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What changed in NETSTREIT Corp.'s 10-K — 2024 vs 2025

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

+327 added−306 removedSource: 10-K (2026-02-10) vs 10-K (2025-02-24)

Top changes in NETSTREIT Corp.'s 2025 10-K

327 paragraphs added · 306 removed · 258 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeWe may physically settle the forward sale agreements (by the delivery of shares of common stock) and receive proceeds from the sale of those shares on one or more forward settlement dates, which shall occur no later than December 31, 2025. 1 Annualized base rent (“ABR”) is annualized base rent as of December 31, 2024, for all leases that commenced, and annualized cash interest on mortgage loans receivable in place as of that date. 2 We define “investment grade” tenants as tenants, or tenants that are subsidiaries of a parent entity, with a credit rating of BBB- (S&P/Fitch), Baa3 (Moody’s) or NAIC2 (National Association of Insurance Commissioners) or higher. 3 We define “investment grade profile” tenants as tenants with metrics of more than $1.0 billion in annual sales and a debt to adjusted EBITDA ratio of less than 2.0x but do not carry a published rating from S&P, Moody’s, or NAIC. 5 Table of Contents January 2024 Follow-On Offering In January 2024, we completed a registered public offering of 11,040,000 shares of our common stock at a public offering price of $18.00 per share.
Biggest changeWe have elected to be treated and qualify as a REIT for U.S. federal income tax purposes. 2025 Highlights The following highlights our significant transactions for the year ended December 31, 2025: • We acquired 140 properties located in 31 states with a WALT of approximately 13.9 years for a total purchase price of $603.0 million, inclusive of $7.0 million of capitalized acquisition costs. • We sold 78 properties, including one property under development, for a total sales price, net of disposal costs, of $169.1 million, recognizing a net gain of $7.7 million. • In September 2025, we entered into a term loan agreement that provides for (i) a $200.0 million senior unsecured term loan that was fully funded at closing and matures in March 2031 (the “2031 Term Loan”), and (ii) a $250.0 million senior unsecured term loan that matures in September 2032, of which $100.0 million was funded at closing and $50.0 million was funded in January 2026 (the “2032 Term Loan”). 1 Annualized base rent (“ABR”) is annualized base rent for all leases that commenced and annualized cash interest on all executed mortgage loans as of December 31, 2025. 2 We define “investment grade” tenants as tenants, or tenants that are subsidiaries of a parent entity, with a credit rating of BBB- (S&P/Fitch), Baa3 (Moody’s) or NAIC2 (National Association of Insurance Commissioners) or higher. 3 We define “investment grade profile” tenants as tenants with investment grade credit metrics (more than $1.0 billion in annual sales and a debt to adjusted EBITDA ratio of less than 2.0x), but do not carry a published rating from S&P, Moody’s, or NAIC. 5 Table of Contents • In July 2025, we completed a registered public offering of 12,420,000 shares of our common stock on a forward basis at a public offering price of $17.70 per share, including the full exercise of the underwriters’ option to purchase additional shares.
Investment Origination Process Our current investment pipeline has been, and our investments going forward will be, identified by our senior management team, led by our Chief Executive Officer, Mark Manheimer, supplemented by our entire acquisitions team. Our acquisition team has developed a broad network of long-standing relationships.
Investment Origination Process Our current investment pipeline has been, and our investments going forward will be, identified by our senior management team, led by our Chief Executive Officer, Mark Manheimer, and supplemented by our entire acquisitions team. Our acquisition team has developed a broad network of long-standing relationships.
We believe these characteristics make our tenants’ businesses e-commerce resistant and resilient through all economic cycles.
We believe these characteristics make our tenants’ businesses e-commerce resistant and resilient through all economic cycles.
Item 1. Business Business Overview We are an internally managed real estate company that acquires, owns, and manages a diversified portfolio of single-tenant, retail commercial real estate subject to long-term net leases with high credit quality tenants across the United States. We also invest in property developments and mortgage loans secured by real estate.
Item 1. Business Business Overview We are an internally managed real estate company that acquires, owns, and manages a diversified portfolio of single-tenant commercial retail properties, subject to long-term net leases with high-credit-quality tenants across the United States. We also invest in property developments and mortgage loans secured by real estate.
Finally, we use our active portfolio management strategy to (i) regularly review each of our properties for changes in unit performance, tenant credit and local real estate conditions, (ii) identify properties that do not meet our disciplined underwriting strategy, diversification objectives or risk management criteria, including rent coverage ratios below 2.0x or likelihood of non-renewal upon lease expiration, and (iii) opportunistically dispose of those properties and reinvest the proceeds in tax-deferred exchanges under Section 1031 (“1031 Exchange”) of the Internal Revenue Code of 1986, as amended, (the “Code”), that will generate higher returns, enhance the credit quality of our real estate portfolio or extend our average remaining lease term.
Finally, we use our active portfolio management strategy to (i) regularly review each of our properties for changes in unit performance, tenant credit and local real estate conditions, (ii) identify properties that do not meet our disciplined underwriting strategy, diversification objectives or risk management criteria, including below average rent coverage ratios or likelihood of non-renewal upon lease expiration, and (iii) opportunistically dispose of those properties and reinvest the proceeds in tax-deferred exchanges under Section 1031 (“1031 Exchange”) of the Internal Revenue Code of 1986, as amended, (the “Code”), that will generate higher returns, enhance the credit quality of our real estate portfolio or extend our average remaining lease term.
Our Target Properties We seek to acquire, own, invest in and manage a diversified portfolio of single-tenant, retail commercial real estate subject to long-term net leases with high credit quality tenants across the United States.
Our Target Properties We seek to acquire, own, invest in and manage a diversified portfolio of single-tenant commercial retail properties subject to long-term net leases with high credit quality tenants across the United States.
We focus on tenants in industries where a physical location is critical to the generation of sales and profits, with a focus on necessity goods and essential services in the retail sector, including home improvement, auto parts, drug stores and pharmacies, general retail, grocers, convenience stores, discount stores, and quick-service restaurants, all of which we refer to as defensive retail industries.
We focus on tenants in industries where we believe a physical location is critical to the generation of sales and profits, with a focus on necessity goods and essential services in the retail sector, including grocers, convenience stores, discount stores, home improvement, quick-service restaurants, general retail, and auto parts, all of which we refer to as defensive retail industries.
We ensure that employees have a clear voice in sharing and upholding our cultural value and expectations through the Employee Experience Committee (EEC). The EEC allows the leadership team to engage with, and obtain feedback from, our employees on their workplace experiences. The EEC is comprised of non-management members of the organization and rotate annually.
We ensure that employees have a clear voice in sharing and upholding our cultural values and expectations through the Employee Experience Committee (EEC). The EEC allows the leadership team to engage with, and obtain feedback from, our employees on their workplace experiences. The EEC is comprised of non-management members of the organization who rotate annually.
General Investment Criteria Our objective is to maximize stockholder value by generating attractive risk-adjusted returns through owning, managing and growing a diversified portfolio of commercially desirable properties.
General Investment Criteria Our objective is to maximize stockholder value by generating attractive risk-adjusted returns through owning, managing, investing in, and growing a diversified portfolio of commercially desirable properties.
We intend to target a conservative net debt to EBITDA re leverage ratio of 4.5x to 5.5x, including the impact of any forward unsettled equity, to best position the Company for growth, and we intend to capitalize on our leading origination, underwriting, financing, documentation and property processes to improve our efficiency.
We intend to target a conservative net debt to EBITDA re leverage ratio, including the impact of any forward unsettled equity, to best position the Company for growth, and we intend to capitalize on our leading origination, underwriting, financing, documentation and property processes to improve our efficiency.
The average purchase price of a property in our portfolio as of December 31, 2024 was $3.6 million, our ABR per property is approximately $251 thousand, and our leases typically have initial lease terms of approximately 10 years and contain two or more options for the tenant to extend the lease term, most often for additional five-year periods. 6 Table of Contents We seek to invest in properties that have strong unit-level economics to reduce the risk of default on a particular property.
The average purchase price of a property in our portfolio as of December 31, 2025 was $3.7 million, our ABR per property is approximately $275 thousand, and our leases typically have initial lease terms of approximately 10 years and contain two or more options for the tenant to extend the lease term, most often for additional five-year periods. 6 Table of Contents We seek to invest in properties that have strong unit-level economics to reduce the risk of default on a particular property.
Human Capital Management As of December 31, 2024, we had 22 full-time employees. Our staff mostly comprises professional employees engaged in origination, underwriting, closing, accounting and financial reporting, portfolio management, and capital markets activities essential to our business. We are committed to creating a strong internal culture that promotes inclusion and employee well-being.
Human Capital Management As of December 31, 2025, we had 29 full-time employees. Our staff mostly comprises professional employees engaged in origination, underwriting, closing, accounting and financial reporting, portfolio management, and capital markets activities essential to our business. We are committed to creating a strong internal culture that promotes inclusion and employee well-being.
Our growth and diversification strategy focuses on tenants in industries where a physical location is critical to the generation of sales and profits, with a focus on necessity goods and essential services in the retail sector, including home improvement, auto parts, drug stores and pharmacies, general retail, grocers, convenience stores, discount stores, and quick-service restaurants.
Our growth and diversification strategy focuses on tenants in industries where we believe a physical location is critical to the generation of sales and profits, with a focus on necessity goods and essential services in the retail sector, including grocers, convenience stores, discount stores, home improvement, quick-service restaurants, general retail, and auto parts.
Additionally, our WALT of 9.8 years as of December 31, 2024 and superior underwriting and portfolio monitoring capabilities, which reduce default losses, are intended to make our cash flows highly stable. 8 Table of Contents Tax Status We are organized and have operated in a manner that has enabled us to qualify to be taxed as a REIT commencing with our short taxable year ended December 31, 2019, and we intend to continue to operate so as to satisfy the requirements for qualification as a REIT for U.S. federal income tax purposes.
Additionally, our WALT of 10.1 years as of December 31, 2025, along with our superior underwriting and portfolio monitoring capabilities that reduce default losses, are intended to make our cash flows highly stable. 8 Table of Contents Tax Status We are organized and have operated in a manner that has enabled us to qualify to be taxed as a REIT commencing with our short taxable year ended December 31, 2019, and we intend to continue to operate so as to satisfy the requirements for qualification as a REIT for U.S. federal income tax purposes.
Our ability to efficiently deploy capital is a direct result of our management team’s extensive network of industry relationships with retailers, brokers, intermediaries, private equity firms and others in the net lease industry, which we utilize to source a robust pipeline of attractive marketed and off-market investment opportunities through which we have deployed capital, acquiring 572 single-tenant retail net leased properties with an aggregate purchase price of $2.1 billion since our formation in December 2019 (excluding our property development acquisitions).
Our ability to efficiently deploy capital is a direct result of our management team’s extensive network of industry relationships with retailers, brokers, intermediaries, private equity firms and others in the net lease industry, which we utilize to source a robust pipeline of attractive marketed and off-market investment opportunities through which we have deployed capital, acquiring 712 single-tenant retail net leased properties as of December 31, 2025 with an aggregate purchase price of $2.7 billion since our formation in December 2019 (excluding our property development acquisitions).
As part of this analysis, we look for tenants that operate in industries where a physical location is critical to the generation of sales and profits, with a focus on necessity goods and essential services in the retail sector, including home improvement, auto parts, drug stores and pharmacies, general retail, grocers, convenient stores, discount stores, and quick-service restaurants.
As part of this analysis, we look for tenants that operate in industries where we believe a physical location is critical to the generation of sales and profits, with a focus on necessity goods and essential services in the retail sector, including grocers, convenience stores, discount stores, home improvement, quick-service restaurants, general retail, and auto parts.
As we continue to grow our portfolio, we seek to acquire single-tenant, retail commercial real estate net leased on a long-term basis (generally at least ten years) to high credit quality tenants in industries where a physical location is critical to the generation of sales and profits, with a focus on necessity goods and essential services in the retail sector, including home improvement, auto parts, drug stores and pharmacies, general retail, grocers, convenient stores, discount stores, and quick-service restaurants.
As we continue to grow our portfolio, we seek to acquire single-tenant, commercial retail properties net leased on a long-term basis (generally at least ten years) to high credit quality tenants in industries where we believe a physical location is critical to the generation of sales and profits, with a focus on necessity goods and essential services in the retail sector, including grocers, convenience stores, discount stores, home improvement, quick-service restaurants, general retail, and auto parts.
As of December 31, 2024, our investments generated ABR 1 of $165.1 million. Approximately 56% of our ABR is from investment grade 2 credit rated tenants and an additional 15% of our ABR is derived from tenants with an investment grade profile 3 .
As of December 31, 2025, our investments generated ABR 1 of $198.3 million. Approximately 44% of our ABR is from investment grade 2 credit rated tenants and an additional 14% of our ABR is derived from tenants with an investment grade profile 3 .
We also provide employees with standing desks, ergonomic desk chairs, and fitness center memberships. Available Information Our principal executive office is located at 2021 McKinney Avenue, Suite 1150, Dallas, Texas, 75201, and our telephone number is 972-200-7100. Our website address is www.NETSTREIT.com.
We offer competitive healthcare insurance and generous paid time off, as well as paid medical and parental leave. We also provide employees with standing desks, ergonomic desk chairs, and fitness center memberships. Available Information Our principal executive office is located at 2021 McKinney Avenue, Suite 1150, Dallas, Texas, 75201, and our telephone number is 972-200-7100. Our website address is www.NETSTREIT.com.
As we grow, we anticipate having access to the investment grade debt and equity capital markets to maintain a prudent balance between debt and equity financing.
We also may access investment grade debt and equity capital markets to further maintain a prudent balance between debt and equity financing.
Members meet periodically to discuss recommendations to present to the leadership team, which may include additional substantive training, personal growth and professional development programs, company social and team-building events, employee benefits, and health and wellness programs. In addition, we established an Employee Recognition Program designed to recognize exemplary performance.
Members meet periodically to discuss recommendations to present to the leadership team, which may include additional substantive training, personal growth and professional development programs, company social and team-building events, employee benefits, and health and wellness programs. ◦ Employee wellness. We are committed to providing a safe and healthy working environment for our employees.
As of December 31, 2024, we owned or had investments in 687 properties that were diversified by tenant, industry, and geography, including 98 different tenants, across 26 retail sectors in 45 states, excluding five property developments where rent has yet to commence.
As of December 31, 2025, we owned or had investments in 761 properties diversified by tenant, industry, and geography, comprising 129 different tenants across 28 retail sectors in 45 states. This includes three property developments where rent has not yet commenced.
We were formed as a Maryland corporation on October 11, 2019, and our common stock began trading on the New York Stock Exchange (“NYSE”) under the symbol “NTST” on August 13, 2020.
Our portfolio was 99.9% occupied and, excluding mortgage loans receivable, had a weighted average remaining lease term (“WALT”) of 10.1 years. We were formed as a Maryland corporation on October 11, 2019, and our common stock began trading on the New York Stock Exchange (“NYSE”) under the symbol “NTST” on August 13, 2020.
During 2024, we disposed of 56 properties for a total sales price, net of disposal costs, of $110.9 million and improved portfolio performance by diversifying tenant concentration and improving key metrics such as tenant credit quality, WALT, and geographic diversity.
During 2025, we disposed of 78 properties, including one property under development, for a total sales price, net of disposal costs, of $169.1 million and improved portfolio performance by diversifying tenant concentration and improving certain key metrics.
As of December 31, 2024, we had $239.0 million of borrowings outstanding under our $400.0 million Revolver, as well as $175.0 million outstanding under the 2027 Term Loan, $200.0 million outstanding under the $200.0 million 2028 Term Loan, and $250.0 million outstanding under the 2029 Term Loan.
As of December 31, 2025, we had $200.0 million outstanding under the $200.0 million senior unsecured term loan (the “2028 Term Loan”), $250.0 million outstanding under the $250.0 million senior unsecured term loan (the “2029 Term Loan”), $175.0 million outstanding under the $175.0 million senior unsecured term loan (the “2030 Term Loan A”), $175.0 million outstanding under the $175.0 million senior unsecured term loan (the “2030 Term Loan B”), $200.0 million outstanding under the 2031 Term Loan, and $100.0 million outstanding under the 2032 Term Loan.
As of December 31, 2024, we owned 99.5% of the limited partnership interests in our operating partnership. We have elected to be treated and qualify as a REIT for U.S. federal income tax purposes.
As of December 31, 2025, we owned 99.6% of the units of limited partnership interests in our operating partnership (“OP Units”).
ATM Program During 2024, we entered into forward sale agreements with respect to an aggregate 1,895,647 shares of common stock under our at-the-market (“ATM”) program at a weighted average price of $17.63 per share that remain unsettled.
We physically settled 8,155,053 of these shares in December 2025 and received $137.0 million of net proceeds. • We entered into forward sale agreements with respect to an aggregate 9,068,486 shares of common stock under our existing $300.0 million at-the-market equity program established in August 2024 (the “2024 ATM Program”) at a weighted-average price of $17.75 per share. • In January 2025, we amended our existing credit agreements to provide for an aggregate of $550.0 million in senior unsecured term loans and to upsize our senior unsecured revolving credit facility to $500.0 million.
Removed
Our portfolio was 99.9% occupied and, excluding mortgage loans receivable, had a weighted average remaining lease term (“WALT”) of 9.8 years, which we believe provides a strong, stable source of recurring cash flow.
Removed
Recent Financing Activities January 2025 Debt Transactions On January 15, 2025, the Company amended its existing credit agreements agented by PNC Bank, National Association (the “PNC Credit Agreement”), Wells Fargo Bank, National Association (the “Wells Fargo Credit Agreement”) and Truist Bank (the “Truist Credit Agreement”).
Removed
The PNC Credit Agreement was amended and restated and provides for: a new $175.0 million senior unsecured term loan (the “2030 Term Loan B”); an existing $200.0 million senior unsecured term loan, which was fully funded under the existing PNC Credit Agreement (the “2028 Term Loan”); and an upsized $500.0 million senior unsecured revolving credit facility (increased from $400 million under the existing PNC Credit Agreement) (the “Revolver”).
Removed
The 2030 Term Loan B and the upsized Revolver initially mature in January 2029 and include, at the Company’s election, a one-year option to extend the maturity to January 2030.
Removed
The 2030 Term Loan B was fully funded on the closing date and the Company has hedged the entire $175.0 million 2030 Term Loan B at an all-in fixed interest rate of 5.12% through January 2030.
