MacKenzie Realty Capital, Inc. (MKZR) is a non-traded REIT with a consolidated balance sheet as of December 31, 2025 showing total assets of $238.1M against total liabilities of $152.0M, yielding GAAP book equity of $86.0M (including $34.2M attributable to noncontrolling interests and $51.8M to parent). Under a liquidation lens, recovery to common equity is materially negative. The primary asset is net real estate investment property of $215.3M (gross $238.0M less $25.5M accumulated depreciation). Applying a 50-70% haircut to the real estate asset base—appropriate for a portfolio of smaller, illiquid, non-traded commercial and multifamily properties concentrated in California—yields a haircut loss of $64.6M to $107.6M on that single line alone. Against this, total debt stands at $145.6M in long-term debt (substantially all secured, per $129.9M SecuredDebt tag) plus $1.8M finance lease liability, plus $3.1M accounts payable and accrued liabilities, plus $0.7M dividends payable, plus $0.6M disposal group liabilities. Total liability stack at face value approximates $152.0M. The MFFAIS CLV/LLV/OLV is reported at negative $143.0M, consistent with this math: even at the optimistic end of the PP&E haircut range, haircutted assets cannot cover face-value liabilities after netting out the minority interest slice. Additional value-destruction factors: (1) The company suspended its common stock dividend in May 2025 citing recession concerns and tariff impacts on office/retail demand—a signal of operating cash flow stress. (2) Accumulated deficit stands at negative $94.8M. (3) The portfolio includes a held-for-sale property (Woodland Corporate Center, $11.8M carrying value) with $0.6M of associated liabilities; fair value realization is uncertain. (4) Equity investments and limited partnership interests ($3.3M at fair value, substantially all Level 3) carry a 0% liquidation recovery assumption for intangibles/speculative positions. (5) The filing discloses $58.7M in aggregate variable-rate debt (SOFR, Prime, Treasury-indexed), of which $17.65M SOFR and $15.13M Treasury payments are deferred to 2026-2027, creating a near-term liability step-up not yet reflected in current cash interest. (6) The company added two new Streeterville Capital secured promissory notes (Note #2 and #3, disclosed in MD&A and as subsequent events) totaling material incremental secured debt; the filing does not separately XBRL-tag these individual instruments in TAG_CONTEXT beyond the aggregate SecuredDebt line. (7) Series B preferred stock has a liquidation preference that accretes ($134K increase in the Q ending December 31, 2025 alone), further subordinating common equity recovery. On the QoQ comparison versus the prior Q1 FY2026 filing (period ended September 30, 2025), balance sheet structure is broadly similar; the incremental Streeterville Note #3 ($15.13M, January 2026 vintage, disclosed as subsequent event) will increase the secured debt stack further in the next period.
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