Broadstone Net Lease, Inc. 10-Q

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations Except where the context suggests otherwise, as used in this Quarterly Report on Form 10-Q, the terms “BNL,” “we,”“us,”“our,” and “our Company” refer to Broadstone Net Lease, Inc., a Maryland corporation incorporated on October 18, 2007, and, as required by context, Broadstone Net Lease, LLC, a New York limited liability company, which we refer to as the or our “OP,” and to their respective subsidiaries. The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help the reader understand our results of operations and financial condition. This MD&A is provided as a supplement to, and should be read in conjunction with, our Condensed Consolidated Financial Statements and the accompanying Notes to the Condensed Consolidated Financial Statements appearing elsewhere in this Quarterly Report on Form 10-Q. Cautionary Note Regarding Forward-Looking Statements This Quarterly Report on Form 10-Q contains forward-looking statements, which reflect our current views regarding our business, financial performance, growth prospects and strategies, market opportunities, and market trends, that are intended to be made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements include all statements that are not historical facts. In some cases, you can identify these forward-looking statements by the use of words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “could,” “seeks,” “approximately,” “projects,” “predicts,” “intends,” “plans,” “estimates,” “anticipates,” or the negative version of these words or other comparable words. All of the forward-looking statements included in this Quarterly Report on Form 10-Q are subject to various risks and uncertainties. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions, and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond our control. Although we believe that the expectations reflected in such forward-looking statements are based on reasonable assumptions, our actual results, performance, and achievements could differ materially from those expressed in or by the forward-looking statements and may be affected by a variety of risks and other factors. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from such forward-looking statements. Important factors that could cause results to differ materially from the forward-looking statements are described in Item 1. “Business,” Item 1A. “Risk Factors,” and Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2024 Annual Report on Form 10-K, as filed with the SEC on February 20, 2025, and the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2025, which was filed with the SEC on May 1, 2025. The “Risk Factors” of our 2024 Annual Report should not be construed as exhaustive and should be read in conjunction with other cautionary statements included elsewhere in this Quarterly Report on Form 10-Q. You are cautioned not to place undue reliance on any forward-looking statements included in this Quarterly Report on Form 10-Q. All forward-looking statements are made as of the date of this Quarterly Report on Form 10-Q and the risk that actual results, performance, and achievements will differ materially from the expectations expressed in or referenced by this Quarterly Report on Form 10-Q will increase with the passage of time. We undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments, or otherwise, except as required by law. Regulation FD Disclosures We use any of the following to comply with our disclosure obligations under Regulation FD: U.S. Securities and Exchange Commission (“SEC”) filings, press releases, public conference calls, or our website. We routinely post important information on our website at www.broadstone.com, including information that may be deemed material. We encourage our shareholders and others interested in our company to monitor these distribution channels for material disclosures. Our website address is included in this Quarterly Report as a textual reference only and the information on the website is not incorporated by reference in this Quarterly Report. 28 Explanatory Note and Certain Defined Terms Unless the context otherwise requires, the following terms and phrases are used throughout this MD&A as described below: • “annualized base rent” or “ABR” means the annualized contractual cash rent due for the last month of the reporting period, excluding the impacts of short-term rent deferrals, abatements, or free rent, and adjusted to remove rent from properties sold during the month and to include a full month of contractual cash rent for investments made during the month; • “investments” or amounts “invested” include real estate investments in new property acquisitions, revenue generating capital expenditures, whereby we agree to fund certain expenditures in exchange for increased rents that often include rent escalations and terms consistent with that of the underlying lease, build-to-suit developments, and transitional capital, which represent shorter term investments and currently includes preferred equity investments, and exclude capitalized costs; • “cash capitalization rate” represents either (1) for acquisitions and new build-to-suit developments, our pro-rata share of the estimated first year cash yield to be generated on a real estate investment, which was estimated at the time of investment based on the contractually specified cash base rent for the first full year after the date of the investment, divided by the purchase price for the property excluding capitalized acquisition costs, or (2) for dispositions, the property’s ABR in effect immediately prior to the disposition, divided by the disposition price, or (3) for