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What changed in MODIV INDUSTRIAL, INC.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of MODIV INDUSTRIAL, INC.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+290 added−258 removedSource: 10-K (2026-03-25) vs 10-K (2025-03-04)

Top changes in MODIV INDUSTRIAL, INC.'s 2025 10-K

290 paragraphs added · 258 removed · 169 edited across 5 sections

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

84 edited+72 added−21 removed224 unchanged
Biggest changeHowever, investments in real estate are illiquid, and it may not be possible to dispose of assets in a timely manner or on favorable terms or at all, which could adversely affect our financial condition, operating results and cash flows. • Disruptions in the financial markets and uncertain economic conditions could adversely affect market rental rates, commercial real estate values and our ability to secure debt financing at interest rates acceptable to us or at all, to service future debt obligations, or to pay distributions to our stockholders. • Our real estate properties and related intangible assets may be subject to impairment charges. • Downturns relating to certain geographic regions, industries or business sectors may have a more significant adverse impact on our assets and our ability to pay distributions than if we had a more diversified investment portfolio. • We are subject to risks related to tenant concentration, and an adverse development with respect to a large tenant could materially and adversely affect us. • We may change our targeted investments or investment strategy. • We have incurred losses in the past and we may experience additional losses in the future. • Our charter and bylaws contain provisions that may delay, defer or prevent an acquisition of our common stock or a change in control. • Certain provisions in the Partnership Agreement of our Operating Partnership may delay, make more difficult, or prevent unsolicited acquisitions of us. • We are subject to risks from natural disasters, such as hurricanes, tornados and flooding, and changes in weather patterns. • We are subject to risks relating to litigation and regulatory liability. • Inflation and rising interest rates may adversely affect our financial condition and results of operations or result in a decrease in the market price of our Class C Common Stock. • Each of our current properties depends upon a single-tenant for its rental income, and our financial condition and ability to make distributions may be adversely affected by the bankruptcy or insolvency of a tenant, a downturn in the business of a tenant or a tenant’s lease termination in bankruptcy, or otherwise. • We have a substantial amount of indebtedness outstanding, which may expose us to the risk of default under our debt obligations. • Increases in mortgage rates or changes in underwriting standards may make it difficult for us to finance or refinance properties, which could reduce the number of properties we can acquire, our cash flow from operations and the amount of cash available for distribution to our stockholders. • We may be subject to adverse legislative or regulatory tax changes. 4 Table of Contents PART I ITEM 1A.
Biggest changeRisk Factors section in this Annual Report on Form 10-K. • Our listing on the NYSE does not guarantee an active and liquid market for our Class C Common Stock, and the market price and trading volume of the shares of our Class C Common Stock may fluctuate significantly. • Our Class C Common Stock is subordinate to our Series A Preferred Stock and our existing and future debt, and our common stockholders' interests could be diluted by the issuance of additional preferred stock, future offerings of debt securities, which could be senior to our common stock, or equity securities, and by other transactions. • We are focused on future acquisitions of industrial manufacturing properties, recycling certain of our assets, and reducing t he number of non-core properties in our portfolio, and therefore the prior performance of our real estate investments may not be comparable to our ongoing results. • We face risks associated with cybersecurity incidents through cyber-attacks, cyber intrusions or otherwise, as well as failures of systems on which we rely and other significant disruptions of our information technology networks and related systems. • We face significant competition for real estate investment opportunities, which may limit our ability to acquire suitable investments and achieve our investment objectives or pay distributions. • Investments in real estate are illiquid, and it may not be possible to dispose of assets in a timely manner or on favorable terms or at all, which could adversely affect our financial condition, operating results and cash flows. • Disruptions in the financial markets and uncertain economic conditions could adversely affect market rental rates, commercial real estate values and our ability to secure debt financing at interest rates acceptable to us or at all, to service future debt obligations, or to pay distributions to our stockholders. • Our real estate properties and related intangible assets may be subject to impairment charges. • Downturns relating to certain geographic regions, industries or business sectors may have a more significant adverse impact on our assets and our ability to pay distributions than if we had a more diversified investment portfolio. • We are subject to risks related to tenant concentration, and an adverse development with respect to a large tenant could materially and adversely affect us. • We may change our targeted investments or investment strategy. • We have incurred losses in the past and we may experience additional losses in the future. • Our charter and bylaws contain provisions that may delay, defer or prevent an acquisition of our common stock or a change in control. • Certain provisions in the Partnership Agreement of our Operating Partnership may delay, make more difficult, or prevent unsolicited acquisitions of us. • We are subject to risks from natural disasters, such as hurricanes, tornadoes and flooding, and changes in weather patterns. • We are subject to risks relating to litigation and regulatory liability. • Inflation and rising interest rates may adversely affect our financial condition and results of operations or result in a decrease in the market price of our Class C Common Stock. • Each of our current properties depends upon a single-tenant for its rental income, and our financial condition and ability to make distributions may be adversely affected by the bankruptcy or insolvency of a tenant, a downturn in the business of a tenant or a tenant’s lease termination in bankruptcy, or otherwise. • We have a substantial amount of indebtedness outstanding, which may expose us to the risk of default under our debt obligations. • Increases in mortgage rates or changes in underwriting standards may make it difficult for us to finance or refinance properties, which could reduce the number of properties we can acquire, our cash flow from operations and the amount of cash available for distribution to our stockholders. • We may be subject to adverse legislative or regulatory tax changes. 4 Table of Contents PART I ITEM 1.
These holders of the Class C OP Units that have been outstanding for at least one year may require the redemption of all or a portion of these units for shares of Class C Common Stock or, at our option as the general partner of the Operating Partnership, for cash (the “Class C OP Unit Redemption”).
These holders of the Class C OP Units that have been outstanding for at least one year may require the redemption of all or a portion of these units for shares of Class C Common Stock or, at our option as the general partner of the Operating Partnership, for cash (a “Class C OP Unit Redemption”).
If market interest rates rise, prospective purchasers of shares of our Class C Common Stock may expect a higher distribution rate. Higher interest rates would not, however, result in more funds being available for distribution and, in fact, would likely increase our borrowing costs and might decrease our funds available for distribution.
If market interest rates rise, prospective purchasers of shares of our Class C Common Stock may expect a higher distribution rate. Higher interest rates would not, however, result in more funds being available for distribution and, in fact, would likely increase our borrowing costs and might decrease our funds available for distribution.
Further, our Credit Facility allows for borrowings up to 60% of our borrowing base; however, we are targeting leverage of 40% over the long term and do not currently plan to allow our leverage ratio to exceed 50% in order to minimize the interest rate payable on the Revolver and Term Loan (each as defined below).
Further, our Credit Facility allows for borrowings up to 60% of our borrowing base; however, we are targeting leverage below 40% over the long term and do not currently plan to allow our leverage ratio to exceed 50% in order to minimize the interest rate payable on the Revolver and Term Loan (each as defined below).
As a result, our stockholders will be diluted by the issuance of Class C Common Stock in connection with the Class C OP Unit Redemption, which could have a material adverse impact on the market price of our common stock.
As a result, our stockholders will be diluted by the issuance of Class C Common Stock in connection with any Class C OP Unit Redemption, which could have a material adverse impact on the market price of our common stock.
We intend to focus future investments in industrial manufacturing real estate properties and reduce the number of non-core properties in our portfolio; however, we may make adjustments to our target portfolio based on real estate market conditions and investment opportunities, and we may change our targeted investments and investment guidelines at any time without the consent of our stockholders, which could result in our making investments that are different from, and possibly riskier than, the investments described in this Annual Report on Form 10-K.
We intend to focus future investments in industrial manufacturing real estate properties and reduce the number of non-core properties and certain legacy properties in our portfolio; however, we may make adjustments to our target portfolio based on real estate market conditions and investment opportunities, and we may change our targeted investments and investment guidelines at any time without the consent of our stockholders, which could result in our making investments that are different from, and possibly riskier than, the investments described in this Annual Report on Form 10-K.
Furthermore, declining economic conditions could negatively impact commercial real estate fundamentals and result in lower occupancy, lower rental rates and declining values in our real estate portfolio, which could have the following negative effects on us: 1. the values of our investments in commercial properties could decrease below the amounts paid for such investments; and/or 2. revenues from our properties could decrease due to fewer tenants and/or lower rental rates, making it more difficult for us to pay distributions or meet our debt service obligations on debt financing.
Furthermore, declining economic conditions could negatively impact commercial real estate fundamentals and result in lower occupancy, lower rental rates and declining values in our real estate portfolio, which could have the following negative effects on us: • the values of our investments in commercial properties could decrease below the amounts paid for such investments; and/or • revenues from our properties could decrease due to fewer tenants and/or lower rental rates, making it more difficult for us to pay distributions or meet our debt service obligations on debt financing.
We are subject to risks from natural disasters, such as hurricanes, tornados and flooding, and changes in weather patterns. Natural disasters and severe weather such as flooding, earthquakes, fires, tornadoes or hurricanes may result in significant damage to our properties.
We are subject to risks from natural disasters, such as hurricanes, tornadoes and flooding, and changes in weather patterns. Natural disasters and severe weather such as flooding, earthquakes, fires, tornadoes or hurricanes may result in significant damage to our properties.
Each of our stockholders that is not a tax-exempt entity may have to use funds from other sources to pay such tax liability. 23 Table of Contents If our Operating Partnership fails to maintain its status as a partnership, its income may be subject to taxation, which would reduce the cash available for distribution to stockholders and likely result in a loss of our REIT status .
Each of our stockholders that is not a tax-exempt entity may have to use funds from other sources to pay such tax liability. 26 Table of Contents If our Operating Partnership fails to maintain its status as a partnership, its income may be subject to taxation, which would reduce the cash available for distribution to stockholders and likely result in a loss of our REIT status .
It is possible, however, that the IRS could successfully assert that we did not own these assets during the term of the repurchase agreements, in which case we may fail to satisfy the “asset tests” or the “income tests” for REIT qualification and, consequently, lose our REIT status. 22 Table of Contents Complying with REIT requirements may limit our ability to hedge effectively.
It is possible, however, that the IRS could successfully assert that we did not own these assets during the term of the repurchase agreements, in which case we may fail to satisfy the “asset tests” or the “income tests” for REIT qualification and, consequently, lose our REIT status. 25 Table of Contents Complying with REIT requirements may limit our ability to hedge effectively.
Inflation and rising interest rates may adversely affect our financial condition and results of operations or result in a decrease in the market price of our Class C Common Stock. Rising inflation may have an adverse impact on our general and administrative expenses, as these costs could increase at a rate higher than our rental and other revenue. The U.S.
Inflation and rising interest rates may adversely affect our financial condition and results of operations or result in a decrease in the market price of our Class C Common Stock. Rising inflation may have an adverse impact on our general and administrative expenses, as these costs could increase at a rate higher than our rental and other revenue.
Such a bankruptcy filing would bar all efforts by us to collect pre-bankruptcy debts from these entities or their properties, including any work performed by contactors that could result in mechanics liens on our property, unless we receive an enabling order from the bankruptcy court. Post-bankruptcy debts would be paid currently.
Such a bankruptcy filing would bar all efforts by us to collect pre-bankruptcy debts from these entities or their properties, including any work performed by contractors that could result in mechanics liens on our property, unless we receive an enabling order from the bankruptcy court. Post-bankruptcy debts would be paid currently.
If any of these persons were to cease their association with us, we may be unable to find suitable replacements and our operating results could suffer as a result. We believe that our future success depends, in large part, upon our ability to retain our highly skilled managerial, financial and operational professionals.
If either of these persons were to cease their association with us, we may be unable to find suitable replacements and our operating results could suffer as a result. We believe that our future success depends, in large part, upon our ability to retain our highly skilled managerial, financial and operational professionals.
In order to qualify as a REIT, we must distribute annually at least 90% of our REIT taxable income to stockholders (which is determined without regard to the dividends-paid deduction or net capital gain).
For example: • In order to qualify as a REIT, we must distribute annually at least 90% of our REIT taxable income to stockholders (which is determined without regard to the dividends-paid deduction or net capital gain).
Further, our lenders may have a first priority claim to any recovery under the leases, any guarantees and any credit support, such as security deposits and letters of credit. In addition, we often enter into sale-leaseback transactions, whereby we purchase a property and then lease the same property back to the person from whom we purchased it.
Further, our lenders may have a first priority claim to any recovery under the leases, any guarantees and any credit support, such as security deposits and letters of credit. 20 Table of Contents In addition, we often enter into sale-leaseback transactions, whereby we purchase a property and then lease the same property back to the person from whom we purchased it.
Stockholders who elect to participate in our DRP, and who are subject to U.S. federal income taxation laws, will incur a tax liability on any such reinvested dividend to the extent such dividend is properly treated as being paid out of “earnings and profits,” even though such stockholders have elected to receive shares instead of cash.
Stockholders who elect to participate in such a DRP, and who are subject to U.S. federal income taxation laws, would incur a tax liability on any such reinvested dividend to the extent such dividend is properly treated as being paid out of “earnings and profits,” even though such stockholders have elected to receive shares instead of cash.
As a result, we 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 the amount available for distributions to stockholders. 17 Table of Contents Net leases may not result in fair market lease rates over time.
As a result, we 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 the amount available for distributions to stockholders. Net leases may not result in fair market lease rates over time.
Additionally, data protection laws and regulations often require “reasonable,” “appropriate” or “adequate” technical and organizational security measures, and the interpretation and application of those laws and regulations are often uncertain and evolving; there can be no assurance that our security measures will be deemed adequate, appropriate or reasonable by a regulator or court.
Additionally, data protection laws and regulations often require “reasonable,” “appropriate” or “adequate” technical and organizational security measures, and the interpretation and application of those laws and regulations are often uncertain and evolving; there can be no assurance that our 11 Table of Contents security measures will be deemed adequate, appropriate or reasonable by a regulator or court.
If we determine that an impairment has occurred, we would be required to make a downward adjustment to the net carrying value of the property or related intangible assets, which could have a material adverse effect on our results of operations in the period in which the impairment charge is recorded.
If we determine that an impairment has occurred, we would be required to make a downward adjustment to the net carrying value of the property or related intangible assets, which could have a material adverse effect on our results of operations in the period in which the 13 Table of Contents impairment charge is recorded.
