What changed in this filing

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Item 7. Management’s Discussion and Analysis

2025-02-20 compared with 2024-02-22 · 449 added, 347 removed, 1585 unchanged (33% of the section changed)

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states and seven properties located in four Canadian provinces.

We expect to achieve growth in revenues and earnings through our four core building blocks, which are (1) embedded same store net operating income growth through best-in-class portfolio rent escalations, stable rent collections, minimal credit losses, strong lease rollover outcomes, and accretive recycling, (2) revenue generating capital expenditures with existing tenants, (3) build-to-suit developments, and (4) a diversified acquisition pipeline.

We focus on investing in real estate that is operated by creditworthy single tenants in industries characterized by positive business drivers and trends.

We target properties that are an integral part of the tenants’ businesses and are therefore opportunities to secure long-term net leases.

Through long-term net leases, our tenants are able to retain operational control of their strategically important locations, while allocating their debt and equity capital to fund core business operations rather than real estate ownership.

We target properties that are an integral part of the tenants’ businesses and are therefore opportunities to secure long-term net leases through which our tenants are able to retain operational control of their strategically important locations, while allocating their debt and equity capital to fund core business operations rather than real estate ownership.

• Diversified Investment Strategy.

We invest in real estate through property acquisitions, revenue generating capital expenditures, build-to-suit developments, and transitional capital.

Our investments in these alternatives fluctuate from time to time depending on macroeconomic conditions and business or market trends.

Our strong relationships with brokers, developers, and tenants provides access to, off-market and marketed investment opportunities.

Off-market transactions are characterized by a lack of a formal marketing process and a lack of widely disseminated marketing materials.

Marketed transactions are often characterized by extensive buyer competition.

For all investments, we seek to maintain our portfolio’s diversification by property type, geography, tenant, and industry in an effort to reduce fluctuations in income caused by under-performing individual real estate assets or adverse economic conditions affecting an entire industry or geographic region.

• Diversified Portfolio .

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• Property Type :

We are diversified across industrial, healthcare, restaurant, and retail property types.

Within these sectors, we have meaningful concentrations in manufacturing, distribution and warehouse, food processing, casual dining, clinical, quick service restaurants, and general merchandise.

We are primarily diversified across industrial and retail property types.

Within these sectors, we have meaningful concentrations in manufacturing, distribution and warehouse, food processing, general merchandise, casual dining, and quick service restaurants.

• Geographic Diversification :

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• Tenant and Industry Diversification :

Our properties are occupied by approximately 220 different commercial tenants who operate 208 different brands that are diversified across 53 differing industries, with no single tenant accounting for more than 4.1% of our ABR.

Our properties are occupied by 202 different commercial tenants who operate 190 distinct brands that are diversified across 55 varying industries, with no single tenant accounting for more than 4.1% of our ABR.

• Strong In-Place Leases with Significant Remaining Lease Term .

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• Standard Contractual Base Rent Escalation .

Approximately 97.3% of our leases have contractual rent escalations, with an ABR weighted average minimum increase of 2.0%.

Approximately 97.4% of our leases have contractual rent escalations, with an ABR weighted average increase of 2.0%.

• Extensive Tenant Financial Reporting .

Approximately 94.2% of our tenants, based on ABR, provide financial reporting, of which 85.6% are required to provide us with specified financial information on a periodic basis, and an additional 8.6% of our tenants report financial statements publicly, either through SEC filings or otherwise.

Diversified Investment Activity

During the year ended December 31, 2024, our investment activity consisted of the following:

For the Three Months Ended

For the Year Ended

December 31, 2024

September 30, 2024

June 30, 2024

March 31, 2024

December 31, 2024

Acquisitions:

Acquisition price

Initial cash capitalization rate

Straight-line yield

Weighted average lease term (years)

Weighted average annual rent increase

Build-to-suit developments:

Revenue generating capital expenditures:

Initial cash capitalization rate

Weighted average lease term (years)

Weighted average annual rent increase

Transitional capital:

Cash capitalization rate

Total investments

Total initial cash capitalization rate (a)

Total weighted average lease term (years) (a)

Total weighted average annual rent increase (a)

(a) Due to the nature of (1) transitional capital representing a contractual yield on invested capital, and (2) build-to-suit developments not generating revenue during construction, these are excluded from the calculation of total cash capitalization rates, weighted average lease terms, and weighted average rent increases.

Build-to-Suit Development Projects

The following table summarizes the Company’s in-process developments as of December 31, 2024:

Property Type

Projected Rentable Square Feet

Start Date (b)

Target Stabilization Date (c)

Lease Term (Years)

Total Project Commitment (d)

Estimated Total Project Investment (e)

Cumulative Investment

Estimated Remaining Investment

Estimated Cash Capitalization Rate (f)

Estimated Straight-line Yield

(High Point - NC)

Sierra Nevada

(Dayton - OH)

Sierra Nevada

(Dayton - OH)

(Bremen - GA)

(b) The period in which we have acquired access to the land and begun physical construction on a property.

(c) Represents our current estimate of the period in which we will have substantially completed a project and the project is made available for occupancy.

We expect to update our timing estimates on a quarterly basis.

(d) Represents the contractual maximum amount of costs that we are committed to fund for the build-to-suit development project.

(e) Represents the estimated costs to be incurred to complete development of each project.

We expect to update our estimates upon completion of the project, or sooner if there are any significant changes to expected costs from quarter to quarter.

Excludes capitalized costs consisting of capitalized interest and other acquisition costs.

(f) Calculated by dividing the estimated first year cash yield to be generated on a real estate investment by the Estimated Project Investment for the property.

The following table summarizes the Company’s stabilized developments during the year ended December 31, 2024:

Property Type

Rentable Square Feet

Lease Commencement Date (g)

Total Project Commitment (d)

Estimated Total Project Investment (e)

Cumulative Investment

Estimated Remaining Investment

Estimated Cash Capitalization Rate (f)

Estimated Straight-line Yield

(Sarasota - FL)

(g) The month in which the development was substantially completed and was made available for occupancy.

(h) Revenue on additional fundings will receive a cash capitalization rate of 6.8%.

Factors That Impact Our Result of Operations

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Our ability to grow rental revenue from our existing portfolio will depend on our ability to realize the rental escalations built into our leases.

As of December 31, 2023, leases contributing approximately 97.3% of our ABR provided for increases in future ABR, generally ranging from 1.5% to 3.0% annually, with an ABR weighted average minimum increase of 2.0%.

As of December 31, 2024, leases contributing approximately 97.4% of our ABR provided for increases in future ABR, generally ranging from 1.5% to 3.0% annually, with an ABR weighted average increase of 2.0%.

Generally, our rent escalators increase rent on specified dates by a fixed percentage.

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Lease Renewals and Occupancy

As of December 31, 2023, the ABR weighted average remaining term of our portfolio was approximately 10.5 years, excluding tenant renewal options, and leases for five properties, or 1.2% of ABR, will expire during 2024.

As of December 31, 2024, the ABR weighted average remaining term of our portfolio was approximately 10.2 years, excluding tenant renewal options, and 16 leases, or approximately 1.2% of ABR, will expire during 2025.

Approximately 3% of the properties in our portfolio are subject to tenant leases without at least one renewal option.

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Market conditions may also impact the total returns we can achieve on our investments.

Our investment volume also depends on our ability to access third-party debt and equity financing.

Our investment volume also depends on our ability to access third-party debt and equity financing or our ability to recycle capital through property dispositions.

Net Lease Terms

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In addition, although we attempt to limit our total floating-rate debt exposure, changes in the interest rate environment could either increase or decrease our weighted average interest rate in the future.

As of December 31, 2023, 99.2% of our debt was fixed, with $30 million of interest rate swap notional maturing in the fourth quarter of 2024.

As of December 31, 2024, 97.2% of our $1.9 billion of debt is fixed through fixed rates and $939.5 million of interest rate swap notional.

As interest rate swaps mature, we will be subject to interest rate risk from changes in rates on our floating-rate debt to the extent we do not enter into new interest rate swaps.

Any changes to our debt structure or debt financing associated with property investments, could materially influence our operating results depending on the terms of any such debt.

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To mitigate the impact of inflation on our fixed revenue streams, we have implemented limited escalation clauses in our leases.

As of December 31, 2023, substantially all of our leases had contractual rent escalations, with an ABR weighted average minimum increase of 2.0%.

As of December 31, 2024, substantially all of our leases had contractual rent escalations, with an ABR weighted average increase of 2.0%.

A majority of our leases have fixed annual rent increases or periodic escalations over the term of the lease ( e.g.

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Such cash flows include expected future operating income, as adjusted for trends and prospects, as well as the effects of demand, competition, and other factors.

An impairment loss is measured as the amount by which the carrying amount of the long-lived asset or asset group exceeds its fair value.

Significant judgment is made as to if and when impairment should be taken.

If our strategy, or one or more of the assumptions described above, changes in the future, we may have to recognize an impairment.

Indications of a tenant’s inability to continue as a going concern, changes in our view or strategy relative to a tenant’s business or industry, or changes in our long-term hold strategies, could each be indicative of an impairment triggering event.

For the year ended December 31, 2023, we recognized $31.3 million of impairment due to a change in our long-term hold strategy for four properties.

Indications of a tenant’s inability to continue as a going concern, plans to vacate the property upon lease expiration, changes in our view or strategy relative to a tenant’s business or industry, or changes in our long-term hold strategies, could each be indicative of an impairment triggering event.

For the year ended December 31, 2024, we recognized $49.0 million of impairment due to a change in our long-term hold strategy for 18 properties.

Current Market Conditions and Strategic Priorities

Over the last two fiscal years, challenging capital market conditions directly impacted the broader commercial real estate market and, in particular, the net lease real estate market.

During the latter half of fiscal 2022, interest rates began to rise steadily and persisted through fiscal years 2023 and 2024, resulting in a challenging lending environment and a material increase in the cost of capital for commercial real estate buyers and lenders.

The increase in interest rates accelerated at a more aggressive pace than commercial real estate capitalization rates, thereby compressing earnings on new investments.

More recently, market expectations about expansionary monetary policy resulted in net lease real estate sellers maintaining higher pricing expectations, which ultimately led to a significant decrease in transaction volumes during the latter half of 2023 and throughout 2024.

These challenging market conditions have limited and may continue to limit the ability of commercial real estate owners, including us, to complete real estate acquisitions at volume and accretion levels consistent with prior years, resulting in lower earnings growth rates compared to historical periods.

On February 21, 2024, we announced the strategic decision to sell our clinically-oriented healthcare properties as part of our healthcare portfolio simplification strategy.

Our decision to sell these assets was in part due to our review of our investment pipeline and expectation that we would fully redeploy the proceeds into our core investment verticals of industrial and retail assets without diluting our per share results.

Through December 31, 2024, we have sold 55 clinical healthcare properties for gross proceeds of $345.6 million, thereby reducing our exposure to clinical healthcare assets to 3.2% of our ABR.

We have successfully redeployed all sale proceeds and expect to employ a deliberate and methodical approach to repositioning our remaining clinically-oriented healthcare properties in order to enhance and preserve the value of those assets.

As a result of actual and planned sales from our clinical healthcare portfolio simplification strategy, we have recognized an $72.6 million gain on sale of real estate and incurred $71.5 million of impairment charges through December 31, 2024.

Outside of gains on sale of real estate and impairments, we do not expect our healthcare portfolio simplification strategy to materially impact our results of operations or financial position.

Results of Operations

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billings on a straight-line basis

Write-off of accrued rental income

Net write-offs of accrued rental income

Variable rental amount earned

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Total Lease revenues, net

The increase in Lease revenues, net was primarily due to recognizing a full year of rental revenue for all property acquisitions made during 2022 partially offset by the reductions of revenues associated with property dispositions.

During the year ended December 31, 2022, we invested $907.2 million, in 87 properties at a weighted average initial cash capitalization rate of 6.4%.

During the year ended December 31, 2023, we invested $68.4 million in new property acquisitions and revenue generating capital expenditures at a weighted average initial cash capitalization rate of 7.2%, and we disposed of 14 properties for net proceeds of $195.0 million at a weighted average cash capitalization rate of 6.0%.

The increase in lease revenues was additionally due to an increase in lease termination fee income, which we classified as other income from real estate transactions in the table above, associated with the early lease termination and sale of an office property for total proceeds of $39.5 million.

The timing and amount of lease termination income varies from period to period.

The decrease in Lease revenues, net was primarily due to a decrease in lease termination fee income (classified as other income from real estate transactions in the table above), which fluctuates from period to period, coupled with a decrease in realizable revenues associated with certain clinical healthcare properties.

While lease revenues decreased as a result of our healthcare portfolio simplification strategy, this was offset by redeployment into revenue generating properties.

Operating Expenses

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Depreciation and amortization

The increase in depreciation and amortization during the year ended December 31, 2023 was primarily due to properties acquired in the previous year having a full year’s worth of depreciation in the current year, offset by net dispositions for the year ended December 31, 2023.

The decrease in depreciation and amortization for the year ended December 31, 2024 was primarily due to properties sold in the previous year not having a full year of depreciation in the current year, offset by a full year’s worth of depreciation from property investments made in the previous year as well as partial depreciation from property investments made in the current year.

