ESSENTIAL PROPERTIES REALTY TRUST, INC. 10-K

Item 8. Financial Statements and Supplementary Data. Index to Consolidated Financial Statements Financial Statements and Supplemental Data Reports of Independent Registered Public Accounting Firm (PCAOB ID: Number 248 ) 67 Consolidated Balance Sheets as of December 31, 202 5 and 20 2 4 70 Consolidated Statements of Operations for the Years Ended December 31, 202 5 , 202 4 , and 20 2 3 71 Consolidated Statements of Comprehensive Income for the Years Ended December 31, 202 5 , 202 4 , and 202 3 72 Consolidated Statements of Stockholders' Equity for the Years Ended December 31, 202 5 , 202 4 , and 202 3 73 Consolidated Statements of Cash Flows for the Years Ended December 31, 202 5 , 202 4 , and 202 3 74 Notes to Consolidated Financial Statements 76 66 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Board of Directors and Stockholders Essential Properties Realty Trust, Inc. Opinion on the financial statements We have audited the accompanying consolidated balance sheets of Essential Properties Realty Trust, Inc. (a Maryland corporation) and subsidiaries (the “Company”) as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive income, stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2025, and the related notes and financial statement schedules included under Item 15(a) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America. We also have 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, 2025, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), and our report dated February 11, 2026, expressed an unqualified opinion. Basis for opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated 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) relates 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 matters 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 a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Evaluation of the measurement of the fair values used in the purchase price allocation of real estate acquisitions As described further in Notes 2 and 3 to the consolidated financial statements, the acquisition of real estate for investment purposes is typically accounted for as an asset acquisition in which the Company allocates the purchase price of acquired properties to land, site improvements, buildings, and other tangible and identifiable intangible assets and liabilities based on their relative fair values. The Company acquired approximately $1.1 billion of real estate investments subject to this allocation process during the year ended December 31, 2025. We identified fair value measurements used to allocate the purchase price to the assets acquired and liabilities assumed in real estate acquisitions as a critical audit matter. 67 The principal consideration for our determination that the fair value measurements used to allocate the purchase price to the assets acquired and liabilities assumed in real estate acquisitions is a critical audit matter is the degree of estimation uncertainty in determining fair value estimates. Specifically, these fair value measurements were sensitive to establishing a range of market assumptions for land values, building replacement values, and rental rates. Establishing the market assumptions for land, site improvements, buildings, and rent included identifying the relevant properties in the established range that were most comparable to the acquired property. There was a high degree of subjective and complex auditor judgment in evaluating significant assumptions used in developing the fair value measurements. Our audit procedures related to the fair value measurements used to allocate the purchase price to the assets acquired and liabilities assumed in real estate acquisitions included the following, among others. We obtained an understanding, evaluated the design, and tested the operating effectiveness of relevant controls relating to the allocation of the purchase price of real estate acquisitions, including internal controls over the selection and review of the significant assumptions to estimate fair value, including those developed by third-party valuation professionals. For a selection of real estate acquisitions, we involved our real estate valuation specialists who assisted in evaluating the significant assumptions to the fair value measurements used in the purchase price allocations. We read the purchase agreements and tested the completeness and accuracy of underlying inputs used, including contractual data and rental data, where applicable. The evaluation included comparison of the Company’s assumptions to independently developed ranges using market data from industry transaction databases and published industry reports. We analyzed where the Company’s market rental rates fell within our real estate valuation specialists’ independently developed ranges to evaluate if management bias was present. /s/ GRANT THORNTON LLP We have served as the Company’s auditor since 2021. New York, New York February 11, 2026 68 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Board of Directors and Stockholders Essential Properties Realty Trust, Inc. Opinion on internal control over financial reporting We have audited the internal control over financial reporting of Essential Properties Realty Trust, Inc. (a Maryland corporation) and subsidiaries (the “Company”) as of December 31, 2025, based on criteria established in the 2013 Internal Control—Integrated Framework 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, 2025, based on criteria established in the 2013 Internal Control—Integrated Framework issued by COSO. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements of the Company as of and for the year ended December 31, 2025, and our report dated February 11, 2026 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/ GRANT THORNTON LLP New York, New York February 11, 2026 69 ESSENTIAL PROPERTIES REALTY TRUST, INC. CONSOLIDATED FINANCIAL STATEMENTS Consolidated Balance Sheets December 31, (In thousands, except share and per share data) 2025 2024 ASSETS Investments: Real estate investments, at cost: Land and improvements $ 2,200,829 $ 1,865,610 Building and improvements 4,388,959 3,536,000 Lease incentives 24,154 17,903 Construction in progress 49,881 153,789 Intangible lease assets 99,217 94,047 Total real estate investments, at cost 6,763,040 5,667,349 Less: accumulated depreciation and amortization ( 612,674 ) ( 476,827 ) Total real estate investments, net 6,150,366 5,190,522 Loans and direct financing lease receivables, net 401,323 352,066 Real estate investments held for sale, net 2,635 10,018 Net investments 6,554,324 5,552,606 Cash and cash equivalents 60,181 40,713 Restricted cash 10,184 4,265 Straight-line rent receivable, net 191,008 143,435 Derivative assets 7,861 27,714 Rent receivables, prepaid expenses and other assets, net 39,465 29,949 Total assets (1) $ 6,863,023 $ 5,798,682 LIABILITIES AND EQUITY Unsecured term loans, net of deferred financing costs $ 1,725,010 $ 1,721,114 Senior unsecured notes, net 786,708 396,403 Revolving credit facility — — Intangible lease liabilities, net 10,766 10,700 Dividend payable 65,391 55,608 Derivative liabilities 26,226 7,585 Accrued liabilities and other payables 41,028 35,145 Total liabilities (1) 2,655,129 2,226,555 Commitments and contingencies (see Note 11) Stockholders' equity: Preferred stock, $ 0.01 par value per share; 150,000,000 authorized; none issued and outstanding as of December 31, 2025 and 2024 — — Common stock, $ 0.01 par value per share; 500,000,000 authorized; 209,702,433 and 187,537,592 issued and outstanding as of December 31, 2025 and 2024, respectively 2,097 1,875 Additional paid-in capital 4,328,137 3,658,219 Distributions in excess of cumulative earnings ( 109,261 ) ( 113,302 ) Accumulated other comprehensive (loss) income ( 20,979 ) 16,886 Total stockholders' equity 4,199,994 3,563,678 Non-controlling interests 7,900 8,449 Total equity 4,207,894 3,572,127 Total liabilities and equity $ 6,863,023 $ 5,798,682 _____________________________________ (1) The Company's consolidated balance sheets include assets and liabilities of consolidated variable interest entities ("VIEs"). See Note 2 — Summary of Significant Accounting Policies. As of December 31, 2025 and 2024, all of the assets and liabilities of the Company were held by its operating partnership, a consolidated VIE, with the exception of $ 65.1 million and $ 55.4 million, respectively, of dividends payable. The accompanying notes are an integral part of these consolidated financial statements. 70 ESSENTIAL PROPERTIES REALTY TRUST, INC. CONSOLIDATED FINANCIAL STATEMENTS Consolidated Statements of Operations Year ended December 31, (In thousands, except share and per share data) 2025 2024 2023 Revenues: Rental revenue $ 527,534 $ 425,749 $ 339,897 Interest on loans and direct financing lease receivables 31,625 23,409 18,128 Other revenue, net 2,060 452 1,570 Total revenues 561,219 449,610 359,595 Expenses: General and administrative 40,864 35,161 30,678 Property expenses 7,576 4,997 4,663 Depreciation and amortization 153,602 122,161 102,219 Provision for impairment of real estate 11,997 14,845 3,548 Change in provision for credit losses 108 230 ( 99 ) Total expenses 214,147 177,394 141,009 Other operating income: Gain on dispositions of real estate, net 12,849 5,977 24,167 Income from operations 359,921 278,193 242,753 Other (expense)/income: Loss on debt extinguishment — — ( 116 ) Interest expense ( 108,083 ) ( 78,544 ) ( 52,597 ) Interest income 2,537 3,069 2,011 Other income — 1,548 — Income before income tax expense 254,375 204,266 192,051 Income tax expense 644 628 636 Net income 253,731 203,638 191,415 Net income attributable to non-controlling interests ( 718 ) ( 634 ) ( 708 ) Net income attributable to stockholders $ 253,013 $ 203,004 $ 190,707 Basic weighted average shares outstanding 196,051,237 173,855,427 152,140,735 Basic net income per share $ 1.29 $ 1.16 $ 1.25 Diluted weighted average shares outstanding 198,054,768 177,115,170 153,521,854 Diluted net income per share $ 1.28 $ 1.15 $ 1.24 The accompanying notes are an integral part of these consolidated financial statements. 71 ESSENTIAL PROPERTIES REALTY TRUST, INC. CONSOLIDATED FINANCIAL STATEMENTS Consolidated Statements of Comprehensive Income Year ended December 31, (In thousands) 2025 2024 2023 Net income $ 253,731 $ 203,638 $ 191,415 Other comprehensive income: Unrealized (loss) gain on cash flow hedges ( 22,424 ) 42,210 ( 9,187 ) Cash flow hedge gain reclassified to interest expense ( 15,553 ) ( 29,310 ) ( 27,687 ) Total other comprehensive (loss) income ( 37,977 ) 12,900 ( 36,874 ) Comprehensive income 215,754 216,538 154,541 Net income attributable to non-controlling interests ( 718 ) ( 634 ) ( 708 ) Other comprehensive loss (income) attributable to non-controlling interests 112 ( 33 ) 174 Comprehensive income attributable to stockholders $ 215,148 $ 215,871 $ 154,007 The accompanying notes are an integral part of these consolidated financial statements. 72 ESSENTIAL PROPERTIES REALTY TRUST, INC. CONSOLIDATED FINANCIAL STATEMENTS Consolidated Statements of Stockholders' Equity Common Stock (In thousands, except share data) Number of Shares Par Value Additional Paid-In Capital Distributions in Excess of Cumulative Earnings Accumulated Other Comprehensive Income (Loss) Total Stockholders' Equity Non- Controlling Interests Total Equity Balance at December 31, 2022 142,379,655 $ 1,424 $ 2,563,305 $ ( 117,187 ) $ 40,719 $ 2,488,261 $ 8,510 $ 2,496,771 Common stock issuance 21,971,744 219 507,161 — — 507,380 — 507,380 Common stock withheld related to net share settlement of equity awards — — — ( 3,671 ) — ( 3,671 ) — ( 3,671 ) Costs related to issuance of common stock — — ( 1,010 ) — — ( 1,010 ) — ( 1,010 ) Other comprehensive loss — — — — ( 36,700 ) ( 36,700 ) ( 174 ) ( 36,874 ) Equity-based compensation expense 283,751 3 9,003 — — 9,006 — 9,006 Dividends and distributions declared — — — ( 175,394 ) — ( 175,394 ) ( 621 ) ( 176,015 ) Net income — — — 190,707 — 190,707 708 191,415 Balance at December 31, 2023 164,635,150 1,646 3,078,459 ( 105,545 ) 4,019 2,978,579 8,423 2,987,002 Common stock issuance 22,713,852 227 570,016 — — 570,243 — 570,243 Common stock withheld related to net share settlement of equity awards — — — ( 3,313 ) — ( 3,313 ) — ( 3,313 ) Costs related to issuance of common stock — — ( 1,083 ) — — ( 1,083 ) — ( 1,083 ) Other comprehensive income — — — — 12,867 12,867 33 12,900 Equity-based compensation expense 188,590 2 10,827 — — 10,829 — 10,829 Dividends and distributions declared — — — ( 207,448 ) — ( 207,448 ) ( 641 ) ( 208,089 ) Net income — — — 203,004 — 203,004 634 203,638 Balance at December 31, 2024 187,537,592 1,875 3,658,219 ( 113,302 ) 16,886 3,563,678 8,449 3,572,127 Common stock issuance 21,893,991 219 657,370 — — 657,589 — 657,589 Common stock withheld related to net share settlement of equity awards — — — ( 6,407 ) — ( 6,407 ) — ( 6,407 ) Costs related to issuance of common stock — — ( 633 ) — — ( 633 ) — ( 633 ) Other comprehensive loss — — — — ( 37,865 ) ( 37,865 ) ( 112 ) ( 37,977 ) Equity-based compensation expense 270,850 3 13,181 — — 13,184 — 13,184 Dividends and distributions declared — — — ( 242,565 ) — ( 242,565 ) ( 1,155 ) ( 243,720 ) Net income — — — 253,013 — 253,013 718 253,731 Balance at December 31, 2025 209,702,433 $ 2,097 $ 4,328,137 $ ( 109,261 ) $ ( 20,979 ) $ 4,199,994 $ 7,900 $ 4,207,894 The accompanying notes are an integral part of these consolidated financial statements. 73 ESSENTIAL PROPERTIES REALTY TRUST, INC. CONSOLIDATED FINANCIAL STATEMENTS Consolidated Statements of Cash Flows Year ended December 31, (In thousands) 2025 2024 2023 Cash flows from operating activities: Net income $ 253,731 $ 203,638 $ 191,415 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 153,602 122,161 102,219 Amortization of lease incentives 1,852 2,040 1,782 Amortization of above/below market leases and right of use assets, net ( 129 ) ( 238 ) ( 275 ) Amortization of deferred financing costs and other non-cash interest expense 7,485 5,374 3,863 Loss on debt extinguishment — — 116 Provision for impairment of real estate 11,997 14,845 3,548 Change in provision for credit losses 108 230 ( 99 ) Gain on dispositions of real estate, net ( 12,849 ) ( 5,977 ) ( 24,167 ) Straight-line rent receivable, net ( 52,207 ) ( 38,882 ) ( 28,285 ) Equity-based compensation expense 13,184 10,829 9,006 Adjustment to rental revenue for tenant credit 3,454 635 640 Changes in other assets and liabilities: Rent receivables, prepaid expenses and other assets, net ( 7,259 ) ( 7,258 ) ( 5,956 ) Accrued liabilities and other payables 8,111 1,087 767 Net cash provided by operating activities 381,080 308,484 254,574 Cash flows from investing activities: Proceeds from sales of investments, net 128,562 96,928 128,598 Principal collections on loans and direct financing lease receivables 28,559 10,022 27,908 Investments in loans receivable ( 93,067 ) ( 136,264 ) ( 13,091 ) Deposits for prospective real estate investments ( 6,345 ) ( 3,880 ) 189 Investment in real estate, including capital expenditures ( 1,103,163 ) ( 825,751 ) ( 894,550 ) Investment in construction in progress ( 100,007 ) ( 263,232 ) ( 105,075 ) Lease incentives paid ( 8,586 ) ( 991 ) ( 1,104 ) Net cash used in investing activities ( 1,154,047 ) ( 1,123,168 ) ( 857,125 ) Cash flows from financing activities: Borrowings under term loans — 174,569 247,972 Borrowings under revolving credit facility 855,000 490,000 70,000 Repayments under revolving credit facility ( 855,000 ) ( 220,000 ) ( 70,000 ) Proceeds from issuance of senior unsecured notes, net 390,668 — — Payments for taxes related to net settlement of equity awards ( 6,407 ) ( 3,313 ) ( 3,671 ) Payment of deferred financing costs ( 8,811 ) ( 115 ) ( 2,426 ) Proceeds from issuance of common stock, net 657,589 570,243 507,318 Offering costs ( 748 ) ( 1,022 ) ( 948 ) Dividends paid ( 233,937 ) ( 199,663 ) ( 168,231 ) Net cash provided by financing activities 798,354 810,699 580,014 Net increase (decrease) in cash and cash equivalents and restricted cash 25,387 ( 3,985 ) ( 22,537 ) Cash and cash equivalents and restricted cash, beginning of period 44,978 48,963 71,500 Cash and cash equivalents and restricted cash, end of period $ 70,365 $ 44,978 $ 48,963 Reconciliation of cash and cash equivalents and restricted cash: Cash and cash equivalents $ 60,181 $ 40,713 $ 39,807 Restricted cash 10,184 4,265 9,156 Cash and cash equivalents and restricted cash, end of period $ 70,365 $ 44,978 $ 48,963 The accompanying notes are an integral part of these consolidated financial statements. 