What changed in this filing

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Item 1A. Risk Factors

2024-02-14 compared with 2023-02-16 · 66 added, 82 removed, 454 unchanged (25% of the section changed)

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adverse changes in national, regional and local economic conditions;

inability to re-lease or sell properties upon expiration or termination of leases;

inability to re-lease or sell our properties upon expiration or termination of leases;

environmental risks;

the subjectivity and volatility of real estate valuations and the relative illiquidity of real estate investments compared to many other financial assets, which may limit our ability to modify our portfolio promptly in response to changes in economic or other conditions;

changes in laws and governmental regulations, including those governing real estate usage and

changes in laws and governmental regulations, including those governing real estate usage and zoning;

changes in interest rates and the availability of financing;

acts of God, including natural disasters, which may result in uninsured losses;

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The success of any one of our tenants is dependent on the location of the leased property, its individual business and its industry, which could be adversely affected by poor management, economic conditions in general, changes in consumer trends and preferences that decrease demand for a tenant's products or services or other factors over which neither they nor we have control.

At any given time, any tenant may experience a downturn in its business that may weaken its operating results or the overall financial condition of individual properties or its business as whole.

At any given time, any tenant may experience a downturn in its business, including as a result of adverse economic conditions, that may weaken its operating results or the overall financial condition of individual properties or its business as whole.

As a result, a tenant may delay lease commencement, fail to make rental payments when due, decline to extend a lease upon its expiration, become insolvent or declare bankruptcy.

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Cash flow generated by certain tenant businesses may not be sufficient for a tenant to meet its obligations to us.

We could be materially and adversely affected if a number of our tenants were unable to meet their obligations to us.

We could be materially and adversely affected if a number of our tenants are unable to meet their obligations to us.

Our assessment that certain businesses are more insulated from e-commerce pressure than many others may prove to be incorrect, and changes in macroeconomic trends may adversely affect our tenants, either of which could impair our tenants' ability to make rental payments to us and materially and adversely affect us.

We primarily invest in properties leased to tenants in industries where a physical location is critical to the generation of sales and profits.

Such tenants are particularly focused in service-oriented and experienced-based businesses, such as car washes, early childhood education centers, medical/dental offices, quick service restaurants, automotive service facilities, equipment rental locations and convenience stores.

We believe these businesses have characteristics that make them e-commerce resistant and resilient through economic cycles.While

we believe this to be the case, businesses previously thought to be internet resistant, such as the retail grocery industry, have proven to be susceptible to competition from e-commerce.

Technology and business conditions, particularly in the retail industry, are rapidly changing, and our tenants may be adversely affected by technological innovation, changing consumer preferences and competition from non-traditional sources.

Businesses previously thought to be internet resistant, such as the retail grocery industry, have proven to be susceptible to competition from e-commerce.

To the extent our tenants face increased competition from non-traditional competitors, such as internet vendors, some of which may have different business models and larger profit margins, their businesses could suffer.

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The financial failure of, or default in payment by, a single-tenant under its lease is likely to cause a significant or complete reduction in our rental revenue from that property and a reduction in the value of the property.

We may also experience difficulty or a significant delay in re-leasing or selling such property.

This risk is magnified in situations where we lease multiple properties to a single-tenant under a master lease.

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Texas (13.1%), Georgia (8.0%), Ohio (6.0%), Florida (5.9%) and Wisconsin (5.2%).

We are susceptible to adverse developments in the economic or regulatory environments of the geographic areas in which we own substantial assets (or in which we may develop a substantial concentration of assets in the future), such as COVID-19 pandemic surges and measures intended to mitigate its spread, business layoffs or downsizing, industry slowdowns, relocations of businesses, increases in real estate and other taxes or costs of complying with governmental regulations.

As of December 31, 2022, leases representing approximately 22.6% of our annualized base rent were with tenants in industries that have been particularly adversely affected by the COVID-19 pandemic, including entertainment (7.9% of annualized base rent), casual and family dining (8.7% of annualized base rent), health and fitness (3.9% of annualized base rent), movie theaters (1.4% of annualized base rent) and home furnishings (0.7% of annualized base rent).

