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What changed in Global Net Lease, Inc.'s 10-K — 2023 vs 2024

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

+451 added−483 removedSource: 10-K (2025-02-27) vs 10-K (2024-02-27)

Top changes in Global Net Lease, Inc.'s 2024 10-K

451 paragraphs added · 483 removed · 316 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeIn addition, our international assets and operations, including those owned through direct or indirect subsidiaries that are disregarded entities for U.S. federal income tax purposes, continue to be subject to taxation in the foreign jurisdictions where those assets are held or those operations are conducted. Competition The commercial real estate market is highly competitive.
Biggest changeEven if we qualify for taxation as a REIT, we may be subject to certain state, and local taxes on our income and properties, and federal income and excise taxes on our undistributed income. 5 Table of Contents In addition, our international assets and operations, including those owned through direct or indirect subsidiaries that are disregarded entities for U.S. federal income tax purposes, continue to be subject to taxation in the foreign jurisdictions where those assets are held or those operations are conducted.
“Investment Grade” for our purposes includes both actual investment grade ratings of the tenant or guarantor, if available, or implied investment grade.
For our purposes, “Investment Grade” for our properties includes both actual investment grade ratings of the tenant or guarantor, if available, or implied investment grade.
The number of competing properties in a particular market could have a material effect on our occupancy levels, rental rates and on the operating expenses of certain of our properties. 5 Table of Contents In addition, we compete for acquisitions with other REITs, specialty finance companies, savings and loan associations, banks, mortgage bankers, insurance companies, sovereign wealth funds, mutual funds and other entities.
The number of competing properties in a particular market could have a material effect on our occupancy levels, rental rates and on the operating expenses of certain of our properties. In addition, we compete for acquisitions with other REITs, specialty finance companies, savings and loan associations, banks, mortgage bankers, insurance companies, sovereign wealth funds, mutual funds and other entities.
Based on the percentage of annualized rental income on a straight-line basis as of December 31, 2023, approximately 80% of our properties were located in the U.S. and Canada and approximately 20% were located in Europe.
Based on the percentage of annualized rental income on a straight-line basis as of December 31, 2024, approximately 80% of our properties were located in the U.S. and Canada and approximately 20% were located in Europe.
Item 1. Business. Overview We are a real estate investment trust for United States (“U.S.”) federal income tax purposes (“REIT”) that focuses on acquiring and managing a global portfolio of income producing net lease assets across the U.S., and Western and Northern Europe.
Item 1. Business. Overview We are an internally managed real estate investment trust (“REIT) for United States (“U.S.”) federal income tax purposes that focuses on acquiring and managing a global portfolio of income producing net lease assets across the U.S., and Western and Northern Europe.
In this regard, we have substantial discretion with respect to the selection of specific investments, subject to approval by and any guidelines established by our board of directors (the “Board”). We may change our business strategy, including the assets we seek to acquire, in the absolute discretion of our Board.
In this regard, we have substantial discretion with respect to the selection of specific investments, subject to approval for certain investments by and any guidelines established by our board of directors (the “Board”) or the Finance Committee of the Board. We may change our business strategy, including the assets we seek to acquire, in the absolute discretion of our Board.
As of December 31, 2023, approximately 78.0% of our leases with our tenants contained rent escalation provisions that increase the cash rent that is due over time by an average cumulative increase of 1.3% per year. For additional information, see Item 7.
As of December 31, 2024, approximately 81% of our leases with our tenants contained rent escalation provisions that increase the cash rent that is due over time by an average cumulative increase of 1.3% per year. For additional information, see Item 7.
As of December 31, 2023, no industry represented more than 10% of our portfolio’s rental income on a straight-line basis and our portfolio was 96% occupied. Tenants and Leasing We are focused over the long term on acquiring strategically located properties in the U.S. and strong sovereign debt rated countries in Western and Northern Europe.
As of December 31, 2024, no industry represented more than 10% of our portfolio’s rental income on a straight-line basis and our portfolio was 97% occupied. 4 Table of Contents Tenants and Leasing We are focused over the long term on acquiring strategically located properties in the U.S. and strong sovereign debt rated countries in Western and Northern Europe.
Investment Strategy We seek to: • generate stable and consistent cash flows by acquiring properties, or entering into new leases, with long lease terms; • acquire properties utilizing a well-defined investment strategy and rigorous underwriting process to identify and select high-quality net lease investment opportunities; • lease properties to tenants with logistical and local advantages, strong operating performance, strong business financials, financial visibility, and corporate-level profitability; • enter into new leases with contractual rent escalations or inflation adjustments included in the lease terms; • enhance the diversity of our asset base by continuously evaluating opportunities in different geographic regions of the U.S., Canada, and Europe; and • manage our leverage, which we expect will include strategic or opportunistic dispositions.
On a long-term basis, we seek to: • generate stable and consistent cash flows by acquiring properties, or entering into new leases, with long lease terms; • acquire properties utilizing a well-defined investment strategy and rigorous underwriting process to identify and select high-quality net lease investment opportunities; • lease properties to tenants with logistical and local advantages, strong operating performance, strong business financials, financial visibility, and corporate-level profitability; • enter into new leases with contractual rent escalations or inflation adjustments included in the lease terms; and • enhance the diversity of our asset base by continuously evaluating opportunities in different geographic regions of the U.S., Canada, and Europe.
In addition, as of December 31, 2023, our portfolio was comprised of 32% Industrial & Distribution properties, 27% Multi-Tenant retail properties, 21% Single-Tenant Retail properties and 20% Office properties. These represent our four reportable segments and the percentages are calculated using annualized straight-line rent converted from local currency into the U.S. Dollar (“USD”) as of December 31, 2023.
In addition, as of December 31, 2024, our portfolio was comprised of 34% Industrial & Distribution properties, 28% Multi-Tenant retail properties, 21% Single-Tenant Retail properties and 17% Office properties. These represent our four reportable segments and the percentages are calculated using annualized straight-line rent converted from local currency into the U.S. Dollar (“USD”) as of December 31, 2024.
We compete for tenants in all of our markets based on various factors that include location, rental rates, security, suitability of the property’s design for a tenant’s needs and the manner in which the property is operated and marketed.
Competition The commercial real estate market is highly competitive. We compete for tenants in all of our markets based on various factors that include location, rental rates, security, suitability of the property’s design for a tenant’s needs and the manner in which the property is operated and marketed.
For additional details on our acquisition of RTL and the internalization of our advisory and property management services, see N o te 1 — Organization, Note 3 — The Mergers and N ote 12 — Related Party Transactions to our consolidated financial statements included in this Annual Report on Form 10-K.
For additional information on the acquisition of RTL and the internalization of our advisory and property management services and RTL’s advisory and property management functions, see Note 3 — The Mergers and N ote 12 — Related Party Transactions to our consolidated financial statements included in this Annual Report on Form 10-K.
We may also originate or acquire first mortgage loans, mezzanine loans, preferred equity or securitized loans (secured by real estate) but do not currently own any of these asset types. We own assets located in eleven different countries. As of December 31, 2023, we leased space to 803 different tenants doing business across 94 different industries.
We may also originate or acquire first mortgage loans, mezzanine loans, preferred equity or securitized loans (secured by real estate) but do not currently own any of these asset types. We own assets located in ten countries and territories. As of December 31, 2024, we leased space to 705 different tenants doing business across 90 different industries.
Ratings information is as of December 31, 2023. As of December 31, 2023, our portfolio had a weighted-average remaining lease term of 6.8 years (based on square feet as of the last day of the applicable quarter), as compared to 8.0 years as of December 31, 2022.
As of December 31, 2024, our portfolio had a weighted-average remaining lease term of 6.2 years (based on square feet as of the last day of the applicable quarter), as compared to 6.8 years as of December 31, 2023.
As of December 31, 2023, we owned 1,296 properties consisting of 66.8 million rentable square feet, which were 96% leased, with a weighted-average remaining lease term of 6.8 years.
As of December 31, 2024, we owned 1,121 properties consisting of 60.7 million rentable square feet, which were 97% leased, with a weighted-average remaining lease term of 6.2 years.
A total of 57.6% of our rental income on an annualized straight-line basis for leases in place as of December 31, 2023 was derived from Investment Grade rated tenants, comprised of 33.4% leased to tenants with an actual investment grade rating 4 Table of Contents and 24.2% leased to tenants with an implied investment grade rating.
Ratings information is as of December 31, 2024. A total of 60.5% of our rental income on an annualized straight-line basis for leases in place as of December 31, 2024 was derived from Investment Grade rated tenants, comprised of 31.4% leased to tenants with an actual investment grade rating and 29.1% leased to tenants with an implied investment grade rating.
Our single-tenant properties and our multi-tenant anchor spaces are leased to primarily “Investment Grade” rated tenants in well established markets in the U.S. and Europe.
We continuously monitor improving or deteriorating credit quality for asset management opportunities which we review in-house using Moody’s Analytics. Our single-tenant properties and our multi-tenant anchor spaces are leased to primarily “Investment Grade” rated tenants in well established markets in the U.S. and Europe.
For additional details on the internalization of our advisory and property management services, see Note 1 — Organization, Note 3 — The Mergers and N ote 12 — Related Party Transactions to our consolidated financial statements included in this Annual Report on Form 10-K.
The Acquisition of The Necessity Retail REIT and the Internalization As noted above, on September 12, 2023 (the “Acquisition Date”), the REIT Merger and the Internalization Merger (both as defined in Note 3 — The Mergers to our consolidated financial statements included in this Annual Report on Form 10-K) were consummated (collectively, the “Mergers”).
Over the short term, we are focused on managing our leverage, which we expect will include strategic or opportunistic dispositions. We continuously monitor improving or deteriorating credit quality for asset management opportunities which we review in-house using Moody’s Analytics.
Over the short term, we remain focused on managing our leverage, which we expect will include strategic or opportunistic dispositions. Over the course of calendar year 2024 we closed transactions for the sale of an aggregate of approximately $835.0 million of assets under our 2024 strategic disposition initiative.
Removed
Even if we qualify for taxation as a REIT, we may be subject to certain state, and local taxes on our income and properties, and federal income and excise taxes on our undistributed income.
Added
See Note 3 — The Mergers to our consolidated financial statements included in this Annual Report on Form 10-K for additional information. Investment Strategy Our current strategic focus has been on reducing our leverage through select dispositions, prioritizing non-core assets and opportunistic sales.
Removed
Employees and Human Capital Resources As of December 31, 2023, we had 77 employees located across the United States (73 employees) and Europe (four employees). As of December 31, 2022, we did not have any employees except for one person located in Europe that we directly employed to provide certain tax services.
Added
Employees and Human Capital Resources As of December 31, 2024, we had 73 employees located across the United States (69 employees) and Europe (four employees). None of our employees is represented by a labor union or covered by a collective bargaining agreement. We believe we enjoy good relationships with our employees.
Removed
Prior to the internalization of our advisory and property management services on September 12, 2023, we had retained the former Advisor to manage our affairs on a day-to-day basis and our properties were managed and leased to third parties by the Property Manager.
Added
Our human capital resources objectives center around employee engagement, fostering our culture, and leadership development in order to attract and retain talented and well-qualified employees. Our compensation program, including competitive salaries and other benefits, are designed to attract, hire, retain and motivate highly qualified employees and executives.
Removed
During that time, the employees of the former Advisor, Property Manager and their respective affiliates performed a full range of services for us, including acquisitions, property management, accounting, legal, asset management, investor relations and all general administrative services.
Added
We strive to recognize and reward noteworthy performance, evaluated through periodic reviews with each employee. We also offer training and development opportunities for our employees. In 2024, we offered training and development for our employees, which included anti-harassment training, cybersecurity training, and site manager training.
Removed
The employees of the former Advisor, Property Manager and their respective affiliates were also eligible to participate in our stock option plan and our employee and director incentive restricted share plan, the 2021 Omnibus Incentive Compensation Plan of Global Net Lease, Inc. (the “Individual Plan”).
Removed
We depended on the former Advisor and the Property Manager for services that were essential to us.
Removed
As noted above, we internalized our advisory and property management services and the advisory and property management functions of RTL on September 12, 2023, resulting in the termination or assumption of arrangements with the former Advisor and Property Manager (and the advisor and property manager of RTL) and the hiring of our own dedicated workforce.
Removed
As a result, we no longer incur fees from contracts with those parties which were recorded in operating fees to related parties in our consolidated statement of operations. Instead, we now incur and will continue to incur costs for employee compensation, which are included in general and administrative expenses in our consolidated statement of operations.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeSummary Risk Factors • We may be unable to integrate the operations of RTL and the other entities we acquired in the Mergers successfully and may not realize the anticipated synergies and other benefits of the Mergers or do so within the anticipated time frame. • We may be unable to acquire or dispose of properties on advantageous terms or our property acquisitions may not perform as we expect. • Our ability to grow depends on our ability to access additional debt or equity financing on attractive terms, and there can be no assurance we will be able to so on favorable terms or at all. • Certain of the agreements governing our indebtedness may limit our ability to pay dividends on our common stock, $0.01 par value per share (“Common Stock”), our 7.25% Series A Cumulative Redeemable Preferred Stock, $0.01 par value per share (“Series A Preferred Stock”), our 6.875% Series B Cumulative Redeemable Perpetual Preferred Stock, $0.01 par value per share (“Series B Preferred Stock”), our 7.50% Series D Cumulative Redeemable Perpetual Preferred Stock, $0.01 par value per share (“Series D Preferred Stock”), our 7.375% Series E Cumulative Redeemable Perpetual Preferred Stock, par value $0.01 (“Series E Preferred Stock”, together with the Series A Preferred Stock, the Series B Preferred Stock and the Series D Preferred Stock, the “Preferred Stock”), or any other equity securities we may issue. • If we are not able to generate sufficient cash from operations, we may have to reduce the amount of dividends we pay or identify other financing sources. • Funding dividends from other sources such as borrowings, asset sales or equity issuances limits the amount we can use for property acquisitions, investments and other corporate purposes. • Market and economic challenges experienced by the U.S. and global economies may adversely impact our operating results and financial condition. • We are subject to risks associated with our international investments, including compliance with and changes in foreign laws and fluctuations in foreign currency exchange rates. • Inflation and continuing increases in the inflation rate will have an adverse effect on our investments and results of operations. • We are subject to risks associated with a pandemic, epidemic or outbreak of a contagious disease, including negative impacts on our tenants and their respective businesses. • We depend on tenants for our rental revenue and, accordingly, our rental revenue depends upon the success and economic viability of our tenants.
Biggest changeSummary Risk Factors • We may be unable to enter into contracts for and complete property acquisitions or dispositions on advantageous terms and our property acquisitions may not perform as we expect. • Our ability to grow depends on our ability to access additional debt or equity financing on attractive terms, and there can be no assurance we will be able to so on favorable terms or at all. • Certain of the agreements governing our indebtedness may limit our ability to pay dividends on our common stock, $0.01 par value per share (“Common Stock”), our 7.25% Series A Cumulative Redeemable Preferred Stock, $0.01 par value per share (“Series A Preferred Stock”), our 6.875% Series B Cumulative Redeemable Perpetual Preferred Stock, $0.01 par value per share (“Series B Preferred Stock”), our 7.50% Series D Cumulative Redeemable Perpetual Preferred Stock, $0.01 par value per share (“Series D Preferred Stock”), our 7.375% Series E Cumulative Redeemable Perpetual Preferred Stock, par value $0.01 (“Series E Preferred Stock”, together with the Series A Preferred Stock, the Series B Preferred Stock and the Series D Preferred Stock, the “Preferred Stock”), or any other equity securities we may issue. • If we are not able to generate sufficient cash from operations, we may have to reduce the amount of dividends we pay or identify other financing sources. • Market and economic challenges experienced by the U.S. and global economies may adversely impact our operating results and financial condition. • We are subject to risks associated with our international investments, including compliance with and changes in foreign laws and fluctuations in foreign currency exchange rates. • Inflation and continuing increases in the inflation rate will have an adverse effect on our investments and results of operations. • We have substantial indebtedness and we may incur significant additional indebtedness and other liabilities.
Unless exempted by our board of directors, for so long as we qualify as a REIT, our charter prohibits, among other limitations on ownership and transfer of shares of our stock, any person from beneficially or constructively owning (applying certain attribution rules under the Code) more than 8.8% in value of the aggregate outstanding shares of our stock and more than 8.8% (in value or in number of shares, whichever is more restrictive) of any class or series of the outstanding shares of our stock.
Unless exempted by our Board, for so long as we qualify as a REIT, our charter prohibits, among other limitations on ownership and transfer of shares of our stock, any person from beneficially or constructively owning (applying certain attribution rules under the Code) more than 8.8% in value of the aggregate outstanding shares of our stock and more than 8.8% (in value or in number of shares, whichever is more restrictive) of any class or series of the outstanding shares of our stock.
As a result, we may be required to liquidate assets from our portfolio or not make otherwise attractive investments in order to maintain our qualification as a REIT. The ability of our board of directors to revoke our REIT qualification without stockholder approval may subject us to U.S. federal income tax and reduce distributions to our stockholders.
As a result, we may be required to liquidate assets from our portfolio or not make otherwise attractive investments in order to maintain our qualification as a REIT. The ability of our Board to revoke our REIT qualification without stockholder approval may subject us to U.S. federal income tax and reduce distributions to our stockholders.
However, we may terminate our REIT qualification inadvertently, or if our board of directors determines that doing so is in our best interests. Our qualification as a REIT depends upon our satisfaction of certain asset, income, organizational, distribution, stockholder ownership and other requirements on a continuing basis.
However, we may terminate our REIT qualification inadvertently, or if our Board determines that doing so is in our best interests. Our qualification as a REIT depends upon our satisfaction of certain asset, income, organizational, distribution, stockholder ownership and other requirements on a continuing basis.
Further, pursuing our investment objective exposes us to numerous risks, including: • competition from other real estate investors with significant capital resources; • we may acquire properties that are not accretive or dispose of properties at prices less than we originally contemplated; • we may not successfully integrate, manage and lease the properties we acquire to meet our expectations or market conditions may result in future vacancies and lower-than expected rental rates; • we may be unable to obtain debt financing or raise equity required to fund acquisitions on favorable terms, or at all; • we may need to spend more than budgeted amounts to make necessary improvements or renovations to acquired properties; • agreements to acquire properties are typically subject to customary conditions to closing that may or may not be completed, and we may spend significant time and money on potential acquisitions that we do not consummate; • the process of acquiring or pursuing the acquisition of a new property may divert the attention of our management team from our existing business operations; and • we may acquire properties without recourse, or with only limited recourse, for liabilities, whether known or unknown.
