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What changed in GLADSTONE COMMERCIAL CORP's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of GLADSTONE COMMERCIAL CORP'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.

+299 added−286 removedSource: 10-K (2026-02-18) vs 10-K (2025-02-18)

Top changes in GLADSTONE COMMERCIAL CORP's 2025 10-K

299 paragraphs added · 286 removed · 234 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

55 edited+12 added−6 removed82 unchanged
Biggest changeWe may sell some of our real estate assets when our Adviser determines that doing so would be advantageous to us and our stockholders. 6 Table of Contents In addition to cash on hand and cash from operations, we use funds from various other sources to finance our acquisitions and operations, including equity, our Credit Facility, mortgage financing, long-term private debt, and other sources that may become available from time to time.
Biggest changeIn addition to cash on hand and cash from operations, we use funds from various other sources to finance our acquisitions and operations, including equity, our Credit Facility, mortgage financing, long-term private debt, and other sources that may become available from time to time. We believe that moderate leverage is prudent and we aspire to reduce our leverage over time.
During the years ended December 31, 2022, and 2023, the Series F Preferred Stock was registered with the SEC pursuant to the 2022 Registration Statement, and offered and sold pursuant to a prospectus supplement, dated February 9, 2023, and a base prospectus dated November 23, 2022.
During the years ended December 31, 2023, and 2024, the Series F Preferred Stock was registered with the SEC pursuant to the 2022 Registration Statement, and offered and sold pursuant to a prospectus supplement, dated February 9, 2023, and a base prospectus dated November 23, 2022.
During the year ended December 31, 2024, the Series F Preferred Stock was registered with the SEC pursuant to the 2024 Registration Statement, and offered and sold pursuant to a prospectus supplement, dated May 1, 2024, and a base prospectus dated March 21, 2024.
During the year ended December 31, 2025, the Series F Preferred Stock was registered with the SEC pursuant to the 2024 Registration Statement, and offered and sold pursuant to a prospectus supplement, dated May 1, 2024, and a base prospectus dated March 21, 2024.
The Series F Preferred Stock was previously registered with the SEC pursuant to a registration statement on Form S-3 (File No. 333-268549), as the same may be amended and/or supplemented (the “2022 Registration Statement”), under the Securities Act, and are offered and sold pursuant to a prospectus supplement, dated February 9, 2023, and a base prospectus dated November 23, 2022 relating to the 2022 Registration Statement.
The Series F Preferred Stock was previously registered with the SEC pursuant to a registration statement on Form S-3 (File No. 333-268549), as the same may be amended and/or supplemented (the “2022 Registration Statement”), under the Securities Act, and were offered and sold pursuant to a prospectus supplement, dated February 9, 2023, and a base prospectus dated November 23, 2022 relating to the 2022 Registration Statement.
The question of comparable properties’ sale prices is particularly relevant if a property might be sold by us at a later date. • An assessment of the relative appropriate nature and flexibility of the building configuration and its ability to be re-leased to other users in a single or multiple tenant arrangement. • The comparable real estate rental rates for similar properties in the same area of the prospective property. • Alternative property uses that may offer higher value. 9 Table of Contents • The replacement cost of the property at current construction prices if it were to be sold. • The assessed value as determined by the local real estate taxing authority.
The question of comparable properties’ sale prices is particularly relevant if a property might be sold by us at a later date. • An assessment of the relative appropriate nature and flexibility of the building configuration and its ability to be re-leased to other users in a single or multiple tenant arrangement. • The comparable real estate rental rates for similar properties in the same area of the prospective property. • Alternative property uses that may offer higher value. • The replacement cost of the property at current construction prices if it were to be sold. • The assessed value as determined by the local real estate taxing authority.
Under our current conflict of interest policy, without the approval of a majority of our independent directors, we will not: • acquire from or sell any assets or other property to any of our officers, directors or our Adviser’s employees, or any entity in which any of our officers, directors or Adviser’s employees has an interest of more than 5%; 10 Table of Contents • borrow from any of our directors, officers or our Adviser’s employees, or any entity, in which any of our officers, directors or our Adviser’s employees has an interest of more than 5%; or • engage in any other transaction with any of our directors, officers or our Adviser’s employees, or any entity in which any of our directors, officers or our Adviser’s employees has an interest of more than 5% (except that our Adviser may lease office space in a building that we own, provided that the rental rate under the lease is determined by our independent directors to be at a fair market rate).
Under our current conflict of interest policy, without the approval of a majority of our independent directors, we will not: • acquire from or sell any assets or other property to any of our officers, directors or our Adviser’s employees, or any entity in which any of our officers, directors or Adviser’s employees has an interest of more than 5%; • borrow from any of our directors, officers or our Adviser’s employees, or any entity, in which any of our officers, directors or our Adviser’s employees has an interest of more than 5%; or • engage in any other transaction with any of our directors, officers or our Adviser’s employees, or any entity in which any of our directors, officers or our Adviser’s employees has an interest of more than 5% (except that our Adviser may lease office space in a building that we own, provided that the rental rate under the lease is determined by our independent directors to be at a fair market rate).
Our Board of Directors has authorized our Adviser to make investments in any property on our behalf without the prior approval of our Board of Directors if the following conditions are satisfied: • our Adviser has obtained an independent appraisal for the property indicating that the total cost of the property does not exceed its appraised value; and • our Adviser has concluded that the property, in conjunction with our other investments and proposed investments, is reasonably expected to fulfill our investment objectives and policies as established by our Board of Directors then in effect.
Our Board of Directors has authorized our Adviser to make investments in any property on our behalf without the prior approval of our Board of Directors if the following conditions are satisfied: 12 Table of Contents • our Adviser has obtained an independent appraisal for the property indicating that the total cost of the property does not exceed its appraised value; and • our Adviser has concluded that the property, in conjunction with our other investments and proposed investments, is reasonably expected to fulfill our investment objectives and policies as established by our Board of Directors then in effect.
Use of Leverage In addition to cash on hand and cash from operations, we use funds from various other sources to finance our acquisitions and operations, including common and preferred equity, our Credit Facility, mortgage financing, long-term private debt, and other sources that may become available from time to time.
Use of Leverage In addition to cash on hand and cash from operations, we use funds from various other sources to finance our acquisitions and operations, including common and preferred equity, our Credit Facility (defined below), mortgage financing, long-term private debt, and other sources that may become available from time to time.
Each of our executive officers is an employee or officer, or both, of our Adviser or our Administrator. We expect that a total of 15 to 20 full time employees of our Adviser and our Administrator will spend substantially all or all of their time on our matters during calendar year 2025.
Each of our executive officers is an employee or officer, or both, of our Adviser or our Administrator. We expect that a total of 15 to 20 full time employees of our Adviser and our Administrator will spend substantially all or all of their time on our matters during calendar year 2026.
Generally, we lease properties to tenants that our Adviser deems creditworthy under leases that will be full recourse obligations of our tenants or their affiliates. We seek to obtain lease terms of approximately seven to 15 years with built-in rental increases.
Generally, we lease properties to tenants that our Adviser deems creditworthy under leases that will be full recourse obligations of our tenants or their affiliates. We seek to obtain lease terms of approximately seven to 20 years with built-in rental increases.
We have historically entered into, and intend in the future to enter into, purchase agreements for real estate having net leases with terms of approximately seven to 15 years with built-in rental rate increases.
We have historically entered into, and intend in the future to enter into, purchase agreements for real estate having net leases with terms of approximately seven to 20 years with built-in rental rate increases.
We believe that the review process of our investment committee gives us a competitive advantage over other REITs because of the substantial experience that its 11 Table of Contents members possess and their unique perspective in evaluating the blend of corporate credit, real estate and lease terms that collectively provide an acceptable risk for our investments.
We believe that the review process of our investment committee gives us a competitive advantage over other REITs because of the substantial experience that its members possess and their unique perspective in evaluating the blend of corporate credit, real estate and lease terms that collectively provide an acceptable risk for our investments.
Dealer Manager Agreement On February 20, 2020 we entered into a dealer manager agreement, as amended on February 9, 2023 (together, the “Dealer Manager Agreement”), whereby Gladstone Securities acts as the exclusive dealer manager in connection with our offering (the “Offering”) of up to (i) 20,000,000 shares of our Series F Preferred Stock on a “reasonable best efforts” basis (the “Primary Offering”), and (ii) 6,000,000 shares of Series F Preferred Stock pursuant to our distribution reinvestment plan (the “DRIP”) to those holders of the Series F Preferred Stock who participate in such DRIP.
Dealer Manager Agreement On February 20, 2020 we entered into a dealer manager agreement, as amended on February 9, 2023 (together, the “Dealer Manager Agreement”), whereby Gladstone Securities acted as the exclusive dealer manager in connection with our offering (the “Offering”) of up to (i) 20,000,000 shares of our Series F Preferred Stock on a “reasonable best efforts” basis (the “Primary Offering”), and (ii) 6,000,000 shares of Series F Preferred Stock pursuant to our distribution reinvestment plan (the “DRIP”) to those holders of the Series F Preferred Stock who participated in such DRIP.
These governmental authorities may take similar actions in the future in the event of new public health emergencies. Such regulations may materially affect our results of operations for the year ending December 31, 2025.
These governmental authorities may take similar actions in the future in the event of new public health emergencies. Such regulations may materially affect our results of operations for the year ending December 31, 2026.
The SEC also maintains a website that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at www.sec.gov . 14 Table of Contents
The SEC also maintains a website that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at www.sec.gov . 15 Table of Contents
Code of Ethics We have adopted a code of ethics and business conduct (a “Code”) applicable to all personnel of our Adviser and Administrator performing services on our behalf that complies with the guidelines set forth in Item 406 of Regulation S-K of the Securities Act of 1933.
Code of Ethics We have adopted a code of ethics and business conduct (a “Code of Ethics”) applicable to all personnel of our Adviser and Administrator performing services on our behalf that complies with the guidelines set forth in Item 406 of Regulation S-K of the Securities Act of 1933.
Our Adviser evaluates each potential tenant or borrower for its creditworthiness, considering factors such as its rating by a national credit rating agency, if any, management experience, industry position and fundamentals, operating history and capital structure. As of December 31, 2024, 38% of our lease revenues were earned from tenants that were rated by a nationally recognized statistical rating organization.
Our Adviser evaluates each potential tenant or borrower for its creditworthiness, considering factors such as its rating by a national credit rating agency, if any, management experience, industry position and fundamentals, operating history and capital structure. As of December 31, 2025, 35% of our lease revenues were earned from tenants that were rated by a nationally recognized statistical rating organization.
We did not sell any shares of our Series E Preferred Stock during the year ended December 31, 2024, as we terminated that program and the Common Stock Sales Agreement, effective February 10, 2023, in connection with the expiration of our registration statement on Form S-3 (File No. 333-236143) (the “2020 Registration Statement”) on February 11, 2023.
We did not sell any shares of our Series E Preferred Stock during the year ended December 31, 2025, as we terminated that program and the Common Stock Sales Agreement dated December 3, 2019, effective February 10, 2023, in connection with the expiration of our registration statement on Form S-3 (File No. 333-236143) (the “2020 Registration Statement”) on February 11, 2023.
The information contained on or connected to our website is not incorporated by reference into this Form 10-K and should not be considered part of this or any other report that we file with or furnish to the SEC.
The information contained 11 Table of Contents on or connected to our website is not incorporated by reference into this Form 10-K and should not be considered part of this or any other report that we file with or furnish to the SEC.
This review normally also includes the components of each building, such as the roof, the structure and configuration, the electrical wiring, the heating and air-conditioning system, the plumbing, parking lot and various other aspects such as compliance with state and federal building codes.
This review normally also includes the components of each building, such as the roof, the structure and configuration, the electrical wiring, the heating 9 Table of Contents and air-conditioning system, the plumbing, parking lot and various other aspects such as compliance with state and federal building codes.
David Gladstone, our chairman and chief executive officer, is also the chairman, chief executive officer and the controlling stockholder of our Adviser and our Administrator. Arthur “Buzz” Cooper, our president, is also an executive managing director of our Adviser. Our Adviser has an investment committee that approves each of our investments. This investment committee is currently comprised of Messrs.
David Gladstone, our chairman and chief executive officer, is also the chairman, chief executive officer and the controlling stockholder of our Adviser and our Administrator. Arthur “Buzz” Cooper, our president, is also an Executive Vice President of our Adviser. Our Adviser has an investment committee that approves each of our investments. This investment committee is currently comprised of Messrs.
The agreement is scheduled to terminate on August 31, 2025, unless renewed and approved by our Board of Directors or earlier terminated.
The agreement is scheduled to terminate on August 31, 2026, unless renewed and approved by our Board of Directors or earlier terminated.
Under the Dealer Manager Agreement, Gladstone Securities, as dealer manager, provides certain sales, promotional and marketing services to the Company in connection with the Offering, and the Company pays Gladstone Securities (i) selling commissions of 6.0% of the gross proceeds from sales of Series F Preferred Stock in the Primary Offering (the “Selling Commissions”), and (ii) a dealer manager fee of 3.0% of the gross proceeds from sales of Series F Preferred Stock in the Primary Offering (the “Dealer Manager Fee”).
Under the Dealer Manager Agreement, Gladstone Securities, as dealer manager, provided certain sales, promotional and marketing services to the Company in connection with the Offering, and the Company paid Gladstone Securities (i) selling commissions of 6.0% of the gross proceeds from sales of Series F Preferred Stock in the Primary Offering (the “Selling Commissions”), and (ii) a dealer manager fee of 3.0% of the gross proceeds from sales of Series F Preferred Stock in the Primary Offering (the “Dealer Manager Fee”).
A majority of our leases contain fixed rental escalations; however certain of our leases are tied to increases in indices, such as the consumer price index and we have a small number of leases without rental escalations. • Diversification .
A majority of our leases contain fixed rental 8 Table of Contents escalations; however certain of our leases are tied to increases in indices, such as the consumer price index and we have a small number of leases without rental escalations. • Diversification .
The Series F Preferred Stock is currently registered with the SEC pursuant to a registration statement on Form S-3 (File No. 333-277877), as the same may be amended and/or supplemented (the “2024 Registration Statement”), under the Securities Act, and is offered and sold pursuant to a prospectus supplement dated May 1, 2024, and a base prospectus dated March 21, 2024 relating to the 2024 Registration Statement (the “Prospectus”).
The Series F Preferred Stock is currently registered with the SEC pursuant to a registration statement on Form S-3 (File No. 333-277877), as the same may be amended and/or supplemented (the “2024 Registration Statement”), under 13 Table of Contents the Securities Act, and was offered and sold pursuant to a prospectus supplement dated May 1, 2024, and a base prospectus dated March 21, 2024 relating to the 2024 Registration Statement (the “Prospectus”).
A breakdown of these employees is summarized by functional area in the table below: Number of Individuals Functional Area 12 Executive Management 37 Investment Management, Asset Management, Portfolio Management and Due Diligence 23 Administration, Accounting, Compliance, Human Resources, Legal and Treasury The Adviser and the Administrator aim to attract and retain capable advisory and administrative personnel, respectively, by offering competitive base salaries, benefits and bonus structure and by providing employees with appropriate opportunities for professional development and growth.
A breakdown of these employees is summarized by functional area in the table below: Number of Individuals Functional Area 16 Executive Management 40 Investment Management, Asset Management, Portfolio Management and Due Diligence 19 Administration, Accounting, Compliance, Human Resources, Legal and Treasury The Adviser and the Administrator aim to attract and retain capable advisory and administrative personnel, respectively, by offering competitive base salaries, benefits and bonus structure and by providing employees with appropriate opportunities for professional development and growth.
Our Adviser will also examine 8 Table of Contents the available operating results of prospective investment properties to determine whether or not projected rental levels are likely to be met.
Our Adviser will also examine the available operating results of prospective investment properties to determine whether or not projected rental levels are likely to be met.
Otherwise, we do not expect that compliance with the various laws and regulations we are subject to will have a material effect on our capital expenditures, results of operations and competitive position for the year ending December 31, 2025, as compared to prior periods.
