What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-10-29 compared with 2025-07-31 · 159 added, 125 removed, 653 unchanged (30% of the section changed)

38 unchanged sentences

We are an industrial-focused, diversified net lease real estate investment trust (“REIT”) that invests in primarily single-tenant commercial real estate properties that are net leased on a long-term basis to a diversified group of tenants.

As of June 30, 2025, our portfolio includes 766 properties, with 759 properties located in 44 U.S.

As of September 30, 2025, our portfolio includes 759 properties, with 752 properties located in 44 U.S.

states and seven properties located in four Canadian provinces.

10 unchanged sentences

- Diversified Portfolio .

As of June 30, 2025, our portfolio comprised approximately 40.1 million rentable square feet of operational space, was highly diversified based on property type, geography, tenant, and industry, and was cross-diversified within each (e.g., property-type diversification within a geographic concentration):

As of September 30, 2025, our portfolio comprised approximately 40.7 million rentable square feet of operational space, was highly diversified based on property type, geography, tenant, and industry, and was cross-diversified within each (e.g., property-type diversification within a geographic concentration):

• Property Type:

7 unchanged sentences

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

As of June 30, 2025, our portfolio was approximately 99.1% leased with an ABR weighted average remaining lease term of approximately 9.7 years, excluding renewal options.

As of September 30, 2025, our portfolio was approximately 99.5% leased with an ABR weighted average remaining lease term of approximately 9.5 years, excluding renewal options.

- Standard Contractual Base Rent Escalation .

9 unchanged sentences

Notwithstanding the challenging macroeconomic conditions, we believe that our portfolio performance and strong liquidity profile position our Company well for future opportunities.

We expect to achieve growth in revenues and earnings through our four building blocks, including best-in-class portfolio rent escalations, revenue generating capital expenditures with existing tenants, development funding opportunities, and a diversified acquisition pipeline.

We expect to achieve growth in revenues and earnings through our four building blocks, including embedded same store net operating income growth, revenue generating capital expenditures with existing tenants, build-to-suit developments, and a diversified acquisition pipeline.

Diversified Investment Activity

During the three months ended June 30, 2025, our investment activity consisted of the following:

For the Three Months Ended For the Six Months Ended

June 30, 2025 March 31, 2025 June 30, 2025

During the three months ended September 30, 2025, our investment activity consisted of the following:

For the Three Months Ended For the Nine Months Ended

September 30, 2025 June 30, 2025 March 31, 2025 September 30, 2025

Acquisitions:

24 unchanged sentences

Build-to-Suit Development Projects

The following table summarizes the Company’s in-process and stabilized developments as of June 30, 2025:

The following table summarizes the Company’s in-process and stabilized developments as of September 30, 2025:

Property Projected Rentable Square Feet Start Date (b)

6 unchanged sentences

2025 15.0 1.9 % $ 2,008 $ 1,411 $ 597 8.0 % 8.8 %

(Bedford, TX) 22 Jul.

2026 15.0 0.9 % $ 9,533 $ — $ 9,533 7.2 % 7.7 %

In-process industrial:

11 unchanged sentences

2026 12.0 3.5 % 19,523 14,314 5,209 7.0 % 8.5 %

Palmer Logistics

(Midlothian, TX) (f)

2026 12.3 3.5 % 32,063 5,260 26,803 7.6 % 9.2 %

Total / weighted average 2,252 13.1 2.9 % 370,868 135,056 235,812 7.5 % 8.9 %

16 unchanged sentences

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

(f) Development represents our common and preferred equity investments in a consolidated joint venture, and exclude amounts attributed to non-controlling interest holders.

Our Real Estate Investment Portfolio

The following charts summarize our portfolio diversification by property type, tenant, brand, industry, and geographic location as of June 30, 2025.

The following charts summarize our portfolio diversification by property type, tenant, brand, industry, and geographic location as of September 30, 2025.

These portfolio statistics exclude transitional capital investments.

The percentages below are calculated based on our ABR of $404.2 million as of June 30, 2025.

The percentages below are calculated based on our ABR of $412.9 million as of September 30, 2025.

Diversification by Property Type

20 unchanged sentences

In-process Developments 2 — — — —

Untenanted 2 — — % 14 — %

Retail Total 523 126,363 30.6 % 5,934 14.6 %

17 unchanged sentences

Tractor Supply Company General Merchandise 23 6,525 1.6 % 462 1.1 %

Alexander’s, LLC* Casual Dining 16 6,301 1.6 % 132 0.3 %

Alexander's, LLC*

Hotels, Restaurants & Leisure 16 6,301 1.5 % 132 0.3 %

Salm Partners, LLC* Food Processing 2 6,276 1.5 % 426 1.0 %

5 unchanged sentences

Flex and R&D 1 5,900 1.4 % 417 1.0 %

Owens & Minor Distribution & Warehouse 2 5,785 1.4 % 523 1.3 %

Red Lobster Hospitality & Red Lobster Restaurants LLC* Casual Dining 18 5,674 1.4 % 147 0.4 %

