10q10k10q10k.net

What changed in Global Net Lease, Inc.'s 10-K — 2022 vs 2023

vs

Paragraph-level year-over-year comparison of Global Net Lease, Inc.'s 2022 and 2023 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 2023 report.

+698 added−316 removedSource: 10-K (2024-02-27) vs 10-K (2023-02-23)

Top changes in Global Net Lease, Inc.'s 2023 10-K

698 paragraphs added · 316 removed · 192 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

23 edited+11 added−5 removed23 unchanged
Biggest changeInvestment Strategy We currently seek to: • generate stable and consistent cash flows by acquiring properties, or entering into new leases, with long lease terms; • acquire properties, or 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 and leveraging the market presence of our Advisor.
Biggest changeInvestment 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.
Implied investment grade may include actual ratings of the tenant parent, guarantor parent (regardless of whether or not the parent has guaranteed the tenant’s obligation under the lease) or tenants that are identified as investment grade by using a proprietary Moody’s analytical tool, which generates an implied rating by measuring an entity’s probability of default.
Implied investment grade may include actual ratings of the tenant parent, guarantor parent (regardless of whether or not the parent has guaranteed the tenant’s obligation under the lease) or tenants that are identified as investment grade by using a proprietary Moody’s Analytics tool, which generates an implied rating by measuring an entity’s probability of default.
As part of our efforts to mitigate these risks, we typically engage third parties to perform assessments of potential environmental risks when evaluating a new acquisition of property, and we frequently require sellers to address them before closing or obtain contractual protection (indemnities, cash reserves, letters of credit, or other instruments) from property sellers, tenants, a tenant’s parent company, or another third party to address known or potential environmental issues.
As part of our efforts to mitigate these risks, we typically engage third parties to perform assessments of potential environmental risks when evaluating a new acquisition of property, and we frequently require sellers to address them before closing or obtain contractual protection (indemnities, cash reserves, letters of credit, or other instruments) from property sellers, tenants, a tenant’s parent company, or another third party to address known or potential environmental issues in the current fiscal year.
In this regard, the Advisor has substantial discretion with respect to the selection of specific investments, subject to board approval and any guidelines established by our board of directors. 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 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.
Ratings information is as of December 31, 2022. As of December 31, 2022, our portfolio had a weighted-average remaining lease term of 8.0 years (based on square feet as of the last day of the applicable quarter), as compared to 8.3 years as of December 31, 2021.
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.
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, 2022, we leased space to 138 different tenants doing business across 51 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 eleven different countries. As of December 31, 2023, we leased space to 803 different tenants doing business across 94 different industries.
In evaluating prospective investments, our Advisor considers relevant real estate and financial factors, including the location of the property, the leases and other agreements affecting it, the creditworthiness of its major tenants, its income producing capacity, its physical condition, its prospects for appreciation and liquidity, tax considerations and other factors.
In evaluating prospective investments, we consider relevant real estate and financial factors, including the location of the property, the leases and other agreements affecting it, the creditworthiness of its major tenants, its income producing capacity, its physical condition, its prospects for appreciation and liquidity, tax considerations and other factors.
As of December 31, 2022, approximately 94.5% 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 1.2% per year. For additional information, see Item 7.
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.
A total of 60.5% of our rental income on an annualized straight-line basis for leases in place as of December 31, 2022 was derived from Investment Grade rated tenants, comprised of 34.9% leased to tenants with an actual investment grade rating and 25.6% leased to tenants with an implied investment grade rating.
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.
We also reimburse these entities for certain expenses they incur in providing these services to us. Tax Status We elected to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the “Code”), commencing with our taxable year ended December 31, 2013.
Tax Status We elected to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the “Code”), commencing with our taxable year ended December 31, 2013.
Our portfolio is leased to primarily “Investment Grade” rated tenants in well established markets in the U.S. and Europe.
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 have also entered into an agreement with our Property Manager to manages and leases our properties. The employees of the Advisor, Property Manager and their respective affiliates perform a full range of services for us, including acquisitions, property management, accounting, legal, asset management, investor relations and all general administrative services.
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.
Employees and Human Capital Resources 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. We have retained the Advisor pursuant to a long-term advisory contract to manage our affairs on a day-to-day basis.
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.
Based on the percentage of rental income on a straight-line basis as of December 31, 2022, 65% of our properties were located in the U.S. and Canada and 35% of our properties were located in Europe. In addition, as of December 31, 2022, our portfolio was comprised of 56% industrial/distribution properties, 41% office properties and 3% retail properties.
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.
The employees of the Advisor, Property Manager and their respective affiliates are also eligible to participate in our stock option plan and our employee and director incentive restricted share plan. We depend on the Advisor and the Property Manager for services that are essential to us.
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”).
Financing Strategies and Policies We use various sources to fund our business including acquisitions and other investments as well as property and tenant improvements, leasing commissions and other working capital needs.
Management’s Discussion and Analysis of Financial Condition and Results of Operations - “Inflation” found later in this Annual Report on Form 10-K. Our business is generally not seasonal. Financing Strategies and Policies We use various sources to fund our business including acquisitions and other investments as well as property and tenant improvements, leasing commissions and other working capital needs.
Item 1. Business. Overview We are an externally managed real estate investment trust for United States (“U.S.”) federal income tax purposes (“REIT”) that focuses on acquiring and managing a globally diversified portfolio of strategically-located commercial real estate properties, which are leased primarily to “Investment Grade” (defined below) tenants.
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.
Our Advisor manages our day-to-day business with the assistance of our property manager, Global Net Lease Properties, LLC (the “Property Manager”). Our Advisor and Property Manager are under common control with AR Global Investments, LLC (“AR Global”) and these related parties receive compensation and fees for providing services to us.
Prior to September 12, 2023, the former Advisor and the Property Manager were under common control with AR Global Investments, LLC (“AR Global”), and these related parties had historically received compensation and fees for various services provided to us.
This was consistent with the first three quarters of 2022, in which we collected 100% of the original cash rent due in each quarter. Organizational Structure Substantially all of our business is conducted through Global Net Lease Operating Partnership, L.P. (the “OP”), a Delaware limited partnership, and its wholly-owned subsidiaries.
Organizational Structure Substantially all of our business is conducted through Global Net Lease Operating Partnership, L.P. (the “OP”), a Delaware limited partnership, and The Necessity Retail REIT Operating Partnership, L.P. (“RTL OP,” and together with the OP, the “OPs”) and each of their wholly-own subsidiaries.
We invest in commercial properties, with an emphasis on sale-leaseback transactions and mission-critical, single tenant net-lease assets. As of December 31, 2022, we owned 309 properties consisting of 39.2 million rentable square feet, which were 98.0% leased, with a weighted-average remaining lease term of 8.0 years.
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.
These percentages are calculated using straight-line rent converted from local currency into the U.S. Dollar (“USD”) as of December 31, 2022. The straight-line rent includes amounts for tenant concessions.
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.
Tenants and Leasing We focus on acquiring strategically located industrial and distribution facilities in the U.S. and strong sovereign debt rated countries in Europe. 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 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.
During the year ended December 31, 2022, the auto manufacturing and financial services industries each represented 12% of our portfolio’s rental income on a straight-line basis. No other industry represented more than 10% of our portfolio’s rental income on a straight-line basis. As of December 31, 2022, our portfolio was 98.0% occupied.
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.
Removed
Management’s Discussion and Analysis of Financial Condition and Results of Operations - “Inflation” found later in this Annual Report on Form 10-K. Our business is generally not seasonal. 4 Table of Contents Acquisitions We leverage direct relationships with landlords and developers to generate high-quality global opportunities at what we believe to be better than market pricing.
Added
Historically, we focused on acquiring and managing a globally diversified portfolio of strategically-located commercial real estate properties, which consisted primarily of mission-critical, single tenant net-lease assets. As a result of acquiring RTL in the quarter ended September 30, 2023, we acquired a diversified portfolio of 989 properties consisting of primarily necessity-based retail single-tenant and multi-tenant properties located in the U.S.
Removed
During the year ended December 31, 2022, we acquired three properties for $33.9 million, including capitalized acquisition costs. We utilize a well-defined investment strategy and rigorous underwriting process to identify and select high-quality net lease investment opportunities. We look for tenants with logistical and local advantages, strong operating performance, strong business financials, financial visibility, and corporate-level profitability.
Added
Until September 12, 2023, we were managed by Global Net Lease Advisors, LLC (the “Advisor”), who managed our day-to-day business with the assistance of the property manager, Global Net Lease Properties, LLC (the “Property Manager”), who managed and leased our properties to third parties.
Removed
In recent years, these sources have consisted of: (1) offerings of common and preferred stock; (2) property-level financing secured by the underlying property or properties; (3) draws on our senior unsecured multi-currency credit facility (the “Revolving Credit Facility,), and a senior unsecured term loan facility (the “Term Loan” and, together with the Revolving Credit Facility, the “Credit Facility”) and (4) a private placement of $500.0 million aggregate principal amount of 3.75% Senior Notes due 2027 (the “Senior Notes”).
Added
On September 12, 2023, we internalized our advisory and property management functions as well as the advisory and property management functions of RTL.
Removed
Impact of the COVID-19 Pandemic To date the COVID-19 global pandemic has not significantly impacted our business. As of January 31, 2023, we have collected approximately 100% of the original cash rent due for the fourth quarter of 2022 across our entire portfolio.
Added
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.
Removed
If the Advisor and the Property Manager were unable to provide these services to us, we would be required to provide these services ourselves or obtain them from other sources.
Added
The straight-line rent includes amounts for tenant concessions.
Added
In addition to cash flows from operations, other sources of capital which we have used and may use in the future include, proceeds received from our senior unsecured multi-currency credit facility (the “Revolving Credit Facility), proceeds from secured or unsecured financings (which may include note issuances), proceeds from offerings of equity securities, including offerings of our Preferred Stock and offerings pursuant to our at-the-market programs and proceeds from any future sales of properties.
Added
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
We depended on the former Advisor and the Property Manager for services that were essential to us.
Added
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.
Added
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.
Added
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.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