Otherwise, we do not expect that compliance with the various laws and regulations we are 14 Table of Contents subject to will have a material effect on our capital expenditures, results of operations and competitive position for the year ending December 31, 2026, as compared to prior periods.
We believe that moderate leverage is prudent and we aspire to achieve an investment grade rating over time. Currently, the majority of our mortgage borrowings are structured as non-recourse to us, with limited exceptions that would trigger recourse to us only upon the occurrence of certain fraud, misconduct, environmental or bankruptcy events.
We believe that moderate leverage is prudent and we aspire to reduce our leverage over time. Currently, the majority of our mortgage borrowings are structured as non-recourse to us, with limited exceptions that would trigger recourse to us only upon the occurrence of certain fraud, misconduct, environmental or bankruptcy events.
No Selling Commissions or Dealer Manager Fees are paid with respect to Shares sold pursuant to the DRIP. Gladstone Securities may, in its sole discretion, reallow a portion of the Dealer Manager Fee to participating broker-dealers in support of the Offering.
No Selling Commissions or Dealer Manager Fees were paid with respect to Shares sold pursuant to the DRIP. Gladstone Securities had the sole discretion to reallow a portion of the Dealer Manager Fee to participating broker-dealers in support of the Offering.
Mortgage Financing Arrangement Agreement We also entered into an agreement with Gladstone Securities, effective June 18, 2013, for it to act as our non-exclusive agent to assist us with arranging mortgage financing for properties we own.
Gladstone also serves on the board of managers of Gladstone Securities. Mortgage Financing Arrangement Agreement We also entered into an agreement with Gladstone Securities, effective June 18, 2013, for it to act as our non-exclusive agent to assist us with arranging mortgage financing for properties we own.
On October 5, 2015, we added a $25.0 million five-year term loan facility (“Term Loan A”) that was increased to $160.0 million through subsequent amendments. On February 11, 2021, we added a new $65.0 million term loan component, inclusive of a $15.0 million delayed funding component which was funded on July 20, 2021 (“Term Loan B”).
On October 5, 2015, we added a $25.0 million five-year term loan facility (“Term Loan A”). On February 11, 2021, we added a new $65.0 million term loan component, inclusive of a $15.0 million delayed funding component which was funded on July 20, 2021 (“Term Loan B”).
On March 26, 2024, we entered into Amendment No. 1 to the 2023 Common Stock Sales Agreement (the “2024 Common Stock Sales Agreement”).
On March 26, 2024, we entered into Amendment No. 1 to the 2023 Common Stock Sales Agreement (as amended from time to time, the “2024 Common Stock Sales Agreement”).
The Administrator employs our chief financial officer, treasurer, chief compliance officer, and general counsel and secretary (who also serves as our Administrator’s president, general counsel, and secretary) and their respective staffs and provides administrative services for us under the administration agreement with our Administrator (the “Administration Agreement”).
The Administrator employs our chief financial officer, treasurer, chief compliance officer, and co-general counsels and co-secretaries (one of whom also serves as our Administrator’s president, general counsel, and secretary) and their respective staffs and provides administrative services for us under the administration agreement with our Administrator (the “Administration Agreement”).
Our primary focus currently and going forward is single-tenant industrial properties, although we may continue to acquire select multi-tenant industrial properties. We may, from time to time, also acquire office properties, but this is not our primary focus.
Our portfolio consists primarily of single-tenant industrial and office real property. Our primary focus currently and going forward is single-tenant industrial properties, although we may continue to acquire select multi-tenant industrial properties. We may, from time to time, also acquire office properties, but this is not our primary focus.
During the year ended December 31, 2024, we sold 3,699,597 shares of common stock, raising approximately $53.5 million in net proceeds under the 2024 Common Stock Sales Agreement. Investment Policies Types of Investments Overview We intend to continue earning substantially all of our revenues from the ownership of income-producing real property.
During the year ended December 31, 2025, we sold 4,412,814 shares of common stock, raising approximately $61.0 million, in net proceeds under the 2024 Common Stock Sales Agreement, as amended. Investment Policies Types of Investments Overview We intend to continue earning substantially all of our revenues from the ownership of income-producing real property.
As of February 18, 2025: • we owned 135 properties totaling 16.9 million square feet (all references herein and throughout the Notes to Consolidated Financial Statements to the number of properties and square footage are unaudited) of rentable space, located in 27 states; • our occupancy rate was 98.7%; • the weighted average remaining term of our mortgage debt was 3.4 years, and the weighted average interest rate was 4.29%; and • the average remaining lease term of the portfolio was 6.9 years.
As of February 18, 2026: • we owned 151 properties totaling 17.7 million square feet (all references herein and throughout the Notes to Consolidated Financial Statements to the number of properties and square footage are unaudited) of rentable space, located in 27 states; • our occupancy rate was 99.1%; • the weighted average remaining term of our mortgage debt was 2.5 years, and the weighted average interest rate was 4.21%; • the weighted average remaining term of our senior unsecured notes was 4.4 years, and the weighted average interest rate was 6.22%; and • the average remaining lease term of the portfolio was 7.3 years.
On December 18, 2024, we and the Operating Partnership entered into a Note Purchase Agreement with the institutional investors named therein, in connection with a private placement of $75.0 million of 6.47% senior unsecured notes, maturing on December 18, 2029 (the “2029 Notes”). Conflict of Interest Policy We have adopted policies to reduce potential conflicts of interest.
On December 15, 2025, we and the Operating Partnership entered into a Note Purchase Agreement with the institutional investors named therein, in connection with a private placement of $85.0 million of 5.99% senior unsecured notes, maturing on December 15, 2030 (the “2030 Notes”). Conflict of Interest Policy We have adopted policies to reduce potential conflicts of interest.
We anticipate that we will continue to make substantially all of our investments through our Operating Partnership. Our Operating Partnership may acquire interests in real property or mortgage loans in exchange for the issuance of common shares, OP Units, cash, or through a combination of the aforementioned.
Our Operating Partnership may acquire interests in real property or mortgage loans in exchange for the issuance of common shares, OP Units, cash, or through a combination of the aforementioned.
Gladstone and Cooper, Laura Gladstone, who is a managing director of our Adviser, and John Sateri, who is also a managing director of our Adviser and President of Gladstone Alternative.
Gladstone and Cooper, Laura Gladstone, who is an Executive Vice President of our Adviser, and John Sateri, who is also an Executive Vice President of our Adviser and President of Gladstone Alternative.
In addition to our use of leverage, we were active in the equity markets during 2024 by issuing shares of common stock under our common stock at-the-market program, pursuant to our current At-the-Market Equity Offering Sales Agreement (defined below as the 2024 Common Stock Sales Agreement) with BofA Securities, Inc. (“BofA”), Goldman Sachs & Co. LLC (“Goldman Sachs”), Robert W.
In addition to our use of leverage, we were active in the equity markets during 2025 by issuing shares of common stock under our common stock at-the-market program, pursuant to our current At-the-Market Equity Offering Sales Agreement (defined below as the 2024 Common Stock Sales Agreement).
Our president and CFO, accounting team, and the employees of our Adviser that manage our assets and our investments spend all of their time on our matters.
Our president and CFO, accounting team, and the employees of our Adviser that manage our assets and our investments spend all of their time on our matters. To the extent that we acquire more investments, we anticipate that the number of employees of our Adviser and our Administrator who devote time to our matters will increase.
Investments are not restricted to geographical areas, but we expect that most of our investments in real estate will continue to be made within the continental United States. Some of our investments may also be made through joint ventures that would permit us to own interests in large properties without restricting the diversity of our portfolio.
Investments are not restricted to geographical areas, but we expect that most of our investments in real estate will continue to be made within the continental United States.
On August 7, 2013, we procured a senior unsecured revolving credit facility (“Revolver”), with KeyBank National Association (“KeyBank”) (serving as a revolving lender, a letter of credit issuer and an administrative agent) for $60.0 million that was increased to $100.0 million through subsequent amendments.
None of the $250.2 million in mortgage notes payable, net, outstanding as of December 31, 2025 have recourse to the Company. On August 7, 2013, we procured a senior unsecured revolving credit facility (“Revolver”), with KeyBank National Association (“KeyBank”) (serving as a revolving lender, a letter of credit issuer and an administrative agent) for $60.0 million.
Our strategy is to invest in and own a diversified portfolio of leased properties (primarily industrial and office) that we believe will produce stable cash flow and increase in value.
Our strategy is to invest in and own a diversified portfolio 6 Table of Contents of leased properties (primarily industrial) that we believe will produce stable cash flow and increase in value. We may sell some of our real estate assets when our Adviser determines that doing so would be advantageous to us and our stockholders.
The Advisory Agreement is not assignable or transferable by either us or our Adviser without the consent of the other party, except that our Adviser may assign the Advisory Agreement to an affiliate for whom our Adviser agrees to guarantee its obligations to us. 12 Table of Contents Gladstone Securities Gladstone Securities, LLC (“Gladstone Securities”), is a privately held broker dealer registered with the Financial Industry Regulatory Authority and insured by the Securities Investor Protection Corporation.
The Advisory Agreement is not assignable or transferable by either us or our Adviser without the consent of the other party, except that our Adviser may assign the Advisory Agreement to an affiliate for whom our Adviser agrees to guarantee its obligations to us.
In these transactions, 7 Table of Contents we may act as one of several sources of financing by purchasing one or more properties from the tenant and by leasing it on a net basis to the tenant or its successor in interest. Our portfolio consists primarily of single-tenant industrial and office real property.
We expect that some of our sale-leaseback transactions will be in conjunction with acquisitions, recapitalizations or other corporate transactions affecting our tenants. In these transactions, we may act as one of several sources of financing by purchasing one or more properties from the tenant and by leasing it on a net basis to the tenant or its successor in interest.
Under a net lease, the tenant is required to pay most or all operating, maintenance, repair and insurance costs and real estate taxes with respect to the leased property. We actively communicate with buyout funds, real estate brokers and other third parties to locate properties for potential acquisition or to provide mortgage financing in an effort to build our portfolio.
Under a net lease, the tenant is required to pay most or all operating, maintenance, repair and insurance costs and real estate taxes with respect to the leased property.
On March 3, 2023, we entered into an At-the-Market Equity Offering Sales Agreement (the “2023 Common Stock Sales Agreement”), with the Common Stock Sales Agents.
On March 3, 2023, we entered into an At-the-Market Equity Offering Sales Agreement (the “2023 Common Stock Sales Agreement”), with BofA Securities, Inc. (“BofA”), Goldman Sachs, Baird, KeyBanc Capital Markets Inc. (“KeyBanc”), and Fifth Third (collectively the “Common Stock Sales Agents”).
We refer to Term Loan A, Term Loan B, Term Loan C and the Revolver, collectively, herein as the Credit Facility. As of December 31, 2024, there was $351.9 million outstanding under our Credit Facility at a weighted average interest rate of approximately 5.79% and no outstanding letters of credit.
As of December 31, 2025, there was $437.4 million outstanding under our Credit Facility at a weighted average interest rate of approximately 5.42% and $2.1 million of outstanding letters of credit.
Gladstone Securities is an affiliate of ours, as its parent company is controlled by David Gladstone, our chairman and chief executive officer. Mr. Gladstone also serves on the board of managers of Gladstone Securities.
Gladstone Securities Gladstone Securities, LLC (“Gladstone Securities”), is a privately held broker dealer registered with the Financial Industry Regulatory Authority and insured by the Securities Investor Protection Corporation. Gladstone Securities is an affiliate of ours, as its parent company is controlled by David Gladstone, our chairman and chief executive officer. Mr.
Baird & Co. Incorporated (“Baird”), KeyBanc Capital Markets Inc. (“KeyBanc”), and Fifth Third Securities, Inc. (“Fifth Third”) (collectively the “Common Stock Sales Agents”). We also issued shares of our Series F Preferred Stock through bimonthly closings of this registered non-traded continuous offering.
We also issued shares of our Series F Preferred Stock through bimonthly closings of this registered non-traded continuous offering.
We incurred fees of approximately $4.2 million in connection with extending and upsizing our Credit Facility. The Credit Facility’s current bank syndicate is comprised of KeyBank, Fifth Third Bank, The Huntington National Bank, Bank of America, Synovus Bank, United Bank, First Financial Bank, and S&T Bank.
On August 18, 2022, we added a new $140.0 million term loan facility component (“Term Loan C”). The Credit Facility’s bank syndicate was then comprised of KeyBank, Fifth Third Bank, The Huntington National Bank, Bank of America, Synovus Bank, United Bank, First Financial Bank, and S&T Bank.
To the extent that we acquire more investments, we anticipate that the number of employees of our Adviser and our Administrator who devote time to our matters will increase. 13 Table of Contents As of December 31, 2024, our Adviser and Administrator collectively had 72 full-time employees.
As of December 31, 2025, our Adviser and Administrator collectively had 75 full-time employees.
We target secondary growth markets that possess favorable economic growth trends, diversified industries, and growing population and employment.
We actively communicate with private equity funds, real estate brokers and other third parties to locate properties for potential acquisition or to provide mortgage financing in an effort to build our portfolio. We target secondary growth markets that possess favorable economic growth trends, diversified industries, and growing population and employment.
Removed
We believe that moderate leverage is prudent and we aspire to become an investment grade borrower over time.
Added
On February 22, 2022, we entered into Amendment No. 1 to the At-the-Market Equity Offering Sales Agreement with sales agents Robert W. Baird & Co. Incorporated (“Baird”), Goldman Sachs & Co. LLC (“Goldman Sachs”), Stifel, Nicolaus & Company, Incorporated, (“Stifel”) BTIG, LLC (“BTIG”), and Fifth Third Securities, Inc.
Removed
We expect that some of our sale-leaseback transactions will be in conjunction with acquisitions, recapitalizations or other corporate transactions affecting our tenants.
Added
(“Fifth Third”), dated December 3, 2019 (together, the “Prior Common Stock Sales Agreement”). We terminated the Prior Common Stock Sales Agreement effective February 10, 2023 in connection with the expiration of our registration statement on Form S-3 (File No. 333-236143) (the “2020 Registration Statement”) on February 11, 2023.
Removed
None of the $269.6 million in mortgage notes payable, net, outstanding as of December 31, 2024 have recourse to the Company.
Added
On August 12, 2025, we entered into Amendment No. 2 (“Amendment No. 2”) to the 2024 Common Stock Sales Agreement which, among other things, (i) removed Baird as a Common Stock Sales Agent and (ii) added Huntington Securities, Inc. (“Huntington”) as a Common Stock Sales Agent.
Removed
On August 18, 2022, we added a new $140.0 million term loan facility component (“Term Loan C”). Term Loan C has a maturity date of February 18, 2028 and a Secured Overnight Financing Rate (“SOFR”) spread ranging from 125 to 195 basis points, depending on our leverage.
Added
After giving effect to Amendment No. 2, the Common Stock Sales Agents are BofA, Goldman Sachs, KeyBanc, Fifth Third, and Huntington.
Removed
We also increased our Revolver from $100.0 million to $120.0 million (and its term to August 2026), decreased the principal balance of Term Loan B to $60.0 million and extended the maturity date of Term Loan A to August 2027.
Added
In connection with Amendment No. 2, we filed a prospectus supplement with the SEC dated August 12, 2025, which updates and supplements the prospectus supplement dated March 26, 2024, for the offer and sale of an aggregate offering amount of $250.0 million of common stock under the 2024 Registration Statement.
Removed
On September 27, 2022, we further increased the Revolver to $125.0 million and Term Loan C to $150.0 million, as permitted under the terms of the Credit Facility. We entered into multiple interest rate swap agreements on Term Loan C, which swap the interest rate to fixed rates ranging from 3.15% to 3.75%.
Added
Some of our investments may also be made through joint ventures that would permit us to own interests in large properties without restricting the diversity of our portfolio. 7 Table of Contents We anticipate that we will continue to make substantially all of our investments through our Operating Partnership.
Added
We refer to Term Loan A, Term Loan B, Term Loan C and the Revolver, collectively, herein as the Credit Facility. On May 30, 2025, the Operating Partnership entered into a Term Loan Agreement with KeyBank in connection with the $20.0 million Term Loan D (“Term Loan D”).
Added
Term Loan D was unsecured and had a maturity date of May 30, 2027 and a SOFR spread ranging from 155 to 200 basis points throughout the life of the loan. The proceeds from Term Loan D were used to pay down the Revolver.
Added
On September 18, 2025, we amended our Credit Facility, increasing our Revolver from $125.0 million to $155.0 million. We incurred fees of approximately $0.5 million in connection with the increase to our Credit Facility.
Added
The increased credit availability was used, in part, to fund a nine-property portfolio acquisition that closed on September 30, 2025. 10 Table of Contents On October 10, 2025, we amended, extended, and upsized our Credit Facility, increasing our Revolver from $155.0 million to $200.0 million (and its term to October 2029), decreasing the principal balance of Term Loan A from $160.0 million to $125.0 million (and extending its term to October 2029), increasing the principal balance of Term Loan B from $60.0 million to $143.3 million (and its term to February 2030), decreasing the principal balance of Term Loan C from $150.0 million to $131.7 million, and repaying the full principal balance of Term Loan D.
Added
The SOFR spread increased by 10 basis points, ranging from 140 to 210 basis points for the Revolver and 135 to 205 basis points for the Term Loans, depending on our leverage. We incurred fees of approximately $4.2 million in connection with amending, extending, and upsizing our Credit Facility.
Added
The Credit Facility’s new (and current) bank syndicate is comprised of KeyBank, Fifth Third Bank, The Huntington National Bank, Bank of America, Synovus Bank, PNC Bank, National Association (“PNC Bank”), Webster Bank, National Association (“Webster Bank”), and S&T Bank.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