Outback Steakhouse of Florida LLC* (a)

Casual Dining 22 5,544 1.4 % 140 0.3 %

Outback Steakhouse of Florida LLC*(a) Casual Dining 22 5,544 1.3 % 140 0.3 %

Krispy Kreme Doughnut Corporation Quick Service Restaurants/

2 unchanged sentences

Jelly Belly Candy Company Distribution & Warehouse/Food Processing/General Merchandise 5 4,790 1.2 % 575 1.4 %

Arkansas Surgical Hospital, LLC Clinical & Surgical 1 4,702 1.2 % 129 0.3 %

Chiquita Holdings Limited Food Processing 1 4,692 1.1 % 335 1.0 %

Carvana, LLC Industrial Services 2 4,755 1.2 % 230 0.6 %

Total Top 20 Tenants 287 $ 143,543 34.7 % 13,654 33.6 %

9 unchanged sentences

Food Distributors 7 28,049 6.8 % 2,534 6.2 %

Distributors 28 21,936 5.3 % 3,357 8.3 %

Healthcare Facilities 42 21,220 5.1 % 748 1.8 %

43 21,323 5.3 % 757 1.9 %

Auto Parts & Equipment 46 20,975 5.2 % 3,168 7.9 %

Specialty Stores 39 21,207 5.1 % 1,845 4.5 %

Distributors 27 18,049 4.5 % 2,757 6.9 %

Auto Parts & Equipment 38 19,003 4.6 % 2,971 7.3 %

Home Furnishing Retail 17 12,370 3.0 % 1,692 4.2 %

Healthcare Services 18 12,175 2.9 % 663 1.6 %

Specialized Consumer Services 45 11,698 2.8 % 712 1.8 %

3 unchanged sentences

Forest Products 8 9,852 2.4 % 2,284 5.6 %

Healthcare Services

17 9,739 2.4 % 507 1.3 %

Electronic Components 2 6,765 1.6 % 466 1.1 %

14 unchanged sentences

(’000s) SF as a

TX 66 $ 38,406 9.5 % 3,643 9.1 % MS 12 4,135 1.0 % 607 1.5 %

MI 52 36,504 9.1 % 4,016 10.0 % LA 5 3,833 0.9 % 211 0.5 %

FL 31 26,486 6.6 % 1,662 4.1 % SC 15 3,692 0.9 % 323 0.8 %

TX 66 $ 37,820 9.2 % 3,562 8.8 % SD 2 $4,524 1.1% 340 0.8%

MI 51 36,592 8.9 % 4,009 9.9 % MS 12 4,160 1.0% 607 1.5%

FL 29 26,212 6.3 % 1,643 4.0 % LA 5 3,833 0.9% 211 0.5%

IL 29 23,097 5.6 % 2,364 5.8 % NE 6 3,438 0.8% 492 1.2%

CA 16 22,426 5.5 % 2,330 5.8 % WA 14 3,349 0.8 % 148 0.4 %

CA 16 22,586 5.5 % 2,215 5.5 % SC 13 3,379 0.8% 304 0.7%

MN 21 20,164 4.9 % 3,051 7.5 % WA 14 3,349 0.8% 148 0.4%

WI 23 18,744 4.5 % 1,909 4.7 % IA 4 2,922 0.7% 622 1.5%

OH 49 16,891 4.1 % 1,584 3.9 % NM 9 2,795 0.7% 107 0.3%

MN 21 16,135 4.0 % 2,500 6.2 % UT 3 2,749 0.7 % 280 0.7 %

TN 48 15,243 3.8 % 1,084 2.7 % CO 4 2,589 0.6 % 126 0.3 %

IN 28 14,199 3.5 % 1,852 4.6 % MD 3 2,155 0.5 % 205 0.5 %

PA 23 12,986 3.2 % 2,169 5.4 % CT 2 1,938 0.5 % 55 0.1 %

AL 52 12,397 3.1 % 863 2.2 % MT 7 1,728 0.4 % 43 0.1 %

GA 35 12,129 3.0 % 1,576 3.9 % DE 4 1,162 0.3 % 133 0.3 %

NC 29 10,771 2.7 % 1,039 2.6 % ND 2 1,057 0.3 % 24 0.1 %

KY 23 9,254 2.3 % 927 2.3 % VT 2 439 0.1 % 24 0.1 %

MO 19 9,019 2.2 % 1,260 3.1 % WY 1 338 0.1 % 21 0.1 %

OK 25 9,019 2.2 % 1,006 2.5 % NV 1 277 0.1 % 6 0.0 %

WV 18 8,968 2.2 % 1,232 3.1 % OR 1 136 — % 9 0.0 %

AZ 7 8,915 2.2 % 747 1.9 % SD 1 81 — % 9 0.0 %

NY 28 7,319 1.8 % 562 1.4 % Total U.S.