transitional capital, the contractual cash yield to be generated on total invested capital; • “CPI” means the Consumer Price Index for All Urban Consumers (CPI-U): U.S. City Average, All Items, as published by the U.S. Bureau of Labor Statistics, or other similar index which is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services; • “occupancy” or a specified percentage of our portfolio that is “occupied” or “leased” means as of a specified date the quotient of (1) the total rentable square footage of our properties minus the square footage of our properties that are vacant and from which we are not receiving any rental payment, and (2) the total square footage of our properties; • “Revolving Credit Facility” means our $1.0 billion unsecured revolving credit facility, dated February 28, 2025, with J.P. Morgan Chase Bank, N.A., as administrative agent, and the other lenders party thereto; and • “straight-line yield” represents our pro-rata share of the estimated first year yield to be generated on a real estate investment, which was computed at the time of investment based on the straight-line annual rental income computed in accordance with GAAP, divided by the purchase price. Overview 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 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. 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 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. 29 - 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 . 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: We are primarily diversified across industrial and retail property types. Within these sectors, we have meaningful concentrations in distribution and warehouse, manufacturing, food processing, general merchandise, quick service restaurants, and casual dining. • Geographic Diversification: Our properties are located in 44 U.S. states and four Canadian provinces, with no single geographic concentration exceeding 9.2% of our ABR. • Tenant and Industry Diversification: Our properties are occupied by 204 different commercial tenants who operate 195 distinct brands that are diversified across 56 varying industries, with no single tenant accounting for more than 3.9% of our ABR. - Strong In-Place Leases with Significant Remaining Lease Term . 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 . Approximately 97.5% of our leases have contractual rent escalations, with an ABR weighted average increase of 2.0%. - Extensive Tenant Financial Reporting . Approximately 96.6% of our tenants, based on ABR, provide financial reporting, of which 82.0% are required to provide us with specified financial information on a periodic basis, and an additional 14.6% of our tenants report financial statements publicly, either through SEC filings or otherwise. Current Macroeconomic Conditions and Strategic Priorities Throughout 2023 and 2024, challenging macroeconomic conditions directly impacted the broader commercial real estate market and, in particular, the net lease real estate market. During that period, interest rates rose steadily, 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. 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. These challenging macroeconomic 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 years prior to this environment, resulting in lower earnings growth rates compared to historical periods. 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 embedded same store net operating income growth, revenue generating capital expenditures with existing tenants, build-to-suit developments, and a diversified acquisition pipeline. 30 Diversified Investment Activity 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: Acquisition price $ 139,462 $ 54,722 $ 59,004 $ 253,188 Initial cash capitalization rate 7.1 % 7.1 % 7.2 % 7.1 % Straight-line yield 8.1 % 8.2 % 8.3 % 8.2 % Weighted average lease term (years) 12.0 10.7 13.6 12.1 Weighted average annual rent increase 2.4 % 3.0 % 2.6 % 2.6 % Build-to-suit developments: Investments $ 40,999 $ 63,295 $ 26,494 $ 130,788 Revenue generating capital expenditures: Investments $ 5,507 $ — $ 2,835 $ 8,342 Initial cash capitalization rate 8.5 % — % 8.0 % 8.3 % Weighted average lease term (years) 16.7 — 17.7 17.0 Weighted average annual rent increase 2.0 % — % 1.7 % 1.9 % Transitional Capital: Investments $ 17,920 $ 22,781 $ — $ 40,701 Cash capitalization rate 7.8 % 7.8 % — % 7.8 % Total investments $ 203,894 $ 140,798 $ 88,333 $ 433,025 Total initial cash capitalization rate (a) 7.1 % 7.1 % 7.2 % 7.1 % Total weighted average lease term (years) (a) 12.2 10.7 13.8 12.3 Total weighted average annual rent increase (a) 2.4 % 3.0 % 2.5 % 2.5 % (a) Transitional capital, which represents a contractual yield on invested capital, and build-to-suit developments, which do not generate revenue during construction, are excluded from the calculations of total cash capitalization, weighted average lease terms, and weighted average rent increases. 31 Build-to-Suit Development Projects 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) Target Stabilization Date/Stabilized Date (c) Lease Term (Years) Annual Rent Escalations Estimated Total Project Investment (d) Cumulative Investment Estimated Remaining Investment Estimated Cash Capitalization Rate (e) Estimated Straight-line Yield In-process retail: 7 Brew (Jacksonville - FL) 1 Jun. 2025 Oct. 2025 15.0 1.9 % $ 2,008 $ 1,411 $ 597 8.0 % 8.8 % Sprouts (Bedford, TX) 22 Jul. 2025 Aug. 2026 15.0 0.9 % $ 9,533 $ — $ 9,533 7.2 % 7.7 % In-process industrial: Sierra Nevada (Dayton - OH) 122 Oct. 2024 Nov. 2025 15.0 3.0 % 58,563 44,584 13,979 7.5 % 9.3 % Sierra Nevada (Dayton - OH) 122 Oct. 2024 Mar. 2026 15.0 3.0 % 55,525 27,652 27,873 7.7 % 9.6 % Southwire (Bremen - GA) 1,178 Dec. 2024 Oct. 2026 10.0 2.8 % 115,411 22,200 93,211 7.8 % 8.8 % Fiat Chrysler Automobile (Forsyth - GA) 422 Apr. 2025 Aug. 2026 15.0 2.8 % 78,242 19,635 58,607 6.9 % 8.4 % AGCO (Vasaila - CA) 115 Jun. 2025 Aug. 2026 12.0 3.5 % 19,523 14,314 5,209 7.0 % 8.5 % Palmer Logistics (Midlothian, TX) (f) 270 Jul. 2025 Jul. 