74 ESSENTIAL PROPERTIES REALTY TRUST, INC. CONSOLIDATED FINANCIAL STATEMENTS Consolidated Statements of Cash Flows (continued) Year ended December 31, (In thousands) 2025 2024 2023 Supplemental disclosure of cash flow information: Cash paid for interest, net of amounts capitalized $ 99,079 $ 73,703 $ 49,587 Cash paid for income taxes 244 902 1,486 Non-cash investing and financing activities: Reclassification from construction in progress upon project completion $ 199,471 $ 200,566 $ 45,518 Net settlement of proceeds on the sale of investments ( 1,650 ) ( 2,200 ) ( 4,625 ) Non-cash investment in real estate and loan receivable activity 18,294 2,200 — Transfer from real estate to direct financing lease receivable 3,150 — — Unrealized (loss) gain on cash flow hedges ( 22,424 ) 42,210 ( 9,187 ) Non-cash deferred financing costs 2,600 4,647 2,028 Non-cash repayment of term loan facility — 270,000 200,000 Non-cash borrowing under term loan facility — ( 270,000 ) ( 202,028 ) Payable and accrued offering and deferred financing costs — 115 24 Discounts and fees on capital raised through issuance of common stock — — 38 Dividends declared and unpaid 65,391 55,608 47,182 The accompanying notes are an integral part of these consolidated financial statements. 75 ESSENTIAL PROPERTIES REALTY TRUST, INC. CONSOLIDATED FINANCIAL STATEMENTS Notes to Consolidated Financial Statements December 31, 2025 1. Description of Business and Organization Essential Properties Realty Trust, Inc. (the “Company”) is an internally managed real estate company that acquires, owns and manages primarily single-tenant properties that are net leased on a long-term basis to middle-market companies operating service-oriented or experience-based businesses. The Company generally invests in and leases freestanding, single-tenant commercial real estate facilities where a tenant services its customers and conducts activities that are essential to the generation of the tenant’s sales and profits. The Company was organized on January 12, 2018 as a Maryland corporation. It elected to be taxed as a real estate investment trust (“REIT”) for U.S. federal income tax purposes beginning with the year ended December 31, 2018, and it believes that its current organizational and operational status and intended distributions will allow it to continue to so qualify. Substantially all of the Company’s business is conducted directly and indirectly through its operating partnership, Essential Properties, L.P. (the “Operating Partnership”). The common stock of the Company is listed on the New York Stock Exchange under the ticker symbol “EPRT”. 2. Summary of Significant Accounting Policies Basis of Accounting The accompanying consolidated financial statements of the Company are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and with the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”). Principles of Consolidation The accompanying consolidated financial statements include the accounts of the Company and subsidiaries in which the Company has a controlling financial interest. All intercompany accounts and transactions have been eliminated in consolidation. As of December 31, 2025 and 2024, the Company, directly and indirectly, held a 99.7 % ownership interest in the Operating Partnership and the consolidated financial statements include the financial statements of the Operating Partnership as of these dates. See Note 8—Non-controlling Interests for changes in the ownership interest in the Operating Partnership. Use of Estimates The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Reportable Segments Accounting Standards Codification ("ASC") Topic 280, Segment Reporting, establishes standards for the manner in which enterprises report information about operating segments. Substantially all of the Company’s investments, at acquisition, are comprised of real estate owned and leased to tenants on a long-term basis and loans and direct financing lease receivables secured by real estate. Therefore, the Company aggregates these investments for reporting purposes and operates in one reportable segment. The chief operating decision maker, which is the Company's Chief Executive Officer, determines resource allocations based on characteristics of potential future investments (e.g., return on investment, tenant credit quality, industry type, and geographic location) and assesses the performance of the Company's existing portfolio based primarily on operating results and cash flow on a consolidated basis. 76 Real Estate Investments Investments in real estate are carried at cost less accumulated depreciation and impairment losses. The cost of investments in real estate reflects their purchase price or development cost. The Company evaluates each acquisition transaction to determine whether the acquired asset meets the definition of a business. Under Accounting Standards Update ("ASU") 2017-1, Business Combinations (Topic 805): Clarifying the Definition of a Business , an acquisition does not qualify as a business when there is no substantive process acquired or substantially all of the fair value is concentrated in a single identifiable asset or group of similar identifiable assets or the acquisition does not include a substantive process in the form of an acquired workforce or an acquired contract that cannot be replaced without significant cost, effort or delay. Transaction costs related to acquisitions that are asset acquisitions are capitalized as part of the cost basis of the acquired assets, while transaction costs for acquisitions that are deemed to be acquisitions of a business are expensed as incurred. Improvements and replacements are capitalized when they extend the useful life or improve the productive capacity of the asset. Costs of repairs and maintenance are expensed as incurred. The Company incurs various costs in the leasing and development of its properties. Amounts paid to tenants that incentivize them to extend or otherwise amend an existing lease or to sign a new lease agreement are capitalized to lease incentives on the Company's consolidated balance sheets. Tenant improvements are capitalized to building and improvements within the Company's consolidated balance sheets. Costs incurred which are directly related to properties under development, which include pre-construction costs essential to the development of the property, development costs, construction costs, interest costs and real estate taxes and insurance, are capitalized during the period of development as construction in progress. Determination of when a development project commences, and capitalization begins, and when a development project has reached substantial completion, and is available for occupancy and capitalization must cease, involves a degree of judgment. The Company does not engage in speculative real estate development. The Company does, however, opportunistically agree to reimburse certain of its tenants for development costs at its properties in exchange for contractually-specified rent that generally increases proportionally with its funding. The Company allocates the purchase price of acquired properties accounted for as asset acquisitions to tangible assets and liabilities and identifiable intangible assets or liabilities, if any, based on their relative fair values. Tangible assets may include land, site improvements and buildings. Intangible assets may include the value of in-place leases and above- and below-market leases and other identifiable intangible assets or liabilities based on lease or property specific characteristics. The fair value of the tangible assets of an acquired property with an in-place operating lease is determined by valuing the property as if it were vacant, and the "as-if-vacant" value is then allocated to the tangible assets based on the fair value of the tangible assets. The fair value of in-place leases is determined by considering estimates of carrying costs during the expected lease-up periods, current market conditions, as well as costs to execute similar leases based on the specific characteristics of each tenant's lease. The Company estimates the cost to execute leases with terms similar to the remaining lease terms of the in-place leases, including leasing commissions, legal and other related expenses. Factors the Company considers in this analysis include an estimate of the carrying costs during the expected lease-up periods considering current market conditions and costs to execute similar leases. In estimating carrying costs, the Company includes real estate taxes, insurance and other operating expenses, and estimates of lost rentals at market rates during the expected lease-up periods, which primarily range from six to 12 months. The fair value of above- or below-market leases is recorded based on the net present value (using a discount rate that reflects the risks associated with the leases acquired) of the difference between the contractual amount to be paid pursuant to the in-place lease and the Company's estimate of the fair market lease rate for the corresponding in-place lease, measured over the remaining non-cancelable term of the lease including any below-market fixed rate renewal options for below-market leases. In making estimates of fair values for purposes of allocating purchase price, the Company uses a number of sources, including real estate valuations prepared by independent valuation firms. The Company also considers information and other factors including market conditions, the industry that the tenant operates in, characteristics of the real estate (e.g., location, size, demographics, value and comparative rental rates), tenant credit profile and the importance of the location of the real estate to the operations of the tenant's business. Additionally, the Company considers information obtained about each property as a result of its pre-acquisition due diligence, marketing and leasing activities in estimating the fair value of the tangible and intangible assets acquired. The Company uses the information obtained as a result of its pre-acquisition due diligence as part of its consideration of the accounting 77 standard governing asset retirement obligations and, when necessary, will record an asset retirement obligation as part of the purchase price allocation. Real estate investments that are intended to be sold are designated as "held for sale" on the consolidated balance sheets at the lesser of carrying amount and fair value less estimated selling costs. Real estate investments are no longer depreciated when they are classified as held for sale. If the disposal, or intended disposal, of certain real estate investments represents a strategic shift that has had or will have a major effect on the Company's operations and financial results, the operations of such real estate investments would be presented as discontinued operations in the consolidated statements of operations for all applicable periods. Depreciation and Amortization Depreciation is computed using the straight-line method over the estimated useful lives of up to 40 years for buildings and 15 years for site improvements. The Company recorded the following amounts of depreciation expense on its real estate investments during the periods presented: Year ended December 31, (in thousands) 2025 2024 2023 Depreciation on real estate investments $ 147,647 $ 115,371 $ 95,527 Lease incentives are amortized on a straight-line basis as a reduction of rental revenue over the remaining non-cancellable terms of the respective leases. If a tenant terminates its lease, the unamortized portion of the lease incentive is charged to rental revenue. Construction in progress is not depreciated until the development has reached substantial completion. Tenant improvements are depreciated over the non-cancellable term of the related lease or their estimated useful life, whichever is shorter. Capitalized above-market lease intangibles are amortized on a straight-line basis as a reduction of rental revenue over the remaining non-cancellable terms of the respective leases. Capitalized below-market lease intangibles are accreted on a straight-line basis as an increase to rental revenue over the remaining non-cancellable terms of the respective leases including any below-market fixed rate renewal option periods. Capitalized above-market ground lease values are accreted as a reduction of property expenses over the remaining terms of the respective leases. Capitalized below-market ground lease values are amortized as an increase to property expenses over the remaining terms of the respective leases and any expected below-market renewal option periods where renewal is considered probable. The value of in-place leases, exclusive of the value of above-market and below-market lease intangibles, is amortized to depreciation and amortization expense on a straight-line basis over the remaining periods of the respective leases. If a tenant terminates its lease, the unamortized portion of each intangible, including in-place lease values, is charged to depreciation and amortization expense, while above- and below-market lease adjustments are recorded within rental revenue in the consolidated statements of operations. Loans Receivable The Company holds its loans receivable for long-term investment. Loans receivable are carried at amortized cost, including related unamortized discounts or premiums, if any, less the Company's estimated allowance for credit losses. The Company recognizes interest income on loans receivable using the effective-interest method applied on a loan-by-loan basis. Direct costs associated with originating loans are offset against any related fees received and the balance, along with any premium or discount, is deferred and amortized as an adjustment to interest on loans and direct financing lease receivables over the term of the related loan receivable using the effective-interest method. Direct Financing Lease Receivables Certain of the Company’s real estate investment transactions are accounted for