In addition, we may choose to retain operating cash flow for investment purposes, working capital reserves or other purposes, and these retained funds, although increasing the value of our underlying assets, may not correspondingly increase the market price of our Class C Common Stock.
In addition, we may choose to retain operating cash flow for investment purposes, working capital reserves or other purposes, and these retained 10 Table of Contents funds, although increasing the value of our underlying assets, may not correspondingly increase the market price of our Class C Common Stock.
When we have geographic concentration like we have in California, a single catastrophe (such as an earthquake) or destructive weather event (such as a 13 Table of Contents tornado or hurricane) affecting a region may have a significant negative effect on our financial condition and results of operations.
When we have geographic 17 Table of Contents concentration like we have in California, a single catastrophe (such as an earthquake) or destructive weather event (such as a wildfire, tornado or hurricane) affecting a region may have a significant negative effect on our financial condition and results of operations.
Risk Factors” section. Our Class C Common Stock is subordinate to our Series A Preferred Stock and our existing and future debt, and our common stockholders' interests could be diluted by the issuance of additional preferred stock, future offerings of debt securities, which could be senior to our common stock, or equity securities, and by other transactions.
Risk Factors” section. 9 Table of Contents Our Class C Common Stock is subordinate to our Series A Preferred Stock and our existing and future debt, and our common stockholders' interests could be diluted by the issuance of additional preferred stock, future offerings of debt securities, which could be senior to our common stock, or equity securities, and by other transactions.
If any of our properties are foreclosed upon due to a default, our ability to pay cash distributions to our stockholders may be adversely affected. 18 Table of Contents Covenants in the Credit Facility and our mortgages may restrict our operating activities and adversely affect our financial condition.
If any of our properties are foreclosed upon due to a default, our ability to pay cash distributions to our stockholders may be adversely affected. Covenants in the Credit Facility and our mortgages may restrict our operating activities and adversely affect our financial condition.
We will not forgo an investment opportunity because it does not precisely fit our expected portfolio composition. We believe that we are most likely to meet our investment objectives through the careful selection and underwriting of assets.
We will not forgo an investment opportunity because it does not precisely fit our expected portfolio composition. We believe that 14 Table of Contents we are most likely to meet our investment objectives through the careful selection and underwriting of assets.
Further, some of 14 Table of Contents our assets may be outfitted to suit the particular needs of the tenants. We may have difficulty replacing the tenants of these properties if the outfitted space limits the types of businesses that could lease that space without major renovation.
Further, some of our assets may be outfitted to suit the particular needs of the tenants. We may have difficulty replacing the tenants of these properties if the outfitted space limits the types of businesses that could lease that space without major renovation.
Our ability to satisfy the asset tests depends upon our analysis of the characterization and fair market values of our 20 Table of Contents assets, some of which are not susceptible to a precise determination, and for which we may not obtain independent appraisals.
Our ability to satisfy the asset tests depends upon our analysis of the characterization and fair market values of our assets, some of which are not susceptible to a precise determination, and for which we may not obtain independent appraisals.
Even if we qualify as a REIT, we may nonetheless be subject to tax in certain circumstances that reduce our cash flow and our ability to make distributions to our stockholders. Even if we qualify as a REIT, we may be subject to some federal, state and local taxes. For example: 1.
Even if we qualify as a REIT, we may nonetheless be subject to tax in certain circumstances that reduce our cash flow and our ability to make distributions to our stockholders. Even if we qualify as a REIT, we may be subject to some federal, state and local taxes.
Item 1A. Risk Factors section below for a discussion of the risks and uncertainties that we believe are material to our business, operating results, prospects and financial condition. Forward-looking statements that were true at the time made may ultimately prove to be incorrect or false.
Item 1A. Risk Factors section in this filing for a discussion of the risks and uncertainties that we believe are material to our business, operating results, prospects and financial condition. Forward-looking statements that were true at the time made may ultimately prove to be incorrect or false.
Our failure to meet the market’s expectations with regard to future cash distributions could adversely affect the market price of our Class C Common Stock. 6 Table of Contents Increases in market interest rates may result in a decrease in the market price of our Class C Common Stock.
Our failure to meet the market’s expectations with regard to future cash distributions could adversely affect the market price of our Class C Common Stock. Increases in market interest rates may result in a decrease in the market price of our Class C Common Stock.
As of December 31, 2024, we owned 43 properties, including one property held for sale and a tenant-in-common real estate investment (an approximate 72.7% interest in a 91,740 square foot industrial property located in Santa Clara, California).
As of December 31, 2025, we owned 42 properties, including one property held for sale and a tenant-in-common real estate investment (an approximate 72.7% interest in a 91,740 square foot industrial property located in Santa Clara, California).
Negative developments in the real estate market may cause management to reevaluate the business and macro-economic assumptions used 9 Table of Contents in its impairment analysis. Changes in management’s assumptions based on actual results may have a material impact on our financial statements.
Negative developments in the real estate market may cause management to reevaluate the business and macro-economic assumptions used in its impairment analysis. Changes in management’s assumptions based on actual results may have a material impact on our financial statements.
If we need additional capital in the future to improve or maintain our properties or for any other reason, we may have to obtain funding from sources other than our cash flow from operations or proceeds from our Distribution Reinvestment Plan (“DRP”) and At-The-Market (“ATM”) offering, such as borrowings or future equity offerings.
If we need additional capital in the future to improve or maintain our properties or for any other reason, we may have to obtain funding from sources other than our cash flow from operations or proceeds from our At-The-Market (“ATM”) offering, such as borrowings or future equity offerings.
For example, 78% of our ABR as of December 31, 2024, is concentrated in industrial property assets and we expect that percentage to continue to increase as we target acquisitions of additional industrial property assets and dispose of our remaining legacy retail and office assets.
For example, 82% of our ABR as of December 31, 2025, is concentrated in industrial property assets and we expect that percentage to continue to increase as we target acquisitions of additional industrial property assets and dispose of our remaining legacy retail and office assets.
Dividends payable by REITs, however, generally are not eligible for the reduced rates for qualified dividends and are taxed at ordinary income rates (and are also subject the 3.8% “Medicare tax”; provided, however, that under current tax laws that will expire at the end of 2025 (if not extended), U.S. stockholders that are individuals (directly or indirectly through a pass-through entity), trusts and estates generally may deduct 20% of ordinary dividends from a REIT.
Dividends payable by REITs, however, generally are not eligible for the reduced rates for qualified dividends and are taxed at ordinary income rates (and are also subject to the 3.8% “Medicare tax”; provided, however, that under current tax laws, U.S. stockholders that are individuals (directly or indirectly through a pass-through entity), trusts and estates generally may deduct 20% of ordinary dividends from a REIT.
We could be subject to liability in the form of fines, penalties or damages for noncompliance with these laws and regulations.
We could be subject to liability in the form of fines, penalties or 18 Table of Contents damages for noncompliance with these laws and regulations.
However, the U.S. federal income tax laws governing REITs are extremely complex, and interpretations of the U.S. federal income tax laws governing qualification as a REIT are limited.
However, the U.S. federal income tax laws governing REITs are extremely complex, and interpretations of the U.S. federal 23 Table of Contents income tax laws governing qualification as a REIT are limited.
The limited partners in our Operating Partnership (other than us) owned approximately 17% of the outstanding OP Units of our Operating Partnership as of February 28, 2025. General Risks Related to Investments in Real Estate Economic, market and regulatory changes that impact the real estate market generally may decrease the value of our investments and weaken our operating results.
The limited partners in our Operating Partnership (other than us) owned approximately 19% of the outstanding OP Units of our Operating Partnership as of December 31, 2025. General Risks Related to Investments in Real Estate Economic, market and regulatory changes that impact the real estate market generally may decrease the value of our investments and weaken our operating results.
As of December 31, 2024, eight of our 43 operating properties, including our approximate 72.7% TIC Interest, are located in California, which makes the performance of our properties highly dependent on the health of the California economy. As of December 31, 2024, approximately 30% of our ABR is concentrated in California.
As of December 31, 2025, eight of our 42 operating properties, including our approximate 72.7% TIC Interest, are located in California, which makes the performance of our properties highly dependent on the health of the California economy. As of December 31, 2025, approximately 31% of our ABR is concentrated in California.
As of December 31, 2024, three of our 43 properties, including the TIC Interest, were encumbered with mortgages. Incurring mortgage debt increases the risk of loss of a property since defaults on indebtedness secured by a property may result in lenders initiating foreclosure actions.
As of December 31, 2025, two of our 42 properties, including the TIC Interest, were encumbered with mortgages. Incurring mortgage debt increases the risk of loss of a property since defaults on indebtedness secured by a property may result in lenders initiating foreclosure actions.
Moreover, even security measures that are deemed appropriate, reasonable, and/or in accordance with applicable legal requirements may not be able to protect the information we maintain. 7 Table of Contents A cybersecurity incident or other significant disruption involving IT networks and related systems we use could: • disrupt the proper functioning of our networks and systems and therefore our operations; • result in misstated financial reports, violations of loan covenants and/or missed reporting deadlines to the regulators; • result in our inability to properly monitor our compliance with the rules and regulations regarding our qualification as a REIT; • result in the unauthorized access to, or destruction, loss, theft, misappropriation or release of, proprietary, confidential, sensitive or otherwise valuable information of ours or others, which others could use to compete against us, or which could expose us to damage claims by third-parties for disruptive, destructive or otherwise harmful purposes and outcomes; • require significant management attention and resources to remedy any damages that result or improve our security; • subject us to claims for breach of contract, damages, credits, penalties or termination of leases or other agreements; • result in litigation or increased regulatory oversight, including governmental investigations, enforcement actions, regulatory fines, and/or criminal prosecution; and/or • damage our reputation among investors.
A cybersecurity incident or other significant disruption involving IT networks and related systems we use could: • disrupt the proper functioning of our networks and systems and therefore our operations; • result in misstated financial reports, violations of loan covenants and/or missed reporting deadlines to the regulators; • result in our inability to properly monitor our compliance with the rules and regulations regarding our qualification as a REIT; • result in the unauthorized access to, or destruction, loss, theft, misappropriation or release of, proprietary, confidential, sensitive or otherwise valuable information of ours or others, which others could use to compete against us, or which could expose us to damage claims by third-parties for disruptive, destructive or otherwise harmful purposes and outcomes; • require significant management attention and resources to remedy any damages that result or improve our security; • subject us to claims for breach of contract, damages, credits, penalties or termination of leases or other agreements; • result in litigation or increased regulatory oversight, including governmental investigations, enforcement actions, regulatory fines, and/or criminal prosecution; and/or • damage our reputation among investors.
Risks Related to Our Business We are focused on future acquisitions of industrial manufacturing properties while reducing the number of non-core properties in our portfolio, and therefore the prior performance of our real estate investments may not be comparable to our ongoing results.
Risks Related to Our Business Our business focuses on future acquisitions of industrial manufacturing properties while reducing the number of non-core properties and certain legacy properties in our portfolio, and therefore the prior performance of our real estate investments may not be comparable to our ongoing results.
We were incorporated in the State of Maryland on May 15, 2015, and during the fourth quarter of 2021, we embarked on a strategic plan to reduce our exposure to non-core properties and invest primarily in industrial manufacturing real estate properties. We also may seek to acquire listed and non-listed real estate companies or portfolios.
We were incorporated in the State of Maryland on May 15, 2015, and during the fourth quarter of 2021, we embarked on a strategic plan to reduce our exposure to non-core properties and invest primarily in industrial manufacturing real estate properties.
Thus, our portfolio composition may vary from our initial expectations. However, we will attempt to continue to construct a portfolio that produces stable and attractive returns by spreading risk across different real estate investments. We have incurred losses in the past and we may experience additional losses in the future .
However, we will attempt to continue to construct a portfolio that produces stable and attractive returns by spreading risk across different real estate investments. We have incurred losses in the past and we may experience additional losses in the future .
Our operating results and the performance of the properties we acquire are subject to the risks typically associated with real estate, any of which could decrease the value of our investments and could weaken our operating results, including: • downturns in national, regional and local economic conditions; • competition from other commercial developments; • adverse local conditions, such as oversupply or reduction in demand for commercial buildings and changes in real estate zoning laws that may reduce the desirability of real estate in an area; • vacancies, changes in market rental rates and the need to periodically repair, renovate and re-let space; • changes in interest rates and the availability of permanent mortgage financing, which may render the sale of a property or loan difficult or unattractive; • changes in tax (including real and personal property tax), real estate, environmental and zoning laws; • potential tariffs and trade wars; • material failures, inadequacy, interruptions or security failures of the technology on which our operations rely; • natural disasters such as hurricanes, earthquakes and floods; • acts of war or terrorism, including the consequences of terrorist attacks or the ongoing war between Russia and Ukraine and the economic sanctions and other restrictive actions taken against Russia by the U.S. and other countries in response thereto; • a pandemic or other public health crisis; • the potential for uninsured or underinsured property losses; and • periods of high inflation, high interest rates and tight money supply.
Our operating results and the performance of the properties we acquire are subject to the risks typically associated with real estate, any of which could decrease the value of our investments and could weaken our operating results, including: • downturns in national, regional and local economic conditions; • competition from other commercial developments; • adverse local conditions, such as oversupply or reduction in demand for commercial buildings and changes in real estate zoning laws that may reduce the desirability of real estate in an area; • vacancies, changes in market rental rates and the need to periodically repair, renovate and re-let space; • changes in interest rates and the availability of permanent mortgage financing, which may render the sale of a property or loan difficult or unattractive; • changes in tax (including real and personal property tax), real estate, environmental and zoning laws; • potential tariffs and trade wars; • material failures, inadequacy, interruptions or security failures of the technology on which our operations rely; • natural disasters such as hurricanes, earthquakes and floods; • geopolitical instability; • acts of war or terrorism; • the potential for uninsured or underinsured property losses; and • periods of high inflation, high interest rates and tight money supply.
Overall, no more than 20% of the value of a REIT’s assets may consist of stock or securities of one or more TRSs. A domestic TRS will pay U.S. federal, state and local income tax at regular corporate rates on any income that it earns.
Overall, no more than 20% (25% for taxable years beginning after December 31, 2025) of the value of a REIT’s assets may consist of stock or securities of one or more TRSs. A domestic TRS will pay U.S. federal, state and local income tax at regular corporate rates on any income that it earns.