Removed
The Wells Fargo Credit Agreement was amended and restated to extend the maturity date of the existing $175.0 million senior unsecured term loan (the “2030 Term Loan A” or, prior to the extended maturity, referred to as the “2027 Term Loan”) thereunder from January 2027 to January 2029 with an option, at the Company’s election, to extend the maturity to January 2030.
Removed
The Truist Credit Agreement governs existing term loans thereunder (the “2029 Term Loan”). Among other changes, each of the PNC Credit Agreement, Wells Fargo Credit Agreement, and Truist Credit Agreement were also amended to remove certain financial covenants and provide for revised, improved pricing when the Company meets certain investment grade rating and leverage targets.
Removed
In connection with the offering, we entered into forward sale agreements for 11,040,000 shares of our common stock. We did not initially receive any proceeds from the sale of shares of common stock by the forward purchasers.
Removed
On September 26, 2024, we physically settled 2,200,000 shares of common stock at a price of $17.22 per share in accordance with the forward sale agreements. We received net proceeds from the settlement of $37.8 million, net of underwriting discounts and offering costs of $1.8 million.
Removed
As of December 31, 2024, 8,840,000 shares remain unsettled under the January 2024 forward sale agreements. We expect to physically settle the forward sale agreements (by the delivery of shares of common stock) and receive proceeds from the sale of those shares upon one or more forward settlement dates, which shall occur no later than December 31, 2025.
Removed
Employees have an opportunity to nominate their teammates who have made significant contributions, and two nominees per quarter are chosen to win an award. ◦ Employee wellness. We are committed to providing a safe and healthy working environment for our employees. We offer competitive healthcare insurance and generous paid time off, as well as paid medical and parental leave.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeWe are a holding company and we conduct substantially all of our operations through our operating partnership. We do not have, apart from an interest in our operating partnership, any independent operations. As a result, we rely on distributions from our operating partnership to pay any dividends and other distributions we might declare on shares of our common stock.
Biggest changeWe are a holding company with no direct operations and we rely on funds received from our operating partnership to pay liabilities. We are a holding company and we conduct substantially all of our operations through our operating partnership. We do not have, apart from an interest in our operating partnership, any independent operations.
The success of any one of our tenants is dependent on its individual business and its industry, which could be adversely affected by poor management, global market and economic conditions in general, changes in consumer trends and preferences that decrease demand for a tenant’s products or services, or other factors over which neither they nor we have control.
The success of any one of our tenants is dependent on the tenant’s individual business and its industry, which could be adversely affected by poor management, global market and economic conditions in general, changes in consumer trends and preferences that decrease demand for a tenant’s products or services, or other factors over which neither they nor we have control.
We compete with numerous developers, owners, and operators of properties, many of which own properties similar to ours in the same markets in which our properties are located, some of which may have greater financial resources than we do.
We compete with numerous developers, owners, and operators of properties, many of which own properties similar to ours in the same markets in which our properties are located, and some of which may have greater financial resources than we do.
In addition, if a 1031 Exchange were later to be determined to be taxable, we may be required to amend our tax returns for the applicable year in question, including any information reports we sent our stockholders.
In addition, if a 1031 Exchange were later determined to be taxable, we may be required to amend our tax returns for the applicable year in question, including any information reports we sent our stockholders.
In addition, our results of operations could be below the expectations of public market analysts and investors due to a number of potential factors, including variations in our quarterly results of operations, additions or departures of key management personnel, our ability to accretively raise capital and deploy proceeds in suitable investments, failure to meet analysts’ earnings estimates, publication of research reports about our industry, cybersecurity incidents, litigation and government investigations, changes or proposed changes in laws or regulations, or differing interpretations or enforcement thereof affecting our business, changes in market valuations of similar companies, or speculation in the press or investment community, adverse market reactions to announcements by our tenants, including announcements about store closures, credit rating downgrades and bankruptcies, announcements by our competitors of significant acquisitions, dispositions, strategic partnerships, joint ventures or capital commitments, and adverse publicity about our industry, and in response the market price of shares of our common stock could decrease significantly.
In addition, our results of operations could be below the expectations of public market analysts and investors due to a number of potential factors, including variations in our quarterly results of operations, additions or departures of key management personnel, our ability to accretively raise capital and deploy proceeds in suitable investments, failure to meet analysts’ earnings estimates, publication of research reports about our industry, cybersecurity incidents, litigation and government investigations, changes or proposed changes in laws or regulations, or differing interpretations or enforcement thereof affecting our business, changes in market valuations of similar companies, speculation in the press or investment community, adverse market reactions to announcements by our tenants, including announcements about store closures, credit rating downgrades and bankruptcies, announcements by our competitors of significant acquisitions, dispositions, strategic partnerships, joint ventures or capital commitments, and adverse publicity about our industry, and in response the market price of shares of our common stock could decrease significantly.
Our level of debt and the limitations imposed on us by our debt agreements could have significant adverse consequences, including the following: our cash flow may be insufficient to meet our required principal and interest payments; cash interest expense and financial covenants relating to our indebtedness may limit or eliminate our ability to make distributions to our common stockholders; we may be unable to borrow additional funds as needed or on favorable terms, which could, among other things, adversely affect our ability to capitalize upon investment opportunities or meet operational needs; we may be unable to refinance our indebtedness at maturity, or the refinancing terms may be less favorable than the terms of our original indebtedness; counterparties may fail to honor their obligations under any hedge agreements we enter into, such agreements may not effectively hedge interest rate fluctuation risk, and, upon the expiration of any hedge agreements we enter into, we would be exposed to then-existing market rates of interest and future interest rate volatility; we may be forced to dispose of properties, possibly on unfavorable terms or in violation of certain covenants to which we may be subject; we may be restricted from accessing some of our excess cash flow after debt service if certain of our tenants fail to meet certain financial performance metric thresholds; we may violate restrictive covenants in our loan documents, which would entitle the lenders to accelerate our debt obligations; and our default under any loan with cross default provisions could result in a default on other indebtedness.
Our level of debt and the limitations imposed on us by our debt agreements could have significant adverse consequences, including the following: our cash flow may be insufficient to meet our required principal and interest payments; cash interest expense and financial covenants relating to our indebtedness may limit or eliminate our ability to make distributions to our common stockholders; we may be unable to borrow additional funds as needed or on favorable terms, or at all, which could, among other things, adversely affect our ability to capitalize upon investment opportunities or meet operational needs; we may be unable to refinance our indebtedness at maturity, or the refinancing terms may be less favorable than the terms of our original indebtedness; counterparties may fail to honor their obligations under any hedge agreements we enter into, such agreements may not effectively hedge interest rate fluctuation risk, and, upon the expiration of any hedge agreements we enter into, we would be exposed to then-existing market rates of interest and future interest rate volatility; we may be forced to dispose of properties, possibly on unfavorable terms or in violation of certain covenants to which we may be subject; we may be restricted from accessing some of our excess cash flow after debt service if certain of our tenants fail to meet certain financial performance metric thresholds; we may violate restrictive covenants in our loan documents, which would entitle the lenders to accelerate our debt obligations; and our default under any loan with cross default provisions could result in a default on other indebtedness.
While our tenants are obligated by law to comply with the ADA and typically obligated under our leases to cover costs associated with compliance with the ADA and other property regulations, if required changes involve greater expenditures than anticipated or if the changes must be made on a more accelerated basis than anticipated, the ability of our tenants to cover costs could be adversely affected, and we could be required to expend our own funds to comply with applicable law and regulation. 26 Table of Contents Risks Related to Our Organizational Structure and Ownership of Our Common Stock Our bylaws designate the Circuit Court for Baltimore City, Maryland as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders and provide that claims relating to causes of action under the Securities Act may only be brought in federal district courts, which could limit stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees and could discourage lawsuits against us and our directors, officers, and employees.
While our tenants are obligated by law to comply with the ADA and typically obligated under our leases to cover costs associated with compliance with the ADA and other property regulations, if required changes involve greater expenditures than anticipated or if the changes must be made on a more accelerated basis than anticipated, the ability of our tenants to cover costs could be adversely affected, and we could be required to expend our own funds to comply with applicable law and regulation. 27 Table of Contents Risks Related to Our Organizational Structure and Ownership of Our Common Stock Our bylaws designate the Circuit Court for Baltimore City, Maryland as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders and provide that claims relating to causes of action under the Securities Act may only be brought in federal district courts, which could limit stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees and could discourage lawsuits against us and our directors, officers, and employees.
Any claims against such a tenant for unpaid future rent would be subject to statutory limitations that would likely result in our receipt of rental revenues that are substantially less than the contractually specified rent we are owed under the lease(s). In addition, any claim we have for unpaid past rent, if any, may not be paid in full.
Any claims against such a tenant for unpaid future rent would be subject to statutory limitations that would likely result in our receipt of rental revenues that are substantially less than the contractually specified rent we are owed under the lease(s). In addition, any claim we have for unpaid past rent may not be paid in full.
We primarily invest in properties leased to tenants in industries where a physical location is critical to the generation of sales and profits with a focus on necessity goods and essential services in the retail sector such as home improvement, auto parts, general retail, grocers, convenience stores, discount stores and quick-service restaurants.
We primarily invest in properties leased to tenants in industries where we believe a physical location is critical to the generation of sales and profits with a focus on necessity goods and essential services in the retail sector such as grocers, convenience stores, discount stores, home improvement, quick-service restaurants, general retail, and auto parts.
Therefore, our directors and officers will be subject to monetary liability resulting only from: actual receipt of an improper benefit or profit in money, property, or services; or active and deliberate dishonesty by the director or officer that is established by a final judgment and is being material to the cause of action adjudicated.
Therefore, our directors and officers will be subject to monetary liability resulting only from: actual receipt of an improper benefit or profit in money, property, or services; or active and deliberate dishonesty by the director or officer that is established by a final judgment and is material to the cause of action adjudicated.
In these cases, we utilize technology tools that track cell phone use in stores to assess the performance of a particular store. If the data provided by these tools is not accurate, we may be subject to defaults, and investors may view our cash flows as less stable.
In these cases, we utilize technology tools that track cell phone use in stores to assess the performance of a particular store. If the data provided by these tools is not accurate, we may be subject to tenant defaults, and investors may view our cash flows as less stable.
If our measurement of credit quality proves to be inaccurate, we may be subject to defaults, and investors may view our cash flows as less stable. In addition, most investment grade tenants are not required to provide unit-level reporting information pursuant to their leases.
If our measurement of credit quality proves to be inaccurate, we may be subject to tenant defaults, and investors may view our cash flows as less stable. In addition, most investment-grade tenants are not required to provide unit-level reporting information pursuant to their leases.
Depending on the location of the property, losses of a catastrophic nature, such as those caused by earthquakes and floods, may be covered by insurance policies that are held by our tenant with limitations such as large deductibles or co-payments that a tenant may not be able to meet.
Depending on the location of the property, losses of a catastrophic nature, such as those caused by earthquakes and floods, may be covered by insurance policies that are held by our tenants with limitations such as large deductibles or co-payments that a tenant may not be able to meet.
The properties we own or have owned in the past may subject us to known and unknown environmental liabilities. We typically obtain Phase I environmental site assessments on all properties we finance or acquire. However, the Phase I environmental site assessments are limited in scope and therefore may not reveal all environmental conditions affecting a property.
The properties we own or have owned in the past may subject us to known and unknown environmental liabilities. We typically obtain Phase I environmental site assessments on all properties we finance or acquire. However, the Phase I environmental site assessments are limited in scope and therefore may not reveal all adverse environmental conditions affecting a property.
This competition also may increase the demand for the types of properties in which we typically invest and, therefore, reduce the number of suitable investment opportunities available to us, and increase the prices paid for such acquisition properties. Accordingly, competition for the acquisition of real property and tenants could materially and adversely affect us.
This competition also may increase the demand for the types of properties in which we typically invest and, therefore, reduce the number of suitable investment opportunities available to us, and increase the prices paid for such acquired properties. Accordingly, competition for the acquisition of real property and tenants could materially and adversely affect us.
We have not and may not in the future, however, detect and remediate all such vulnerabilities, including on a timely basis. Further, we have (and may in the future) experienced delays in developing and deploying remedial measures and patches designed to address any such identified vulnerabilities. Vulnerabilities could be exploited and result in a security incident.
We have not and may not in the future, however, detect and remediate all such vulnerabilities, including on a timely basis. Further, we have (and may in the future) experienced delays in developing and deploying remedial measures and patches designed to address any such identified vulnerabilities. As a result, vulnerabilities could be exploited and result in a security incident.
In addition, the loss of a tenant, either through lease expiration or tenant bankruptcy or insolvency, may require us to spend significant amounts of capital to renovate the property before it is suitable for a new tenant and cause us to incur significant costs.
In addition, the loss of a tenant, either through lease expiration or tenant bankruptcy or insolvency, may require us to spend significant amounts of capital and time to renovate the property before it is suitable for a new tenant and cause us to incur significant costs.
If we cease to be a REIT, we will not be allowed a deduction for dividends paid to stockholders in computing our taxable income and will be subject to U.S. federal income tax at corporate rates and state and local taxes, which may have adverse consequences on our total return to our stockholders. 22 Table of Contents If a transaction intended to qualify as a 1031 Exchange is later determined to be taxable, we may face adverse consequences, and if the laws applicable to such transactions are amended or repealed, we may not be able to dispose of properties on a tax-deferred basis.
If we cease to be a REIT, we will not be allowed a deduction for dividends paid to stockholders in computing our taxable income and will be subject to U.S. federal income tax at corporate rates and state and local taxes, which may have adverse consequences on our total return to our stockholders. 23 Table of Contents If a transaction intended to qualify as a 1031 Exchange is later determined to be taxable, we may face adverse consequences, and if the laws applicable to such transactions are amended or repealed, we may not be able to dispose of properties on a tax-deferred basis.
If a tenant becomes bankrupt or insolvent, federal law may prohibit us from evicting such tenant based solely upon such bankruptcy or insolvency. In addition, a bankrupt or insolvent tenant may be authorized to reject and terminate its lease or leases with us.
If a tenant becomes bankrupt or insolvent, federal or state law may prohibit us from evicting such tenant based solely upon such bankruptcy or insolvency. In addition, a bankrupt or insolvent tenant may be authorized to reject and terminate its lease or leases with us.
We face significant competition for tenants, which may decrease or prevent increases of the occupancy and rental rates of our properties, and competition for acquisitions may reduce the number of acquisitions we are able to complete and increase the costs of these acquisitions.
We face significant competition for tenants, which may decrease or prevent increases in occupancy and rental rates of our properties, and competition for acquisitions may reduce the number of acquisitions we are able to complete and increase the costs of these acquisitions.
In such case, the trading price of our common stock could decline. Risks Related to Our Business and Properties Global market and economic conditions may materially and adversely affect us and our tenants.
In such case, the market price of our common stock could decline. Risks Related to Our Business and Properties Global market and economic conditions may materially and adversely affect us and our tenants.
We may experience a decline in the fair value of our assets, which may have a material impact on our financial condition, liquidity, and results of operations and adversely impact the market value of our common stock.
We may experience a decline in the fair value of our assets, which may have a material impact on our financial condition, liquidity, and results of operations and adversely impact the market price of our common stock.
If tenants do not renew the leases as they expire, we will have to find new tenants to lease our properties, and there is no guarantee that we will be able to find new tenants, that our properties will be re-leased at rental rates equal to or above the current average rental rates, or that substantial rent abatements, tenant improvement allowances, early termination rights, or below-market renewal options or other tenant inducements will not be offered to attract new tenants.
If tenants do not renew the leases as they expire, we will have to find new tenants to lease our properties, and there is no guarantee that we will be able to find new tenants, that our properties will be re-leased at rental rates equal to or above the current average rental rates, or that substantial rent abatements, tenant improvement allowances, early termination rights, below-market renewal options or other tenant inducements will not be necessary to attract new tenants.
Because these properties have been designed or physically modified for a particular tenant, if the current lease is terminated or not renewed, we may be subject to an uncertain period of downtime without rental income, be required to renovate the property at substantial costs, decrease the rent we charge, or provide other concessions in order to lease the property to another tenant.
Because these properties have been designed or physically modified for a particular tenant, if the current lease is terminated or not renewed, we may be subject to an uncertain period of downtime without rental income, be required to renovate the property at significant costs, decrease the rent we charge, or provide other concessions in order to lease the property to another tenant.
If we determine it to be in our best interest to own a substantial number of our properties through one or more TRSs, then it is possible that the IRS may conclude that the value of our interests in our TRSs exceeds 20% of the value of our total assets at the end of any calendar quarter and therefore cause us to fail to qualify as a REIT.
If we determine it to be in our best interest to own a substantial number of our properties through one or more TRSs, then it is possible that the IRS may conclude that the value of our interests in our TRSs exceeds 25% of the value of our total assets at the end of any calendar quarter and therefore cause us to fail to qualify as a REIT.
If our competitors offer space at rental rates below current market rates, or below the rental rates we currently charge, we may lose existing or potential tenants, and we may be pressured to reduce our rental rates or to offer more substantial rent abatements, tenant improvements, early termination rights, or below-market renewal options in order to retain tenants when our leases expire.
If our competitors offer space at rental rates below current market rates, or below the rental rates we currently charge, we may lose existing or potential tenants, and we may be pressured to reduce our rental rates or to offer more substantial rent abatements, tenant improvements, early termination rights, or below-market renewal options in order to retain tenants or attract new tenants when our leases expire.
Any of these taxes would reduce our cash available for distribution to stockholders. 21 Table of Contents Dividends payable by REITs generally do not qualify for the reduced tax rates available for some dividends. Income from “qualified dividends” payable to U.S. stockholders that are individuals, trusts, and estates is generally subject to tax at reduced rates.
Any of these taxes would reduce our cash available for distribution to stockholders. 22 Table of Contents Dividends payable by REITs generally do not qualify for the reduced tax rates available for some dividends. Income from “qualified dividends” payable to U.S. stockholders that are individuals, trusts, and estates is generally subject to tax at reduced rates.
Other potential consequences of changes in economic and financial conditions include: changes in the performance of our tenants, which may result in lower rent and lower recoverable expenses than the tenant can afford to pay, and tenant defaults under the lease; current or potential tenants may delay or postpone entering into long-term leases with us; continuing increased costs of acquiring new properties on attractive terms; inability to borrow on terms and conditions that we find to be acceptable, which could continue to reduce our ability to pursue acquisition opportunities or increase future interest expense; and the recognition of impairment charges on or reduced values of our properties, which may adversely affect our results of operations or limit our ability to dispose of assets at attractive prices and may reduce the availability of buyer financing.