TN 48 15,383 3.7 % 1,083 2.7 % UT 3 2,768 0.7% 280 0.7%

IN 27 14,343 3.5 % 1,687 4.1 % CO 4 2,612 0.6% 126 0.3%

PA 23 13,029 3.2 % 2,169 5.3 % MD 3 2,155 0.5% 205 0.5%

AL 53 12,981 3.1 % 949 2.3 % CT 2 1,938 0.5% 55 0.1%

GA 35 12,173 2.9 % 1,576 3.9 % MT 7 1,728 0.4% 43 0.1%

NC 26 9,963 2.4 % 961 2.4 % DE 4 1,175 0.3% 133 0.3%

KY 23 9,296 2.3 % 927 2.3 % ND 2 1,073 0.3% 24 0.1%

MO 19 9,076 2.2 % 1,260 3.1 % VT 2 439 0.1% 24 0.1%

WV 18 8,982 2.2 % 1,232 3.0 % WY 1 338 0.1% 21 0.1%

AZ 7 8,956 2.2 % 747 1.8 % NV 1 277 0.1% 6 0.0%

OK 25 8,704 2.1 % 1,006 2.5 % OR 1 136 0.0% 9 0.0%

AR 10 7,589 1.8 % 340 0.8 % Total U.S.

752 $404,890 98.0% 40,224 98.9%

AR 9 6,681 1.7 % 277 0.7 % BC 2 4,780 1.2 % 253 0.6 %

NY 28 7,410 1.8 % 562 1.4 % BC 2 $4,698 1.1% 253 0.6%

MA 3 6,332 1.5 % 444 1.1 % ON 3 2,049 0.6% 101 0.3%

KS 10 5,318 1.3 % 643 1.6 % AB 1 963 0.2% 50 0.1%

VA 15 5,067 1.3 % 178 0.4 % MB 1 350 0.1 % 25 0.1 %

NJ 3 4,918 1.2 % 366 0.9 % Total Canada 7 $ 8,195 2.0 % 430 1.1 %

NJ 3 5,137 1.2 % 366 0.9 % MB 1 344 0.1% 25 0.1%

VA 15 5,073 1.2 % 178 0.4 % Total Canada 7 $8,054 2.0% 429 1.1%

Grand Total 759 $412,944 100.0% 40,653 100.0%

The following chart sets forth our lease expirations based upon the terms of the leases in place as of June 30, 2025.

The following chart sets forth our lease expirations based upon the terms of the leases in place as of September 30, 2025.

The following table presents certain information based on lease expirations by year:

27 unchanged sentences

Substantially all of our leases provide for periodic contractual rent escalations.

As of June 30, 2025, leases contributing 97.5% of our ABR provided for increases in future ABR, generally ranging from 1.5% to 3.0% annually, with an ABR weighted average annual increase equal to 2.0% of base rent.

As of September 30, 2025, leases contributing 97.5% of our ABR provided for increases in future ABR, generally ranging from 1.5% to 3.0% annually, with an ABR weighted average annual increase equal to 2.0% of base rent.

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

Our escalations provide us with a source of organic revenue growth and a measure of inflation protection.

Additional information on lease escalation frequency and weighted average annual escalation rates as of June 30, 2025 is displayed below:

Additional information on lease escalation frequency and weighted average annual escalation rates as of September 30, 2025 is displayed below:

Lease Escalation Frequency % of ABR Weighted Average Annual Increase (a)

9 unchanged sentences

For leases where rent escalates by the greater of a stated fixed percentage or the change in CPI, we have assumed an escalation equal to the stated fixed percentage in the lease.

As of June 30, 2025, leases contributing 4.8% of our ABR provide for rent increases equal to the lesser of a stated fixed percentage or the change in CPI.

As of September 30, 2025, leases contributing 4.7% of our ABR provide for rent increases equal to the lesser of a stated fixed percentage or the change in CPI.

As any future increase in CPI is unknowable at this time, we have not included an increase in the rent pursuant to these leases in the weighted average annual increase presented.

(b) Generally associated with investment grade retail tenants.

The escalation provisions of our leases (by percentage of ABR) as of June 30, 2025, are displayed in the following chart:

The escalation provisions of our leases (by percentage of ABR) as of September 30, 2025, are displayed in the following chart:

Transitional Capital

1 unchanged sentence

Such investments are intended to be shorter in duration, offering an alternative source of financing.