132 edited+63 added−85 removed210 unchanged
Biggest changeSummary Risk Factors • We may be unable to acquire properties on advantageous terms or our property acquisitions may not perform as we expect. • Our ability to continue implementing our growth strategy 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. • We face the uncertainties and costs associated with a proxy contest. • 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”), or any other stock 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, such as the COVID-19 pandemic, 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 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.
Our operating results and value of our properties are subject to risks generally incident to the ownership of real estate, including: • changes in general, economic or local conditions; • changes in supply of or demand for similar or competing properties in an area; • changes in interest rates and availability of mortgage financing on favorable terms, or at all; • changes in tax, real estate, environmental and zoning laws; • the possibility that one or more of our tenants will be unable to pay their rental obligations; • decreased demand for our properties due to among other things, significant job losses that occur or may occur in the future, resulting in lower rents and occupancy levels; • an increase in the number of bankruptcies or insolvency proceedings of our tenants and lease guarantors, which could delay or preclude our efforts to collect rent and any past due balances under the relevant leases; • widening credit spreads as investors demand higher risk premiums, resulting in lenders increasing the cost for debt financing; • reduction in the amount of capital that is available to finance real estate, which, in turn, could lead to a decline in real estate values generally, slow real estate transaction activity, a reduction in the loan-to-value ratio upon which lenders are willing to lend, and difficulty refinancing our debt; • a decrease in the market value of our properties, which may limit our ability to obtain debt financing • a need for us to establish significant provisions for losses or impairments; • reduction in the value and liquidity of our short-term investments and increased volatility in market rates for such investments; and • reduced cash flows from our operations due to changing exchange rates impacting conditions from our operations in continental Europe, the United Kingdom and Canada. 9 Table of Contents We are subject to additional risks from our international investments.
Our operating results and value of our properties are subject to risks generally incident to the ownership of real estate, including: • changes in general, economic or local conditions; • changes in supply of or demand for similar or competing properties in an area; • changes in interest rates and availability of mortgage financing on favorable terms, or at all; • changes in tax, real estate, environmental and zoning laws; • the possibility that one or more of our tenants will be unable to pay their rental obligations; • decreased demand for our properties due to among other things, significant job losses that occur or may occur in the future, resulting in lower rents and occupancy levels; • an increase in the number of bankruptcies or insolvency proceedings of our tenants and lease guarantors, which could delay or preclude our efforts to collect rent and any past due balances under the relevant leases; • widening credit spreads as investors demand higher risk premiums, resulting in lenders increasing the cost for debt financing; 9 Table of Contents • reduction in the amount of capital that is available to finance real estate, which, in turn, could lead to a decline in real estate values generally, slow real estate transaction activity, a reduction in the loan-to-value ratio upon which lenders are willing to lend, and difficulty refinancing our debt; • a decrease in the market value of our properties, which may limit our ability to obtain debt financing • a need for us to establish significant provisions for losses or impairments; • reduction in the value and liquidity of our short-term investments and increased volatility in market rates for such investments; and • reduced cash flows from our operations due to changing exchange rates impacting conditions from our operations in continental Europe, the United Kingdom and Canada.
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 9.8% in value of the aggregate outstanding shares of our stock and more than 9.8% (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 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.
In addition, restrictions under future debt we may incur, may not allow us to repurchase the Senior Notes upon a Change of Control Triggering Event, and we expect that a change in control will result in an event of default under the Credit Facility, which could result in such debt becoming immediately due and payable and the commitments thereunder terminated.
In addition, restrictions under future debt we may incur, may not allow us to repurchase the Senior Notes upon a Change of Control Triggering Event, and we expect that a change in control will result in an event of default under the Revolving Credit Facility, which could result in such debt becoming immediately due and payable and the commitments thereunder terminated.
This, in turn, could cause our other debt, including the Senior Notes and the Credit Facility, to become due and payable as a result of cross-default or cross-acceleration provisions contained in the agreements governing the other debt and permit certain of our lenders to foreclose on our assets, if any, that secure this debt.
This, in turn, could cause our other debt, including the Senior Notes and the Revolving Credit Facility, to become due and payable as a result of cross-default or cross-acceleration provisions contained in the agreements governing the other debt and permit certain of our lenders to foreclose on our assets, if any, that secure this debt.
If we are unable to meet our debt obligations or to fund our other liquidity needs, we will need to restructure or refinance all or a portion of our debt. We may be unable to refinance any of our debt, including the Credit Facility or the Senior Notes, on commercially reasonable terms or at all.
If we are unable to meet our debt obligations or to fund our other liquidity needs, we will need to restructure or refinance all or a portion of our debt. We may be unable to refinance any of our debt, including the Revolving Credit Facility or the Senior Notes, on commercially reasonable terms or at all.
In addition, the Credit Facility requires us to comply with financial maintenance covenants, consisting of a maximum debt to asset value ratio, a minimum fixed charge coverage ratio, a maximum unencumbered leverage ratio, a minimum debt service coverage ratio, a maximum secured debt to asset value ratio, a maximum secured recourse debt to asset value ratio, and a minimum consolidated tangible net worth test.
In addition, the Revolving Credit Facility requires us to comply with financial maintenance covenants, consisting of a maximum debt to asset value ratio, a minimum fixed charge coverage ratio, a maximum unencumbered leverage ratio, a minimum debt service coverage ratio, a maximum secured debt to asset value ratio, a maximum secured recourse debt to asset value ratio, and a minimum consolidated tangible net worth test.
Our business may fail to generate sufficient cash flow from operations or future borrowings may be unavailable to us under the Credit Facility or from other sources in an amount sufficient to enable us to service our debt, to refinance our debt or to fund our other liquidity needs.
Our business may fail to generate sufficient cash flow from operations or future borrowings may be unavailable to us under the Revolving Credit Facility or from other sources in an amount sufficient to enable us to service our debt, to refinance our debt or to fund our other liquidity needs.
Our board of directors may not grant an exemption from these restrictions to any proposed transferee whose ownership in excess of the 9.8% ownership limit would result in the termination of our qualification 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 Advisor and other parties that provide us with services are continuously working including with the aid of third party service providers, to install new, and to upgrade existing, network and information technology systems, to create processes for risk assessment, testing, prioritization, remediation, risk acceptance, and reporting, and to provide awareness training around phishing, malware and other cyber risks to ensure they provide us with services essential to our operations are protected against cyber risks and security breaches and that we are also therefore so protected.
We are continuously working including with the aid of third party service providers, to install new, and to upgrade existing, network and information technology systems, to create processes for risk assessment, testing, prioritization, remediation, risk acceptance, and reporting, and to provide awareness training around phishing, malware and other cyber risks to ensure they provide us with services essential to our operations are protected against cyber risks and security breaches and that we are also therefore so protected.
We intend to avoid the 100% prohibited transaction tax by (a) conducting activities that may otherwise be considered prohibited transactions through a TRS (but such TRS will incur corporate rate income taxes with respect to any income or gain recognized by it), (b) conducting our operations in such a manner so that no sale or other disposition of an asset we own, directly or indirectly through any subsidiary, will be treated as a prohibited transaction, and (c) structuring certain dispositions of our properties to comply with the requirements of 28 Table of Contents the prohibited transaction safe harbor available under the Code for properties that, among other requirements, have been held for at least two years.
We intend to avoid the 100% prohibited transaction tax by (a) conducting activities that may otherwise be considered prohibited transactions through a TRS (but such TRS will incur corporate rate income taxes with respect to any income or gain recognized by it), (b) conducting our operations in such a manner so that no sale or other disposition of an asset we own, directly or indirectly through any subsidiary, will be treated as a prohibited transaction, and (c) structuring certain dispositions of our properties to comply with the requirements of the prohibited transaction safe harbor available under the Code for properties that, among other requirements, have been held for at least two years.
In the past, the lenders under our Credit Facility have consented to increase the maximum amount of our Adjusted FFO we may use to pay cash dividends and other distributions and make redemptions and other repurchases in certain periods. There can be no assurance that they will do so again in the future if we need to do so.
In the past, the lenders under our Credit Agreement have consented to increase the maximum amount of our Adjusted FFO we may use to pay cash dividends and other distributions and make redemptions and other repurchases in certain periods. There can be no assurance that they will do so again in the future if we need to do so.
For example, our Credit Facility prohibits us from paying distributions, including cash dividends payable on our Common Stock, Series A Preferred Stock, Series B Preferred Stock or any other class or series of stock we may issue in the future, or redeem or otherwise repurchase shares of any of these outstanding securities, or any other class or series of stock we may issue in the future, that exceed 100% of our Adjusted FFO as defined in the Credit Facility (which is different from the definition of AFFO disclosed in this Annual Report on Form 10-K) for any period of four consecutive fiscal quarters, except in limited circumstances, including that for one fiscal quarter in each calendar year, we may pay cash dividends and other distributions and make redemptions and other repurchases in an aggregate amount equal to no more than 105% of our Adjusted FFO.
For example, our Credit Agreement prohibits us from paying distributions, including cash dividends payable on our Common Stock, Preferred Stock or any other class or series of stock we may issue in the future, or redeem or otherwise repurchase shares of any of these outstanding securities, or any other class or series of stock we may issue in the future, that exceed 100% of our Adjusted FFO as defined in the Credit Agreement (which is different from the definition of AFFO disclosed in this Annual Report on Form 10-K) for any period of four consecutive fiscal quarters, except in limited circumstances, including that for one fiscal quarter in each calendar year, we may pay cash dividends and other distributions and make redemptions and other repurchases in an aggregate amount equal to no more than 105% of our Adjusted FFO.
However, a portion of the amounts that we pay to our stockholders generally may (1) be designated by us as capital gain dividends taxable as long-term capital gain to the extent that such portion is attributable to net capital gain recognized by us, (2) 29 Table of Contents be designated by us as qualified dividend income, taxable at capital gains rates, to the extent they are attributable to dividends we receive from TRSs, or (3) constitute a return of capital to the extent that such portion exceeds our accumulated earnings and profits as determined for U.S. federal income tax purposes.
However, a portion of the amounts that we pay to our stockholders generally may (1) be designated by us as capital gain dividends taxable as long-term capital gain to the extent that such portion is attributable to net capital gain recognized by us, (2) be designated by us as qualified dividend income, taxable at capital gains rates, to the extent they are attributable to dividends we receive from TRSs, or (3) constitute a return of capital to the extent that such portion exceeds our accumulated earnings and profits as determined for U.S. federal income tax purposes.
This restriction may have the effect of delaying, deferring or preventing a change in control of us, including an extraordinary transaction (such as a merger, tender offer or sale of all or substantially all our assets) that might provide a premium price for holders of our Common Stock.
This restriction may have the effect of delaying, deferring or preventing a change in control of the Company, including an extraordinary transaction (such as a merger, tender offer or sale of all or substantially all of our assets) that might provide a premium price for holders of our Common Stock.
Upon the occurrence of a change of control, holders of Series A Preferred Stock and Series B Preferred Stock will, under certain circumstances, have the right to convert some of or all their shares of Series A Preferred Stock and Series B Preferred Stock into shares of our Common Stock (or equivalent value of alternative consideration) and under these circumstances we will also have a special optional redemption right to redeem shares of Series A Preferred Stock and Series B Preferred Stock.
Upon the occurrence of a change of control, holders of Preferred Stock will, under certain circumstances, have the right to convert some of or all their shares of Preferred Stock into shares of our Common Stock (or equivalent value of alternative consideration) and under these circumstances we will also have a special optional redemption right to redeem shares of Preferred Stock.
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.
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.
Furthermore, a security breach or other significant disruption involving the information technology networks and related systems of our Advisor or any other party that provides us with services essential to our operations could: 18 Table of Contents • 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.