as direct financing leases. The Company records the direct financing lease receivables at their net investment, determined as the aggregate minimum lease payments and the estimated non-guaranteed residual value of the leased property less unearned 78 income. The unearned income is recognized over the term of the related lease so as to produce a constant rate of return on the net investment in the asset. The Company’s investment in direct financing lease receivables is reduced over the applicable lease term to its non-guaranteed residual value by the portion of rent allocated to the direct financing lease receivables. Allowance for Credit Losses Under ASC Topic 326, Financial Instruments - Credit Losses, the Company uses a real estate loss estimate model (“RELEM”) which estimates losses on its loans and direct financing lease receivable portfolio, for purposes of calculating allowances for credit losses. The RELEM allows the Company to refine (on an ongoing basis) the expected loss estimate by incorporating asset-specific assumptions as necessary, such as anticipated funding, interest payments, estimated extensions and estimated loan repayment/refinancing at maturity to estimate cash flows over the life of the loan or direct financing lease receivable. The model also incorporates assumptions related to underlying collateral values, various loss scenarios, and predicted losses to estimate expected losses. The Company's specific asset-level inputs include loan-to-stabilized-value (“LTV”), principal balance, property type, location, coupon, origination year, term, subordination, expected repayment date and future funding. The Company categorizes the results by LTV range, which it considers the most significant indicator of credit quality for its loans and direct financing lease receivables. A lower LTV ratio typically indicates a lower credit loss risk. The Company also evaluates each loan and direct financing lease receivable measured at amortized cost for credit deterioration at least quarterly. Credit deterioration occurs when it is deemed probable that the Company will not be able to collect all amounts due according to the contractual terms of the loan or direct financing lease receivable. The Company's allowance for credit losses is adjusted to reflect its estimation of the current and future economic conditions that impact the performance of the real estate assets securing its loans. These estimations include various macroeconomic factors impacting the likelihood and magnitude of potential credit losses for the Company's loans and direct financing lease receivables during their anticipated term. Changes in the Company's allowance for credit losses are presented within change in provision for credit losses in its consolidated statements of operations. Impairment of Long-Lived Assets If circumstances indicate that the carrying value of a property may not be recoverable, the Company reviews the property for impairment. This review is based on an estimate of the future undiscounted cash flows, excluding interest charges, expected to result from the property’s use and eventual disposition. These estimates consider factors such as expected future operating income, market and other applicable trends and residual value, as well as the effects of leasing demand, competition and other factors. If impairment exists due to the inability to recover the carrying value of a property, an impairment loss is recorded to the extent that the carrying value exceeds the estimated fair value of the property for properties to be held and used. For properties held for sale, the impairment loss is the adjustment to fair value less estimated cost to dispose of the asset. Impairment losses, if any, are recorded directly within our consolidated statements of operations. The Company recorded the following provisions for impairment of long lived assets during the periods presented: Year ended December 31, (in thousands) 2025 2024 2023 Provision for impairment of real estate $ 11,997 $ 14,845 $ 3,548 Cash and Cash Equivalents Cash and cash equivalents includes cash in the Company’s bank accounts. The Company considers all cash balances and highly liquid investments with original maturities of three months or less to be cash and cash equivalents. The Company deposits cash with high quality financial institutions. These deposits are guaranteed by the Federal Deposit Insurance Corporation (“FDIC”) up to an insurance limit. As of December 31, 2025 and 2024, the Company had cash and cash equivalents of $ 60.2 million and $ 40.7 million, respectively, of which $ 59.7 million and $ 40.2 million, respectively, were not insured by the FDIC. 79 Although the Company bears risk with respect to amounts not insured by the FDIC, it has not experienced and does not anticipate any losses as a result due to the high quality of the financial institutions where balances are held. Restricted Cash Restricted cash primarily consists of cash proceeds from the sale of assets held by a qualified intermediary to facilitate tax-deferred exchange transactions under Section 1031 of the Internal Revenue Code of 1986, as amended (the "Code"). Forward Equity Sales The Company has and may continue to enter into forward sale agreements relating to shares of its common stock, either through its ATM Programs (as defined herein) or through underwritten public offerings. These agreements may be physically settled in stock, settled in cash or net share settled at the Company’s election. The Company evaluated its forward sale agreements and concluded they meet the conditions to be classified within stockholders’ equity. Prior to settlement, a forward sale agreement will be reflected in the diluted net income per share calculations using the treasury stock method. Under this method, the number of shares of the Company’s common stock used in calculating diluted net income per share is deemed to be increased by the excess, if any, of the number of shares of the Company’s common stock that would be issued upon full physical settlement of such forward sale agreement over the number of shares of the Company’s common stock that could be purchased by the Company in the market (based on the average market price during the reporting period) using the proceeds receivable upon full physical settlement (based on the adjusted forward sale price at the end of the reporting period). Consequently, prior to settlement of a forward sale agreement, there will be no dilutive effect on the Company’s net income per share except during periods when the average market price of the Company’s common stock is above the adjusted forward sale price. However, upon settlement of a forward sales agreement, if the Company elects to physically settle or net share settle such forward sale agreement, delivery of the Company’s shares will result in dilution to the Company’s net income per share. Deferred Financing Costs Financing costs related to establishing the Company’s Revolving Credit Facility (as defined below) were deferred and are being amortized as an increase to interest expense in the consolidated statements of operations over the term of the facility and are reported as a component of rent receivables, prepaid expenses and other assets, net on the consolidated balance sheets. Financing costs related to the incurrence of borrowings under the Company's unsecured term loans and the issuance of senior unsecured notes were deferred and are being amortized as an increase to interest expense in the consolidated statements of operations over the term of the related debt instrument and are reported as a reduction of the related debt balance on the consolidated balance sheets. Derivative Instruments In the normal course of business, the Company uses derivative financial instruments, which may include interest rate swaps, caps, options, floors and other interest rate derivative contracts, to protect the Company against adverse fluctuations in interest rates by reducing its exposure to variability in cash flows on a portion of the Company’s floating-rate debt. Instruments that meet these hedging criteria are formally designated as hedges at the inception of the derivative contract. The Company records all derivatives on the consolidated balance sheets at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. The Company may also enter into derivative contracts that are intended to economically hedge certain risk, even though hedge accounting does not apply or the Company elects not to apply hedge accounting. 80 The accounting for subsequent changes in the fair value of these derivatives depends on whether each has been designed and qualifies for hedge accounting treatment. If a derivative is designated and qualifies for cash flow hedge accounting treatment, the change in the estimated fair value of the derivative is recorded in other comprehensive income (loss) in the consolidated statements of comprehensive income to the extent that it is effective. Any ineffective portion of a change in derivative fair value is immediately recorded in earnings. If the Company elects not to apply hedge accounting treatment (or for derivatives that do not qualify as hedges), any change in the fair value of such derivative instruments would be recognized immediately as a gain or loss on derivative instruments in the consolidated statements of operations. Fair Value Measurement The Company estimates the fair value of financial and non-financial assets and liabilities based on the framework established in fair value accounting guidance. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). The hierarchy described below prioritizes inputs to the valuation techniques used in measuring the fair value of assets and liabilities. This hierarchy maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring the most observable inputs to be used when available. The hierarchy is broken down into three levels based on the reliability of inputs as follows: Level 1—Quoted prices in active markets for identical assets and liabilities that the Company has the ability to access at the measurement date. Level 2—Inputs other than quoted prices included within Level 1 that are observable for the asset and liability or can be corroborated with observable market data for substantially the entire contractual term of the asset or liability. Level 3—Unobservable inputs that reflect the Company's own assumptions that market participants would use in the pricing of the asset or liability and are consequently not based on market activity, but rather through particular valuation techniques. Revenue Recognition The Company’s rental revenue is primarily rent received from tenants. Rent from tenants is recorded in accordance with the terms of each lease on a straight-line basis over the non-cancellable initial term of the lease from the later of the date of the commencement of the lease and the date of acquisition of the property subject to the lease. Rental revenue recognition begins when the tenant controls the space and continues through the term of the related lease. Because substantially all of the leases provide for rental increases at specified intervals, the Company records a straight-line rent receivable and recognizes revenue on a straight-line basis through the expiration of the non-cancelable term of the lease. The Company considers whether the collectability of rents is reasonably assured in determining the amount of straight-line rent to record. Generally, the Company’s leases provide the tenant with one or more multi-year renewal options, subject to generally the same terms and conditions provided under the initial lease term, including rent increases. If economic incentives make it reasonably certain that an option period to extend the lease will be exercised, the Company will include these options in determining the non-cancelable term of the lease. The Company defers rental revenue related to lease payments received from tenants in advance of their due dates. These amounts are presented within accrued liabilities and other payables on the Company’s consolidated balance sheets. Certain properties in the Company’s investment portfolio are subject to leases that provide for contingent rent based on a percentage of the tenant’s gross sales. For these leases, the Company recognizes contingent rental revenue when the threshold upon which the contingent lease payment is based is actually reached. 81 The Company recorded the following amounts as contingent rent, which are included as a component of rental revenue in the Company's consolidated statements of operations, during the periods presented: Year ended December 31, (in thousands) 2025 2024 2023 Contingent rent $ 775 $ 863 $ 743 Adjustment to Rental Revenue for Tenant Credit The Company continually reviews receivables related to rent and unbilled rent receivables and determines collectability by taking into consideration the tenant’s payment history, the financial condition of the tenant, business conditions in the industry in which the tenant operates and economic conditions in the area in which the property is located. If the assessment of the collectability of substantially all payments due under a lease changes from probable to not probable, any difference between the rental revenue recognized to date and the lease payments that have been collected is recognized as a current period reduction of rental revenue in the consolidated statements of operations. Conversely, if the assessment of the collectability changes from not probable to probable, any difference is recognized as a current period increase of rental revenue in the consolidated statements of operations. The Company recorded the following adjustments to rental revenue for tenant credit during the periods presented: Year ended December 31, (in thousands) 2025 2024 2023 Adjustment to decrease rental revenue for tenant credit $ ( 3,454 ) $ ( 635 ) $ ( 640 ) Offering Costs In connection with the completion of equity offerings, the Company incurs legal, accounting and other offering-related costs. Such costs are deducted from the gross proceeds of each equity offering when the offering is completed. As of December 31, 2025 and 2024, the Company capitalized a total of $ 93.0 million and $ 92.3 million, respectively, of such costs, which are presented as a reduction of additional paid-in capital on the Company's consolidated balance sheets. Income Taxes The Company elected and qualified to be taxed as a REIT under sections 856 through 860 of the Code commencing with its taxable year ended December 31, 2018. REITs are subject to a number of organizational and operational requirements, including a requirement that 90% of ordinary “REIT taxable income” (as determined without regard to the dividends paid deduction or net capital gains) be distributed. As a REIT, the Company will generally not be subject to U.S. federal income tax to the extent that it meets the organizational and operational requirements and its distributions equal or exceed REIT taxable income. For the period subsequent to the effective date of its REIT election, the Company continues to meet the organizational and operational requirements and expects distributions to exceed REIT taxable income. Accordingly, no provision has been made for U.S. federal income taxes. Even though the Company has elected