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Item 7. Management’s Discussion and Analysis

2026-02-19 compared with 2025-02-20 · 214 added, 1595 removed, 439 unchanged (80% of the section changed)

4 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 December 31, 2024, our portfolio includes 765 properties, with 758 properties located in 44 U.S.

December 31, 2025, our portfolio includes 771 properties, with 764 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 expect to achieve growth in revenues and earnings through our three 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, accretive recycling, and revenue generating capital expenditures with existing tenants, (2) build-to-suit developments, and (3) 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.

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We are primarily diversified across industrial and retail property types.

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

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

• Geographic Diversification :

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During the year ended December 31, 2025, our investment activity consisted of the following:

For the Three Months Ended

For the Year Ended

December 31, 2024

September 30, 2024

June 30, 2024

March 31, 2024

December 31, 2024

For the Three Months Ended For the Year Ended

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

Acquisitions:

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Build-to-suit developments:

$ 78,523 $ 40,999 $ 63,295 $ 26,494 $ 209,311

Revenue generating capital expenditures:

Investments $ — $ 5,507 $ — $ 2,835 $ 8,342

Initial cash capitalization rate — 8.5 % — 8.0 % 8.3 %

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Transitional capital:

Investments $ 60,067 $ 17,926 $ 22,781 $ — $ 100,774

Cash capitalization rate 7.8 % 7.8 % 7.8 % — 7.8 %

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Total initial cash capitalization rate (a)

7.0 % 7.1 % 7.1 % 7.2 % 7.0 %

Total weighted average lease term (years) (a)

17.1 12.2 10.7 13.8 14.2

Total weighted average annual rent increase (a)

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

2.6 % 2.4 % 3.0 % 2.5 % 2.6 %

(a) Transitional capital, which represents a contractual yield on invested capital, and build-to-suit developments, which do not generate revenue until stabilization, are excluded from the calculations of total cash capitalization, weighted average lease terms, and weighted average rent increases.

Build-to-Suit Development Projects

The following table summarizes the Company’s in-process developments as of December 31, 2025:

Property Type

Projected Rentable Square Feet

Start Date (b)

Target Stabilization Date (c)

Lease Term (Years)

Total Project Commitment (d)

Estimated Total Project Investment (e)

Cumulative Investment

Estimated Remaining Investment

Estimated Cash Capitalization Rate (f)

Property Projected Rentable Square Feet Start Date (a)

Target Stabilization Date/Stabilized Date (b)

Lease Term (Years) Annual Rent Escalations Estimated Total Project Investment (c)

Cumulative Investment Estimated Remaining Investment Estimated Cash Capitalization Rate (d)

Estimated Straight-line Yield

(High Point - NC)

Sierra Nevada

(Dayton - OH)

Sierra Nevada

(Dayton - OH)

(Bremen - GA)

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

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

In-process retail:

Sprouts (Bedford, TX) 22 Jul.

2026 15 0.9 % $ 9,533 $ 626 $ 8,907 7.2 % 7.7 %

Hobby Lobby (Granbury, TX) 55 Oct.

2026 15 0.7 % 8,129 1,407 6,722 7.1 % 7.4 %

Academy Sports (Granbury, TX) 55 Oct.

2026 15 0.6 % 12,393 2,793 9,600 7.1 % 7.4 %

Academy Sports (Waco, TX) 68 Dec.

2026 15 0.6 % 14,488 5,824 8,664 7.2 % 7.5 %

In-process industrial:

Sierra Nevada (Dayton, OH) 122 Oct.

2026 15 3.0 % 55,525 42,826 12,699 7.7 % 9.6 %

Southwire (Bremen, GA) 1,178 Dec.

2026 10 2.8 % 115,411 42,607 72,804 7.8 % 8.8 %

Fiat Chrysler Automobile (Forsyth, GA) 422 Apr.

2026 15 2.8 % 78,242 34,326 43,916 6.9 % 8.3 %

AGCO (Visalia, CA) 115 Jun.

2026 12 3.5 % 19,567 14,536 5,031 7.0 % 8.5 %

Palmer Logistics (Midlothian, TX) (e)

2026 12.3 3.5 % 32,063 12,875 19,188 7.6 % 9.2 %

2,307 12.9 2.7 % 345,351 157,820 187,531 7.4 % 8.6 %

Stabilized industrial:

UNFI (Sarasota, FL) 1,016 Jan.

2024 15 2.5 % 200,958 200,958 — 7.2 % 8.6 %

Sierra Nevada (Dayton, OH) 122 Oct.

2025 15 3.0 % 58,563 54,146 4,417 7.5 % 9.3 %

Stabilized retail:

7Brew (High Point, NC) 1 Dec.

2025 15 1.9 % 1,975 1,975 — 8.0 % 8.8 %

7Brew (Charleston, SC) 1 Feb.

2025 15 1.9 % 1,729 1,729 — 7.9 % 8.8 %

7Brew (Jacksonville, FL) 1 Jun.

2025 15 1.9 % 2,008 1,613 395 8.0 % 8.8 %

Total / weighted average 3,448 13.8 2.6 % $ 610,584 $ 418,241 $ 192,343 7.4 % 8.7 %

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

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

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

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

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

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

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

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

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

Property Type

Rentable Square Feet

Lease Commencement Date (g)

Total Project Commitment (d)

Estimated Total Project Investment (e)

Cumulative Investment

Estimated Remaining Investment

Estimated Cash Capitalization Rate (f)

Estimated Straight-line Yield

(Sarasota - FL)

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

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

(d) 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.

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

Factors That Impact Our Result of Operations

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Property Dispositions

From time to time, we strategically dispose of properties, primarily when we believe the risk profile has changed and become misaligned with our then current risk-adjusted return objectives.

From time to time, we strategically dispose of properties, primarily when we believe the risk profile has changed and become misaligned with our then current risk-adjusted return objectives or opportunistically when the capital can be redeployed accretively.

The resulting gains or losses on dispositions may materially impact our operating results, and the 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 at the time a property is listed for sale.

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Our historical growth in revenues and earnings has been achieved through rent escalations associated with existing in-place leases, coupled with rental income generated from accretive property investments.

Our ability to grow revenue will depend, to a significant degree, on our ability to identify and complete acquisitions that meet our investment criteria.

Changes in capitalization rates, interest rates, or other factors may impact our acquisition opportunities in the future.

Our ability to grow revenue will depend, to a significant degree, on our ability to identify and complete investment opportunities that meet our investment criteria.

Changes in capitalization rates, interest rates, or other factors may impact our investment opportunities in the future.

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

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As of December 31, 2025, 87.2% of our $2.5 billion of debt is fixed through fixed rates and $943.0 million of interest rate swap notional.

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

As interest rate swaps mature, we will be subject to interest rate risk from changes in rates on our floating-rate

debt to the extent we do not enter into new interest rate swaps.

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

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For a portion of our portfolio, we have leases that are not fully net, and, therefore, we bear certain responsibilities for the maintenance and structural component replacements ( e.g., roof, structure, or parking lot) that may be required in the future, although the tenants are still required to pay all operating expenses associated with the property ( e.g.

, real estate taxes, insurance, and maintenance).

, real estate taxes, insurance, and maintenance and repair).

Inflation and increased costs may have an adverse impact to our tenants and their creditworthiness if the increase in costs are greater than their increase in revenue.

Where we cannot implement a net lease, we attempt to limit our exposure to inflation through the use of warranties and other remedies that reduce the likelihood of a significant capital outlay.

Although contractual risk‑mitigation provisions and budget contingencies help reduce our exposure to inflation on in-process build‑to‑suit developments, our construction projects remain subject to potential cost overruns that could increase total project costs and adversely affect expected investment yields.

To further manage these risks, we utilize a number of protective measures in our build-to-suit arrangements, including contingencies, allowances, guaranteed maximum price contracts and change orders with Tenants.

We generally seek to lock in material and labor pricing through guaranteed maximum price contracts, which shift a portion of the inflationary cost risk to our general contractors and development partners.

Where appropriate, our agreements permit us to pass certain cost increases thru to tenants or to change project scopes to minimize cost impacts.

These strategies help mitigate the potential impact of inflation on construction costs;

however, sudden, significant or sustained inflationary pressures could still adversely affect our development yields and returns if such costs are not allowed to be passed through to the general contractor, developer or tenant or to be absorbed by contingency in the project budget.

Tenant Bankruptcies

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

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

Indications of a tenant’s inability to continue as a going concern, plans to vacate the property

upon lease expiration, changes in our view or strategy relative to a tenant’s business or industry, or changes in our long-term hold strategies, could each be indicative of an impairment triggering event.

For the year ended December 31, 2025, we recognized $39.7 million of impairment due to a change in our long-term hold strategy for 19 properties.

Current Market Conditions and Strategic Priorities

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

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

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

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

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

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

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

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

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

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

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

Results of Operations

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Lease revenues, net

Year ended December 31,

Increase/(Decrease)

Year Ended December 31, Increase/(Decrease)

(in thousands) 2025 2024 $ %

Contractual rental amounts billed for operating leases $ 408,794 $ 388,074 $ 20,720 5.3 %

Adjustment to recognize contractual operating lease

billings on a straight-line basis

Adjustment to recognize contractual operating lease billings on a straight-line basis 22,269 22,163 106 0.5 %

Net write-offs of accrued rental income (4,086) (2,556) (1,530) 59.9 %

Variable rental amount earned

Variable rental amounts earned 3,340 2,999 341 11.4 %

Earned income from direct financing leases 2,707 2,748 (41) (1.5 %)

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Operating expenses billed to tenants 20,629 20,693 (64) (0.3 %)

Other income from real estate transactions

Adjustment to revenue recognized for uncollectible

rental amounts billed, net

Other income from real estate transactions (a)

574 2,039 (1,465) (71.8 %)

Adjustment to revenue recognized for uncollectible rental amounts billed, net (917) (4,418) 3,501 (79.2 %)

Total lease revenues, net $ 454,138 $ 431,800 $ 22,338 5.2 %

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

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

The increase in Lease revenues, net was primarily attributable to increased contractual rents related to rent escalations and growth in our real estate portfolio, specifically through recognizing a full year of rental revenue for all property acquisitions, revenue generating capital expenditures, and development stabilizations made in 2024.

This was partially offset by the reductions of revenues associated with property dispositions.

During the year ended December 31, 2025, we invested $438.2 million in new property acquisitions and revenue generating capital expenditures at a weighted average cash capitalization rate of 7.0%, and reached stabilization on a $54.1 million industrial build-to-suit development at a cash capitalization rate of 7.5%.

During the year ended December 31, 2024, we invested $237.3 million in new property acquisitions and revenue generating capital expenditures at a weighted average initial cash capitalization rate of 7.3%, and reached stabilization on a $201.0 million build-to-suit development at a cash capitalization rate of 7.2%.

Operating Expenses

Year ended December 31,

Increase/(Decrease)

Year ended December 31, Increase/(Decrease)

(in thousands) 2025 2024 $ %

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Depreciation and amortization

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

The increase in depreciation and amortization for the year ended December 31, 2025 was primarily due to an increase in net investment activity during 2025, as well as properties acquired and developments stabilized in the previous year having a full year’s worth of depreciation in the current year.

Property and operating expense

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

General and administrative

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

The decrease in property and operating expenses for the year ended December 31, 2025 was primarily due to a decrease in non-reimbursable property expenses for two properties that were re-leased and sold at the beginning of 2025 and end of 2024, respectively.

Provision for impairment of investment in rental properties

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Carrying value prior to impairment charge $ 127,542 $ 146,811

Fair value 87,808 97,810

Impairment charge $ 39,734 $ 49,001

During the year ended December 31, 2025, we recognized $39.7 million of impairment on our investments in rental properties, primarily from changes in the Company’s long-term hold strategy with respect to the individual properties.

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

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.

The remaining impairments recognized during the year ended December 31, 2025 were not material.

Other income (expenses)

Year ended December 31,

Increase/(Decrease)

Year ended December 31, Increase/(Decrease)

(in thousands) 2025 2024 $ %

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Gain on sale of real estate 12,601 73,153 (60,552) (82.8 %)

Other income (expenses)

Income taxes (1,154) (1,175) 21 (1.8 %)

Other (expenses) income (6,417) 6,201 (12,618) > 100.0%

Interest expense

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

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

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

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

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

The increase in interest expense during the year ended December 31, 2025 was 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 to Interest expense.

Additionally, interest expense increased due to an increase in total borrowings on our variable-rate Revolving Credit Facility, an additional $100.0 million of term debt outstanding, and the completion of our $350.0 million 5.00% senior unsecured notes, the proceeds of which were used to fund acquisitions and paydown the Revolving Credit Facility during 2025.

Gain on sale of real estate

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During the year ended December 31, 2025, we recognized a gain of $12.6 million on the sale of 28 properties, compared to a gain of $73.2 million on the sale of 58 properties during the year ended December 31, 2024.

Other income (expenses)

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

Other (expenses) income

The increase in other expenses during the year ended December 31, 2025 was primarily due to a $3.7 million unrealized foreign exchange loss recognized on the remeasurement of our $100 million Canadian Dollars (“CAD”) Revolving Credit Facility borrowings, compared to a $6.2 million unrealized foreign exchange gain recognized during the year ended December 31, 2024.