Accordingly, to the extent the pandemic measures intended to mitigate its spread or changed consumer preferences continue to adversely affect these industries, our tenants in these industries could fail to meet their obligations to us, and we could be required to provide further tenant concessions.

We are susceptible to adverse developments in the economic or regulatory environments of the geographic areas in which we own substantial assets (or in which we may develop a substantial concentration of assets in the future), such as epidemics, pandemics or public health crises and measures intended to mitigate their spread, business layoffs or downsizing, industry slowdowns, relocations of businesses, increases in real estate and other taxes or costs of complying with governmental regulations.

As of December 31, 2023, our five largest tenants contributed 11.2% of our annualized base rent, and our ten largest tenants contributed 18.1% of our annualized base rent.

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As we continue to acquire properties, our portfolio may become more concentrated by geographic area, industry or tenant.

If our portfolio becomes less diverse, our business will be more sensitive to the general economic downturn in a particular geographic area, to changes in trends affecting a particular industry and to the financial weakness, bankruptcy or insolvency of fewer tenants.

If our portfolio becomes less diverse, our business will be more sensitive to a general economic downturn in a particular geographic area, to changes in trends affecting a particular industry and to the financial weakness, bankruptcy or insolvency of fewer tenants.

The vast majority of our properties are leased to unrated tenants whose credit is evaluated through our internal underwriting and credit analysis.

However, the tools we use to measure credit quality, such as property-level rent coverage ratio, may not be accurate.

However, the tools and methods we use, such as property-level rent coverage ratio, may not accurately assess the investment related credit risk.

The vast majority of our properties are leased to unrated tenants whose credit is evaluated through our internal underwriting and credit analysis.

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We analyze the creditworthiness of our tenants using Moody’s Analytics RiskCalc, which provides an estimated default frequency (“EDF”) and a “shadow rating,” and a lease's property-level rent coverage ratio.

methods may not adequately assess the risk of an investment.

Our methods may not adequately assess the risk of an investment.

An EDF score and a shadow rating are not the same as, and may not be as indicative of creditworthiness as, a rating published by a nationally recognized statistical rating organization.

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The ability of an unrated tenant to meet its obligations to us may be more speculative than that of a rated tenant.

We may be unable to renew expiring leases with the existing tenants or re-lease the spaces to new tenants on favorable terms or at all.

Our results of operations depend to a significant degree on our ability to continue to lease our properties, including renewing expiring leases, leasing vacant space and re-leasing space in properties where leases are expiring and leasing vacant space.

We may be unable to renew expiring leases with existing tenants or re-lease spaces to new tenants on favorable terms or at all.

As of December 31, 2023, our occupancy was 99.8% and leases representing approximately 4.7% of our annualized base rent as of such date will expire prior to 2029.

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Most of our portfolio is leased to tenants operating service-oriented or experience-based businesses at our properties.

As of December 31, 2022, the largest industries in our portfolio were restaurants (including quick service and casual and family dining), car washes, early childhood education, medical and dental services, automotive services, entertainment (including movie theaters), convenience stores, and equipment rental and sales.

As of December 31, 2023, the largest industries in our portfolio were restaurants (including quick service, casual dining and family dining), car washes, early childhood education, medical and dental services, entertainment (including movie theaters), automotive service, equipment rental and sales, and convenience stores.

As of December 31, 2023, tenants operating in those industries represented approximately 84.7% of our annualized base rent.

EquipmentShare, Captain D's, Chicken N Pickle, WhiteWater Express Car Wash, Festival Foods, Mister Car Wash, Spare Time, The Nest Schools, Zaxby's and Crunch Fitness represent the largest concepts in our portfolio.

These types of businesses were severely affected by the COVID-19 pandemic, principally due to store closures or limitations on operations (which may be government-mandated or voluntary) and reduced economic activity.

While restrictions have generally been lifted and many of our tenants' businesses have generally recovered from pandemic-induced declines, it is unclear if restrictions will be reinstituted in the future.

The success of most of these businesses depends on the willingness of consumers to physically patronize their businesses and use discretionary income to purchase their products or services.

