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What changed in ESSENTIAL PROPERTIES REALTY TRUST, INC.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of ESSENTIAL PROPERTIES REALTY TRUST, INC.'s 2024 and 2025 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 2025 report.

+290 added−284 removedSource: 10-K (2026-02-11) vs 10-K (2025-02-12)

Top changes in ESSENTIAL PROPERTIES REALTY TRUST, INC.'s 2025 10-K

290 paragraphs added · 284 removed · 262 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

59 edited+3 added−4 removed103 unchanged
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.
Biggest changeIncluding shares physically settled to date and assuming full physical settlement of the remaining forward sale agreements, net proceeds are expected to be $285.6 million. 6 • In August 2025, through our Operating Partnership, we completed a public offering of $400.0 million aggregate principal amount of unsecured 5.400% Senior Notes due 2035 (the "2035 Notes"), raising net proceeds of $390.7 million. • During 2025, we sold 10,245,801 shares of our common stock under our ATM Program (as defined herein) at a weighted average price per share of $31.59 for gross proceeds of $323.6 million, including 6,185,920 shares sold on a forward basis that have not been physically settled for cash as of December 31, 2025. • As of December 31, 2025, our liquidity totaled $1.4 billion, which includes $70.4 million of cash and cash equivalents and restricted cash available for future investment, $332.2 million available assuming physical settlement of our outstanding forward equity sales agreements and $1.0 billion of availability under our revolving credit facility.
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.
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, 4 • Early childhood education, • Quick service restaurants, • Entertainment, • Automotive services, • Casual dining restaurants, • Convenience stores, • Equipment rental and sales, • Health and fitness, and • Grocery.
This competition may increase the demand for the types of properties in which we typically invest and, therefore, may reduce the number of suitable investment opportunities available to us and increase the prices paid for such investment properties. This competition will increase if investments in real estate become more attractive relative to other forms of investment.
This competition may increase the demand for the types of properties in which we typically invest and, therefore, may reduce the 11 number of suitable investment opportunities available to us and increase the prices paid for such investment properties. This competition will increase if investments in real estate become more attractive relative to other forms of investment.
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
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.
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.
Additionally, we maintain a robust Code of Business Conduct and Ethics, reinforcing our commitment to transparency, integrity, 12 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.
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.
Investing in smaller, more 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.
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.
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.
If there is damage to our properties that is not covered by insurance and such properties are subject to recourse indebtedness, we will continue to be liable for the indebtedness, even if these properties are irreparably damaged. See "Item 1A.
If there is damage to our properties that is 13 not covered by insurance and such properties are subject to recourse indebtedness, we will continue to be liable for the indebtedness, even if these properties are irreparably damaged. See "Item 1A.
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.
The substantial experience, knowledge and relationships of our senior leadership team provide us with an extensive 9 network of contacts that we believe allows us to originate attractive investment opportunities and effectively grow our business.
We believe that many publicly traded REITs that invest in net leased properties concentrate their investment activity in properties leased to tenants whose creditworthiness has been rated by a nationally recognized statistical rating organization, which tend to be larger and often publicly traded organizations, with the result that unrated, middle-market and smaller companies are relatively underserved and offer us an opportunity to make investments with attractive risk-adjusted return potential.
We believe that many publicly traded REITs and institutional investors that invest in net leased properties concentrate their investment activity in properties leased to tenants whose creditworthiness has been rated by a nationally recognized statistical rating organization, which tend to be larger and often publicly traded organizations, with the result that unrated, middle-market and smaller companies are relatively underserved and offer us an opportunity to make investments with attractive risk-adjusted return potential.
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.
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.
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 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.
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.
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 2025 Corporate Responsibility Report, aligned with the Sustainability Accounting Standards Board and The Financial Stability Board Task Force on Climate-related Financial Disclosure indices; • Measurement.
"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.
"Annualized base rent" means annualized contractually specified cash base rent in effect on December 31, 2025 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 believe that our portfolio's diversity and the rigorous underwriting process we utilize decreases the impact on us of an adverse event affecting an individual tenant, industry or region.
We believe that our portfolio's diversity and the rigorous underwriting process we utilize decrease the impact on us of an adverse event affecting an individual tenant, industry or region.
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.
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, 2025, 66.8% of our annualized base rent was attributable to master leases.
Over time, we believe an appropriate ceiling for net debt is generally less than six times our Annualized Adjusted EBITDA re . We have access to multiple sources of debt capital, including, but not limited to, the investment grade-rated unsecured bond market and bank debt, through our revolving credit facility and our unsecured term loan facilities.
Over time, we believe an appropriate ceiling for pro forma net debt is generally less than 5.5 times our Annualized Adjusted EBITDA re . We have access to multiple sources of debt capital, including, but not limited to, the investment grade-rated unsecured bond market and bank debt, through our revolving credit facility and our unsecured term loan facilities.
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.
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, 2025, 73% of our investments (weighted by annualized base rent) were in a master lease structure. Contractual Base Rent Escalation.
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.
No single tenant contributed more than 3.4% of our annualized base rent as of December 31, 2025, 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.
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.
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, 2025, we had $2.5 billion of gross debt outstanding and $2.5 billion of net debt outstanding.
Our focus on leasing to tenants in industries where the operator's properties are essential to generating their revenues and profits (and that we believe are well-positioned to withstand competition from e-commerce businesses) increases the stability and predictability of our rental revenue. • Differentiated Investment Strategy .
Our focus on leasing to tenants in industries where the leased properties are essential to generating the tenants' revenues and profits (and that we believe are well-positioned to withstand competition from e-commerce) increases the stability and predictability of our rental revenue. • Differentiated Investment Strategy .
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.
As of December 31, 2025, leases contributing 99.2% of our annualized base rent required tenants to provide us with specified unit-level financial information. • 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.
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 have $332.2 million of equity sold on a forward basis under our ATM program that was unsettled as of December 31, 2025. • 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.
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, 2025, 95% of our new investments in real estate were attributable to internally originated sale-leaseback transactions and 82% 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).
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, 2025: • Our leases had a weighted average remaining lease term (based on annualized base rent) of 14.4 years, with only 5.2% of our annualized base rent attributable to leases expiring prior to January 1, 2031; • Master leases contributed 66.8% of our annualized base rent; • Our portfolio's weighted average rent coverage ratio was 3.6x, with leases contributing 68.5% 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; 8 • Leases contributing 97.9% 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 1.8% of base rent; and • Leases contributing 97.3% of annualized base rent were triple-net. • Extensive Tenant Financial Reporting Supports Active Asset Management.
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.
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, 2025, we had the ability to sell additional common stock thereunder with an aggregate gross sales price of up to $347.5 million.
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, 2025, 95% of our new 10 investments in real estate were attributable to internally originated sale-leaseback transactions and 82% 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).
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, 2025, our average investment per property was $3.1 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).
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.
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, for substantially all our investments, the requirement for the lessee/operator to provide us with unit-level and corporate-level financial statements, typically on a quarterly basis in arrears.
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.
During the years ended December 31, 2025, 2024 and 2023, we completed $1.3 billion, $1.2 billion and $1.0 billion of investments, respectively. • Growth-Oriented Balance Sheet Scalable Infrastructure . We believe our financial position, liquidity and existing operating infrastructure support our external growth strategy.
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.
Our ratio of net debt to Annualized Adjusted EBITDA re was 4.4x as of December 31, 2025. Net debt, EBITDA re and Annualized Adjusted EBITDAre are non-GAAP financial measures.
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.
For the year ended December 31, 2025, 95% of our investments (weighted by annualized base rent) were through the sale-leaseback structure. 5 Smaller, Low Basis Single-Tenant Properties. We generally invest in freestanding "small-box" single-tenant properties.
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.
As a result, our average size investment of $3.1 million as of December 31, 2025 provides a level of diversity in our portfolio, in that we do not have oversized amounts of capital attributable to any individual property.
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 of December 31, 2025, our leases had a weighted average remaining lease term of 14.4 years (based on annualized base rent), with only 5.2% of our annualized base rent attributable to leases expiring prior to January 1, 2031, and 97.9% of our leases (based on annualized base rent) provided for increases in future base rent at a weighted average of 1.8% 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. Significant Use of Sale-Leaseback Structure.
As of December 31, 2025, our leases had a weighted average remaining lease term of 14.4 years (based on annualized base rent), with only 5.2% of our annualized base rent attributable to leases expiring prior to January 1, 2031. Significant Use of Sale-Leaseback Structure.
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.
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, 2025, 91.5% of our total annualized base rent of $555.0 million was attributable to properties operated by tenants in service-oriented and experience-based businesses.
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.
As of December 31, 2025, our portfolio's weighted average rent coverage ratio was 3.6x, and 99.2% of our leases (based on annualized base rent) obligate the tenant to periodically provide us with specified unit-level financial reporting.
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.
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. 2025 Financial and Operating Highlights • During 2025, we completed $1.3 billion of investments in 270 properties, including $94.7 million in mortgage loans receivable secured by 15 properties. • As of December 31, 2025, our total gross investment in real estate, including our investments in mortgage loans receivable, was $7.2 billion and we had total debt of $2.5 billion. • Our Board of Directors (the "Board") declared quarterly distributions for the year ended December 31, 2025 that totaled $1.205 per share of common stock. • In March 2025, we completed, on a forward basis, a primary underwritten public follow-on offering of 9,430,000 shares of our common stock, including 1,230,000 shares of common stock purchased by the underwriters pursuant to an option to purchase additional shares, at a public offering price of $31.00 per share.
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.
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.
Our staff is mostly comprised of professionals engaged in originating, underwriting and closing investments; portfolio asset management; portfolio servicing (e.g., collections, property tax compliance, etc.); capital markets activity; sustainability initiatives; and accounting, financial reporting and cash management.
Employees As of December 31, 2025, we had 56 full-time employees. Our staff is mostly comprised of professionals engaged in originating, underwriting and closing investments; portfolio asset management; portfolio servicing (e.g., collections, property tax compliance, etc.); capital markets activity; sustainability initiatives; and accounting, financial reporting and cash management.
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.
As of December 31, 2025, our portfolio consisted of 2,300 properties, inclusive of one undeveloped land parcel and 150 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, 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.
As of December 31, 2025, 97.9% of our leases (based on annualized base rent) provided for increases in future base rent at a weighted average rate of 1.8% per year.
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, 2025, we had $2.5 billion of gross debt outstanding, with a weighted average maturity of 4.2 years, and net debt of $2.5 billion. For the year ended December 31, 2025, our net income was $253.7 million, our EBITDA re was $512.7 million and our Annualized Adjusted EBITDA re was $562.4 million.
We strive to offer our employees attractive and equitable compensation, regular opportunities to participate in professional development activities, outlets for civic engagement and reasonable flexibility to allow a healthy work/life balance. All of our employees are eligible to participate in our Equity Incentive Plan through the annual performance review process.
We strive to offer our employees attractive and equitable compensation, regular opportunities to participate in professional development activities, outlets for civic engagement and reasonable flexibility to allow a healthy work/life balance. All of our employees are eligible to receive equity-based awards under our Equity Incentive Plan as part of their year end performance-based compensation.
Available Information Our headquarters are located at 902 Carnegie Center Blvd., Suite 520, Princeton, New Jersey, 08540, where we lease approximately 13,453 square feet of office space from an unaffiliated third party. Our telephone number is (609) 436-0619 and our website is www.essentialproperties.com.
Available Information Our headquarters are located at 5 Vaughn Drive., Suite 202, Princeton, New Jersey, 08540, where we lease approximately 19,601 square feet of office space from an unaffiliated third party. Our telephone number is (609) 15 436-0619 and our website is www.essentialproperties.com.
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, 2025, our portfolio was 99.7% occupied by tenants operating 659 different concepts (i.e., brands) across 48 states, with none of our tenants contributing more than 3.4% of our annualized base rent. Long Lease Term.
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.
As of December 31, 2025, our portfolio consisted of 2,300 properties, with total annualized base rent of $555.0 million, which was purposefully selected by our management team in accordance with our focused and disciplined investment strategy. Our diversified portfolio is comprised of tenants operating 659 different concepts across 48 states.
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.
As of December 31, 2025, our total liquidity was $1.4 billion, including $70.4 million of cash and cash equivalents and restricted cash, $332.2 million available upon physical settlement of our outstanding forward equity sale agreements, and $1.0 billion of availability under our revolving credit facility.
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.
During the year ended December 31, 2025, we sold 60 properties for net sales proceeds of $130.1 million, including 13 properties that were vacant.
As a result, while we believe our net-lease financing solutions may be attractive to a wide variety of companies, we believe our most attractive opportunity is owning properties net leased to middle-market and smaller companies that are generally unrated and have less access to efficient sources of long-term capital than larger, credit-rated companies.
As a result, while we believe our net-lease financing solutions may be attractive to a wide variety of companies, we believe our most attractive opportunity is owning properties net leased to middle-market and smaller companies that are generally unrated and have less access to efficient sources of long-term capital than larger, credit-rated companies. 7 Our Competitive Strengths We believe the following competitive strengths distinguish us from our competitors and allow us to compete effectively in the single-tenant, net-lease market: • Carefully Constructed Portfolio Leased to Service-Oriented or Experience-Based Tenants .