Property and operating expense

The increase in property and operating expense for the year ended December 31, 2024 was primarily due to a $2.9 million increase in non-reimbursable property expenses related to a decrease in occupancy, of which $1.7 million related to real estate taxes.

General and administrative

The increase in general and administrative expense for the year ended December 31, 2023 was primarily due to increases of stock-based compensation expense associated with an additional annual grant during the first quarter of 2023, payroll expense related to general annual merit adjustments, and transaction-related expenses for investments that did not close during the year.

This was partially offset by a decrease in directors and officers insurance expense, associated with the length of time that has elapsed since our initial public offering in 2020.

The decrease in general and administrative expense for the year ended December 31, 2024 was primarily due to a decrease in severance and employee transition costs, and directors and officers insurance premiums associated with the length of time that has elapsed since our initial public offering in 2020.

Provision for impairment of investment in rental properties

During the year ended December 31, 2023, we recognized $31.3 million of impairment on our investments in rental properties, primarily due to a change in our long-term hold strategy on Green Valley Medical Center, compared to $5.5 million of impairment during the year ended December 31, 2022.

The following table presents the impairment charges for their respective periods:

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Impairment charge

During the year ended December 31, 2024, we recognized $49.0 million of impairment on our investments in rental properties, primarily from changes in the Company’s long-term hold strategy with respect to the individual properties.

Such impairments primarily related to our strategic decision to sell our clinically-oriented healthcare properties as part of our healthcare portfolio simplification strategy.

The timing and amount of impairment fluctuates from period to period depending on the specific facts and circumstances.

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Interest expense

The increase in interest expense reflects an increase in our weighted average cost of our United States Dollar (“USD”) Revolving Credit Facility borrowings, our only variable rate debt.

At December 31, 2023, the one-month SOFR rate was 5.35%, compared with 4.36% at December 31, 2022.

This increase was offset by decreased average outstanding borrowings.

Since December 31, 2022, we decreased total outstanding borrowings by $116.0 million, excluding the impacts of foreign exchange remeasurement.

The decrease in interest expense related to capitalizing $2.3 million more interest on in-process development spend during the year ended December 31, 2024.

Additionally, approximately $1.9 million of the decrease was attributable to a decrease in our weighted average cost and outstanding balance of borrowings on our variable-rate Revolving Credit Facility.

At December 31, 2024, the overnight Secured Overnight Financing Rate (“SOFR”) was 4.49% compared with the one-month SOFR rate of 5.35% at December 31, 2023.

Our weighted average outstanding revolver balance was $95.8 million for the year ended December 31, 2024 compared to $121.7 million for the year ended December 31, 2023.

Lastly, $1.7 million of the decrease in interest expense related to swap terminations.

Gain on sale of real estate

Our recognition of a gain or loss on the sale of real estate varies from transaction to transaction based on fluctuations in asset prices and demand in the real estate market.

During the year ended December 31, 2023, we recognized gains of $54.3 million on the sale of 14 properties, compared to gains of $16.0 million on the sale of eight properties during the year ended December 31, 2022.

During the year ended December 31, 2024, we recognized a gain of $73.2 million on the sale of 58 properties, compared to a gain of $54.3 million on the sale of 14 properties during the year ended December 31, 2023.

Other income (expenses)

The change in other income during the year ended December 31, 2023 was primarily $1.7 million of unrealized foreign exchange loss recognized on the remeasurement of our $100 million CAD Revolving Credit Facility borrowings, compared to a $5.6 million unrealized foreign exchange gain recognized during the year ended December 31, 2022.

The increase in other income (expenses) during the year ended December 31, 2024 was primarily due to a $6.2 million unrealized foreign exchange gain recognized on the quarterly remeasurement of our $100 million Canadian Dollars (“CAD”) Revolving Credit Facility borrowings, compared to a $1.7 million unrealized foreign exchange loss recognized during the year ended December 31, 2023.

Net Income and Net earnings per diluted share

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Net earnings per diluted share

The increase in net income is primarily due to a $38.4 million increase in the gain on sale of real estate, together with revenue growth of $35.4 million.

These factors were partially offset by a $25.7 million increase in the provision for impairment of investment in rental properties and a $7.1 million decrease in other income (expenses).

The increase in net income is primarily due to an $18.8 million increase in the gain on sale of real estate together with a $7.9 million increase in other income (expenses), and $6.0 million decrease in interest expense.

These are offset by an increase in the provision for impairment of investment in rental properties of $17.7 million and an $11.1 million decrease in lease revenues.

GAAP net income includes items such as gain or loss on sale of real estate and provisions for impairment, among others, which can vary from quarter to quarter and impact period-over-period comparisons.

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We seek to maintain on a sustained basis a Leverage Ratio that is generally less than 6.0x.

As of December 31, 2023, we had total debt outstanding and Net Debt of $1.9 billion each, and a Leverage Ratio of 5.0x.

Net Debt and Annualized Adjusted EBITDAre are non-GAAP financial measures, and Annualized Adjusted EBITDAre is calculated based upon EBITDA, EBITDAre, and Adjusted EBITDAre, each of which is also a non-GAAP financial measure.

As of December 31, 2024, we had total debt outstanding of $1.9 billion, Net Debt of $1.9 billion, Pro Forma Net Debt of $1.9 billion, a Net Debt to Annualized Adjusted EBITDAre ratio of 5.0x, and a Pro Forma Net Debt to Annualized Adjusted EBITDAre ratio of 4.9x.

Net Debt, Pro Forma Net Debt, and Annualized Adjusted EBITDAre are non-GAAP financial measures, Annualized Adjusted EBITDAre, and Pro Forma Net Debt to Annualized Adjusted EBITDAre are calculated based upon EBITDA, EBITDAre, Adjusted EBITDAre, and Pro Forma Adjusted EBITDAre each of which is also a non-GAAP financial measure.

Refer to Non-GAAP Measures below for further details concerning our calculation of non-GAAP measures and reconciliations to the comparable GAAP measure.

Liquidity/REIT Requirements

Liquidity is a measure of our ability to meet potential cash requirements, including our ongoing commitments to repay debt, fund our operations, acquire properties, make distributions to our stockholders, and other general business needs.

Liquidity is a measure of our ability to meet potential cash requirements, including our ongoing commitments to repay debt, fund our operations, acquire and develop properties, make distributions to our stockholders, and other general business needs.

As a REIT, we are required to distribute to our stockholders at least 90% of our REIT taxable income determined without regard to the dividends paid deduction and excluding net capital gains, on an annual basis.

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Short-term Liquidity Requirements

Our short-term liquidity requirements consist primarily of funds necessary to pay for our operating expenses, including our general and administrative expenses as well as interest payments on our outstanding debt, to pay distributions, to fund our acquisitions that are under control or expected to close within a short time period, and to pay for commitments to fund development opportunities, tenant improvements, and revenue generating capital expenditures.

Our short-term liquidity requirements consist primarily of funds necessary to pay for our operating expenses, including our general and administrative expenses as well as interest payments on our outstanding debt, to pay distributions, to fund our acquisitions that are under control or expected to close within a short time period, and to pay for commitments to fund build-to-suit developments, tenant improvements, revenue generating capital expenditures, and transitional capital investments.

Under leases where we are required to bear the cost of structural repairs and replacements, we do not currently anticipate making significant capital expenditures or incurring other significant property costs, including as a result of inflationary pressures in the current economic environment, because of the strong occupancy levels across our portfolio and the net lease nature of our leases.

We expect to meet our short-term liquidity requirements primarily from cash and cash equivalents balances and net cash provided by operating activities, supplemented by borrowings under our Revolving Credit Facility and capital recycled through selective property dispositions.

We use cash on hand and borrowings under our Revolving Credit Facility to initially fund acquisitions, which are subsequently repaid or replaced with proceeds from our equity and debt capital markets activities as well as proceeds from dispositions.

As detailed in the contractual obligations table below, we have approximately $214.1 million of expected obligations due throughout 2024, primarily consisting of $118.7 million of commitments to fund investments, $55.9 million of dividends declared, $37.2 million of interest expense due, and $2.3 million of mortgage amortization.

We use cash on hand and borrowings under our Revolving Credit Facility to initially fund investments, which are subsequently repaid or replaced with proceeds from our equity and debt capital markets activities as well as proceeds from dispositions.

As detailed in the contractual obligations table below, we have approximately $300.4 million of expected obligations due throughout 2025, primarily consisting of $169.0 million of commitments to fund investments, $57.2 million of dividends declared, $54.1 million of projected interest expense, and $20.2 million of mortgage amortization.

We expect our cash provided by operating activities, as discussed below, will be sufficient to pay for our current obligations including interest and mortgage amortization.

We expect to pay for commitments to fund investments and our dividends declared using our Revolving Credit Facility.

As of December 31, 2023, we have $909.6 million of available capacity under our Revolving Credit Facility with sufficient leverage capacity to remain within our targeted leverage profile.

As of December 31, 2024, we have $907.0 million of available capacity under our Revolving Credit Facility.

Long-term Liquidity Requirements

Our long-term liquidity requirements consist primarily of funds necessary to repay debt and invest in additional revenue generating properties.

Our long-term liquidity requirements consist primarily of funds necessary to repay debt and invest in additional revenue generating properties and build-to-suit developments.

We expect to source debt capital from unsecured term loans from commercial banks, revolving credit facilities, private placement senior unsecured notes, and public bond offerings.

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We have no material debt maturities until 2026, as detailed in the table below.

We expect to meet our long-term liquidity requirements primarily from borrowings under our Revolving Credit Facility, future debt and equity financings, and proceeds from limited sales of our properties.

We expect to meet our long-term liquidity requirements primarily from borrowings under our Revolving Credit Facility, future debt and equity financings, as well as proceeds from dispositions.

Our ability to access these capital sources may be impacted by unfavorable market conditions, particularly in the debt and equity capital markets, that are outside of our control.

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Our equity capital is primarily provided through our at-the-market common equity offering program (“ATM Program”), as well as follow-on equity offerings.

During May 2024, we replaced our prior ATM Program with a new ATM Program with the same aggregate gross sales price of up to $400.0 million.

Under the terms of our ATM Program we may, from time to time, publicly offer and sell shares of our common stock having an aggregate gross sales price of up to $400.0 million.

The ATM Program provides for forward sale agreements, enabling us to set the price of shares upon pricing the offering while delaying the issuance of shares and the receipt of the net proceeds.

We did not raise any equity on our ATM Program during the twelve months ended December 31, 2023, and have approximately $145.4 million of available capacity remaining on the ATM Program as of December 31, 2023.

The following table presents information about our ATM Program activity:

For the Year Ended December 31,

(in thousands, except per share amounts)

Number of common shares issued

Weighted average sale price per share

Gross proceeds

The ATM Program provides for forward sale agreements, which enable us to set the price of shares upon pricing the offering, while delaying the issuance of shares and the receipt of the net proceeds.

During the year ended December 31, 2024, in connection with forward sales agreements provided for under the ATM Program, we sold 2,187,700 shares of common stock at a weighted average price of $18.29 per share, subject to certain adjustments.

We expect to settle the outstanding shares of these forward sales agreements before their maturities in August and September 2025.

Our estimated net proceeds of these forward sale agreements, assuming physical settlement for cash as of December 31, 2024, is approximately $38.5 million.

We have not settled any part of these forward sales agreements as of December 31, 2024.

After considering the shares sold subject to forward sale agreements, we have $360.0 million of capacity remaining under the ATM Program as of December 31, 2024.

There were no shares issued under the ATM Program for the year ended December 31, 2023.

Our public offerings have been used to repay debt, fund acquisitions, and for other general corporate purposes.

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2026 Unsecured Term Loan

one-month adjusted SOFR + 1.00% (b)(c)

one-month adjusted SOFR + 1.00% (b)

2027 Unsecured Term Loan

one-month adjusted SOFR + 0.95% (c)

daily simple adjusted SOFR + 0.95% (c)

2029 Unsecured Term Loan

one-month adjusted SOFR + 1.25% (c)

daily simple adjusted SOFR + 1.25% (c)

Total unsecured term loans

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Total unsecured debt

(a) At December 31, 2023, the balance includes $100 million CAD borrowings remeasured to $75.4 million USD, and was subject to the one-month Canadian Dollar Offered Rate of 5.46%.

(b) Effective July 1, 2023, the loan converted into a one-month SOFR borrowing concurrent with LIBOR's cessation.

(a) At December 31, 2024, a balance of $23.5 million was subject to daily simple SOFR.

At December 31, 2024, the balance includes $100 million CAD borrowings remeasured to $69.5 million USD, and was subject to the daily simple Canadian Overnight Repo Rate Average (“CORRA”) of 3.32%.

(b) At December 31, 2024, one-month SOFR was 4.33%.

(d) Our Revolving Credit Facility contains two six-month extension options subject to certain conditions, including the payment of an extension fee equal to 0.0625% of the revolving commitments.

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Our Revolving Credit Facility has a $1.0 billion capacity with a maturity date of March 2026 and contains two six-month extension options, subject to certain conditions, including an extension fee equal to 0.0625%.