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.
If (a) we are a “pension-held REIT,” (b) a tax-exempt stockholder has incurred (or is deemed to have incurred) debt to purchase or hold shares of our stock, or (c) a holder of shares of our stock is a certain type of tax-exempt stockholder, dividends 31 Table of Contents on, and gains recognized on the sale of, shares of our stock by such tax-exempt stockholder may be subject to U.S. federal income tax as unrelated business taxable income under the Code.
If (a) we are a “pension-held REIT,” (b) a tax-exempt stockholder has incurred (or is deemed to have incurred) debt to purchase or hold shares of our stock, or (c) a holder of shares of our stock is a certain type of tax-exempt stockholder, dividends on, and gains recognized on the sale of, shares of our stock by such tax-exempt stockholder may be subject to U.S. federal income tax as unrelated business taxable income under the Code.
Further, courts interpreting change of control provisions under New York law (which is the governing law of the indenture governing the Senior Notes) have not provided clear and consistent meanings of change of control provisions which leads to subjective judicial interpretation of what may constitute a “Change of Control.” The “Change of Control Triggering Event” may impact the willingness of a third party to seek or engage in a “Change of Control” transaction with us.
Further, courts interpreting change of control provisions under New York law (which is the governing law of each of the indentures governing the Senior Notes) have not provided clear and consistent meanings of change of control provisions which leads to subjective judicial interpretation of what may constitute a “Change of Control.” The “Change of Control Triggering Event” may impact the willingness of a third party to seek or engage in a “Change of Control” transaction with us.
These features of our Series A Preferred Stock and Series B Preferred Stock may have the effect of discouraging a third party from seeking to acquire us or of delaying, deferring or preventing a change of control under circumstances that otherwise could provide the holders of our Common Stock with the opportunity to realize a premium over the then-current market price or that stockholders may otherwise believe is in their best interests.
These features of our Preferred Stock may have the effect of discouraging a third party from seeking to acquire us or of delaying, deferring or preventing a change of control under circumstances that otherwise could provide the holders of our Common Stock with the opportunity to realize a premium over the then-current market price or that stockholders may otherwise believe is in their best interests.
The Maryland Control Share Acquisition Act provides that holders of “control shares” of a Maryland corporation acquired in a “control share acquisition” have no voting rights except to the extent approved by the stockholders by the affirmative vote of two-thirds of all the votes entitled to be cast on the matter, excluding all shares of stock owned by the acquirer, by officers or 26 Table of Contents by employees who are directors of the corporation.
The Maryland Control Share Acquisition Act provides that holders of “control shares” of a Maryland corporation acquired in a “control share acquisition” have no voting rights except to the extent approved by the stockholders by the affirmative vote of two-thirds of all the votes entitled to be cast on the matter, excluding all shares of stock owned by the acquirer, by officers or by employees who are directors of the corporation.
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.
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.
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.
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.
The terms of our Series A Preferred Stock and Series B Preferred Stock, and the terms other preferred stock we may issue, may discourage a third party from acquiring us in a manner that might result in a premium price to our stockholders.
The terms of our Preferred Stock, and the terms other preferred stock we may issue, may discourage a third party from acquiring us in a manner that might result in a premium price to our stockholders.
In addition, certain important corporate events, such as leveraged recapitalization that would increase the level of our indebtedness, would not constitute a “Change of Control” under the indenture governing the Senior Notes although these types of transactions could affect our capital structure or credit ratings and the holders of the Senior Notes.
In addition, certain important corporate events, such as leveraged recapitalization that would increase the level of our indebtedness, would not constitute a “Change of Control” under the either of the indentures governing the Senior Notes although these types of transactions could affect our capital structure or credit ratings and the holders of the Senior Notes.
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.
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.
The change of control conversion and redemption features of our Series A Preferred Stock and Series B Preferred Stock may make it more difficult for a party to acquire us or discourage a party from seeking to acquire us.
The change of control conversion and redemption features of our Preferred Stock may make it more difficult for a party to acquire us or discourage a party from seeking to acquire us.
In addition, we would generally be disqualified from treatment as a REIT for the four taxable years following the year in which we lose our REIT qualification. 27 Table of Contents Losing our REIT qualification would reduce our net earnings available for investment or distribution to stockholders because of the additional tax liability.
In addition, we would generally be disqualified from treatment as a REIT for the four taxable years following the year in which we lose our REIT qualification. Losing our REIT qualification would reduce our net earnings available for investment or distribution to stockholders because of the additional tax liability.
Based on annualized rental income on a straight-line basis as of December 31, 2022, 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.
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.
Although REITs generally receive better tax treatment than entities taxed as non-REIT “C corporations,” it is possible that future legislation would result in a REIT having fewer tax advantages, and it could become more advantageous for a company 30 Table of Contents that invests in real estate to elect to be treated for U.S. federal income tax purposes as a non-REIT “C corporation”.
Although REITs generally receive better tax treatment than entities taxed as non-REIT “C corporations,” it is possible that future legislation would result in a REIT having fewer tax advantages, and it could become more advantageous for a company that invests in real estate to elect to be treated for U.S. federal income tax purposes as a non-REIT “C corporation”.
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 8 Table of Contents 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 of directors, which reserves the right to change our dividend policy at any time and for any reason.
Leases with certain of these tenants may therefore pose a higher risk of default than would long-term leases with tenants who have actual investment grade ratings. Long-term leases may result in income lower than short term leases. We generally seek to enter into long-term leases with our tenants.
Leases with certain of these tenants may therefore pose a higher risk of default than would long-term leases with tenants who have actual investment grade ratings. 14 Table of Contents Long-term leases may result in income lower than short term leases. We generally seek to enter into long-term leases with our tenants.
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.
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.
We also are required to maintain total unencumbered assets of at least 150% of our unsecured indebtedness under the indenture governing the Senior Notes. Our ability to meet these requirements may be affected by events beyond our control, and we may not meet these requirements.
We also are required to maintain total unencumbered assets of at least 150% of our unsecured indebtedness under each of the indentures governing the Senior Notes. Our ability to meet these requirements may be affected by events beyond our control, and we may not meet these requirements.
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. The share ownership restrictions for REITs and the 9.8% share ownership limit in our charter may inhibit market activity in shares of our stock and restrict our business combination opportunities.
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.
Leases of long duration, or with renewal options that specify a maximum rate increase, may not result in fair market lease rates over time if we do not accurately judge the potential for increases in market rental rates.
Leases of long duration, or with renewal options that specify a maximum rate increase, may not result in market rent over time if we do not accurately judge the potential for increases in market rental rates.
Competition that we face from other properties within our market areas, and competition our tenants face from tenants in such properties could result in decreased cash flow from tenants and may require us to make capital improvements to maintain competitiveness. 15 Table of Contents We may incur significant costs to comply with governmental laws and regulations, including those related to environmental matters.
Competition that we face from other properties within our market areas, and competition our tenants face from tenants in such properties could result in decreased cash flow from tenants and may require us to make capital improvements to maintain competitiveness. We may incur significant costs to comply with governmental laws and regulations, including those related to environmental matters.
Each subsidiary of the OP’s is a distinct legal entity and, under certain circumstances, legal and contractual restrictions may limit our ability to obtain cash from these entities. In addition, any claims we may have will be structurally subordinated to all existing and future liabilities and obligations of our OP and its subsidiaries.
Each subsidiary of each of the OP’s is a distinct legal entity and, under certain circumstances, legal and contractual restrictions may limit our ability to obtain cash from these entities. In addition, any claims we may have will be structurally subordinated to all existing and future liabilities and obligations of our OPs and their subsidiaries.
Our debt agreements, including the indenture governing the Senior Notes and the credit agreement governing the 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 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.
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.
Upon the occurrence of a “Change of Control Triggering Event” defined in the indenture governing the Senior Notes, we are required to make an offer to repurchase all outstanding Senior Notes at 101% of the principal amount thereof, plus accrued and unpaid interest on the Senior Notes, if any, but not including, the date of repurchase.
Upon the occurrence of a “Change of Control Triggering Event” defined in each of the indentures governing the Senior Notes, we are required to make an offer to repurchase all outstanding Senior Notes at 101% of the principal amount thereof, plus accrued and unpaid interest on each series of notes, if any, but not including, the date of repurchase.
The trading prices of shares of our Common Stock, Series A Preferred Stock and Series B Preferred Stock may be volatile and subject to significant price and volume fluctuation in response to market and other factors, many of which are outside our control.
The trading prices of shares of our Common Stock and Preferred Stock may be volatile and subject to significant price and volume fluctuation in response to market and other factors, many of which are outside our control.
We indemnify our officers, directors, the Advisor and its affiliates against claims or liability they may become subject to due to their service to us, and our rights and the rights of our stockholders to recover claims against our officers, directors, the Advisor and its affiliates are limited.
We indemnify our officers and directors against claims or liability they may become subject to due to their service to us, and our rights and the rights of our stockholders to recover claims against our officers and directors are limited.
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; • 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, Series A Preferred Stock or Series B 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; • our reputation and the reputation of AR Global and its affiliates or other entities advised by AR Global and its affiliates; • 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; 23 Table of Contents • 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, 2022.
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.
Therefore, in the event of our bankruptcy, liquidation or reorganization, our assets and those of our OP and its 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 OP and its 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 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.
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.
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.
Moreover, although shares of both the Series A Preferred Stock and Series B Preferred Stock are listed on the New York Stock Exchange (“NYSE”), there can be no assurance that the trading volume for these shares will provide sufficient liquidity for holders to sell their shares at the time of their choosing or that the trading price for shares will equal or exceed the price paid for the shares.
Moreover, although shares of the Preferred Stock are listed on the New York Stock Exchange (“NYSE”), there can be no assurance that the trading volume for these shares will provide sufficient liquidity for holders to sell their shares at the time of their choosing or that the trading price for shares will equal or exceed the price paid for the shares.
Our goal is to grow through acquiring additional properties, including potentially multi-tenant properties, and 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; • 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.
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.
The Disabilities Act has separate compliance requirements for “public accommodations” and “commercial facilities” that generally require that buildings and services, including restaurants and retail stores, be made accessible and 16 Table of Contents available to people with disabilities.
The Disabilities Act has separate compliance requirements for “public accommodations” and “commercial facilities” that generally require that buildings and services, including restaurants and retail stores, be made accessible and available to people with disabilities.
Any rating assigned to debt securities that we or our OP issues could be lowered or withdrawn entirely by a rating agency if, in that rating agency’s judgment, future circumstances relating to the basis of the rating, such as adverse changes, so warrant.
Any rating assigned to debt securities that we or either of our OP’s issue could be lowered or withdrawn entirely by a rating agency if, in that rating agency’s judgment, future circumstances relating to the basis of the rating, such as adverse changes, so warrant.