The following table presents our transitional capital investments at June 30, 2025:

June 30, 2025

The following table presents our transitional capital investments at September 30, 2025:

September 30, 2025

Transitional Capital:

17 unchanged sentences

Remaining term (years) (f)

Industrial Park - Olyphant, PA

Type Preferred Equity

Investment (’000s) (e)

Stabilized cash capitalization rate (b)

Annualized initial cash NOI yield —%

Remaining term (years) (f)

(a) Agreement includes an additional $7.8 million commitment of preferred capital.

The remaining commitment at June 30, 2025 is $7.3 million..

The remaining commitment at September 30, 2025 is $7.2 million.

(b) Represents stated yield with unpaid amounts accruing with preferential payment.

6 unchanged sentences

The following discussion includes the results of our operations for the periods presented.

Three Months Ended June 30, 2025 Compared to Three Months Ended March 31, 2025

Three Months Ended September 30, 2025 Compared to Three Months Ended June 30, 2025

Lease revenues, net

(in thousands) For the Three Months Ended

2025 March 31,

September 30,

2025 June 30,

2025 Increase/(Decrease)

11 unchanged sentences

Total lease revenues, net $ 114,167 $ 112,986 $ 1,181 1.0 %

The increase in lease revenues, net, was primarily attributable to a $2.2 million write-off of accrued rental income that occurred for the three months ended March 31, 2025 but did not occur during the three months ended June 30, 2025.

Write-offs of accrued rental income are discrete charges in a quarter related to collection probabilities and fluctuate quarter to quarter.

Additionally, there was an increase in rents related to real property acquisitions during the three months ended June 30, 2025, partially offset by dispositions.

We closed on investments of $54.7 million of acquisitions at a weighted average cash capitalization rate of 7.1%, and completed dispositions of $13.1 million at a weighted average cash capitalization rate of 9.5% during the three months ended June 30, 2025.

The increase in lease revenues, net, was primarily attributable to increase in rents related to real property acquisitions and investments in revenue generating capital expenditures during the three months ended September 30, 2025, partially offset by dispositions.

We closed on $145.0 million of acquisitions and revenue generating capital expenditures at a weighted average cash capitalization rate of 7.1%, and completed dispositions of $38.7 million at a weighted average cash capitalization rate of 7.0% during the three months ended September 30, 2025.

Operating expenses

For the Three Months Ended

2025 March 31,

September 30,

2025 June 30,

2025 Increase/(Decrease)

7 unchanged sentences

Depreciation and amortization

The increase in depreciation and amortization for the three months ended June 30, 2025 was primarily due to growth in our real estate portfolio.

The decrease in depreciation and amortization for the three months ended September 30, 2025 was primarily due to $4.7 million of accelerated amortization of intangible lease assets resulting from an early lease termination during the three months ended June 30, 2025 that did not reoccur during the three months ended September 30, 2025.

Property and operating expense

The increase in property and operating expense during the three months ended September 30, 2025 is primarily related to an increase in reimbursable expenses that are billed to tenants.

Provision for impairment of investment in rental properties

1 unchanged sentence

For the Three Months Ended

(in thousands, except number of properties) June 30,

2025 March 31,

(in thousands, except number of properties) September 30,

2025 June 30,

Number of properties 7 8

2 unchanged sentences

Impairment charge $ 6,999 $ 11,939

During the three months ended June 30, 2025, we recognized $11.9 million of impairment primarily from changes in our long-term hold strategy with respect to the individual properties.

During the three months ended September 30, 2025, we recognized $7.0 million of impairment primarily from changes in our long-term hold strategy with respect to the individual properties.

Such impairments were based on actual and expected sales prices of the individual properties.

2 unchanged sentences

(in thousands) For the Three Months Ended Increase/(Decrease)

2025 March 31,

September 30,

2025 June 30,

Other income (expenses)

3 unchanged sentences

Income taxes (208) (199) $ 9 4.5 %

Other (expenses) income (3,445) (487) $ 2,958 > 100.0 %

Other income (expenses) 1,312 (3,445) $ (4,757) > 100.0 %

Interest expense

The increase in interest expense for the three months ended June 30, 2025 is primarily due to an increase in total borrowings on our variable-rate Revolving Credit Facility and an additional $100.0 million draw on the 2028 Unsecured Term Loan, all of which were used to fund acquisitions and developments.

The increase in interest expense for the three months ended September 30, 2025 is primarily due to the termination of interest rate swap agreements with an aggregate termination value of $6.7 million, resulting in $6.1 million of accumulated losses held in Other comprehensive income (loss) to be reclassified to interest expense.

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 three months ended September 30, 2025, we recognized a gain of $3.3 million on the sale of 12 properties, compared to a gain of $0.6 million on the sale of eight properties during the three months ended June 30, 2025.

Other (expenses) income

The increase in other (expenses) income during the three months ended June 30, 2025 was primarily due to a $3.4 million unrealized foreign exchange loss recognized on the quarterly remeasurement of our $100 million Canadian Dollars (“CAD”) Revolving Credit Facility borrowings, compared to a $0.3 million unrealized foreign exchange gain recognized during the three months ended March 31, 2025.