In addition to United States Dollars (“USD”), borrowings under the Revolving Credit Facility can be made in Pound Sterling, Euros or Canadian Dollars (“CAD”) up to an aggregate amount of $500.0 million.

In addition to USD, borrowings under the Revolving Credit Facility can be made in Pound Sterling, Euros or CAD up to an aggregate amount of $500.0 million.

Borrowings under the amended credit facility are subject to interest only payments at variable rates equal to the applicable reference rate plus a margin of 0.85% based on our current credit ratings of ‘BBB’ and ‘Baa2’ from S&P and Moody’s, respectively.

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2027 Unsecured Term Loan and 2029 Unsecured Term Loan

Borrowings under the 2027 Unsecured Term Loan and 2029 Unsecured Term Loan bear interest at variable rates based on one-month adjusted SOFR plus a margin based on our credit rating ranging between 0.80% and 1.60% per annum for the 2027 Unsecured Term Loan, and 1.15% and 2.20% per annum for the 2029 Unsecured Term Loan.

Borrowings under the 2027 Unsecured Term Loan and 2029 Unsecured Term Loan bear interest at variable rates based on daily simple adjusted SOFR plus a margin based on our credit rating ranging between 0.80% and 1.60% per annum for the 2027 Unsecured Term Loan, and 1.15% and 2.20% per annum for the 2029 Unsecured Term Loan.

2027 Senior Unsecured Notes - Series A

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Refer to the discussion in the Liquidity and Capital Resources section above for further discussion over our short and long-term obligations.

Revolving Credit Facility (a)

Revolving Credit

Dividends (c)

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Future undeclared dividends have been excluded.

(d) Amounts include acquisitions under control, defined as under contract or executed letter of intent, and commitments to fund revenue generating capital expenditures and development opportunities.

At December 31, 2023, investment in rental property of $120.5 million, was pledged as collateral against our mortgages.

(d) Amounts include acquisitions under control, defined as under contract or executed letter of intent, and commitments to fund revenue generating capital expenditures, and both current build-to-suit developments and under control build-to-suit developments.

At December 31, 2024, investment in rental property with a book value of $117.8 million, was pledged as collateral against our mortgages.

In the normal course of business, we enter into various types of commitments to purchase real estate properties.

These commitments are generally subject to our customary due diligence process and, accordingly, a number of specific conditions must be met before we are obligated to purchase the properties.

Additionally, we are a party to two separate tax protection agreements with the contributing members of two distinct UPREIT transactions and a third tax protection agreement entered into in connection with the internalization of our management in February 2020.

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We are exposed to interest rate risk arising from changes in interest rates on the floating-rate borrowings under our unsecured credit facilities.

Borrowings pursuant to our unsecured credit facilities bear interest at floating rates based on SOFR or CDOR plus an applicable margin.

Borrowings pursuant to our unsecured credit facilities bear interest at floating rates based on SOFR or CORRA plus an applicable margin.

Accordingly, fluctuations in market interest rates may increase or decrease our interest expense, which will in turn, increase or decrease our net income and cash flow.

We attempt to manage the interest rate risk on variable rate borrowings by entering into interest rate swaps.

As of December 31, 2023, we had 32 interest rate swaps outstanding with an aggregate notional amount of $975.4 million.

Under these agreements, we receive monthly payments from the counterparties equal to the related variable interest rates multiplied by the outstanding notional amounts.

During the year ended December 31, 2024, the Company entered into nine forward-starting interest rate swaps for a total notional amount of $460.0 million.

These forward-starting swap arrangements are effective during various periods between March and December 2025 and mature in 2030.

As of December 31, 2024, we had 30 effective and nine forward-starting interest rate swaps with an aggregate notional amount of $1.4 billion.

Under the effective swap agreements, we receive monthly payments from the counterparties equal to the related variable interest rates multiplied by the outstanding notional amounts.

In turn, we pay the counterparties each month an amount equal to a fixed interest rate multiplied by the related outstanding notional amounts.

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Net cash provided by operating activities

Net cash provided by (used in) investing activities

Net cash (used in) provided by investing activities

Net cash (used in) provided by financing activities

(Decrease) increase in cash and cash equivalents and restricted cash

The increase in net cash provided by operating activities during the years ended December 31, 2023 and 2022 was mainly due to growth in our real estate portfolio and associated incremental net lease revenues.

The increase in net cash provided by investing activities during the years ended December 31, 2023 and 2022 was mainly due to increased disposition volume.

The increase in net cash used in investing activities in 2022 as compared to 2021 was driven by an increase in investing activities.

The decrease in net cash (used in) provided by financing activities during the year ended December 31, 2023 as compared to the year ended December 31, 2022, mainly reflects a decrease in our total outstanding borrowings in 2023.

The increase in net cash provided by financing activities during the year ended December 31, 2022 as compared to the year ended December 31, 2021, mainly reflects an increase in net proceeds from equity and debt offerings in 2022 to fund growth in our real estate portfolio.

The increase in net cash provided by operating activities during the year ended December 31, 2024 as compared to 2023 was mainly due to a decrease in interest expense.

The increase in net cash provided by operating activities during the year ended December 31, 2023 as compared to 2022 was mainly due to growth in our real estate portfolio and associated incremental net lease revenues.

The increase in net cash used in investing activities during the year ended December 31, 2024 as compared to 2023 was mainly due to increased investment volume, partially offset by proceeds from disposition activity.

The increase in net cash provided by investing activities during the year ended December 31, 2023 as compared to 2022 was mainly due to increased proceeds from disposition activity.

The decrease in net cash used in financing activities during the year ended December 31, 2024 as compared to the year ended December 31, 2023, mainly reflects an increase in net borrowings on the Revolving Credit Facility and increased distributions paid to shareholders in 2024 compared to 2023.

The decrease in net cash provided by financing activities during the year ended December 31, 2023 as compared to the year ended December 31, 2022, mainly reflects a decrease in our total outstanding borrowings in 2023 compared to 2022.

Non-GAAP Measures

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FFO is used by management, investors, and analysts to facilitate meaningful comparisons of operating performance between periods and among our peers, primarily because it excludes the effect of real estate depreciation and amortization and net gains (losses) on sales, which are based on historical costs and implicitly assume that the value of real estate diminishes predictably over time, rather than fluctuating based on existing market conditions.

We compute Core Funds From Operations (“Core FFO”) by adjusting FFO, as defined by Nareit, to exclude certain GAAP income and expense amounts that we believe are infrequently recurring, unusual in nature, or not related to its core real estate operations, including write-offs or recoveries of accrued rental income, lease termination fees, gain on insurance recoveries, the change in fair value of our earnout liability, cost of debt extinguishments, unrealized and realized gains or losses on foreign currency transactions, severance and executive transition costs, and other extraordinary items.

We compute Core Funds From Operations (“Core FFO”) by adjusting FFO, as defined by Nareit, to exclude certain GAAP income and expense amounts that we believe are infrequently recurring, unusual in nature, or not related to its core real estate operations, including write-offs or recoveries of accrued rental income, gain on insurance recoveries, lease termination fees and other non-core income from real estate transactions, cost of debt extinguishment, unrealized and realized gains or losses on foreign currency transactions, severance and employee transition costs, and other extraordinary items.

Exclusion of these items from similar FFO-type metrics is common within the equity REIT industry, and management believes that presentation of Core FFO provides investors with a metric to assist in their evaluation of our operating performance across multiple periods and in comparison to the operating performance of our peers, because it removes the effect of unusual items that are not expected to impact our operating performance on an ongoing basis.

We compute Adjusted Funds From Operations (“AFFO”), by adjusting Core FFO for certain non-cash revenues and expenses, including straight-line rents, amortization of lease intangibles, adjustment to provision for credit losses, amortization of debt issuance costs, amortization of net mortgage premiums, (gain) loss on interest rate swaps and other non-cash interest expense, deferred taxes, stock-based compensation, and other specified non-cash items.

We compute Adjusted Funds From Operations (“AFFO”), by adjusting Core FFO for certain revenues and expenses that are non-cash or unique in nature, including straight-line rents, amortization of lease intangibles, adjustment to provision for credit losses, amortization of debt issuance costs, amortization of net mortgage premiums, non-capitalized transaction costs such as acquisition costs related to deals that failed to transact, loss on interest rate swaps and other non-cash interest expense, deferred taxes, stock-based compensation, and other specified non-cash items.

We believe that excluding such items assists management and investors in distinguishing whether changes in our operations are due to growth or decline of operations at our properties or from other factors.

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Net write-offs of accrued rental income

Lease termination fees

Other non-core income from real estate transactions (a)

Gain on insurance recoveries

Cost of debt extinguishment

Severance and executive transition costs

Change in fair value of earnout liability

Other expenses (income) (a)

Severance and employee transition costs

Other (income) expenses (b)

Straight-line rent adjustment

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Amortization of net mortgage premiums

Non-capitalized transaction costs

Loss on interest rate swaps and other non-cash interest expense

Amortization of lease intangibles

Amortization of lease intangibles (c)

Stock-based compensation

Deferred taxes

(a) Amount includes $1.7 million, ($5.6) million, and ($0.1) million of unrealized foreign exchange loss (gain) for the years ended December 31, 2023, 2022, and 2021, respectively, primarily associated with our Canadian dollar denominated Revolver Credit Facility borrowings.

EBITDA, EBITDAre, Adjusted EBITDAre and Annualized Adjusted EBITDAre

(a) Amount includes $1.2 million of lease termination fees and $0.9 million in income for the settlement of a permanent land easement for an insignificant portion of two of our properties during the year ended December 31, 2024.

Amount includes $7.5 million and $2.5 million in lease termination fees for the year ended December 31, 2023 and 2022, respectively.

(b) Amount includes ($6.2) million, $1.7 million, and ($5.6) million of unrealized foreign exchange (gain) loss for the years ended December 31, 2024, 2023, and 2022, respectively, primarily associated with our Canadian dollar denominated Revolver Credit Facility borrowings.

(c) Amount includes $1.5 million of accelerated amortization of lease intangibles for an early lease termination of a property during the year ended December 31, 2023.

EBITDA, EBITDAre, Adjusted EBITDAre, Pro Forma Adjusted EBITDAre, Annualized EBITDAre, Annualized Adjusted EBITDAre, and Pro Forma Annualized Adjusted EBITDAre

We compute EBITDA as earnings before interest, income taxes and depreciation and amortization.

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We are focused on a disciplined and targeted investment strategy, together with active asset management that includes selective sales of properties.

We manage our leverage profile using a ratio of Net Debt to Annualized Adjusted EBITDAre, each discussed further below, which we believe is a useful measure of our ability to repay debt and a relative measure of leverage, and is used in communications with our lenders and rating agencies regarding our credit rating.

We manage our leverage profile using a ratio of Net Debt to Annualized Adjusted EBITDAre, and Pro Forma Net Debt to Annualized Adjusted EBITDAre, each discussed further below, which we believe is a useful measure of our ability to repay debt and a relative measure of leverage, and is used in communications with our lenders and rating agencies regarding our credit rating.

As we fund new investments using our unsecured Revolving Credit Facility, our leverage profile and Net Debt will be immediately impacted by current quarter investments.

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We adjust EBITDAre (“Adjusted EBITDAre”) for the most recently completed quarter (i) to recalculate as if all investments and dispositions had occurred at the beginning of the quarter, (ii) to exclude certain GAAP income and expense amounts that are either non-cash, such as cost of debt extinguishments, realized or unrealized gains and losses on foreign currency transactions, or gains on insurance recoveries, or that we believe are one time, or unusual in nature because they relate to unique circumstances or transactions that had not previously occurred and which we do not anticipate occurring in the future, and (iii) to eliminate the impact of lease termination fees and other items that are not a result of normal operations.

While investments in property developments have an immediate impact to Net Debt, we do not make an adjustment to EBITDAre until the quarter in which the lease commences.

We then annualize quarterly Adjusted EBITDAre by multiplying it by four (“Annualized Adjusted EBITDAre”).

While investments in build-to-suit developments have an immediate impact to Net Debt, we do not make an adjustment to EBITDAre until the quarter in which the lease commences.

We define our Pro Forma Adjusted EBITDAre as Adjusted EBITDAre adjusted to show the impact of estimated contractual revenues based on in-process development spend to-date.

Our Pro Forma Net Debt is defined as Net Debt adjusted for estimated net proceeds from forward sale agreements that have not settled as if they have been physically settled for cash as of the period presented.

We then annualize quarterly Adjusted EBITDAre and Pro Forma Adjusted EBITDAre by multiplying them by four (“Annualized Adjusted EBITDAre” and “Annualized Pro Forma Adjusted EBITDAre”).

You should not unduly rely on this measure as it is based on assumptions and estimates that may prove to be inaccurate.

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You should not consider our Adjusted EBITDAre and Annualized Adjusted EBITDAre as alternatives to net income or cash flows from operating activities determined in accordance with GAAP.

The following table reconciles net income (which is the most comparable GAAP measure) to EBITDA, EBITDAre, and Adjusted EBITDAre.