Other potential consequences of changes in economic and financial conditions include, among others: changes in the performance of our tenants, which may result in lower rent and lower recoverable expenses than the tenant can afford to pay, and tenant defaults under their leases; current or potential tenants may delay or postpone entering into long-term leases with us; continuing increased costs of acquiring new properties on attractive terms; inability to borrow on terms and conditions that we find to be acceptable, which could continue to reduce our ability to pursue acquisition opportunities or increase future interest expense; and the recognition of impairment charges on or reduced values of our properties, which may adversely affect our results of operations or limit our ability to dispose of assets at attractive prices and may reduce the availability of buyer financing.
As we grow our business, our internal controls will become more complex, and we will require additional resources to ensure our internal controls remain effective. If we or our independent auditors discover a material weakness, the disclosure of that fact, even if quickly remedied, could reduce the market value of our common stock.
As we grow our business, our internal controls will become more complex, and we will require additional resources to ensure our internal controls remain effective. If we or our independent auditors discover a material weakness, the disclosure of that fact, even if quickly remedied, could reduce the market price of our common stock.
Generally, franchise agreements have terms that end earlier than the respective expiration dates of the related leases. In addition, a tenants’ rights as a franchisee or licensee typically may be terminated, and the tenant may be precluded from competing with the franchiser or licensor upon termination.
Generally, franchise agreements have terms that end earlier than the respective expiration dates of the related leases. In addition, a tenant’s rights as a franchisee or licensee typically may be terminated, and the tenant may be precluded from competing with the franchiser or licensor upon termination.
Although our operating partnership’s partnership units are not traded on an established securities market, the operating partnership’s units could be viewed as readily tradable on a secondary market (or the substantial equivalent thereof), and our operating partnership may not qualify for one of the “safe harbors” under the applicable tax regulations.
Although our operating partnership’s partnership units are not traded on an established securities market, the operating partnership’s units could be viewed as readily tradable on a secondary market (or the substantial equivalent thereof), and our operating partnership may not qualify for one of the “safe harbors” under the applicable Treasury Regulations.
A decline in the fair market value of our assets may require us to recognize an other-than-temporary impairment against such assets under Generally Accepted Accounting Principles (“GAAP”) if we were to determine that we do not have the ability and intent to hold any assets in unrealized loss positions to maturity or for a period of time sufficient to allow for recovery to the amortized cost of such assets.
A decline in the fair value of our assets may require us to recognize an other-than-temporary impairment against such assets under U.S. generally accepted accounting principles (“GAAP”) if we were to determine that we do not have the ability and intent to hold any assets in unrealized loss positions to maturity or for a period of time sufficient to allow for recovery to the amortized cost of such assets.
In the event that these relief provisions were not available, we could lose our REIT status under the Code. 23 Table of Contents Complying with REIT requirements may cause us to forego otherwise attractive opportunities or liquidate otherwise attractive investments.
In the event that these relief provisions were not available, we could lose our REIT status under the Code. 24 Table of Contents Complying with REIT requirements may cause us to forego otherwise attractive opportunities or liquidate otherwise attractive investments.
There can be no assurance that future changes to the U.S. federal income tax laws or regulatory changes will not be proposed or enacted that could impact our business and financial results. If enacted, certain of such changes could have an adverse impact on our business and financial results.
There can be no assurance that future changes to the U.S. federal income tax laws or regulatory changes will not be proposed or enacted that could impact our business and financial results. If enacted, such changes could have an adverse impact on our business and financial results.
Prospective investors should consult their tax advisors regarding the application and effect of state and local income and other tax laws on an investment in our stock. 25 Table of Contents Liabilities arising under environmental laws may materially and adversely affect us.
Prospective investors should consult their tax advisors regarding the application and effect of state and local income and other tax laws on an investment in our stock. 26 Table of Contents Liabilities arising under environmental laws may materially and adversely affect us.
In particular, these risks could arise from weakness in or lack of an established market for a property, changes in the financial condition, or prospects of prospective purchasers, changes in macroeconomic conditions, and changes in laws, regulations, or fiscal policies of the jurisdiction in which the property is located.
In particular, these risks could arise from weakness in or lack of an established market for a property, changes in the financial condition, or prospects of potential purchasers, changes in macroeconomic conditions, and changes in laws, regulations, or fiscal policies of the jurisdiction in which the property is located.
There can be no assurance that we will be able to comply with the 20% limitation discussed above or to avoid application of the 100% excise tax discussed above. 24 Table of Contents New legislation or administrative or judicial action, in each instance potentially with retroactive effect, could make it more difficult or impossible for us to qualify or remain qualified as a REIT.
There can be no assurance that we will be able to comply with the 25% limitation discussed above or to avoid application of the 100% excise tax discussed above. 25 Table of Contents New legislation or administrative or judicial action, in each instance potentially with retroactive effect, could make it more difficult or impossible for us to qualify or remain qualified as a REIT.
Usually, we have no notice or cure rights with respect to such a termination and have no rights to assignment of any such franchise agreement. This may have an adverse effect on our ability to mitigate losses arising from a default on any of our leases.
Typically, we have no notice or cure rights with respect to such a termination and have no rights to assignment of any such franchise agreement. This may have an adverse effect on our ability to mitigate losses arising from a default on any of our leases.
Accordingly, our performance is subject to risks incident to the ownership of commercial real estate, which include the inability to collect rents from tenants due to financial hardship, including bankruptcy; changes in local real estate conditions in the markets in which we operate, including the availability and demand for single-tenant, retail commercial real estate space; changes in consumer trends and preferences that affect the demand for products and services offered by our tenants; inability to lease or sell properties upon expiration or termination of existing leases; environmental risks, including the presence of hazardous or toxic substances or materials on our properties; the subjectivity of real estate valuations and changes in these valuations over time; the illiquid nature of real estate compared to most other financial assets; changes in laws and governmental regulations, including those governing real estate usage and zoning; changes in interest rates and the availability of financing; and changes in the general economic and business climate.
Accordingly, our performance is subject to risks incident to the ownership of commercial real estate, which include, among others, the inability to collect rents from tenants due to financial hardship, including bankruptcy; changes in local real estate conditions in the markets in which we operate, including the availability and demand for single-tenant, commercial retail properties space; changes in consumer trends and preferences that affect the demand for products and services offered by our tenants; inability to lease or sell properties upon expiration or termination of existing leases; environmental risks, including the presence of hazardous or toxic substances or materials on our properties; the subjectivity of real estate valuations and changes in these valuations over time; the illiquid nature of real estate compared to most other financial assets; changes in laws and governmental regulations, including those governing real estate usage and zoning; changes in interest rates and the availability of financing on attractive terms or at all; and changes in the general economic and business climate.
Our current debt agreements and other debt agreements we may enter into in the future contain or may contain financial and other covenants with which we are or will be required to comply, and that limits or will limit our ability to operate our business.
Our current debt agreements contain, and other debt agreements we may enter into in the future may contain, financial and other covenants with which we are or will be required to comply, and which limit or will limit our ability to operate our business.
Applicable data privacy and security obligations may require us, or we may voluntarily choose, to notify relevant stakeholders (including affected individuals, customers, regulators, and investors) of security incidents, or to take other actions. Such disclosures and actions are costly, and the disclosure or the failure to comply with such requirements could lead to adverse consequences.
Applicable data privacy and security obligations may require us, or we may voluntarily choose, to notify relevant stakeholders (including affected individuals, customers, regulators, and investors) of security incidents, or to take other actions. Such disclosures and actions can be costly, and the disclosure or the failure to comply with such requirements could lead to adverse consequences.
For example, the current and continuing macro-economic conditions of fluctuating inflation and fluctuating interest rates have increased the costs associated with acquiring new properties and decreased the availability of financing on terms that we find attractive, which has reduced our ability to acquire properties at our historical rate with attractive terms.
For example, the recent macro-economic conditions of fluctuating interest and inflation rates have increased the costs associated with acquiring new properties and decreased the availability of financing on terms that we find attractive, which has reduced our ability to acquire properties at our historical rate with attractive terms.
The current and continued macro-economic conditions of fluctuating inflation and fluctuating interest rates have increased the costs associated with acquiring new properties and decreased the availability of financing on terms that we find acceptable, which has reduced our ability to acquire properties at our historical rate with attractive terms.
The recent macro-economic conditions of fluctuating interest and inflation rates have increased the costs associated with acquiring new properties and decreased the availability of financing on terms that we find acceptable, which has reduced our ability to acquire properties at our historical rate with attractive terms.
This litigation, if instituted against us, could result in substantial costs and a diversion of our management’s attention and resources. Conflicts of interest could arise in the future between the interests of our stockholders and the interests of holders of OP units, which may impede business decisions that could benefit our stockholders.
This litigation, if instituted against us, could result in substantial costs and a diversion of our management’s attention and resources. 30 Table of Contents Conflicts of interest could arise in the future between the interests of our stockholders and the interests of holders of OP Units, which may impede business decisions that could benefit our stockholders.
These consequences may include: government enforcement actions (for example, investigations, fines, penalties, audits, and inspections); additional reporting requirements and/or oversight; restrictions on processing sensitive data (including personal data); litigation (including class claims); indemnification obligations; negative publicity; reputational harm; monetary fund diversions; interruptions in our operations (including availability of data); financial loss; and other similar harms.
These consequences may include: regulatory inquiries or government enforcement actions (for example, investigations, fines, penalties, audits, and inspections); additional reporting requirements and/or oversight; restrictions on the processing of data (including personal data); litigation (including class claims); indemnification obligations; negative publicity; reputational harm; monetary fund diversions; interruptions in our operations (including availability of data); financial loss; and other similar harms.
In order to avoid potentially significant taxable gains upon the sale of properties that no longer meet our investment criteria, we intend to dispose of properties in 1031 Exchanges.
In order to defer potentially significant taxable gains upon the sale of properties that no longer meet our investment criteria, we intend to dispose of properties in 1031 Exchanges.
Because our properties have generally been built to suit a particular tenant’s specific needs, we may also incur significant costs to make the leased premises ready for another tenant. 13 Table of Contents Our assessment that certain businesses are e-commerce resistant and recession-resilient may prove to be incorrect.
Because our properties have generally been built to suit a particular tenant’s specific needs, we may also incur significant time and costs to prepare the leased premises for another tenant. 13 Table of Contents Our assessment that certain businesses are e-commerce resistant and recession-resilient may prove to be incorrect.
The occurrence of any of these may cause the value of our real estate to decline, which could materially and adversely affect us. We may not be able to successfully execute our acquisition or development strategies.
The occurrence of any of these may cause the value of our real estate to decline, which could materially and adversely affect us. 12 Table of Contents We may not be able to successfully execute our acquisition or development strategies.
These covenants, as well as any additional covenants to which we may be subject in the future because of additional borrowings, could cause us to have to forgo investment opportunities, reduce, or eliminate distributions to our common stockholders or obtain financing that is more expensive than financing we could obtain if we were not subject to the covenants.
These covenants, as well as any additional covenants to which we may be subject in the future in connection with additional borrowings, may cause us to have to forgo investment opportunities, reduce, or eliminate distributions to our common stockholders or obtain financing that is more expensive than financing we could obtain if we were not subject to the covenants.
The bankruptcy or insolvency of any of our tenants could result in the termination of such tenants’ lease and material losses to us.
The bankruptcy or insolvency of any of our tenants could result in the termination of such tenant’s lease and material losses to us.
As a result of all these factors, our failure to qualify as a REIT could impair our ability to expand our business and raise capital, and it would adversely affect the value of our common stock. 20 Table of Contents If our operating partnership failed to qualify as a partnership or is not otherwise disregarded for U.S. federal income tax purposes, we would cease to qualify as a REIT.
As a result of all these factors, our failure to qualify as a REIT could impair our ability to expand our business and raise capital, and it would adversely affect the market price of our common stock. 21 Table of Contents If our operating partnership failed to qualify as a partnership or is not otherwise disregarded for U.S. federal income tax purposes, we would cease to qualify as a REIT.
We are subject to risks related to commercial real estate ownership that could reduce the value of our properties. Our core business is the ownership of single-tenant, retail commercial real estate subject to long-term net leases.
We are subject to risks related to commercial real estate ownership that could reduce the value of our properties. Our core business is the ownership of single-tenant, commercial retail properties subject to long-term net leases across the United States.
We may be unable to realize our investment objective by sale, other disposition, or refinancing at attractive prices within any given period of time or may otherwise be unable to complete any exit strategy.
We may be unable to realize our investment objectives by a sale, other disposition, or refinancing at attractive prices within any given period of time or may otherwise be unable to complete any exit strategy.
Therefore, we may not be able to alter our portfolio in response to economic or other conditions promptly or on favorable terms, which may materially and adversely affect us.
Therefore, we may not be able to alter our portfolio in response to economic or other conditions promptly or on favorable terms, if at all, which may materially and adversely affect us.
In addition, the agreements governing our borrowings may have cross default provisions, which provide that a default under one of our debt financing agreements would lead to a default on all of our debt financing agreements.
In addition, the agreements governing our borrowings may have cross default provisions, which provide that a default under one of our debt financing agreements would lead to a default on some or all of our other debt financing agreements.
Our results of operations depend on our ability to continue to strategically lease our properties, including renewing expiring leases, leasing vacant space, and re-leasing space in properties where leases are expiring, optimizing our tenant mix, or leasing properties on more economically favorable terms.
Our results of operations depend on our ability to continue to strategically lease our properties, including renewing expiring leases, leasing vacant space, and re-leasing space in properties where leases are expiring with the objective of optimizing our tenant mix and/or leasing properties on economically favorable terms.
For example, during the second quarter of 2024, the Company was the victim of a criminal scheme involving a business email compromise of an employee that led to two fraudulent transfers to a third party impersonating one of our development partners.
For example, during the second quarter of 2024, we were the victim of a criminal scheme involving a business email compromise of an employee that led to two fraudulent transfers to a third party impersonating one of our development partners.
We are also limited in our ability to reduce costs to offset the results of a prolonged or severe economic downturn given certain fixed costs and commitments associated with our operations. Accordingly, a decline in economic conditions could materially and adversely affect us.
We are also limited in our ability to reduce costs to offset the results of a prolonged or severe economic downturn given certain fixed costs and commitments associated with our operations, which we may be unable to renegotiate or offset. Accordingly, a decline in economic conditions could materially and adversely affect us.
In particular, severe ransomware attacks are becoming increasingly prevalent and can lead to significant interruptions in our operations, loss of sensitive data and income, reputational harm, and diversion of funds.
In particular, severe ransomware attacks are becoming increasingly prevalent and can lead to significant interruptions in our operations, loss of sensitive data and income, reputational harm, civil litigation and regulatory investigations, and diversion of funds.
We could be materially and adversely affected if a number of our tenants were unable to meet their obligations to us. Single-tenant leases involve significant risks of tenant default. Our strategy focuses primarily on investing in single-tenant, retail commercial real estate subject to long-term net leases across the United States.
We could be materially and adversely affected if a number of our tenants, or a single tenant that leases multiple properties from us, were unable to meet their obligations to us. Single-tenant leases involve significant risks of tenant default. Our strategy focuses primarily on investing in single-tenant, commercial retail properties subject to long-term net leases across the United States.
As of December 31, 2024, 44.2% of our properties are leased to unrated or sub-investment grade tenants that we determine, through our disciplined underwriting and risk management strategy, to be creditworthy. This strategy includes reviewing corporate level financial information, assessing business risks, and reviewing investment ratings or establishing a “shadow rating” using our proprietary credit modeling process for unrated tenants.
As of December 31, 2025, 55.7% of our properties were leased to unrated or sub-investment-grade tenants that we determine, through our disciplined underwriting and risk management strategy, to be creditworthy. This strategy includes reviewing corporate level financial information, assessing business risks, and reviewing investment ratings or establishing a “shadow rating” using our proprietary credit modeling process for unrated tenants.
For example, the CCPA, which applies to business representative and other types of personal data of California residents, provides for fines per intentional violation and allows private litigants affected by certain data breaches to recover significant statutory damages.
For example, the CCPA, which applies to certain categories of personal data of California residents, provides for fines per intentional violation and allows private litigants affected by certain data breaches to recover significant statutory damages.
Laws, regulations, and other obligations (including applicable guidance, industry standards, external and internal privacy and security policies and contractual requirements) relating to personal data are constantly evolving, as federal, state, local, and foreign governments continue to adopt new measures addressing data privacy, data security, and processing personal data.
Laws, regulations, and other obligations (including applicable guidance, industry standards, external and internal privacy and security policies and contractual requirements) relating to the collection, use, processing and protection of personal data are constantly evolving, as federal, state, local, and foreign governments continue to adopt new or enhanced measures addressing data privacy, data security, and processing personal data.
An economic downturn or other adverse events or conditions, such as natural disasters in any of these areas, or any other area where we may have significant concentration in the future, could materially and adversely affect us.
An economic downturn, changes in state-specific tax or labor laws or other regulatory changes, or other adverse events or conditions, such as natural disasters in any of these areas, or any other area where we may have significant concentration in the future, could materially and adversely affect us.
Many of the leases we enter into or acquire are for properties that are specially suited to the particular business of our tenants.
Many of the leases we enter into or acquire are for properties that are built to suit the particular business of our tenants.
Our portfolio has geographic market concentrations that make us especially susceptible to adverse developments in those geographic markets. As of December 31, 2024, our portfolio included substantial holdings in Texas (12.3%), Illinois (10.1%), New York (7.4%), Georgia (6.2%), Wisconsin (5.7%), and North Carolina (5.0%) based on ABR as of December 31, 2024.
Our portfolio has geographic market concentrations that make us especially susceptible to adverse developments in those geographic markets. As of December 31, 2025, our portfolio included substantial holdings in Texas (17.3%), Illinois (8.3%), New York (6.9%), Georgia (5.0%), Wisconsin (4.9%), and North Carolina (4.0%) based on ABR as of December 31, 2025.
Moreover, the partnership agreement of our operating partnership provides that our operating partnership is required to indemnify the general partner and its members, managers, managing members, officers, employees, agents, and designees from and against any and all claims that relate to the operations of our operating partnership, except (i) if the act or omission of the person was material to the matter giving rise to the action and either was committed in bad faith or was the result of active or deliberate dishonesty, (ii) for any transaction for which the indemnified party received an improper personal benefit, in money, property, or services or otherwise in violation or breach of any provision of the partnership agreement or (iii) in the case of a criminal proceeding, if the indemnified person had reasonable cause to believe that the act or omission was unlawful. 28 Table of Contents If we fail to maintain an effective system of internal controls, we may not be able to accurately determine our financial results or prevent fraud.