The issuance of additional shares of preferred stock ranking equal or senior to our Series A Preferred Stock and Series B Preferred Stock, including preferred stock convertible into shares of our Common Stock, could dilute the interests of the holders of Common Stock, Series A Preferred Stock and Series B Preferred Stock, and any issuance of shares of preferred stock senior to our Series A Preferred Stock and Series B Preferred Stock or incurrence of additional indebtedness could affect our ability to pay dividends on, redeem or pay the liquidation preference on our Series A Preferred Stock and Series B Preferred Stock.
The issuance of additional shares of preferred stock ranking equal or senior to our issued and outstanding Preferred Stock, including preferred stock convertible into shares of our Common Stock, could dilute the interests of the holders of Common Stock, Preferred Stock, and any issuance of shares of preferred stock senior to our issued and outstanding Preferred Stock or incurrence of additional indebtedness could affect our ability to pay dividends on, redeem or pay the liquidation preference on our Preferred Stock.
Our access to capital depends, in part, on: • general market conditions; • the market’s view of the quality of our assets; • the market’s perception of our growth potential; • our current and expected debt levels; • our current and expected future earnings; • our current and expected cash flow and cash dividend payments; and • market price per share of our Common Stock, Series A Preferred Stock, Series B 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; 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.
As of December 31, 2022, 18% of our annualized rental income on a straight-line basis was generated from net leases, with remaining lease term of more than ten years.
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.
Our ability to make scheduled payments on and to refinance our indebtedness depends on and is subject to our future financial and operating performance, which in turn is affected by general and regional economic, financial, competitive, business and other factors beyond our control.
We may be unable to service our indebtedness. Our ability to make scheduled payments on and to refinance our indebtedness depends on and is subject to our future financial and operating performance, which in turn is affected by general and regional economic, financial, competitive, business and other factors beyond our control.
We may not have the funds necessary to finance the repurchase of the Senior Notes in connection with a change of control offer required by the indenture governing the Senior Notes.
We may not have the funds necessary to finance the repurchase of the Senior Notes in connection with a change of control offer required by the indentures governing each series of notes.
We conduct, and intend to continue conducting, all of our business operations through our OP and accordingly, we rely on distributions from our OP and its subsidiaries to provide cash to pay our obligations.
We conduct, and intend to continue conducting, all of our business operations through our OPs and accordingly, we rely on distributions from our OPs and their subsidiaries to provide cash to pay our obligations.
There is no assurance that our OP or its subsidiaries will be able to, or be permitted to, pay distributions to us that will enable us to pay dividends to our stockholders and meet our other obligations.
There is no assurance that our OPs or their subsidiaries will be able to, or be permitted to, pay distributions to us that will enable us to pay dividends to our stockholders and meet our other obligations.
Based on the percentage of annualized rental income on a straight-line basis as of December 31, 2022, 35% of our properties were located in Europe, primarily in the United Kingdom, The Netherlands, Finland, France, Germany, and the Channel Islands, and 65% 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, 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.
If we could not refinance such senior debt or otherwise obtain a waiver from the holders of such debt, we would be prohibited from repurchasing the Senior Notes, which would constitute an event of default under the indenture governing the Senior Notes, which in turn would constitute a default under our Credit Facility.
If we could not refinance such senior debt or otherwise obtain a waiver from the holders of such debt, we would be prohibited from repurchasing the Senior Notes, which would constitute an event of default under the applicable indentures governing either series of Senior Notes, which in turn would constitute a default under our Revolving Credit Facility.
Subject to the approval rights of holders of our Series A Preferred Stock and Series B Preferred Stock regarding authorization or issuance of equity securities ranking senior to the Series A Preferred Stock and Series B 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.
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.
The issuance of additional shares of our Common Stock could dilute the interests of the holders of our Common Stock, and any issuance of shares of preferred stock senior to our Common Stock, such as our Series A Preferred Stock and Series B Preferred Stock, or any incurrence of additional indebtedness, could affect our ability to pay dividends on our Common Stock.
The issuance of additional shares of our Common Stock could dilute the interests of the holders of our Common Stock, and any issuance of shares of preferred stock senior to our Common Stock, such as our issued and outstanding Preferred Stock, or any incurrence of additional indebtedness, could affect our ability to pay dividends on our Common Stock.
Foreign investments pose several risks, including the following: • the burden of complying with a wide variety of foreign laws; • changing governmental rules and policies, including changes in land use and zoning laws, more stringent environmental laws or changes in such laws; • existing or new laws relating to the foreign ownership of real property or loans and laws restricting the ability of foreign persons or companies to remove profits earned from activities within the country to the person’s or company’s country of origin; • the potential for expropriation; • possible currency transfer restrictions; • imposition of adverse or confiscatory taxes; • changes in real estate and other tax rates and changes in other operating expenses in particular countries; • possible challenges to the anticipated tax treatment of the structures that allow us to acquire and hold investments; • adverse market conditions caused by terrorism, civil unrest and changes in national or local governmental or economic conditions; • the willingness of domestic or foreign lenders to make loans in certain countries and changes in the availability, cost and terms of loan funds resulting from varying national economic policies; • general political and economic instability in certain regions; • the potential difficulty of enforcing obligations in other countries; and • the Advisor’s limited experience and expertise in foreign countries relative to its experience and expertise in the U.S.
Foreign investments pose several risks, including the following: • the ongoing uncertainties as a result of instability or changes in geopolitical conditions, including military or political conflicts, such as those caused by the ongoing conflicts between Russia and Ukraine or Israel and Hamas; • the burden of complying with a wide variety of foreign laws; • changing governmental rules and policies, including changes in land use and zoning laws, more stringent environmental laws or changes in such laws; • existing or new laws relating to the foreign ownership of real property or loans and laws restricting the ability of foreign persons or companies to remove profits earned from activities within the country to the person’s or company’s country of origin; • the potential for expropriation; • possible currency transfer restrictions; • imposition of adverse or confiscatory taxes; • changes in real estate and other tax rates and changes in other operating expenses in particular countries; • possible challenges to the anticipated tax treatment of the structures that allow us to acquire and hold investments; • adverse market conditions caused by terrorism, civil unrest and changes in national or local governmental or economic conditions; • the willingness of domestic or foreign lenders to make loans in certain countries and changes in the availability, cost and terms of loan funds resulting from varying national economic policies; • general political and economic instability in certain regions; and • the potential difficulty of enforcing obligations in other countries.
As of December 31, 2022, 5.5% of our annualized rental income on a straight-line basis was generated from leases that do not contain any rent escalation provisions, which impacts our ability to cover increased operating costs at properties with these leases.
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.
For example, as of December 31, 2022, 3% of our properties, based on annualized rental income on a straight-line basis, were retail properties.
For example, as of December 31, 2023, 48% of our properties, based on annualized rental income on a straight-line basis, were retail properties.
We depend on our OP and its subsidiaries for cash flow and are structurally subordinated in right of payment to the obligations of our OP and its subsidiaries.
We depend on our OPs and their subsidiaries for cash flow and are structurally subordinated in right of payment to the obligations of our OPs and their subsidiaries.
Our bylaws contain a provision exempting from the Maryland Control Share Acquisition Act any and all acquisitions of our stock by any person. There can be no assurance that this provision will not be amended or eliminated at any time in the future. Certain provisions in our bylaws and agreements may deter, delay or prevent a change in our control.
Our bylaws contain a provision exempting from the Maryland Control Share Acquisition Act any and all acquisitions of our stock by any person. There can be no assurance that this provision will not be amended or eliminated at any time in the future.
As of December 31, 2022, the following industries had concentrations of properties accounting for 5.0% or more of our consolidated annualized rental income on a straight-line basis: 12 Table of Contents Industry December 31, 2022 Auto Manufacturing 12% Financial Services 12% Consumer Goods 6% Healthcare 6% Technology 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, 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.
Unless exempted by our board of directors, no person may own more than 9.8% in value of the aggregate of the outstanding shares of our stock or more than 9.8% (in value or in number of shares, whichever is more restrictive) of any class or series of shares of our stock.
Unless exempted (prospectively or retroactively) by our board of directors, no person may own more than 8.8% in value of the aggregate of the outstanding shares of our stock and 8.8% (in value or in number of shares, whichever is more restrictive) of any class or series of our stock (the “Beneficial Ownership Limit”).
In addition, subject to certain limitations set forth therein or under Maryland law, our charter provides that no director or officer will be liable to us or our stockholders for monetary damages and permits us to indemnify our directors and officers from liability and advance certain expenses to them in connection with claims or liability they may become subject to due to their service to us, and we are not restricted from indemnifying our Advisor or its affiliates on a similar basis.
In addition, subject to certain limitations set forth therein or under Maryland law, our charter provides that no director or officer will be liable to us or our stockholders for monetary damages and permits us to indemnify our directors and officers from liability and advance certain expenses to them in connection with claims or liability they may become subject to due to their service to us.
Legislation to regulate GHG emissions has periodically been introduced in the U.S. Congress, and there has been a wide-ranging policy debate, both in the U.S. and internationally, regarding the impact of these gases and possible means for their regulation.
Congress, and there has been a wide-ranging policy debate, both in the U.S. and internationally, regarding the impact of these gases and possible means for their regulation.
As of December 31, 2022, the following countries and states accounted for 5% or more of our consolidated annualized rental income on a straight-line basis: Country December 31, 2022 European Countries: United Kingdom 17% Other European Countries 18% Total European Countries 35% United States and Canada: Michigan 16% Texas 7% Ohio 6% Other States and Canada 36% Total United States and Canada 65% 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, 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.
The Series A Preferred Stock ranks on parity with Series B Preferred Stock with respect to dividend rights and rights upon our voluntary or involuntary liquidation, dissolution or winding-up.
Each series of Preferred Stock ranks on parity with each other with respect to dividend rights and rights upon our voluntary or involuntary liquidation, dissolution or winding-up.
The COVID-19 pandemic has had, and may continue to have, and another pandemic in the future could have, repercussions across many sectors and areas of the global economy and financial markets, leading to significant adverse impacts on economic activity as well as significant volatility and negative pressure in financial markets. The impact of the COVID-19 pandemic evolved rapidly.
Another pandemic in the future could have repercussions across many sectors and areas of the global economy and financial markets, leading to significant adverse impacts on economic activity as well as significant volatility and negative pressure in financial markets.
Approximately 63.4% of our leases, based on straight line rent, are fixed-rate increase averaging 1.7%, 25.9% are based on the Consumer Price Index, subject to certain caps, 5.2% are based on other measures, and 5.5% do not contain any escalation provisions.
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.
For example, the interest rate on borrowings under the Credit Facility increased from 2.7% as of December 31, 2021 to 4.6% as of December 31, 2022. The interest rate on any indebtedness we refinance will 20 Table of Contents likely be higher than the rate on the maturing indebtedness.
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.
Further, COVID-19 impacted, and will likely 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 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.
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.
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.
This may result in future acquisitions generating lower overall economic returns. Volatility in the debt markets may negatively impact our ability to borrow monies to finance the purchase of, or other activities related to, our real estate assets.
Volatility in the debt markets may negatively impact our ability to borrow monies to finance the purchase of, or other activities related to, our real estate assets.
Our cash flows provided by operations were $181.8 million for the year ended December 31, 2022. During this period, we paid total dividends of $187.5 million, including payments to holders of our Common Stock, Series A Preferred Stock, Series B Preferred Stock and distributions to holders of LTIP Units.
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.
All of these actions will likely lead to increases in our borrowing costs. If our overall cost of borrowings increases, either due to increases in the index rates or due to increases in lender spreads, we will need to factor such increases into pricing and projected returns for any future acquisitions.
If our overall cost of borrowings increases, either due to increases in the index rates or due to increases in lender spreads, we will need to factor such increases into pricing and projected returns for any future acquisitions. This may result in future acquisitions generating lower overall economic returns.

