10-Q · May 15, 2026
MacKenzie Realty Capital reported improving rental revenues and decreased costs in its latest 10-Q, indicating a stabilizing operational performance despite macroeconomic uncertainty. The company experienced solid…
Earnings analysis · 10-K
MKZR earnings analysis
Filed September 28, 2026 · Our reading of the company's report
The latest report
MacKenzie Realty Capital improved its reported net loss and EPS year over year, helped by lower impairment and corporate expenses, but revenue fell to $20.01 million, AFFO loss widened to $3.47 million, and operating…
Read full summary
MacKenzie Realty Capital improved its reported net loss and EPS year over year, helped by lower impairment and corporate expenses, but revenue fell to $20.01 million, AFFO loss widened to $3.47 million, and operating cash flow remained negative at $3.31 million. Residential growth, particularly Aurora at Green Valley, is offset by weak commercial occupancy and the normalization of Satellite Place income. The outlook is constrained by a $5.8 million mortgage covenant-related acceleration, $148.47 million of underlying-company debt maturities, limited liquidity, and continued reliance on capital markets and refinancing.
Gross and operating margin
How much of each revenue dollar the business keeps.
One point per quarterly or annual filing. Both margins are shares of that report's revenue.
Where revenue came from
The business segments reported by the company.
Shares of the segments disclosed in this filing, largest first.
How we read each report
Our analysis across the last few reports.
Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.
Reported figures
- Earnings per share
- $-9.54
- Operating margin
- -78.05%
What stood out
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Net Loss Improved Despite Lower Revenue
Revenue was $20.01 million in fiscal 2026, down from $22.06 million in fiscal 2025, while net loss improved to $14.13 million from $23.97 million and loss per share improved to $9.54 from $18.66.
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Aurora Drives Residential Growth
Residential revenue increased 17.8% to $6.94 million from $5.89 million, primarily because Aurora at Green Valley was completed in July 2025 and began leasing in August 2025; the property was 93.1% occupied at June 30, 2026 and 100% leased as of the report date.
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Residential Occupancy Outpaces Offices
The company owns nine commercial properties and five residential apartment properties. Average occupancy was 65% for commercial properties and 90% for residential properties, with Main Street West at 97% occupancy and Satellite Place at only 33%.
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Commercial Revenue Normalized
Commercial revenue declined $3.10 million to $13.07 million, primarily because fiscal 2025 included approximately $3.0 million of lease-termination income at Satellite Place; Main Street West revenue increased $0.23 million after space was re-leased to Napa County.
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Distressed Assets and Blue Ridge Roadmap
Management is expanding its real-estate strategy toward distressed properties and intends to maintain real-estate-related securities below 20% of the portfolio. It also plans the Blue Ridge project, expected to contain 84 luxury multifamily units, with construction targeted for fall 2027 subject to approvals and financing.
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Capital Invested and Asset Sale Advanced
Fiscal 2026 investing cash outflows included $9.15 million for real-estate assets, including $6.39 million for Aurora construction and approximately $2.76 million for tenant improvements and other capitalized costs. The company also entered an agreement to sell Woodland Corporate Center after recording a $1.69 million impairment.
What to watch
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Mortgage Covenant Violation
The company was not in compliance with the required debt-service coverage ratio for the MacKenzie Satellite mortgage as of June 30, 2026. The remaining principal of approximately $5.8 million was accelerated into the fiscal 2027 maturity category, and foreclosure remedies could be triggered if the lender acts.
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New Adviser Fee Conflicts
The amended advisory agreement effective January 1, 2026 pays the Real Estate Adviser a 1.25% annual fee on gross assets and a 5% quarterly fee on AFFO. The agreement has a five-year term that renews automatically and requires a substantial early-termination fee, creating potential incentives to grow gross assets or leverage even if per-share value declines.
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Negative Cash Flow and Refinancing Risk
Fiscal 2026 operating cash flow was negative $3.31 million, AFFO loss widened to $3.47 million from $0.57 million, and cash and restricted cash ended at $3.81 million. The company has $148.47 million of underlying-company loan maturities, including $26.86 million in fiscal 2027, while the common dividend remains suspended.
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Potential Securities Rescission Liability
The company disclosed potential rescission liability relating to shares sold under a deficient Form N-2 during June-December 2021. If all affected purchasers successfully seek rescission, the company estimates payments of approximately $865,000, funded from existing cash.
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Office Vacancy and Rate Pressure
Office exposure remains material: average commercial occupancy was 65%, Satellite Place was 33% occupied, and the company states that available office space is plentiful in its markets. Higher interest rates have also increased variable-rate borrowing costs and could reduce property values and financing access.
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Third-Party Cybersecurity Dependence
The company relies on an outsourced managed-service provider for cybersecurity, while management has no specialized cybersecurity expertise and the company lacks control over systems operated by third parties, including certain property-management providers. A material incident could disrupt operations or expose tenant data.
Management's outlook
No quantitative annual guidance was provided in the 10-K. Management states that future investment and cash requirements are expected to be funded through cash on hand, property operations, preferred-stock proceeds, borrowings, refinancings and potential property sales.
Earlier filings 4
10-Q · February 17, 2026
MacKenzie Realty Capital reported Q2 (three months ended Dec 31, 2025) revenue of $4,594,058 and a net loss attributable to common stockholders of $5,507,255 (loss per share $(2.97)). Revenue declined materially versus…
10-K · September 29, 2025
MacKenzie Realty Capital positions itself as a small-cap REIT focused on value-add and opportunistic mid-market real estate investments (primarily Western U.S.) while reserving up to 20% of assets for illiquid…
10-Q · February 14, 2025
MacKenzie Realty Capital reported strong top-line growth for the quarter with rental and related revenue of $8,030,316 (up from $3,577,486 a year earlier), but profitability weakened in absolute dollars due to a large…
This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.