Prospective investors are urged to consult their tax advisors regarding the effect of potential future changes to the U.S. federal tax laws on an investment in our shares.
Prospective investors are urged to consult their tax advisors regarding the effect of potential future changes to the U.S. federal tax laws on an investment in our shares. ITEM 1B. UNRESOLVED STAFF COMMENTS None
Our portfolio has two tenants that in the aggregate contribute approximately 23% of our ABR as of December 31, 2024, with Lindsay (which is comprised of nine properties in six states) representing approximately 13% of our ABR and the KIA retail property in Carson, California representing approximately 10% of our ABR.
Our portfolio has two tenants that in the aggregate contribute approximately 25% of our ABR as of December 31, 2025, with Lindsay (which is comprised of nine properties in six states) representing approximately 14% of our ABR and the KIA retail property in Carson, California representing approximately 11% of our ABR.
These features of the Series A Preferred Stock may have the effect of discouraging a third party from seeking to acquire us or of delaying, deferring or preventing a change of control under circumstances that otherwise could provide the holders of our Class C Common Stock and Series A Preferred Stock with the opportunity to realize a premium over the then-current market price or that stockholders may otherwise believe is in their best interests. 12 Table of Contents Certain provisions in our Operating Partnership Agreement may delay, make more difficult, or prevent unsolicited acquisitions of us.
These features of the Series A Preferred Stock may have the effect of discouraging a third party from seeking to acquire us or of delaying, deferring or preventing a change of control under circumstances that otherwise could provide the holders of our Class C Common Stock and Series A Preferred Stock 16 Table of Contents with the opportunity to realize a premium over the then-current market price or that stockholders may otherwise believe is in their best interests.
Our ability to dispose of properties on advantageous terms depends on factors beyond our control, including competition from other sellers and the availability of attractive financing for potential buyers, and we cannot predict whether we will be able to sell any property we desire to for the price or on the terms set by us or acceptable to us, or the length of time needed to find a willing buyer and to close the sale.
Although we have identified 12 to 15 assets that we would like to recycle over the next 24 months, our ability to dispose of properties on advantageous terms depends on factors beyond our control, including competition from other sellers and the availability of attractive financing for potential buyers, and we cannot predict whether we will be able to sell any property we desire to for the price or on the terms set by us or acceptable to us, or the length of time needed to find a willing buyer and to close the sale.
Our Credit Facility includes, and our future debt may include, restrictions on our ability to pay dividends to common 5 Table of Contents stockholders, including holders of Class C Common Stock. As of December 31, 2024, there were 2.0 million shares of Series A Preferred Stock issued and outstanding.
Our Credit Facility includes, and our future debt may include, restrictions on our ability to pay dividends to common stockholders, including holders of Class C Common Stock. As of December 31, 2025, there were approximately 1.7 million shares of Series A Preferred Stock issued and outstanding.
As a result, our board of directors may establish a class or series of shares of common or preferred stock that could delay or prevent a transaction or a change in control that might involve a premium price for our shares of Class C Common Stock or otherwise be in the best interests of our stockholders. 11 Table of Contents Our rights and the rights of our stockholders to take action against our directors and officers are limited.
As a result, our board of directors may establish a class or series of shares of common 15 Table of Contents or preferred stock that could delay or prevent a transaction or a change in control that might involve a premium price for our shares of Class C Common Stock or otherwise be in the best interests of our stockholders.
If a tenant does not renew, terminates or defaults on a lease, we may be unable to lease the property for the rent previously received or sell the property without incurring a loss. These events could cause us to reduce distributions to stockholders.
If a tenant does not renew, terminates or defaults on a lease, we may be unable to lease the property for the rent previously received or sell the property without incurring a loss. These events could cause us to reduce distributions to stockholders. There are no leases scheduled to expire within the next 12 months.
As of February 28, 2025, we owned 83% of the outstanding OP Units in our Operating Partnership. We have issued OP Units to third parties as consideration for acquisitions and to employees as compensation, and we may do so in the future.
As of March 20, 2026, we owned 81% of the outstanding OP Units in our Operating Partnership. We have issued OP Units to third parties as consideration for acquisitions and to employees as compensation, and we may do so in the future.
When making an acquisition, we will 10 Table of Contents analyze the performance and risk characteristics of that investment, how that investment will fit with our portfolio-level performance objectives, the other assets in our portfolio and how the returns and risks of that investment compare to the returns and risks of available investment alternatives.
When making an acquisition, we will analyze the performance and risk characteristics of that investment, how that investment will fit with our portfolio-level performance objectives, the other assets in our portfolio and how the returns and risks of that investment compare to the returns and risks of available investment alternatives. Thus, our portfolio composition may vary from our initial expectations.
However, investments in real estate are illiquid, and it may not be possible to dispose of assets in a timely manner or on favorable terms, which could adversely affect our financial condition, operating results and cash flows.
If such events occur, our stockholders may experience a lower return on their investment. Investments in real estate are illiquid, and it may not be possible to dispose of assets in a timely manner or on favorable terms, which could adversely affect our financial condition, operating results and cash flows.
Federal Reserve has significantly raised interest rates to combat inflation and restore price stability. To the extent our exposure to increases in interest rates is not eliminated through interest rate swaps or other protection agreements, such increases may result in higher debt service costs, which will adversely affect our cash flows.
To the extent our exposure to increases in interest rates is not eliminated through interest rate swaps or other protection agreements, such increases may result in higher debt service costs, which will adversely affect our cash flows.
We may have higher leverage in the near or medium-term if we identify attractive investment opportunities in advance of completing dispositions or raising additional equity.
As of December 31, 2025, our leverage was 45.1%. We may have higher leverage in the near or medium-term if we identify attractive investment opportunities in advance of completing dispositions or raising additional equity.
The trading price for our Class C Common Stock may be influenced by many factors, including: • general financial and economic market conditions and, in particular, developments related to market conditions for REITs and other real estate-related companies including the potential impact of inflation; • low trading volume in our Class C Common Stock, which makes it difficult to attract institutional investors; • our operating results and financial condition, including actual or anticipated quarterly fluctuations therein; • our ability to grow through property acquisitions or real estate-related investments, the terms and pace of any acquisitions we may make and the availability and terms of financing for those acquisitions; • the financial condition of our tenants, including tenant bankruptcies or defaults; • the amount and frequency of our payment of dividends and other distributions; • additional sales of equity securities, including Series A Preferred Stock, Class C Common Stock or any other equity interests, or the perception that additional sales may occur; • the reputation of REITs and real estate investments generally and the attractiveness of REIT equity securities in comparison to other equity securities, and fixed income debt securities; • uncertainty and volatility in the equity and credit markets; • fluctuations in interest rates and exchange rates; • changes in revenue or earnings estimates, if any, or publication of research reports and recommendations by financial analysts or actions taken by rating agencies with respect to our securities or those of other REITs; • failure to meet analysts’ revenue or earnings estimates; • strategic actions by us or our competitors, such as acquisitions or restructurings; • the extent of investment in our Class C Common Stock by institutional investors; • the extent of short-selling of our Class C Common Stock; • failure to maintain our REIT status; • changes in tax laws; • additions and departures of key personnel; • potential tariffs which could impact our manufacturing tenants; • domestic and international economic factors unrelated to our performance including uncertainty and volatility resulting from public health crises, the violence and unrest in the Middle East, the ongoing war between Russia and Ukraine, the economic sanctions and other restrictive actions taken against Russia, China and Iran by the U.S. and other countries in response thereto, all of which have added to continuing concerns about supply chain disruptions, inflation and increased interest rates in the markets in which we operate; and • the occurrence of any of the other risk factors presented in this Annual Report on Form 10-K, including in this “Part I, Item 1A .
The trading price for our Class C Common Stock may be influenced by many factors, including: • general financial and economic market conditions and, in particular, developments related to market conditions for REITs and other real estate-related companies including the potential impact of inflation; • low trading volume in our Class C Common Stock, which makes it difficult to attract institutional investors; • our operating results and financial condition, including actual or anticipated quarterly fluctuations therein; • our ability to grow through property acquisitions or real estate-related investments, the terms and pace of any acquisitions we may make and the availability and terms of financing for those acquisitions; • the financial condition of our tenants, including tenant bankruptcies or defaults; • the amount and frequency of our payment of dividends and other distributions; • additional sales of equity securities, including Series A Preferred Stock, Class C Common Stock or any other equity interests, or the perception that additional sales may occur; • the reputation of REITs and real estate investments generally and the attractiveness of REIT equity securities in comparison to other equity securities, and fixed income debt securities; • uncertainty and volatility in the equity and credit markets; • fluctuations in interest rates and exchange rates; • changes in revenue or earnings estimates, if any, or publication of research reports and recommendations by financial analysts or actions taken by rating agencies with respect to our securities or those of other REITs; • failure to meet analysts’ revenue or earnings estimates; • strategic actions by us or our competitors, such as acquisitions or restructurings; • the extent of investment in our Class C Common Stock by institutional investors; • the extent of short-selling of our Class C Common Stock; • failure to maintain our REIT status; • changes in tax laws; • additions and departures of key personnel; • potential tariffs which could impact our manufacturing tenants; • domestic and international economic factors unrelated to our performance including uncertainty related to inflation and interest rates, tariffs, supply chain disruptions and negative impacts associated with foreign policy actions implemented by the United States, and volatility in stock and bond markets, and particularly yields on U.S.
Possible future declines in rental rates and expectations of future rental concessions, including free rent to renew tenants early, to retain tenants who are up for renewal or to attract new tenants may result in decreases in cash flows from investment properties.
Political uncertainties both home and abroad may discourage business investment in real estate and other capital spending. Possible future declines in rental rates and expectations of future rental concessions, including free rent to renew tenants early, to retain tenants who are up for renewal or to attract new tenants may result in decreases in cash flows from investment properties.
Our stockholders may have current tax liability on distributions if they elect to reinvest in shares of our common stock. Participation in our DRP does not defer the recognition of any taxable income that results from the reinvested dividends.
Our stockholders may have current tax liability on distributions if they elect to reinvest in shares of our common stock. We terminated our Distribution Reinvestment Plan (“DRP”). In the event we restart a DRP, participation in such a plan would not defer the recognition of any taxable income that results from the reinvested dividends.
Further, in connection with acquisitions in January 2022 and April 2023, as discussed herein, the sellers received Class C OP Units as a portion of the purchase price. In February 2025, we granted Class X OP Units, which convert automatically into Class C OP Units upon vesting and satisfaction of certain other conditions, to our executive officers.
Further, in connection with an acquisition in March 2025, as discussed herein, the seller received Class C OP Units as a portion of the purchase price. In the first quarter of 2025, we granted Class X OP Units, which convert automatically into Class C OP Units upon vesting and satisfaction of certain other conditions, to our employees.
Provisions in the Operating Partnership Agreement may delay, make more difficult, or prevent unsolicited acquisitions of us or changes of our control. These provisions could discourage third parties from making proposals involving an unsolicited acquisition of us or change of our control, although some of our stockholders might consider such proposals, if made, desirable.
These provisions could discourage third parties from making proposals involving an unsolicited acquisition of us or change of our control, although some of our stockholders might consider such proposals, if made, desirable.
For example, the early termination of, or default under, a lease by a tenant may lead to an impairment charge. Furthermore, as we reposition our portfolio by selling some of our legacy office and retail properties with short lease terms, such pending sales could lead to potential impairment charges depending on the final selling price.
Furthermore, as we reposition our portfolio by selling some of our legacy office and industrial properties with short lease terms, such sales could lead to potential impairment charges depending on the final selling price.
Therefore, as a result of the foregoing events or circumstances, we may not be able to achieve our targeted industrial composition of our portfolio promptly, on favorable terms or at all in response to changing economic, financial and investment conditions, which may adversely affect our cash flows and our ability to make distributions to stockholders. 8 Table of Contents Disruptions in the financial markets and uncertain economic conditions could adversely affect market rental rates, commercial real estate values and our ability to secure debt financing at interest rates acceptable to us or at all, to service future debt obligations, or to pay distributions to our stockholders.
Therefore, as a result of the foregoing events or circumstances, we 12 Table of Contents may not be able to achieve our targeted industrial composition of our portfolio promptly, on favorable terms or at all in response to changing economic, financial and investment conditions, which may adversely affect our cash flows and our ability to make distributions to stockholders.
In that case, we could lose the property securing the loan that is in default, thus reducing the value of our stockholders’ investment. For tax purposes, a foreclosure on any of our properties will be treated as a sale of the property for a purchase price equal to the outstanding balance of the debt secured by the mortgage.
For tax purposes, a foreclosure on any of our properties will be treated as a sale of the property for a purchase price equal to the outstanding balance of the debt secured by the mortgage.
Variable rate borrowings expose us to increased interest expense in a rising interest rate environment. If interest rates were to increase, our debt service obligations on variable rate indebtedness would increase even though the amount borrowed remained the same, which could adversely affect our cash flows and cash available for distribution to our stockholders.
If interest rates were to increase, our debt service obligations on variable rate indebtedness would increase even though the amount borrowed remained the same, which could adversely affect our cash flows and cash available for distribution to our stockholders. Changes in the Secured Overnight Financing Rate (“SOFR”) could adversely affect the amount of interest that accrues on SOFR-linked instruments.
As a result, prospective purchasers may decide to purchase other securities rather than our Class C Common Stock, which would reduce the demand for, and result in a decline in the market price of, our Class C Common Stock. 16 Table of Contents Risks Related to Investments in Single-Tenant Real Estate Our current properties depend upon a single-tenant for their rental income, and our financial condition and ability to make distributions may be adversely affected by the bankruptcy or insolvency of a tenant, a downturn in the business of a tenant or a tenant’s lease termination in bankruptcy or otherwise.
Risks Related to Investments in Single-Tenant Real Estate Our current properties depend upon a single-tenant for their rental income, and our financial condition and ability to make distributions may be adversely affected by the bankruptcy or insolvency of a tenant, a downturn in the business of a tenant or a tenant’s lease termination in bankruptcy or otherwise.
Aaron Halfacre, Ray Pacini and John Raney, our Chief Executive Officer, Chief Financial Officer and Chief Operating Officer and General Counsel, respectively, each of whom would be difficult to replace. Neither we nor our affiliates have employment agreements with these individuals.
