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What changed in ESSENTIAL PROPERTIES REALTY TRUST, INC.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of ESSENTIAL PROPERTIES REALTY TRUST, INC.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+295 added−308 removedSource: 10-K (2025-02-12) vs 10-K (2024-02-14)

Top changes in ESSENTIAL PROPERTIES REALTY TRUST, INC.'s 2024 10-K

295 paragraphs added · 308 removed · 253 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

63 edited+8 added−9 removed95 unchanged
Biggest changeNet proceeds, after settlement of the related forward sale agreements, are expected to be $263.4 million. 6 • During 2023, we sold 5,931,654 shares of our common stock under the ATM Program (as defined herein) at a weighted average price per share of $24.48 for gross proceeds of $145.2 million, including 1,937,450 shares sold on a forward basis that have not been physically settled for cash as of December 31, 2023. • As of December 31, 2023, our liquidity totaled $779.6 million, which includes $49.0 million of cash and cash equivalents and restricted cash, $130.6 million available upon settlement of our outstanding forward equity contracts and $600.0 million of availability under our revolving credit facility.
Biggest changeAll shares were physically settled as of December 31, 2024 and the Company realized net proceeds from this offering, after deducting underwriting discounts and commissions and other expenses, of $245.0 million. • During 2024, we sold 19,704,599 shares of our common stock under our ATM Program (as defined herein) at a weighted average price per share of $29.52 for gross proceeds of $581.7 million, including 13,119,110 shares sold on a forward basis that have not been physically settled for cash as of December 31, 2024. • As of December 31, 2024, our liquidity totaled $1.0 billion, which includes $45.0 million of cash and cash equivalents and restricted cash available for future investment, $380.8 million available upon physical 6 settlement of our outstanding forward equity contracts and $600.0 million of availability under our revolving credit facility.
Risk Factors—Risks Related to Our Business and Properties—Insurance on our properties may not adequately cover all losses and uninsured losses could materially and adversely affect us." In addition to being a named insured on our tenants' liability and property insurance policies, we separately maintain commercial insurance policies providing general liability and umbrella coverages associated with our portfolio.
Risk Factors—Risks Related to Our Business and Properties—Insurance on our properties may not adequately cover all losses and uninsured losses could materially and adversely affect us." In addition to being a named insured on our tenants' general liability and property insurance policies, we separately maintain commercial insurance policies providing general liability and umbrella coverages associated with our portfolio.
Information contained on or hyperlinked from our website is not incorporated by reference into and should not be considered part of this Annual Report or our other filings with the the SEC.
Information contained on or hyperlinked from our website is not incorporated by reference into and should not be considered part of this Annual Report or our other filings with the SEC.
These assessments are carried out in accordance with the 14 Standard Practice for Environmental Site Assessments (ASTM Practice E 1527-13) as set by ASTM International, formerly known as the American Society for Testing and Materials, and generally include a physical site inspection, a review of relevant federal, state and local environmental and health agency database records, one or more interviews with appropriate site-related personnel, review of the property's chain of title and review of historical aerial photographs and other information on past uses of the property.
These assessments are carried out in accordance with the Standard Practice for Environmental Site Assessments (ASTM Practice E 1527-13) as set by ASTM International, formerly known as the American Society for Testing and Materials, and generally include a physical site inspection, a review of relevant federal, state and local environmental and health agency database records, one or more interviews with appropriate site-related personnel, review of the property's chain of title and review of historical aerial photographs and other information on past uses of the property.
Under various of these laws and regulations, a current or previous owner, operator or tenant of real estate may be required to 13 investigate and clean up hazardous or toxic substances, hazardous wastes or petroleum product releases or threats of releases at the property, and may be held liable to a government entity or to third parties for property damage and for investigation, clean-up and monitoring costs incurred by those parties in connection with the actual or threatened contamination.
Under various of these laws and regulations, a current or previous owner, operator or tenant of real estate may be required to investigate and clean up hazardous or toxic substances, hazardous wastes or petroleum product releases or threats of releases at the property, and may be held liable to a government entity or to third parties for property damage and for investigation, clean-up and monitoring costs incurred by those parties in connection with the actual or threatened contamination.
We have strategically constructed a portfolio that is diversified by tenant, industry, concept and 7 geography and generally avoids exposure to businesses that we believe are subject to pressure from e-commerce. Our properties are generally subject to long-term net leases that we believe provide us with a stable and predictable base of revenue from which to grow our portfolio.
We have strategically constructed a portfolio that is diversified by tenant, industry, concept and geography and generally avoids exposure to businesses that we believe are subject to pressure from e-commerce. Our properties are generally subject to long-term net leases that we believe provide us with a stable and predictable base of revenue from which to grow our portfolio.
We believe our senior management team’s reputation, in-depth market knowledge and extensive network of long-standing relationships in the net lease industry provide us access to an ongoing pipeline of attractive investment opportunities. 10 • Focus on Middle-Market Companies in Service-Oriented or Experience-Based Businesses .
We believe our senior management team’s reputation, in-depth market knowledge and extensive network of long-standing relationships in the net lease industry provide us access to an ongoing pipeline of attractive investment opportunities. • Focus on Middle-Market Companies in Service-Oriented or Experience-Based Businesses .
Additionally, we have a consistent and strong record of hiring veterans of the U.S. military, including our chief executive officer and our senior vice president of investments. We seek to provide a dynamic work environment that promotes the retention and development of our employees, and is a differentiating factor in our ability to attract new talent.
Additionally, we have a consistent and strong record of hiring veterans of the U.S. military, including our Chief Executive Officer and our Executive Vice President of Investments. We seek to provide a dynamic work environment that promotes the retention and development of our employees, and is a differentiating factor in our ability to attract new talent.
We believe that operating properties in these 13 industries are the essential venues through which these businesses transact with their customers, and therefore that such properties and businesses are generally more insulated from the competitive pressure of e-commerce than many other businesses where significant activity can take place online.
We believe that operating properties in these industries are the essential venues through which these businesses transact with their customers, and therefore that such properties and businesses are generally more insulated from the competitive pressure of e-commerce than many other businesses where significant activity can take place online.
We believe that this market is underserved, from a capital perspective, and therefore offers attractive risk-adjusted investment returns. Within this market, we focus our investment activities on properties leased to tenants engaged in a targeted set of 13 service-oriented or experience-based businesses.
We believe that this market is underserved, from a capital perspective, and therefore offers attractive risk-adjusted investment returns. Within this market, we focus our investment activities on properties leased to tenants engaged in a targeted set of service-oriented or experience-based businesses.
You may obtain these reports and any amendments thereto free of charge on our website as soon as reasonably practicable after we file such material with, or furnish it to, the SEC, or by sending an email message to info@essentialproperties.com.
You may obtain these reports and any amendments thereto free of charge on our website as soon as reasonably practicable after we file such material with, or furnish it to, the SEC, or by sending an email message to info@essentialproperties.com. 15
Our leases generally require our tenants to name us (and any of our lenders that have a mortgage on the property leased by the tenant) as additional insureds on their liability policies and additional named insured and/or loss payee (or mortgagee, in the case of our lenders) on their property policies.
Our leases generally require our tenants to name us (and any of our lenders that have a mortgage on the property leased by the tenant) as additional insureds on their general liability policies and additional named insured and/or loss payee (or mortgagee, in the case of our lenders) on their property policies.
When excessive moisture accumulates in buildings or on building materials, mold growth may occur, particularly if the moisture problem remains undiscovered or is not addressed over a period of time. Some molds may produce airborne toxins or irritants.
When excessive moisture accumulates in buildings or on building materials, mold growth may occur, particularly if the moisture problem remains undiscovered or is not addressed over a period of time. Some molds 14 may produce airborne toxins or irritants.
Implement sustainability upgrades at our corporate offices and our income properties to reduce our carbon footprint; • Expanding our Relationships with our Tenants through Sustainability. Implement sustainability upgrades at our properties to positively impact our tenants' operations and prospects for success; and • Our People are EPRT.
Implement sustainability upgrades at our corporate offices and our income properties to reduce our carbon footprint; 12 • Expanding our Relationships with our Tenants through Sustainability. Implement sustainability upgrades at our properties to positively impact our tenants' operations and prospects for success; and • Our People are EPRT.
We primarily focus on investing in properties that we lease on a long-term, triple-net basis to middle-market companies that we determine have attractive credit characteristics and stable operating histories.
We primarily focus on investing in properties that we lease on a long-term, triple-net basis to middle- 10 market companies that we determine have attractive credit characteristics and stable operating histories.
We have assembled a diversified portfolio using a disciplined strategy that focuses on properties leased to tenants in businesses including, but not limited to,: • Automotive services, • Car washes, • Convenience stores, 4 • Early childhood education, • Entertainment, • Equipment rental and sales, • Grocery, • Health and fitness, • Industrial, • Medical and dental services, and • Restaurants (primarily quick service restaurants and casual dining).
We have assembled a diversified portfolio using a disciplined strategy that focuses on properties leased to tenants in businesses including, but not limited to,: • Car washes, • Medical and dental services, • Early childhood education, 4 • Quick service restaurants, • Entertainment, • Automotive services, • Casual dining restaurants, • Convenience stores, • Equipment rental and sales, • Health and fitness, and • Grocery.
Because the focus of our investment strategy is on middle-market and smaller operators, our investment in their real estate operating assets is typically either the first time the real estate has transacted, or we are the capital provider for the portion of a merger/acquisition transaction with another operator involving the real estate properties.
Because the focus of our investment strategy is on middle-market and select smaller operators, our investment in their real estate operating assets is typically either the first time the real estate has transacted, or we are the capital provider for a portion of a merger/acquisition transaction with another operator involving the real estate.
"Annualized base rent" means annualized contractually specified cash base rent in effect on December 31, 2023 for all of our leases (including those accounted for as loans or direct financing leases) commenced as of that date and annualized cash interest on our mortgage loans receivable as of that date.
"Annualized base rent" means annualized contractually specified cash base rent in effect on December 31, 2024 for all of our leases (including those accounted for as loans or direct financing leases) commenced as of that date and annualized cash interest on our mortgage loans receivable as of that date.
If our competitors offer space at rental rates below current market rates or below the rental rates we currently charge our tenants, we may lose our tenants or prospective tenants, and we may be pressured to reduce our rental rates or to offer substantial rent abatements, tenant improvement allowances, early termination rights or below-market renewal options in order to retain tenants when our leases expire. 11 Employees As of December 31, 2023, we had 40 full-time employees.
If our competitors offer space at rental rates below current market rates or below the rental rates we currently charge our tenants, we may lose our tenants or prospective tenants, and we may be pressured to reduce our rental rates or to offer substantial rent abatements, tenant improvement allowances, early termination rights or below-market renewal options in order to retain tenants when our leases expire. 11 Employees As of December 31, 2024, we had 48 full-time employees.
We intend to pursue our objective through the following business and growth strategies. 9 • Structure and Manage Our Diverse Portfolio with Focused and Disciplined Underwriting and Risk Management .
We intend to pursue our primary business objective through the following business and growth strategies. • Structure and Manage Our Diverse Portfolio with Focused and Disciplined Underwriting and Risk Management .
As of December 31, 2023, our average investment per property was $2.7 million (which equals our aggregate investment in our properties (including transaction costs, lease incentives and amounts funded for construction in progress) divided by the number of properties owned at such date).
As of December 31, 2024, our average investment per property was $2.9 million (which equals our aggregate investment in our properties (including transaction costs, lease incentives and amounts funded for construction in progress) divided by the number of properties owned at such date).
As of December 31, 2023, our leases had a weighted average remaining lease term of 14.0 years (based on annualized base rent), with only 4.7% of our annualized base rent attributable to leases expiring prior to January 1, 2029, and 98.7% of our leases (based on annualized base rent) provided for increases in future base rent at a weighted average of 1.7% per year. • Actively Manage Our Balance Sheet to Maximize Capital Efficiency .
As of December 31, 2024, our leases had a weighted average remaining lease term of 14.0 years (based on annualized base rent), with only 5.8% of our annualized base rent attributable to leases expiring prior to January 1, 2030, and 98.4% of our leases (based on annualized base rent) provided for increases in future base rent at a weighted average of 1.7% per year. • Actively Manage Our Balance Sheet to Maximize Capital Efficiency .
As a result, our average size investment of $2.7 million as of December 31, 2023 provides a level of diversity in our portfolio, in that we do not have oversized amounts of capital attributable to any individual property.
As a result, our average size investment of $2.9 million as of December 31, 2024 provides a level of diversity in our portfolio, in that we do not have oversized amounts of capital attributable to any individual property.
We seek to maintain a prudent balance between debt and equity financing and to maintain funding sources that lock in long-term investment spreads and limit interest rate sensitivity. As of December 31, 2023, we had $1.7 billion of gross debt outstanding and $1.6 billion of net debt outstanding.
We seek to maintain a prudent balance between debt and equity financing and to maintain funding sources that lock in long-term investment spreads and limit interest rate sensitivity. As of December 31, 2024, we had $2.1 billion of gross debt outstanding and $2.1 billion of net debt outstanding.
Women comprise 40% of our employee base and hold approximately 50% of our management positions, providing significant leadership at our company, and minorities comprise approximately 25% of our employee base and 14% of our management team. Our commitment to diversity also extends to our Board, as three of its seven members, or approximately 43%, are women.
Women comprise 40% of our employee base and hold approximately 46% of our management positions, providing significant leadership at our company, and minorities comprise approximately 23% of our employee base and 14% of our management positions. Our commitment to diversity also extends to our Board, as three of its seven board members, or approximately 43%, are women.
In addition, other losses of a catastrophic nature, such as those caused by wind/hail, hurricanes, terrorism or acts of war, may be uninsurable or not economically insurable.
In addition, other losses of a catastrophic nature, such as those caused by wind/hail, wildfires, hurricanes, terrorism or acts of war, may be uninsurable or not insurable on economically reasonable terms.
We believe that, in general, properties leased to tenants in these businesses and similar businesses are essential to the generation of the tenants' sales and profits. We also believe that these businesses have favorable growth potential and, because of their nature, they are more insulated from e-commerce pressure than many other businesses.
We believe that, in general, properties leased to tenants in these industries and similar businesses are essential to the generation of the tenants' sales and profits. We also believe that these businesses have favorable growth potential and, because of their nature, they are more insulated from the competitive pressures presented by e-commerce than many other businesses.
Management's Discussion and Analysis of Financial Condition and Results of Operations'—Non-GAAP Financial Measures." We also maintain an ATM Program and, as of December 31, 2023, we had the ability to sell additional common stock thereunder with an aggregate gross sales price of up to $279.4 million.
Management's Discussion and Analysis of Financial Condition and Results of Operations'—Non-GAAP Financial Measures." We also maintain an ATM Program and, as of December 31, 2024, we had the ability to sell additional common stock thereunder with an aggregate gross sales price of up to $671.1 million.
The substantial experience, knowledge and relationships of our senior leadership team provide us with an extensive network of contacts that we believe allows us to originate attractive investment opportunities and effectively grow our business. • Scalable Platform Allows for Significant Growth .
The substantial experience, knowledge and relationships of our senior leadership team provide us with an extensive network of contacts that we believe allows us to originate attractive investment opportunities and effectively grow our business.
No single tenant contributed more than 3.8% of our annualized base rent as of December 31, 2023, consistent with our strategy of having a scaled portfolio that, over time, allows us to derive no more than 5.0% of our annualized base rent from any single-tenant or more than 1.0% from any single property.
No single tenant contributed more than 4.2% of our annualized base rent as of December 31, 2024, consistent with our strategy of having a scaled portfolio that, over time, allows us to derive no more than 5.0% of our annualized base rent from any single-tenant or more than 1.0% from any single property.
Among the benefits of executing the sale-leaseback 5 structure is that we use a standard lease form that we structured, and which includes terms favorable to us, including the requirement for the operator to provide us with unit-level and, in some instances, corporate level financial statements on a quarterly basis, in arrears.
Among the benefits of the sale-leaseback structure is the use of a standard lease form that we structured, with terms we believe are favorable to us, including the requirement for the lessee/operator to provide us with unit-level and, in some instances, corporate-level financial statements on a quarterly basis, in arrears.
As of December 31, 2023, our portfolio's weighted average rent coverage ratio was 3.8x, and 98.8% of our leases (based on annualized base rent) obligate the tenant to periodically provide us with specified unit-level financial reporting.
As of December 31, 2024, our portfolio's weighted average rent coverage ratio was 3.5x, and 98.9% of our leases (based on annualized base rent) obligate the tenant to periodically provide us with specified unit-level financial reporting.
Our ratio of net debt to Annualized Adjusted EBITDA re was 4.4x as of December 31, 2023. Net debt, EBITDA re and Annualized Adjusted EBITDAre are non-GAAP financial measures.
Our ratio of net debt to Annualized Adjusted EBITDA re was 4.6x as of December 31, 2024. Net debt, EBITDA re and Annualized Adjusted EBITDAre are non-GAAP financial measures.
During the year ended December 31, 2023, 98.8% of our new investments in real estate were attributable to internally originated sale-leaseback transactions and 85.1% of our new investments were consummated with parties who had previously engaged in one or more transactions that involved a member of our senior management team (including operators and tenants and other participants in the net lease industry, such as brokers, intermediaries and financing sources).
During the year ended December 31, 2024, 97.2% of our new investments in real estate were attributable to internally originated sale-leaseback transactions and 81.4% of our new investments were consummated with parties who had previously engaged in one or more transactions that involved a member of our senior management team (including operators and tenants and other participants in the net lease industry, such as brokers, intermediaries and financing sources).
During the year ended December 31, 2023, 98.8% of our new investments in real estate were attributable to internally originated sale-leaseback transactions and 85.1% of our new investments were consummated with parties who had previously engaged in one or more transactions that involved a member of our senior management team (including operators and tenants and other participants in the net lease industry, such as brokers, intermediaries and financing sources).
During the year ended December 31, 2024, 97.2% of our new investments in real estate were attributable to internally originated sale-leaseback transactions and 81.4% of our new investments were consummated with parties who had previously engaged in one or more transactions that involved a member of our senior management team (including operators and tenants and other participants in the net lease industry, such as brokers, intermediaries and financing sources).
We completed our initial public offering in June 2018 and we qualified to be taxed as a REIT beginning with our taxable year ended December 31, 2018. As of December 31, 2023, 92.9% of our total annualized base rent of $364.8 million was attributable to properties operated by tenants in service-oriented and experience-based businesses.
We completed our initial public offering in June 2018 and we qualified to be taxed as a REIT beginning with our taxable year ended December 31, 2018. As of December 31, 2024, 93.2% of our total annualized base rent of $460.6 million was attributable to properties operated by tenants in service-oriented and experience-based businesses.
The structure of these transactions, which represent the majority of our investment activity, involves our acquisition of the property and then the leasing back of the property to the operator of the real estate, a sale-leaseback structure.
The structure of these transactions, which represent a significant majority of our investment activity, involves our acquisition of a property and the substantially concurrent leasing of the property back to the operator of the real estate (i.e., a sale-leaseback structure).
In addition, the financial reporting we receive from out tenants provides us with an expansive data set from which to underwrite new investments for properties in similar industries or operating platforms. 2023 Financial and Operating Highlights • During 2023, we completed $1.0 billion of investments in 293 properties, including $13.1 million in newly originated mortgage loans receivable secured by 2 properties. • As of December 31, 2023, our total gross investment in real estate was $4.9 billion and we had total debt of $1.7 billion. • During 2023, our Board of Directors ("Board") declared quarterly distributions for the year ended December 31, 2023 that totaled $1.12 per share of common stock. • In February 2023, we completed, on a forward basis, a primary underwritten public follow-on offering of 8,855,000 shares of our common stock, including 1,155,000 shares of common stock purchased by the underwriters pursuant to an option to purchase additional shares, at a public offering price of $24.60 per share.
In addition, the financial reporting we receive from our tenants provides us with an expansive data set from which to underwrite new investments for properties in similar industries or operating platforms. 2024 Financial and Operating Highlights • During 2024, we completed $1.2 billion of investments in 297 properties, including $138.5 million in newly originated mortgage loans receivable secured by 31 properties. • As of December 31, 2024, our total gross investment in real estate, including our investments in mortgage loans receivable, was $6.0 billion and we had total debt of $2.1 billion. • During 2024, our Board of Directors ("Board") declared quarterly distributions for the year ended December 31, 2024 that totaled $1.16 per share of common stock. • In March 2024, we completed, on a forward basis, a primary underwritten public follow-on offering of 10,350,000 shares of our common stock, including 1,350,000 shares of common stock purchased by the underwriters pursuant to an option to purchase additional shares, at a public offering price of $24.75 per share.
We seek to acquire properties owned and operated by middle-market businesses and lease the properties back to the operators pursuant to our standard lease form. For the year ended December 31, 2023, 68% of our investments (weighted by annualized base rent) were in a master lease structure. Significant Use of Sale-Leaseback Structure.
We seek to acquire properties owned and operated by middle-market businesses and lease the properties back to the operators pursuant to our standard lease form. For the year ended December 31, 2024, 71% of our investments (weighted by annualized base rent) were in a master lease structure. Contractual Base Rent Escalation.
As of December 31, 2023, we had $1.7 billion of gross debt outstanding, with a weighted average maturity of 4.9 years, and net debt of $1.6 billion. For the year ended December 31, 2023, our net income was $191.4 million, our EBITDA re was $324.2 million and our Annualized Adjusted EBITDA re was $374.6 million.