Net Income and Net earnings per diluted share

Year Ended December 31,

Increase/(Decrease)

Year Ended December 31, Increase/(Decrease)

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

Net income $ 99,416 $ 168,989 $ (69,573) (41.2) %

Net earnings per diluted share 0.50 0.86 (0.36) (41.9) %

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

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

The decrease in net income was primarily due to a decrease in the gain on sale of real estate of $60.6 million, an increase in interest expense of $20.4 million, and an increase in other expense of $12.6 million, which was partially offset by an increase in lease revenues, net of $22.3 million.

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

Liquidity and Capital Resources

We acquire real estate using a combination of debt and equity capital and with cash from operations that is not otherwise distributed to our stockholders, and proceeds from dispositions of real estate properties.

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.

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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.

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 investment 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.

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.

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.

Our short-term liquidity requirements consist primarily of funds necessary to pay for our operating expenses, including our general and administrative expenses and 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-level 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 $300.4 million of expected obligations due throughout 2025, primarily consisting of $169.0 million of commitments to fund investments, $57.2 million of dividends declared, $54.1 million of projected interest expense, and $20.2 million of mortgage amortization.

As detailed in the contractual obligations table below, we have approximately $383.4 million of expected obligations due throughout 2026, consisting of $197.6 million of commitments to fund investments, $107.8 million of projected interest

expense, $59.5 million of dividends declared, $16.8 million of mortgage payments and amortization, and $1.5 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 and mortgage amortization.

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

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

At December 31, 2025, we have $723.5 million of available capacity under our Revolving Credit Facility.

Long-term Liquidity Requirements

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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.

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

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

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

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

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

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

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

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

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

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

After considering the shares sold subject to forward sale agreements, we have $348.6 million of capacity remaining under the ATM Program as of December 31, 2025.

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

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

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

As we continue to invest in accretive real estate properties, we expect to balance our debt and equity capitalization, while maintaining a Leverage Ratio below 6.0x on a sustained basis.

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The following table sets forth our outstanding Revolving Credit Facility, unsecured term loans and senior unsecured notes at December 31, 2025.

(in thousands, except interest rates)

Revolving Credit Facility

Applicable reference rate + 0.85% (a)

(in thousands, except interest rates) Outstanding

Balance Interest

Rate Maturity

Revolving Credit Facility $ 266,036 applicable reference rate + 0.85% (a)

Unsecured term loans:

2026 Unsecured Term Loan

one-month adjusted SOFR + 1.00% (b)

2027 Unsecured Term Loan

daily simple adjusted SOFR + 0.95% (c)

2029 Unsecured Term Loan

daily simple adjusted SOFR + 1.25% (c)

2027 Unsecured Term Loan 200,000 daily simple SOFR + 0.95% (b)

2028 Unsecured Term Loan 500,000 one-month SOFR + 0.95% (c)

2029 Unsecured Term Loan 300,000 daily simple SOFR + 0.95% (b)

Total unsecured term loans 1,000,000

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Senior unsecured notes:

2027 Senior Unsecured Notes - Series A

2028 Senior Unsecured Notes - Series B

2030 Senior Unsecured Notes - Series C

2031 Senior Unsecured Public Notes

2027 Senior Unsecured Notes - Series A 150,000 4.84% Apr.

2028 Senior Unsecured Notes - Series B 225,000 5.09% Jul.

2030 Senior Unsecured Notes - Series C 100,000 5.19% Jul.

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

Unamortized debt issuance costs and

original issuance discount, net

Unamortized debt issuance costs and original issuance discounts, net

Total senior unsecured notes, net 1,190,738

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At December 31, 2025, the balance includes $100.0 million CAD borrowings remeasured to $73.0 million USD, and was subject to the daily simple Canadian Overnight Repo Rate Average (“CORRA”) of 2.30%.

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

(b) At December 31, 2025, overnight SOFR was 3.87%.

(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) The 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.

(f) The 2029 Unsecured Term Loan contains two twelve-month extension options subject to certain conditions, including the payment of an extension fee equal to 0.10% of the aggregate principal amount of the loans outstanding under the 2029 term loan facility.

Revolving Credit Facility

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

Our Revolving Credit Facility has a $1.0 billion capacity with a maturity date of March 2029 and contains two six-month extension options, subject to certain conditions, including the payment of an extension fee equal to 0.0625%.

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

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

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

In addition, the Revolving Credit Facility is subject to a facility fee on the amount of the revolving commitments, based on our credit rating.

The applicable facility fee is 0.20% per annum.

2026 Unsecured Term Loan

Borrowings under the 2026 Unsecured Term Loan are subject to interest at variable rates based on one-month adjusted SOFR plus a margin based on our credit rating ranging between 0.85% and 1.65% based on our credit rating.

The Company may issue letters of credit up to $20.0 million under the Revolving Credit Facility.

At December 31, 2025, the Company had a $10.5 million standby letter of credit outstanding, which reduces the borrowing capacity under the facility.

The letter of credit primarily supports the Company’s build-to-suit transactions.

2027 Unsecured Term Loan and 2029 Unsecured Term Loan

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

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

The 2029 Unsecured Term Loan contains two twelve-month extension options subject to certain conditions, including the payment of

an extension fee equal to 0.10% of the aggregate principal amount of the loans outstanding under the 2029 term loan facility.

2028 Unsecured Term Loan

Borrowings under the 2028 Unsecured Term Loan are subject to interest at variable rates based on one-month SOFR plus a margin based on our credit rating ranging between 0.80% and 1.60% based on our credit rating.

The 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.

2027 Senior Unsecured Notes - Series A

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Borrowings under the 2031 Senior Unsecured Public Notes are subject to interest only, semi-annual payments at a fixed rate of 2.60% per annum and mature in September 2031.

2032 Senior Unsecured Public Notes

Borrowings under the 2032 Senior Unsecured Public Notes are subject to interest only, semi-annual payments at a fixed rate of 5.00% per annum and mature in November 2032.

Debt Covenants

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

Revolving Credit

Dividends (c)

Commitments to Fund Investments (d)

Maturity Revolving Credit

Mortgages Term Loans Senior Notes Interest

Dividends (e)

Commitments to Fund Investments (f)

Lessee Obligations (g)

2026 $ — $ 16,843 $ — $ — $ 107,838 $ 59,513 $ 197,640 $ 1,523 $ 383,357

2027 — 1,596 200,000 150,000 95,617 — 1,469 448,682

2028 — 38,278 500,000 (b)

225,000 64,496 — 1,352 829,126

2029 266,036 — 300,000 (c)

— 40,981 1,412 608,429

2030 — — — 100,000 30,010 1,447 131,457

Thereafter — — — 725,000 39,676 32,693 797,369

Total $ 266,036 $ 56,717 $ 1,000,000 $ 1,200,000 $ 378,618 $ 59,513 $ 197,640 $ 39,896 $ 3,198,420

(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) Interest expense is projected based on the outstanding borrowings and interest rates in effect as of December 31, 2024.

(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) Our 2029 Unsecured Term Loan contains two twelve-month extension options subject to certain conditions, including the payment of an extension fee equal to 0.10% of the aggregate principal amount of the loans outstanding under the 2029 term loan facility.

(d) Interest expense is projected based on the outstanding borrowings and interest rates in effect as of December 31, 2025.

This amount includes the impact of interest rate swap agreements.

(e) Amounts include dividends declared as of December 31, 2025 of $0.29 per common share and OP Unit.

Future undeclared dividends have been excluded.

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

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

(f) Amounts include acquisitions under control, defined as acquisitions under contract or executed letter of intent, commitments to fund revenue generating capital expenditures, and both current in-process developments and under control development opportunities.

(g) 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 December 31, 2025, investment in rental property with a net book value of $81.0 million was pledged as collateral against the Company’s 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.

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

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

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

As of December 31, 2025, we had 27 effective interest rate swaps with an aggregate notional amount of $943.0 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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Net cash (used in) provided by investing activities (675,273) (59,703) 24,338

Net cash (used in) provided by financing activities

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

Net cash provided by (used in) financing activities

393,426 (221,189) (334,820)

Increase (decrease) in cash and cash equivalents and restricted cash

$ 17,649 $ (4,639) $ (39,408)

The increase in net cash provided by operating activities during the year ended December 31, 2025 as compared to 2024 was mainly due to increased contractual rents related to rent escalations and growth in our real estate portfolio.

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

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

The increase in net cash used in investing activities during the year ended December 31, 2025 as compared to 2024 was mainly due to increased investment volume.

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

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

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

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

The increase in net cash provided by financing activities during the year ended December 31, 2025 as compared 2024, mainly reflects an increase in net proceeds from unsecured term loans, senior unsecured notes, and Revolving Credit Facility.

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 Nareit, the worldwide representative voice for REITs and publicly traded real estate companies with an interest in the U.S.

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.

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

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

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, amortization of net mortgage premiums, non-capitalized transaction costs such as acquisition costs related to deals that failed to transact, loss on interest rate swaps and other non-cash interest expense, deferred taxes, stock-based compensation, and other specified non-cash items.

We 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, adjustment to provision for credit losses, amortization of net mortgage premiums, non-capitalized transaction costs such as acquisition costs related to deals that failed to transact, loss on interest rate swaps and other non-cash interest expense, deferred taxes, stock-based compensation, and other specified non-cash items.

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

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.

We use AFFO as a measure of our performance when we formulate corporate goals and as a factor in determining management compensation.

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.

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(in thousands, except per share data) 2025 2024 2023

Net income $ 99,416 $ 168,989 $ 163,312

Real property depreciation and amortization 163,752 155,844 158,346

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Provision for impairment on investment in rental properties 39,734 49,001 31,274

FFO $ 290,301 $ 300,681 $ 298,622

Net write-offs of accrued rental income 4,089 2,676 4,458

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

Gain on insurance recoveries

(348) (2,070) (7,500)

Cost of debt extinguishment 166 — 3

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Other (income) expenses (b)

6,252 (6,201) 1,678

Core FFO $ 300,515 $ 295,471 $ 298,883

Straight-line rent adjustment (21,591) (21,652) (26,736)

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Amortization of lease intangibles (c)

(4,470) (4,413) (5,846)

Stock-based compensation 9,597 7,355 5,972

Deferred taxes 75 155 (282)

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

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

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

AFFO $ 296,281 $ 281,991 $ 277,725

(a) Amount includes $0.4 million, $1.2 million, and $7.5 million in lease termination fees for the years end December 31, 2025, 2024, and 2023, respectively, and $0.9 million in income for the settlement of a permanent land easement for an insignificant portion of two properties during the year ended December 31, 2024.

(b) Amount includes $3.7 million, ($6.2) million, and $1.7 million of unrealized foreign exchange (gain) loss for the years ended December 31, 2025, 2024, and 2023, respectively, primarily associated with our Canadian dollar denominated Revolver Credit Facility borrowings, and a $2.5 million write-off of a non-real estate note receivable during the year ended December, 31, 2025.

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

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(in thousands) 2025 2024 2023

Net income $ 35,028 $ 27,607 $ 6,797

Depreciation and amortization 41,768 42,987 39,278

Interest expense 25,051 19,565 18,972

Income taxes 392 527 (268)

EBITDA $ 102,239 $ 90,686 $ 64,779

Provision for impairment of investment in rental properties 4,667 17,690 29,801

Gain on sale of real estate (8,371) (8,197) (6,270)

EBITDAre $ 98,535 $ 100,179 $ 88,310

Adjustment for current quarter acquisition activity (a)

Adjustment for current quarter disposition activity (b)

(286) (11) (156)

Adjustment to exclude non-recurring expenses (income) (c)

2,515 348 128

Adjustment to exclude net write-offs of accrued rental income 1,103 120 4,161

Adjustment to exclude gain on insurance recoveries

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

Adjustment to exclude cost of debt extinguishments

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

1,282 (4,699) 1,453

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

(392) (1,183) —

Adjusted EBITDAre $ 104,578 $ 94,782 $ 94,049

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

(c) Amount includes a $2.5 million write-off of a non-real estate note receivable for the three months ended December 31, 2025.

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

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

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

(d) Amount includes lease termination fees during the three months ended December 31, 2025 and 2024.

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

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

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

We define Net Debt as gross debt (total reported debt plus debt issuance costs and original issuance discount) 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.

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Debt issuance costs 15,072 6,802

Gross Debt 2,522,754 1,919,927

Cash and cash equivalents (30,540) (14,845)

Restricted cash (3,102) (1,148)

Net Debt $ 2,489,112 $ 1,903,934

Estimated net proceeds from forward equity agreements (a)

(10,964) (38,514)

Pro Forma Net Debt $ 2,478,148 $ 1,865,420

Leverage Ratios:

Net Debt to Annualized EBITDAre

Net Debt to Annualized Adjusted EBITDAre

Pro Forma Net Debt to Annualized Adjusted EBITDAre

Net Debt to Annualized EBITDAre 6.3x 4.8x

Net Debt to Annualized Adjusted EBITDAre 6.0x 5.0x

Pro Forma Net Debt to Annualized Adjusted EBITDAre 5.8x 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.

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These generally include tangible assets, consisting of land and land improvements, buildings and other improvements, and equipment, and identifiable intangible assets and liabilities, including the value of in-place leases and acquired above-market and below-market leases.

We use multiple sources to estimate fair value, including information obtained about each property as a result of our pre-acquisition due diligence and our marketing and leasing activities.