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 % Stabilized industrial: UNFI (Sarasota - FL) 1,016 May 2023 Stabilized - Sep. 2024 15.0 2.5 % 200,958 200,958 — 7.2 % 8.6 % Stabilized retail: 7 Brew (High Point - NC) 1 Dec. 2024 Stabilized - Jun. 2025 15.0 1.9 % 1,975 1,975 — 8.0 % 8.8 % 7 Brew (Charleston - SC) 1 Feb. 2025 Stabilized - May 2025 15.0 1.9 % 1,729 1,729 — 7.9 % 8.8 % Total / weighted average 3,270 13.7 2.7 % $ 575,530 $ 339,718 $ 235,812 7.4 % 8.8 % (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 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. (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. 32 Our Real Estate Investment Portfolio 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 $412.9 million as of September 30, 2025. Diversification by Property Type Property Type # of Properties ABR (’000s) ABR as a % of Total Portfolio Square Feet (’000s) SF as a % of Total Portfolio Industrial Distribution & Warehouse 53 $ 85,810 20.8 % 12,057 29.7 % Manufacturing 79 71,030 17.2 % 12,270 30.2 % Food Processing 34 50,722 12.3 % 5,736 14.1 % Flex and R&D 10 22,059 5.3 % 1,589 3.9 % Industrial Services 21 13,000 3.1 % 528 1.3 % Cold Storage 3 10,266 2.5 % 723 1.8 % In-process Developments 6 — — — — % Untenanted 1 — — 178 0.4 % Industrial Total 207 252,887 61.2 % 33,081 81.4 % Retail General Merchandise 145 32,572 7.8 % 2,452 6.0 % Quick Service Restaurants 153 27,498 6.7 % 515 1.3 % Casual Dining 95 26,731 6.5 % 637 1.6 % Automotive 64 11,571 2.8 % 760 1.9 % Animal Services 27 11,492 2.8 % 421 1.0 % Home Furnishings 13 7,476 1.8 % 797 2.0 % Healthcare Services 18 6,071 1.5 % 220 0.5 % Education 4 2,952 0.7 % 118 0.3 % In-process Developments 2 — — — — Untenanted 2 — — % 14 — % Retail Total 523 126,363 30.6 % 5,934 14.6 % Other Office 14 23,967 5.8 % 1,311 3.2 % Clinical & Surgical 15 9,727 2.4 % 327 0.8 % Other Total 29 33,694 8.2 % 1,638 4.0 % Total 759 $ 412,944 100.0 % 40,653 100.0 % 33 Diversification by Tenant Tenant Property Type # of Properties ABR (’000s) ABR as a % of Total Portfolio Square Feet (’000s) SF as a % of Total Portfolio Roskam Baking Company, LLC* Food Processing 7 $ 16,236 3.9 % 2,250 5.5 % United Natural Foods, Inc. Distribution & Warehouse 1 14,386 3.5 % 1,016 2.6 % AHF, LLC* Distribution & Warehouse/Manufacturing 8 9,852 2.4 % 2,284 5.6 % Joseph T. Ryerson & Son, Inc Distribution & Warehouse 11 8,116 2.0 % 1,599 4.0 % Jack’s Family Restaurants LP* Quick Service Restaurants 43 7,605 1.8 % 147 0.4 % Dollar General Corporation General Merchandise 64 6,606 1.6 % 609 1.5 % Tractor Supply Company General Merchandise 23 6,525 1.6 % 462 1.1 % J. 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 % Nestle’ Dreyer's Ice Cream Company Cold Storage 2 6,259 1.5 % 503 1.2 % Total Top 10 Tenants 177 88,162 21.3 % 9,428 23.2 % Hensley & Company* Distribution & Warehouse 3 6,231 1.5 % 577 1.4 % BluePearl Holdings, LLC** Animal Services 13 5,905 1.4 % 159 0.4 % Axcelis Technologies, Inc. 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 1.3 % 140 0.3 % Krispy Kreme Doughnut Corporation Quick Service Restaurants/ Food Processing 27 5,538 1.3 % 156 0.4 % Big Tex Trailer Manufacturing Inc.* Automotive/Distribution & Warehouse/Manufacturing/Office 17 5,259 1.3 % 1,302 3.2 % Jelly Belly Candy Company Distribution & Warehouse/Food Processing/General Merchandise 5 4,790 1.2 % 575 1.4 % 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 % (a) Tenant’s properties include 20 Outback Steakhouse restaurants and two Carrabba’s Italian Grill restaurants. * Subject to a master lease. ** Includes properties leased by multiple tenants, some, not all, of which are subject to master leases. 34 Diversification by Industry Tenant Industry # of Properties ABR (’000s) ABR as a % of Total Portfolio Square Feet (’000s) SF as a % of Total Portfolio Restaurants 252 $ 55,071 13.3 % 1,195 2.9 % Packaged Foods & Meats 36 51,452 12.5 % 5,873 14.4 % 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 % Specialty Stores 39 21,207 5.1 % 1,845 4.5 % 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 % Metal & Glass Containers 8 10,933 2.6 % 2,206 5.4 % General Merchandise Stores 100 10,437 2.5 % 928 2.3 % Industrial Machinery 19 9,932 2.4 % 1,901 4.7 % Forest Products 8 9,852 2.4 % 2,284 5.6 % Electronic Components 2 6,765 1.6 % 466 1.1 % Other (41 industries) 97 110,844 27.1 % 11,086 27.4 % Untenanted properties 3 — — 192 0.5 % Total 759 $ 412,944 100.0 % 40,653 100.0 % 35 Diversification by Geographic Location State / Province # of Properties ABR (’000s) ABR as a % of Total Portfolio Square Feet (’000s) SF as a % of Total Portfolio State / Province # of Properties ABR (’000s) ABR as a % of Total Portfolio Square Feet (’000s) SF as a % of Total Portfolio 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 22,586 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% 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% 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% 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% 36 Our Leases 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: Expiration Year # of Properties # of Leases ABR ('000s) ABR as a % of Total Portfolio Square Feet ('000s) SF as a % of Total Portfolio 2025 1 1 $ 1,737 0.4 % 99 0.2 % 2026 23 24 12,207 3.0 % 913 2.2 % 2027 28 30 26,256 6.4 % 2,257 5.6 % 2028 28 28 20,043 4.9 % 1,793 