As of December 31, 2024, we had $2.1 billion of gross debt outstanding, with a weighted average maturity of 4.2 years, and net debt of $2.1 billion. For the year ended December 31, 2024, our net income was $203.6 million, our EBITDA re was $410.8 million and our Annualized Adjusted EBITDA re was $451.7 million.
As of December 31, 2023, our portfolio consisted of 1,873 properties, inclusive of 136 properties which secure our investments in mortgage loans receivable. Our portfolio was built based on the following core investment attributes: Diversified Portfolio.
As of December 31, 2024, our portfolio consisted of 2,104 properties, inclusive of 150 properties which secure our investments in mortgage loans receivable. Our portfolio was built based on the following core investment attributes: Diversified Portfolio.
We take our responsibilities to all of our stakeholders, including our stockholders, creditors, employees, tenants, and business relationships, very seriously. We are dedicated to being trusted stewards of capital and also providing our employees with a rewarding and dynamic work environment.
EPRT is committed to conducting its business in accordance with the highest ethical standards. We take our responsibilities to all of our stakeholders, including our stockholders, creditors, employees, tenants, and business relationships, very seriously. We are dedicated to being trusted stewards of our stockholder's capital and also providing our employees with a rewarding and dynamic work environment.
As of December 31, 2023: • Our leases had a weighted average remaining lease term (based on annualized base rent) of 14.0 years, with only 4.7% of our annualized base rent attributable to leases expiring prior to January 1, 2029; • Master leases contributed 65.7% of our annualized base rent; • Our portfolio's weighted average rent coverage ratio was 3.8x, with leases contributing 73.2% of our annualized base rent having rent coverage ratios in excess of 2.0x (excluding leases that do not report unit-level financial information); • Our portfolio was 99.8% occupied; • Leases contributing 98.7% of our annualized base rent provide for increases in future annual base rent that generally range from 1.0% to 4.0% annually, with a weighted average annual escalation equal to 1.7% of base rent; and • Leases contributing 95.9% of annualized base rent were triple-net. • Growth-Oriented Balance Sheet Scalable Infrastructure .
As of December 31, 2024: • Our leases had a weighted average remaining lease term (based on annualized base rent) of 14.0 years, with only 5.8% of our annualized base rent attributable to leases expiring prior to January 1, 2030; • Master leases contributed 66.1% of our annualized base rent; • Our portfolio's weighted average rent coverage ratio was 3.5x, with leases contributing 70.4% of our annualized base rent having rent coverage ratios in excess of 2.0x (excluding leases that do not report unit-level financial information); • Our portfolio was 99.7% occupied; • Leases contributing 98.4% of our annualized base rent provide for increases in future annual base rent that generally range from 1.0% to 4.0% annually, with a weighted average annual escalation equal to 1.7% of base rent; and • Leases contributing 96.6% of annualized base rent were triple-net. • Extensive Tenant Financial Reporting Supports Active Asset Management.
As of December 31, 2023, our portfolio was 99.8% occupied by 374 tenants operating 588 different concepts (i.e., generally brands) in 16 industries across 48 states, with none of our tenants contributing more than 3.8% of our annualized base rent. Long Lease Term.
As of December 31, 2024, our portfolio was 99.7% occupied by 413 tenants operating 592 different concepts (i.e., generally brands) in 16 industries across 49 states, with none of our tenants contributing more than 4.2% of our annualized base rent. Long Lease Term.
As of December 31, 2023, our portfolio consisted of 1,873 properties, with total annualized base rent of $364.8 million, which was purposefully selected by our management team in accordance with our focused and disciplined investment strategy. Our diversified portfolio is comprised of 374 tenants operating 588 different concepts across 48 states and in 16 distinct industries.
As of December 31, 2024, our portfolio consisted of 2,104 properties, with total annualized base rent of $460.6 million, which was purposefully selected by our management team in accordance with our focused and disciplined investment 7 strategy. Our diversified portfolio is comprised of 413 tenants operating 592 different concepts across 49 states and in 16 distinct industries.
Fixed rent escalation provisions provide contractually-specified incremental increases in the yield on our investments, provide a degree of protection from inflation or a rising interest rate environment, and provide our tenants with predictability and stability in managing their operating expenses. Smaller, Low Basis Single-Tenant Properties. We generally invest in freestanding "small-box" single-tenant properties.
Fixed rent escalation provisions provide contractually-specified incremental increases in the yield on our investments, provide a degree of protection from inflation or a rising interest rate environment, and provide our tenants with predictability and stability in managing their operating expenses. Healthy Rent Coverage Ratio and Tenant Financial Reporting.
As of December 31, 2023, our leases had a weighted average remaining lease term of 14.0 years (based on annualized base rent), with only 4.7% of our annualized base rent attributable to leases expiring prior to January 1, 2029. Significant Use of Master Leases. As of December 31, 2023, 65.7% of our annualized base rent was attributable to master leases.
As of December 31, 2024, our leases had a weighted average remaining lease term of 14.0 years (based on annualized base rent), with only 5.8% of our annualized base rent attributable to leases expiring prior to January 1, 2030. Significant Use of Sale-Leaseback Structure.
During the year ended December 31, 2023, we sold 52 properties for net sales proceeds of $138.0 million, including three properties that were vacant.
During the year ended December 31, 2024, we sold 46 properties for net sales proceeds of $94.2 million, including five properties that were vacant.
For the year ended December 31, 2023, 98.8% of our investments (weighted by annualized base rent) were through the sale-leaseback structure. Contractual Base Rent Escalation. As of December 31, 2023, 98.7% of our leases (based on annualized base rent) provided for increases in future base rent at a weighted average rate of 1.7% per year.
As of December 31, 2024, 98.4% of our leases (based on annualized base rent) provided for increases in future base rent at a weighted average rate of 1.7% per year.
Our net income for the year ended December 31, 2023 was $191.4 million, our EBITDA re was $324.2 million, our Annualized Adjusted EBITDA re was $374.6 million and our ratio of net debt to Annualized Adjusted EBITDA re was 4.4x.
Our net income for the year ended December 31, 2024 was $203.6 million, our EBITDA re was $410.8 million, our Annualized Adjusted EBITDA re was $451.7 million and our ratio of net debt to Annualized Adjusted EBITDA re was 4.6x.
As of December 31, 2023, our 8 total liquidity was $779.6 million, including $49.0 million of cash and cash equivalents and restricted cash, $130.6 million available upon settlement of our outstanding forward equity contracts, and $600.0 million of availability under our senior unsecured revolving credit facility that matures in February 2026.
As of December 31, 2024, our total liquidity was $1.0 billion, including $45.0 million of cash and cash equivalents and restricted cash, $380.8 million available upon physical settlement of our outstanding forward equity contracts, and $600.0 million of availability under our revolving credit facility.
Compliance with applicable requirements may require modifications to our properties, and the failure to comply with applicable requirements could result in the imposition of fines or an award of damages to private litigants, as well as the incurrence of the costs of making modifications to attain compliance.
Regulation and Requirements Our properties are subject to various laws, ordinances and regulations, including those relating to fire and safety requirements, and affirmative and negative covenants and, in some instances, common area obligations. 13 Compliance with applicable requirements may require modifications to our properties, and the failure to comply with applicable requirements could result in the imposition of fines or an award of damages to private litigants, as well as the incurrence of the costs of making modifications to attain compliance.
As of December 31, 2023, leases contributing 98.8% of our annualized base rent required tenants to provide us with specified unit-level financial information. Our Business and Growth Strategies Our primary business objective is to maximize stockholder value by generating attractive risk-adjusted returns through owning, managing and growing a diversified portfolio of commercially desirable net lease properties.
Our Business and Growth Strategies Our primary business objective is to maximize stockholder value by generating attractive risk-adjusted returns through owning, managing and growing a diversified portfolio of commercially desirable net lease properties.
Insurance Our tenants are generally contractually required to maintain liability and property insurance coverage for the properties they lease from us pursuant to triple-net leases.
Maintain our annual employee survey process to ensure consistent engagement with our team and promote our understanding of our work environment and opportunities for improvement. Insurance Our tenants, pursuant to triple-net leases, are generally contractually required to maintain general liability and property insurance coverage for the properties they lease from us.
We seek to maintain the stability of our rental revenue and maximize the long-term return on our investments while continuing our growth by using our focused and disciplined underwriting and risk management expertise. When underwriting assets, we focus on commercially desirable properties, with strong operating performance, healthy rent coverage ratios and tenants with what we believe are attractive credit characteristics.
We seek to maintain the stability of our rental revenue and maximize the long-term return on our investments while continuing our growth by using our focused and disciplined underwriting and risk management expertise.
Environmental, Social and Governance (ESG) We believe that responsible and effective corporate governance, a positive corporate culture, good corporate citizenship, and the promotion of sustainability initiatives are critical to our ability to create long-term stockholder value. EPRT is committed to conducting its business in accordance with the highest ethical standards.
We conduct annual training in an effort to ensure that all employees remain aware of and help prevent harassment and discrimination. Environmental, Social and Governance (ESG) We believe that responsible and effective corporate governance, a positive corporate culture, good corporate citizenship, and the promotion of sustainability initiatives are critical to our ability to create long-term stockholder value.
Building on our senior leadership team's experience in net lease real estate investing, we have developed leading origination, underwriting, financing, and property management capabilities. We believe our platform is scalable, and we consistently seek to leverage our capabilities to improve our efficiency and processes to continue to seek attractive risk-adjusted growth.
We believe our platform is scalable, and we consistently seek to leverage our capabilities to improve our efficiency and processes to continue to seek attractive risk-adjusted growth.
Maintain strong oversight and visibility over our ESG strategy and initiatives led by our independent and experienced Board, and specifically our Nominating and Corporate Governance Committee; 12 • Reporting.
Maintain strong oversight and visibility over our ESG strategy and initiatives led by our independent and experienced Board, and specifically our Nominating and Corporate Governance Committee; • Reporting. Publish our 2024 Corporate Responsibility Report, aligned with the Sustainability Accounting Standards Board and The Financial Stability Board Task Force on Climate-related Financial Disclosure indices; • Measurement.
Continue to implement energy efficiency upgrades throughout our income property portfolio; • Equity. Continue to invest in our employees through our various benefit programs and incentive structures that maintain our alignment with our stockholders at an employee level; • Diversity.
Continue to invest in our employees through our various benefit programs and incentive structures that maintain our alignment with our stockholders at an employee level; • Diversity. Continue to ensure that diversity is at the forefront of our hiring practices and maintained as a key input to our operations; and • Inclusion.
Our senior management has significant experience in the net lease industry and a track record of growing net lease businesses to significant scale.
We have $380.8 million of equity sold on a forward basis under our ATM program that was unsettled as of December 31, 2024. • Experienced and Proven Management Team . Our senior management has significant experience in the net lease industry and a track record of growing net lease businesses to significant scale.
We conduct annual training in an effort to ensure that all employees remain aware of and help prevent harassment and discrimination. Our compensation program is designed to attract and retain talent, and align our employee’s efforts with the interests of all of our stakeholders.
As of December 31, 2024, 100% of our employees were owners of our common stock. Our compensation program is designed to attract and retain talent, and align our employees’ efforts with the interests of all of our stakeholders.
We believe that investing in smaller more granular assets provides us with an element of risk mitigation with regard to credit risk, real estate risk, and the risk associated with the applicable lease, and allows us to not have large concentrations of our capital allocated to any single asset.
Investing in smaller, more 5 granular assets avoids concentrating a large amount of capital in a single asset and mitigates credit, lease and real estate risk. Among other things, this limits our exposure to events that may adversely affect a particular property.
During the years ended December 31, 2023, 2022 and 2021, we invested in properties with aggregate investment values of $1.0 billion, $937.4 million and $974.0 million, respectively. • Extensive Tenant Financial Reporting Supports Active Asset Management.
During the years ended December 31, 2024, 2023 and 2022, we completed $1.2 billion, $1.0 billion and $937.4 million of investments, respectively. • Growth-Oriented Balance Sheet Scalable Infrastructure . We believe our financial position, liquidity and existing operating infrastructure support our external growth strategy.
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This should provide us with an ability to limit our exposure to events that may adversely affect a particular property. Because of the smaller investment size of individual investments, we believe we benefit from our properties being fungible in terms of the alternative commercial uses that could be operated at any given property we own.
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For the year ended December 31, 2024, 97.2% of our investments (weighted by annualized base rent) were through the sale-leaseback structure. Smaller, Low Basis Single-Tenant Properties. We generally invest in freestanding "small-box" single-tenant properties.
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This also reduces the risk that the particular property might become obsolete and enhances our ability to sell a property if we choose to do so, in part to alleviate credit risk. Healthy Rent Coverage Ratio and Tenant Financial Reporting.
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Additionally, smaller assets are often more liquid and can be sold more rapidly than larger assets, and they are often fungible, in that they are suitable for a variety of commercial uses.
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Net proceeds, after settlement of the related forward sale agreements, were $209.3 million. • In September 2023, we completed, on a forward basis, a primary underwritten public follow-on offering of 12,006,000 shares of our common stock, including 1,566,000 shares of common stock purchased by the underwriters pursuant to an option to purchase additional shares, at a public offering price of $23.00 per share.
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These qualities enhance our ability to sell certain properties, which we may choose to do to manage tenant, concept, industry or geographic concentrations, or other reasons, and reduce the risk that a particular property may become obsolete. Significant Use of Master Leases. As of December 31, 2024, 66.1% of our annualized base rent was attributable to master leases.
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We believe our financial position, liquidity and existing operating infrastructure are supportive of our external growth strategy.
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As of December 31, 2024, leases contributing 98.9% of our annualized base rent required tenants to provide us with specified unit-level financial information. 8 • Scalable Platform Allows for Significant Growth . Building on our senior leadership team's experience in net lease real estate investing, we have developed leading origination, underwriting, financing, and property management capabilities.
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We have $130.6 million of unsettled forward equity as of December 31, 2023, including $83.7 million sold through our equity offering completed in September 2023 and $46.9 million sold on a forward basis under our ATM program in the fourth quarter of 2023 and early 2024. • Experienced and Proven Management Team .
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When underwriting assets, we focus on commercially desirable properties, with 9 strong operating performance, healthy rent coverage ratios and tenants with what we believe are attractive credit characteristics. Leasing.
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Publish our Corporate Responsibility Report during the first quarter of 2024, aligned with the Sustainability Accounting Standards Board and The Financial Stability Board Task Force on Climate-related Financial Disclosure indices; • Measurement. Establish the carbon footprint of our portfolio, specifically our Scope 3 emissions, as we have immaterial Scope 1 and 2 emissions; • Structure.
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Our Board actively oversees ESG initiatives, with the Nominating and Corporate Governance Committee responsible for reviewing and guiding ESG-related policies, risk management and reporting. We integrate ESG considerations into our risk management framework, aligning with Task Force on Climate-related Financial Disclosures ("TCFD") recommendations to assess climate risks and implement mitigation strategies.
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Continue to enhance our robust cybersecurity program including using third-party experts to facilitate our system penetration testing; • Engagement. Perform a survey of our tenants in 2024 to increase our understanding of their sustainability initiatives, expand our tenant engagement and understand how we can continue to contribute to our tenants' operational effectiveness; • Implementation.
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Additionally, we maintain a robust Code of Business Conduct and Ethics, reinforcing our commitment to transparency, integrity, and corporate responsibility. To enhance accountability, we have integrated ESG performance metrics into executive compensation to align senior leadership incentives with our long-term sustainability goals.
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Continue to ensure that diversity is at the forefront of our hiring practices and maintained as a key input to our operations; and • Inclusion. Maintain our annual employee survey process to ensure consistent engagement with our team and promote our understanding of our work environment and opportunities for improvement.
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Establish the carbon footprint of our portfolio, specifically our Scope 3 emissions, as we have no Scope 1 emissions and no material Scope 2 emissions; • Structure. Continue to enhance our cybersecurity risk management program including using third-party experts to facilitate our system penetration testing; • Implementation. Continue to implement energy efficiency upgrades throughout our income property portfolio; • Equity.
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Regulation and Requirements Our properties are subject to various laws, ordinances and regulations, including those relating to fire and safety requirements, and affirmative and negative covenants and, in some instances, common area obligations.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeOur Board could establish a class or series of common stock or preferred stock that could, depending on the terms of such class or series, delay, defer or prevent a transaction or a change of control that might involve a premium price for our common stock or otherwise be in the best interest of our stockholders. 26 Our bylaws designate the Circuit Court for Baltimore City, Maryland as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit stockholders' ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees and could discourage lawsuits against us and our directors, officers and employees.
Biggest changeOur bylaws designate the Circuit Court for Baltimore City, Maryland as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit stockholders' ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees and could discourage lawsuits against us and our directors, officers and employees.
However, the tools and methods we use, such as property-level rent coverage ratio, may not accurately assess the investment related credit risk. The vast majority of our properties are leased to unrated tenants whose credit is evaluated through our internal underwriting and credit analysis.
The vast majority of our properties are leased to unrated tenants whose credit is evaluated through our internal underwriting and credit analysis. However, the tools and methods we use, such as property-level rent coverage ratio, may not accurately assess the investment related credit risk.
Our ability to expand through acquisitions requires us to identify, finance and complete acquisitions or investment opportunities that are compatible with our growth strategy and to successfully finance and integrate newly acquired properties into our portfolio, which may be constrained by the following significant risks: we face competition from other real estate investors, some of which have greater economies of scale, lower costs of capital, access to more financial resources, greater name recognition than we do, and a greater ability to borrow funds and the ability to accept more risk than we can prudently manage, which may significantly reduce our acquisition volume or increase the purchase price for property we acquire, which could reduce our growth prospects; we may be unable to locate properties that will produce a sufficient spread between our cost of capital and the lease rate we can obtain from a tenant, in which case our ability to profitably grow our company will decrease; we may fail to have sufficient capital resources to complete acquisitions or our cost of capital could increase; we may incur significant costs and divert management attention in connection with evaluating and negotiating potential acquisitions, including ones that we are subsequently unable to complete; we may acquire properties that are not accretive to our results upon acquisition; our cash flow from an acquired property may be insufficient to meet our required principal and interest payments with respect to debt used to finance the acquisition of such property; we may discover unexpected items, such as unknown liabilities, during our due diligence investigation of a potential acquisition or other customary closing conditions may not be satisfied, causing us to abandon an investment opportunity after incurring expenses related thereto; we may spend more than budgeted amounts to make necessary improvements or renovations to acquired properties; we may acquire properties subject to liabilities and without any recourse, or with only limited recourse, with respect to unknown liabilities, such as liabilities for clean-up of undisclosed environmental contamination, claims by tenants, vendors or other persons dealing with the former owners of the properties, liabilities incurred in 20 the ordinary course of business and claims for indemnification by general partners, directors, officers and others indemnified by the former owners of the properties; and we may obtain only limited warranties when we acquire a property, including properties purchased in “as is” condition on a “where is” basis and “with all faults,” without warranties of merchantability or fitness for a particular purpose and pursuant to purchase agreements that contain only limited warranties, representations and indemnifications that survive for only a limited period after the closing.
Our ability to expand through acquisitions requires us to identify, finance and complete acquisitions or investment opportunities that are compatible with our growth strategy and to successfully finance and integrate newly acquired properties into our portfolio, which may be constrained by the following significant risks: we face competition from other real estate investors, some of which have greater economies of scale, lower costs of capital, access to more financial resources, greater name recognition than we do, and a greater ability to borrow funds and the ability to accept more risk than we can prudently manage, which may significantly reduce our acquisition volume or increase the purchase price for property we acquire, which could reduce our growth prospects; we may be unable to locate properties that will produce a sufficient spread between our cost of capital and the lease rate we can obtain from a tenant, in which case our ability to profitably grow our company will decrease; we may fail to have sufficient capital resources to complete acquisitions or our cost of capital could increase; we may incur significant costs and divert management attention in connection with evaluating and negotiating potential acquisitions, including ones that we are subsequently unable to complete; we may acquire properties that are not accretive to our results upon acquisition; our cash flow from an acquired property may be insufficient to meet our required principal and interest payments with respect to debt used to finance the acquisition of such property; we may discover unexpected items, such as unknown liabilities, during our due diligence investigation of a potential acquisition or other customary closing 20 conditions may not be satisfied, causing us to abandon an investment opportunity after incurring expenses related thereto; we may spend more than budgeted amounts to make necessary improvements or renovations to acquired properties; we may acquire properties subject to liabilities and without any recourse, or with only limited recourse, with respect to unknown liabilities, such as liabilities for clean-up of undisclosed environmental contamination, claims by tenants, vendors or other persons dealing with the former owners of the properties, liabilities incurred in the ordinary course of business and claims for indemnification by general partners, directors, officers and others indemnified by the former owners of the properties; and we may obtain only limited warranties when we acquire a property, including properties purchased in “as is” condition on a “where is” basis and “with all faults,” without warranties of merchantability or fitness for a particular purpose and pursuant to purchase agreements that contain only limited warranties, representations and indemnifications that survive for only a limited period after the closing.
Risks Related to Environmental and Compliance Matters and Climate Change The costs of compliance with or liabilities related to environmental laws may materially and adversely affect us. The properties we own or have owned in the past may subject us to known and unknown environmental liabilities. We obtain Phase I environmental site assessments on all properties we finance or acquire.
Risks Related to Environmental Matters, Related Compliance and Climate Change The costs of compliance with or liabilities related to environmental laws may materially and adversely affect us. The properties we own or have owned in the past may subject us to known and unknown environmental liabilities. We obtain Phase I environmental site assessments on all properties we finance or acquire.