Factors that impact our fair value determination include real estate market conditions, industry conditions that the tenant operates in, and characteristics of the real estate and/or real estate appraisals.

We use multiple sources to estimate fair value, including information obtained about each property from our pre-acquisition due diligence and our marketing and leasing activities.

Factors that impact our fair value determination include real estate market conditions, tenant industry conditions, and characteristics of the real estate and/or real estate appraisals.

Changes in any of these factors could impact the future purchase prices of our investments and the corresponding capitalization rates recognized.

The estimated fair value of the tangible assets of an acquired property is determined by valuing the property as if it were vacant.

The as-if-vacant value is then allocated to land and land improvements, buildings, and equipment based on comparable sales and other relevant information with respect to the property, as estimated by management.

The "if vacant" value is then allocated to land and land improvements, buildings, and equipment based on comparable sales and other relevant information with respect to the property, as estimated by management.

Specifically, the “if vacant” value of buildings and equipment is calculated using an income approach.

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However, based on management’s plans with respect to each of those properties, we believe that their carrying amounts are recoverable and therefore, no impairment charges were recognized other than those described below.

If the operating conditions mentioned above deteriorate or if our expected holding period for assets changes, subsequent tests for impairments could result in additional impairment charges in the future.

If operating conditions deteriorate or if our expected holding period for assets changes, subsequent tests for impairments could result in additional impairment charges in the future.

Inputs used in establishing fair value for real estate assets generally fall within Level 3 of the fair value hierarchy, which are characterized as requiring significant judgment as little or no current market activity may be available for validation.

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Carrying value prior to impairment charge $ 127,542 $ 146,811 $ 62,720

Fair value 87,808 97,810 31,446

Impairment charge $ 39,734 $ 49,001 $ 31,274

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

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

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

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

Goodwill represents the excess of the amount paid over the fair value of the identifiable tangible and intangible assets acquired and liabilities assumed in a business combination and it assigned to one or more reporting units.

During the year ended December 31, 2025, we recognized $39.7 million of impairment on our investments in rental properties, 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.

The remaining impairments recognized during the year ended December 31, 2025 were not material.

We evaluate goodwill for impairment when an event occurs or circumstances change that indicate the carrying value may not be recoverable, or at least annually.

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We commence revenue recognition on our leases based on a number of factors, including the initial determination that the contract is or contains a lease.

Generally, all of our property related contracts are or contain leases, and therefore revenue is recognized when the lessee takes possession of or controls the physical use of the leased assets.

Generally, all of our property-related contracts are or contain leases, and therefore revenue is recognized when the lessee takes possession of or controls the physical use of the leased asset(s).

In most instances this occurs on the lease commencement date.

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The interest rate swap agreements, designated and qualifying as cash flow hedges, are reported at fair value.

Interest rate swaps are measured at fair value using inputs that are directly observable in active markets and are classified within Level 2 of the valuation hierarchy, using an income approach.

Interest rate swaps are measured at fair value using inputs that are directly observable in active markets and are classified within Level 2 of the fair value hierarchy, using an income approach.

Specifically, the fair value of the interest rate swaps is determined using a discounted cash flow analysis on the expected future cash flows of each instrument.

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

When an existing cash flow hedge is terminated, we determine the accounting treatment for the accumulated gain or loss recognized in Accumulated other comprehensive income (loss), based on the probability of the hedged forecasted transaction occurring within the period the cash flow hedge was anticipated to affect earnings.

When an existing cash flow hedge is terminated, we determine the accounting treatment for the accumulated gain or loss recognized in Accumulated other comprehensive income, based on the probability of the hedged forecasted transaction occurring within the period the cash flow hedge was anticipated to affect earnings.

If management determines that the hedged forecasted transaction is probable of occurring during the original period, the accumulated gain or loss is reclassified into earnings over the remaining life of the cash flow hedge using a straight-line method.

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“Financial Statements and Supplementary Data” of this Annual Report on Form 10-K.

Quantitative and Qualitat ive Disclosures About Market Risk

Interest Rate Risk

We are exposed to certain market risks, one of the most predominant of which is a change in interest rates.

Increases in interest rates can result in increased interest expense under our Revolving Credit Facility and other variable-rate debt.

Increases in interest rates can also result in increased interest expense when our fixed rate debt and interest rate swaps mature.

We attempt to manage interest rate risk by entering into long-term fixed rate debt, entering into interest rate swaps to convert certain variable-rate debt to a fixed rate, and staggering our debt maturities.

We have designated the interest rate swaps as cash flow hedges for accounting purposes and they are reported at fair value.

We have not entered, and do not intend to enter, into derivative or interest rate transactions for speculative purposes.

Further information concerning our interest rate swaps can be found in Note 9 in our Consolidated Financial Statements contained elsewhere in this Annual Report on Form 10-K.

Our fixed-rate debt includes our senior unsecured notes, mortgages, and variable-rate debt converted to a fixed rate with the use of interest rate swaps.

Our fixed-rate debt had a carrying value and fair value of approximately $1.9 billion and $1.7 billion, respectively, as of December 31, 2024.

Changes in market interest rates impact the fair value of our fixed-rate debt and interest rate swaps, but they have no impact on interest incurred or on cash flows.

For instance, if interest rates were to increase and the fixed-rate debt balance were to remain constant, we would expect the fair value of our debt to decrease, similar to how the price of a bond decreases as interest rates rise.

A 1% increase in market interest rates would have resulted in a decrease in the fair value of our fixed-rate debt as of approximately $35.7 million as of December 31, 2024.

Borrowings pursuant to our Revolving Credit Facility and other variable-rate debt bear interest at rates based on the applicable reference rate plus an applicable margin, and totaled $1.0 billion as of December 31, 2024, of which $939.5 million was swapped to a fixed rate by our use of interest rate swaps.

Taking into account the effect of our interest rate swaps, a 1% increase or decrease in interest rates would have a corresponding $0.5 million increase or decrease in interest expense annually.

With the exception of our interest rate swap transactions, we have not engaged in transactions in derivative financial instruments or derivative commodity instruments.

Foreign Currency Exchange Rate Risk

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.

A 10% increase or decrease in the exchange rate between the Canadian dollar and USD would have a corresponding $7.0 million increase or decrease in unrealized foreign currency gain or loss.

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.

Financial Statemen ts and Supplementary Data

Report of Independent Registered Accounting Firm (PCAOB ID No.

Consolidated Balance Sheets

Consolidated Statements of Income and Comprehensive Income

Consolidated Statements of Equity

Consolidated Statements of Cash Flows

Notes to Consolidated Financial Statements

Schedule III – Real Estate Assets and Accumulated Depreciation

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the stockholders and the Board of Directors of Broadstone Net Lease, Inc.

Opinion on the Financial Statements

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

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

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

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 20, 2025, expressed an unqualified opinion on the Company’s internal control over financial reporting.

Basis for Opinion

These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Evaluation of long-lived asset impairment —Refer to Note 2 to the consolidated financial statements

Critical Audit Matter Description

The Company’s evaluation of long-lived assets to be held and used for possible impairment involves an initial assessment to determine whether events or changes in circumstances indicate that their carrying amounts may not be recoverable.

If, and when, such events or changes in circumstances are present, an impairment exists to the extent the carrying value of the long-lived asset or asset group exceeds the sum of the undiscounted cash flows expected to result from the use of the long-lived asset and its eventual disposition.

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

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

Certain of the Company’s properties may have fair values less than their carrying amounts.

However, based on the Company’s plans with respect to each of those properties, the Company believes that their carrying amounts are recoverable and therefore, no impairment charges were recognized other than those reflected in the financial statements.

If the operating conditions deteriorate or if the Company’s expected holding period for assets changes, subsequent tests for impairments could result in additional impairment charges in the future.

We identified the estimated holding period used in determining the recoverability of long-lived assets as a critical audit matter because of the subjective judgments made by management to determine the holding period for long-lived assets as part of their impairment analysis.

This required a higher degree of auditor judgment and an increased extent of effort when performing audit procedures to evaluate the reasonableness of management’s assumptions, given the inherent unpredictability involved in the timing of sales of long-lived assets.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to the assessment of the Company’s expected holding periods included the following, among others:

• We obtained an understanding and tested the design and operating effectiveness of the Company’s controls to monitor long-lived assets for events or changes in circumstances that indicate that their carrying amounts may not be recoverable due to a change in the expected holding period.

• We held discussions with the Company’s management and evaluated the reasonableness of management’s assertions regarding the expected holding period of its long-lived assets, more specifically by performing the following:

• Engaged in discussions with senior management, including legal and asset management, and inspected Board of Director meeting minutes regarding the assumptions utilized in determining the expected holding periods.

• Evaluated audit evidence (e.g.

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

/s/ Deloitte & Touche LLP

Rochester, New York

February 20, 2025

We have served as the Company’s auditor since 2016.

Broadstone Net Lease, Inc.

and Subsidiaries

Consolidated Ba lance Sheets

(in thousands, except per share amounts)

Accounted for using the operating method:

Land improvements

Buildings and improvements

Total accounted for using the operating method

Less accumulated depreciation

Accounted for using the operating method, net

Accounted for using the direct financing method

Accounted for using the sales-type method

Property under development

Investment in rental property, net

Cash and cash equivalents

Accrued rental income

Tenant and other receivables, net

Prepaid expenses and other assets

Interest rate swap, assets

Intangible lease assets, net

Liabilities and equity

Unsecured revolving credit facility

Mortgages, net

Unsecured term loans, net

Senior unsecured notes, net

Accounts payable and other liabilities

Dividends payable

Accrued interest payable

Intangible lease liabilities, net

Total liabilities

Commitments and contingencies (Note 17)

Broadstone Net Lease, Inc.

Preferred stock, $ 0.001 par value;

20,000 shares authorized, no shares issued or outstanding

Common stock, $ 0.00025 par value;

500,000 shares authorized, 188,626 and 187,614 shares issued

and outstanding at December 31, 2024 and 2023, respectively

Additional paid-in capital

Cumulative distributions in excess of retained earnings

Accumulated other comprehensive income

Total Broadstone Net Lease, Inc.

Non-controlling interests

Total liabilities and equity

The accompanying notes are an integral part of these consolidated financial statements.

Broadstone Net Lease, Inc.

and Subsidiaries

Consolidated Statements of Income and Comprehensive Income

(in thousands, except per share amounts)

For the Year Ended December 31,

Lease revenues, net

Operating expenses

Depreciation and amortization

Property and operating expense

General and administrative

Provision for impairment of investment in rental properties

Total operating expenses

Other income (expenses)

Interest income

Interest expense

Gain on sale of real estate

Other income (expenses)

Net income attributable to non-controlling interests

Net income attributable to Broadstone Net Lease, Inc.

Weighted average number of common shares outstanding

Net earnings per share attributable to common stockholders

Basic and Diluted

Comprehensive income

Other comprehensive income

Change in fair value of interest rate swaps

Realized loss on interest rate swaps

Comprehensive income

Comprehensive income attributable to non-controlling interests

Comprehensive income attributable to Broadstone Net Lease, Inc.

The accompanying notes are an integral part of these consolidated financial statements.

Broadstone Net Lease, Inc.

and Subsidiaries

Consolidated Statement s of Equity

(in thousands, except per share amounts)

Paid-in Capital

Distributions

Comprehensive

Income (Loss)

Balance, January 1, 2022

Issuance of 23,682 shares of common stock

Offering costs, discounts, and commissions

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

Retirement of 59 shares of common stock under equity incentive plan

Conversion of 118 OP Units to 118 shares of common stock

Distributions declared ($ 1.080 per share and OP Unit)

Change in fair value of interest rate swap agreements

Realized loss on interest rate swap agreements

Adjustment to non-controlling interests

Balance, December 31, 2022

Issuance of 312 shares of common stock under equity incentive plan

Offering costs, discounts, and commissions

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

Retirement of 66 shares of common stock under equity incentive plan

Conversion of 1,277 OP Units to 1,277 shares of common stock

Distributions declared ($ 1.120 per share and OP Unit)

Change in fair value of interest rate swap agreements

Realized loss on interest rate swap agreements

Adjustment to non-controlling interests

Balance, December 31, 2023

Issuance of 893 shares of common stock under equity incentive plan

Offering costs, discounts, and commissions

Contributions from non-controlling interests

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

Retirement of 71 shares of common stock under equity incentive plan

Conversion of 282 OP Units to 282 shares of common stock

Distributions declared ($ 1.155 per share and OP Unit)

Change in fair value of interest rate swap agreements

Realized loss on interest rate swap agreements

Adjustment to non-controlling interests

Balance, December 31, 2024

The accompanying notes are an integral part of these consolidated financial statements.