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.
Our net income for the year ended December 31, 2025 was $253.7 million, our EBITDA re was $512.7 million, our Annualized Adjusted EBITDA re was $562.4 million and our ratio of net debt to Annualized Adjusted EBITDA re was 4.4x.
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.
Additionally, we are a veteran-led organization with our Chief Executive Officer and Chief Operating Officer having served in the U.S. military. 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.
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.
Women comprise 38% of our employee base and hold approximately 55% of our non-executive management positions, providing significant leadership at our company, and minorities comprise approximately 30% of our employee base and 35% of our non-executive management positions. Our commitment to diversity also extends to our Board, as four of its eight board members, or 50%, are women.
Our diversity is our strength, creating an inclusive work environment is our culture, and all of our employees are owners, thus aligned with our fellow stockholders. Our ESG goals include the following: • Oversight.
Our diversity is our strength, creating an inclusive work environment is our culture, and all of our employees are eligible to receive equity-based awards under our Equity Incentive Plan as part of their year end performance-based compensation, and are thus aligned with our fellow stockholders. Our ESG goals include the following: • Oversight.
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.
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.
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.
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.
As a result of the foregoing, we could be materially and adversely affected. Environmental laws also govern the presence, maintenance and removal of asbestos-containing material ("ACM"). Federal regulations require building owners and those exercising control over a building's management to identify and warn, through signs and labels, of potential hazards posed by workplace exposure to installed ACM in their building.
Federal regulations require building owners and those exercising control over a building's management to 14 identify and warn, through signs and labels, of potential hazards posed by workplace exposure to installed ACM in their building. The regulations also have employee training, record keeping and due diligence requirements pertaining to ACM. Significant fines can be assessed for violation of these regulations.
Factors we evaluate in connection with hiring, developing, training, compensating and advancing individuals include, but are not limited to, qualification, performance, skill and experience. Our employees are fairly compensated based on merit, without regard to color, race, sex, national origin, ethnicity, religion, age, disability, sexual orientation, gender identification or expression, or any other status protected by applicable law.
Our employees are fairly compensated based on merit, without regard to color, race, sex, national origin, ethnicity, religion, age, disability, sexual orientation, gender identification or expression, or any other status protected by applicable law. We value equal opportunity in the workplace and fair employment practices. We have built an inclusive culture that encourages, supports and celebrates our diverse employee population.
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.
Our compensation program is designed to attract and retain talent, and align our employees’ efforts with the interests of all of our stakeholders. Factors we evaluate in connection with hiring, developing, training, compensating and advancing individuals include, but are not limited to, qualification, performance, skill and experience.
Removed
Our Competitive Strengths We believe the following competitive strengths distinguish us from our competitors and allow us to compete effectively in the single-tenant, net-lease market: • Carefully Constructed Portfolio of Properties Leased to Service-Oriented or Experience-Based Tenants .
Added
Through December 31, 2025, we physically settled 4,715,000 shares under the forward sale agreements relating to this offering, realizing net proceeds of $143.7 million.
Removed
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.
Added
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.
Removed
We value equal opportunity in the workplace and fair employment practices. We have built an inclusive culture that encourages, supports and celebrates our diverse employee population.
Added
As a result of the foregoing, we could be materially and adversely affected. Environmental laws also govern the presence, maintenance and removal of asbestos-containing material ("ACM").
Removed
The regulations also have employee training, record keeping and due diligence requirements pertaining to ACM. Significant fines can be assessed for violation of these regulations.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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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.
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.
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.
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 20 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 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.
The restrictions on ownership and transfer of our stock may, among other things: discourage a tender offer or other transaction or a change in management or of control that might involve a premium price for our common stock or that our stockholders otherwise believe to be in their best interests; or result in the transfer of shares acquired in excess of the restrictions to a trust for the benefit of one or more charitable beneficiaries and, as a result, the forfeiture by the acquirer of the benefits of owning the additional shares.
The restrictions on ownership and transfer of our stock may, among other things: discourage a tender offer or other transaction or a change in management or of control that might involve a premium price for our common stock or that our stockholders otherwise believe to be in their best interests; or result in the transfer of shares acquired in excess of the ownership restrictions to a trust for the benefit of one or more charitable beneficiaries and, as a result, the forfeiture by the acquirer of the benefits of owning the additional shares.
An epidemic or pandemic could have a material and adverse effect on or cause disruption to our business or financial condition, results of operations, cash flows and the market value and trading price of our securities due to, among other factors: 33 • A complete or partial closure of, or other operational issues with, our properties as a result of government or tenant action; • The declines in or instability of the economy or financial markets may result in a recession or negatively impact consumer discretionary spending, which could adversely affect our tenants and consumers; • The reduction of economic activity may severely impact our tenants' business operations, financial condition, liquidity and access to capital resources and may cause one or more of our tenants to be unable to meet their obligations to us in full, or at all, to default on their lease, or to otherwise seek modifications of such obligations; • The inability to access debt and equity capital on favorable terms, if at all, or a severe disruption and instability in the global financial markets or deteriorations in credit and financing conditions may affect our access to capital necessary to fund business operations, pursue acquisition and investment opportunities, refinance existing debt, reduce our ability to make cash distributions to our stockholders and increase our future interest expense; • A general decline in business activity and demand for real estate transactions would adversely affect our ability to successfully execute our investment strategy and grow our business; • A significant reduction in our cash flows could impact our ability to continue paying cash dividends to our stockholders at expected levels or at all; • The financial impact could negatively affect our future compliance with financial and other covenants under agreements relating to our indebtedness, and the failure to comply with such covenants could result in a default that accelerates the payment of such debt; and • The potential negative impact on the health of our officers, other employees and members of our Board, particularly if a significant number are impacted, or the impact of government actions or restrictions, including stay-at-home orders, restricting access to our headquarters, could result in a deterioration in our ability to ensure business continuity during a disruption.
An epidemic or pandemic could have a material and adverse effect on or cause disruption to our business or financial condition, results of operations, cash flows and the market value and trading price of our securities due to, among other factors: • A complete or partial closure of, or other operational issues with, our properties as a result of government or tenant action; • The declines in or instability of the economy or financial markets may result in a recession or negatively impact consumer discretionary spending, which could adversely affect our tenants and consumers; • The reduction of economic activity may severely impact our tenants' business operations, financial condition, liquidity and access to capital resources and may cause one or more of our tenants to be unable to meet their obligations to us in full, or at all, to default on their lease, or to otherwise seek modifications of such obligations; • The inability to access debt and equity capital on favorable terms, if at all, or a severe disruption and instability in the global financial markets or deteriorations in credit and financing conditions may affect our access to capital necessary to fund business operations, pursue acquisition and investment opportunities, refinance existing debt, reduce our ability to make cash distributions to our stockholders and increase our future interest expense; • A general decline in business activity and demand for real estate transactions would adversely affect our ability to successfully execute our investment strategy and grow our business; • A significant reduction in our cash flows could impact our ability to continue paying cash dividends to our stockholders at expected levels or at all; • The financial impact could negatively affect our future compliance with financial and other covenants under agreements relating to our indebtedness, and the failure to comply with such covenants could result in a default that accelerates the payment of such debt; and • The potential negative impact on the health of our officers, other employees and members of our Board, particularly if a significant number are impacted, or the impact of government actions or restrictions, including stay-at-home orders, restricting access to our headquarters, could result in a deterioration in our ability to ensure business continuity during a disruption.
Though many of our leases obligate our tenants to provide us with certain 23 information relating to environmental matters, this lack of control over our net-leased properties makes it difficult for us to collect property-level environmental metrics and to enforce sustainability initiatives, which may impact our ability to comply with certain regulatory disclosure requirements to which we are subject or comply effectively with established Environmental, Social and Governance ("ESG") frameworks and standards, such as the Global Real Estate Sustainability Benchmarks, Task Force for Climate-Related Financial Disclosures (“TCFD”) and the Sustainability Accounting Standards Board.
Though many of our leases obligate our tenants to provide us with certain information relating to environmental matters, this lack of control over our net-leased properties makes it difficult for us to collect property-level environmental metrics and to enforce sustainability initiatives, which may impact our ability to comply with certain regulatory disclosure requirements to which we are subject or comply effectively with established Environmental, Social and Governance ("ESG") frameworks and standards, such as the Global Real Estate Sustainability Benchmarks, Task Force for Climate-Related Financial Disclosures (“TCFD”) and the Sustainability Accounting Standards Board.
Any income from a hedging transaction that we enter into to manage the risk of interest rate changes with respect to borrowings made or to be made to acquire or carry real estate assets, or from certain terminations of such hedging positions, does not constitute “gross income” for purposes of the 75% or 95% gross income tests that apply to REITs, provided that certain identification requirements are met.
Any income from a hedging transaction that we enter into to manage the risk of interest rate changes with respect to borrowings made or to be made to acquire or carry real estate assets, or from certain terminations of such hedging positions, does not constitute “gross income” for purposes of the 75% or 95% gross income tests that apply to REITs, provided 30 that certain identification requirements are met.
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.
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.
While our leases generally do not allow tenants to withhold rent if the tenants are not operating at the property leased from us, some tenants may pay rent under protest, not pay rent at all, request rent deferrals, and assert legal or equitable claims in the courts that such tenants are not obligated to pay rent while closed or while operating at reduced capacity, because of an epidemic or pandemic.
While our leases generally do not allow tenants to withhold rent if the tenants are not operating at the property leased from us, some 34 tenants may pay rent under protest, not pay rent at all, request rent deferrals, and assert legal or equitable claims in the courts that such tenants are not obligated to pay rent while closed or while operating at reduced capacity, because of an epidemic or pandemic.
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.
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.
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.
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.
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.
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.
Additionally, the known or potential presence of hazardous substances on a property may adversely affect our ability to sell, lease or improve the property or to borrow using the property as collateral. Environmental laws may also create liens on contaminated properties in favor of the government for damages and costs it incurs to address such contamination.
Additionally, the known or potential presence of hazardous substances on a property may adversely affect our ability to sell, lease or improve the property or to borrow using the property as collateral. Environmental laws may also create liens on contaminated 22 properties in favor of the government for damages and costs it incurs to address such contamination.
As a result, we may be unable to obtain debt financing on favorable terms or at all or fully refinance maturing indebtedness with new indebtedness. A deterioration in our credit or credit rating, reductions in our available borrowing capacity or our inability to obtain credit when required or when business conditions warrant could materially and adversely affect us.
As a 24 result, we may be unable to obtain debt financing on favorable terms or at all or fully refinance maturing indebtedness with new indebtedness. A deterioration in our credit or credit rating, reductions in our available borrowing capacity or our inability to obtain credit when required or when business conditions warrant 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.
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. We depend on key personnel. We depend on the efforts of our executive officers and key employees.
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.
To the extent that consumer behavior changes in a manner that reduces patronage of service-based and/or experience-based businesses, for 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.
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.
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.
Our charter provides that we may issue up to 500,000,000 shares of common stock, and a majority of our entire Board has the power to amend our charter to increase the aggregate number of shares of stock or the number of shares of stock of any class or series that we are authorized to issue without stockholder approval.
Our charter provides that we may issue up to 32 500,000,000 shares of common stock, and a majority of our entire Board has the power to amend our charter to increase the aggregate number of shares of stock or the number of shares of stock of any class or series that we are authorized to issue without stockholder approval.
Geographic, industry and tenant concentrations reduce the diversity of our portfolio and make us more susceptible to adverse economic or regulatory developments in those areas or industries. Geographic, industry and tenant concentrations expose us to greater economic or regulatory risks than if we owned a more diverse portfolio.
Geographic, industry and tenant concentrations reduce the diversity of our portfolio and make us more susceptible to adverse economic or regulatory developments in those areas or industries. 17 Geographic, industry and tenant concentrations expose us to greater economic or regulatory risks than if we owned a more diverse portfolio.
At any given time, any tenant may experience a downturn in its business, including as a result of adverse economic conditions, that may weaken its operating results or the overall financial condition of individual properties or its business as whole.
At any given time, any tenant may experience a downturn in its business, including as a result of adverse economic conditions, that may weaken its operating results or the overall financial condition of individual properties 16 or its business as whole.
In particular, the market price of our common stock on the New York Stock Exchange (“NYSE”) has experienced significant volatility. Similarly, the availability and pricing of debt and equity capital has been volatile and, in many instances, more expensive.
In particular, the market price of our common stock on the New York Stock Exchange (“NYSE”) has 21 experienced significant volatility. Similarly, the availability and pricing of debt and equity capital has been volatile and, in many instances, more expensive.
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.
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. 35 Item 1B. Unresolved Staff Comments. None.
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.
As of December 31, 2025, 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.
One of the factors that may influence the price of shares of our common stock is the distribution yield on shares of our common stock (as a percentage of the price of shares of our common stock) relative to market interest rates.
One of the factors that may influence the price of shares of our common stock is the distribution yield on shares of our common stock (as a percentage of the price of shares of our common stock) relative to market 31 interest rates.