If we lose our REIT status, we will face significant tax consequences that would substantially reduce our cash available for distribution 28 to our stockholders for each of the years involved because: we would not be allowed a deduction for distributions to stockholders in computing our taxable income and would be subject to federal income tax at the corporate rate; we also could be subject to increased state and local taxes; and unless we are entitled to relief under applicable statutory provisions, we could not elect to be taxed as a REIT for four taxable years following the year during which we were disqualified.
If we lose our REIT status, we will face significant tax consequences that would substantially reduce our cash available for distribution to our stockholders for each of the years involved because: we would not be allowed a deduction for distributions to stockholders in computing our taxable income and would be subject to federal income tax at the corporate rate; we also could be subject to increased state and local taxes; and unless we are entitled to relief under applicable statutory provisions, we could not elect to be taxed as a REIT for four taxable years following the year during which we were disqualified.
As a result, having to comply with the distribution requirement could cause us to: (i) sell assets in adverse market conditions; (ii) borrow on unfavorable terms; or (iii) distribute amounts that would otherwise be invested in future acquisitions, capital expenditures or repayment of debt. Accordingly, satisfying the REIT requirements could materially and adversely affect us.
As a result, having to comply with the distribution requirement could cause us to: (i) sell assets in adverse market conditions; (ii) borrow on unfavorable terms; or (iii) distribute amounts that would otherwise be invested in future acquisitions, capital 30 expenditures or repayment of debt. Accordingly, satisfying the REIT requirements could materially and adversely affect us.
All tenants are required to maintain casualty coverage. Depending on the location of the property, losses of a catastrophic nature, such as those caused by earthquakes and floods, may be covered by insurance policies that are held by our tenant with limitations such as large deductibles or co-payments that a tenant may not be able to meet.
All tenants are required to maintain casualty coverage. Depending on the location of the property, losses of 22 a catastrophic nature, such as those caused by earthquakes and floods, may be covered by insurance policies that are held by our tenant with limitations such as large deductibles or co-payments that a tenant may not be able to meet.
Secured debt subjects us to certain risks, including the potential loss of the property securing such debt through foreclosure or otherwise and the possible inability to refinance any such debt at maturity at a similar loan-to-value ratio. A downgrade in our credit ratings could have a material adverse effect on our business and financial condition.
Secured debt subjects us to certain risks, including the potential 24 loss of the property securing such debt through foreclosure or otherwise and the possible inability to refinance any such debt at maturity at a similar loan-to-value ratio. A downgrade in our credit ratings could have a material adverse effect on our business and financial condition.
If any credit rating agency downgrades or lowers our credit rating, places any such rating on a so-called “watch list” for a possible downgrading or lowering or otherwise publishes a negative outlook for that rating, it could materially 24 adversely affect the market price of our debt securities and possibly our common stock, and generally the cost and availability of our capital.
If any credit rating agency downgrades or lowers our credit rating, places any such rating on a so-called “watch list” for a possible downgrading or lowering or otherwise publishes a negative outlook for that rating, it could materially adversely affect the market price of our debt securities and possibly our common stock, and generally the cost and availability of our capital.
As a result, a significant number of tenant bankruptcies may materially and adversely affect us. 19 Tenants who are considering filing for bankruptcy protection may request that we agree to amendments of their master leases to remove certain of the properties they lease from us under such master leases.
As a result, a significant number of tenant bankruptcies may materially and adversely affect us. Tenants who are considering filing for bankruptcy protection may request that we agree to amendments of their master leases to remove certain of the properties they lease from us under such master leases.
Any claims against such bankrupt tenant for unpaid future rent would be subject to statutory limitations that would likely result in our receipt of rental revenues that are substantially less than the contractually specified rent we are owed under the lease or leases.
Any claims against such bankrupt tenant for unpaid future rent would be subject to statutory limitations that would likely result in our receipt of rental revenues that are substantially less than the contractually specified rent we are owed 19 under the lease or leases.
Some statements in this report including statements in the following risk factors constitute forward-looking statements. See "Special Note Regarding Forward-Looking Statements." 15 Risks Related to Our Business and Properties We are subject to risks related to the ownership of commercial real estate that could adversely impact the value of our properties.
Some statements in this report including statements in the following risk factors constitute forward-looking statements. See "Special Note Regarding Forward-Looking Statements." Risks Related to Our Business and Properties We are subject to risks related to the ownership of commercial real estate that could adversely impact the value of our properties.
Moreover, if 22 contamination is discovered on our properties, environmental laws may impose restrictions on the manner in which they may be used, and these restrictions may require substantial expenditures. Insurance on our properties may not adequately cover all losses and uninsured losses could materially and adversely affect us.
Moreover, if contamination is discovered on our properties, environmental laws may impose restrictions on the manner in which they may be used, and these restrictions may require substantial expenditures. Insurance on our properties may not adequately cover all losses and uninsured losses could materially and adversely affect us.
Even if we continue to qualify as a REIT for federal income tax purposes, we may be subject to some federal, state and local income, property and excise taxes on our income or property and, in certain cases, a 100% penalty tax, in the event we sell property as a dealer.
Even if we continue to qualify as a REIT for federal income tax purposes, we may be subject to some federal, state and local income, property and excise taxes on our income or property and, in certain cases, a 100% 28 penalty tax, in the event we sell property as a dealer.
Sales of substantial amounts of our common stock or securities convertible into or exercisable or exchangeable therefor (such as OP Units), or the perception that such sales might occur, could adversely affect the market price of our common stock. OP Units (“OP Units”) are limited partnership interests in the Operating 32 Partnership.
Sales of substantial amounts of our common stock or securities convertible into or exercisable or exchangeable therefor (such as OP Units), or the perception that such sales might occur, could adversely affect the market price of our common stock. OP Units (“OP Units”) are limited partnership interests in the Operating Partnership.
We believe these businesses have characteristics that make them e-commerce resistant and resilient through economic cycles.While 16 we believe this to be the case, businesses previously thought to be internet resistant, such as the retail grocery industry, have proven to be susceptible to competition from e-commerce.
We believe these businesses have characteristics that make them e-commerce resistant and resilient through economic cycles.While we believe this to be the case, businesses previously thought to be internet resistant, such as the retail grocery industry, have proven to be susceptible to competition from e-commerce.
Many of 31 these factors are beyond our control. These factors may cause the market price of shares of our common stock to decline significantly, regardless of our financial condition, results of operations, business or our prospects. Increases in market interest rates may result in a decrease in the value of shares of our common stock.
Many of these factors are beyond our control. These factors may cause the market price of shares of our common stock to decline significantly, regardless of our financial condition, results of operations, business or our prospects. Increases in market interest rates may result in a decrease in the value of shares of our common stock.
Similarly, these changes could materially and adversely affect our tenants’ reported financial condition or results of operations and affect their preferences regarding leasing real estate. 34 Item 1B. Unresolved Staff Comments. None.
Similarly, these changes could materially and adversely affect our tenants’ reported financial condition or results of operations and affect their preferences regarding leasing real estate. Item 1B. Unresolved Staff Comments. None.
In addition, losses of a catastrophic nature, such as those caused by wind/hail, hurricanes, terrorism or acts of war, may be uninsurable or not economically insurable.
In addition, losses of a catastrophic nature, such as those caused by wind/hail, wildfires, hurricanes, terrorism or acts of war, may be uninsurable or not economically insurable.
Most of our portfolio is leased to tenants operating service-oriented or experience-based businesses at our properties. As of December 31, 2023, the largest industries in our portfolio were restaurants (including quick service, casual dining and family dining), car washes, early childhood education, medical and dental services, entertainment (including movie theaters), automotive service, equipment rental and sales, and convenience stores.
Most of our portfolio is leased to tenants operating service-oriented or experience-based businesses at our properties. As of December 31, 2024, the largest industries in our portfolio were restaurants (including quick service, casual dining and family dining), car washes, early childhood education, medical and dental services, entertainment (including movie theaters), automotive service, equipment rental and sales, and convenience stores.
However, for non-corporate U.S. stockholders, dividends payable by REITs that are not designated as capital gain dividends or otherwise treated as "qualified dividends" generally are eligible for a deduction of 20% of the amount of such dividends, for taxable years beginning before January 1, 2027.
However, for non-corporate U.S. stockholders, dividends payable by REITs that are not designated as capital gain dividends or otherwise treated as "qualified dividends" generally are eligible for a deduction of 20% of the amount of such dividends, for taxable years beginning before January 1, 2026.
As of December 31, 2023, we had $1.7 billion of indebtedness outstanding. This indebtedness consisted of $1.3 billion of combined borrowings under our term loans and $400.0 million outstanding principal amount of senior unsecured notes. We had no indebtedness outstanding under our Revolving Credit Facility as of December 31, 2023, but we may borrow from this facility in the future.
This indebtedness consisted of $1.7 billion of combined borrowings under our term loans and $400.0 million outstanding principal amount of senior unsecured notes. We had no indebtedness outstanding under our Revolving Credit Facility as of December 31, 2024, but we may borrow from this facility in the future.
However, we can provide such non-customary services to our tenants and receive our share in the revenue from such services if we do so through a taxable REIT subsidiary (“TRS”), though income earned by such TRS will be subject to U.S. federal corporate income taxation.
However, we can provide such non-customary services to our tenants and receive our share in the revenue from such services if we do so through a taxable REIT subsidiary (“TRS”), though income earned by such TRS will be subject to U.S. federal and state corporate income tax.
As of December 31, 2023, we were party to 25 interest rate swap agreements with third-party financial institutions having an aggregate notional amount of $1.3 billion that are designated as cash flow hedges and designed to effectively fix the Secured Overnight Financing Rate (“SOFR”) component of the interest rate on the debt outstanding under our term loans.
As of December 31, 2024, we were party to 39 interest rate swap agreements with third-party financial institutions having an aggregate notional amount of $1.7 billion that are designated as cash flow hedges and designed to effectively fix the Secured Overnight Financing Rate (“SOFR”) component of the interest rate on the debt outstanding under our term loans.
Some of our tenants operate under franchise or license agreements, and, if they are terminated or not renewed prior to the expiration of their leases with us, that would likely impair their ability to pay us rent. As of December 31, 2023, tenants contributing 9.1% of our annualized base rent operated under franchise or license agreements.
Some of our tenants operate under franchise or license agreements, and, if they are terminated or not renewed prior to the expiration of their leases with us, that would likely impair their ability to pay us rent. As of December 31, 2024, tenants contributing 16.4% of our annualized base rent operated under franchise or license agreements.
Although many of our rent escalators increase rent at a fixed amount on fixed dates, approximately 2.4% of our rent escalators relate to an increase in the CPI over a specified period.
Although many of our rent escalators increase rent at a fixed amount on fixed dates, approximately 1.9% of our rent escalators relate to an increase in the CPI over a specified period.
As of December 31, 2023, our occupancy was 99.8% and leases representing approximately 4.7% of our annualized base rent as of such date will expire prior to 2029. Current tenants may decline to renew leases and we may not be able to find replacement tenants.
As of December 31, 2024, our occupancy was 99.7% and leases representing approximately 5.8% of our annualized base rent as of such date will expire prior to 2030. Current tenants may decline to renew leases and we may not be able to find replacement tenants.
As of December 31, 2023, we had 164,635,150 shares of common stock outstanding and 553,847 OP Units outstanding (excluding OP Units held directly or indirectly by us). Any exchange of OP Units for common stock may result in stockholder dilution. In the future we may acquire properties through tax deferred contribution transactions in exchange for OP Units.
As of December 31, 2024, we had 187,537,592 shares of common stock outstanding and 553,847 OP Units outstanding (excluding OP Units held directly or indirectly by us). Any exchange of OP Units for common stock may result in stockholder dilution. In the future we may acquire properties through tax deferred contribution transactions in exchange for OP Units.
Our assessment that certain businesses are more insulated from e-commerce pressure than many others may prove to be incorrect, and changes in macroeconomic trends may adversely affect our tenants, either of which could impair our tenants' ability to make rental payments to us and materially and adversely affect us.
We could be materially and adversely affected if a number of our tenants are unable to meet their obligations to us. 16 Our assessment that certain businesses are more insulated from e-commerce pressure than many others may prove to be incorrect, and changes in macroeconomic trends may adversely affect our tenants, either of which could impair our tenants' ability to make rental payments to us and materially and adversely affect us.
Additional adverse economic conditions and other developments that discourage consumer spending, such as high unemployment levels, wage stagnation, interest rates, inflation, tax rates and fuel and energy costs, may have an adverse impact on the results of operations and financial conditions of our tenants and their ability to pay rent to us. 18 Our ability to realize future rent increases on some of our leases may vary depending on changes in the CPI.
Additional adverse economic conditions and other developments that discourage consumer spending, such as high unemployment levels, wage stagnation, interest rates, inflation, tax rates and fuel and energy costs, may have an adverse impact on the results of operations and financial conditions of our tenants and their ability to pay rent to us.
From time to time, we may become party to various lawsuits, claims and other legal proceedings. These matters may involve significant expense and may result in judgments or settlements, which may be significant.
We may become subject to litigation, which could materially and adversely affect us. From time to time, we may become party to various lawsuits, claims and other legal proceedings. These matters may involve significant expense and may result in judgments or settlements, which may be significant.
Misuse of or failure to secure personal information could also result in violation of data privacy laws and regulations, proceedings against the Company by governmental entities or others, fines and penalties, or damage to our reputation and credibility with regulators, tenants and investors. We may become subject to litigation, which could materially and adversely affect us.
Misuse of or failure to secure personal information could also result in violation of data privacy laws and regulations, proceedings against the Company by governmental entities or others, fines and penalties, or damage to our reputation and credibility with regulators, tenants and investors.
The vast majority of our leases provide for periodic contractual rent escalations. As of December 31, 2023, leases contributing 98.7% of our annualized base rent provided for increases in future annual base rent, generally ranging from 1.0% to 4.0% annually, with a weighted average annual escalation equal to 1.7% of base rent.
As of December 31, 2024, leases contributing 98.4% of our annualized base rent provided for increases in future annual base rent, generally ranging from 1.0% to 4.0% annually, with a weighted average annual escalation equal to 1.7% of base rent.
If we cannot obtain capital from third-party sources, or if our cost of capital increases materially, we may not be able to acquire properties when strategic opportunities exist, meet the capital and operating needs of our existing properties, satisfy our debt service obligations or make the cash distributions to our stockholders necessary to qualify as a REIT. 21 Loss of senior executives with long-standing business relationships could materially impair our ability to operate successfully.
If we cannot obtain capital from third-party sources, or if our cost of capital increases materially, we may not be able to 21 acquire properties when strategic opportunities exist, meet the capital and operating needs of our existing properties, satisfy our debt service obligations or make the cash distributions to our stockholders necessary to qualify as a REIT.
Therefore, our directors and officers are subject to monetary liability resulting only from: actual receipt of an improper benefit or profit in money, property or services; or active and deliberate dishonesty by the director or officer that was established by a final judgment as being material to the cause of action adjudicated. 27 As a result, we and our stockholders have rights against our directors and officers that are more limited than might otherwise exist.
Therefore, our directors and officers are subject to monetary liability resulting only from: actual receipt of an improper benefit or profit in money, property or services; or active and deliberate dishonesty by the director or officer that was established by a final judgment as being material to the cause of action adjudicated.
Although we do not intend to hold any properties that would be characterized as held for sale to customers in the ordinary course of our business, unless a sale or disposition qualifies under certain statutory safe harbors, no guarantee can be given that the IRS would agree with our characterization of our properties or that we will always be able to make use of the available safe harbors. 30 Complying with REIT requirements may limit our ability to hedge effectively and may cause us to incur tax liabilities.
Although we do not intend to hold any properties that would be characterized as held for sale to customers in the ordinary course of our business, unless a sale or disposition qualifies under certain statutory safe harbors, no guarantee can be given that the IRS would agree with our characterization of our properties or that we will always be able to make use of the available safe harbors.
The decision to declare and pay distributions on our common stock, as well as the form, timing and amount of any such future distributions, is at the sole discretion of our Board and depends upon a number of factors, including our actual and projected results of operations, FFO, Core FFO, AFFO, liquidity, cash flows and financial condition, the revenue we actually receive from our properties, our operating expenses, our debt service requirements, our capital expenditures, prohibitions and other limitations under our financing arrangements, our REIT taxable income, the annual REIT distribution requirements, applicable law and such other factors as our Board deems relevant.
If cash available for distribution generated by our assets is less than expected, or if such cash available for distribution decreases in future periods from expected levels, our inability to make distributions could result in a decrease in the market price of our common stock. 31 The decision to declare and pay distributions on our common stock, as well as the form, timing and amount of any such future distributions, is at the sole discretion of our Board and depends upon a number of factors, including our actual and projected results of operations, FFO, Core FFO, AFFO, liquidity, cash flows and financial condition, the revenue we actually receive from our properties, our operating expenses, our debt service requirements, our capital expenditures, prohibitions and other limitations under our financing arrangements, our REIT taxable income, the annual REIT distribution requirements, applicable law and such other factors as our Board deems relevant.
In addition, these agreements have cross-default provisions that generally result in an event of default if we default under other material indebtedness. 25 The covenants and other restrictions under our debt agreements may affect, among other things, our ability to: incur indebtedness; create liens on assets; cause our subsidiaries to distribute cash to us to fund distributions to stockholders or to otherwise use in our business; sell or substitute assets; modify certain terms of our leases; manage our cash flows; and make distributions to equity holders, including our common stockholders.
The covenants and other restrictions under our debt agreements may affect, among other things, our ability to: incur indebtedness; create liens on assets; cause our subsidiaries to distribute cash to us to fund distributions to stockholders or to otherwise use in our business; sell or substitute assets; modify certain terms of our leases; manage our cash flows; and make distributions to equity holders, including our common stockholders.
Resolution of these types of matters against us may result in our having to pay significant fines, judgments or settlements, which, if uninsured, or if the fines, judgments, and settlements exceed insured levels, could materially and adversely affect us.
Resolution of these types of matters against us may result in our having to pay significant fines, judgments or settlements, which, if uninsured, or if the fines, judgments, and settlements exceed insured levels, could materially and adversely affect us. 34 We depend on key personnel. We depend on the efforts of our executive officers and key employees.
If the outstanding balance of the debt secured by the mortgage exceeds our tax basis in the property, we would recognize taxable income on foreclosure, but would not receive any cash proceeds, which could hinder our ability to meet the REIT distribution requirements. As we execute our business plan, we may assume or incur new mortgage indebtedness on our properties.
If the outstanding balance of the debt secured by the mortgage exceeds our tax basis in the property, we would recognize taxable income on foreclosure, 25 but would not receive any cash proceeds, which could hinder our ability to meet the REIT distribution requirements.
Our business includes substantial holdings in the following states as of December 31, 2023 (based on annualized base rent): Texas (13.1%), Georgia (8.0%), Ohio (6.0%), Florida (5.9%) and Wisconsin (5.2%).
Our business includes substantial holdings in the following states as of December 31, 2024 (based on annualized base rent): Texas (12.6%), Georgia (7.3%), Florida (6.4%), Ohio (5.7%) and Wisconsin (5.0%).
Any default under any mortgage debt obligation we incur may increase the risk of our default on our other indebtedness.
As we execute our business plan, we may assume or incur new mortgage indebtedness on our properties. Any default under any mortgage debt obligation we incur may increase the risk of our default on our other indebtedness.
As of December 31, 2023, tenants operating in those industries represented approximately 84.7% of our annualized base rent. EquipmentShare, Chicken N Pickle , Crunch Fitness, Captain D's, Tidal Wave Auto Spa, Festival Foods, Five Star, Mister Car Wash, Spare Time Entertainment and John Deere represent the largest concepts in our portfolio.
As of December 31, 2024, tenants operating in those industries represented approximately 84.3% of our annualized base rent. EquipmentShare, Crunch Fitness, Chicken N Pickle, YesWay, Captain D's, Super Star Car Wash , Pops Mart, Tidal Wave Auto Spa, Festival Foods, and Red Robin Gourmet Burgers & Brews represent the largest concepts in our portfolio.
Our ability to operate our business and grow our portfolio depend, in large part, upon the efforts of our senior executive team.
Loss of senior executives with long-standing business relationships could materially impair our ability to operate successfully. Our ability to operate our business and grow our portfolio depend, in large part, upon the efforts of our senior executive team.
In addition, we will be subject to a 4% nondeductible excise tax on the amount, if any, by which distributions paid by us in any calendar year are less than the sum of 85% of our ordinary income, 95% of our capital gain net income and 100% of our undistributed income from prior years. 29 In order to maintain our REIT status and avoid the payment of income and excise taxes, we may need to borrow funds to meet the REIT distribution requirements even if market conditions are not favorable for these borrowings.
In addition, we will be subject to a 4% nondeductible excise tax on the amount, if any, by which distributions paid by us in any calendar year are less than the sum of 85% of our ordinary income, 95% of our capital gain net income and 100% of our undistributed income from prior years.
Accordingly, if actions taken by any of our directors or officers impede the performance of our company, your and our ability to recover damages from such director or officer will be limited.
As a result, we and our stockholders have rights against our directors and officers that are more limited than might otherwise exist. Accordingly, if actions taken by any of our directors or officers impede the performance of our company, your and our ability to recover damages from such director or officer will be limited.
To the extent that the COVID-19 pandemic or the responses thereto caused a secular change in consumer behavior that reduces patronage of service-based and/or experience-based businesses, many of our tenants would be adversely affected and their ability to meet their obligations to us could be impaired.
To the extent that consumer behavior changes in a manner that reduces patronage of service-based and/or experience-based businesses, for 18 example due to public health concerns, many of our tenants would be adversely affected and their ability to meet their obligations to us could be impaired.