Broadstone Net Lease, Inc.

and Subsidiaries

Consolidated Stateme nts of Cash Flows

(in thousands)

For the Year Ended December 31,

Operating activities

Adjustments to reconcile net income including non-controlling interests to net cash

provided by operating activities:

Depreciation and amortization including intangibles associated with

investment in rental property

Provision for impairment of investment in rental properties

Amortization of debt issuance costs and original issuance discounts charged to interest expense

Stock-based compensation expense

Straight-line rent, direct financing and sales-type lease adjustments

Gain on sale of real estate

Other non-cash items

Changes in assets and liabilities:

Tenant and other receivables

Prepaid expenses and other assets

Accounts payable and other liabilities

Accrued interest payable

Net cash provided by operating activities

Investing activities

Acquisition of rental property

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

Capital expenditures and improvements

Proceeds from disposition of rental property, net

Change in deposits on investments in rental property

Net cash (used in) provided by investing activities

Financing activities

Proceeds from issuance of common stock, net of $ 996 , $ 180 , and $ 7,492 of offering costs,

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

Contributions from non-controlling interests

Borrowings on mortgages, senior unsecured notes and unsecured term loans

Principal payments on mortgages and unsecured term loans

Borrowings on unsecured revolving credit facility

Repayments on unsecured revolving credit facility

Cash distributions paid to stockholders

Cash distributions paid to non-controlling interests

Debt issuance and extinguishment costs paid

Net cash (used in) provided by financing activities

Net (decrease) increase in cash and cash equivalents and restricted cash

Cash and cash equivalents and restricted cash at beginning of period

Cash and cash equivalents and restricted cash at end of period

Reconciliation of cash and cash equivalents and restricted cash

Cash and cash equivalents at beginning of period

Restricted cash at beginning of period

Cash and cash equivalents and restricted cash at beginning of period

Cash and cash equivalents at end of period

Restricted cash at end of period

Cash and cash equivalents and restricted cash at end of period

The accompanying notes are an integral part of these consolidated financial statements.

Broadstone Net Lease, Inc.

and Subsidiaries

Notes to Consolidated Financial Statements

December 31, 2024, 2023, and 2022

Business Description

Broadstone Net Lease, Inc.

(the “Corporation”) is a Maryland corporation formed on October 18, 2007, that elected to be taxed as a real estate investment trust (“REIT”) commencing with the taxable year ended December 31, 2008.

Broadstone Net Lease, LLC (the Corporation’s operating company, or the “OP”), is the entity through which the Corporation conducts its business and owns (either directly or through subsidiaries) all of the Corporation’s properties.

The Corporation is the sole managing member of the OP.

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

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

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

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

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

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

states and seven properties located in four Canadian provinces.

The following table summarizes the outstanding equity and economic ownership interest of the Company:

December 31, 2024

December 31, 2023

December 31, 2022

(in thousands)

Total Diluted Shares

Ownership interest

Percent ownership of OP

Refer to Note 14 for further discussion regarding the calculation of weighted average shares outstanding.

Summary of Significant Accounting Policies

Basis of Accounting

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

Principles of Consolidation

The Consolidated Financial Statements include the accounts and operations of the Company.

All intercompany balances and transactions have been eliminated in consolidation.

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

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

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

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

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

A primary beneficiary:

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

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

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

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

Based on consolidation guidance, the Corporation has concluded that the OP is a VIE as the members in the OP do not possess kick-out rights or substantive participating rights.

Accordingly, the Corporation consolidates its interest in the OP.

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

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

The Company is the primary beneficiary as it:

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

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

(in thousands)

Accounted for using the operating method:

Land improvements

Buildings and improvements

Total accounted for using the operating method

Less accumulated depreciation

Accounted for using the operating method, net

Intangible lease assets, net

Intangible lease liabilities, net

Other liabilities

Total liabilities

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

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

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

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

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

Use of Estimates

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

Accordingly, actual results may differ from those estimates.

Investment in Rental Property

Rental property accounted for under operating leases is recorded at cost.

Rental property accounted for under direct financing leases and sales-type leases are recorded at its net investment, which generally represents the cost of the property at the inception of the lease.

The Company accounts for its acquisitions of real estate as asset acquisitions in accordance with Accounting Standards Codification (“ASC”) 805, Business Combinations , as substantially all of the fair value of the assets acquired are concentrated in a single identifiable asset or group of similar identifiable assets.

The Company allocates the purchase price of investments in rental property accounted for as asset acquisitions based on the relative fair value of the assets acquired and liabilities assumed.

Acquisition costs incurred in connection with investments in real estate accounted for as asset acquisitions are capitalized and included with the allocated purchase price.

The results of operations of acquired properties are included in the Consolidated Statements of Income and Comprehensive Income from the respective date of acquisition.

Estimated fair value determinations are based on management’s judgment, which considers various factors including real estate market conditions, industry conditions that the tenant operates in, and characteristics of the real estate and/or real estate appraisals.

The estimated fair value of the tangible assets of an acquired property is determined by valuing the property as if it were vacant.

Specifically, the “if vacant” value of buildings and equipment is calculated using an income approach.

Assumptions used in the income approach to value the buildings include:

capitalization and discount rates, lease-up time, market rents, make ready costs, land value, and land improvement value.

The estimated fair value of acquired in-place leases are the costs that the Company would have had to incur to lease the properties to the occupancy level of the properties at the date of acquisition.

Such costs include the fair value of leasing commissions and other operating costs that would have been incurred to lease the properties, had they been vacant, to their acquired occupancy level.

Acquired in-place leases as of the date of acquisition are amortized over the remaining non-cancellable lease terms of the respective leases to amortization expense.

Acquired above-market and below-market lease values are recorded based on the present value (using an interest rate that reflects the risks associated with the lease acquired) of the differences between the contractual amounts to be paid pursuant to the in-place leases and management’s estimate of fair market value lease rates at the time of acquisition.

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

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

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

Assumed mortgages are initially recorded at their estimated fair value as of the assumption date, and the difference between such estimated fair value and the notes’ outstanding principal balance is amortized to interest expense over the remaining term of the debt.

Expenditures for significant betterments and improvements are capitalized.

Maintenance and repairs are charged to expense when incurred.

Investment in Property Under Development

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

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

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

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

(in thousands)

Development, construction and improvement costs

Capitalized interest

Property under development

For the Year Ended

(in thousands)

Investment in properties under development,

excluding capitalized costs

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

Long-lived Asset Impairment

The Company reviews long-lived assets to be held and used for possible impairment when events or changes in circumstances indicate that their carrying amounts may not be recoverable.

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

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

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

The Company’s assessment of impairment as of December 31, 2024, 2023, and 2022 , was based on the most current information available to the Company.

Certain of the Company’s properties may have fair values less than their carrying amounts.

If the operating conditions mentioned above deteriorate or if the Company’s expected holding period for assets changes, subsequent tests for impairments could result in additional impairment charges in the future.

Inputs used in establishing fair value for impaired real estate assets generally fall within Level 3 of the fair value hierarchy, which are characterized as requiring significant judgment as little or no current market activity may be available for validation.

The main indicator used to establish the classification of the inputs is current market conditions, as derived through the use of published commercial real estate market information and information obtained from brokers and other third party sources.

The Company determines the valuation of impaired assets using generally accepted valuation techniques including discounted cash flow analysis, income capitalization, analysis of recent comparable sales transactions, actual sales negotiations, and bona fide purchase offers received from third parties.

Management may consider a single valuation technique or multiple valuation techniques, as appropriate, when estimating the fair value of its real estate.

The following table summarizes the Company’s impairment charges, resulting primarily from changes in the Company's long-term hold strategy with respect to the individual properties:

For the Year Ended December 31,

(in thousands, except number of properties)

Number of properties

Impairment charge

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

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

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

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

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

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

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

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

Investments in Rental Property Held for Sale

The Company classifies investments in rental property as held for sale when all of the following criteria are met:

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

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

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

At December 31, 2024 and 2023 , the Company did not have any properties that met the held for sale criteria.

Sales of Real Estate

Under ASC 610-20, Other Income – Gains and Losses from the Derecognition of Nonfinancial Assets, the Company’s sales of real estate are generally considered to be sales to non-customers, requiring the Company to identify each distinct non-financial asset promised to the buyer.

The Company determines whether the buyer obtains control of the non-financial assets, achieved through the transfer of the risks and rewards of ownership of the non-financial assets.

If control is transferred to the buyer, the Company derecognizes the asset.

If the Company determines that it did not transfer control of the non-financial assets to the buyer, the Company analyzes the contract for separate performance obligations and allocates a portion of the sales price to each performance obligation.

As performance obligations are satisfied, the Company recognizes the respective income in the Consolidated Statements of Income and Comprehensive Income.

The Company presents discontinued operations if disposals of properties represent a strategic shift in operations.

Those strategic shifts would need to have a major effect on the Company’s operations and financial results in order to meet the definition.

For the years ended December 31, 2024, 2023, and 2022 , the Company did not have property dispositions that qualified as discontinued operations.

Depreciation is computed using the straight-line method over the estimated useful lives of the related assets, which are as follows:

Land improvements

Buildings and improvements

15 to 39 years

Leasing fees represent costs incurred to lease properties to tenants and are capitalized as they are incremental costs of a lease that would not have been incurred if the lease had not been obtained.

Leasing fees are amortized using the straight-line method over the term of the lease to which they relate, which range from 3 to 25 years.

Cash Equivalents

Cash equivalents consist of highly liquid investments with an original maturity at date of acquisition of three months or less, including money market funds.

The Company estimates that the fair value of cash equivalents approximates the carrying value due to the relatively short maturity of these instruments.

Restricted Cash

Restricted cash generally includes escrow funds the Company maintains pursuant to the terms of certain mortgages, lease agreements, and undistributed proceeds from the sale of properties under Section 1031 of the Internal Revenue Code of 1986, as amended (the “Code”), and is reported within Prepaid expenses and other assets in the Consolidated Balance Sheets.

Restricted cash consisted of the following:

(in thousands)

Escrow funds and other

Revenue Recognition

The Company accounts for leases in accordance with ASC 842, Leases (“ASC 842”).

The Company commences revenue recognition on its leases based on a number of factors, including the initial determination that the contract is or contains a lease.

Generally, all of the Company’s property related contracts are or contain leases, and therefore revenue is recognized when the lessee takes possession of or controls the physical use of the leased assets.

In most instances this occurs on the lease commencement date.

At the time of lease assumption or at the inception of a new lease, including new leases that arise from amendments, the Company assesses the terms and conditions of the lease to determine the proper lease classification.

Certain of the Company’s leases require tenants to pay rent based upon a percentage of the property’s net sales (“percentage rent”) or contain rent escalators indexed to future changes in the Consumer Price Index (“CPI”).

Lease income associated with such provisions, absent the existence of a floor, are considered variable lease income and are not included in the initial measurement of the lease receivable, or in the calculation of straight-line rent revenue.

Such amounts are recognized as income when the amounts are determinable.

A lease is classified as an operating lease if none of the following criteria are met:

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

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

Prior to the adoption of ASC 842, a lease that was not an operating lease would be accounted for as a direct financing lease.

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

Determination of significance requires management judgment.

In determining whether the accounting effect of separately reporting the land component from other components for its real estate leases is significant, the Company assesses:

(i) whether separating the land component impacts the classification of any lease component, (ii) the value of the land component in the context of the overall contract, and (iii) whether the right to use the land is coterminous with the rights to use the other assets.

Revenue recognition methods for operating leases, direct financing leases, and sales-type leases are described below:

Rental property accounted for under operating leases – Revenue is recognized as rents are earned on a straight-line basis over the non-cancelable terms of the related leases.

For leases that have fixed and measurable rent escalations and collectability of the lease payments is probable, the difference between such rental income earned and the cash rent due under the provisions of the lease is recorded as Accrued rental income in the Consolidated Balance Sheets.

If the Company determines that collectability of the lease payments is not probable, the Company records an adjustment to Lease revenues, net to reduce cumulative income recognized since lease commencement to the amount of cash collected from the lessee (i.e., write off of accrued rental income).

Future revenue recognition is limited to amounts paid by the lessee.

Rental property accounted for under direct financing leases – The Company utilizes the direct finance method of accounting to record direct financing lease income.

The net investment in the direct financing lease represents receivables for the sum of future lease payments to be received and the estimated residual value of the leased property, less unamortized unearned income (which represents the difference between undiscounted cash flows and discounted cash flows).

Unearned income is deferred and amortized into income over the lease terms so as to produce a constant periodic rate of return on the Company’s net investment in the leases.

Rental property accounted for under sales-type leases – For leases accounted for as sales-type leases, the Company records selling profit arising from the lease at inception, along with the net investment in the lease.

The Company leases assets through the assumption of existing leases or through sale-leaseback transactions, and records such assets at their fair value at the time of acquisition, which in most cases coincides with lease inception.

As a result, the Company does not generally recognize selling profit on sales-type leases.

The net investment in the sales-type lease represents receivables for the sum of future lease payments and the estimated unguaranteed residual value of the leased property, each measured at net present value.

Interest income is recorded over the lease terms so as to produce a constant periodic rate of return on the Company’s net investment in the leases.

Certain of the Company’s lease contracts contain nonlease components ( e.g.

, charges for management fees, common area maintenance, and reimbursement of third-party maintenance expenses) in addition to lease components (e .g.

, monthly rental charges).

Services related to nonlease components are provided over the same period of time as, and billed in the same manner as, monthly rental charges.

The Company elected to apply the practical expedient available under ASC 842, for all classes of assets, not to separate the lease components from the nonlease components when accounting for operating leases.

Since the lease component is the predominant component under each of these leases, combined revenues from both the lease and nonlease components are reported as Lease revenues, net in the accompanying Consolidated Statements of Income and Comprehensive Income.

In accordance with ASC 842, provisions for uncollectible rent are recorded as an offset to Lease revenues, net in the accompanying Consolidated Statements of Income and Comprehensive Income.

