions were used in 2023 and 2024. The second extensions have been used in 2024 and 2025. As of April 30, 2026, all three are operating on the back end of the maximum permitted extension period under their original loan documents. The next maturity event is a hard maturity. Either the property is refinanced into new debt at prevailing market rates, or it is sold, or it goes back to the lender.

This is the context in which to read the August 8, 2025 Miami River refinance.

The Miami River Dilution

Miami River was carrying the same kind of senior-plus-mezz variable-rate stack as the others. The new $90.8 million five-year fixed-rate mortgage at 4.895% replaced that stack. On its face, this is a good outcome — the property locked in a fixed rate well below the variable-rate trough of 5.80%, eliminated the mezzanine layer, and extended the maturity to 2030.

The price of that outcome is what the filing discloses, and what the disclosure does not analyze.

The Note 5 disclosure on Miami River, repeated in slightly different language in Item 1 of the filing, describes the August 2025 transaction as follows:

“On August 8, 2025, Cardone Miami River LLC admitted Cardone Equity Fund 27, LLC (‘CEF 27’) as a new partner, with CEF 27 acquiring a 27.84% ownership interest. Proceeds from the transaction were used to repay existing debt and refinance the remaining balance with a new $90,846,000 five-year fixed-rate mortgage loan at 4.895%. As a result of this transaction, the Company’s ownership interest in Miami River decreased from 15.00% to 10.82%.”

The co-investment table in Note 5 shows the resulting capital structure:

Cardone REIT I at $7,050,000 for 10.82%,

CEF 20 at $38,775,000 for 59.53%,

CEF 27 at $18,135,873 for 27.84%,

Grant Cardone personally at $1,175,000 for 1.81%.

Total members’ equity in the Cardone Member LLC: $65,135,873.

Several things follow from this that the filing does not state explicitly.

CEF 27 is a Cardone Equity Fund. Cardone Equity Funds are managed by Cardone Capital LLC, the same Manager that manages Cardone REIT I.

The 27.84% stake CEF 27 acquired in Miami River was sold to it by an entity controlled by the same person who controls CEF 27.

The terms of that sale — the implied valuation of the Miami River property, the price per percentage point of equity, the allocation of the refinancing proceeds and any cash distribution between the existing partners and the new partner — were set by Grant Cardone, on both sides of the transaction.

Cardone REIT I’s stake in Miami River was diluted from 15.00% to 10.82%, a reduction of 27.87% in proportionate ownership. The mechanical effect is that the Company now owns 28% less of any future cash flow or sale proceeds from Miami River than it did before the transaction, in exchange for whatever value was generated by the refinancing event.

The Class A Members of Cardone REIT I did not vote on this transaction. Class A units are non-voting on any matter under the Operating Agreement. The decision to admit a new partner and accept dilution at the Cardone Member LLC level was made by the Manager in its sole discretion. The Class A Members were informed of the result through the disclosure in this Form 1-K, eight months after the fact.

The filing provides no disclosure of the implied valuation of Miami River used in the CEF 27 admission.

CEF 27 paid $18,135,873 for 27.84% of the Cardone Member LLC, which implies a total equity value of approximately $65.1 million for the Miami River investment. The property’s underlying total assets at December 31, 2025 were $113.7 million against $90.4 million of liabilities, leaving members’ equity at the property level of $23.3 million on a GAAP basis.

The implied valuation in the CEF 27 transaction therefore represented a significant premium to GAAP book value — which is exactly the kind of “appreciation” management refers to in the abstract throughout the MD&A. But the gain that this implies was captured by the CEF 27 entry valuation, not by Cardone REIT I, which gave up proportionate ownership at the same valuation level.

Without the underlying transaction documents, it is impossible to tell whether the dilution was executed on terms that fairly compensated Cardone REIT I investors for the equity they surrendered, or whether the new CEF 27 investors got a better entry price than the existing partners’ implied carrying value would suggest.

This is a textbook conflict-of-interest transaction.

The filing acknowledges, in the abstract, that “Our Manager and its affiliates originate, offers, and manages other investment opportunities and funds outside of the Company including those that have similar investment objectives as the Company.”

It does not analyze the specific transaction.

It does not disclose the third-party valuation, if any, that supported the dilution.

It does not disclose whether independent counsel reviewed the terms on behalf of the Cardone REIT I investors.

The Class A Members are simply informed that their economic interest in the Miami River property has been reduced by 27.87% and that proceeds were used to repay debt.

It is also worth noting what the timing of this transaction means in the context of the certified Pino class action.