57 edited+6 added−8 removed193 unchanged
Biggest changeAccordingly, we generally may not make a distribution on our stock if, after giving effect to the distribution, we would not be able to pay our debts as they become due in the usual course of business or our total assets would be less than the sum of our total liabilities plus, unless the terms of such class or series provide otherwise, the amount that would be needed to satisfy the preferential rights upon dissolution of the holders of shares of any class or series of stock then outstanding, if any, with preferences upon dissolution senior to those of such class of stock with respect to which the distribution would be made. 28 Table of Contents Cybersecurity threats and cyber incidents may adversely affect our business by causing a disruption to our operations, or the operations of businesses in which we invest, a compromise or corruption of our confidential information and/or damage to our business relationships, all of which could negatively impact our business, financial condition and operating results.
Biggest changeAccordingly, we generally may not make a distribution on our stock if, after giving effect to the distribution, we would not be able to pay our debts as they become due in the usual course of business or our total assets would be less than the sum of our total liabilities plus, unless the terms of such class or series provide otherwise, the amount that would be needed to satisfy the preferential rights upon dissolution of the holders of shares of any class or series of stock then outstanding, if any, with preferences upon dissolution senior to those of such class of stock with respect to which the distribution would be made.
The ownership limit does not apply to (i) offerors which, in accordance with applicable federal and state securities laws, make a cash tender offer, where at least 90% of the outstanding shares of our stock (not including shares or subsequently issued securities convertible into common stock which are held by the tender offeror and any “affiliates” or “associates” thereof within the meaning of the Exchange Act) are duly tendered and accepted pursuant to the cash tender offer; (ii) an underwriter in a 25 Table of Contents public offering of our shares; (iii) a party initially acquiring shares in a transaction involving the issuance of our shares of capital stock, if our Board determines such party will timely distribute such shares such that, following such distribution, such shares will not be deemed excess shares; and (iv) a person or persons which our Board exempt from the ownership limit upon appropriate assurances that our qualification as a REIT is not jeopardized.
The ownership limit does not apply to (i) offerors which, in accordance with applicable federal and state securities laws, make a cash tender offer, where at least 90% of the outstanding shares of our stock (not including shares or subsequently issued securities convertible into common stock which are held by the tender offeror and any “affiliates” or “associates” thereof within the meaning of the Exchange Act) are duly tendered and accepted pursuant to the cash tender offer; (ii) an underwriter in a public offering of our shares; (iii) a party initially acquiring shares in a transaction involving the issuance of our shares of capital stock, if our Board determines such party will timely distribute such shares such that, following such distribution, such 26 Table of Contents shares will not be deemed excess shares; and (iv) a person or persons which our Board exempt from the ownership limit upon appropriate assurances that our qualification as a REIT is not jeopardized.
Tenants that have experienced leveraged restructurings or acquisitions will generally have substantially greater debt and substantially lower net worth than they had prior to the leveraged transaction. In addition, the payment of rent and debt service may reduce the working capital available to leveraged entities and prevent them from devoting the resources necessary to remain competitive in their industries.
Tenants that have experienced leveraged restructurings or acquisitions will generally have substantially greater debt and substantially lower net worth than they had prior to the leveraged transaction. In addition, the payment of rent may reduce the working capital available to leveraged entities and prevent them from devoting the resources necessary to remain competitive in their industries.
Because our target tenants and borrowers are typically smaller businesses that may have narrower product lines and smaller market share, they may be more vulnerable to competitors’ actions and market conditions, as well as general economic downturns. • There is generally little or no publicly available information about our target tenants and borrowers.
Because our target tenants and borrowers are typically smaller businesses that may have narrower product lines and smaller market share, they may be more vulnerable to competitors’ actions and market conditions, as well as general economic downturns, conditions, and events. • There is generally little or no publicly available information about our target tenants and borrowers.
The 2029 Notes and certain of our other secured loans contain, and any other future indebtedness we incur may contain, various covenants, including business activity restrictions, and the failure to comply with those covenants could materially adversely affect us.
The 2029 Notes, the 2030 Notes, and certain of our other secured loans contain, and any other future indebtedness we incur may contain, various covenants, including business activity restrictions, and the failure to comply with those covenants could materially adversely affect us.
Some market conditions that could negatively affect our share price or result in fluctuations in the price or trading volume of our securities include, but are not limited to: • price and volume fluctuations in the stock market from time to time, which are often unrelated to the operating performance of particular companies; • significant volatility in the market price and trading volume of shares of REITs, real estate companies or other companies in our sector, which is not necessarily related to the performance of those companies; • price and volume fluctuations in the stock market as a result of terrorist attacks, or speculation regarding future terrorist attacks, in the United States or abroad; • actual or anticipated variations in our quarterly operating results or distributions to stockholders; • changes in our FFO or earnings estimates or the publication of research reports about us or the real estate industry generally; • actions by institutional stockholders; • speculation in the press or investment community; • the national and global political environment, including foreign relations, conflicts and trading policies; • changes in regulatory policies or tax guidelines, particularly with respect to REITs; and • investor confidence in the stock market.
Some market 27 Table of Contents conditions that could negatively affect our share price or result in fluctuations in the price or trading volume of our securities include, but are not limited to: • price and volume fluctuations in the stock market from time to time, which are often unrelated to the operating performance of particular companies; • significant volatility in the market price and trading volume of shares of REITs, real estate companies or other companies in our sector, which is not necessarily related to the performance of those companies; • price and volume fluctuations in the stock market as a result of terrorist attacks, or speculation regarding future terrorist attacks, in the United States or abroad; • actual or anticipated variations in our quarterly operating results or distributions to stockholders; • changes in our FFO or earnings estimates or the publication of research reports about us or the real estate industry generally; • actions by institutional stockholders; • speculation in the press or investment community; • the national and global political environment, including foreign relations, conflicts and trading policies; • changes in regulatory policies or tax guidelines, particularly with respect to REITs; and • investor confidence in the stock market.
The 2029 Notes and certain of our other secured loans contain, and any other future indebtedness we incur may contain, certain covenants, which, among other things, restrict our activities, including, the incurrence of indebtedness, disposition of assets, mergers and transactions with affiliates.
The 2029 Notes, the 2030 Notes, and certain of our other secured loans contain, and any other future indebtedness we incur may contain, certain covenants, which, among other things, restrict our activities, including, the incurrence of indebtedness, disposition of assets, mergers and transactions with affiliates.
Although we, through our Adviser and Administrator, engage in customary mitigating activities, such as succession planning, the unplanned departure of any of our executive officers or key personnel from the Adviser or Administrator, as applicable, could have a material adverse effect on our ability to implement our business strategy and to achieve our investment objectives.
Although we, through our Adviser and Administrator, engage in customary mitigating activities, such as succession planning, the death, disability, or the unplanned departure of any of our executive officers or key personnel from the Adviser or Administrator, as applicable, could have a material adverse effect on our ability to implement our business strategy and to achieve our investment objectives.
If we were unable to meet a request to add collateral 20 Table of Contents to this unsecured asset pool under the Credit Facility, this inability could have a material adverse effect on our liquidity and our ability to meet our loan covenants. Interest rate fluctuations may adversely affect our results of operations.
If we were unable to meet a request to add collateral to this unsecured asset pool under the Credit Facility, this inability could have a material adverse effect on our liquidity and our ability to meet our loan covenants. 21 Table of Contents Interest rate fluctuations may adversely affect our results of operations.
Our 22 Table of Contents Adviser’s failure to effectively manage our future growth could have a material adverse effect on our business, financial condition and results of operations. We may have conflicts of interest with our Adviser and other affiliates. Our Adviser manages our business and locates, evaluates, recommends and negotiates the acquisition of our real estate investments.
Our Adviser’s failure to effectively manage our future growth could have a material adverse effect on our business, financial condition and results of operations. 23 Table of Contents We may have conflicts of interest with our Adviser and other affiliates. Our Adviser manages our business and locates, evaluates, recommends and negotiates the acquisition of our real estate investments.
Tenants and borrowers that are subject to significant debt obligations may be unable to make their rent or mortgage payments if there are adverse changes to their businesses or because of the impact of public health emergencies. Rising interest rates, inflation and recessionary conditions also impact a tenant’s ability to timely make their rent or mortgage payments.
Tenants that are subject to significant debt obligations may be unable to make their rent payments if there are adverse changes to their businesses or because of the impact of public health emergencies. Rising interest rates, inflation and recessionary conditions also impact a tenant’s ability to timely make their rent payments.
This provision may reduce any premiums paid to stockholders in a change in control transaction. 26 Table of Contents • Certain provisions of Maryland law applicable to us prohibit business combinations with: • any person who beneficially owns 10% or more of the voting power of our common stock, referred to as an “interested stockholder;” • an affiliate of ours who, at any time within the two-year period prior to the date in question, was an interested stockholder; or • an affiliate of an interested stockholder.
This provision may reduce any premiums paid to stockholders in a change in control transaction. • Certain provisions of Maryland law applicable to us prohibit business combinations with: • any person who beneficially owns 10% or more of the voting power of our common stock, referred to as an “interested stockholder;” • an affiliate of ours who, at any time within the two-year period prior to the date in question, was an interested stockholder; or • an affiliate of an interested stockholder.
We have implemented processes, procedures and internal controls to help prevent, detect and mitigate cybersecurity threats and cyber intrusions, but these measures, as well as our increased awareness of the nature and extent of a threat of a cyber-incident, do not guarantee that a cyber-incident will not occur, will be timely detected and/or that our financial results, operations or confidential information will not be negatively impacted by such an incident.
We have implemented processes, procedures and internal controls to help prevent, detect and mitigate cybersecurity threats and cyber intrusions, but these measures, as well as our increased awareness of the nature and extent of a threat of a cyber-incident, do not 29 Table of Contents guarantee that a cyber-incident will not occur, will be timely detected and/or that our financial results, operations or confidential information will not be negatively impacted by such an incident.
Failure to comply with these covenants would result in a default which, if we were unable to obtain a waiver from the lenders, could accelerate our repayment obligations under the Credit Facility and thereby have a material adverse impact on our liquidity, financial condition, results of operations and ability to pay distributions to stockholders.
Failure to comply with these covenants would result in a default which, if we were unable to obtain a waiver from the lenders, 20 Table of Contents could accelerate our repayment obligations under the Credit Facility and thereby have a material adverse impact on our liquidity, financial condition, results of operations and ability to pay distributions to stockholders.
We have acquired an interest in three of our properties by acquiring a leasehold interest in the land underlying the property, and we may acquire additional properties in the future that are subject to similar ground leases.
We have acquired an interest in four of our properties by acquiring a leasehold interest in the land underlying the property, and we may acquire additional properties in the future that are subject to similar ground leases.
If a tenant defaults, our lease revenues would be reduced and our expenses associated with carrying the property would increase, as we would be responsible for payments such as taxes and insurance. Lease payment 17 Table of Contents defaults by these tenants could adversely affect our cash flows and cause us to reduce the amount of distributions to stockholders.
If a tenant defaults, our lease revenues would be reduced and our expenses associated with carrying the property would increase, as we would be responsible for payments such as taxes and insurance. Lease payment defaults by these tenants could adversely affect our cash flows and cause us to reduce the amount of distributions to stockholders.
If this were to occur, we could incur significant remedial costs and we may also be subject to material private damage claims and awards. Concern about indoor exposure to mold has been increasing, as exposure to mold may cause a variety of adverse health effects and symptoms, including allergic or other 18 Table of Contents reactions.
If this were to occur, we could incur significant remedial costs and we may also be subject to material private damage claims and awards. Concern about indoor exposure to mold has been increasing, as exposure to mold may cause a variety of adverse health effects and symptoms, including allergic or other reactions.
If we become subject to claims in this regard, it could materially and adversely affect us and our future insurability for such matters. The assessments we perform on our acquisitions of properties may fail to reveal all environmental conditions, liabilities or compliance concerns.
If we become subject to claims in this regard, it could materially and adversely affect us and our future insurability for such matters. 19 Table of Contents The assessments we perform on our acquisitions of properties may fail to reveal all environmental conditions, liabilities or compliance concerns.
Risks related to our business and properties Certain of our tenants and borrowers may be unable to pay rent or make mortgage payments, which could adversely affect our cash available to make distributions to our stockholders. Some of our tenants and borrowers may have recently been either restructured using leverage, or acquired in a leveraged transaction.
Risks related to our business and properties Certain of our tenants may be unable to pay rent, which could adversely affect our cash available to make distributions to our stockholders. Some of our tenants may have recently been either restructured using leverage, or acquired in a leveraged transaction.
Our Board of Directors may change our investment policy without stockholders’ approval. 27 Table of Contents Our Board of Directors will determine our investment and financing policies, growth strategy and our debt, capitalization, distribution, acquisition, disposition and operating policies. Our Board of Directors may revise or amend these strategies and policies at any time without a vote by stockholders.
Our Board of Directors may change our investment policy without stockholders’ approval. Our Board of Directors will determine our investment and financing policies, growth strategy and our debt, capitalization, distribution, acquisition, disposition and operating policies. Our Board of Directors may revise or amend these strategies and policies at any time without a vote by stockholders.
Regulatory pressures and the burden of troubled and uncollectible loans has led some lenders and institutional investors to reduce, and in some cases, cease to provide funding to borrowers.
Regulatory pressures and the burden of troubled and uncollectible loans have led some lenders and institutional investors to reduce, and in some cases, cease to provide funding to borrowers.
If we fail to comply with these requirements at the end of any calendar quarter, we must qualify for certain statutory relief provisions to avoid losing our REIT qualification and suffering adverse tax consequences.
If we fail to comply with these requirements at the end of any calendar quarter, we must 25 Table of Contents qualify for certain statutory relief provisions to avoid losing our REIT qualification and suffering adverse tax consequences.
In the event of a default by a tenant, we may experience delays in enforcing our rights as landlord and may incur substantial costs in protecting our investment and re-leasing our property.
In the event of a default by a tenant, we may experience delays in enforcing our rights as landlord and may incur 18 Table of Contents substantial costs in protecting our investment and re-leasing our property.
In addition, in general, no more than 5% of the value of our assets (other than government securities, securities of TRSs and qualified real estate assets) can consist of the securities of any one issuer, and no more than 20% (25% for taxable years beginning before January 1, 2018) of the value of our total assets can be represented by the securities of one or more TRSs.
In addition, in general, no more than 5% of the value of our assets (other than government securities, securities of TRSs and qualified real estate assets) can consist of the securities of any one issuer, and no more than 25% (20% for taxable years beginning after December 31, 2017 and before January 1, 2026) of the value of our total assets can be represented by the securities of one or more TRSs.
Our Adviser is not obligated to provide a waiver of the incentive fee, which could negatively impact our earnings and our ability to maintain our current level of, or increase, distributions to our stockholders. The Advisory Agreement contemplates a quarterly incentive fee based on our Core Funds from Operations (“FFO”) (as defined in the Advisory Agreement).
Our Adviser is not obligated to provide a waiver of the incentive fee, which could negatively impact our earnings and our ability to maintain our current level of, or increase, distributions to our stockholders. The Advisory Agreement contemplates a quarterly incentive fee based on our FFO (as defined in the Advisory Agreement).
We are subject to restrictions that may discourage a change of control. Certain provisions contained in our articles of incorporation and Maryland law may prohibit or restrict a change of control. • Our articles of incorporation prohibit ownership of more than 9.8% of the outstanding shares of our capital stock by one person.
Certain provisions contained in our articles of incorporation and Maryland law may prohibit or restrict a change of control. • Our articles of incorporation prohibit ownership of more than 9.8% of the outstanding shares of our capital stock by one person.
We have balloon payments of $10.4 million payable during the year ending December 31, 2025. We mortgage our properties, which subjects us to the risk of foreclosure in the event of non-payment.
We have balloon payments of $27.6 million payable during the year ending December 31, 2026. We mortgage our properties, which subjects us to the risk of foreclosure in the event of non-payment.
As of December 31, 2024, we owned 135 properties and had 132 leases on these properties, and our five largest tenants accounted for approximately 16.9% of our total lease revenue. A consequence of a limited number of tenants is that the aggregate returns we realize may be materially adversely affected by the unfavorable performance of a small number of tenants.
As of December 31, 2025, we owned 151 properties and had 143 leases on these properties, and our five largest tenants accounted for approximately 17.2% of our total lease revenue. A consequence of a limited number of tenants is that the aggregate returns we realize may be materially adversely affected by the unfavorable performance of a small number of tenants.
However, our continued compliance with these covenants depends on many factors, and could be impacted by current or future economic conditions, and thus there are no assurances that 19 Table of Contents we will continue to comply with these covenants.
As of December 31, 2025, we were in compliance with these covenants. However, our continued compliance with these covenants depends on many factors, and could be impacted by current or future economic conditions, and thus there are no assurances that we will continue to comply with these covenants.
We recognized impairment charges of $6.8 million, $19.3 million, and $12.1 million during the years ended December 31, 2024, 2023, and 2022, respectively.
We recognized impairment charges of $0.01 million, $6.8 million, and $19.3 million during the years ended December 31, 2025, 2024, and 2023, respectively.
As of December 31, 2024, 15.8% of our total lease revenue was earned from tenants in the Diversified/Conglomerate Services industry, 14.5% was earned from tenants in the Automotive industry, 9.9% was earned from tenants in the Buildings and Real Estate industry, and 9.0% was earned from tenants in the Telecommunications industry.
As of December 31, 2025, 15.2% was earned from tenants in the Automotive industry, 12.6% of our total lease revenue was earned from tenants in the Diversified/Conglomerate Services industry, 9.6% was earned from tenants in the Buildings and Real Estate industry, and 8.7% was earned from tenants in the Telecommunications industry.
Our performance, and the value of our investments, is subject to risks inherent to the ownership and operation of these types of properties, including: • changes in the general economic climate, including the credit market; • changes in local conditions, such as an oversupply of space or reduction in demand for real estate; • changes in interest rates and the availability of financing; • competition from other available space; • changes in laws and governmental regulations, including those governing real estate usage, zoning and taxes, and the related costs of compliance with laws and regulations; and 21 Table of Contents • variations in the occupancy rate of our properties.
Our performance, and the value of our investments, is subject to risks inherent to the ownership and operation of these types of properties, including: • changes in the general economic climate, including the credit market; • changes in local conditions, such as an oversupply of space or reduction in demand for real estate; • changes in interest rates and the availability of financing; • competition from other available space; • changes in laws and governmental regulations, including those governing real estate usage, zoning and taxes, and the related costs of compliance with laws and regulations; and • variations in the occupancy rate of our properties. 22 Table of Contents The debt obligations of our tenants are dependent upon certain factors, which neither we nor our tenants or borrowers control, such as national, local and regional business and economic conditions, government economic policies, and the level of interest rates.
For the year ended December 31, 2022, our Advisor did not issue a full or partial waiver of the incentive fee. Under the amendment of the Advisory Agreement dated January 10, 2023, our Advisor was not entitled to receive an incentive fee for the quarters ended March 31, 2023 and June 30, 2023.
Under the amendment of the Advisory Agreement dated January 10, 2023, our Advisor was not entitled to receive an incentive fee for the quarters ended March 31, 2023 and June 30, 2023.
Should these events occur, our income and funds available for distribution could be adversely affected. In addition, as a REIT, we may be subject to a 100% tax on net income derived from the sale of property considered to be held primarily for sale to customers in the ordinary course of our business.
In addition, as a REIT, we may be subject to a 100% tax on net income derived from the sale of property considered to be held primarily for sale to customers in the ordinary course of our business.
For the year ended December 31, 2024, our Adviser issued a voluntary waiver of a portion of the incentive fee of $2.3 million.
For the years ended December 31, 2025 and 2024, our Adviser issued a voluntary waiver of a portion of the incentive fee of $1.5 million and $2.3 million, respectively.
We also must ensure that (i) at least 75% of our gross income for each taxable year consists of certain types of income that we derive, directly or indirectly, from investments relating to real property or mortgages on real property or qualified temporary investment income and (ii) at least 95% of our gross income for each taxable year consists of income that is qualifying income for purposes of the 75% gross income test, other types of interest and distributions, gain from the sale or disposition of stock or securities, or any combination of these. 24 Table of Contents In addition, we may be required to make distributions to our stockholders at disadvantageous times or when we do not have funds readily available for distribution.
We also must ensure that (i) at least 75% of our gross income for each taxable year consists of certain types of income that we derive, directly or indirectly, from investments relating to real property or mortgages on real property or qualified temporary investment income and (ii) at least 95% of our gross income for each taxable year consists of income that is qualifying income for purposes of the 75% gross income test, other types of interest and distributions, gain from the sale or disposition of stock or securities, or any combination of these.
If our Adviser does not issue other voluntary waivers in future quarters, it could negatively impact 23 Table of Contents our earnings and may compromise our ability to maintain our current level of, or increase, distributions to our stockholders, which could have a material adverse impact on the market price of our securities.
If our Adviser does not issue other voluntary waivers in future quarters, it could negatively impact our earnings and may compromise our ability to maintain our current level of, or increase, distributions to our stockholders, which could have a material adverse impact on the market price of our securities. 24 Table of Contents Risks Related to Qualification and Operation as a REIT If we fail to qualify as a REIT, our operations and distributions to stockholders would be adversely impacted.
Therefore, in the event of our bankruptcy, liquidation or reorganization, claims of our stockholders will be satisfied only after all of our and our Operating Partnership’s and its subsidiaries’ liabilities and obligations have been paid in full.
Therefore, in the event of our bankruptcy, liquidation or reorganization, claims of our stockholders will be satisfied only after all of our and our Operating Partnership’s and its subsidiaries’ liabilities and obligations have been paid in full. Other risks We are subject to restrictions that may discourage a change of control.
These covenants require us to, among other things, maintain certain financial ratios, including fixed charge coverage, debt service coverage and a minimum net worth. We are also required to limit our distributions to stockholders to 95% of our FFO. As of December 31, 2024, we were in compliance with these covenants.
These covenants require us to, among other things, maintain certain financial ratios, including fixed charge coverage, debt service coverage and a minimum net worth. We are also required to limit our distributions to stockholders to 95% of our Core Funds from Operations (“FFO”) (as defined in the Advisory Agreement).
We may enter into tax protection agreements in the future if we issue OP Units in connection with the acquisition of properties, which could limit our ability to sell or otherwise dispose of certain properties.
In addition, we may be obligated to fund the defense costs incurred by our directors and officers. 28 Table of Contents We may enter into tax protection agreements in the future if we issue OP Units in connection with the acquisition of properties, which could limit our ability to sell or otherwise dispose of certain properties.
In addition, in the event we are forced to sell the property, we may have 16 Table of Contents difficulty selling it to a party other than the tenant or borrower due to the special purpose for which the property may have been designed.
In addition, in the event we are forced to sell the property, we may have difficulty selling it to a party other than the tenant or borrower due to the special purpose for which the property may have been designed. 17 Table of Contents These and other limitations may affect our ability to sell or re-lease properties without adversely affecting returns to our stockholders.
As a result, our stockholders and we may have more limited rights against our directors and officers than might otherwise exist under common law. In addition, we may be obligated to fund the defense costs incurred by our directors and officers.
As a result, our stockholders and we may have more limited rights against our directors and officers than might otherwise exist under common law.
In situations where management of the tenant or borrower will change after a transaction, it may be difficult for our Adviser to determine with reasonable certainty the likelihood of the tenant’s or borrower’s business success and of its ability to pay rent or make mortgage payments throughout the lease or loan term.
In situations where management of the tenant will change after a transaction, it may be difficult for our Adviser to determine with reasonable certainty the likelihood of the tenant’s business success and of its ability to pay rent throughout the lease term. These companies generally are more vulnerable to adverse economic and business conditions, and increases in interest rates.
Even if we can renew leases, tenants may be able to negotiate lower rates as a result of market conditions. Market conditions may also hinder our ability to lease vacant space in newly developed or redeveloped properties. In addition, we may enter into or acquire leases for properties that are suited to the needs of a particular tenant.
Market conditions may also hinder our ability to lease vacant space in newly developed or redeveloped properties. In addition, we may enter into or acquire leases for properties that are suited to the needs of a particular tenant. Such properties may require renovations, tenant improvements or other concessions to lease them to other tenants if the initial leases terminate.
We focus our investments on industrial and office properties, a number of which include manufacturing facilities, special use storage or warehouse facilities and special use single or multi-tenant properties. These types of properties are relatively illiquid compared to other types of real estate and financial assets.
We focus our investments on industrial properties, a number of which include manufacturing facilities, special use storage or warehouse facilities and special use single or multi-tenant properties. Our real estate portfolio also includes office properties, which are a secondary focus for our business.
A significant change in interest rates could have an adverse impact on our results of operations. Adverse changes in our credit ratings could negatively affect our financing activity. A decline in the credit rating of the 2029 Notes, which we guarantee, will increase our cost of such debt.
A significant change in interest rates could have an adverse impact on our results of operations. Adverse changes in our credit ratings could negatively affect our financing activity.
We compete with many other entities to acquire properties, including financial institutions, institutional pension funds, other REITs, foreign real estate investors, other public and private real estate companies and private real estate investors.
Competition for real estate may impede our ability to make acquisitions or may increase the cost of these acquisitions. We compete with many other entities to acquire properties, including financial institutions, institutional pension funds, other REITs, foreign real estate investors, other public and private real estate companies and private real estate investors.
These companies generally are more vulnerable to adverse economic and business conditions, and increases in interest rates. We are subject to the credit risk of our tenants, which in the event of bankruptcy, could adversely affect our results of operations. We are subject to the credit risk of our tenants.
We are subject to the credit risk of our tenants, which in the event of bankruptcy, could adversely affect our results of operations. We are subject to the credit risk of our tenants.
For the year ended December 31, 2024, we obtained approximately $15.2 million in long-term mortgage financing and $75.0 million of long-term private debt financing, which we used to acquire additional properties and repay our revolving credit facility and bank term loans.
For the year ended December 31, 2025, we obtained approximately $85.0 million of long-term private debt financing, which we used to acquire additional properties and repay our revolving credit facility and bank term loans. If we are unable to make our debt payments as required, a mortgage lender could foreclose on the property securing its loan.
We face a risk from the fact that certain of our properties are cross-collateralized. As of December 31, 2024, the mortgages on certain of our properties were cross-collateralized.
As of December 31, 2025, the mortgages on certain of our properties were cross-collateralized.
The determination of various factual matters and circumstances not entirely within our control may affect our ability to continue to qualify as a REIT.
Qualification as a REIT involves the application of highly technical and complex rules for which there are only limited judicial or administrative interpretations. The determination of various factual matters and circumstances not entirely within our control may affect our ability to continue to qualify as a REIT.
This illiquidity will limit our ability to quickly change our portfolio in response to changes in economic or other conditions. To the extent the properties are not subject to net leases, some significant expenditures, such as real estate taxes and maintenance costs, are generally not reduced when circumstances cause a reduction in income from the investment.
To the extent the properties are not subject to net leases, some significant expenditures, such as real estate taxes and maintenance costs, are generally not reduced when circumstances cause a reduction in income from the investment. Should these events occur, our income and funds available for distribution could be adversely affected.
If we are unable to make our debt payments as required, a mortgage lender could foreclose on the property securing its loan. This could cause us to lose part or all of our investment in such property which in turn could cause the value of our securities or the amount of distributions to our stockholders to be reduced.
This could cause us to lose part or all of our investment in such property, which in turn could cause the value of our securities or the amount of distributions to our stockholders to be reduced. We face a risk from the fact that certain of our properties are cross-collateralized.
As a result, we 15 Table of Contents could be held liable, under some circumstances, for debts incurred by the lessee relating to the property. Either of these outcomes could adversely affect our cash flow and our ability to pay distributions to stockholders.
As a result, we could be held liable, under some circumstances, for debts incurred by the lessee relating to the property.
We may be unable to renew leases, lease vacant space or re-lease space as leases expire, which could adversely affect our business and our ability to make distributions to our stockholders. If we cannot renew leases, we may be unable to re-lease our properties to other tenants at rates equal to or above the current market rate.
If we cannot renew leases, we may be unable to re-lease our properties to other tenants at rates equal to or above the current market rate. Even if we can renew leases, tenants may be able to negotiate lower rates as a result of market conditions.
These and other limitations may affect our ability to sell or re-lease properties without adversely affecting returns to our stockholders. Many of our tenants are lower middle market businesses, which exposes us to additional risks specific to these entities.
Many of our tenants are lower middle market businesses, which exposes us to additional risks specific to these entities.
Risks Related to Qualification and Operation as a REIT If we fail to qualify as a REIT, our operations and distributions to stockholders would be adversely impacted. We intend to continue to be organized and to operate to qualify as a REIT under the Internal Revenue Code of 1986, as amended (the “Code”).
We intend to continue to be organized and to operate to qualify as a REIT under the Internal Revenue Code of 1986, as amended (the “Code”). A REIT generally is not taxed at the corporate level on income it currently distributes to its stockholders.
Removed
Such properties may require renovations, tenant improvements or other concessions to lease them to other tenants if the initial leases terminate.
Added
Either of these outcomes could adversely affect our cash flow and our ability to pay distributions to stockholders. 16 Table of Contents We may be unable to renew leases, lease vacant space or re-lease space as leases expire, which could adversely affect our business and our ability to make distributions to our stockholders.
Removed
We have $7.3 million outstanding principal on variable rate mortgages as of December 31, 2024.
Added
Our types of real estate properties are relatively illiquid compared to other types of real estate and financial assets. This illiquidity will limit our ability to quickly change our portfolio in response to changes in economic or other conditions.
Removed
The debt obligations of our tenants are dependent upon certain factors, which neither we nor our tenants or borrowers control, such as national, local and regional business and economic conditions, government economic policies, and the level of interest rates. Competition for real estate may impede our ability to make acquisitions or may increase the cost of these acquisitions.
Added
We do not have any variable rate mortgages that are not swapped to fixed rates as of December 31, 2025.
Removed
A REIT generally is not taxed at the corporate level on income it currently distributes to its stockholders. Qualification as a REIT involves the application of highly technical and complex rules for which there are only limited judicial or administrative interpretations.
Added
A decline in the credit rating of the $75.0 million senior unsecured 6.47% notes (the “2029 Notes”) and the $85.0 million senior unsecured 5.99% notes (the “2030 Notes”), which we guarantee, will increase our cost of such debt.
Removed
Other risks The number of shares of preferred stock outstanding may increase as a result of bimonthly closings related to our Offering of Series F Preferred Stock, which could adversely affect our business, financial condition and results of operations.
Added
In addition, we may be required to make distributions to our stockholders at disadvantageous times or when we do not have funds readily available for distribution.
Removed
The number of outstanding shares of preferred stock may increase as a result of bimonthly closings related to our Offering of Series F Preferred Stock.
Added
Cybersecurity threats and cyber incidents may adversely affect our business by causing a disruption to our operations, or the operations of businesses in which we invest, a compromise or corruption of our confidential information and/or damage to our business relationships, all of which could negatively impact our business, financial condition and operating results.
Removed
The issuance of additional shares of Preferred Stock could have significant consequences on our future operations, including: • making it more difficult for us to meet our payment and other obligations to holders of our preferred stock and under our Credit Facility and to pay dividends on our common stock; • reducing the availability of our cash flow to fund acquisitions and for other general corporate purposes, and limiting our ability to obtain additional financing for these purposes; and • limiting our flexibility in planning for, or reacting to, and increasing our vulnerability to, changes in our business, and adverse changes the industry in which we operate and the general economy.
Removed
Any of the above-listed factors could have an adverse effect on our business, financial condition and results of operations and our ability to meet our payment obligations under our Credit Facility and monthly dividend obligations with respect to our preferred stock and to pay dividends on our common stock.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