We are susceptible to adverse developments in the economic or regulatory environments of the geographic areas in which we own substantial assets (or in which we may develop a substantial concentration of assets in the future), such as epidemics, pandemics or public health crises and measures intended to mitigate their spread, business layoffs or downsizing, industry slowdowns, relocations of businesses, increases in real estate and other taxes or costs of complying with governmental regulations.
We are susceptible to adverse developments in the economic or regulatory environments of the geographic areas in which we own substantial assets (or in which we may develop a substantial concentration of assets in the future), such as business layoffs or downsizing, industry slowdowns, relocations of businesses, severe weather events, public health crises, increases in real estate and other taxes or costs of complying with governmental regulations. 17 As of December 31, 2024, our five largest tenants contributed 10.7% of our annualized base rent, and our ten largest tenants contributed 17.6% of our annualized base rent.
We cannot guarantee that any backup systems, regular data backups, security protocols, network protection mechanisms and other procedures currently in place, or that may be in place in the future, will be adequate to prevent network and service interruption, system failure, damage to one or more of our systems or data loss in the event of a security breach or attack. 33 In addition, the regulatory framework around data custody, data privacy and breaches varies by jurisdiction and is an evolving area of law with increasingly complex and rigorous regulatory standards enacted to protect business and personal data in the United States.
We cannot guarantee that any backup systems, regular data backups, security protocols, network protection mechanisms and other procedures currently in place, or that may be in place in the future, will be adequate to prevent network and service interruption, system failure, damage to one or more of our systems or data loss in the event of a security breach or attack.
These exclusive forum provisions may limit the ability of our stockholders to bring a claim in a judicial forum that such stockholders find favorable for disputes with us or our directors, officers, or employees, which may discourage such lawsuits against us and our directors, officers, and employees.
These choice of forum provisions will not apply to suits brought to enforce a duty or liability created by the Securities Act, the Exchange Act, or any other claim for which federal courts have exclusive jurisdiction. 26 These exclusive forum provisions may limit the ability of our stockholders to bring a claim in a judicial forum that such stockholders find favorable for disputes with us or our directors, officers, or employees, which may discourage such lawsuits against us and our directors, officers, and employees.
General Risk Factors We may be vulnerable to security breaches or cyber attacks which could disrupt our operations and have a material adverse effect on our financial condition and operating results.
As of December 31, 2024, 3,915,711 shares remain available for issuance under our 2023 Incentive Plan. 32 General Risk Factors We may be vulnerable to security breaches or cyber attacks which could disrupt our operations and have a material adverse effect on our financial condition and operating results.
The REIT provisions of the Code substantially limit our ability to hedge our assets and liabilities.
Complying with REIT requirements may limit our ability to hedge effectively and may cause us to incur tax liabilities. The REIT provisions of the Code substantially limit our ability to hedge our assets and liabilities.
If our portfolio becomes less diverse, our business will be more sensitive to a general economic downturn in a particular geographic area, to changes in trends affecting a particular industry and to the financial weakness, bankruptcy or insolvency of fewer tenants. 17 The vast majority of our properties are leased to unrated tenants whose credit is evaluated through our internal underwriting and credit analysis.
As we continue to acquire properties, our portfolio may become more concentrated by geographic area, industry or tenant. If our portfolio becomes less diverse, our business will be more sensitive to a general economic downturn in a particular geographic area, to changes in trends affecting a particular industry and to the financial weakness, bankruptcy or insolvency of fewer tenants.
If a sale-leaseback transaction were so re-characterized, we might fail to satisfy the REIT asset tests, the income tests or distribution requirements and consequently lose our REIT status effective with the year of re-characterization unless we elect to make an additional distribution to maintain our REIT status.
The IRS may take the position that specific sale-leaseback transactions that we treat as leases are not true leases for federal income tax purposes but, instead, should be re-characterized as financing arrangements or loans. 29 If a sale-leaseback transaction were so re-characterized, we might fail to satisfy the REIT asset tests, the income tests or distribution requirements and consequently lose our REIT status effective with the year of re-characterization unless we elect to make an additional distribution to maintain our REIT status.
These restrictions could limit our ability to sell an asset at a time, or on terms, that would be favorable absent such restrictions. As of December 31, 2023, 4,365,504 shares remain available for issuance under our 2023 Incentive Plan.
These restrictions could limit our ability to sell an asset at a time, or on terms, that would be favorable absent such restrictions.
If you do not directly own units of our Operating Partnership, you will not have any voting rights with respect to any such issuances or other partnership level activities of our Operating Partnership.
If you do not directly own units of our Operating Partnership, you will not have any voting rights with respect to any such issuances or other partnership level activities of our Operating Partnership. 27 Conflicts of interest could arise in the future between the interests of our stockholders and the interests of holders of units in our Operating Partnership, which may impede business decisions that could benefit our stockholders.
Furthermore, these provisions could delay or otherwise impact a transaction or a change in control of our company that might involve a premium paid for shares of our common stock or otherwise be in the best interests of our stockholders.
Our Board could establish a class or series of common stock or preferred stock that could, depending on the terms of such class or series, delay, defer or prevent a transaction or a change of control that might involve a premium price for our common stock or otherwise be in the best interest of our stockholders.
Compliance with existing, proposed and recently enacted laws and regulations can be costly; any failure to comply with these regulatory standards could subject us to legal and reputational risks.
Data protection legislation is becoming increasingly common in the United States at both the federal and state level and may require us to further modify our data processing practices and policies. Compliance with existing, proposed and recently enacted laws and regulations can be costly; any failure to comply with these regulatory standards could subject us to legal and reputational risks.
The occurrence of any of these events or conditions may adversely impact our ability to lease our properties or our or our tenants’ ability to obtain property insurance on acceptable terms, which would materially and adversely affect us. 23 Risks Related to Our Indebtedness As of December 31, 2023, we had $1.7 billion of indebtedness outstanding, which requires substantial cash flow to service, subjects us to covenants and refinancing risk and the risk of default.
Risks Related to Our Indebtedness As of December 31, 2024, we had $2.1 billion of indebtedness outstanding, which requires substantial cash flow to service, subjects us to covenants and refinancing risk and the risk of default. As of December 31, 2024, we had $2.1 billion of indebtedness outstanding.
Substantially all of our tenants are required to provide financial information to us periodically or, in some instances, at our request.
The vast majority of our properties are leased to unrated tenants whose credit is evaluated through our internal underwriting and credit analysis. Substantially all of our tenants are required to provide financial information to us periodically or, in some instances, at our request that we use in evaluating their creditworthiness.
We may not be able to limit our liability or damages in the event of such a loss. Data protection legislation is becoming increasingly common in the United States at both the federal and state level and may require us to further modify our data processing practices and policies.
In addition, the regulatory framework around data custody, data privacy and breaches varies by jurisdiction and is an evolving area of law with increasingly complex and rigorous regulatory standards enacted to protect business and personal data in the United States. We may not be able to limit our liability or damages in the event of such a loss.
Removed
We could be materially and adversely affected if a number of our tenants are unable to meet their obligations to us.
Added
Our ability to realize future rent increases on some of our leases may vary depending on changes in the CPI. The vast majority of our leases provide for periodic contractual rent escalations.
Removed
As of December 31, 2023, our five largest tenants contributed 11.2% of our annualized base rent, and our ten largest tenants contributed 18.1% of our annualized base rent.
Added
In addition, even if some or all of certain losses are covered by insurance, drawing on such insurance may cause our premiums and other insurance costs to increase or result in certain types of policies becoming unavailable in the future.
Removed
As we continue to acquire properties, our portfolio may become more concentrated by geographic area, industry or tenant.
Added
Our business is subject to risks associated with climate change and our sustainability strategies. Our business is subject to risks associated with the effects of climate change, and a resulting shift to a lower carbon economy, and may be subject to further risks in the future.
Removed
As of December 31, 2023, leases contributing 98.8% of our annualized base rent required tenants to provide us with specified unit-level financial information and leases contributing 98.8% of our annualized base rent required tenants to provide us with corporate-level financial information.
Added
Climate change could adversely affect our business through both chronic and acute perils including, but not limited to, extreme weather, fires, wind, changes in precipitation and temperature, and rising sea levels, all of which may result in physical damage to, or a decrease in demand for, our properties located in the areas affected by these conditions, and may adversely impact consumer behaviors, preferences and spending at our properties, which may impact our tenants’ ability to fulfill their obligations under our leases, or our ability to re-lease the properties in the future.
Removed
The long-term impact of the COVID-19 pandemic is unclear and could further adversely affect us. The direct adverse impact of the COVID-19 pandemic on us has significantly diminished; however, its long-term impact is unclear.
Added
In addition, should the impact of climate change be severe or occur for lengthy periods of time, connectivity, labor and supply chain issues could impact business continuity for ourselves and our tenants.
Removed
For instance, a reinstitution of lockdowns, quarantines, restrictions on travel, “shelter in place” rules, school closures and/or restrictions on the types of businesses that may continue to operate or limitations on certain business operations, whether in response to a COVID-19 resurgence or another pathogen, could cause a decline in economic activity and a reduction in consumer confidence that could impair the ability of many of our tenants to operate their businesses and meet their obligations to us, including rental payment obligations.
Added
Chronic climate change may lead to increased costs for us and our tenants to reduce carbon footprints, including with respect to heating, cooling or electricity costs, retrofitting properties to be more energy efficient or comply with new rules or regulations, or other unforeseen costs. These risks could adversely affect our reputation, financial condition or results of operations.
Removed
More broadly, to the extent the COVID-19 pandemic has caused or causes a secular change in consumer behavior that reduces patronage of service-based and/or experience-based businesses, many of our tenants will be adversely affected and their ability to meet their obligations to us could be impaired; this could also reduce the value of our properties and cause us to realize impairment charges.
Added
We seek to promote effective energy efficiency and other sustainability strategies and compliance with federal, state and other applicable laws and regulations related to climate change, both internally and with our tenants.
Removed
Our operations and financial condition may be adversely affected by climate change, including possible changes in weather patterns, weather-related events, government policy, laws, regulations and economic conditions.
Added
Our sustainability strategies and efforts to comply with changes in federal, state and other applicable laws and regulations on climate change could result in significant capital expenditures to improve our existing properties or properties we may acquire. Any changes to such laws and regulations could also result in increased operating costs or capital expenditures at our properties.
Removed
In recent years, the assessment of the potential impact of climate change has begun to impact the activities of government authorities, the pattern of consumer behavior and other areas that impact the business environment in the U.S., including, but not limited to, energy-efficiency measures, water use measures and land-use practices.
Added
If we are unable to comply with laws and regulations on climate change or implement effective sustainability strategies, our reputation among our tenants and investors may be damaged and we may incur fines and/or penalties.
Removed
The promulgation of policies, laws or regulations relating to climate change by governmental authorities in the U.S. and the markets in which we own properties may require us to invest additional capital in our properties.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

9 edited+1 added−1 removed11 unchanged
Biggest changeOur incident response and recovery plans address—and guide our employees, management and the Board on—our response to a cybersecurity incident. 35 Third-Party Risk Management We have implemented controls designed to identify and mitigate cybersecurity threats associated with our use of third-party service providers.
Biggest changeThird-Party Risk Management We have implemented controls designed to identify and mitigate cybersecurity threats associated with our use of third-party service providers. Such providers are subject to security risk assessments at the time of engagement, contract renewal and upon detection of an increase in risk profile.
We are not aware of any risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, that have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations or financial condition.
We are not aware of any risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, that have 35 materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations or financial condition.
They receive periodic reports from management and our external cybersecurity consultant about the identification, prevention, detection, mitigation and remediation of cybersecurity incidents, including material security risks and information security vulnerabilities. Our Nominating and Corporate Governance Committee directly oversees our cybersecurity program.
Governance Board Oversight Our Board, in coordination with its Nominating and Corporate Governance Committee, oversees our management of cybersecurity risk. They receive periodic reports from management and our external cybersecurity consultant about the identification, prevention, detection, mitigation and remediation of cybersecurity incidents, including material security risks and information security vulnerabilities.
External Assessments Our cybersecurity policies and procedures are periodically assessed by our external cybersecurity consultant. These assessments include a variety of activities including information security maturity assessments, penetration tests, and independent reviews of our information security control environment and operating effectiveness. The results of significant assessments are reported to management, the Board and its Nominating and Corporate Governance Committee.
These assessments include a variety of activities including information security maturity assessments, 36 penetration tests, and independent reviews of our information security control environment and operating effectiveness. The results of significant assessments are reported to management, the Board and its Nominating and Corporate Governance Committee. Cybersecurity processes are adjusted based on the information provided from these assessments.
Incident Response and Recovery Planning We have established comprehensive incident response and recovery plans and continue to periodically test and evaluate the effectiveness of those plans.
Incident Response and Recovery Planning We have established comprehensive incident response and recovery plans and continue to periodically test and evaluate the effectiveness of those plans. Our incident response and recovery plans address—and guide our employees, management and the Board on—our response to a cybersecurity incident.
Education and Awareness Each of our employees is required to comply with our cybersecurity policies. We regularly remind employees of the importance of handling and protecting our data, including through annual privacy and security training to enhance employee awareness of how to detect and respond to cybersecurity threats.
We regularly remind employees of the importance of handling and protecting our data, including through annual privacy and security training to enhance employee awareness of how to detect and respond to cybersecurity threats. External Assessments Our cybersecurity policies and procedures are periodically assessed by our external cybersecurity consultant.
The CFO meets periodically with our external cybersecurity consultant to review security performance metrics and identify security risks. The CFO and our external cybersecurity consultant also consider and make recommendations on security policies and procedures, security service requirements and risk mitigation strategies to the Nominating and Corporate Governance Committee.
The Chief Financial Officer and our external cybersecurity consultant also consider and make recommendations on security policies and procedures, security service requirements and risk mitigation strategies to the Nominating and Corporate Governance Committee.
The Nominating and Corporate Governance Committee receives periodic updates from management and our external cybersecurity consultant on cybersecurity risk resulting from risk assessments, progress of risk reduction initiatives, external auditor feedback, control maturity assessments, and relevant internal and industry cybersecurity incidents. Management’s Role Our chief financial officer (“CFO”) has primary responsibility for assessing and managing material risks from cybersecurity threats.
Our Nominating and Corporate Governance Committee oversees risks arising from our cybersecurity program. The Nominating and Corporate Governance Committee receives periodic updates from management and our external cybersecurity consultant on cybersecurity risk resulting from risk assessments, progress of risk reduction initiatives, external auditor feedback, control maturity assessments, and relevant internal and industry cybersecurity incidents.
Such providers are subject to security risk assessments at the time of engagement, contract renewal and upon detection of an increase in risk profile. We use a variety of inputs in such risk assessments, including information supplied by providers and third parties, and investigate security incidents that have impacted our third-party providers, as appropriate.
We use a variety of inputs in such risk assessments, including information supplied by providers and third parties, and investigate security incidents that have impacted our third-party providers, as appropriate. Education and Awareness Each of our employees is required to comply with our cybersecurity policies.
Removed
Cybersecurity processes are adjusted based on the information provided from these assessments. Governance Board Oversight Our Board, in coordination with its Nominating and Corporate Governance Committee, oversees our management of cybersecurity risk.
Added
Management’s Role Our Chief Financial Officer has primary responsibility for assessing and managing material risks from cybersecurity threats. The Chief Financial Officer meets periodically with our external cybersecurity consultant to review security performance metrics and identify security risks.

Item 2. Properties

Properties — owned and leased real estate

19 edited+1 added−2 removed2 unchanged
Biggest changeFt.) Texas $ 47,745 13.1 % 215 2,312,947 Georgia 29,165 8.0 % 153 1,051,818 Ohio 22,002 6.0 % 141 1,198,456 Florida 21,455 5.9 % 86 775,400 Wisconsin 19,048 5.2 % 72 1,011,950 Missouri 13,274 3.6 % 69 849,260 North Carolina 12,394 3.4 % 63 642,318 Arizona 11,874 3.3 % 52 562,798 Oklahoma 10,849 3.0 % 59 831,399 Michigan 10,400 2.9 % 60 1,002,532 Alabama 9,791 2.7 % 56 514,795 New Jersey 9,296 2.6 % 29 373,874 New York 8,749 2.4 % 58 304,086 Arkansas 8,675 2.4 % 58 480,277 Virginia 8,662 2.4 % 29 321,102 Illinois 8,659 2.4 % 51 403,037 Minnesota 8,633 2.4 % 40 551,746 Tennessee 8,592 2.4 % 51 349,388 South Carolina 8,310 2.3 % 50 456,252 Pennsylvania 7,402 2.0 % 39 391,321 Indiana 7,140 2.0 % 49 365,594 Mississippi 6,718 1.8 % 53 316,851 Connecticut 6,513 1.8 % 20 508,568 Colorado 6,202 1.7 % 28 319,000 Massachusetts 6,119 1.7 % 31 431,281 Iowa 5,297 1.5 % 32 363,483 Nevada 4,385 1.2 % 13 104,860 Kentucky 4,234 1.2 % 38 234,363 Kansas 3,918 1.1 % 17 162,837 California 3,647 1.0 % 17 125,741 Louisiana 3,624 1.0 % 19 133,848 New Hampshire 3,499 1.0 % 15 255,981 New Mexico 3,359 0.9 % 21 128,455 South Dakota 2,684 0.7 % 9 130,152 Washington 2,382 0.7 % 12 99,374 Maryland 2,379 0.7 % 9 75,410 West Virginia 1,655 0.5 % 24 66,746 Maine 1,002 0.3 % 3 56,981 Utah 956 0.3 % 2 67,659 Nebraska 911 0.3 % 8 32,892 Idaho 644 0.2 % 2 41,146 North Dakota 559 0.2 % 4 62,270 Rhode Island 466 0.1 % 2 22,865 Wyoming 453 0.1 % 2 14,001 Oregon 403 0.1 % 7 119,584 Alaska 250 0.1 % 2 6,630 Vermont 223 0.1 % 1 30,508 Montana 179 0.1 % 1 — Total $ 364,776 100.0 % 1,873 18,661,836 40 Lease Expirations As of December 31, 2023, the weighted average remaining term of our leases was 14.0 years (based on annualized base rent), with only 4.7% of our annualized base rent attributable to leases expiring prior to January 1, 2029.
Biggest changeFt.) Texas $ 58,094 12.6 % 232 2,688,743 Georgia 33,687 7.3 % 159 1,170,288 Florida 29,609 6.4 % 102 1,009,063 Ohio 26,224 5.7 % 141 1,558,468 Wisconsin 23,063 5.0 % 89 1,203,062 North Carolina 18,040 3.9 % 86 823,149 Arizona 15,975 3.5 % 65 687,393 Oklahoma 15,603 3.4 % 70 961,748 Missouri 15,174 3.3 % 72 900,451 Illinois 13,925 3.0 % 63 603,709 South Carolina 12,663 2.7 % 66 542,546 Indiana 12,092 2.6 % 64 652,790 Michigan 12,062 2.6 % 62 1,135,416 Minnesota 11,099 2.4 % 44 628,174 New Jersey 10,728 2.3 % 31 429,474 Alabama 10,383 2.3 % 57 548,645 New York 9,528 2.1 % 61 390,778 Virginia 9,496 2.1 % 30 367,074 Arkansas 9,474 2.1 % 62 509,900 Tennessee 8,989 2.0 % 52 361,919 Pennsylvania 8,039 1.7 % 42 419,149 Mississippi 7,975 1.7 % 59 371,968 New Mexico 7,653 1.7 % 29 194,880 Colorado 7,465 1.6 % 30 353,655 Connecticut 7,174 1.6 % 23 579,458 Kentucky 6,410 1.4 % 48 310,474 Massachusetts 6,255 1.4 % 32 439,465 California 5,679 1.2 % 19 149,755 Louisiana 5,651 1.2 % 29 172,990 Iowa 5,650 1.2 % 32 363,483 Nevada 5,155 1.1 % 15 114,488 Kansas 4,683 1.0 % 18 201,900 Utah 4,426 1.0 % 5 321,256 New Hampshire 3,638 0.8 % 14 279,182 South Dakota 2,727 0.6 % 9 130,153 Maryland 2,411 0.5 % 9 75,410 Oregon 2,320 0.5 % 8 131,957 Washington 2,267 0.5 % 12 94,427 West Virginia 2,045 0.4 % 24 84,684 Nebraska 1,750 0.4 % 11 138,797 Maine 1,147 0.2 % 4 71,000 Vermont 1,006 0.2 % 9 64,622 North Dakota 876 0.2 % 5 72,400 Idaho 659 0.1 % 2 41,146 Rhode Island 473 0.1 % 2 22,865 Delaware 408 0.1 % 1 4,186 Wyoming 289 0.1 % 2 14,001 Alaska 253 0.1 % 2 6,630 Montana 179 0.1 % 1 3,400 Total $ 460,571 100.0 % 2,104 22,400,571 41 Lease Expirations As of December 31, 2024, the weighted average remaining term of our leases was 14.0 years (based on annualized base rent), with only 5.8% of our annualized base rent attributable to leases expiring prior to January 1, 2030.
The following table details information about our tenants and the related concepts they operate as of December 31, 2023 (dollars in thousands): Tenant (1) Concept Number of Properties (2) Annualized Base Rent % of Annualized Base Rent EquipmentShare.com Inc.
The following table details information about our tenants and the related concepts they operate as of December 31, 2024 (dollars in thousands): Tenant (1) Concept Number of Properties (2) Annualized Base Rent % of Annualized Base Rent EquipmentShare.com Inc.
The following table provides information about the top ten concepts in our portfolio as of December 31, 2023 (dollars in thousands): Concept Type of Business Annualized Base Rent % of Annualized Base Rent Number of Properties (1) Building (Sq.