Pursuing our longer term investment objective exposes us to numerous risks, including: • competition from other real estate investors with significant capital resources; • we may acquire properties that are not accretive or dispose of properties at prices less than we originally contemplated; • we may not successfully integrate, manage and lease the properties we acquire to meet our expectations or market conditions may result in future vacancies and lower-than expected rental rates; • we may be unable to obtain debt financing or raise equity required to fund acquisitions on favorable terms, or at all; • we may need to spend more than budgeted amounts to make necessary improvements or renovations to acquired properties; • agreements to acquire properties are typically subject to customary conditions to closing that may or may not be completed, and we may spend significant time and money on potential acquisitions that we do not consummate; • the process of acquiring or pursuing the acquisition of a new property may divert the attention of our management team from our existing business operations; and • we may acquire properties without recourse, or with only limited recourse, for liabilities, whether known or unknown.
Furthermore, a security breach or other significant disruption involving our information technology networks and related systems could: • result in misstated financial reports, violations of loan covenants, missed reporting or permitting deadlines; • affect our ability to properly monitor our compliance with the rules and regulations regarding our qualification as a REIT; 18 Table of Contents • result in the unauthorized access to, and destruction, loss, theft, misappropriation or release of, proprietary, confidential, sensitive or otherwise valuable information (including information about tenants), which others could use to compete against us or for disruptive, destructive or otherwise harmful purposes and outcomes; • result in our inability to maintain the building systems relied upon by our tenants for the efficient use of their leased space; • require significant management attention and resources to remedy any damages that result; • subject us to claims for breach of contract, damages, credits, penalties or termination of leases or other agreements; or • adversely impact our reputation among our tenants and investors generally.
Furthermore, a security breach or other significant disruption involving our information technology networks and related systems could: • result in misstated financial reports, violations of loan covenants, missed reporting or permitting deadlines; • affect our ability to properly monitor our compliance with the rules and regulations regarding our qualification as a REIT; • result in the unauthorized access to, and destruction, loss, theft, misappropriation or release of, proprietary, confidential, sensitive or otherwise valuable information (including information about tenants), which others could use to compete against us or for disruptive, destructive or otherwise harmful purposes and outcomes; • result in our inability to maintain the building systems relied upon by our tenants for the efficient use of their leased space; • require significant management attention and resources to remedy any damages that result; • subject us to claims for breach of contract, damages, credits, penalties or termination of leases or other agreements; or • adversely impact our reputation among our tenants and investors generally.
Decisions regarding the frequency and amount of any future dividends we pay on our Common Stock will remain at all times entirely at the discretion of our board of directors, which reserves the right to change our dividend policy at any time and for any reason.
Decisions regarding the frequency and amount of any future dividends we pay on our Common Stock will remain at all times entirely at the discretion of our Board, which reserves the right to change our dividend policy at any time and for any reason.
As a result, our charter provides our board of directors with the power, under certain circumstances, to revoke or otherwise terminate our REIT election and cause us to be taxed as a non-REIT “C corporation”, without the vote of our stockholders.
As a result, our charter provides our Board with the power, under certain circumstances, to revoke or otherwise terminate our REIT election and cause us to be taxed as a non-REIT “C corporation”, without the vote of our stockholders.
Our charter provides that our board of directors may revoke or otherwise terminate our REIT election, without the approval of our stockholders, if it determines that it is no longer in our best interests to continue to qualify as a REIT.
Our charter provides that our Board may revoke or otherwise terminate our REIT election, without the approval of our stockholders, if it determines that it is no longer in our best interests to continue to qualify as a REIT.
Our board of directors may not grant an exemption from these restrictions to any proposed transferee whose ownership in excess of the 8.8% ownership limit would result in the termination of our qualification as a REIT.
Our Board may not grant an exemption from these restrictions to any proposed transferee whose ownership in excess of the 8.8% ownership limit would result in the termination of our qualification as a REIT.
In addition, as a REIT, our ability to sell properties that have been held for less than two years is limited as any gain recognized on the sale or other disposition of such property could be subject to the 100% prohibited transaction tax, as discussed in more detail below.
Furthermore, as a REIT, our ability to sell properties that have been held for less than two years is limited as any gain recognized on the sale or other disposition of such property could be subject to the 100% prohibited transaction tax, as discussed in more detail below.
Such a recharacterization of an underlying property owner could also threaten our ability to maintain our REIT qualification. We may choose to make distributions in shares of our Common Stock, in which case our stockholders may be required to pay U.S. federal income taxes in excess of the cash portion of distributions they receive.
Such a recharacterization of an underlying property owner could also threaten our ability to maintain our REIT qualification. We may choose to make distributions in a combination of cash and shares of our Common Stock, in which case our stockholders may be required to pay U.S. federal income taxes in excess of the cash portion of such distributions they receive.
These restrictions on transferability and ownership will not apply, however, if our board of directors determines that it is no longer in our best interests to continue to qualify as a REIT or that compliance with the restrictions is no longer required in order for us to continue to so qualify as a REIT.
These restrictions on transferability and ownership will not apply, however, if our Board determines that it is no longer in our best interests to continue to qualify as a REIT or that compliance with the restrictions is no longer required in order for us to continue to so qualify as a REIT.
Foreign exchange rates may be influenced by many factors, including: • changing supply and demand for a particular currency; 10 Table of Contents • the prevailing interest rates in one country as compared to another country; • monetary policies of governments (including exchange control programs, restrictions on local exchanges or markets and limitations on foreign investment in a country or an investment by residents of a country in other countries); • trade restrictions and other factors that could lead to changes in balances of payments and trade; and • currency devaluations and revaluations.
Foreign exchange rates may be influenced by many factors, including: • changing supply and demand for a particular currency; • the prevailing interest rates in one country as compared to another country; • monetary policies of governments (including exchange control programs, restrictions on local exchanges or markets and limitations on foreign investment in a country or an investment by residents of a country in other countries); • trade restrictions and other factors that could lead to changes in balances of payments and trade; and • currency devaluations and revaluations.
Based on the percentage of annualized rental income on a straight-line basis as of December 31, 2023, 20% of our properties were located in Europe, primarily in the United Kingdom, The Netherlands, Finland, France, Germany, and the Channel Islands, and 80% of our properties were located in the U.S. and Canada.
Based on the percentage of annualized rental income on a straight-line basis as of December 31, 2024, 20% of our properties were located in Europe, primarily in the United Kingdom, The Netherlands, Finland, France, Germany, and the Channel Islands, and 80% of our properties were located in the U.S. and Canada.
Although we intend to make distributions sufficient to meet the annual distribution requirements and to avoid U.S. federal income and excise taxes on our earnings while we qualify as a REIT, it is possible that we might not always be able to do so. Recharacterization of sale-leaseback transactions may cause us to lose our REIT status.
Although we intend to make distributions sufficient to meet the annual distribution requirements and to avoid U.S. federal income and excise taxes on our earnings while we qualify as a REIT, it is possible that we might not always be able to do so. 29 Table of Contents Recharacterization of sale-leaseback transactions may cause us to lose our REIT status.
However, stockholders that are tax-exempt, such as charities or qualified pension plans, would 26 Table of Contents have no benefit from their deemed payment of such tax liability unless they file U.S. federal income tax returns and seek a refund of such tax. We also will be subject to corporate tax on any undistributed REIT taxable income.
However, stockholders that are tax-exempt, such as charities or qualified pension plans, would have no benefit from their deemed payment of such tax liability unless they file U.S. federal income tax returns and seek a refund of such tax. We also will be subject to corporate tax on any undistributed REIT taxable income.
Capital gain distributions attributable to sales or exchanges of “U.S. real property interests” (“USRPIs”) generally will be taxed to a non-U.S. stockholder (other than a “qualified foreign pension fund,” certain entities wholly-owned by a “qualified foreign pension fund,” and certain foreign publicly-traded entities) as if such gain were effectively connected with a U.S. trade or business.
Capital gain 32 Table of Contents distributions attributable to sales or exchanges of “U.S. real property interests” (“USRPIs”) generally will be taxed to a non-U.S. stockholder (other than a “qualified foreign pension fund,” certain entities wholly-owned by a “qualified foreign pension fund,” and certain foreign publicly-traded entities) as if such gain were effectively connected with a U.S. trade or business.
Our access to capital depends, in part, on: • general market conditions; • the market’s perception of our assets and growth potential; • our current and expected debt levels; • our current and expected future earnings, cash flow and dividend payments; 8 Table of Contents • market price per share of our Common Stock and Preferred Stock, and any other class or series of equity security we may seek to issue.
Our access to capital depends, in part, on: • general market conditions; • the market’s perception of our assets and growth potential; • our current and expected debt levels; • our current and expected future earnings, cash flow and dividend payments; • market price per share of our Common Stock and Preferred Stock, and any other class or series of equity security we may seek to issue.
Our ability to satisfy the asset tests depends on our analysis of the characterization and fair market values of our assets, some of which are not susceptible to a precise determination, and for which we will not obtain independent appraisals.
Our ability to satisfy the asset tests depends on our analysis of the characterization and fair market values of our assets, some of which are not susceptible to a precise determination, and for which we may not obtain independent appraisals.
If any property is not fully occupied or if rents are being paid in an amount that is insufficient to cover operating expenses, we could be required to fund these expenses. Property expense may increase because of changes in 15 Table of Contents tax rates, utility costs, operating expenses, insurance costs, repairs and maintenance and administrative expenses.
If any property is not fully occupied or if rents are being paid in an amount that is insufficient to cover operating expenses, we could be required to fund these expenses. Property expense may increase because of changes in tax rates, utility costs, operating expenses, insurance costs, repairs and maintenance and administrative expenses.
Amounts paid to our stockholders that exceed our current and accumulated earnings and profits and a stockholder’s tax basis in shares of our stock generally will be taxable as capital gain. 28 Table of Contents Complying with REIT requirements may limit our ability to hedge our liabilities effectively and may cause us to incur tax liabilities.
Amounts paid to our stockholders that exceed our current and accumulated earnings and profits and a stockholder’s tax basis in shares of our stock generally will be taxable as capital gain. Complying with REIT requirements may limit our ability to hedge our liabilities effectively and may cause us to incur tax liabilities.
Our debt agreements, including each of the indentures governing the Senior Notes and the Credit Agreement governing the Revolving Credit Facility, contain various covenants that limit our ability and the ability of our subsidiaries to engage in various transactions including, as applicable: • incurring or guaranteeing additional secured and unsecured debt; • creating liens on our assets; • making investments or other restricted payments; • entering into tran sactions with affiliates; • creating restrictions on the ability of our subsidiaries to pay dividends or other amounts to us; • selling assets; • making optional prepayments of indebtedness during a payment default or an event of default under the Revolving Credit Facility; • effecting a consolidation or merger or selling all or substantially all of our assets; and 21 Table of Contents • amending certain material agreements, including material leases and debt agreements.
Our debt agreements, including each of the indentures governing the Senior Notes and the Credit Agreement governing the Revolving Credit Facility, contain various covenants that limit our ability and the ability of our subsidiaries to engage in various transactions including, as applicable: • incurring or guaranteeing additional secured and unsecured debt; • creating liens on our assets; • making investments or other restricted payments (including, without limitation, share repurchases); • entering into tran sactions with affiliates; • creating restrictions on the ability of our subsidiaries to pay dividends or other amounts to us; 22 Table of Contents • selling assets; • making optional prepayments of indebtedness during a payment default or an event of default under the Revolving Credit Facility; • effecting a consolidation or merger or selling all or substantially all of our assets; and • amending certain material agreements, including material leases and debt agreements.
Noncorporate stockholders are entitled to a 20% deduction with respect to these ordinary REIT dividends which would, if allowed in full, result in a maximum effective U.S. federal income tax rate on these ordinary REIT dividends of 29.6% (or 33.4% including the 3.8% surtax on net investment income); however, the 20% deduction will end after December 31, 2025.
Noncorporate stockholders are entitled to a 20% deduction with respect to these ordinary REIT dividends which would, if allowed in full, result in a maximum effective U.S. federal income tax rate on these ordinary REIT dividends of 29.6% (or 33.4% including the 3.8% surtax on net investment income); however, the 20% deduction will end after December 31, 2025, unless the law is extended.
Accordingly, U.S. stockholders receiving a distribution of shares of our Common Stock may be required to sell shares received in such distribution or may be required to sell other stock or assets owned by them, at a time that may be disadvantageous, in order to satisfy any tax imposed on such distribution.
Accordingly, U.S. stockholders receiving a distribution of a combination of cash and shares of our Common Stock may be required to sell shares received in such distribution or may be required to sell other stock or assets owned by them, at a time that may be disadvantageous, in order to satisfy any tax imposed on such distribution.
The remainder of our investment in securities (other than securities that qualify for the 75% asset test and securities of qualified REIT subsidiaries and TRSs) generally cannot exceed 10% of the outstanding voting securities of any one issuer, 10% of the total value of the outstanding securities of any one issuer, or 5% of the value of our assets as to any one issuer.
The remainder of our investment in securities (other than securities that qualify for the 75% asset test and securities of qualified REIT subsidiaries and TRSs) generally cannot exceed 10% of the outstanding voting securities of any one issuer, 10% of the 31 Table of Contents total value of the outstanding securities of any one issuer, or 5% of the value of our assets as to any one issuer.
Any positive impact to revenue from tenants in prior years from a weaker USD may not continue in the future. Changes to exchange rates have affected and may continue to affect the book value of our assets and the amount of stockholders’ equity. Changes in foreign currency exchange rates may impact the value of our assets.
Any positive impact to revenue from tenants in prior years from a weaker USD 10 Table of Contents may not continue in the future. Changes to exchange rates have affected and may continue to affect the book value of our assets and the amount of stockholders’ equity. Changes in foreign currency exchange rates may impact the value of our assets.
Environmental laws and regulations may impose joint and several liability on tenants, owners or operators for the costs to investigate or remediate contaminated properties, regardless of fault or whether the acts causing the contamination were legal. This liability could be substantial.
Environmental laws and regulations may impose joint and several liability on tenants, 16 Table of Contents owners or operators for the costs to investigate or remediate contaminated properties, regardless of fault or whether the acts causing the contamination were legal. This liability could be substantial.
Therefore, in the event of our bankruptcy, liquidation or reorganization, our assets and those of our OPs and their subsidiaries will be available to satisfy the claims of our creditors or to pay dividends to our stockholders only after all the liabilities and obligations of our OPs and their subsidiaries have been paid in full.
Therefore, in the event of our bankruptcy, liquidation or reorganization, our assets and those of our OPs and their 24 Table of Contents subsidiaries will be available to satisfy the claims of our creditors or to pay dividends to our stockholders only after all the liabilities and obligations of our OPs and their subsidiaries have been paid in full.
Alternatively, if a court were to find these provisions of our bylaws inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving these matters in other jurisdictions.
Alternatively, if a court were 26 Table of Contents to find these provisions of our bylaws inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving these matters in other jurisdictions.
Control shares do not include shares the acquiring person is then entitled to vote as a result of having previously obtained stockholder approval or shares acquired directly from the corporation. A “control share 25 Table of Contents acquisition” means the acquisition of issued and outstanding control shares.
Control shares do not include shares the acquiring person is then entitled to vote as a result of having previously obtained stockholder approval or shares acquired directly from the corporation. A “control share acquisition” means the acquisition of issued and outstanding control shares.
Any lowering of the ratings likely would make it more difficult or more expensive for us to obtain additional debt financing. Risks Related to Our Corporate Structure, Common Stock and Preferred Stock The trading prices of our Common Stock and Preferred Stock may fluctuate significantly.
Any lowering of the ratings likely would make it more difficult or more expensive for us to obtain additional debt financing. 23 Table of Contents Risks Related to Our Corporate Structure, Common Stock and Preferred Stock The trading prices of our Common Stock and Preferred Stock may fluctuate significantly.
In addition, approximately 20% of our annualized straight-line rent (calculated as of December 31, 2023) is attributable to our Office segment. In recent years, the market for office space has seen a shift in the use of space due to the widespread practices of telecommuting, videoconferencing, and renting shared workspaces, which accelerated at the onset of the COVID-19 pandemic.
In addition, approximately 17% of our annualized straight-line rent (calculated as of December 31, 2024) is attributable to our Office segment. In recent years, the market for office space has seen a shift in the use of space due to the widespread practices of telecommuting, videoconferencing, and renting shared workspaces, which accelerated at the onset of the COVID-19 pandemic.
Among the factors that could affect these trading prices are: • our financial condition, including the level of our indebtedness and performance; • our ability to grow through property acquisitions, the terms, and pace of any acquisitions, we may make and the availability and terms of financing for those acquisitions; • our ability to integrate the operations of RTL and the other entities we acquired in the Mergers successfully; • the financial condition of our tenants, including tenant bankruptcies or defaults; 22 Table of Contents • actual or anticipated quarterly fluctuations in our operating results and financial condition; • the amount and frequency of dividends that we pay; • additional sales of equity securities, including our Common Stock or Preferred Stock, or the perception that additional sales may occur; • the reputation of REITs and real estate investments generally and the attractiveness of REIT equity securities in comparison to other equity securities, and fixed income debt securities; • uncertainty and volatility in the equity and credit markets; • increases in interest rates and fluctuations in exchange rates; • inflation and continuing increases in the inflation rate; • changes in revenue or earnings estimates, if any, or publication of research reports and recommendations by financial analysts or actions taken by rating agencies with respect to our securities or those of other REITs; • failure to meet analyst revenue or earnings estimates; • strategic actions by us or our competitors, such as acquisitions or restructurings; • the extent of investment in our securities by institutional investors; • the extent of short-selling of our securities; • general financial and economic market conditions and, in particular, developments related to market conditions for REITs and other real estate related companies; • failure to maintain our REIT status; • changes in tax laws; • domestic and international economic factors unrelated to our performance; and • all other risk factors addressed elsewhere in this Annual Report on Form 10-K for the year ended December 31, 2023.
Among the factors that could affect these trading prices are: • our financial condition, including the level of our indebtedness and performance; • our ability to grow through property acquisitions, the terms, and pace of any acquisitions or dispositions we may make and the availability and terms of financing for those acquisitions; • the financial condition of our tenants, including tenant bankruptcies or defaults; • actual or anticipated quarterly fluctuations in our operating results and financial condition; • the amount and frequency of dividends that we pay; • additional sales of equity securities, including our Common Stock or Preferred Stock, or the perception that additional sales may occur; • the reputation of REITs and real estate investments generally and the attractiveness of REIT equity securities in comparison to other equity securities, and fixed income debt securities; • uncertainty and volatility in the equity and credit markets; • increases in interest rates and fluctuations in exchange rates; • inflation and continuing increases in the inflation rate; • changes in revenue or earnings estimates, if any, or publication of research reports and recommendations by financial analysts or actions taken by rating agencies with respect to our securities or those of other REITs; • failure to meet analyst revenue or earnings estimates; • strategic actions by us or our competitors, such as acquisitions or restructurings; • the extent of investment in our securities by institutional investors; • the extent of short-selling of our securities; • general financial and economic market conditions and, in particular, developments related to market conditions for REITs and other real estate related companies; • failure to maintain our REIT status; • changes in tax laws; • domestic and international economic factors unrelated to our performance; and • all other risk factors addressed elsewhere in this Annual Report on Form 10-K for the year ended December 31, 2024.