To continue to qualify as a REIT, we generally must distribute to our stockholders at least 90% of our REIT taxable income each year, determined without regard to the dividends-paid deduction and excluding any net capital gains, and we will be subject to corporate income tax on our undistributed taxable income to the extent that we distribute less than 100% of our REIT taxable income, determined without regard to the dividends-paid deduction and including any net capital gains, each year.
To continue to qualify as a REIT, we generally must distribute to our stockholders at least 90% of our REIT taxable income each year, determined without regard to the dividends-paid deduction and excluding any net capital gains, and we will be subject to U.S. corporate income tax on our undistributed taxable income to the extent that we distribute less than 100% of our REIT taxable income, determined without regard to the dividends-paid deduction and including any net capital gains, each year.
If the IRS were successful in treating our Operating Partnership or any such other subsidiary partnership as an entity taxable as a corporation for federal income tax purposes, we will fail to meet the gross income tests and certain of the asset tests applicable to REITs and, accordingly, we will likely cease to qualify as a REIT.
If the IRS were successful in treating our Operating Partnership or any such other subsidiary partnership as an entity taxable as a corporation for U.S. federal income tax purposes, we will fail to meet the gross income tests and certain of the asset tests applicable to REITs and, accordingly, we will likely cease to qualify as a REIT.
Also, the failure of our Operating Partnership or any subsidiary partnerships to qualify as a disregarded entity or partnership could cause it to become subject to federal and state corporate income tax, which will reduce significantly the amount of cash available for debt service and for distribution to its partners, including us.
Also, the failure of our Operating Partnership or any subsidiary partnerships to qualify as a disregarded entity or partnership could cause it to become subject to U.S. federal and state corporate income tax, which will reduce significantly the amount of cash available for debt service and for distribution to its partners, including us.
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.
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 and was material to the cause of action adjudicated.
There is a risk of changes in the tax law applicable to REITs. Because the IRS, the United States Treasury Department and Congress frequently review federal income tax legislation, we cannot predict whether, when or to what extent new federal tax laws, regulations, interpretations or rulings will be adopted.
There is a risk of changes in the tax law applicable to REITs. Because the IRS, the United States Treasury Department and Congress frequently review U.S. federal income tax legislation, we cannot predict whether, when or to what extent new U.S. federal tax laws, regulations, interpretations or rulings will be adopted.
In addition, legislation, new regulations, administrative interpretations or court decisions may materially and adversely affect our investors, our ability to continue to qualify as a REIT for federal income tax purposes or the desirability of an investment in a REIT relative to other investments.
In addition, legislation, new regulations, administrative interpretations or court decisions may materially and adversely affect our investors, our ability to continue to qualify as a REIT for U.S. federal income tax purposes or the desirability of an investment in a REIT relative to other investments.
In addition, any taxable REIT subsidiaries will be subject to tax as regular corporations in the jurisdictions in which they operate. If our Operating Partnership fails to qualify as a partnership for federal income tax purposes, we will cease to qualify as a REIT and suffer other adverse consequences.
In addition, any taxable REIT subsidiaries will be subject to tax as regular corporations in the jurisdictions in which they operate. If our Operating Partnership fails to qualify as a partnership for U.S. federal income tax purposes, we will cease to qualify as a REIT and suffer other adverse consequences.
We elected to be taxed as a REIT for federal income tax purposes beginning with our taxable year ended December 31, 2018, and we believe that our current organization and operations have allowed and will continue to allow us to qualify as a REIT.
We elected to be taxed as a REIT for U.S. federal income tax purposes beginning with our taxable year ended December 31, 2018, and we believe that our current organization and operations have allowed and will continue to allow us to qualify as a REIT.
The tax imposed on REITs engaging in “prohibited transactions” may limit our ability to engage in transactions which would be treated as sales for federal income tax purposes. A REIT's net income from “prohibited transactions” is subject to a 100% penalty tax.
The tax imposed on REITs engaging in “prohibited transactions” may limit our ability to engage in transactions which would be treated as sales for U.S. federal income tax purposes. A REIT's net income from “prohibited transactions” is subject to a 100% penalty tax.
Instead, for federal income tax purposes each of the partners of the Operating Partnership, including us, will be allocated, and may be required to pay tax with respect to, such partner's share of its income.
Instead, for U.S. federal income tax purposes each of the partners of the Operating Partnership, including us, will be allocated, and may be required to pay tax with respect to, such partner's share of its income.
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.
Although many of our rent escalators increase rent at a fixed amount on fixed dates, approximately 0.9% of our rent escalators relate to an increase in the CPI over a specified period.
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.
Even if we continue to qualify as a REIT for U.S. federal income tax purposes, we may be subject to some U.S. 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.
We believe that our Operating Partnership will be treated as a partnership for federal income tax purposes and, as a result, will generally not be subject to federal income tax on its income.
We believe that our Operating Partnership will be treated as a partnership for U.S. federal income tax purposes and, as a result, will generally not be subject to U.S. federal income tax on its income.
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.
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, 2025, tenants contributing 17.4% of our annualized base rent operated under franchise or license agreements.
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.
This indebtedness consisted of $1.7 billion of combined borrowings under our term loans and $800.0 million outstanding principal amount of senior unsecured notes. We had no indebtedness outstanding under our Revolving Credit Facility as of December 31, 2025, but we may borrow from this facility in the future.
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.
Misuse of or failure to secure personal 33 information could also result in violation of data privacy laws and regulations, proceedings against us by governmental entities or others, fines and penalties, or damage to our reputation and credibility with regulators, tenants and investors.
However, from time to time, our ratio of net debt to our Annualized Adjusted EBITDA re may equal or exceed six times. Our Board may alter or eliminate our current policy on borrowing at any time without stockholder approval.
However, from time to time, our ratio of pro forma net debt to our Annualized Adjusted EBITDA re may equal or exceed 5.5 times. Our Board may alter or eliminate our current policy on borrowing at any time without stockholder approval.
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%).
Our business includes substantial holdings in the following states as of December 31, 2025 (based on annualized base rent): Texas (12.7%), Florida (7.4%), Georgia (6.5%), Ohio (5.4%) and Wisconsin (4.6%).
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.
Risks Related to Our Indebtedness As of December 31, 2025, we had $2.5 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, 2025, we had $2.5 billion of indebtedness outstanding.
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.
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 U.S. 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. 28 Any such corporate tax liability could be substantial and would reduce our cash available for, among other things, our operations and distributions to stockholders.
In addition, our charter requires us to indemnify our directors and officers for actions taken by them in those and certain other capacities to the maximum extent permitted by Maryland law. We are a holding company with no direct operations and rely on funds received from our Operating Partnership to make any distributions to stockholders and to pay liabilities.
In addition, our charter requires us to indemnify our directors and officers for actions taken by them in those and certain other capacities to the maximum extent permitted by Maryland law and to advance their expenses before the final disposition of the proceeding. 27 We are a holding company with no direct operations and rely on funds received from our Operating Partnership to make any distributions to stockholders and to pay liabilities.
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.
As of December 31, 2025, we had 209,702,433 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.
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.
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.
Conflicts of interest could arise in the future as a result of the relationships between us and our stockholders, on the one hand, and our Operating Partnership and its limited partners, on the other.
Conflicts of interest could arise in the future between the interests of us and our stockholders, on the one hand, and the interests of our Operating Partnership and its limited partners, on the other.
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.
As of December 31, 2025, leases contributing 97.9% 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 1.8% of base rent.
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, 2025, our occupancy was 99.7% and leases representing approximately 5.2% of our annualized base rent as of such date will expire prior to January 1, 2031. Current tenants may decline to renew leases and we may not be able to find replacement tenants.
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.
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.
A franchisor's or licensor's termination or refusal to renew a franchise or license agreement would likely have a material adverse effect on the ability of the tenant to make payments under its lease, which could materially and adversely affect us.
A franchisor's or licensor's termination or refusal to renew a franchise or license agreement would likely have a material adverse effect on the ability of the tenant to make payments under its lease, which could materially and adversely affect us. 19 The bankruptcy or insolvency of a tenant could result in the termination or modification of such tenant's lease and material losses to us.
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.
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.
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. 25 Additionally, these restrictions may adversely affect our operating and financial flexibility and may limit our ability to respond to changes in our business or competitive environment, all of which may materially and adversely affect us.
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.
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.
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 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.
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.
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.
A reduction in the willingness or ability of consumers to physically patronize and use their discretionary income in the businesses of our tenants and potential tenants could adversely impact our tenants’ business and thereby adversely impact our ability to collect rents and reduce the demand for our properties.
A reduction in the willingness or ability of consumers to physically patronize and use their discretionary income in the businesses of our tenants and potential tenants could adversely impact our tenants’ business and thereby adversely impact our ability to collect rents and reduce the demand for our properties. 18 Most of our portfolio is leased to tenants operating service-oriented or experience-based businesses at our properties.
We cannot assure you that we will have access to such capital on favorable terms at the desired times, or at all, which may cause us to curtail our investment activities and/or to dispose of assets at inopportune times, and could materially and adversely affect us and the per share trading price of our common stock.
We cannot assure you that we will have access to such capital on favorable terms at the desired times, or at all, which may cause us to curtail our investment activities and/or to dispose of assets at inopportune times, and could materially and adversely affect us and the per share trading price of our common stock. 29 Our ability to provide certain services to our tenants may be limited by the REIT rules or may have to be provided through a taxable REIT subsidiary.
Although we are not required by our organizational documents to maintain a particular leverage ratio and may not be able to do so, we generally intend to target a level of net debt (which includes recourse and non-recourse borrowings and any outstanding preferred stock issuance less unrestricted cash and cash equivalents) that, over time, is less than six times our Annualized Adjusted EBITDA re .
Although we are not required by our organizational documents to maintain a particular leverage ratio and may not be able to do so, we generally intend to target a level of pro forma net debt (which includes recourse and non-recourse borrowings and any outstanding preferred stock issuance less unrestricted cash and cash equivalents, restricted cash available for future investment and estimated proceeds from unsettled forward equity sale agreements assuming full physical settlement) that, over time, is less than 5.5 times our Annualized Adjusted EBITDA re .
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.
As of December 31, 2025, the largest industries in our portfolio were restaurants (including quick service, casual dining and family dining), car washes, medical and dental services, early childhood education, , entertainment (including movie theaters), automotive service, convenience stores, and equipment rental and sales.
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.
Any default under any mortgage debt obligation we incur may increase the risk of our default on our other indebtedness.
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.
These risks could adversely affect our reputation, financial condition or results of operations. 23 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.
Our ability to provide certain services to our tenants may be limited by the REIT rules or may have to be provided through a taxable REIT subsidiary. As a REIT, we generally cannot provide services to our tenants other than those that are customarily provided by landlords, nor can we derive income from a third party that provides such services.
As a REIT, we generally cannot provide services to our tenants other than those that are customarily provided by landlords, nor can we derive income from a third party that provides such services. If we forego providing such services to our tenants, we may be at a disadvantage to competitors that are not subject to the same restrictions.
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.
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.
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.
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 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.
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.
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, 2025, 3,689,632 shares remain available for issuance under our 2023 Incentive Plan.
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.
As of December 31, 2025, tenants operating in those industries represented approximately 82.8% of our annualized base rent. EquipmentShare, Crunch Fitness, Whistle Express Car Wash, Chicken N Pickle, Allsup's/YesWay, Primrose School , Super Star Car Wash, John Deere, Captain D's, and Flagstop Car Wash represent the largest concepts in our portfolio.
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.
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.
Any such corporate tax liability could be substantial and would reduce our cash available for, among other things, our operations and distributions to stockholders. In addition, if we fail to remain qualified as a REIT, we will not be required to make distributions to our stockholders.
In addition, if we fail to remain qualified as a REIT, we will not be required to make distributions to our stockholders.
Any of such legislative actions may prospectively or retroactively modify our tax treatment and, therefore, may adversely affect taxation of us and/or our investors. For example, the Tax Cuts and Jobs Act of 2017 (the “TCJA”) has significantly changed the U.S. federal income taxation of U.S. businesses and their owners, including REITs and their stockholders.
For example, the Tax Cuts and Jobs Act of 2017 (the “TCJA”) and the 2025 One Big Beautiful Bill Act have significantly changed the U.S. federal income taxation of U.S. businesses and their owners, including REITs and their stockholders.
Removed
The bankruptcy or insolvency of a tenant could result in the termination or modification of such tenant's lease and material losses to us.
Added
We could be materially and adversely affected if a number of our tenants are unable to meet their obligations to us.
Removed
Additionally, these restrictions may adversely affect our operating and financial flexibility and may limit our ability to respond to changes in our business or competitive environment, all of which may materially and adversely affect us.
Added
As of December 31, 2025, our five largest tenants contributed 9.9% of our annualized base rent, and our ten largest tenants contributed 16.5% of our annualized base rent.
Removed
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.
Added
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.
Removed
If we forego providing such services to our tenants, we may be at a disadvantage to competitors that are not subject to the same restrictions.
Added
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.
Added
The IRS may take the position that specific sale-leaseback transactions that we treat as leases are not true leases for U.S. federal income tax purposes but, instead, should be re-characterized as financing arrangements or loans.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