4.4 % 2029 60 35 18,473 4.5 % 2,587 6.4 % 2030 99 62 51,403 12.4 % 4,806 11.8 % 2031 32 27 8,496 2.1 % 854 2.1 % 2032 61 46 32,877 8.0 % 3,481 8.6 % 2033 50 24 19,778 4.8 % 1,495 3.7 % 2034 38 27 14,654 3.5 % 1,245 3.1 % 2035 23 18 18,103 4.4 % 2,314 5.7 % 2036 88 23 31,554 7.6 % 3,158 7.8 % 2037 22 12 29,233 7.1 % 2,777 6.8 % 2038 35 34 12,819 3.1 % 1,212 3.0 % 2039 15 11 22,741 5.5 % 1,805 4.4 % 2040 32 10 8,778 2.1 % 359 0.9 % 2041 39 8 17,018 4.1 % 1,367 3.4 % 2042 58 13 45,099 10.9 % 4,803 11.8 % 2043 3 2 8,050 1.9 % 517 1.3 % 2044 3 3 1,660 0.4 % 103 0.3 % Thereafter 10 3 11,965 2.9 % 2,516 6.0 % Total leased properties 748 441 412,944 100.0 % 40,461 99.5 % In-process developments 8 8 — — — — Untenanted properties 3 3 — — 192 0.5 % Total properties 759 452 $ 412,944 100.0 % 40,653 100.0 % 37 Substantially all of our leases provide for periodic contractual rent escalations. 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 September 30, 2025 is displayed below: Lease Escalation Frequency % of ABR Weighted Average Annual Increase (a) Annually 79.8 % 2.2 % Every 2 years 0.1 % 1.8 % Every 3 years 2.2 % 2.9 % Every 4 years 1.0 % 2.4 % Every 5 years 8.3 % 1.6 % Every 6 years 0.1 % 1.7 % Other escalation frequencies 6.0 % 1.5 % Flat (b) 2.5 % — % Total/ABR Weighted Average 100.0 % 2.0 % (a) Represents the ABR weighted average annual increase of the entire portfolio as if all escalations occurred annually. 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 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 September 30, 2025, are displayed in the following chart: 38 Transitional Capital In addition to investing in new property acquisitions, revenue generating capital expenditures, and build-to-suit developments, we may, from time to time, invest in transitional capital opportunities, including preferred equity interests and real estate lending opportunities. Such investments are intended to be shorter in duration, offering an alternative source of financing. The following table presents our transitional capital investments at September 30, 2025: September 30, 2025 Transitional Capital: Retail Center - St. Louis, MO Type Preferred Equity Investment (’000s) (a) $ 52,790 Stabilized cash capitalization rate (b) 8.0 % Annualized initial cash NOI yield 7.6 % Remaining term (years) (c) 1.8 Underlying property metrics Number of retail spaces 28 Rentable square footage (“SF”) (’000s) 332 Weighted average remaining lease term (years) 5.8 Occupancy rate (based on SF) (d) 95.2 % Quarterly rent collection 100.0 % Industrial Park - Olyphant, PA Type Preferred Equity Investment (’000s) (e) $ 22,287 Stabilized cash capitalization rate (b) 7.8 % Annualized initial cash NOI yield — % Remaining term (years) (f) 2.8 Industrial Park - Olyphant, PA Type Preferred Equity Investment (’000s) (e) $ 17,830 Stabilized cash capitalization rate (b) 7.8% Annualized initial cash NOI yield —% Remaining term (years) (f) 2.8 (a) Agreement includes an additional $7.8 million commitment of preferred capital. The remaining commitment at September 30, 2025 is $7.2 million. (b) Represents stated yield with unpaid amounts accruing with preferential payment. (c) Agreement contains two one-year extension options subject to a 0.50% extension fee. Repayment at end of term subject to a $3.5 million repayment fee. (d) Includes leases that have been executed but rent has not yet commenced. (e) Preferred equity investment in a consolidated joint venture that has acquired entitled land designated for industrial build-to-suit development. (f) Agreement contains two one-year extension options subject to a 0.25% fee for the first option, and 0.5% for the second option, and the right to transfer or sell our preferred equity at any time. 39 Results of Operations The following discussion includes the results of our operations for the periods presented. Three Months Ended September 30, 2025 Compared to Three Months Ended June 30, 2025 Lease revenues, net (in thousands) For the Three Months Ended September 30, 2025 June 30, 2025 Increase/(Decrease) $ % Contractual rental amounts billed for operating leases $ 102,270 $ 101,014 $ 1,256 1.2 % Adjustment to recognize contractual operating lease billings on a straight-line basis 5,134 5,753 (619) (10.8) % Net write-offs of accrued rental income (755) — (755) 100.0 % Variable rental amounts earned 732 718 14 1.9 % Earned income from direct financing leases 675 679 (4) (0.6) % Interest income from sales-type leases 326 14 312 > 100% Operating expenses billed to tenants 5,752 4,795 957 20.0 % Other income from real estate transactions 43 63 (20) (31.7) % Adjustment to revenue recognized for uncollectible rental amounts billed, net (10) (50) 40 80.0 % Total lease revenues, net $ 114,167 $ 112,986 $ 1,181 1.0 % 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 September 30, 2025 June 30, 2025 Increase/(Decrease) (in thousands) $ % Operating expenses Depreciation and amortization $ 40,246 $ 42,575 $ (2,329) (5.5) % Property and operating expense 6,198 5,003 1,195 23.9 % General and administrative 9,974 9,571 403 4.2 % Provision for impairment of investment in rental properties 6,999 11,939 (4,940) (41.4) % Total operating expenses $ 63,417 $ 69,088 $ (5,671) (8.2) % Depreciation and amortization 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. 