Aaron Halfacre, our Chief Executive Officer, and John Raney, our Chief Financial Officer (effective upon Mr. Pacini’s resignation upon the filing of this Annual Report on Form 10-K) and General Counsel, each of whom would be difficult to replace. Neither we nor our affiliates have employment agreements with these individuals.
Legal enforceability risks encompass general contractual risks including the risk that the counterparty will breach the terms of, or fail to perform its obligations under, the derivative contract. There is a risk that counterparties could fail, shut down, file for bankruptcy or be unable to pay out contracts.
Legal enforceability risks encompass general contractual risks including the risk that the counterparty will breach the terms of, or fail to perform its obligations under, the derivative contract.
More recently, the U.S. has imposed and subsequently paused, in part, tariffs on certain foreign products, including from China, Mexico and Canada, that in the past have resulted in retaliatory tariffs on U.S. goods and products. Such uncertainty has disrupted global financial markets and the enforcement of any new or significant tariffs could harm our tenants.
Recent events have resulted in disruption to global financial markets and affected macroeconomic conditions. More recently, the U.S. has imposed and subsequently paused, in part, tariffs on certain foreign products, including from China, Mexico and Canada, that in the past have resulted in retaliatory tariffs on U.S. goods and products.
For example, the COVID-19 pandemic resulted in significant disruptions in financial markets, supply chains, sustained elevated inflation and interest rate levels, uncertainty about how the economy will perform and the extent to which employees working from home will return to the office.
Since we publicly listed our common stock in February 2022, there have been significant disruptions in financial markets, supply chains, elevated inflation and interest rate levels, uncertainty about how the economy will perform and the extent to which employees working from home will return to the office.
Any material expenditures, fines, penalties or damages we must pay will reduce our ability to pay distributions to our stockholders and could seriously harm our operating results and financial condition. 15 Table of Contents The costs of defending against claims of environmental liability, of complying with environmental regulatory requirements, of remediating any contaminated property or of paying personal injury or other damage claims could reduce our cash available for distribution to our stockholders.
The costs of defending against claims of environmental liability, of complying with environmental regulatory requirements, of remediating any contaminated property or of paying personal injury or other damage claims could reduce our cash available for distribution to our stockholders.
If the manner in which SOFR is calculated is changed, that change may result in a change in the amount of interest that accrues on any SOFR-linked instruments.
There can be no assurance that SOFR will not be discontinued or fundamentally altered in a manner that is materially adverse to the interests of debtors in SOFR-linked instruments. If the manner in which SOFR is calculated is changed, that change may result in a change in the amount of interest that accrues on any SOFR-linked instruments.
Because we are focused on future acquisitions of industrial manufacturing properties while reducing the number of non-core properties in our portfolio, the prior performance of our real estate investments or real estate investment programs, particularly those in place prior to the fourth quarter of 2021, may not be comparable to our ongoing results.
As a result, the prior performance of our real estate investments or real estate investment programs, particularly those in place prior to the fourth quarter of 2021, may not be comparable to our ongoing results.
Volatility in global markets and changing political environments can cause fluctuations in the performance of the U.S. commercial real estate markets. Economic slowdowns of large economies outside the United States could negatively impact growth of the U.S. economy. Political uncertainties both home and abroad may discourage business investment in real estate and other capital spending.
Such uncertainty has disrupted global financial markets and the enforcement of any new or significant tariffs could harm our tenants. Volatility in global markets and changing political environments can cause fluctuations in the performance of the U.S. commercial real estate markets. Economic slowdowns of large economies outside the United States could negatively impact growth of the U.S. economy.
Because SOFR is published by the Federal Reserve Bank of New York (“FRBNY”) based on data received from other sources, we have no control over its determination, calculation or publication. There can be no assurance that SOFR will not be discontinued or fundamentally altered in a manner that is materially adverse to the interests of debtors in SOFR-linked instruments.
Our Credit Facility includes floating rates based, in part, on SOFR. Because SOFR is published by the Federal Reserve Bank of New York (“FRBNY”) based on data received from other sources, we have no control over its determination, calculation or publication.
Risks Associated with Debt Financing We have a substantial amount of indebtedness outstanding, which may expose us to the risk of default under our debt obligations.
Risks Associated with Debt Financing We have a substantial amount of indebtedness outstanding, which may expose us to the risk of default under our debt obligations. We are targeting leverage, over the long-term once we achieve scale, of 40% or lower of the aggregate fair value of our real estate properties plus our cash and cash equivalents.
As of February 28, 2025, amounts outstanding under the Credit Facility, as adjusted by swap agreements, bear interest at fixed rates through December 31, 2025. However, in the future, we may incur additional indebtedness that bears interest at variable rates or be unable to enter into new swap agreements to fix interest rates.
However, in the future, we may incur additional indebtedness that bears interest at variable rates or be unable to enter into new swap agreements to fix interest rates. Variable rate borrowings expose us to increased interest expense in a rising interest rate environment.
Currently, both the investing and leasing environments are highly competitive. The uncertainty regarding the economic environment has made businesses reluctant to make long-term commitments or changes in their business plans.
The uncertainty regarding the economic environment has made businesses reluctant to make long-term commitments.
Our inability to renew or re-lease space in 2025, 2026 and beyond could adversely impact our financial condition, results of operations, cash flow and our ability to pay distributions to our stockholders. Actions of our potential future tenants-in-common could reduce the returns on tenants-in-common investments and decrease our stockholders’ overall return.
We have one lease scheduled to expire in 2027: our property in Charlotte, North Carolina leased to Husqvarna that expires on June 30, 2027. Our inability to renew or re-lease space in 2027 and beyond could adversely impact our financial condition, results of operations, cash flow and our ability to pay distributions to our stockholders.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

4 edited+1 added−1 removed15 unchanged
Biggest changeIn addition, our cybersecurity program includes engagement of other Company management and employees and outside service providers to oversee or perform specific roles in connection with cybersecurity risk assessment and management, and incident management. 29 Table of Contents Processes for Assessing, Identifying and Managing Material Risks from Cybersecurity Threats The principal objectives of our cybersecurity program (“Cybersecurity Program”) are to minimize the risks associated with cybersecurity threats to our business operations, financial performance and financial condition, and protect confidential information, our intellectual property and other assets, and those of our investors, tenants, vendors, partners and employees that may be at risk due to our cybersecurity threats.
Biggest changeProcesses for Assessing, Identifying and Managing Material Risks from Cybersecurity Threats The principal objectives of our cybersecurity program (“Cybersecurity Program”) are to minimize the risks associated with cybersecurity threats to our business operations, financial performance and financial condition, and protect confidential information, our intellectual property and other assets, and those of our investors, tenants, vendors, partners and employees that may be at risk due to our cybersecurity threats.
See Item 1A, “Risk Factors - Risks Related to Our Business - We face risks associated with cybersecurity incidents through cyber-attacks, cyber intrusions or otherwise, as well as failures of systems on which we rely and other significant disruptions of our information technology (“IT”) networks and related systems.” 30 Table of Contents
See Item 1A, “Risk Factors - Risks Related to Our Business - We face risks associated with cybersecurity incidents through cyber-attacks, cyber intrusions or otherwise, as well as failures of systems on which we rely and other significant disruptions of our information technology (“IT”) networks and related systems.” 28 Table of Contents
Our CEO, CFO and COO/GC have familiarity and oversight experience, appropriate for their positions, regarding general cybersecurity matters and threats affecting business-to-business software and cloud services vendors.
Our CEO and CFO/GC have familiarity and oversight 27 Table of Contents experience, appropriate for their positions, regarding general cybersecurity matters and threats affecting business-to-business software and cloud services vendors.
With oversight from our audit committee and our board of directors, our management team including our Chief Executive Officer (“CEO”), Chief Financial Officer (“CFO”) and Chief Operating Officer and General Counsel (“COO/GC”), is responsible for managing all cybersecurity risks and overseeing our security programs.
These actions include implementing industry-recognized practices for protecting systems, third-party monitoring of certain systems and cybersecurity training for employees. With oversight from our audit committee and our board of directors, our management team including our Chief Executive Officer (“CEO”) and Chief Financial Officer and General Counsel (“CFO/GC”), is responsible for managing all cybersecurity risks and overseeing our security programs.
Removed
These actions include implementing industry-recognized practices for protecting systems, third-party monitoring of certain systems and cybersecurity training for employees.
Added
In addition, our cybersecurity program includes engagement of other Company management and employees and outside service providers to oversee or perform specific roles in connection with cybersecurity risk assessment and management, and incident management.

Item 2. Properties

Properties — owned and leased real estate

7 edited+2 added−2 removed1 unchanged
Biggest changeThe following tables reflect lease expirations with respect to our properties as of December 31, 2024, including the TIC Interest and one held for sale property (dollars in thousands): Year Number of Leases Expiring ABR Expiring Percentage of ABR Expiring Cumulative Percentage of ABR Expiring Leased Area Expiring (Square Feet) Percentage of Leased Area Expiring (Square Feet) Cumulative Percentage of Leased Area Expiring (Square Feet) 2025 2 $ 1,812 5 % 5 % 123,227 3 % 3 % 2026 2 3,053 8 % 13 % 199,159 4 % 7 % 2027 1 944 2 % 15 % 64,637 1 % 8 % 2028 1 568 1 % 16 % 148,012 3 % 11 % 2029 2 1,525 4 % 20 % 84,714 2 % 13 % 2030 1 673 2 % 22 % 20,800 1 % 14 % 2031 — — — % 22 % — — % 14 % 2032 1 2,412 6 % 28 % 162,714 4 % 18 % 2033 1 1,688 4 % 32 % 216,727 5 % 23 % 2034 (1) 3 5,295 13 % 45 % 554,441 12 % 35 % Thereafter 29 21,668 55 % 100 % 2,924,507 65 % 100 % Total 43 $ 39,638 100 % 4,498,938 100 % (1) Includes OES that has a purchase option that can be exercised any time through December 31, 2026 and an early termination option that can be exercised any time on or after December 31, 2028.
Biggest changeThe following table reflects lease expirations with respect to our properties as of December 31, 2025, including the TIC Interest and one property held for sale (dollars in thousands): Year Number of Leases Expiring (2) ABR Expiring Percentage of ABR Expiring Cumulative Percentage of ABR Expiring Leased Area Expiring (Square Feet) (2) Percentage of Leased Area Expiring (Square Feet ) (2) Cumulative Percentage of Leased Area Expiring (Square Feet) (2) 2026 — $ — — % — % — — % — % 2027 1 968 2 % 2 % 64,637 1 % 1 % 2028 1 585 1 % 3 % 148,012 3 % 4 % 2029 2 1,492 5 % 8 % 84,714 2 % 6 % 2030 1 687 2 % 10 % 20,800 1 % 7 % 2031 1 1,352 3 % 13 % 107,419 3 % 10 % 2032 2 2,948 8 % 21 % 211,303 5 % 15 % 2033 1 1,714 4 % 25 % 216,727 5 % 20 % 2034 (1) 3 5,568 14 % 39 % 554,441 13 % 33 % 2035 — — — % 39 % — — % 33 % Thereafter 28 23,832 61 % 100 % 2,865,401 65 % 98 % Total 40 $ 39,146 100 % 4,273,454 98 % (1) Includes OES that has a purchase option that can be exercised any time through December 31, 2026 and an early termination option that can be exercised any time on or after December 31, 2028.
ITEM 2. PROPERTIES Properties and Investment: As of December 31, 2024, we owned a real estate investment portfolio consisting of 43 operating properties, comprised of 39 industrial properties, including our approximate 72.7% TIC Interest in an industrial property in Santa Clara, California, and four non-core properties, including one property held for sale, with an overall occupancy rate of 98%.
ITEM 2. PROPERTIES Properties and Investment: As of December 31, 2025, we owned a real estate investment portfolio consisting of 42 operating properties, comprised of 39 industrial properties, including our approximate 72.7% TIC Interest in an industrial property in Santa Clara, California and one property held for sale, and three non-core properties, with an overall occupancy rate of 98%.
The exercise of these options was not determined to be probable. Investment: As of December 31, 2024, we had the following other real estate investment (dollars in thousands): TIC Interest Investment Balance Santa Clara, CA Property – an approximate 72.7% TIC Interest (1) $ 9,324 (1) This industrial property was acquired in 2017 and has approximately 91,740 rentable square feet.
Investment: As of December 31, 2025, we had the following other real estate investment (dollars in thousands): TIC Interest Investment Balance Santa Clara, CA Property – an approximate 72.7% TIC Interest (1) $ 9,437 (1) This industrial property was acquired in 2017 and has approximately 91,740 rentable square feet. Our TIC Interest ABR is approximately $1.8 million.
Our TIC Interest ABR is approximately $1.7 million. The tenant's lease expiration date is March 16, 2026, the mortgage bears interest at a fixed rate of 3.86% and matures on October 1, 2027, and the lease provides for two seven-year renewal options.
The tenant's lease expiration date is March 16, 2036, the mortgage bears interest at a fixed rate of 3.86% and matures on October 1, 2027, and the lease provides for two seven-year renewal options. In January 2026, we acquired the 27.3% remaining TIC interest for $9.6 million, giving us 100% ownership of the property.
Additional information about our other real estate investment is included in Note 4 to our accompanying consolidated financial statements included in this Annual Report on Form 10-K. 32 Table of Contents ITEM 3. LEGAL PROCEEDINGS None. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. PART II
Additional information about our other real estate investment is included in Note 4 to our accompanying consolidated financial statements included in this Annual Report on Form 10-K.
The following tables provide summary information regarding our real estate portfolio as of December 31, 2024 (dollars in thousands): Tenant Industry Diversification Industry Number of Properties ABR ABR as a Percentage of Total Portfolio Leased Area (Square Feet) Square Feet as a Percentage of Total Portfolio Infrastructure 17 $ 9,284 23 % 1,246,022 28 % Automotive 3 6,015 15 % 501,233 11 % Industrial Products 4 5,603 14 % 907,837 20 % Aerospace/Defense 4 5,057 13 % 346,046 8 % Government 1 2,618 7 % 106,592 2 % Metals 5 2,509 6 % 450,263 10 % Technology 2 2,347 6 % 130,240 3 % Energy 2 1,830 5 % 249,118 6 % Agriculture/Food Production 2 1,688 4 % 295,584 7 % Retail 1 1,446 4 % 97,191 2 % Other (1) 2 1,241 3 % 168,812 3 % Total 43 $ 39,638 100 % 4,498,938 100 % (1) Includes industries with ABR of less than 4% of total portfolio.