To the extent the COVID-19 pandemic causes a secular change in consumer behavior that reduces patronage of service-based and/or experience-based businesses, many of our tenants would be adversely affected and their ability to meet their obligations to us could be further impaired.

Additional adverse economic conditions and other developments that discourage consumer spending, such as high unemployment levels, wage stagnation, interest rates, inflation, tax rates and fuel and energy costs, may have an impact on the results of operations and financial conditions of our tenants and their ability to pay rent to us.

EquipmentShare, Chicken N Pickle , Crunch Fitness, Captain D's, Tidal Wave Auto Spa, Festival Foods, Five Star, Mister Car Wash, Spare Time Entertainment and John Deere represent the largest concepts in our portfolio.

These types of businesses depend on the willingness of consumers to physically patronize their businesses and use discretionary income to purchase their products or services.

To the extent that the COVID-19 pandemic or the responses thereto caused a secular change in consumer behavior that reduces patronage of service-based and/or experience-based businesses, many of our tenants would be adversely affected and their ability to meet their obligations to us could be impaired.

Additional adverse economic conditions and other developments that discourage consumer spending, such as high unemployment levels, wage stagnation, interest rates, inflation, tax rates and fuel and energy costs, may have an adverse impact on the results of operations and financial conditions of our tenants and their ability to pay rent to us.

Our ability to realize future rent increases on some of our leases may vary depending on changes in the CPI.

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Conversely, during periods of relatively high inflation, fixed rate rent increases may be lower than the rate of inflation, resulting in a deterioration of the real return on our assets.

Recently, numerous measures of inflation have

been relatively high, and our fixed rent escalators have not resulted in increases that equal or exceed the rate of inflation.

Recently, numerous measures of inflation have been relatively high, and our fixed rent escalators have not resulted in increases that equal or exceed the rate of inflation.

Similarly, to the extent our tenants are unable to increase the prices they charge to their customers in response to any rent increases, their ability to meet their rental payment and other obligations to us could be reduced.

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If such a lease is terminated or not renewed, we may be required to renovate the property at substantial costs, decrease the rent we charge or provide other concessions in order to lease the property to another tenant.

In addition, if we determine to sell the property, we may have difficulty selling it to a party other than the tenant due to

the special purpose for which the property may have been designed or modified.

In addition, if we determine to sell the property, we may have difficulty selling it to a party other than the current tenant due to the special purpose for which the property may have been designed or modified.

This potential illiquidity may limit our ability to quickly modify our portfolio in response to changes in economic or other conditions, including tenant demand.

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Our ability to expand through acquisitions requires us to identify, finance and complete acquisitions or investment opportunities that are compatible with our growth strategy and to successfully finance and integrate newly acquired properties into our portfolio, which may be constrained by the following significant risks:

we face competition from other real estate investors, some of which have greater economies of scale, lower costs of capital, access to more financial resources and greater name recognition than we do, a greater ability to borrow funds and the ability to accept more risk than we can prudently manage, which may significantly reduce our acquisition volume or increase the purchase price for property we acquire, which could reduce our growth prospects;

we face competition from other real estate investors, some of which have greater economies of scale, lower costs of capital, access to more financial resources, greater name recognition than we do, and a greater ability to borrow funds and the ability to accept more risk than we can prudently manage, which may significantly reduce our acquisition volume or increase the purchase price for property we acquire, which could reduce our growth prospects;

we may be unable to locate properties that will produce a sufficient spread between our cost of capital and the lease rate we can obtain from a tenant, in which case our ability to profitably grow our company will decrease;

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we may spend more than budgeted amounts to make necessary improvements or renovations to acquired properties;

we may acquire properties subject to liabilities and without any recourse, or with only limited recourse, with respect to unknown liabilities, such as liabilities for clean-up of undisclosed environmental contamination, claims by tenants, vendors or other persons dealing with the former owners of the properties, liabilities incurred in the ordinary course of business and claims for indemnification by general partners, directors, officers and others indemnified by the former owners of the properties;

we may obtain only limited warranties when we acquire a property, including properties purchased in “as is” condition on a “where is” basis and “with all faults,” without warranties of merchantability or fitness for a particular purpose and pursuant to purchase agreements that contain only limited warranties, representations and indemnifications that survive for only a limited period after the closing.