Information is also presented with respect to Annualized EBITDAre and Annualized Adjusted EBITDAre:

The following table reconciles net income (which is the most comparable GAAP measure) to EBITDA, EBITDAre, Adjusted EBITDAre, and Pro Forma Adjusted EBITDAre.

Information is also presented with respect to Annualized EBITDAre, Annualized Adjusted EBITDAre, and Pro Forma Annualized Adjusted EBITDAre:

For the Three Months Ended December 31,

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Adjustment to exclude gain on insurance recoveries

Adjustment to exclude realized/unrealized foreign exchange loss

Adjustment to exclude realized/unrealized foreign exchange (gain) loss

Adjustment to exclude cost of debt extinguishments

Adjustment to exclude lease termination fees

Adjustment to exclude other income from real estate transactions (d)

Adjusted EBITDAre

Estimated revenues from developments (e)

Pro Forma Adjusted EBITDAre

Annualized EBITDAre

Annualized Adjusted EBITDAre

Pro Forma Annualized Adjusted EBITDAre

(a) Reflects an adjustment to give effect to all investments during the quarter as if they had been made as of the beginning of the quarter.

(b) Reflects an adjustment to give effect to all dispositions during the quarter as if they had been sold as of the beginning of the quarter.

(c) Amounts include $0.2 million of employee severance and ($0.1) million of forfeited stock-based compensation for the three months ended December 31, 2023.

Net Debt, Net Debt to Annualized EBITDAre and Net Debt to Annualized Adjusted EBITDAre

(c) Amount includes $0.2 million accelerated lease intangible amortization and $0.1 million of severance and employee transition costs for the three months ended December 31, 2024.

Amount includes $0.1 million of severance and employee transition costs for the three months ended December 31, 2023.

(d) Amount includes lease termination fees during the three months ended December 31, 2024 and December 31, 2022.

(e) Represents estimated contractual revenues based on in-process development spend to-date.

Net Debt, Pro Forma Net Debt, Net Debt to Annualized EBITDAre, Net Debt to Annualized Adjusted EBITDAre, and Pro Forma Net Debt to Annualized Adjusted EBITDAre

We define Net Debt as gross debt (total reported debt plus debt issuance costs) less cash and cash equivalents and restricted cash.

Our Pro Forma Net Debt is defined as Net Debt adjusted for estimated net proceeds from unsettled forward sale agreements as if they have been settled for cash as of the period presented.

We believe that the presentation of Net Debt to Annualized EBITDAre and Net Debt to Annualized Adjusted EBITDAre is useful to investors and analysts because these ratios provide information about gross debt less cash and cash equivalents, which could be used to repay debt, compared to our performance as measured using EBITDAre, and is used in communications with lenders and rating agencies regarding our credit rating.

The following table reconciles total debt (which is the most comparable GAAP measure) to Net Debt, and presents the ratio of Net Debt to Annualized EBITDAre and Net Debt to Annualized Adjusted EBITDAre, respectively:

The following table reconciles total debt (which is the most comparable GAAP measure) to Net Debt, Pro Forma Net Debt, and presents the ratios of Net Debt to Annualized EBITDAre, Net Debt to Annualized Adjusted EBITDAre, and Pro Forma Net Debt to Annualized Adjusted EBITDAre, respectively:

As of December 31,

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Restricted cash

Estimated net proceeds from forward equity agreements (a)

Pro Forma Net Debt

Leverage Ratios:

Net Debt to Annualized EBITDAre

Net Debt to Annualized Adjusted EBITDAre

Pro Forma Net Debt to Annualized Adjusted EBITDAre

(a) Represents pro forma adjustment for estimated net proceeds from forward sale agreements that have not settled as if they have been physically settled for cash as of the period presented.

Critical Accounting Policies and Estimates

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Impairment charge

During the year ended December 31, 2023, we recognized an impairment charge of $26.4 million on a healthcare property due to changes in our tenant’s ability to perform under the lease agreement, leading to a change in management’s long-term hold strategy and desire to sell in the near term.

We determined the fair value measurement using a range of significant unobservable inputs, including a third-party appraisal, broker market information, and recent comparable vacant sales transactions.

Decreases in the sale price assumptions based on continued marketing of the property could result in additional impairment in the future.

Based on the range of fair value estimates, which was the best available information, an additional $9 million of impairment would be recorded if we sold the property at the low end of the range.

During the year ended December 31, 2024, we recognized impairment of $49.0 million, resulting from changes in our long-term hold strategy with respect to the individual properties.

The 2024 impairments primarily relate to our healthcare portfolio simplification strategy and include $41.7 million on 16 clinical healthcare properties, which were based on actual or estimated sales prices of the individual properties.

Of these properties, 11 were sold as part of a portfolio with a gain of $59.1 million, excluding any impairment.

The remaining impairments recognized during the year ended December 31, 2024 were immaterial.

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(i) ownership transfers to the lessee at the end of the lease term, (ii) the lessee has a purchase option that is reasonably expected to be exercised, (iii) the lease term is for a major part of the economic life of the leased property, (iv) the present value of the future lease payments and any residual value guaranteed by the lessee that is not already reflected in the lease payments equals or exceeds substantially all of the fair value of the leased property, and (v) the leased property is of such a specialized nature that it is expected to have no future alternative use to the Company at the end of the lease term.

more of these criteria are met, the lease will generally be classified as a sales-type lease, unless the lease contains a residual value guarantee from a third party other than the lessee, in which case it would be classified as a direct financing lease under certain circumstances.

If one or more of these criteria are met, the lease will generally be classified as a sales-type lease, unless the lease contains a residual value guarantee from a third party other than the lessee, in which case it would be classified as a direct financing lease under certain circumstances.

We account for the right to use land as a separate lease component, unless the accounting effect of doing so would be insignificant.

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We have audited the accompanying consolidated balance sheets of Broadstone Net Lease, Inc.

and subsidiaries (the “Company”) as of December 31, 2023 and 2022, the related consolidated statements of income and comprehensive income, equity, and cash flows for each of the three years in the period ended December 31, 2023, and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the “financial statements”).

and its subsidiaries (the “Company”) as of December 31, 2024 and 2023, the related consolidated statements of income and comprehensive income, equity, and cash flows, for each of the three years in the period ended December 31, 2024, and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

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• Evaluated audit evidence (e.g.

hindsight analysis) to determine whether it supported or contradicted the conclusions reached by management.

hindsight analysis, disposal status report) to determine whether it supported or contradicted the conclusions reached by management.

/s/ Deloitte & Touche LLP

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Gain on sale of real estate

Change in fair value of earnout liability

Other (expenses) income

Other income (expenses)

Net income attributable to non-controlling interests

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(in thousands, except per share amounts)

Class A Common Stock

Paid-in Capital

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Issuance of 23,682 shares of common stock

Issuance of 1,859 OP Units

Offering costs, discounts, and commissions

Stock-based compensation, net of seven shares of restricted stock forfeited

Stock-based compensation, net of ten shares of restricted stock forfeited

Retirement of 59 shares of common stock under equity incentive plan

Conversion of 37,000 Class A common stock to 37,000 shares of common stock

Conversion of 118 OP Units to 118 shares of common stock

Conversion of 2,049 OP Units to 2,049 shares of common stock with a related party

Distributions declared ($ 1.080 per share and OP Unit)

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Balance, December 31, 2022

Issuance of 23,682 shares of common stock

Issuance of 312 shares of common stock under equity incentive plan

Offering costs, discounts, and commissions

Stock-based compensation, net of ten shares of restricted stock forfeited

Stock-based compensation, net of 23 shares of restricted stock forfeited

Retirement of 66 shares of common stock under equity incentive plan

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Offering costs, discounts, and commissions

Contributions from non-controlling interests

Stock-based compensation, net of 92 shares of restricted stock forfeited

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Gain on sale of real estate

Change in fair value of earnout liability

Cash paid for earnout liability

Settlement of interest rate swaps

Other non-cash items

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Acquisition of rental property

Investment in property under development including capitalized interest of $ 1,469 in 2023 and $ 0 in 2022 and 2021

Investment in property under development including capitalized interest of $ 3,871 , $ 1,469 , and $ 0 in 2024, 2023, and 2022, respectively

Capital expenditures and improvements

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Change in deposits on investments in rental property

Net cash provided by (used in) investing activities

Net cash (used in) provided by investing activities

Financing activities

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discounts, and commissions in 2024, 2023 and 2022, respectively

Contributions from non-controlling interests

Borrowings on mortgages, senior unsecured notes and unsecured term loans

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Cash distributions paid to non-controlling interests

Cash paid for earnout liability

Debt issuance and extinguishment costs paid

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The Corporation is the sole managing member of the OP.

The membership units not owned by the Corporation are referred to as OP Units or non-controlling interests.

As the Corporation conducts substantially all of its operations through the OP, it is structured as what is referred to as an umbrella partnership real estate investment trust (“UPREIT”).

The membership units not owned by the Corporation are referred to as OP Units and are recorded as non-controlling interests in the Consolidated Financial Statements.

As the Corporation conducts substantially all of its operations through the OP, it is structured as an umbrella partnership real estate investment trust (“UPREIT”).

The Corporation’s common stock is listed on the New York Stock Exchange under the symbol “BNL.” The Corporation, the OP, and its consolidated subsidiaries are collectively referred to as the “Company.”

The Company is an industrial-focused, diversified net lease REIT that focuses on investing in income-producing, single-tenant net leased commercial properties, primarily in the United States.

The Company leases industrial, healthcare, restaurant, retail, and office commercial properties under long-term lease agreements.

The Company leases primarily industrial and retail commercial properties under long-term lease agreements.

At December 31, 2024, the Company owned a diversified portfolio of 765 individual commercial properties with 758 properties located in 44 U.S.

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Summary of Significant Accounting Policies

Basis of Accounting

The Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”).

Principles of Consolidation

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All intercompany balances and transactions have been eliminated in consolidation.

To the extent the Corporation has a variable interest in entities that are not evaluated under the variable interest entity (“VIE”) model, the Corporation evaluates its interests using the voting interest entity model.

When the Company obtains an economic interest in an entity, the entity is evaluated to determine if it should be deemed a variable interest entity (“VIE”) and, if so, whether the Company is the primary beneficiary and is therefore required to consolidate the entity.

The accounting guidance for consolidation of VIEs is applied to certain entities in which the equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties.

Certain decision-making rights within a loan or joint-venture agreement may cause us to consider an entity a VIE.

The contractual arrangements in a partnership agreement or other related contracts are reviewed to determine whether the entity is a VIE, and if the Company has variable interests in the VIE.

The Company’s variable interests are then compared to those of the other variable interest holders to determine which party is the primary beneficiary of the VIE.

A primary beneficiary:

(i) has the power to direct the activities that most significantly impact the economic performance of the VIE and (ii) has the obligation to absorb losses or the right to receive benefits of the VIE that could potentially be significant to the VIE.

The Company reassesses the initial evaluation of whether an entity is a VIE when certain events occur, and reassesses the primary beneficiary determination of a VIE on an ongoing basis based on current facts and circumstances.

To the extent the Company has a variable interest in entities that are not evaluated under the VIE model, the Company evaluates its interests using the voting interest entity model.

The Corporation has complete responsibility for the day-to-day management of, authority to make decisions for, and control of the OP.

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However, because the Corporation holds the majority voting interest in the OP and certain other conditions are met, it qualifies for the exemption from providing certain disclosure requirements associated with investments in VIEs.

The portion of the OP not owned by the Corporation is presented as non-controlling interests as of and during the periods presented.

Basis of Accounting

The Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”).

In June 2024, the Company invested $ 52.2 million in exchange for 98.1 % ownership interest in a VIE.

The Company is the primary beneficiary as it:

(i) has the power to direct the activities that significantly impact the economic performance of the VIE, and (ii) has the obligation to absorb losses and the right to receive benefits of the VIE, and therefore consolidates the VIE.

The following table presents a summary of selected financial data of the consolidated VIE included in the Consolidated Balance Sheets:

(in thousands)

Accounted for using the operating method:

Land improvements

Buildings and improvements

Total accounted for using the operating method

Less accumulated depreciation

Accounted for using the operating method, net

Intangible lease assets, net

Intangible lease liabilities, net

Other liabilities

Total liabilities

From time to time, the Company acquires properties using a reverse like-kind exchange structure pursuant to Section 1031 of the Internal Revenue Code (a “reverse 1031 exchange”) and, as such, the properties are in the possession of an Exchange Accommodation Titleholder (“EAT”) until the reverse 1031 exchange is completed.

The EAT is classified as a VIE as it is a “thinly capitalized” entity.

The Company consolidates the EAT because it is the primary beneficiary as it has the ability to control the activities that most significantly impact the EAT's economic performance and can collapse the reverse 1031 exchange structure at its discretion.

The assets of the EAT primarily consist of leased property (net real estate investment in rental property and lease intangibles).

The portions of a consolidated entity not owned by the Company are presented as non-controlling interests as of and during the periods presented.

Use of Estimates

The preparation of Consolidated Financial Statements in conformity with GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting periods.