Moreover, the partnership agreement of our operating partnership provides that our operating partnership is required to indemnify the general partner and its members, managers, managing members, officers, employees, agents, and designees from and against any and all claims that relate to the operations of our operating partnership, except (i) if the act or omission of the person was material to the matter giving rise to the action and either was committed in bad faith or was the result of active or deliberate dishonesty, (ii) for any transaction for which the indemnified party received an improper personal benefit, in money, property, or services or otherwise in violation or breach of any provision of the partnership agreement or (iii) in the case of a criminal proceeding, if the indemnified person had reasonable cause to believe that the act or omission was unlawful.
Privacy-related claims or lawsuits initiated by governmental bodies, customers, or other third parties, irrespective of the merits, could be time consuming, result in costly enforcement actions (including regulatory proceedings, investigations, fines, penalties, audits, and inspections), litigation (including class action claims), or mass arbitration demands, penalties and fines, require us to change our business practices, or cause business interruptions, and may lead to administrative, civil, or criminal liability. 17 Table of Contents Insurance on our properties may not adequately cover losses, and uninsured losses could materially and adversely affect us.
Privacy-related claims or lawsuits initiated by governmental bodies, customers, or other third parties, irrespective of the merits, could be time consuming, result in costly enforcement actions (including regulatory proceedings, investigations, fines, penalties, audits, and inspections), litigation (including class action claims), or mass arbitration demands, penalties and fines, require us to change our business practices, or cause business interruptions, and may lead to administrative, civil, or criminal liability.
Some of our tenants operate under franchise or license agreements, which, if terminated or not renewed prior to the expiration of their leases with us, would likely impair their ability to pay us rent. Of the ABR of our portfolio as of December 31, 2024, 8.8% is operated by tenants under franchise or license agreements.
Some of our tenants operate under franchise or license agreements, which, if terminated or not renewed prior to the expiration of their leases with us, would likely impair their ability to pay us rent. Of the ABR of our portfolio as of December 31, 2025, 15.8% was generated from tenants under franchise or license agreements.
For taxable years beginning before January 1, 2026, distributions from REITs that are treated as dividends but are not designated as qualified dividends or capital gain dividends are taxed as ordinary income after deducting 20% of the amount of the dividend in the case of non-corporate stockholders.
Distributions from REITs that are treated as dividends but are not designated as qualified dividends or capital gain dividends are taxed as ordinary income after deducting 20% of the amount of the dividend in the case of non-corporate stockholders.
In the future, we may enter into secured lending arrangements whereby lenders or mortgagees may foreclose on our properties or our interests in entities that our properties that secure their loans and receive an assignment of rents and leases if we were to default under such arrangements. The occurrence of any of these events could materially and adversely affect us.
In the future, we may enter into secured lending arrangements whereby lenders or mortgagees may foreclose on our properties or our interests in entities that own our properties that secure their loans and receive an assignment of rents and leases if we were to default under such arrangements.
These arrangements involve risks and may not be effective in reducing our exposure to interest rate changes. In addition, the counterparties to any hedging arrangements we enter into in the future may not honor their obligations.
We currently hedge a portion of our interest rate volatility through interest rate swaps. These arrangements involve risks and may not be effective in reducing our exposure to interest rate changes. In addition, the counterparties to any hedging arrangements we enter into in the future may not honor their obligations.
Our portfolio includes properties leased to single tenants that operate in multiple locations, which means that, as of December 31, 2024, we owned numerous properties leased by the same entity (or related group of entities), including Dollar General, CVS, Walgreens, Dollar Tree / Family Dollar, Food Lion / Stop & Shop, Hobby Lobby, 7-Eleven, Advance Auto Parts, and Sam’s / Walmart.
Our portfolio includes properties leased to single tenants that operate in multiple locations, which means that, as of December 31, 2025, we owned numerous properties leased by the same entity (or related group of entities), including Dollar General, CVS, Walgreens, Family Dollar, Food Lion / Stop & Shop, Hobby Lobby, and Tractor Supply.
A TRS may hold assets and earn income that would not be qualifying assets or income if held or earned directly by a REIT. Overall, no more than 20% of the value of a REIT’s assets may consist of securities of one or more TRSs.
A TRS may hold assets and earn income that would not be qualifying assets or income if held or earned directly by a REIT. Overall, no more than 25% of the value of a REIT’s assets may consist of securities of one or more TRSs (20% for taxable years beginning after December 31, 2017 through December 31, 2025).
In addition, in general, no more than 5% of the value of our assets (other than government securities, securities of TRSs, and qualified real estate assets) can consist of the securities of any one issuer, and no more than 20% of the value of our total assets can be represented by securities of one or more TRSs.
In addition, in general, no more than 5% of the value of our assets (other than government securities, securities of TRSs, and qualified real estate assets) can consist of the securities of any one issuer, and no more than 25% of the value of our total assets can be represented by securities of one or more TRSs (20% for taxable years beginning after December 31, 2017 through December 31, 2025).
Furthermore, foreclosures could create taxable income without accompanying cash proceeds, which could hinder our ability to meet the REIT distribution requirements imposed by the Code. 19 Table of Contents Failure to hedge effectively against interest rate changes may materially and adversely affect us. We currently hedge a portion of our interest rate volatility through interest rate swaps.
The occurrence of any of these events could materially and adversely affect us. Furthermore, foreclosures could create taxable income without accompanying cash proceeds, which could hinder our ability to meet the REIT distribution requirements imposed by the Code. Failure to hedge effectively against interest rate changes may materially and adversely affect us.
A failure or weakness in our information systems (or those of the third parties with whom we work) has in the past and could again in the future materially and adversely affect us, and the remediation of any such problems could result in significant unplanned expenditures. 16 Table of Contents Our reliance on third parties could introduce new cybersecurity risks and vulnerabilities and other threats to our business operations.
A failure or weakness in our information systems (or those of the third parties with whom we work) has in the past and could again in the future materially and adversely affect us, and the remediation of any such problems could result in significant unplanned expenditures, including, but not limited to costs associated with investigating, remediating, and responding to any such event, including civil penalties, fines, and litigation defense costs, as further discussed below. 16 Table of Contents Our reliance on third parties could introduce new cybersecurity risks and vulnerabilities and other threats to our business operations.
In the future we may acquire properties or portfolios of properties through tax deferred contribution transactions in exchange for OP units, which may result in stockholder dilution.
We may acquire properties or portfolios of properties through tax deferred contribution transactions, which could result in stockholder dilution and limit our ability to sell such assets. In the future we may acquire properties or portfolios of properties through tax deferred contribution transactions in exchange for OP Units, which may result in stockholder dilution.
At the current maximum ordinary income tax rate of 37% applicable for taxable years beginning before January 1, 2026, the maximum tax rate on ordinary REIT dividends for non-corporate stockholders is 29.6%.
At the current maximum ordinary income tax rate of 37%, the maximum tax rate on ordinary REIT dividends for non-corporate stockholders is 29.6%.
Therefore, in the event of our bankruptcy, liquidation or reorganization, our assets and those of our operating partnership and its subsidiaries will be able to satisfy the claims of our stockholders only after all of our and our operating partnership’s and its subsidiaries’ liabilities and obligations have been paid in full. 27 Table of Contents In connection with the acquisition of properties or otherwise, we may issue units of our operating partnership to third parties.
Therefore, in the event of our bankruptcy, liquidation or reorganization, our assets and those of our operating partnership and its subsidiaries will be able to satisfy the claims of our stockholders only after all of our and our operating partnership’s and its subsidiaries’ liabilities and obligations have been paid in full.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur Chief Financial Officer is responsible for hiring appropriate personnel, helping to integrate cybersecurity risk considerations into the Company’s overall risk management strategy, and communicating key priorities to relevant personnel. Our Chief Financial Officer is responsible for approving budgets, helping prepare for cybersecurity incidents, approving cybersecurity processes, and reviewing security assessments and other security-related reports.
Biggest changeOur Chief Financial Officer is also responsible for approving budgets, helping prepare for cybersecurity incidents, approving cybersecurity processes, and reviewing security assessments and other security-related reports. Our cybersecurity incident response policy is designed to escalate certain cybersecurity incidents to members of management depending on the circumstances, including senior management.
Risk Factors in this Annual Report on Form 10-K, including Any material failure, weakness, interruption, or breach in security of our information systems or data, or those of the third parties with whom we work, could prevent us from effectively operating our business.
Risk Factors in this Annual Report on Form 10-K, including Risks Related to our Business and Properties - Any material failure, weakness, interruption, or breach in security of our information systems or data, or those of the third parties with whom we work, could prevent us from effectively operating our business.
Third Party Risk Management The Company uses third-party service providers to assist us from time to time to identify, assess, and manage material risks from cybersecurity threats, including, for example, a managed service security provider that monitors certain of the Company’s computer networks and third-party hosted services. 29 Table of Contents We use third-party service providers to perform a variety of functions throughout our business, including application providers and hosting companies.
Third Party Risk Management The Company uses third-party service providers to assist us from time to time to identify, assess, and manage material risks from cybersecurity threats, including, for example, a managed service security provider that monitors certain of the Company’s computer networks and third-party hosted services.
The Company has implemented certain measures designed to help identify and mitigate cybersecurity threats associated with the use of third-party service providers, such as assessing the security protocols of certain service providers and obtaining security reports from certain vendors.
We use third-party service providers to perform a variety of functions throughout our business, including application providers and hosting companies. The Company has implemented certain measures designed to help identify and mitigate cybersecurity threats associated with the use of third-party service providers, such as assessing the security protocols of certain service providers and obtaining security reports from certain vendors.
Our cybersecurity risk assessment and management processes are implemented and maintained by certain Company management, including our IT Manager, who has worked in various roles responsible for securing networks, hardware, and other application systems, Chief Financial Officer, and Chief Accounting Officer.
Our cybersecurity risk assessment and management processes are implemented and maintained by certain Company management, including our IT Manager, who has worked in various roles responsible for securing networks, hardware, and other application systems, our Chief Financial Officer, and our Chief Accounting Officer. 32 Table of Contents Our Chief Financial Officer is responsible for hiring appropriate personnel, helping to integrate cybersecurity risk considerations into the Company’s overall risk management strategy, and communicating key priorities to relevant personnel.
Our cybersecurity incident response policy is designed to escalate certain cybersecurity incidents to members of management depending on the circumstances, including senior management. The Company has identified and designated certain Company employees as members of a cybersecurity incident response team, including the Chief Accounting Officer, the Chief Financial Officer, and the IT Manager.
The Company has identified and designated certain Company employees as members of a cybersecurity incident response team, including our Chief Accounting Officer, Chief Financial Officer, and IT Manager. This team helps the Company mitigate and remediate cybersecurity incidents of which they are notified.
The audit committee of the board of directors receives quarterly reports concerning the Company’s significant cybersecurity threats and risk and the processes the Company has implemented to address them. These quarterly reports include summaries or presentations related to cybersecurity threats, risk, and mitigation. 30 Table of Contents
In addition, the Company’s incident response policy includes reporting to the audit committee of the board of directors for certain cybersecurity incidents. The audit committee of the board of directors receives quarterly reports concerning the Company’s significant cybersecurity threats and risk and the processes the Company has implemented to address them.
Removed
This team helps the Company mitigate and remediate cybersecurity incidents of which they are notified. In addition, the Company’s incident response policy includes reporting to the audit committee of the board of directors for certain cybersecurity incidents.
Added
These quarterly reports include summaries or presentations related to cybersecurity threats, risk, and mitigation.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe breakdown of our necessity-based retail, service-oriented, discount-focused, and other, non-defensive retail industries by sector and by percentage of ABR as of December 31, 2024 is set forth below: Tenant Industry and Sector Number of Leases (1) % of Total ABR (2) % of Total Gross Leasable Area (2) (3) Necessity-Based Retail Grocery 35 13.6 % 15.0 % Home Improvement 30 11.2 % 12.6 % Drug Stores & Pharmacies (4) 57 10.6 % 6.0 % Farm Supplies 19 3.6 % 4.1 % Auto Parts 59 3.2 % 3.7 % General Retail 7 3.0 % 8.2 % Healthcare 14 2.0 % 0.9 % Wholesale Warehouse Club 1 0.3 % 0.9 % Banking 3 0.3 % 0.1 % Total Necessity-Based Retail 225 47.6 % 51.5 % Service-Oriented Industry Convenience Stores 98 9.4 % 2.4 % Automotive Service 42 3.7 % 2.3 % Health and Fitness 4 3.7 % 2.1 % Quick-Service Restaurants 33 3.2 % 0.7 % Casual Dining 7 0.7 % 0.3 % Equipment Rental and Leasing 5 0.4 % 0.4 % Total Service-Oriented Industry 189 21.1 % 8.1 % Discount-Focused Industry Dollar Stores 200 14.3 % 16.9 % Discount Retail 30 4.5 % 8.4 % Total Discount-Focused Industry 230 18.8 % 25.3 % Defensive Retail Industries 644 87.5 % 85.0 % Other, Non-Defensive Industries Arts & Crafts 16 4.2 % 7.0 % Sporting Goods 6 3.2 % 3.1 % Consumer Electronics 7 2.4 % 2.7 % Specialty 2 1.0 % 0.4 % Apparel 5 0.7 % 1.3 % Furniture Stores 2 0.6 % 0.4 % Telecommunications 2 0.2 % 0.1 % Gift, Novelty, and Souvenir Shops 1 0.1 % 0.1 % Home Furnishings 1 0.1 % 0.0 % Total Other, Non-Defensive 42 12.5 % 15.0 % Total, All Industries 686 100.0 % 100.0 % (1) Excludes one vacant property.
Biggest changeThe breakdown of our necessity-based retail, service-oriented, discount-focused, and other, non-defensive retail industries by sector and by percentage of ABR as of December 31, 2025 is set forth below: Tenant Industry and Sector Number of Investments (1) % of Total ABR (2) % of Total Gross Leasable Area (2) (3) Necessity-Based Retail Grocery 50 14.0 % 18.0 % Home Improvement 31 8.8 % 10.9 % Drug Stores & Pharmacies (4) 48 7.3 % 4.6 % Farm Supplies 28 4.6 % 5.6 % Medical & Dental 32 4.5 % 2.2 % General Retail 7 2.5 % 7.5 % Auto Parts 53 2.3 % 3.1 % Banking 2 0.2 % 0.1 % Wholesale Warehouse Club 1 0.2 % 0.8 % Pet Supplies 1 0.1 % 0.1 % Total Necessity-Based Retail 253 44.5 % 52.9 % Service-Oriented Industry Convenience Stores 134 13.7 % 3.2 % Health and Fitness 10 5.4 % 3.8 % Quick Service Restaurants 65 5.2 % 0.9 % Automotive Service 56 4.4 % 2.6 % Casual Dining 6 0.5 % 0.3 % Equipment Rental and Leasing 6 0.4 % 0.4 % Total Service-Oriented Industry 277 29.6 % 11.1 % Discount-Focused Industry Dollar Stores 144 8.6 % 11.4 % Discount Retail 33 4.4 % 8.5 % Total Discount-Focused Industry 177 13.1 % 19.9 % Defensive Retail Industries 707 87.1 % 83.9 % Other, Non-Defensive Industries Sporting Goods 10 4.8 % 4.7 % Arts & Crafts 16 3.5 % 6.4 % Consumer Electronics 7 2.0 % 2.5 % Apparel 6 0.8 % 1.4 % Specialty 2 0.5 % 0.5 % Furniture Stores 2 0.5 % 0.3 % Telecommunications 4 0.4 % 0.2 % Beauty Supplies 1 0.1 % 0.1 % Gift, Novelty, and Souvenir Shops 1 0.1 % 0.1 % Home Furnishings 1 0.1 % 0.0 % Total Other, Non-Defensive 50 12.9 % 16.1 % Total, All Industries 757 100.0 % 100.0 % (1) Excludes one vacant property and three properties under development.
Necessity-based industries are those that are considered essential by consumers and include sectors such as home improvement, auto parts, drug stores, general retail, and grocers. Service-oriented industries consist of retailers that provide services rather than goods, including, for example, convenience stores, quick-service and casual dining restaurants, and tire and auto services.
Necessity-based industries are those that are considered essential by consumers and include sectors such as grocers, home improvement, drug stores, general retail, and auto parts. Service-oriented industries consist of retailers that provide services rather than goods, including, for example, convenience stores, health and fitness, quick-service restaurants, and tire and auto services.
(2) Certain figures in this table may not foot due to rounding. Developments During 2024, rent commenced on 23 completed property developments. As of December 31, 2024, we had five property developments with rent expected to commence at various dates throughout 2025. The following table illustrates actual and anticipated rent commencement of those developments.
(2) Certain figures in this table may not foot due to rounding. Developments During 2025, rent commenced on three completed property developments. As of December 31, 2025, we had three property developments under construction, with rent expected to commence at various dates throughout 2026. The following table illustrates actual and anticipated rent commencement of those developments.
Nine of our top 10 tenants are publicly traded companies, or are subsidiaries of publicly traded companies, that have investment grade credit ratings, in addition to Hobby Lobby, an investment grade profile tenant. 31 Table of Contents Tenant Diversification As of December 31, 2024, our 687 investments were operated by 98 different tenants, each representing a distinct brand or concept, with no one tenant representing more than 9.0% of our portfolio by ABR.
Six of our top 10 tenants are publicly traded companies, or are subsidiaries of publicly traded companies, that have investment grade credit ratings, in addition to Hobby Lobby Stores, Inc., an investment grade profile tenant. 33 Table of Contents Tenant Diversification As of December 31, 2025, our 761 investments were operated by 129 different tenants, each representing a distinct brand or concept, with no one tenant representing more than 5.0% of our portfolio by ABR.
(2) Square feet. (3) Includes 25 states. 34 Table of Contents Lease Terms and Expirations Our leases typically have initial lease terms of approximately 10 years and contain two or more options for the tenant to extend the lease term, most often for additional five-year periods.
(2) Certain figures in this table may not foot due to rounding. (3) Square feet. (4) Includes 25 states. 36 Table of Contents Lease Terms and Expirations Our leases typically have initial lease terms of approximately 10 years and contain two or more options for the tenant to extend the lease term, most often for additional five-year periods.