the ordinary course of business and claims for indemnification by general partners, directors, officers and others indemnified by the former owners of the properties;

and we may obtain only limited warranties when we acquire a property, including properties purchased in “as is” condition on a “where is” basis and “with all faults,” without warranties of merchantability or fitness for a particular purpose and pursuant to purchase agreements that contain only limited warranties, representations and indemnifications that survive for only a limited period after the closing.

If any of these risks are realized, we may be materially and adversely affected.

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Our investments are relatively difficult to sell quickly.

As a result of this illiquidity, our ability to promptly sell one or more properties in our portfolio in response to changing economic, financial or investment conditions is

As a result of this illiquidity, our ability to promptly sell one or more properties in our portfolio in response to changing economic, financial or investment conditions is limited.

Return of capital and realization of gains, if any, from an investment generally will occur upon disposition or refinancing of the underlying property.

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Our access to debt and equity capital, and the cost thereof, depends on many factors, including general market conditions, interest rates, inflation, the market's perception of our growth potential, our debt levels, our credit rating, our current and expected future earnings, our cash flow and cash distributions, and the market price of our common stock.

The COVID-19 pandemic has significantly and adversely impacted global, national, regional and local economic activity and has contributed to significant volatility and negative pressure in the financial markets.

In particular, our stock price has experienced significant volatility and our credit spreads in certain credit markets have recently been wider relative to our historical levels.

In particular, the market price of our common stock on the New York Stock Exchange (“NYSE”) has experienced significant volatility.

Similarly, the availability and pricing of debt and equity capital has been volatile and, in many instances, more expensive.

Accordingly, we could experience difficulty accessing debt and equity capital on attractive terms, or at all, which would adversely affect our ability to grow our business, conduct our operations or address maturing liabilities.

Similarly, a deterioration in access to capital or an increase in cost may adversely affect our tenants' abilities to finance their businesses and reduce their liquidity, which could reduce their ability to meet their obligations to us.

An important aspect of our business is capturing a positive “spread” between the cost at which we raise capital and the returns that we receive on our investments.

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In particular, relationships that these individuals have with financial institutions and existing and prospective tenants are important to our growth and the success of our business.

The loss of services of one or more members of our senior management team, including due to the adverse health effects of the COVID-19 pandemic, or our inability to attract and retain highly qualified personnel, could adversely affect our business, diminish our investment opportunities and weaken our relationships with lenders, business partners, existing and prospective tenants and industry personnel, which could materially and adversely affect us.

The COVID-19 pandemic has materially and adversely impacted our business and those of our tenants, particularly during 2020 and 2021, and could further affect our financial condition, results of operations,

cash flows and liquidity, prospects, access to and costs of capital, the trading price of our common stock and our ability to service our debt and make distributions to our stockholders.

For much of 2020, the COVID-19 pandemic created significant uncertainty and economic disruption that adversely affected the Company and its tenants.

The adverse impact of the pandemic moderated during 2021 and significantly diminished during 2022.

However, the continuing impact of the COVID-19 pandemic, its duration and any enduring effects are unclear, and various factors could erode the progress that has been made against the virus to date.

The loss of services of one or more members of our senior management team, or our inability to attract and retain highly qualified personnel, could adversely affect our business, diminish our investment opportunities and weaken our relationships with lenders, business partners, existing and prospective tenants and industry personnel, which could materially and adversely affect us.

The long-term impact of the COVID-19 pandemic is unclear and could further adversely affect us.

The direct adverse impact of the COVID-19 pandemic on us has significantly diminished;

however, its long-term impact is unclear.

For instance, a reinstitution of lockdowns, quarantines, restrictions on travel, “shelter in place” rules, school closures and/or restrictions on the types of businesses that may continue to operate or limitations on certain business operations, whether in response to a COVID-19 resurgence or another pathogen, could cause a decline in economic activity and a reduction in consumer confidence that could impair the ability of many of our tenants to operate their businesses and meet their obligations to us, including rental payment obligations.