Significant estimates include, but are not limited to, the allocation of purchase price between tangible and intangible assets acquired and liabilities assumed, the fair value of long-lived assets and goodwill utilized in impairment assessments, the depreciable lives of rental property, the amortizable lives of intangible assets and liabilities, the probability of collecting outstanding and future lease payments, the fair value of the earnout liability, and the fair value of the Company’s interest rate swap agreements.

Accordingly, actual results may differ from those estimates.

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The capitalized above-market and below-market lease values are amortized as adjustments to lease revenue over the remaining term of the respective leases.

Should a tenant terminate its lease, the unamortized portion of the in-place lease value is charged to amortization expense and the unamortized portion of above-market or below-market lease value is charged to lease revenue.

Should a tenant terminate the lease, the unamortized portion of the in-place lease value is charged to amortization expense and the unamortized portion of above-market or below-market lease value is charged to lease revenue.

Management estimates the fair value of assumed mortgages payable based upon indications of then-current market pricing for similar types of debt with similar maturities.

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Maintenance and repairs are charged to expense when incurred.

Investment in Property Under Development

Land acquired for development and construction and improvement costs incurred in connection with the development of new properties are capitalized and recorded as Property under development in the accompanying Consolidated Balance Sheets until construction has been completed.

Such capitalized costs include all direct and indirect costs related to planning, development, and construction, including interest, real estate taxes, and other miscellaneous costs incurred during the construction period.

Once completed, the property under development is placed in service and depreciation commences.

For the year ended December 31, 2023, the Company funded $ 96.8 million of costs related to two properties under development, inclusive of $ 1.5 million of capitalized interest.

Once substantially complete, the property under development is placed in service and depreciation commences.

The following tables summarize the Company’s investments in property under development:

(in thousands)

Development, construction and improvement costs

Capitalized interest

Property under development

For the Year Ended

(in thousands)

Investment in properties under development,

excluding capitalized costs

During the year ended December 31, 2024 , and subsequent to reaching substantial completion, the Company funded an additional $ 10.8 million of capital expenditures in connection with a development property.

Long-lived Asset Impairment

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Impairment charge

During the year ended December 31, 2023, we recognized an impairment charge of $ 26.4 million on a healthcare property with a remaining carrying value of $ 24.4 million, which declined due to changes in our tenant’s ability to perform under the lease agreement, leading to a change in management’s long-term hold strategy and desire to sell in the near term.

During the year ended December 31, 2024 , the Company recognized impairment of $ 49.0 million, resulting from changes in the Company’s long-term hold strategy with respect to the individual properties.

The 2024 impairments primarily relate to the Company’s decision to sell clinically-oriented healthcare properties and include $ 41.7 million on 16 clinical healthcare properties, which were based on actual or estimated sales prices of the individual properties.

Of these properties, 11 were sold as part of a portfolio with a gain of $ 59.1 million, excluding any impairment.

The remaining impairments recognized during the year ended December 31, 2024 were immaterial.

During the year ended December 31, 2023, the Company recognized an impairment charge of $ 26.4 million on a healthcare property due to changes in the tenant’s ability to perform under the lease agreement, leading to a change in management’s long-term hold strategy and desire to sell in the near term.

The fair value measurement was determined using a range of significant unobservable inputs, including a third-party appraisal, broker market information, and recent comparable vacant sales transactions.

Decreases in the sale price assumptions based on continued marketing of the property could result in additional impairment in the future.

The remaining impairments recognized during the year ended December 31, 2023 were immaterial.

Impairments recognized during the year ended December 31, 2022 were immaterial.

During the year ended December 31, 2021, the Company executed an early lease termination with an office tenant on two properties in exchange for a fee of $ 35.0 million, and simultaneously sold the underlying properties to an unrelated third party for aggregate gross proceeds of $ 16.0 million.

As the sale of the underlying properties was to an unrelated third party, the Company accounted for the lease termination income and sale of properties as separate transactions in accordance with GAAP.

As a result, the $ 35.0 million cash receipt was not able to be factored into the properties’ future undiscounted cash flows, resulting in a $ 25.7 million impairment charge in the Consolidated Statements of Income and Comprehensive Income.

The Company recognized termination fee income of $ 33.5 million as other income from real estate transactions, a component of Lease revenues, net, in the Consolidated Statements of Income and Comprehensive Income.

The net impact of the lease termination and the sale of the underlying properties was a $ 4.0 million increase to net income after considering certain other adjustments.

Remaining impairments recognized during the year ended December 31, 2021 were immaterial.

Investments in Rental Property Held for Sale

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(i) management commits to a plan to sell the property, (ii) the property is available for immediate sale in its present condition, subject only to terms that are usual and customary for sales of investment properties, (iii) an active program to locate a buyer and conduct other actions required to complete the sale has been initiated, (iv) the sale of the property is probable in occurrence and is expected to qualify as a completed sale, (v) the property is actively marketed for sale at a sale price that is reasonable in relation to its fair value, and (vi) actions required to complete the sale indicate that it is unlikely that any significant changes will be made or that the plan to sell will be withdrawn.

For properties classified as held for sale, the Company suspends depreciation and amortization of the related assets, including the acquired in-place lease and above- or below-market lease intangibles, as well as straight-line revenue recognition of the associated lease, and records the investment in rental property at the lower of cost or net realizable value.

For properties classified as held for sale, the Company suspends depreciation and amortization of the related assets and liabilities, including the acquired in-place lease and above- or below-market lease intangibles, as well as straight-line revenue recognition of the associated lease, and records the investment in rental property at the lower of cost or net realizable value.

The assets and liabilities associated with the properties classified as held for sale are presented separately in the Consolidated Balance Sheets for the most recent reporting period.

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Escrow funds and other

1031 exchange proceeds

Revenue Recognition

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Forward Sale Agreements

The Company occasionally sells shares of common stock through forward sale agreements to enable the Company to set the price of such shares upon pricing the offering (subject to certain adjustments) while delaying the issuance of such shares and the receipt of the net proceeds by the Company.

The Company occasionally sells shares of common stock through forward sale agreements to enable locking in the gross price of such shares upon pricing the offering (subject to certain adjustments) while delaying the issuance of such shares and the receipt of the net proceeds.

To account for the forward sale agreements, the Company considers the accounting guidance governing financial instruments and derivatives.

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The Company uses the treasury stock method to determine the dilution resulting from the forward sale agreements during the period of time prior to settlement.

Earnout Liability

The Company’s earnout liability was payable in four tranches, in a combination of cash, common shares, and OP Units, in the same proportion as the initial consideration paid in the Company’s internalization (see Note 4).

During the year ended December 31, 2021, the portion of the earnout to be paid in cash was classified as a liability in the Consolidated Balance Sheets.

The fair value of the earnout liability was remeasured each reporting period, with changes recorded as Change in fair value of earnout liability in the Consolidated Statements of Income and Comprehensive Income.

The Company achieved all four milestones applicable to the earnout thereby triggering the payout of all earnout tranches during the year ended December 31, 2021, and therefore no remaining earnout liability existed on, or after, December 31, 2021.

Non-controlling Interests

Non-controlling interests represents the membership interests held in the OP of 4.5 %, 5.2 %, and 6.0 % at December 31, 2023, 2022, and 2021, respectively, by third parties which are accounted for as a separate component of equity.

The Company adjusts the carrying value of non-controlling interests to reflect their share of the book value of the OP.

Non-controlling interests represent the portions of equity in consolidated subsidiaries that are held by third parties, which are accounted for as a separate component of equity.

The Company adjusts the carrying value of non-controlling interests to reflect their share of the book value of each not wholly-owned subsidiary.

Such adjustments are recorded to Additional paid-in capital as a reallocation of Non-controlling interests in the Consolidated Statements of Equity.

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The Company currently operates in a single reportable segment, which includes the acquisition, leasing, and ownership of net leased properties.

The Company’s chief operating decision maker assesses, measures, and reviews the operating and financial results at the consolidated level for the entire portfolio, and therefore, each property or property type is not considered an individual operating segment.

The Company’s chief operating decision maker (“CODM”) is the Company’s senior leadership team, which includes, the Chief Executive Officer, President and Chief Operating Officer, Chief Financial Officer and Treasurer, and the Company’s Senior Vice Presidents.

The CODM assesses, measures, and reviews the operating and financial results at the consolidated level for the entire portfolio based on consolidated revenues, expenses, and net income as reported on the Consolidated Statements of Income and Comprehensive Income.

The Company does not evaluate the results of operations based on geography, size, or property type.

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Recurring Fair Value Measurements

Interest Rate Swap Assets and Liabilities – The Company measures and records its interest rate swap instruments (see Note 11) and earnout liability at fair value, and discloses the fair value of its long-term debt, on a recurring basis.

Interest Rate Swap Assets and Liabilities – The Company measures and records its interest rate swap instruments (see Note 9) at fair value, and discloses the fair value of its long-term debt, on a recurring basis.

Interest rate swaps are derivative instruments that have no quoted readily available Level 1 inputs, and therefore are measured at fair value using inputs that are directly observable in active markets and are classified within Level 2 of the valuation hierarchy, using an income approach.

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As a result, the Company has determined that its interest rate swap valuations in their entirety are appropriately classified within Level 2 of the fair value hierarchy.

Earnout Liability – In connection with the Company’s internalization, the Company recognized an earnout liability that was due and payable to the former owners of the Company’s former asset manager if certain milestones were achieved during specified periods of time following the closing (the “Earnout Periods”).

Under the terms of the agreement, the milestones related to either (a) the 40-day dollar volume-weighted average price of a share of the Company’s common stock (“VWAP per REIT Share”), following the completion of an IPO of the Company’s common stock, or (b) the Company’s AFFO per share, prior to the completion of an IPO.

The Company utilized third-party valuation experts to assist in estimating the fair value of the earnout liability, and developed estimates by considering weighted-average probabilities of likely outcomes, and using a Monte Carlo simulation and discounted cash flow analysis.

The change in fair value of the earnout liability recognized during the year ended December 31, 2021 related to the Company achieving all four VWAP milestones thereby triggering the payout of all earnout tranches during the year ended December 31, 2021.

The following table presents a reconciliation of the change in the earnout liability:

(in thousands)

For the Year Ended December 31, 2021

Beginning balance

Change in fair value subsequent to internalization

Payout of tranches earned

Ending balance

The balances of financial instruments measured at fair value on a recurring basis are as follows (see Note 11):

The balances of financial instruments measured at fair value on a recurring basis are as follo ws (see Note 9):

December 31, 2024

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December 31, 2023

(in thousands)

Interest rate swap, assets

Long-term Debt – The fair value of the Company’s debt was estimated using Level 1, Level 2, and Level 3 inputs based on recent secondary market trades of the Company’s 2031 Senior Unsecured Public Notes (see Note 9), recent comparable financing transactions, recent market risk premiums for loans of comparable quality, applicable London Interbank Offered Rate (“LIBOR”), Secured Overnight Financing Rate (“SOFR”), Canadian Dollar Offered Rate (“CDOR”), U.S.

Long-term Debt – The fair value of the Company’s debt was estimated using Level 1, Level 2, and Level 3 inputs based on recent secondary market trades of the Company’s 2031 Senior Unsecured Public Notes (see Note 7), recent comparable financing transactions, recent market risk premiums for loans of comparable quality, Secured Overnight Financing Rate (“SOFR”), Canadian Dollar Offered Rate (“CDOR”), Canadian Overnight Repo Rate Average (“CORRA”), U.S.

Treasury obligation interest rates, and discounted estimated future cash payments to be made on such debt.

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Since such amounts are estimates that are based on limited available market information for similar transactions and do not acknowledge transfer or other repayment restrictions that may exist on specific loans, it is unlikely that the estimated fair value of any such debt could be realized by immediate settlement of the obligation.

The following table summarizes the carrying amount reported in the Consolidated Balance Sheets and the Company’s estimate of the fair value of the unsecured revolving credit facility, mortgages, unsecured term loans, and senior unsecured notes which reflects the fair value of interest rate swaps:

(in thousands)

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Accounts payable and other liabilities

The Company’s right-of-use assets and lease liabilities primarily consist of a ten year lease for the Company’s corporate office space that was executed in October 2022 and commenced on October 1, 2023.

The Company’s right-of-use assets and lease liabilities primarily consist of a lease for the Company’s corporate office space, which expires in October 2033.

The lease contains two five-year extension options, exercisable at the Company’s discretion, that are not reasonably certain to be exercised, and are therefore excluded from our calculation of the lease liability.

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Recently Adopted Accounting Standards

In October 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-06, Disclosure Improvements:

Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative .

ASU 2023-06 codifies disclosure requirements related to various ASUs related to the Securities and Exchange Commission’s (“SEC”) Disclosure Update and Simplification Initiative, which was implemented by the Company in 2018 when it became effective.

There are no new or additional requirements applicable to the Company as part of ASU 2023-06, and consequently this has no impact to the Company’s financial statements or disclosures.

Other Recently Issued Accounting Standards

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures .

The ASU requires additional disclosures regarding segment expenses and other items on an interim and annual basis.

The amendments in ASU 2023-07 are effective for the Company beginning January 1, 2024.

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures (“ASU 2023-07”).