Lease Termination Fee Income

The Company recognizes lease termination fee income as other income from real estate transactions, a component of Lease revenues, net, when all conditions of the termination agreement have been met, and collection of the lease termination fee is probable.

If the tenant immediately vacates the property upon satisfying the conditions of the termination agreement, the Company recognizes the lease termination fee income net of the write off of accrued rental income associated with the lease immediately.

If the tenant continues to occupy the property, the Company treats the termination as a lease modification, and recognizes the lease termination fee income on a straight-line basis over the new lease term.

Lease termination fee income is recorded as other income from real estate transactions, a component of Lease revenues, net, in the Consolidated Statements of Income and Comprehensive Income.

The Company evaluates goodwill for impairment when an event occurs or circumstances change that indicate the carrying value may not be recoverable, or at least annually.

The Company’s annual testing date is November 30.

The goodwill impairment evaluation is completed using either a qualitative or quantitative approach.

Under a qualitative approach, the impairment review for goodwill consists of an assessment of whether it is more-likely-than-not that the reporting unit’s fair value is less than its carrying value, including goodwill.

If a qualitative approach indicates it is more likely-than-not that the estimated carrying value of a reporting unit (including goodwill) exceeds its fair value, or if we choose to bypass the qualitative approach, we perform the quantitative approach described below.

When the Company performs a quantitative test of goodwill for impairment, it compares the carrying value of its reporting unit with its fair value.

If the fair value of the reporting unit exceeds its carrying amount, the Company does not consider goodwill to be impaired and no further analysis would be required.

If the fair value is determined to be less than its carrying value, the amount of goodwill impairment equals the amount by which the reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill.

The Company determined that it has one reporting unit, consistent with its segment reporting analysis, which includes the acquisition, leasing, and ownership of net leased properties (i.e., the consolidated entity).

When necessary to perform the quantitative test for goodwill impairment, the Company’s estimate of fair value is determined using a market approach, leveraging assumptions such as the fair value of our equity inclusive of our consideration of a control premium, if necessary, which includes an analysis of similar market transactions and other quantitative and qualitative factors.

While the Company believes the assumptions used to estimate the fair value of its reporting unit are reasonable, changes in these assumptions may have a material impact on the Company’s financial results.

Based on the results of its annual goodwill impairment test on November 30, 2024 and 2023, the Company concluded that goodwill was not impaired, and that the fair value of its reporting unit was substantially in excess of carrying value.

Rent Received in Advance

Rent received in advance represents tenant rent payments received prior to the contractual due date, and is included in Accounts payable and other liabilities in the Consolidated Balance Sheets.

Rent received in advance consisted of the following:

(in thousands)

Rent received in advance

Debt Issuance Costs

In accordance with ASC 835, Interest, debt issuance costs related to mortgages, unsecured term loans and senior unsecured notes are reported as a direct deduction from the carrying amount of the related liability, consistent with debt discounts, in the Consolidated Balance Sheets.

Debt issuance costs associated with the unsecured revolving credit facility are reported as an asset in the Consolidated Balance Sheets.

Debt issuance costs incurred in connection with the Company’s unsecured revolving credit facility, mortgages, unsecured term loans and senior unsecured notes have been deferred and are being amortized over the term of the respective loan commitment using the straight-line method, which approximates the effective interest method.

Offering Costs

In connection with equity offerings, the Company incurs and capitalizes certain direct, incremental legal, professional, accounting and other third-party costs.

Such costs are offset against the gross proceeds of each equity offering, and recorded as a component of Additional paid-in capital in the Consolidated Balance Sheets upon the consummation of the offering.

See Note 12 for further discussion of net proceeds associated with equity offerings.

Forward Sale Agreements

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

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

To date, the Company has concluded that its forward sale agreements are not liabilities as they do not embody obligations to repurchase its shares nor do they embody obligations to issue a variable number of shares for which the monetary value is predominantly fixed, varying with something other than the fair value of the shares, or varying inversely in relation to its shares.

The Company then evaluates whether the agreements meet the derivatives and hedging guidance scope exception to be accounted for as equity instruments.

The Company has concluded that the agreements are classifiable as equity contracts based on the following assessments:

(i) none of the agreements’ exercise contingencies are based on observable markets or indices besides those related to the market for the Company’s own stock price and operations;

and (ii) none of the settlement provisions preclude the agreements from being indexed to its own stock.

The Company also considers the potential dilution resulting from the forward sale agreements on the earnings per share calculations.

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

Non-controlling Interests

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

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

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

Derivative Instruments

The Company uses interest rate swap agreements to manage risks related to interest rate movements.

The interest rate swap agreements, designated and qualifying as cash flow hedges, are reported at fair value.

ASC 815, Derivatives and Hedging (“ASC 815”) , requires a company to present the earnings effect of the hedging instrument in the same income statement line item in which the earnings effect of the hedged item is reported.

In accordance with ASC 815, the gain or loss on the qualifying hedges is initially included as a component of other comprehensive income or loss and is subsequently reclassified into earnings when interest payments (the forecasted transactions) on the related debt are incurred and as the swap net settlements occur.

When an existing cash flow hedge is terminated, the Company determines the accounting treatment for the accumulated gain or loss recognized in Accumulated other comprehensive income based on the probability of the hedged forecasted transaction occurring within the period the cash flow hedge was anticipated to affect earnings.

If the Company determines that the hedged forecasted transaction is probable of occurring during the original period, the accumulated gain or loss is reclassified into earnings over the remaining life of the cash flow hedge using a straight-line method.

If the Company determines that the hedged forecasted transaction is not probable of occurring during the original period, the entire amount of accumulated gain or loss is reclassified into earnings at such time.

The Company documents its risk management strategy and hedge effectiveness at the inception of, and during the term of, each hedge.

The Company’s interest rate risk management strategy is intended to stabilize cash flow requirements by maintaining interest rate swap agreements to convert certain variable-rate debt to a fixed rate.

Property Loss and Insurance Recoveries

Property losses, whether full or partial, are accounted for using a combination of impairment, insurance, and revenue recognition guidance prescribed by GAAP.

Upon incurring a loss event, the Company evaluates for asset impairment under ASC 350, Intangibles – Goodwill and Other, and ASC 360, Property, Plant, and Equipment.

Under the terms of the Company’s lease agreements with tenants, a majority of which are net leases (whereby the tenants are responsible for insurance, taxes, and maintenance, among other property costs), the tenants are responsible for repairs and maintenance to the properties.

The terms of the leases generally also require the tenants to continue making their monthly rental payments despite the property loss.

To the extent that the assets are recoverable, determined utilizing undiscounted cash flows expected to result from the use of the asset or asset group and its eventual disposition, the Company accounts for a full or partial property loss as an acceleration of depreciation and evaluates whether all or a portion of the property loss can be offset by the recognition of insurance recoveries.

Under the terms of the lease agreements with tenants, in the case of full or partial loss to a property, the tenant has an obligation to restore/rebuild the premises as nearly as possible to its value, condition and character immediately prior to such event.

To mitigate the risk of loss, the Company requires tenants to maintain general liability insurance policies on the replacement value of the properties.

Based on these considerations, the Company follows the guidance in ASC 610-30, Other Income – Gains and Losses on Involuntary Conversions (“ASC 610-30”) , for the conversion of nonmonetary assets ( i.e.

, the properties) to monetary assets ( i.e.

, insurance recoveries or tenant recoveries).

Under ASC 610-30, once probable of receipt, the Company recognizes an insurance/tenant recovery receivable in Tenant and other receivables, net, in the Consolidated Balance Sheets, with a corresponding offset to the accelerated depreciation recognized in the Consolidated Statements of Income and Comprehensive Income.

If the insurance/tenant recovery is less than the amount of accelerated depreciation recognized, the Company will recognize a net loss in the Consolidated Statements of Income and Comprehensive Income.

If the insurance/tenant recovery is greater than the amount of accelerated depreciation recognized, the Company will only recognize a recovery up to the amount of the accelerated depreciation, and will account for the excess as a gain contingency in accordance with ASC 450-30, Gain Contingencies.

Gain contingencies are recognized when earned and realized, which typically will occur at the time of final settlement or when non-refundable cash advances are received.

Segment Reporting

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

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

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

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

Fair Value Measurements

ASC 820, Fair Value Measurement (“ASC 820”) , defines fair value as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.

ASC 820 also establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value.

The standard describes three levels of inputs that may be used to measure fair value:

Level 1 – Quoted prices that are available in active markets for identical assets or liabilities.

The types of financial instruments included in Level 1 are marketable, available-for-sale equity securities that are traded in an active exchange market.

Level 2 – Pricing inputs other than quoted prices in active markets, such as quoted prices for similar assets or liabilities;

quoted prices in markets that are not active;

or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Instruments included in this category are derivative contracts whose value is determined using a pricing model with inputs (such as yield curves and credit spreads) that are observable in the market or can be derived principally from or corroborated by observable market data.

Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Level 3 includes assets and liabilities whose values are determined using pricing models, discounted cash flow methodologies, or similar techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation.

The Company has estimated that the carrying amount reported in the Consolidated Balance Sheets for Cash and cash equivalents, Prepaid expenses and other assets, Tenant and other receivables, net, Accrued interest payable, Accounts payable and other liabilities, and Dividends payable approximates their fair values due to their short-term nature.

Recurring Fair Value Measurements

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

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

Specifically, the fair value of the interest rate swaps is determined using a discounted cash flow analysis on the expected future cash flows of each instrument.

This analysis utilizes observable market data including yield curves and implied volatilities to determine the market’s expectation of the future cash flows of the variable component.

The fixed and variable components of the interest rate swaps are then discounted using calculated discount factors developed based on the overnight indexed swap (“OIS”) curve and are aggregated to arrive at a single valuation for the period.

The Company also incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements.

Although the Company has determined that the majority of the inputs used to value its interest rate swaps fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its interest rate swaps utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by itself and its counterparties.

At December 31, 2024 and 2023, the Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation.

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

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

December 31, 2024

(in thousands)

Interest rate swap, assets

December 31, 2023

(in thousands)

Interest rate swap, assets

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

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

The discount rates estimated reflect the Company’s judgment as to the approximate current lending rates for loans or groups of loans with similar maturities and assumes that the debt is outstanding through maturity.

Market information, as available, or present value techniques were utilized to estimate the amounts required to be disclosed.

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

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

(in thousands)

Carrying amount

Non-recurring Fair Value Measurements

The Company’s non-recurring fair value measurements at December 31, 2024 and 2023 , consisted of the fair value of impaired real estate assets that were determined using Level 3 inputs.

The Company has made an election to be taxed as a REIT under Sections 856 through 860 of the Code, commencing with its taxable year ended December 31, 2008.

The Company believes it is organized and operates in such a manner as to qualify for treatment as a REIT, and intends to operate in the foreseeable future in such a manner so that it will remain qualified as a REIT for U.S.

federal income tax purposes.

Accordingly, the Company is not subject to U.S.

federal corporate income tax to the extent its dividends paid deduction exceeds its taxable income, as defined in the Code.

Accordingly, no provision has been made for U.S.

federal income taxes in the accompanying Consolidated Financial Statements.

The Company has a wholly-owned subsidiary that elected to be treated as a taxable REIT subsidiary (“TRS”) and is subject to U.S.

federal, state and local income taxes at regular corporate tax rates when due.

The Company is subject to state and local income or franchise taxes and foreign taxes in certain jurisdictions in which some of its properties are located and records these within Income taxes in the accompanying Consolidated Statements of Income and Comprehensive Income when due.

The Company is required to file income tax returns with federal, state, and Canadian taxing authorities.

At December 31, 2024, the Company’s U.S.

federal and state income tax returns remain subject to examination by the respective taxing authorities for the 2021 through 2023 tax years.

The Company recognizes and measures uncertain tax positions using a two-step approach.

The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more-likely-than-not that the position will be sustained upon examination, including resolution of related appeals or litigation processes, if any.

In making this assessment, the Company must assume that the taxing authority will examine the income tax position and have full knowledge of all relevant information.

The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon ultimate settlement.

The Company considers many factors when evaluating and estimating tax positions and tax benefits, which may require periodic adjustments and which may or may not accurately forecast actual outcomes.

The Company has determined that it has no uncertain tax positions as of December 31, 2024 and 2023.

Interest and penalties related to income taxes are charged to tax expense during the year in which they are incurred.

Taxes Collected From Tenants and Remitted to Governmental Authorities

A majority of the Company’s properties are leased on a net basis, which provides that the tenants are responsible for the payment of property operating expenses, including, but not limited to, property taxes, maintenance, insurance, repairs, and capital costs, during the lease term.

The Company records such expenses on a net basis.

In other situations, the Company may collect property taxes from its tenants and remit those taxes to governmental authorities.

Taxes collected from tenants and remitted to governmental authorities are presented on a gross basis, where amounts billed to tenants are included in Lease revenues, net and the corresponding expense is included in Property and operating expense in the accompanying Consolidated Statements of Income and Comprehensive Income.

Right-of-Use Assets and Lease Liabilities

The Company is a lessee under non-cancelable operating leases associated with its corporate headquarters and other office spaces as well as with leases of land (“ground leases”).

The Company records right-of-use assets and lease liabilities associated with these leases.

The lease liability is equal to the net present value of the future payments to be made under the lease, discounted using estimates based on observable market factors.