Item 2. Properties During the year ended December 31, 2024, we acquired 115 single-tenant retail net lease properties with an aggregate purchase price of $479.0 million. As of December 31, 2024, we owned or had investments in 687 properties spanning 45 states, with 98 different tenants represented across 26 retail sectors.
Item 2. Properties During the year ended December 31, 2025, we acquired 140 single-tenant retail net lease properties with an aggregate purchase price of $603.0 million. As of December 31, 2025, we owned or had investments in 761 properties spanning 45 states, with 129 different tenants represented across 28 retail sectors.
As of December 31, 2024, none of our tenants represented more than 9.0% of our portfolio by ABR, and our top 10 largest tenants represented, in aggregate, 46.4% of our ABR.
As of December 31, 2025, none of our tenants represented more than 5.0% of our portfolio by ABR, and our top 10 largest tenants represented, in aggregate, 34.5% of our ABR.
As of December 31, 2024, the leases in our portfolio had a WALT of 9.8 years (exclusive of mortgage loans receivable).
As of December 31, 2025, the leases in our portfolio had a WALT of 10.1 years (exclusive of mortgage loans receivable).
As of December 31, 2024, our portfolio consisted of approximately 56% and 15% of investment grade tenants and investment grade profile tenants, respectively, by ABR, and had a WALT of 9.8 years (exclusive of mortgage loans receivable).
As of December 31, 2025, our portfolio consisted of approximately 44% and 14% of investment grade tenants and investment grade profile tenants, respectively, by ABR, and had a WALT of 10.1 years (exclusive of mortgage loans receivable).
(4) The Drug Stores & Pharmacies industry has one property that resides in NETSTREIT Management TRS, LLC (“NETSTREIT TRS”), representing approximately 0.3% of ABR. 33 Table of Contents Geographic Diversification The following table presents ABR by state for our portfolio as of December 31, 2024: Tenant State Number of Leases (1) % of Total ABR % of Total Gross Leasable Area (2) Texas 70 12.3 % 7.9 % Illinois 43 10.1 % 8.3 % New York 36 7.4 % 7.2 % Georgia 36 6.2 % 9.1 % Wisconsin 23 5.7 % 7.3 % North Carolina 72 5.0 % 4.5 % Alabama 50 4.6 % 4.4 % Ohio 42 4.0 % 5.5 % Pennsylvania 30 3.9 % 3.9 % Virginia 11 3.6 % 2.2 % Indiana 20 3.6 % 3.6 % Florida 30 3.4 % 2.6 % Louisiana 16 3.2 % 3.4 % Michigan 18 2.5 % 3.4 % Mississippi 21 2.4 % 4.0 % California 12 2.4 % 1.7 % Oregon 3 2.0 % 1.2 % South Carolina 11 1.3 % 1.7 % New Jersey 6 1.2 % 0.7 % Washington 5 1.1 % 1.1 % Other (3) 131 14.1 % 16.3 % Total 686 100.0 % 100.0 % (1) Excludes one vacant property.
(4) The Drug Stores & Pharmacies industry has one property that resides in NETSTREIT Management TRS, LLC (“NETSTREIT TRS”), representing approximately 0.2% of ABR. 35 Table of Contents Geographic Diversification The following table presents ABR by state for our portfolio as of December 31, 2025: Tenant State Number of Investments (1) % of Total ABR (2) % of Total Gross Leasable Area (2) (3) Texas 102 17.3 % 10.4 % Illinois 43 8.3 % 7.5 % New York 40 6.9 % 7.4 % Georgia 36 5.0 % 7.3 % Wisconsin 26 4.9 % 6.7 % North Carolina 69 4.0 % 3.9 % Alabama 50 3.9 % 3.7 % Indiana 30 3.9 % 3.5 % Florida 24 3.9 % 2.7 % Ohio 37 3.8 % 5.2 % Pennsylvania 30 3.5 % 3.6 % Virginia 16 3.4 % 2.2 % Louisiana 18 3.1 % 3.9 % California 12 2.6 % 2.0 % Mississippi 19 2.1 % 3.8 % Michigan 16 2.0 % 3.0 % South Carolina 17 1.8 % 2.7 % Arizona 7 1.5 % 1.1 % Oklahoma 14 1.4 % 1.4 % Missouri 13 1.3 % 0.5 % Other (4) 138 15.5 % 17.8 % Total 757 100.0 % 100.0 % (1) Excludes one vacant property and three properties under development.
(3) Certain figures in this table may not foot due to rounding. 32 Table of Contents Tenant Industry Diversification The majority of our portfolio is comprised of properties leased to tenants operating in defensive retail industries, with 87.5% of our ABR as of December 31, 2024 coming from necessity, service-oriented, and/or discount industries.
(2) Excludes one vacant property and three properties under development. 34 Table of Contents Tenant Industry Diversification The majority of our portfolio is comprised of properties leased to tenants operating in defensive retail industries, with 87.1% of our ABR as of December 31, 2025 coming from necessity, service-oriented, and/or discount industries.
The following table details information about our tenants as of December 31, 2024: Tenant (1) Number of Properties (2) % of Annualized Base Rent (3) Dollar General Corporation 125 9.0 % CVS Health Corporation 33 6.2 % Dollar Tree Stores, Inc. / Family Dollar Stores, Inc. 75 5.2 % The Home Depot, Inc. 5 5.0 % Walgreen Co. 24 4.3 % Hobby Lobby Stores, Inc. 17 4.2 % Koninklijke Ahold Delhaize N.V.
The following table details information about our tenants as of December 31, 2025: Tenant (1) Number of Investments (2) % of Annualized Base Rent CVS Health Corporation 31 4.8 % Dollar General Corporation 78 4.7 % Koninklijke Ahold Delhaize N.V.
As of December 31, 2024, our portfolio consisted of 12.6 million square feet and was 99.9% occupied. As of December 31, 2024, our portfolio generated ABR of $165.1 million.
This includes three property developments where rent has not yet commenced. As of December 31, 2025, our portfolio consisted of 13.7 million square feet and was 99.9% occupied (excluding three properties under development). As of December 31, 2025, our portfolio generated ABR of $198.3 million.
Tenant Industry Location Lease Term (Years) Actual or Anticipated Rent Commencement Dollar Stores (multiple programs) Various (9 completed) 10 to 15 Commenced 1Q'24 Farm Supplies Malakoff, TX 20 Commenced 1Q'24 Dollar Stores (multiple programs) Various (5 completed) 15 Commenced 2Q'24 Automotive Service (multiple locations) Various (1 completed) 10 to 15 Commenced 2Q'24 Home Improvement Butte, MT 15 Commenced 3Q'24 Dollar Stores (multiple programs) Various (2 completed) 15 Commenced 3Q'24 Automotive Service (multiple locations) Various (1 completed) 15 Commenced 3Q'24 Dollar Stores (multiple programs) Various (2 completed) 10 to 15 Commenced 4Q'24 Automotive Service (multiple locations) Various (1 completed) 15 Commenced 4Q'24 Dollar Stores (multiple programs) Various (1 in progress) 10 1Q'25 to 2Q'25 Automotive Service (multiple locations) Various (3 in progress) 15 1Q'25 to 2Q'25 Pet Supplies Sumter, SC 10 1Q'25
Tenant Industry Location Lease Term (Years) Actual or Anticipated Rent Commencement Automotive Service Mobile, AL 15 Commenced 1Q'25 Pet Supplies Sumter, SC 10 Commenced 2Q'25 Automotive Service Cedar Rapids, IA 15 Commenced 2Q'25 Automotive Service Whitestown, IN 15 2Q'26 Automotive Service Goldsboro, NC 15 3Q'26 Health and Fitness Fort Worth, TX 20 4Q'26
The following table illustrates contractual lease expirations within the Company’s portfolio as of December 31, 2024, assuming no exercise of contractual extension options (dollars in thousands): ABR Gross Leasable Area Year Number of Leases (1) Amount % of Total (2) Square Feet % of Total 2025 4 $ 1,215 0.8 % 238,918 2.0 % 2026 9 2,459 1.6 % 275,967 2.3 % 2027 12 4,077 2.7 % 364,935 3.0 % 2028 25 10,094 6.6 % 770,829 6.4 % 2029 41 9,602 6.3 % 833,668 6.9 % 2030 32 11,046 7.2 % 1,106,203 9.1 % 2031 53 12,260 8.0 % 1,177,377 9.7 % 2032 39 10,582 6.9 % 1,536,491 12.7 % 2033 52 11,520 7.5 % 883,568 7.3 % 2034 71 18,040 11.8 % 1,014,302 8.4 % 2035 36 9,681 6.3 % 562,621 4.7 % 2036 19 5,797 3.8 % 354,613 2.9 % 2037 21 7,265 4.7 % 577,962 4.8 % 2038 63 8,420 5.5 % 752,191 6.2 % 2039 47 9,916 6.5 % 762,249 6.3 % Thereafter 86 21,421 14.0 % 882,156 7.3 % Total 610 $ 153,395 100.0 % 12,094,050 100.0 % (1) Excludes one vacant property and 76 investments that secure mortgage loans receivable.
The following table illustrates contractual lease expirations within the Company’s portfolio as of December 31, 2025, assuming no exercise of contractual extension options (dollars in thousands): ABR Gross Leasable Area Year Number of Leases (1) Amount % of Total (2) Square Feet % of Total (2) 2026 4 $ 1,163 0.6 % 85,025 0.6 % 2027 10 3,227 1.7 % 288,535 2.2 % 2028 22 9,769 5.2 % 753,094 5.7 % 2029 41 10,274 5.5 % 849,114 6.4 % 2030 43 14,446 7.7 % 1,245,165 9.4 % 2031 60 14,023 7.5 % 1,443,220 10.9 % 2032 46 11,656 6.3 % 1,572,205 11.8 % 2033 45 10,815 5.8 % 816,573 6.1 % 2034 73 19,674 10.6 % 1,193,039 9.0 % 2035 41 12,097 6.5 % 890,740 6.7 % 2036 21 6,969 3.7 % 423,919 3.2 % 2037 25 10,178 5.5 % 669,894 5.0 % 2038 39 6,593 3.5 % 573,011 4.3 % 2039 39 9,464 5.1 % 712,511 5.4 % 2040 33 8,785 4.7 % 608,997 4.6 % Thereafter 134 37,294 20.0 % 1,166,768 8.8 % Total 676 $ 186,427 100.0 % 13,291,810 100.0 % (1) Excludes one vacant property, three properties under development, and 81 investments that secure mortgage loans receivable.
Removed
(Food Lion / Stop & Shop) 8 3.9 % Walmart Inc. 7 3.0 % Tractor Supply Company 17 2.8 % Speedway, LLC 49 2.6 % 7-Eleven, Inc. 18 2.5 % Life Time Inc. 2 2.5 % Best Buy Co., Inc. 7 2.4 % Aldi Inc. 7 2.4 % MDSFEST, Inc. (Festival Foods) 3 2.3 % Advance Stores Company, Inc.
Added
(Food Lion / Stop & Shop) 11 4.3 % Home Depot U.S.A, Inc. 5 3.8 % Hobby Lobby Stores, Inc. 17 3.6 % Tractor Supply Company 25 3.5 % Walgreen Co. 17 2.5 % Family Dollar Stores, Inc. 43 2.5 % Wal-Mart Stores, Inc. 7 2.5 % United Lone Enterprises LLC 13 2.3 % Speedway, LLC 50 2.3 % Life Time, Inc. 2 2.1 % Academy, Ltd. 5 2.1 % Best Buy Stores, L.P. 7 2.0 % Subtotal of Tenants with ABR greater than 2.0% 311 43.0 % Other 446 57.0 % Total / Weighted Average 757 100.0 % (1) Represents tenant or guarantor.
Removed
(Advance Auto Parts) 37 2.2 % Lowe's Companies, Inc. 4 2.2 % The Kroger Co. 7 2.1 % Subtotal of Tenants with ABR greater than 2.0% 445 65.0 % Other 241 35.0 % Total / Weighted Average 686 100.0 % (1) Represents tenant or guarantor. (2) Excludes one vacant property.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings From time to time, we may be party to various lawsuits, claims, and other legal proceedings that arise in the ordinary course of our business. We are not currently subject to any material lawsuits, claims, or other legal proceedings. 35 Table of Contents Item 4. Mine Safety Disclosures Not applicable. PART II — OTHER INFORMATION
Biggest changeItem 3. Legal Proceedings From time to time, we may be party to various lawsuits, claims, and other legal proceedings that arise in the ordinary course of our business. We are not currently subject to any material lawsuits, claims, or other legal proceedings.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeDuring the years ended December 31, 2024 and 2023, we declared and paid the following common stock dividends (in thousands, except per share data): Year Ended December 31, 2024 Declaration Date Dividend Per Share Record Date Total Amount Payment Date February 13, 2024 $ 0.205 March 15, 2024 $ 15,031 March 28, 2024 April 23, 2024 0.205 June 3, 2024 15,042 June 14, 2024 July 23, 2024 0.210 September 3, 2024 16,251 September 13, 2024 October 18, 2024 0.210 December 2, 2024 17,133 December 13, 2024 $ 0.830 $ 63,457 Year Ended December 31, 2023 Declaration Date Dividend Per Share Record Date Total Amount Payment Date February 21, 2023 $ 0.200 March 15, 2023 $ 11,650 March 30, 2023 April 25, 2023 0.200 June 1, 2023 12,173 June 15, 2023 July 24, 2023 0.205 September 1, 2023 13,768 September 15, 2023 October 24, 2023 0.205 December 1, 2023 14,084 December 15, 2023 $ 0.810 $ 51,675 The holders of OP Units are entitled to an equal distribution per each OP Unit held as of each record date.
Biggest changeDuring the years ended December 31, 2025 and 2024, we declared and paid the following common stock dividends (in thousands, except per share data): Year Ended December 31, 2025 Declaration Date Dividend Per Share Record Date Total Amount Payment Date February 21, 2025 $ 0.210 March 14, 2025 $ 17,157 March 31, 2025 April 25, 2025 0.210 June 2, 2025 17,159 June 16, 2025 July 21, 2025 0.215 September 2, 2025 17,947 September 15, 2025 October 24, 2025 0.215 December 1, 2025 17,967 December 15, 2025 $ 0.850 $ 70,230 Year Ended December 31, 2024 Declaration Date Dividend Per Share Record Date Total Amount Payment Date February 13, 2024 $ 0.205 March 15, 2024 $ 15,031 March 28, 2024 April 23, 2024 0.205 June 3, 2024 15,042 June 14, 2024 July 23, 2024 0.210 September 3, 2024 16,251 September 13, 2024 October 18, 2024 0.210 December 2, 2024 17,133 December 13, 2024 $ 0.830 $ 63,457 The holders of OP Units are entitled to an equal distribution per each OP Unit held as of each record date.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information for Common Stock, Holders of Record, and Distribution Policy Our common stock is traded on the NYSE under the symbol “NTST.” As of February 19, 2025, there were 81,663,128 shares of our common stock issued and outstanding, which were held by approximately 62 stockholders of record.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information for Common Stock, Holders of Record, and Distribution Policy Our common stock is traded on the NYSE under the symbol “NTST.” As of February 6, 2026, there were 97,073,872 shares of our common stock issued and outstanding, which were held by approximately 59 stockholders of record.
Recent Sales of Unregistered Securities None. 36 Table of Contents Performance Graph The following graph compares our cumulative total stockholder return based on the market price of our common stock, assuming dividends are reinvested, with the Standard & Poor’s 500 Composite Stock Index (“S&P 500”) and the NAREIT US Equity REIT Index for the period beginning August 13, 2020 (the date our common stock began trading on the NYSE exchange) and ending December 31, 2024.
Recent Sales of Unregistered Securities None. 38 Table of Contents Performance Graph The following graph compares our cumulative total stockholder return based on the market price of our common stock, assuming dividends are reinvested, with the Standard & Poor’s 500 Composite Stock Index (“S&P 500”) and the NAREIT US Equity REIT Index for the five year period ended December 31, 2025.
Period Ending Index 8/13/2020 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/31/2024 NETSTREIT Corp. $ 100.00 $ 111.58 $ 136.05 $ 113.24 $ 115.61 $ 96.30 S&P 500 $ 100.00 $ 112.05 $ 144.21 $ 118.08 $ 149.14 $ 186.45 NAREIT US EQUITY REIT Index $ 100.00 $ 106.04 $ 149.84 $ 112.46 $ 125.23 $ 131.39 The information above shall not be deemed to be “soliciting material” or to be “filed” with the SEC or subject to Regulation 14A or 14C, other than as provided in Item 201 of Regulation S-K, or to the liabilities of Section 18 of the Exchange Act, except to the extent we specifically request that such information be treated as soliciting material or specifically incorporate it by reference into a filing under the Securities Act or the Exchange Act.
Period Ending Index 1/1/2021 12/31/2021 12/31/2022 12/31/2023 12/31/2024 12/31/2025 NETSTREIT Corp. $ 100.00 $ 121.93 $ 101.50 $ 103.62 $ 86.31 $ 113.19 S&P 500 $ 100.00 $ 128.71 $ 105.40 $ 133.10 $ 166.40 $ 196.16 NAREIT US EQUITY REIT Index $ 100.00 $ 141.30 $ 106.05 $ 118.09 $ 123.90 $ 126.71 The information above shall not be deemed to be “soliciting material” or to be “filed” with the SEC or subject to Regulation 14A or 14C, other than as provided in Item 201 of Regulation S-K, or to the liabilities of Section 18 of the Exchange Act, except to the extent we specifically request that such information be treated as soliciting material or specifically incorporate it by reference into a filing under the Securities Act or the Exchange Act.
The graph assumes an investment of $100 on August 13, 2020.
The graph assumes an investment of $100 on January 1, 2021.
In addition, as of February 19, 2025, there were 424,956 outstanding Class A units of limited partnership of the operating partnership (“Class A OP Units”), which are convertible into shares of our common stock on a one-for-one basis.
In addition, as of February 6, 2026, there were 412,143 outstanding OP Units held by limited partners of the operating partnership (other than OP Units held by us), which are redeemable for cash or, at our election, for shares of our common stock.
Removed
In addition, there are no remaining Class B units of limited partnership of the operating partnership (“Class B OP Units”), which have all been converted into shares of our common stock.