and qualifies for taxation as a REIT, it may be subject to state and local income and franchise taxes, and to federal income and excise tax on its undistributed income. Franchise taxes and federal excise taxes on the Company’s undistributed income, if any, are included in general and administrative expenses on the accompanying consolidated statements of operations. Additionally, taxable income from non-REIT activities managed through the Company's taxable REIT subsidiary is subject to U.S. federal, state, and local taxes. The Company analyzes its tax filing positions in all of the U.S. federal, state and local tax jurisdictions where it is required to file income tax returns, as well as for all open tax years in such jurisdictions. The Company follows a two-step process to evaluate uncertain tax positions. Step one, recognition, occurs when an entity concludes that a tax position, based solely on its technical merits, is more-likely-than-not to be sustained upon examination. Step two, measurement, determines the amount of benefit that is more-likely-than-not to be realized upon settlement. Derecognition of a tax position that was previously recognized would occur when the Company 82 subsequently determines that a tax position no longer meets the more-likely-than-not threshold of being sustained. The use of a valuation allowance as a substitute for derecognition of tax positions is prohibited. As of December 31, 2025 and 2024, the Company had no accruals recorded for uncertain tax positions. The Company’s policy is to classify interest expense and penalties relating to taxes in general and administrative expense in the consolidated statements of operations. During the years ended December 31, 2025, 2024 and 2023, the Company recorded de minimis interest or penalties relating to taxes, and there were no interest or penalties with respect to taxes accrued as of December 31, 2025 or 2024. The 2024, 2023, 2022, 2021, and 2020 taxable years remain open to examination by federal and/or state taxing jurisdictions to which the Company is subject. Equity-Based Compensation The Company grants shares of restricted common stock (“RSAs”), restricted stock units (“RSUs”) and long-term incentive plan units (“LTIP Units”) in its Operating Partnership to its directors, executive officers and other employees that vest over specified time periods, subject to the recipient’s continued service. The Company also grants performance-based RSUs and performance-based LTIP Units to executive officers, the final number of which is determined based on objective and, with respect to performance-based RSUs issued prior to 2024, subjective performance conditions and which vest over a multi-year period, subject to the recipient’s continued service. LTIP Units are a class of partnership units issued by the Operating Partnership which are convertible into limited partnership interests in the Operating Partnership ("OP Units") upon satisfaction of certain conditions, including, depending upon the particular award, those relating to vesting periods or performance criteria, and continued service. The Company accounts for RSAs, RSUs and LTIP Units in accordance with ASC 718, Compensation – Stock Compensation, which requires that such compensation be recognized in the financial statements based on its estimated grant-date fair value. The value of such awards is recognized as compensation expense in general and administrative expenses in the accompanying consolidated statements of operations over the applicable service periods. The Company recognizes compensation expense for equity-based compensation using the straight-line method based on the fair value of the award on the grant date. Forfeitures of equity-based compensation awards, if any, are recognized when they occur. Variable Interest Entities The Financial Accounting Standards Board (“FASB”) provides guidance for determining whether an entity is a VIE. VIEs are defined as entities in which 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. A VIE is required to be consolidated by its primary beneficiary, which is the party that (i) has the power to control the activities that most significantly impact the VIE’s economic performance 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 has concluded that the Operating Partnership is a VIE of which the Company is the primary beneficiary, as the Company has the power to direct the activities that most significantly impact the economic performance of the Operating Partnership. Substantially all of the Company’s assets and liabilities are held by the Operating Partnership. The assets and liabilities of the Operating Partnership are consolidated and reported as assets and liabilities on the Company’s consolidated balance sheets as of December 31, 2025 and 2024. Additionally, the Company has concluded that certain entities to which it has provided mortgage loans are VIEs because the entities' equity was not sufficient to finance their activities without additional subordinated financial support. The following table presents information about the Company’s mortgage loan-related VIEs as of the dates 83 presented: December 31, (Dollars in thousands) 2025 2024 Number of VIEs 57 49 Aggregate carrying value $ 374,671 $ 327,423 The Company was not the primary beneficiary of any of these entities, because the Company did not have the power to direct the activities that most significantly impact the entities’ economic performance as of December 31, 2025 and 2024. The Company’s maximum exposure to loss in these entities is limited to the carrying amount of its investment. The Company had no liabilities associated with these VIEs as of December 31, 2025 and 2024. Recent Accounting Developments In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 requires annual disclosure of specific categories in the rate reconciliation and the provision of additional information for reconciling items that meet a quantitative threshold within the rate reconciliation. In addition, ASU 2023-09 requires annual disclosure of income taxes paid disaggregated by federal, state and foreign jurisdictions as well as individual jurisdictions in which income taxes paid is equal to or greater than 5 percent of total income taxes paid. ASU 2023-09 is effective for annual periods beginning after December 15, 2024 on a prospective basis, however early adoption and retrospective application is permitted. The Company adopted this standard in the year ended December 31, 2025. The adoption did not have a material effect on the Company’s consolidated financial statements and related disclosures. In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40). ASU 2024-03 requires additional disclosures about a public company’s expenses and addresses requests from investors for more detailed information about the types of expenses (e.g., purchases of inventory, employee compensation, depreciation, amortization, and depletion) in commonly presented expense captions (e.g., cost of sales; selling, general, and administrative (SG&A); and research and development (R&D). ASU 2024-03 is effective for annual periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. The Company is currently evaluating the impact of this guidance on its consolidated financial statements and related disclosures. 3. Investments The following table presents information about the number of investments in the Company's real estate investment portfolio as of each date presented: December 31, 2025 2024 Owned properties (1) 2,140 1,946 Properties securing investments in mortgage loans (2) 150 150 Ground lease interests 10 8 Total number of investments 2,300 2,104 _____________________________________ (1) Includes eight and seven properties which are subject to leases accounted for as direct financing leases or loans as of December 31, 2025 and 2024, respectively. (2) Properties secure 28 and 25 mortgage loans receivable as of December 31, 2025 and 2024, respectively. 84 The following table presents information about the gross investment value of the Company's real estate investment portfolio as of each date presented: December 31, (in thousands) 2025 2024 Real estate investments, at cost $ 6,763,040 $ 5,667,349 Loans and direct financing lease receivables, net 401,323 352,066 Real estate investments held for sale, net 2,635 10,018 Total gross investments $ 7,166,998 $ 6,029,433 Investments in 2025 and 2024 The following table presents information about the Company’s investment activity during the years ended December 31, 2025 and 2024: Year ended December 31, (Dollars amounts in thousands) 2025 2024 Ownership type (1) Fee Interest Number of properties 255 264 Investment allocation: Land and improvements $ 348,642 $ 333,983 Building and improvements 751,921 484,417 Intangible lease assets 10,218 7,319 Intangible lease liabilities ( 970 ) ( 312 ) Construction in progress (2) 100,007 263,232 Total investments (including acquisition costs) $ 1,209,818 $ 1,088,639 _____________________________________ (1) During the year ended December 31, 2025, the Company acquired fee interests in 253 properties and acquired two properties subject to a ground lease. (2) Represents amounts incurred at and subsequent to initial investment and includes $ 3.2 million and $ 5.8 million, respectively, of capitalized interest expense during the years ended December 31, 2025 and 2024. During the years ended December 31, 2025 and 2024, the Company did not make any new investments that individually represented more than 5% of the Company’s total real estate investment portfolio. 85 Gross Investment Activity During the years ended December 31, 2025, 2024 and 2023, the Company had the following gross investment activity: (Dollar amounts in thousands) Number of Investment Locations Dollar Amount of Investments Gross investments, December 31, 2022 1,653 $ 4,055,385 Acquisitions of and additions to real estate investments 291 1,004,075 Sales of investments in real estate ( 51 ) ( 120,809 ) Relinquishment of properties at end of ground lease term ( 2 ) ( 1,543 ) Provisions for impairment of real estate (1) — ( 3,548 ) Investments in loans receivable 2 13,091 Principal collections on and settlements of loans and direct financing lease receivables ( 20 ) ( 27,908 ) Other — ( 3,497 ) Gross investments, December 31, 2023 1,873 4,915,246 Acquisitions of and additions to real estate investments 264 1,100,712 Sales of investments in real estate ( 46 ) ( 96,774 ) Relinquishment of properties at end of ground lease term ( 3 ) ( 1,471 ) Provisions for impairment of real estate (2) — ( 14,845 ) Investments in loans receivable 33 138,464 Principal collections on and settlements of loans and direct financing lease receivables ( 17 ) ( 10,022 ) Other — ( 1,877 ) Gross investments, December 31, 2024 2,104 6,029,433 Acquisitions of and additions to real estate investments 255 1,240,364 Sales of investments in real estate ( 60 ) ( 132,951 ) Provisions for impairment of real estate (3) — ( 11,997 ) Investments in loans and direct financing lease receivables 15 97,868 Principal collections on and settlements of loans and direct financing lease receivables ( 14 ) ( 48,503 ) Other — ( 7,216 ) Gross investments, December 31, 2025 2,300 7,166,998 Less: Accumulated depreciation and amortization (4) — ( 612,674 ) Net investments, December 31, 2025 2,300 $ 6,554,324 _____________________________________________ (1) During the year ended December 31, 2023, the Company identified and recorded provisions for impairment at six tenanted properties and two vacant properties. (2) During the year ended December 31, 2024, the Company identified and recorded provisions for impairment at 17 tenanted properties and five vacant properties. (3) During the year ended December 31, 2025, the Company identified and recorded provisions for impairment at 12 tenanted properties and two vacant properties. (4) Includes $ 556.7 million of accumulated depreciation as of December 31, 2025. Loans and Direct Financing Lease Receivables As of December 31, 2025 and 2024, the Company had 28 and 25 mortgage loans receivable outstanding, respectively, and three leases accounted for as loans with an aggregate carrying amount of $ 398.0 million and $ 351.6 million, respectively. The maximum amount of loss due to credit risk is the Company's current principal balance of $ 398.0 million as of December 31, 2025. 86 The Company's loans receivable portfolio as of December 31, 2025 and 2024 is summarized below (dollars in thousands): Loan Type Monthly Payment (1) Number of Secured Properties Effective Interest Rate Stated Interest Rate Maturity Date Principal Balance Outstanding December 31, 2025 December 31, 2024 Mortgage (2)(3) I/O 2 8.80 % 8.00 % 2039 $ 12,000 $ 12,000 Mortgage (2) I/O 1 8.53 % 7.75 % 2039 2,500 7,300 Mortgage (2)(3) I/O 69 7.82 % 7.33 % 2034 51,000 51,000 Mortgage (2) I/O — 8.42 % 7.65 % 2040 — 5,300 Mortgage (2)(3) I/O 1 8.54 % 8.50 % 2026 1,525 1,525 Mortgage (2)(3) I/O 2 8.33 % 8.33 % 2026 994 994 Mortgage (2) I/O 2 6.87 % 6.40 % 2036 2,520 2,520 Mortgage (2) I/O 2 8.33 % 8.33 % 2026 2,389 2,389 Mortgage (2) I/O 1 8.99 % 8.09 % 2051 35,000 29,100 Mortgage (2) I/O 7 7.39 % 6.80 % 2036 35,474 35,474 Mortgage (2) I/O 1 7.73 % 7.20 % 2036 2,470 2,470 Mortgage (2)(3) I/O 1 8.00 % 8.00 % 2040 1,754 1,754 Mortgage (2) I/O 8 7.00 % 7.00 % 2027 6,275 10,070 Mortgage (2) I/O — 7.73 % 7.20 % 2037 — 3,600 Mortgage (2) I/O 1 8.30 % 8.25 % 2026 760 760 Mortgage (2)(3) I/O 4 8.64 % 8.05 % 2037 12,250 12,250 Mortgage (2)(3) I/O 9 8.85 % 8.25 % 2037 25,993 25,993 Mortgage (2) I/O 1 8.84 % 8.25 % 2038 10,200 10,200 Mortgage (2) I/O — 8.10 % 8.10 % 2025 — 8,654 Mortgage (2) I/O 3 10.19 % 9.50 % 2039 10,300 16,059 Mortgage (2) I/O 14 10.00 % 8.65 % 2044 57,454 57,454 Mortgage (2)(3) I/O 1 8.60 % 9.75 % 2034 15,000 7,560 Mortgage (2)(3) I/O 2 10.20 % 9.50 % 2039 5,900 17,451 Mortgage (2) I/O 1 8.00 % 8.00 % 2027 900 900 Mortgage (2) I/O 6 9.58 % 8.25 % 2044 23,649 6,400 Mortgage (2) P+l 1 7.50 % 7.50 % 2028 1,550 — Mortgage (2) I/O 1 9.72 % 8.00 % 2045 19,950 — Mortgage (2) I/O 2 10.93 % 9.00 % 2045 13,000 — Mortgage (2) I/O 1 8.06 % 7.25 % 2040 8,276 — Mortgage (2) I/O 5 9.92 % 9.25 % 2040 13,650 — Mortgage (2) I/O 1 9.54 % 8.25 % 2045 3,692 — Leasehold interest P+I 1 (4) (4) 2034 794 862 Leasehold interest P+I 1 (4) (4) 2034 1,180 1,283 Leasehold interest P+I 2 (4) (4) 2039 19,567 20,327 Net investment $ 397,966 $ 351,649 ________________________________________________ (1) I/O: Interest Only; P+I: Principal and Interest (2) Loan requires monthly payments of interest only with a balloon payment due at maturity. (3) Loan allows for prepayments in whole or in part without penalty. (4) These leasehold interests are accounted for as loans receivable, as the lease for each property contains an option for the lessee to repurchase the leased property in the future. 