9 edited+1 added−1 removed11 unchanged
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.
Biggest changeOur incident response and recovery plans address—and guide our employees, management and the Board on—our response to a cybersecurity incident. 36 Third-Party Risk Management We have implemented controls designed to identify and mitigate cybersecurity threats associated with our use of third-party service providers.
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.
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.
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.
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 oversees risks arising from our cybersecurity program.
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 Chief Financial Officer meets periodically with our external cybersecurity consultant to review security performance metrics and identify security risks. 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.
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.
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.
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.
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.
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.
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.
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.
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 has primary responsibility for assessing and managing material risks from cybersecurity threats.
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.
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.
Removed
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.
Added
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.

Item 2. Properties

Properties — owned and leased real estate

14 edited+5 added−6 removed2 unchanged
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.
Biggest changeFt.) Texas $ 70,519 12.7 % 249 3,240,002 Florida 41,138 7.4 % 128 1,179,748 Georgia 36,305 6.5 % 168 1,285,477 Ohio 30,099 5.4 % 143 1,681,799 Wisconsin 25,423 4.6 % 97 1,452,393 Missouri 19,520 3.5 % 89 1,201,110 Oklahoma 19,013 3.4 % 74 992,576 North Carolina 18,177 3.3 % 86 790,650 Arizona 16,823 3.0 % 66 711,434 Illinois 16,507 3.0 % 64 789,679 Alabama 14,894 2.7 % 65 931,287 South Carolina 14,011 2.5 % 67 558,561 Michigan 13,896 2.5 % 65 1,184,067 Indiana 13,130 2.4 % 69 620,979 Pennsylvania 12,675 2.3 % 66 681,534 New Jersey 12,622 2.3 % 32 475,202 Virginia 12,426 2.2 % 38 408,583 Tennessee 12,114 2.2 % 61 434,505 Minnesota 11,373 2.0 % 44 638,333 Mississippi 10,995 2.0 % 74 411,690 Louisiana 10,586 1.9 % 37 352,037 New York 10,534 1.9 % 65 508,928 Arkansas 9,818 1.8 % 66 507,946 Colorado 8,979 1.6 % 33 367,634 California 8,369 1.5 % 21 196,715 New Mexico 8,154 1.5 % 28 187,680 Massachusetts 7,708 1.4 % 35 488,841 Kentucky 7,582 1.4 % 51 327,218 Iowa 7,540 1.4 % 35 414,813 Connecticut 7,166 1.3 % 22 555,537 Utah 6,919 1.2 % 7 528,350 Nevada 6,693 1.2 % 16 168,720 Kansas 4,914 0.9 % 18 201,900 Maryland 4,461 0.8 % 13 257,335 New Hampshire 3,719 0.7 % 13 268,937 Oregon 3,233 0.6 % 9 138,785 South Dakota 2,765 0.5 % 9 130,152 North Dakota 2,573 0.5 % 7 97,442 Washington 2,404 0.4 % 11 90,459 West Virginia 2,335 0.4 % 24 85,800 Nebraska 2,248 0.4 % 11 138,797 Vermont 1,282 0.2 % 10 80,819 Maine 1,167 0.2 % 4 71,000 Idaho 777 0.1 % 3 43,588 Rhode Island 480 0.1 % 2 22,865 Delaware 415 0.1 % 1 4,186 Wyoming 294 0.1 % 2 14,001 Alaska 214 — % 2 6,630 Total $ 554,989 100.0 % 2,300 25,926,724 40 Lease Expirations As of December 31, 2025, the weighted average remaining term of our leases was 14.4 years (based on annualized base rent), with only 5.2% of our annualized base rent attributable to leases expiring prior to January 1, 2031.
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 details information about our tenants and the related concepts they operate as of December 31, 2025 (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, 2024 (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, 2025 (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, 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 summarizes those industries as of December 31, 2025 (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, 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
The following table illustrates the portions of our annualized base rent as of December 31, 2025 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 % 0.5 % 0.4 % 0.4 % B- 0.1 % 0.2 % 0.9 % 0.7 % 2.9 % B — % 1.2 % 2.7 % 1.2 % 6.4 % B+ 0.1 % 0.4 % 2.4 % 2.8 % 12.0 % BB- 0.1 % 0.2 % 0.5 % 3.8 % 10.6 % BB — % 0.5 % 1.9 % 2.8 % 6.5 % BB+ — % — % 1.9 % 0.6 % 11.6 % BBB- — % 0.1 % 0.9 % 0.5 % 9.3 % BBB — % — % 0.6 % 1.5 % 3.4 % BBB+ — % 0.3 % 0.4 % 0.3 % 1.6 % A- — % — % 0.1 % — % 2.4 % A — % — % — % — % 0.3 % A+ — % — % — % — % — % AA- — % — % — % — % — % _____________________________________ NR Not reported
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.
As of December 31, 2025, 97.3% 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.
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.
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, 2025 are displayed below: Unit Level Coverage Ratio % of Total ≥ 2.00x 68.5 % 1.50x to 1.99x 14.8 % 1.00x to 1.49x 12.8 % 3.2 % Not reported 0.7 % 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.
(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.
(2) Excludes one undeveloped land parcel and six 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, 2025, the weighted average rent coverage ratio of our portfolio was 3.6x.
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.
Item 2. Properties. Our Real Estate Investment Portfolio As of December 31, 2025, we had a portfolio of 2,300 properties, inclusive of one undeveloped land parcel and 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 $555.0 million.
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.
The following table details the geographical locations of our properties as of December 31, 2025 (dollars in thousands): State Annualized Base Rent % of Annualized Base Rent Number of Properties Building (Sq.
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).
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 Tenant As of December 31, 2025, our top ten tenants included ten different concepts.
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.
As of December 31, 2025, 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 2.5x, our tenants operating retail businesses had a weighted average rent coverage ratio of 3.9x and our tenants operating other types of businesses had a weighted average rent coverage ratio of 8.6x. 39 Diversification by Geography Our 2,300 properties locations are located in 48 states.
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.
Our tenants operate 659 different concepts across 48 states. None of our tenants represented more than 3.4% of our portfolio at December 31, 2025 and our top ten largest tenants represented 16.5% of our annualized base rent as of that date.
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.
The following table sets forth our lease expirations for leases in place as of December 31, 2025 (dollars in thousands): Lease Expiration Year (1) Annualized Base Rent % of Annualized Base Rent Number of Properties (2) Weighted Average Rent Coverage Ratio (3) 2026 $ 3,444 0.6 % 25 2.9 x 2027 5,488 1.0 % 36 3.8 x 2028 4,470 0.8 % 16 3.0 x 2029 10,138 1.8 % 114 5.1 x 2030 5,382 1.0 % 51 4.0 x 2031 10,910 2.0 % 54 2.8 x 2032 13,223 2.4 % 42 4.1 x 2033 7,200 1.3 % 27 3.0 x 2034 29,169 5.3 % 190 5.8 x 2035 20,217 3.6 % 122 3.8 x 2036 38,283 6.9 % 161 3.9 x 2037 23,361 4.2 % 121 3.4 x 2038 50,720 9.1 % 186 4.3 x 2039 40,226 7.2 % 156 3.6 x 2040 45,841 8.3 % 162 4.8 x 2041 18,879 3.4 % 89 2.4 x 2042 25,831 4.7 % 123 2.8 x 2043 52,122 9.4 % 190 2.4 x 2044 46,801 8.4 % 165 2.7 x 2045 70,871 12.8 % 205 3.0 x Thereafter 32,413 5.8 % 58 4.7 x Total/Weighted Average $ 554,989 100.0 % 2,293 3.6 x _______________________________________________________________ (1) Expiration year of leases in place as of December 31, 2025, excluding any tenant option renewal periods that have not been exercised.
Removed
Our 413 tenants operate 592 different concepts in 16 industries across 49 states.
Added
EquipmentShare 57 $ 18,934 3.4 % Express Wash Operations, LLC Whistle Express Car Wash 33 10,900 2.0 % CNP Holdings, LLC Chicken N Pickle 8 8,641 1.6 % BW Ultimate Parent, LLC Allsup's/YesWay 13 8,337 1.5 % Dave & Buster's Inc.
Removed
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.
Added
Dave & Buster's 5 8,078 1.5 % Undefeated Tribe Operating Company, LLC Crunch Fitness 13 7,823 1.4 % Busy Bees US Holdings Limited Various 32 7,344 1.3 % Early Foundations LLC Primrose School 21 7,329 1.3 % Denali Midco 2 LLC Super Star Car Wash 19 6,961 1.3 % GSP Flagstop LLC Flagstop Car Wash 20 6,787 1.2 % Top 10 Subtotal 221 91,134 16.5 % Other 2,072 463,855 83.5 % Total 2,293 $ 554,989 100.0 % __________________________________________ (1) Represents tenant, guarantor or parent company.
Removed
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.
Added
(2) Excludes one undeveloped land parcel and six vacant properties. Diversification by Concept Our tenants operate their businesses across 659 concepts (i.e., brands).
Removed
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.
Added
Ft.) (1) EquipmentShare Service $ 18,934 3.4 % 57 1,104,897 Crunch Fitness Experience 14,977 2.7 % 26 962,740 Whistle Express Car Wash Service 10,900 2.0 % 33 135,867 Chicken N Pickle Experience 8,641 1.6 % 8 279,483 Allsup's/YesWay Service 8,337 1.5 % 13 75,429 Primrose School Service 8,289 1.5 % 23 272,636 Super Star Car Wash Service 6,961 1.3 % 19 91,470 John Deere Service 6,813 1.2 % 31 654,285 Captain D's Service 6,792 1.2 % 86 223,411 Flagstop Car Wash Service 6,787 1.2 % 20 93,538 Top 10 Subtotal 97,431 17.6 % 316 3,893,756 Other 457,558 82.4 % 1,977 21,887,349 Total $ 554,989 100.0 % 2,293 25,781,105 ______________________________________ (1) Excludes one undeveloped land parcel and six vacant properties. 38 Diversification by Industry Our tenants' business concepts are diversified across various industries.
Removed
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.
Added
(2) Car Washes Service $ 75,854 13.7 % 220 1,083,076 $ 69.73 Medical / Dental Service 69,431 12.5 % 279 2,273,733 29.97 Early Childhood Education Service 62,970 11.3 % 255 2,773,263 22.51 Quick Service Service 48,290 8.7 % 461 1,244,290 39.87 Automotive Service Service 44,491 8.0 % 297 2,314,388 19.08 Convenience Stores Service 37,024 6.7 % 178 774,644 48.43 Casual Dining Service 33,556 6.0 % 132 936,979 35.91 Equipment Rental and Sales Service 25,746 4.6 % 88 1,759,182 14.64 Other Services Service 17,227 3.1 % 70 877,164 19.64 Pet Care Services Service 7,024 1.3 % 34 270,434 25.29 Family Dining Service 6,537 1.2 % 26 205,924 31.75 Service Subtotal 428,150 77.1 % 2,040 14,513,077 29.41 Entertainment Experience 51,530 9.3 % 72 2,523,151 19.22 Health and Fitness Experience 23,877 4.3 % 46 1,738,193 13.49 Movie Theaters Experience 4,429 0.8 % 6 293,206 15.11 Experience Subtotal 79,836 14.4 % 124 4,554,550 16.77 Other Industrial Industrial 26,718 4.8 % 62 3,673,369 7.12 Building Materials Industrial 4,808 0.9 % 24 1,297,669 3.71 Industrial Subtotal 31,526 5.7 % 86 4,971,038 6.23 Grocery Retail 14,715 2.7 % 41 1,635,542 9.00 Home Furnishings Retail 762 0.1 % 2 106,898 7.12 Retail Subtotal 15,477 2.8 % 43 1,742,440 8.88 Total/Weighted Average $ 554,989 100.0 % 2,293 25,781,105 $ 21.30 ____________________________________________________ (1) Excludes one undeveloped land parcel and six vacant properties.
Removed
(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.