Our board of directors has duties to us and could only cause such changes in our tax treatment if it determines that such changes are in our best interests. 29 Table of Contents The share ownership restrictions for REITs and the 8.8% share ownership limit in our charter may inhibit market activity in shares of our stock and restrict our business combination opportunities.
Our Board has duties to us and could only cause such changes in our tax treatment if it determines that such changes are in our best interests. The share ownership restrictions for REITs and the 8.8% share ownership limit in our charter may inhibit market activity in shares of our stock and restrict our business combination opportunities.
Based on annualized rental income on a straight-line basis as of December 31, 2023, 42% of our tenants were not evaluated or ranked by credit rating agencies, or were ranked below “investment grade,” which, for our purposes, includes both actual investment grade ratings of the tenant and “implied investment grade rating,” which includes ratings of the tenant’s parent (regardless of whether the parent has guaranteed the tenant’s obligation under the lease) or lease guarantor.
Based on annualized rental income on a straight-line basis as of December 31, 2024, approximately 40% of our tenants were not evaluated or ranked by credit rating agencies, or were ranked below “investment grade,” which, for our purposes, includes both actual investment grade ratings of the tenant and “implied investment grade rating,” which includes ratings of the tenant’s parent (regardless of whether the parent has guaranteed the tenant’s obligation under the lease) or lease guarantor.
There is no assurance that well will be able to refinance any of our indebtedness as it comes due, especially indebtedness secured by mortgages, on favorable terms, or at all.
There is no assurance that well will be able to refinance any of our indebtedness as it comes due, especially indebtedness 21 Table of Contents secured by mortgages, on favorable terms, or at all.
Additionally, tenants are involved in mergers or acquisitions with or by third parties or undertake other restructurings may choose to consolidate, downsize or relocate operations, resulting in terminating or not 13 Table of Contents renewing their leases with us or vacating the leases premises.
Additionally, tenants are involved in mergers or acquisitions with or by third parties or undertake other restructurings may choose to consolidate, downsize or relocate operations, resulting in terminating or not renewing their leases with us or vacating the leases premises.
Increases in interest rates or changes in underwriting standards imposed by lenders may require us to use either cash on hand or raise additional equity to repay or 20 Table of Contents refinance any indebtedness or for that matter to incur new indebtedness.
Increases in interest rates or changes in underwriting standards imposed by lenders may require us to use either cash on hand or raise additional equity to repay or refinance any indebtedness or for that matter to incur new indebtedness.
Our charter authorizes us to issue up to 280 million shares of stock, consisting of 250 million shares of common stock, par value $0.01 per share and 40 million shares of preferred stock, par value $0.01 per share. As of December 31, 2023, we had 24 million shares of Preferred Stock issued and outstanding.
Our charter authorizes us to issue up to 290 million shares of stock, consisting of 250 million shares of common stock, par value $0.01 per share and 40 million shares of preferred stock, par value $0.01 per share. As of December 31, 2024, we had 24 million shares of Preferred Stock issued and outstanding.
As of December 31, 2023, the following countries and states accounted for 5% or more of our consolidated annualized rental income on a straight-line basis: Country December 31, 2023 European Countries: United Kingdom 11% Other European Countries 9% Total European Countries 20% United States and Canada: Michigan 8% Texas 6% Ohio 6% Georgia 6% Other States and Canada 54% Total United States and Canada 80% Total 100% Likewise, a high concentration of our tenants in a similar industry magnifies the effects of downturns in that industry and would have a disproportionate adverse effect on the value of investments and results of operations.
As of December 31, 2024, the following countries and states accounted for 5% or more of our consolidated annualized rental income on a straight-line basis: Country December 31, 2024 European Countries: United Kingdom 10% Other European Countries 10% Total European Countries 20% United States and Canada: Michigan 9% Ohio 6% Texas 6% North Carolina 5% Other States and Canada 54% Total United States and Canada 80% Total 100% Likewise, a high concentration of our tenants in a similar industry magnifies the effects of downturns in that industry and would have a disproportionate adverse effect on the value of investments and results of operations.
The market for retail space has been and could be adversely affected by weaknesses in the national, regional and local economies, the adverse financial condition of anchored shopping centers and other large retailing companies, the ongoing consolidation in the retail and grocery sector, changes in consumer preferences and spending, excess amounts of retail space in a number of markets and competition for tenants in the markets, as well as the increasing use of the Internet by retailers and consumers.
The market for retail space has been and could be adversely affected by weaknesses in the national, regional and local economies, the adverse financial condition of anchored shopping centers and other large retailing companies, the ongoing consolidation in the retail and grocery sector, changes in consumer preferences and spending, excess amounts of retail space in a number of markets and competition for tenants in the markets, as well as the increasing use of the Internet by 12 Table of Contents retailers and consumers and adoption and use of mobile electronic devices by consumers.
As of December 31, 2023, the following industries had concentrations of properties accounting for 5.0% or more of our consolidated annualized rental income on a straight-line basis: Industry December 31, 2023 Financial Services 6% Auto Manufacturing 6% Healthcare 5% Discount Retail 5% Any adverse situation that disproportionately affects the industries listed above may have a magnified adverse effect on our portfolio.
As of December 31, 2024, the following industries had concentrations of properties accounting for 5.0% or more of our consolidated annualized rental income on a straight-line basis: 11 Table of Contents Industry December 31, 2024 Financial Services 7% Auto Manufacturing 6% Discount Retail 6% Specialty Retail 5% Healthcare 5% Any adverse situation that disproportionately affects the industries listed above may have a magnified adverse effect on our portfolio.
As of December 31, 2023 , we had $5.4 billion of total gross indebtedness outstanding, including $2.7 billion of secured indebtedness, $1.7 billion outstanding under the Revolving Credit Facility, and $1.0 billion of our Senior Notes. We had availability to borrow an additional $14.2 million, under our Revolving Credit Facility as of December 31, 2023 .
As of December 31, 2024 , we had $4.7 billion of total gross indebtedness outstanding, including $2.3 billion of secured indebtedness, $1.4 billion outstanding under the Revolving Credit Facility, and $1.0 billion of our Senior Notes. We had availability to borrow an additional $332.5 million, under our Revolving Credit Facility as of December 31, 2024 .
Revenues generated from properties or other real estate investments located in foreign countries are generally denominated in the local currency but reflected as USD on our consolidated financial statements. As of December 31, 2023, we had $2.7 billion ( $2.3 billion , £101.0 million and €191.5 million) of gross mortgage notes payable.
Revenues generated from properties or other real estate investments located in foreign countries are generally denominated in the local currency but reflected as USD on our consolidated financial statements. As of December 31, 2024, we had $2.3 billion ($2.2 billion and €74.0 million) of gross mortgage notes payable.
Subject to the approval rights of holders of our Preferred Stock regarding authorization or issuance of equity securities ranking senior to the Preferred Stock, our board of directors, without approval of our common stockholders, may amend our charter from time to time to increase or decrease the aggregate number of authorized shares of stock, or the number of authorized shares of any class or series of stock, or may classify or reclassify any unissued shares into the classes or series of stock without obtaining stockholder approval and establish the preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications or terms or conditions of redemption of the stock. 23 Table of Contents All of our authorized but unissued shares of stock may be issued in the discretion of our board of directors.
Subject to the approval rights of holders of our Preferred Stock regarding authorization or issuance of equity securities ranking senior to the Preferred Stock, our Board, without approval of our common stockholders, may amend our charter from time to time to increase or decrease the aggregate number of authorized shares of stock, or the number of authorized shares of any class or series of stock, or may classify or reclassify any unissued shares into the classes or series of stock without obtaining stockholder approval and establish the preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications or terms or conditions of redemption of the stock.
As of December 31, 2023, 22.0% of our annualized rental income on a straight-line basis was generated from leases that did not contain any rent escalation provisions, which impacts our ability to cover increased operating costs at properties with these leases.
As of December 31, 2024, approximately 19.5% of our annualized rental income on a straight-line basis was generated from leases that did not contain any rent escalation provisions, which impacts our ability to cover increased operating costs at properties with these leases.
If we are unable to repay or refinance any indebtedness secured by mortgages, we lose the mortgaged property in a foreclosure action. We have incurred, and may continue to incur, variable-rate debt. As of December 31, 2023 , a total of 20% of our indebtedness bore interest at variable rates which averaged 7.2%.
If we are unable to repay or refinance any indebtedness secured by mortgages, we lose the mortgaged property in a foreclosure action. We have incurred, and may continue to incur, variable-rate debt. As of December 31, 2024 , a total of 9% of our indebtedness bore interest at variable rates which averaged 6.0%.
These sources of funding may not be available on attractive terms or at all. If we cannot procure additional funding for capital improvements, the value of the applicable property or our ability to lease space at the applicable property on favorable terms could be adversely impacted. We may be unable to sell a property when we desire to do so.
These sources of funding may not be available on attractive terms or at all. If we cannot procure additional funding for capital improvements, the value of the applicable property or our ability to lease space at the applicable property on favorable terms could be adversely impacted.
Further, as of December 31, 2023, we had $1.7 billion ($1.0 billion, £261.0 million, €319.1 million and C$38.0 million) in outstanding debt under the Revolving Credit Facility. We may continue to borrow in foreign currencies when purchasing properties located outside the Unites States, including draws under our Revolving Credit Facility.
Further, as of December 31, 2024, we had $1.4 billion ($0.5 billion, £344.0 million, €422.1 million and C$38.0 million) in outstanding debt under the Revolving Credit Facility. We may continue to borrow in foreign currencies when purchasing properties located outside the Unites States, including draws under our Revolving Credit Facility.
Approximately 59.7% of our leases, based on straight line rent, are fixed-rate increase averaging 1.7%, 14.3% are based on the Consumer Price Index, subject to certain caps, 4.0% are based on other measures, and 22.0% do not contain any escalation provisions.
Approximately 61.1% of our leases, based on straight line rent, are fixed-rate increase averaging 1.7%, 14.8% are based on the Consumer Price Index, subject to certain caps, 4.6% are based on other measures, and 19.5% do not contain any escalation provisions.
COVID-19 has impacted, and new variants or other potential pandemics could continue to impact in-person commerce which has and may continue to impact the revenues generated by our tenants which may further impact their ability to pay their rent to us when due.
COVID-19 previously impacted, and a novel strain of COVID-19 or other potential pandemics could in the future impact, in-person commerce which has and may in the future impact the revenues generated by our tenants which may further impact their ability to pay their rent to us when due.
Our cash flows provided by operations were $143.7 million for the year ended December 31, 2023. During this period, we paid total dividends of $236.4 million, including payments to holders of our Common Stock, Preferred Stock and distributions to holders of LTIP Units.
Our cash flows provided by operations were $299.5 million for the year ended December 31, 2024. During this period, we paid total dividends of $316.3 million, including payments to holders of our Common Stock, Preferred Stock and distributions to holders of LTIP Units.
This also would result in our failing to qualify as a REIT, and we would become subject to a corporate-level tax on our income. This substantially would reduce our cash available to pay dividends and other distributions to our stockholders.
In such event this would reduce the amount of distributions that the OP could make to us. This also would result in our failing to qualify as a REIT, and we would become subject to a corporate-level tax on our income. This substantially would reduce our cash available to pay dividends and other distributions to our stockholders.
Certain of our properties are located in areas that may experience catastrophic weather and other natural events from time to time, including hurricanes or other severe weather, flooding, fires, snow or ice storms, windstorms or, earthquakes. These adverse weather and natural events could cause substantial damages or losses to our properties which could exceed our insurance coverage.
Damage from catastrophic weather and other natural events and climate change could result in losses to us. Certain of our properties are located in areas that may experience catastrophic weather and other natural events from time to time, including hurricanes or other severe weather, flooding, fires, snow or ice storms, windstorms or, earthquakes.
Our internal information technology networks and related systems are vulnerable to damage from any number of sources, including computer viruses, unauthorized access, energy blackouts, natural disasters, terrorism, war and telecommunication failures. Any system failure or accident that causes interruptions in our operations could result in a material disruption to our business.
Our business and operations could suffer if we experience system failures or cyber incidents or a deficiency in cybersecurity. Our internal information technology networks and related systems are vulnerable to damage from any number of sources, including computer viruses, unauthorized access, energy blackouts, natural disasters, terrorism, war and telecommunication failures.
Compliance with new or more stringent laws or regulations or stricter interpretation of existing laws may require material expenditures by us. Future laws, ordinances or regulations may impose material environmental liability.
Some of these laws and regulations have been amended to require compliance with new or more stringent standards as of future dates. Compliance with new or more stringent laws or regulations or stricter interpretation of existing laws may require material expenditures by us. Future laws, ordinances or regulations may impose material environmental liability.
Lock-out provisions may also prohibit us from reducing the outstanding indebtedness with respect to any properties, refinancing such indebtedness on a non-recourse basis at maturity, or increasing the amount of indebtedness with respect to such properties.
Certain mortgage loans we have entered into contain lock-out provisions prohibiting us from reducing the outstanding indebtedness with respect to any properties, refinancing such indebtedness on a non-recourse basis at maturity, or increasing the amount of indebtedness with respect to such properties.
If we fail to effectively hedge our currency exposure, or if we experience other losses related to our exposure to foreign currencies, our operating results could be negatively impacted and cash flows could be reduced.
If we fail to effectively hedge our currency exposure, or if we experience other losses related to our exposure to foreign currencies, our operating results could be negatively impacted and cash flows could be reduced. A major tenant default may have an adverse impact on our results of operations.
Because our decision to issue equity securities in any future offering will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of our future offerings. Future sales of Common Stock by certain selling stockholders affiliated with AR Global may adversely affect the market price of Common Stock.
Because our decision to issue equity securities in any future offering will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of our future offerings.
If we sell properties by providing financing to purchasers, we will be exposed to defaults by the purchasers. In some instances, we may sell our properties by providing financing to purchasers. If we provide financing to purchasers, we will bear the risk that the purchaser may default, which could negatively impact our cash flow.
If we provide financing to purchasers, we will bear the risk that the purchaser may default, which could negatively impact our cash flow.
Recently proposed regulations would apply special look-through rules to certain U.S. corporate shareholders in determining whether a REIT is domestically controlled. We believe, but there can be no assurance, that we will be a domestically-controlled qualified investment entity.
In order to determine indirect ownership, Treasury regulations apply a modified look-through rule to certain U.S. corporate shareholders in determining whether a REIT is domestically controlled. We believe, but there can be no assurance, that we are and will continue to be a domestically-controlled qualified investment entity.
For example, the interest rate on borrowings under the Revolving Credit Facility increased from 4.6% as of December 31, 2022 to 6.0% as of December 31, 2023 . The interest rate on any indebtedness we refinance will likely be higher than the rate on the maturing indebtedness.
The interest rate on borrowings under the Revolving Credit Facility was 5.7% and 6.0% as of December 31, 2024 and 2023, respectively . The interest rate on any indebtedness we refinance will likely be higher than the rate on the maturing indebtedness.
A corporation of which a TRS directly or indirectly owns more than 35% of the voting power or value of the stock will automatically be treated as a TRS.
A corporation of which a TRS directly or indirectly owns more than 35% of the voting power or value of the stock will automatically be treated as a TRS. Overall, no more than 20% of the gross value of a REIT’s assets may consist of stock or securities of one or more TRSs.
In order to satisfy this requirement, as much as 80% of the distribution may be in shares of our Common Stock. Taxable stockholders receiving such distributions will be required to include the full amount of such distributions as ordinary dividend income to the extent of our current or accumulated earnings and profits, as determined for U.S. federal income tax purposes.
Taxable stockholders receiving such distributions will be required to include the full amount of such distributions (including the fair market value of any shares of Common 30 Table of Contents Stock received) as ordinary dividend income to the extent of our current or accumulated earnings and profits, as determined for U.S. federal income tax purposes.
The domestic and international commercial real estate debt markets are subject to volatility, resulting in, from time to time, the tightening of underwriting standards by lenders and credit rating agencies and reductions in the availability of financing. Beginning in early 2022, the U.S. Federal Reserve Board has increased interest rates and the federal funds rate increased to a 22-year high.
The domestic and international commercial real estate debt markets are subject to volatility, resulting in, from time to time, the tightening of underwriting standards by lenders and credit rating agencies and reductions in the availability of financing. Beginning in early 2022, in response to significant and prolonged increases in inflation, the U.S.
Changes in shopping trends as a result of the growth in e-commerce may also affect the profitability of retailers that do not adapt to changes in market conditions.
This shift may adversely affect our occupancy and rental rates, which would affect our revenues and cash flows. Changes in shopping trends as a result of the growth in e-commerce may also affect the profitability of retailers that do not adapt to changes in market conditions.
There can be no assurance that the measures we have adopted will be sufficient. Further, while we carry cyber liability insurance, such insurance may not be adequate to cover all losses related to such events. We may acquire or originate commercial real estate debt or invest in commercial real estate-related securities which would expose us to additional risks.
There can be no assurance that the measures we have adopted will be sufficient. Further, while we carry cyber liability insurance, such insurance may not be adequate to cover all losses related to such events.
As of December 31, 2023, 21% of our annualized rental income on a straight-line basis was generated from net leases, with remaining lease term of more than ten years.
We generally seek to enter into long-term leases with our tenants. As of December 31, 2024, 20% of our annualized rental income on a straight-line basis was generated from leases with remaining lease terms of more than ten years.
In addition, the presence of hazardous substances, or the failure to properly remediate them, may adversely affect our ability to sell, rent or pledge a property as collateral for future borrowings. Some of these laws and regulations have been amended to require compliance with new or more stringent standards as of future dates.
In addition, the presence of hazardous substances, or the failure to properly remediate them, may adversely affect our ability to sell, rent or pledge a property as collateral for future borrowings.
There is no assurance that we will be able to dispose of properties on terms that are found favorable to us or at the time we wish to do so.
There is no assurance that we will be able to dispose of properties on terms that are found favorable to us or at the time we wish to do so. In addition, we may not have funds available to correct defects or make improvements that are necessary or desirable before the sale of a property.
The Terrorism Risk Insurance Act, which was designed for a sharing of terrorism losses between insurance companies and the federal government, will expire on December 31, 2027, and there can be no assurance that Congress will act to renew or replace it. 17 Table of Contents More generally, any terrorist attack, other act of violence or war, including armed conflicts, could result in increased volatility in, or damage to, the worldwide financial markets and economy.
The Terrorism Risk Insurance Act, which was designed for a sharing of terrorism losses between insurance companies and the federal government, will expire on December 31, 2027, and there can be no assurance that Congress will act to renew or replace it.
Some of our properties are “special use single-tenant properties” that may be relatively illiquid compared to other types of real estate and financial assets limiting our ability to quickly change our portfolio in response to changes in economic or other conditions. 12 Table of Contents Retail conditions and decreased demand for office space may adversely affect our revenues.
Some of our properties are “special use single-tenant properties” that may be relatively illiquid compared to other types of real estate and financial assets limiting our ability to quickly change our portfolio in response to changes in economic or other conditions. There is no assurance that we could obtain a substitute tenant on acceptable terms.