ASU 2023-07 is intended to improve reportable segment disclosure by requiring disclosure of incremental segment information, such as, annual and interim disclosure of significant segment expenses that are regularly reviewed by the CODM, interim disclosure of a reportable segment’s profit or loss and assets, and require that a public entity with a single reportable segment provide all the disclosures required by ASU 2023-07 and all existing required segment disclosures.

The amendments in ASU 2023-07 were effective for the Company beginning January 1, 2024, and disclosures were retrospectively applied to all periods presented.

The impact to the Company was primarily including disclosure around identifying the title and position of the Company’s CODM.

The Company has one reportable segment and the required disclosure updates have been reflected in the Segment Reporting section elsewhere in Note 2.

Recently Issued Accounting Standards

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) (“ASU 2024-03”).

ASU 2024-03 requires a public entity to disclose additional information about specific expense categories in the notes to financial statements on an annual and interim basis.

The amendments are effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoption permitted.

The Company will have the election to apply the amendments either prospectively to financial statements issued for reporting periods after the effective date of this ASU or retrospectively to any or all prior periods presented in the financial statements.

While this update will result in enhanced disclosures, the Company does not expect it will have a material impact on the Company’s financial statements.

Reclassifications

The Company reclassified Debt issuance costs - unsecured revolving credit facility, net of $ 6.0 million and Leasing fees, net of $ 8.5 million to Prepaid expenses and other assets in the Consolidated Balance Sheets at December 31, 2022 to conform with the current period presentation.

Additionally, the Company reclassified $ 0.3 and $ 0.4 million of Cost of debt extinguishment to Other (expenses) income in the Consolidated Statements of Income and Comprehensive Income and to Other non-cash items in the Consolidated Statements of Cash Flows for the years ended December 31, 2022, and 2021, respectively.

Related-Party Transactions

Prior to the Company’s internalization on February 7, 2020, the former asset manager, a related party in which certain directors of the Corporation had either a direct or indirect ownership interest, and its wholly-owned subsidiary were considered to be related parties.

Earnout Consideration

In connection with the Company’s internalization, the Company incurred a contingent obligation that would be payable to certain members of the Company’s Board of Directors and employees who had previously been owners and/or employees of the former asset manager, upon the occurrence of certain events (see Note 4).

During the year ended December 31, 2021, the Company achieved all four VWAP milestones applicable to the earnout.

As a result, the Company issued 1,088,977 shares of common stock, 1,859,257 OP Units and made cash payments of $ 13.0 million to these related parties (see Note 4).

Conversion of OP Units to Common Stock

During the year ended December 31, 2021, in non-cash transactions (see Note 18), the Company converted 2,049,439 OP Units held by an affiliated third party to 2,049,439 shares of common stock, respectively, at a total conversion value of $ 32.8 million.

There were no conversions of OP Units held by a related party during the years ended December 31, 2023, and 2022.

See further discussion in Notes 12 and 14.

Internalization

In accordance with the Company’s internalization, the Company was required to pay additional earnout consideration of up to $ 75.0 million payable in four tranches of $ 10.0 million, $ 15.0 million, $ 25.0 million, and $ 25.0 million if certain milestones related to the 40 -day VWAP per REIT Share were achieved.

The consideration consisted of a combination of cash, shares of the Company’s common stock, and OP Units, based on the same proportions paid in the base consideration.

As of December 31, 2021, the Company achieved all four VWAP milestones, thereby triggering the payout of all earnout tranches.

Below is a summary of the shares of common stock and OP Units issued, and cash paid for each earnout tranche:

(in thousands, except per share amounts)

Achievement Date

June 16, 2021

July 14, 2021

September 21, 2021

(a) Cash payments include amounts earned for dividends.

Acquisitions of Rental Property

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Acquisition Price

March 14, 2023

July 11, 2023

November 14, 2023

(a) Acquisition of land to be developed in connection with a $ 204.8 million build-to-suit transaction expected to fund in multiple draws through October 2024 (see Note 2).

(b) Acquisition of land developed in connection with a $ 1.7 million build-to-suit transaction completed in October 2023 (see Note 2).

April 4, 2024

April 18, 2024

Industrial & Retail

June 24, 2024

September 3, 2024

September 5, 2024

December 12, 2024

December 24, 2024

(a) In April 2024, the Company acquired $ 52.0 million of real estate assets.

In June 2024, the Company contributed these assets in exchange for preferred equity in a consolidated VIE (see Note 2).

(b) Acquisition of land to be developed in connection with a $ 2.0 million build-to-suit transaction expected to fund in multiple draws through March 2025.

(c) Acquisition of land to be developed in connection with a $ 115.4 million build-to-suit transaction expected to fund in multiple draws through July 2026.

(d) Acquisition price excludes capitalized acquisition costs of $ 8.3 million.

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Acquisition Price

January 7, 2022

February 10, 2022

February 15, 2022

February 28, 2022

March 14, 2023

March 31, 2022

April 12, 2022

April 13, 2022

April 19, 2022

June 13, 2022

June 15, 2022

June 21, 2022

June 29, 2022

June 30, 2022

August 25, 2022

August 26, 2022

September 6, 2022

September 28, 2022

September 29, 2022

October 12, 2022

Industrial / Office

October 12, 2022

October 17, 2022

October 19, 2022

November 2, 2022

November 4, 2022

July 11, 2023

November 14, 2023

(e) Acquisition price excludes capitalized acquisition costs of $ 6.4 million .

(e) Acquisition of land developed in connection with a $ 204.8 million build-to-suit transaction substantially completed in September 2024.

(f) Acquisition of land developed in connection with a $ 1.7 million build-to-suit transaction completed in October 2023.

(g) Acquisition price excludes capitalized acquisition costs of $ 3.1 million.

The Company allocated the purchase price of these properties to the fair value of the assets acquired and liabilities assumed.

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Property under development

Acquired in-place leases (f)

Acquired above-market leases (g)

Acquired below-market leases (h)

Right-of-use asset

Lease liability

Non-real estate liabilities assumed

(f) The weighted average amortization period for acquired in-place leases is 16 years, 20 years, and 16 years for acquisitions completed during the years ended December 31, 2023, 2022, and 2021 , respectively.

(g) The weighted average amortization period for acquired above-market leases is 10 years for acquisitions completed during the year ended December 31, 2021.

There were no above-market leases acquired during the years ended December 31, 2023 and 2022.

(h) The weighted average amortization period for acquired below-market leases is 20 years and 14 years for acquisitions completed during the years ended December 31, 2023 and 2022, respectively.

There were no below-market leases acquired during the year ended December 31, 2021.

Acquired in-place leases (h)

Acquired above-market leases (i)

Acquired below-market leases (j)

(h) The weighted average amortization period for acquired in-place leases is 10 years and 16 years for acquisitions completed during the years ended December 31, 2024 and 2023, respectively.

(i) The weighted average amortization period for acquired above-market leases is six years for acquisitions completed during the year ended December 31, 2024.

There were no above-market leases acquired during the year ended December 31, 2023.

(j) The weighted average amortization period for acquired below-market leases is nine years and 20 years for acquisitions completed during the years ended December 31, 2024 and 2023 , respectively.

The above acquisitions were funded using a combination of available cash on hand and unsecured revolving credit facility borrowings.

All real estate acquisitions closed during the years ended December 31, 2023, 2022, and 2021 , qualified as asset acquisitions and, as such, acquisition costs have been capitalized.

All real estate acquisitions closed during the years ended December 31, 2024 and 2023, qualified as asset acquisitions and as such, acquisition costs were capitalized.

Subsequent to December 31, 2024, the Company closed on the following acquisitions (see Note 18):

(in thousands, except number of properties)

January 28, 2025

February 13, 2025

(k) Acquisition of land to be developed in connection with a $ 1.7 million build-to-suit transaction expected to fund in multiple draws through April 2025.

Sale of Real Estate

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Investment in Rental Property and Lease Arrangements

The Company generally leases its investment rental property to established tenants in the industrial, healthcare, restaurant, retail, and office property types.

The Company generally leases its investment rental property to established tenants in the industrial and retail property types.

At December 31, 2024, the Company had 765 real estate properties, 753 of which were leased under leases that have been classified as operating leases , nine that have been classified as direct financing leases, one that has been classified as a sales-type lease, and two that were vacant.

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Total lease revenues, net

(a) Other income from real estate transactions includes $ 7.5 million, $ 2.5 million, and $ 33.5 million of lease termination fee income for the years ended December 31, 2023, 2022, and 2021, respectively.

(a) I ncludes $ 1.2 million, $ 7.5 million and $ 2.5 million of lease termination fee income for the years ended December 31, 2024, 2023, and 2022 , respectively.

Intangible Assets and Liabilities, and Leasing Fees

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Prior to the amendment, borrowings under the Revolving Credit Facility were subject to interest at variable rates based on LIBOR plus a margin based on the Company’s current credit rating ranging between 0.825 % to 1.550 % per annum.

Borr owings under the amended Revolving Credit Facility are subject to interest only payments at variable rates equal to the applicable reference rate plus a margin based on the Company’s credit rating, ranging between 0.725 % and 1.400 %.

All other terms and conditions of the Revolving Credit Facility remained materially the same as those in effect prior to this amendment.

The amended Revolving Credit Facility is subject to a facility fee on the amount of the revolving commitments, based on the Company’s credit rating, ranging between 0.125 % and 0.300 %.

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2026 Unsecured Term Loan

On February 7, 2020, the Company entered into a $ 60.0 million term loan (the “2022 Unsecured Term Loan”) with JP Morgan Chase, N.A.

as administrative agent.

The 2022 Unsecured Term Loan was fully funded at closing and used to repay a portion of the debt assumed by the Company as part of the Company’s internalization.

Borrowings under the 2022 Unsecured Term Loan were subject to interest only payments at variable rates equal to LIBOR plus a margin based upon the Company’s credit rating, ranging between 0.85 % and 1.65 % per annum.

The 2022 Unsecured Term Loan was paid in full in February 2022 with borrowings from the Revolving Credit Facility.

2024 Unsecured Term Loan

Borrowings under the 2024 unsecured term loan of $190.0 million bore interest at variable rates based on LIBOR plus a margin based on the Company’s credit rating ranging between 0.85 % and 1.65 % per annum.

The loan was paid in full in August 2022 with borrowings from the 2027 Unsecured Term Loan and 2029 Unsecured Term Loan (defined below).

2026 Unsecured Term Loan

On February 27, 2019, the Company entered into a $ 450.0 million seven-year unsecured term loan agreement (the “2026 Unsecured Term Loan”) with Capital One, National Association as administrative agent.

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The 2026 Unsecured Term Loan has an initial maturity date of February 27, 2026 .

Borrowings under the 2026 Unsecured Term Loan were subject to interest only payments at variable rates equal to LIBOR plus a margin between 1.45 % and 2.40 % per annum based on the Company’s credit rating through March 12, 2021.

On March 12, 2021, the Company amended the 2026 Unsecured Term Loan and made a $ 50.0 million paydown on the loan.

The amendment reduced the margin on variable interest rate borrowings to a range between 0.85 % and 1.65 % per annum based on the Company’s credit rating.

All other terms and conditions of the 2026 Unsecured Term Loan remained materially the same as those in effect prior to this amendment.

Effective July 1, 2023, the Company amended the 2026 Unsecured Term Loan to transition to SOFR upon the cessation of LIBOR.

Interest on borrowings bear interest at one-month SOFR plus a margin between 0.85 % and 1.65 % per annum based on the Company’s credit rating.

Following the amendment, borrowings under the 2026 Unsecured Term Loan were subject to interest only payments at variable rates equal to LIBOR plus a margin between 1.45 % and 2.40 % per annum based on the Company’s credit rating through March 12, 2021.

On March 12, 2021, the Company amended the 2026 Unsecured Term Loan to reduce the margin on variable interest rate borrowings, and made a $ 50.0 million paydown on the loan.

Borrowings under the amended 2026 Unsecured Term Loan are subject to interest only payments at variable rates equal to LIBOR plus a margin between 0.85 % and 1.65 % per annum based on the Company’s credit rating.

Effective July 1, 2023, the Company further amended the 2026 Unsecured Term Loan to transition to SOFR upon the cessation of LIBOR.

Interest on borrowings bear interest at one-month adjusted SOFR plus a margin between 0.85 % and 1.65 % per annum based on the Company’s credit rating.

The 2026 Unsecured Term Loan is subject to a fee of 0.25 % per annum on the amount of the commitment, reduced by the amount of term loans outstanding.

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The following table summarizes the Company’s unsecured credit agreements:

(in thousands, except interest rates)

Outstanding Balance

Revolving Credit Facility

(in thousands, except interest rates)

Interest Rate

Maturity Date

Unsecured revolving credit facility

Applicable reference rate + 0.85 % (a)

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2026 Unsecured Term Loan

one-month adjusted SOFR + 1.00 % (b)(c)

o ne-month adjusted SOFR + 1.00 % (b)

2027 Unsecured Term Loan

one-month adjusted SOFR + 0.95 % (c)

daily simple adjusted SOFR + 0.95 % (c)

2029 Unsecured Term Loan

one-month adjusted SOFR + 1.25 % (c)

daily simple adjusted SOFR + 1.25 % (c)

Total unsecured term loans

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Total unsecured debt, net

(a) At December 31, 2023 and 2022, a balance of $ 15.0 million and $ 123.5 million was subject to the one-month SOFR of 5.35 % and 4.36 %, respectively.