87 Scheduled principal payments due to be received under the Company's loans receivable as of December 31, 2025 were as follows: (in thousands) Loans Receivable 2026 $ 6,680 2027 8,271 2028 2,736 2029 1,280 2030 1,379 Thereafter 377,620 Total $ 397,966 As of December 31, 2025 and 2024, the Company had $ 4.4 million and $ 1.3 million, respectively, of net investments accounted for as direct financing lease receivables. The components of the investments accounted for as direct financing lease receivables were as follows: December 31, (in thousands) 2025 2024 Minimum lease payments receivable $ 18,652 $ 1,499 Estimated unguaranteed residual value of leased assets 559 250 Unearned income from leased assets ( 14,850 ) ( 436 ) Net investment $ 4,361 $ 1,313 Scheduled future minimum non-cancelable base rental payments due to be received under the direct financing lease receivables as of December 31, 2025 were as follows: (in thousands) Future Minimum Base Rental Payments 2026 $ 531 2027 518 2028 532 2029 546 2030 560 Thereafter 15,965 Total $ 18,652 Allowance for Credit Losses The Company utilizes a real estate loss estimate model (i.e. a RELEM) which estimates losses on loans and direct financing lease receivables for purposes of calculating an allowance for credit losses. As of December 31, 2025 and 2024, the Company recorded an allowance for credit losses of $ 1.0 million and $ 0.9 million, respectively, which is recorded within loans and direct financing receivables on the Company's consolidated balance sheets. Changes in the Company’s allowance for credit losses are presented within change in provision for credit losses in the Company’s consolidated statements of operations. 88 For the years ended December 31, 2025, 2024 and 2023, the changes to the Company's allowance for credit losses were as follows: (in thousands) Allowance for Credit Losses Balance at December 31, 2022 $ 765 Current period provision for expected credit losses (1) ( 99 ) Write-offs charged — Recoveries — Balance at December 31, 2023 666 Current period provision for expected credit losses (1) 230 Write-offs charged — Recoveries — Balance at December 31, 2024 896 Current period provision for expected credit losses (1) 108 Write-offs charged — Recoveries — Balance at December 31, 2025 $ 1,004 _____________________________________ (1) Changes in expected credit loss were primarily due to overall changes in the size of our loans and direct financing lease receivables portfolio. The Company considers the ratio of loan to value ("LTV") to be a significant credit quality indicator for its loans and direct financing lease portfolio. The following table presents information about the LTV of the Company's loans and direct financing lease receivables measured at amortized cost as of as of December 31, 2025: Amortized Cost Basis by Origination Year Total Amortized Cost Basis (in thousands) 2025 2024 2023 2022 Prior to 2022 LTV <60% $ 3,151 $ — $ — $ — $ 54,314 $ 57,465 LTV 60%-70% — 15,000 — — 30,207 45,207 LTV >70% 77,367 100,522 10,200 56,792 54,774 299,655 $ 80,518 $ 115,522 $ 10,200 $ 56,792 $ 139,295 $ 402,327 Real Estate Investments Held for Sale The Company continually evaluates its portfolio of real estate investments and may elect to dispose of investments considering criteria including , but not limited to, tenant concentration, tenant credit quality, tenant operation type (e.g., industry, sector or concept), unit-level financial performance, local market conditions and lease rates, associated indebtedness and asset location. Real estate investments held for sale are expected to be sold within twelve months. The following table shows the activity in real estate investments held for sale and intangible lease liabilities held for sale during the years ended December 31, 2025 and 2024: (Dollar amounts in thousands) Number of Properties Real Estate Investments Intangible Lease Liabilities Net Carrying Value Held for sale balance, December 31, 2023 4 $ 7,455 $ — $ 7,455 Transfers to held for sale classification 16 25,854 ( 76 ) 25,778 Sales ( 15 ) ( 23,291 ) 76 ( 23,215 ) Transfers to held and used classification — — — — Held for sale balance, December 31, 2024 5 10,018 $ — 10,018 Transfers to held for sale classification 5 7,440 — 7,440 Sales ( 7 ) ( 9,936 ) — ( 9,936 ) Transfers to held and used classification ( 2 ) ( 4,887 ) — ( 4,887 ) Held for sale balance, December 31, 2025 1 $ 2,635 $ — $ 2,635 89 Significant Concentrations The Company did not have any tenants (including for this purpose, all affiliates of such tenants) whose rental revenue for the years ended December 31, 2025, 2024 or 2023 represented 10% or more of total rental revenue in the Company's consolidated statements of operations. The following table lists the state where the rental revenue from the properties in that state during the periods presented represented 10% or more of total rental revenue in the Company's consolidated statements of operations: Year ended December 31, State 2025 2024 2023 Texas 12.5 % 13.4 % 13.3 % Intangible Assets and Liabilities Intangible assets and liabilities consisted of the following as of the dates presented: December 31, 2025 December 31, 2024 (in thousands) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Intangible assets: In-place leases $ 88,145 $ 44,489 $ 43,656 $ 82,926 $ 40,499 $ 42,427 Intangible market lease assets 11,072 6,607 4,465 11,121 5,955 5,166 Total intangible assets $ 99,217 $ 51,096 $ 48,121 $ 94,047 $ 46,454 $ 47,593 Intangible market lease liabilities $ 15,521 $ 4,755 $ 10,766 $ 15,523 $ 4,823 $ 10,700 The remaining weighted average amortization period for the Company's intangible assets and liabilities as of December 31, 2025, by category and in total, were as follows: Years Remaining In-place leases 8.9 Intangible market lease assets 8.6 Total intangible assets 8.9 Intangible market lease liabilities 9.2 The following table discloses amounts recognized within the consolidated statements of operations related to amortization of in-place leases, amortization and accretion of above- and below-market lease assets and liabilities, net and the amortization and accretion of above- and below-market ground leases for the periods presented: Year ended December 31, (in thousands) 2025 2024 2023 Amortization of in-place leases (1) $ 5,490 $ 6,377 $ 6,408 Amortization (accretion) of market lease intangibles, net (2) ( 3 ) ( 60 ) 11 Amortization (accretion) of above- and below-market ground lease intangibles, net (3) ( 126 ) ( 178 ) ( 286 ) ______________________________________________________ (1) Reflected within depreciation and amortization expense. (2) Reflected within rental revenue. (3) Reflected within property expenses. 90 The following table provides the estimated amortization of in-place lease assets to be recognized as a component of depreciation and amortization expense for the next five years and thereafter: (in thousands) In-Place Lease Assets 2026 $ 5,122 2027 4,606 2028 4,080 2029 3,985 2030 3,903 Thereafter 21,960 Total $ 43,656 The following table provides the estimated net amortization of above- and below-market lease intangibles to be recognized as a component of rental revenue for the next five years and thereafter: (in thousands) Above Market Lease Asset Below Market Lease Liabilities Net Adjustment to Rental Revenue 2026 $ ( 657 ) $ 644 $ ( 13 ) 2027 ( 636 ) 768 132 2028 ( 393 ) 745 352 2029 ( 381 ) 712 331 2030 ( 380 ) 694 314 Thereafter ( 2,018 ) 7,203 5,185 Total $ ( 4,465 ) $ 10,766 $ 6,301 4. Leases As Lessor The Company’s investment properties are leased to tenants under long-term operating leases that typically include one or more tenant renewal options. The Company’s leases provide for annual base rental payments (generally payable in monthly installments), and generally provide for increases in rent based on fixed contractual terms or as a result of increases in the Consumer Price Index. Substantially all of the leases are triple-net, which means that the lessees are responsible for paying all property operating expenses, including maintenance, insurance, utilities, property taxes and, if applicable, ground rent expense; therefore, the Company is generally not responsible for repairs or other capital expenditures related to the properties while the triple-net leases are in effect and, at the end of the lease term, the lessees are responsible for returning the property to the Company in a substantially similar condition as when they took possession. Some of the Company’s leases provide that in the event the Company wishes to sell the property subject to that lease, it first must offer the lessee the right to purchase the property on the same terms and conditions as any offer which it intends to accept for the sale of the property. 91 Scheduled future minimum base rent due to be received under the remaining non-cancelable term of operating leases in place as of December 31, 2025 were as follows: (in thousands) Future Minimum Base Rental Receipts 2026 $ 526,284 2027 532,160 2028 537,437 2029 542,397 2030 544,269 Thereafter 6,345,331 Total $ 9,027,878 Since lease renewal periods are exercisable at the option of the lessee, the preceding table presents future minimum base rental payments to be received during the initial non-cancelable lease term only. In addition, the future minimum lease payments exclude contingent rent payments, as applicable, that may be collected from certain tenants based on provisions related to gross sales thresholds and exclude increases in annual rent based on future changes in the Consumer Price Index, among other items. The fixed and variable components of lease revenues for the years ended December 31, 2025, 2024, and 2023 were as follows: Year ended December 31, (in thousands) 2025 2024 2023 Fixed lease revenues $ 527,509 $ 424,313 $ 338,720 Variable lease revenues (1) 5,329 4,051 3,610 Total lease revenues (2) $ 532,838 $ 428,364 $ 342,330 _____________________________________ (1) Includes contingent rent based on a percentage of the tenant’s gross sales and costs paid by the Company for which it is reimbursed by its tenants. (2) Excludes the amortization and accretion of above- and below-market lease intangible assets and liabilities and lease incentives and the adjustment to rental revenue for tenant credit. As Lessee The Company has a number of ground leases, office leases and other equipment leases which are classified as operating leases. As of December 31, 2025, the Company's right of use ("ROU") assets and lease liabilities were $ 8.7 million and $ 8.8 million, respectively. As of December 31, 2024, the Company's ROU assets and lease liabilities were $ 8.8 million and $ 9.5 million, respectively. These amounts are included in rent receivables, prepaid expenses and other assets, net and accrued liabilities and other payables on the Company's consolidated balance sheets. The discount rate applied to measure each ROU asset and lease liability is based on the Company's incremental borrowing rate ("IBR"). The Company considers the general economic environment and its historical borrowing activity and factors in various financing and asset specific adjustments to ensure the IBR is appropriate to the intended use of the underlying lease. As the Company did not elect to apply hindsight, lease term assumptions determined under ASC 840 were carried forward and applied in calculating the lease liabilities recorded under ASC 842. Certain of the Company's ground leases offer renewal options which it assesses against relevant economic factors to determine whether it is reasonably certain of exercising or not exercising the option. Lease payments associated with renewal periods that the Company is reasonably certain will be exercised, if any, are included in the measurement of the corresponding lease liability and ROU asset. 92 The following table sets forth information related to the measurement of the Company's lease liabilities as of the dates presented: December 31, 2025 December 31, 2024 Weighted average remaining lease term (in years) 24.4 23.3 Weighted average discount rate 6.86 % 6.83 % The following table sets forth the details of rent expense for the years ended December 31, 2025, 2024 and 2023: Year ended December 31, (in thousands) 2025 2024 2023 Fixed rent expense - Ground Rent $ 691 $ 761 $ 970 Fixed rent expense - Office Rent 720 670 606 Variable rent expense — — — Total rent expense $ 1,411 $ 1,431 $ 1,576 As of December 31, 2025, future lease payments under office and equipment operating leases to be paid by the Company directly and future lease payments under ground leases where the Company’s tenants are directly responsible for payment over the next five years and thereafter were as follows: (in thousands) Office and Equipment Leases Ground Leases Total Future Minimum Base Rental Payments 2026 $ 226 $ 697 $ 923 2027 228 705 933 2028 233 729 962 2029 60 743 803 2030 — 754 754 Thereafter — 17,260 17,260 Total $ 747 $ 20,888 21,635 Present value discount ( 12,807 ) Lease liabilities $ 8,828 The Company has adopted the short-term lease policy election and accordingly, the table above excludes future minimum base cash rental payments by the Company or its tenants on leases that have a term of less than 12 months at lease inception. The total of such future obligations is not material. 93 5. Long Term Debt The following table summarizes the Company's outstanding indebtedness as of December 31, 2025 and 2024: Principal Outstanding Weighted Average Interest Rate (1) (in thousands) Maturity Date December 31, 2025 December 31, 2024 December 31, 2025 December 31, 2024 Unsecured term loans: 2027 Term Loan February 2027 $ 430,000 $ 430,000 4.87 % 5.62 % 2028 Term Loan January 2028 400,000 400,000 4.77 % 5.62 % 2029 Term Loan February 2029 (2) 450,000 450,000 4.77 % 5.62 % 2030 Term Loan January 2030 (2) 450,000 450,000 4.77 % 5.62 % Senior unsecured notes: 2031 Notes July 2031 400,000 400,000 2.95 % 2.95 % 2035 Notes December 2035 400,000 — 5.40 % — % Revolving Credit Facility February 2030 (2) — — — % — % Total principal outstanding $ 2,530,000 $ 2,130,000 4.60 % 5.12 % ______________________________________________________ (1) Interest rates are presented as stated in debt agreements and do not reflect the impact of the Company's interest rate swap and lock agreements, where applicable (see Note 6—Derivative and Hedging Activities). (2) After giving effect to extension options exercisable at the Operating Partnership's election. The following table summarizes the scheduled principal payments on the Company’s outstanding indebtedness as of December 31, 2025: (in thousands) 2027 Term Loan 2028 Term Loan 2029 Term Loan (1) 2030 Term Loan (1) Senior Unsecured Notes Revolving Credit Facility (2) Total 2026 $ — $ — $ — $ — $ — $ — $ — 2027 430,000 — — — — — 430,000 2028 — 400,000 — — — — 400,000 2029 — — 450,000 — — — 450,000 2030 — — — 450,000 — — 450,000 Thereafter — — — — 800,000 — 800,000 Total $ 430,000 $ 400,000 $ 450,000 $ 450,000 $ 800,000 $ — $ 2,530,000 ______________________ (1) After giving effect to extension options exercisable at the Operating Partnership's election. (2) Any amounts drawn will be due in February 2030, after giving effect to extension options exercisable at the Operating Partnership's election. The Company was not in default of any provisions under any of its outstanding indebtedness as of December 31, 2025 or 2024. Revolving Credit Facility and Credit Facility Term Loans Revolving Credit Facility. In February 2025, the Company, through the Operating Partnership, entered into an amended and restated credit agreement (the “Amended Credit Agreement”) with a group of lenders, amending and restating the terms of the Company’s previous credit facility (the "Prior Credit Agreement") to, among other things, increase the maximum aggregate initial original principal amount of the revolving loans available thereunder from $ 600.0 million to $ 1.0 billion (the “Revolving Credit Facility”). The Revolving Credit Facility matures in February 2029, with two extension options of six months each, exercisable by the Operating Partnership, subject to the satisfaction of certain conditions. The loans under the Revolving Credit Facility initially bear interest at an annual rate of applicable Adjusted Term SOFR (as defined in the Amended Credit Agreement) plus an applicable margin. The Adjusted Term SOFR is a rate for a term equivalent to the interest period applicable to the relevant borrowing. In addition, the Operating Partnership is required to pay a revolving facility fee throughout the term of the Revolving Credit Facility. 