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. 43 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. 42 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

7 edited+0 added−0 removed5 unchanged
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.
Biggest changeThe historical stock price performance reflected in the graph and related table is not necessarily indicative of future stock price performance. 43 Ticker / Index 1/1/2021 12/31/2021 12/31/2022 12/31/2023 12/31/2024 12/31/2025 EPRT 100.00 138.80 119.07 135.91 169.52 167.28 S&P 500 100.00 127.25 102.27 127.08 156.73 182.45 FNER 100.00 137.20 99.81 106.71 107.86 106.12 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.
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").
Stock Performance Graph The following performance graph and related table compare, for the five year period ended December 31, 2025, 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").
Issuer Purchases of Equity Securities During the three months ended December 31, 2024, the Company did not repurchase any of its equity securities.
Issuer Purchases of Equity Securities During the three months ended December 31, 2025, the Company did not repurchase any of its equity securities.
The graph and related table assume $100.00 was invested on January 1, 2020 and assumes the reinvestment of all dividends.
The graph and related table assume $100.00 was invested on January 1, 2021 and assumes the reinvestment of all dividends.
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
Equity Compensation Plan Information The information concerning our Equity Compensation Plan will be included in the Proxy Statement to be filed relating to our 2026 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
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.
Management's Discussion and Analysis of Financial Condition and Results of Operations — Description of Certain Debt." We have determined that, for U.S. federal income tax purposes, approximately 96.0% of the distributions paid for the 2025 tax year represented taxable income and 4.0% represented a return of capital.
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.
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 6, 2026, there were 210 holders of record of the 209,879,818 outstanding shares of our common stock.

