Copper Property CTL Pass Through Trust Your 2025 Annual Report Snapshot

This summary provides a clear, accessible overview of Copper Property CTL Pass Through Trust's performance and activities for the year ended December 31, 2025. It highlights key financial results, strategic developments, and future outlook, helping you understand your investment.

1. Business Overview: The Trust's Purpose and Model

Copper Property CTL Pass Through Trust formed in early 2021, following the reorganization of J.C. Penney Company. Its core mission is to sell off a portfolio of real estate assets – primarily former J.C. Penney retail stores and distribution centers – to benefit its Certificateholders (investors like you). As a "Pass Through Trust," it typically distributes its income directly to investors, with a long-term strategy to sell all properties over time and eventually dissolve.

The Trust's main business activities currently include:

• Owning and leasing properties: These properties are primarily leased to Penney Intermediate Holdings LLC, an entity associated with the "new" J.C. Penney. Lease income forms a key revenue stream.
• Strategic asset sales: The Trust actively sells properties when market conditions are favorable, aiming to maximize value for Certificateholders.

When the Trust began in January 2021, it owned 160 retail properties and 6 distribution centers. By the end of 2025, the Trust had strategically reduced its portfolio to 117 retail properties across 35 states and Puerto Rico, totaling approximately 15.5 million square feet. This reduction demonstrates its ongoing strategy of converting assets into cash.

2. Financial Performance: A Look at the Numbers for 2025

For the year ended December 31, 2025, the Trust's financial results reflected its core strategy:

• Revenue: The Trust's revenue included $32.265 million from property sales.
• Expenses: Operating expenses included property taxes, maintenance, and administrative costs.
• Net Income: The Trust's net income for the year included a $4.273 million gain from property sales.
• Cash Flow:
  • Cash from Operations: Primarily from lease payments.
  • Cash from Investing Activities: This largely reflects the $32.265 million received from property sales, offset by any capital expenditures.
  • Cash Used in Financing Activities: The Trust distributed a significant $128.339 million to Certificateholders. This distribution included proceeds from sales completed in late 2024 (paid out in early 2025) but did not yet include proceeds from sales made in late 2025 (which will be distributed in early 2026).

3. Management's Discussion and Analysis (MD&A) Highlights

Management's discussion emphasizes the Trust's operational results, liquidity, and capital resources, focusing on its core strategy of asset monetization and returning capital to Certificateholders.

• Results of Operations: The Trust's 2025 financial performance reflects its dual strategy: generating lease income from its portfolio and realizing gains from strategic property sales. The $4.273 million gain from property sales underscores effective execution in a dynamic real estate market.
• Major Achievements:
  • Successful Asset Sales: The Trust successfully sold four retail properties, generating $32.265 million in proceeds and a $4.273 million gain. This demonstrates effective execution of its core strategy.
  • Significant Capital Distributions: The substantial $128.339 million distributed to Certificateholders highlights the Trust's commitment to returning capital to investors as it monetizes assets.
  • Portfolio Management: The continued, strategic reduction of the property portfolio marks a key step toward its ultimate liquidation, demonstrating proactive asset management.
• Challenges and Considerations:
  • Asset Base Reduction: While strategic, the shrinking number of properties means the Trust has a finite life. Investors should understand this is a liquidating entity, not a growth-oriented REIT.
  • Tenant Concentration: Penney Intermediate Holdings LLC is the Trust's primary tenant. J.C. Penney's financial health and performance directly impact the Trust's lease income stability, posing a concentration risk.
• Liquidity and Capital Resources: The Trust's primary sources of liquidity are cash on hand, lease income, and proceeds from property sales. The significant distribution to Certificateholders demonstrates the Trust's ability to convert assets into cash and return capital. Management continues to monitor market conditions to optimize the timing and pricing of future asset sales.

4. Key Risk Factors for Investors

Investing in Copper Property CTL Pass Through Trust involves specific risks:

• Reliance on J.C. Penney: The Trust's primary income stream comes from leases with Penney Intermediate Holdings LLC. Any deterioration in J.C. Penney's financial health or ability to pay rent could significantly impact the Trust's revenue and distributions.
• Real Estate Market Fluctuations: The value of the Trust's properties, and thus the proceeds from future sales, depend on broader retail real estate market conditions, which can be volatile.
• Liquidation Risk: As a liquidating trust, there is no guarantee of the timing or amount of future distributions, nor of the total value realized from asset sales. The Trust's ultimate value depends on its ability to sell properties at favorable prices.
• Interest Rate Risk: Changes in interest rates can affect property valuations and the cost of any outstanding debt.
• Tax Implications: As a "Pass Through Trust," income and losses typically pass directly to Certificateholders, which can have specific tax implications depending on individual circumstances.

5. Future Outlook & Strategy

Looking ahead, the Trust's strategy remains consistent:

• Continued Asset Monetization: The Trust will continue to pursue strategic sales of its remaining 117 properties to maximize value for Certificateholders.
• Efficient Portfolio Management: The Trust will efficiently manage existing leases and properties to generate stable income until their sale.
• Capital Distributions: Investors can anticipate further distributions as properties are sold and proceeds become available.
• Ultimate Dissolution: The long-term goal is the complete liquidation of all assets and the eventual dissolution of the Trust. The timing of this depends on market conditions and successful sales.

6. Competitive Position

The Trust's competitive position primarily relates to its ability to effectively sell its real estate assets and manage its existing leases within the broader commercial real estate market.

• Competition for Asset Sales: The Trust competes with other property owners, including other liquidating entities, real estate investment trusts (REITs), and private investors, when selling its properties. Achieving favorable sale prices depends on factors such as property location, condition, current market demand for retail and distribution space, and the overall economic environment.
• Competition for Tenants: While Penney Intermediate Holdings LLC is the primary tenant, if properties become vacant or leases are renegotiated, the Trust would compete with other landlords to attract new tenants. The retail real estate market, particularly for former department store spaces, can be challenging due to evolving consumer preferences and the growth of e-commerce.
• Market Dynamics: Market dynamics, such as interest rates, economic growth, and demographic shifts, influence the Trust's competitive standing.

Market & Regulatory Context

The Trust operates within a dynamic retail real estate market, which e-commerce growth and changing consumer shopping habits continue to influence. The current interest rate environment also plays a role in property valuations and potential buyer interest. No significant new regulatory changes specifically impacting the Trust emerged during this period.

This summary covers the essential details of Copper Property CTL Pass Through Trust's performance and outlook. For a complete understanding, always review the full 10-K filing.