The right-of-use asset is generally equal to the lease liability plus initial direct costs associated with the leases.

The Company includes in the recognition of the right-of-use asset and lease liability those renewal periods that are reasonably certain to be exercised, based on the facts and circumstances that exist at lease inception.

Amounts associated with percentage rent provisions are considered variable lease costs and are not included in the initial measurement of the right-of-use asset or lease liability.

The Company has made an accounting policy election, applicable to all asset types, not to separate lease from nonlease components when allocating contract consideration related to operating leases.

Right-of-use assets and lease liabilities associated with operating leases were included in the accompanying Consolidated Balance Sheets as follows:

(in thousands)

Financial Statement Presentation

Right-of-use assets

Prepaid expenses and other assets

Lease liabilities

Accounts payable and other liabilities

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

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

Rental Expense

Rental expense associated with operating leases is recorded on a straight-line basis over the term of each lease, for leases that have fixed and measurable rent escalations.

The difference between rental expense incurred on a straight-line basis and the cash rental payments due under the provisions of the lease is recorded as part of the right-of-use asset in the accompanying December 31, 2024 and 2023 Consolidated Balance Sheets.

Amounts associated with percentage rent provisions based on the achievement of sales targets are recognized as variable rental expense when achievement of the sales targets are considered probable.

Rental expense, which primarily consists of office space, is included in both General and administrative and Property and operating expense line items in the accompanying Consolidated Statements of Income and Comprehensive Income as follows:

For the Year Ended December 31,

(in thousands)

Rental expense

Stock-Based Compensation

The Company has issued restricted stock awards (“RSAs”) and performance-based restricted stock units (“PRSUs”) under its 2020 Omnibus Equity and Incentive Plan (the “Equity Incentive Plan”).

The Company accounts for stock-based incentives in accordance with ASC 718, Compensation – Stock Compensation , which requires that such compensation be recognized in the financial statements based on the award’s estimated grant date fair value.

The value of such awards is recognized as compensation expense in General and administrative expenses in the Consolidated Statements of Income and Comprehensive Income over the appropriate vesting period on a straight-line basis or at the cumulative amount vested at each balance sheet date, if greater.

The Company records forfeitures during the period in which they occur by reversing all previously recorded stock compensation expense associated with the forfeited shares.

Dividends declared on RSAs issued under the Equity Incentive Plan are recorded as Cumulative distributions in excess of retained earnings in the Consolidated Balance Sheets.

Accumulated dividends related to forfeited RSAs are reversed through compensation expense in the period the forfeiture occurs.

Dividends accrued on the PRSUs are recorded as Cumulative distributions in excess of retained earnings in the Consolidated Balance Sheets.

Accumulated dividends accrued related to forfeited PRSUs are reversed in the period the forfeiture occurs.

Earnings per Share

Earnings per common share has been computed pursuant to the guidance in ASC 260, Earnings Per Share, which requires the classification of the Company’s unvested shares of restricted common stock, which contain rights to receive non-forfeitable dividends, as participating securities requiring the two-class method of computing earnings per share.

The two-class method is an earnings allocation formula that determines earnings per share for each class of common stock and participating securities according to dividends declared (or accumulated) and participation rights in undistributed earnings.

In accordance with the two-class method, the Company’s calculation of earnings per share excludes the income attributable to the unvested shares of restricted common stock from the numerator of the calculation and the weighted average number of such unvested shares from the denominator.

Diluted earnings per share is computed by dividing net income by the weighted average shares of common stock and potentially dilutive securities in accordance with the treasury stock method and/or if converted method.

See Note 14 .

Recently Adopted Accounting Standards

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

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

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

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

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

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

Recently Issued Accounting Standards

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

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

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

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

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

Acquisitions of Rental Property

The Company closed on the following acquisitions during the year ended December 31, 2024:

(in thousands, except number of properties)

Property Type

Acquisition Price

April 4, 2024

April 18, 2024

Industrial & Retail

June 24, 2024

September 3, 2024

September 5, 2024

December 12, 2024

December 24, 2024

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

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

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

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

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

The Company closed on the following acquisitions during the year ended December 31, 2023:

(in thousands, except number of properties)

Property Type

Acquisition Price

March 14, 2023

July 11, 2023

November 14, 2023

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

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

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

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

The following table summarizes the purchase price allocation for completed real estate acquisitions:

For the Year Ended December 31,

(in thousands)

Land improvements

Buildings and improvements

Property under development

Acquired in-place leases (h)

Acquired above-market leases (i)

Acquired below-market leases (j)

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

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

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

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

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

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

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

(in thousands, except number of properties)

January 28, 2025

February 13, 2025

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

Sale of Real Estate

The Company closed on the following sales of real estate, none of which qualified as discontinued operations:

For the Year Ended December 31,

(in thousands, except number of properties)

Number of properties disposed

Aggregate sale price

Aggregate carrying value

Additional sales expenses

Gain on sale of real estate

Investment in Rental Property and Lease Arrangements

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

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

Of the nine leases classified as direct financing leases , three include land portions which are accounted for as operating leases.

The sales-type lease includes a land portion which is accounted for as an operating lease (see Revenue Recognition within Note 2).

Most leases have initial terms of 10 to 20 years.

The Company’s leases generally provide for limited increases in rent as a result of fixed increases, increases in the CPI, or increases in the tenant’s sales volume.

Generally, tenants are also required to pay all property taxes and assessments, substantially maintain the interior and exterior of the building, and maintain property and liability insurance coverage.

The leases also typically provide for one or more multiple year renewal options, at the election of the tenant, and are subject to generally the same terms and conditions as the initial lease.

Investment in Rental Property – Accounted for Using the Operating Method

Depreciation expense on investment in rental property was as follows:

For the Year Ended December 31,

(in thousands)

Estimated lease payments to be received under non-cancelable operating leases with tenants at December 31, 2024 are as follows:

(in thousands)

Since lease renewal periods are exercisable at the option of the tenant, the above amounts only include future lease payments due during the initial lease terms.

Such amounts exclude any potential variable rent increases that are based on changes in the CPI or future variable rents which may be received under the leases based on a percentage of the tenant’s gross sales.

Additionally, certain of our leases provide tenants with the option to terminate their leases in exchange for termination penalties, or that are contingent upon the occurrence of a future event.

Future lease payments within the table above have not been adjusted for these termination rights.

Investment in Rental Property – Direct Financing Leases

The Company’s net investment in direct financing leases was comprised of the following:

(in thousands)

Undiscounted estimated lease payments to be received

Estimated unguaranteed residual values

Unearned revenue

Reserve for credit losses

Net investment in direct financing leases

Undiscounted estimated lease payments to be received under non-cancelable direct financing leases with tenants at December 31, 2024 are as follows:

(in thousands)

The above rental receipts do not include future lease payments for renewal periods, potential variable CPI rent increases, or variable percentage rent payments that may become due in future periods.

The following table summarizes amounts reported as Lease revenues, net in the Consolidated Statements of Income and Comprehensive Income:

For the Year Ended December 31,

(in thousands)

Contractual rental amounts billed for operating leases

Adjustment to recognize contractual operating lease billings on a

straight-line basis

Net write-offs of accrued rental income

Variable rental amounts earned

Earned income from direct financing leases

Interest income from sales-type leases

Operating expenses billed to tenants

Other income from real estate transactions (a)

Adjustment to revenue recognized for uncollectible rental amounts billed, net

Total lease revenues, net

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

Intangible Assets and Liabilities, and Leasing Fees

The following is a summary of intangible assets and liabilities, and leasing fees, and related accumulated amortization:

(in thousands)

Lease intangibles:

Acquired above-market leases

Less accumulated amortization

Acquired above-market leases, net

Acquired in-place leases

Less accumulated amortization

Acquired in-place leases, net

Total intangible lease assets, net

Acquired below-market leases

Less accumulated amortization

Intangible lease liabilities, net

Less accumulated amortization

Leasing fees, net

Amortization of intangible lease assets and liabilities, and leasing fees was as follows:

(in thousands)

For the Year Ended December 31,

Financial Statement Presentation

Acquired in-place leases and leasing fees

Depreciation and amortization

Above-market and below-market leases

Lease revenues, net

For the years ended December 31, 2024, 2023 and 2022 , amortization of all intangible assets and liabilities includes $ 1.6 million, $ 0.9 million, and $ 8.5 million, respectively, of accelerated amortization resulting from early lease terminations.

Estimated future amortization of intangible assets and liabilities, and leasing fees at December 31, 2024 is as follows:

(in thousands)

Unsecured Credit Agreements

Unsecured Revolving Credit Agreements

Unsecured Revolving Credit Facility

On September 4, 2020, the Company entered into a $ 900.0 million unsecured revolving credit facility (the “Revolving Credit Facility”), with JPMorgan Chase Bank, N.A., as administrative agent.

The Company closed the Revolving Credit Facility on September 21, 2020.

The Revolving Credit Facility includes an accordion feature to increase the aggregate facility size from $ 900.0 million to $ 2.0 billion, subject to the willingness of existing or new lenders to fund such increase and other customary conditions.

The Company has the option to extend the term of the Revolving Credit Facility twice for six months per extension , subject to certain conditions, including payment of an extension fee equal to 0.0625 % of the revolving commitments.

On January 28, 2022, the Company amended and restated the Revolving Credit Facility to increase the available borrowings to $ 1.0 billion and extend the maturity date to March 31, 2026 .

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

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

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

The applicable facility fee is 0.200 % per annum.

Unsecured Term Loan Agreements

2026 Unsecured Term Loan

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

The 2026 Unsecured Term Loan provides an accordion feature for up to a total of $ 550.0 million borrowing capacity.

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

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

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

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

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

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

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

2027 and 2029 Unsecured Term Loans

On August 1, 2022, the Company entered into two unsecured term loans, including a $ 200.0 million, five-year unsecured term loan (the “2027 Unsecured Term Loan”), and a $ 300.0 million, seven-year unsecured term loan (the “2029 Unsecured Term Loan”) both with Regions Bank as administrative agent.

Borrowings on the term loans bear interest at variable rates based on adjusted SOFR, plus a margin based on the Company’s credit rating, ranging between 0.80 % and 1.60 % per annum for the 2027 Unsecured Term Loan, and 1.15 % and 2.20 % per annum for the 2029 Unsecured Term Loan.

Senior Unsecured Notes

2027 Senior Unsecured Notes - Series A

On April 18, 2017, the Company issued $ 150.0 million of unsecured, fixed-rate, interest-only guaranteed senior promissory notes (the “2027 Senior Unsecured Notes - Series A”).

The 2027 Senior Unsecured Notes - Series A were issued at par, and bear interest at a rate of 4.84 %.

2028 Senior Unsecured Notes - Series B and 2030 Senior Unsecured Notes - Series C

On July 2, 2018, the Company entered into a Note and Guaranty Agreement (the “NGA Agreement”) with each of the purchasers of unsecured, fixed-rate, interest-only, guaranteed senior promissory notes.

Under the NGA Agreement, the OP issued and sold senior promissory notes in two series, series B guaranteed senior notes (the “2028 Senior Unsecured Notes - Series B”) and series C guaranteed senior notes (the “2030 Unsecured Notes - Series C”), for an aggregate principal amount of $ 325.0 million.

The 2028 Senior Unsecured Notes - Series B provide for an aggregate principal amount of $ 225.0 million with a fixed-rate of 5.09 %.

The 2030 Senior Unsecured Notes - Series C provide for an aggregate principal amount of $ 100.0 million with a fixed-rate of 5.19 %.

2031 Senior Unsecured Public Notes

On September 15, 2021, the Company completed a public offering of $ 375.0 million in aggregate principal amount of 2.60 % senior unsecured notes due in 2031 (the “2031 Senior Unsecured Public Notes”), issued at 99.816 % of the principal amount.

The 2031 Senior Unsecured Public Notes require semi-annual interest payments through the maturity date of September 15, 2031 , unless earlier redeemed.

The 2031 Senior Unsecured Public Notes were issued by the OP and are fully and unconditionally guaranteed by the Company.

Covenants on Unsecured Credit Agreements

The Company is subject to various financial and operational covenants and financial reporting requirements pursuant to its unsecured credit agreements.

These covenants require the Company to maintain certain financial ratios.

As of December 31, 2024, and for all periods presented, the Company believes it was in compliance with all of its loan covenants.

Failure to comply with the covenants would result in a default which, if the Company were unable to cure or obtain a waiver from the lenders, could accelerate the repayment of the obligations.

Further, in the event of default, the Company may be restricted from paying dividends to its stockholders in excess of dividends required to maintain its REIT qualification.

Accordingly, an event of default could have a material effect on the Company.