We may also potentially experience a negative impact on the health of our personnel, particularly if a significant number of them are impacted, which could result in a deterioration in our ability to ensure business continuity during this disruption Additionally, a continuing or permanent impact on the business of our tenants could make it difficult for us to renew or re-lease our properties at rental rates equal to or above historical rates.
We may also potentially experience a negative impact on the health of our personnel, particularly if a significant number of them are during a future pandemic, which could result in a deterioration in our ability to ensure business continuity during this disruption.
If we are unable to collect the data necessary to comply with these disclosure requirements, we may be subject to increased regulatory risk. If the data is incomplete or unfavorable, our relationship with our stockholders, our stock price, and our access to capital may be negatively impacted.
If we are unable to collect the data necessary to comply with these disclosure requirements, we may be subject to increased regulatory risk.
Many expenses associated with properties (such as operating expenses and capital expenses) cannot be reduced, and may even increase due to inflation or otherwise, in the case of a termination. A lease transfer to a new anchor tenant could also allow other tenants to make reduced rental payments or to terminate their leases at the retail center.
Many expenses associated with properties (such as operating expenses and capital expenses) cannot be reduced, and may even increase due to inflation or otherwise, in the case of a termination.
If the IRS were to successfully challenge the status of the OP as a partnership or disregarded entity for U.S. federal income tax purposes, the OP would be taxable as a corporation. In such event this would reduce the amount of distributions that the OP could make to us.
If the OP 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. If the IRS were to successfully challenge the status of the OP as a partnership or disregarded entity for U.S. federal income tax purposes, the OP would be taxable as a corporation.
A TRS is subject to applicable U.S. federal, state, local, and foreign income tax on its taxable income, as well as limitations on the deductibility of its interest expenses.
A TRS is subject to applicable U.S. federal, state, local, and foreign income tax on its taxable income, as well as limitations on the deductibility of its interest expenses. In addition, the Code imposes a 100% excise tax on certain transactions between a TRS and its parent REIT that are not conducted on an arm’s-length basis.
As of December 31, 2023, a total of $405.2 million of our indebtedness bearing interest at a weighted rate of 4.0% matures in calendar year 2024 . Interest rates have increased considerably in the last twelve months and may continue to increase.
As of December 31, 2024, a total of $464.5 million of our indebtedness bearing interest at a weighted rate of 3.8% matures in calendar year 2025 . Interest rates increased considerably over the last two years and may increase further in the future.
Deflation would have a serious impact on economic growth and may adversely affect the financial condition of our tenants and the rental rates at which we renew or enter into leases. Our business and operations could suffer if we experience system failures or cyber incidents or a deficiency in cybersecurity.
Deflation would have a serious impact on economic growth and may adversely affect the financial condition of our tenants and the rental rates at which we renew or enter into leases. 18 Table of Contents Periodically, we have experienced, and we may experience in the future, a decline in the fair value of our real estate assets, resulting in impairment charges that impact our financial condition and results of operations.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe have not identified risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected or are reasonably likely to materially affect us, including our operations, business strategy, results of operations, or financial condition. Cybersecurity Governance Our Board considers cybersecurity risk and other information technology risks as part of its risk oversight function.
Biggest changeWe have not identified risks from known cybersecurity threats, including as a result of any prior cybersecurity incidents, that have materially affected or are reasonably likely to materially affect us, including our operations, business strategy, results of operations, or financial condition. 33 Table of Contents Cybersecurity Governance Our Board considers cybersecurity risk and other information technology risks as part of its risk oversight function.
Our management team supervises efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, which may include briefings from IT personnel, threat intelligence and other information obtained from governmental, public or private sources, including external consultants engaged by us; and alerts and reports produced by security tools deployed in the IT environment. 31 Table of Contents
Our management team supervises efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, which may include briefings from IT personnel, threat intelligence and other information obtained from governmental, public or private sources, including external consultants engaged by us; and alerts and reports produced by security tools deployed in the IT environment. 34 Table of Contents
Item 1C. Cybersecurity. 30 Table of Contents Cybersecurity Risk Management and Strategy We have developed and implemented a cybersecurity risk management program intended to protect the confidentiality, integrity, and availability of our critical systems and information. We design and assess our program based on industry practices and accepted frameworks (e.g. the NIST framework).
Item 1C. Cybersecurity. Cybersecurity Risk Management and Strategy We have developed and implemented a cybersecurity risk management program intended to protect the confidentiality, integrity, and availability of our critical systems and information. We design and assess our program based on industry practices and accepted frameworks (e.g. the NIST framework).

Item 2. Properties

Properties — owned and leased real estate

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Biggest change(2) Other includes 94 industry types as of December 31, 2023. 33 Table of Contents The following table details the geographic distribution of our portfolio as of December 31, 2023: Region Number of Properties Annualized Straight-Line Rent (1) (in thousands) Annualized Straight-Line Rent as a Percentage of the Total Portfolio (2) Square Feet (in thousands) (2) Square Feet as a Percentage of the Total Portfolio (2) United States 1,208 $ 582,601 79.7 % 55,251 82.6 % Michigan 97 61,130 8.4 % 6,870 10.3 % Texas 72 44,704 6.1 % 3,244 4.9 % Ohio 79 42,415 5.8 % 6,103 9.1 % Georgia 117 40,324 5.5 % 3,074 4.6 % North Carolina 57 35,506 4.9 % 5,008 7.5 % Illinois 68 29,725 4.1 % 2,985 4.5 % Alabama 48 25,669 3.5 % 2,168 3.2 % Florida 61 25,427 3.5 % 1,652 2.5 % South Carolina 49 23,641 3.2 % 2,622 3.9 % California 8 21,909 3.0 % 1,520 2.3 % Kentucky 33 18,567 2.5 % 1,611 2.4 % Pennsylvania 34 18,090 2.5 % 1,338 2.0 % Indiana 25 16,965 2.3 % 2,437 3.6 % Oklahoma 27 14,793 2.0 % 1,187 1.8 % Missouri 17 14,184 1.9 % 1,221 1.8 % Tennessee 36 12,188 1.7 % 1,335 2.0 % Louisiana 40 12,047 1.6 % 868 1.3 % Massachusetts 15 10,689 1.5 % 1,007 1.5 % New Jersey 6 9,985 1.4 % 430 0.6 % New York 23 8,983 1.2 % 1,073 1.6 % Wisconsin 21 8,488 1.2 % 664 1.0 % Mississippi 38 8,143 1.1 % 630 0.9 % Kansas 24 8,120 1.1 % 689 1.0 % Arkansas 18 7,827 1.1 % 486 0.7 % Nevada 5 7,818 1.1 % 423 0.6 % Minnesota 13 6,419 0.9 % 646 1.0 % Maryland 6 4,784 0.7 % 419 0.6 % Connecticut 5 4,598 0.6 % 402 0.6 % New Mexico 11 4,543 0.6 % 415 0.6 % Virginia 20 3,850 0.5 % 332 0.5 % Iowa 28 3,837 0.5 % 402 0.6 % Colorado 8 3,290 0.5 % 138 0.2 % West Virginia 29 3,133 0.4 % 345 0.5 % New Hampshire 5 2,912 0.4 % 345 0.5 % Maine 5 2,323 0.3 % 76 0.1 % Rhode Island 2 2,208 0.3 % 107 0.2 % Wyoming 11 1,840 0.3 % 103 0.2 % North Dakota 5 1,814 0.2 % 193 0.3 % Nebraska 8 1,671 0.2 % 113 0.2 % Montana 13 1,663 0.2 % 100 0.1 % South Dakota 4 1,474 0.2 % 101 0.2 % Utah 5 1,430 0.2 % 53 0.1 % Vermont 4 1,316 0.2 % 235 0.4 % Idaho 4 783 0.1 % 36 0.1 % Alaska 1 424 0.1 % 9 — % Arizona 1 366 0.1 % 22 — % Delaware 1 337 — % 10 — % Washington, DC 1 249 — % 4 — % United Kingdom 55 81,203 11.1 % 5,238 7.9 % Netherlands 4 16,817 2.3 % 1,007 1.5 % Finland 5 14,606 2.0 % 1,457 2.2 % Germany 5 10,400 1.4 % 1,584 2.4 % France 7 7,736 1.1 % 1,394 2.1 % Luxembourg 1 5,892 0.8 % 156 0.2 % Channel Islands 1 5,847 0.8 % 114 0.2 % Canada 7 3,132 0.4 % 372 0.6 % Italy 2 2,240 0.3 % 196 0.3 % Spain 1 391 0.1 % 29 — % Total 1,296 $ 730,865 100 % 66,798 100 % (1) Annualized straight-line rent converted from local currency into USD as of December 31, 2023 for the in-place lease in the property on a straight-line basis, which includes tenant concessions such as free rent, as applicable.
Biggest change(2) Other includes 81 industry types as of December 31, 2024. 36 Table of Contents The following table details the geographic distribution of our portfolio as of December 31, 2024: Region Number of Properties Annualized Straight-Line Rent (1) (in thousands) Annualized Straight-Line Rent as a Percentage of the Total Portfolio (2) Square Feet (in thousands) (2) Square Feet as a Percentage of the Total Portfolio (2) United States 1,036 $ 525,491 80.1 % 49,562 81.9 % Michigan 92 60,443 9.2 % 6,457 10.6 % Ohio 66 40,649 6.2 % 5,787 9.5 % Texas 66 40,241 6.1 % 2,919 4.8 % North Carolina 41 32,006 4.9 % 3,699 6.1 % Georgia 94 27,822 4.2 % 2,176 3.6 % Illinois 61 27,131 4.1 % 2,767 4.6 % Florida 50 23,725 3.6 % 1,607 2.6 % Alabama 37 22,468 3.4 % 1,967 3.2 % South Carolina 38 19,606 3.0 % 2,194 3.6 % Kentucky 24 17,932 2.7 % 1,465 2.4 % Indiana 23 16,767 2.6 % 2,416 4.0 % Pennsylvania 29 16,682 2.5 % 1,248 2.1 % Oklahoma 26 15,118 2.3 % 1,185 2.0 % Missouri 16 14,845 2.3 % 1,214 2.0 % Tennessee 29 11,123 1.7 % 1,295 2.1 % Massachusetts 15 10,999 1.7 % 1,007 1.7 % Louisiana 36 10,514 1.6 % 638 1.1 % New Jersey 5 9,684 1.5 % 421 0.7 % New York 23 9,004 1.4 % 1,073 1.8 % Wisconsin 21 8,807 1.3 % 664 1.1 % Kansas 24 8,109 1.2 % 692 1.1 % Nevada 4 7,907 1.2 % 408 0.7 % Arkansas 16 7,759 1.2 % 475 0.8 % California 6 7,699 1.2 % 1,002 1.7 % Mississippi 34 7,167 1.1 % 597 1.0 % New Mexico 11 5,348 0.8 % 415 0.7 % Maryland 6 5,155 0.8 % 419 0.7 % Connecticut 5 4,598 0.7 % 402 0.7 % Iowa 28 3,844 0.6 % 402 0.7 % Virginia 14 3,799 0.6 % 308 0.5 % Minnesota 9 3,152 0.5 % 333 0.5 % West Virginia 29 3,134 0.5 % 345 0.6 % Colorado 5 3,101 0.5 % 120 0.2 % New Hampshire 4 2,779 0.4 % 339 0.6 % Rhode Island 2 2,207 0.3 % 107 0.2 % Maine 4 2,021 0.3 % 64 0.1 % North Dakota 5 1,848 0.3 % 193 0.3 % Nebraska 8 1,761 0.3 % 113 0.2 % South Dakota 4 1,489 0.2 % 101 0.2 % Utah 4 1,357 0.2 % 50 0.1 % Wyoming 6 1,350 0.2 % 89 0.1 % Vermont 4 1,338 0.2 % 235 0.4 % Montana 5 893 0.1 % 74 0.1 % Idaho 3 731 0.1 % 35 0.1 % Alaska 1 424 0.1 % 9 — % Arizona 1 366 0.1 % 22 — % Delaware 1 340 0.1 % 10 — % Washington, DC 1 249 — % 4 — % United Kingdom 53 68,451 10.4 % 4,836 8.0 % Netherlands 4 16,128 2.5 % 1,007 1.7 % Finland 5 12,826 2.0 % 1,457 2.4 % Germany 5 9,939 1.5 % 1,584 2.6 % France 7 7,325 1.1 % 1,416 2.3 % Channel Islands 1 5,646 0.9 % 114 0.2 % Luxembourg 1 5,544 0.8 % 156 0.3 % Canada 7 2,888 0.4 % 372 0.6 % Italy 2 2,238 0.3 % 195 0.3 % Total 1,121 $ 656,476 100 % 60,699 100 % (1) Annualized straight-line rent converted from local currency into USD as of December 31, 2024 for the in-place lease in the property on a straight-line basis, which includes tenant concessions such as free rent, as applicable.
Property Financings See Note 5 — Mortgage Notes Payable, Net, Note 6 — Revolving Credit Facility and Note 7 — Senior Notes, Net to our consolidated financial statements included in this Annual Report on Form 10-K for property financings as of December 31, 2023 and 2022. Item 3. Legal Proceedings. None. Item 4. Mine Safety Disclosures.
Property Financings See Note 5 — Mortgage Notes Payable, Net, Note 6 — Revolving Credit Facility and Note 7 — Senior Notes, Net to our consolidated financial statements included in this Annual Report on Form 10-K for property financings as of December 31, 2024 and 2023. Item 3. Legal Proceedings. None. Item 4. Mine Safety Disclosures.
Significant Properties As of December 31, 2023, we did not have any properties whose rentable square footage or annualized rental income represented greater than 5% of total portfolio rentable square footage or annualized straight-line rent, respectively.
Significant Properties As of December 31, 2024, we did not have any properties whose rentable square footage or annualized rental income represented greater than 5% of total portfolio rentable square footage or annualized straight-line rent, respectively.
Tenant Concentration As of December 31, 2023, we did not have any tenant whose rentable square footage or annualized straight-line rent represented greater than 10% of total portfolio rentable square footage or annualized straight-line rent, respectively.
Tenant Concentration As of December 31, 2024, we did not have any tenant whose rentable square footage or annualized straight-line rent represented greater than 10% of total portfolio rentable square footage or annualized straight-line rent, respectively.
Weighted-average remaining lease term in years is calculated based on square feet as of December 31, 2023.
Weighted-average remaining lease term in years is calculated based on square feet as of December 31, 2024.
(2) Totals may not foot due to rounding. 34 Table of Contents Future Minimum Lease Payments For a summary of future minimum base rent payments, on a cash basis, due to us over the next five calendar years and thereafter (as of December 31, 2023), see N o te 2 — Summary of Significant Accounting Polices to our consolidated financial statements included in this Annual Report on Form 10-K.
(2) Totals may not foot due to rounding. 37 Table of Contents Future Minimum Lease Payments For a summary of future minimum base rent payments, on a cash basis, due to us over the next five calendar years and thereafter (as of December 31, 2024), see Note 2 — Summary of Significant Accounting Polices to our consolidated financial statements included in this Annual Report on Form 10-K.
Not applicable. 35 Table of Contents PART II
Not applicable. 38 Table of Contents PART II
The following table details distribution of our portfolio by country/location as of December 31, 2023: Country Acquisition Period Number of Properties Square Feet Percentage of Properties by Square Feet Average Remaining Lease Term (1) (In thousands) Canada Dec. 2019 - Dec. 2021 7 372 0.6% 16.1 Channel Islands Sept. 2021 1 114 0.2% 7.0 Finland Nov. 2014 - Sep. 2015 5 1,457 2.2% 8.5 France Dec. 2016 - Dec. 2020 7 1,394 2.1% 3.4 Germany Jan. 2014 - Dec. 2016 5 1,584 2.4% 4.0 Italy Feb. 2020 2 196 0.3% 8.2 Luxembourg Dec. 2016 1 156 0.2% 3.0 Spain Sep. 2020 1 29 —% 8.7 The Netherlands Jul. 2014 - Dec. 2021 4 1,007 1.5% 5.3 United Kingdom Oct. 2012 - Dec. 2023 55 5,237 7.8% 7.9 United States Aug. 2013 - Dec. 2023 1,208 55,252 82.7% 6.5 Total 1,296 66,798 100% 6.8 _________ (1) If the portfolio has multiple properties with varying lease expirations, average remaining lease term is calculated on a weighted-average basis.
The following table details distribution of our portfolio by country/location as of December 31, 2024: Country Acquisition Period Number of Properties Square Feet Percentage of Properties by Square Feet Average Remaining Lease Term (1) (In thousands) Canada Dec. 2019 - Dec. 2021 7 372 0.6% 15.1 Channel Islands Sept. 2021 1 114 0.2% 6.0 Finland Nov. 2014 - Sep. 2015 5 1,457 2.4% 7.5 France Dec. 2016 - Dec. 2020 7 1,416 2.3% 3.3 Germany Jan. 2014 - Dec. 2016 5 1,584 2.6% 3.5 Italy Feb. 2020 2 196 0.3% 7.2 Luxembourg Dec. 2016 1 156 0.3% 2.0 The Netherlands Nov. 2014 - Dec. 2021 4 1,007 1.7% 4.3 United Kingdom Oct. 2012 - Jan. 2023 53 4,834 8.0% 8.3 United States Aug. 2013 - Oct. 2023 1,036 49,563 81.7% 5.9 Total 1,121 60,699 100% 6.2 _________ (1) If the portfolio has multiple properties with varying lease expirations, average remaining lease term is calculated on a weighted-average basis.
Assumes exchange rates of £1.00 to $1.27 for GBP, €1.00 to $1.10 for EUR and $1.00 Canadian Dollar (“CAD”) to $0.75, as of December 31, 2023 for illustrative purposes, as applicable.
Assumes exchange rates of £1.00 to $1.25 for GBP, €1.00 to $1.04 for EUR and $1.00 Canadian Dollar (“CAD”) to $0.70, as of December 31, 2024 for illustrative purposes, as applicable.
Assumes exchange rates of £1.00 to $1.27 for GBP, €1.00 to $1.10 for EUR and $1.00 CAD to $0.75 as of December 31, 2023 for illustrative purposes, as applicable.
Assumes exchange rates of £1.00 to $1.25 for GBP, €1.00 to $1.04 for EUR and $1.00 CAD to $0.70 as of December 31, 2024 for illustrative purposes, as applicable.