6 edited+1 added−0 removed18 unchanged
Biggest changeSee “ Risk Factors - Cybersecurity threats and cyber incidents may adversely affect our business by causing a disruption to our operations, or the operations of businesses in which we invest, a compromise or corruption of our confidential information and/or damage to our business relationships, all of which could negatively impact our business, financial condition and operating results. ” for a discussion of risks related to cybersecurity and cyber incidents. 30 Table of Contents Governance Our Board of Directors is actively engaged in overseeing our cybersecurity and information security program.
Biggest changeSee “ Risk Factors - Cybersecurity threats and cyber incidents may adversely affect our business by causing a disruption to our operations, or the operations of businesses in which we invest, a compromise or corruption of our confidential information and/or damage to our business relationships, all of which could negatively impact our business, financial condition and operating results. ” for a discussion of risks related to cybersecurity and cyber incidents.
Our Director of IT has over 20 years of experience in IT, with a focus in the implementation of information security projects to enhance organizations’ resilience against emerging threats, and has collaborated closely with security vendors/partners to contain and address cybersecurity incidents.
Our Director of IT has over 20 years of experience in IT, with a focus in the implementation of information security projects to enhance organizations’ resilience against emerging threats, and has collaborated closely with security vendors/partners to contain and 31 Table of Contents address cybersecurity incidents.
Item 1C. Cybersecurity. 29 Table of Contents Risk Management and Strategy We have implemented ongoing processes that are designed to continually identify, assess, manage and mitigate the dynamic and evolving material risks to us from cybersecurity threats.
Item 1C. Cybersecurity. Risk Management and Strategy We have implemented ongoing processes that are designed to continually identify, assess, manage and mitigate the dynamic and evolving material risks to us from cybersecurity threats.
Cybersecurity risks are assessed in general as part of the overall enterprise risk management for us, but also specifically between the ISP and our Adviser and Administrator in monitoring and determining not only the risks but also in assessing corresponding processes and procedures to mitigate those risks appropriately. Additionally, third party business applications are also incorporated in these risk assessments.
Cybersecurity risks are assessed in general as part of the overall enterprise risk management for us, but also specifically between the ISP and our Adviser and Administrator in monitoring and determining not only the risks but also in assessing corresponding processes and procedures to mitigate those risks appropriately.
Our Board of Directors receives regular reports during board meetings from our CCO on our and our Adviser’s and Administrator’s efforts concerning information security and addressing information technology and cybersecurity risks, no less than quarterly.
Governance Our Board of Directors is actively engaged in overseeing our cybersecurity and information security program. Our Board of Directors receives regular reports during board meetings from our CCO on our and our Adviser’s and Administrator’s efforts concerning information security and addressing information technology and cybersecurity risks, no less than quarterly.
As an international service provider, our ISP constantly monitors information technology risk and cybersecurity threats globally. When risks are detected, our Head of Resource Management, Director of IT, and CCO consult with the ISP to assess if the risk is a cybersecurity threat to our information technology systems or data.
When risks are detected, our Head of Resource Management, Director of IT, and CCO consult with the ISP to assess if the risk is a cybersecurity threat to our information technology systems or data.
Added
Additionally, third party business applications are also incorporated in these risk assessments. 30 Table of Contents As an international service provider, our ISP constantly monitors information technology risk and cybersecurity threats globally.