The following tables provide summary information regarding our real estate portfolio as of December 31, 2025 (dollars in thousands): Tenant Industry Diversification Industry Number of Properties (2) ABR ABR as a Percentage of Total Portfolio Leased Area (Square Feet) (2) Square Feet as a Percentage of Total Portfolio Infrastructure 17 $ 9,646 25 % 1,217,915 28 % Automotive 3 6,126 16 % 501,233 11 % Industrial Products 4 5,682 15 % 897,242 21 % Aerospace/Defense 4 5,092 13 % 346,046 8 % Government 1 2,697 7 % 106,592 2 % Technology 2 2,502 6 % 132,601 3 % Metals 4 2,421 6 % 419,001 10 % Agriculture/Food Production 1 1,714 4 % 216,727 5 % Energy 1 1,506 4 % 218,696 5 % Other (1) 3 1,760 4 % 217,401 5 % Total 40 $ 39,146 100 % 4,273,454 98 % (1) Includes industries with ABR of less than 4% of total portfolio.
Tenant Geographic Diversification State Number of Properties ABR ABR as a Percentage of Total Portfolio Leased Area (Square Feet) Square Feet as a Percentage of Total Portfolio California 8 $ 11,925 30 % 439,954 10 % Ohio 6 4,866 12 % 1,016,742 23 % Arizona 2 4,100 10 % 379,441 8 % Illinois 2 3,463 9 % 629,687 14 % Florida 3 2,341 6 % 233,910 5 % Pennsylvania 2 2,135 6 % 253,646 6 % South Carolina 3 2,115 5 % 343,422 8 % Texas 2 1,698 4 % 255,969 6 % Minnesota 5 1,671 4 % 377,450 8 % North Carolina 2 1,574 4 % 134,576 3 % Washington 1 1,446 4 % 97,191 2 % Other (1) 7 2,304 6 % 336,950 7 % Total 43 $ 39,638 100 % 4,498,938 100 % (1) Includes states with ABR of less than 4% of total portfolio. 31 Table of Contents Lease Expirations: We completed extensions of existing leases with six of our tenants during 2023 and 2024 and we are continuing to explore potential lease extensions for certain of our other properties.
Tenant Geographic Diversification State Number of Properties ABR ABR as a Percentage of Total Portfolio Leasable Area (Square Feet) Square Feet as a Percentage of Total Portfolio California 8 $ 11,986 31 % 442,315 10 % Ohio 6 4,985 13 % 1,003,438 23 % Arizona 2 4,174 11 % 379,441 9 % Illinois 2 3,487 9 % 619,092 14 % Florida 4 2,880 7 % 282,499 6 % Pennsylvania 2 2,187 6 % 253,646 6 % South Carolina 3 2,168 6 % 343,422 8 % Texas 2 1,745 4 % 251,583 6 % Minnesota 5 1,717 4 % 362,647 8 % North Carolina 2 1,611 4 % 134,576 3 % Other (1) 6 2,206 5 % 305,688 7 % Total 42 $ 39,146 100 % 4,378,347 100 % (1) Includes states with ABR of less than 4% of total portfolio. 29 Table of Contents Lease Expirations: We completed extensions of existing leases with two of our tenants during 2025 and we are continuing to explore potential lease extensions for certain of our other properties.
Removed
We also entered into a new lease with the State of California’s Office of Emergency Services (“OES”) effective January 4, 2023, for 12 years through December 31, 2034.
Added
(2) Excludes 104,893 vacant square feet comprised of (i) the industrial property in Saint Paul, Minnesota subject to a purchase and sale agreement and (ii) the legacy property formerly leased to Solar Turbines in San Diego, California that we expect to sell after we complete a parcel split.
Removed
As part of our continued effort to increase balance sheet simplicity, management is currently exploring opportunities to acquire the minority interests in the property in which we hold the TIC Interest, which would result in consolidation of the asset, or to sell the TIC Interest.
Added
The exercise of these options was not determined to be probable. (2) Excludes 104,893 vacant square feet comprised of (i) the industrial property in Saint Paul, Minnesota subject to a purchase and sale agreement and (ii) the legacy property formerly leased to Solar Turbines in San Diego, California that we expect to sell after we complete a parcel split.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

12 edited+8 added−8 removed10 unchanged
Biggest changeThe 2024 cash distribution details are as follows: Distribution Period Amount Per Share and Unit Per Month Declaration Date Payment Date 2024: January 1-31 $ 0.09583 November 6, 2023 February 28, 2024 February 1-28 $ 0.09583 November 6, 2023 March 25, 2024 March 1-31 $ 0.09583 November 6, 2023 April 25, 2024 April 1-30 $ 0.09583 March 1, 2024 May 28, 2024 May 1-31 $ 0.09583 March 1, 2024 June 25, 2024 June 1-30 $ 0.09583 March 1, 2024 July 25, 2024 July 1-31 $ 0.09583 May 1, 2024 August 26, 2024 August 1-31 $ 0.09583 May 1, 2024 September 25, 2024 September 1-30 $ 0.09583 May 1, 2024 October 25, 2024 October 1-31 $ 0.09583 July 31, 2024 November 25, 2024 November 1-30 $ 0.09583 July 31, 2024 December 24, 2024 December 1-31 $ 0.09583 July 31, 2024 January 27, 2025 On January 31, 2024, we distributed 2,623,153 shares of common stock of Generation Income Properties, Inc.
Biggest changeThe 2025 distribution details are as follows: Distribution Period Amount Per Share and Unit Per Month Declaration Date Payment Date 2025: January 1-31 $ 0.09750 November 4, 2024 February 25, 2025 February 1-28 $ 0.09750 November 4, 2024 March 25, 2025 March 1-31 $ 0.09750 November 4, 2024 April 25, 2025 April 1-30 $ 0.09750 February 27, 2025 May 15, 2025 May 1-31 $ 0.09750 February 27, 2025 June 16, 2025 June 1-30 $ 0.09750 February 27, 2025 July 15, 2025 July 1-31 $ 0.09750 May 6, 2025 August 15, 2025 August 1-31 $ 0.09750 May 6, 2025 September 15, 2025 September 1-30 $ 0.09750 May 6, 2025 October 15, 2025 October 1-31 $ 0.09750 October 7, 2025 November 14, 2025 November 1-30 $ 0.09750 October 7, 2025 December 15, 2025 December 1-31 $ 0.09750 October 7, 2025 January 15, 2026 2026: January 1-31 $ 0.10000 January 16, 2026 February 13, 2026 February 1-28 $ 0.10000 January 16, 2026 March 13, 2026 March 1-31 $ 0.10000 January 16, 2026 April 15, 2026 (1) April 1- 30 $ 0.10000 March 17, 2026 May 15, 2026 (1) May 1-31 $ 0.10000 March 17, 2026 June 15, 2026 (1) June 1- 30 $ 0.10000 March 17, 2026 July 15, 2026 (1) (1) Reflects the expected payment date since the distribution has not been paid as of the filing date of this Annual Report on Form 10-K.
In the event our cash flow from operations decreases in the future, the level of our distributions may also decrease. 34 Table of Contents Distribution Reinvestment Plan On January 22, 2021, we filed a Registration Statement on Form S-3 (File No. 333-252321) to register a maximum of $100 million of additional shares of Class C Common Stock to be issued pursuant to the DRP (the “Registered DRP Offering”).
In the event our cash flow from operations decreases in the future, the level of our distributions may also decrease. 32 Table of Contents Distribution Reinvestment Plan On January 22, 2021, we filed a Registration Statement on Form S-3 (File No. 333-252321) to register a maximum of $100 million of additional shares of Class C Common Stock to be issued pursuant to the DRP (the “Registered DRP Offering”).
The Second Amended and Restated DRP also reflects the $0.05 per share processing fee that will be paid to our transfer agent by DRP participants for each share of Class C Common Stock purchased through the DRP. The Second Amended and Restated DRP was effective beginning with distributions paid in February 2022.
The Second Amended and Restated DRP also reflected the $0.05 per share processing fee that was paid to our transfer agent by DRP participants for each share of Class C Common Stock purchased through the DRP. The Second Amended and Restated DRP was effective beginning with distributions paid in February 2022.
The purchase price for the Class C Common Stock that we or any third-party administrator purchases from parties other than us, either in the open market or in privately negotiated transactions, will be 100% of the “average price per share” (as described in the Second Amended and Restated DRP) actually paid for such shares of Class C Common Stock, excluding any processing fees.
The purchase price for the Class C Common Stock that we or any third-party administrator purchased from parties other than us, either in the open market or in privately negotiated transactions, was 100% of the “average price per share” (as described in the Second Amended and Restated DRP) actually paid for such shares of Class C Common Stock, excluding any processing fees.
On November 4, 2024, we, with the authorization of our board of directors, increased the discount for the purchase price of shares of Class C Common Stock under our DRP from 3% to 5%, which went into effect on December 7, 2024 and applies to distributions payable on January 27, 2025 and thereafter.
On November 4, 2024, we, with the authorization of our board of directors, increased the discount for the purchase price of shares of Class C Common Stock under our DRP from 3% to 5%, which went into effect on December 7, 2024 and applied to distributions payable on January 27, 2025 through February 15, 2026.
The following presents the U.S. federal income tax characterization of the distributions paid in 2024 and 2023: Years Ended December 31, 2024 2023 Ordinary taxable income $ 0.37 $ 0.33 Capital gain — — Non-taxable distribution 1.94 0.82 Total $ 2.31 $ 1.15 33 Table of Contents Distributions generally are declared during the month or two prior to the beginning of a quarter and paid based on a month end record date and a monthly rate per share.
The following presents the U.S. federal income tax characterization of the distributions paid in 2025 and 2024: Years Ended December 31, 2025 2024 Ordinary income $ — $ 0.37 Capital gain — — Non-taxable distribution 1.17 1.94 Total $ 1.17 $ 2.31 31 Table of Contents Distributions generally are declared during the beginning of a quarter and paid based on a month end record date and a monthly rate per share.
For the year ended December 31, 2024, distributions paid to our stockholders were approximately 84% return of capital and 16% ordinary income and for the year ended December 31, 2023, distributions paid to our stockholders were approximately 71% return of capital and 29% ordinary income.
For the year ended December 31, 2025, distributions paid to our stockholders were 100% return of capital and for the year ended December 31, 2024, distributions paid to our stockholders were approximately 84% return of capital and 16% ordinary income.
Market Information Our Class C Common Stock is listed on the NYSE under the symbol “MDV” (see Note 9 to our accompanying consolidated financial statements included in this Annual Report on Form 10-K for more details).
Market Information Our Class C Common Stock is listed on the NYSE under the symbol “MDV” (see Note 8 to our accompanying consolidated financial statements included in this Annual Report on Form 10-K for more details). Unregistered Sales of Equity Securities None.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Stockholder Information As of February 28, 2025, there were approximately 3,900 holders of record of our Class C Common Stock.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Stockholder Information As of March 20, 2026, there were approximately 3,200 holders of record of our Class C Common Stock.
We have not established a minimum distribution level, and our charter does not require that we make distributions to our stockholders other than as necessary to meet REIT qualification requirements.
Our board of directors has not pre-established a percentage range of return for distributions to stockholders. We have not established a minimum distribution level, and our charter does not require that we make distributions to our stockholders other than as necessary to meet REIT qualification requirements.
For the years ended December 31, 2024 and 2023, the purchase price for the Class C Common Stock issued directly by us is 97% of the market price (as defined in the Second Amended and Restated DRP) of the Class C Common Stock, reflecting a 3% discount.
Prior to November 4, 2024, the purchase price for the Class C Common Stock issued directly by us was 97% of the market price (as defined in the Second Amended and Restated DRP) of the Class C Common Stock, reflecting a 3% discount.
The distribution rate is determined by our board of directors based on our financial condition and such other factors as our board of directors deems relevant. Our board of directors has not pre-established a percentage range of return for distributions to stockholders.
Distribution Information We have historically paid distributions on a monthly basis, and we paid our first distribution on August 10, 2016. The distribution rate is determined by our board of directors based on our financial condition and such other factors as our board of directors deems relevant.
Removed
Unregistered Sales of Equity Securities During the three months ended December 31, 2024, we issued 4,369 shares of Class C Common Stock to our independent directors for their services as board members. Such issuances were made in reliance on the exemption from registration under Rule 4(a)(2) of the Securities Act.
Added
On January 16, 2026, our board of directors authorized a 2.6% increase in the annual distribution rate from $1.17 per share to $1.20 per share commencing with monthly distributions payable to common stockholders and Class C OP Unit holders of record beginning as of January 30, 2026.
Removed
During the year ended December 31, 2024, we issued a total of 1,675,219 shares of Class C Common Stock to holders of Class C OP Units who requested an exchange, including 199,924 shares of Class C Common Stock to employees who exchanged their Class C OP Units upon vesting in March 2024.
Added
On January 16, 2026, our board of directors authorized the termination of the DRP, effective on February 15, 2026.
Removed
Such issuances were made in reliance on the exemption from registration under Rule 4(a)(2) of the Securities Act. Distribution Information We have historically paid distributions on a monthly basis, and we paid our first distribution on August 10, 2016.
Added
Through December 31, 2025, the Company has issued 598,337 shares of Class C Common Stock pursuant to the DRP.
Removed
(NASDAQ: GIPR) (“GIPR”) to our stockholders and holders of Class C OP Units, which we received in exchange for shares of GIPR Preferred Stock that were originally received as partial proceeds for the sale of property on August 10, 2023.
Added
Issuer Purchases of Equity Securities On March 4, 2025, the Company’s board of directors authorized the Company to repurchase shares of its Series A Preferred Stock up to an aggregate amount not to exceed the aggregate amount of proceeds from sales of the Company’s Class C Common Stock during the trailing twelve month period (the “Repurchase Program”).
Removed
The shares were distributed to holders of record on January 17, 2024, based on the distribution ratio of 0.28 GIPR common shares for each share of our Class C Common Stock or Class C OP Unit which represented $1.1648 for each share of our Class C Common Stock or Class C OP Unit based on the closing price of GIPR common stock on January 31, 2024 (see Note 5 to our accompanying consolidated financial statements included in this Annual Report on Form 10-K for more details).