… 200 more changes not shown on this page.

Item 2. Properties

Properties — owned and leased real estate

9 edited+4 added−11 removed0 unchanged
Biggest changeAssumes exchange rates of £1.00 to $1.21 for GBP, €1.00 to $1.07 for EUR and $1.00 Canadian Dollar (“CAD”) to $0.74, as of December 31, 2022 for illustrative purposes, as applicable. [2] Other includes 28 industry types as of December 31, 2022. 37 Table of Contents The following table details the geographic distribution, by U.S. state or country/location, of our portfolio as of December 31, 2022: 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 229 $ 217,665 63.9 % 28,001 71.5 % Michigan 29 52,938 15.5 % 6,263 16.1 % Texas 35 24,336 7.1 % 1,887 4.8 % Ohio 19 18,924 5.6 % 4,405 11.2 % California 7 14,006 4.1 % 1,226 3.1 % New Jersey 3 8,327 2.4 % 349 0.9 % North Carolina 9 8,273 2.4 % 2,657 6.8 % Tennessee 5 8,213 2.4 % 1,125 2.9 % Indiana 9 7,031 2.1 % 1,556 4.0 % Missouri 5 6,790 2.0 % 656 1.7 % Illinois 9 6,337 1.9 % 1,138 2.9 % Alabama 2 5,606 1.7 % 257 0.7 % New York 4 5,391 1.6 % 760 1.9 % South Carolina 6 5,104 1.5 % 801 2.0 % Kentucky 4 4,228 1.2 % 523 1.3 % Pennsylvania 7 4,079 1.2 % 459 1.2 % Arkansas 1 2,973 0.9 % 90 0.2 % Massachusetts 4 2,822 0.8 % 250 0.6 % Minnesota 5 2,789 0.8 % 266 0.7 % New Hampshire 4 2,779 0.8 % 339 0.9 % Connecticut 1 2,742 0.8 % 305 0.8 % Colorado 2 2,694 0.8 % 87 0.2 % Kansas 7 2,118 0.6 % 292 0.7 % Maine 2 1,969 0.6 % 50 0.1 % Florida 4 1,878 0.6 % 179 0.5 % Mississippi 2 1,580 0.5 % 314 0.8 % Georgia 2 1,557 0.5 % 492 1.3 % Vermont 3 1,236 0.4 % 213 0.5 % Nebraska 5 1,150 0.3 % 101 0.3 % Iowa 3 1,117 0.3 % 236 0.6 % Louisiana 4 1,111 0.3 % 112 0.3 % South Dakota 2 1,110 0.3 % 54 0.1 % West Virginia 1 980 0.3 % 104 0.3 % North Dakota 3 884 0.3 % 47 0.1 % Oklahoma 8 699 0.2 % 79 0.2 % Maryland 1 690 0.2 % 120 0.3 % New Mexico 5 556 0.2 % 46 0.1 % Wyoming 1 498 0.2 % 37 0.1 % Montana 1 441 0.1 % 58 0.2 % Idaho 1 441 0.1 % 22 0.1 % Delaware 1 374 0.1 % 10 — % Nevada 1 344 0.1 % 14 — % Utah 1 315 0.1 % 12 — % Virginia 1 235 0.1 % 10 — % United Kingdom 47 59,000 17.4 % 4,913 12.4 % Netherlands 4 15,616 4.6 % 1,007 2.6 % Finland 5 13,500 4.0 % 1,457 3.7 % Germany 5 10,113 3.0 % 1,584 4.0 % France 7 7,583 2.2 % 1,398 3.6 % Channel Islands 1 5,884 1.7 % 114 0.3 % Luxembourg 1 5,714 1.7 % 156 0.4 % Canada 7 3,064 0.9 % 372 1.0 % Italy 2 2,240 0.6 % 196 0.5 % Spain 1 378 — % 29 0.1 % Total 309 $ 340,757 100 % 39,227 100 % ____________ (1) Annualized straight-line rent converted from local currency into USD as of December 31, 2022 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 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.
Tenant Concentration As of December 31, 2022, 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, 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.
The following table details distribution of our portfolio by country/location as of December 31, 2022: Country Acquisition Period Number of Properties Square Feet (in thousands) Percentage of Properties by Square Feet Average Remaining Lease Term (1) Canada Dec. 2019 - Dec. 2021 7 372 0.9% 17.1 Channel Islands Sept. 2021 1 114 0.3% 7.8 Finland Nov. 2014 - Sep. 2015 5 1,457 3.7% 9.6 France Dec. 2016 - Dec. 2020 7 1,399 3.6% 2.9 Germany Jan. 2014 - Dec. 2016 5 1,584 4.0% 3.0 Italy Feb. 2020 2 196 0.5% 9.2 Luxembourg Dec. 2016 1 156 0.4% 3.9 Spain Sep. 2020 1 29 0.1% 9.7 The Netherlands Jul. 2014 - Dec. 2021 4 1,007 2.6% 6.3 United Kingdom Oct. 2012 - Dec. 2022 47 4,913 12.5% 8.6 United States Aug. 2013 - Dec. 2022 229 28,000 71.4% 8.3 Total 309 39,227 100.0% 8.0 _______________ (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, 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.
We did not have any other properties whose 39 Table of Contents 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, 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.
Property Financings See Note 4 — Mortgage Notes Payable, Net, Note 5 — Revolving Credit Facility and Term Loan, Net and Note 6 — Senior Notes to our consolidated financial statements included in this Annual Report on Form 10-K for property financings as of December 31, 2022 and 2021.
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.
Assumes exchange rates of £1.00 to $1.21 for GBP, €1.00 to $1.07 for EUR and $1.00 CAD to $0.74 as of December 31, 2022 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.
(2) If the portfolio has multiple properties with varying lease expirations, average remaining lease term is calculated on a weighted-average basis. Weighted-average remaining lease term in years is calculated based on square feet as of December 31, 2022.
Weighted-average remaining lease term in years is calculated based on square feet as of December 31, 2023.
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, 2022: 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 Portfolio Rentable Square Feet Expiring (In thousands) (In thousands) 2023 20 $ 9,438 2.8 % 824 2.1 % 2024 31 36,315 10.7 % 3,893 9.9 % 2025 21 25,216 7.4 % 2,906 7.4 % 2026 18 27,036 7.9 % 1,737 4.4 % 2027 24 19,800 5.8 % 1,567 4.0 % 2028 42 34,988 10.3 % 4,806 12.3 % 2029 24 33,339 9.8 % 4,141 10.6 % 2030 21 30,209 8.9 % 2,154 5.5 % 2031 14 21,444 6.3 % 3,857 9.8 % 2032 32 25,697 7.5 % 2,331 5.9 % Total 247 $ 263,482 77.4 % 28,216 71.9 % ________ (1) Assumes exchange rates of £1.00 to $1.21 for GBP, €1.00 to $1.07 for EUR and $1.00 CAD to $0.74 as of December 31, 2022 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, 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.
Weighted-average remaining lease term in years is calculated based on square feet as of December 31, 2022. 36 Table of Contents The following table details the tenant industry distribution of our portfolio as of December 31, 2022: Industry Number of Properties Annualized Straight-Line Rent (1) (in thousands) Annualized Straight-Line Rent as a Percentage of the Total Portfolio Square Feet (in thousands) Square Feet as a Percentage of the Total Portfolio Auto Manufacturing 16 $ 40,889 12 % 4,237 11 % Financial Services 13 40,432 12 % 3,126 8 % Consumer Goods 16 20,468 6 % 4,544 12 % Healthcare 19 19,491 6 % 1,000 3 % Technology 14 17,449 5 % 987 3 % Freight 28 15,057 4 % 1,494 4 % Aerospace 9 14,538 4 % 1,416 4 % Government 15 14,331 4 % 536 1 % Metal Processing 12 14,331 4 % 2,472 6 % Logistics 6 14,036 4 % 2,269 6 % Energy 28 11,446 3 % 964 2 % Metal Fabrication 18 11,430 3 % 1,524 4 % Pharmaceuticals 4 10,809 3 % 476 1 % Engineering 1 10,704 3 % 366 1 % Automotive Parts Supplier 5 9,665 3 % 964 2 % Telecommunications 3 7,759 2 % 599 2 % Discount Retail 22 7,366 2 % 1,001 3 % Home Furnishings 5 5,977 2 % 2,456 6 % Building Products 12 5,862 2 % 760 2 % Retail Food Distribution 3 4,710 1 % 1,128 3 % Publishing 1 4,070 1 % 873 2 % Food Manufacturing 6 3,979 1 % 598 2 % Specialty Retail 8 3,881 1 % 486 1 % Other [2] 45 32,077 12 % 4,951 11 % Total 309 $ 340,757 100 % $ 39,227 100 % ________ [1] Annualized straight-line rent converted from local currency into USD as of December 31, 2022 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, 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.
Removed
The following table represents our portfolio of real estate properties as of December 31, 2022: Portfolio Acquisition Date Country Number of Properties Square Feet (in thousands) (1) Average Remaining Lease Term (2) McDonald's Oct. 2012 UK 1 9 1.2 Wickes Building Supplies I May 2013 UK 1 30 9.1 Everything Everywhere Jun. 2013 UK 1 65 4.5 Thames Water Jul. 2013 UK 1 79 2.7 Wickes Building Supplies II Jul. 2013 UK 1 29 4 PPD Global Labs Aug. 2013 US 1 77 2.1 Northern Rock Sep. 2013 UK 2 86 4.7 Wickes Building Supplies III Nov. 2013 UK 1 28 5.9 XPO Logistics Nov. 2013 US 7 105 0.9 Wolverine Dec. 2013 US 1 469 5.1 Rheinmetall Jan. 2014 GER 1 320 6 GE Aviation Jan. 2014 US 1 369 3 Provident Financial Feb. 2014 UK 1 117 12.9 Crown Crest Feb. 2014 UK 1 806 16.1 Trane Feb. 2014 US 1 25 0.9 Aviva Mar. 2014 UK 1 132 6.5 DFS Trading I Mar. 2014 UK 5 240 7.2 GSA I Mar. 2014 US 1 135 0 National Oilwell Varco I Mar. 2014 US 1 24 0.6 GSA II Apr. 2014 US 2 25 6.1 OBI DIY Apr. 2014 GER 1 144 1 DFS Trading II Apr. 2014 UK 2 39 7.2 GSA III Apr. 2014 US 2 28 0.2 GSA IV May 2014 US 1 33 2.5 Indiana Department of Revenue May 2014 US 1 99 10.0 National Oilwell Varco II May 2014 US 1 23 7.2 Nissan May 2014 US 1 462 5.8 GSA V Jun. 2014 US 1 27 0.2 Lippert Components Jun. 2014 US 1 539 15.1 Select Energy Services I Jun. 2014 US 3 136 3.8 Bell Supply Co I Jun. 2014 US 6 80 6.0 Axon Energy Products Jun. 2014 US 2 88 7.4 Lhoist Jun. 2014 US 1 23 10.0 GE Oil & Gas Jun. 2014 US 2 70 2.5 Select Energy Services II Jun. 2014 US 4 143 3.9 Bell Supply Co II Jun. 2014 US 2 19 6.0 Superior Energy Services Jun. 2014 US 2 42 1.3 Amcor Packaging Jun. 2014 UK 7 295 1.9 GSA VI Jun. 2014 US 1 7 1.3 Nimble Storage Jun. 2014 US 1 165 — FedEx -3-Pack Jul. 2014 US 3 339 6.5 Sandoz, Inc.
Added
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.
Removed
Jul. 2014 US 1 154 3.6 Wyndham Jul. 2014 US 1 32 2.3 Valassis Jul. 2014 US 1 101 0.3 GSA VII Jul. 2014 US 1 26 1.9 AT&T Services Jul. 2014 US 1 402 3.5 PNC - 2-Pack Jul. 2014 US 2 210 6.6 Fujitsu Jul. 2014 UK 3 163 7.2 Continental Tire Jul. 2014 US 1 91 2.6 BP Oil Aug. 2014 UK 1 3 2.8 33 Table of Contents Portfolio Acquisition Date Country Number of Properties Square Feet (in thousands) (1) Average Remaining Lease Term (2) Malthurst Aug. 2014 UK 2 4 11.7 HBOS Aug. 2014 UK 3 36 2.6 Thermo Fisher Aug. 2014 US 1 115 1.7 Black & Decker Aug. 2014 US 1 71 10.4 Capgemini Aug. 2014 UK 1 90 3.6 Merck & Co.
Added
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.
Removed
Aug. 2014 US 1 146 2.7 GSA VIII Aug. 2014 US 1 24 1.6 Waste Management Sep. 2014 US 1 84 5.0 Intier Automotive Interiors Sep. 2014 UK 1 153 1.4 HP Enterprise Services Sep. 2014 UK 1 99 3.2 FedEx II Sep. 2014 US 1 12 1.2 Shaw Aero Devices, Inc.
Added
(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.
Removed
Sep. 2014 US 1 131 10.0 Dollar General - 39-Pack Sep. 2014 US 21 200 5.2 FedEx III Sep. 2014 US 2 221 5.1 Mallinkrodt Pharmaceuticals Sep. 2014 US 1 90 1.7 Kuka Sep. 2014 US 1 200 1.5 CHE Trinity Sep. 2014 US 2 374 5.3 FedEx IV Sep. 2014 US 2 255 5.5 GE Aviation Sep. 2014 US 1 102 — DNV GL Oct. 2014 US 1 82 2.2 Rexam Oct. 2014 GER 1 176 2.2 FedEx V Oct. 2014 US 1 76 1.5 Onguard Oct. 2014 US 1 120 8.1 Metro Tonic Oct. 2014 GER 1 636 2.8 Tokmanni Nov. 2014 FIN 1 801 10.7 Fife Council Nov. 2014 UK 1 37 1.1 GSA IX Nov. 2014 US 1 28 9.3 KPN BV Nov. 2014 NETH 1 133 4 Follett School Dec. 2014 US 1 487 2.0 Quest Diagnostics Dec. 2014 US 1 224 1.7 Diebold Dec. 2014 US 1 158 — Weatherford Intl Dec. 2014 US 1 20 2.8 AM Castle Dec. 2014 US 1 128 6.8 FedEx VI Dec. 2014 US 1 28 6.7 Constellium Auto Dec. 2014 US 1 321 6.9 C&J Energy II Mar. 2015 US 1 125 7.8 Fedex VII Mar. 2015 US 1 12 1.8 Fedex VIII Apr. 2015 US 1 26 1.8 Crown Group I Aug. 2015 US 2 204 1.0 Crown Group II Aug. 2015 US 2 411 12.7 Mapes & Sprowl Steel, Ltd.
Added
Not applicable. 35 Table of Contents PART II
Removed
Sep. 2015 US 1 61 7.0 JIT Steel Services Sep. 2015 US 2 127 7.0 Hannibal/Lex JV LLC Sep. 2015 US 1 109 6.8 FedEx Ground Sep. 2015 US 1 91 2.5 Office Depot Sep. 2015 NETH 1 206 6.2 Finnair Sep. 2015 FIN 4 656 8.2 Auchan Dec. 2016 FR 1 152 10.2 Pole Emploi Dec. 2016 FR 1 41 0.5 NCR Dundee Dec. 2016 UK 1 132 3.9 FedEx Freight I Dec. 2016 US 1 69 0.7 DB Luxembourg Dec. 2016 LUX 1 156 3.9 ING Amsterdam Dec. 2016 NETH 1 509 4.5 Worldline Dec. 2016 FR 1 111 1.0 34 Table of Contents Portfolio Acquisition Date Country Number of Properties Square Feet (in thousands) (1) Average Remaining Lease Term (2) Foster Wheeler Dec. 2016 UK 1 366 1.6 ID Logistics I Dec. 2016 GER 1 309 1.8 ID Logistics II Dec. 2016 FR 2 964 1.9 Harper Collins Dec. 2016 UK 1 873 2.7 DCNS Dec. 2016 FR 1 97 1.8 Cott Beverages Inc Feb. 2017 US 1 170 4.1 FedEx Ground - 2 Pack Mar. 2017 US 2 162 3.7 Bridgestone Tire Sep. 2017 US 1 48 4.6 GKN Aerospace Oct. 2017 US 1 98 4.0 NSA-St.
Removed
Johnsbury I Oct. 2017 US 1 87 9.8 NSA-St. Johnsbury II Oct. 2017 US 1 85 9.8 NSA-St.
Removed
Johnsbury III Oct. 2017 US 1 41 9.8 Tremec North America Nov. 2017 US 1 127 4.8 Cummins Dec. 2017 US 1 59 2.4 GSA X Dec. 2017 US 1 26 7.0 NSA Industries Dec. 2017 US 1 83 10.0 Chemours Feb. 2018 US 1 300 5.1 FCA USA Mar. 2018 US 1 128 5.2 Lee Steel Mar. 2018 US 1 114 5.8 LSI Steel - 3 Pack Mar. 2018 US 3 218 4.8 Contractors Steel Company May 2018 US 5 1,392 5.4 FedEx Freight II Jun. 2018 US 1 22 9.7 DuPont Pioneer Jun. 2018 US 1 200 9.5 Rubbermaid - Akron OH Jul. 2018 US 1 669 6.1 NetScout - Allen TX Aug. 2018 US 1 145 7.7 Bush Industries - Jamestown NY Sep. 2018 US 1 456 15.8 FedEx - Greenville NC Sep. 2018 US 1 29 10.1 Penske Nov. 2018 US 1 606 5.9 NSA Industries Nov. 2018 US 1 65 15.9 LKQ Corp.
Removed
Dec. 2018 US 1 58 8.1 Walgreens Dec. 2018 US 1 86 2.9 Grupo Antolin Dec. 2018 US 1 360 9.8 VersaFlex Dec. 2018 US 1 113 16.0 Cummins Mar. 2019 US 1 37 5.9 Stanley Security Mar. 2019 US 1 80 5.5 Sierra Nevada Apr. 2019 US 1 60 6.3 EQT Apr. 2019 US 1 127 7.5 Hanes Apr. 2019 US 1 276 5.8 Union Partners May 2019 US 2 390 6.3 ComDoc Jun. 2019 US 1 108 6.4 Metal Technologies Jun. 2019 US 1 228 11.4 Encompass Health Jun. 2019 US 1 199 10.3 Heatcraft Jun. 2019 US 1 216 5.5 C.F.
Removed
Sauer SLB Aug. 2019 US 6 598 16.6 SWECO Sep. 2019 US 1 191 12.4 Viavi Solutions Sep. 2019 US 2 132 9.7 Faurecia Dec. 2019 US 1 278 6.3 Plasma Dec. 2019 US 9 125 7.5 Whirlpool Dec. 2019 US 6 2,924 9.0 FedEx Dec. 2019 CN 2 20 6.5 NSA Industries Dec. 2019 US 1 116 17.0 Viavi Solutions Jan. 2020 US 1 46 9.7 CSTK Feb. 2020 US 1 56 7.2 35 Table of Contents Portfolio Acquisition Date Country Number of Properties Square Feet (in thousands) (1) Average Remaining Lease Term (2) Metal Technologies Feb. 2020 US 1 31 12.2 Whirlpool Feb. 2020 IT 2 29 3.4 Fedex Mar. 2020 CN 1 2,195 17.3 Klaussner Mar. 2020 US 4 196 9.2 Plasma May 2020 US 6 78 8.7 Klaussner Jun. 2020 US 1 261 17.3 NSA Industries Jun. 2020 US 1 48 17.5 Johnson Controls Sep. & Dec. 2020 UK, SP & FR 4 156 9.8 Broadridge Financial Solutions Nov. 2020 US 4 1,248 7.0 ZF Active Safety Dec. 2020 US 1 216 10.8 FCA USA Dec. 2020 US 1 997 7.5 Momentum Manufacturing Group Apr. 2021 US 1 93 18.3 Cameron International Apr. 2021 US 1 44 5.8 The McLaren Group Apr. 2021 UK 3 841 18.3 Trafalgar Court Sep. 2021 C.I. 1 114 7.8 Pilot Point Steel Oct. 2021 US 2 166 13.8 Walmart Learning Center Oct. 2021 US 1 90 5.8 Promess Dec. 2021 US 3 68 14.0 Thetford Corporation Dec. 2021 US & NETH 4 483 14.0 PFB Corporation Dec. 2021 CAN & US 8 604 19.0 Executive Mailing Service Apr. 2022 US 1 175 14.3 Caledonia House May 2022 UK 1 67 10.8 Momentum Manufacturing Group Jun. 2022 US 1 58 19.5 Total 309 39,227 8.0 ______________ (1) Total may not foot due to rounding.
Removed
(2) Totals may not foot due to rounding. 38 Table of Contents Future Minimum Lease Payments The following table presents future minimum base rent payments, on a cash basis, due to us over the next ten calendar years and thereafter on the properties we owned as of December 31, 2022: (In thousands) Future Minimum Base Rent Payments (1) 2023 $ 335,047 2024 321,006 2025 290,026 2026 267,292 2027 240,266 2028 216,113 2029 — 2030 — 2031 — 2032 — Thereafter 977,924 Total $ 2,647,674 _______ (1) Assumes exchange rates of £1.00 to $1.21 for GBP, €1.00 to $1.07 for EUR and $1.00 CAD to $0.74 as of December 31, 2022 for illustrative purposes, as applicable.
Removed
Significant Properties As of December 31, 2022, we had one property, the McLaren property located in the United Kingdom, whose annualized rental income represented 5.0% of total portfolio annualized straight-line rent.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