Item 2. Properties

Properties — owned and leased real estate

3 edited+1 added−0 removed1 unchanged
Biggest changeN/A - Not Applicable The following table summarizes the geographic locations of our properties as of December 31, 2024, 2023, and 2022, respectively (dollars in thousands): 31 Table of Contents State Lease Revenue for the twelve months ended December 31, 2024 % of Lease Revenue Number of Leases for the twelve months ended December 31, 2024 Rentable Square Feet for the twelve months ended December 31, 2024 Lease Revenue for the twelve months ended December 31, 2023 % of Lease Revenue Number of Leases for the twelve months ended December 31, 2023 Rentable Square Feet for the twelve months ended December 31, 2023 Lease Revenue for the year ended December 31, 2022 % of Lease Revenue Number of Leases for the year ended December 31, 2022 Rentable Square Feet for the year ended December 31, 2022 Pennsylvania $ 20,209 13.5 % 11 2,420,790 $ 14,809 10.0 % 10 2,267,847 $ 14,850 10.0 % 10 2,224,007 Texas 18,772 12.6 15 1,367,382 17,847 12.1 14 1,473,264 21,462 14.4 14 1,377,568 Florida 17,228 11.5 9 1,045,404 19,387 13.1 9 1,045,404 16,329 11.0 9 1,045,404 Ohio 12,267 8.2 15 1,197,505 14,347 9.7 15 1,312,291 13,888 9.3 16 1,312,291 Georgia 12,132 8.1 9 1,660,655 12,061 8.2 11 1,686,986 11,674 7.8 10 1,686,986 North Carolina 9,464 6.3 10 1,539,430 9,340 6.3 10 1,539,430 8,684 5.8 10 1,539,430 Alabama 8,675 5.8 6 1,107,654 8,793 6.0 6 1,107,654 7,578 5.1 7 1,138,504 Colorado 7,480 5.0 4 482,481 7,480 5.1 4 482,481 4,613 3.1 4 482,481 Michigan 6,833 4.6 6 973,638 6,487 4.4 6 973,638 6,435 4.3 6 973,638 Indiana 4,685 3.1 10 639,605 4,223 2.9 11 639,605 4,121 2.8 10 571,896 All Other States 31,643 21.3 37 4,465,343 32,810 22.2 41 4,530,669 39,347 26.4 41 4,827,746 $ 149,388 100.0 % 132 16,899,887 $ 147,584 100.0 % 137 17,059,269 $ 148,981 100.0 % 137 17,179,951 The following table summarizes lease revenue by tenant industries for the years ended December 31, 2024, 2023 and 2022 (dollars in thousands): For the year ended December 31, 2024 2023 2022 Industry Classification Lease Revenue Percentage of Lease Revenue Lease Revenue Percentage of Lease Revenue Lease Revenue Percentage of Lease Revenue Diversified/Conglomerate Services $ 23,584 15.8 % $ 18,379 12.5 % $ 17,946 12.0 % Automotive 21,617 14.5 20,697 14.0 19,133 12.8 Buildings and Real Estate 14,800 9.9 9,667 6.6 9,319 6.3 Telecommunications 13,401 9.0 21,306 14.1 22,456 15.1 Diversified/Conglomerate Manufacturing 9,969 6.7 10,648 7.2 10,976 7.4 Personal, Food & Miscellaneous Services 9,554 6.4 9,382 6.4 7,232 4.9 Banking 9,366 6.3 9,538 6.5 13,136 8.8 Healthcare 8,180 5.5 11,156 7.6 15,928 10.7 Personal & Non-Durable Consumer Products 7,440 5.0 7,648 5.2 5,531 3.7 Machinery 7,393 4.9 5,874 4.0 4,257 2.9 Beverage, Food & Tobacco 5,829 3.9 5,724 3.9 5,615 3.8 Chemicals, Plastics & Rubber 5,391 3.6 5,365 3.6 4,838 3.2 Containers, Packaging & Glass 4,620 3.1 4,065 2.8 3,827 2.6 Childcare 2,293 1.5 2,292 1.6 2,292 1.5 Information Technology 2,288 1.5 2,439 1.7 3,515 2.4 Electronics 1,176 0.8 1,145 0.8 725 0.5 Printing & Publishing 1,065 0.7 930 0.6 917 0.6 Education 590 0.4 836 0.6 845 0.6 Home & Office Furnishings 493 0.3 493 0.3 493 0.2 Oil & Gas 339 0.2 — — — — Total $ 149,388 100.0 % $ 147,584 100.0 % $ 148,981 100.0 % 32 Table of Contents
Biggest changeN/A - Not Applicable The following table summarizes the geographic locations of our properties as of December 31, 2025, 2024, and 2023, respectively (dollars in thousands): State Lease Revenue for the twelve months ended December 31, 2025 % of Lease Revenue Number of Leases for the twelve months ended December 31, 2025 Rentable Square Feet for the twelve months ended December 31, 2025 Lease Revenue for the twelve months ended December 31, 2024 % of Lease Revenue Number of Leases for the twelve months ended December 31, 2024 Rentable Square Feet for the twelve months ended December 31, 2024 Lease Revenue for the year ended December 31, 2023 % of Lease Revenue Number of Leases for the year ended December 31, 2023 Rentable Square Feet for the year ended December 31, 2023 Texas $ 25,454 15.8 % 17 1,723,160 $ 18,772 12.6 % 15 1,367,382 $ 17,847 12.1 % 14 1,473,264 Pennsylvania 21,419 13.3 11 2,420,790 20,209 13.5 11 2,420,790 14,809 10.0 10 2,267,847 Florida 17,489 10.8 9 1,045,404 17,228 11.5 9 1,045,404 19,387 13.1 9 1,045,404 Ohio 13,487 8.4 15 1,197,505 12,267 8.2 15 1,197,505 14,347 9.7 15 1,312,291 Georgia 9,439 5.9 12 1,102,054 12,132 8.1 9 1,660,655 12,061 8.2 11 1,686,986 Alabama 8,689 5.4 6 1,107,654 8,675 5.8 6 1,107,654 8,793 6.0 6 1,107,654 North Carolina 8,577 5.3 9 1,479,430 9,464 6.3 10 1,539,430 9,340 6.3 10 1,539,430 Michigan 8,073 5.0 10 1,341,513 6,833 4.6 6 973,638 6,487 4.4 6 973,638 Colorado 7,506 4.7 4 482,481 7,480 5.0 4 482,481 7,480 5.1 4 482,481 Wisconsin 5,761 3.6 3 951,083 1,815 1.2 2 647,092 1,728 1.2 2 647,092 All Other States 35,442 21.8 47 4,824,889 34,513 23.2 45 4,457,856 35,305 23.9 50 4,523,182 $ 161,336 100.0 % 143 17,675,963 $ 149,388 100.0 % 132 16,899,887 $ 147,584 100.0 % 137 17,059,269 32 Table of Contents The following table summarizes lease revenue by tenant industries for the years ended December 31, 2025, 2024 and 2023 (dollars in thousands): For the year ended December 31, 2025 2024 2023 Industry Classification Lease Revenue Percentage of Lease Revenue Lease Revenue Percentage of Lease Revenue Lease Revenue Percentage of Lease Revenue Automotive $ 24,534 15.2 % $ 21,617 14.5 % $ 20,697 14.0 % Diversified/Conglomerate Services 20,285 12.6 23,584 15.8 18,379 12.5 Buildings and Real Estate 15,437 9.6 14,800 9.9 9,667 6.6 Telecommunications 14,030 8.7 13,401 9.0 21,306 14.1 Beverage.
Item 2. Properties. As of December 31, 2024, we wholly-owned 135 properties, comprised of 16.9 million square feet of rentable space in 27 states. Our properties were 98.7% leased with an average remaining lease term of 7.0 years.
Item 2. Properties. As of December 31, 2025, we wholly-owned 151 properties, comprised of 17.7 million square feet of rentable space in 27 states. Our properties were 99.1% leased with an average remaining lease term of 7.3 years.
The following table summarizes the lease expirations by year for our properties for leases in place as of December 31, 2024 (dollars in thousands): Year of Lease Expiration Square Feet (1) Number of Expiring Leases Lease Revenue for the year ended December 31, 2024 % Expiring 2025 851,355 4 $ 4,773 3.2 % 2026 1,683,479 9 17,535 11.7 2027 1,081,647 12 16,497 11.0 2028 1,754,938 14 12,082 8.1 2029 1,647,579 17 11,619 7.8 Thereafter 9,658,573 76 79,743 53.4 Sold/terminated leases N/A N/A 7,139 4.8 16,677,571 132 $ 149,388 100.0 % (1) Our vacant square footage totaled 222,316 square feet as of December 31, 2024.
The following table summarizes the lease expirations by year for our properties for leases in place as of December 31, 2025 (dollars in thousands): Year of Lease Expiration Square Feet (1) Number of Expiring Leases Lease Revenue for the twelve months ended December 31, 2025 % Expiring 2026 1,386,295 8 $ 19,103 11.8 % 2027 1,136,955 13 18,215 11.3 2028 1,822,647 15 12,772 7.9 2029 1,647,579 17 11,731 7.3 2030 996,574 12 12,063 7.5 Thereafter 10,519,597 78 84,918 52.6 Sold/terminated leases N/A N/A 2,534 1.6 17,509,647 143 $ 161,336 100.0 % (1) Our vacant square footage totaled 166,316 square feet as of December 31, 2025.
Added
Food & Tobacco 12,918 8.0 5,829 3.9 5,724 3.9 Diversified/Conglomerate Manufacturing 12,126 7.5 9,969 6.7 10,648 7.2 Personal, Food & Miscellaneous Services 10,481 6.5 9,554 6.4 9,382 6.4 Banking 8,949 5.5 9,366 6.3 9,538 6.5 Machinery 7,375 4.6 7,393 4.9 5,874 4.0 Personal & Non-Durable Consumer Products 7,317 4.5 7,440 5.0 7,648 5.2 Healthcare 7,217 4.5 8,180 5.5 11,156 7.6 Chemicals, Plastics & Rubber 5,399 3.3 5,391 3.6 5,365 3.6 Containers, Packaging & Glass 4,727 2.9 4,620 3.1 4,065 2.8 Electronics 2,829 1.8 1,176 0.8 1,145 0.8 Childcare 2,294 1.4 2,293 1.5 2,292 1.6 Information Technology 2,288 1.4 2,288 1.5 2,439 1.7 Printing & Publishing 1,066 0.7 1,065 0.7 930 0.6 Oil & Gas 994 0.6 339 0.2 — — Education 577 0.4 590 0.4 836 0.6 Home & Office Furnishings 493 0.3 493 0.3 493 0.3 Total $ 161,336 100.0 % $ 149,388 100.0 % $ 147,584 100.0 % 33 Table of Contents

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

4 edited+1 added−2 removed12 unchanged
Biggest changeSale of Unregistered Securities We did not sell unregistered shares of stock during the fiscal year ended December 31, 2024. 33 Table of Contents Issuer Purchaser of Equity Securities We repurchased 600 shares of our Series G Preferred Stock and 80,780 shares of our Common Stock during the fiscal year ended December 31, 2023.
Biggest changeSale of Unregistered Securities We did not sell unregistered shares of stock during the fiscal year ended December 31, 2025. 34 Table of Contents Issuer Purchases of Equity Securities We did not repurchase any stock during the fourth fiscal quarter ended December 31, 2025.
The stock performance graph assumes $100 was invested on December 31, 2019.
The stock performance graph assumes $100 was invested on December 31, 2020.
The Senior Common Stock is not traded on any exchange or automated quotation system. As of February 10, 2025, there were 143 beneficial owners of our Senior Common Stock.
The Senior Common Stock is not traded on any exchange or automated quotation system. As of February 11, 2026, there were 141 beneficial owners of our Senior Common Stock.
As of February 10, 2025, there were 49,912 beneficial owners of our common stock. We pay distributions on shares of our Senior Common Stock in an amount equal to $1.05 per share per annum, declared daily and paid at the rate of $0.0875 per share per month.
As of February 11, 2026, there were 54,347 beneficial owners of our common stock. Subject to the approval of our board of directors, we pay distributions on shares of our Senior Common Stock in an amount equal to $1.05 per share per annum, declared daily and paid at the rate of $0.0875 per share per month.
Removed
We did not repurchase any stock during the year ended December 31, 2024.
Added
At December 31, 2020 2021 2022 2023 2024 2025 GOOD $ 100.00 $ 165.45 $ 129.38 $ 101.43 $ 135.27 $ 96.95 S&P 500 $ 100.00 $ 128.26 $ 109.04 $ 132.69 $ 172.54 $ 199.19 FNAR $ 100.00 $ 139.88 $ 104.77 $ 116.80 $ 121.86 $ 123.90 Item 6. Reserved.
Removed
At December 31, 2019 2020 2021 2022 2023 2024 GOOD $ 100.00 $ 89.41 $ 136.24 $ 106.53 $ 83.52 $ 111.39 S&P 500 $ 100.00 $ 118.50 $ 151.99 $ 129.21 $ 157.24 $ 204.45 FNAR $ 100.00 $ 94.14 $ 131.68 $ 98.63 $ 109.95 $ 114.69 Item 6. Reserved.