Added
Repurchases under the Repurchase Program may be made through open market purchases, block purchases, privately negotiated transactions or other methods of acquiring shares permitted by applicable law, and the amount and timing of any repurchases will be dependent on various factors, including market conditions and corporate and regulatory considerations.
Removed
Issuer Purchases of Equity Securities We did not have a share repurchase program in place for the year ended December 31, 2024.
Added
Repurchases under the Repurchase Program may also be made pursuant to a plan adopted under Rule 10b5-1 promulgated under the Exchange Act.
Removed
Private Repurchase Transaction On July 31, 2024, we entered into an agreement with First City Investment Group, LLC (“First City”) to purchase the remaining 656,191 Class C OP Units held by First City and to repurchase 123,809 shares of Class C Common Stock also held by First City.
Added
On January 16, 2026, the Company’s board approved an amendment to the Repurchase Program to (1) extend the expiration date of the Repurchase Program from December 31, 2026 to December 31, 2027 and (2) set the maximum amount of shares of Series A Preferred Stock that may be repurchased under the Repurchase Program at $49.6 million, including shares of Series A Preferred Stock that had been repurchased as of January 16, 2026.
Removed
The transaction closed on August 1, 2024 at a price of $14.80 per share/unit, for total consideration of $11.5 million. The repurchased shares of Class C Common Stock are held as treasury stock and presented as a component of equity in the accompanying consolidated balance sheet and consolidated statement of equity included in this Annual Report on Form 10-K.
Added
Issuer Purchases of Series A Preferred Stock Period Total Number of Shares (or Units) Purchased Average Price Paid Per Share (or Unit) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs October 1-31, 2025 — $ — — (1) November 1-30, 2025 10,000 24.71 10,000 (1) December 1-31, 2025 13,500 24.82 13,500 (1) Total 23,500 $ 24.77 23,500 (1) (1) During the three months ended December 31, 2025, the Company was authorized to repurchase an aggregate amount not to exceed the aggregate amount of proceeds from sales of the Company’s Class C Common Stock during the trailing twelve month period. 33 Table of Contents ITEM 6. [RESERVED] 34 Table of Contents

Item 7. Management's Discussion & Analysis

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

62 edited+38 added−57 removed41 unchanged
Biggest changeIn the future, the SEC or Nareit may decide to standardize the allowable exclusions across the REIT industry, and we may have to adjust the calculation and characterization of this non-GAAP measure. 41 The following are the calculations of FFO and AFFO for the years ended December 31, 2024 and 2023 (in thousands, except shares outstanding and per share data): Year Ended December 31, 2024 2023 Net income (loss) (in accordance with GAAP) $ 6,493 $ (8,696) Preferred stock dividends (3,688) (3,688) Net income (loss) attributable to common stockholders and Class C OP Unit holders 2,805 (12,384) FFO adjustments: Depreciation and amortization of real estate properties 16,601 15,551 Amortization of deferred lease incentives — 154 Depreciation and amortization for unconsolidated investment in a real estate property 756 757 Impairment of real estate investment property — 4,388 (Gain) loss on sale of real estate investments, net (3,360) 1,709 FFO attributable to common stockholders and Class C OP Unit holders 16,802 10,175 AFFO adjustments: Stock compensation expense 1,586 11,171 Amortization and write-off of deferred financing costs 1,192 767 Abandoned pursuit costs 240 348 Amortization of deferred rents (5,716) (6,232) Unrealized loss on interest rate swap valuation 1,479 618 Amortization of (below) above market lease intangibles, net (847) (808) Loss on equity investments 151 — Increase in fair value of investment in preferred stock — (1,419) Other adjustments for unconsolidated investment in a real estate property 101 53 AFFO attributable to common stockholders and Class C OP Unit holders $ 14,988 $ 14,673 Weighted Average Shares/Units Outstanding: Fully diluted (1) 11,188,974 11,067,725 FFO Per Share/Unit: Fully diluted $ 1.50 $ 0.92 AFFO Per Share/Unit: Fully diluted $ 1.34 $ 1.33 (1) Fully diluted weighted average number of shares for 2023 includes the Class M OP Units which automatically converted to Class C OP Units on January 30, 2024, and Class P and Class R OP Units which automatically converted to Class C OP Units as of March 31, 2024, to compute the fully diluted weighted average number of shares. 42 Property Portfolio Information Following the issuance of our publicly listed Series A Preferred Stock in September 2021, we began to significantly transform our portfolio in furtherance of our strategic plan to reduce our exposure to office properties and increase our WALT.
Biggest changeIn the future, the SEC or Nareit may decide to standardize the allowable exclusions across the REIT industry, and we may have to adjust the calculation and characterization of this non-GAAP measure. 39 Table of Contents The following are the calculations of FFO and AFFO for the year ended December 31, 2025 and 2024 (in thousands, except shares outstanding and per share data): Year Ended December 31, 2025 2024 Net income (in accordance with GAAP) $ 554 $ 6,493 Preferred stock dividends (3,202) (3,688) Net (loss) income attributable to common stockholders and OP Unit holders (2,648) 2,805 FFO adjustments: Depreciation and amortization of real estate properties 15,087 16,601 Depreciation and amortization for unconsolidated investment in a real estate property 756 756 Impairment of real estate investment property 5,814 — Gain on sale of real estate investments, net (2,520) (3,360) FFO attributable to common stockholders and OP Unit holders 16,489 16,802 AFFO adjustments: Stock compensation expense 2,915 1,586 Amortization of deferred financing costs 629 1,192 Abandoned pursuit costs 143 240 Amortization of deferred rents (5,048) (5,716) Amortization of unrealized holding gain, net of unrealized loss on non-designated or ineffective interest rate derivative instruments (1,015) 1,479 Amortization of off-market interest rate derivatives and reduction for accrued interest 4,200 — Loss on early extinguishment of debt 768 — Amortization of (below) above market lease intangibles, net (854) (847) Proceeds from the settlement of property-related insurance claims (684) — Loss on equity investments — 151 Other adjustments for unconsolidated investment in a real estate property (305) 101 AFFO attributable to common stockholders and OP Unit holders $ 17,238 $ 14,988 Weighted Average Shares/Units Outstanding: Fully diluted (1) 12,480,553 11,188,974 FFO Per Share/Unit: Fully diluted $ 1.32 $ 1.50 AFFO Per Share/Unit: Fully diluted $ 1.38 $ 1.34 (1) Fully diluted shares/units outstanding includes the weighted average dilutive effect of 1,532,047 Class C OP Units and 803,715 Class X OP Units for the year ended December 31, 2025, and 1,895,871 Class C OP Units for the year ended December 31, 2024.
The Credit Facility is available for general corporate purposes, including, but not limited to, acquisitions, repayment of existing indebtedness, capital expenditures and general corporate purposes.
The Credit Facility is available for general corporate purposes, including, but not limited to, acquisitions, repayment of existing indebtedness, and capital expenditures.
On February 26, 2025,we completed the sale of our property that is located in Endicott, New York and is leased to New Vision Industries, LLC, a subsidiary of Producto Holdings LLC (“Producto”) for a sales price of $2.4 million.
Dispositions On February 26, 2025, we completed the sale of our property that is located in Endicott, New York and is leased to New Vision Industries, LLC, a subsidiary of Producto Holdings LLC (“Producto”), for a sales price of $2.4 million.
The Credit Agreement currently provides a $280.0 million line of credit comprised of a $30.0 million revolving line of credit (“Revolver”), and a $250.0 million term loan (“Term Loan” and together with the Revolver, the “Credit Facility”), as further described in Note 7 to our accompanying consolidated financial statements included in this Annual Report on Form 10-K.
The Credit Agreement currently provides a $280.0 million line of credit comprised of a $30.0 million revolving line of credit (“Revolver”), and a $250.0 million term loan (“Term Loan” and together with the Revolver, the “Credit Facility”), as further described in Note 6 to our accompanying audited consolidated financial statements included in this Annual Report on Form 10-K.
We designated these pay-fixed, receive-floating interest rate swaps as cash flow hedges, which are expected to be effective through December 31, 2025. The derivatives will be marked to fair value each reporting period with any change in fair value being recorded through accumulated other comprehensive income as long as the derivatives are deemed effective.
We designated these pay-fixed, receive-floating interest rate swaps as cash flow hedges, which are expected to be effective through December 31, 2026. The derivatives will be marked to fair value each reporting period with any change in fair value recorded through accumulated other comprehensive income as long as the derivatives are deemed effective.
We have $30.0 million of borrowing capacity available under our Credit Facility which we may utilize in the near or medium-term if we identify attractive investment opportunities in advance of completing dispositions or raising additional equity, which could result in temporary increases in leverage.
We have $30.0 million of borrowing capacity available under our Credit Facility as of March 25, 2026, which we may utilize in the near or medium-term if we identify attractive investment opportunities in advance of completing dispositions or raising additional equity, which could result in temporary increases in leverage.
As of December 31, 2024 and 2023, the Term Loan outstanding principal balance was $250.0 million and there was no outstanding balance on the Revolver.
As of December 31, 2025, the Term Loan outstanding principal balance was $250.0 million and there was no outstanding balance on the Revolver.
The property is located in the Jacksonville, Florida metropolitan statistical area and is subject to an existing lease that expires on December 31, 2032, with annual rent escalations based on the consumer price index. The property contains an adjacent land parcel that has the potential to be developed into additional industrial space.
The property with a leasable area of 48,589 square feet is located in the Jacksonville, Florida metropolitan statistical area and is subject to an existing lease that expires on December 31, 2032, with annual rent escalations based on the consumer price index. The property contains an adjacent land parcel that has the potential to be developed into additional industrial space.
As of December 31, 2024, our approximate 72.7% pro-rata share of the TIC Interest’s mortgage note payable of $12.4 million was $9.0 million, which is not included in our consolidated balance sheets in this Annual Report on Form 10-K. The Credit Facility includes customary representations, warranties and covenants.
As of December 31, 2025, our approximate 72.7% pro-rata share of the TIC Interest’s mortgage note payable of $12.1 million was $8.8 million, which is not included in our audited consolidated balance sheets in this Annual Report on Form 10-K. The Credit Facility includes customary representations, warranties and covenants.
Volatility in stock and bond markets and particularly the rapid rise in yields on U.S. Treasury securities during 2023 and 2024 may negatively impact our operating results, liquidity and sources of borrowings. We, our tenants and operating partners are impacted by inflation and interest rates.
Volatility in stock and bond markets, and particularly yields on U.S. Treasury securities, may negatively impact our operating results, liquidity and sources of borrowings. We, our tenants and operating partners are impacted by inflation and interest rates.
In addition, debt financing may be used from time-to-time for property improvements, lease inducements, tenant improvements and other working capital needs.
In addition, debt financing may be used from time-to- 37 Table of Contents time for property improvements, lease inducements, tenant improvements and other working capital needs.
On a regular basis, we evaluate these estimates. These estimates are based on management’s historical industry experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results may differ from these estimates.
These estimates are based on management’s historical industry experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results may differ from these estimates.
Market conditions can change quickly, potentially negatively impacting the value of real estate investments. 37 Liquidity and Capital Resources Generally, our cash requirements for property acquisitions, debt payments and refinancings, capital expenditures and other investments will be funded by bank borrowings through our Credit Facility (as defined below), mortgage indebtedness on our properties, real estate property sales, internally generated funds or offerings of shares of our Class C Common Stock.
Liquidity and Capital Resources Generally, our cash requirements for property acquisitions, debt payments and refinancings, capital expenditures and other investments will be funded by bank borrowings through our Credit Facility (as defined below), mortgage indebtedness on our properties, real estate property sales, internally generated funds or offerings of shares of our Class C Common Stock.
AFFO excludes non-routine and certain non-cash items such as stock-based compensation, amortization of deferred rent, amortization of below/above market lease intangibles, amortization of deferred financing costs, gain or loss from the extinguishment of debt, unrealized gains (losses) on derivative instruments, and write-offs of due diligence expenses for abandoned pursuits.
AFFO excludes non-routine and certain non-cash items such as stock-based compensation, amortization of deferred rent, amortization of below/above market lease intangibles, proceeds from the settlement of property-related insurance claims, amortization of deferred financing costs, gain or loss from the extinguishment of debt, unrealized gains (losses) on derivative instruments, amortization of off-market interest rate derivatives and reduction for accrued interest, and write-offs of due diligence expenses for abandoned pursuits.
In January 2025, we entered into two new swap agreements, for $125.0 million each, for an aggregate of $250.0 million, corresponding to the Term Loan, to fix SOFR for the year ending December 31, 2025 at 2.45%, resulting in a fixed rate of 4.25% effective December 31, 2024, based on our leverage ratio of 47.6% as of December 31, 2024.
In January 2025, we entered into two swap agreements, effective December 31, 2024, for $125.0 million each, for an aggregate of $250.0 million, corresponding to the Term Loan, which fixed SOFR for the year ending December 31, 2025 at 2.45%, resulting in a fixed rate of 4.25%.
The following is a summary of how we have transformed the composition of our real estate portfolio over time, resulting in a majority of our ABR produced by industrial properties, including the TIC Interest, as shown and described below.
The following is a summary of how we have transformed the composition of our real estate portfolio over time, resulting in a majority of our ABR produced by industrial properties, including the TIC Interest, as shown and described below . 40 Table of Contents The following is a breakdown of our ABR by property type as of December 31, 2025, 2024, 2023, 2022 and 2021.
We are the sole general partner of, and owned an approximate 89% and 83% interest in the Operating Partnership as of December 31, 2024 and February 28, 2025, respectively. The Operating Partnership’s limited partners are further described in Note 12 to our accompanying consolidated financial statements included in this Annual Report on Form 10-K.
We are the sole general partner of, and owned an approximate 81% interest in the Operating Partnership as of both December 31, 2025 and March 20, 2026. The Operating Partnership’s limited partnership interests are further described in Note 11 to our accompanying consolidated financial statements included in this Annual Report on Form 10-K.
Possible future declines in rental rates and expectations of future rental concessions, including free rent to renew tenants early, to retain tenants who are up for renewal or to attract new tenants, may result in decreases in cash flows from office properties.