The increase in other (expenses) income during the three months ended September 30, 2025 was primarily due to a $1.3 million unrealized foreign exchange gain recognized on the quarterly remeasurement of our $100 million Canadian Dollars (“CAD”) Revolving Credit Facility borrowings, compared to a $3.4 million unrealized foreign exchange loss recognized during the three months ended June 30, 2025.

Net income and Net earnings per diluted share

For the Three Months Ended Increase/(Decrease)

2025 March 31,

September 30,

2025 June 30,

(in thousands, except per share data) $ %

1 unchanged sentence

Net earnings per diluted share 0.14 0.10 0.04 40.0 %

The increase in net income is primarily attributable to a $4.3 million increase in lease revenues, net and a $4.2 million decrease in the provision for impairment of investment in rental properties.

This was partially offset by a $3.1 million increase in unrealized foreign exchange loss, a $3.1 million increase in depreciation and amortization, and a $1.0 million increase in interest expense.

The increase in net income is primarily attributable to a $4.9 million decrease in the provision for impairment of investment in rental properties, a $4.8 million decrease in unrealized foreign exchange loss, a $2.3 million decrease in depreciation and amortization expense, and a $2.7 million gain on sale of real estate.

This was partially offset by a $7.1 million increase in interest expense primarily related to termination of interest rate swap agreements.

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

Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024

Nine Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2024

Lease revenues, net

For the Six Months Ended Increase/(Decrease)

For the Nine Months Ended Increase/(Decrease)

September 30,

(in thousands) 2025 2024 $ %

12 unchanged sentences

The increase in lease revenues, net was primarily attributable to growth in our real estate portfolio.

During the first two quarters of 2025, we had a total of $113.7 million of acquisitions at a cash capitalization rate of 7.1%, $2.8 million of revenue generating capital expenditures at a weighted average cash capitalization rate of 8.0%, as well as had a $201.0 million build-to-suit development reach stabilization at a cash capitalization rate of 7.2%.

During the first three quarters of 2025, we had a total of $253.2 million of acquisitions at a cash capitalization rate of 7.1%, $8.3 million of revenue generating capital expenditures at a weighted average cash capitalization rate of 8.3%, as well as had a $201.0 million build-to-suit development reach stabilization at a cash capitalization rate of 7.2%.

This stabilized investment activity is partially offset by 2025 disposition activity of $59.2 million at a weighted average cash capitalization rate of 7.7%.

1 unchanged sentence

Operating expenses

For the Six Months Ended Increase/(Decrease)

For the Nine Months Ended Increase/(Decrease)

September 30,

(in thousands) 2025 2024 $ %

6 unchanged sentences

Depreciation and amortization

The increase in depreciation and amortization for the six months ended June 30, 2025 was primarily due to timing and amount of net investment activity during 2024 and during the first two quarters of 2025 compared to the first two quarters of 2024.

The increase in depreciation and amortization for the nine months ended September 30, 2025 was primarily due to timing and amount of net investment activity during 2024 and during the first three quarters of 2025 compared to the first three quarters of 2024.

Provision for impairment of investment in rental properties

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

For the Six Months Ended

For the Nine Months Ended

September 30,

(in thousands, except number of properties) 2025 2024

3 unchanged sentences

Impairment charge $ 35,067 $ 31,311

During the six months ended June 30, 2025, we recognized $28.1 million of impairment primarily from changes in our long-term hold strategy with respect to the individual properties.

During the nine months ended September 30, 2025, we recognized $35.1 million of impairment primarily from changes in our long-term hold strategy with respect to the individual properties.

Such impairments were based on actual and expected sales prices of the individual properties and primarily included a $14.6 million impairment charge on two healthcare properties.

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

Property and operating expense

The decrease in property and operating expenses for the nine months ended September 30, 2025 was primarily due to a decrease in non-reimbursable expenses related to two properties that were re-leased and sold at the beginning of 2025, and end of 2024, respectively.

General and administrative

The increase in general and administrative expenses for the nine months ended September 30, 2025 was primarily due to an increase in stock based compensation expense of $1.7 million, partially offset by a decrease in corporate expenses compared to the nine months ended September 30, 2024.

Other income (expenses)

For the Six Months Ended

June 30, Increase/(Decrease)

For the Nine Months Ended

September 30, Increase/(Decrease)

(in thousands) 2025 2024 $ %

4 unchanged sentences

Income taxes (763) (649) $ 114 17.6 %

Other (expenses) income (3,932) 2,443 $ 6,375 > 100.0 %

Other income (expenses) (2,620) 1,502 $ (4,122) > 100.0 %

Interest expense

The increase in interest expense is primarily a result of a $1.5 million decrease in capitalized interest related to our build-to-suit development projects due to a $48.4 million net decrease in property under development as of June 30, 2025 when compared to June 30, 2024.