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

Outstanding Balance

(in thousands, except interest rates)

Interest Rate

Maturity Date

Unsecured revolving credit facility

Applicable reference rate + 0.85 % (a)

Unsecured term loans:

2026 Unsecured Term Loan

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

2027 Unsecured Term Loan

daily simple adjusted SOFR + 0.95 % (c)

2029 Unsecured Term Loan

daily simple adjusted SOFR + 1.25 % (c)

Total unsecured term loans

Unamortized debt issuance costs, net

Total unsecured term loans, net

Senior unsecured notes:

2027 Senior Unsecured Notes - Series A

2028 Senior Unsecured Notes - Series B

2030 Senior Unsecured Notes - Series C

2031 Senior Unsecured Public Notes

Total senior unsecured notes

Unamortized debt issuance costs and

original issuance discount, net

Total senior unsecured notes, net

Total unsecured debt, net

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

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

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

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

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

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

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

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

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

The following table summarizes debt issuance cost and original issuance discount amortization:

For the Year Ended December 31,

(in thousands)

Debt issuance costs and original issuance discount amortization

The Company’s mortgages consist of the following:

(in thousands, except interest rates)

Wilmington Trust National Association

(a) (b) (c) (d)

Wilmington Trust National Association

(a) (b) (c) (d)

Total mortgages

Debt issuance costs, net

Mortgages, net

(a) Non-recourse debt includes the indemnification/guaranty of the Company pertaining to fraud, environmental claims, insolvency, and other matters.

(b) Debt secured by related rental property and lease rents.

(d) Mortgage was assumed as part of the acquisition of the related property.

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

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

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

(in thousands)

Certain of the Company’s mortgages provide for prepayment fees and can be terminated under certain events of default as defined under the related agreements.

These prepayment fees are not reflected as part of the table above.

Interest Rate Swaps

Interest rate swaps were entered into with certain financial institutions in order to mitigate the impact of interest rate variability over the term of the related debt agreements.

The interest rate swaps are considered cash flow hedges.

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

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

The intended net impact of these transactions is that the Company pays a fixed interest rate on its variable-rate borrowings.

In order to reduce counterparty concentration risk, the Company diversifies the institutions that serve as swap counterparties.

The Company is exposed to credit risk in the event of non-performance by the counterparties of the swaps.

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

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

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

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

(in thousands, except interest rates)

December 31, 2024

December 31, 2023

Maturity Date

Variable Rate Index (a)

Effective Swaps:

Wells Fargo Bank, N.A.

daily compounded SOFR

Capital One, National Association

December 2024

daily compounded SOFR

Bank of Montreal

daily compounded SOFR

Truist Financial Corporation

daily compounded SOFR

Bank of Montreal

daily compounded SOFR

Truist Financial Corporation

daily compounded SOFR

Truist Financial Corporation

December 2025

daily compounded SOFR

Bank of Montreal

daily compounded SOFR

Bank of Montreal

daily compounded SOFR

Capital One, National Association

daily compounded SOFR

Truist Financial Corporation

daily compounded SOFR

Capital One, National Association

daily compounded SOFR

Capital One, National Association

daily compounded SOFR

Bank of Montreal

December 2026

daily compounded SOFR

Bank of Montreal

December 2026

daily compounded SOFR

Toronto-Dominion Bank

daily compounded CORRA

Wells Fargo Bank, N.A.

daily compounded SOFR

Bank of Montreal

December 2027

daily compounded SOFR

Capital One, National Association

December 2027

daily compounded SOFR

Wells Fargo Bank, N.A.

daily compounded SOFR

Bank of Montreal

daily compounded SOFR

Bank National Association

daily compounded SOFR

one-month SOFR

Toronto-Dominion Bank

one-month SOFR

Bank National Association

one-month SOFR

Bank National Association

one-month SOFR

Bank National Association

daily compounded SOFR

daily compounded CORRA

Bank National Association

daily compounded CORRA

Bank of Montreal

daily compounded CORRA

Forward Starting Swaps:

Bank of Montreal

daily simple SOFR

JPMorgan Chase Bank, N.A.

daily simple SOFR

Bank National Association

daily simple SOFR

Truist Financial Corporation

daily simple SOFR

Manufacturers & Traders Trust Company

September 2030

daily simple SOFR

September 2030

daily simple SOFR

Truist Financial Corporation

September 2030

daily simple SOFR

Toronto-Dominion Bank

December 2030

daily simple SOFR

December 2030

daily simple SOFR

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

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

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

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

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

Total Interest Expense

Amount of Gain (Loss)

Presented in the

Recognized in

Reclassification from Accumulated

Consolidated Statements

Accumulated Other

Other Comprehensive Income

of Income and

(in thousands)

Comprehensive

For the year ended December 31,

Interest expense

Amounts related to the interest rate swaps expected to be reclassified out of Accumulated other comprehensive income to Interest expense during the next twelve months are estimated to be a gain of $ 16.1 million.

Non-Controlling Interests

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

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

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

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

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

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

The OP Units are redeemable for cash at the option of the holder, however, the Company may issue shares in lieu of cash.

Therefore, the OP Units are considered to be permanent equity.

Exchanges of OP Units held by non-controlling interest holders are recorded by reducing non-controlling interest on a historical cost basis with a corresponding increase in common stock and additional paid-in capital.

The following table summarizes OP Units exchanged for shares of common stock:

For the Year Ended December 31,

(in thousands)

OP Units exchanged for shares of common stock

Value of units exchanged

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

Credit Risk Concentrations

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

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

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

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

The common stock has no preferences or preemptive conversion or exchange rights.

Pursuant to the limited liability company agreement between the Corporation and the OP, each outstanding OP Unit is convertible into one share of the Corporation’s common stock, subject to the terms and conditions set forth in the OP’s operating agreement.

Preferred Stock

The Charter also provides the Board of Directors with the authority to issue one or more classes or series of preferred stock, and prior to the issuance of such shares of preferred stock, the Board of Directors shall have the power from time to time to classify or reclassify, in one or more series, any unissued shares and designate the preferences, rights and privileges of such shares of preferred stock.

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

At-the-Market Program (“ATM Program”)

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

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

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

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

(in thousands)

Aggregate Gross Sales

Shares Issued

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

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

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

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

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

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

For the Year Ended December 31,

(in thousands, except per share amounts)

Number of common shares issued

Weighted average sale price per share

Gross proceeds

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

Stock Repurchase Program

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

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

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

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

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

Stock-Based Compensation

Restricted Stock Awards

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

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

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

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

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

For the Year Ended December 31,

(in thousands)

Compensation cost

Dividends declared on unvested RSAs

Fair value of shares vested during the period

As of December 31, 2024 , there was $ 11.2 million of unrecognized compensation costs related to the unvested restricted shares, which is expected to be recognized over a weighted average period of 3.3 years.

The following table presents information about the Company’s restricted stock activity:

For the Year Ended December 31,

(in thousands, except per share amounts)

Number of Shares

Weighted Average Grant Date Fair Value per Share

Number of Shares

Weighted Average Grant Date Fair Value per Share

Number of Shares

Weighted Average Grant Date Fair Value per Share

Unvested at beginning of period

Unvested at end of period

Performance-based Restricted Stock Units

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

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

Vesting percentages range from 0 % to 200 %, with a target of 100 %.

rTSR means the percentage appreciation in the fair market value of one share over the three year measurement period beginning on the date of grant, assuming the reinvestment of dividen ds on the ex-dividend date.

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

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

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

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

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

For the Year Ended December 31,

(in thousands)

Compensation cost

As of December 31, 2024 , there was $ 3.8 million of unrecognized compensation costs related to the unvested PRSUs, which is expected to be recognized over a weighted average period of 1.7 years.

The following table presents information about the Company’s performance-based restricted stock unit activity:

For the Year Ended December 31,

(in thousands, except per share amounts)

Number of Shares

Weighted Average

Grant Date Fair

Value per Share

Number of Shares

Weighted Average

Grant Date Fair

Value per Share

Number of Shares

Weighted Average

Grant Date Fair

Value per Share

Unvested at beginning of period

Unvested at end of period

Earnings per Share

The following table summarizes the components used in the calculation of basic and diluted earnings per share (“EPS”):

For the Year Ended December 31,

(in thousands, except per share amounts)

Basic earnings:

Net earnings attributable to Broadstone Net Lease, Inc.

earnings allocated to unvested restricted shares

Net earnings used to compute basic earnings per common share

Diluted earnings:

Net earnings used to compute basic earnings per common share

net earnings attributable to OP Unit holders

Net earnings used to compute diluted earnings per common share

Weighted average number of common shares outstanding

weighted average unvested restricted shares (a)

Weighted average number of common shares outstanding used in

basic earnings per common share

effects of restricted stock units (b)

effects of convertible OP Units (c)

Weighted average number of common shares outstanding used in

diluted earnings per common share

Basic and Diluted earnings per share

(a) Represents the weighted average effects of 988,555 , 492,046 , and 396,383 unvested restricted shares of common stock as of December 31, 2024, 2023, and 2022 , respectively, which will be excluded from the computation of earnings per share until they vest .

(b) R epresents the weighted average effects of shares of common stock to be issued as though the end of the period were the end of the performance period (see Note 13).

(c) Represents the weighted average effects of 8,645,793 , 8,927,736 , and 10,204,806 OP Units outstanding at December 31, 2024, 2023, and 2022 , respectively.

For federal income tax purposes, distributions to stockholders are characterized as ordinary dividends, capital gain distributions, or return of capital distributions.

Return of capital distributions will reduce stockholders’ basis in their shares, but not below zero.

The portion of the distribution that exceeds the adjusted basis of the stock will be treated as gain from the sale or exchange of property.

The following table shows the character of the distributions the Company paid on a percentage basis:

For the Year Ended December 31,

Character of Distributions

Ordinary dividends

Capital gain distributions

Return of capital distributions

Supplemental Cash Flow Disclosures

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

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

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

• During the year ended December 31, 2024 , the Company converted 281,943 OP Units valued at $ 4.5 million to 281,943 shares of common stock.

During the year ended December 31, 2023 , the Company converted 1,277,070 OP Units valued at $ 21.2 million to 1,277,070 shares of common stock.

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

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

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

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

Commitments and Contingencies

From time to time, the Company is a party to various litigation matters incidental to the conduct of the Company’s business.

While the resolution of such matters cannot be predicted with certainty, based on currently available information, the Company does not believe that the final outcome of any of these matters will have a material effect on its consolidated financial position, results of operations, or liquidity.

Property and Acquisition Related

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

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

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

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

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

The tax protection agreements require the Company to indemnify the beneficiaries in the event of a sale, exchange, transfer, or other disposal of the contributed property, and in the case of the tax protection agreement entered into in connection with the Company’s internalization, the entire Company, in a taxable transaction that would cause such beneficiaries to recognize a gain that is protected under the agreements, subject to certain exceptions.

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

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

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

Based on values as of December 31, 2024 , taxable sales of the applicable properties would trigger liability under the agreements of approximately $ 20.4 million.

Based on information available, the Company does not believe that the events resulting in damages as detailed above have occurred or are likely to occur in the foreseeable future.

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

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

Subsequent Events

On January 15, 2025, the Company paid distributions totaling $ 57.2 million.

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

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

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

(see Note 3).

Broadstone Net Lease, Inc.

and Subsidiaries

Schedule III – Real Estate Assets an d Accumulated Depreciation

As of December 31, 2024

(in thousands)

Costs Capitalized

Initial Costs to

Gross Amount at Which Carried at

to Acquisition

Close of Period

Buildings and

Property Type

Manufacturing

Distribution & Warehouse

Food Processing

General Merchandise

Casual Dining

Quick Service Restaurants

Animal Services

Home Furnishings

Healthcare Services

Clinical/Surgical

Acquisitions in Process (c)

Property Under Development

(a) The initial cost to the Company represents the original purchase price of the property (see Note 3).

(b) The aggregate cost of real estate owned as of December 31, 2024 for U.S.

federal income tax purposes was approximately $ 5.1 billion.

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

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

For the Year Ended December 31,

Change in Total Real Estate Assets

Balance, beginning of period

Acquisitions, developments, and improvements

Balance, end of period

For the Year Ended December 31,

Change in Accumulated Depreciation

Balance, beginning of period

Acquisitions and building improvements

Balance, end of period

Changes in and Disagreements with Accoun tants on Accounting and Financial Disclosure.

Control s and Procedures.

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act), that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

For the year ended December 31, 2024, we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer.

Based on the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective and were operating at a reasonable assurance level.

Management’s Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act.

Internal control over financial reporting is a process to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of financial statements for external purposes in accordance with GAAP.

Because of its inherent limitations, internal control over financial reporting is not intended to provide absolute assurance that a misstatement of our financial statements would be prevented or detected.

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Based on this evaluation, management has concluded that our internal control over financial reporting was effective as of December 31, 2024.

The effectiveness of our internal control over financial reporting as of December 31, 2024 has been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report in this Annual Report on Form 10-K.

Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting during the quarter ended December 31, 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the stockholders and the Board of Directors of Broadstone Net Lease, Inc.

Opinion on Internal Control over Financial Reporting

We have audited the internal control over financial reporting of Broadstone Net Lease, Inc.

and subsidiaries (the “Company”) as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, 2024, of the Company and our report dated February 20, 2025, expressed an unqualified opinion on those financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control Over Financial Reporting.

Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances.

We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Deloitte & Touche LLP

Rochester, New York

February 20, 2025

Othe r Information.

During the three months ended December 31, 2024 , no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non- Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

D isclosure Regarding Foreign Jurisdictions That Prevent Inspections.

Not applicable.

Directors, Executive Offi cers, and Corporate Governance.

The information required by this Item will be included in the definitive proxy statement and is incorporated herein by reference.

The Company will file such definitive proxy statement with the SEC pursuant to Regulation 14A no later than 120 days after the end of the Company’s 2024 fiscal year covered by this Annual Report on Form 10-K.

Executiv e Compensation.

The information required by this Item will be included in the definitive proxy statement and is incorporated herein by reference.