The following table provides information about the top ten concepts in our portfolio as of December 31, 2024 (dollars in thousands): Concept Type of Business Annualized Base Rent % of Annualized Base Rent Number of Properties (1) Building (Sq.
The following table summarizes those industries as of December 31, 2023 (dollars in thousands except per sq. ft amounts): Tenant Industry Type of Business Annualized Base Rent % of Annualized Base Rent Number of Properties (1) Building (Sq. Ft.) (1) Rent Per Sq. Ft.
The following table summarizes those industries as of December 31, 2024 (dollars in thousands except per sq. ft amounts): Tenant Industry Type of Business Annualized Base Rent % of Annualized Base Rent Number of Properties (1) Building (Sq. Ft.) (1) Rent Per Sq. Ft.
The following table illustrates the portions of our annualized base rent as of December 31, 2023 attributable to leases with tenants having specified implied credit ratings based on their Moody’s RiskCalc scores: Credit Rating NR 1.00 to 1.49x 1.50 to 1.99x ≥ 2.00x CCC+ 0.1 % 0.4 % 0.1 % 0.8 % 0.5 % B- — % 0.1 % 0.1 % — % 1.1 % B 0.2 % 0.1 % 1.9 % 1.1 % 7.4 % B+ 0.1 % 1.1 % 2.3 % 0.7 % 13.4 % BB- — % — % 0.7 % 2.9 % 9.6 % BB 0.2 % 0.3 % 1.0 % 0.7 % 5.4 % BB+ — % 0.2 % 1.4 % 2.1 % 9.8 % BBB- — % 0.4 % 1.0 % 1.7 % 8.2 % BBB 0.2 % 0.1 % 0.3 % 1.5 % 7.7 % BBB+ — % — % 0.3 % 0.1 % 2.3 % A- — % — % 0.1 % 0.1 % 2.2 % A — % — % — % 0.4 % 1.9 % A+ — % — % 0.6 % — % 0.2 % AA- — % — % — % — % — % _____________________________________ NR Not reported
The following table illustrates the portions of our annualized base rent as of December 31, 2024 attributable to leases with tenants having specified implied credit ratings based on their Moody’s RiskCalc scores: Credit Rating NR 1.00 to 1.49x 1.50 to 1.99x ≥ 2.00x CCC+ — % 0.6 % 0.9 % 0.4 % 2.0 % B- — % 0.4 % 0.1 % 1.1 % 5.4 % B 0.1 % 0.2 % 1.4 % 2.3 % 8.3 % B+ — % 0.5 % 2.1 % 2.5 % 12.4 % BB- — % 0.4 % 1.6 % 2.3 % 9.8 % BB — % 0.5 % 2.3 % 2.3 % 9.4 % BB+ 0.2 % 0.1 % 0.1 % 1.7 % 6.3 % BBB- 0.2 % 0.2 % 1.4 % 0.6 % 6.7 % BBB — % — % 0.5 % 1.5 % 2.2 % BBB+ — % 0.1 % — % 0.1 % 2.7 % A- — % — % — % — % 1.9 % A — % — % — % — % 0.6 % A+ — % — % — % — % 0.5 % AA- — % — % — % — % — % _____________________________________ NR Not reported
Due to the triple-net structure of our leases, we do not expect to incur significant capital expenditures relating to our triple-net leased properties, and the potential impact of inflation on our operating expenses is reduced. 37 Diversification by Concept Our tenants operate their businesses across 588 concepts (i.e., generally brands).
Due to the triple-net structure of our leases, we do not expect to incur significant capital expenditures relating to our triple-net leased properties, and the potential impact of inflation on our operating expenses is reduced. 38 Diversification by Concept Our tenants operate their businesses across 592 concepts (i.e., generally brands).
As of December 31, 2023, 95.9% of our leases (based on annualized base rent) were triple-net, where the tenant is typically responsible for all improvements and is contractually obligated to pay all operating expenses, such as maintenance, insurance, utility and tax expense, related to the leased property.
As of December 31, 2024, 96.6% of our leases (based on annualized base rent) were triple-net, where the tenant is typically responsible for all improvements and is contractually obligated to pay all operating expenses, such as maintenance, insurance, utility and tax expense, related to the leased property.
(2) Excludes three vacant properties. (3) Weighted by annualized base rent. Unit Level Rent Coverage Generally, we seek to acquire investments with healthy rent coverage ratios, and as of December 31, 2023, the weighted average rent coverage ratio of our portfolio was 3.8x.
(2) Excludes seven vacant properties. (3) Weighted by annualized base rent. Unit Level Rent Coverage Generally, we seek to acquire investments with healthy rent coverage ratios, and as of December 31, 2024, the weighted average rent coverage ratio of our portfolio was 3.5x.
Our portfolio’s unit-level rent coverage ratios (by annualized base rent and excluding leases that do not report unit-level financial information) as of December 31, 2023 are displayed below: Unit Level Coverage Ratio % of Total ≥ 2.00x 73.2 % 1.50x to 1.99x 12.5 % 1.00x to 1.49x 9.9 % 3.1 % Not reported 1.3 % 100.0 % 41 Implied Tenant Credit Ratings Tenant financial distress is typically caused by consistently poor or deteriorating operating performance, near-term liquidity issues or unexpected liabilities.
Our portfolio’s unit-level rent coverage ratios (by annualized base rent and excluding leases that do not report unit-level financial information) as of December 31, 2024 are displayed below: Unit Level Coverage Ratio % of Total ≥ 2.00x 70.4 % 1.50x to 1.99x 15.1 % 1.00x to 1.49x 10.3 % 3.1 % Not reported 1.1 % 100.0 % 42 Implied Tenant Credit Ratings Tenant financial distress is typically caused by consistently poor or deteriorating operating performance, near-term liquidity issues or unexpected liabilities.
Item 2. Properties. Our Real Estate Investment Portfolio As of December 31, 2023, we had a portfolio of 1,873 properties, inclusive of 136 properties that secure our investments in mortgage loans receivable, that was diversified by tenant, concept, industry and geography and had annualized base rent of $364.8 million.
Item 2. Properties. Our Real Estate Investment Portfolio As of December 31, 2024, we had a portfolio of 2,104 properties, inclusive of 150 properties that secure our investments in mortgage loans receivable, that was diversified by tenant, concept, industry and geography and had annualized base rent of $460.6 million.
None of our tenants represented more than 3.8% of our portfolio at December 31, 2023 and our top ten largest tenants represented 18.1% of our annualized base rent as of that date. 36 Diversification by Tenant As of December 31, 2023, our top ten tenants included ten different concepts.
None of our tenants represented more than 4.2% of our portfolio at December 31, 2024 and our top ten largest tenants represented 17.6% of our annualized base rent as of that date. 37 Diversification by Tenant As of December 31, 2024, our top ten tenants included ten different concepts.
As of December 31, 2023, our five largest tenants, who contributed 11.2% of our annualized base rent, had a rent coverage ratio of 7.3x while our ten largest tenants, who contributed 18.1% of our annualized base rent, had a rent coverage ratio of 5.4x.
As of December 31, 2024, our five largest tenants, who contributed 10.7% of our annualized base rent, had a rent coverage ratio of 6.4x while our ten largest tenants, who contributed 17.6% of our annualized base rent, had a rent coverage ratio of 5.2x.
The following table details the geographical locations of our properties as of December 31, 2023 (dollars in thousands): State Annualized Base Rent % of Annualized Base Rent Number of Properties Building (Sq.
Diversification by Geography Our 2,104 properties locations are located in 49 states. The following table details the geographical locations of our properties as of December 31, 2024 (dollars in thousands): 40 State Annualized Base Rent % of Annualized Base Rent Number of Properties Building (Sq.
Our 374 tenants operate 588 different concepts in 16 industries across 48 states.
Our 413 tenants operate 592 different concepts in 16 industries across 49 states.
As of December 31, 2023, our tenants operating service-oriented businesses had a weighted average rent coverage ratio of 3.7x, our tenants operating experience-based businesses had a weighted average rent coverage ratio of 2.8x, our tenants operating retail businesses had a weighted average rent coverage ratio of 4.2x and our tenants operating other types of businesses had a weighted average rent coverage ratio of 10.9x. 39 Diversification by Geography Our 1,873 properties locations are located in 48 states.
As of December 31, 2024, our tenants operating service-oriented businesses had a weighted average rent coverage ratio of 3.5x, our tenants operating experience-based businesses had a weighted average rent coverage ratio of 2.7x, our tenants operating retail businesses had a weighted average rent coverage ratio of 4.1x and our tenants operating other types of businesses had a weighted average rent coverage ratio of 8.8x.
The following table sets forth our lease expirations for leases in place as of December 31, 2023 (dollars in thousands): Lease Expiration Year (1) Annualized Base Rent % of Annualized Base Rent Number of Properties (2) Weighted Average Rent Coverage Ratio (3) 2024 $ 1,506 0.4 % 20 2.3 x 2025 2,226 0.6 % 15 3.2 x 2026 3,046 0.8 % 19 3.0 x 2027 6,140 1.7 % 55 2.9 x 2028 4,323 1.2 % 16 2.7 x 2029 9,701 2.7 % 113 5.2 x 2030 4,116 1.1 % 45 4.7 x 2031 13,059 3.6 % 78 2.8 x 2032 12,209 3.3 % 47 4.2 x 2033 7,842 2.1 % 24 3.4 x 2034 28,169 7.7 % 200 6.6 x 2035 14,795 4.1 % 98 3.7 x 2036 39,372 10.8 % 159 4.4 x 2037 21,714 6.0 % 127 6.0 x 2038 42,516 11.7 % 178 3.6 x 2039 17,471 4.8 % 80 2.5 x 2040 28,548 7.8 % 126 2.5 x 2041 23,060 6.3 % 111 2.6 x 2042 40,198 11.0 % 177 3.3 x 2043 37,333 10.2 % 158 2.9 x Thereafter 7,432 2.0 % 24 4.1 x Total/Weighted Average $ 364,776 100.0 % 1,870 3.8 x _______________________________________________________________ (1) Expiration year of contracts in place as of December 31, 2023, excluding any tenant option renewal periods that have not been exercised.
The following table sets forth our lease expirations for leases in place as of December 31, 2024 (dollars in thousands): Lease Expiration Year (1) Annualized Base Rent % of Annualized Base Rent Number of Properties (2) Weighted Average Rent Coverage Ratio (3) 2025 $ 2,535 0.6 % 17 3.0 x 2026 3,476 0.8 % 24 3.2 x 2027 5,741 1.2 % 43 3.5 x 2028 4,378 1.0 % 16 2.6 x 2029 10,479 2.3 % 119 4.9 x 2030 4,129 0.9 % 45 3.8 x 2031 12,401 2.7 % 66 3.0 x 2032 12,835 2.8 % 43 4.1 x 2033 7,984 1.7 % 30 2.7 x 2034 30,100 6.5 % 201 6.4 x 2035 16,260 3.5 % 104 4.1 x 2036 40,300 8.8 % 159 4.1 x 2037 24,005 5.2 % 126 4.1 x 2038 53,264 11.6 % 206 3.6 x 2039 39,941 8.7 % 159 3.6 x 2040 22,551 4.9 % 104 2.3 x 2041 19,399 4.2 % 92 2.9 x 2042 33,408 7.3 % 149 2.7 x 2043 48,689 10.6 % 178 2.5 x 2044 54,227 11.7 % 178 3.3 x Thereafter 14,469 3.0 % 38 2.9 x Total/Weighted Average $ 460,571 100.0 % 2,097 3.5 x _______________________________________________________________ (1) Expiration year of contracts in place as of December 31, 2024, excluding any tenant option renewal periods that have not been exercised.
(2) Car Washes Service $ 55,177 15.1 % 179 887,863 $ 62.53 Early Childhood Education Service 42,288 11.6 % 191 1,990,269 21.25 Quick Service Service 39,101 10.7 % 427 1,145,403 34.48 Medical / Dental Service 38,581 10.6 % 206 1,557,129 24.78 Automotive Service Service 30,003 8.2 % 224 1,526,876 19.65 Casual Dining Service 25,506 7.0 % 115 817,546 31.20 Equipment Rental and Sales Service 18,572 5.1 % 72 1,252,458 14.83 Convenience Stores Service 18,415 5.0 % 145 578,272 33.09 Other Services Service 8,634 2.4 % 46 600,191 14.39 Family Dining Service 6,835 1.9 % 38 249,173 27.43 Pet Care Services Service 5,904 1.6 % 38 260,429 23.92 Service Subtotal 289,016 79.2 % 1,681 10,865,609 26.73 Entertainment Experience 29,970 8.2 % 54 1,727,559 17.35 Health and Fitness Experience 15,633 4.3 % 38 1,427,431 11.34 Movie Theatres Experience 4,398 1.2 % 6 293,206 15.00 Experience Subtotal 50,001 13.7 % 98 3,448,196 14.71 Grocery Retail 11,604 3.2 % 32 1,477,780 7.85 Home Furnishings Retail 1,491 0.4 % 3 176,809 8.44 Retail Subtotal 13,095 3.6 % 35 1,654,589 7.91 Other Industrial Industrial 8,754 2.4 % 33 1,367,097 6.40 Building Materials Industrial 3,910 1.1 % 23 1,257,017 3.11 Industrial Subtotal 12,664 3.5 % 56 2,624,114 4.83 Total/Weighted Average $ 364,776 100.0 % 1,870 18,592,508 $ 19.73 ____________________________________________________ (1) Excludes three vacant properties.
(2) Car Washes Service $ 65,352 14.2 % 195 993,402 $ 64.32 Medical / Dental Service 54,162 11.8 % 233 1,955,274 26.35 Early Childhood Education Service 54,093 11.7 % 230 2,459,190 21.50 Quick Service Service 42,115 9.1 % 428 1,135,522 37.07 Automotive Service Service 36,035 7.8 % 265 1,956,478 18.16 Casual Dining Service 34,695 7.5 % 145 1,006,976 31.93 Convenience Stores Service 29,867 6.5 % 169 699,890 38.38 Equipment Rental and Sales Service 24,723 5.4 % 86 1,675,003 14.76 Other Services Service 12,360 2.7 % 59 763,088 16.29 Pet Care Services Service 6,953 1.5 % 39 335,760 20.15 Family Dining Service 6,666 1.5 % 29 221,953 30.03 Service Subtotal 367,021 79.7 % 1,878 13,202,536 26.92 Entertainment Experience 36,122 7.8 % 62 2,247,463 15.21 Health and Fitness Experience 21,670 4.7 % 46 1,788,976 10.78 Movie Theatres Experience 4,404 1.0 % 6 293,206 15.02 Experience Subtotal 62,196 13.5 % 114 4,329,645 13.38 Grocery Retail 13,677 3.0 % 40 1,604,320 8.53 Home Furnishings Retail 1,530 0.3 % 3 176,809 8.65 Retail Subtotal 15,207 3.3 % 43 1,781,129 8.54 Other Industrial Industrial 12,181 2.6 % 39 1,790,388 6.49 Building Materials Industrial 3,966 0.9 % 23 1,257,017 3.16 Industrial Subtotal 16,147 3.5 % 62 3,047,405 5.11 Total/Weighted Average $ 460,571 100.0 % 2,097 22,360,715 $ 19.88 ____________________________________________________ (1) Excludes seven vacant properties.
EquipmentShare 48 $ 14,039 3.8 % CNP Holdings, LLC Chicken N Pickle 8 8,346 2.3 % Busy Bees US Holdings Limited Various 31 6,943 1.9 % New Potato Creek Holdings, LLC Tidal Wave Auto Spa 16 5,943 1.6 % Mdsfest, Inc.
EquipmentShare 59 $ 19,210 4.2 % CNP Holdings, LLC Chicken N Pickle 8 8,492 1.9 % BW Ultimate Parent, LLC YesWay 13 7,472 1.6 % Busy Bees US Holdings Limited Various 32 7,215 1.6 % Undefeated Tribe Operating Company, LLC Crunch Fitness 12 6,740 1.5 % Denali Midco 2, LLC Super Star Car Wash 20 6,627 1.4 % Pops Mart Holdings, LLC and Pops Mart Fuels, LLC Various 26 6,601 1.4 % New Potato Creek Holdings, LLC Tidal Wave Auto Spa 16 6,546 1.4 % Mdsfest, Inc.
Ft.) (1) EquipmentShare Service $ 14,039 3.8 % 48 823,701 Chicken N Pickle Experience 8,346 2.3 % 8 279,483 Crunch Fitness Experience 8,028 2.2 % 19 675,084 Captain D's Service 6,707 1.8 % 88 228,470 Tidal Wave Auto Spa Service 5,943 1.6 % 16 30,497 Festival Foods Retail 5,778 1.6 % 6 465,660 Five Star Experience 4,717 1.3 % 9 65,455 Mister Car Wash Service 4,566 1.3 % 13 54,621 Spare Time Entertainment Experience 4,521 1.2 % 6 272,979 John Deere Service 4,259 1.2 % 22 395,014 Top 10 Subtotal 66,904 18.3 % 235 3,290,964 Other 297,872 81.7 % 1,635 15,301,544 Total $ 364,776 100.0 % 1,870 18,592,508 ______________________________________ (1) Excludes three vacant properties. 38 Diversification by Industry Our tenants' business concepts are diversified across various industries.
Ft.) (1) EquipmentShare Service $ 19,210 4.2 % 59 1,132,619 Crunch Fitness Experience 13,645 3.0 % 26 1,013,523 Chicken N Pickle Experience 8,492 1.9 % 8 279,483 YesWay Service 7,472 1.6 % 13 75,429 Captain D's Service 6,762 1.5 % 87 225,956 Super Star Car Wash Service 6,627 1.4 % 20 98,234 Pops Mart Service 6,601 1.4 % 26 130,893 Tidal Wave Auto Spa Service 6,546 1.4 % 16 58,154 Festival Foods Retail 6,104 1.3 % 7 520,475 Red Robin Gourmet Burgers & Brews Service 5,984 1.3 % 28 188,041 Top 10 Subtotal 87,443 19.0 % 290 3,722,807 Other 373,128 81.0 % 1,807 18,637,908 Total $ 460,571 100.0 % 2,097 22,360,715 ______________________________________ (1) Excludes seven vacant properties. 39 Diversification by Industry Our tenants' business concepts are diversified across various industries.
Removed
Festival Foods 6 5,778 1.6 % The Track Holdings, LLC Five Star 10 5,695 1.6 % Captain D's, LLC Captain D's 77 5,627 1.5 % SB Pep Holdco, LLC (3) Various 12 4,650 1.3 % Premier Early Childhood Education Partners LLC Various 26 4,619 1.3 % Car Wash Partners, Inc.
Added
Festival Foods 7 6,104 1.3 % Alimentation Couche Tard Inc. Circle K 40 6,000 1.3 % Top 10 Subtotal 233 81,007 17.6 % Other 1,864 379,564 82.4 % Total 2,097 $ 460,571 100.0 % __________________________________________ (1) Represents tenant, guarantor or parent company. (2) Excludes seven vacant properties.
Removed
Mister Car Wash 13 4,566 1.3 % Top 10 Subtotal 247 66,205 18.1 % Other 1,623 298,571 81.9 % Total 1,870 $ 364,776 100.0 % __________________________________________ (1) Represents tenant or guarantor. (2) Excludes three vacant properties. (3) Includes properties leased to a subsidiary of Accelerated Brands.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−0 removed5 unchanged
Biggest changeFurther, management cannot predict the outcome of these legal proceedings and if management's expectation regarding such matters is not correct, such proceedings could have a material adverse effect on our business, financial condition, results of operations or liquidity. Item 4. Mine Safety Disclosures. Not applicable. 42 PART II
Biggest changeFurther, management cannot predict the outcome of these legal proceedings and if management's expectation regarding such matters is not correct, such proceedings could have a material adverse effect on our business, financial condition, results of operations or liquidity. Item 4. Mine Safety Disclosures. Not applicable. 43 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

8 edited+0 added−0 removed4 unchanged
Biggest changeTicker / Index 1/1/2019 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 EPRT 100.00 187.70 169.71 238.32 204.45 233.36 S&P 500 100.00 136.89 159.19 202.58 162.81 202.31 FNER 100.00 123.96 113.69 156.04 113.51 121.37 The performance graph and the related table are being furnished solely to accompany this Annual Report on Form 10-K pursuant to Item 201(e) of Regulation S-K, and are not being filed for purposes of Section 18 of the Exchange Act and are not to be incorporated by reference into any filing of ours, whether made before or after the date hereof, regardless of any general incorporation language in such filing.
Biggest changeThe historical stock price performance reflected in the graph and related table is not necessarily indicative of future stock price performance. 44 Ticker / Index 1/1/2020 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/31/2024 EPRT 100.00 89.62 125.86 107.97 123.23 153.71 S&P 500 100.00 116.28 147.98 118.93 147.78 182.26 FNER 100.00 93.09 127.76 92.94 99.37 100.40 The performance graph and the related table are being furnished solely to accompany this Annual Report on Form 10-K pursuant to Item 201(e) of Regulation S-K, and are not being filed for purposes of Section 18 of the Exchange Act and are not to be incorporated by reference into any filing of ours, whether made before or after the date hereof, regardless of any general incorporation language in such filing.
To the extent that our cash available for distribution is less than 90% of our REIT taxable income, we may consider various means to cover any such shortfall, including borrowing under the Revolving Credit Facility or other loans, selling certain of our assets, or using a portion of the net proceeds we receive from offerings of equity, equity-related or debt securities or declaring taxable share dividends.