Weighted-average remaining lease term in years is calculated based on square feet as of December 31, 2023. 32 Table of Contents The following table details the tenant industry distribution of our portfolio as of December 31, 2023: Industry Annualized Straight-Line Rent (1) Annualized Straight-Line Rent as a Percentage of the Total Portfolio Leased Square Feet Square Feet as a Percentage of the Total Portfolio (In thousands) (In thousands) Financial Services $ 46,805 6 % 3,169 5 % Auto Manufacturing 41,938 6 % 4,237 7 % Healthcare 39,644 5 % 1,726 3 % Discount Retail 37,059 5 % 3,785 6 % Specialty Retail 31,783 4 % 2,708 4 % Gas/Convenience 28,784 4 % 665 1 % Freight 22,323 3 % 2,527 4 % Consumer Goods 21,948 3 % 4,705 7 % Home Improvement 20,769 3 % 2,621 4 % Quick Service Restaurant 19,156 3 % 560 1 % Retail Banking 19,015 3 % 596 1 % Other (2) 401,641 55 % 36,645 57 % Total $ 730,865 100 % $ 63,944 100 % ________ (1) Annualized straight-line rent converted from local currency into USD as of December 31, 2023 for the in-place lease in the property on a straight-line basis, which includes tenant concessions such as free rent, as applicable.
Weighted-average remaining lease term in years is calculated based on square feet as of December 31, 2024. 35 Table of Contents The following table details the tenant industry distribution of our portfolio as of December 31, 2024: Industry Annualized Straight-Line Rent (1) Annualized Straight-Line Rent as a Percentage of the Total Portfolio Leased Square Feet Square Feet as a Percentage of the Total Portfolio (In thousands) (In thousands) Financial Services $ 45,392 7 % 3,159 5 % Auto Manufacturing 42,173 6 % 4,237 7 % Discount Retail 36,111 6 % 3,686 6 % Specialty Retail 30,787 5 % 2,670 5 % Healthcare 30,614 5 % 1,359 2 % Gas/Convenience 28,672 4 % 655 1 % Freight 25,675 4 % 2,766 5 % Consumer Goods 21,933 3 % 4,705 8 % Apparel Retail 16,967 3 % 1,223 2 % Other (2) 378,152 57 % 34,211 59 % Total $ 656,476 100 % $ 58,671 100 % ________ (1) Annualized straight-line rent converted from local currency into USD as of December 31, 2024 for the in-place lease in the property on a straight-line basis, which includes tenant concessions such as free rent, as applicable.
The following table represents a summary by segment of our portfolio of real estate properties as of December 31, 2023: Annualized Straight-Line Rent Annualized Base Rent Square Feet Segment Number of Properties Amount % Amount % Amount % Occupancy Weighted-Average Remaining Lease Term (Years) (1) (In thousands) (In thousands) (In thousands) Industrial & Distribution 219 $ 234,656 32 % $ 225,724 32 % 33,878 51 % 100 % 7.7 Multi-Tenant Retail 109 199,702 27 % 197,326 28 % 16,398 25 % 88 % 5.2 Single-Tenant Retail 878 153,535 21 % 141,200 20 % 7,878 12 % 98 % 8.3 Office 90 142,972 20 % 143,059 20 % 8,644 12 % 94 % 5.0 Total 1,296 $ 730,865 100 % $ 707,309 100 % 66,798 100 % 96 % 6.8 _____________ (1) If the portfolio has multiple properties with varying lease expirations, average remaining lease term is calculated on a weighted-average basis.
The following table represents a summary by segment of our portfolio of real estate properties as of December 31, 2024: Annualized Straight-Line Rent Annualized Base Rent Square Feet Segment Number of Properties Amount % Amount % Amount % Occupancy Weighted-Average Remaining Lease Term (Years) (1) (In thousands) (In thousands) (In thousands) Industrial & Distribution 206 $ 221,066 34 % $ 216,038 34 % 31,938 53 % 99 % 6.6 Multi-Tenant Retail 101 181,798 28 % 181,676 28 % 14,785 24 % 91 % 5.5 Single-Tenant Retail 748 135,767 21 % 126,059 20 % 7,261 12 % 99 % 7.4 Office 66 117,845 17 % 120,110 18 % 6,715 11 % 97 % 4.3 Total 1,121 $ 656,476 100 % $ 643,883 100 % 60,699 100 % 97 % 6.2 _____________ (1) If the portfolio has multiple properties with varying lease expirations, average remaining lease term is calculated on a weighted-average basis.
Future Lease Expirations The following is a summary of lease expirations for the next ten calendar years on the properties we owned as of December 31, 2023: Year of Expiration Number of Leases Expiring Annualized Straight-Line Rent (1) Annualized Straight-Line Rent as a Percentage of the Total Portfolio Leased Rentable Square Feet Percent of Leased Square Feet Expiring (In thousands) (In thousands) 2024 201 $ 44,305 6.1 % 3,087 4.8 % 2025 244 58,300 8.0 % 5,047 7.9 % 2026 234 62,604 8.6 % 4,411 6.9 % 2027 267 72,553 9.9 % 6,786 10.6 % 2028 327 88,490 12.1 % 8,887 13.9 % 2029 263 84,297 11.5 % 7,993 12.5 % 2030 119 54,067 7.4 % 3,909 6.1 % 2031 94 36,962 5.1 % 5,420 8.5 % 2032 103 37,811 5.2 % 3,063 4.8 % 2033 100 37,693 5.2 % 2,715 4.2 % Total 1,952 $ 577,082 79.1 % 51,318 80.2 % ________ (1) Assumes exchange rates of £1.00 to $1.27 for GBP, €1.00 to $1.10 for EUR and $1.00 CAD to $0.75 as of December 31, 2023 for the in-place lease in the property on a straight-line basis, which includes tenant concessions such as free rent, as applicable.
Future Lease Expirations The following is a summary of lease expirations for the next ten calendar years on the properties we owned as of December 31, 2024: Year of Expiration Number of Leases Expiring Annualized Straight-Line Rent (1) Annualized Straight-Line Rent as a Percentage of the Total Portfolio Leased Rentable Square Feet Percent of Leased Square Feet Expiring (In thousands) (In thousands) 2025 176 $ 47,465 7.2 % 4,157 7.0 % 2026 202 53,966 8.2 % 3,880 7.0 % 2027 249 56,870 8.7 % 5,330 9.0 % 2028 306 84,365 12.9 % 8,894 15.0 % 2029 285 86,013 13.1 % 8,335 14.0 % 2030 179 61,823 9.4 % 4,854 8.0 % 2031 84 34,722 5.3 % 5,366 9.0 % 2032 96 35,629 5.4 % 2,973 5.0 % 2033 79 36,160 5.5 % 2,821 5.0 % 2034 86 26,643 4.1 % 1,995 3.0 % Total 1,742 $ 523,656 79.8 % 48,605 82.0 % ________ (1) Assumes exchange rates of £1.00 to $1.25 for GBP, €1.00 to $1.04 for EUR and $1.00 CAD to $0.70 as of December 31, 2024 for the in-place lease in the property on a straight-line basis, which includes tenant concessions such as free rent, as applicable.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

14 edited+4 added−11 removed9 unchanged
Biggest changeOn February 26, 2024, the Board approved a dividend policy that will reduce our future Common Stock dividend rate and we expect the next formal declaration of Common Stock dividends to be $0.275 per share on a quarterly basis ($1.10 annualized).
Biggest changeOn February 26, 2024, the Board approved a dividend policy that reduced our Common Stock dividend rate to an annual rate of $1.10 per share, or $0.275 per share on a quarterly basis. This Common Stock dividend rate became effective with the Common Stock dividend declared and paid in April 2024 and was effective through January 2025.
Dividends have been, and we anticipate will continue to be, paid on a quarterly basis on the 15th day of the first month following the end of each fiscal quarter (unless otherwise specified) to common stockholders of record on the record date for such payment.
Dividends have been, and we anticipate will continue to be, paid on a quarterly basis on or around the 15th day of the first month following the end of each fiscal quarter (unless otherwise specified) to common stockholders of record on the record date for such payment.
Risk Factors - If we are not able to increase the amount of cash we have available to pay dividends, we may have to reduce dividend payments or identify other financing sources to fund the payment of dividends at their current levels.” For tax purposes, of the amounts distributed for Common Stock dividends during the year ended December 31, 2023, 100.0%, or $1.55 per share per annum, represented a return of capital.
Risk Factors - If we are not able to increase the amount of cash we have available to pay dividends, we may have to reduce dividend payments or identify other financing sources to fund the payment of dividends at their current levels.” For tax purposes, of the amounts distributed for Common Stock dividends during the year ended December 31, 2024, 100.0%, or $1.18 per share per annum, represented a return of capital.
Dividends paid during the year ended December 31, 2023 on the Series E Preferred Stock were considered 100% return of capital. See Note 10 — Stockholders' Equity to our consolidated financial statements included in this Annual Report on Form 10-K for further discussion on tax characteristics of dividends.
Dividends paid during the year ended December 31, 2024 and 2023 on the Series E Preferred Stock were considered 89.3% and 100% return of capital, respectively. See Note 10 — Stockholders' Equity to our consolidated financial statements included in this Annual Report on Form 10-K for further discussion on tax characteristics of dividends.
Dividends paid on Series A Preferred Stock during the years ended December 31, 2022 and 2021 were considered 69.9% and 100% ordinary dividend income, respectively. Dividends paid during the year ended December 31, 2023 on the Series B Preferred Stock were considered 100% return of capital.
Dividends paid on Series A Preferred Stock during the year ended December 31, 2022 were considered 69.9% ordinary dividend income. Dividends paid during the years ended December 31, 2024 and 2023 on the Series B Preferred Stock were considered 89.3% and 100% return of capital, respectively.
Dividends paid on Series B Preferred Stock during the years ended December 31, 2022 and 2021 were considered 69.9% and 100% ordinary dividend income, respectively. Dividends paid during the year ended December 31, 2023 on the Series D Preferred Stock were considered 100% return of capital.
Dividends paid on Series B Preferred Stock during the year ended December 31, 2022 were considered 69.9% ordinary dividend income. Dividends paid during the year ended December 31, 2024 and 2023 on the Series D Preferred Stock were considered 89.3% and 100% return of capital, respectively.
Dividends on the Series D Preferred Stock are payable quarterly in arrears on the 15th day of each of January, April, July and October of each year (or, if not a business day, the next succeeding business day) to holders of record on the applicable record date.
Dividends on the Series D Preferred Stock are payable quarterly in arrears on the 15th day of each of January, April, July and October of each year (or, if not a business day, the next succeeding business day) to holders of record at the close of business on the record date set by our Board.
During the year ended December 31, 2022, 100.0%, or $1.60 per share per annum, represented a return of capital.
During the year ended December 31, 2023, 100.0%, or $1.55 per share per annum, represented a return of capital.
Dividends to Common Stockholders In connection with the Mergers, in October 2023, the Board approved a new annual dividend rate on our Common Stock of $1.42 per share, or $0.354 per share on a quarterly basis. The first dividend paid at the new rate occurred on October 16, 2023.
Dividends to Common Stockholders In connection with the Mergers, in October 2023, the Board approved an annual dividend rate on our Common Stock of $1.42 per share, or $0.354 per share on a quarterly basis.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our Common Stock is traded on the NYSE under the symbol “GNL.” Set forth below is a line graph comparing the cumulative total stockholder return on our Common Stock, based on the market price of our Common Stock, with the FTSE National Association of Real Estate Investment Trusts Equity Index (“NAREIT”), Modern Index Strategy Indexes (“MSCI”), and the New York Stock Exchange Index (“NYSE Index”) for the period commencing June 2, 2015, the date on which we listed shares of our Common Stock on the NYSE and ending December 31, 2023.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our Common Stock is traded on the NYSE under the symbol “GNL.” Set forth below is a line graph comparing the cumulative total stockholder return on our Common Stock, based on the market price of our Common Stock, with the FTSE National Association of Real Estate Investment Trusts Equity Index (“NAREIT”), Modern Index Strategy Indexes (“MSCI”), and the New York Stock Exchange Index (“NYSE Index”).
During the year ended December 31, 2021, 63.5%, or $1.01 per share per annum, and 36.5%, or $0.58 per share per annum, represented a return of capital and ordinary dividends, respectively. 36 Table of Contents Dividends paid during the year ended December 31, 2023 on the Series A Preferred Stock were considered 100% return of capital.
During the year ended December 31, 2022, 100.0%, or $1.60 per share per annum, represented a return of capital. 39 Table of Contents Dividends paid during the years ended December 31, 2024 and 2023 on the Series A Preferred Stock were considered 89.3% and 100% return of capital, respectively.
The graph assumes an investment of $100 on June 2, 2015 with the reinvestment of dividends. Holders As of February 22, 2024, we had 230.3 million shares of Common Stock outstanding held by 6,521 stockholders of record. Dividends We elected to be taxed as a REIT, commencing with our taxable year ended December 31, 2013.
Holders As of February 24, 2025, we had 230.8 million shares of Common Stock outstanding held by 6,002 stockholders of record. Dividends We elected to be taxed as a REIT, commencing with our taxable year ended December 31, 2013.
The new Common Stock dividend rate will become effective upon the next formal dividend declaration, which is expected to be declared in April 2024. The reduction of the dividend rate is expected to yield benefits to us, including increasing the amount of cash that may be used to lower leverage.
The reduction of the dividend rate is expected to yield benefits to us, including increasing the amount of cash that may be used to lower our leverage.
Dividends on the Series E Preferred Stock are payable quarterly in arrears on the 15th day of each of January, April, July and October of each year (or, if not a business day, the next succeeding business day) to holders of record on the applicable record date. 37 Table of Contents Unregistered Sales of Equity Securities In October, 2023, we issued 59,253 shares of Common Stock to an unaffiliated third party for certain advisory services.
Dividends on the Series E Preferred Stock are payable quarterly in arrears on the 15th day of each of January, April, July and October of each year (or, if not a business day, the next succeeding business day) to holders of record at the close of business on the record date set by our Board. 40 Table of Contents Item 6. [Reserved] 41 Table of Contents
Removed
During the nine months ended September 30, 2023 and the years ended December 31, 2022 and 2021, we paid dividends at an annual rate of $1.60 per share or $0.40 per share on a quarterly basis.
Added
The graph tracks the performance of a $100 investment in our Common Stock and in each index (with the reinvestment of all dividends) from December 31, 2019 to December 31, 2024.
Removed
We recorded expense and an increase to additional paid-in-capital of $0.6 million. The shares of Common Stock were issued pursuant to the exemption from registration set forth in Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), without the involvement of any underwriter or placement agent.
Added
The performance graph shall not be deemed incorporated by reference by any general statement incorporating by reference this Annual Report on Form 10-K into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except to the extent we specifically incorporate this information by reference, and shall not otherwise be deemed filed under such acts.
Removed
Purchases of Equity Securities by the Issuer and Affiliated Purchasers None.
Added
The first dividend paid at this rate occurred on October 16, 2023 and, accordingly, during the three months ended March 31, 2024, we paid dividends at this rate as well.
Removed
Securities Authorized for Issuance Under Equity Compensation Plans Plan Category Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (a) Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights (b) Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (excluding securities Reflected in Column (a)) (c) Equity compensation plans approved by security holders 1,004,160 (1) — (2) 2,250,838 (3) Equity compensation plans not approved by security holders — — 2,295,658 (4) Total 1,004,160 (1) — (2) 4,546,496 (1) Represents shares of Common Stock underlying outstanding restricted stock units in respect of shares of Common Stock (“RSUs”) and performance stock units (“PSUs”) under the Individual Plan at December 31, 2023.
Added
On February 27, 2025, we announced that our Board plans to reduce our quarterly dividend per share of Common Stock from $0.275 to $0.190 per share, representing an annual dividend rate of $0.76 per share, beginning with the dividend expected to be declared in April 2025.
Removed
For PSUs, which may vest in varying amounts depending on the achievement of specified performance criteria, the Target amount of shares that may be issued upon vesting, aggregating 468,392 shares, was used; the Maximum amount of shares that may be issued upon vesting is 1,288,072 shares.
Removed
(2) All RSUs and PSUs are settled in shares of Common Stock on a one-for-one basis and accordingly do not have a Weighted-Average Exercise Price.
Removed
(3) Includes the shares of Common Stock remaining available for issuance at December 31, 2023 under the 2021 Equity Plan (as defined in N o te 13 — Equity-Based Compensation to our consolidated financial statements included in this Annual Report on Form 10-K).
Removed
(4) Represents shares available for issuance under the 2018 Omnibus Incentive Compensation Plan of The Necessity Retail REIT, Inc. (the “2018 RTL Equity Plan”). In connection with the merger of the Company with RTL in September 2023, the company assumed the 2018 RTL Equity Plan.
Removed
New awards under the 2018 RTL Equity Plan may only be made to the extent that the available share reserve under the 2018 RTL Equity Plan (10.0% of the Company’s outstanding shares of common stock on a fully diluted basis at any time, as adjusted) may be utilized for such purpose under Section 303A.08 of the NYSE Listed Company Manual.
Removed
Under 2018 RTL Equity Plan, the Company may make awards to its directors, officers, employees and consultants and historically, entities that provide services to the Company. The 2018 RTL Equity Plan permits awards of restricted shares, RSUs, options, stock appreciation rights, stock awards, and other equity awards.
Removed
The 2018 RTL Equity Plan has a term of 10 years, expiring on July 19 2028. If any awards granted under the 2018 RTL Equity Plan are forfeited for any reason, the number of forfeited shares is again available for purposes of granting awards under the 2018 RTL Equity Plan. Item 6. [Reserved] 38 Table of Contents

Item 7. Management's Discussion & Analysis

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

151 edited+41 added−113 removed127 unchanged
Biggest changeAFFO should not be considered as an alternative to net income (loss) as an indication of our performance or to cash flows as a measure of our liquidity or ability to make distributions. 57 Table of Contents Year Ended December 31, (In thousands) 2023 2022 Net loss attributable to common stockholders (in accordance with GAAP) $ (239,348) $ (8,363) Impairment charges 68,684 21,561 Depreciation and amortization 222,271 154,026 (Gain) loss on dispositions of real estate investments 1,672 (325) FFO (as defined by NAREIT) attributable to common stockholders (1) 53,279 166,899 Merger, transaction and other costs (2) 54,492 244 Settlement costs (3) 29,727 — Loss on extinguishment of debt 1,221 2,040 Core FFO attributable to common stockholders (1) 138,719 169,183 Non-cash equity-based compensation 17,297 12,072 Non-cash portion of interest expense 8,622 9,494 Amortization related to above and below-market lease intangibles and right-of-use assets, net 5,603 1,303 Straight-line rent (10,396) (9,608) Straight-line rent (rent deferral agreements) (4) — (159) Unrealized loss on undesignated foreign currency advances and other hedge ineffectiveness — (2,439) Eliminate unrealized gains on foreign currency transactions (5) 7,286 (9,366) Amortization of mortgage discounts 18,916 939 Expenses attributable to 2023 proxy contest and related litigation (6) 9,101 1,436 Expenses attributable to European tax restructuring (7) 2,169 — Transition costs related to the Mergers (8) 2,484 — AFFO attributable to common stockholders (1) $ 199,801 $ 172,855 Summary FFO (as defined by NAREIT) attributable to common stockholders $ 53,279 $ 166,899 Core FFO attributable to common stockholders $ 138,719 $ 169,183 AFFO attributable to common stockholders $ 199,801 $ 172,855 _____ (1) FFO, Core FFO and AFFO for the year ended December 31, 2022 includes income from a lease termination fee of $0.3 million which is recorded in Revenue from tenants in the consolidated statements of operations.