Security Ownership of Certai n Beneficial Owners and Management.

The information required by this Item will be included in the definitive proxy statement and is incorporated herein by reference.

Certain Relationships and Related Transactions and Director Independence.

The information required by this Item will be included in the definitive proxy statement and is incorporated herein by reference.

Principal Accountant Fees and Services.

The information required by this Item will be included in the definitive proxy statement and is incorporated herein by reference.

Exhibits and Finan cial Statement Schedules.

Financial Statements

“Financial Statements and Supplementary Data” of this Annual Report on Form 10-K.

Financial Statement Schedules

“Financial Statements and Supplementary Data” of this Annual Report on Form 10-K.

All other schedules are omitted because they are not applicable or because the required information is shown in the financial statements or the notes thereto.

Form 10-K Summary.

Index to Exhibits.

Articles of Incorporation of Broadstone Net Lease, Inc.

(filed as Exhibit 3.1 to the Company’s Registration Statement on Form 10 filed April 24, 2017 and incorporated by reference)

Articles of Amendment to Articles of Incorporation of Broadstone Net Lease, Inc.

(filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K filed September 18, 2020 and incorporated by reference)

Articles Supplementary to Articles of Incorporation of Broadstone Net Lease, Inc.

(filed as Exhibit 3.2 to the Company’s Current Report on Form 8-K filed September 18, 2020 and incorporated by reference)

Articles of Amendment to Articles of Incorporation of Broadstone Net Lease, Inc.

(filed as Exhibit 3.3 to the Company’s Current Report on Form 8-K filed September 18, 2020 and incorporated by reference)

Articles of Amendment and Restatement of Broadstone Net Lease, Inc.

(filed as Exhibit 3.1 to the Corporation’s Current Report on Form 8-K filed May 8, 2023 and incorporated by reference)

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

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

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

Indenture, dated as of September 15, 2021, by and among Broadstone Net Lease, Inc., Broadstone Net Lease, LLC and U.S.

Bank National Association, as trustee, including the form of the Guarantee (filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K filed September 15, 2021 and incorporated by reference)

First Supplemental Indenture, dated as of September 15, 2021, by and among Broadstone Net Lease, Inc., Broadstone Net Lease, LLC and U.S.

Bank National Association, as trustee, including the form of the Notes (filed as Exhibit 4.2 to the Company’s Current Report on Form 8-K filed September 15, 2021 and incorporated by reference)

Second Amended and Restated Operating Agreement of Broadstone Net Lease, LLC, dated September 21, 2020 (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed September 21, 2020 and incorporated by reference)

Director Compensation and Stock Ownership Policy, effective as of May 5, 2022 (filed as Exhibit 10.2 of the Company’s Annual Report on Form 10-K filed February 23, 2023, and incorporated by reference)

Form of Indemnification Agreement, between Broadstone Net Lease, Inc.

and each of its officers and directors (filed as Exhibit 10.25 to the Company’s Registration Statement on Form 10 filed April 24, 2017 and incorporated by reference)

Note and Guaranty Agreement, dated March 16, 2017, for 4.84% Guaranteed Senior Notes due April 18, 2027, by and among Broadstone Net Lease, Inc., Broadstone Net Lease, LLC, and the purchasers party thereto (filed as Exhibit 10.23 to the Company’s Registration Statement on Form 10 filed April 24, 2017 and incorporated by reference)

Revolving Credit and Term Loan Agreement, dated as of June 23, 2017, by and among Broadstone Net Lease, LLC, Broadstone Net Lease, Inc., Manufacturers and Traders Trust Company, as administrative agent, and the lenders party thereto (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed June 29, 2017, and incorporated by reference)

Consent and Agreement Regarding Commitment Increases and Additional Term Loans, dated as of November 20, 2017, by and among Broadstone Net Lease, Inc., Broadstone Net Lease, LLC, Manufacturers and Traders Trust Company, as administrative agent, and the lenders party thereto (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed November 27, 2017, and incorporated by reference)

First Amendment Regarding Commitment Increases, dated February 28, 2019, by and among Broadstone Net Lease, Inc., Broadstone Net Lease, LLC, Manufacturers and Traders Trust Company and the other parties thereto (filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K filed March 5, 2019, and incorporated by reference)

Second Amendment to Revolving Credit and Term Loan Agreement, dated as of July 1, 2019, by and among Broadstone Net Lease, Inc., Broadstone Net Lease, LLC, Manufacturers and Traders Trust Company, and other parties thereto (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed July 3, 2019, and incorporated by reference)

Third Amendment to Revolving Credit and Term Loan Agreement, dated as of September 21, 2020, by and among Broadstone Net Lease, Inc., Broadstone Net Lease, LLC, Manufacturers and Traders Trust Company, and other parties thereto (filed as Exhibit 10.4 to the Company’s Current Report on Form 8-K filed September 21, 2020, and incorporated by reference)

Fourth Amendment to Revolving Credit and Term Loan Agreement, dated as of March 31, 2022, by and among Broadstone Net Lease, Inc., Broadstone Net Lease, LLC, Manufacturers and Traders Trust Company, and other parties thereto (filed as Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q filed May 4, 2022 and incorporated by reference)

Note and Guaranty Agreement, dated July 2, 2018, for 5.09% Series B Guaranteed Senior Notes due July 2, 2028 and 5.19% Series C Guaranteed Senior Notes due July 2, 2030, by and among Broadstone Net Lease, Inc., Broadstone Net Lease, LLC, and the purchasers party thereto (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed July 6, 2018, and incorporated by reference)

Term Loan Agreement, dated February 27, 2019, by and among Broadstone Net Lease, Inc., Broadstone Net Lease, LLC, Capital One, National Association, and the other parties thereto (“Capital One Term Loan Agreement”) (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed March 5, 2019, and incorporated by reference)

Guaranty, dated February 27, 2019, by Broadstone Net Lease, Inc., in favor of Capital One, National Association (filed as Exhibit 10.3 to the Company’s Current Report on Form 8-K filed March 5, 2019, and incorporated by reference)

First Amendment to Capital One Term Loan Agreement, dated July 1, 2019, by and among Broadstone Net Lease, Inc., Broadstone Net Lease, Capital One, National Association, and the other parties thereto (filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed November 12, 2019, and incorporated by reference)

Second Amendment to Capital One Term Loan Agreement, dated September 21, 2020, by and among Broadstone Net Lease, Inc., Broadstone Net Lease, Capital One, National Association, and the other parties thereto (filed as Exhibit 10.3 to the Company’s Current Report on Form 8-K filed September 21, 2020, and incorporated by reference)

Third Amendment to Capital One Term Loan Agreement, dated March 12, 2021, by and among Broadstone Net Lease, Inc., Broadstone Net Lease, Capital One, National Association, and the other parties thereto (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed March 18, 2021 and incorporated by reference)

Fourth Amendment to Capital One Term Loan Agreement, dated March 31, 2022, by and among Broadstone Net Lease, Inc., Broadstone Net Lease, Capital One, National Association, and the other parties thereto (filed as Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q filed May 4, 2022 and incorporated by reference)

Fifth Amendment to Capital One Term Loan Agreement, dated June 8, 2023, by and among Broadstone Net Lease, Inc., Broadstone Net Lease, LLC, Capital One, National Association and the lenders party thereto (filed as Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed August 3, 2023 and incorporated by reference)

Term Loan Agreement, dated February 7, 2020, by and among Broadstone Net Lease, LLC, Broadstone Net Lease, Inc., JPMorgan Chase Bank, N.A., and the other lenders party thereto (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed February 7, 2020 and incorporated by reference)

Guaranty, dated February 7, 2020, by Broadstone Net Lease, Inc.

in favor of JPMorgan Chase Bank, N.A (filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K filed February 7, 2020 and incorporated by reference)

Amendment No.1 to Term Loan Agreement, dated September 21, 2020, by and among Broadstone Net Lease, Inc., Broadstone Net Lease, LLC, JP Morgan Chase Bank, N.A., as administrative agent, and the other lenders party thereto (filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K filed September 21, 2020 and incorporated by reference)

Amended and Restated Revolving Credit Agreement, dated as of January 28, 2022, by and among, Broadstone Net Lease, LLC, Broadstone Net Lease, Inc., JPMorgan Chase Bank, N.A., as administrative agent, and the lenders party thereto (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed February 3, 2022 and incorporated by reference)

Guaranty, dated January 28, 2022, by Broadstone Net Lease, Inc.

in favor of JPMorgan Chase Bank, N.A (filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K filed February 3, 2022 and incorporated by reference)

Term Loan Credit Agreement, dated as of August 1, 2022, by and among Broadstone Net Lease, Inc., Broadstone Net Lease, LLC, Regions Bank, as administrative agent, and the lender parties thereto (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed August 3, 2022 and incorporated by reference)

Guaranty, dated August 1, 2022, by Broadstone Net Lease, Inc.

in favor of Regions Bank (filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K filed August 3, 2022 and incorporated by reference)

Tax Protection Agreement, dated February 7, 2020, by and among Broadstone Net Lease, Inc., Broadstone Net Lease, LLC, and the persons named therein (filed as Exhibit 10.3 to the Company’s Current Report on Form 8-K filed February 7, 2020 and incorporated by reference)

Registration Rights Agreement, dated February 7, 2020, between Broadstone Net Lease, Inc.

and the persons named therein (filed as Exhibit 10.4 to the Company’s Current Report on Form 8-K filed February 7, 2020 and incorporated by reference)

Amended and Restated Employment Agreement, effective February 7, 2020, by and among Broadstone Net Lease, Inc., Broadstone Net Lease, LLC, Broadstone Employee Sub, LLC, and John D.

Moragne (filed as Exhibit 10.10 to the Company’s Current Report on Form 8-K filed February 7, 2020 and incorporated by reference)

First Amendment to Amended and Restated Employment Agreement, dated January 10, 2023 and effective February 28, 2023, by and among Broadstone Net Lease, Inc., Broadstone Net Lease, LLC, Broadstone Employee Sub, LLC, and John D.

Moragne (filed as Exhibit 10.30 to the Company’s Quarterly Report on Form 10-Q filed May 4, 2023 and incorporated by reference)

Amended and Restated Employment Agreement, effective February 7, 2020, by and among Broadstone Net Lease, Inc., Broadstone Net Lease, LLC, Broadstone Employee Sub, LLC, and Ryan M.

Albano (filed as Exhibit 10.8 to the Company’s Current Report on Form 8-K filed February 7, 2020 and incorporated by reference)

Albano (filed as Exhibit 10.32 to the Company’s Quarterly Report on Form 10-Q filed May 4, 2023 and incorporated by reference)

Severance Protection Agreement, dated January 10, 2023 and effective February 28, 2023, by and among Broadstone Net Lease, Inc., Broadstone Net Lease, LLC, Broadstone Employee Sub, LLC, and Kevin M.

Fennell (filed as Exhibit 10.33 to the Company’s Quarterly Report on Form 10-Q filed May 4, 2023 and incorporated by reference)

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

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

Broadstone Net Lease, Inc.

2020 Omnibus Equity and Incentive Plan, dated August 4, 2020 (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed August 4, 2020 and incorporated by reference)

Form of Broadstone Net Lease, Inc.

2020 Omnibus Equity and Incentive Plan Restricted Stock Award Agreement (filed as Exhibit 10.2 to the Company’s Current Report on Form 8-K filed August 4, 2020 and incorporated by reference)

Form of Broadstone Net Lease, Inc.

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

Form of Broadstone Net Lease, Inc.

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

Form of Broadstone Net Lease, Inc.

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

Broadstone Net Lease, Inc.

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

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

Amendment No.

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

Broadstone Net Lease, Inc.

Insider Trading Policy

List of Subsidiaries of Broadstone Net Lease, Inc.

Consent of Deloitte & Touche LLP, Independent Registered Public Accounting Firm

Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Certification of Chief Executive Officer pursuant to 18 U.S.C.

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Certification of Chief Financial Officer pursuant to 18 U.S.C.

Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Broadstone Net Lease, Inc.

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

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* Filed herewith.

+ Management contract or compensatory plan or arrangement.

In accordance with Item 601(b)(32) of Regulation S-K, this Exhibit is not deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section.

Such certifications will not be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the Registrant specifically incorporates it by reference.

Pursuant to the requirements of Section 13 or 15(d) the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

BROADSTONE NET LEASE, INC.

February 20, 2025

Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

February 20, 2025

/s/ Laurie A.

Chairman of the Board of Directors

February 20, 2025

Director, Chief Executive Officer

February 20, 2025

/s/ Denise Brooks-Williams

Denise Brooks-Williams

February 20, 2025

/s/ Michael A.

February 20, 2025

/s/ Jessica Duran

Jessica Duran

February 20, 2025

/s/ Laura Felice

February 20, 2025

/s/ Richard Imperiale

Richard Imperiale

February 20, 2025

/s/ Shekar Narasimhan

Shekar Narasimhan

February 20, 2025

/s/ Joseph Saffire

Joseph Saffire

February 20, 2025

Executive Vice President and Chief Financial Officer (Principal Financial Officer)

February 20, 2025

/s/ Jennie O’Brien

Jennie O’Brien

Senior Vice President and Chief Accounting Officer

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

What changed 10-K

Item 7. Management’s Discussion and Analysis