Item 7. Management's Discussion & Analysis

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

99 edited+40 added−36 removed62 unchanged
Biggest changeA comparison of our operating results for the year ended December 31, 2024 and 2023 is below (dollars in thousands, except per share amounts): For the year ended December 31, 2024 2023 $ Change % Change Operating revenues Lease revenue $ 149,388 $ 147,584 $ 1,804 1.2 % Total operating revenues $ 149,388 $ 147,584 $ 1,804 1.2 % Operating expenses Depreciation and amortization $ 55,786 $ 57,856 $ (2,070) (3.6) % Property operating expenses 25,418 25,858 (440) (1.7) % Base management fee 6,111 6,380 (269) (4.2) % Incentive fee 4,488 — 4,488 100.0 % Administration fee 2,567 2,350 217 9.2 % General and administrative 3,879 4,363 (484) (11.1) % Impairment charge 6,822 19,296 (12,474) (64.6) % Total operating expense before incentive fee waiver $ 105,071 $ 116,103 $ (11,032) (9.5) % Incentive fee waiver (2,263) — (2,263) 100.0 % Total operating expenses $ 102,808 $ 116,103 $ (13,295) (11.5) % Other income (expense) Interest expense $ (37,395) $ (37,330) $ (65) 0.2 % Gain on sale of real estate, net 14,229 7,737 6,492 83.9 % Gain on debt extinguishment, net 300 2,830 (2,530) (89.4) % Other income 326 204 122 59.8 % Total other expense, net $ (22,540) $ (26,559) $ 4,019 (15.1) % Net income $ 24,040 $ 4,922 $ 19,118 388.4 % Distributions attributable to Series E, F, and G preferred stock (12,440) (12,285) (155) 1.3 % Distributions attributable to senior common stock (420) (430) 10 (2.3) % Loss on extinguishment of Series F preferred stock (14) (11) (3) 27.3 % Gain on repurchase of Series G preferred stock — 3 (3) (100.0) % Net income (loss) available (attributable) to common stockholders and Non-controlling OP Unitholders $ 11,166 $ (7,801) $ 18,967 (243.1) % Net income (loss) available (attributable) to common stockholders and Non-controlling OP Unitholders per weighted average share and unit - basic & diluted $ 0.27 $ (0.19) $ 0.46 (242.1) % FFO available to common stockholders and Non-controlling OP Unitholders - basic (1) $ 59,245 $ 58,784 $ 461 0.8 % FFO available to common stockholders and Non-controlling OP Unitholders - diluted (1) $ 59,665 $ 59,214 $ 451 0.8 % FFO per weighted average share of common stock and Non-controlling OP Unit - basic (1) $ 1.41 $ 1.46 $ (0.05) (3.4) % FFO per weighted average share of common stock and Non-controlling OP Unit - diluted (1) $ 1.41 $ 1.46 $ (0.05) (3.4) % (1) Refer to the “Funds from Operations” section below within the Management’s Discussion and Analysis section for the definition of FFO and FFO, as adjusted for comparability.
Biggest changeThe weighted average yield does not account for the interest expense incurred on the mortgages placed on our properties or other types of existing indebtedness. 44 Table of Contents A comparison of our operating results for the year ended December 31, 2025 and 2024 is below (dollars in thousands, except per share amounts): For the year ended December 31, 2025 2024 $ Change % Change Operating revenues Lease revenue $ 161,336 $ 149,388 $ 11,948 8.0 % Total operating revenues $ 161,336 $ 149,388 $ 11,948 8.0 % Operating expenses Depreciation and amortization $ 58,245 $ 55,786 $ 2,459 4.4 % Property operating expenses 28,625 25,418 3,207 12.6 % Base management fee 6,641 6,111 530 8.7 % Incentive fee 2,765 4,488 (1,723) (38.4) % Administration fee 2,581 2,567 14 0.5 % General and administrative 4,040 3,879 161 4.2 % Impairment charge 9 6,822 (6,813) (99.9) % Total operating expense before incentive fee waiver $ 102,906 $ 105,071 $ (2,165) (2.1) % Incentive fee waiver (1,517) (2,263) 746 (33.0) % Total operating expenses $ 101,389 $ 102,808 $ (1,419) (1.4) % Other (expense) income Interest expense $ (41,914) $ (37,395) $ (4,519) 12.1 % Gain on sale of real estate, net 367 14,229 (13,862) (97.4) % Gain on debt extinguishment, net — 300 (300) (100.0) % Other income 892 326 566 173.6 % Total other expense, net $ (40,655) $ (22,540) $ (18,115) 80.4 % Net income $ 19,292 $ 24,040 $ (4,748) (19.8) % Distributions attributable to Series E, F, and G preferred stock (12,299) (12,440) 141 (1.1) % Distributions attributable to senior common stock (406) (420) 14 (3.3) % Gain (loss) on extinguishment of Series F preferred stock 10 (14) 24 (171.4) % Net income available to common stockholders and Non-controlling OP Unitholders $ 6,597 $ 11,166 $ (4,569) (40.9) % Net income available to common stockholders and Non-controlling OP Unitholders per weighted average share and unit - basic & diluted $ 0.14 $ 0.27 $ (0.13) (48.1) % FFO available to common stockholders and Non-controlling OP Unitholders - basic (1) $ 64,484 $ 59,245 $ 5,239 8.8 % FFO available to common stockholders and Non-controlling OP Unitholders - diluted (1) $ 64,890 $ 59,665 $ 5,225 8.8 % FFO per weighted average share of common stock and Non-controlling OP Unit - basic (1) $ 1.38 $ 1.41 $ (0.03) (2.1) % FFO per weighted average share of common stock and Non-controlling OP Unit - diluted (1) $ 1.38 $ 1.41 $ (0.03) (2.1) % (1) Refer to the “Funds from Operations” section below within the Management’s Discussion and Analysis section for the definition of FFO and FFO, as adjusted for comparability.
The Eighth Amended Advisory Agreement contractually eliminated the payment of the incentive fee for the quarters ended September 30, 2023 and December 31, 2023.
The Eighth Amended Advisory Agreement contractually eliminated the payment of the incentive fee for the quarters ended September 30, 2023 and December 31, 2023.
Investing Activities Net cash used in investing activities during the year ended December 31, 2024, was $1.7 million, which primarily consisted of the acquisition of seven properties, coupled with the capital improvements performed at certain of our properties, partially offset by proceeds from the sale of real estate.
Net cash used in investing activities during the year ended December 31, 2024, was $1.7 million, which primarily consisted of the acquisition of seven properties, coupled with the capital improvements performed at certain of our properties, partially offset by proceeds from the sale of real estate.
Financing Activities Net cash used in financing activities during the year ended December 31, 2024, was $56.3 million, which primarily consisted of proceeds from our common and preferred equity offerings, mortgage borrowings, and borrowings under unsecured notes, partially offset by the repayment of outstanding mortgage debt, net decrease in Credit Facility borrowings and distributions paid to our stockholders and Non-controlling OP Unitholders.
Net cash used in financing activities during the year ended December 31, 2024, was $56.3 million, which primarily consisted of proceeds from our common and preferred equity offerings, mortgage borrowings, and borrowings under unsecured notes, partially offset by the repayment of outstanding mortgage debt, net decrease in Credit Facility borrowings, and distributions paid to our stockholders and Non-controlling OP Unitholders.
Termination Fee The Advisory Agreement includes a termination fee whereby, in the event of our termination of the agreement without cause (with 120 days’ prior written notice and the vote of at least two-thirds of our independent directors), a termination fee would be payable to the Adviser equal to two times the sum of the average annual base management fee and incentive fee earned by the Adviser during the 24-month period prior to such termination.
Termination Fee The Advisory Agreement includes a termination fee clause whereby, in the event of our termination of the agreement without cause (with 120 days’ prior written notice and the vote of at least two-thirds of our independent directors), a termination fee would be payable to the Adviser equal to two times the sum of the average annual base management fee and incentive fee earned by the Adviser during the 24-month period prior to such termination.
The Seventh Amended Advisory Agreement contractually eliminated the payment of the incentive fee, as applicable, for the quarters ended March 31, 2023 and June 30, 2023. The calculation of the other fees remained unchanged. On July 11, 2023, we entered into the Eighth Amended Advisory Agreement, as approved unanimously by our Board of Directors, including specifically, our independent directors.
The Seventh Amended Advisory Agreement contractually eliminated the payment of the incentive fee, as applicable, for the quarters ended March 31, 2023 and June 30, 2023. The calculation of the other fees remained unchanged. On July 11, 2023, we then entered into the Eighth Amended Advisory Agreement, as approved unanimously by our Board of Directors, including specifically, our independent directors.
The Seventh Amended Advisory Agreement contractually eliminated the payment of the incentive fee for the quarters ended March 31, 2023 and June 30, 2023. The calculation of the other fees remained unchanged. On July 11, 2023, the Company entered into the Eighth Amended Advisory Agreement, as approved unanimously by our Board of Directors, including specifically, our independent directors.
The Seventh Amended Advisory Agreement contractually eliminated the payment of the incentive fee for the quarters ended March 31, 2023 and June 30, 2023. The calculation of the other fees remained unchanged. On July 11, 2023, the Company then entered into the Eighth Amended Advisory Agreement, as approved unanimously by our Board of Directors, including specifically, our independent directors.
Core FFO (as defined in the Advisory Agreement) is GAAP net income (loss) available to common stockholders, excluding the incentive fee, depreciation and amortization, any realized and unrealized gains, losses or other non-cash items recorded in net income (loss) available to common stockholders for the period, and one-time events pursuant to changes in GAAP.
Core FFO (as defined in the Advisory Agreement) is GAAP net income (loss) available (attributable) to common stockholders, excluding the incentive fee, depreciation and amortization, any realized and unrealized gains, losses or other non-cash items recorded in net income (loss) available (attributable) to common stockholders for the period, and one-time events pursuant to changes in GAAP.
Generally, the Series G Preferred Units provided for under the Third Amendment have preferences, distribution rights, and other provisions substantially equivalent to those of the Series G Preferred Stock.
Generally, the Series G Term Preferred Units provided for under the Third Amendment have preferences, distribution rights, and other provisions substantially equivalent to those of the Series G Preferred Stock.
The balance and interest rate on our Revolver and Term Loan A, Term Loan B, Term Loan C is variable; thus, the interest payment obligation calculated for purposes of this table was based upon rates and balances as of December 31, 2024. (3) Operating lease obligations represent the ground lease payments due on three of our properties.
The balance and interest rate on our Revolver and Term Loan A, Term Loan B, Term Loan C is variable; thus, the interest payment obligation calculated for purposes of this table was based upon rates and balances as of December 31, 2025. (3) Operating lease obligations represent the ground lease payments due on three of our properties.
Under the Sixth Amended Advisory Agreement, the Base Management Fee is payable quarterly in arrears and shall be calculated at an annual rate of 0.425% (0.10625% per quarter) of the prior calendar quarter’s “Gross Tangible Real Estate,” defined in the agreement as the current gross value of the Company’s property portfolio (meaning the aggregate of each property’s original acquisition price plus the cost of any subsequent capital improvements thereon).
Under the Sixth Amended Advisory Agreement, the Base Management Fee is payable quarterly 41 Table of Contents in arrears and shall be calculated at an annual rate of 0.425% (0.10625% per quarter) of the prior calendar quarter’s “Gross Tangible Real Estate,” defined in the agreement as the current gross value of the Company’s property portfolio (meaning the aggregate of each property’s original acquisition price plus the cost of any subsequent capital improvements thereon).
Amendments to Operating Partnership Agreement In connection with the authorization of the Series F Preferred Stock in February of 2020, the Operating Partnership controlled by the Company through its ownership of GCLP Business Trust II, the general partner of the Operating Partnership, adopted the Second Amendment to its Second Amended and Restated Agreement of Limited Partnership (collectively, the “Amendment”), 38 Table of Contents as amended from time to time, establishing the rights, privileges and preferences of 6.00% Series F Cumulative Redeemable Preferred Units, a newly-designated class of limited partnership interests (the “Series F Preferred Units”).
Amendments to Operating Partnership Agreement In connection with the authorization of the Series F Preferred Stock in February of 2020, the Operating Partnership controlled by the Company through its ownership of GCLP Business Trust II, the general partner of the Operating Partnership, adopted the Second Amendment to its Second Amended and Restated Agreement of Limited Partnership (collectively, the “Amendment”), as amended from time to time, establishing the rights, privileges and preferences of 6.00% Series F Cumulative Redeemable Preferred Units, a newly-designated class of limited partnership interests (the “Series F Preferred Units”).
During its July 2024 meeting, our Board of Directors reviewed and renewed the Advisory Agreement and Administration Agreement for an additional year, through August 31, 2025. Base Management Fee On July 14, 2020, the Company entered into the Sixth Amended Advisory Agreement, which replaced the previous calculation of the Base Management Fee.
During its July 2025 meeting, our Board of Directors reviewed and renewed the Advisory Agreement and Administration Agreement for an additional year, through August 31, 2026. Base Management Fee On July 14, 2020, the Company entered into the Sixth Amended Advisory Agreement, which replaced the previous calculation of the Base Management Fee.
We did not sell any shares of our Series E Preferred Stock pursuant to the Series E Preferred Stock Sales Agreement during the year ended December 31, 2024, as we terminated the Series E Preferred Stock Sales Agreement effective February 10, 2023 in connection with the expiration of the 2020 Registration Statement on February 11, 2023.
We did not sell any shares of our Series E Preferred Stock pursuant to the Series E Preferred Stock Sales Agreement during the year ended December 31, 2025, as we terminated the Series E Preferred Stock Sales Agreement effective February 10, 2023 in connection with the expiration of the 2020 Registration Statement on February 11, 2023.
At the end of the fiscal year, if this number is positive, then the capital gain fee payable for such time period shall equal 15.0% of such amount. No capital gains fee was recognized during the years ended December 31, 2024, 2023, and 2022.
At the end of the fiscal year, if this number is positive, then the capital gain fee payable for such time period shall equal 15.0% of such amount. No capital gains fee was recognized during the years ended December 31, 2025, 2024, and 2023.
We believe we currently have adequate liquidity in the near term, and we believe that our cash on hand combined with the availability on our Credit Facility is sufficient to cover all near term debt obligations and operating expenses and to continue our industrial growth strategy.
We believe we currently have adequate liquidity in the near term, and we believe that our cash on hand combined with the availability on our Credit Facility is sufficient to cover all near-term debt obligations and operating expenses and to continue our industrial property focused growth strategy.
Allocation of Purchase Price When we acquire real estate with an existing lease, we allocate the purchase price to (i) the acquired tangible assets and liabilities, consisting of land, building, tenant improvements and long-term debt and (ii) the identified intangible assets and liabilities, consisting of the value of above-market and below-market leases, in-place leases, unamortized lease origination 41 Table of Contents costs, tenant relationships and capital lease obligations.
Allocation of Purchase Price When we acquire real estate with an existing lease, we allocate the purchase price to (i) the acquired tangible assets and liabilities, consisting of land, building, tenant improvements and long-term debt and (ii) the identified intangible assets and liabilities, consisting of the value of above-market and below-market leases, in-place leases, unamortized lease origination costs, tenant relationships and capital lease obligations.
The increase in property operating expenses for properties with vacancy for the year ended December 31, 2024, as compared to the year ended December 31, 2023, is a result of general cost increases due to the inflationary environment.
The increase in property operating expenses for properties with vacancy for the year ended December 31, 2025, as compared to the year ended December 31, 2024, is a result of general cost increases due to the inflationary environment.
Incentive Fee Pursuant to the Advisory Agreement, the calculation of the incentive fee rewards the Adviser in circumstances where our quarterly Core FFO (defined at the end of this paragraph), before giving effect to any incentive fee, or pre-incentive fee Core FFO, exceeds 2.0% quarterly, or 8.0% annualized, of adjusted total equity (after giving effect to the base management fee but 40 Table of Contents before giving effect to the incentive fee).
Incentive Fee Pursuant to the Advisory Agreement, the calculation of the incentive fee rewards the Adviser in circumstances where our quarterly Core FFO (defined at the end of this paragraph), before giving effect to any incentive fee, or pre-incentive fee Core FFO, exceeds 2.0% quarterly, or 8.0% annualized, of adjusted total equity (after giving effect to the base management fee but before giving effect to the incentive fee).
Basic funds from operations per share (“Basic FFO per share”), and diluted funds from operations per share (“Diluted FFO per share”), is FFO available to common stockholders and Non-controlling OP Unitholders divided by the number of weighted average shares of the aggregate of shares of common stock and OP Units held by Non-controlling OP Unitholders outstanding and FFO available to common stockholders and Non-controlling OP Unitholders divided by the number of weighted average shares of the aggregate of shares of common stock and OP Units held by Non-controlling OP Units outstanding on a diluted basis, respectively, during a period.
Basic funds from operations per share (“Basic FFO per share”), and diluted funds from operations per share (“Diluted FFO per share”), is FFO available to common stockholders and Non-controlling OP Unitholders divided by the number of weighted average shares of the aggregate of shares of common stock and OP Units held by Non-controlling OP Unitholders outstanding and FFO available to common stockholders and Non-controlling OP Unitholders divided by the number of weighted average shares of the aggregate of shares of common stock and OP Units held by Non-controlling OP Unitholders outstanding on a 50 Table of Contents diluted basis, respectively, during a period.
We utilize 46 Table of Contents this cash to fund our property-level operating expenses and use the excess cash primarily for debt and interest payments on our mortgage notes payable, interest payments on our Credit Facility, distributions to our stockholders, management fees to our Adviser, administration fees to our Administrator and other entity-level operating expenses.
We utilize this cash to fund our property-level operating expenses and use the excess cash primarily for debt and interest payments on our mortgage notes payable, interest payments on our Credit Facility, interest payments on our unsecured notes, distributions to our 48 Table of Contents stockholders, management fees to our Adviser, administration fees to our Administrator and other entity-level operating expenses.
FFO available to common stockholders and holders of Non-controlling interests in the Operating Partnership (“Non-controlling OP Unitholders”) is FFO adjusted to subtract preferred share and Senior Common Stock share distributions. We believe that net loss attributable to common stockholders is the most directly comparable GAAP measure to FFO available to the aggregate of our common stockholders and Non-controlling OP Unitholders.
FFO available to common stockholders and holders of Non-controlling interests in the Operating Partnership (“Non-controlling OP Unitholders”) is FFO adjusted to subtract preferred share and Senior Common Stock share distributions. We believe that net income available to common stockholders is the most directly comparable GAAP measure to FFO available to the aggregate of our common stockholders and Non-controlling OP Unitholders.
A discussion of the results of operations for the year ended December 31, 2022 is found in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 21, 2024, which is available free of charge on the SEC's website at www.sec.gov and on the investors section of our website at www.GladstoneCommercial.com.
A discussion of the results of operations for the year ended December 31, 2023 is found in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 18, 2025, which is available free of charge on the SEC's website at www.sec.gov and on the investors section of our website at www.GladstoneCommercial.com.
Our properties are geographically diversified and our tenants cover a broad cross section of business sectors and range in size from small to very 34 Table of Contents large private and public companies, many of which are corporations that do not have publicly-rated debt.
Our properties are geographically diversified and our tenants cover a broad cross section of business sectors and range in size from small to very large private and public companies, many of which are corporations that do not have publicly-rated debt.
Gladstone also serves as the chairman and chief executive officer of both our Adviser and Administrator. Mr. Cooper, our president, also serves as executive vice president of commercial and industrial real estate of our Adviser.
Gladstone, who is also our chairman and chief executive officer. Mr. Gladstone also serves as the chairman and chief executive officer of both our Adviser and Administrator. Mr. Cooper, our president, also serves as executive vice president of commercial and industrial real estate of our Adviser.
The decrease in property operating expenses on acquired and disposed of properties for the year ended December 31, 2024, as compared to the year ended December 31, 2023, is a result of a decrease in property operating expenses in relation to properties held for sale or sold during the year that were fully vacant.