More broadly, if the ongoing effects of COVID-19, the responses thereto or other factors cause the United States to enter into a recessionary period, or if reduced consumer confidence or unemployment weakens economic activity, our business, and those of our tenants, could be adversely affected.

To the extent the pandemic causes a secular change in consumer behavior that reduces patronage of service-based and/or experience-based businesses, many of our tenants would be adversely affected and their ability to meet their obligations to us could be impaired;

More broadly, to the extent the COVID-19 pandemic has caused or causes a secular change in consumer behavior that reduces patronage of service-based and/or experience-based businesses, many of our tenants will be adversely affected and their ability to meet their obligations to us could be impaired;

this could also reduce the value of our properties and cause us to realize impairment charges.

The market price of our common stock on the NYSE has experienced significant volatility since the outbreak of the COVID-19 pandemic.

Similarly, the availability and pricing of debt and equity capital has become increasingly volatile and, in many instances, more expensive.

The ultimate extent to which the COVID-19 pandemic adversely impacts us (and our tenants) will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the pandemic, the actions taken to contain the pandemic or mitigate its impact, and the direct and indirect economic effects of the pandemic and containment and mitigation measures, among others.

Risks Related to Environmental and Compliance Matters and Climate Change

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We cannot be sure that our tenants will, or will be able to, satisfy their indemnification obligations, if any, under our leases.

Furthermore, the discovery of environmental liabilities on any of our properties could lead to significant remediation costs or to other liabilities or obligations attributable to the tenant of that property or could result in material interference with the ability of our

tenants to operate their businesses as currently operated.

Noncompliance with environmental laws or discovery of environmental liabilities could each individually or collectively affect such tenant's ability to make payments to us, including rental payments and, where applicable, indemnification payments.

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Environmental laws may also create liens on contaminated properties in favor of the government for damages and costs it incurs to address such contamination.

Moreover, if contamination is discovered on our properties, environmental laws may impose restrictions on the manner in which they may be used or businesses may be operated, and these restrictions may require substantial expenditures.

contamination is discovered on our properties, environmental laws may impose restrictions on the manner in which they may be used, and these restrictions may require substantial expenditures.

Insurance on our properties may not adequately cover all losses and uninsured losses could materially and adversely affect us.

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The loss of our capital investment in or anticipated future returns from our properties due to material uninsured losses could materially and adversely affect us.

Compliance with the ADA and fire, safety and other regulations may require us to make unanticipated expenditures.

Compliance with the Americans with Disability Act of 1990 (the “ADA”), fire and safety regulations, and other regulations may require us to make unanticipated expenditures.

Our properties are subject to the ADA, fire and safety regulations, building codes and other regulations.

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In addition, the impact of climate change on businesses operated by our tenants is not reasonably determinable at this time.

Climate change may impact weather patterns, the occurrence of significant weather events and rising sea

levels, which could impact economic activity or the value of our properties in specific markets.

Climate change may impact weather patterns, the occurrence of significant weather events and rising sea levels, which could impact economic activity or the value of our properties in specific markets.

The occurrence of any of these events or conditions may adversely impact our ability to lease our properties or our or our tenants’ ability to obtain property insurance on acceptable terms, which would materially and adversely affect us.

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we may be forced to dispose of properties, possibly on unfavorable terms or in violation of certain covenants to which we may be subject;

we may default on our obligations, we may violate restrictive covenants in our loan documents, which would entitle the lenders to accelerate our debt obligations;

we may default on our obligations;

we may violate restrictive covenants in our loan documents, which would entitle the lenders to accelerate our debt obligations;

and our default under any loan with cross-default provisions could result in a default on other indebtedness.

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Our business plan depends on external sources of capital, including debt financings, and market conditions could adversely affect our ability to refinance existing indebtedness or obtain additional financing for growth on commercially acceptable terms or at all.

Credit markets have recently experienced significant price volatility, displacement and liquidity disruptions.

Credit markets have recently experienced significant price volatility, interest rate fluctuations, displacement and liquidity disruptions.