The Miami River refinance closed on August 8, 2025 — exactly seven days after the Ninth Circuit denied rehearing en banc on August 1, 2025.

The Cardone Capital management team was on notice, the day they closed the dilution transaction, that the Pino case was returning to district court with the appellate court’s findings on subjective falsity intact.

This is a related-party transaction, executed by the Manager without retail investor consent, in the period between the appellate court’s reversal and the district court’s class certification order.

The Manager as Senior Creditor: $26.9 Million in Affiliate Loans

The most structurally significant disclosure in the 2025 filing — the one that fundamentally changes the character of the investment from what was originally marketed — is the Note 5 disclosure of related-party loans. These loans did not exist in the original offering. They have accumulated over the past two to three years as the underlying properties have required liquidity injections that the SPE-level cash flow could not support and that the Cardone REIT I investors were never asked to fund through additional capital calls.

The disclosures, broken into two categories:

Interest Rate Cap Extension Loans. During 2023 and 2024, an affiliate of the Manager (the filing does not name the specific affiliate) made loans aggregating to approximately $13,715,000 to certain Cardone Member LLCs or SPEs to fund the purchase of interest rate cap extensions required by the senior lenders. These loans bear interest at 5% per annum. Principal and accrued interest are due at the earlier of twelve years from origination or the occurrence of a payment acceleration event. As of December 31, 2024, the affiliate was owed $13,514,000 of principal and $640,000 of accrued interest.

During 2025, the affiliate made additional loans for the same purpose. Here the filing contains an internal inconsistency that warrants note: the body of the filing in Item 5 says the additional loans totaled $2,948,000, while the Note 5 financial statement disclosure says they totaled $4,378,000.

Both figures appear in the same filing, attributed to the same activity in the same year.

The likely reconciliation is that one figure represents net of intra-year repayments and the other represents gross originations, but the filing does not explain the discrepancy. The 2025 tranche bears interest at 6.5% per annum, reflecting the higher rate environment. The affiliate also received repayments of $2,641,000 in principal and $148,000 in interest during 2025.

As of December 31, 2025, the affiliate is owed $15,251,000 of principal and $1,203,000 of accrued interest on the cap extension loan portfolio.

Line of Credit Advances. On December 24, 2024, the Manager itself — not an affiliate, but Cardone Capital LLC directly — advanced $2,958,750 to one Cardone Member LLC. On January 9, 2025, the Manager advanced an additional $8,684,375 to another Cardone Member LLC. The advances were funded by the Manager’s existing line of credit facilities. They are payable on demand.

The Cardone Member LLCs are obligated to reimburse the Manager for the interest expense charged by the lending institution, which was at a variable rate of 6.12% as of year-end 2025.

As of December 31, 2025, the Manager is owed $11,643,000 of principal and $634,000 of interest reimbursement on the line of credit advances.

The total related-party debt position at the underlying property level: $26,894,000 of principal and $1,837,000 of accrued interest — $28.7 million in aggregate.

The structural significance of this disclosure cannot be overstated, and the filing makes no effort to highlight it. When retail investors purchased Class A units at $1,000 in 2021, 2022, and 2023, they acquired equity interests in a real estate fund whose capital structure consisted of (i) third-party senior mortgages on the properties, (ii) third-party mezzanine loans on three of the properties, and (iii) the equity members of the Cardone Member LLCs, including Cardone REIT I, the relevant CEFs, and Grant Cardone personally. The retail equity sat behind the third-party debt and ahead of — in fact, equal to — the affiliated capital from the Manager’s other vehicles and from Cardone himself.

That capital structure has now changed:

1. The Manager and its affiliates have inserted themselves as creditors of the property entities, ahead of the equity.

2. The senior mortgages remain.

3. The mezzanine loans remain on the three SPEs that have them.

4. The affiliate loans are new.

6. The recovery cascade in any sale or wind-down scenario at any of the affected properties is now: (1) senior lender, (2) mezzanine lender, (3) Manager and its affiliates as holders of the cap extension loans and LOC advances, (4) equity. The retail Class A investors are now in the fourth position. They were in the third when they bought.

7. The Operating Agreement permits this. The filing notes that “loan terms will be established by the Manager in good faith and not because of arm’s length negotiations.” The retail investor is asked to take on faith that the rates — 5%, 6.5%, and a variable LOC pass-through at 6.12% — are commercially reasonable and that the loans were necessary.

Some of them probably were necessary. Cap extensions on multifamily senior loans in 2024 and 2025 were genuinely expensive, and a property that could not extend its cap was facing an interest rate environment that would have crushed its debt service coverage.