40 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 The following table presents the impairment charges for the respective periods: For the Three Months Ended (in thousands, except number of properties) September 30, 2025 June 30, 2025 Number of properties 7 8 Carrying value prior to impairment charge $ 33,533 $ 32,607 Fair value 26,534 20,668 Impairment charge $ 6,999 $ 11,939 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. The timing and amount of impairment fluctuates from period to period depending on the specific facts and circumstances. Other income (expenses) (in thousands) For the Three Months Ended Increase/(Decrease) September 30, 2025 June 30, 2025 $ % Other income (expenses) Interest income $ 182 $ 122 $ 60 49.2 % Interest expense (28,230) (21,112) $ 7,118 33.7 % Gain on sale of real estate 3,259 566 $ 2,693 >100% Income taxes (208) (199) $ 9 4.5 % Other income (expenses) 1,312 (3,445) $ (4,757) > 100.0 % Interest expense 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 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) September 30, 2025 June 30, 2025 (in thousands, except per share data) $ % Net income $ 27,065 $ 19,830 $ 7,235 36.5 % Net earnings per diluted share 0.14 0.10 0.04 40.0 % 41 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. Nine Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2024 Lease revenues, net For the Nine Months Ended Increase/(Decrease) September 30, (in thousands) 2025 2024 $ % Contractual rental amounts billed for operating leases $ 302,598 $ 289,881 $ 12,717 4.4 % Adjustment to recognize contractual operating lease billings on a straight-line basis 16,952 15,720 1,232 7.8 % Net write-offs of accrued rental income (2,983) (2,556) (427) (16.7) % Variable rental amounts earned 2,130 1,901 229 12.0 % Earned income from direct financing leases 2,036 2,063 (27) (1.3) % Interest income from sales-type leases 354 43 311 >100% Operating expenses billed to tenants 15,491 15,292 199 1.3 % Other income from real estate transactions 183 985 (802) (81.4) % Adjustment to revenue recognized for uncollectible rental amounts billed, net (917) (3,659) 2,742 74.9 % Total lease revenues, net $ 335,844 $ 319,670 $ 16,174 5.1 % The increase in lease revenues, net was primarily attributable to growth in our real estate portfolio. 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%. Additionally, the increase in lease revenues, net was partially due to a decrease in bad debt expense related to the sale of a healthcare asset and collection efforts on outstanding rent. Operating expenses For the Nine Months Ended Increase/(Decrease) September 30, (in thousands) 2025 2024 $ % Operating expenses Depreciation and amortization $ 122,318 $ 113,192 $ 9,126 8.1 % Property and operating expense 16,688 17,976 (1,288) (7.2) % General and administrative 29,216 28,058 1,158 4.1 % Provision for impairment of investment in rental properties 35,067 31,311 3,756 12.0 % Total operating expenses $ 203,289 $ 190,537 $ 12,752 6.7 % Depreciation and amortization 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. 42 Provision for impairment of investment in rental properties The following table presents the impairment charges for the respective periods: For the Nine Months Ended September 30, (in thousands, except number of properties) 2025 2024 Number of properties 18 17 Carrying value prior to impairment charge $ 104,759 $ 111,303 Fair value 69,693 79,992 Impairment charge $ 35,067 $ 31,311 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 Nine Months Ended September 30, Increase/(Decrease) (in thousands) 2025 2024 $ % Other income (expenses) Interest income $ 403 $ 952 $ (549) (57.7) % Interest expense (69,416) (54,512) $ 14,904 27.3 % Gain on sale of real estate 4,230 64,956 $ (60,726) (93.5) % Income taxes (763) (649) $ 114 17.6 % Other income (expenses) (2,620) 1,502 $ (4,122) > 100.0 % Interest expense 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 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 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”) 43 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 Nine Months Ended Increase/(Decrease) September 30, (in thousands, except per share data) 2025 2024 $ % Net income $ 64,388 $ 141,382 $ (76,994) (54.5) % 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 $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. 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. Liquidity and Capital Resources General We acquire real estate using a combination of debt and equity capital, cash from operations that is not otherwise distributed to our stockholders, and proceeds from dispositions of real estate properties. Our focus is on maximizing the risk-adjusted return to our stockholders through an appropriate balance of debt and equity in our capital structure. We are committed to maintaining an investment grade balance sheet through active management of our leverage profile and overall liquidity position. We believe our leverage strategy has allowed us to take advantage of the lower cost of debt while simultaneously strengthening our balance sheet, as evidenced by our current investment grade credit ratings of ‘BBB’ from S&P and ‘Baa2’ from Moody’s. We seek to maintain on a sustained basis a Leverage Ratio that is generally less than 6.0x. 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. 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 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. As a result, it is unlikely that we will be able to retain substantial cash balances to meet our long-term liquidity needs, including repayment of debt and the acquisition of additional properties, from our annual taxable income. Instead, we expect to meet our long-term liquidity needs primarily by relying upon external sources of capital and proceeds from selective property dispositions. 