To the extent that our cash available for distribution is less than 90% of our REIT taxable income, we may consider various means to cover any such shortfall, including borrowing under our Revolving Credit Facility or other loans, selling certain of our assets, or using a portion of the net proceeds we receive from offerings of equity, equity-related or debt securities or declaring taxable share dividends.
Stock Performance Graph The following performance graph and related table compare, for the five year period ended December 31, 2023, the cumulative total stockholder return on our common stock with that of the Standard & Poor's 500 Composite Stock Index ("S&P 500") and the FTSE NAREIT All Equity REITs index ("FNER").
Stock Performance Graph The following performance graph and related table compare, for the five year period ended December 31, 2024, the cumulative total stockholder return on our common stock with that of the Standard & Poor's 500 Composite Stock Index ("S&P 500") and the FTSE NAREIT All Equity REITs index ("FNER").
Equity Compensation Plan Information The information concerning our Equity Compensation Plan will be included in the Proxy Statement to be filed relating to our 2024 Annual Meeting of Stockholders and is incorporated herein by reference. Unregistered Sales of Equity Securities and Use of Proceeds Not applicable. Item 6. [Reserved] 44
Equity Compensation Plan Information The information concerning our Equity Compensation Plan will be included in the Proxy Statement to be filed relating to our 2025 Annual Meeting of Stockholders and is incorporated herein by reference. Unregistered Sales of Equity Securities and Use of Proceeds Not applicable. Item 6. [Reserved] 45
Management's Discussion and Analysis of Financial Condition and Results of Operations — Description of Certain Debt." We have determined that, for federal income tax purposes, approximately 86.0% of the distributions paid for the 2023 tax year represented taxable income and 14.0% represented a return of capital.
Management's Discussion and Analysis of Financial Condition and Results of Operations — Description of Certain Debt." We have determined that, for federal income tax purposes, approximately 92.7% of the distributions paid for the 2024 tax year represented taxable income and 7.3% represented a return of capital.
Issuer Purchases of Equity Securities During the year ended December 31, 2023, the Company did not repurchase any of its equity securities.
Issuer Purchases of Equity Securities During the three months ended December 31, 2024, the Company did not repurchase any of its equity securities.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Our common stock is listed on the NYSE under the symbol "EPRT". As of February 9, 2024, there were 196 holders of record of the 166,102,747 outstanding shares of our common stock.
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Our common stock is listed on the NYSE under the symbol "EPRT". As of February 7, 2025, there were 207 holders of record of the 187,691,457 outstanding shares of our common stock.
The graph and related table assume $100.00 was invested on January 1, 2019 and assumes the reinvestment of all dividends. The historical stock price performance reflected in the graph and related table is not necessarily indicative of future stock price performance. 43 Essential Properties Realty Trust, Inc.
The graph and related table assume $100.00 was invested on January 1, 2020 and assumes the reinvestment of all dividends.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

87 edited+10 added−14 removed99 unchanged
Biggest changeHistorical Investment and Disposition Activity The following table sets forth select information about our investment activity for the previous eight quarters beginning with the quarter ended March 31, 2022 through December 31, 2023 (dollars in thousands): Three Months Ended March 31, 2023 June 30, 2023 September 30, 2023 December 31, 2023 Investment activity $ 207,147 $ 277,361 $ 213,327 $ 314,865 Number of transactions 24 29 30 43 Property count 57 78 65 93 Avg. investment per unit $ 3,401 $ 3,350 $ 2,812 $ 3,008 Cash cap rate 1 7.6% 7.4% 7.6% 7.9% GAAP cap rate 2 9.0% 8.7% 8.7% 9.1% Master lease percentage 3,4 86% 57% 60% 72% Sale-leaseback percentage 3,5 100% 99% 100% 97% Existing relationship percentage 94% 66% 86% 96% Percentage of financial reporting 3 100% 100% 100% 100% Rent coverage ratio 3.3x 3.9x 3.3x 3.3x Lease term (years) 19.0 19.3 17.6 17.6 Three Months Ended March 31, 2022 June 30, 2022 September 30, 2022 December 31, 2022 Investment activity $ 237,795 $ 175,738 $ 195,454 $ 328,370 Number of transactions 23 23 27 39 Property count 105 39 40 115 Avg. investment per unit $ 2,187 $ 3,870 $ 3,750 $ 2,782 Cash cap rate 1 7.0% 7.0% 7.1% 7.5% GAAP cap rate 2 7.8% 8.0% 8.2% 8.8% Master lease percentage 3,4 83% 86% 68% 90% Sale-leaseback percentage 3,5 100% 100% 89% 99% Existing relationship percentage 83% 79% 94% 95% Percentage of financial reporting 3 100% 100% 100% 100% Rent coverage ratio 3.3x 2.7x 4.4x 3.2x Lease term (years) 15.0 17.2 16.5 18.7 _____________________________________ (1) Cash annualized base rent for the first full month after the investment divided by the gross investment in the property plus transaction costs.
Biggest changeHistorical Investment and Disposition Activity The following table sets forth select information about our investment activity for the previous eight quarters beginning with the quarter ended March 31, 2023 through the quarter ended December 31, 2024 (dollars in thousands): Three Months Ended March 31, 2024 June 30, 2024 September 30, 2024 December 31, 2024 Investment activity $ 248,770 $ 333,910 $ 307,615 $ 333,435 Number of transactions 36 35 37 37 Property count 79 83 57 78 Avg. investment per unit $ 2,767 $ 3,393 $ 4,102 $ 3,281 Cash cap rate 1 8.1% 8.0% 8.1% 8.0% GAAP cap rate 2 9.3% 9.1% 9.1% 9.2% Master lease percentage 3,4 82% 76% 57% 69% Sale-leaseback percentage 3,5 100% 100% 89% 100% Existing relationship percentage 87% 82% 79% 79% Percentage of financial reporting 3 100% 100% 100% 100% Rent coverage ratio 2.7x 3.0x 4.7x 3.4x Lease term (years) 17.2 17.8 17.2 17.7 Three Months Ended March 31, 2023 June 30, 2023 September 30, 2023 December 31, 2023 Investment activity $ 207,147 $ 277,361 $ 213,327 $ 314,865 Number of transactions 24 29 30 43 Property count 57 78 65 93 Avg. investment per unit $ 3,401 $ 3,350 $ 2,812 $ 3,008 Cash cap rate 1 7.6% 7.4% 7.6% 7.9% GAAP cap rate 2 9.0% 8.7% 8.7% 9.1% Master lease percentage 3,4 86% 57% 60% 72% Sale-leaseback percentage 3,5 100% 99% 100% 97% Existing relationship percentage 94% 66% 86% 96% Percentage of financial reporting 3 100% 100% 100% 100% Rent coverage ratio 3.3x 3.9x 3.3x 3.3x Lease term (years) 19.0 19.3 17.6 17.6 _____________________________________ (1) Cash annualized base rent for the first full month after the investment divided by the gross investment in the property plus transaction costs. 47 (2) GAAP rent and interest income for the first twelve months after the investment divided by the gross investment in the property plus transaction costs.
Although we are not required to maintain a particular leverage ratio and may not be able to do so, we generally consider that, over time, a level of net debt (which includes recourse and non-recourse borrowings and any outstanding preferred stock less cash and cash equivalents and restricted cash available for future investment) that is less than six times our annualized adjusted EBITDA re is prudent for a real estate company like ours.
Although we are not required to maintain a particular leverage ratio and may not be able to do so, we generally consider that, over time, a level of net debt (which includes recourse and non-recourse borrowings and any outstanding preferred stock less cash and cash equivalents and restricted cash 49 available for future investment) that is less than six times our annualized adjusted EBITDA re is prudent for a real estate company like ours.
The fair value of above- or below-market leases is recorded based on the net present value (using a discount rate that reflects the risks associated with the leases acquired) of the difference between the contractual amount to be paid pursuant to the in-place lease and our estimate of the fair market lease rate for the corresponding in-place lease, measured over the 53 remaining non-cancelable term of the lease including any below-market fixed rate renewal options for below-market leases.
The fair value of above- or below-market leases is recorded based on the net present value (using a discount rate that reflects the risks associated with the leases acquired) of the difference between the contractual amount to be paid pursuant to the in-place lease and our estimate of the fair market lease rate for the corresponding in-place lease, measured over the remaining non-cancelable term of the lease including any below-market fixed rate renewal options for below-market leases.
This review is based on an estimate of the future undiscounted cash flows, excluding interest charges, expected to result from the property's use and eventual disposition. These estimates consider factors such as expected future operating income, market and other applicable trends and residual value, as well as the effects of leasing demand, competition and other factors.
This review is based on an estimate of the future undiscounted cash flows, excluding interest charges, expected to result from the property's use and eventual disposition. These estimates consider factors such 55 as expected future operating income, market and other applicable trends and residual value, as well as the effects of leasing demand, competition and other factors.
An additional inflow was our increase in accrued liabilities and other payables of $0.8 million, offset by the outflow caused by the increase in our rent receivables, prepaid expenses and other assets of $6.0 million. 51 Net cash used in investing activities during the year ended December 31, 2023 was $857.1 million.
An additional inflow was our increase in accrued liabilities and other payables of $0.8 million, offset by the outflow caused by the increase in our rent receivables, prepaid expenses and other assets of $6.0 million. Net cash used in investing activities during the year ended December 31, 2023 was $857.1 million.
If the assessment of the collectability of substantially all payments due under a lease changes from probable to not probable, any difference between the rental revenue recognized to date and the lease payments 54 that have been collected is recognized as a current period reduction of rental revenue in our consolidated statements of operations.
If the assessment of the collectability of substantially all payments due under a lease changes from probable to not probable, any difference between the rental revenue recognized to date and the lease payments that have been collected is recognized as a current period reduction of rental revenue in our consolidated statements of operations.
We believe NOI and Cash NOI provide useful and relevant 61 information because they reflect only those revenue and expense items that are incurred at the property level and present such items on an unlevered basis. NOI and Cash NOI are not measures of financial performance under GAAP.
We believe NOI and Cash NOI provide useful and relevant information because they reflect only those revenue and expense items that are incurred at the property level and present such items on an unlevered basis. NOI and Cash NOI are not measures of financial performance under GAAP.
The applicable margin and the revolving facility fee rate are a spread and rate, as applicable, set according to the Company's credit ratings provided by S&P, Moody's and/or Fitch. Each of the Revolving Credit Facility and the CF Term Loans is freely pre-payable at any time.
The applicable margin and the revolving facility fee rate are a spread and rate, as applicable, set according to the credit ratings provided by S&P, Moody's and/or Fitch. Each of the Revolving Credit Facility and the CF Term Loans is freely pre-payable at any time.
We allocate the purchase price (plus transaction costs) of acquired properties accounted for as asset acquisitions to tangible and identifiable intangible assets or liabilities based on their relative fair values. Tangible assets may include land, site improvements and buildings.
We allocate the purchase price (plus transaction costs) of acquired properties accounted for as asset acquisitions to tangible and identifiable intangible assets or liabilities based on their relative fair values. Tangible 54 assets may include land, site improvements and buildings.
NOI excludes all other items of expense and income included in the financial statements in calculating net income or loss in accordance with GAAP. Cash NOI further excludes non-cash items included in total revenues and property expenses, such as straight-line rental revenue and other amortization and non-cash charges.
NOI excludes all other items of expense and income included in the financial statements in calculating net income or loss in accordance with GAAP. Cash NOI further excludes non-cash items included in total revenues and property expenses, such as straight-line rental 62 revenue and other amortization and non-cash charges.
Changes in our provision for credit losses are driven by revisions to global and loan-specific assumptions in our credit loss model and by changes in the size of our loan and direct financing lease portfolio. Other operating income: Gain on dispositions of real estate, net.
Changes in our provision for credit losses are driven by revisions to global and asset-specific assumptions in our credit loss model and by changes in the size of our loan and direct financing lease portfolio. Other operating income: Gain on dispositions of real estate, net.
(2) Adjustment is made to i) exclude non-core income and expense adjustments made in computing Core FFO, ii) exclude changes in our provision for credit losses and iii) eliminate the impact of seasonal fluctuation in certain non-cash compensation expense recorded in the period.
(2) Adjustment is made to i) exclude non-core adjustments made in computing Core FFO, ii) exclude changes in our provision for credit losses and iii) eliminate the impact of seasonal fluctuation in certain non-cash compensation expense recorded in the period.
As 48 we continue to invest in real estate properties and grow our real estate portfolio, we intend to manage our long-term debt maturities to reduce the risk that a significant amount of our debt will mature in any single year in the future.
As we continue to invest in real estate properties and grow our real estate portfolio, we intend to manage our long-term debt maturities to reduce the risk that a significant amount of our debt will mature in any single year in the future.
These cash outflows were partially offset by $128.6 million of proceeds from sales of investments, net of disposition costs, and $27.9 million of principal collections on our loans and direct financing lease receivables.
These cash outflows were partially offset by $128.6 million of 53 proceeds from sales of investments, net of disposition costs, and $27.9 million of principal collections on our loans and direct financing lease receivables.
These cash inflows were partially offset by the payment of $168.2 million in dividends, $0.9 million of offeing costs paid related to our follow-on offerings and the ATM program, repayment of $70.0 million of borrowings under the Revolving Credit Facility, the payment of deferred financing costs of $2.4 million, and the payment of $3.7 million in taxes related to the net settlement of equity awards.
These cash inflows were partially offset by the payment of $168.2 million in dividends, $0.9 million of offering costs paid related to our follow-on offerings and the ATM program, repayment of $70.0 million of borrowings under the Revolving Credit Facility, the payment of deferred financing costs of $2.4 million, and the payment of $3.7 million in taxes related to the net settlement of equity awards.
Under the terms of the 2027 Term Loan, we are subject to customary restrictive financial and nonfinancial covenants which, among other things, require us to maintain certain leverage ratios, cash flow and debt service coverage ratios and secured borrowing ratios. As of December 31, 2023, we were in compliance with these covenants.
Under the terms of the 2027 Term Loan, we are subject to customary restrictive financial and nonfinancial covenants which, among other things, require us to maintain certain leverage ratios, cash flow and debt service coverage ratios, and secured borrowing ratios. As of December 31, 2024, we were in compliance with these covenants.
"Annualized base rent" means annualized contractually specified cash base rent in effect on December 31, 2023 for all of our leases (including those accounted for as loans or direct financing leases) commenced as of that date and annualized cash interest on our mortgage loans receivable as of that date. We were organized on January 12, 2018 as a Maryland corporation.
"Annualized base rent" means annualized contractually specified cash base rent in effect on December 31, 2024 for all of our leases (including those accounted for as loans or direct financing leases) commenced as of that date and annualized cash interest on our mortgage loans receivable as of that date. We were organized on January 12, 2018 as a Maryland corporation.
The loss on debt extinguishment of $0.1 million during the year ended December 31, 2023 relates to the write-off of deferred financing costs in conjunction with the full repayment of our 2024 Term Loan in August 2023.
The loss on debt extinguishment of $0.1 million during the year ended December 31, 2023 relates to the write-off of deferred financing costs in conjunction with the full repayment of our 2024 Term Loan in August 2023. Interest expense .
The 2028 Term Loan matures on January 25, 2028 and the 2029 Term Loan has an original maturity of three years, plus extension options at the Operating Partnership's election which can extend the maturity to February 24, 2029.
The 2028 Term Loan matures on January 25, 2028, the 2029 Term Loan has an original maturity of three years, plus extension options at the Operating Partnership's election, which can extend the maturity to February 24, 2029 and the 2030 Term Loan has an original maturity of three years, plus extension options at the Operating Partnership's election, which can extend the maturity to January 11, 2030.
Our short-term liquidity requirements also include the funding needs associated with 74 properties where we have agreed to reimburse the tenant for certain development, construction, or renovation costs or to provide construction financing in exchange for contractual payments of interest or increased rent that generally increases in proportion with our level of funding.
Our short-term liquidity requirements also include the funding needs associated with 104 properties where we have agreed to reimburse the tenant for certain 48 development, construction, or renovation costs or to provide construction financing in exchange for contractual payments of interest or increased rent that generally increases in proportion with our level of funding.
As of December 31, 2023, 98.7% of our leases (based on annualized base rent) provided for increases in future base rent at a weighted average rate of 1.7% per year. Smaller, Low Basis Single-Tenant Properties. We generally invest in freestanding “small-box” single- tenant properties.
As of December 31, 2024, 98.4% of our leases (based on annualized base rent) provided for increases in future base rent at a weighted average rate of 1.7% per year. Smaller, Low Basis Single-Tenant Properties. We generally invest in freestanding “small-box” single- tenant properties.
Overall, our 2023 dispositions had a lower sales price in relation to their net book value as compared to our 2022 dispositions. Other (expense)/income: Loss on debt extinguishment.
Overall, our 2024 dispositions had a lower sales price in relation to their net book value as compared to our 2023 dispositions. Other (expense)/income: Loss on debt extinguishment.
As a result of the amendments to Rule 3-10 of Regulation S-X, subsidiary issuers of obligations guaranteed by the parent are not required to provide separate financial statements, provided that the subsidiary obligor is consolidated into the parent company’s consolidated financial statements, the parent guarantee is “full and unconditional” and, subject to certain exceptions as set forth below, the alternative disclosure required by Rule 13-01 is provided, which includes narrative disclosure and summarized financial information.
Pursuant to Rule 3-10 of Regulation S-X, subsidiary issuers of obligations guaranteed by the parent are not required to provide separate financial statements, provided that the subsidiary obligor is consolidated into the parent company’s consolidated financial statements, the parent guarantee is “full and unconditional” and, subject to certain exceptions as set forth below, the alternative disclosure required by Rule 13-01 is provided, which includes narrative disclosure and summarized financial information.
(2) Includes $22.2 million of rental payments due under ground lease arrangements where our tenants are directly responsible for payment. Additionally, we may enter into commitments to purchase goods and services in connection with the operation of our business.
(2) Includes $21.0 million of rental payments due under ground lease arrangements where our tenants are directly responsible for payment. Additionally, we may enter into commitments to purchase goods and services in connection with the operation of our business.
As of December 31, 2023, three of our investment properties were vacant, significantly less than 1% of our portfolio, and all remaining properties were subject to a lease or mortgage loan receivable. We expect to incur property costs from time to time in periods during which properties that become vacant are being marketed for lease or sale.
As of December 31, 2024, seven of our investment properties were vacant, significantly less than 1% of our portfolio, and all remaining properties were subject to a lease or mortgage loan receivable. We expect to incur property costs from time to time in periods during which properties that become vacant are being marketed for lease or sale.
The occupancy level of our portfolio is high (99.8% as of December 31, 2023) and, because substantially all of our leases are triple-net (whereby our tenants are generally responsible for all maintenance, costs for operating the property, and insurance and property taxes associated with the leased properties), our liquidity requirements are not significantly impacted by property costs.
The occupancy level of our portfolio is high (99.7% as of December 31, 2024) and, because substantially all of our leases are triple-net (whereby our tenants are generally responsible for all maintenance, costs for operating the property, and insurance and property taxes associated with the leased properties), our liquidity requirements are not significantly impacted by property costs.
As of December 31, 2023, our average investment per property was $2.7 million (which equals 45 our aggregate investment in our properties (including transaction costs, lease incentives and amounts funded for construction in progress) divided by the number of properties owned at such date), and we believe investments of similar size allow us to grow our portfolio without concentrating a large amount of capital in individual properties and limit our exposure to events that may adversely affect a particular property.
As of December 31, 2024, our average investment per property was $2.9 million (which equals 46 our aggregate investment in our properties (including transaction costs, lease incentives and amounts funded for construction in progress) divided by the number of properties owned at such date), and we believe investments of similar size allow us to grow our portfolio without concentrating a large amount of capital in individual properties and limit our exposure to events that may adversely affect a particular property.
The Company and the Operating Partnership have filed a registration statement on Form S-3 with the SEC registering, among other securities, debt securities of the Operating Partnership, which, unless otherwise specified, will be fully and unconditionally guaranteed by the Company. At December 31, 2023, the Operating Partnership had issued and outstanding $400.0 million of senior notes.
Supplemental Guarantor Information The Company and the Operating Partnership have filed a registration statement on Form S-3 with the SEC registering, among other securities, debt securities of the Operating Partnership, which, unless otherwise specified, will be fully and unconditionally guaranteed by the Company. At December 31, 2024, the Operating Partnership had issued and outstanding $400.0 million of senior notes.
Our cash flows from operating activities primarily depend on the occupancy of our portfolio, the rental rates specified in our leases, the interest on our loans and direct financing lease receivables, the collectability of rent and interest and the level of our operating expenses and general and administrative costs.
Our cash flows from operating activities are primarily dependent upon the occupancy of our portfolio, the rental rates specified in our leases, the interest on our loans and direct financing lease receivables, the collectability of rent and interest, and the level of our operating expenses and general and administrative costs.
We expect to meet our short-term liquidity requirements, including our construction financing and tenant reimbursement obligations and potential investment in future single-tenant properties, primarily with our cash and cash equivalents, net cash from operating activities, issuance of common stock subject to outstanding forward purchase commitments, borrowings under the Revolving Credit Facility and potentially through proceeds generated from asset sales and our 2022 ATM Program, under which we may issue common stock with an aggregate gross sales price of up to $278.5 million as of February 9, 2024.
We expect to meet our short-term liquidity requirements, including our construction financing and tenant reimbursement obligations and potential investment in future single-tenant properties, primarily with our cash and cash equivalents, net cash from operating activities, issuance of common stock subject to outstanding forward purchase commitments, borrowings under the Revolving Credit Facility and potentially through proceeds generated from asset sales and our October 2024 ATM Program, under which we may issue common stock with an aggregate gross sales price of up to $671.1 million as of February 7, 2025.