But “necessary” and “structured in the investors’ interest” are not the same proposition.

A capital call to existing equity holders, including the Class A members, would have preserved seniority.

A bridge loan from a third-party private credit fund would have preserved seniority. The Manager’s choice to fund the cap extensions and operating shortfalls from its own affiliated balance sheet preserved the Manager’s optionality at the expense of the retail investors’ position in the cap stack. That is the choice the filing discloses without framing.

There is also the question of whether the related-party debt represents a real economic claim that will actually be senior in a default scenario, or whether it is structured loosely enough that it could be subordinated, restructured, or forgiven in a workout. The filing does not include the loan agreements as exhibits. The terms disclosed are minimal: rate, maturity at the earlier of twelve years or a payment acceleration event, and the existence of “payment acceleration clauses as defined in the agreement.” Without the agreements themselves, an investor cannot assess whether the affiliate debt is, in fact, harder than the equity in priority terms.

The Fee Engine Continues

The 1% asset management fee Cardone Capital is entitled to under the Operating Agreement is calculated on contributed capital, not on net asset value or fair value. This means the fee does not decline as the portfolio loses value. It declined slightly in 2025 ($749,362) versus 2024 ($749,364) only because of the redemption of two Class A units during the year. In a portfolio that has lost more than half its book value, the fee continues at full strength.

What has changed is the cash position. Cardone REIT I held $891,265 in cash at December 31, 2025, against $1,183,120 in accrued asset management fees payable to the Manager’s affiliate.

The accrued fees alone exceed the fund’s available cash.

The fees are unsecured, do not bear interest, and are payable on demand — but on demand from whom, paid by what cash?

The Manager has exercised forbearance on the fee collection at the REIT level even as it has accelerated its loan position at the property level. This is consistent with rational behavior on the Manager’s part: the loans bear interest and are senior in the property cap stack; the fees are unsecured and junior. Better to defer the unsecured fee than the secured loan.

The “Marketing Fee” — a portion of the property management fee remitted to a Manager-affiliated entity — consumed an additional $97,443 of the Company’s proportional share in 2025 ($114,481 in 2024). This fee is paid at the property level, embedded in the property management expense line, and flows through to Cardone REIT I via the equity-method earnings (or losses) of the underlying entities. It is a fee on top of a fee on top of a fee.

The acquisition fee of 1% on the gross purchase price of each property — which generated $0 in 2025 and $560,000 in 2024 — has now run its course because the fund is no longer making acquisitions. The total acquisition fees capitalized into the basis of the properties across the entire portfolio were $8,892,500.

Cardone REIT I’s pro rata share, at its various ownership percentages, was $1,641,830. That is $1.6 million of the original $74.9 million capital raise that went to the Manager’s affiliate, embedded in the cost basis of the properties, and is therefore being depreciated against the investors’ returns.

The 1% disposition fee remains queued. It will be triggered on the sale of any property, calculated on the gross sale price, and paid before any equity distribution is made.

The deferred Class B distribution — the $2,130,575 the filing discloses as the cumulative amount that would have been paid to Cardone Capital under the 80/20 split if the Manager had not elected to defer — represents a similar contingent claim. Whenever a “Capital Transaction” occurs, the Manager intends to true up its 20% share. That means that on a sale of any property, the proceeds available to retail investors are reduced first by the disposition fee, then by the Class B catch-up, before the 80/20 split applies on a going-forward basis.

The cumulative architecture is that Grant Cardone, through entities he wholly owns, is positioned to extract value from the vehicle through multiple channels:

— Acquisition fees (already capitalized)
— Asset management fees (ongoing)
— Marketing fees (ongoing), property management fees (ongoing), affiliate loan interest (now $1.8 million accrued and growing), disposition fees (queued)
— Class B catch-up distributions (queued).

The retail investor, who fronted the capital and bears all the equity risk, sits at the bottom of this stack with no governance rights and no ability to remove the Manager. The disclosure that “Mr. Cardone does not currently receive any compensation for his services” is true only in the most literal sense and false in every meaningful sense.

Reading the 2025 1-K Against the Pino Discovery Record

The class certification order in Pino v. Cardone Capital LLC was entered on March 27, 2026. The class notice deadline was April 13, 2026. The 2025 Form 1-K was filed on April 30, 2026 — eleven days after the deadline I flagged in the March 30 article. Discovery is now active.

Several disclosures in this filing will be of immediate interest to plaintiff’s counsel at Susman Godfrey.