44 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, 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 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 $332.7 million of expected obligations due throughout the remainder of 2025, consisting of $248.4 million of commitments to fund investments, $58.7 million of dividends declared, $24.8 million of projected interest expense, $0.5 million of mortgage payments and amortization, and $0.4 million of lessee obligations. 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 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 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. The source and mix of our debt capital in the future will be impacted by market conditions as well as our continued focus on lengthening our debt maturity profile to better align with our portfolio’s long-term leases, staggering debt maturities to reduce the risk that a significant amount of debt will mature in any single year in the future, and managing our exposure to interest rate risk. We have no material debt maturities until 2027, 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, 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. In addition, our success will depend on our operating performance, our borrowing restrictions, our degree of leverage, and other factors. Our acquisition growth strategy significantly depends on our ability to obtain acquisition financing on favorable terms. We seek to reduce the risk that long-term debt capital may be unavailable to us by strengthening our balance sheet by investing in real estate with creditworthy tenants and lease guarantors, and by maintaining an appropriate mix of debt and equity capitalization. We also, from time to time, obtain or assume non-recourse mortgage financing from banks and insurance companies secured by mortgages on the corresponding specific property subject to limitations imposed by our Revolving Credit Facility covenants and our investment grade credit rating. Equity Capital Resources Our equity capital is primarily provided through our at-the-market common equity offering program (“ATM Program”), as well as follow-on equity offerings. 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, 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 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. 45 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 Balance Interest Rate Maturity Date Revolving Credit Facility $ 95,824 Applicable reference rate + 0.85% (a) Mar. 2029 (d) Unsecured term loans: 2027 Unsecured Term Loan 200,000 daily simple adjusted SOFR + 0.95% (b) Aug. 2027 2028 Unsecured Term Loan 500,000 one-month adjusted SOFR + 0.95% (c) Mar. 2028 (e) 2029 Unsecured Term Loan 300,000 daily simple adjusted SOFR + 1.25% (b) Aug. 2029 Total unsecured term loans 1,000,000 Unamortized debt issuance costs, net (5,450) Total unsecured term loans, net 994,550 Senior unsecured notes: 2027 Senior Unsecured Notes - Series A 150,000 4.84% Apr. 2027 2028 Senior Unsecured Notes - Series B 225,000 5.09% Jul. 2028 2030 Senior Unsecured Notes - Series C 100,000 5.19% Jul. 2030 2031 Senior Unsecured Public Notes 375,000 2.60% Sep. 2031 2032 Senior Unsecured Public Notes 350,000 5.00% Nov. 2032 Total senior unsecured notes 1,200,000 Unamortized debt issuance costs and original issuance discount, net (9,685) Total senior unsecured notes, net 1,190,315 Total unsecured debt $ 2,280,689 (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%. (c) At September 30, 2025, one-month SOFR was 4.13%. (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. All remaining terms of the Revolving Credit Facility remained the same. On February 28, 2025, we entered into a new unsecured term loan for $400.0 million that matures in March 2028 (the “2028 Unsecured Term Loan”), the proceeds of which were used to repay the $400.0 million 2026 Unsecured Term Loan. The 2028 Unsecured Term Loan allowed us to draw an additional $100.0 million, on May 28, 2025, the proceeds of which were used to repay a portion of the revolving credit facility. 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 September 30, 2025. 46 Debt Covenants We are subject to various covenants and financial reporting requirements pursuant to our debt facilities, which are summarized below. 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. For each of the previous three years, we paid dividends out of our cash flows from operations in excess of the distribution amounts required to maintain our REIT qualification. Contractual Obligations 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. Year of Maturity Revolving Credit Facility (a) Mortgages Term Loans Senior Notes Interest Expense (c) Dividends (d) Commitments to Fund Investments (e) Lessee Obligations (f) Total 2025 $ — $ 488 $ — $ — $ 24,845 $ 58,665 $ 248,368 $ 380 $ 332,746 2026 — 16,843 — — 97,406 — 155,672 1,523 271,444 2027 — 1,596 200,000 150,000 89,168 — — 1,469 442,233 2028 — 38,278 500,000 (b) 225,000 55,382 — — 1,352 820,012 2029 95,824 — 300,000 — 38,355 — — 1,412 435,591 Thereafter — — — 825,000 68,765 — — 34,140 927,905 Total $ 95,824 $ 57,205 $ 1,000,000 $ 1,200,000 $ 373,921 $ 58,665 $ 404,040 $ 40,276 $ 3,229,931 (a) 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. (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 September 30, 2025 of $0.29 per common share and OP Unit. Future undeclared dividends have been excluded. (e) 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 in-process developments and under control development opportunities. (f) Represents our contractual lease obligations as a lessee, primarily including our corporate headquarters and ground leases at our rental properties or properties under development. Our tenants are responsible for paying the rent under these ground leases at our stabilized assets. In the event our tenant fails to pay the ground lease rent, we are primarily responsible. 