Biggest changeAFFO should not be considered as an alternative to net income (loss) as an indication of our performance or to cash flows as a measure of our liquidity or ability to make distributions. 58 Table of Contents Year Ended December 31, (In thousands) 2024 2023 Net loss attributable to common stockholders (in accordance with GAAP) $ (175,316) $ (239,348) Impairment charges 90,410 68,684 Depreciation and amortization 349,943 222,271 (Gain) loss on dispositions of real estate investments (57,015) 1,672 FFO (as defined by NAREIT) attributable to common stockholders 208,022 53,279 Merger, transaction and other costs (1) 6,026 54,492 Settlement costs (2) — 29,727 Loss on extinguishment and modification of debt 15,877 1,221 Core FFO attributable to common stockholders 229,925 138,719 Non-cash equity-based compensation 8,931 17,297 Non-cash portion of interest expense 9,980 8,622 Amortization related to above and below-market lease intangibles and right-of-use assets, net 7,503 5,603 Straight-line rent (19,150) (10,396) Unrealized gains on undesignated foreign currency advances and other hedge ineffectiveness (3,249) — Eliminate unrealized (gains) losses on foreign currency transactions (3) (3,418) 7,286 Amortization of mortgage discounts 68,591 18,916 Expenses attributable to 2023 proxy contest and related litigation (4) — 9,101 Expenses attributable to European tax restructuring (5) 485 2,169 Transition costs related to the Mergers (6) 4,486 2,484 Forfeited disposition deposit (7) (275) — AFFO attributable to common stockholders $ 303,809 $ 199,801 Summary FFO (as defined by NAREIT) attributable to common stockholders $ 208,022 $ 53,279 Core FFO attributable to common stockholders $ 229,925 $ 138,719 AFFO attributable to common stockholders $ 303,809 $ 199,801 _____ (1) For the year ended December 31, 2024 and 2023, these costs primarily consist of advisory, legal and other professional costs that were directly related to the REIT Merger and Internalization Merger.
The availability of borrowings under the Revolving Credit Facility is based on the value of a pool of eligible unencumbered real estate assets owned by us and compliance with various ratios related to those assets.
The availability of borrowings under the Revolving Credit Facility is based on the value of a pool of eligible unencumbered real estate assets owned by us and compliance with various ratios related to those assets.
Dividends accrue on our Preferred Stock as follows: • Dividends on our Series A Preferred Stock accrue in an amount equal to $0.453125 per share per quarter to Series A Preferred Stockholders, which is equivalent to 7.25% of the $25.00 liquidation preference per share of Series A Preferred Stock per annum. • Dividends on our Series B Preferred Stock accrue in an amount equal to $0.4296875 per share per quarter to Series B Preferred Stockholders, which is equivalent to 6.875% of the $25.00 liquidation preference per share of Series B Preferred Stock per annum. • Dividends on our Series D Preferred Stock accrue in an amount equal to $0.46875 per share per quarter to Series D Preferred Stockholders, which is equivalent to the rate of 7.50% of the $25.00 liquidation preference per share per annum. • Dividends on our Series E Preferred Stock accrue in an amount equal to $0.4609375 per share per quarter to Series E Preferred Stockholders, which is equivalent to the rate of 7.375% of the $25.00 liquidation preference per share per annum.
Preferred Stock Dividends accrue on our Preferred Stock as follows: • Dividends on our Series A Preferred Stock accrue in an amount equal to $0.453125 per share per quarter to Series A Preferred Stockholders, which is equivalent to 7.25% of the $25.00 liquidation preference per share of Series A Preferred Stock per annum. • Dividends on our Series B Preferred Stock accrue in an amount equal to $0.4296875 per share per quarter to Series B Preferred Stockholders, which is equivalent to 6.875% of the $25.00 liquidation preference per share of Series B Preferred Stock per annum. • Dividends on our Series D Preferred Stock accrue in an amount equal to $0.46875 per share per quarter to Series D Preferred Stockholders, which is equivalent to the rate of 7.50% of the $25.00 liquidation preference per share of Series D Preferred Stock per annum. • Dividends on our Series E Preferred Stock accrue in an amount equal to $0.4609375 per share per quarter to Series E Preferred Stockholders, which is equivalent to the rate of 7.375% of the $25.00 liquidation preference per share of Series E Preferred Stock per annum.
Cash Flows from Financing Activities Net cash provided by financing activities of $469.0 million during the year ended December 31, 2023 was a result of net proceeds from borrowings under our Revolving Credit Facility of $1.1 billion (for additional information on Revolving Credit Facility activity, see the Liquidity and Capital Resources section below), partially offset by net payments on mortgage notes payable of $340.4 million, dividends paid to common stockholders of $207.0 million, dividends paid to holders of our Series A Preferred Stock of $12.3 million, dividends paid to holders of our Series B Preferred Stock of $8.1 million, dividends paid to holders of our Series D Preferred Stock of $3.7 million, dividends paid to holders of our Series E Preferred Stock of $2.1 million and distributions to non-controlling interest holders of $3.2 million.
Net cash provided by financing activities of $469.0 million during the year ended December 31, 2023 was a result of net proceeds from borrowings under our Revolving Credit Facility of $1.1 billion (for additional information on Revolving Credit Facility activity, see the Liquidity and Capital Resources section below), partially offset by net payments on mortgage notes payable of $340.4 million, dividends paid to common stockholders of $207.0 million, dividends paid to holders of our Series A Preferred Stock of $12.3 million, dividends paid to holders of our Series B Preferred Stock of $8.1 million, dividends paid to holders of our Series D Preferred Stock of $3.7 million, dividends paid to holders of our Series E Preferred Stock of $2.1 million and distributions to non-controlling interest holders of $3.2 million.
See the Purchase Price Allocation section below for a discussion of the initial accounting for investments in real estate. Disposal of real estate investments representing a strategic shift in operations that will have a major effect on our operations and financial results are required to be presented as discontinued operations in our consolidated statements of operations.
See the Purchase Price Allocation section below for a discussion of the initial accounting for investments in real estate. 43 Disposal of real estate investments representing a strategic shift in operations that will have a major effect on our operations and financial results are required to be presented as discontinued operations in our consolidated statements of operations.
Cash Flows from Investing Activities Net cash used in investing activities during the year ended December 31, 2023 of $551.9 million consisted of net cash used to complete the Mergers of $451.4 million, cash used for other property acquisitions of $134.1 million and capital expenditures of $47.3 million, partially offset by proceeds from dispositions of $80.9 million.
Net cash used in investing activities during the year ended December 31, 2023 of $551.9 million consisted of net cash used to complete the Mergers of $451.4 million, cash used for other property acquisitions of $134.1 million and capital expenditures of $47.3 million, partially offset by proceeds from dispositions of $80.9 million.
However, some limited property operating 40 expenses that are not the responsibility of the tenant are absorbed by us. In our Multi-Tenant Retail segment, we own, manage and leases multi-tenant properties where we generally pay for the property operating expenses for those properties and most of our tenants are required to pay their pro rata share of property operating expenses.
However, some limited property operating expenses that are not the responsibility of the tenant are absorbed by us. In our Multi-Tenant Retail segment, we own, manage and leases multi-tenant properties where we generally pay for the property operating expenses for those properties and most of our tenants are required to pay their pro rata share of property operating expenses.
We evaluate new leases originated after the adoption date (by us or by a predecessor lessor/owner) pursuant to the new guidance where a lease for some or all of a building is classified by a lessor as a sales-type lease if the significant risks and rewards of ownership reside with the tenant.
We evaluate new leases originated after the adoption date (by us or by a predecessor lessor/owner) pursuant to the new guidance where a lease for some or all of a building is classified by a lessor as a sales-type lease if the significant risks and rewards of ownership reside 44 with the tenant.
The cost of services received in exchange for a stock award is measured at the grant date fair value of the award and the expense for such awards is included in equity-based compensation on consolidated statements of operations and is recognized over the vesting period or when the requirements for exercise of the award have been met.
The cost of services received in exchange for a stock award is measured at the grant date fair value of the award and the expense for such awards is included in equity-based compensation in the consolidated statements of operations and is recognized over the vesting period or when the requirements for exercise of the award have been met.
In addition, all foreign currency denominated borrowings under our Revolving Credit Facility are designated as net investment hedges. Certain of our foreign operations expose us to fluctuations of foreign interest rates and exchange rates. These fluctuations may impact the value of our cash receipts and payments in our functional currency, the USD.
In addition, all foreign currency denominated borrowings under our Revolving Credit Facility are designated as net investment hedges. Certain of our foreign operations expose us to fluctuations of foreign interest rates and exchange rates. These fluctuations may impact the 46 value of our cash receipts and payments in our functional currency, the USD.
Further, certain transactions where at inception of the lease the buyer-lessor accounted for the transaction as a 42 purchase of real estate and a new lease may now be required to have symmetrical accounting to the seller-lessee if the transaction was not a qualified sale-leaseback and accounted for as a financing transaction.
Further, certain transactions where at inception of the lease the buyer-lessor accounted for the transaction as a purchase of real estate and a new lease may now be required to have symmetrical accounting to the seller-lessee if the transaction was not a qualified sale-leaseback and accounted for as a financing transaction.
In making estimates of fair values for purposes of allocating purchase price, we utilize a number of sources, including independent 41 appraisals that may be obtained in connection with the acquisition or financing of the respective property and other market data.
In making estimates of fair values for purposes of allocating purchase price, we utilize a number of sources, including independent appraisals that may be obtained in connection with the acquisition or financing of the respective property and other market data.
We have used and may continue to use foreign currency derivatives including options, currency forward and cross currency swap agreements to manage our exposure to fluctuations in GBP-USD and EUR-USD exchange rates (see Note 9 — Derivatives and Hedging Activities to the consolidated financial statements included in this Annual Report on Form 10-K for further discussion). 60 Table of Contents Election as a REIT We elected to be taxed as a REIT under Sections 856 through 860 of the Code, effective for our taxable year ended December 31, 2013.
We have used and may continue to use foreign currency derivatives including options, currency forward and cross currency swap agreements to manage our exposure to fluctuations in GBP-USD and EUR-USD exchange rates (see Note 9 — Derivatives and Hedging Activities to the consolidated financial statements included in this Annual Report on Form 10-K for further discussion). 61 Table of Contents Election as a REIT We elected to be taxed as a REIT under Sections 856 through 860 of the Code, effective for our taxable year ended December 31, 2013.
Above and Below-Market Lease Amortization Capitalized above-market lease values are amortized as a reduction of revenue from tenants over the remaining terms of the respective leases and the capitalized below-market lease values are amortized as an increase to revenue from tenants over the 43 remaining initial terms plus the terms of any below-market fixed rate renewal options of the respective leases.
Above and Below-Market Lease Amortization Capitalized above-market lease values are amortized as a reduction of revenue from tenants over the remaining terms of the respective leases and the capitalized below-market lease values are amortized as an increase to revenue from tenants over the remaining initial terms plus the terms of any below-market fixed rate renewal options of the respective leases.
These items include early extinguishment of debt and other items excluded in Core FFO as well as unrealized gain and loss, which may not ultimately be realized, such as gain or loss on derivative instruments, gain or loss on foreign currency transactions, and gain or loss on investments.
These items include early extinguishment or modification of debt and other items excluded in Core FFO as well as unrealized gain and loss, which may not ultimately be realized, such as gain or loss on derivative instruments, gain or loss on foreign currency transactions, and gain or loss on investments.
While we no longer pay the costs of the various fees and expense reimbursements previously paid to the former Advisor and the Property Manager, after the Internalization Merger, our expenses now include the compensation and benefits of our officers, employees, and consultants, as well as overhead expenses, previously paid by those entities in managing our business and operations and are being recorded in general and administrative expenses from the Acquisition Date forward, including in the form of equity compensation.
While we no longer pay the costs of the various fees and expense reimbursements previously paid to the former Advisor and the Property Manager, after the Internalization Merger, our expenses now include the compensation and benefits of our officers, employees, and consultants, as well as overhead expenses, previously paid by those entities in managing our business and operations, which are recorded in general and administrative expenses from the Acquisition Date forward, including in the form of equity compensation.
Additionally, only incremental direct leasing costs may be capitalized under the accounting guidance. Indirect leasing costs in connection with new or extended tenant leases, if any, are being expensed as incurred. As of December 31, 2023, we had two parcels of land leased to tenants that qualify as financing leases which were acquired in the REIT Merger.
Additionally, only incremental direct leasing costs may be capitalized under the accounting guidance. Indirect leasing costs in connection with new or extended tenant leases, if any, are being expensed as incurred. As of December 31, 2024, we had two parcels of land leased to tenants that qualify as financing leases which were acquired in the REIT Merger.
(3) In the year ended December 31, 2023, we recognized these settlement costs which include one-half of the reasonable, documented, out-of-pocket expenses (including legal fees) incurred by the Blackwells/Related Parties in connection with the proxy contest and related litigation as well as expense for Common Stock issued to the Blackwells/Related Parties, as required under the cooperation agreement with the Blackwells/Related Parties.
(2) In the year ended December 31, 2023, we recognized these settlement costs which include one-half of the reasonable, documented, out-of-pocket expenses (including legal fees) incurred by the Blackwells/Related Parties in connection with the proxy contest and related litigation as well as expense for Common Stock issued to the Blackwells/Related Parties, as required under the cooperation agreement with the Blackwells/Related Parties.
Impairment Charges During the year ended December 31, 2023, we recorded aggregate impairment charges of $68.7 million, as described below: • During the three months ended December 31, 2023, we determined that one of our properties located in Scotland (which was owned prior to the REIT Merger) had an estimated fair value that was lower than its carrying value based on the estimated selling price of the property, and as a result, the Company recorded an impairment charge of approximately $1.8 million.
During the year ended December 31, 2023, we recorded aggregate impairment charges of $68.7 million, as described below: 49 Table of Contents • During the three months ended December 31, 2023, we determined that one of our properties located in Scotland (which was owned prior to the REIT Merger) had an estimated fair value that was lower than its carrying value based on the estimated selling price of the property, and as a result, the Company recorded an impairment charge of approximately $1.8 million.
Nevertheless, we believe that the use of FFO, which excludes the impact of real estate related depreciation and amortization, among other things, provides a more complete understanding of our performance to investors and to management, and, when compared year over year, reflects the impact on our operations from trends in occupancy rates, rental rates, operating costs, general and administrative expenses, and interest costs, which may not be immediately apparent from net income.
Nevertheless, we believe that the use of FFO, which excludes the impact of real estate related depreciation and amortization, among other things, provides a 57 Table of Contents more complete understanding of our performance to investors and to management, and, when compared year over year, reflects the impact on our operations from trends in occupancy rates, rental rates, operating costs, general and administrative expenses, and interest costs, which may not be immediately apparent from net income.
Because FFO, Core FFO and AFFO calculations exclude such factors as depreciation and amortization of real estate assets and gain or loss from sales of operating real estate assets (which can vary among owners of identical assets in similar conditions based on historical cost accounting and useful-life estimates), FFO, Core FFO and AFFO presentations facilitate comparisons of operating performance between periods and between other REITs.
Because FFO, Core FFO and AFFO calculations exclude such factors as depreciation and amortization of real estate assets and gain or loss from sales of operating real estate assets (which can vary among owners of identical assets in similar conditions based on historical cost accounting and useful-life estimates), FFO, Core FFO and AFFO presentations can facilitate comparisons of operating performance between periods and between other REITs in our peer group.
We do not consider these expenses to be part of our normal operating performance and have, accordingly, increased AFFO for this amount. (7) Amount relates to costs incurred related to the tax restructuring of our European entities. We do not consider these expenses to be part of our normal operating performance and have, accordingly, increased AFFO for this amount.
We do not consider these expenses to be part of our normal operating performance and have, accordingly, increased AFFO for this amount. (5) Amount relates to costs incurred related to the tax restructuring of our European entities. We do not consider these expenses to be part of our normal operating performance and have, accordingly, increased AFFO for this amount.
Based on the percentage of annualized rental income on a straight-line basis as of December 31, 2023, approximately 80% of our properties were located in the U.S. and Canada and approximately 20% were located in Europe.
Based on the percentage of annualized rental income on a straight-line basis as of December 31, 2024, approximately 80% of our properties were located in the U.S. and Canada and approximately 20% were located in Europe.
Loss on Extinguishment of Debt The loss on extinguishment of debt of $1.2 million during the year ended December 31, 2023 was primarily due to early pre-payment penalties from certain mortgage paydowns.
The loss on extinguishment and modification of debt of $1.2 million during the year ended December 31, 2023 was primarily due to early pre-payment penalties from certain mortgage paydowns.
Settlement Costs For the year ended December 31, 2023 we recognized settlement costs of $29.7 million which consists of the cash reimbursement of approximately $8.8 million of expenses to the Blackwells/Related Parties and non-cash equity expense of approximately $20.9 million for Common Stock issued to Blackwells under the Cooperation Agreement (as defined in Note 1 0 — Stockholders’ Equity to our consolidated financial statements in this Annual Report on Form 10-K).
Settlement Costs We recognized settlement costs of $29.7 million during the year ended December 31, 2023, which related to the cash reimbursement of approximately $8.8 million of expenses to the Blackwells/Related Parties (as defined in Note 10 — Stockholders’ Equity to our consolidated financial statements in this Annual Report on Form 10-K) and non-cash equity expense of approximately $20.9 million for Common Stock issued to Blackwells under the Cooperation Agreement (as defined in Note 10 — Stockholders’ Equity to our consolidated financial statements in this Annual Report on Form 10-K).
AFFO presented by us may not be comparable to AFFO reported by other REITs that define AFFO differently. Furthermore, we believe that in order to facilitate a clear understanding of our operating results, AFFO should be examined in conjunction with net income (loss) as presented in our consolidated financial statements.
AFFO presented by us may not be comparable to AFFO reported by other REITs that define AFFO differently. Furthermore, we believe that in order to facilitate a clear understanding of our operating results, AFFO should be examined in conjunction with net income (loss) calculated in accordance with GAAP as presented in our consolidated financial statements.
Mortgage Notes Payable As of December 31, 2023 and 2022, we had secured mortgage notes payable of $2.5 billion and $1.2 billion, respectively, net of mortgage discounts and deferred financing costs. All of our current mortgage loans require payment of interest-only with the principal due at maturity.
Mortgage Notes Payable As of December 31, 2024 and 2023, we had secured mortgage notes payable of $2.2 billion and $2.5 billion, respectively, net of mortgage discounts and deferred financing costs. All of our current mortgage loans require payment of interest-only with the principal due at maturity.
Further, such new leases would be evaluated to consider whether they would be failed sale-leaseback transactions and accounted for as financing transactions by the lessor. During the three-year period ended December 31, 2023, we did not have any leases as a lessor that would be considered as sales-type leases or financings under sale-leaseback rules.