16 edited+16 added−1 removed2 unchanged
Biggest changeIn March 2020, the board of directors approved a change in the dividend to an annual rate of $1.60 per share or $0.40 per share on a quarterly basis. We have been paying dividends on our shares of common stock at that rate since the second quarter of 2020.
Biggest changeDividends 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.
The amount of dividends payable to our common stockholders is determined by our board of directors and is dependent on a number of factors, including funds available for dividends, our financial condition, provisions in our Credit Facility 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.
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 Facility 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.
Dividends on the Series A Preferred Stock are payable quarterly in arrears on the 15th day of January, April, July and October of each year (or, if not on a business day, on the next succeeding business day) to holders of record on the close of business on the record date set by our board of directors, which must be not more than 30 nor fewer than 10 days prior to the applicable payment date.
Dividends on the Series A Preferred Stock are payable quarterly in arrears on the 15th day of January, April, July and October of each year (or, if not on a business day, on the next succeeding business day) to holders of record on the close of business on the record date set by our Board, which must be not more than 30 nor fewer than 10 days prior to the applicable payment date.
Dividends on the Series B Preferred Stock are payable quarterly in arrears on the 15th day of January, April, July and October of each year (or, if not on a business day, on the next succeeding business day) to holders of record at the close of business on the record date set by our board of directors.
Dividends on the Series B Preferred Stock are payable quarterly in arrears on the 15th day of January, April, July and October of each year (or, if not on a business day, on the next succeeding business day) to holders of record at the close of business on the record date set by our Board.
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, 2022.
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.
Dividends have been, and we anticipate will continue to be, paid on a quarterly basis in arrears 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 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 to Series B Preferred Stockholders Dividends on our Series B Preferred Stock accrue in an amount equal to $0.429688 per share per quarter to holders of Series B Preferred Stock, which is equivalent to 6.875% of the $25.00 liquidation preference per share of Series B Preferred Stock per annum.
Dividends to Series B Preferred Stockholders Dividends on our Series B Preferred Stock accrue in an amount equal to $0.4296875 per share per quarter to holders of Series B Preferred Stock, which is equivalent to 6.875% of the $25.00 liquidation preference per share of Series B Preferred Stock per annum.
For additional information on the restrictions on dividends and other distributions in our Credit Facility, see Note 5 — Revolving Credit Facility and Term Loan, Net to our consolidated financial statements included in this Annual Report on Form 10-K and “ Item 1A.
For additional information on the restrictions on dividends and other distributions in our Credit Facility, see Note 6 — Revolving Credit Facility to our consolidated financial statements included in this Annual Report on Form 10-K and “ Item 1A.
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.” 41 Table of Contents For tax purposes, of the amounts distributed during the year ended December 31, 2022, 100.0%, or $1.60 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, 2023, 100.0%, or $1.55 per share per annum, represented a return of capital.
The graph assumes an investment of $100 on June 2, 2015 with the reinvestment of dividends. Holders As of February 20, 2023, we had 103.8 million shares of Common Stock outstanding held by 1,305 stockholders of record. Dividends We elected to be taxed as a REIT, commencing with our taxable year ended December 31, 2013.
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.
Unregistered Sales of Equity Securities None. Purchase of Equity Securities by the Issuer and Affiliated Purchasers None.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers None.
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.
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.
All dividends paid on Series A Preferred Stock in 2021 and 2020 were considered 100% ordinary dividend income. Dividends paid during 2022 on the Series B Preferred Stock were considered 69.9% ordinary dividend income. All dividends paid on Series B Preferred Stock in 2021 and 2020 were considered 100% ordinary dividend income.
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.
See Note 9 — 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, 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.
During the year ended December 31, 2020, 77.5%, or $1.34 per share per annum, and 22.5%, or $0.39 per share per annum, represented a return of capital and ordinary dividends, respectively. Dividends paid during 2022 on the Series A Preferred Stock were considered 69.9% ordinary dividend income.
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 to Common Stockholders Historically, and through March 31, 2020, we paid dividends on our Common Stock at an annualized rate of $2.13 per share or $0.5325 per share on a quarterly basis.
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.
Removed
For a discussion of the dividend of preferred share purchase rights to common stockholders in April 2020 in connection with our short-term stockholder rights plan see Note 9 — Stockholders' Equity to our consolidated financial statements included in this Annual Report on Form 10-K.
Added
During the year ended December 31, 2022, 100.0%, or $1.60 per share per annum, represented a return of capital.
Added
On 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).
Added
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.
Added
Dividends to Series D Preferred Stockholders 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.
Added
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.
Added
Dividends to Series E Preferred Stockholders 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.
Added
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.
Added
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
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
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.
Added
(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.
Added
(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).
Added
(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.
Added
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.
Added
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.
Added
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