The remaining balances of $ 100 million CAD borrowings were remeasured to $ 75.4 million USD and $ 73.8 million USD at December 31, 2023 and 2022, respectively, and were subject to the one-month CDOR of 5.46 % and 4.74 %, respectively.

(b) At December 31, 2023, one-month SOFR was 5.35 %.

At December 31, 2022, the applicable interest rate was one-month LIBOR of 4.39 % plus 1.00 %.

(d) The Company’s Revolving Credit Facility contains two six-month extension options subject to certain conditions, including the payment of an extension fee equal to 0.0625 % of the revolving commitments .

At December 31, 2023 , the weighted average interest rate on all outstanding borrowings, exclusive of interest rate swap agreements was 5.33 %.

At December 31, 2023, the weighted average interest rate on all outstanding borrowings, inclusive of interest rate swap agreements was 3.73 %.

For the years ended December 31, 2022, and 2021, the Company incurred debt issuance costs of $ 7.0 million, and $ 5.0 million, respectively, associated with financing activities.

The Company did no t incur any debt issuance costs for the year ended December 31, 2023.

(a) At December 31, 2024 , a balance of $ 23.5 million was subject to daily simple SOFR, and at December 31, 2023 a balance of $ 15.0 million was subject to one-month SOFR.

The remaining balance of $ 100.0 million CAD borrowings remeasured to $ 69.5 million USD and $ 75.4 million USD, at December 31, 2024 and 2023 , respectively, and was subject to daily simple CORRA of 3.32 % at December 31, 2024 and one-month CDOR, of 5.46 % at December 31, 2023 .

(b) At December 31, 2024 and 2023 , one-month SOFR was 4.33 % and 5.35 %, respectively.

The applicable reference rate at December 31, 2023 was one-month SOFR, which was 5.35 %.

(d) The Company’s unsecured revolving credit facility contains two six-month extension options subject to certain conditions, including the payment of an extension fee equal to 0.0625 % of the revolving commitments .

At December 31, 2024 , the weighted average interest rate on all outstanding borrowings was 4.79 % exclusive of interest rate swap agreements, and 3.84 % inclusive of interest rate swap agreements.

For the year ended December 31, 2022, the Company incurred debt issuance costs of $ 7.0 million associated with financing activities.

The Company did no t incur any debt issuance costs for the years ended December 31, 2024 and 2023.

Debt issuance costs and original issuance discounts are amortized as a component of Interest expense in the accompanying Consolidated Statements of Income and Comprehensive Income.

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The debt was recorded at fair value at the time of assumption.

At December 31, 2023 , investment in rental property of $ 120.5 million was pledged as collateral against the Company’s mortgages.

At December 31, 2024 , investment in rental property with a book value of $ 117.8 million was pledged as collateral against the Company’s mortgages.

Estimated future principal payments to be made under the above mortgages and the Company’s unsecured credit agreements ( see Note 7) at December 31, 2024, are as follows:

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The Company minimizes the risk exposure by limiting counterparties to only major banks who meet established credit and capital guidelines.

In connection with the issuance of the 2031 Senior Unsecured Public Notes in September 2021 and repayment of outstanding borrowings of variable rate debt indexed to the one-month LIBOR rate (see Note 9), the Company terminated interest rate swap agreements with an aggregate termination value of $ 5.6 million.

The Company determined that it was not probable the hedge forecasted transactions would not occur during the original periods, and therefore, the $ 5.6 million of accumulated losses held in Other comprehensive income is being reclassified to interest expense on a straight-line basis over the original lives of the terminated swaps.

There were no swap terminations for the years ended December 31, 2023 and 2022.

In June 2024, the Company entered into nine forward-starting interest rate swaps with various institutions for a total notional amount of $ 460.0 million in order to mitigate the impact of interest rate variability over the term of the Company’s current and expected debt obligations.

These swap arrangements are effective during various periods between March and December 2025 and mature in 2030.

The following is a summary of the Company’s outstanding interest rate swap agreements:

4 unchanged sentences

Variable Rate Index (a)

Effective Swaps:

Wells Fargo Bank, N.A.

33 unchanged sentences

Toronto-Dominion Bank

one-month CDOR

daily compounded CORRA

Wells Fargo Bank, N.A.

23 unchanged sentences

daily compounded SOFR

one-month CDOR

daily compounded CORRA

Bank National Association

one-month CDOR

daily compounded CORRA

Bank of Montreal

one-month CDOR

(a) Prior to the cessation of LIBOR on July 1, 2023, the variable rate index for daily compounded SOFR based swaps was one-month LIBOR.

daily compounded CORRA

Forward Starting Swaps:

Bank of Montreal

daily simple SOFR

JPMorgan Chase Bank, N.A.

daily simple SOFR

Bank National Association

daily simple SOFR

Truist Financial Corporation

daily simple SOFR

Manufacturers & Traders Trust Company

September 2030

daily simple SOFR

September 2030

daily simple SOFR

Truist Financial Corporation

September 2030

daily simple SOFR

Toronto-Dominion Bank

December 2030

daily simple SOFR

December 2030

daily simple SOFR

(a) Prior to the cessation of CDOR on July 1, 2024, the variable rate index for daily compounded CORRA based swaps was one-month CDOR.

(b) The contractual notional amount is $ 20.0 million CAD.

At December 31, 2023, the weighted average fixed rate on all outstanding interest rate swaps was 2.28 %.

At December 31, 2023, the weighted average interest rate on all outstanding borrowings, inclusive of unsecured credit agreements was 3.73 %.

(d) Forward starting swaps have effective dates that are five years prior to each respective maturity date.

At December 31, 2024 , the weighted average interest rate on all outstanding borrowings was 3.84 %, inclusive of a weighted average fixed rate on effective interest rate swaps of 2.28 %.

The total amounts recognized, and the location in the accompanying Consolidated Statements of Income and Comprehensive Income, from converting from variable rates to fixed rates under these agreements were as follows:

Total Interest Expense

Amount of (Loss) Gain

Amount of Gain (Loss)

Presented in the

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Non-Controlling Interests

Under the Company’s UPREIT structure, entities and individuals can contribute their properties in exchange for OP Units.

The Company has two entities with noncontrolling interests that are consolidated:

the “OP,” and interests in a consolidated VIE not wholly-owned by the Company (See Note 2).

Under the Company’s UPREIT structure, entities and individuals can contribute assets in exchange for OP Units.

There were no UPREIT transactions during the years ended December 31, 2024, 2023, and 2022.

The cumulative amount of UPREIT properties contributed, less assumed debt, amounted to $ 128.7 million as of December 31, 2024 and 2023.

In exchange for the properties contributed and as part of the Company’s internalization, 5,868,654 and 3,059,082 non-controlling OP Units were issued and outstanding, respectively, as of December 31, 2023, representing a 4.5 % interest in the OP at December 31, 2023.

In exchange for the properties contributed and as part of the Company’s internalization, 5,939,680 and 4,265,126 non-controlling OP Units were issued and outstanding, respectively, as of December 31, 2022, representing a 5.2 % interest in the OP at December 31, 2022.

In exchange for the properties contributed and as part of the Company’s internalization, 6,058,080 and 4,265,126 non-controlling OP Units were issued and outstanding, respectively, as of December 31, 2021, representing a 6.0 % interest in the OP at December 31, 2021.

The OP Units are economically equivalent to the Corporation’s common stock and, subject to certain restrictions, are convertible into the Company’s common stock at the option of the respective unit holders on a one-to-one basis.

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Value of units exchanged

During the year ended December 31, 2021, the Company achieved all four VWAP milestones applicable to the earnout and issued 1,859,257 OP Units (see Note 4).

Holders of the OP Units do not have voting rights at the Corporation level.

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The Company maintained bank balances that, at times, exceeded the federally insured limit during the years ended December 31, 2024, 2023, and 2022.

The Company has not experienced losses relating to these deposits and management does not believe that the Company is exposed to any significant credit risk with respect to these amounts based on the financial position and capitalization of the banks holding such balances.

For the years ended December 31, 2024, 2023, and 2022 , the Company had no individual tenants or common franchises that accounted for more than 10 % of Lease revenues, net, excluding lease termination fees.

On September 21, 2020, the Corporation completed its IPO and issued 37,000,000 shares of Class A Common Stock inclusive of the underwriters’ partial exercise of their over-allotment option on October 20, 2020.

Aside from the conversion discussed below, the terms of the Class A Common Stock were identical to the terms of the common stock.

Each share of Class A Common Stock automatically converted into one share of common stock on March 20, 2021, and effective March 22, 2021, all shares of common stock were listed and freely tradeable on the NYSE under the ticker “BNL.” The common stock and Class A Common Stock are collectively referred to as the Corporation’s “common stock.”

On June 28, 2021, the Corporation completed its first public follow-on equity offering and issued 11,500,000 shares of common stock, inclusive of the underwriters’ full exercise of their over-allotment option, at $ 23.00 per share.

The net proceeds, after deducting underwriting discounts and commissions of $ 10.6 million and $ 0.4 million of other expenses, were $ 253.5 million.

The Company used the net proceeds to repay the Company’s Revolving Credit Facility in full, and used the remaining net proceeds for general business purposes, including acquisitions.

During the year ended December 31, 2021, the Company achieved all four VWAP milestones applicable to the earnout.

As a result, the Company issued 1,088,977 shares of common stock (see Note 4).

At-the-Market Program

The Company has an at-the-market common equity offering program (“ATM Program”), through which it may, from time to time, publicly offer and sell shares of common stock having an aggregate gross sales price of up to $ 400.0 million through June 2024.

The ATM Program provides for forward sale agreements, enabling the Company to set the price of shares upon pricing the offering, while delaying the issuance of shares and the receipt of the net proceeds.

As of December 31, 2023, the Company has $ 145.4 million of available capacity under the ATM Program.

The following table presents information about the Company’s ATM Program activity:

For the Year Ended December 31,

(in thousands, except per share amounts)

Number of common shares issued

Weighted average sale price per share

Gross proceeds

In August 2022, the Company completed a public offering to sell an aggregate of 13,000,000 shares of common stock at a price of $ 21.35 per share, subject to certain adjustments, in connection with a forward sale agreement.

On December 28, 2022, the Company settled the forward sale agreement and issued 13,000,000 shares of common stock.

The net proceeds, after deducting underwriting discounts and commissions of $ 3.4 million and $ 0.6 million of other expenses, were $ 272.6 million.

The Company used the net proceeds to pay down the Revolving Credit Facility.

The shares of the Corporation’s common stock entitle the holders to one vote per share on all matters upon which stockholders are entitled to vote, to receive dividends and other distributions as authorized by the Board of Directors in accordance with the Maryland General Corporation Law, and to all rights of a stockholder pursuant to the Maryland General Corporation Law.

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At December 31, 2024 and 2023 , no shares of the Corporation’s preferred stock were issued and outstanding.

Share Repurchase Program

On March 14, 2023, the Company’s Board of Directors approved a stock repurchase program (the “Repurchase Program”), which authorized the Company to repurchase up to $ 150.0 million of the Company’s common stock.

These purchases can be made in the open market or through private transactions from time to time over the 12-month time period following authorization, depending on prevailing market conditions and applicable legal and regulatory requirements.

At-the-Market Program (“ATM Program”)

The Company enters into ATM Programs through which it may, from time to time, publicly offer and sell shares of common stock.

The Company’s ATM Programs also provide for forward sale agreements, enabling the Company to set the price of shares upon pricing the offering, while delaying the issuance of shares and the receipt of the net proceeds.

In May 2024, the Company replaced its prior $ 400.0 million ATM Program (“2021 ATM Program”) with a new $ 400.0 million ATM Program (“2024 ATM Program”), and the 2021 ATM Program was simultaneously terminated.

The following table presents information about the Company’s ATM Programs:

(in thousands)

Aggregate Gross Sales

Shares Issued

(a) ATM Program has been terminated and no future issuance will occur.

During the year ended December 31, 2024 , the Company entered into forward sale agreements to sell an aggregate of 2,187,700 shares of common stock under the 2024 ATM Program at a weighted-average share price of $ 18.29 , subject to certain adjustments.

The Company has the option to settle the outstanding shares of common stock anytime between August and September 2025 for net proceeds of approximately $ 38.5 million.

During the year ended December 31, 2024, the Company has not settled any of the outstanding shares of these forward sales agreements.

There was no ATM Program activity during the year ended December 31, 2023.

The following table presents information about the Company’s ATM Program issuances:

For the Year Ended December 31,

(in thousands, except per share amounts)

Number of common shares issued

Weighted average sale price per share

Gross proceeds

There were no ATM Program issuances during the years ended December 31, 2024 and 2023.

Stock Repurchase Program

The Company has a stock repurchase program (the “Repurchase Program”), which authorizes the Company to repurchase up to $ 150.0 million of the Company’s common stock.

On March 12, 2024, the Company’s Board of Directors re-authorized the Repurchase Program for a 12-month period beginning on March 14, 2024.