Item 7. Management's Discussion & Analysis

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

98 edited+25 added−28 removed26 unchanged
Biggest changeThe following table provides information with respect to our commitments as of December 31, 2024 (in thousands): Payment Due by Period Total 2025 2026 - 2027 2028 - 2029 Thereafter Contractual Obligations 2027 Term Loan – Principal $ 175,000 $ — $ 175,000 $ — $ — 2027 Term Loan – Variable interest (1) 6,643 6,381 262 — — 2028 Term Loan – Principal 200,000 — — 200,000 — 2028 Term Loan – Variable interest (2) 24,172 7,760 15,521 891 — 2029 Term Loan – Principal 250,000 — 250,000 — — 2029 Term Loan – Variable interest (3) 18,748 12,465 6,283 — — Revolver – Borrowings 239,000 — 239,000 — — Revolver – Variable interest 21,677 13,456 8,221 — — Facility Fee (4) 967 600 367 — — Mortgage Note – Principal 8,205 174 8,031 — — Mortgage Note – Interest 1,048 367 681 — — Property development under contract 7,299 7,299 — — — Additional principal under mortgage loans receivable 9,470 9,470 — — — Tenant improvement allowances 4,089 1,349 2,740 — — Corporate office lease obligations 5,270 636 1,323 1,396 1,915 Total $ 971,588 $ 59,957 $ 707,429 $ 202,287 $ 1,915 (1) We entered into five interest rate hedges to fix the base interest rate (daily SOFR) on our 2027 Term Loan.
Biggest changeThe following table provides information with respect to our commitments as of December 31, 2025 (in thousands): Payment Due by Period Total 2026 2027 - 2028 2029 - 2030 Thereafter Contractual Obligations 2028 Term Loan – Principal $ 200,000 $ — $ 200,000 $ — $ — 2028 Term Loan – Variable interest (1) 15,142 7,160 7,982 — — 2029 Term Loan – Principal 250,000 250,000 — — — 2029 Term Loan – Variable interest (1) 5,905 5,905 — — — 2030 Term Loan A – Principal 175,000 — — 175,000 — 2030 Term Loan A – Variable interest (1) 17,809 5,856 11,712 241 — 2030 Term Loan B – Principal 175,000 — — 175,000 — 2030 Term Loan B – Variable interest (1) 25,673 8,442 16,884 347 — 2031 Term Loan – Principal 200,000 — — — 200,000 2031 Term Loan – Variable interest (1) 45,892 8,775 17,549 17,549 2,019 2032 Term Loan – Principal 100,000 — — — 100,000 2032 Term Loan – Variable interest (1) 31,611 4,695 9,391 9,391 8,134 Ticking Fee (2) 220 220 — — — Facility Fee (3) 3,041 1,000 2,000 41 — Mortgage Note – Principal 8,042 178 7,864 — — Mortgage Note – Interest 681 359 322 — — Property development under contract 15,765 15,765 — — — Additional principal under mortgage loans receivable 8,353 7,978 375 — — Tenant improvement allowances 8,064 3,975 4,089 — — Corporate office lease obligations 4,635 653 1,359 1,434 1,189 Total $ 1,290,833 $ 320,961 $ 279,527 $ 379,003 $ 311,342 (1) We have various interest rate derivative contracts to fix the variable base interest rate (SOFR) on our term loans.
The PNC Credit Agreement was amended and restated and provides for: a new $175.0 million senior unsecured term loan (the “2030 Term Loan B”); an existing $200.0 million senior unsecured term loan, which was fully funded under the existing PNC Credit Agreement (the “2028 Term Loan”); and an upsized $500.0 million senior unsecured revolving credit facility (increased from $400 million under the existing PNC Credit Agreement) (the “Revolver”).
The PNC Credit Agreement was amended and restated and provides for: a new $175.0 million senior unsecured term loan (the “2030 Term Loan B”); an existing $200.0 million senior unsecured term loan, which was fully funded under the existing PNC Credit Agreement (the “2028 Term Loan”); and an upsized $500.0 million senior unsecured revolving credit facility (increased from $400.0 million under the existing PNC Credit Agreement) (the “Revolver”).
We believe the availability of proceeds from the settlement of unsettled outstanding forward sale agreements, future issuances of shares of our common stock under the 2024 ATM Program, or subsequent at-the-market sale programs, as well as our cash flows from operations and available borrowing capacity under the Revolver, will be adequate to support our ongoing operations and to fund our debt service requirements, capital expenditures and working capital requirements for at least the next 12 months.
We believe the availability of proceeds from our debt, proceeds from the settlement of unsettled outstanding forward sale agreements, future issuances of shares of our common stock under our 2024 ATM Program or subsequent at-the-market sale programs, as well as our cash flows from operations and available borrowing capacity under the Revolver, will be adequate to support our ongoing operations and to fund our debt service requirements, capital expenditures, and working capital requirements for at least the next 12 months.
We believe Property-Level NOI, Property-Level Cash NOI, Property-Level Cash NOI - Estimated Run Rate, and Total Cash NOI - Estimated Run Rate provide useful and relevant information because they reflect only those income and expense items that are incurred at the property level and present such items on an unlevered basis.
We believe Property-Level NOI, Property-Level Cash NOI, and Property-Level Cash NOI - Estimated Run Rate provide useful and relevant information because they reflect only those income and expense items that are incurred at the property level and present such items on an unlevered basis.
Property-Level NOI, Property-Level Cash NOI, Property-Level Cash NOI - Estimated Run Rate, and Total Cash NOI - Estimated Run Rate are not measurements of financial performance under GAAP and may not be comparable to similarly titled measures of other companies.
Property-Level NOI, Property-Level Cash NOI, and Property-Level Cash NOI - Estimated Run Rate are not measurements of financial performance under GAAP and may not be comparable to similarly titled measures of other companies.
The Wells Fargo Credit Agreement was amended and restated to extend the maturity date of the existing $175.0 million senior unsecured term loan (the “2030 Term Loan A” or, prior to the extended maturity, referred to as the “2027 Term Loan”) thereunder from January 2027 to January 2029 with an option, at the Company’s election, to extend the maturity to January 2030.
The Wells Fargo Credit Agreement was amended and restated to extend the maturity date of the existing $175.0 million senior unsecured term loan (the “2030 Term Loan A” or, prior to the extended maturity, referred to as the “2027 Term Loan”) thereunder from January 2027 to January 2029 with an option, at our election, to extend the maturity to January 2030.
Property-Level NOI, Property-Level Cash NOI, Property-Level Cash NOI - Estimated Run Rate, and Total Cash NOI - Estimated Run Rate Property-Level NOI, Property-Level Cash NOI, Property-Level Cash NOI - Estimated Run Rate, and Total Cash NOI - Estimated Run Rate are non-GAAP financial measures which we use to assess our operating results.
Property-Level NOI, Property-Level Cash NOI, and Property-Level Cash NOI - Estimated Run Rate Property-Level NOI, Property-Level Cash NOI, and Property-Level Cash NOI - Estimated Run Rate are non-GAAP financial measures which we use to assess our operating results.
We believe these non-GAAP financial measures are industry measures used by analysts and investors to compare the operating performance of REITs. FFO, Core FFO, and AFFO The National Association of Real Estate Investment Trusts ("NAREIT"), an industry trade group, has promulgated a widely accepted non-GAAP financial measure of operating performance known as FFO.
We believe these non-GAAP financial measures are industry measures used by analysts and investors to compare the operating performance of REITs. FFO, Core FFO, and AFFO The National Association of Real Estate Investment Trusts (“NAREIT”), an industry trade group, has promulgated a widely accepted non-GAAP financial measure of operating performance known as FFO.
The Wells Fargo Credit Agreement was amended and restated to extend the maturity date of the existing $175.0 million 2030 Term Loan A from January 2027 to January 2029 with an option, at the Company’s election, to extend the maturity to January 2030.
The Wells Fargo Credit Agreement was amended and restated to extend the maturity date of the existing $175.0 million 2030 Term Loan A from January 2027 to January 2029 with an option, at our election, to extend the maturity to January 2030.
We focus on tenants in industries where a physical location is critical to the generation of sales and profits, with a focus on necessity goods and essential services in the retail sector, including home improvement, auto parts, drug stores and pharmacies, general retail, grocers, convenience stores, discount stores, and quick-service restaurants, all of which we refer to as defensive retail industries.
We focus on tenants in industries where we believe a physical location is critical to the generation of sales and profits, with a focus on necessity goods and essential services in the retail sector, including grocers, convenience stores, discount stores, home improvement, quick-service restaurants, general retail, and auto parts, all of which we refer to as defensive retail industries.
Critical Accounting Policies and Estimates Our accounting policies have been established to conform with U.S. GAAP. The preparation of financial statements in conformity with U.S. GAAP requires us to use judgment in the application of accounting policies, including making estimates and assumptions.
Critical Accounting Policies and Estimates Our accounting policies have been established to conform with GAAP. The preparation of financial statements in conformity with GAAP requires us to use judgment in the application of accounting policies, including making estimates and assumptions.
Also refer to “Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s previously filed Annual Report on Form 10-K for the year ended December 31, 2023 filed with the SEC on February 14, 2024, for additional discussion of our financial condition and results of operations, including a comparison of our results of operations for the year ended December 31, 2023 and the year ended December 31, 2022, which is incorporated herein by reference. 37 Table of Contents Business Overview We are an internally managed real estate company that acquires, owns, and manages a diversified portfolio of single-tenant, retail commercial real estate subject to long-term net leases with high credit quality tenants across the United States.
Also refer to “Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s previously filed Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC on February 24, 2025, for additional discussion of our financial condition and results of operations, including a comparison of our results of operations for the year ended December 31, 2024 and the year ended December 31, 2023, which is incorporated herein by reference. 39 Table of Contents Business Overview We are an internally managed real estate company that acquires, owns, and manages a diversified portfolio of single-tenant commercial retail properties, subject to long-term net leases with high-credit-quality tenants across the United States.
The 2030 Term Loan B and the upsized Revolver initially mature in January 2029 and include, at the Company’s election, a one-year option to extend the maturity to January 2030.
The 2030 Term Loan B and the upsized Revolver initially mature in January 2029 and include, at our election, a one-year option to extend the maturity to January 2030.
The 2030 Term Loan B and the upsized Revolver initially mature in January 2029 and include, at the Company’s election, a one-year option to extend the maturity to January 2030.
The 2030 Term Loan B and the upsized Revolver initially mature in January 2029 and include, at our election, a one-year option to extend the maturity to January 2030.
We compute Property-Level NOI as net income (computed in accordance with GAAP), excluding general and administrative expenses, interest expense (or income), income tax expense, amortization of loan origination costs and discounts, transaction costs, depreciation and amortization, gains (or losses) on sales of depreciable property, real estate impairment losses, interest income on mortgage loans receivable, loss on debt extinguishment, lease termination fees and other expense (income), net.
We compute Property-Level NOI as net income (computed in accordance with GAAP), excluding general and administrative expenses, interest expense, net, income tax expense, amortization of loan origination costs and discounts, transaction costs, depreciation and amortization, gains (or losses) on sales of depreciable property, real estate impairment losses, interest income on mortgage loans receivable, debt related transaction costs, and other expense (income), net, including lease termination fees.
The Truist Credit Agreement governs existing term loans thereunder (the “2029 Term Loan”). Among other changes, each of the PNC Credit Agreement, Wells Fargo Credit Agreement, and Truist Credit Agreement were also amended to remove certain financial covenants and provide for revised, improved pricing when the Company meets certain investment grade rating and leverage targets.
The Truist Credit Agreement governs existing term loans thereunder (the “2029 Term Loan”). Among other changes, each of the PNC Credit Agreement, Wells Fargo Credit Agreement, and Truist Credit Agreement were also amended to remove certain financial covenants and provide for revised, improved pricing when we meet certain investment grade rating and leverage targets.
For the year ended December 31, 2024, we recorded provisions for impairment of $30.0 million on 63 properties, the majority of which were either previously classified as held-for sale, newly classified as held-for-sale, or disposed of during the year ended December 31, 2024. Of those properties impaired, 11 are held for investment as of December 31, 2024.
Of those properties impaired, five were held for investment as of December 31, 2025. For the year ended December 31, 2024, we recorded provisions for impairment of $30.0 million on 63 properties, the majority of which were either previously classified as held-for-sale, newly classified as held-for-sale, or disposed of during the year ended December 31, 2024.
We also disclose the following non-GAAP financial measures: Funds From Operations (“FFO”), Core FFO, Adjusted FFO (“AFFO”), earnings before interest expense, income tax expense, and depreciation and amortization (“EBITDA”), EBITDA further adjusted to exclude gains (or losses) from the sales of depreciable property and real estate impairment losses (“EBITDAre”), Adjusted EBITDAre, Annualized Adjusted EBITDAre, Net Debt, Adjusted Net Debt, property-level net operating income (“Property-Level NOI”), property-level cash net operating income (“Property-Level Cash NOI”), property-level cash net operating income estimated run rate (“Property-Level Cash NOI Estimated Run Rate”), and total property-level cash net operating income estimated run rate (“Total Property-Level Cash NOI Estimated Run Rate”), all of which are detailed below.
We also disclose the following non-GAAP financial measures: Funds From Operations (“FFO”), Core FFO, Adjusted FFO (“AFFO”), earnings before interest expense, income tax expense, and depreciation and amortization (“EBITDA”), EBITDA further adjusted to exclude gains (or losses) from the sales of depreciable property and real estate impairment losses (“EBITDA re ”), Adjusted EBITDA re , Annualized Adjusted EBITDA re , Net Debt, Adjusted Net Debt, property-level net operating income (“Property-Level NOI”), property-level cash net operating income (“Property-Level Cash NOI”), and property-level cash net operating income estimated run rate (“Property-Level Cash NOI Estimated Run Rate”), all of which are detailed below.
Adjusted EBITDA re is a non-GAAP financial measure defined as EBITDA re further adjusted to exclude straight-line rent, non-cash compensation expense, non-recurring executive transition costs, severance and related charges, loss on debt extinguishment and other related costs, other non-recurring loss (gain), net, other non-recurring expenses (income), transaction costs, lease termination fees, adjustment for construction in process, and adjustment for intraquarter activities.
Adjusted EBITDA re is a non-GAAP financial measure defined as EBITDA re further adjusted to exclude straight-line rent, non-cash compensation expense, non-recurring executive transition costs, severance and related charges, debt related transaction costs, transaction costs, other non-recurring loss (gain), net, other non-recurring expenses (income) including lease termination fees, as well as adjustments for construction in process and for intraquarter activities.
FFO, Core FFO, and AFFO do not measure whether cash flow is sufficient to fund our cash needs, including principal amortization, capital improvements and distributions to stockholders. FFO, Core FFO, and AFFO do not represent cash flows from operating, investing, or financing activities as defined by GAAP.
FFO, Core FFO, and AFFO do not measure whether cash flow is sufficient to fund our cash needs, including debt service obligations, capital improvements, and distributions to stockholders. FFO, Core FFO, and AFFO do not represent cash flows from operating, investing, or financing activities as defined by GAAP.
Core FFO is a non-GAAP financial measure defined as FFO adjusted to remove the effect of unusual and non-recurring items that are not expected to impact our operating performance or operations on an ongoing basis. These include non-recurring executive transition costs, severance and related charges, other loss (gain), net, and loss on debt extinguishments and other related costs.
Core FFO is a non-GAAP financial measure defined as FFO adjusted to remove the effect of unusual and non-recurring items that are not expected to impact our operating performance or operations on an ongoing basis. These include non-recurring executive transition costs, severance and related charges, other non-recurring losses (gains), and debt related transaction costs.
Results of Operations Overall We continued to grow our assets held for investment during the year ended December 31, 2024 through the acquisition of properties, property developments, and investment in mortgage loans receivable, with an underwritten weighted-average capitalization rate of approximately 7.5%.
Results of Operations Overall We continued to grow our assets held for investment during the year ended December 31, 2025 through the acquisition of properties, property developments, and investment in mortgage loans receivable, with an underwritten weighted-average cash yield of approximately 7.5%.
In general, our TRS may perform services for tenants of the Company, hold assets that the Company cannot hold directly, and may engage in any real estate or non-real estate-related business.
In general, our TRS may perform services for our tenants, hold assets that we cannot hold directly, and may engage in any real estate or non-real estate-related business.
While our general and administrative expenses will continue to rise in some measure as our portfolio grows, we expect that such expenses as a percentage of our portfolio will decrease over time due to efficiencies and economies of scale. 41 Table of Contents • Depreciation and amortization.
While our general and administrative expenses will continue to rise in some measure as our portfolio grows, we expect that such expenses as a percentage of our portfolio ABR and total assets will decrease over time due to efficiencies and economies of scale. • Depreciation and amortization.
Annualized Adjusted EBITDA re is Adjusted EBITDA re multiplied by four. 47 Table of Contents We present EBITDA, EBITDA re , Adjusted EBITDA re, and Annualized Adjusted EBITDA re as they are measures commonly used in our industry.
Annualized Adjusted EBITDA re is Adjusted EBITDA re multiplied by four. We present EBITDA, EBITDA re , Adjusted EBITDA re, and Annualized Adjusted EBITDA re as they are measures commonly used in our industry.
Accordingly, the Company will generally not be subject to corporate U.S. federal or state income tax to the extent that it makes qualifying distributions of all of its taxable income to its stockholders and provided it satisfies on a continuing basis, through actual investment and operating results, the REIT requirements, including certain asset, income, distribution, and share ownership tests.
Accordingly, we will generally not be subject to corporate U.S. federal or state income tax to the extent that we make qualifying distributions of all of our taxable income to our stockholders and provided we satisfy on a continuing basis, through actual investment and operating results, the REIT requirements, including certain asset, income, distribution, and share ownership tests.
We allocate the purchase price of acquired properties accounted for as asset acquisitions to tangible and identifiable intangible assets or liabilities based on their relative fair values. Tangible assets may include land, buildings, site improvements, and tenant improvements.
We allocate the purchase price of acquired properties accounted for as asset acquisitions to tangible and identifiable intangible assets or liabilities based on their relative fair values. Tangible assets may include land, buildings, site improvements, and tenant improvements. Intangible assets include the value of in-place leases and above-market leases, and intangible liabilities include below-market leases.
To qualify as a REIT, the Company must meet certain organizational, income, asset, and distribution tests.
To qualify as a REIT, we must meet certain organizational, income, asset, and distribution tests.
We further consider FFO, Core FFO, and AFFO to be useful in determining funds available for payment of distributions. FFO, Core FFO, and AFFO do not represent net income or cash flows from operations as defined by GAAP.
We consider FFO to be useful in evaluating potential property acquisitions and measuring operating performance. We further consider FFO, Core FFO, and AFFO to be useful in determining funds available for payment of distributions. FFO, Core FFO, and AFFO do not represent net income or cash flows from operations as defined by GAAP.