Further, such new leases would be evaluated to consider whether they would be failed sale-leaseback transactions and accounted for as financing transactions by the lessor. During the three-year period ended December 31, 2024, we did not have any leases as a lessor that would be considered as sales-type leases or financings.
Cash flows provided by operating activities during the year ended December 31, 2023 reflect net loss of $211.9 million, adjusted for non-cash items of $339.1 million (primarily depreciation, amortization of intangibles, amortization of deferred financing costs, amortization of mortgage discounts, amortization of above- and below-market lease and ground lease assets and liabilities, amortization of right of use assets, amortization of lease incentives and commissions, unbilled straight-line rent (including the effect of adjustments due to rent deferrals), equity-based compensation, unrealized gains on foreign currency transactions, derivatives and impairment charges).
Cash flows provided by operating activities during the year ended December 31, 2023 reflect net loss of $211.9 million, adjusted for non-cash items of $339.1 million (primarily depreciation, amortization of intangibles, amortization of deferred financing costs, amortization of mortgage discounts, amortization of above- and below-market lease and ground lease assets and liabilities, amortization of right of use assets, amortization of lease incentives and commissions, unbilled straight-line rent, equity-based compensation, unrealized gains on foreign currency transactions, derivatives and impairment charges).
We evaluate probability of sale based on specific facts including whether a sales agreement is in place and the buyer has made significant non-refundable deposits. Properties are no longer depreciated when they are classified as held for sale. As of December 31, 2023, we had two properties classified as held for sale.
We evaluate probability of sale based on specific facts including whether a sales agreement is in place and the buyer has made significant non-refundable deposits. Properties are no longer depreciated when they are classified as held for sale. As of December 31, 2024, we had 13 properties classified as held for sale.
The total gross carrying value of unencumbered assets as of December 31, 2023 was $4.9 billion, of which approximately $4.8 billion was included in the unencumbered asset pool comprising the borrowing base under the Revolving Credit Facility and therefore is not available to serve as collateral for future borrowings.
The total gross carrying value of unencumbered assets as of December 31, 2024 was $4.8 billion, of which approximately $4.5 billion was included in the unencumbered asset pool comprising the borrowing base under the Revolving Credit Facility and therefore is not available to serve as collateral for future borrowings.
Amounts recorded as reductions of revenue during the years ended December 31, 2023, 2022 and 2021 totaled and $3.5 million, $0.7 million, and $1.1 million, respectively. Investments in Real Estate Investments in real estate are recorded at cost. Improvements and replacements are capitalized when they extend the useful life of the asset.
Amounts recorded as reductions of revenue during the years ended December 31, 2024, 2023 and 2022 totaled and $3.4 million, $3.5 million, and $0.7 million, respectively. Investments in Real Estate Investments in real estate are recorded at cost. Improvements and replacements are capitalized when they extend the useful life of the asset.
The Company is the lessee under certain land leases which were previously classified prior to adoption of ASC 842 and will continue to be classified as operating leases under transition elections unless subsequently modified, as well as land leases and other operating leases that were acquired or entered into in connection with the Mergers.
We are the lessee under certain land leases which were previously classified prior to adoption of ASC 842 and will continue to be classified as operating leases under transition elections unless subsequently modified, as well as land leases and other operating leases that were acquired or entered into in connection with the Mergers.
Any other method of accounting for real estate such as the fair value method cannot be construed to be any more 56 Table of Contents accurate or relevant than the comparable methodologies of real estate valuation found in GAAP.
Any other method of accounting for real estate such as the fair value method cannot be construed to be any more accurate or relevant than the comparable methodologies of real estate valuation found in GAAP.
See Note 8 — Fair Value of Financial Instruments to our consolidated financial statements included in this Annual Report on Form 10-K for a discussion of fair value of such debt as of December 31, 2023. As of December 31, 2023 the weighted-average maturity of our indebtedness was 3.2 years.
See Note 8 — Fair Value of Financial Instruments to our consolidated financial statements included in this Annual Report on Form 10-K for a discussion of fair value of such debt as of December 31, 2024. As of December 31, 2024 the weighted-average maturity of our indebtedness was 3.0 years.
Our other sources of capital, which we have used and may use in the future, include proceeds received from our Revolving Credit Facility, proceeds from secured or unsecured financings (which may include note issuances), proceeds from our offerings of equity securities (including Common Stock and Preferred Stock), proceeds from any future sales of properties and undistributed cash flows from operations, if any.
Our other sources of capital, which we have used and may use in the future, include proceeds received from our Revolving Credit Facility, proceeds from secured or unsecured financings (which may include note issuances), proceeds from our offerings of equity securities (including Common Stock and Preferred Stock), proceeds from any future sales of properties, including proceeds from the RCG Multi-Tenant Retail Disposition and undistributed cash flows from operations, if any.
The applicable interest rate margin is based on a range from 0.30% to 0.90% per annum with respect to Base Rate borrowings under the Revolving Credit Facility and 1.30% to 1.90% per annum with respect to Benchmark Rate borrowings under the Revolving 53 Table of Contents Credit Facility. These spreads reflect a reduction from the previous spreads.
The applicable interest rate margin is based on a range from 0.30% to 0.90% per annum with respect to Base Rate borrowings under the Revolving Credit Facility and 1.30% to 1.90% per annum with respect to Benchmark Rate borrowings under the Revolving Credit Facility. These spreads reflect a reduction from the previous spreads.
We do not consider these expenses to be part of our normal operating performance and have, accordingly, increased AFFO for this amount. 58 Table of Contents Dividends The amount of dividends payable to our common stockholders is determined by our Board and is dependent on a number of factors, including funds available for dividends, our financial condition, provisions in our Credit Agreement or other agreements that may restrict our ability to pay dividends, capital expenditure requirements, as applicable, requirements of Maryland law and annual distribution requirements needed to maintain our status as a REIT.
We do not consider this income to be part of our normal operating performance and have, accordingly, decreased AFFO for this amount. 59 Table of Contents Dividends Common Stock The amount of dividends payable to our common stockholders is determined by our Board and is dependent on a number of factors, including funds available for dividends, our financial condition, provisions in our Credit Agreement or other agreements that may restrict our ability to pay dividends, capital expenditure requirements, as applicable, requirements of Maryland law and annual distribution requirements needed to maintain our status as a REIT.
Management expects that cash generated from operations, supplemented by our existing cash, will be sufficient to fund the payment of quarterly dividends to our common stockholders and holders of our Preferred Stock, as well as anticipated capital expenditures.
Management expects that cash generated from operations, supplemented by our existing cash, will be sufficient to fund, in the near and long term, the payment of quarterly dividends to our common stockholders and holders of our Preferred Stock, as well as anticipated capital expenditures.
To help mitigate the adverse impact of inflation, approximately 78.0% of our leases with our tenants contain rent escalation provisions that increase the cash rent that is due over time by an average cumulative increase of 1.3% per year.
To help mitigate the adverse impact of inflation, approximately 81% of our leases with our tenants contain rent escalation provisions that increase the cash rent that is due under the leases over time by an average cumulative increase of 1.3% per year.
Inflation We may be adversely impacted by inflation on the leases that do not contain indexed escalation provisions, or those leases which have escalations at rates which do not exceed or approximate current inflation rates. As of December 31, 2023, the increase to the 12-month CPI for all items, as published by the Bureau of Labor Statistics, was 3.4%.
Inflation We may be adversely impacted by inflation on the leases that do not contain indexed escalation provisions, or those leases which have escalations at rates which do not exceed or approximate current inflation rates. As of December 31, 2024, the increase to the 12-month CPI for all items, as published by the Bureau of Labor Statistics, was 2.9%.
For the years ended December 31, 2023, 2022 and 2021, our revenue from tenants included the impact of unbilled rental revenue of $10.4 million, $9.6 million and $5.7 million, respectively, to adjust contractual rent to straight-line rent. For new leases after acquisition of property, the commencement date is considered to be the date the lease modification is executed.
For the years ended December 31, 2024, 2023 and 2022, our revenue from tenants included the impact of unbilled rental revenue of $19.2 million, $10.4 million and $9.6 million, respectively, to adjust contractual rent to straight-line rent. For new leases after acquisition of property, the commencement date is considered to be the date the lease modification is executed.
As of December 31, 2023, the Revolving Credit Facility had a weighted-average effective interest rate of 6.0% after giving effect to interest rate swaps in place. The Revolving Credit Facility matures on October 8, 2026, subject to our option, subject to customary conditions, to extend the maturity date by up to two additional six-month terms.
As of December 31, 2024, the Revolving Credit Facility had a weighted-average effective interest rate of 5.7% after giving effect to interest rate swaps in place. The Revolving Credit Facility matures on October 8, 2026, subject to our option, subject to customary conditions, to extend the maturity date by up to two additional six-month terms.
Unrealized Income (Loss) on Undesignated Foreign Currency Advances and Other Hedge Ineffectiveness We recorded income of $2.4 million on undesignated foreign currency advances and other hedge ineffectiveness, related to the accelerated reclassification of amounts in other comprehensive income to earnings as a result of certain hedged forecasted transactions becoming probable not to occur, for the year ended December 31, 2022.
Unrealized Gains on Undesignated Foreign Currency Advances and Other Hedge Ineffectiveness We recorded gains of $3.2 million on undesignated foreign currency advances and other hedge ineffectiveness, related to the accelerated reclassification of amounts in other comprehensive income to earnings as a result of certain hedged forecasted transactions becoming probable not to occur, for the year ended December 31, 2024.
Equity-Based Compensation We maintain stock-based incentive plans under which our directors, officers, employees, consultants and, historically, entities that provide services to us are eligible to receive awards. Awards granted thereunder are accounted for under the guidance for employee share-based payments.
Equity-Based Compensation We have stock-based incentive plans under which our directors, officers, employees, consultants or entities that provide services to us are, or have historically been, eligible to receive awards. Awards granted thereunder are accounted for under the guidance for employee share-based payments.
The increase was due to additional depreciation and amortization expense recorded as a result of the impact of the REIT Merger and the year-over-year change in average foreign exchange rates during the year ended December 31, 2023, when compared to the year ended December 31, 2022.
The increase was due to the full year period of additional depreciation and amortization expense recorded as a result of the impact of the REIT Merger for a full year period in the year ended December 31 2024 and the year-over-year change in average foreign exchange rates during the year ended December 31, 2024, when compared to the year ended December 31, 2023.
All paid and accrued acquisition, transaction and other costs (including prepayment penalties for debt extinguishments and merger related expenses) and certain other expenses, including expenses incurred for our 2023 proxy contest and related Blackwells/Related Parties litigation (as described herein), expenses related to our European tax restructuring and transition costs related to the Mergers, negatively impact our operating performance during the period in which expenses are incurred or properties are acquired and will also have negative effects on returns to investors, but are not reflective of on-going performance.
All paid and accrued acquisition, transaction and other costs (including prepayment penalties for debt extinguishments or modifications and merger related expenses) and certain other expenses, including expenses incurred for our 2023 proxy contest and related Blackwells/Related Parties litigation, expenses related to our European tax restructuring and transition costs related to the Mergers, negatively impact our operating performance during the period in which expenses are incurred or properties are acquired and will also have negative effects on returns to investors, but are excluded by us as we believe they are not reflective of on-going performance.
For additional details on our acquisition of RTL and the internalization of our advisory and property management services and the advisory and property management functions of RTL, also see Note 1 — Organization, Note 3 — The Mergers and N ote 12 — Related Party Transactions to our consolidated financial statements included in this Annual Report on Form 10-K.
For additional information on the acquisition of RTL and the internalization of our advisory and property management services and RTL’s advisory and property management functions, see Note 3 — The Mergers and N ote 12 — Related Party Transactions to our consolidated financial statements included in this Annual Report on Form 10-K.
No properties were presented as discontinued operations as of December 31, 2023 and 2022.
No properties were presented as discontinued operations as of December 31, 2024 and 2023.
As of December 31, 2023, approximately 49% of our total debt outstanding was secured and 51% was unsecured, the latter including amounts outstanding under our Credit Facility and Senior Notes.
As of December 31, 2024, approximately 49% of our total debt outstanding was secured and 51% was 51 Table of Contents unsecured, the latter including amounts outstanding under our Credit Facility and Senior Notes.
The PSA’s and LOI’s are subject to conditions and there can be no assurance we will be able to complete these dispositions on their contemplated terms, or at all.
The PSAs and LOIs are subject to conditions and there can be no assurance we will be able to complete these dispositions on their contemplated terms, or at all.
Both the 4.50% Senior Notes and our original 3.75% Senior Notes (together, the “Senior Notes”) do not require 52 Table of Contents any principal payments prior to maturity.
Both the 4.50% Senior Notes and our original 3.75% Senior Notes (together, the “Senior Notes”) do not require any principal payments prior to maturity.
Dividends authorized by our Board and declared by us are paid on a quarterly basis on the 15th day of the first month following the end of each fiscal quarter (unless otherwise specified) to common stockholders of record on the record date for such payment.
Common Stock dividends authorized by our Board and declared by us are paid on a quarterly basis in arrears during the first month following the end of each fiscal quarter (unless otherwise specified) to common stockholders of record on the record date for such payment.
Deferred leasing commissions are recorded over the terms of the related leases. Amounts related to leasing commissions incurred from third parties are recorded in depreciation and amortization. Amounts related to leasing commissions incurred from the former Advisor are recorded within operating fees to related parties in the consolidated statements of operations.
Deferred leasing commissions are recorded over the terms of the related leases. The amortization expense related to leasing commissions incurred from third parties are recorded in depreciation and amortization. Prior to the Mergers, amortization expense related to leasing commissions incurred from the former Advisor were recorded within operating fees to related parties in the consolidated statements of operations.
In addition, as of December 31, 2023, our portfolio was comprised of 32% Industrial & Distribution properties, 27% Multi-Tenant retail properties, 21% Single-Tenant Retail properties and 20% Office properties. These represent our four reportable segments and the percentages are calculated using annualized straight-line rent converted from local currency into the U.S. Dollar (“USD”) as of December 31, 2023.
In addition, as of December 31, 2024, our portfolio was comprised of 34% Industrial & Distribution properties, 28% Multi-Tenant retail properties, 21% Single-Tenant Retail properties and 17% Office properties. These represent our four reportable segments and the percentages are calculated using annualized straight-line rent converted from local currency into the U.S. Dollar (“USD”) as of December 31, 2024.
The carrying value of these leases was $6.6 million as of December 31, 2023 and the amounts are included in prepaid expenses and other assets on our consolidated balance sheet as of December 31, 2023.
The carrying value of these leases was $6.7 million and $6.6 million as of December 31, 2024 and 2023, respectively, and the amounts are included in prepaid expenses and other assets on our consolidated balance sheets as of December 31, 2024 and 2023.
General and Administrative Expense General and administrative expenses were $40.2 million and $17.7 million for the years ended December 31, 2023 and 2022, respectively, primarily consisting of professional fees including audit and taxation related services, employee compensation/payroll expenses, board member compensation, and directors’ and officers’ liability insurance.
General and Administrative Expense General and administrative expenses were $57.7 million and $40.2 million for the years ended December 31, 2024 and 2023, respectively, which primarily consist of employee compensation/payroll expenses, professional fees including audit and taxation related services, board member compensation, and directors’ and officers’ liability insurance.
During the year ended December 31, 2023, we did not sell any shares of Series B Preferred Stock through the Series B Preferred Stock ATM Program.
During the years ended December 31, 2024 and 2023, we did not sell any shares of Series B Preferred Stock through the Series B Preferred Stock ATM Program.
As of December 31, 2023, the carrying amount of the outstanding Senior Notes on our balance sheets totaled $886.0 million which is net of $114.0 million of deferred financing costs and discounts, and as of December 31, 2022 the carrying amount of the outstanding Senior Notes on our balance sheets totaled $493.1 million, which is net of $6.9 million of deferred financing costs.
As of December 31, 2024, the carrying amount of the outstanding Senior Notes on our balance sheets totaled $906.1 million which is net of $93.9 million of deferred financing costs and discounts, and as of December 31, 2023 the carrying amount of the outstanding Senior Notes on our balance sheets totaled $886.0 million, which is net of $114.0 million of deferred financing costs.
Other than the Mergers, which were accounted for as a business combination, all of the other acquisitions during the years ended December 31, 2023, 2022 and 2021 were asset acquisitions.
Other than the Mergers, which were accounted for as a business combination, all of the other acquisitions during the years ended December 31, 2023 and 2022 were asset acquisitions. There were no acquisitions during the year ended December 31, 2024.
In addition, we perform an analysis of potential deferred tax or future tax benefit and expense as a result of book and tax differences and timing differences in taxes across jurisdictions. Income tax expense was $14.5 million and $11.0 million for the years ended December 31, 2023 and 2022, 49 Table of Contents respectively.
In addition, we perform an analysis of potential deferred tax or future tax benefit and expense as a result of book and tax differences and timing differences in taxes across jurisdictions. Income tax expense was $4.4 million and $14.5 million for the years ended December 31, 2024 and 2023, respectively.
The increase in revenue from tenants was primarily driven by revenue of $9.7 million attributable to properties acquired from RTL on the Acquisition Date, with minimal impact from the year-over-year change in average foreign exchange rates during the year ended December 31, 2023, when compared to the year ended December 31, 2022.
The increase in revenue from tenants was primarily driven by a full year of revenue attributable to properties acquired from RTL on the Acquisition Date for the year ended December 31, 2024, with minimal impact from the year-over-year change in average foreign exchange rates during the year ended December 31, 2024, when compared to the year ended December 31, 2023.
Income of $0.2 million relating to these two leases is included in revenue from tenants in our consolidated statement of operations for the year ended December 31, 2023.
Income of $0.7 million and $0.2 million relating to these two leases is included in revenue from tenants in our consolidated statement of operations for the years ended December 31, 2024 and 2023, respectively.
Comparison of the Year Ended December 31, 2023 to the Year Ended December 31, 2022 Net Loss Attributable to Common Stockholders Net loss attributable to common stockholders was $239.3 million for the year ended December 31, 2023, as compared to $8.4 million for the year ended December 31, 2022.
Comparison of the Year Ended December 31, 2024 to the Year Ended December 31, 2023 Net Loss Attributable to Common Stockholders Net loss attributable to common stockholders was $175.3 million for the year ended December 31, 2024, as compared to $239.3 million for the year ended December 31, 2023.
Please see the “Results of Operations” section located on page 48 under Item 7 of our Annual Report on Form 10-K for the year ended December 31, 202 2 for a discussion of our results of operations for the year ended December 31, 2021 and year-to-year comparisons between 2022 and 2021.
Please see the “Results of Operations” section located on page 39 under Item 7 of our Annual Report on Form 10-K for the year ended December 31, 20 23 for a discussion of our results of operations for the year ended December 31, 2023 and year-to-year comparisons between 2023 and 2022.
We did not have any assets held for sale as of December 31, 2022. Purchase Price Allocation In both a business combination and an asset acquisition, we allocate the purchase price of acquired properties to tangible and identifiable intangible assets or liabilities based on their respective fair values.