Possible future declines in rental rates and expectations of future rental concessions, including free rent to renew tenants early, to retain tenants who are up for renewal or to attract new tenants, may result in decreases in cash flows . There are no leases scheduled to expire within the next 12 months.
The debt market remains sensitive to the macro environment, such as inflation, Federal Reserve policy, the impacts of increases in tariffs by the U.S. and other countries, market sentiment and regulatory factors affecting the banking and commercial mortgage-backed securities industries.
The debt market remains sensitive to the macro environment, such as inflation, Federal Reserve policy, the impacts of increases in tariffs by the U.S. and other countries, market sentiment and regulatory factors affecting the banking and commercial mortgage-backed securities industries. Our Credit Facility (as defined below) includes floating interest rates based on SOFR and our leverage ratio as described below.
We believe that our properties are adequately insured. Pursuant to our lease agreements, as of December 31, 2024 and 2023, we had obligations to reimburse $3.0 million and $2.4 million, respectively, for future on-site and tenant improvements expected to be incurred by tenants.
Pursuant to our lease agreements, as of December 31, 2025, we had obligations to reimburse $2.0 million for future on-site and tenant improvements expected to be incurred by tenants.
We also pay an annual unused fee of up to 25 basis points on the Revolver, depending on the daily amount of the unused commitment, and incurred total unused fees of $0.4 million for each of the years ended December 31, 2024 and 2023.
As of March 25, 2026, there were no amounts outstanding on the Revolver. We also pay an annual unused fee of up to 25 basis points on the Revolver, depending on the daily amount of the unused commitment, and incurred $0.1 million and $0.4 million of unused fees for the years ended December 31, 2025 and 2024, respectively.
More information on our properties and investments can be found in Note 3 to our accompanying consolidated financial statements included in this Annual Report on Form 10-K.
These improvements will be funded from cash on hand or operating cash flows. More information on our properties and investments can be found in Note 3 to our accompanying audited consolidated financial statements included in this Annual Report on Form 10-K.
The Federal Reserve may continue to refrain from reducing interest rates to try to rein in inflation, which could lead to a recession and will negatively impact our future results due to higher borrowing costs on any future borrowing.
While the Federal Reserve reduced rates in September, October and December 2025, the Federal Reserve may refrain from reducing interest rates further to try to rein in inflation, which could lead to a recession, and would negatively impact our future operating results due to higher borrowing costs.
Risk Factors section of this Annual Report on Form 10-K for additional information. 36 Recent Events and Uncertainties There are continuing significant uncertainties in the market in which we operate related to inflation and interest rates, supply chain disruptions, potential tariffs and negative impacts associated with the violence and unrest in the Middle East, the ongoing Russian war against Ukraine and sanctions which have been implemented by the United States and other countries against Russia, China and Iran.
Risk Factors section of this Annual Report on Form 10-K for additional information. Recent Events and Uncertainties There are continuing significant uncertainties in the market in which we operate related to inflation and interest rates, tariffs, supply chain disruptions and negative impacts associated with foreign policy actions implemented by the United States.
In January 2025, we entered into two new swap agreements, effective December 31, 2024, for $125.0 million each, for an aggregate of $250.0 million, corresponding to the Term Loan (as defined below), which fixed the Secured Overnight Financing Rate (“SOFR”) for the year ending December 31, 2025 to 2.45%, resulting in a fixed rate of 4.25% based on our leverage ratio of 47.6% as of December 31, 2024.
In January 2026, we entered into three new swap agreements, effective December 31, 2025, for $83.3 million each, for an aggregate of $250.0 million, corresponding to the Term Loan, which will fix SOFR for the year ending December 31, 2026 to 2.45%, resulting in a fixed rate of 4.15% based on our leverage ratio of 45.1% as of December 31, 2025.
Distributions will be determined by our board of directors based on our financial condition and such other factors as our board of directors deems relevant. We have not established a minimum dividend or distribution level, and our charter does not require that we make dividends or distributions to our stockholders other than as necessary to meet REIT qualification standards.
We have not established a minimum dividend or distribution level, and our charter does not require that we make dividends or distributions to our stockholders other than as necessary to meet REIT qualification standards.
We repurchased 656,191 of those units and 123,809 shares of Class C Common Stock from an affiliate of the seller at $14.80 per share on August 1, 2024 as described in Note 12 to our accompanying consolidated financial statements included in this Annual Report on Form 10-K; (ii) our 12-year lease with OES executed in January 2023 for one of our legacy assets located in Rancho Cordova, California that includes a purchase option which OES may exercise until December 31, 2026.
We repurchased 656,191 of those units and 123,809 shares of Class C Common Stock from an affiliate of the seller at $14.80 per share on August 1, 2024; (ii) our 12-year lease with OES executed in January 2023 for one of our legacy assets located in Rancho Cordova, California that includes a purchase option which OES may exercise until December 31, 2026; and (iii) one legacy office property formerly leased to Solar Turbines in San Diego, California, that we expect to sell after we complete a parcel split to maximize its value.
The following is a breakdown of our income by property type for the year ended December 31, 2024 (in thousands): Industrial Core (1) Non-Core (2) Total Total rental income $ 35,190 $ 11,307 $ 46,497 Management fee income $ 264 $ — $ 264 (1) Industrial core properties include an approximate 72.7% TIC interest in the Santa Clara, California property.
The following is a breakdown of our revenue by property type for the year ended December 31, 2025 (in thousands): Industrial Core (1) Non-Core (2) Total Rental $ 35,841 $ 9,982 $ 45,823 Other property $ 564 $ — $ 564 (1) Industrial core properties include an approximate 72.7% TIC interest in the Santa Clara, California property.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA See the Index to Consolidated Financial Statements at page F-1 of this Annual Report on Form 10-K. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.
ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk Not applicable as we are a smaller reporting company. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA See the Index to Consolidated Financial Statements at page F-1 of this Annual Report on Form 10-K. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.
We paid aggregate premiums of $4.2 million to buy down the fixed rate below the prevailing market rate. The buydown premium is a derivative that will be recorded as an asset on our balance sheet as of January 31, 2025 and amortized over the 12 months ending December 31, 2025, increasing interest expense by approximately $1.1 million per quarter.
The buydown premium is a derivative that will be recorded as an asset on our balance sheet as of January 31, 2026 and amortized over the 12 months ending December 31, 2026, increasing interest expense by approximately $0.6 million per quarter.
Our two mortgages with fixed rates do not mature until after September 2027. As a result of the interest rate swap agreements entered into for the year ending December 31, 2025, 100% of our consolidated indebtedness held a weighted average fixed interest rate of 4.27% as long as our leverage ratio is less than 50%.
As a result of the interest rate swap agreements entered into for the year ending December 31, 2026, 100% of our indebtedness has a weighted average fixed interest rate of 4.14% as long as our leverage ratio is less than 50%.
In addition, we have identified approximately $0.5 million of capital expenditures that are expected to be completed in the next 12 months which are not recoverable from tenants with double-net leases. These improvements will be funded from cash on hand or operating cash flows.
We expect that the related improvements will be completed during the 2026 calendar year and will be funded from cash on hand, operating cash flow, offerings of shares of our Class C Common Stock or borrowings under our Credit Facility. 38 Table of Contents In addition, we have identified approximately $0.5 million of capital expenditures that are expected to be completed in the next 12 months which are not recoverable from tenants with double-net leases.
Depreciation and Amortization Depreciation and amortization expense was $16.6 million and $15.6 million for the years ended December 31, 2024 and 2023, respectively. The purchase price of properties acquired is allocated to tangible assets, identifiable intangibles and assumed liabilities, if any, and depreciated or amortized over their estimated useful lives.
The purchase price of properties acquired is allocated to tangible assets, identifiable intangibles and assumed liabilities, if any, and depreciated or amortized over their estimated useful lives.
Acquisitions and Dispositions of Real Estate Investments We define “initial cap rate” for property acquisitions as the initial annual cash rent divided by the purchase price of the property.
We and/or our subsidiary borrowers were in compliance with such financial loan covenants as of December 31, 2025. Acquisitions and Dispositions of Real Estate Investments We define “initial cap rate” for property acquisitions as the initial annual cash rent divided by the purchase price of the property.
These expenses primarily relate to property taxes and repairs and maintenance expenses, the majority of which are reimbursed by tenants and included in rental income.
Property Expenses Property expenses remained relatively constant at $3.5 million and $3.6 million for the years ended December 31, 2025 and 2024, respectively. These expenses primarily relate to property taxes and repairs and maintenance expenses, the majority of which are reimbursed by tenants and included in rental income.
While the rate of inflation has declined from historic highs, inflation remains somewhat elevated and there is continued uncertainty over the future rate of inflation. In January 2025, the Federal Reserve maintained the current federal funds rate after reducing rates three times in 2024.
While the rate of inflation has declined from historic highs, inflation remains elevated and there is continued uncertainty over the future rate of inflation and interest rates.
Cash Flows from Investing Activities The net cash provided by investing activities for the year ended December 31, 2024 primarily reflects the net proceeds from the sale of two real estate properties and a land parcel aggregating $15.0 million, partially offset by the cost of one acquisition and building additions aggregating $7.0 million.
Cash Flows from Investing Activities The increase in net cash provided by investing activities for the year ended December 31, 2025 compared to the year ended December 31, 2024 primarily reflects (i) net proceeds from the sale of two real estate properties of $27.1 million during the year ended December 31, 2025 compared to net proceeds from the sale of two real estate properties and a land parcel aggregating $15.0 million during the year ended December 31, 2024, and (ii) a property acquired during the year ended December 31, 2025 primarily for Class C OP Units compared to a property acquisition for $5.2 million of cash during the year ended December 31, 2024.
Compliance with All Debt Agreements Pursuant to the terms of our Credit Facility and our two mortgage notes payable secured by certain of our properties, we and/or our subsidiary borrowers are subject to certain financial loan covenants. We and/or our subsidiary borrowers were in compliance with such financial loan covenants as of December 31, 2024.
We also may use a portion of the funds for payment of principal on our outstanding indebtedness and for general corporate purposes. Compliance with All Debt Agreements Pursuant to the terms of our Credit Facility and our mortgage notes payable secured by certain of our properties, we and/or our subsidiary borrowers are subject to certain financial loan covenants.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities - Distribution Information . We expect that our board of directors will continue to declare distributions based on a single record date as of the end of each month and to pay these distributions on a monthly basis.
We expect that our board of directors will continue to declare distributions based on a single record date as of the end of each month and to pay these distributions on a monthly basis. Distributions will be determined by our board of directors based on our financial condition and such other factors as our board of directors deems relevant.
In connection with this sale, the lease for our property in Jamestown, New York with another Producto subsidiary was amended to increase the base rent by $2,500 per month. 40 Capital Expenditures and Tenant Improvements Other than as discussed below, we do not have plans to incur any significant costs to renovate, improve or develop our properties.
In connection with this sale, the lease for our property in Jamestown, New York with another Producto subsidiary was amended to increase the base rent by $2,500 per month.
The following is a breakdown of our assets by property type (in thousands): As of December 31, 2024 Industrial Core (1) Non-Core (2) Total investments in real estate property $ 393,488 $ 108,200 Accumulated depreciation and amortization (49,604) (9,920) Total real estate investments, net, excluding unconsolidated investment in real estate property 343,884 98,280 Unconsolidated investment in a real estate property (3) 9,324 — Total real estate investments, net 353,208 98,280 Real estate investments held for sale, net — 22,372 Tenant deferred rent and other receivables 13,137 5,169 Above-market lease intangibles, net 1,240 — Prepaid expenses and other assets 1,161 289 Other assets related to real estate investments held for sale — 215 Total assets $ 368,746 $ 126,325 (1) See footnote (1) above (2) See footnote (2) above.
The following is a breakdown of our assets by property type as of December 31, 2025 (in thousands): Industrial Core (1) Non-Core (2) Total investments in real estate property $ 386,975 $ 108,378 Accumulated depreciation and amortization (61,261) (11,947) Total real estate investments, net, excluding unconsolidated investment in real estate property 325,714 96,431 Unconsolidated investment in a real estate property 9,437 — Total real estate investments, net $ 335,151 $ 96,431 Real estate investments held for sale, net (3) $ 3,901 $ — Tenant deferred rent and other receivables $ 17,293 $ 6,143 Above-market lease intangibles, net $ 1,169 $ — (1) See footnote (1) above (2) See footnote (2) above.
Management’s discussion and analysis of financial condition and results of operations are based upon our audited consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires our management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities.
The preparation of these financial statements requires our management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On a regular basis, we evaluate these estimates.
See details of mortgage debt in Note 7 to our accompanying consolidated financial statements included in this Annual Report on Form 10-K. Distributions The source of cash used to pay our distributions has been and is expected to continue to be internally generated funds from operations. A table of distributions declared and paid is disclosed in Part II, Item 5.
Distributions The source of cash used to pay our distributions has been and is expected to continue to be internally generated funds from operations. A table of distributions declared and paid is disclosed in Part II, Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities - Distribution Information .
Percentage of Annual ABR: Year Ended December 31, 2021 2022 2023 2024 Industrial core 41 % 59 % 76 % 78 % Non-core 59 % 41 % 24 % 22 % WALT (years) 6.1 11.9 14.1 13.8 Following the public listing of our Class C Common Stock in February 2022, we began to focus strategically and exclusively on acquiring industrial manufacturing properties while at the same time continuing the tactical reduction of our non-core properties exposure.
December 31, 2021 2022 2023 2024 2025 Industrial core 41 % 59 % 76 % 78 % 82 % Non-core 59 % 41 % 24 % 22 % 18 % WALT (years) 6.1 11.9 14.1 13.8 14.0 Since the public listing of our Class C Common Stock in February 2022, we have repositioned the composition of our portfolio toward a primary focus of industrial assets, specifically those supporting domestic manufacturing.
The year ended December 31, 2023 includes a gain of $1.4 million for the fair value adjustment of the GIPR preferred stock for the period from August 10, 2023 (when the GIPR preferred stock was acquired) through December 31, 2023. 47 Critical Accounting Policies and Estimates The policies and estimates discussed below reflect those that management believes are or will be critical in affecting the preparation of our consolidated financial statements.
Critical Accounting Policies and Estimates The policies and estimates discussed below reflect those that management believes are or will be critical in affecting the preparation of our consolidated financial statements.