The decrease in property operating expenses on acquired and disposed of properties for the year ended December 31, 2025, as compared to the year ended December 31, 2024, is a result of a decrease in property operating expenses in relation to properties held for sale or sold during the year that were fully or partially vacant.
Equity Activity Common Stock ATM Program 37 Table of Contents On February 22, 2022, we entered into Amendment No. 1 to the At-the-Market Equity Offering Sales Agreement with sales agents Baird, Goldman Sachs, Stifel, Nicolaus & Company, Incorporated, (“Stifel”) BTIG, LLC, and Fifth Third, dated December 3, 2019 (together, the “Prior Common Stock Sales Agreement”).
Equity Activity Common Stock ATM Program On February 22, 2022, we entered into Amendment No. 1 to the At-the-Market Equity Offering Sales Agreement with sales agents Baird, Goldman Sachs, Stifel, Nicolaus & Company, Incorporated, (“Stifel”) BTIG, LLC, and Fifth Third, dated December 3, 2019 (together, the “Prior Common Stock Sales Agreement”).
The gain on sale of real estate, net, during the year ended December 31, 2024 is a result of the sale of seven properties and a selling profit from sales-type leases related to one lease. The gain on sale of real estate, net, during the year ended December 31, 2023 was a result of the sale of seven properties.
The gain on sale of real estate, net, during the year ended December 31, 2025 is a result of the sale of two properties. The gain on sale of real estate, net, during the year ended December 31, 2024 was a result of the sale of seven properties and a selling profit from sales-type leases related to one lease.
Using the methodology discussed above, we evaluated our entire portfolio, as of December 31, 2024, for any impairment indicators and performed an impairment analysis on select properties that had an indication of impairment. See Note 5 - Real Estate Dispositions, Held for Sale, and Impairment Charges - Impairment Charges of the accompanying consolidated financial statements.
Using the methodology discussed above, we evaluated our entire portfolio, as of December 31, 2025, for any impairment indicators and performed an impairment analysis on select properties that had an indication of impairment. See Note 4 - Real Estate Dispositions, Held for Sale, and Impairment Charges - Impairment Charges of the accompanying consolidated financial statements.
During the year ended December 31, 2024, we did not sell any shares of common stock under the 2023 Common Stock Sales Agreement.
During the year ended December 31, 2025, we did not sell any shares of common stock under the 2023 Common Stock Sales Agreement.
We intend to use the proceeds received from future equity raised and debt capital borrowed to continue to invest in industrial properties, which is our strategic focus, or to a lessor extent, office real 45 Table of Contents property, or pay down outstanding borrowings under our Revolver.
We intend to use the proceeds received from future equity raised and debt capital borrowed to continue to invest in industrial properties, which is our strategic focus, or to a lessor extent, office real property, or pay down outstanding borrowings under our Revolver.
Our entrance into the Advisory Agreement and each amendment thereto has been approved unanimously by our Board of Directors. Our Board of Directors reviews and considers renewing the agreement with our Adviser annually, typically during the month of July.
Our entrance into the Advisory Agreement and each amendment thereto (including the Eighth Amended Advisory Agreement) has been approved unanimously by our Board of Directors. Our Board of Directors reviews and considers renewing the agreement with our Adviser annually, typically during the month of July.
We anticipate being able to refinance our mortgages that come due during 2025 and 2026 with a combination of new mortgage debt, availability under our Credit Facility, the issuance of long-term unsecured notes in the private placement market, the issuance of additional equity securities under our 2024 Common Stock Sales Agreement, the sale and issuance of other equity securities (including our Series F Preferred Stock) that are registered under the 2024 Registration Statement, or the sale and issuance of unregistered equity or debt securities.
We anticipate being able to refinance our mortgages that come due during 2026 and 2027 with a combination of new mortgage debt, availability under our Credit Facility, the issuance of long-term unsecured notes in the private placement market, the issuance of additional equity securities under our 2024 Common Stock Sales Agreement, the sale and issuance of other equity securities that are registered under the 2024 Registration Statement, or the sale and issuance of unregistered equity or debt securities.
There were no material changes to our critical accounting policies during the year ended December 31, 2024.
There were no material changes to our critical accounting policies during the year ended December 31, 2025.
Same Store Analysis For the purposes of the following discussion, same store properties are properties we owned as of January 1, 2023, which have not been subsequently vacated or disposed. Acquired and disposed properties are properties which were either acquired, 43 Table of Contents disposed of or classified as held for sale at any point subsequent to December 31, 2022.
Same Store Analysis For the purposes of the following discussion, same store properties are properties we owned as of January 1, 2024, which have not been subsequently vacated or disposed. Acquired and disposed properties are properties which were either acquired, disposed of or classified as held for sale at any point subsequent to December 31, 2023.
In addition, the Eighth Amended Advisory Agreement also clarified that for any future quarter whereby an incentive fee would exceed by greater than 15% of the average quarterly incentive fee paid, the measurement would be versus the last four quarters where an incentive fee was actually paid. The calculation of the other fees remained unchanged.
In addition, the Eighth Amended Advisory Agreement also clarified that for any future quarter whereby an incentive fee would exceed by greater than 15% of the average quarterly incentive fee paid, the measurement would be versus the last four quarters where an incentive fee was actually paid.
We have historically entered into, and intend in the future to enter into, purchase agreements primarily for real estate having net leases with remaining terms of approximately seven to 15 years and built-in rental rate increases.
We have historically 35 Table of Contents entered into, and intend in the future to enter into, purchase agreements primarily for real estate having net leases with remaining terms of approximately seven to 20 years and built-in rental rate increases.
This figure does not include $(0.01) million of premiums and (discounts), net, and $5.0 million of deferred financing costs, net, which are reflected in mortgage notes payable, net, borrowings under Revolver, and borrowings under Term Loan A, Term Loan B, Term Loan C, net, and the 2029 Notes, net, on the consolidated balance sheet.
This figure does not include $0.02 million of premiums and (discounts), net, and $5.5 million of deferred financing costs, net, which are reflected in mortgage notes payable, net, borrowings under Term Loan A, Term Loan B, Term Loan C, net, and senior unsecured notes, net, on the consolidated balance sheet.
Other Income and Expenses Interest expense increased slightly for the year ended December 31, 2024, as compared to the year ended December 31, 2023.
Other Income and Expenses Interest expense increased for the year ended December 31, 2025, as compared to the year ended December 31, 2024.
Our available borrowing capacity under the Revolver has decreased to $90.6 million as of February 18, 2025. Future Capital Needs We actively seek conservative investments that we expect are likely to produce income to allow us to pay distributions to our stockholders and Non-controlling OP Unitholders.
Our available borrowing capacity under the Revolver decreased to $60.0 million as of February 18, 2026. Future Capital Needs We actively seek conservative investments that we expect are likely to produce income to allow us to pay distributions to our stockholders and Non-controlling OP Unitholders.
Property operating expenses increased for same store properties for the year ended December 31, 2024, as compared to the year ended December 31, 2023, as a result of general cost increases due to the inflationary environment.
Property operating expenses increased for same store properties for the year ended December 31, 2025, as compared to the year ended December 31, 2024, as a result of general cost increases due to the inflationary environment and increased repair expenses during the year.
The reclassification decreased the number of shares classified as common stock from 86,290,000 shares immediately prior to the reclassification to 60,290,000 shares immediately after the reclassification. We sold 47,328 shares of our Series F Preferred Stock, raising $1.1 million in net proceeds, pursuant to the 2024 Registration Statement, during the year ended December 31, 2024.
The reclassification decreased the number of shares classified as common stock from 86,290,000 shares immediately prior to the reclassification to 60,290,000 shares immediately after the reclassification. We sold 15,700 shares of our Series F Preferred Stock, raising $0.4 million in net proceeds, pursuant to the 2024 Registration Statement, during the year ended December 31, 2025.
We recorded an impairment charge during the year ended December 31, 2024 on three properties, as we had determined the carrying value of these properties was in excess of the fair market value and not recoverable. Accordingly, we impaired these properties to fair market value. We recorded an impairment charge on five properties during the year ended December 31, 2023.
We recorded an impairment charge during the year ended December 31, 2025 on one property, as we had determined the carrying value of this property was in excess of the fair market value and not recoverable. Accordingly, we impaired this property to fair market value. We recorded an impairment charge on three properties during the year ended December 31, 2024.
The increase is a result of our Administrator incurring greater costs that are allocated to the Company.
The slight increase is a result of our Administrator incurring greater costs that are allocated to 46 Table of Contents the Company.
Our short-term liquidity needs include proceeds necessary to fund our distributions to stockholders, pay the debt service costs on our existing long-term mortgages, bank debt, and long-term private debt, refinancing maturing debt and fund our current operating costs. Our long-term liquidity needs include proceeds necessary to grow and maintain our portfolio of investments.
Our short-term liquidity needs include proceeds necessary to fund our distributions to stockholders, pay the debt service costs on our existing long-term mortgages, bank debt, and long-term private debt, refinance maturing debt and fund our current operating costs.
Administration Agreement Under the terms of the Administration Agreement, we pay separately for our allocable portion of our Administrator’s overhead expenses in performing its obligations to us including, but not limited to, rent and our allocable portion of the salaries and benefits expenses of our Administrator’s employees, including, but not limited to, our chief financial officer, treasurer, chief compliance officer, general counsel and secretary (who also serves as our Administrator’s president, general counsel and secretary), and their respective staffs.
Administration Agreement Under the terms of the Administration Agreement, we pay separately for our allocable portion of our Administrator’s overhead expenses in performing its obligations to us including, but not limited to, rent and our allocable portion of the salaries and benefits expenses of our Administrator’s employees, including, but not limited to, our chief financial officer, treasurer, chief 42 Table of Contents compliance officer, chief administrative officer, co-general counsels and co-secretaries (one of whom also serves as our Administrator’s president), and their respective staffs.
Net cash provided by investing activities during the year ended December 31, 2023, was $1.1 million, which primarily consisted of proceeds from the sale of real estate, partially offset by the acquisition of five properties, coupled with the capital improvements performed at certain of our properties.
Investing Activities Net cash used in investing activities during the year ended December 31, 2025, was $221.4 million, which primarily consisted of the acquisition of 19 properties, coupled with the capital improvements performed at certain of our properties, partially offset by proceeds from the sale of real estate.
Lease revenues from same store properties increased for the year ended December 31, 2024, due to an increase in recovery revenue from property operating expenses and a settlement received at one of our properties related to deferred maintenance during the current period, partially offset by accelerated rent attributable to a lease termination in the prior period.
Lease revenues from same store properties increased for the year ended December 31, 2025, due to an increase in recovery revenue from property operating expenses and an increase in rental rates from leasing activity subsequent to the year ended December 31, 2024, partially offset by a settlement received at one of our properties related to deferred maintenance in the prior period.
Intangible assets are generally amortized over the respective life of the leases, which normally range from 10 to 15 years. Also, we depreciate our buildings for a period of time up to 39 years, but do not depreciate our land. These differences in timing could have a material impact on our results of operations.
Intangible assets are generally amortized over the respective life of the leases, which normally range from 10 to 15 years. Also, we depreciate our buildings for a period of time up to 39 years, but do not depreciate our land.
For the year ended December 31, 2023, the contractually eliminated incentive fee would have been $4.6 million. Non-controlling Interests in Operating Partnership As of December 31, 2024 and 2023, we owned approximately 99.9% and 99.2%, respectively, of the outstanding OP Units.
The calculation of the other fees remained unchanged. 40 Table of Contents For the years ended December 31, 2023, the contractually eliminated incentive fee would have been $4.6 million. Non-controlling Interests in Operating Partnership As of December 31, 2025 and 2024, we owned approximately 99.9% and 99.9%, respectively, of the outstanding OP Units.
During the years ended December 31, 2024 and 2023, we redeemed 271,169 and 80,825 OP units, respectively, for an equivalent amount of common stock.
During the year ended December 31, 2024, we redeemed 271,169 OP units for an equivalent amount of common stock.
Liquidity and Capital Resources Overview Our sources of liquidity include cash flows from operations, cash and cash equivalents, borrowing capacity under our Revolver and through issuance of additional equity securities. Our available liquidity as of December 31, 2024, was $101.7 million, including $11.0 million in cash and cash equivalents and an available borrowing capacity of $90.7 million under our Revolver.
Liquidity and Capital Resources Overview Our sources of liquidity include cash flows from operations, cash and cash equivalents, borrowing capacity under our Revolver and through issuance of additional equity securities. Our available liquidity as of December 31, 2025, was $73.6 million, including $10.8 million in cash and cash equivalents and an available borrowing capacity of $62.8 million under our Revolver.
As of December 31, 2024 and 2023, there were 39,474 and 310,643 outstanding OP Units held by Non-controlling OP Unitholders, respectively. Our Adviser and Administrator The Adviser is led by a management team with extensive experience purchasing real estate. Our Adviser and Administrator are controlled by Mr. Gladstone, who is also our chairman and chief executive officer. Mr.
As of December 31, 2025 and 2024, there were 39,474 and 39,474 outstanding OP Units held by Non-controlling OP Unitholders, respectively. Our Adviser and Administrator The Adviser is led by a management team with extensive experience purchasing real estate and originating mortgage loans. Our Adviser and Administrator are controlled by Mr.
We recorded an incentive fee, which was partially waived, during the year ended December 31, 2024. The calculation of the incentive fee is described in detail above within “Advisory and Administration Agreements.” The administration fee paid to the Administrator increased for the year ended December 31, 2024, as compared to the year ended December 31, 2023.
The calculation of the incentive fee is described in detail above within “Advisory and Administration Agreements.” The administration fee paid to the Administrator increased slightly for the year ended December 31, 2025, as compared to the year ended December 31, 2024.
We have successfully repaid $32.5 million of mortgage debt over the past 12 months with either new mortgage debt or by generating additional availability by adding properties to our unsecured pool under our Credit Facility. As of December 31, 2024, we also had $75.0 million of the 2029 Notes outstanding.
We have successfully repaid $10.3 million of mortgage debt over the past 12 months through property sales or by generating additional availability by adding properties to our unsecured pool under our Credit Facility. As of December 31, 2025, we also had $75.0 million of the 2029 Notes outstanding and $85.0 million of the 2030 Notes outstanding.
The calculation of the administration fee is described in detail above within “ Advisory and Administration Agreements.” General and administrative expenses decreased for the year ended December 31, 2024, as compared to the year ended December 31, 2023, primarily as a result of a decrease in legal fee expenses.
The calculation of the administration fee is described in detail above within “ Advisory and Administration Agreements.” General and administrative expenses increased for the year ended December 31, 2025, as compared to the year ended December 31, 2024, primarily as a result of an increase in professional fee expenses, partially offset by a decrease in travel and advertising expenses.
The following table provides a reconciliation of our FFO and FFO as adjusted for comparability for the years ended December 31, 2024 and 2023 to the most directly comparable GAAP measure, net income (loss), and a computation of basic and diluted FFO and diluted FFO as adjusted for comparability per weighted average total share: For the twelve months ended December 31, (Dollars in Thousands, Except for Per Share Amounts) 2024 2023 Calculation of basic FFO per share of common stock and Non-controlling OP Unit Net income $ 24,040 $ 4,922 Less: Distributions attributable to preferred and senior common stock (12,860) (12,715) Less: Loss on extinguishment of Series F preferred stock, net (14) (11) Add: Gain on repurchase of Series G preferred stock — 3 Net income (loss) available (attributable) to common stockholders and Non-controlling OP Unitholders $ 11,166 $ (7,801) Adjustments: Add: Real estate depreciation and amortization 55,786 57,856 Add: Impairment charge 6,822 19,296 Less: Gain on sale of real estate, net (14,229) (7,737) Less: Gain on debt extinguishment, net (300) (2,830) FFO available to common stockholders and Non-controlling OP Unitholders - basic $ 59,245 $ 58,784 Weighted average common shares outstanding - basic 41,766,263 39,943,167 Weighted average Non-controlling OP Units outstanding 157,160 382,563 Weighted average common shares and Non-controlling OP Units 41,923,423 40,325,730 Basic FFO per weighted average share of common stock and Non-controlling OP Unit $ 1.41 $ 1.46 Calculation of diluted FFO per share of common stock and Non-controlling OP Unit Net income $ 24,040 $ 4,922 Less: Distributions attributable to preferred and senior common stock (12,860) (12,715) Less: Loss on extinguishment of Series F preferred stock, net (14) (11) Add: Gain on repurchase of Series G preferred stock — 3 Net income (loss) available (attributable) to common stockholders and Non-controlling OP Unitholders $ 11,166 $ (7,801) Adjustments: Add: Real estate depreciation and amortization 55,786 57,856 Add: Impairment charge 6,822 19,296 Add: Income impact of assumed conversion of senior common stock 420 430 Less: Gain on sale of real estate, net (14,229) (7,737) Less: Gain on debt extinguishment, net (300) (2,830) FFO available to common stockholders and Non-controlling OP Unitholders plus assumed conversions $ 59,665 $ 59,214 Weighted average common shares outstanding - basic 41,766,263 39,943,167 Weighted average Non-controlling OP Units outstanding 157,160 382,563 Effect of convertible senior common stock 330,456 345,132 Weighted average common shares and Non-controlling OP Units outstanding - diluted 42,253,879 40,670,862 Diluted FFO per weighted average share of common stock and Non-controlling OP Unit $ 1.41 $ 1.46 Distributions declared per share of common stock and Non-controlling OP Unit $ 1.20 $ 1.20 49 Table of Contents
The following table provides a reconciliation of our FFO and FFO as adjusted for comparability for the years ended December 31, 2025 and 2024 to the most directly comparable GAAP measure, net income, and a computation of basic and diluted FFO per weighted average total share: For the twelve months ended December 31, (Dollars in Thousands, Except for Per Share Amounts) 2025 2024 Calculation of basic FFO per share of common stock and Non-controlling OP Unit Net income $ 19,292 $ 24,040 Less: Distributions attributable to preferred and senior common stock (12,705) (12,860) Add/Less: Gain (loss) on extinguishment of Series F preferred stock, net 10 (14) Net income available to common stockholders and Non-controlling OP Unitholders $ 6,597 $ 11,166 Adjustments: Add: Real estate depreciation and amortization 58,245 55,786 Add: Impairment charge 9 6,822 Less: Gain on sale of real estate, net (367) (14,229) Less: Gain on debt extinguishment, net — (300) FFO available to common stockholders and Non-controlling OP Unitholders - basic $ 64,484 $ 59,245 Weighted average common shares outstanding - basic 46,538,232 41,766,263 Weighted average Non-controlling OP Units outstanding 39,474 157,160 Weighted average common shares and Non-controlling OP Units 46,577,706 41,923,423 Basic FFO per weighted average share of common stock and Non-controlling OP Unit $ 1.38 $ 1.41 Calculation of diluted FFO per share of common stock and Non-controlling OP Unit Net income $ 19,292 $ 24,040 Less: Distributions attributable to preferred and senior common stock (12,705) (12,860) Add/Less: Gain (loss) on extinguishment of Series F preferred stock, net 10 (14) Net income available to common stockholders and Non-controlling OP Unitholders $ 6,597 $ 11,166 Adjustments: Add: Real estate depreciation and amortization 58,245 55,786 Add: Impairment charge 9 6,822 Add: Income impact of assumed conversion of senior common stock 406 420 Less: Gain on sale of real estate, net (367) (14,229) Less: Gain on debt extinguishment, net — (300) FFO available to common stockholders and Non-controlling OP Unitholders plus assumed conversions $ 64,890 $ 59,665 Weighted average common shares outstanding - basic 46,538,232 41,766,263 Weighted average Non-controlling OP Units outstanding 39,474 157,160 Effect of convertible senior common stock 322,315 330,456 Weighted average common shares and Non-controlling OP Units outstanding - diluted 46,900,021 42,253,879 Diluted FFO per weighted average share of common stock and Non-controlling OP Unit $ 1.38 $ 1.41 Distributions declared per share of common stock and Non-controlling OP Unit $ 1.20 $ 1.20 51 Table of Contents