The Miami River dilution was executed on August 8, 2025 — seven days after the Ninth Circuit denied rehearing en banc on August 1, 2025. The Manager admitted an affiliated CEF as a new partner at a valuation that the filing does not disclose, on terms not subject to retail investor approval, in the immediate aftermath of the appellate court’s confirmation that the Manager’s prior return projections likely lacked a reasonable basis. The transaction documents — including any third-party valuation, any independent counsel review, and the allocation of refinancing proceeds among the existing and new partners — are now within the scope of class discovery.

The $26.9 million in affiliate loans now sitting senior to retail equity in the property capital stacks were documented in loan agreements between Cardone Capital and its affiliates, on the one hand, and the Cardone Member LLCs and SPEs, on the other. The agreements set the rates, the maturities, and the payment acceleration provisions. They are not exhibits to the 1-K. They are within the scope of class discovery.

The $1,183,120 in accrued asset management fees payable to CREA at year-end 2025 represents a balance that has more than doubled from $433,758 a year earlier. The growth pattern of the accrued fee is consistent with a Manager that recognizes the fund cannot pay the fee in cash and is queuing the receivable against an eventual recovery event. The internal communications that document this decision-making — when the Manager elected to defer rather than collect, what alternatives were considered, how the fee was treated for tax and audit purposes — are within the scope of class discovery.

The “Trends and Key Information Affecting our Performance” section of the MD&A describes the multifamily market in optimistic terms, citing “evolving demographic trends” and “tariff policies enacted under the current administration” that have “constrained new housing starts.” It does not mention the certified securities class action against the Manager. It does not mention the Ninth Circuit’s June 2025 finding on subjective falsity. It does not mention the August 2025 Miami River dilution. It does not mention the $26.9 million affiliate loan position. The section reads as if none of those things had happened. Plaintiff’s counsel will note the omission.

The single-paragraph Pino disclosure in Item 1 — concluding with the assertion that the Manager and Mr. Cardone “do not believe that this case will interfere with their ability to manage the affairs of the Company” — is itself a representation made in a sworn filing by Grant Cardone. Discovery will examine the basis for this representation. So will any deposition.

What the Investor Holds, in Numbers

A unit was purchased for $1,000.

Cumulative cash distributions per unit through April 30, 2026: $9,261,375 in total distributions across 74,934 units, or $123.59 per unit. This represents an average annualized cash yield of approximately 2.8% over the holding period — well below the 6-8% targets implied in the original offering materials.

Reported book value per unit at December 31, 2025: $31,714,274 in members’ equity divided by 74,934 units, or $423.23 per unit.

Total economic position per unit, using book value as a proxy for current value: $423.23 in residual equity plus $123.59 in cumulative distributions equals $546.82 against a $1,000 cost basis. Approximately 45% loss of capital, before any consideration of the inflation-adjusted opportunity cost of capital tied up for four years.

The 4.00% annualized distribution declared on March 18, 2026 ($739,074 paid April 15, 2026 to Class A members for the period December 16, 2025 to March 15, 2026) represents the current distribution run rate. At that pace, annual distributions to Class A members would total approximately $2,956,000. The property-level cash distributions to Cardone REIT I in 2025 totaled $3,083,711. The arithmetic is tight: distributions from properties roughly equal distributions to Class A members, with very little margin and no cushion. Any further operational deterioration at the property level, any further dilution of REIT-level interests, or any further interest rate cap renewal cycle would impair the distribution.

And the distribution itself is being paid out of cash flow that is being subsidized, in effect, by the related-party loans. The cap extensions funded by the Manager’s affiliate loans are what is keeping the senior debt from defaulting.

The defaults would trigger consequences — potentially including foreclosure, forced sale, or transfer of equity to lender control — that would reduce or eliminate the property-level cash flow to Cardone REIT I.

The Manager has, in effect, lent money to the property entities to keep the debt service current, and the property entities are using their remaining cash to pay distributions to Cardone REIT I, which is using those distributions to pay 4% to retail investors.

Strip out the affiliate loans and the cap extensions they fund, and the senior debt service ratios at the three variable-rate SPEs would be in serious distress. The 4% distribution would not be supportable.

How the 1-K Bears on the Tokenization Plan

The most striking absence from this 1-K, given the public record of the past two months, is any reference whatsoever to the tokenization announcement Grant Cardone made on February 26, 2026. He told his X audience that Cardone Capital would tokenize its entire $5 billion real estate portfolio. The eight properties documented in this filing are part of that $5 billion portfolio. The 1-K does not mention tokenization. It does not mention any contemplated transaction that would convert the existing equity structure. It does not name any blockchain partner. It does not reference NODE40 or any digital asset infrastructure vendor.