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. 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. 47 Derivative Instruments and Hedging Activities 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 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 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. In turn, we pay the counterparties each month an amount equal to a fixed interest rate multiplied by the related outstanding notional amounts. 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 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. We assess, both at inception and on an ongoing basis, the effectiveness of our qualifying cash flow hedges. We have not entered, and do not intend to enter, into derivative or interest rate transactions for speculative purposes. In addition, we own investments in Canada, and as a result are subject to risk from the effects of exchange rate movements in the Canadian dollar, which may affect future costs and cash flows. We funded a significant portion of our Canadian investments through Canadian dollar borrowings under our Revolving Credit Facility, which is intended to act as a natural hedge against our Canadian dollar investments. The Canadian dollar Revolving Credit Facility borrowings are remeasured each reporting period, with the unrealized foreign currency gains and losses flowing through earnings. These unrealized foreign currency gains and losses do not impact our cash flows from operations until settled, and are expected to directly offset the changes in the value of our net investments as a result of changes in the Canadian dollar. 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 Flows 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 Net cash provided by operating activities $ 214,929 $ 212,342 Net cash used in investing activities (390,647) (87,041) Net cash provided by (used in) financing activities 243,045 (134,715) Net increase (decrease) in cash and cash equivalents and restricted cash $ 67,327 $ (9,414) 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 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. 48 Non-GAAP Measures FFO, Core FFO, and AFFO We compute Funds From Operations (“FFO”) in accordance with the standards established by the Board of Governors of the National Association of Real Estate Investment Trusts (“Nareit”), the worldwide representative voice for REITs and publicly traded real estate companies with an interest in the U.S. real estate and capital markets. Nareit defines FFO as GAAP net income or loss adjusted to exclude net gains (losses) from sales of certain depreciated real estate assets, depreciation and amortization expense from real estate assets, and impairment charges related to certain previously depreciated real estate assets. 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 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 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, 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. We use AFFO as a measure of our performance when we formulate corporate goals, and is a factor in determining management compensation. We believe that AFFO is a useful supplemental measure for investors to consider because it will help them to better assess our operating performance without the distortions created by non-cash revenues or expenses. Specific to our adjustment for straight-line rents, our leases include cash rents that increase over the term of the lease to compensate us for anticipated increases in market rental rates over time. Our leases do not include significant front-loading or back-loading of payments, or significant rent-free periods. Therefore, we find it useful to evaluate rent on a contractual basis as it allows for comparison of existing rental rates to market rental rates. FFO, Core FFO, and AFFO may not be comparable to similarly titled measures employed by other REITs, and comparisons of our FFO, Core FFO, and AFFO with the same or similar measures disclosed by other REITs may not be meaningful. Neither the SEC nor any other regulatory body has passed judgment on the acceptability of the adjustments to FFO that we use to calculate Core FFO and AFFO. In the future, the SEC, Nareit or another regulatory body may decide to standardize the allowable adjustments across the REIT industry and in response to such standardization we may have to adjust our calculation and characterization of Core FFO and AFFO accordingly. 49 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 Nine Months Ended (in thousands, except per share data) September 30, 2025 June 30, 2025 September 30, 2025 September 30, 2024 Net income $ 27,065 $ 19,830 $ 64,388 $ 141,382 Real property depreciation and amortization 40,164 42,492 122,066 112,942 Gain on sale of real estate (3,259) (566) (4,230) (64,956) Provision for impairment on investment in rental properties 6,999 11,939 35,067 31,311 FFO $ 70,969 $ 73,695 $ 217,291 $ 220,679 Net write-offs of accrued rental income 755 3 2,987 2,556 Other non-core income from real estate transactions (27) (46) (137) (887) Cost of debt extinguishment — — 166 — Severance and employee transition costs 1 53 55 199 Other (income) expenses (a) (1,312) 3,445 2,454 (1,502) Core FFO $ 70,386 $ 77,150 $ 222,816 $ 221,045 Straight-line rent adjustment (4,960) (5,586) (16,452) (15,341) Adjustment to provision for credit losses — (13) (13) (17) Amortization of debt issuance costs 1,357 1,328 3,922 2,949 Non-capitalized transaction costs 125 142 383 653 Realized gain or loss on interest rate swaps and other non-cash interest expense 6,116 7 6,126 216 Amortization of lease intangibles (1,198) (1,191) (3,453) (3,422) Stock-based compensation 2,488 2,471 7,105 5,377 AFFO $ 74,314 $ 74,308 $ 220,434 $ 211,460 (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. 