There was no limit on the aggregate amount of the securities that we could offer pursuant to the 2022 Registration Statement. On March 13, 2024, we filed the 2024 Registration Statement, which was declared effective on March 21, 2024. The 2024 Registration Statement allows us to issue up to $1.3 billion of securities and replaced the 2022 Registration Statement.
There was no limit on the aggregate amount of the securities that we could offer pursuant to the 2022 Registration Statement. 39 Table of Contents On March 13, 2024, we filed the 2024 Registration Statement, which was declared effective on March 21, 2024.
(4) Purchase obligations consist of tenant and capital improvements at ten of our properties. Off-Balance Sheet Arrangements We did not have any material off-balance sheet arrangements as of December 31, 2024.
(4) Finance lease obligations represent the ground lease payments due on one of our properties. (5) Purchase obligations consist of tenant and capital improvements at ten of our properties. Off-Balance Sheet Arrangements We did not have any material off-balance sheet arrangements as of December 31, 2025.
For this purpose, aggregate realized capital gains and losses, if any, equals the realized gain or loss calculated by the difference between the sales price of the property, less any costs to sell the property and the all-in acquisition cost of the disposed property.
For this purpose, aggregate realized capital gains and losses, if any, equals the realized gain or loss calculated by the difference between the sales price of the property, less any costs to sell the property and the current gross value of the property (equal to the property’s original acquisition price plus any subsequent non-reimbursed capital improvements) of the disposed property.
Our Administrator employs our chief financial officer, treasurer, chief compliance officer, and general counsel and secretary (who also serves as our Administrator’s president, general counsel, and secretary, as well as executive vice president of administration of our Adviser) and their respective staffs. 39 Table of Contents Our Adviser and Administrator also provide investment advisory and administrative services, respectively, to certain of our affiliates, including, but not limited to, Gladstone Capital and Gladstone Investment, both publicly-traded business development companies, Gladstone Land, a publicly-traded REIT that primarily invests in farmland, and Gladstone Alternative, a non-diversified, closed-end management investment company that operates as an “interval fund” that is also our affiliate.
Our Adviser and Administrator also provide investment advisory and administrative services, respectively, to certain of our affiliates, including, but not limited to, Gladstone Capital and Gladstone Investment, both publicly-traded business development companies, Gladstone Land, a publicly-traded REIT that primarily invests in farmland, and Gladstone Alternative, a non-diversified, closed-end management investment company that operates as an “interval fund” that is also our affiliate.
We target secondary growth markets that possess favorable economic growth trends, diversified industries, and growing population and employment. All references to annualized generally accepted accounting principles (“GAAP”) rent are rents that each tenant pays in accordance with the terms of its respective lease reported evenly over the non-cancelable term of the lease.
All references to annualized generally accepted accounting principles (“GAAP”) rent are rents that each tenant pays in accordance with the terms of its respective lease reported evenly over the non-cancelable term of the lease.
Additionally, to satisfy our short-term obligations, we may request credits to our management fees that are issued from our Adviser, although our Adviser is under no obligation to provide any such credits, either in whole or in part.
We also believe we will be able to refinance our mortgage debt, bank debt, and long-term private debt as they mature. Additionally, to satisfy our short-term obligations, we may request credits to our management fees that are issued from our Adviser, although our Adviser is under no obligation to provide any such credits, either in whole or in part.
As of February 18, 2025: • we owned 135 properties totaling 16.9 million square feet of rentable space, located in 27 states; • our occupancy rate was 98.7%; • the weighted average remaining term of our mortgage debt was 3.4 years and the weighted average interest rate was 4.29%; and • the average remaining lease term of the portfolio was 6.9 years.
As of February 18, 2026: • we owned 151 properties totaling 17.7 million square feet of rentable space, located in 27 states; • our occupancy rate was 99.1%; • the weighted average remaining term of our mortgage debt was 2.5 years and the weighted average interest rate was 4.21%; • the weighted average remaining term of our senior unsecured notes was 4.4 years, and the weighted average interest rate was 6.22%; and • the average remaining lease term of the portfolio was 7.3 years.
Net cash used in financing activities for the year ended December 31, 2023, was $61.4 million, which primarily consisted of proceeds from our common and preferred equity offerings, mortgage borrowings on new acquisitions and a net increase in Credit Facility borrowings, partially offset by the repayment of outstanding mortgage debt and distributions paid to our stockholders and Non-controlling OP Unitholders.
Financing Activities Net cash provided by financing activities during the year ended December 31, 2025, was $134.7 million, which primarily consisted of proceeds from our common and preferred equity offerings, mortgage borrowings, net increase in Credit Facility borrowings, and borrowings under unsecured notes, partially offset by the repayment of outstanding mortgage debt, redemptions of Series F Preferred Stock, and distributions paid to our stockholders and Non-controlling OP Unitholders.
The base management fee paid to the Adviser decreased for the year ended December 31, 2024, as compared to the year ended December 31, 2023, due to a decrease in gross tangible real estate, the main component of the base management fee calculation under the Sixth Amended Advisory Agreement, due to property sales.
The base management fee paid to the Adviser increased for the year ended December 31, 2025, as compared to the year ended December 31, 2024, due to an increase in gross tangible real estate, the main component of the base management fee calculation under the Eighth Amended Advisory Agreement, from property acquisitions and capital projects.
Our leases have remaining terms ranging from 1.0 year to 13.8 years.
Our leases have remaining terms ranging from 0.7 years to 11.7 years.
Real Estate Impairment Evaluation We periodically review the carrying value of each property to determine if circumstances that indicate impairment in the carrying value of the investment exist or that depreciation periods should be modified.
These differences in timing could have a material impact on our results of operations. 43 Table of Contents Real Estate Impairment Evaluation - Held and Used We periodically review the carrying value of each property to determine if circumstances that indicate impairment in the carrying value of the investment exist or that depreciation periods should be modified.
For the year ended December 31, (Dollars in Thousands) Property Operating Expenses 2024 2023 $ Change % Change Same Store Properties $ 16,683 $ 14,930 $ 1,753 11.7 % Acquired & Disposed Properties 1,006 3,839 (2,833) (73.8) % Properties with Vacancy 7,729 7,089 640 9.0 % $ 25,418 $ 25,858 $ (440) (1.7) % Property operating expenses consist of franchise taxes, management fees, insurance, ground lease payments, property maintenance and repair expenses paid on behalf of tenants at certain of our properties.
For the year ended December 31, (Dollars in Thousands) Property Operating Expenses 2025 2024 $ Change % Change Same Store Properties $ 20,355 $ 16,795 $ 3,560 21.2 % Acquired & Disposed Properties 543 1,029 (486) (47.2) % Properties with Vacancy 7,727 7,594 133 1.8 % $ 28,625 $ 25,418 $ 3,207 12.6 % Property operating expenses consist of franchise taxes, management fees, insurance, ground lease payments, property maintenance and repair expenses paid on behalf of tenants at certain of our properties.
The gain on debt extinguishment, net, during the year ended December 31, 2024 was recognized in conjunction with two of our sales. The gain on debt extinguishment, net, during the year ended December 31, 2023 was recognized in conjunction with one of our sales.
The gain on debt extinguishment, net, during the year ended December 31, 2024 was recognized in conjunction with two of our sales. Other income increased during the year ended December 31, 2025, as compared to the year ended December 31, 2024, mainly due to nonrecurring income items that occurred during the year ended December 31, 2025.
We will continue to monitor our portfolio for any other indicators of impairment. 42 Table of Contents Results of Operations The weighted average yield on our total portfolio, which was 8.6% and 8.2% at December 31, 2024 and 2023, respectively, is calculated by taking the annualized straight-line rents, reflected as lease revenue on our consolidated statements of operations, of each acquisition as a percentage of the acquisition cost.
Results of Operations The weighted average yield on our total portfolio, which was 8.5% and 8.6% at December 31, 2025 and 2024, respectively, is calculated by taking the annualized straight-line rents plus operating expense recoveries, reflected as lease revenue on our consolidated statements of operations and other comprehensive income, less property operating expenses, of each acquisition since inception, as a percentage of the acquisition cost plus subsequent capital improvements.
During the year ended December 31, 2024, we sold 3,699,597 shares of common stock, raising approximately $53.5 million in net proceeds under the 2024 Common Stock Sales Agreement. Series E Preferred ATM Program We previously had an At-the-Market Equity Offering Sales Agreement (the “Series E Preferred Stock Sales Agreement”) with sales agents Baird, Goldman Sachs, Stifel, Fifth Third, and U.S.
Series E Preferred ATM Program We previously had an At-the-Market Equity Offering Sales Agreement (the “Series E Preferred Stock Sales Agreement”) with sales agents Baird, Goldman Sachs, Stifel, Fifth Third, and U.S.
Lease revenues decreased for acquired and disposed of properties for the year ended December 31, 2024, as compared to the year ended December 31, 2023, primarily due to the loss of recovery revenue from the 14 properties sold during and subsequent to December 31, 2023.
Lease revenues increased for acquired and disposed of properties for the year ended December 31, 2025, as compared to the year ended December 31, 2024, primarily due to an increase in recovery revenue from property expenses and an increase in rental rates on the 19 properties acquired subsequent to December 31, 2024.
Operating Expenses Depreciation and amortization decreased for the year ended December 31, 2024, as compared to the year ended December 31, 2023, due to reduced depreciation and amortization expense for the seven properties sold during the year ended December 31, 2024.
Operating Expenses Depreciation and amortization expense increased for the year ended December 31, 2025, as compared to the year ended December 31, 2024, due to an increase in depreciation and amortization expense on the 19 properties acquired subsequent to December 31, 2024.
Lease revenues increased for properties with vacancy for the year ended December 31, 2024 due to an increase in variable lease payments due to an increase in property operating expenses.
Lease revenues decreased for properties with vacancy for the year ended December 31, 2025, mainly due to a loss of rental revenue from increased vacancy, partially offset by an increase in variable lease payments.
We believe our lease expiration schedule for 2025 is manageable as it equates to 3.2% of annual lease revenue at December 31, 2024.
We believe our lease expiration schedule for 2026 is manageable as it equates to 11.8% of annual lease revenue at December 31, 2025. Our ability to make new investments depends on our access to capital and financing markets.
In the past, we have received rent modification requests from certain of our tenants, and it is possible we may receive additional requests in the future.
While we received rent modification requests from certain of our tenants in the past, and it is possible we may receive additional requests in the future, occupancy increased to 99.1% at December 31, 2025. During 2025, we continued to strengthen our balance sheet and liquidity position.
Under a net lease, the tenant is required to pay most or all operating, maintenance, repair and insurance costs and real estate taxes with respect to the leased property. We actively communicate with buyout funds, real estate brokers and other third parties to locate properties for potential acquisition or to provide mortgage financing in an effort to build our portfolio.
Under a net lease, the tenant is required to pay most or all operating, maintenance, repair and insurance costs and real estate taxes with respect to the leased property.
Net Income (Loss) Available (Attributable) to Common Stockholders and Non-controlling OP Unitholders Net income available to common stockholders and Non-controlling OP Unitholders increased for the year ended December 31, 2024, as compared to net loss attributable to common stockholders and Non-controlling OP Unitholders the year ended December 31, 2023, primarily due to lower impairment charges coupled with a higher gain on sale of real estate, net.
Net Income Available to Common Stockholders and Non-controlling OP Unitholders Net income available to common stockholders and Non-controlling OP Unitholders decreased for the year ended December 31, 2025, as compared to the year ended December 31, 2024, primarily due to the gain on sale, net, from the prior period coupled with an increase in interest expense and depreciation expense in the current period.
We expect to continue to execute our capital recycling plan and sell non-core properties as reasonable disposition opportunities become available, and we intend to use the sale proceeds to acquire properties in our target, secondary growth markets or pay down outstanding debt.
Recent Developments Sale Activity During the year ended December 31, 2025, we continued to execute our capital recycling program, whereby we sold properties and redeployed proceeds to either fund property acquisitions in our target secondary growth markets, or repay outstanding debt. We expect to continue to execute our capital recycling plan and sell properties as reasonable disposition opportunities become available.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeTerm Loan A, Term Loan B, and Term Loan C), or long-term mortgage debt, which we use to maintain liquidity and fund expansion of our real estate investment portfolio and operations. Our interest rate risk management objectives are to limit the impact of interest rate changes on earnings and cash flows and to lower overall borrowing costs.
Biggest changeIn the future, we may be exposed to additional effects of interest rate changes, primarily as a result of our Revolver, Term Loans (i.e., Term Loan A, Term Loan B, and Term Loan C), private placement bond issuances, or long-term mortgage debt, which we use to maintain liquidity and fund expansion of our real estate investment portfolio and operations.
To illustrate the potential impact of changes in interest rates on our net income for the year ended December 31, 2024, we have performed the following analysis, which assumes that our consolidated balance sheet remains constant and that no further actions beyond a minimum interest rate or escalation rate are taken to alter our existing interest rate sensitivity.
To illustrate the potential impact of changes in interest rates on our net income for the year ended December 31, 2025, we have performed the following analysis, which assumes that our consolidated balance sheet remains constant and that no further actions beyond a minimum interest rate or escalation rate are taken to alter our existing interest rate sensitivity.
We will not enter into derivative or interest rate transactions for speculative purposes. In addition to changes in interest rates, the value of our real estate is subject to fluctuations based on changes in local and regional economic conditions and changes in the creditworthiness of lessees and borrowers, all of which may affect our ability to refinance debt, if necessary.
We will not enter into derivative or interest rate transactions for speculative purposes. 52 Table of Contents In addition to changes in interest rates, the value of our real estate is subject to fluctuations based on changes in local and regional economic conditions and changes in the creditworthiness of lessees and borrowers, all of which may affect our ability to refinance debt, if necessary.
For details regarding our rate cap agreements and our interest rate swap agreements, see Note 6 – Mortgage Notes Payable, Credit Facility, and Senior Unsecured Notes of the accompanying consolidated financial statements .
For details regarding our rate cap agreements and our interest rate swap agreements, see Note 5 – Mortgage Notes Payable, Credit Facility, and Senior Unsecured Notes of the accompanying consolidated financial statements .
Interest rate fluctuations may affect the fair value of our debt instruments. If interest rates on our debt instruments, using rates at December 31, 2024, had been one percentage point higher or lower, the fair value of those debt instruments on that date would have decreased or increased by $7.3 million and $7.6 million, respectively.
Interest rate fluctuations may affect the fair value of our debt instruments. If interest rates on our debt instruments, using rates at December 31, 2025, had been one percentage point higher or lower, the fair value of those debt instruments on that date would have decreased or increased by $3.7 million and $3.8 million, respectively.
The following table summarizes the annual impact of a 1%, 2% and 3% increase, and a 1%, 2% and 3% decrease in SOFR as of December 31, 2024. As of December 31, 2024, our effective average SOFR was 4.49%. The impact of these fluctuations is presented below (dollars in thousands).
The following table summarizes the annual impact of a 1%, 2% and 3% increase, and a 1%, 2% and 3% decrease in SOFR as of December 31, 2025. As of December 31, 2025, our effective average SOFR was 3.87%. The impact of these fluctuations is presented below (dollars in thousands).
Interest Rate Change (Decrease) increase to Interest Expense Net increase (decrease) to Net Income 3% Decrease to SOFR $ (1,495) $ 1,495 2% Decrease to SOFR (997) 997 1% Decrease to SOFR (498) 498 1% Increase to SOFR 498 (498) 2% Increase to SOFR 186 (186) 3% Increase to SOFR 279 (279) As of December 31, 2024, the fair value of our mortgage debt outstanding was $253.1 million.
Interest Rate Change (Decrease) increase to Interest Expense Net increase (decrease) to Net Income 3% Decrease to SOFR $ (1,137) $ 1,137 2% Decrease to SOFR (758) 758 1% Decrease to SOFR (379) 379 1% Increase to SOFR 379 (379) 2% Increase to SOFR 758 (758) 3% Increase to SOFR 1,137 (1,137) As of December 31, 2025, the fair value of our mortgage debt outstanding was $240.5 million.
To achieve these objectives, we will borrow primarily at fixed rates or variable rates with the lowest margins available and, in some cases, with the ability to convert variable rates to fixed rates. We may also enter into derivative financial instruments, such as interest rate swaps and caps to mitigate the interest rate risk on a related financial instrument.
We may also enter into derivative financial instruments, such as interest rate swaps and caps to mitigate the interest rate risk on a related financial instrument.
As of December 31, 2024, approximately $339.2 million of our debt bore interest at fixed rates, as shown in the future principal debt payment table below (dollars in thousands): 2025 2026 2027 2028 2029 Thereafter Total Fixed rate $ 12,654 $ 35,367 $ 95,406 $ 37,444 $ 109,851 $ 48,521 $ 339,243 Variable rate $ 7,260 $ 41,900 $ 160,000 $ 150,000 $ — $ — $ 359,160 $ 19,914 $ 77,267 $ 255,406 $ 187,444 $ 109,851 $ 48,521 $ 698,403 50 Table of Contents
As of December 31, 2025, approximately $411.6 million of our debt bore interest at fixed rates, as shown in the future principal debt payment table below (dollars in thousands): 2026 2027 2028 2029 2030 Thereafter Total Fixed rate $ 35,369 $ 95,392 $ 37,433 $ 109,868 $ 118,528 $ 14,988 $ 411,578 Variable rate $ — $ — $ 131,667 $ 162,370 $ 143,333 $ — $ 437,370 $ 35,369 $ 95,392 $ 169,100 $ 272,238 $ 261,861 $ 14,988 $ 848,948 53 Table of Contents
The amount outstanding under the Credit Facility approximates fair value as of December 31, 2024. In the future, we may be exposed to additional effects of interest rate changes, primarily as a result of our Revolver, Term Loans (i.e.
The amount outstanding under the Credit Facility approximates fair value as of December 31, 2025.
Added
Interest rate fluctuations may affect the fair value of our debt instruments. If interest rates on our debt instruments, using rates at December 31, 2025, had been one percentage point higher or lower, the fair value of those debt instruments on that date would have decreased or increased by $5.4 million and $5.6 million, respectively.
Added
As of December 31, 2025, the fair value of our 2029 Notes outstanding was $75.8 million. Interest rate fluctuations may affect the fair value of our debt instruments.
Added
If interest rates on our debt instruments, using rates at December 31, 2025, had been one percentage point higher or lower, the fair value of those debt instruments on that date would have decreased or increased by $3.3 million and $3.4 million, respectively. As of December 31, 2025, the fair value of our 2030 Notes outstanding was $84.5 million.
Added
Our interest rate risk management objectives are to limit the impact of interest rate changes on earnings and cash flows and to lower overall borrowing costs. To achieve these objectives, we will borrow primarily at fixed rates or variable rates with the lowest margins available and, in some cases, with the ability to convert variable rates to fixed rates.

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