Item 7. Management's Discussion & Analysis

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

98 edited+12 added−7 removed91 unchanged
Biggest changeContractual 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.
Biggest change(2) 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.
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”).
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 "Amended 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”).
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.
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.
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.
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.
To derive AFFO, we modify our computation of Core FFO to include other adjustments to GAAP net income related to certain items that we believe are not indicative of our operating performance, including straight-line rental revenue, non-cash interest expense, non-cash compensation expense, other amortization expense, other non-cash charges and capitalized interest expense.
To derive AFFO, we modify our computation of Core FFO to include other adjustments to GAAP net income related to certain items that we believe are not indicative of our operating performance, including straight-line rental revenue, non-cash interest, non-cash compensation expense, other amortization expense, other non-cash adjustments and capitalized interest expense.
To accomplish this objective, we seek to invest in real estate utilizing a combination of debt and equity capital and with cash from operations that we do not distribute to our stockholders. When we sell properties, we generally reinvest the cash proceeds from our sales in new single-tenant properties.
To accomplish this objective, we seek to invest in real estate utilizing a combination of debt and equity capital and with cash from operations that we do not distribute to our stockholders. When we sell properties, we generally reinvest the cash proceeds in new single-tenant properties.
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. 56 We recognize compensation expense for equity-based compensation using the straight-line method based on the fair value of the award on the grant date.
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 recognize compensation expense for equity-based compensation using the straight-line method based on the fair value of the award on the grant date.
Changes in our allowance for credit losses are presented within change in provision for credit losses in the accompanying statements of operations. Impairment of Long-Lived Assets If circumstances indicate that the carrying value of a property may not be recoverable, we review the asset for impairment.
Changes in our allowance for credit losses are presented within change in provision for credit losses in the accompanying statements of operations. 54 Impairment of Long-Lived Assets If circumstances indicate that the carrying value of a property may not be recoverable, we review the asset for impairment.
Additionally, our computation of FFO, Core FFO and AFFO may differ from the 59 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.
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.
The loans under each of the Revolving Credit Facility and the CF Term Loans initially bear interest at an annual rate of applicable Adjusted Term SOFR (as defined in the Credit Agreement) plus an applicable margin (which applicable margin varies between the Revolving Credit Facility and the CF Term Loans).
The loans under each of the Revolving Credit Facility and the CF Term Loans initially bear interest at an annual rate of applicable Adjusted Term SOFR (as defined in the Amended Credit Agreement) plus an applicable margin (which applicable margin varies between the Revolving Credit Facility and the CF Term Loans).
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.
These cash outflows were partially offset by $96.9 million of 52 proceeds from sales of investments, net of disposition costs, and $10.0 million of principal collections on our loans and direct financing lease receivables.
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.
The Amended 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.
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.
We believe that the cash generated by our operations, together with our cash and cash equivalents at December 31, 2025, 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.
The Operating Partnership is the borrower under the Credit Agreement, and we and certain of the subsidiaries of the Operating Partnership that own a direct or indirect interest in an eligible real property asset are guarantors under the Credit Agreement.
The Operating Partnership is the borrower under the Amended Credit Agreement, and we and certain of the subsidiaries of the Operating Partnership that own a direct or indirect interest in an eligible real property asset are guarantors under the Amended Credit Agreement.
EBITDA and EBITDA re do not include all items of revenue and expense included in net income, they do not represent cash generated from operating activities and they are not necessarily indicative of cash available to fund cash requirements; accordingly, they should not be considered alternatives to net income as a performance measure or cash flows from operations as a liquidity measure and should be considered in addition to, and not in lieu of, GAAP financial measures.
EBITDA and EBITDAre do not include all items of revenue and expense included in net income, they do not represent cash generated from operating activities and they are not necessarily indicative of cash available to fund cash requirements; accordingly, they should not be considered alternatives to net income as a performance measure or cash flows from operations as a liquidity measure and should be considered in addition to, and not in lieu of, GAAP financial measures.
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.
The occupancy level of our portfolio is high (99.7% as of December 31, 2025) 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.
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.
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, 2025, we were in compliance with these covenants.
"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.
"Annualized base rent" means annualized contractually specified cash base rent in effect on December 31, 2025 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.
We believe these non-GAAP financial measures are industry measures used by analysts and investors to compare the operating performance of REITs. We compute FFO in accordance with the definition adopted by the Board of Governors of the National Association of Real Estate Investment Trusts ("NAREIT").
We believe these non-GAAP financial measures are industry measures used by analysts and investors to compare the operating performance of REITs. We compute FFO in accordance with the definition adopted by the Board of Governors of the National Association of Real Estate Investment Trusts (“NAREIT”).
Core FFO is used by management in evaluating the performance of our core business operations. Items included in calculating FFO that may be excluded in calculating Core FFO include certain transaction related gains, losses, income or expenses or other non-core amounts as they occur.
Core FFO is used by management in evaluating the performance of our core business operations. Items included in calculating FFO that may be excluded in calculating Core FFO include certain transaction related gains, losses, income or expense or other non-core amounts as they occur.
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.
Changes in our provision for loan losses are driven by revisions to global and loan-specific assumptions in our loan 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 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, if any, 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.
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 .
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 2025 from acquisitions that were made during 2024 and 2025. Interest on loans and direct financing lease receivables.
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.
We account for RSAs, RSUs, and LTIP Units 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.
A discussion of our results of operations for the year ended December 31, 2023, as compared to the year ended December 31, 2022, has been omitted from this Annual Report but may be found in "Item 7.
A discussion of our results of operations for the year ended December 31, 2024, as compared to the year ended December 31, 2023, has been omitted from this Annual Report but may be found in "Item 7.
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.
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.
Forfeitures of equity-based compensation awards, if any, are recognized when they occur. Results of Operations The following discusses our results of operations for the year ended December 31, 2024 as compared to the year ended December 31, 2023.
Forfeitures of equity-based compensation awards, if any, are recognized when they occur. Results of Operations The following discusses our results of operations for the year ended December 31, 2025 as compared to the year ended December 31, 2024.
Senior Unsecured Notes On June 22, 2021, the Operating Partnership issued $400.0 million aggregate principal amount of 2.950% Senior Notes due 2031 (the "2031 Notes"), resulting in net proceeds of $396.6 million.
Senior Unsecured Notes In June 2021, the Operating Partnership issued $400.0 million aggregate principal amount of 2.950% Senior Notes due 2031 (the "2031 Notes"), resulting in net proceeds of $396.6 million.
Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations—Comparison of the years ended December 31, 2023 and 2022" in our Annual Report on Form 10-K for the year ended December 31, 2022.
Management's Discussion and Analysis of Financial Condition and Results of Operations—Results of Operations—Comparison of the years ended December 31, 2024 and 2023" in our Annual Report on Form 10-K for the year ended December 31, 2024.
The 2031 Notes were issued by the Operating Partnership and the obligations of the Operating Partnership under the 2031 Notes are fully and unconditionally guaranteed on a senior basis by the Company. The indenture and supplemental indenture creating the 2031 Notes contain customary restrictive covenants, including limitations on our ability to incur additional secured and unsecured indebtedness.
The Senior Notes were issued by the Operating Partnership and the obligations of the Operating Partnership under the Senior Notes are fully and unconditionally guaranteed by the Company. The indenture and supplemental indenture creating the Senior Notes contain customary restrictive covenants, including limitations on our ability to incur additional secured and unsecured indebtedness.
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.
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, 2025, the Operating Partnership had issued and outstanding $800.0 million of senior notes.
All principal amounts available under the CF Term Loans were drawn prior to December 31, 2024. The Revolving Credit Facility has a fully-extended maturity date of February 6, 2030, after giving effect to two extension options of six months each, exercisable by the Operating Partnership, subject to the satisfaction of certain conditions.
All principal amounts available under the CF Term Loans were drawn as of December 31, 2025. The Revolving Credit Facility has a fully-extended maturity date of February 6, 2030, after giving effect to two extension options of six months each, exercisable by the Operating Partnership, subject to the satisfaction of certain conditions.
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.
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 61 further excludes non-cash items included in total revenues and property expenses, such as straight-line rental revenue and other amortization and non-cash adjustments.
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.
As of December 31, 2025, our average investment per property was $3.1 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), and we believe investments of 45 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.
We elected to be taxed as a REIT for federal income tax purposes beginning with the year ended December 31, 2018, and we believe that our current organization, operations and intended distributions will allow us to continue to so qualify. Our common stock is listed on the New York Stock Exchange under the symbol “EPRT”.
We elected to be taxed as a REIT for U.S. federal income tax purposes beginning with the year ended December 31, 2018, and we believe that our current organization, operations and intended distributions will allow us to continue to so qualify. Our common stock is listed on the NYSE under the symbol “EPRT”.
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 outflows were partially offset by $128.6 million of proceeds from sales of investments, net of disposition costs, and $28.6 million of principal collections on our loans and direct financing lease receivables.
The obligations of the Operating Partnership under the senior notes are guaranteed on a senior basis by the Company. The guarantee is full and unconditional, and the Operating Partnership is a consolidated subsidiary of the Company.
The obligations of the Operating Partnership under these senior notes are guaranteed by the Company. The guarantee is full and unconditional, and the Operating Partnership is a consolidated subsidiary of the Company.
Income tax expense decreased by approximately $8,000 for the year ended December 31, 2024, as compared to the year ended December 31, 2023. We are organized and operate as a REIT and are generally not subject to U.S. federal corporate income taxes on our REIT taxable income that is currently distributed to our stockholders.
Income tax expense increased by approximately $16,000 for the year ended December 31, 2025, as compared to the year ended December 31, 2024. We are organized and operate as a REIT and are generally not subject to U.S. federal corporate income taxes on our REIT taxable income that is currently distributed to our stockholders.
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.
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 offer and sell common stock with an aggregate gross sales price of up to $338.5 million as of February 6, 2026.
(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.
(3) Includes $20.9 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.
Off-Balance Sheet Arrangements We had no off-balance sheet arrangements as of December 31, 2024.
Off-Balance Sheet Arrangements We had no off-balance sheet arrangements as of December 31, 2025.
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 .
Depreciation and amortization expense increased by $31.4 million for the year ended December 31, 2025, as compared to the year ended December 31, 2024. Depreciation and amortization expense increased in proportion to the increase in the size of our real estate investment portfolio during the year ended December 31, 2025. Provision for impairment of real estate .
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.
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, 2025, 91.5% of our $555.0 million of annualized base rent was attributable to properties operated by tenants in service-oriented and experience-based businesses.
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 .
Property expenses increased by $2.6 million for the year ended December 31, 2025, as compared to the year ended December 31, 2024. The increase in property expenses was primarily due to increased reimbursable property taxes and property-related operational costs during the year ended December 31, 2025. Depreciation and amortization .
Intangible assets may include the value of in-place leases and above- and below-market leases and other identifiable intangible assets or liabilities based on lease or property specific characteristics.
Tangible assets may include land, site improvements and buildings. Intangible assets may include the value of in-place leases and above- and below-market leases and other identifiable intangible assets or liabilities based on lease or property specific characteristics.
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.
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. 49 Description of Certain Debt The following table summarizes our outstanding indebtedness as of December 31, 2025 and 2024: Principal Outstanding Weighted Average Interest Rate (1) (in thousands) Maturity Date December 31, 2025 December 31, 2024 December 31, 2025 December 31, 2024 Unsecured term loans: 2027 Term Loan February 2027 $ 430,000 $ 430,000 2.36% 2.46% 2028 Term Loan January 2028 400,000 400,000 4.51% 4.71% 2029 Term Loan February 2029 (2) 450,000 450,000 5.25% 5.45% 2030 Term Loan January 2030 (2) 450,000 450,000 4.67% 4.87% Senior unsecured notes: 2031 Notes July 2031 400,000 400,000 3.12% 3.12% 2035 Notes December 2035 400,000 — 5.40% —% Revolving Credit Facility February 2026 — — —% —% Total principal outstanding $ 2,530,000 $ 2,130,000 4.23% 4.14% _______________________________________________________________ (1) Interest rates are presented after giving effect to our interest rate swap and lock agreements, where applicable.
We also grant performance-based RSUs to our executive officers, the final number of which is determined based on objective and subjective performance conditions and which vest over a multi-year period, subject to the recipient's continued service.
We also grant performance-based RSUs and performance-based LTIP Units to our executive officers, the final number of which is determined based on objective and, with respect to performance-based RSUs issued prior to 2024, subjective performance conditions and which vest over a multi-year period, subject to the recipient's continued service.
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.
As of December 31, 2025, 97.9% of our leases (based on annualized base rent) provided for increases in future base rent at a weighted average rate of 1.8% per year. Smaller, Low Basis Single-Tenant Properties. We generally invest in freestanding “small-box” single- tenant properties.
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.
Impairment charges on real estate investments were $12.0 million and $14.8 million for the years ended December 31, 2025 and 2024, respectively. During the years ended December 31, 2025 and 2024, we recorded a provision for impairment of real estate on 14 and 22 of our real estate investments, respectively. Change in provision for credit losses.