Other (Expense) Income Interest income was $0.5 million and $0.3 million for the years ended December 31, 2024 and 2023, respectively.
Stock Compensation Stock compensation expense was $2.9 million and $1.6 million for the years ended December 31, 2025 and 2024, respectively.
On or before March 14, 2025, following the completion of our exploration of a potential tenant build-to-suit opportunity, we will acquire an industrial property for $6.1 million, consisting of a $0.25 million cash deposit that has been distributed to the contributor, and at closing, approximately 344,118 Class C OP Units valued at $5.85 million, based on an agreed upon value of $17.00 per Class C OP Unit.
Acquisitions On March 7, 2025, we acquired an industrial property for $6.1 million, consisting of $0.3 million in cash and 344,119 Class C OP Units valued at $5.9 million, based on an estimated fair value of $17.00 per Class C OP Unit.
Gain (Loss) on Sale of Real Estate Investments, Net The gain on sale of real estate investments of $3.4 million for the year ended December 31, 2024 relates to the aggregate gain on sale of two properties (one industrial property with a lease expiration at the end of 2024 and one office property), which were sold during the first quarter of 2024 and the gain on sale of a land parcel in September 2024 (see Note 3 to our accompanying consolidated financial statements included in this this Annual Report on Form 10-K for more details).
The gain on sale of real estate investments of $3.4 million for the year ended December 31, 2024 related to the aggregate gain on sale of two properties (one industrial property with a lease expiration at the end of 2024 and one office property). 43 Table of Contents Other (Expense) Income Other expense was $15.3 million and $15.5 million for the years ended December 31, 2025 and 2024, respectively.
With our leverage ratio of 47.6% as of December 31, 2024, the spread over SOFR, including a 10-basis point credit adjustment, is 185 basis points and the interest rate on the Revolver was 6.2250% as of February 28, 2025; however, there was no outstanding balance on the Revolver.
The Credit Facility is priced on a leverage-based grid that fluctuates based on our actual leverage ratio at the end of the prior quarter. With our leverage ratio of 45.1% as of December 31, 2025, the spread over SOFR was 175 basis points and the interest rate on the Revolver was 5.4375% as of February 26, 2026.
On November 4, 2024, our board of directors authorized a 1.7% increase in the annual distribution rate from $1.15 per share to $1.17 per share commencing with monthly distributions payable to common stockholders and Class C OP Unit holders of record beginning as of January 31, 2025. 44 Cash Flow Summary The following table summarizes our cash flow activity for the years ended December 31, 2024 and 2023 (in thousands): December 31, 2024 2023 Net cash provided by operating activities $ 18,241 $ 16,579 Net cash provided by (used in) investing activities $ 8,395 $ (93,602) Net cash (used in) provided by financing activities $ (18,235) $ 71,544 Cash Flows from Operating Activities The net increase in cash provided by operating activities for the year ended December 31, 2024 compared to the year ended December 31, 2023 primarily reflects a decrease in property expenses which resulted from the August 2023 sale of properties subject to gross leases and an increase in distributions from unconsolidated investment in a real estate property, which resulted from an increase in available cash following completion of roof replacements.
On November 4, 2024, our board of directors authorized a 1.7% increase in the annual distribution rate from $1.15 per share to $1.17 per share commencing with monthly distributions payable to common stockholders and Class C OP Unit holders of record beginning as of January 31, 2025.
Amortization of the stock compensation expense related to our Class P OP Units and Class R OP Units was completed effective with their automatic conversion to Class C OP Units on the last business day of March 2024. From April 1, 2024 through December 31, 2024, there were no other stock incentive awards outstanding.
Stock compensation expense in 2024 included $1.3 million for our Class P OP Units and Class R OP Units, which vested and automatically converted to Class C OP Units on the last business day of March 2024. Depreciation and Amortization Depreciation and amortization expense was $15.1 million and $16.6 million for the years ended December 31, 2025 and 2024, respectively.
See Note 3 to our accompanying consolidated financial statements included in this Annual Report on Form 10-K for further details of these dispositions.
Recent Accounting Pronouncements See Note 2 to our accompanying audited consolidated financial statements included in this Annual Report on Form 10-K for any recent accounting pronouncements. 44 Table of Contents Commitments and Contingencies We may be subject to certain commitments and contingencies with regard to certain transactions (see Note 10 to our accompanying audited consolidated financial statements included in this Annual Report on Form 10-K for discussion of commitments and contingencies).
We have one mortgage secured by an industrial core property and one mortgage secured by a non-core property. The equity of each special purpose subsidiary that owns our other properties is pledged as collateral under our Credit Facility or the properties are unencumbered.
The equity of each special purpose subsidiary that owns our other properties is pledged as collateral under our Credit Facility or the properties are unencumbered. See details of mortgage debt in Note 6 to our accompanying audited consolidated financial statements included in this Annual Report on Form 10-K.
The resulting net proceeds from the ATM Offering for the year ended December 31, 2024 were $7.7 million after legal, accounting, investor relations and other offering costs of $0.5 million. As of December 31, 2024, we had $40.3 million of shares of Class C Common Stock available for future issuance under the ATM Offering.
As 36 Table of Contents of December 31, 2025, we had $36.9 million of shares of Class C Common Stock available for future issuance under the ATM Offering. No shares of Class C Common Stock were sold in the ATM Offering subsequent to December 31, 2025.
Cash Flows from Financing Activities The net cash used in financing activities for the year ended December 31, 2024 primarily reflects the net cost of repurchasing Class C OP Units and shares of Class C Common Stock for $11.5 million, our dividends and distributions paid to preferred and common stockholders and Class C OP Unit holders and monthly repayments of mortgage notes payable, partially offset by net proceeds from the sale of common stock under our ATM offering.
Cash Flows from Financing Activities The increase in net cash used in financing activities for the year ended December 31, 2025 compared to the year ended December 31, 2024 primarily reflects an aggregate of $18.6 million for the repayment of the mortgage note secured by the office property in Issaquah, Washington formerly leased to Costco in conjunction with the property sale and monthly principal payments, the repurchase of Series A Preferred Stock for $7.1 million, and an increase in distributions paid to common stockholders and OP Unit holders during the year ended December 31, 2025, partially offset by the repurchase of Class C Common Stock and Class C OP Units for $11.5 million during the year ended December 31, 2024. 42 Table of Contents Results of Operations Comparison of the Year Ended December 31, 2025 to the Year Ended December 31, 2024 Rental Revenue Rental revenue was $45.8 million and $46.5 million for the years ended December 31, 2025 and 2024, respectively, which included tenant reimbursements of $1.7 million and $2.0 million, respectively.
Purchases of properties in the near-term will be funded primarily with proceeds from dispositions of remaining non-core properties, proceeds from our ATM program and cash on hand. In the future, we expect to sell additional shares of our Class C Common Stock, subject to market conditions and a recovery in the trading price of our Class C Common Stock.
Purchases of properties in the near-term will be funded primarily with proceeds from dispositions of certain legacy assets, bank borrowing through our Credit Facility, proceeds from our ATM Offering and cash on hand.
In addition to the portion of independent directors' fees that are paid in common stock, stock compensation expense in future periods will include amortization for the Class X OP Units granted on February 3, 2025 as described in Note 14 to our accompanying consolidated financial statements included in this Annual Report on Form 10-K.
The increase of $1.3 million, or 84%, compared to 2024 was due to the Class X OP Units awarded in the first quarter of the year ended December 31, 2025, as described in Note 11 to our accompanying audited consolidated financial statements included in this Annual Report on Form 10-K.
The impairment charge represents the excess of the property’s carrying value over the property’s contracted sale price less estimated selling costs for the sale that was completed on February 28, 2024.
We determined that an impairment charge was required based on current market conditions and represented the excess of the assets' carrying value over the assets’ estimated sale price less estimated selling costs. No impairment charges were recorded during the year ended December 31, 2024.
During the year ended December 31, 2024, 521,837 shares were sold at an average price of $16.16 per share and issued for $8.2 million, net of sale commissions of $0.2 million, of which 287,840 shares were sold at an average price of $16.16 per share and issued for $4.5 million, net of sale commissions, during the three months ended December 31, 2024.
ATM Offering During the year ended December 31, 2025, we sold 212,791 shares of Class C Common Stock in the ATM Offering at an average price of $15.66 per share for proceeds of $3.3 million, net of sale commissions.
The loss on sale of real estate investments of $1.7 million for the year ended December 31, 2023 includes the $1.9 million loss on sale of the 13 non-core properties sold to GIPR on August 10, 2023, partially offset by the $0.2 million gain on sale of the office property sold on August 31, 2023.
Gain on Sale of Real Estate Investments, Net The gain on sale of real estate investments of $2.5 million for the year ended December 31, 2025 primarily related to the sale of our office property in Issaquah, Washington formerly leased to Costco.
Interest expense, including unrealized gain or loss on interest rate swaps and net of derivative settlements, was $16.2 million and $13.8 million for the years ended December 31, 2024 and 2023, respectively (see Note 7 to our accompanying consolidated financial statements included in this Annual Report on Form 10-K for details of the components of interest expense, net).
We paid aggregate premiums of $4.2 million, including accrued interest receivable of $0.3 million, to buy down the fixed rate below the prevailing market rate. We designated the two pay-fixed, receive-floating interest rate swaps as cash flow hedges (see Note 7 to our accompanying audited consolidated financial statements included in this Annual Report on Form 10-K for more details).
Impairment of Real Estate Investment Property There was no impairment for the year ended December 31, 2024. Impairment of real estate investment property amounted to $4.4 million for the year ended December 31, 2023 related to our property in Nashville, Tennessee, which was leased to Cummins Inc.
Impairment of real estate investment property We recorded an impairment charge of $5.8 million related to our property and equipment located in Saint Paul, Minnesota during the year ended December 31, 2025.
Removed
Overview We are a Maryland corporation with issued and outstanding stock consisting of Series A Preferred Stock, listed on the NYSE under the symbol “MDV.PA,” and Class C Common Stock, listed on the NYSE under the symbol “MDV.” We currently own and manage single-tenant net-lease properties throughout the United States, which are primarily, but not exclusively, industrial properties.
Added
Management’s discussion and analysis of financial condition and results of operations are based upon our accompanying audited consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”).
Removed
Our focus for future acquisitions is on critical industrial manufacturing properties with long-term leases to tenants that fuel the national economy and strengthen the nation’s supply chains. We elected to be taxed as a REIT for U.S. federal income tax purposes beginning with our taxable year ended December 31, 2016.
Added
In addition, sustained elevated inflation rates may negatively impact our longer term leases if contractual rent increases are not sufficient to keep up with market leases. 35 Table of Contents In January 2026, we entered into three new swap agreements, effective December 31, 2025, for $83.3 million each, for an aggregate of $250.0 million, corresponding to the Term Loan (as defined below), which will fix the Secured Overnight Financing Rate (“SOFR”) for the year ending December 31, 2026 to 2.45%, resulting in a fixed rate of 4.15% based on our leverage ratio of 45.1% as of December 31, 2025.
Removed
We believe that we have operated in conformity with the requirements for qualification as a REIT for U.S. federal income tax purposes. Since December 31, 2019, we have been internally managed.
Added
We paid aggregate premiums of $2.7 million, including accrued interest receivable of $0.1 million, to buy down the fixed rate below the prevailing market rate.
Removed
In addition, sustained elevated inflation rates may negatively impact our longer term leases if contractual rent increases are not sufficient to keep up with market leases. On December 31, 2024, the counterparties to the swap agreements exercised their one-time options to cancel the swap agreements (see Note 8 for more details).
Added
We have one lease scheduled to expire in 2027: our property in Charlotte, North Carolina leased to Husqvarna that expires on June 30, 2027.
Removed
We have two leases expiring in the next 12 months: our office property in Issaquah, Washington leased to Costco, which expires on July 31, 2025 and is under contract to be sold to KB Home, as described in Note 3 to our accompanying consolidated financial statements included in this Annual Report on Form 10-K, and our office property in San Diego, California leased to Solar Turbines that also expires on July 31, 2025.
Added
We obtained two lease extensions during 2025, with Fujifilm Dimatix, Inc. extending its lease for ten years from March 17, 2026 to March 16, 2036, and Northrop Grumman Systems Corporation extending its lease for five years from June 1, 2026 to May 31, 2031; however, changing circumstances may make future lease extensions more difficult.
Removed
We also have two leases scheduled to expire in 2026: our industrial property in Santa Clara, California leased to Fujifilm Dimatix, Inc. that expires on March 16, 2026 and our industrial property in Melbourne, Florida leased to Northrop Grumman that expires on May 31, 2026.
Added
We entered into new swaps for 2026 that fix the rate of our Term Loan for one year. Our mortgages with fixed rates, including the mortgage on the Santa Clara, California property leased to Fujifilm Dimatix, Inc., mature after September 2027.
Removed
We successfully negotiated lease extensions for six properties during the years ended December 31, 2024 and 2023; however, changing circumstances may make future lease extensions more difficult.
Added
Market conditions can change quickly, potentially negatively impacting the value of real estate investments.
Removed
Our Credit Facility (as defined below), includes floating interest rates based on SOFR and our leverage ratio as described below and although our swaps entered into in 2022 were cancelled on December 31, 2024, we entered into new swaps for 2025 which fix the rate of our Term Loan for one year.
Added
From November 15, 2023 through December 31, 2025, an aggregate of 819,700 shares have been sold in the ATM Offering at an average price of $15.95 per share for aggregate net proceeds of $11.3 million after legal, accounting, investor relations and other offering costs of $1.4 million.
Removed
We are targeting leverage, over the long-term once we achieve scale, of 40% or lower of the aggregate fair value of our real estate properties plus our cash and cash equivalents; however, we increased our borrowing during 2023 in order to execute attractive acquisition opportunities resulting in leverage of 47.6% as of December 31, 2024.
Added
On January 16, 2026, we entered into an agreement with the Lenders to amend the Credit Agreement to (i) extend the maturity date of the credit facility eighteen months to July 18, 2028, (ii) remove the 10 basis point SOFR Adjustment and (iii) allow repurchases of shares of the Series A Preferred Stock, by amending certain distribution covenants so long as such repurchases are funded by proceeds from the issuance of preferred or common stock or asset sales, in each case, occurring within the trailing twelve month period of such repurchase.

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