Property under development is expected to increase over the period of construction for each build-to-suit development.

Additionally, interest expense has partially increased due to an increase in total borrowings on our variable-rate Revolving Credit Facility and additional $100.0 million draw on the 2028 Unsecured Term Loan to fund acquisitions in the first two quarters of 2025.

The increase in interest expense for the nine months ended September 30, 2025 is primarily due to the termination of interest rate swap agreements with an aggregate termination value of $6.7 million, which resulted in $6.1 million of accumulated losses held in Other comprehensive income (loss) to Interest expense.

Additionally, interest expense has partially increased due to an increase in total borrowings on our variable-rate Revolving Credit Facility and additional $100.0 million of term debt outstanding, the proceeds of which were used to fund acquisitions in the first three quarters of 2025.

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 six months ended June 30, 2025, we recognized a gain of $1.0 million on the sale of 11 properties, compared to a gain of $62.5 million on the sale of 40 properties during the six months ended June 30, 2024.

During the nine months ended September 30, 2025, we recognized a gain of $4.2 million on the sale of 23 properties, compared to a gain of $65.0 million on the sale of 46 properties during the nine months ended September 30, 2024.

Other (expenses) income

The increase in other (expenses) income during the six months ended June 30, 2025 was primarily due to a $3.7 million foreign exchange loss recognized on the quarterly remeasurement of our $100 million Canadian Dollars (“CAD”) Revolving Credit Facility borrowings, compared to a $2.4 million unrealized foreign exchange gain recognized during the six months ended June 30, 2024.

The increase in other (expenses) income during the nine months ended September 30, 2025 was primarily due to a $2.4 million foreign exchange loss recognized on the quarterly remeasurement of our $100 million Canadian Dollars (“CAD”)

Revolving Credit Facility borrowings, compared to a $1.5 million unrealized foreign exchange gain recognized during the nine months ended September 30, 2024.

Net income and Net earnings per diluted share

For the Six Months Ended Increase/(Decrease)

For the Nine Months Ended Increase/(Decrease)

September 30,

(in thousands, except per share data) 2025 2024 $ %

1 unchanged sentence

Net earnings per diluted share 0.33 0.72 (0.39) (54.2) %

The decrease in net income is primarily due to a decrease in the gain on sale of real estate of $61.5 million, an increase in depreciation and amortization of $6.9 million, and an increase in interest expense of $4.9 million.

These are offset by an increase in net lease revenues of $10.4 million and a decrease in the provision for impairment of investment in rental properties of $2.2 million.

The decrease in net income is primarily due to a decrease in the gain on sale of real estate of $60.7 million, an increase in interest expense of $14.9 million, and an increase in depreciation and amortization of $9.1 million.

These are offset by an increase in net lease revenues of $16.2 million.

5 unchanged sentences

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

As of June 30, 2025, we had total debt outstanding of $2.1 billion, Net Debt of $2.1 billion, Pro Forma Net Debt of $2.1 billion, a Net Debt to Annualized Adjusted EBITDAre ratio of 5.3x, and a Pro Forma Net Debt to Annualized Adjusted EBITDAre ratio of 5.2x.

As of September 30, 2025, we had total debt outstanding of $2.4 billion, Net Debt of $2.3 billion, Pro Forma Net Debt of $2.2 billion, a Net Debt to Annualized Adjusted EBITDAre ratio of 5.7x, and a Pro Forma Net Debt to Annualized Adjusted EBITDAre ratio of 5.4x.

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.

6 unchanged sentences

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 build-to-suit developments, tenant improvements, revenue generating capital expenditures, and transitional capital investments.

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, 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.

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

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

As of June 30, 2025, we have $802.1 million of available capacity under our Revolving Credit Facility.

We expect to pay for commitments to fund investments and our dividends declared using our available cash on hand and borrowings from our Revolving Credit Facility.

As of September 30, 2025, we have $904.2 million of available capacity under our Revolving Credit Facility.

Long-term Liquidity Requirements

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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 June 30, 2025, is approximately $37.7 million.

We have not settled any part of these forward sales agreements as of June 30, 2025.

After considering the shares sold subject to forward sale agreements, we have $360.0 million of capacity remaining under the ATM Program as of June 30, 2025.

We expect to settle the outstanding shares of these forward sale agreements in the fourth quarter of 2025.

Our estimated net proceeds of these forward sale agreements, assuming physical settlement for cash as of September 30, 2025, is approximately $37.3 million.

We have not settled any part of these forward sales agreements as of September 30, 2025.

After considering the shares sold, we have $360.0 million of capacity remaining under the ATM Program as of September 30, 2025.