Lastly, we had $152.0 million of unsettled forward equity under the January 2024 follow-on offering forward sale agreements as of December 31, 2024. 42 Table of Contents On January 15, 2025, we amended our PNC Credit Agreement to provide for: a new $175.0 million 2030 Term Loan B and an upsized $500.0 million Revolver.
Lastly, we had $149.9 million and $71.7 million of unsettled forward equity under the January 2024 and July 2025 follow-on offering forward sale agreements, respectively, as of December 31, 2025. On January 15, 2025, we amended our PNC Credit Agreement to provide for: a new $175.0 million 2030 Term Loan B and an upsized $500.0 million Revolver.
The increase was largely attributed to the increase in the size of our real estate investment portfolio with an increase in rental receipts of $26.1 million, additional interest received under our mortgage loans receivable, partially offset by an increase in cash interest paid of $12.0 million, increases in operating and general and administrative expenses paid associated with our larger portfolio and changes in working capital accounts.
The increase was largely attributed to the increase in the size of our real estate investment portfolio with an increase in rental receipts of $26.6 million, additional interest received under our mortgage loans receivable, and changes in working capital accounts, partially offset by an increase in cash paid for interest of $13.7 million, and an increase in operating expenses paid associated with our larger portfolio.
We may physically settle the forward sale agreements (by the delivery of shares of common stock) and receive proceeds from the sale of those shares on one or more forward settlement dates, which shall occur no later than December 31, 2025.
We may physically settle the forward sale agreements (by delivery of shares of common stock) and receive proceeds from the sale of those shares on one or more forward settlement dates, which shall occur no later than the stated maturity dates ranging from September 2026 to December 2026.
Net (loss) income. Net (loss) income decreased by $18.9 million to a net loss of $12.0 million for the year ended December 31, 2024 from net income of $6.9 million for the year ended December 31, 2023.
Net income (loss) increased by $18.9 million to net income of $6.9 million for the year ended December 31, 2025 from net loss of $12.0 million for the year ended December 31, 2024.
The increase in depreciation and amortization is proportionate to the increase in the size of the portfolio over the comparable period with associated increases primarily in building depreciation expense of $7.4 million, building improvements depreciation expense of $2.9 million, in-place lease amortization expense of $2.1 million, leasehold improvements depreciation expense of $0.4 million, and amortization of leasing commissions of $0.4 million. • Provisions for impairment.
The increase in depreciation and amortization is proportionate to the increase in the size of the portfolio over the comparable period with associated increases primarily in building depreciation expense of $5.7 million, building improvements depreciation expense of $2.3 million, and in-place lease amortization expense of $1.5 million. • Provisions for impairment.
The Company expects the distributions made during 2024 are sufficient to receive a full dividends paid deduction. We maintain a taxable REIT subsidiary (“TRS”), which may be subject to U.S. federal, state, and local income taxes on its taxable income.
We expect the distributions made during the year ended December 31, 2025 are sufficient to receive a full dividends paid deduction. We maintain a taxable REIT subsidiary (“TRS”) which may be subject to U.S. federal, state, and local income taxes on its taxable income.
The 2030 Term Loan B was fully funded on the closing date and the Company has hedged the entire $175.0 million 2030 Term Loan B at an all-in fixed interest rate of 5.12% through January 2030.
The 2030 Term Loan B was fully funded on the closing date, and we have hedged the entire $175.0 million 2030 Term Loan B at an all-in fixed interest rate of 4.82% through January 2030.
The 2030 Term Loan B was fully funded on the closing date and the Company has hedged the entire $175.0 million 2030 Term Loan B at an all-in fixed interest rate of 5.12% through January 2030.
The 2030 Term Loan B was fully funded on the closing date and we have hedged the entire $175.0 million 2030 Term Loan B at an all-in fixed interest rate of 4.82% through January 2030.
As of December 31, 2024, our investments generated ABR 1 of $165.1 million. Approximately 56% of our ABR is from investment grade 2 credit rated tenants and an additional 15% of our ABR is derived from tenants with an investment grade profile 3 .
As of December 31, 2025, our investments generated ABR 1 of $198.3 million. Approximately 44% of our ABR is from investment grade 2 credit rated tenants and an additional 14% of our ABR is derived from tenants with an investment grade profile 3 .
Revenue for the year ended December 31, 2024 increased by $30.9 million to $162.8 million from $131.9 million for the year ended December 31, 2023, which is attributed to an increase in the number of our operating leases and properties securing our mortgage loans.
Revenue for the year ended December 31, 2025 increased by $32.2 million to $195.0 million from $162.8 million for the year ended December 31, 2024, which is primarily attributed to an increase in the number of our operating leases and properties securing mortgage loans.
Intangible assets include the value of in-place leases and above-market leases, and intangible liabilities include below-market leases. 45 Table of Contents The fair value of the tangible assets of an acquired property with an in-place operating lease is determined by valuing the property as if it were vacant, and the “as-if-vacant” value is then allocated to the tangible assets based on the fair value of the tangible assets.
The fair value of the tangible assets of an acquired property with an in-place operating lease is determined by valuing the property as if it were vacant, and the “as-if-vacant” value is then allocated to the tangible assets based on the fair value of the tangible assets.
Cash Flows Provided By Financing Activities. Net cash provided by financing activities decreased by $4.1 million for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Cash Flows Provided By Financing Activities. Net cash provided by financing activities increased by $12.4 million for the year ended December 31, 2025 compared to the year ended December 31, 2024.
Other (expense) income, net increased by $2.7 million to $1.9 million for the year ended December 31, 2024 from $0.8 million for the year ended December 31, 2023.
Other income (expense), net increased by $2.3 million to $0.4 million of other income, net for the year ended December 31, 2025 from $1.9 million of other expense, net for the year ended December 31, 2024.
Net cash provided by operating activities increased by $10.0 million for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Net cash provided by operating activities increased by $19.3 million for the year ended December 31, 2025 compared to the year ended December 31, 2024.
The decrease is partially offset by increases in employee severance of $1.4 million, including cash severance of $0.9 million and the expense associated with the accelerated vesting of stock-based compensation of $0.5 million, an increase of $0.3 million of stock-based compensation, an increase of $0.3 million in accounting outsourcing fees, and a net increase of $0.2 million in other general and administrative expenses.
The increase is partially offset by a decrease in employee severance of $1.4 million, including cash severance of $0.9 million and the expense associated with the accelerated vesting of stock-based compensation of $0.5 million, and a decrease of $0.2 million of legal expenses.
(2) Adjustment assumes all re-leasing activity, investments in and dispositions of real estate, including developments completed during the three months ended December 31, 2024, had occurred on October 1, 2024. (3) We calculate Annualized Adjusted EBITDA re by multiplying Adjusted EBITDA re by four.
(2) Adjustment assumes all re-leasing activity, investments in and dispositions of real estate, including developments completed during the three months ended December 31, 2025 had occurred on October 1, 2025.
Investment in Mortgage Loans Receivable During the year ended December 31, 2024, we invested an additional $49.8 million in fully collateralized mortgage loans receivable with stated interest rates ranging from 6.5% to 13.1%, inclusive of $20.1 million provided through seller financing transactions.
Investment in Mortgage Loans Receivable During the year ended December 31, 2025, we invested an additional $46.0 million in fully collateralized mortgage loans receivable with stated interest rates ranging from 7.00% to 10.25%, inclusive of $8.5 million provided through seller financing transactions.
Acquisitions During 2024, we acquired 115 properties for a total purchase price of $479.0 million, inclusive of $4.6 million of capitalized acquisition costs. The acquisitions were all accounted for as asset acquisitions.
Acquisitions During 2025, we acquired 140 properties for a total purchase price of $603.0 million, inclusive of $7.0 million of capitalized acquisition costs. The acquisitions were all accounted for as asset acquisitions.
AFFO is a non-GAAP financial measure defined as Core FFO adjusted for GAAP net income related to non-cash revenues and expenses, such as straight-line rent, amortization of above- and below-market lease-related intangibles, amortization of lease incentives, capitalized interest expense and earned development interest, non-cash interest expense, non-cash compensation expense, amortization of deferred financing costs, amortization of above/below-market assumed debt, and amortization of loan origination costs. 46 Table of Contents Historical cost accounting for real estate assets implicitly assumes that the value of real estate assets diminishes predictably over time.
AFFO is a non-GAAP financial measure defined as Core FFO adjusted for GAAP net income related to non-cash revenues and expenses, such as straight-line rent, amortization of above- and below-market lease-related intangibles, amortization of lease incentives, capitalized interest expense and earned development interest, non-cash interest expense, non-cash compensation expense, amortization of deferred financing costs, amortization of above/below-market assumed debt, and amortization of loan origination costs.
We also invest in property developments and mortgage loans secured by real estate. As of December 31, 2024, we owned or had investments in 687 properties that were diversified by tenant, industry, and geography, including 98 different tenants, across 26 retail sectors in 45 states. This excludes five property developments where rent has not yet commenced.
We also invest in property developments and mortgage loans secured by real estate. As of December 31, 2025, we owned or had investments in 761 properties diversified by tenant, industry, and geography, comprising 129 different tenants across 28 retail sectors in 45 states. This includes three property developments where rent has not yet commenced.
The increase includes additional cash rental receipts of $26.1 million, an increase of $4.2 million related to interest income on mortgage loans receivable, and an increase of $1.7 million in straight-line rental revenue. The increase is partially offset by a $0.8 million increase in reserves for uncollectible amounts. Total operating expenses.
The increase includes additional cash rental receipts of $26.6 million, an increase of $1.8 million in straight-line rental revenue, an increase of $1.1 million related to interest income on mortgage loans receivable, an increase of $2.1 million related to reimbursable property expenses, and a net decrease of $0.9 million in reserves for uncollectible amounts.
During the year ended December 31, 2024, we borrowed $392.0 million at a weighted average interest rate of 6.24% and also repaid $233.0 million on our Revolver.
During the year ended December 31, 2025, we borrowed $349.0 million at a weighted average interest rate of 5.45% and also repaid $588.0 million on our Revolver.
Cash Flows Used In Investing Activities. Net cash used in investing activities decreased by $19.1 million for the year ended December 31, 2024 compared to the year ended December 31, 2023.
Cash Flows Used In Investing Activities. Net cash used in investing activities increased by $16.0 million for the year ended December 31, 2025 compared to the year ended December 31, 2024.
The following table sets forth a reconciliation of FFO, Core FFO, and AFFO for the periods presented to net (loss) income before allocation to noncontrolling interests, as computed in accordance with GAAP (in thousands): Year Ended December 31, 2024 2023 Net (loss) income $ (12,000) $ 6,890 Depreciation and amortization of real estate 76,560 63,379 Provisions for impairment 29,969 7,083 Gain on sales of real estate, net (1,876) (1,175) FFO 92,653 76,177 Adjustments: Non-recurring executive transition costs, severance and related charges 1,643 362 Loss on debt extinguishment and other related costs — 223 Other non-recurring loss (gain), net 2,934 (78) Core FFO 97,230 76,684 Adjustments: Straight-line rent adjustments (2,949) (1,163) Amortization of deferred financing costs 2,230 1,730 Amortization of above/below-market assumed debt 114 114 Amortization of loan origination costs and discounts (365) 163 Amortization of lease-related intangibles (458) (611) Earned development interest 1,072 515 Capitalized interest expense (806) (1,060) Non-cash interest expense (3,789) (2,124) Non-cash compensation expense 5,126 4,822 AFFO $ 97,405 $ 79,070 EBITDA, EBITDAre, Adjusted EBITDAre, and Annualized Adjusted EBITDAre We compute EBITDA as earnings before interest expense, income tax expense, and depreciation and amortization.
Further, FFO, Core FFO, and AFFO as disclosed by other REITs might not be comparable to our calculations of FFO, Core FFO, and AFFO. 48 Table of Contents The following table sets forth a reconciliation of FFO, Core FFO, and AFFO for the periods presented to net income (loss) before allocation to noncontrolling interests, as computed in accordance with GAAP (in thousands): Year Ended December 31, 2025 2024 Net income (loss) $ 6,938 $ (12,000) Depreciation and amortization of real estate 86,081 76,560 Provisions for impairment 15,909 29,969 Gain on sales of real estate, net (7,686) (1,876) FFO 101,242 92,653 Adjustments: Non-recurring executive transition costs, severance, and related charges 124 1,643 Loss on debt extinguishment and other related costs 495 — Other non-recurring loss, net 1,314 2,934 Core FFO 103,175 97,230 Adjustments: Straight-line rent adjustments (4,793) (2,949) Amortization of deferred financing costs 3,136 2,230 Amortization of above/below-market assumed debt 114 114 Amortization of loan origination costs and discounts (342) (365) Amortization of lease-related intangibles (157) (458) Earned development interest 184 1,072 Capitalized interest expense (154) (806) Non-cash interest expense (income) 2,859 (3,789) Non-cash compensation expense 5,898 5,126 AFFO $ 109,920 $ 97,405 EBITDA, EBITDAre, Adjusted EBITDAre, and Annualized Adjusted EBITDAre We compute EBITDA as earnings before interest expense, income tax expense, and depreciation and amortization.
The increase is primarily attributed to an increase in the number of operating properties, including combined net increases of reimbursable property expenses of $0.5 million, of which $0.9 million and $0.3 million were related to reimbursable property taxes and reimbursable insurance costs, respectively, partially offset by a decrease of $0.6 million of common area maintenance costs, and combined net increases of non-reimbursable property expenses of $0.5 million, of which $0.3 million, $0.1 million, and $0.1 million were related to common area maintenance costs, property insurance, and property taxes, respectively. • General and administrative expenses.
The increase is primarily attributed to an increase in the number of operating properties, including combined net increases of reimbursable property expenses of $1.5 million, substantially all of which were related to reimbursable property taxes, and combined net increases of non-reimbursable property expenses of $0.3 million, most of which were related to property insurance. • General and administrative expenses.
The decrease was primarily due to a decrease in cash invested in mortgage loans receivable of $42.9 million, an increase of $52.4 million from proceeds from the sale of real estate, an increase of $23.4 million in principal collections on mortgage loans receivable, and a decrease of $38.5 million in real estate development and improvements, partially offset by an increase of $138.6 million in acquisitions of real estate.
The increase was primarily due to an increase of $119.0 million in acquisitions of real estate, an increase in cash invested in mortgage loans receivable of $7.9 million, and an increase of $6.2 million in earnest money deposits, partially offset by an increase of $69.8 million of proceeds received from the sale of real estate, an increase of $10.5 million of proceeds received from the sale of mortgage loans receivable, an increase of $6.4 million in principal collections on mortgage loans receivable, and a decrease of $30.9 million in real estate development and improvements.
We believe excluding cash, cash equivalents, and restricted cash available for future investment from our principal amount in addition to excluding the net value of unsettled forward equity, all of which could be used to repay debt, provides an estimate of the net contractual amount of borrowed capital to be repaid.
We believe excluding cash, cash equivalents, and restricted cash available for future investment from the principal amount of our total debt outstanding, together with the exclusion of the net value of unsettled forward equity as of period end and the net value of unsettled forward equity and at-the-market sales subsequent to the period, all of which could be used to repay debt, provides a useful estimate of the net contractual amount of borrowed capital to be repaid.
For the year ended December 31, 2023, we recorded provisions for impairment of $7.1 million on 22 properties, the majority of which were either previously classified as held-for-sale, newly classified as held-for-sale, or disposed of during the year ended December 31, 2023.
For the year ended December 31, 2025, we recorded provisions for impairment of $17.3 million on 36 properties and three mortgage loans receivable, the majority of which were either previously classified as held-for sale, newly classified as held-for-sale, or disposed of during the year ended December 31, 2025.
Net Debt and Adjusted Net Debt We calculate our Net Debt as our principal amount of total debt outstanding excluding deferred financing costs, net discounts, and debt issuance costs less cash, cash equivalents, and restricted cash available for future investment.
(3) We calculate Annualized Adjusted EBITDA re by multiplying Adjusted EBITDA re by four. 50 Table of Contents Net Debt, Adjusted Net Debt, and Pro Forma Adjusted Net Debt We calculate Net Debt as the principal amount of our total debt outstanding excluding deferred financing costs, net discounts, and debt issuance costs, less cash, cash equivalents, and restricted cash available for future investment.
Historical Cash Flow Information Year Ended December 31, 2024 Compared with the Year Ended December 31, 2023 Year Ended December 31, (in thousands) 2024 2023 Net cash provided by (used in): Operating activities $ 90,164 $ 80,155 Investing activities (432,875) (451,953) Financing activities 327,102 331,184 Cash Flows Provided By Operating Activities.
Historical Cash Flow Information Year Ended December 31, 2025 Compared with the Year Ended December 31, 2024 Year Ended December 31, (In thousands) 2025 2024 Net cash provided by (used in): Operating activities $ 109,510 $ 90,164 Investing activities (448,842) (432,875) Financing activities 339,479 327,102 Cash Flows Provided By Operating Activities.
These properties are located in 27 states with a WALT of approximately 13.5 years. 39 Table of Contents Development As of December 31, 2024, we had four property developments under construction. During 2024, we invested $29.8 million in our property developments, including the land acquisition of four new developments with a combined initial purchase price of $2.0 million.
These properties are located in 31 states with a WALT of approximately 13.9 years. 41 Table of Contents Development As of December 31, 2025, we had three property developments under construction. During 2025, we invested $6.9 million in property developments, including the land acquisition of two new developments with a combined initial purchase price of $3.1 million.
Depreciation and amortization expense increased by $13.2 million to $76.9 million for the year ended December 31, 2024 from $63.7 million for the year ended December 31, 2023.
Depreciation and amortization expense increased by $9.5 million to $86.4 million for the year ended December 31, 2025 from $76.9 million for the year ended December 31, 2024.
The net increase to expense is primarily related to a transfer fraud loss of $2.8 million, net of insurance recoveries, $0.9 million of losses associated with property damages related to flooding and foundation issues, partially offset by $0.5 million of proceeds received from the settlement of a lease escrow agreement and an increase in property insurance proceeds of $0.3 million.
The net increase to income is primarily related to events that occurred during the year ended December 31, 2024, including a transfer fraud loss of $2.8 million, net of insurance recoveries, and $0.9 million of losses associated with property damages, partially offset by $0.5 million of proceeds received from the settlement of a lease escrow agreement.