In addition to the financial covenants described above, the Credit Agreement contains customary affirmative and negative covenants that, among other things and subject to exceptions, limit or restrict our ability to incur indebtedness and liens, consummate mergers or other fundamental changes, dispose of assets, make certain restricted payments, make certain investments, modify our organizational documents, transact with affiliates, change our fiscal periods, provide negative pledge clauses, make subsidiary distributions, enter into certain new lines of business or engage in certain activities, and fail to meet the requirements for taxation as a REIT. 2027 Term Loan On February 18, 2022, we, through our Operating Partnership, amended our existing $430.0 million term loan credit facility (the "2027 Term Loan") to, among other things, reduce the Applicable Margin, extend the maturity date to February 18, 2027 and make certain other changes consistent with market terms and conditions.
In addition to the financial covenants described above, the Amended Credit Agreement contains customary affirmative and negative covenants that, among other things and subject to exceptions, limit or restrict our ability to incur indebtedness and liens, consummate mergers or other fundamental changes, dispose of assets, make certain restricted payments, make certain investments, modify our organizational documents, transact with affiliates, change our fiscal periods, provide negative pledge clauses, make subsidiary distributions, enter into certain new lines of business or engage in certain activities, and fail to meet the requirements for taxation as a REIT. 2027 Term Loan Through our Operating Partnership, we are party to a $430.0 million term loan (the “2027 Term Loan”) that matures in February 2027.
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" ).
Additionally, our computation of EBITDA and EBITDAre 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) 2025 2024 2023 Net income $ 253,731 $ 203,638 $ 191,415 Depreciation and amortization 153,602 122,161 102,219 Interest expense 108,083 78,544 52,597 Interest income (2,537) (3,069) (2,011) Income tax expense 644 628 636 EBITDA attributable to stockholders and non-controlling interests 513,523 401,902 344,856 Provision for impairment of real estate 11,997 14,845 3,548 Gain on dispositions of real estate, net (12,849) (5,977) (24,167) EBITDA re attributable to stockholders and non-controlling interests $ 512,671 $ 410,770 $ 324,237 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" ).
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.
As of December 31, 2025, our portfolio’s weighted average rent coverage ratio was 3.6x, and 99.2% of our leases (based on annualized base rent) obligate the tenant to periodically provide us with specified unit-level financial reporting.
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.
An additional inflow was our increase in accrued liabilities and other payables of $8.1 million, offset by the outflow caused by the increase in our rent receivables, prepaid expenses and other assets of $7.3 million. Net cash used in investing activities during the year ended December 31, 2025 was $1.2 billion.
Our cash inflows from operating activities reflect adjustments to net income for non-cash items of $68.3 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 $107.6 million, ii) loss on debt extinguishment of $0.1 million, iii) our provision for impairment of real estate of $3.5 million, iv) adjustment to rental revenue for tenant credit of $0.6 million, and v) non-cash equity-based compensation expense of $9.0 million, reduced by i) our $24.2 million gain on dispositions of real estate, net, ii) $28.3 million related to the recognition of straight-line rent receivables, and iii) the subtraction of the change in our provision for credit losses of $0.1 million.
Our cash inflows from operating activities reflect adjustments to net income for non-cash items of $126.5 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 $162.8 million, ii) our provision for impairment of real estate of $12.0 million, iii) non-cash equity-based compensation expense of $13.2 million, iv) adjustments to rental revenue for tenant credit of $3.5 million and v) the change in our provision for credit losses of $0.1 million, reduced by i) our $12.8 million gain on dispositions of real estate, net and ii) $52.2 million related to the recognition of straight-line rent receivables.
Equity-Based Compensation We grant shares of restricted common stock ("RSAs") and restricted stock units ("RSUs") to our directors, executive officers and other employees that vest over multiple periods, subject to the recipient's continued service.
Equity-Based Compensation We grant shares of restricted common stock ("RSAs"), restricted stock units ("RSUs"), and long-term incentive plan units ("LTIP Units") in our Operating Partnership to our directors, executive officers and other employees that vest over multiple periods, subject to the recipient's continued service.
Our net cash used in investing activities generally reflects our investment in real estate, including capital expenditures, construction in progress and lease incentives, and in mortgage loans receivable, which totaled $1.0 billion in the aggregate for the year ended December 31, 2023.
Our net cash used in investing activities generally reflects our investment in real estate, including capital expenditures, construction in progress and lease incentives, and in mortgage loans receivable, which totaled $1.3 billion in the aggregate.
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 .
Interest expense increased by $29.5 million for the year ended December 31, 2025, as compared to the year ended December 31, 2024. This increase in interest expense was primarily due to an 57 increase in our outstanding debt balance and increased interest rates during the year ended December 31, 2025 compared to the year ended December 31, 2024.
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, 2025, our leases had a weighted average remaining lease term of 14.4 years (based on annualized base rent), with 5.2% of our annualized base rent attributable to leases expiring prior to January 1, 2031.
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.
During the year ended December 31, 2025, 95% of our investments were sale-leaseback transactions. Significant Use of Master Leases. As of December 31, 2025, 66.8% of our annualized base rent was attributable to master leases. Contractual Base Rent Escalation.
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.
Substantially all of our cash from operations is generated by our investment portfolio. 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.
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 sets forth select information about our disposition activity for the previous eight quarters beginning with the quarter ended March 31, 2024 through the quarter ended December 31, 2025 (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, 2025 June 30, 2025 September 30, 2025 December 31, 2025 Disposition volume 1 $ 24,338 $ 46,193 $ 11,455 $ 48,083 Cash cap rate on leased assets 2 6.9% 7.3% 6.6% 6.9% Leased properties sold 3 10 18 6 13 Vacant properties sold 3 1 5 1 6 _____________________________________ (1) Net of transaction costs.
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.
Additionally, as of February 6, 2026, we were under contract to acquire 1 property with an aggregate purchase price of $9.6 million, subject to completion of our due diligence procedures and satisfaction of customary closing conditions.
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.
As of December 31, 2025, we agreed to provide construction financing or reimburse the tenant for certain development, construction and renovation costs in an aggregate amount of $388.4 million, and, as of such date, we have funded $273.9 million of 47 this commitment. We expect to fund the remaining commitment totaling approximately $114.5 million by December 31, 2026.
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.
Holders of OP Units and LTIP Units are entitled to distributions per unit equivalent to those paid by us per share of common stock. During the year ended December 31, 2025, our Board declared total cash distributions of $1.205 per share of common stock/OP Unit/LTIP Unit totaling $243.7 million and $65.4 million is payable as of December 31, 2025.
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.
Under the terms of the Amended Credit Agreement, we are subject to customary restrictive financial and nonfinancial covenants which, among other things, require us to 50 maintain certain leverage ratios, cash flow and debt service coverage ratios, secured borrowing ratios. As of December 31, 2025, we were in compliance with these covenants.
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.
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 EBITDAre as measures of our operating performance and not as measures of liquidity.
We also disclose the following non-GAAP financial measures: funds from operations ("FFO"), core funds from operations ("Core FFO"), adjusted funds from operations ("AFFO"), earnings before interest, taxes, depreciation and amortization ("EBITDA"), EBITDA further adjusted to exclude gains (or losses) on sales of depreciable property and real estate impairment losses ("EBITDA re" ), adjusted EBITDA re , annualized adjusted EBITDA re , net debt, net operating income ("NOI") and cash NOI ("Cash NOI").
We also disclose the following non-GAAP financial measures: funds from operations (“FFO”), core funds from operations (“Core FFO”), adjusted funds from operations (“AFFO”), earnings before interest, taxes, depreciation and amortization (“EBITDA”), EBITDA further adjusted to exclude gains (or losses) on sales of depreciable property and real estate impairment losses (“EBITDAre”), adjusted EBITDAre, annualized adjusted EBITDAre, net debt, net operating income (“NOI”), cash NOI (“Cash NOI”) and cash general and administrative expense ("Cash G&A").
Historical 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.
Historical 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, 2024 through the quarter ended December 31, 2025 (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, 2025 June 30, 2025 September 30, 2025 December 31, 2025 Investment activity $ 307,706 $ 334,041 $ 369,848 $ 295,814 Number of transactions 21 25 35 34 Property count 48 77 87 58 Avg. investment per unit $ 5,453 $ 3,971 $ 3,849 $ 4,588 Cash cap rate 1 7.8% 7.9% 8.0% 7.7% GAAP cap rate 2 9.4% 9.7% 10.0% 9.1% Master lease percentage 3,4 71% 69% 76% 76% Sale-leaseback percentage 3,5 90% 93% 97% 100% Existing relationship percentage 86% 88% 70% 85% Percentage of financial reporting 3 100% 100% 100% 100% Rent coverage ratio 3.0x 3.4x 5.9x 4.7x Lease term (years) 17.5 19.5 18.6 19.4 _____________________________________ (1) Cash annualized base rent for the first full month after the investment divided by the gross investment in the property plus transaction costs.
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 Amended 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) 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.
The following table reconciles total debt (which is the most comparable GAAP measure) to net debt: December 31, (in thousands) 2025 2024 Unsecured term loan, net of deferred financing costs $ 1,725,010 $ 1,721,114 Revolving credit facility — — Senior unsecured notes 786,708 396,403 Total debt 2,511,718 2,117,517 Deferred financing costs and original issue discount, net 18,282 12,483 Gross debt 2,530,000 2,130,000 Cash and cash equivalents (60,181) (40,713) Restricted cash available for future investment (10,184) (4,265) Net debt $ 2,459,635 $ 2,085,022 We compute NOI as total revenues less 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 .
General and administrative expense increased by $5.7 million for the year ended December 31, 2025, as compared to the year ended December 31, 2024. The increase was primarily related to an increase in salary expense and professional fees incurred during the year ended December 31, 2025. Property expenses .
FFO, Core FFO and AFFO do not include all items of revenue and expense included in net income, they do not represent cash generated from operating activities and they are not necessarily indicative of cash available to fund cash requirements; accordingly, they should not be considered alternatives to net income as a performance measure or cash flows from operations as a liquidity measure and should be considered in addition to, and not in lieu of, GAAP financial measures.
We believe that AFFO is an additional useful supplemental measure for investors to consider when assessing our operating performance without the distortions created by non-cash items and certain other revenues and expenses. 58 FFO, Core FFO and AFFO do not include all items of revenue and expense included in net income, they do not represent cash generated from operating activities and they are not necessarily indicative of cash available to fund cash requirements; accordingly, they should not be considered alternatives to net income as a performance measure or cash flows from operations as a liquidity measure and should be considered in addition to, and not in lieu of, GAAP financial measures.
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.
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, 2025: (in thousands) Three months ended December 31, 2025 Net income $ 68,274 Depreciation and amortization 41,044 Interest expense 30,944 Interest income (631) Income tax expense 160 EBITDA attributable to stockholders and non-controlling interests 139,791 Provision for impairment of real estate 4,063 Gain on dispositions of real estate, net (4,428) EBITDA re attributable to stockholders and non-controlling interests 139,426 Adjustment for current quarter re-leasing, acquisition and disposition activity (1) 4,645 Adjustment to exclude other non-core or non-recurring activity (2) (2,047) Adjustment to exclude termination/prepayment fees and certain percentage rent (3) (1,420) Adjusted EBITDA re attributable to stockholders and non-controlling interests $ 140,604 Annualized Adjusted EBITDA re attributable to stockholders and non-controlling interests $ 562,416 _____________________________________ (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, 2025 had occurred on October 1, 2025.
Cash Flows for the year ended December 31, 2023 During the year ended December 31, 2023, net cash provided by operating activities was $254.6 million and our net income was $191.4 million.
Cash Flows for the year ended December 31, 2025 During the year ended December 31, 2025, net cash provided by operating activities was $381.1 million and our net income was $253.7 million.
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 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) 2025 2024 2023 Net income $ 253,731 $ 203,638 $ 191,415 General and administrative expense 40,864 35,161 30,678 Depreciation and amortization 153,602 122,161 102,219 Provision for impairment of real estate 11,997 14,845 3,548 Change in provision for credit losses 108 230 (99) Gain on dispositions of real estate, net (12,849) (5,977) (24,167) Loss on debt extinguishment — — 116 Interest expense 108,083 78,544 52,597 Interest income (2,537) (3,069) (2,011) Other income — (1,548) — Income tax expense 644 628 636 NOI attributable to stockholders and non-controlling interests 553,643 444,613 354,932 Straight-line rental revenue, net (50,162) (38,661) (30,375) Other amortization and non-cash adjustments 3,777 2,877 1,507 Cash NOI attributable to stockholders and non-controlling interests $ 507,258 $ 408,829 $ 326,064 We compute Cash G&A as general and administrative expense, as determined in accordance with GAAP, less non-core general and administrative expense, non-cash compensation expense and straight-line rent expense on leases where we are the lessee.
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.
Liquidity and Capital Resources As of December 31, 2025, the net investment value of our income property portfolio totaled $6.6 billion, consisting of investments in 2,300 properties (inclusive of one undeveloped land parcel and 150 properties which secure our investments in mortgage loans receivable), with annualized base rent of $555.0 million.
Interest income increased by $1.1 million for the year ended December 31, 2024, as compared to the year ended December 31, 2023. The increase in interest income was primarily due to an increase 58 in interest rates on our short-term investments during the year ended December 31, 2024 as compared to the year ended December 31, 2023. Other income .
Interest income . Interest income decreased by $0.5 million for the year ended December 31, 2025, as compared to the year ended December 31, 2024. The decrease in interest income was primarily due to a decrease in our short-term investments during the year ended December 31, 2025 as compared to the year ended December 31, 2024. Other income .
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.
The cost of investments in real estate reflects their purchase price or development cost and, in the case of asset acquisitions, transaction costs related to the acquisition. 53 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.
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.
As of December 31, 2025, we had a portfolio of 2,300 properties (inclusive of one undeveloped land parcel and 150 properties which secure our investments in mortgage loans receivable) that was diversified by tenant, industry, concept and geography, had annualized base rent of $555.0 million and was 99.7% occupied.
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.
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) 2025 2024 2023 Net income $ 253,731 $ 203,638 $ 191,415 Depreciation and amortization of real estate 153,453 121,997 102,103 Provision for impairment of real estate 11,997 14,845 3,548 Gain on dispositions of real estate, net (12,849) (5,977) (24,167) FFO attributable to stockholders and non-controlling interests 406,332 334,503 272,899 Non-core (income) expense (1)(2) (2,354) — (510) Core FFO attributable to stockholders and non-controlling interests 403,978 334,503 272,389 Adjustments: Straight-line rental revenue, net (50,162) (38,661) (30,375) Non-cash interest 5,802 4,086 3,187 Non-cash compensation expense 14,438 10,827 9,192 Other amortization expense 1,723 1,802 1,507 Other non-cash adjustments 2,054 1,075 (73) Capitalized interest expense (3,192) (5,760) (2,430) AFFO attributable to stockholders and non-controlling interests $ 374,641 $ 307,872 $ 253,397 _____________________________________ (1) Includes the recognition of $2.4 million of cash and non-cash compensation expense that was not incurred due to the departure of an executive during the year ended December 31, 2025.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