We had two properties classified as held for sale as of December 31, 2023. Purchase Price Allocation In both a business combination and an asset acquisition, we allocate the purchase price of acquired properties to tangible and identifiable intangible assets or liabilities based on their respective fair values.
As of December 31, 2022, approximately 23% of our total debt outstanding was denominated in EUR, and 16% of our total debt outstanding was denominated in GBP. We view a combination of secured and unsecured financing as an efficient and accretive means to acquire properties and manage working capital.
As of December 31, 2023, approximately 10% of our total debt outstanding was denominated in EUR, 8% of our total debt outstanding was denominated in GBP, and 1% was denominated in CAD. We view a combination of secured and unsecured financing as an efficient and accretive means to acquire properties and manage working capital.
For the year ended December 31, 2023, the loss on derivative instruments consisted of unrealized losses of $7.3 million and realized gains of $3.6 million. For the year ended December 31, 2022, the gain on derivative instruments consisted of unrealized gains of $9.4 million and realized gains of $9.2 million.
For the year ended December 31, 2024, the gain on derivative instruments consisted of unrealized gains of $3.4 million and realized gains of $0.8 million. For the year ended December 31, 2023, the loss on derivative instruments consisted of unrealized losses of $7.3 million and realized gains of $3.6 million.
As of December 31, 2023 and 2022, we had cash and cash equivalents of $121.6 million and $103.3 million, respectively. See discussion above our how our cash flows from various sources impacted our cash.
As of December 31, 2024 and 2023, we had cash and cash equivalents of $159.7 million and $121.6 million, respectively. See discussion above our how our cash flows from various sources impacted our cash.
Our debt leverage ratio was 65.0% (total debt as a percentage of total purchase price of real estate investments, based on the exchange rate at the time of purchase) as of December 31, 2023.
Our debt leverage ratio was 63.8% (total debt as a percentage of total purchase price of real estate investments, based on the exchange rate at the time of purchase) as of December 31, 2024.
Covenants As of December 31, 2023, we were in compliance with the covenants under the Indenture governing the 3.75% Senior Notes, the 4.50% Senior Notes and the Credit Agreement (see Note 6 — Revolving Credit Facility and Note 7 — Senior Notes, Net to our consolidated financial statements included in this Annual Report on Form 10-K for further discussion on the Credit Facility and Senior Notes and the related covenants).
Covenants As of December 31, 2024, we were in compliance with the covenants under the indenture governing the 3.75% Senior Notes, the indenture governing the 4.50% Senior Notes and the Credit Agreement (see Note 6 — Revolving Credit Facility and Note 7 — Senior Notes, Net to our consolidated financial statements included in this Annual Report on Form 10-K for further discussion on the Credit Facility and Senior Notes and the related covenants). 56 Table of Contents As of December 31, 2024, we were in compliance with all property-level debt covenants with the exception of four property-level debt instruments.
The increase was primarily due to an increase in property operating expenses resulting from properties acquired from RTL on the Acquisition Date, with minimal impact from the year-over-year change in average foreign exchange rates during the year ended December 31, 2023, when compared to the year ended December 31, 2022.
The increase was primarily due to an increase in property operating expenses resulting from a full period of expenses attributable to properties acquired from RTL on the Acquisition Date for the year ended December 31, 2024, with minimal impact from the year-over-year change in average foreign exchange rates, when compared to the year ended December 31, 2023.
As of December 31, 2023, these leases had a weighted-average remaining lease term of 6.8 years.
As of December 31, 2024, these leases had a weighted-average remaining lease term of 6.2 years.
As of December 31, 2023, 20% of our total debt outstanding was variable-rate debt, which bore interest at a weighted- average interest rate of 7.2% per annum (30% variable with a rate of 4.4% in 2022).
As of December 31, 2024, 9% of our total debt outstanding was variable-rate debt, which bore interest at a weighted- average interest rate of 6.0% per annum (20% variable with a rate of 7.2% in 2023).
As of December 31, 2023 and 2022, our cumulative straight-line rents receivable in the consolidated balance sheets was $84.3 million, and $73.0 million, respectively.
As of December 31, 2024 and 2023, our cumulative straight-line rents receivable in the consolidated balance sheets was $99.5 million, and $84.3 million, respectively.
Core Funds from Operations In calculating Core FFO, we start with FFO, then we exclude certain non-core items such as merger, transaction and other costs, settlement costs related to the Blackwells/Related Parties litigation (as described herein), as well as certain other costs that are considered to be non-core, such as debt extinguishment costs.
Core Funds From Operations In calculating Core FFO, we start with FFO, then we exclude certain non-core items such as merger, transaction and other costs, settlement costs related to the Blackwells/Related Parties litigation (recorded in the second and third quarters of 2023), as well as certain other costs that are considered to be non-core, such as debt extinguishment or modification costs.
We will continue to assess for triggering events. Should any triggering event occur, we would evaluate the carrying value of our goodwill by segment through an impairment test. If impairment is warranted, the charge would be recorded through the combined income statement as a reduction to earnings.
Should any triggering event occur, we would evaluate the carrying value of our goodwill by segment through an impairment test. If impairment is warranted, the charge would be recorded through the consolidated statement of operations as a reduction to earnings.
Single-Tenant Retail Property operating expenses in our Single-Tenant Retail were $5.3 million and $0.8 million for the years ended December 31, 2023 and 2022, respectively.
Single-Tenant Retail Property operating expenses in our Single-Tenant Retail were $15.8 million and $6.0 million for the years ended December 31, 2024 and 2023, respectively.
We believe we have the ability to service our debt obligations as they come due. As noted above, we plan on managing our leverage by using proceeds from strategic or opportunistic dispositions to reduce our debt, and we currently have entered into PSA’s and LOI’s totaling an aggregate of $147.7 million.
We believe we have the ability to service our debt obligations as they come due. As noted above, we plan on continuing to manage our leverage by using proceeds from strategic or opportunistic dispositions to reduce our debt, and we currently have entered into PSA’s and LOI’s totaling an aggregate of $2.1 billion, inclusive of the RCG PSA.
Equity Offerings Common Stock We have an “at the market” equity offering program (the “Common Stock ATM Program”) pursuant to which we may sell shares of Common Stock, from time to time through our sales agents.
Preferred Stock We have an “at the market” equity offering program for our Series B Preferred Stock (the “Series B Preferred Stock ATM Program”) pursuant to which we may sell shares of Series B Preferred Stock, from time to time through our sales agents.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThe following table presents future principal payments based upon expected maturity dates and fixed/variable classification of our debt obligations outstanding as of December 31, 2023: (In thousands) Fixed-rate debt (1) (2) Variable-rate debt (1) Total Debt 2024 $ 388,901 $ 16,339 (3) $ 405,240 2025 698,775 — 698,775 2026 762,542 1,091,927 (4) 1,854,469 2027 663,191 — 663,191 2028 1,031,229 — 1,031,229 Thereafter 756,661 — 756,661 Total $ 4,301,299 $ 1,108,266 $ 5,409,565 Additional Details: Percentage of Fixed / Variable Rate Debt 80.0 % 20.0 % 100.0 % Weighted-average effective interest rate 4.1 % 7.2 % 4.8 % ________ (1) Assumes exchange rates of £1.00 to $1.27 for GBP, €1.00 to $1.10 for EUR and $1.00 CAD to $0.75 as of December 31, 2023, for illustrative purposes, as applicable.
Biggest changeThe following table presents future principal payments based upon expected maturity dates and fixed/variable classification of our debt obligations outstanding as of December 31, 2024: (In thousands) Fixed-rate debt (1) (2) Variable-rate debt (1) Total Debt 2025 $ 464,526 $ — (3) $ 464,526 2026 1,110,447 385,770 1,496,217 2027 663,191 — (4) 663,191 2028 1,029,620 — 1,029,620 2029 644,729 15,373 660,102 Thereafter 400,257 — 400,257 Total $ 4,312,770 $ 401,143 $ 4,713,913 Additional Details: Percentage of total debt 91.0 % 9.0 % N/A Weighted-average effective interest rate 4.7 % 6.0 % 4.8 % ________ (1) Assumes exchange rates of £1.00 to $1.25 for GBP, €1.00 to $1.04 for EUR and $1.00 CAD to $0.70 as of December 31, 2024, for illustrative purposes, as applicable.
The total estimated fair value of our foreign currency forward contracts and put options, which are included in derivatives, at fair value on the consolidated balance sheets, was in a net asset position of $1.6 million as of December 31, 2023 (see Note 8 — Fair Value of Financial Instruments to our consolidated financial statements included in this Annual Report on Form 10-K).
The total estimated fair value of our foreign currency forward contracts and put options, which are included in derivatives, at fair value on the consolidated balance sheets, was in a net asset position of $1.6 million as of December 31, 2024 (see Note 8 — Fair Value of Financial Instruments to our consolidated financial statements included in this Annual Report on Form 10-K).
While we believe our portfolio is reasonably well diversified, it does contain concentrations in excess of 10%, based on the percentage of our annualized rental income as of December 31, 2023, in certain areas. See Item 2. Properties in this Annual Report on Form 10-K for further discussion on distribution across countries and industries.
While we believe our portfolio is reasonably well diversified, it does contain concentrations in excess of 10%, based on the percentage of our annualized rental income as of December 31, 2024, in certain areas. See Item 2. Properties in this Annual Report on Form 10-K for further discussion on distribution across countries and industries.
Foreign Currency Exchange Rate Risk We own foreign investments, primarily in Europe but also in Canada and as a result are subject to risk from the effects of exchange rate movements in the Euro, the GBP and the CAD which have affected and may continue to affect future costs and cash flows, in our functional currency, the USD.
Foreign Currency Exchange Rate Risk 63 Table of Contents We own foreign investments, primarily in Europe but also in Canada and as a result are subject to risk from the effects of exchange rate movements in the Euro, the GBP and the CAD which have affected and may continue to affect future costs and cash flows, in our functional currency, the USD.
However, from time to time, we have entered and may continue to enter into foreign currency forward contracts to hedge our foreign currency cash flow exposures. 61 Table of Contents Interest Rate Risk The values of our real estate and related fixed-rate debt obligations are subject to fluctuations based on changes in interest rates.
However, from time to time, we have entered and may continue to enter into foreign currency forward contracts to hedge our foreign currency cash flow exposures. Interest Rate Risk The values of our real estate and related fixed-rate debt obligations are subject to fluctuations based on changes in interest rates.
Management’s Discussion and Analysis of Financial Condition and Results of Operations above. 62 Table of Contents The estimated fair value of our fixed-rate debt and our variable-rate debt that currently bears interest at fixed rates or has effectively been converted to a fixed rate through the use of interest rate swaps is affected by changes in interest rates.
Management’s Discussion and Analysis of Financial Condition and Results of Operations above. The estimated fair value of our fixed-rate debt and our variable-rate debt that currently bears interest at fixed rates or has effectively been converted to a fixed rate through the use of interest rate swaps is affected by changes in interest rates.
Interest rate swaps are agreements in which one party exchanges a stream of interest payments for a counterparty’s stream of cash flows over a specific period, and interest rate caps limit the effective borrowing rate of variable-rate debt obligations while allowing participants to share in downward shifts in interest rates.
Interest rate swaps are agreements in which one party exchanges 62 Table of Contents a stream of interest payments for a counterparty’s stream of cash flows over a specific period, and interest rate caps limit the effective borrowing rate of variable-rate debt obligations while allowing participants to share in downward shifts in interest rates.
As of December 31, 2023, our total consolidated debt, which includes secured mortgage financings, borrowings under the Revolving Credit Facility, our 3.75% Senior Notes and our 4.50% Senior Notes, had a total gross carrying value of $5.4 billion, an estimated fair value of $5.1 billion.
As of December 31, 2024, our total consolidated debt, which includes secured mortgage financings, borrowings under the Revolving Credit Facility, our 3.75% Senior Notes and our 4.50% Senior Notes, had a total gross carrying value of $4.7 billion, an estimated fair value of $4.5 billion.
The annual interest rates on our fixed-rate debt mortgage debt as of December 31, 2023 ranged from 1.4% to 6.5% and the interest rates on our 3.75% Senior Notes and 4.50% Senior Notes are fixed at 3.75% and 4.50%, respectively. The contractual annual interest rates on our variable-rate debt as of December 31, 2023 ranged from 2.4% to 6.0%.
The annual interest rates on our fixed-rate debt mortgage debt as of December 31, 2024 ranged from 2.2% to 6.5% and the interest rates on our 3.75% Senior Notes and 4.50% Senior Notes are fixed at 3.75% and 4.50%, respectively. The contractual annual interest rates on our variable-rate debt as of December 31, 2024 ranged from 5.0% to 5.7%.
Based on our annualized rental income, the majority of our directly owned real estate properties and related loans are located in the U.S. and Canada (80%) and the remaining are in the United Kingdom (11%), The Netherlands (2%), Finland (2%) and Germany (1%).
Based on our annualized rental income, the majority of our directly owned real estate properties and related loans are located in the U.S. and Canada (80%) and the remaining are in the United Kingdom (10%), The Netherlands (3%), Finland (2%) and Germany (2%).
Annual interest expense on our unhedged variable-rate debt that does not bear interest at fixed rates as of December 31, 2023 would increase or decrease by approximately $11.1 million for each respective 1% change in annual interest rates.
Annual interest expense on our unhedged variable-rate debt that does not bear interest at fixed rates as of December 31, 2024 would increase or decrease by approximately $4.0 million for each respective 1% change in annual interest rates.
No individual tenant accounted for more than 10% of our annualized rental income as of December 31, 2023. Based on annualized rental income, as of December 31, 2023, our directly owned real estate properties contain significant concentrations in the following asset types: Industrial & Distribution (32%), Multi-Tenant Retail (27%), Single-Tenant Retail (21%) and Office (20%).
No individual tenant accounted for more than 10% of our annualized rental income as of December 31, 2024. Based on annualized rental income, as of December 31, 2024, our directly owned real estate properties contain significant concentrations in the following asset types: Industrial & Distribution (34%), Multi-Tenant Retail (28%), Single-Tenant Retail (21%) and Office (17%).
We estimated that the total fair value of our interest rate swaps, which are included in derivative assets, at fair value and derivative liabilities, at fair value on our consolidated balance sheets, totaled $10.6 million and $5.1 million as of December 31, 2023, respectively (see Note 9 — Derivatives and Hedging Activities to our consolidated financial statements included in this Annual Report on Form 10-K).
We estimated that the total fair value of our interest rate swaps, which are included in derivative assets, at fair value and derivative liabilities, at fair value on our consolidated balance sheets, totaled $2.5 million and $3.7 million as of December 31, 2024, respectively (see Note 9 — Derivatives and Hedging Activities to our consolidated financial statements included in this Annual Report on Form 10-K for more information, including the fair value of such assets and liabilities as of December 31, 2023).
As of December 31, 2023, we did not have any foreign currency draws in excess of our net investments in our foreign subsidiaries (see Note 9 — Derivatives and Hedging Activities to our consolidated financial statements included in this Annual Report on Form 10-K).
As of December 31, 2024, we had foreign currency draws (EUR) in excess of our net investments in our foreign subsidiaries (see Note 9 — Derivatives and Hedging Activities to our consolidated financial statements included in this Annual Report on Form 10-K).
A decrease or increase in interest rates of 1% would change the estimated fair value of this debt as of December 31, 2023 by an aggregate increase of $759.1 million or an aggregate decrease of $914.5 million, respectively.
A decrease or increase in interest rates of 1% would change the estimated fair value of this debt as of December 31, 2024 by an aggregate increase of $850.0 million or an aggregate decrease of $980.4 million, respectively.
Removed
Scheduled future minimum rents, exclusive of renewals, under non-cancelable operating leases, for our foreign operations as of December 31, 2023, during each of the next five calendar years and thereafter, are as follows: Future Minimum Base Rent Payments (1) (In thousands) EUR GBP CAD Total 2024 $ 54,299 $ 71,976 $ 2,787 $ 129,062 2025 49,739 60,859 2,828 113,426 2026 46,513 53,502 2,728 102,743 2027 33,181 50,510 2,669 86,360 2028 27,316 47,546 2,712 77,574 Thereafter 82,000 378,335 33,647 493,982 Total $ 293,048 $ 662,728 $ 47,371 $ 1,003,147 ______ (1) Assumes exchange rates of £1.00 to $1.27 for GBP, €1.00 to $1.10 for EUR and $1.00 CAD to $0.75 as of December 31, 2023 for illustrative purposes, as applicable. 63 Table of Contents Scheduled debt service payments (principal and interest) for mortgage notes payable for our foreign operations as of December 31, 2023, during each of the next five calendar years and thereafter, are as follows: Future Debt Service Payments Mortgage Notes Payable (In thousands) EUR GBP Total 2024 $ 212,631 (1) $ 130,997 $ 343,628 2025 — — — 2026 — — — 2027 — — — 2028 — — — Thereafter — — — Total $ 212,631 $ 130,997 $ 343,628 (1) In January 2024, the maturity date of the mortgage note that encumbers our properties in Finland (principal balance of $81.7 million as of December 31, 2023) was extended to February 2029.
Added
See Note 5 — Mortgage Notes Payable, Net and Note 6 — Revolving Credit Facility to our consolidated financial statements included in this Annual Report on Form 10-K for more information regarding the Company’s debt obligations for year ended December 31, 2023, including the fixed/variable classification of such obligations.
Removed
We currently anticipate that, by their respective due dates, we will have repaid or refinanced certain of these loans, or extended them, but there can be no assurance that we will be able to refinance these loans on favorable terms, if at all.
Added
Scheduled future minimum rents, exclusive of renewals, under non-cancelable operating leases, for our foreign operations as of December 31, 2024, during each of the next five calendar years and thereafter, are as follows: Future Minimum Base Rent Payments (1) (In thousands) EUR GBP CAD Total 2025 $ 47,667 $ 60,978 $ 2,608 $ 111,253 2026 45,520 53,657 2,515 101,692 2027 32,741 51,729 2,461 86,931 2028 27,068 48,827 2,501 78,396 2029 22,297 43,947 2,297 68,541 Thereafter 59,447 347,285 28,727 435,459 Total $ 234,740 $ 606,423 $ 41,109 $ 882,272 ______ (1) Assumes exchange rates of £1.00 to $1.25 for GBP, €1.00 to $1.04 for EUR and $1.00 CAD to $0.70 as of December 31, 2024 for illustrative purposes, as applicable. 64 Table of Contents Scheduled debt service payments (principal and interest) for mortgage notes payable for our foreign operations as of December 31, 2024, during each of the next five calendar years and thereafter, are detailed in the table below: Future Debt Service Payments Mortgage Notes Payable (In thousands) EUR 2025 $ 3,911 2026 3,911 2027 3,911 2028 3,922 2029 77,113 Thereafter — Total $ 92,768 We currently anticipate that, by their respective due dates, we will have repaid or refinanced certain of these loans, or extended them, but there can be no assurance that we will be able to refinance these loans on favorable terms, if at all.

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