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

Unsecured Indebtedness as of June 30, 2025

The following table sets forth our outstanding Revolving Credit Facility, unsecured term loans and senior unsecured notes at June 30, 2025:

Unsecured Indebtedness as of September 30, 2025

The following table sets forth our outstanding Revolving Credit Facility, unsecured term loans and senior unsecured notes at September 30, 2025:

(in thousands, except interest rates) Outstanding

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2031 Senior Unsecured Public Notes 375,000 2.60% Sep.

2032 Senior Unsecured Public Notes

350,000 5.00% Nov.

Total senior unsecured notes 1,200,000

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Total unsecured debt $ 2,280,689

(a) At June 30, 2025, a balance of $124.8 million was subject to daily simple SOFR.

The remaining balance of $100.0 million Canadian Dollars (“CAD”) borrowings remeasured to $73.1 million United States Dollars (“USD”), and was subject to daily simple CORRA of 2.75% at June 30, 2025.

(b) At June 30, 2025, overnight SOFR was 4.45%.

(a) At September 30, 2025, a balance of $24.0 million was subject to daily simple SOFR.

The remaining balance of $100.0 million Canadian Dollars (“CAD”) borrowings remeasured to $71.8 million United States Dollars (“USD”), and was subject to daily simple CORRA of 2.56% at September 30, 2025.

(b) At September 30, 2025, overnight SOFR was 4.24%.

(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.

(e) Our 2028 unsecured term loan contains two twelve-month extension options subject to certain conditions, including the payment of an extension fee equal to 0.125% of the aggregate principal amount of the loans outstanding under the 2028 term loan facility.

On September 26, 2025, we completed a public offering of $350.0 million 5.00% senior unsecured notes due in 2032 (the "2032 Senior Unsecured Public Notes"), issued at 99.151% of the principal amount.

The 2032 Senior Unsecured Public Notes require semi-annual interest payments through the maturity date of November 1, 2025, unless earlier redeemed.

The 2032 Senior Unsecured Public Notes can be redeemed at par within two months of their respective maturities, or the Company can call the notes at any time for the principal, accrued interest, and a make-whole amount based upon the applicable government bond yield plus 20 basis points.

The proceeds were used to repay borrowings on the unsecured revolving credit facility, to fund investments in real estate, and for general corporate purposes.

On February 28, 2025, we amended and restated the Revolving Credit Facility, extending the maturity date to March 31, 2029, and increasing the accordion feature that increases the aggregate facility size from $1.5 billion to $2.5 billion.

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Borrowings under the 2028 Unsecured Term Loan are subject to interest only payments at variable rates equal to RFR plus a margin based on our credit rating, ranging between 0.800% and 1.600% per annum.

Based on our current credit rating, the applicable margin was 0.950% as of June 30, 2025.

Based on our current credit rating, the applicable margin was 0.950% as of September 30, 2025.

Debt Covenants

We are subject to various covenants and financial reporting requirements pursuant to our debt facilities, which are summarized below.

As of June 30, 2025, we believe we were in compliance with all of our covenants on all outstanding borrowings.

As of September 30, 2025, we believe we were in compliance with all of our covenants on all outstanding borrowings.

In the event of default, either through default on payments or breach of covenants, we may be restricted from paying dividends to our stockholders in excess of dividends required to maintain our REIT qualification.

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Contractual Obligations

The following table provides information with respect to our contractual commitments and obligations as of June 30, 2025 (in thousands).

The following table provides information with respect to our contractual commitments and obligations as of September 30, 2025 (in thousands).

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

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(b) Our 2028 Unsecured Term Loan contains two twelve-month extension options subject to certain conditions, including the payment of an extension fee equal to 0.125% of the aggregate principal amount of the loans outstanding under the 2028 term loan facility.

(c) Interest expense is projected based on the outstanding borrowings and interest rates in effect as of September 30, 2025.

This amount includes the impact of interest rate swap agreements.

(d) Amounts include dividends declared as of June 30, 2025 of $0.29 per common share and OP Unit.

(d) Amounts include dividends declared as of September 30, 2025 of $0.29 per common share and OP Unit.

Future undeclared dividends have been excluded.

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In the event our tenant fails to pay the ground lease rent, we are primarily responsible.

At June 30, 2025 investment in rental property with a net book value of $116.4 million was pledged as collateral against our mortgages.

At September 30, 2025 investment in rental property with a net book value of $81.4 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.

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

As of June 30, 2025, we had 32 effective and five forward-starting interest rate swaps with an aggregate notional amount of $1.4 billion.

As of September 30, 2025, we had 26 effective and two forward-starting interest rate swaps with an aggregate notional amount of $966.8 million.

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.

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The intended net impact of these transactions is that we pay a fixed interest rate on our variable-rate borrowings.

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

The forward-starting swap arrangements are effective during December 2025 and mature in 2030.

The interest rate swaps have been designated by us as cash flow hedges for accounting purposes and are reported at fair value.