As of December 31, 2023, all of our long-term debt was fixed-rate debt or was effectively converted to a fixed-rate for the term of the debt though hedging strategies and our weighted average debt maturity was 4.9 years.
As of December 31, 2024, all of our long-term debt was fixed-rate debt or was effectively converted to a fixed-rate for the term of the debt though hedging strategies and our weighted average debt maturity was 4.2 years.
The Credit Agreement has an accordion feature to increase, subject to certain conditions, the maximum availability of credit (either through increased revolving commitments or additional term loans) by up to $600.0 million.
The Credit Agreement has an accordion feature to increase, subject to certain conditions, the maximum availability of credit (either through increased revolving commitments or additional term loans) by up to $1.0 billion.
As of December 31, 2023, our portfolio’s weighted average rent coverage ratio was 3.8x, and 98.8% of our leases (based on annualized base rent) obligate the tenant to periodically provide us with specified unit-level financial reporting.
As of December 31, 2024, our portfolio’s weighted average rent coverage ratio was 3.5x, and 98.9% of our leases (based on annualized base rent) obligate the tenant to periodically provide us with specified unit-level financial reporting.
Interest expense increased by $12.2 million for the year ended December 31, 2023, as compared to the year ended December 31, 2022. This increase in interest expense was primarily due to an increase in our outstanding debt balance and increased interest rates during the year ended December 31, 2023 compared to the year ended December 31, 2022. Interest income .
Interest expense increased by $25.9 million for the year ended December 31, 2024, as compared to the year ended December 31, 2023. This increase in interest expense was primarily due to an increase in our outstanding debt balance and increased interest rates during the year ended December 31, 2024 compared to the year ended December 31, 2023. Interest income .
We generally invest in and lease freestanding, single-tenant commercial real estate facilities where a tenant services its customers and conducts activities that are essential to the generation of the tenant’s sales and profits. As of December 31, 2023, 92.9% of our $364.8 million of annualized base rent was attributable to properties operated by tenants in service-oriented and experience-based businesses.
We generally invest in and lease freestanding, single-tenant commercial real estate facilities where a tenant services its customers and conducts activities that are essential to the generation of the tenant’s sales and profits. As of December 31, 2024, 93.2% of our $460.6 million of annualized base rent was attributable to properties operated by tenants in service-oriented and experience-based businesses.
Property expenses increased by $1.2 million for the year ended December 31, 2023, as compared to the year ended December 31, 2022. The increase in property expenses was primarily due to increased reimbursable property taxes and property-related operational costs during the year ended December 31, 2023. Depreciation and amortization .
Property expenses increased by $0.3 million for the year ended December 31, 2024, as compared to the year ended December 31, 2023. The increase in property expenses was primarily due to increased reimbursable property taxes and property-related operational costs during the year ended December 31, 2024. Depreciation and amortization .
Depreciation and amortization expense increased by $13.7 million for the year ended December 31, 2023, as compared to the year ended December 31, 2022. Depreciation and amortization expense increased in proportion to the general increase in the size of our real estate investment portfolio. Provision for impairment of real estate .
Depreciation and amortization expense increased by $19.9 million for the year ended December 31, 2024, as compared to the year ended December 31, 2023. Depreciation and amortization expense increased in proportion to the general increase in the size of our real estate investment portfolio during the year ended December 31, 2024. Provision for impairment of real estate .
The liquidity requirements for operating our Company consist primarily of funding our investment activities, servicing our outstanding indebtedness and paying our general and administrative expenses.
The liquidity requirements for operating our Company consist primarily of funding our investment activities, servicing our outstanding indebtedness and paying our general and administrative expenses and dividends as declared by our Board.
In August 2022, the 2027 Term Loan was further amended to revise the applicable margin grid such that the applicable pricing is based on the credit rating of the Company’s long-term senior unsecured non-credit enhanced debt for borrowed money (subject to a single step-down in the applicable pricing if the Company achieves a consolidated leverage ratio that is less than 0.35 to 1:00 while maintaining a credit rating of BBB/Baa2 provided by S&P, Moody's and/or Fitch). 50 The borrowings under the 2027 Term Loan, as amended, bear interest at an annual rate of applicable Adjusted Term SOFR (as defined in the Credit Agreement) plus an applicable margin.
In August 2022, the 2027 Term Loan was further amended to revise the applicable margin grid such that the applicable pricing is based on the credit rating of the Company’s long-term senior unsecured non-credit enhanced debt for borrowed money (subject to a single step-down in the applicable pricing if the Company achieves a consolidated leverage ratio that is less than 0.35 to 1:00 while maintaining a credit rating of BBB/Baa2 provided by S&P, Moody's and/or Fitch).
Additionally, our computation of EBITDA and EBITDA re may differ from the methodology for calculating these metrics used by other equity REITs and, therefore, may not be comparable to similarly titled measures reported by other equity REITs. 59 The following table reconciles net income (which is the most comparable GAAP measure) to EBITDA and EBITDA re attributable to stockholders and non-controlling interests: Year ended December 31, (in thousands) 2023 2022 2021 Net income $ 191,415 $ 134,742 $ 96,211 Depreciation and amortization 102,219 88,562 69,146 Interest expense 52,597 40,370 33,614 Interest income (2,011) (2,825) (94) Income tax expense 636 998 227 EBITDA attributable to stockholders and non-controlling interests 344,856 261,847 199,104 Provision for impairment of real estate 3,548 20,164 6,120 Gain on dispositions of real estate, net (24,167) (30,647) (9,338) EBITDA re attributable to stockholders and non-controlling interests $ 324,237 $ 251,364 $ 195,886 We further adjust EBITDA re for the most recently completed quarter i) based on an estimate calculated as if all re-leasing, investment and disposition activity that took place during the quarter had been made on the first day of the quarter, ii) to exclude certain GAAP income and expense amounts that we believe are infrequent and unusual in nature and iii) to eliminate the impact of lease termination fees and contingent rental revenue from certain of our tenants, which is subject to sales thresholds specified in the applicable leases ("Adjusted EBITDA re" ).
Additionally, our computation of EBITDA and EBITDA re may differ from the methodology for calculating these metrics used by other equity REITs and, therefore, may not be comparable to similarly titled measures reported by other equity REITs. 60 The following table reconciles net income (which is the most comparable GAAP measure) to EBITDA and EBITDA re attributable to stockholders and non-controlling interests: Year ended December 31, (in thousands) 2024 2023 2022 Net income $ 203,638 $ 191,415 $ 134,742 Depreciation and amortization 122,161 102,219 88,562 Interest expense 78,544 52,597 40,370 Interest income (3,069) (2,011) (2,825) Income tax expense 628 636 998 EBITDA attributable to stockholders and non-controlling interests 401,902 344,856 261,847 Provision for impairment of real estate 14,845 3,548 20,164 Gain on dispositions of real estate, net (5,977) (24,167) (30,647) EBITDA re attributable to stockholders and non-controlling interests $ 410,770 $ 324,237 $ 251,364 We further adjust EBITDA re for the most recently completed quarter i) based on an estimate calculated as if all re-leasing, investment and disposition activity that took place during the quarter had been made on the first day of the quarter, ii) to exclude certain GAAP income and expense amounts that we believe are infrequent and unusual in nature and iii) to eliminate the impact of lease termination fees and contingent rental revenue from certain of our tenants, which is subject to sales thresholds specified in the applicable leases ("Adjusted EBITDA re" ).
Our real estate investments were acquired throughout the periods presented and were not all owned by us for the entirety of the applicable periods; accordingly, a significant portion of the increase in rental revenue between periods is related to recognizing revenue in 2023 from acquisitions that were made during 2022 and 2023.
A portion of our real estate investments were acquired throughout the periods presented and were not all owned by us for the entirety of the applicable periods; accordingly, a significant portion of the increase in rental revenue between periods is related to recognizing revenue in 2024 from acquisitions that were made during 2023 and 2024. 57 Interest on loans and direct financing lease receivables .
We believe that these measures are useful to investors and analysts because they provide supplemental information concerning our operating performance, exclusive of certain non-cash items and other costs. We use EBITDA and EBITDA re as measures of our operating performance and not as measures of liquidity.
We present EBITDA and EBITDA re as they are measures commonly used in our industry. We believe that these measures are useful to investors and analysts because they provide supplemental information concerning our operating performance, exclusive of certain non-cash items and other costs.
Under the terms of the Credit Agreement, we are subject to customary restrictive financial and nonfinancial covenants which, among other things, require us to maintain certain leverage ratios, cash flow and debt service coverage ratios and secured borrowing ratios. As of December 31, 2023, we were in compliance with these covenants.
Under the terms of the Credit Agreement, we are subject to customary restrictive financial and nonfinancial covenants which, among other things, require us to maintain certain leverage ratios, cash flow and debt service coverage ratios and secured borrowing ratios.
Additionally, as of February 9, 2024, we were under contract to acquire 20 properties with an aggregate purchase price of $59.4 million, subject to completion of our due diligence procedures and satisfaction of customary closing conditions.
Additionally, as of February 7, 2025, we were under contract to acquire 13 properties with an aggregate purchase price of $41.9 million, subject to completion of our due diligence procedures and satisfaction of customary closing conditions.
As of December 31, 2023, our leases had a weighted average remaining lease term of 14.0 years (based on annualized base rent), with 4.7% of our annualized base rent attributable to leases expiring prior to January 1, 2029.
As of December 31, 2024, our leases had a weighted average remaining lease term of 14.0 years (based on annualized base rent), with 5.8% of our annualized base rent attributable to leases expiring prior to January 1, 2030.
As of December 31, 2023, we had a portfolio of 1,873 properties (inclusive of 136 properties which secure our investments in mortgage loans receivable) that was diversified by tenant, industry, concept and geography, had annualized base rent of $364.8 million and was 99.8% occupied. Our portfolio is built based on the following core investment attributes: Diversification.
As of December 31, 2024, we had a portfolio of 2,104 properties (inclusive of 150 properties which secure our investments in mortgage loans receivable) that was diversified by tenant, industry, concept and geography, had annualized base rent of $460.6 million and was 99.7% occupied. Our portfolio is built based on the following core investment attributes: Diversification.
Holders of OP Units are entitled to distributions per unit equivalent to those paid by us per share of common stock. During the year ended December 31, 2023, our Board declared total cash distributions of $1.12 per share of common stock/OP Unit totaling $176.0 million and $47.2 million is payable as of December 31, 2023.
Holders of OP Units are entitled to distributions per unit equivalent to those paid by us per share of common stock. During the year ended December 31, 2024, our Board declared total cash distributions of $1.16 per share of common stock/OP Unit totaling $208.1 million and $55.6 million is payable as of December 31, 2024.
Liquidity and Capital Resources As of December 31, 2023, the net investment value of our income property portfolio totaled $4.5 billion, consisting of investments in 1,873 properties (inclusive of 136 properties which secure our investments in mortgage loans receivable), with annualized base rent of $364.8 million. Substantially all of our cash from operations is generated by our investment portfolio.
Liquidity and Capital Resources As of December 31, 2024, the net investment value of our income property portfolio totaled $5.6 billion, consisting of investments in 2,104 properties (inclusive of 150 properties which secure our investments in mortgage loans receivable), with annualized base rent of $460.6 million. Substantially all of our cash from operations is generated by our investment portfolio.
Rental revenue increased by $70.1 million for the year ended December 31, 2023, as compared to the year ended December 31, 2022. The increase in rental revenue was driven primarily by the growth in our real estate investment portfolio, which grew by 220 rental properties, or 13% since December 31, 2022.
Rental revenue increased by $85.9 million for the year ended December 31, 2024, as compared to the year ended December 31, 2023. The increase in rental revenue was driven primarily by the growth in our real estate investment portfolio which grew by 217 rental properties, or 12%, since December 31, 2023.
We believe that the cash generated by our operations, together with our cash and cash equivalents at December 31, 2023, our borrowing availability under the Revolving Credit Facility, issuance of common stock subject to outstanding forward purchase commitments, and our potential access to additional sources of capital, will be sufficient to fund our operations for the foreseeable future and allow us to invest in the real estate for which we currently have made commitments.
We believe that the cash generated by our operations, together with our cash and cash equivalents at December 31, 2024, our borrowing availability under the Revolving Credit Facility, issuance of common stock subject to outstanding forward purchase commitments, and our potential access to additional sources of capital, will be sufficient to fund our operations for the next 12 months, including investing in the real estate for which we currently have commitments, and the longer term period thereafter.
During the year ended December 31, 2023, approximately 98.8% of our investments were sale-leaseback transactions. Significant Use of Master Leases. As of December 31, 2023, 65.7% of our annualized base rent was attributable to master leases. Contractual Base Rent Escalation.
During the year ended December 31, 2024, approximately 97.2% of our investments were sale-leaseback transactions. Significant Use of Master Leases. As of December 31, 2024, 66.1% of our annualized base rent was attributable to master leases. Contractual Base Rent Escalation.
These cash inflows were partially offset by $443.0 million of repayments on the Revolving Credit Facility, the payment of $141.7 million in dividends, $1.0 million of offering costs paid related to our follow-on offering and the ATM Program, the payment of deferred financing costs of $5.0 million and $2.5 million of payments for taxes related to the net settlement of equity awards.
These cash inflows were partially offset by the payment of $199.7 million in dividends, $1.0 million of offering costs paid related to our follow-on offerings and our ATM Program, repayment of $220.0 million of borrowings under the Revolving Credit Facility, the payment of deferred financing costs of $0.1 million, and the payment of $3.3 million in taxes related to the net settlement of equity awards.
Change in provision for credit losses. During the year ended December 31, 2023, our provision for credit losses decreased by $0.1 million, compared to a $0.1 million increase in our provision for credit losses during the year ended December 31, 2022.
During the year ended December 31, 2024, our provision for credit losses increased by $0.2 million, compared to a $0.1 million decrease in our provision for credit losses during the year ended December 31, 2023.
As of December 31, 2023, we agreed to provide construction financing or reimburse the tenant for certain development, construction and renovation costs in an aggregate amount of $435.2 million, and, as of such date, we have funded 47 $254.6 million of this commitment. We expect to fund the remaining commitment totaling $180.6 million by December 31, 2024.
As of December 31, 2024, we agreed to provide construction financing or reimburse the tenant for certain development, construction and renovation costs in an aggregate amount of $627.3 million, and, as of such date, we have funded $472.5 million of this commitment. We expect to fund the remaining commitment totaling approximately $154.8 million by December 31, 2025.
The Credit Agreement also restricts our ability to pay distributions to our stockholders under certain circumstances. However, we may make distributions to the extent necessary to maintain our qualification as a REIT under the Code.
As of December 31, 2024, we were in compliance with these covenants. 51 The Credit Agreement also restricts our ability to pay distributions to our stockholders under certain circumstances. However, we may make distributions to the extent necessary to maintain our qualification as a REIT under the Code.
The following table reconciles total debt (which is the most comparable GAAP measure) to net debt: December 31, (in thousands) 2023 2022 Unsecured term loan, net of deferred financing costs $ 1,272,772 $ 1,025,492 Revolving credit facility — — Senior unsecured notes 395,846 395,286 Total debt 1,668,618 1,420,778 Deferred financing costs and original issue discount, net 11,382 9,222 Gross debt 1,680,000 1,430,000 Cash and cash equivalents (39,807) (62,345) Restricted cash available for future investment (9,156) (9,155) Net debt $ 1,631,037 $ 1,358,500 We compute NOI as total revenues less property expenses.
The following table reconciles total debt (which is the most comparable GAAP measure) to net debt: December 31, (in thousands) 2024 2023 Unsecured term loan, net of deferred financing costs $ 1,721,114 $ 1,272,772 Revolving credit facility — — Senior unsecured notes 396,403 395,846 Total debt 2,117,517 1,668,618 Deferred financing costs and original issue discount, net 12,483 11,382 Gross debt 2,130,000 1,680,000 Cash and cash equivalents (40,713) (39,807) Restricted cash available for future investment (4,265) (9,156) Net debt $ 2,085,022 $ 1,631,037 We compute NOI as total revenues less property expenses.
As of December 31, 2023, our portfolio was 99.8% occupied by 374 tenants operating 588 different brands, or concepts, in 16 industries across 48 states, with none of our tenants contributing more than 3.8% of our annualized base rent.
As of December 31, 2024, our portfolio was 99.7% occupied by 413 tenants operating 592 different brands, or concepts, in 16 industries across 49 states, with none of our tenants contributing more than 4.2% of our annualized base rent.
Gain on dispositions of real estate, net, decreased by $6.5 million for the year ended December 31, 2023, as compared to the year ended December 31, 2022. We disposed of 52 real estate properties during the year ended December 31, 2023, compared to 54 real estate properties during the year ended December 31, 2022.
G ain on dispositions of real estate, net, decreased by $18.2 million for the year ended December 31, 2024, as compared to the year ended December 31, 2023. We disposed of 46 real estate properties during the year ended December 31, 2024, compared to 52 real estate properties during the year ended December 31, 2023.
The following table sets forth select information about our quarterly disposition activity for the quarters ended March 31, 2022 through December 31, 2023 (dollars in thousands): Three Months Ended March 31, 2023 June 30, 2023 September 30, 2023 December 31, 2023 Disposition volume 1 $ 37,161 $ 41,736 $ 28,496 $ 30,602 Cash cap rate on leased assets 2 6.1% 6.2% 6.5% 6.6% Leased properties sold 3 17 14 9 9 Vacant properties sold 3 — 2 1 — Three Months Ended March 31, 2022 June 30, 2022 September 30, 2022 December 31, 2022 Disposition volume 1 $ 18,443 $ 26,091 $ 35,513 $ 75,522 Cash cap rate on leased assets 2 7.1% 6.2% 6.2% 6.9% Leased properties sold 3 6 8 12 25 Vacant properties sold 3 — — — 1 _____________________________________ (1) Net of transaction costs.
The following table sets forth select information about our disposition activity for the previous eight quarters beginning with the quarter ended March 31, 2023 through the quarter ended December 31, 2024 (dollars in thousands): Three Months Ended March 31, 2024 June 30, 2024 September 30, 2024 December 31, 2024 Disposition volume 1 $ 11,949 $ 4,783 $ 16,973 $ 60,449 Cash cap rate on leased assets 2 6.5% 7.3% 6.8% 7.0% Leased properties sold 3 6 4 7 24 Vacant properties sold 3 1 2 2 — Three Months Ended March 31, 2023 June 30, 2023 September 30, 2023 December 31, 2023 Disposition volume 1 $ 37,161 $ 41,736 $ 28,496 $ 30,602 Cash cap rate on leased assets 2 6.1% 6.2% 6.5% 6.6% Leased properties sold 3 17 14 9 9 Vacant properties sold 3 — 2 1 — _____________________________________ (1) Net of transaction costs.
The following table reconciles net income (which is the most comparable GAAP measure) to NOI and Cash NOI attributable to stockholders and non-controlling interests: Year ended December 31, (in thousands) 2023 2022 2021 Net income $ 191,415 $ 134,742 $ 96,211 General and administrative expense 30,678 29,464 24,329 Depreciation and amortization 102,219 88,562 69,146 Provision for impairment of real estate 3,548 20,164 6,120 Change in provision for credit losses (99) 88 (204) Gain on dispositions of real estate, net (24,167) (30,647) (9,338) Loss on debt extinguishment 116 2,138 4,461 Interest expense 52,597 40,370 33,614 Interest income (2,011) (2,825) (94) Income tax expense 636 998 227 NOI attributable to stockholders and non-controlling interests 354,932 283,054 224,472 Straight-line rental revenue, net (30,375) (20,615) (19,116) Other amortization and non-cash charges 1,507 2,912 2,675 Cash NOI attributable to stockholders and non-controlling interests $ 326,064 $ 265,351 $ 208,031 62
The following table reconciles net income (which is the most comparable GAAP measure) to NOI and Cash NOI attributable to stockholders and non-controlling interests: Year ended December 31, (in thousands) 2024 2023 2022 Net income $ 203,638 $ 191,415 $ 134,742 General and administrative expense 35,161 30,678 29,464 Depreciation and amortization 122,161 102,219 88,562 Provision for impairment of real estate 14,845 3,548 20,164 Change in provision for credit losses 230 (99) 88 Gain on dispositions of real estate, net (5,977) (24,167) (30,647) Loss on debt extinguishment — 116 2,138 Interest expense 78,544 52,597 40,370 Interest income (3,069) (2,011) (2,825) Other income (1,548) — — Income tax expense 628 636 998 NOI attributable to stockholders and non-controlling interests 444,613 354,932 283,054 Straight-line rental revenue, net (38,661) (30,375) (20,615) Other amortization and non-cash adjustments 2,877 1,507 2,912 Cash NOI attributable to stockholders and non-controlling interests $ 408,829 $ 326,064 $ 265,351 63
The 2027 Term Loan has an accordion feature to increase, subject to certain conditions, the maximum availability of the facility up to an aggregate of $500.0 million.
The 2027 Term Loan is pre-payable at any time by the Operating Partnership without penalty. The 2027 Term Loan has an accordion feature to increase, subject to certain conditions, the maximum availability of the facility up to an aggregate of $500.0 million.
We account for RSAs and RSUs in accordance with ASC 718, Compensation – Stock Compensation, which requires that such compensation be recognized in the financial statements based on its estimated grant-date fair value. The value of such awards is recognized as compensation expense in general and administrative expenses in the accompanying consolidated statements of operations over the applicable service periods.