50 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. EBITDA is a measure commonly used in our industry. We believe that this ratio provides investors and analysts with a measure of our performance that includes our operating results unaffected by the differences in capital structures, capital investment cycles and useful life of related assets compared to other companies in our industry. We compute EBITDAre in accordance with the definition adopted by Nareit, as EBITDA excluding gains (losses) from the sales of depreciable property and provisions for impairment on investment in real estate. We believe EBITDA and EBITDAre are useful to investors and analysts because they provide important supplemental information about our operating performance exclusive of certain non-cash and other costs. EBITDA and EBITDAre are not measures of financial performance under GAAP, and our EBITDA and EBITDAre may not be comparable to similarly titled measures of other companies. You should not consider our EBITDA and EBITDAre as alternatives to net income or cash flows from operating activities determined in accordance with GAAP. 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, 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. However, the full benefit of EBITDAre from new investments will not be received in the same quarter in which the properties are acquired. Additionally, EBITDAre for the quarter includes amounts generated by properties that have been sold during the quarter. Accordingly, the variability in EBITDAre caused by the timing of our investments and dispositions can temporarily distort our leverage ratios. 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 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. Our actual reported EBITDAre for future periods may be significantly different from our Annualized Adjusted EBITDAre. Adjusted EBITDAre and Annualized Adjusted EBITDAre are not measurements of performance under GAAP, and our Adjusted EBITDAre and Annualized Adjusted EBITDAre may not be comparable to similarly titled measures of other companies. 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. 51 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 (in thousands) September 30, 2025 June 30, 2025 September 30, 2024 Net income $ 27,065 $ 19,830 $ 37,268 Depreciation and amortization 40,246 42,575 38,016 Interest expense 28,230 21,112 18,178 Income taxes 208 199 291 EBITDA $ 95,749 $ 83,716 $ 93,753 Provision for impairment of investment in rental properties 6,999 11,939 1,059 Gain on sale of real estate (3,259) (566) (2,441) EBITDAre $ 99,489 $ 95,089 $ 92,371 Adjustment for current quarter investment activity (a) 1,797 573 4,080 Adjustment for current quarter disposition activity (b) (257) (490) (66) 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 other income from real estate transactions (43) (46) (887) Adjusted EBITDAre $ 100,252 $ 98,242 $ 96,239 Estimated revenues from developments (d) 2,544 1,629 — Pro Forma Adjusted EBITDAre $ 102,796 $ 99,871 $ 96,239 Annualized EBITDAre $ 397,956 $ 380,356 $ 369,484 Annualized Adjusted EBITDAre $ 401,008 $ 392,968 $ 384,956 Pro Forma Annualized Adjusted EBITDAre $ 411,184 $ 399,484 $ 384,956 (a) Reflects an adjustment to give effect to all investments during the quarter, including developments that have reached rent commencement, 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) 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. 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, Pro 52 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) September 30, 2025 June 30, 2025 September 30, 2024 Debt Revolving Credit Facility $ 95,824 $ 197,880 $ 125,482 Unsecured term loans, net 994,550 994,028 896,887 Senior unsecured notes, net 1,190,315 846,441 845,875 Mortgages, net 57,168 75,685 77,416 Debt issuance costs 15,171 9,578 7,314 Gross Debt 2,353,028 2,123,612 1,952,974 Cash and cash equivalents (81,966) (20,784) (8,999) Restricted cash (1,354) (1,192) (2,219) Net Debt $ 2,269,708 $ 2,101,636 $ 1,941,756 Estimated net proceeds from forward equity agreements (a) (37,257) (37,722) (38,983) Pro Forma Net Debt $ 2,232,451 $ 2,063,914 $ 1,902,773 Leverage Ratios: Net Debt to Annualized EBITDAre 5.7x 5.5x 5.3x Net Debt to Annualized Adjusted EBITDAre 5.7x 5.3x 5.0x Pro Forma Net Debt to Annualized Adjusted EBITDAre 5.4x 5.2x 4.9x (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 This Management’s Discussion and Analysis of Financial Condition and Results of Operations is based upon our Condensed Consolidated Financial Statements, which have been prepared in accordance with GAAP. The preparation of these Condensed Consolidated Financial Statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses as well as other disclosures in the financial statements. We base our estimates on historical experience and on various other assumptions believed to be reasonable under the circumstances. These judgments affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the dates of the financial statements, and the reported amounts of revenue and expenses during the reporting periods. On an ongoing basis, management evaluates its estimates and assumptions; however, actual results may differ from these estimates and assumptions, which in turn could have a material impact on our financial statements. 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 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 For information on the impact of recent accounting pronouncements on our business, see Note 2 of the Notes to the Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q. 53