5 edited+386 added−21 removed0 unchanged
Biggest changeOur results of operations of our foreign properties benefit from a weaker USD, and are adversely affected by a stronger USD, relative to the foreign currency subject to any impacts from our hedging activity. We have designated all current foreign currency draws under the Credit Facility as net investment hedges to the extent of our net investment in foreign subsidiaries.
Biggest changeWe are generally a net receiver of these currencies (we receive more cash than we pay out), and therefore our results of operations of our foreign properties benefit from a weaker USD, and are adversely affected by a stronger USD, relative to the foreign currency.
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.
As a result of our foreign investments in Europe, and, to a lesser extent, our investments in Canada, we are subject to risk from the effects of exchange rate movements in the EUR, GBP and, to a lesser extent, CAD against the USD, which may affect costs and cash flows in our functional currency, the USD.
We generally manage foreign currency exchange rate movements by matching our debt service obligation to the lender and the tenant’s rental obligation to us in the same currency. This reduces, but does not eliminate, our overall exposure to currency fluctuations.
We generally manage foreign currency exchange rate movements by matching our debt service obligation to the lender and the tenant’s rental obligation to us in the same currency. This reduces our overall exposure to currency fluctuations. In addition, we may use currency hedging to further reduce the exposure to our net cash flow.
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 $6.2 million at December 31, 2022 (see Note 7 — Fair Value of Financial Instruments to our consolidated financial statements included in this Annual Report on Form 10-K).
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.
As of December 31, 2022, we did not have any foreign currency draws in excess of our net investments in our foreign subsidiaries (see Note 8 — Derivatives and Hedging Activities to our consolidated financial statements included in this Annual Report on Form 10-K).
We recorded goodwill of $25.2 million during the year ended December 31, 2023 related to the Mergers (see Note 3 — The Mergers to our consolidated financial statements included in this Annual Report on Form 10-K).
Removed
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations-Contractual Obligations above.
Added
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis should be read in conjunction with the accompanying financial statements. The following information contains forward-looking statements, which are subject to risks and uncertainties.
Removed
The following table presents future principal payments based upon expected maturity dates of our debt obligations outstanding at December 31, 2022: (In thousands) Fixed-rate debt (1) (2) Variable-rate debt (1) Total Debt 2023 (3) $ 199,569 $ 49,891 $ 249,460 2024 314,053 15,846 329,899 2025 — — — 2026 — 669,968 669,968 2027 662,580 — 662,580 Thereafter 502,750 — 502,750 Total $ 1,678,952 $ 735,705 $ 2,414,657 ____________________ (1) Assumes exchange rates of £1.00 to $1.21 for GBP and €1.00 to $1.07 for EUR as of December 31, 2022, for illustrative purposes, as applicable.
Added
Should one or more of these risks or uncertainties materialize, actual results may differ materially from those expressed or implied by the forward-looking statements. Please see “Forward-Looking Statements” elsewhere in this report for a description of these risks and uncertainties.
Removed
(2) Fixed-rate debt includes variable debt that bears interest at margin plus a floating rate which is fixed through our interest rate swap agreements. (3) See Liquidity and Capital Resource s - Mortgage Notes Payable section above for additional discussion of the implications of debt coming due in 2023.
Added
Overview We are a 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. Historically, we focused on acquiring and managing a globally diversified portfolio of strategically-located commercial real estate properties, which consisted primarily of mission-critical, single tenant net-lease assets.
Removed
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.
Added
As a result of acquiring RTL in September 2023, we acquired a diversified portfolio of 989 properties consisting of primarily necessity-based retail single-tenant and multi-tenant properties located in the U.S.
Removed
A decrease or increase in interest rates of 1% would change the estimated fair value of this debt at December 31, 2022 by an aggregate increase of $0.4 million or an aggregate decrease of $0.5 million, respectively.
Added
Until September 12, 2023, we were managed by the former Advisor, who managed our day-to-day business with the assistance of the Property Manager, who managed and leased our properties to third parties.
Removed
Annual interest expense on our unhedged variable-rate debt that does not bear interest at fixed rates at December 31, 2022 would increase or decrease by approximately $7.4 million for each respective 1% change in annual interest rates.
Added
Prior to September 12, 2023, the former Advisor and the Property Manager were under common control with AR Global, and these related parties had historically received compensation and fees for various services provided to us.
Removed
In addition, we have used and may continue to use currency hedging to further reduce the exposure to our net cash flow. We are generally a net receiver of the Euro, the GBP and the CAD (we receive more cash than we pay out).
Added
On September 12, 2023, we internalized our advisory and property management functions as well as the advisory and property management functions of RTL as a result of the Internalization Merger (as defined below).
Removed
To the extent foreign draws in each currency exceed the net investment, we reflect the effects of changes in currency on such excess in earnings.
Added
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.
Removed
We enter into foreign currency forward contracts and put options to hedge certain of our foreign currency cash flow exposures. A foreign currency forward contract is a commitment to deliver a certain amount of foreign currency at a certain price on a specific date in the future.
Added
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.
Removed
By entering into forward contracts and holding them to maturity, we are locked into a future currency exchange rate for the term of the contract.
Added
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.
Removed
A foreign currency put option contract consists of a right, but not the 63 Table of Contents obligation, to sell a specified amount of foreign currency for a specified amount of another currency at a specific date.
Added
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.
Removed
If the exchange rate of the currency fluctuates favorably beyond the strike rate of the put at maturity, the option would be considered “in-the-money” and exercised accordingly.
Added
The straight-line rent includes amounts for tenant concessions. Our portfolio is leased to primarily “Investment Grade” rated tenants in well established markets in the U.S. and Europe.
Removed
We have obtained, and may in the future obtain, non-recourse mortgage financing in a foreign currency.
Added
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 and 24.2% leased to tenants with an implied investment grade rating.
Removed
To the extent that currency fluctuations increase or decrease rental revenues as translated to USD, the change in debt service, as translated to USD, will partially offset the effect of fluctuations in revenue and, to some extent, mitigate the risk from changes in foreign currency exchange rates.
Added
For our purposes, “Investment Grade” includes both actual investment grade ratings of the tenant or guarantor, if available, or implied investment grade.
Removed
Scheduled future minimum rents, exclusive of renewals, under non-cancelable operating leases, for our foreign operations as of December 31, 2022, 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 2023 $ 52,293 $ 72,746 $ 2,687 $ 127,726 2024 50,399 67,683 2,727 120,809 2025 44,402 57,103 2,767 104,272 2026 40,781 50,095 2,669 93,545 2027 27,296 46,926 2,611 76,833 Thereafter 92,168 397,355 35,571 525,094 Total $ 307,339 $ 691,908 $ 49,032 $ 1,048,279 ______ (1) Assumes exchange rates of £1.00 to $1.21 for GBP, €1.00 to $1.07 for EUR and $1.00 CAD to $0.74 as of December 31, 2022 for illustrative purposes, as applicable.
Added
Implied investment grade may include actual ratings of the tenant parent, guarantor parent (regardless of whether or not the parent has guaranteed the tenant’s obligation under the lease) or tenants that are identified as investment grade by using a proprietary Moody’s Analytics tool, which generates an implied rating by measuring an entity’s probability of default.
Removed
Scheduled debt service payments (principal and interest) for mortgage notes payable for our foreign operations as of December 31, 2022, during each of the next five calendar years and thereafter, are as follows: Future Debt Service Payments (1) (2) Mortgage Notes Payable (In thousands) EUR GBP Total 2023 $ 59,225 $ 205,093 $ 264,318 2024 208,664 124,473 333,137 2025 — — — 2026 — — — 2027 — — — Thereafter — — — Total $ 267,889 $ 329,566 $ 597,455 We currently anticipate that, by their respective due dates, we will have repaid or refinanced certain of these loans, or extended it, but there can be no assurance that we will be able to refinance these loans on favorable terms, if at all.
Added
Ratings information is as of December 31, 2023. The Acquisition of The Necessity Retail REIT and the Internalization On September 12, 2023 (the “Acquisition Date”), the REIT Merger (as defined below) and the Internalization Merger (as defined below) were both consummated (collectively, the “Mergers”).
Removed
If refinancing has not occurred, we would expect to use our cash resources, including unused capacity on our Credit Facility, to make these payments, if necessary.
Added
The REIT Merger and Internalization Merger were conditioned upon each other and accordingly are considered “related” and treated as a single transaction for accounting and reporting purposes (see Note 3 — The Mergers to our consolidated financial statements included in this Annual Report on Form 10-K for additional information).
Removed
Concentration of Credit Risk Concentrations of credit risk arise when a number of tenants are engaged in similar business activities or have similar economic risks or conditions that could cause them to default on their lease obligations to us. We regularly monitor our portfolio to assess potential concentrations of credit risk.
Added
The REIT Merger Pursuant to the terms and conditions of the Agreement and Plan of Merger dated May 23, 2023 (the “REIT Merger Agreement”), on the Acquisition Date, RTL merged with and into Osmosis Sub I, LLC, a wholly-owned subsidiary of GNL (“REIT Merger Sub”), with REIT Merger Sub continuing as the surviving entity (the “REIT Merger”) and a wholly-owned subsidiary of GNL, followed by Osmosis Sub II, LLC, a wholly-owned subsidiary of the Global Net Lease Operating Partnership, L.P.
Removed
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, 2022, in certain areas. See Item 2. Properties in this Annual Report on Form 10-K for further discussion on distribution across countries and industries.
Added
(the “OP”), merging with and into The Necessity Retail REIT Operating Partnership, L.P. (“RTL OP”), with RTL OP continuing as the surviving entity (the “OP Merger” and collectively with the REIT Merger, the “REIT Mergers”).
Removed
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 (65%) and the remaining are in the United Kingdom (17%), The Netherlands (5%), Finland 64 Table of Contents (4%) and Germany (3%).
Added
On the Acquisition Date, pursuant to the REIT Merger Agreement, each issued and outstanding share of RTL’s (i) Class A Common Stock, par value $0.01 per share (the “RTL Class A Common Stock”), was converted into 0.670 shares (the “Exchange Ratio”) of Common Stock, (ii) 7.50% Series A Cumulative Redeemable Preferred Stock, par value $0.01 per share (“RTL Series A Preferred Stock”), was automatically converted into one share of newly created Series D Preferred Stock, and (iii) 7.375% Series C Cumulative Redeemable Perpetual Preferred Stock, par value $0.01 per share (“RTL Series C Preferred Stock”), was automatically converted into one share of newly created Series E Preferred Stock. 39 Table of Contents On the Acquisition Date, after the REIT Merger but prior to the OP Merger, REIT Merger Sub distributed its general partnership interests in RTL OP to the Company.
Removed
No individual tenant accounted for more than 10% of our annualized rental income at December 31, 2022. Based on annualized rental income, at December 31, 2022, our directly owned real estate properties contain significant concentrations in the following asset types: office (41%), industrial/distribution (56%), and retail (3%).
Added
The Company, in turn, contributed its general partnership interests in RTL OP to the OP and, in turn, the OP contributed the general partnership interests in RTL OP to GNL Retail GP, LLC, a newly formed limited liability company that is wholly owned by the OP (“GNL Retail”).
Added
By virtue of the OP Merger and without any further action on the part of the OP, (i) GNL Retail became the sole general partner of the surviving company with respect to the OP Merger; (ii) all the preferred units of RTL OP held by REIT Merger Sub immediately after the Acquisition Date were cancelled and no payment was made with respect thereto; (iii) the OP continues as the sole limited partner of RTL OP; and (iv) each units of limited partnership interest in the OP designated as “OP Units” (“OP Units”) held by a limited partner of RTL OP other than RTL or any subsidiary of RTL issued and outstanding immediately prior to the Acquisition Date was automatically converted into new OP units in an amount equal to (x) one multiplied by (y) the Exchange Ratio, and each holder of new OP units was admitted as a limited partner of the OP in accordance with the terms of the partnership agreement of the OP.
Added
As a result, GNL Retail became the general partner and the OP is now the limited partner of RTL OP.
Added
The Internalization Merger Pursuant to the terms and conditions of the Agreement and Plan of Merger dated May 23, 2023 (the “Internalization Merger Agreement”) to internalize the advisory and property management functions of the combined companies, on the Acquisition Date, (i) GNL Advisor Merger Sub LLC, a wholly-owned subsidiary of the OP merged with and into the former Advisor, with the former Advisor continuing in existence; (ii) GNL PM Merger Sub LLC, a wholly-owned subsidiary of the OP merged with and into the Property Manager, with the Property Manager continuing in existence; (iii) RTL Advisor Merger Sub LLC merged with and into Necessity Retail Advisors, LLC (“RTL Advisor”), with RTL Advisor continuing in existence; and (iv) RTL PM Merger Sub LLC, a wholly-owned subsidiary of the OP merged with and into Necessity Retail Properties, LLC (“RTL Property Manager”), with RTL Property Manager continuing in existence (collectively, the “Internalization Merger”).
Added
As a result of the consummation of the Internalization Merger, the advisory agreements were terminated for both us and RTL and we assumed both ours and RTL’s property management agreements and we were no longer externally managed.
Added
We internalized these functions with our own dedicated workforce (see Note 3 — The Mergers for additional information on the Internalization Merger and see Note 12 — Related Party Transactions to our consolidated financial statements included in this Annual Report on Form 10-K for additional information on the Internalization Merger). Transaction Fees BMO Capital Markets Corp.
Added
(“BMO”), the financial advisor to the special committee of the Board comprised solely of independent directors that was formed by the Board (the “Special Committee”), was paid a fee of $30.0 million, $3.0 million of which was paid in the quarter ended June 30, 2023 upon delivery of BMO’s opinion regarding the REIT Merger and the remaining $27.0 million was paid upon consummation of the Mergers in the quarter ended September 30, 2023.
Added
In addition, the Company paid BMO a fee of $1.0 million in the quarter ended June 30, 2023, which was paid upon delivery of BMO’s opinion regarding the Internalization Merger.
Added
The Company has also agreed to reimburse BMO for its transaction-related expenses, which totaled approximately $0.3 million, and agreed to indemnify BMO and certain related parties against certain potential liabilities arising out of or in connection with its engagement.
Added
Significant Accounting Estimates and Accounting Policies Set forth below is a summary of the significant accounting estimates and accounting policies that management believes are important to the preparation of our financial statements.
Added
Certain of our accounting estimates are particularly important for an understanding of our financial position and results of operations, and require the application of significant judgment by our management. As a result, these estimates are subject to a degree of uncertainty.
Added
These significant accounting estimates and accounting policies include: Revenue Recognition Our revenues, which are derived primarily from lease contracts, which include rents that each tenant pays in accordance with the terms of each lease agreement and are reported on a straight-line basis over the initial term of the lease.
Added
As of December 31, 2023, these leases had a weighted-average remaining lease term of 6.8 years.
Added
Because many of our leases provide for rental increases at specified intervals, straight-line basis accounting requires us to record a receivable for, and include in revenues, unbilled rent receivables that we will only receive if the tenant makes all rent payments required through the expiration of the initial term of the lease.
Added
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.
Added
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.
Added
We defer the revenue related to lease payments received from tenants in advance of their due dates. When we acquire a property, the acquisition date is considered to be the commencement date for purposes of this calculation for all leases in place at the time of acquisition.
Added
In our Industrial & Distribution, Single-Tenant Retail and Office segments, in addition to base rent, our lease agreements generally require tenants to pay for their property operating expenses or reimburse us for property operating expenses that we incur (primarily insurance costs and real estate taxes).
Added
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.
Added
Under ASC 842, we elected to report combined lease and non-lease components in a single line “Revenue from tenants.” For expenses paid directly by the tenant, under both ASC 842 and 840, we reflected them on a net basis.
Added
We continually review receivables related to rent and unbilled rent receivables and determine collectability by taking into consideration the tenant’s payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates and economic conditions in the area in which the property is located.
Added
Under lease accounting rules, we are required to assess, based on credit risk only, if it is probable that we will collect virtually all of the lease payments at lease commencement date and we must continue to reassess collectability periodically thereafter based on new facts and circumstances affecting the credit risk of the tenant.
Added
Partial reserves, or the ability to assume partial recovery are not permitted. If we determine that it is probable that we will collect virtually all of the lease payments (rent and contractually reimbursable property operating expenses), the lease will continue to be accounted for on an accrual basis (i.e. straight-line).
Added
However, if we determine it is not probable that we will collect virtually all of the lease payments, the lease will be accounted for on a cash basis and a full reserve would be recorded on previously accrued amounts in cases where it was subsequently concluded that collection was not probable.
Added
Cost recoveries from tenants are included in Revenue from tenants on the accompanying consolidated statements of operations in the period the related costs are incurred, as applicable. In accordance with lease accounting rules, we record uncollectible amounts as reductions in revenue form tenants.
Added
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.
Added
Costs of repairs and maintenance are expensed as incurred. At the time an asset is acquired, we evaluate the inputs, processes and outputs of the asset acquired to determine if the transaction is a business combination or asset acquisition.
Added
If an acquisition qualifies as a business combination, the related transaction costs are recorded as an expense in the consolidated statements of operations. If an acquisition qualifies as an asset acquisition, the related transaction costs are generally capitalized and subsequently amortized over the useful life of the acquired assets.
Added
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.
Added
No properties were presented as discontinued operations as of December 31, 2023 and 2022.
Added
Properties that are intended to be sold are designated as “held for sale” on our consolidated balance sheets at the lesser of carrying amount or fair value less estimated selling costs when they meet specific criteria to be presented as held for sale, most significantly that the sale is probable within one year.
Added
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.
Added
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.
Added
Tangible assets may include land, land improvements, buildings, fixtures and tenant improvements on an as- if vacant basis. Intangible assets may include the value of in-place leases, and above- and below- market leases and other identifiable assets or liabilities based on lease or property specific characteristics.