In particular, credit spreads in certain credit markets have recently been wider relative to historical levels.

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As a result, we may be unable to obtain debt financing on favorable terms or at all or fully refinance maturing indebtedness with new indebtedness.

A deterioration in our credit or credit rating, reductions in our available borrowing capacity or inability to obtain credit when required or when business conditions warrant could materially and adversely affect us.

A deterioration in our credit or credit rating, reductions in our available borrowing capacity or our inability to obtain credit when required or when business conditions warrant could materially and adversely affect us.

If prevailing interest rates or other factors at the time of refinancing result in higher interest rates upon refinancing, then the interest expense relating to that refinanced indebtedness would increase.

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The credit ratings assigned to us and our debt, which are subject to ongoing evaluation by the rating agencies who have published them, could change based upon, among other things, our historical and projected business, prospects, liquidity, results of operations and financial condition, or the real estate industry generally.

If any credit rating agency downgrades or lowers our credit rating, places any such rating on a so-called “watch list” for a possible downgrading or lowering or otherwise publishes a negative outlook for that rating, it could materially adversely affect the market price of our debt securities and possibly our common stock, and generally the cost and availability of our capital.

adversely affect the market price of our debt securities and possibly our common stock, and generally the cost and availability of our capital.

We have engaged in hedging transactions and may engage in additional hedging transactions in the future;

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We use hedging strategies, in a manner consistent with the REIT qualification requirements, in an effort to reduce our exposure to changes in interest rates.

As of December 31, 2022, we were party to 19 interest rate swap agreements with third-party financial institutions having an aggregate notional amount of $1.0 billion that are designated as cash flow hedges and designed to effectively fix the LIBOR component of the interest rate on the debt outstanding under our term loans.

As of December 31, 2023, we were party to 25 interest rate swap agreements with third-party financial institutions having an aggregate notional amount of $1.3 billion that are designated as cash flow hedges and designed to effectively fix the Secured Overnight Financing Rate (“SOFR”) component of the interest rate on the debt outstanding under our term loans.

Unanticipated changes in interest rates may result in poorer overall investment performance than if we had not engaged in any such hedging transactions and may materially and adversely affect our business by increasing our cost of capital and reducing the net returns we earn on our portfolio.

The Secured Overnight Financing Rate (“SOFR”), which is expected to replace LIBOR as the principal floating rate benchmark, has a limited history, is different than LIBOR and rates derived from SOFR may perform differently than LIBOR would have performed, which could create increased volatility in our cost of borrowing or increase our interest expense.

In anticipation of the discontinuation of LIBOR as a floating rate benchmark, we transitioned the reference interest rate used in connection with our floating rate debt obligations to ones based on SOFR, which is generally expected to replace LIBOR as the principal floating rate benchmark in the financial markets.

SOFR, which has replaced the London Interbank Offer Rate (“LIBOR”) as the principal floating rate benchmark, has a limited history, is different than LIBOR and rates derived from SOFR may perform differently than LIBOR would have performed, which could create increased volatility in our cost of borrowing or increase our interest expense.

In anticipation of the discontinuation of LIBOR as a floating rate benchmark, we transitioned the reference interest rate used in connection with our floating rate debt obligations to ones based on SOFR, which the Alternative Reference Rates Committee, convened by the Federal Reserve Board and the Federal Reserve Bank of New York, selected as the principal floating rate benchmark in the financial markets.

SOFR-based rates differ from LIBOR, and the differences may be material.

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Treasury securities.

Because SOFR is a financing rate based on overnight secured funding transactions, it differs fundamentally from LIBOR, which is intended to be an unsecured rate that represents interbank funding costs for different short-term tenors.

LIBOR is a forward-looking rate reflecting expectations regarding interest rates for those tenors.

Thus, LIBOR is intended to be sensitive to bank credit risk and to short-term interest rate risk.

Because SOFR is a financing rate based on overnight secured funding transactions, it differs fundamentally from LIBOR, which was intended to be an unsecured rate that represents interbank funding costs for different short-term tenors.