94 Credit Facility Term Loans. The Amended Credit Facility also provides for three separate term loans, as further described below, with an aggregate principal amount of $ 1.3 billion (the "CF Term Loans"). Under the Prior Credit Agreement, the Company was also party to a $ 200.0 million term loan which was borrowed in 2019 and repaid in full in August 2023. 2028 Term Loan. In July 2022, the Prior Credit Agreement was amended to provide for $ 400.0 million of second tranche term loans (the “2028 Term Loan”). Loans under the 2028 Term Loan in an aggregate principal amount of $ 400.0 million were drawn in 2022 and the 2028 Term Loan matures in January 2028. 2029 Term Loan. In August 2023, the Prior Credit Agreement was amended to provide for an additional $ 450.0 million of term loans (the "2029 Term Loan"). Loans under the 2029 Term Loan in an aggregate principal amount of $ 450.0 million were drawn in 2023. The 2029 Term Loan has an original maturity of three years , which may be extended, at the Operating Partnership's election, to February 2029 by exercising two one-year extension options and a six-month extension option, subject to the satisfaction of certain conditions. 2030 Term Loan . In July 2024, the Prior Credit Agreement was further amended to provide for an additional $ 450.0 million of term loans (the "2030 Term Loan"). Loans under the 2030 Term Loan in an aggregate principal amount of $ 450.0 million were drawn in 2024. The 2030 Term Loan has an original maturity of three years , which may be extended, at the Operating Partnership's election, to January 2030 by exercising two one-year extension options and a six-month extension option, subject to the satisfaction of certain conditions. The CF Term Loans bear interest at an annual rate of applicable Adjusted Term SOFR plus an applicable margin. Each of the Revolving Credit Facility and the CF Term Loans is freely pre-payable at any time. Outstanding credit extensions under the Revolving Credit Facility are mandatorily payable if the amount of such credit extensions exceeds the revolving facility limit. The Operating Partnership may re-borrow amounts paid down on the Revolving Credit Facility prior to its maturity, but any loans repaid under the CF Term Loans cannot be reborrowed. The Operating Partnership is the borrower under the Amended Credit Agreement, and the Company and certain of its subsidiaries that own direct or indirect interests in an eligible real property assets are guarantors under the Amended Credit Agreement. Under the terms of the Amended Credit Agreement, the Company is subject to various restrictive financial and nonfinancial covenants which, among other things, require the Company to maintain certain leverage ratios, cash flow and debt service coverage ratios and secured borrowing ratios. The Company was in compliance with all financial covenants and was not in default of any provisions under the Amended Credit Agreement as of December 31, 2025 and 2024. The following table presents information about borrowings and repayments under the Revolving Credit Facility for the periods presented: (in thousands) 2025 2024 2023 Balance on January 1, $ — $ — $ — Borrowings 855,000 490,000 70,000 Repayments ( 855,000 ) ( 490,000 ) ( 70,000 ) Balance on December 31, $ — $ — $ — 95 The following table presents information about interest expense related to the Revolving Credit Facility for the periods presented: Year ended December 31, (in thousands) 2025 2024 2023 Interest expense and fees $ 9,185 $ 4,558 $ 1,038 Amortization of deferred financing costs 2,150 1,228 1,203 Total $ 11,335 $ 5,786 $ 2,241 Total deferred financing costs, net, of $ 6.7 million and $ 1.3 million related to the Revolving Credit Facility are included within rent receivables, prepaid expenses and other assets, net on the Company’s consolidated balance sheets as of December 31, 2025 and 2024, respectively. As of December 31, 2025 and 2024, the Company had $ 1.0 billion and $ 600.0 million, respectively, of unused borrowing capacity under the Revolving Credit Facility. 2027 Term Loan The Company, through the Operating Partnership, is party to a $ 430.0 million term loan (the “2027 Term Loan”) that matures in February 2027. The Company borrowed the entire $ 430.0 million available under the 2027 Term Loan in separate draws in 2019 and 2020. The 2027 Term Loan bears interest at an annual rate of applicable Adjusted Term SOFR plus the applicable margin. The applicable Adjusted Term SOFR is the rate for a term equivalent to the interest period applicable to the relevant borrowing. The 2027 Term Loan is pre-payable at any time by the Operating Partnership without penalty. The Operating Partnership may not re-borrow amounts paid down on the 2027 Term Loan. The 2027 Term Loan has an accordion feature to increase, subject to certain conditions, the maximum availability of the facility up to an aggregate of $ 500.0 million. The Operating Partnership is the borrower under the 2027 Term Loan, and the Company and certain of its subsidiaries that own direct or indirect interests in eligible real property assets are guarantors under the facility. Under the terms of the 2027 Term Loan, the Company is subject to various restrictive financial and nonfinancial covenants which, among other things, require the Company to maintain certain leverage ratios, cash flow and debt service coverage ratios, secured borrowing ratios and a minimum level of tangible net worth. The Company was in compliance with all financial covenants and was not in default of any provisions under the 2027 Term Loan as of December 31, 2025 and 2024. The following table presents information about aggregate interest expense related to the 2027 Term Loan and the CF Term Loans: Year ended December 31, (in thousands) 2025 2024 2023 Interest expense $ 91,322 $ 92,451 $ 66,582 Amortization of deferred financing costs 3,922 3,104 1,617 Total $ 95,244 $ 95,555 $ 68,199 As of December 31, 2025 and 2024, total deferred financing costs, net, of $ 5.0 million and $ 8.9 million, respectively, related to the 2027 Term Loan and the CF Term Loans are included as a component of unsecured term loans, net of deferred financing costs on the Company’s consolidated balance sheets. The Company fixed the interest rates on its variable-rate term loan debt through the use of interest rate swap agreements. See Note 6—Derivative and Hedging Activities for additional information. 96 Senior Unsecured Notes In June 2021, through its Operating Partnership, the Company completed a public offering of $ 400.0 million aggregate principal amount of 2.950 % Senior Notes due 2031 (the "2031 Notes"), resulting in net proceeds of $ 396.6 million. The 2031 Notes were issued at 99.8 % of their principal amount. In connection with the offering of the 2031 Notes, the Operating Partnership incurred $ 4.7 million in deferred financing costs and an offering discount of $ 0.8 million. In August 2025, through its Operating Partnership, the Company completed a public offering of $ 400.0 million aggregate principal amount of 5.400 % Senior Notes due 2035 (the "2035 Notes" and, together with the 2031 Notes, the "Senior Notes"), resulting in net proceeds of $ 390.7 million. The 2035 Notes were issued at 98.3 % of their principal amount. In connection with the offering of the 2035 Notes, the Operating Partnership incurred $ 3.9 million in deferred financing costs and an offering discount of $ 6.7 million. The following is a summary of the senior unsecured notes outstanding as of December 31, 2025: (dollars in thousands) Maturity Date Interest Payment Dates Stated Interest Rate Principal Outstanding 2031 Notes July 15, 2031 January 15 and July 15 2.95 % $ 400,000 2035 Notes December 1, 2035 June 1 and December 1 5.40 % 400,000 The Senior Notes were issued by the Operating Partnership, and the obligations of the Operating Partnership under the Senior Notes are fully and unconditionally guaranteed by the Company. The Senior Notes are redeemable in whole at any time or in part from time to time, at the Operating Partnership's option, at a redemption price equal to the sum of: • 100 % of the principal amount of the Senior Notes to be redeemed plus accrued and unpaid interest, if any, up to, but not including, the redemption date; and • a make-whole premium calculated in accordance with the indenture governing the Senior Notes. In addition, if any of the Senior Notes are redeemed on or after the date that is three months prior to the stated maturity date of such Senior Notes, the redemption price will equal 100 % of the principal amount of the Senior Notes to be redeemed plus accrued and unpaid interest, if any, up to, but not including, the redemption date, without any make-whole premium. The following table presents information about interest expense related to the Company's Senior Notes for the periods presented: Year ended December 31, (in thousands) 2025 2024 2023 Interest expense $ 19,319 $ 11,716 $ 11,713 Amortization of deferred financing costs and original issue discount 930 557 560 Total $ 20,249 $ 12,273 $ 12,273 Total deferred financing costs, net, of $ 6.4 million and $ 3.1 million related to the Senior Notes were included within senior unsecured notes, net on the Company's consolidated balance sheets as of December 31, 2025 and 2024, respectively. The Company was in compliance with all financial covenants and was not in default of any provisions under the Senior Notes as of December 31, 2025 and 2024. 6. Derivative and Hedging Activities The Company does not enter into derivative financial instruments for speculative or trading purposes. The Company's objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish these objectives, the Company uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. 97 These derivatives are considered cash flow hedges and are recorded on a gross basis at fair value. Assessments of hedge effectiveness are performed quarterly using either a qualitative or quantitative approach. The Company recognizes the entire change in the fair value in accumulated other comprehensive income (loss) and the change is reflected as derivative changes in fair value in the supplemental disclosures of non-cash financing activities in the consolidated statements of cash flows. The amounts recorded in accumulated other comprehensive income (loss) will subsequently be reclassified to interest expense as interest payments are made on the Company's borrowings under its variable-rate term loan facilities. During the next twelve months, the Company estimates that $ 11.6 million will be reclassified from accumulated other comprehensive (loss) income as an increase to interest expense. The Company does not have netting arrangements related to its derivatives. The use of derivative financial instruments carries certain risks, including the risk that the counterparties to these contractual arrangements are not able to perform under the agreements. To mitigate this risk, the Company only enters into derivative financial instruments with counterparties with high credit ratings and with major financial institutions with which the Company and its affiliates may also have other financial relationships. The Company does not anticipate that any of the counterparties will fail to meet their obligations to the Company. As of December 31, 2025 and 2024, there were no events of default related to the Company's derivative financial instruments. The following table summarizes the notional amount at inception and fair value of these instruments on the Company's consolidated balance sheets, all of which are interest rates swaps designated as cash flow hedges, as of December 31, 2025 and 2024 (dollar amounts in thousands): Fair Value of Asset/(Liability) (2) Number of Swap Agreements Associated Debt Instrument Fixed Rate Paid by Company Maturity Date Aggregate Notional Value (1) December 31, 2025 December 31, 2024 5 2027 Term Loan 1.41 % November 2026 $ 430,000 $ 7,777 $ 20,759 11 2028 Term Loan 3.66 % January 2028 400,000 ( 3,148 ) 3,805 8 2029 Term Loan 4.40 % February 2029 450,000 ( 14,973 ) ( 7,407 ) 15 2030 Term Loan 3.82 % December 2029 450,000 ( 8,021 ) 2,972 $ 1,730,000 $ ( 18,365 ) $ 20,129 _____________________________________ (1) Aggregate notional value indicates the extent of the Company's involvement in these instruments, but does not represent exposure to credit, interest rate or market risks. (2) Derivatives in an asset position are included within derivative assets and derivatives in a liability position are included within derivative liabilities on the Company's consolidated balance sheets. The Company has agreements with each of its derivative counterparties that contain a provision where if the Company either defaults or is capable of being declared in default on any of its indebtedness, then the Company could also be declared in default on its derivative obligations. The following table presents amounts recorded to accumulated other comprehensive (loss)income related to derivative and hedging activities for the periods presented: Year ended December 31, (in thousands) 2025 2024 2023 Other comprehensive (loss) income $ ( 37,977 ) $ 12,900 $ ( 36,874 ) As of December 31, 2025, the fair value of derivatives in a net asset position including accrued interest but excluding any adjustment for nonperformance risk related to these agreements was $ 7.9 million and the fair value of derivatives in a net liability position, including accrued interest but excluding any adjustment for nonperformance risk related to these agreements was $ 26.4 million. As of December 31, 2024, the fair value of derivatives in a net asset position, including accrued interest but excluding any adjustment for nonperformance risk related to these agreements, was $ 27.8 million and the fair value of derivatives in a net liability position, including accrued interest but excluding an adjustment for nonperformance risk related to these agreements, was $ 7.7 million. 98 During the years ended December 31, 2025, 2024 and 2023, the Company realized a gain on the change in fair value of its interest rate swaps of $ 15.6 million, $ 29.3 million and $ 27.7 million, respectively, which are included as a reduction of interest expense in the Company's consolidated statements of operations. As of December 31, 2025 and 2024, the Company had not posted any collateral related to these agreements and was not in breach of any provisions of such agreements. If the Company had breached any of these provisions, it could have been required to settle its obligations under the agreements at their aggregate termination value, which were a $ 18.5 million net liability and a $ 20.1 million net asset as of December 31, 2025 and 2024, respectively. 