… 332 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

7 edited+26 added−1 removed7 unchanged
Biggest changeAt December 31, 2022, a significant portion (approximately 70%) of our long-term debt either bore interest at fixed rates, or was swapped to a fixed rate. The annual interest rates on our fixed-rate debt mortgage debt at December 31, 2022 ranged from 1.4% to 6.0% and the fixed interest rate on our Senior Notes is 3.75%.
Biggest changeThe 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%.
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.
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.
Interest rates are highly sensitive to many factors, including governmental monetary and tax policies, domestic and international economic and political conditions, and other factors beyond our control. Increases in interest rates may have an impact on the credit profile of certain tenants. We are exposed to the impact of interest rate changes primarily through our borrowing activities.
Interest rates are highly sensitive to many factors, including governmental monetary and tax policies, domestic and international economic and political conditions, and other factors beyond our control. Increases in interest rates may impact the credit profile of certain tenants. We are exposed to the impact of interest rate changes primarily through our borrowing activities.
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 in the consolidated financial 62 Table of Contents statements, which totaled $37.3 million and $0.3 million as of December 31, 2022, respectively (see Note 8 — 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 $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).
The value of our real estate is also subject to fluctuations based on local and regional economic conditions and changes in the creditworthiness of lessees, all of which may affect our ability to refinance property-level mortgage debt when balloon payments are scheduled, or otherwise if we do not choose to repay the debt when due.
The value of our real estate is also subject to fluctuations based on local and regional economic conditions and changes in the creditworthiness of lessees, all of which may affect our ability to refinance property-level mortgage debt when due.
Our interest expense in future periods will vary based on our level of future borrowings, which will depend on our refinancing needs and acquisition activity. In addition, our interest expense will vary based on movements in interest rates, including LIBOR rates. Our debt obligations are more fully described in
Our interest expense in future periods will vary based on our level of future borrowings, which will depend on, among other things, our refinancing needs or plans to reduce our leverage and acquisition activity. In addition, our interest expense will vary based on movements in interest rates. Our debt obligations are more fully described in Item 7.
As of December 31, 2022, our total consolidated debt, which includes borrowings under the Credit Facility and secured mortgage financings, had a total carrying value of $2.4 billion, an estimated fair value of $2.3 billion and a weighted-average effective interest rate per annum of 4.0%.
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.
Removed
In the aggregate, these fixed rate instruments had a weighted-average interest rate of 3.8%. The contractual annual interest rates on our variable-rate debt at December 31, 2022 ranged from 1.9% to 4.6% and had a weighted-average interest rate of 4.4%.
Added
The 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.
Added
(2) Fixed-rate debt includes variable debt that bears interest at margin plus a floating rate which is fixed through our interest rate swap agreements. Also see Item 1A. Risk Factors - Risks Related to Our Indebtedness - Our derivative financial instruments have been, and any derivative financial instruments in the future, will be subject to counterparty default risk .
Added
(3) Represents the variable portion of the mortgage that secures the properties in Finland. Interest on this mortgage is 80% fixed as a result of a “pay-fixed” interest rate swap agreement and 20% variable. (4) Represents the portion of the Revolving Credit Facility that bears interest at variable rates.
Added
The GBP and CAD portions of the Revolving Credit Facility are 100% variable and the USD portion in 71% variable. The EUR portion of Revolving Credit Facility is 100% fixed via swaps.
Added
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.
Added
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.
Added
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.
Added
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.
Added
We generally manage foreign currency exchange rate movements by matching our debt service obligation to the lender and the tenant’s rental obligation to us in the same currency. This reduces, but does not eliminate, our overall exposure to currency fluctuations.
Added
In addition, we have used and may continue to use currency hedging to further reduce the exposure to our net cash flow. We are generally a net receiver of the Euro, the GBP and the CAD (we receive more cash than we pay out).
Added
Our results of operations of our foreign properties benefit from a weaker USD, and are adversely affected by a stronger USD, relative to the foreign currency subject to any impacts from our hedging activity. We have designated all current foreign currency draws under the Credit Facility as net investment hedges to the extent of our net investment in foreign subsidiaries.
Added
To the extent foreign draws in each currency exceed the net investment, we reflect the effects of changes in currency on such excess in earnings.
Added
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).
Added
We enter into foreign currency forward contracts and put options to hedge certain of our foreign currency cash flow exposures. A foreign currency forward contract is a commitment to deliver a certain amount of foreign currency at a certain price on a specific date in the future.
Added
By entering into forward contracts and holding them to maturity, we are locked into a future currency exchange rate for the term of the contract. A foreign currency put option contract consists of a right, but not the obligation, to sell a specified amount of foreign currency for a specified amount of another currency at a specific date.
Added
If the exchange rate of the currency fluctuates favorably beyond the strike rate of the put at maturity, the option would be considered “in-the-money” and exercised accordingly.
Added
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).
Added
We have obtained, and may in the future obtain, non-recourse mortgage financing in a foreign currency.
Added
To the extent that currency fluctuations increase or decrease rental revenues as translated to USD, the change in debt service, as translated to USD, will partially offset the effect of fluctuations in revenue and, to some extent, mitigate the risk from changes in foreign currency exchange rates.
Added
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
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
If refinancing has not occurred, we would expect to use our cash resources, including unused capacity on our Credit Facility, to make these payments, if necessary.
Added
Concentration of Credit Risk Concentrations of credit risk arise when a number of tenants are engaged in similar business activities or have similar economic risks or conditions that could cause them to default on their lease obligations to us. We regularly monitor our portfolio to assess potential concentrations of credit risk.
Added
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.
Added
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%).
Added
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%).

Other GNL 10-K year-over-year comparisons