LIBOR was a forward-looking rate reflecting expectations regarding interest rates for those tenors.

Thus, LIBOR was intended to be sensitive to bank credit risk and to short-term interest rate risk.

In contrast, SOFR is a secured overnight rate reflecting the credit of U.S.

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Our debt financing agreements contain financial and other covenants with which we are required to comply and that limit our ability to operate our business.

These covenants, as well as any additional covenants to which we may be subject in the future because of additional or replacement debt financing, could cause us to have to forego

investment opportunities, reduce or eliminate distributions to our common stockholders or obtain financing that is more expensive than financing we could obtain if we were not subject to the covenants.

These covenants, as well as any additional covenants to which we may be subject in the future because of additional or replacement debt financing, could cause us to have to forego investment opportunities, reduce or eliminate distributions to our common stockholders or obtain financing that is more expensive than financing we could obtain if we were not subject to the covenants.

The covenants impose limitations on, among other things, our ability to incur additional indebtedness, encumber assets and pay distributions to our stockholders under certain circumstances (subject to certain exceptions relating to our qualification as a REIT under the Code).

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cause our subsidiaries to distribute cash to us to fund distributions to stockholders or to otherwise use in our business;

(see “Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations—Description of Certain Debt”);

sell or substitute assets;

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We could increase or decrease the number of authorized shares of stock, classify and reclassify unissued stock and issue stock without stockholder approval.

stock and to classify or reclassify any unissued shares of our common stock or preferred stock into one or more classes or series of stock and to set the terms of such newly classified or reclassified shares.

Our Board, without stockholder approval, has the power under our charter to amend our charter to increase or decrease the aggregate number of shares of stock or the number of shares of stock of any class or series that we are authorized to issue, to authorize us to issue authorized but unissued shares of our common stock or preferred stock and to classify or reclassify any unissued shares of our common stock or preferred stock into one or more classes or series of stock and to set the terms of such newly classified or reclassified shares.

As a result, we may issue one or more classes or series of common stock or preferred stock with preferences, conversion or other rights, voting powers or rights, restrictions, limitations as to dividends or other distributions, qualifications or terms or conditions of redemption that are senior to, or otherwise conflict with, the rights of our common stockholders.

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If this policy changed, we could become more highly leveraged, which could result in an increase in our debt service and the risk of default on our obligations.

In addition, a change in our investment policies, including the manner in which we allocate our resources across our portfolio or the types of assets in which we seek to invest,

may increase our exposure to interest rate risk, real estate market fluctuations and liquidity risk.

In addition, a change in our investment policies, including the manner in which we allocate our resources across our portfolio or the types of assets in which we seek to invest, may increase our exposure to interest rate risk, real estate market fluctuations and liquidity risk.

Changes to our policies with regard to the foregoing could materially and adversely affect us.

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Therefore, we cannot assure you that we will remain qualified as a REIT in the future.

If we lose our REIT status, we will face significant tax consequences that would substantially reduce our cash available for distribution to our stockholders for each of the years involved because:

If we lose our REIT status, we will face significant tax consequences that would substantially reduce our cash available for distribution

to our stockholders for each of the years involved because:

we would not be allowed a deduction for distributions to stockholders in computing our taxable income and would be subject to federal income tax at the corporate rate;

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Changes in market conditions and volatility of stock prices could adversely affect the market price of our common stock.

The market price of our common stock on the NYSE has experienced significant volatility, particularly since the outbreak of the COVID-19 pandemic.

The market price of our common stock will fluctuate, and such fluctuations

could be significant and frequent;

The market price of our common stock on the NYSE has experienced significant volatility.

The market price of our common stock will fluctuate, and such fluctuations could be significant and frequent;

accordingly, our common stockholders may experience a significant decrease in the value of their shares, including decreases that may be related to technical market factors and may be unrelated to our operating performance or prospects.

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and the other factors described in this Risk Factors section.

Many of these factors are beyond our control.

these factors are beyond our control.

These factors may cause the market price of shares of our common stock to decline significantly, regardless of our financial condition, results of operations, business or our prospects.