7. Equity Stockholders' Equity In February 2023, the Company completed a follow-on primary public offering of 8,855,000 shares of its common stock, including the full exercise of the underwriters' option to purchase up to 1,155,000 additional shares of common stock, at a public offering price of $ 24.60 per share, and entered into forward sale agreements relating to all such shares. All of these forward sale agreements were physically settled as of May 2023 and the Company realized net proceeds from this offering, after deducting underwriting discounts and commissions and other expenses, of $ 209.3 million. In September 2023, the Company completed a follow-on primary public offering of 12,006,000 shares of its common stock, including the full exercise of the underwriters' option to purchase up to 1,566,000 additional shares of common stock, at a public offering price of $ 23.00 per share, and entered into forward sale agreements relating to all such shares. All of these forward sale agreements were physically settled as of March 2024 and the Company realized net proceeds from this offering, after deducting underwriting discounts and commissions and other expenses, of $ 263.4 million. In March 2024, the Company completed a follow-on primary public offering of 10,350,000 shares of its common stock, including the full exercise of the underwriters' option to purchase up to 1,350,000 additional shares of common stock, at a public offering price of $ 24.75 per share, and entered into forward sale agreements relating to all such shares. All of these forward sale agreements were physically settled as of December 2024 and the Company realized net proceeds from this offering, after deducting underwriting discounts and commissions and other expenses, of $ 245.0 million. In March 2025, the Company completed a follow-on primary public offering of 9,430,000 shares of its common stock, including the full exercise of the underwriters' option to purchase up to 1,230,000 additional shares of common stock, at a public offering price of $ 31.00 per share, and entered into forward sale agreements relating to all such shares. Through December 31, 2025, the Company physically settled 4,715,000 shares under the forward sale agreements relating to this offering, realizing net proceeds of $ 143.7 million. Including shares physically settled to date and assuming full physical settlement of the remaining forward sale agreements, net proceeds from this offering, after deducting underwriting discounts and commissions and other expenses and making certain other adjustments as provided in the forward sale agreements, are expected to be $ 285.6 million. The Company is required to settle these forward sale agreements by September 2026. At the Market Program In October 2024, the Company established a successor at the market common equity offering program, pursuant to which it is authorized to publicly offer and sell, from time to time, shares of its common stock with an aggregate gross sales price of up to $ 750 million (as amended, the "October 2024 ATM Program"). In connection with establishing the October 2024 ATM Program, the Company terminated its June 2024 ATM Program (the "June 2024 ATM Program"), which had replaced the Company’s 2022 ATM Program (the “2022 ATM Program”). The June 2024 ATM Program and the 2022 ATM Program have been terminated and no additional stock can be sold thereunder. As context requires, the October 2024 ATM Program, the June 2024 ATM Program and the 2022 ATM Program are referred herein as the "ATM Programs." Sales may be made under the October 2024 ATM Program and, during their pendency the prior ATM programs, through identified sales agents, as sales agents or, if applicable, as forward sellers, or directly to such agents as principals. In addition to the issuance and sale by the Company of shares to or through the agents, the October 2024 ATM Program and, during their pendency the prior 99 ATM programs, also permitted the Company to enter into separate forward sale agreements with identified forward purchasers. The following table presents information about the ATM Programs (dollar amounts in thousands): Program Name Date Established Date Terminated Maximum Sales Authorization Gross Sales through December 31, 2025 2022 ATM Program May 2022 June 2024 $ 500,000 $ 383,426 June 2024 ATM Program June 2024 October 2024 $ 500,000 $ 339,992 October 2024 ATM Program (1) October 2024 $ 750,000 $ 402,530 _____________________________________ (1) Includes 6,185,920 shares under the October 2024 ATM Program that the Company sold on a forward basis and were not physically settled as of December 31, 2025. The following table details information related to activity under the ATM Program for each period presented: Year ended December 31, (in thousands, except share and per share data) 2025 2024 2023 Shares of common stock sold (1)(2) 10,245,801 19,704,599 5,931,654 Weighted average sale price per share $ 31.59 $ 29.52 $ 24.48 Gross proceeds $ 323,615 $ 581,689 $ 145,224 Net proceeds $ 319,968 $ 573,343 $ 142,922 _____________________________________ (1) Includes 6,185,920 shares of common stock that the Company sold on a forward basis during the year ended December 31, 2025 and were not physically settled as of December 31, 2025. (2) During the years ended December 31, 2025 and 2024, the Company issued 13,119,110 and 1,937,450 shares of common stock, respectively, which were previously sold on a forward basis under the ATM Programs and were unsettled as of December 31, 2024 and 2023, respectively. Dividends on Common Stock During the years ended December 31, 2025, 2024 and 2023, the Company's board of directors declared the following quarterly cash dividends on common stock: Date Declared Record Date Date Paid Dividend per Share of Common Stock Total Dividend (dollars in thousands) December 5, 2025 December 31, 2025 January 14, 2026 $ 0.31 $ 65,107 September 5, 2025 September 30, 2025 October 14, 2025 $ 0.30 $ 59,543 May 30, 2025 June 30, 2025 July 14, 2025 $ 0.30 $ 59,544 March 7, 2025 March 31, 2025 April 11, 2025 $ 0.295 $ 58,368 December 6, 2024 December 31, 2024 January 14, 2025 $ 0.295 $ 55,444 September 5, 2024 September 30, 2024 October 11, 2024 $ 0.29 $ 50,964 May 31, 2024 June 28, 2024 July 12, 2024 $ 0.29 $ 50,965 March 7, 2024 March 29, 2024 April 12, 2024 $ 0.285 $ 50,079 December 1, 2023 December 29, 2023 January 12, 2024 $ 0.285 $ 47,024 September 7, 2023 September 29, 2023 October 13, 2023 $ 0.28 $ 43,788 June 9, 2023 June 30, 2023 July 14, 2023 $ 0.28 $ 43,551 March 7, 2023 March 31, 2023 April 14, 2023 $ 0.275 $ 41,031 The Company has determined that, during the years ended December 31, 2025, 2024 and 2023, approximately 96.0 %, 92.7 % and 86.0 %, respectively, of the distributions it paid represented taxable income and 4.0 %, 7.3 % and 14.0 %, respectively, of the distributions it paid represented return of capital for federal income tax purposes. 100 8. Non-controlling Interests Essential Properties OP G.P., LLC, a wholly owned subsidiary of the Company, is the sole general partner of the Operating Partnership and holds a 1.0 % general partner interest in the Operating Partnership. The Company contributes the net proceeds from issuing shares of common stock to the Operating Partnership in exchange for a number of OP Units equal to the number of shares of common stock issued. As of December 31, 2025, the Company held 209,702,433 OP Units, representing a 99.7 % limited partner interest in the Operating Partnership. As of the same date, external parties (the "Non-controlling OP Unit Holders") held 553,847 OP Units in the aggregate, representing a 0.3 % limited partner interest in the Operating Partnership. As of December 31, 2024, the Company held 187,537,592 OP Units, representing a 99.7 % limited partner interest in the Operating Partnership and the Non-controlling OP Unit Holders held 553,847 OP Units in the aggregate, representing a 0.3 % limited partner interest in the Operating Partnership. The OP Units held by the Non-controlling OP Unit Holders are presented as non-controlling interests in the Company's consolidated financial statements. A holder of OP Units has the right to distributions per unit equal to dividends per share paid on the Company's common stock and has the right to redeem OP Units for cash or, at the Company's election, shares of the Company's common stock on a one -for-one basis, provided, however, that such OP Units must have been outstanding for at least one year . Distributions to OP Unit holders are declared and paid concurrently with the Company's cash dividends to common stockholders. See Note 7—Equity for details. 9. Equity-Based Compensation Equity Incentive Plan In May 2023, the Company’s stockholders approved the Essential Properties Realty Trust, Inc. 2023 Incentive Plan (the “2023 Equity Incentive Plan”), which replaced the Essential Properties Realty Trust, Inc. 2018 Incentive Plan (the “2018 Equity Incentive Plan” and, collectively with the 2023 Equity Incentive Plan, the “Equity Incentive Plans”). The 2023 Equity Incentive Plan provides for the grant of incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock awards, RSUs, other stock awards, performance awards and LTIP Units up to an aggregate of 4,300,808 shares of the Company’s common stock, subject to certain conditions. Officers, employees, non-employee directors, consultants, independent contractors and agents who provide services to the Company or to any subsidiary of the Company are eligible to receive such awards. All subsequent awards of equity will be granted under the 2023 Equity Incentive Plan, and no further awards will be made under the 2018 Equity Incentive Plan. 101 The following table presents information about the Company's RSAs, RSUs and LTIP Units during the years ended December 31, 2025, 2024 and 2023: Restricted Stock Awards Restricted Stock Units LTIP Units Shares Wtd. Avg. Grant Date Fair Value Units Wtd. Avg. Grant Date Fair Value Shares Wtd. Avg. Grant Date Fair Value Unvested, January 1, 2023 9,039 $ 14.12 817,380 $ 30.26 — $ — Granted — — 457,859 31.39 — — Vested ( 9,039 ) 14.12 ( 436,967 ) 26.98 — — Forfeited — — ( 94,419 ) 32.79 — — Unvested, December 31, 2023 — $ — 743,853 $ 32.56 — $ — Unvested, January 1, 2024 — $ — 743,853 $ 32.56 — $ — Granted — — 532,311 33.05 — — Vested — — ( 322,372 ) 32.46 — — Forfeited — — ( 391 ) 24.86 — — Unvested, December 31, 2024 — $ — 953,401 $ 32.87 — $ — Unvested, January 1, 2025 — $ — 953,401 $ 32.87 — $ — Granted — — 366,333 34.15 221,983 38.39 Vested — — ( 473,543 ) 32.72 — — Forfeited — — ( 56,978 ) 32.30 ( 32,573 ) 38.39 Unvested, December 31, 2025 — $ — 789,213 $ 33.59 189,410 $ 38.39 Restricted Stock Awards In January 2019, RSAs relating to an aggregate of 46,368 shares of unvested restricted common stock were granted to the Company's executive officers, other employees and an external consultant under the Equity Incentive Plans. These RSAs vested over periods ranging from one year to four years from the date of grant, subject to the individual recipient's continued provision of service to the Company through the applicable vesting dates. The Company estimates the grant date fair value of RSAs granted under the Equity Incentive Plans using the average market price of the Company's common stock on the date of grant. The final vesting of these RSAs occurred in January 2023. The following table presents information about the Company's RSAs for the periods presented: Year ended December 31, (in thousands) 2025 2024 2023 Compensation cost recognized in general and administrative expense $ — $ — $ 2 Dividends declared on unvested RSAs and charged directly to distributions in excess of cumulative earnings — — — Fair value of shares vested during the period — — 128 Restricted Stock Units and LTIP Units Performance-Based Awards . The Company issues grants of performance-based RSUs and LTIP Units to the Company’s senior management team under the Equity Incentive Plans. Of these awards, 75 %, in the case of performance-based RSU awards issued in 2020, 2021, 2022, and 2023, and 100 %, in the case of awards issued subsequent to 2023, are non-vested RSUs or LTIP Units for which vesting percentages and the ultimate number of units vesting is calculated based on the total stockholder return (“TSR”) of the Company’s common stock as compared to the TSR of peer companies identified in the grant agreements over the relevant performance period. The payout schedule can produce vesting percentages ranging from 0 % to 250 % of target. TSR is calculated over the performance period for each award based upon the average closing price for the 20 -trading day period ending December 31st of the year prior to grant divided by the average closing price for the 20 -trading day period ending 102 December 31st of the third year following the grant. The target number of units is based on achieving a TSR equal to the 50 th percentile of the peer group. The Company records expense on these TSR RSUs and LTIP Units based on achieving the target. The following table summarizes the Company’s performance-based RSU and LTIP Unit grants at target during the relevant periods: 2025 2024 2023 2022 2021 2020 Performance-based RSU grants 6,840 149,936 147,587 149,699 126,353 84,684 Performance-based LTIP Unit grants 133,191 — — — — — Total performance-based grants 140,031 149,936 147,587 149,699 126,353 84,684 The grant date fair values of the TSR RSUs and LTIP Units were measured using a Monte Carlo simulation model based on the following assumptions: Grant Year 2025 2024 2023 Volatility 24 % 24 % 37 % Risk free rate 4.50 % 4.46 % 4.36 % The remaining 25 % of these performance-based RSUs issued in 2020, 2021, 2022 and 2023 vest based on the Compensation Committee's subjective evaluation of the individual recipient’s achievement of certain strategic objectives over the relevant performance period of the award. In February 2023, 2024 and 2025, the Compensation Committee identified specific performance targets and completed its subjective evaluation in relation to the performance-based RSUs issued in 2020, 2021 and 2022 and concluded that 50,598 , 63,448 and 85,114 RSUs, respectively, should be awarded. 