This growth was financed through a $100.0 million draw on our $250.0 million 2029 Term Loan, settlement of shares of common stock through our forward sale agreements in an amount of $135.4 million, the usage of cash balances as a result of borrowings on our Revolver, the usage of restricted cash balances as a result of tax-free exchanges under Section 1031 of the Internal Revenue Code of 1986, and cash flows from operations during the year ended December 31, 2024.
This growth was financed through the PNC Term Loan Agreement and receipt of proceeds of $200.0 million and $100.0 million under the 2031 Term Loan and 2032 Term Loan, respectively, the amendment of our PNC Credit Agreement and receipt of proceeds of $175.0 million under the 2030 Term Loan B, settlement of shares of common stock through our forward sale agreements in an amount of $136.8 million, the issuance of common stock under the 2024 ATM Program in an amount of $51.6 million, including settlement of forward shares, the usage of cash balances as a result of borrowings on our Revolver, the usage of restricted cash balances as a result of tax-free exchanges under Section 1031 of the Internal Revenue Code of 1986, and cash flows from operations during the year ended December 31, 2025.
In fact, real estate values historically have risen or fallen with market conditions. FFO is intended to be a standard supplemental measure of operating performance that excludes historical cost depreciation and valuation adjustments from net income. We consider FFO to be useful in evaluating potential property acquisitions and measuring operating performance.
Historical cost accounting for real estate assets implicitly assumes that the value of real estate assets diminishes predictably over time. In fact, real estate values historically have risen or fallen with market conditions. FFO is intended to be a standard supplemental measure of operating performance that excludes historical cost depreciation and valuation adjustments from net income.
We further adjust Net Debt by the net value of unsettled forward equity as of period end to derive Adjusted Net Debt.
We then adjust Net Debt by the net value of unsettled forward equity as of period end to derive Adjusted Net Debt. Further, we adjust Adjusted Net Debt by the value of any unsettled forward equity and at-the-market sales occurring subsequent to the period to derive Pro Forma Adjusted Net Debt.
During 2024, we completed development on 18 projects and reclassified approximately $52.9 million from property under development to land, buildings and improvements, and other assets (leasing commissions) in the accompanying consolidated balance sheets.
During 2025, we completed development on two projects and reclassified approximately $6.5 million from property under development to land, buildings and improvements, and other assets (leasing commissions) in the accompanying consolidated balance sheets. Rent commenced for both of the completed developments in the second quarter of 2025.
Our portfolio was 99.9% occupied and, excluding mortgage loans receivable, had a weighted average remaining lease term (“WALT”) of 9.8 years, which we believe provides a strong, stable source of recurring cash flow.
Our portfolio was 99.9% occupied and, excluding mortgage loans receivable, had a weighted average remaining lease term (“WALT”) of 10.1 years.
See discussion of our mortgage loans receivable portfolio included in “Note 4 - Real Estate Investments” of our consolidated financial statements, included in Part II, Item 8 of this Annual Report on Form 10-K. Economic and Financial Environment The annual inflation rate for the twelve months ended December 31, 2024 and 2023 was 2.9% and 3.4%, respectively.
See discussion of our mortgage loans receivable portfolio included in “Note 4 – Real Estate Investments” of our consolidated financial statements, included in Part II, Item 8 of this Annual Report on Form 10-K.
Total operating expenses include the following: • Property expenses. Property expenses increased $1.0 million to $17.4 million for the year ended December 31, 2024 from $16.4 million for the year ended December 31, 2023.
Property expenses increased $1.8 million to $19.2 million for the year ended December 31, 2025 from $17.4 million for the year ended December 31, 2024.
Recent Accounting Pronouncements A discussion of new accounting standards and the possible effects of these standards on our consolidated financial statements is included in “Note 2 - Summary of Significant Accounting Policies” of our consolidated financial statements, included in Part II, “Item 8 - Financial Statements and Supplementary Data” of this Annual Report on Form 10-K.
We recognize franchise and other state and local tax expenses in general and administrative expenses and federal income tax in income tax (expense) benefit in the accompanying consolidated statements of operations and comprehensive loss. 46 Table of Contents Recent Accounting Pronouncements A discussion of recent accounting pronouncements and their possible effects on our consolidated financial statements is included in “Note 2 – Summary of Significant Accounting Policies” of our consolidated financial statements, included in Part II, “Item 8 – Financial Statements and Supplementary Data” of this Annual Report on Form 10-K.
(4) We are subject to a facility fee of 0.15% on our Revolver. 43 Table of Contents In August 2021, we entered into a lease agreement on a new corporate office space, which is classified as an operating lease. We began operating out of the new office in February 2022.
(2) We are subject to a ticking fee of 0.20% on the undrawn amount under our 2032 Term Loan. (3) We are subject to a facility fee of 0.20% on our Revolver. In August 2021, we entered into a lease agreement related to our corporate office space, which is classified as an operating lease.
We continually monitor the commercial real estate and credit markets carefully and, if required, will make decisions to adjust our business strategy accordingly. 40 Table of Contents Year Ended December 31, 2024 Compared with the Year Ended December 31, 2023 The following table sets forth our operating results for the periods indicated (in thousands): Year Ended December 31, 2024 2023 Revenues Rental revenue (including reimbursable) $ 150,823 $ 123,967 Interest income on loans receivable 11,561 7,388 Other revenue 400 550 Total revenues 162,784 131,905 Operating expenses Property 17,422 16,413 General and administrative 19,722 20,176 Depreciation and amortization 76,871 63,677 Provisions for impairment 29,969 7,083 Transaction costs 359 456 Total operating expenses 144,343 107,805 Other (expense) income Interest expense, net (30,324) (19,058) Gain on sales of real estate, net 1,876 1,175 Loss on debt extinguishment — (128) Other (expense) income, net (1,944) 752 Total other expense, net (30,392) (17,259) Net (loss) income before income taxes (11,951) 6,841 Income tax (expense) benefit (49) 49 Net (loss) income $ (12,000) $ 6,890 Revenue.
Year Ended December 31, 2025 Compared with the Year Ended December 31, 2024 The following table sets forth our operating results for the periods indicated (in thousands): Year Ended December 31, 2025 2024 Revenues Rental revenue (including reimbursable) $ 182,136 $ 150,823 Interest income on loans receivable 12,625 11,561 Other revenue 245 400 Total revenues 195,006 162,784 Operating expenses Property 19,211 17,422 General and administrative 21,723 19,722 Depreciation and amortization 86,376 76,871 Provisions for impairment 17,268 29,969 Transaction costs 218 359 Total operating expenses 144,796 144,343 Other (expense) income Interest expense, net (51,302) (30,324) Gain on sales of real estate, net 7,686 1,876 Loss on debt extinguishment (46) — Other income (expense), net 444 (1,944) Total other expense, net (43,218) (30,392) Net income (loss) before income taxes 6,992 (11,951) Income tax expense (54) (49) Net income (loss) $ 6,938 $ (12,000) 42 Table of Contents Revenue.
As of December 31, 2024, we had $175.0 million outstanding principal amount under the 2027 Term Loan, $200.0 million outstanding principal amount under the 2028 Term Loan, $250.0 million outstanding principal amount under the 2029 Term Loan, and $239.0 million of borrowings outstanding under the Revolver.
As of December 31, 2025, we had total outstanding debt of $1.1 billion, including $200.0 million outstanding principal amount under the 2028 Term Loan, $250.0 million outstanding principal amount under the 2029 Term Loan, $175.0 million outstanding principal amount under the 2030 Term Loan A, $175.0 million outstanding principal amount under the 2030 Term Loan B, $200.0 million outstanding principal amount under the 2031 Term Loan, and $100.0 million outstanding principal amount under the 2032 Term Loan.
This is offset by a $1.7 million increase in amortization of deferred gains on interest rate swaps. Gain on sales of real estate, net. Net gain on sales of real estate increased by $0.7 million to $1.9 million for the year ended December 31, 2024 from $1.2 million for the year ended December 31, 2023.
Gain on sales of real estate, net. Net gain on sales of real estate increased by $5.8 million to $7.7 million for the year ended December 31, 2025 from $1.9 million for the year ended December 31, 2024.
Additionally, we consider information obtained about each property as a result of its pre-acquisition due diligence, marketing, and leasing activities in estimating the fair value of the tangible and intangible assets and liabilities acquired.
Additionally, we consider information obtained about each property as a result of its pre-acquisition due diligence, marketing, and leasing activities in estimating the fair value of the tangible and intangible assets and liabilities acquired. 47 Table of Contents Impairment of Long-Lived Assets Fair value measurement of an asset group occurs when events or changes in circumstances related to an asset indicate that the carrying amount of the asset group is no longer recoverable.
Total expenses increased by $36.5 million to $144.3 million for the year ended December 31, 2024 as compared to $107.8 million for the year ended December 31, 2023. The increase is primarily attributed to an increase in the number of operating properties, with the most significant increases being depreciation and amortization expense and provisions for impairment.
The increase is primarily attributed to an increase in the number of operating properties, with the most significant increases being depreciation and amortization expense, partially offset by a decrease in provisions for impairment. Total operating expenses include the following: • Property expenses.
The following table sets forth a reconciliation of Property-Level NOI, Property-Level Cash NOI, Property-Level Cash NOI - Estimated Run Rate, and Total Cash NOI - Estimated Run Rate for the period presented (in thousands): Three Months Ended December 31, 2024 Net income $ (5,424) General and administrative 4,456 Depreciation and amortization 20,349 Provisions for impairment 12,633 Transaction costs 158 Interest expense, net 8,576 Gain on sales of real estate, net (1,002) Income tax expense 18 Amortization of loan origination costs and discounts (123) Interest income on mortgage loans receivable (3,103) Lease termination fees (400) Other expense, net 103 Property-Level NOI 36,241 Straight-line rent adjustments (1,120) Amortization of lease-related intangibles (95) Property-Level Cash NOI $ 35,026 Adjustment for intraquarter acquisitions, dispositions, and completed development (1) 1,817 Property-Level Cash NOI Estimated Run Rate $ 36,843 Interest income on mortgage loans receivable 3,103 Adjustments for intraquarter mortgage loan activity (2) 93 Total Cash NOI - Estimated Run Rate $ 40,039 (1) Adjustment assumes all re-leasing activity, investments in and dispositions of real estate, including developments completed during the three months ended December 31, 2024, had occurred on October 1, 2024.
You should not consider our measures as alternatives to net income or cash flows from operating activities determined in accordance with GAAP. 51 Table of Contents The following table sets forth a reconciliation of Property-Level NOI, Property-Level Cash NOI, and Property-Level Cash NOI - Estimated Run Rate for the period presented (in thousands): Three Months Ended December 31, 2025 Net income $ 1,328 General and administrative 5,951 Depreciation and amortization 22,558 Provisions for impairment 3,737 Transaction costs 79 Interest expense, net 14,568 Gain on sales of real estate, net (956) Income tax expense 13 Amortization of loan origination costs and discounts (145) Interest income on mortgage loans receivable (3,140) Other income, net (295) Property-Level NOI 43,698 Straight-line rent adjustments (1,530) Amortization of lease-related intangibles (46) Property-Level Cash NOI $ 42,122 Adjustment for intraquarter acquisitions, dispositions, and completed development (1) 2,879 Property-Level Cash NOI Estimated Run Rate $ 45,001 (1) Adjustment assumes all re-leasing activity, investments in and dispositions of real estate, including developments completed during the three months ended December 31, 2025, had occurred on October 1, 2025.
As of December 31, 2024, $300.0 million of remaining gross proceeds were available for future issuances of shares of our common stock under the 2024 ATM Program, inclusive of unsettled shares under forward sale agreements.
Additionally, as of December 31, 2025, we had $121.5 million and $0.0 million of unsettled forward equity under our 2024 ATM Program and prior at-the-market equity program, respectively. As of December 31, 2025, $124.3 million of shares of our common stock were available for future issuances under the 2024 ATM Program.
The following table details information related to activity under the ATM Programs for the year ended December 31, 2024 (in thousands, except share and per share data): Year Ended December 31, 2024 (1) Shares of common stock issued 5,983,711 Weighted average price per share $ 16.50 Gross proceeds $ 98,731 Sales commissions and offering costs $ 1,070 Net proceeds $ 97,661 (1) Represented shares of common stock physically settled under the forward sale agreement with respect to the 2021 ATM Program. 1 Annualized base rent (“ABR”) is annualized base rent as of December 31, 2024, for all leases that commenced, and annualized cash interest on mortgage loans receivable in place as of that date. 2 We define “investment grade” tenants as tenants, or tenants that are subsidiaries of a parent entity, with a credit rating of BBB- (S&P/Fitch), Baa3 (Moody’s) or NAIC2 (National Association of Insurance Commissioners) or higher. 3 We define “investment grade profile” tenants as tenants with metrics of more than $1.0 billion in annual sales and a debt to adjusted EBITDA ratio of less than 2.0x but do not carry a published rating from S&P, Moody’s or NAIC. 38 Table of Contents January 2024 Follow-On Offering In January 2024, we completed a registered public offering of 11,040,000 shares of our common stock at a public offering price of $18.00 per share.
We expect to physically settle the forward sale agreements (by delivery of shares of common stock) and receive proceeds from the sale of those shares upon one or more forward settlement dates, which shall occur no later than July 28, 2026. 1 Annualized base rent (“ABR”) is annualized base rent for all leases that commenced and annualized cash interest for all executed mortgage loans as of December 31, 2025. 2 We define “investment grade” tenants as tenants, or tenants that are subsidiaries of a parent entity, with a credit rating of BBB- (S&P/Fitch), Baa3 (Moody’s) or NAIC2 (National Association of Insurance Commissioners) or higher. 3 We define “investment grade profile” tenants as tenants with investment grade credit metrics (more than $1.0 billion in annual sales and a debt to adjusted EBITDA ratio of less than 2.0x), but do not carry a published rating from S&P, Moody’s, or NAIC. 40 Table of Contents ATM Program During 2025, we entered into forward sale agreements with respect to an aggregate 9,068,486 shares of common stock under the existing $300.0 million at-the-market equity program established in August 2024 (the “2024 ATM Program”) at a weighted-average price of $17.75 per share.
Contractual Obligations and Commitments As of December 31, 2024, our contractual debt obligations primarily include the maturity of our 2027 Term Loan with the scheduled principal payment due on January 15, 2026, the maturity of our 2028 Term Loan with the scheduled principal payment due on February 11, 2028, the maturity of our 2029 Term Loan with the scheduled principal payment due on July 3, 2026, and the repayment of borrowings on our Revolver with a contractual maturity of August 11, 2026.
We anticipate funding our long-term capital needs through cash provided from operations, borrowings under our 2032 Term Loan, borrowings under our Revolver, and issuances of common stock. 44 Table of Contents Contractual Obligations and Commitments As of December 31, 2025, our contractual debt obligations primarily include the maturity of our 2028 Term Loan with the scheduled principal payment due on February 11, 2028, the maturity of our 2029 Term Loan with the scheduled principal payment due on July 3, 2026, the maturities of our 2030 Term Loan A and 2030 Term Loan B with the scheduled principal payments due on January 15, 2029, the maturity of our 2031 Term Loan with the scheduled principal payment due on March 25, 2031, and the maturity of our 2032 Term Loan with the scheduled principal payment due on September 24, 2032.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

5 edited+1 added−1 removed3 unchanged
Biggest changeAs of December 31, 2024, we had total indebtedness of approximately $175.0 million under the 2027 Term Loan, $200.0 million under the 2028 Term Loan, $250.0 million under the 2029 Term Loan, and $239.0 million of borrowings under our Revolver, all of which is floating rate debt with a variable interest rate.
Biggest changeAs of December 31, 2025, we had total indebtedness of $200.0 million under the 2028 Term Loan, $250.0 million under the 2029 Term Loan, $175.0 million under the 2030 Term Loan A, $175.0 million under the 2030 Term Loan B, $200.0 million under the 2031 Term Loan, and $100.0 million under the 2032 Term Loan, all of which are floating rate debt with a variable interest rate.
Based on the results of our sensitivity analysis and daily outstanding borrowings on the Revolver during 2024, which assumes a 1% adverse change in the interest rate as of December 31, 2024, the estimated market risk exposure was approximately $1.0 million.
Based on the results of our sensitivity analysis and daily outstanding borrowings on the Revolver during the year ended December 31, 2025, which assumes a 1% adverse change in the interest rate as of December 31, 2025, the estimated market risk exposure was approximately $0.9 million. 52 Table of Contents
Additionally, we will occasionally fund acquisitions through the use of our Revolver which, as of December 31, 2024, bore an interest rate determined by either (i) SOFR, plus a SOFR adjustment of 0.10%, plus a margin ranging from 1.00% to 1.45%, based on our consolidated total leverage ratio, or (ii) a Base Rate (as defined in the PNC Credit Agreement), plus a margin ranging from 0.00% to 0.45%, based on our consolidated total leverage ratio.
Additionally, we will occasionally fund acquisitions through the use of our Revolver which, as of December 31, 2025, bore an interest rate determined by either (i) SOFR, plus a margin ranging from 0.725% to 1.40%, based on the Company’s current credit rating and consolidated total leverage ratio, or (ii) a Base Rate, plus a margin ranging from 0.00% to 0.40%, based on the Company’s current credit rating and consolidated total leverage ratio.
The interest rate derivative contracts convert the variable rate debt on our term loans to a fixed interest rate (as further described in “Note 6 – Debt” in our consolidated financial statements).
The interest rate derivative contracts convert the variable rate debt on our term loans to a fixed interest rate (as further described in “Note 7 – Derivative Financial Instruments” in our consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K).
For the years ended December 31, 2024 and 2023, we had average daily outstanding borrowings on our Revolver of $100.2 million and $82.5 million, respectively.
For the years ended December 31, 2025 and 2024, we had average daily outstanding borrowings on our Revolver of $89.5 million and $100.2 million, respectively. We have entered into interest rate derivative contracts in order to hedge our market risk associated with our term loans.
Removed
Effective through the fully extended maturity dates (as of December 31, 2024) of January 15, 2027, February 11, 2028, and January 3, 2029, we have entered into interest rate derivative contracts in order to hedge our market interest risk associated with the 2027 Term Loan, 2028 Term Loan, and 2029 Term Loan, respectively.
Added
The 2028 Term Loan, 2029 Term Loan, 2030 Term Loan B, 2031 Term Loan, and 2032 Term Loan have interest rate hedges that coincide with the extended maturity dates of the loans. The 2030 Term Loan A interest rate hedges mature on January 23, 2027.

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