We account for RSAs and RSUs in accordance with ASC 718, Compensation – Stock Compensation, which requires that such compensation be recognized in the financial statements based on its estimated grant-date fair value.
(2) Includes $0.2 million of fees incurred in conjunction with the August 2022 amendment to our 2027 Term Loan and our $2.1 million loss on debt extinguishment during the year ended December 31, 2022. (3) Includes our $4.5 million loss on debt extinguishment during the year ended December 31, 2021.
(2) Includes $0.2 million of fees incurred in conjunction with the August 2022 amendment to our 2027 Term Loan and our $2.1 million loss on debt extinguishment during the year ended December 31, 2022. We compute EBITDA as earnings before interest, income taxes and depreciation and amortization.
Our actual reported EBITDA re for future periods may be significantly less than our current Annualized Adjusted EBITDA re . 60 The following table reconciles net income (which is the most comparable GAAP measure) to Annualized Adjusted EBITDA re attributable to stockholders and non-controlling interests for the three months ended December 31, 2023: (in thousands) Three months ended December 31, 2023 Net income $ 49,271 Depreciation and amortization 27,440 Interest expense 15,760 Interest income (595) Income tax expense 164 EBITDA attributable to stockholders and non-controlling interests 92,040 Provision for impairment of real estate 1,903 Gain on dispositions of real estate, net (4,847) EBITDA re attributable to stockholders and non-controlling interests 89,096 Adjustment for current quarter re-leasing, acquisition and disposition activity (1) 4,506 Adjustment to exclude other non-core or non-recurring activity (2) 185 Adjustment to exclude termination/prepayment fees and certain percentage rent (3) (144) Adjusted EBITDA re attributable to stockholders and non-controlling interests $ 93,643 Annualized Adjusted EBITDA re attributable to stockholders and non-controlling interests $ 374,572 _____________________________________ (1) Adjustment assumes all re-leasing activity, investments in and dispositions of real estate and loan repayments completed during the three months ended December 31, 2023 had occurred on October 1, 2023.
Our actual reported EBITDA re for future periods may be significantly less than our current Annualized Adjusted EBITDA re . 61 The following table reconciles net income (which is the most comparable GAAP measure) to Annualized Adjusted EBITDA re attributable to stockholders and non-controlling interests for the three months ended December 31, 2024: (in thousands) Three months ended December 31, 2024 Net income $ 55,548 Depreciation and amortization 32,829 Interest expense 23,958 Interest income (559) Income tax expense 157 EBITDA attributable to stockholders and non-controlling interests 111,933 Provision for impairment of real estate 2,587 Gain on dispositions of real estate, net (4,575) EBITDA re attributable to stockholders and non-controlling interests 109,945 Adjustment for current quarter re-leasing, acquisition and disposition activity (1) 3,856 Adjustment to exclude other non-core or non-recurring activity (2) (784) Adjustment to exclude termination/prepayment fees and certain percentage rent (3) (93) Adjusted EBITDA re attributable to stockholders and non-controlling interests $ 112,924 Annualized Adjusted EBITDA re attributable to stockholders and non-controlling interests $ 451,696 _____________________________________ (1) Adjustment assumes all re-leasing activity, investments in and dispositions of real estate and loan repayments completed during the three months ended December 31, 2024 had occurred on October 1, 2024.
Other revenue for the year ended December 31, 2023 increased by $0.4 million, as compared to the year ended December 31, 2022, primarily due to the receipt of insurance claim proceeds offset by a decrease in mortgage loan prepayment income fees received during the year ended December 31, 2023. 56 Expenses: General and administrative.
Other revenue, net . Other revenue for the year ended December 31, 2024 decreased by $1.1 million, as compared to the year ended December 31, 2023, primarily due to the receipt of insurance claim proceeds and higher loan prepayment fees received during the year ended December 31, 2023. Expenses: General and administrative.
General and administrative expense increased by $1.2 million for the year ended December 31, 2023, as compared to the year ended December 31, 2022. This increase in general and administrative expense was primarily due to an increase in salary expense, severance costs, and professional fees during the year ended December 31, 2023. Property expenses .
General and administrative expense increased by $4.5 million for the year ended December 31, 2024, as compared to the year ended December 31, 2023, primarily due to an increase in non-cash share-based compensation, salary expense and professional fees during the year ended December 31, 2024. Property expenses .
Cash Flows Comparison of the years ended December 31, 2023 and 2022 As of December 31, 2023, we had $39.8 million of cash and cash equivalents and $9.2 million of restricted cash, as compared to $62.3 million of cash and cash equivalents and $9.2 million of restricted cash as of December 31, 2022.
As of December 31, 2024, we were in compliance with these covenants. 52 Cash Flows Comparison of the years ended December 31, 2024 and 2023 As of December 31, 2024, we had $40.7 million of cash and cash equivalents and $4.3 million of restricted cash, as compared to $39.8 million of cash and cash equivalents and $9.2 million of restricted cash as of December 31, 2023.
In May 2022, the Operating Partnership made an irrevocable election to have the applicable margin be a spread set according to the Company’s corporate credit ratings provided by S&P, Moody’s and/or Fitch. The 2027 Term Loan is pre-payable at any time by the Operating Partnership without penalty.
The applicable margin was initially a spread set according to a leverage-based pricing grid. In May 2022, the Operating Partnership made an irrevocable election to have the applicable margin be a spread set according to the Company’s corporate credit ratings provided by S&P, Moody’s and/or Fitch.
Additionally, our computation of FFO, Core FFO and AFFO may differ from the methodology for calculating these metrics used by other equity REITs and, therefore, may not be comparable to similarly titled measures reported by other equity REITs. 58 The following table reconciles net income (which is the most comparable GAAP measure) to FFO, Core FFO and AFFO attributable to stockholders and non-controlling interests: Year ended December 31, (in thousands) 2023 2022 2021 Net income $ 191,415 $ 134,742 $ 96,211 Depreciation and amortization of real estate 102,103 88,459 69,043 Provision for impairment of real estate 3,548 20,164 6,120 Gain on dispositions of real estate, net (24,167) (30,647) (9,338) FFO attributable to stockholders and non-controlling interests 272,899 212,718 162,036 Non-core expense (income) (1)(2)(3) (510) 2,388 4,461 Core FFO attributable to stockholders and non-controlling interests 272,389 215,106 166,497 Adjustments: Straight-line rental revenue, net (30,375) (20,615) (19,116) Non-cash interest 3,187 2,616 2,554 Non-cash compensation expense 9,192 9,489 5,683 Other amortization expense 1,507 2,912 2,675 Other non-cash charges (73) 74 (212) Capitalized interest expense (2,430) (757) (81) AFFO attributable to stockholders and non-controlling interests $ 253,397 $ 208,825 $ 158,000 _____________________________________ (1) Includes $0.1 million loss on debt extinguishment, $0.9 million of insurance recovery income and $0.4 million of cash and non-cash separation costs with the departures of a junior executive and a Board member during the year ended December 31, 2023.
The following table reconciles net income (which is the most comparable GAAP measure) to FFO, Core FFO and AFFO attributable to stockholders and non-controlling interests: Year ended December 31, (in thousands) 2024 2023 2022 Net income $ 203,638 $ 191,415 $ 134,742 Depreciation and amortization of real estate 121,997 102,103 88,459 Provision for impairment of real estate 14,845 3,548 20,164 Gain on dispositions of real estate, net (5,977) (24,167) (30,647) FFO attributable to stockholders and non-controlling interests 334,503 272,899 212,718 Non-core (income) expense (1)(2) — (510) 2,388 Core FFO attributable to stockholders and non-controlling interests 334,503 272,389 215,106 Adjustments: Straight-line rental revenue, net (38,661) (30,375) (20,615) Non-cash interest 4,086 3,187 2,616 Non-cash compensation expense 10,827 9,192 9,489 Other amortization expense 1,802 1,507 2,912 Other non-cash adjustments 1,075 (73) 74 Capitalized interest expense (5,760) (2,430) (757) AFFO attributable to stockholders and non-controlling interests $ 307,872 $ 253,397 $ 208,825 _____________________________________ (1) Includes $0.1 million loss on debt extinguishment, $0.9 million of insurance recovery income and $0.4 million of cash and non-cash separation costs with the departures of a junior executive and a Board member during the year ended December 31, 2023.
Interest on loans and direct financing lease receivables increased by $2.6 million during the year ended December 31, 2023, as compared to the year ended December 31, 2022, primarily due to a higher average daily balance of mortgage loans receivable outstanding during 2023 along with increased interest rates earned during the year ended December 31, 2023. Other revenue, net .
Interest on loans and direct financing lease receivables increased by $5.3 million during the year ended December 31, 2024, as compared to the year ended December 31, 2023, primarily due to the increase in our mortgage loans receivable portfolio during 2024, which led to a higher average daily balance of loans receivable outstanding during the year ended December 31, 2024.
Off-Balance Sheet Arrangements We had no off-balance sheet arrangements as of December 31, 2023. 52 Contractual Obligations The following table provides information with respect to our contractual obligations as of December 31, 2023: Payment due by period (in thousands) Total 2024 2025-2026 2027-2028 Thereafter Unsecured Term Loans $ 1,280,000 $ — $ — $ 830,000 $ 450,000 Senior unsecured notes 400,000 — — — 400,000 Revolving Credit Facility — — — — — Tenant Construction Financing and Reimbursement Obligations (1) 180,630 180,630 — — — Operating Lease Obligations (2) 24,359 1,641 2,624 2,035 18,059 Total $ 1,884,989 $ 182,271 $ 2,624 $ 832,035 $ 868,059 _____________________________________ (1) Includes obligations to reimburse certain of our tenants for development, construction and renovation costs that they incur related to properties leased from the Company in exchange for contractual payments of interest or increased rent that generally increases proportionally with our funding.
Contractual Obligations The following table provides information with respect to our contractual obligations as of December 31, 2024: Payment due by period (in thousands) Total 2025 2026-2027 2028-2029 Thereafter Unsecured Term Loans $ 1,730,000 $ — $ 430,000 $ 850,000 $ 450,000 Senior unsecured notes 400,000 — — — 400,000 Revolving Credit Facility — — — — — Tenant Construction Financing and Reimbursement Obligations (1) 154,809 154,809 — — — Operating Lease Obligations (2) 22,434 1,420 1,821 1,736 17,457 Total $ 2,307,243 $ 156,229 $ 431,821 $ 851,736 $ 867,457 _____________________________________ (1) Includes obligations to reimburse certain of our tenants for development, construction and renovation costs that they incur related to properties leased from the Company in exchange for contractual payments of interest or increased rent that generally increases proportionally with our funding.
(2) GAAP rent and interest income for the first twelve months after the investment divided by the gross investment in the property plus transaction costs. 46 (3) As a percentage of annualized base rent. (4) Includes investments in mortgage loans receivable collateralized by more than one property. (5) Includes investments in mortgage loans receivable made in support of sale-leaseback transactions.
(3) As a percentage of annualized base rent. (4) Includes investments in mortgage loans receivable collateralized by more than one property. (5) Includes investments in mortgage loans receivable made in support of sale-leaseback transactions.
(2) After giving effect to extension options exercisable at the Operating Partnership's election. 49 Revolving Credit Facility and Credit Facility Term Loans Through our Operating Partnership, we are party to an Amended and Restated Credit Agreement with a group of lenders, which was amended on August 24, 2023 (the "Credit Agreement") and provides for revolving loans of up to $600.0 million (the "Revolving Credit Facility") and an additional $850.0 million of term loans, consisting of a $400.0 million term loan (the "2028 Term Loan") and a $450.0 million term loan (the “2029 Term Loan” and, together with the 2028 Term Loan, the "CF Term Loans”).
Revolving Credit Facility and Credit Facility Term Loans Through our Operating Partnership, we are party to an Amended and Restated Credit Agreement with a group of lenders, which was most recently amended on February 6, 2025 (the "Credit Agreement") and provides for revolving loans of up to $1.0 billion (the "Revolving Credit Facility") and an additional $1.3 billion of term loans, consisting of a $400.0 million term loan (the "2028 Term Loan"), a $450.0 million term loan (the “2029 Term Loan”) and a $450.0 million term loan (the "2030 Term Loan" and, together with the 2028 Term Loan and 2029 Term Loan, the “CF Term Loans”).
Cash Flows for the year ended December 31, 2022 During the year ended December 31, 2022, net cash provided by operating activities was $211.0 million.
Cash Flows for the year ended December 31, 2024 During the year ended December 31, 2024, net cash provided by operating activities was $308.5 million and our net income was $203.6 million.
Description of Certain Debt The following table summarizes our outstanding indebtedness as of December 31, 2023 and 2022: Principal Outstanding Weighted Average Interest Rate (1) (in thousands) Maturity Date December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022 Unsecured term loans: 2024 Term Loan April 2024 $ — $ 200,000 —% 2.9% 2027 Term Loan February 2027 430,000 430,000 2.4% 2.4% 2028 Term Loan January 2028 400,000 400,000 4.6% 4.6% 2029 Term Loan February 2029 (2) 450,000 — 4.3% —% Senior unsecured notes July 2031 400,000 400,000 3.1% 3.1% Revolving Credit Facility February 2026 — — —% —% Total principal outstanding $ 1,680,000 $ 1,430,000 3.6% 3.3% _______________________________________________________________ (1) Interest rates are presented after giving effect to our interest rate swap and lock agreements, where applicable.
Furthermore, as permitted under Rule 13-01(a)(4)(vi), the Company has excluded the summarized financial information for the Operating Partnership as the assets, liabilities and results of operations of the Company and the Operating Partnership are not materially different than the corresponding amounts presented in the consolidated financial statements of the Company, and management believes such summarized financial information would be repetitive and not provide incremental value to investors. 50 Description of Certain Debt The following table summarizes our outstanding indebtedness as of December 31, 2024 and 2023: Principal Outstanding Weighted Average Interest Rate (1) (in thousands) Maturity Date December 31, 2024 December 31, 2023 December 31, 2024 December 31, 2023 Unsecured term loans: 2027 Term Loan February 2027 $ 430,000 $ 430,000 2.5% 2.4% 2028 Term Loan January 2028 400,000 400,000 4.7% 4.6% 2029 Term Loan February 2029 (2) 450,000 450,000 5.4% 4.3% 2030 Term Loan January 2030 (2) 450,000 — 4.9% —% Senior unsecured notes July 2031 400,000 400,000 3.1% 3.1% Revolving Credit Facility February 2026 — — —% —% Total principal outstanding $ 2,130,000 $ 1,680,000 4.1% 3.6% _______________________________________________________________ (1) Interest rates are presented after giving effect to our interest rate swap and lock agreements, where applicable.
These cash outflows were partially offset by $126.6 million of proceeds from sales of investments, net of disposition costs, and $70.4 million of principal collections on our loans and direct financing lease receivables. Net cash provided by financing activities was $506.8 million during the year ended December 31, 2022.
These cash outflows were partially offset by $96.9 million of proceeds from sales of investments, net of disposition costs, and $10.0 million of principal collections on our loans and direct financing lease receivables.
During the years ended December 31, 2023 and 2022, we recorded a provision for impairment of real estate on 8 and 13 of our real estate investments, respectively, with the average size of our impairments being smaller in 2023.
Impairment charges on real estate investments were $14.8 million and $3.5 million for the years ended December 31, 2024 and 2023, respectively. During the years ended December 31, 2024 and 2023, we recorded a provision for impairment of real estate on 22 and eight of our real estate investments, respectively. Change in provision for credit losses.
Cash inflows during 2022 related to net income adjusted for non-cash items of $210.5 million (net income of $134.7 million adjusted for non-cash items, including the addition of depreciation and amortization of tangible, intangible and right-of-use real estate assets, amortization of deferred financing costs and other non-cash interest expense, loss on debt extinguishment and provision for impairment of real estate, offset by the subtraction of the change in our provision for credit losses, gain on dispositions of real estate, net, straight-line rent receivable, equity-based compensation expense and adjustment to rental revenue for tenant credit, which in aggregate net to an addition of $75.7 million), a decrease in rent receivables, prepaid expenses and other assets of $4.5 million and a decrease in accrued liabilities and other payables of $3.9 million.
Our cash inflows from operating activities reflect adjustments to net income for non-cash items of $111.0 million, including i) depreciation and amortization of tangible, intangible and right-of-use real estate assets, and amortization of deferred financing costs and other non-cash interest expense of $129.3 million, ii) our provision for impairment of real estate of $14.8 million, iii) the change in our provision for credit losses of $0.2 million, iv) non-cash equity-based compensation expense of $10.8 million and v) adjustment to rental revenue for tenant credit of $0.6 million, reduced by i) our $6.0 million gain on dispositions of real estate, net and ii) $38.9 million related to the recognition of straight-line rent receivables.
We compute EBITDA as earnings before interest, income taxes and depreciation and amortization. In 2017, NAREIT issued a white paper recommending that companies that report EBITDA also report EBITDA re . We compute EBITDA re in accordance with the definition adopted by NAREIT.
In 2017, NAREIT issued a white paper recommending that companies that report EBITDA also report EBITDA re . We compute EBITDA re in accordance with the definition adopted by NAREIT. NAREIT defines EBITDA re as EBITDA (as defined above) excluding gains (or losses) from the sales of depreciable property and real estate impairment losses.
We are organized and operate as a REIT and are generally not subject to U.S. federal taxation. However, the Operating Partnership is subject to taxation in certain state and local jurisdictions that impose income taxes on a partnership.
However, the Operating Partnership is subject to taxation in certain state and local jurisdictions that impose income taxes on a partnership. Non-GAAP Financial Measures Our reported results are presented in accordance with GAAP.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

5 edited+0 added−1 removed8 unchanged
Biggest changePrincipal Outstanding Weighted Average Interest Rate (1) (in thousands) Maturity Date December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022 Unsecured term loans: 2024 Term Loan April 2024 $ — $ 200,000 —% 2.9% 2027 Term Loan February 2027 430,000 430,000 2.4% 2.4% 2028 Term Loan January 2028 400,000 400,000 4.6% 4.6% 2029 Term Loan February 2029 (2) 450,000 — 4.3% —% Senior unsecured notes July 2031 400,000 400,000 3.1% 3.1% Revolving Credit Facility February 2026 — — —% —% Total principal outstanding $ 1,680,000 $ 1,430,000 3.6% 3.3% _______________________________________________________________ (1) Interest rates are presented after giving effect to our interest rate swap and lock agreements, where applicable.
Biggest changePrincipal Outstanding Weighted Average Interest Rate (1) (in thousands) Maturity Date December 31, 2024 December 31, 2023 December 31, 2024 December 31, 2023 Unsecured term loans: 2027 Term Loan February 2027 $ 430,000 $ 430,000 2.5% 2.4% 2028 Term Loan January 2028 400,000 400,000 4.7% 4.6% 2029 Term Loan February 2029 (2) 450,000 450,000 5.4% 4.3% 2030 Term Loan January 2030 (2) 450,000 — 4.9% —% Senior unsecured notes July 2031 400,000 400,000 3.1% 3.1% Revolving Credit Facility February 2026 — — —% —% Total principal outstanding $ 2,130,000 $ 1,680,000 4.1% 3.6% _______________________________________________________________ (1) Interest rates are presented after giving effect to our interest rate swap and lock agreements, where applicable.
While our borrowings under the 2027 Term Loan, 2028 Term Loan and 2029 Term Loan are variable-rate, we have effectively fixed the interest rate under these term loans by entering into interest rate swap agreements where we pay a fixed interest rate and receive a floating interest rate equal to the rate we pay on the respective loan.
While our borrowings under the 2027 Term Loan and the CF Term Loans are variable-rate, we have effectively fixed the interest rate under these term loans by entering into interest rate swap agreements where we pay a fixed interest rate and receive a floating interest rate equal to the rate we pay on the respective loan.
At December 31, 2023, our aggregate asset in the event of the early termination of our swaps was $7.7 million. Our borrowings under the Revolving Credit Facility, if any, bear interest at a variable rate equal to 1-month SOFR plus a leverage-based credit spread.
At December 31, 2024, our aggregate asset in the event of the early termination of our swaps was $20.1 million. Borrowings outstanding under the Revolving Credit Facility from time to time bear interest at a variable rate equal to 1-month SOFR plus a leverage-based credit spread.
The following table discloses fair value information related to our fixed-rate indebtedness as of December 31, 2023: (in thousands) Carrying Value (1) Estimated Fair Value Senior unsecured notes $ 400,000 $ 315,336 _____________________________________ (1) Excludes net deferred financing costs of $3.6 million and net discount of $0.6 million. 63
The following table discloses fair value information related to our fixed-rate indebtedness as of December 31, 2024: (in thousands) Carrying Value (1) Estimated Fair Value Senior unsecured notes $ 400,000 $ 340,420 _____________________________________ (1) Excludes net deferred financing costs of $3.1 million and net discount of $0.5 million. 64
Item 7A. Quantitative and Qualitative Disclosures About Market Risk. Over time, we generally seek to match the expected cash inflows from our long-term leases and loans receivable with the expected cash outflows for our long-term debt.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk. Over time, we generally seek to match the expected cash inflows from our long-term leases and loans receivable with the expected cash outflows for our long-term debt. To seek to achieve this objective, we issue senior unsecured notes and borrow under our Revolving Credit Facility and through term loans.
Removed
To achieve this objective, we borrow on a fixed-rate basis through the issuance of senior unsecured notes or incur debt that bears interest at floating rates under the Revolving Credit Facility, which we use in connection with our operations, including for funding investments, the 2027 Term Loan, the 2028 Term Loan and the 2029 Term Loan.

Other EPRT 10-K year-over-year comparisons