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Our Canadian investments are recorded at their historical exchange rates, and therefore are not impacted by changes in the value of the Canadian dollar.

Cash and cash equivalents and restricted cash totaled $22.0 million and $19.9 million at June 30, 2025 and June 30, 2024, respectively.

The table below shows information concerning cash flows for the six months ended June 30, 2025 and 2024:

For the Six Months Ended

Cash and cash equivalents and restricted cash totaled $83.3 million and $11.2 million at September 30, 2025 and September 30, 2024, respectively.

The table below shows information concerning cash flows for the nine months ended September 30, 2025 and 2024:

For the Nine Months Ended

September 30,

(In thousands) 2025 2024

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The increase in net cash provided by operating activities was primarily due to increased contractual rents related to rent escalations and growth in our real estate portfolio.

The decrease in cash provided by investing activities was primarily due to a decrease in disposition volume, partially offset by a decrease in investment activity during the six months ended June 30, 2025 compared to the six months ended June 30, 2024.

The increase in net cash provided by financing activities during the six months ended June 30, 2025 as compared to the six months ended June 30, 2024, mainly reflects an increase in net borrowings on the Revolving Credit Facility as well as an increase in net proceeds from unsecured term loans.

The increase in cash used in investing activities was primarily due to a decrease in disposition volume and proceeds and an increase in build-to-suit development investment, partially offset by a decrease in acquisition investment activity during the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024.

The increase in net cash provided by financing activities during the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024, mainly reflects an increase in net proceeds from unsecured term loans and senior unsecured notes.

Non-GAAP Measures

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The following table reconciles net income (which is the most comparable GAAP measure) to FFO, Core FFO, and AFFO:

For the Three Months Ended For the Six Months Ended

(in thousands, except per share data) June 30,

2025 March 31,

2025 June 30,

For the Three Months Ended For the Nine Months Ended

(in thousands, except per share data) September 30,

2025 June 30,

2025 September 30,

Net income $ 27,065 $ 19,830 $ 64,388 $ 141,382

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AFFO $ 74,314 $ 74,308 $ 220,434 $ 211,460

(a) Amount includes $3.4 million and $0.3 million of unrealized foreign exchange loss for the three months ended June 30, 2025 and March 31, 2025, respectively, and $(3.8) million and $2.4 million of unrealized foreign exchange (loss) gain for the six months ended June 30, 2025 and June 30, 2024, respectively, primarily associated with our Canadian dollar denominated revolving borrowings.

(a) Amount includes $1.3 million and $(3.4) million of unrealized foreign exchange gain (loss) for the three months ended September 30, 2025 and June 30, 2025, respectively, and $(2.4) million and $1.5 million of unrealized foreign exchange (loss) gain for the nine months ended September 30, 2025 and September 30, 2024, respectively, primarily associated with our Canadian dollar denominated revolving borrowings.

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

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For the Three Months Ended

(in thousands) June 30,

2025 March 31,

(in thousands) September 30,

2025 June 30,

2025 September 30,

Net income $ 27,065 $ 19,830 $ 37,268

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Adjustment to exclude non-recurring and other expenses (c)

(177) (332) (201)

Adjustment to exclude net write-offs of accrued rental income 755 3 —

Adjustment to exclude realized / unrealized foreign exchange (gain) loss (1,312) 3,445 942

Adjustment to exclude cost of debt extinguishment — 166 —

Adjustment to exclude other income from real estate transactions

(43) (46) (887)

Adjusted EBITDAre $ 100,252 $ 98,242 $ 96,239

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(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) Amount includes less than $0.4 million of accelerated lease intangible amortization for the three months ended June 30, 2025.

Amount includes less than $0.1 million of accelerated lease intangible amortization for the three months ended March 31, 2025.

Amount includes $0.02 million of employee severance and executive transition costs for the three months ended June 30, 2024.

(c) Amount includes less than $0.2 million of accelerated lease intangible amortization for the three months ended September 30, 2025.

Amount includes less than $0.4 million of accelerated lease intangible amortization for the three months ended June 30, 2025.

Amount includes $0.2 million of forfeited stock-based compensation expense for the three months ended September 30, 2024.

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

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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:

(in thousands) June 30,

2025 March 31,

(in thousands) September 30,

2025 June 30,

2025 September 30,

Revolving Credit Facility

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A summary of our significant accounting policies and procedures are included in Note 2, “Summary of Significant Accounting Policies,” in the Notes to the Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q.

We believe there have been no significant changes during the three months ended June 30, 2025 to the items that we disclosed as our critical accounting policies and estimates in our 2024 Annual Report on Form 10-K.

We believe there have been no significant changes during the three months ended September 30, 2025 to the items that we disclosed as our critical accounting policies and estimates in our 2024 Annual Report on Form 10-K.

Impact of Recent Accounting Pronouncements

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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-Q

Item 2. Management’s Discussion and Analysis