Two readings are possible. Either Cardone REIT I’s underlying property interests are excluded from the tokenization program — in which case the “$5 billion” marketing figure is overstated, and the non-accredited investors who bought into Cardone REIT I are excluded from any future liquidity event the tokenization is designed to provide. Or the property interests are included, in which case the 1-K’s “Trends and Key Information Affecting our Performance” section was required to discuss the contemplated transaction and did not.

I will address this gap in a follow-up piece. The relevant question for any investor evaluating Grant Cardone’s tokenization solicitations — whether under Reg D in the U.S. or Reg S internationally — is whether the offering documents will tell them what the SEC filings, the Ninth Circuit opinion, the class certification order, and now this 2025 Form 1-K already tell anyone who reads them.

What This Filing Is, and What It Is Not

Cardone REIT I, LLC is now four years and four months into operation. It has deployed substantially all of its capital. It is no longer raising. It has eight investments. Three are at zero. Five of the eight underlying properties posted operating losses for 2025. The portfolio’s aggregate net loss at the property level was $46 million. The Manager has positioned itself, through affiliated entities, as a creditor of the property LLCs in the amount of $26.9 million in principal and $1.8 million in accrued interest, all of it senior to the retail equity.

The Class A unitholders cannot vote, cannot remove the Manager, and were not asked to consent to the August 2025 dilution of their Miami River interest from 15% to 10.82% in favor of an affiliated CEF — a transaction executed seven days after the Ninth Circuit denied rehearing en banc in Pino. The Manager continues to accrue 1% asset management fees that the fund cannot pay in cash, with the accrued balance more than doubling year-over-year. The certified federal securities class action proceeds in discovery.

The filing is a public document. It will be read by approximately no one — some lawyers preparing for the Pino discovery cycle, a handful of skeptical journalists, the SEC’s Regulation A compliance staff in a routine review, and a small number of investors who have learned to read these documents the hard way. It will not be read by the people whose money funded the vehicle.

Those people will receive an email summary from Cardone Capital that emphasizes the 4% distribution, the $73 million invested in real estate, the South Florida occupancy figures in the 82-97% range, and the Manager’s continued confidence in the long-term thesis. That email will not mention that three of the eight investments are at zero, that the Manager has lent $27 million to the property entities at 5-6.5%, that the Miami River dilution reduced their interest by 28% without their consent, or that the federal securities class action is now certified and in active discovery.

The information asymmetry between the filing and the marketing is the essential feature of the Regulation A retail real estate fund as a financial instrument. The filing is required by law and read by no one. The marketing is voluntary and read by everyone. The gap between the two is where the investor’s loss lives.

The 2025 Cardone REIT I Form 1-K is a document that, read carefully, tells you exactly where the bodies are buried.

They are buried in Note 3, footnote 1.

They are buried in the Note 5 disclosure of the affiliate loan position.

They are buried in the August 2025 Miami River dilution that is mentioned twice without analysis. They are buried in the procedural posture of Pino, which the filing acknowledges in a single paragraph and the Manager dismisses in a single sentence.

The filing does not lie. It does not have to.

The disclosure regime assumes a sophisticated reader who will piece together the implications. The marketing regime assumes the opposite.

Both regimes coexist within the same regulatory structure, and the people who bought the units at $1,000 per unit were not the readers either regime had in mind.

The class certification order ensures that those readers will be heard from now.

Sources and Methodology

Primary source: Cardone REIT I, LLC, Form 1-K Annual Report for the year ended December 31, 2025, Commission File No. 024-11674, filed April 30, 2026 with the U.S. Securities and Exchange Commission. Independent Auditor’s Report by Kaufman, Rossin & Co., P.A., Miami, Florida, dated April 30, 2026.

Companion sources from prior reporting on this site: “US Ninth Circuit Court Certifies Pino v. Cardone as a Class Action: How Will this Affect Cardone’s Plan to Tokenize His Real Estate Holdings?” (March 30, 2026); “The Cardone Clan’s Digital Asset Empire: Grant’s $5 Billion Tokenization Gambit and the NODE40 Infrastructure Play” (March 23, 2026); Pino v. Cardone Capital, LLC, Case No. 2:20-cv-08499-JFW-KS, Order Granting Class Certification (C.D. Cal. March 27, 2026); Pino v. Cardone Capital LLC, No. 23-3512 (9th Cir. June 10, 2025).

The complete Form 1-K filing follows below.