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Our preferred stock, if issued, could have a preference on liquidating distributions or a preference on distribution payments that could limit our right to make distributions to our stockholders.

Because our decision to issue securities in any future offering will depend on market conditions and other factors beyond our

control, we cannot predict or estimate the amount, timing or nature of our future offerings.

Because our decision to issue securities in any future offering will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of our future offerings.

Our stockholders bear the risk of our future offerings reducing per share trading price of our common stock.

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Sales of substantial amounts of our common stock or securities convertible into or exercisable or exchangeable therefor (such as OP Units), or the perception that such sales might occur, could adversely affect the market price of our common stock.

OP Units (“OP Units”) are limited partnership interests in the Operating Partnership.

OP Units (“OP Units”) are limited partnership interests in the Operating

Generally, beginning on and after the date that is 12 months after the issuance of OP Units, each limited partner of the Operating Partnership has the right to require the Operating Partnership to redeem part or all of its OP Units for cash, based upon the value of an equivalent number of shares of our common stock at the time of the redemption, or, at our election, shares of common stock on a one-for-one basis, subject to certain adjustments and the restrictions on ownership and transfer of our stock.

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As of December 31, 2023, we had 164,635,150 shares of common stock outstanding and 553,847 OP Units outstanding (excluding OP Units held directly or indirectly by us).

The currently outstanding OP Units are primarily held by members of our management team.

Any exchange of OP Units for common stock may result in stockholder dilution.

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Our ability to efficiently manage our business depends significantly on the reliability and capacity of these systems.

Security breaches, cyber attacks, or disruption, of our or our third-party service providers’ physical or information technology infrastructure, networks and related management systems could result in, among other things, a breach of our networks and information technology infrastructure, the misappropriation of our or our tenants’ proprietary or confidential information, interruptions or malfunctions in our or our tenants’ operations, misstated financial reports, violations of loan covenants, an inability to monitor compliance with REIT qualification requirements, breach of our legal, regulatory or contractual obligations, inability to access or rely upon critical business records, unauthorized access to our facilities or other disruptions in our operations.

Security breaches, cyber attacks, or disruption, of our or our third-party service providers’ physical or information technology infrastructure, networks and related management systems could result in, among other things, a breach of our networks and information technology infrastructure, the misappropriation of our or our tenants’ proprietary or confidential information, interruptions or malfunctions in our or our tenants’ operations, misstated financial reports, violations of loan covenants, an inability to monitor compliance with REIT qualification requirements, breach of our legal, regulatory or contractual obligations, our inability to access or rely upon critical business records, unauthorized access to our facilities or other disruptions in our operations.

Numerous sources can cause these types of incidents, including physical or electronic security breaches; viruses, ransomware or other malware; hardware vulnerabilities; accident or human error by our own personnel or third parties; criminal activity or malfeasance (including by our own personnel); fraud or impersonation scams perpetrated against us or our partners or tenants; or security events impacting our third-party service providers or our partners or tenants.

We recognize the increasing volume of cyber attacks and employ commercially practical efforts to provide reasonable assurance such attacks are appropriately mitigated.

We recognize the increasing volume of cyber attacks and employ commercially reasonable efforts to provide reasonable assurance such attacks are appropriately mitigated.

We may be required to expend significant financial resources and management time to protect against or respond to such breaches.

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We also may not be able to implement security measures in a timely manner or, if and when implemented, we may not be able to determine the extent to which these measures could be circumvented.

If an actual or perceived security breach occurs, the market’s perception of our security measures could be harmed and we could lose current and potential tenants, and

such a breach could be harmful to our brand and reputation.

If an actual or perceived security breach occurs, the market’s perception of our security measures could be harmed and we could lose current and potential tenants, and such a breach could be harmful to our brand and reputation.

Any breaches that may occur could expose us to increased risk of lawsuits, material monetary damages, potential violations of applicable privacy and other laws, penalties and fines, harm to our reputation and increases in our security and insurance costs.

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Similarly, these changes could materially and adversely affect our tenants’ reported financial condition or results of operations and affect their preferences regarding leasing real estate.

Unresolved Staff Comments.

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 1A. Risk Factors