MKZR — FY2026 Financial Report Analysis

MacKenzie Realty Capital's fiscal year to June 30, 2026 ended with a net loss of $14.1 million, down from $24.0 million, but almost all of that improvement came from smaller property write-downs, not from the buildings earning more. Revenue fell 9.3% to $20.0 million because last year included a one-off ~$3.0 million payment from a tenant that broke its lease early, interest costs rose 16%, and the business again spent more cash running itself than it took in.

At a glance

• Revenue of $20.0 million, down 9.3% — but strip out last year's roughly $3.0 million lease-termination payment at the Satellite Place office building and underlying rent was up about 5%, helped by the new Aurora at Green Valley apartments.
• Interest expense of $9.9 million, equal to about half of revenue — up from $8.5 million, as a new apartment complex's construction loan started hitting the income statement and the company borrowed more at the parent level.
• Operating cash flow of −$3.3 million, worse than −$1.7 million a year earlier — the company funded that gap, its building work and its preferred dividends with new borrowing and preferred-stock sales.

What kind of company this is

MKZR is not a typical operating business, and it is also no longer the investment fund it started as. It was originally a business development company (BDC — a regulated closed-end fund that invests in private companies), but withdrew that status on December 31, 2020 and now operates as a REIT (real estate investment trust — a company that owns property and must pay out most of its taxable income to avoid corporate tax). It listed on the Nasdaq Capital Market in November 2024 and did a 1-for-10 reverse stock split on August 4, 2025; all per-share figures below reflect that split.

It is externally managed: it has no staff of its own and pays affiliates of MacKenzie Capital Management to run it. From January 1, 2026 the adviser earns a base fee of 1.25% a year of gross assets (replacing a fee of 3.00%/2.00%/1.50% on tiers of invested capital) plus a bonus of 5% of adjusted funds from operations. Asset management fees were $3.39 million this year versus $3.45 million.

What it owns, per the 10-K:

• Nine suburban office buildings — in Napa, Fairfield, Suisun City and Woodland, California, plus Satellite Place in Duluth, Georgia. Average occupancy: 65%.
• Five apartment properties in Oakland, Los Angeles, Concord and Fairfield, California. Average occupancy: . On January 1, 2026 these were moved into a new wholly owned subsidiary, MacKenzie Apartment Communities (MAC), whose board set an estimated value of $18.10 per MAC share; the 10-K stresses that figure is not a value for MKZR's own stock.