50 % of these RSUs vested immediately upon the Compensation Committee's certification and the remaining 50 % vested or will vest on the December 31st following the Compensation Committee's certification, subject to the recipient's continued provision of service to the Company through such date. The Company began recording compensation expense with respect to these subjective performance-based RSUs granted in 2020, 2021 and 2022 after each respective completion of the Compensation Committee's subjective evaluation. In April 2023, the Compensation Committee evaluated and awarded 11,334 subjective performance-based RSUs to a former member of the Company's senior management team, which vested immediately. During the year ended December 31, 2023, the Company recorded $ 0.3 million of compensation expense related to the subjective RSUs awarded to this former employee. As of December 31, 2025, the Compensation Committee had not identified specific performance targets relating to the individual recipients' achievement of strategic objectives for the subjective awards granted in 2023. As such, these awards do not have either a service inception or a grant date for GAAP accounting purposes and the Company recorded no compensation expense with respect to this portion of the performance-based RSUs during the years ended December 31, 2025, 2024 and 2023. January 2022 Performance-Based Award . In January 2022, the Company issued 69,372 performance-based RSUs (at target) to an executive officer under the Equity Incentive Plans. These RSUs vest based on the compound annual growth rate of the Company’s adjusted funds from operations ("AFFO CAGR") over a four year performance period ended December 31, 2025, and the payout schedule can produce vesting percentages ranging from 0 % to 200 % of target. To the extent the performance goal is achieved, these performance-based RSUs will vest in 50 % increments on each of the four-year and five-year anniversary of the grant date, subject to the recipient's continued provision of service to the Company through the applicable vesting dates. During the year ended December 31, 2025, based on its actual AFFO CAGR performance, and during the years ended December 31, 2024 and 2023, based on its AFFO CAGR forecasts, the Company concluded that achievement of the maximum performance level was probable and recorded compensation expense based on these actual or estimated results. Service-Based Awards. The Company also issues RSUs and LTIP Units to the Company’s executive officers, other employees and directors under the Equity Incentive Plans which vest over a period of up to five years 103 from the date of grant, subject to the individual recipient’s continued provision of service to the Company through the applicable vesting dates. The following table summarizes the Company’s service-based vesting RSU and LTIP Unit grants during the relevant periods: 2025 2024 2023 2022 2021 2020 RSU grants 102,892 179,187 210,406 199,793 135,686 184,760 LTIP Unit grants 88,792 — — — — — Total grants 191,684 179,187 210,406 199,793 135,686 184,760 A portion of the RSUs that vested in 2025, 2024, and 2023 were net share settled such that the Company withheld shares with a value equal to the relevant employee's income and employment tax obligations with respect to the vesting and remitted a cash payment to the appropriate taxing authority. The following table presents information about the Company's RSUs and LTIP Units for the periods presented: Year ended December 31, (in thousands) 2025 2024 2023 Compensation cost recognized in general and administrative expense $ 14,438 $ 10,829 $ 9,002 Dividend equivalents and distributions declared and charged directly to distributions in excess of cumulative earnings 893 472 407 Fair value of units vested during the period 15,497 10,465 11,791 The following table presents information about the Company's RSUs and LTIP Units as of the dates presented: December 31, (Dollars in thousands) 2025 2024 Total unrecognized compensation cost $ 12,382 $ 13,955 Weighted average period over which compensation cost will be recognized (in years) 2.0 2.1 10. Net Income Per Share The Company computes net income per share pursuant to the guidance in FASB ASC Topic 260, Earnings Per Share. The guidance requires the classification of the Company’s unvested restricted common stock and units, which contain rights to receive non-forfeitable dividends or dividend equivalents, as participating securities requiring the two-class method of computing net income per share. Diluted net income per share of common stock further considers the effect of potentially dilutive shares of common stock outstanding during the period, including the assumed vesting of RSUs and LTIP Units with a market-based or service-based vesting condition, where dilutive. The OP Units held by non-controlling interests represent potentially dilutive securities as the OP Units may be redeemed for cash or, at the Company’s election, exchanged for shares of the Company’s common stock on a one -for-one basis. 104 The following is a reconciliation of the numerator and denominator used in the computation of basic and diluted net income per share (dollars in thousands): Year ended December 31, (dollar amounts in thousands) 2025 2024 2023 Numerator for basic and diluted earnings per share: Net income $ 253,731 $ 203,638 $ 191,415 Less: net income attributable to non-controlling interests ( 718 ) ( 634 ) ( 708 ) Less: net income allocated to unvested RSUs and LTIP Units ( 893 ) ( 472 ) ( 407 ) Net income available for common stockholders: basic 252,120 202,532 190,300 Net income attributable to non-controlling interests 718 634 708 Net income available for common stockholders: diluted $ 252,838 $ 203,166 $ 191,008 Denominator for basic and diluted earnings per share: Weighted average common shares outstanding 196,051,237 173,855,427 152,140,896 Less: weighted average number of shares of unvested RSAs — — ( 161 ) Weighted average shares outstanding used in basic net income per share 196,051,237 173,855,427 152,140,735 Effects of dilutive securities: (1) OP Units 553,847 553,847 553,847 Unvested RSAs, RSUs and LTIP Units 926,380 859,785 421,292 Forward sales 523,304 1,846,111 405,980 Weighted average shares outstanding used in diluted net income per share 198,054,768 177,115,170 153,521,854 _____________________________________ (1) Excludes the impact of 197,321 , 7,051 and 179,807 unvested RSUs, unvested LTIP Units and unsettled forward equity sales for the years ended December 31, 2025, 2024 and 2023, respectively, as the effect would have been antidilutive. 11. Commitments and Contingencies As of December 31, 2025, the Company had remaining future commitments, under mortgage notes, reimbursement obligations or similar arrangements, to fund $ 114.5 million to its tenants for development, construction and renovation costs related to properties leased from the Company. Litigation and Regulatory Matters In the ordinary course of business, the Company may become subject to litigation, claims and regulatory matters. As of December 31, 2025, there are no material legal or regulatory proceedings pending or known to be contemplated against the Company or its properties. Environmental Matters In connection with the ownership of real estate, the Company may be liable for costs and damages related to environmental matters. As of December 31, 2025, the Company had not been notified by any governmental authority of any non-compliance, liability or other claim, and is not aware of any other environmental condition that it believes will have a material adverse effect on the Company's business, financial condition, results of operations or liquidity. Defined Contribution Retirement Plan The Company has a defined contribution retirement savings plan qualified under Section 401(a) of the Code (the "401(k) Plan"). The 401(k) Plan is available to all of the Company's full-time employees. The Company provides a matching contribution in cash equal to 100 % of the first 6 % of eligible compensation contributed by participants, which vests immediately. 105 The following table presents the matching contributions made by the Company for the years ended December 31, 2025, 2024 and 2023: Year ended December 31, (in thousands) 2025 2024 2023 401(k) matching contributions $ 541 $ 480 $ 331 Employment Agreements The Company has employment agreements with certain of its executive officers. These employment agreements have an initial term of up to five years , with automatic one extensions unless notice of non-renewal is provided by either party. These agreements provide for initial annual base salaries and an annual performance bonus. If an executive officer’s employment terminates under certain circumstances, the Company would be liable for any annual performance bonus awarded for the year prior to termination, to the extent unpaid, continued payments equal to 12 months of base salary, monthly reimbursement for 12 months of COBRA premiums, and under certain situations, a pro rata bonus for the year of termination. 12. Fair Value Measurements GAAP establishes a hierarchy of valuation techniques based on the observability of inputs used in measuring financial instruments at fair value. GAAP establishes market-based or observable inputs as the preferred source of values, followed by valuation models using management assumptions in the absence of market inputs. The determination of where an asset or liability falls in the hierarchy requires significant judgment and considers factors specific to the asset or liability. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Company evaluates its hierarchy disclosures regularly and, depending on various factors, it is possible that an asset or liability may be classified differently from period to period. However, the Company expects that changes in classifications between levels will be rare. In addition to the disclosures for assets and liabilities required to be measured at fair value at the balance sheet date, companies are required to disclose the estimated fair values of all financial instruments, even if they are not presented at their fair value on the consolidated balance sheet.The fair values of financial instruments are estimates based upon market conditions and perceived risks at December 31, 2025 and 2024. These estimates require management's judgment and may not be indicative of the future fair values of the assets and liabilities. Financial assets and liabilities for which the carrying values approximate their fair values include cash and cash equivalents, restricted cash, accounts receivable included within rent receivables, prepaid expenses and other assets, net, dividends payable and accrued liabilities and other payables. Generally, these assets and liabilities are short term in duration and their carrying value approximates fair value on the consolidated balance sheets. The estimated fair values of the Company’s fixed-rate loans receivable have been derived based on primarily unobservable market inputs such as interest rates and discounted cash flow analyses using estimates of the amount and timing of future cash flows, market rates and credit spreads. These measurements are classified as Level 3 within the fair value hierarchy. The Company believes the carrying value of its fixed-rate loans receivable approximates fair value as of December 31, 2025 and 2024. The estimated fair values of the Company’s borrowings under the Revolving Credit Facility, the 2027 Term Loan and the CF Term Loans have been derived based on primarily unobservable market inputs such as interest rates and discounted cash flow analyses using estimates of the amount and timing of future cash flows, market rates and credit spreads. These measurements are classified as Level 3 within the fair value hierarchy. The Company believes the carrying value of its borrowings under the Revolving Credit Facility, the 2027 Term Loan and the CF Term Loans as of December 31, 2025 and 2024 approximates fair value. 106 The Company measures the fair value of its Senior Notes and derivative financial instruments on a recurring basis. The fair values of these financial assets and liabilities were determined using the following input levels as of the dates presented: Net Carrying Value Fair Value Measurements Using Fair Value Hierarchy (in thousands) Fair Value Level 1 Level 2 Level 3 December 31, 2025 Financial (liabilities) assets: Senior unsecured notes (1) $ ( 786,708 ) $ ( 766,504 ) $ ( 766,504 ) $ — $ — Interest rate swaps ( 18,365 ) ( 18,365 ) — ( 18,365 ) — December 31, 2024 Financial (liabilities) assets: Senior unsecured notes (1) $ ( 396,403 ) $ ( 340,420 ) $ ( 340,420 ) $ — $ — Interest rate swaps 20,129 20,129 — 20,129 — _____________________________________ (1) Carrying value is net of $ 6.4 million and $ 3.1 million of net deferred financing costs and $ 6.9 million and $ 0.5 million of net discount as of December 31, 2025 and 2024, respectively. The Company measures its real estate investments at fair value on a nonrecurring basis. The fair values of real estate investments that were impaired as of the dates presented were determined using the following input levels: Net Carrying Value Fair Value Measurements Using Fair Value Hierarchy (in thousands) Fair Value Level 1 Level 2 Level 3 December 31, 2025 Non-financial assets: Long-lived assets $ 3,394 $ 3,394 $ — $ — $ 3,394 December 31, 2024 Non-financial assets: Long-lived assets $ 6,612 $ 6,612 $ — $ — $ 6,612 Long-Lived Assets The Company reviews its investments in real estate when events or circumstances change indicating that the carrying amount of an asset may not be recoverable. In the evaluation of an investment in real estate for impairment, many factors are considered, including estimated current and expected operating cash flows from the asset during the projected holding period, costs necessary to extend the life or improve the asset, expected capitalization rates, projected stabilized net operating income, selling costs, and the ability to hold and dispose of the asset in the ordinary course of business. Quantitative information about Level 3 fair value measurements as of December 31, 2025 is as follows: (dollar amounts in thousands) Fair Value Valuation Techniques Significant Unobservable Inputs Non-financial assets: Long-lived assets Entertainment 3,394 Discounted cash flow approach Terminal Value: 8.0 % Discount Rate: 8.5 % 3,394 The fair values of impaired real estate were determined by using the following information, depending on availability, in order of preference: (i) signed purchase and sale agreements or letters of intent; (ii) recently quoted bid or ask prices; (iii) estimates of future cash flows, which consider, among other things, contractual and forecasted rental revenues, leasing assumptions, terminal capitalization rates, discount rates and expenses based upon market conditions; or (iv) expectations for the use of the real estate. Based on these inputs, the Company determined that its valuation of the impaired real estate falls within Level 3 of the fair value hierarchy. 107 13. Subsequent Events The Company has evaluated all events and transactions that occurred after December 31, 2025 through the filing of this Annual Report on Form 10-K and determined that there have been no events that have occurred that would require adjustment to disclosures in the consolidated financial statements except as disclosed below. Subsequent Acquisition and Disposition Activity Subsequent to December 31, 2025, the Company invested in 81 real estate properties for an aggregate investment amount (including acquisition-related costs) of $ 202.3 million and invested $ 16.7 million in new and ongoing construction in progress and reimbursements to tenants for development, construction and renovation costs related to properties leased from the Company. In addition, the Company invested $ 20.2 million in mortgage loans receivable subsequent to December 31, 2025. Subsequent to December 31, 2025, the Company sold its investment in one real estate property for an aggregate gross sales price of $ 3.3 million and incurred $ 0.2 million of disposition costs related to this transaction. 108 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. None.