3 edited+0 added−0 removed10 unchanged
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.
Biggest changePrincipal Outstanding Weighted Average Interest Rate (1) (in thousands) Maturity Date December 31, 2025 December 31, 2024 December 31, 2025 December 31, 2024 Unsecured term loans: 2027 Term Loan February 2027 $ 430,000 $ 430,000 2.36% 2.46% 2028 Term Loan January 2028 400,000 400,000 4.51% 4.71% 2029 Term Loan February 2029 (2) 450,000 450,000 5.25% 5.45% 2030 Term Loan January 2030 (2) 450,000 450,000 4.67% 4.87% Senior unsecured notes: 2031 Notes July 2031 400,000 400,000 3.12% 3.12% 2035 Notes December 2035 400,000 — 5.40% —% Revolving Credit Facility February 2030 (2) — — —% —% Total principal outstanding $ 2,530,000 $ 2,130,000 4.23% 4.14% _______________________________________________________________ (1) Interest rates are presented after giving effect to our interest rate swap and lock agreements, where applicable.
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.
At December 31, 2025, our aggregate liability in the event of the early termination of our swaps was $18.5 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, 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
The following table discloses fair value information 64 related to our fixed-rate indebtedness as of December 31, 2025: (in thousands) Carrying Value (1) Estimated Fair Value Senior unsecured notes $ 800,000 $ 766,504 _____________________________________ (1) Excludes net deferred financing costs of $6.4 million and net discount of $6.9 million. 65

Other EPRT 10-K year-over-year comparisons