Under the Repurchase Program, repurchases of the Company’s stock can be made in the open market or through private transactions from time to time over the 12-month period, depending on prevailing market conditions and compliance with applicable legal and regulatory requirements.

The timing, manner, price, and amount of any repurchases of common stock under the Repurchase Program will be determined at the Company’s discretion, using available cash resources.

During the year ended December 31, 2023, no shares of the Company’s common stock were repurchased under the program.

During the years ended December 31, 2024 and 2023, no shares of the Company’s common stock were repurchased under the Repurchase Program.

Stock-Based Compensation

Restricted Stock Awards

The Company awarded 311,583 , 181,244 , and 199,430 shares of RSAs, during the years ended December 31, 2023, 2022, and 2021 , respectively, to officers, employees and non-employee directors under the Equity Incentive Plan.

The Company awarded 849,365 , 311,583 , and 181,244 shares of RSAs, during the years ended December 31, 2024, 2023, and 2022 , respectively, to officers, employees and non-employee directors under the Company’s Equity Incentive Plan.

The holder of RSAs is generally entitled at all times on and after the date of issuance of the restricted common shares to exercise the rights of a stockholder of the Company, including the right to vote the shares and the right to receive dividends on the shares.

The RSAs vest over a one , three , or four year period from the date of the grant and are subject to the holder’s continued service through the applicable vesting dates and in accordance with the terms of the individual award agreements.

The weighted average value of awards granted during the years ended December 31, 2023, 2022, and 2021 were $ 17.50 , $ 21.43 , and $ 18.66 , respectively, which were based on the market price per share of the Company’s common stock on the grant dates.

The RSAs vest over a one -, three -, four -, or five-year period from the date of the grant and are subject to the holder’s continued service through the applicable vesting dates and in accordance with the terms of the individual award agreements.

The weighted average value of awards granted per share during the years ended December 31, 2024, 2023, and 2022 were $ 14.79 , $ 17.50 , and $ 21.43 , respectively, which were based on the market price per share of the Company’s common stock on the grant dates.

The following table presents information about the Company’s RSAs:

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Performance-based Restricted Stock Units

During the years ended December 31, 2023, 2022 and 2021, the Company issued target grants of 186,481 , 124,024 , and 132,189 PRSUs under the Equity Incentive Plan to the officers of the Company, respectively.

During the years ended December 31, 2024, 2023 and 2022 , the Company issued target grants of 202,308 , 186,481 , and 124,024 performance-based restricted stock units (“PRSUs”) under the Company’s Equity Incentive Plan to the officers of the Company, respectively.

The awards are non-vested restricted stock units where the vesting percentages and the ultimate number of units vesting will be measured 50 % based on the relative total shareholder return (“rTSR”) of the Company’s common stock as compared to the rTSR of peer companies, as identified in the grant agreements, over a three-year period, and 50% based on the rTSR of the Company’s common stock as compared to the rTSR of the MSCI US REIT Index over a three year measurement period.

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The target number of units is based on achieving a rTSR equal to the 55 th percentile of the peer companies and MSCI US REIT Index.

Dividends accrue during the measurement period and will be paid on the PRSUs ultimately earned at the end of the measurement period in either cash or common stock, at the direction of the Compensation Committee of the Board of Directors.

The grant date fair value of the PRSUs was measured using a Monte Carlo simulation model based on assumptions including share price volatility.

The following table presents compensation cost recognized on the Company’s performance-based restricted stock unit:

For PRSUs issued during the year ended December 31, 2024 that achieve a percentile rank of at least the 55th percentile, and the absolute rTSR of the Company is negative for the performance period, the awards will be reduced by 25 %, not to result in a reduction less than target.

Dividends accrue during the measurement period and will be paid on the PRSUs ultimately earned at the end of the measurement period in either cash or common stock, at the discretion of the Compensation Committee of the Board of Directors.

T he grant date fair value of the PRSUs was measured using a Monte Carlo simulation model based on assumptions including share price volatility.

The following table presents compensation cost recognized on the Company’s performance-based restricted stock units:

For the Year Ended December 31,

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Net earnings used to compute basic earnings per common share

net earnings attributable to non-controlling interests

net earnings attributable to OP Unit holders

Net earnings used to compute diluted earnings per common share

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effects of restricted stock units (b)

effects of convertible membership units (c)

effects of convertible OP Units (c)

Weighted average number of common shares outstanding used in

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Cash paid for interest was $ 73.7 million, $ 77.1 million, and $ 72.0 million for the years ended December 31, 2024, 2023, and 2022 , respectively.

Cash paid for income taxes was $ 0.3 million, $ 0.4 million, and $ 0.6 million for the years ended December 31, 2023, 2022, and 2021, respectively.

Cash (refunded) paid for income taxes was $( 0.5 ) million, $ 0.3 million, and $ 0.4 million for the years ended December 31, 2024, 2023, and 2022, respectively.

The following are non-cash transactions and have been excluded from the accompanying Consolidated Statements of Cash Flows:

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During the year ended December 31, 2022 , the Company converted 118,400 OP Units valued at $ 1.9 million to 118,400 shares of common stock.

(See Note 12).

• At December 31, 2024, 2023, and 2022 , dividend amounts declared and accrued but not yet paid amounted to $ 58.3 million, $ 56.9 million, and $ 54.5 million, respectively.

• During the year ended December 31, 2024 , the Company reclassified $ 184.7 million from Property under development to Buildings and improvements upon the substantial completion of a development property.

• At December 31, 2024, 2023, and 2022 , the Company adjusted the carrying value of Non-controlling interests to reflect their share of the book value of the OP by $ 0.2 million, $ 0.5 million, and $ 6.3 million, respectively, with the reallocation recorded as an offset to Additional paid-in capital (see Note 2).

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Property and Acquisition Related

In connection with ownership and operation of real estate, the Company may potentially be liable for cost and damages related to environmental matters.

In connection with ownership and operation of real estate, the Company may potentially be liable for costs and damages related to environmental matters.

The Company is not aware of any non-compliance, liability, claim, or other environmental condition that would have a material effect on its consolidated financial position, results of operations, or liquidity.

As of December 31, 2023, the Company has a commitment to fund a build-to-suit transaction with a remaining obligation of $ 111.0 million expected to fund in multiple draws through October 2024, using a combination of available cash on hand and Revolving Credit Facility borrowings.

Rent is contractually scheduled to commence at the earlier of construction completion or October 2024.

As of December 31, 2024 , the Company has commitments to fund five build-to-suit transactions with remaining obligations of $ 227.4 million expected to fund in multiple draws through July 2026, using a combination of available cash on hand and Revolving Credit Facility borrowings.

Rent is contractually scheduled to commence when the properties reach substantial completion and are made available for use by the tenant.

The Company is a party to two separate tax protection agreements with the contributing members of two distinct UPREIT transactions and a third tax protection agreement entered into in connection with the Company’s internalization.

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The Company is required to allocate an amount of nonrecourse liabilities to each beneficiary that is at least equal to the minimum liability amount, as contained in the agreements.

The minimum liability amount and the associated allocation of nonrecourse liabilities are calculated in accordance with applicable tax regulations, are completed at the OP level, and do not represent GAAP accounting.

Therefore, there is no impact to the Consolidated Financial Statements.

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On February 14, 2025, the Board of Directors declared a quarterly distribution of $ 0.29 per share on the Company’s common stock and OP Units for the first quarter of 2025, which will be payable on or before April 15, 2025 to stockholders and unit holders of record as of March 31, 2025 .

Subsequent to December 31, 2023, the Company paid down $ 18.5 million, and borrowed $ 32.5 million on the Revolving Credit Facility, the proceeds of which were used for general corporate purposes.

Subsequent to December 31, 2024 , the Company paid down $ 38.0 million, and borrowed $ 71.0 million on the Revolving Credit Facility, the proceeds of which were used to fund investments and for other general corporate purposes.

Subsequent to December 31, 2024, the Company acquired approximately $ 10.4 million of rental property, inclusive of approximately $ 0.5 million of land to be developed in connection with a $ 1.7 million build-to-suit transaction expected to fund in multiple draws through April 2025.

(see Note 3).

Broadstone Net Lease, Inc.

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Food Processing

Healthcare Services

Animal Health Services

Quick Service Restaurants

Casual Dining

General Merchandise

Casual Dining

Quick Service Restaurants

Animal Services

Home Furnishings

Corporate Headquarters

Strategic Operations

Healthcare Services

Clinical/Surgical

Acquisitions in Process (c)

3 unchanged sentences

federal income tax purposes was approximately $ 5.1 billion.

(c) Acquisition costs in progress represents costs incurred during the year ended December 31, 2023 related to asset acquisitions expected to close during the year ended December 31, 2024.

(c) Acquisition costs in progress represents costs incurred during the year ended December 31, 2024 related to asset acquisitions expected to close during the year ending December 31, 2025.

(d) This schedule excludes properties subject to leases that are classified as direct financing leases, sales-type leases, as well as the value of right-of-use assets recorded on certain of the properties where the Company is lessee under a ground lease.

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Second Amended and Restated Bylaws of Broadstone Net Lease, Inc.

(filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on March 25, 2020 and incorporated by reference)

(filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K filed March 25, 2020 and incorporated by reference)

Description of the Company’s Securities (filed as Exhibit 4.1 to the Company’s Annual Report on Form 10-K filed February 23, 2022, and incorporated by reference)

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Chief Executive Officer Transition Agreement, dated January 10, 2023, by and among Broadstone Net Lease, Inc., Broadstone Net Lease, LLC, Broadstone Employee Sub, LLC, and Christopher J.

Czarnecki (filed as Exhibit 10.34 to the Company’s Quarterly Report on Form 10-Q filed on May 4, 2023 and incorporated by reference)

Czarnecki (filed as Exhibit 10.34 to the Company’s Quarterly Report on Form 10-Q filed May 4, 2023 and incorporated by reference)

Broadstone Net Lease, Inc.

3 unchanged sentences

Form of Broadstone Net Lease, Inc.

2020 Omnibus Equity and Incentive Plan Restricted Stock Unit Award Agreement (2021 Form) (filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed on May 5, 2021 and incorporated by reference)

2020 Omnibus Equity and Incentive Plan Restricted Stock Unit Award Agreement (2021 Form) (filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed May 5, 2021 and incorporated by reference)

Form of Broadstone Net Lease, Inc.

2020 Omnibus Equity and Incentive Plan Restricted Stock Unit Award Agreement (2022 Form)

2020 Omnibus Equity and Incentive Plan Restricted Stock Unit Award Agreement (2022 Form) (filed as Exhibit 10.37 to the Company’s Annual Report on Form 10-K filed February 22, 2024 and incorporated by reference)

Form of Broadstone Net Lease, Inc.

2020 Omnibus Equity and Incentive Plan Restricted Stock Unit Award Agreement (2024 Form)

2020 Omnibus Equity and Incentive Plan Restricted Stock Unit Award Agreement (2024 Form) (filed as Exhibit 10.38 to the Company’s Annual Report on Form 10-K filed February 22, 2024 and incorporated by reference)

Broadstone Net Lease, Inc.

Change in Control Severance Protection Policy (filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed August 4, 2022 and incorporated by reference)

Equity Distribution Agreement, dated as of August 23, 2021, among Broadstone Net Lease, Inc., Broadstone Net Lease, LLC and the managers, forward sellers and forward purchasers party thereto (filed as Exhibit 1.1 to the Company’s Current Report on Form 8-K filed August 24, 2021 and incorporated by reference)

Amendment No.

1 to the Equity Distribution Agreement, dated as of May 3, 2024, among Broadstone Net Lease, Inc., Broadstone Net Lease, LLC and the managers, forward sellers and forward purchasers party thereto (filed as Exhibit 1.7 to the Corporation’s Registration Statement on Form S-3 (333-279115) filed May 3, 2024 and incorporated by reference)

Broadstone Net Lease, Inc.

Insider Trading Policy

List of Subsidiaries of Broadstone Net Lease, Inc.

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Broadstone Net Lease, Inc.

Compensation Clawback Policy

Compensation Clawback Policy (filed as Exhibit 97.1 to the Company’s Annual Report on Form 10-K filed February 22, 2024 and incorporated by reference)

Inline XBRL Instance Document – the instance document does not appear in Interactive Data File because XBRL tags are embedded within the Inline XBRL Document

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February 20, 2025

/s/ Denise Brooks-Williams

Denise Brooks-Williams

February 20, 2025

/s/ Michael A.

5 unchanged sentences

February 20, 2025

/s/ Richard Imperiale

Richard Imperiale

February 20, 2025

/s/ Shekar Narasimhan

1 unchanged sentence

February 20, 2025

/s/ Denise Brooks-Williams

Denise Brooks-Williams

/s/ Joseph Saffire

Joseph Saffire

February 20, 2025

2 unchanged sentences

February 20, 2025

/s/ Timothy D.

Dieffenbacher

Senior Vice President, Chief Accounting Officer and Treasurer (Principal Accounting Officer)

/s/ Jennie O’Brien

Jennie O’Brien

Senior Vice President and Chief Accounting Officer

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis