What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2022-11-07 compared with 2022-08-01 · 235 added, 171 removed, 501 unchanged (45% of the section changed)

3 unchanged sentences

(Dollars in Thousands, Except Share and Per Share Data)

June 30, 2022 December 31, 2021

September 30, 2022 December 31, 2021

Real estate, at cost $ 1,279,455 $ 1,225,258

13 unchanged sentences

Borrowings under Revolver 7,750 33,550

Borrowings under Term Loan A and Term Loan B, net 224,194 224,032

Borrowings under Term Loan A, Term Loan B and Term Loan C, net 366,395 224,032

Deferred rent liability, net 40,701 26,770

11 unchanged sentences

10,760,000 shares authorized;

and 7,061,448 and 7,061,448 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively (3)

and 7,061,448 and 7,061,448 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively (3)

$ 170,261 $ 170,261

2 unchanged sentences

950,000 shares authorized;

and 431,064 and 600,061 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively (3)

and 431,064 and 600,061 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively (3)

Common stock, par value $ 0.001 per share, 62,292,200 and 62,290,000 shares authorized;

and 39,136,473 and 37,473,587 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively (3)

and 39,607,009 and 37,473,587 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively (3)

Series F redeemable preferred stock, par value $ 0.001 per share;

$ 25 per share liquidation preference;

25,997,800 and 26,000,000 shares authorized and 554,822 and 422,920 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively (3)

25,997,800 and 26,000,000 shares authorized and 597,616 and 422,920 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively (3)

Additional paid in capital 717,098 671,134

12 unchanged sentences

(Dollars in Thousands, Except Share and Per Share Data)

For the three months ended June 30, For the six months ended June 30,

For the three months ended September 30, For the nine months ended September 30,

2022 2021 2022 2021

13 unchanged sentences

Total operating expenses $ 37,448 $ 25,498 $ 90,932 $ 77,388

Other (expense) income

Other income (expense)

Interest expense $ ( 9,107 ) $ ( 6,688 ) $ ( 22,813 ) $ ( 20,338 )

Loss on sale of real estate, net — — — ( 882 )

Gain (loss) on sale of real estate, net 8,902 — 8,902 ( 882 )

Other income 316 2,350 538 2,884

Total other expense, net $ ( 7,002 ) $ ( 6,263 ) $ ( 13,483 ) $ ( 13,998 )

Total other income (expense), net $ 111 $ ( 4,338 ) $ ( 13,373 ) $ ( 18,336 )

Net income $ 2,497 $ 4,498 $ 7,459 $ 6,657

Net loss attributable to OP Units held by Non-controlling OP Unitholders 10 21 8 63

Net loss (income) attributable (available) to OP Units held by Non-controlling OP Unitholders 4 ( 21 ) 12 42

Net income attributable to the Company $ 2,501 $ 4,477 $ 7,471 $ 6,699

3 unchanged sentences

Loss on extinguishment of Series F preferred stock — — ( 5 ) —

Net loss attributable to common stockholders $ ( 1,499 ) $ ( 3,032 ) $ ( 1,175 ) $ ( 5,985 )

Loss per weighted average share of common stock - basic & diluted

Loss attributable to common shareholders $ ( 0.04 ) $ ( 0.08 ) $ ( 0.03 ) $ ( 0.17 )

Net (loss) income (attributable) available to common stockholders $ ( 600 ) $ 1,439 $ ( 1,778 ) $ ( 4,547 )

(Loss) income per weighted average share of common stock - basic & diluted

(Loss) income (attributable) available to common shareholders $ ( 0.02 ) $ 0.04 $ ( 0.05 ) $ ( 0.13 )

Weighted average shares of common stock outstanding

3 unchanged sentences

Comprehensive income

Change in unrealized gain (loss) related to interest rate hedging instruments, net $ 2,603 $ ( 720 ) $ 6,870 $ 1,704

Other Comprehensive gain (loss) 2,603 ( 720 ) 6,870 1,704

Change in unrealized gain related to interest rate hedging instruments, net $ 6,790 $ 421 $ 13,660 $ 2,125

Other Comprehensive gain 6,790 421 13,660 2,125

Net income $ 2,497 $ 4,498 $ 7,459 $ 6,657

Comprehensive income $ 9,287 $ 4,919 $ 21,119 $ 8,782

Comprehensive loss attributable to OP Units held by Non-controlling OP Unitholders 10 21 8 63

Comprehensive loss (income) attributable (available) to OP Units held by Non-controlling OP Unitholders 4 ( 21 ) 12 42

Total comprehensive income available to the Company $ 9,291 $ 4,898 $ 21,131 $ 8,824

4 unchanged sentences

(Dollars in Thousands)

For the six months ended June 30,

For the nine months ended September 30,

Cash flows from operating activities:

3 unchanged sentences

Impairment charge 12,092 —

Loss on sale of real estate, net — 882

(Gain) loss on sale of real estate, net ( 8,902 ) 882

Amortization of deferred financing costs 3,066 1,175

8 unchanged sentences

Increase in amount due to Adviser and Administrator 273 228

Decrease in other liabilities ( 569 ) ( 437 )

Increase in other liabilities 598 1,016

Tenant inducement payments — ( 20 )

22 unchanged sentences

Borrowings on term loan 150,000 65,000

Repayments on term loan ( 5,000 ) —

Increase (decrease) in security deposits 464 83

9 unchanged sentences

Capital improvements and leasing commissions included in accounts payable and accrued expenses $ 1,142 $ 539

Increase in asset retirement obligation assumed in acquisition $ 718 $ —

Non-controlling OP Units issued in connection with acquisition $ 2,393 $ —

Series D Preferred Stock offering cost write off $ — $ 2,141

1 unchanged sentence

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets that sum to the total of the same amounts shown in the condensed consolidated statements of cash flows (dollars in thousands):

For the six months ended June 30,

For the nine months ended September 30,

Cash and cash equivalents $ 13,540 $ 10,230

17 unchanged sentences

The interim financial statements and notes thereto should be read in conjunction with the financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2021, as filed with the U.S.

Securities and Exchange Commission on February 15, 2022.

The results of operations for the three and six months ended June 30, 2022 are not necessarily indicative of the results that may be expected for other interim periods or for the full fiscal year.

Securities and Exchange Commission (the “SEC”) on February 15, 2022.

The results of operations for the three and nine months ended September 30, 2022 are not necessarily indicative of the results that may be expected for other interim periods or for the full fiscal year.

Use of Estimates

The preparation of 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 financial statements and the reported amounts of revenues and expenses during the reporting periods.

We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, including the impact of extraordinary events such as the ongoing coronavirus (“COVID-19”) pandemic, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.

We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, including the impact of extraordinary events such as the coronavirus (“COVID-19”) pandemic, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.

Actual results may differ from these estimates under different assumptions or conditions.

3 unchanged sentences

A summary of all of our significant accounting policies is provided in Note 1, “Organization, Basis of Presentation and Significant Accounting Policies,” to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2021.

There were no material changes to our critical accounting policies during the three and six months ended June 30, 2022.

There were no material changes to our critical accounting policies during the three and nine months ended September 30, 2022.

Related-Party Transactions

6 unchanged sentences

Terry Lee Brubaker (our vice chairman and chief operating officer) serve as directors and executive officers of our Adviser and our Administrator.

Our current sole president, Mr.

Arthur “Buzz” Cooper (as Mr.

Bob Cutlip, our previous other co-president with Mr.

Cooper, retired on June 30, 2022) is also executive vice president of commercial and industrial real estate of our Adviser.

Our president, Mr.

Arthur “Buzz” Cooper, is also executive vice president of commercial and industrial real estate of our Adviser.

Michael LiCalsi, our general counsel and secretary, also serves as our Administrator’s president, general counsel and secretary, as well as executive vice president of administration of our Adviser.

1 unchanged sentence

The services and fees under the Advisory Agreement and Administration Agreement are described below.

As of June 30, 2022 and December 31, 2021, $ 3.6 million and $ 3.4 million, respectively, were collectively due to our Adviser and Administrator.

As of September 30, 2022 and December 31, 2021, $ 3.7 million and $ 3.4 million, respectively, were collectively due to our Adviser and Administrator.

Our entrance into the Advisory Agreement and each amendment thereto has been approved unanimously by our Board of Directors.

5 unchanged sentences

The calculation of the other fees in the Advisory Agreement remains unchanged.

For the three and six months ended June 30, 2022, we recorded a base management fee of $ 1.6 million and $ 3.1 million, respectively.

For the three and six months ended June 30, 2021, we recorded a base management fee of $ 1.5 million and $ 2.9 million, respectively.

For the three and nine months ended September 30, 2022, we recorded a base management fee of $ 1.6 million and $ 4.7 million, respectively.

For the three and nine months ended September 30, 2021, we recorded a base management fee of $ 1.5 million and $ 4.4 million, respectively.

Incentive Fee

3 unchanged sentences

However, in no event shall the incentive fee for a particular quarter exceed by 15.0 % (the cap) the average quarterly incentive fee paid by us for the previous four quarters (excluding quarters for which no incentive fee was paid).

Core FFO (as defined in the Advisory Agreement) is GAAP net income (loss) available to common stockholders, excluding the incentive fee, depreciation and amortization, any realized and unrealized gains, losses or other non-cash items recorded in net income (loss) available to common stockholders for the period, and one-time events pursuant to changes in GAAP.

Core FFO (as defined in the Advisory Agreement) is GAAP net (loss) income (attributable) available to common stockholders, excluding the incentive fee, depreciation and amortization, any realized and unrealized gains, losses or other non-cash items recorded in net (loss) income (attributable) available to common stockholders for the period, and one-time events pursuant to changes in GAAP.

The Incentive Fee is used by the Adviser primarily for performance-based compensation related to certain of its employees.

For the three and six months ended June 30, 2022, we recorded an incentive fee of $ 1.3 million and $ 2.7 million, respectively.

For the three and six months ended June 30, 2021, we recorded an incentive fee of $ 1.0 million and $ 2.3 million, respectively, partially offset by credits related to non-contractual, unconditional, and irrevocable waivers issued by the Advisor of $ 0.02 million and $ 0.02 million, respectively.

The Adviser did no t waive any portion of the incentive fee for the three and six months ended June 30, 2022.

For the three and nine months ended September 30, 2022, we recorded an incentive fee of $ 1.5 million and $ 4.2 million, respectively.

For the three and nine months ended September 30, 2021, we recorded an incentive fee of $ 1.3 million and $ 3.5 million, respectively, partially offset by credits related to non-contractual, unconditional, and irrevocable waivers issued by the Advisor of $ 0 and $ 0.02 million, respectively.

The Adviser did no t waive any portion of the incentive fee for the three and nine months ended September 30, 2022.

Capital Gain Fee

Under the Advisory Agreement, we will pay to the Adviser a capital gain-based incentive fee that will be calculated and payable in arrears as of the end of each fiscal year (or upon termination of the Advisory Agreement).

In determining the capital

gain fee, we will calculate aggregate realized capital gains and aggregate realized capital losses for the applicable time period.

In determining the capital gain fee, we will calculate aggregate realized capital gains and aggregate realized capital losses for the applicable time period.

For this purpose, aggregate realized capital gains and losses, if any, equals the realized gain or loss calculated by the difference between the sales price of the property, less any costs to sell the property and the current gross value of the property (equal to the property’s original acquisition price plus any subsequent non-reimbursed capital improvements) of the disposed property.

At the end of the fiscal year, if this number is positive, then the capital gain fee payable for such time period shall equal 15.0 % of such amount.

No capital gain fee was recognized during the three and six months ended June 30, 2022 or 2021.

No capital gain fee was recognized during the three and nine months ended September 30, 2022 or 2021.

Termination Fee

7 unchanged sentences

We believe that the methodology of allocating the Administrator’s total expenses by approximate percentage of time services were performed among all companies serviced by our Administrator more closely approximates fees paid to actual services performed.

For the three and six months ended June 30, 2022, we recorded an administration fee of $ 0.4 million and $ 0.9 million, respectively.

For the three and six months ended June 30, 2021, we recorded an administration fee of $ 0.3 million and $ 0.6 million, respectively.

For the three and nine months ended September 30, 2022, we recorded an administration fee of $ 0.5 million and $ 1.3 million, respectively.

For the three and nine months ended September 30, 2021, we recorded an administration fee of $ 0.4 million and $ 1.0 million, respectively.

Gladstone Securities

8 unchanged sentences

The amount of the financing fees may be reduced or eliminated, as determined by us and Gladstone Securities, after taking into consideration various factors, including, but not limited to, the involvement of any third-party brokers and market conditions.

We paid financing fees to Gladstone Securities of $ 0.1 million during the three and six months ended June 30, 2022, which are included in mortgage notes payable, net, in the condensed consolidated balance sheets, or 0.35 % of the mortgage principal secured.

We paid financing fees to Gladstone Securities of $ 14,000 during the six months ended June 30, 2021, which are included in mortgage notes payable, net, in the condensed consolidated balance sheets, or 0.25 % of the mortgage principal secured.

We paid financing fees to Gladstone Securities of $ 0.1 million and $ 0.3 million during the three and nine months ended September 30, 2022, respectively, which are included in mortgage notes payable, net, in the condensed consolidated balance sheets, or 0.29 % and 0.32 %, respectively, of the mortgage principal secured.

We paid financing fees to Gladstone Securities of $ 14,000 during the nine months ended September 30, 2021, which are included in mortgage notes payable, net, in the condensed consolidated balance sheets, or 0.25 % of the mortgage principal secured.

Our Board of Directors renewed the agreement for an additional year, through August 31, 2023, at its July 2022 meeting.

6 unchanged sentences

Gladstone Securities may, in its sole discretion, re-allow a portion of the Dealer Manager Fee to participating broker-dealers in support of the Offering.

We paid fees of $ 0.1 million and $ 0.3 million to Gladstone Securities during the three and six months ended June 30, 2022, respectively, in connection with the Offering.

Loss Per Share of Common Stock

The following tables set forth the computation of basic and diluted loss per share of common stock for the three and six months ended June 30, 2022 and 2021.

The operating partnership units in the Operating Partnership (“OP Units”) held by holders who do not control the Operating Partnership (“Non-controlling OP Unitholders”) (which may be redeemed for shares of common stock) have been excluded from the diluted loss per share calculations, as there would be no effect on the amounts since the Non-controlling OP Unitholders’ share of loss would also be added back to net loss.

Net loss figures are presented net of such non-controlling interests in the loss per share calculation.

We computed basic loss per share for the three and six months ended June 30, 2022 and 2021 using the weighted average number of shares outstanding during the respective periods.

Diluted loss per share for the three and six months ended June 30, 2022 and 2021 reflects additional shares of common stock related to our convertible senior common stock (the “Senior Common Stock”), if the effect of conversion would be dilutive, that would have been outstanding if such dilutive potential shares of common stock had been issued, as well as an adjustment to net loss attributable to common stockholders as applicable to common stockholders that would result from their assumed issuance (dollars in thousands, except per share amounts).

For the three months ended June 30, For the six months ended June 30,

We paid fees of $ 0.1 million and $ 0.4 million to Gladstone Securities during the three and nine months ended September 30, 2022, respectively, in connection with the Offering.

We paid fees of $ 0.4 million and $ 0.5 million to Gladstone Securities during the three and nine months ended September 30, 2021, respectively, in connection with the Offering.

(Loss) Earnings Per Share of Common Stock

The following tables set forth the computation of basic and diluted (loss) earnings per share of common stock for the three and nine months ended September 30, 2022 and 2021.

The operating partnership units in the Operating Partnership (“OP Units”) held by holders who do not control the Operating Partnership (“Non-controlling OP Unitholders”) (which may be redeemed for shares of common stock) have been excluded from the diluted (loss) earnings per share calculations, as there would be no effect on the amounts since the Non-controlling OP Unitholders’ share of (loss) earnings would also be added back to net (loss) income.

Net (loss) income figures are presented net of such non-controlling interests in the (loss) earnings per share calculation.

We computed basic (loss) earnings per share for the three and nine months ended September 30, 2022 and 2021 using the weighted average number of shares outstanding during the respective periods.

Diluted (loss) earnings per share for the three and nine months ended September 30, 2022 and 2021 reflects additional shares of common stock related to our convertible senior common stock (the “Senior Common Stock”), if the effect of conversion would be dilutive, that would have been outstanding if such dilutive potential shares of common stock had been issued, as well as an adjustment to net (loss) income (attributable) available to common stockholders as applicable to common stockholders that would result from their assumed issuance (dollars in thousands, except per share amounts).

For the three months ended September 30, For the nine months ended September 30,

2022 2021 2022 2021

Calculation of basic loss per share of common stock:

Net loss attributable to common stockholders $ ( 1,499 ) $ ( 3,032 ) $ ( 1,175 ) $ ( 5,985 )

Calculation of basic (loss) earnings per share of common stock:

Net (loss) income (attributable) available to common stockholders $ ( 600 ) $ 1,439 $ ( 1,778 ) $ ( 4,547 )

Denominator for basic weighted average shares of common stock (1) 39,504,734 36,768,779 38,723,581 36,296,414

Basic loss per share of common stock $ ( 0.04 ) $ ( 0.08 ) $ ( 0.03 ) $ ( 0.17 )

Calculation of diluted loss per share of common stock:

Net loss attributable to common stockholders $ ( 1,499 ) $ ( 3,032 ) $ ( 1,175 ) $ ( 5,985 )

Net loss attributable to common stockholders plus assumed conversions (2) $ ( 1,499 ) $ ( 3,032 ) $ ( 1,175 ) $ ( 5,985 )

Basic (loss) earnings per share of common stock $ ( 0.02 ) $ 0.04 $ ( 0.05 ) $ ( 0.13 )

Calculation of diluted (loss) earnings per share of common stock:

Net (loss) income (attributable) available to common stockholders $ ( 600 ) $ 1,439 $ ( 1,778 ) $ ( 4,547 )

Net (loss) income (attributable) available to common stockholders plus assumed conversions (2) $ ( 600 ) $ 1,439 $ ( 1,778 ) $ ( 4,547 )

Denominator for basic weighted average shares of common stock (1) 39,504,734 36,768,779 38,723,581 36,296,414

1 unchanged sentence

Denominator for diluted weighted average shares of common stock (2) 39,504,734 36,768,779 38,723,581 36,296,414

Diluted loss per share of common stock $ ( 0.04 ) $ ( 0.08 ) $ ( 0.03 ) $ ( 0.17 )

(1) The weighted average number of OP Units held by Non-controlling OP Unitholders was 256,994 and 256,994 for the three and six months ended June 30, 2022, respectively, and 256,994 and 377,975 for the three and six months ended June 30, 2021, respectively.

(2) We excluded convertible shares of Senior Common Stock of 363,246 and 558,038 from the calculation of diluted loss per share for the three and six months ended June 30, 2022 and 2021, respectively, because they were anti-dilutive.

Diluted (loss) earnings per share of common stock $ ( 0.02 ) $ 0.04 $ ( 0.05 ) $ ( 0.13 )

(1) The weighted average number of OP Units held by Non-controlling OP Unitholders was 273,072 and 262,412 for the three and nine months ended September 30, 2022, respectively, and 256,994 and 337,205 for the three and nine months ended September 30, 2021, respectively.

(2) We excluded convertible shares of Senior Common Stock of 363,246 and 532,785 from the calculation of diluted earnings per share for the three and nine months ended September 30, 2022 and 2021, respectively, because they were anti-dilutive.

Real Estate and Intangible Assets

The following table sets forth the components of our investments in real estate as of June 30, 2022 and December 31, 2021, respectively, excluding real estate held for sale as of June 30, 2022 (dollars in thousands):

June 30, 2022 December 31, 2021

The following table sets forth the components of our investments in real estate as of September 30, 2022 and December 31, 2021, respectively, excluding real estate held for sale as of September 30, 2022 (dollars in thousands):

September 30, 2022 December 31, 2021

Land (1) $ 147,706 $ 149,773

4 unchanged sentences

(1) This amount includes $ 4,436 of land value subject to land lease agreements which we may purchase at our option for a nominal fee.

Real estate depreciation expense on building and tenant improvements was $ 10.2 million and $ 20.1 million for the three and six months ended June 30, 2022, respectively.

Real estate depreciation expense on building and tenant improvements was $ 9.4 million and $ 20.2 million for the three and six months ended June 30, 2021, respectively.

We acquired seven industrial properties during the six months ended June 30, 2022, and two industrial properties during the six months ended June 30, 2021.

Real estate depreciation expense on building and tenant improvements was $ 11.0 million and $ 31.1 million for the three and nine months ended September 30, 2022, respectively.

Real estate depreciation expense on building and tenant improvements was $ 9.8 million and $ 30.0 million for the three and nine months ended September 30, 2021, respectively.

We acquired 11 industrial properties during the nine months ended September 30, 2022, and eight industrial properties during the nine months ended September 30, 2021.

The acquisitions are summarized below (dollars in thousands):

Six Months Ended Aggregate Square Footage Weighted Average Lease Term Aggregate Purchase Price Aggregate Capitalized Acquisition Costs

June 30, 2022 (1) 742,303 11.7 years $ 51,919 $ 519

June 30, 2021 (2) 205,352 13.5 years $ 19,341 $ 216

Nine Months Ended Aggregate Square Footage Weighted Average Lease Term Aggregate Purchase Price Aggregate Capitalized Acquisition Costs

September 30, 2022 (1) 1,105,006 13.8 years $ 98,276 $ 776

September 30, 2021 (2) 367,716 15.5 years $ 46,225 $ 370

(1) On February 24, 2022, we acquired an 80,000 square foot property in Wilkesboro, North Carolina for $ 7.5 million.

6 unchanged sentences

The properties are fully leased to one tenant and had 13.1 years of remaining lease term at the time we acquired the properties.

On August 5, 2022, we acquired a two -property, 246,000 square foot portfolio in Bridgeton, New Jersey and Vineland, New Jersey for $ 32.7 million.

The properties are fully leased to one tenant and had 15.1 years of remaining lease term at the time we acquired the properties.

On September 16, 2022, we acquired a 67,328 square foot property in Jacksonville, Florida for $ 8.1 million.

The property is fully leased to one tenant and had 20.0 years of remaining lease term at the time we acquired the property.

On September 20, 2022, we acquired a 49,375 square foot property in Fort Payne, Alabama for $ 5.6 million.

The property is fully leased to one tenant and had 14.8 years of remaining lease term at the time we acquired the property.

(2) On January 22, 2021, we acquired a 180,152 square foot property in Findlay, Ohio for $ 11.1 million.

2 unchanged sentences

The property is fully leased to one tenant and had 12.6 years of remaining lease term at the time we acquired the property.

We determined the fair value of assets acquired and liabilities assumed related to the properties acquired during the six months ended June 30, 2022 and 2021, respectively, as follows (dollars in thousands):

Six Months Ended June 30, 2022 Six Months Ended June 30, 2021

On July 21, 2021, we acquired an 80,604 square foot, four -property portfolio in Pacific, Missouri for $ 22.1 million.

These properties are fully leased to one tenant for 17.4 years at time we acquired the portfolio.

On August 20, 2021, we acquired an 81,760 square foot, two -property portfolio in Peru, Illinois for $ 4.8 million.

These properties are fully leased to one tenant for 15.0 years at time we acquired the portfolio.

We determined the fair value of assets acquired and liabilities assumed related to the properties acquired during the nine months ended September 30, 2022 and 2021, respectively, as follows (dollars in thousands):

Nine Months Ended September 30, 2022 Nine Months Ended September 30, 2021

Acquired assets and liabilities Purchase price Purchase price

8 unchanged sentences

Total Purchase Price $ 98,276 $ 46,225

(1) This amount includes $ 9 and $ 46 of loans receivable included in Other assets on the condensed consolidated balance sheets, respectively.

(2) This amount includes $ 32 of prepaid rent included in Other liabilities on the condensed consolidated balance sheets.

Future Lease Payments

Future operating lease payments from tenants under non-cancelable leases, excluding tenant reimbursement of expenses, for the six months ending December 31, 2022 and each of the five succeeding fiscal years and thereafter is as follows, excluding real estate held for sale as of June 30, 2022 (dollars in thousands):

Future operating lease payments from tenants under non-cancelable leases, excluding tenant reimbursement of expenses, for the three months ending December 31, 2022 and each of the five succeeding fiscal years and thereafter is as follows, excluding real estate held for sale as of September 30, 2022 (dollars in thousands):

Year Tenant Lease Payments

Six Months Ending 2022 $ 60,600

Three Months Ending 2022 $ 30,721

Thereafter 343,771

2 unchanged sentences

Lease Revenue Reconciliation

The table below sets forth the allocation of lease revenue between fixed contractual payments and variable lease payments for the three and six months ended June 30, 2022 and 2021, respectively (dollars in thousands):

For the three months ended June 30,

The table below sets forth the allocation of lease revenue between fixed contractual payments and variable lease payments for the three and nine months ended September 30, 2022 and 2021, respectively (dollars in thousands):

For the three months ended September 30,

(Dollars in Thousands)

3 unchanged sentences

$ 39,834 $ 34,334 $ 5,500 16.0 %

For the six months ended June 30,

For the nine months ended September 30,

(Dollars in Thousands)

4 unchanged sentences

Intangible Assets

The following table summarizes the carrying value of intangible assets, liabilities and the accumulated amortization for each intangible asset and liability class as of June 30, 2022 and December 31, 2021, respectively, excluding real estate held for sale as of June 30, 2022 (dollars in thousands):

June 30, 2022 December 31, 2021

The following table summarizes the carrying value of intangible assets, liabilities and the accumulated amortization for each intangible asset and liability class as of September 30, 2022 and December 31, 2021, respectively, excluding real estate held for sale as of September 30, 2022 (dollars in thousands):

September 30, 2022 December 31, 2021

Lease Intangibles Accumulated Amortization Lease Intangibles Accumulated Amortization

6 unchanged sentences

Below market leases and deferred revenue ( 64,907 ) 24,206 ( 48,241 ) 21,471

Total amortization expense related to in-place leases, leasing costs and customer relationship lease intangible assets was $ 5.0 million and $ 9.8 million for the three and six months ended June 30, 2022, respectively, and $ 4.7 million and $ 10.7 million for the three and six months ended June 30, 2021, respectively, and is included in depreciation and amortization expense in the condensed consolidated statements of operations and comprehensive income.

Total amortization related to above-market lease values was $ 0.2 million and $ 0.4 million for the three and six months ended June 30, 2022, respectively, and $ 0.2 million and $ 0.4 million for the three and six months ended June 30, 2021, respectively, and is included in lease revenue in the condensed consolidated statements of operations and comprehensive income.

Total amortization related to below-market lease values was $ 0.8 million and $ 1.6 million for the three and six months ended June 30, 2022, respectively, and $ 0.8 million and $ 2.4 million for the three and six months ended June 30, 2021, respectively, and is included in lease revenue in the condensed consolidated statements of operations and comprehensive income.

The weighted average amortization periods in years for the intangible assets acquired and liabilities assumed during the six months ended June 30, 2022 and 2021, respectively, were as follows:

Total amortization expense related to in-place leases, leasing costs and customer relationship lease intangible assets was $ 4.7 million and $ 14.5 million for the three and nine months ended September 30, 2022, respectively, and $ 5.0 million and $ 15.7 million for the three and nine months ended September 30, 2021, respectively, and is included in depreciation and amortization expense in the condensed consolidated statements of operations and comprehensive income.

Total amortization related to above-market lease values was $ 0.2 million and $ 0.6 million for the three and nine months ended September 30, 2022, respectively, and $ 0.2 million and $ 0.6 million for the three and nine months ended September 30, 2021, respectively, and is included in lease revenue in the condensed consolidated statements of operations and comprehensive income.

Total amortization related to below-market lease values was $ 1.5 million and $ 3.1 million for the three and nine months ended September 30, 2022, respectively, and $ 0.9 million and $ 3.3 million for the three and nine months ended September 30, 2021, respectively, and is included in lease revenue in the condensed consolidated statements of operations and comprehensive income.

The weighted average amortization periods in years for the intangible assets acquired and liabilities assumed during the nine months ended September 30, 2022 and 2021, respectively, were as follows:

Intangible Assets & Liabilities 2022 2021

7 unchanged sentences

Real Estate Dispositions

We did not sell any properties during the six months ended June 30, 2022.

During the nine months ended September 30, 2022, we continued to execute our capital recycling program, whereby we sold properties outside of our core markets and redeployed proceeds to either fund property acquisitions in our target, secondary growth markets, or repay outstanding debt.

We expect to continue to execute our capital recycling plan and sell non-core properties as reasonable disposition opportunities become available, and use the sales proceeds to acquire properties in our target, secondary growth markets, or pay down outstanding debt.

During the six months ended June 30, 2021, we sold two non-core properties, located in Rancho Cordova, California and Champaign, Illinois.

The table below summarizes the components of operating income from the real estate and related assets disposed of during the three and six months ended June 30, 2021 (dollars in thousands):

For the three months ended June 30, For the six months ended June 30,

During the nine months ended September 30, 2022, we sold three non-core properties, located in Jupiter, Florida, Parsippany, New Jersey, and Boston Heights, Ohio.

Aggregate Square Footage Sold Aggregate Sales Price Aggregate Sales Costs Aggregate Impairment Charge for the Nine Months Ended September 30, 2022 Aggregate Gain on Sale of Real Estate, net

145,111 $ 28,000 $ 1,153 $ 1,374 $ 8,902

Our dispositions during the nine months ended September 30, 2022 were not classified as discontinued operations because they did not represent a strategic shift in operations, nor will such dispositions have a major effect on our operations and financial results.

Accordingly, the operating results of these properties are included within continuing operations for all periods reported.

The table below summarizes the components of operating income from the real estate and related assets disposed of during the three and nine months ended September 30, 2022 and 2021 (dollars in thousands):

For the three months ended September 30, For the nine months ended September 30,

2022 2021 2022 2021

Operating revenue $ 3,505 $ 730 $ 4,961 $ 2,442

Operating expense 51 442 2,215 1,506

Other expense, net — ( 1,622 ) (1)

Income (loss) from real estate and related assets sold $ 3 $ ( 1,499 )

(1) Includes a $ 0.9 million loss on sale of real estate, net, on two property sales.

Other income (expense), net 8,902 (1) ( 36 ) 8,857 (1) 42

Income from real estate and related assets sold $ 12,356 $ 252 $ 11,603 $ 978

(1) Includes an $ 8.9 million gain on sale of real estate, net, on three property sales.

Real Estate Held for Sale

At June 30, 2022, we had three properties classified as held for sale, located in Parsippany, New Jersey, Jupiter, Florida, and Columbus, Ohio.

At September 30, 2022, we had two properties classified as held for sale, located in Columbus, Ohio and Allen, Texas.

We consider these assets to be non-core to our long term strategy.

At December 31, 2021, we did no t have any properties classified as held for sale.

The table below summarizes the components of the assets and liabilities held for sale at June 30, 2022 reflected on the accompanying condensed consolidated balance sheets (dollars in thousands):

June 30, 2022

The table below summarizes the components of the assets and liabilities held for sale at September 30, 2022 reflected on the accompanying condensed consolidated balance sheets (dollars in thousands):

September 30, 2022

Assets Held for Sale

4 unchanged sentences

Liabilities Held for Sale

Deferred rent liability, net $ 178

Asset retirement obligation $ 16

1 unchanged sentence

Impairment Charges

We evaluated our portfolio for triggering events to determine if any of our held and used assets were impaired during the six months ended June 30, 2022 and did not identify any impaired assets.

We evaluated our held for sale assets to determine if any of these assets were impaired during the six months ended June 30, 2022, and identified one held for sale asset, located in Parsippany, New Jersey, which was impaired by $ 1.4 million.

We evaluated our portfolio for triggering events to determine if any of our held and used assets were impaired during the nine months ended September 30, 2022 and identified one held and used asset, located in Columbia, South Carolina, which was impaired by $ 10.7 million.

In performing our impairment testing, the undiscounted cash flow for this asset was below the carrying value.

We engaged a third party expert to determine the fair value for this asset, which was calculated using level 3 inputs.

As part of their analysis, a sales comparison approach was used with the value per square foot range between $ 9.87 per

square foot and $ 55.48 per square foot, with a weighted average of $ 30.72 per square foot.

As a result, we recorded an impairment charge to the carrying value, to record this property at the appraised value of $ 4.5 million.

We evaluated our held for sale assets to determine if any of these assets were impaired during the nine months ended September 30, 2022, and identified one held for sale asset, located in Parsippany, New Jersey, which was impaired by $ 1.4 million.

In performing our held for sale assessment, the carrying value of this asset was above the fair value, less costs of sale.

As a result, we impaired this property to equal the fair market value less costs of sale.

We did no t recognize an impairment charge during the six months ended June 30, 2021.

The property was sold during the nine months ended September 30, 2022.

We did not recognize an impairment charge during the nine months ended September 30, 2021.

Fair market value for this asset was calculated using Level 3 inputs (defined in Note 6 “Mortgage Notes Payable and Credit Facility”), which were determined using a negotiated sales price from an executed purchase and sale agreement with a third party.

3 unchanged sentences

Mortgage Notes Payable and Credit Facility

Our $ 100.0 million unsecured revolving credit facility (“Revolver”), $ 160.0 million term loan facility (“Term Loan A”), and $ 65.0 million term loan facility (“Term Loan B”), are collectively referred to herein as the Credit Facility.

Our mortgage notes payable and Credit Facility as of June 30, 2022 and December 31, 2021 are summarized below (dollars in thousands):

Our $ 125.0 million unsecured revolving credit facility (“Revolver”), $ 160.0 million term loan facility (“Term Loan A”), $ 60.0 million term loan facility (“Term Loan B”), and $ 150.0 million term loan facility (“Term Loan C”), are collectively referred to herein as the Credit Facility.

Our mortgage notes payable and Credit Facility as of September 30, 2022 and December 31, 2021 are summarized below (dollars in thousands):

Encumbered properties at Carrying Value at Stated Interest Rates at Scheduled Maturity Dates at

June 30, 2022 June 30, 2022 December 31, 2021 June 30, 2022 June 30, 2022

September 30, 2022 September 30, 2022 December 31, 2021 September 30, 2022 September 30, 2022

Mortgage and other secured loans:

Fixed rate mortgage loans 50 $ 370,291 $ 436,530 (1) (2)

Variable rate mortgage loans 6 30,513 16,338 (3) (2)

Variable rate mortgage loans — — 16,338 N/A (2)

Premiums and discounts, net — ( 94 ) ( 130 ) N/A N/A

1 unchanged sentence

Total mortgage notes payable, net 50 $ 367,618 $ 449,944 (3)

Variable rate revolving credit facility 62 (6) $ 46,950 $ 33,550 LIBOR + 1.90 %

Variable rate revolving credit facility 82 (6) $ 7,750 $ 33,550 SOFR + 1.50 %

(4) 8/18/2026

Total revolver 82 $ 7,750 $ 33,550

Variable rate term loan facility A - (6) $ 160,000 $ 160,000 LIBOR + 1.85 %

Variable rate term loan facility B - (6) 65,000 65,000 LIBOR + 2.00 %

Variable rate term loan facility A — (6) $ 160,000 $ 160,000 SOFR + 1.45 %

(4) 8/18/2027

Variable rate term loan facility B — (6) 60,000 65,000 SOFR + 1.45 %

(4) 2/11/2026

Variable rate term loan facility C — (6) 150,000 — SOFR + 1.45 %

(4) 2/18/2028

Deferred financing costs, term loan facility — ( 3,605 ) ( 968 ) N/A N/A

2 unchanged sentences

(1) Interest rates on our fixed rate mortgage notes payable vary from 2.80 % to 6.63 %.

(2) We have 54 mortgage notes payable with maturity dates ranging from July 1, 2022 through August 1, 2037 .

(3) Interest rates on our variable rate mortgage notes payable vary from one month LIBOR + 2.35 % to one month LIBOR + 2.75 %.

As of June 30, 2022, one month LIBOR was approximately 1.79 %.

(4) The weighted average interest rate on the mortgage notes outstanding as of June 30, 2022 was approximately 4.18 %.

(5) The weighted average interest rate on all debt outstanding as of June 30, 2022 was approximately 4.00 %.

(6) The amount we may draw under our Credit Facility is based on a percentage of the fair value of a combined pool of 62 unencumbered properties as of June 30, 2022.

(2) We have 44 mortgage notes payable with maturity dates ranging from December 6, 2022 through August 1, 2037.

(3) The weighted average interest rate on the mortgage notes outstanding as of September 30, 2022 was approximately 4.19 %.

(4) As of September 30, 2022, Secured Overnight Financing Rate (“SOFR”) was approximately 2.98 %.

(5) The weighted average interest rate on all debt outstanding as of September 30, 2022 was approximately 4.31 %.

(6) The amount we may draw under our Credit Facility is based on a percentage of the fair value of a combined pool of 82 unencumbered properties as of September 30, 2022.

N/A - Not Applicable

Mortgage Notes Payable

As of June 30, 2022, we had 54 mortgage notes payable, collateralized by a total of 70 properties with a net book value of $ 683.5 million.

As of September 30, 2022, we had 44 mortgage notes payable, collateralized by a total of 50 properties with a net book value of $ 556.7 million.

We have limited recourse liabilities that could result from any one or more of the following circumstances:

a borrower voluntarily filing for bankruptcy, improper conveyance of a property, fraud or material misrepresentation, misapplication or misappropriation of rents, security deposits, insurance proceeds or condemnation proceeds, or physical waste or damage to the property resulting from a borrower’s gross negligence or willful misconduct.

As of June 30, 2022, we did not have any mortgages subject to recourse.

As of September 30, 2022, we did not have any mortgages subject to recourse.

We will also indemnify lenders against claims resulting from the presence of hazardous substances or activity involving hazardous substances in violation of environmental laws on a property.

During the six months ended June 30, 2022, we repaid one mortgage, collateralized by four properties, which is summarized in the table below (dollars in thousands):

Fixed Rate Debt Repaid Interest Rate on Fixed Rate Debt Repaid

During the nine months ended September 30, 2022, we repaid 13 mortgages, collateralized by 27 properties, which is summarized in the table below (dollars in thousands):

Aggregate Fixed Rate Debt Repaid Weighted Average Interest Rate on Fixed Rate Debt Repaid

$ 97,843 4.75 %

During the six months ended June 30, 2022, we issued three mortgages, collateralized by seven properties, which is summarized in the table below (dollars in thousands):

Aggregate Variable Rate Debt Repaid Weighted Average Interest Rate on Variable Rate Debt Repaid

$ 30,336 LIBOR/SOFR + 2.50 % (1)

(1) As of September 30, 2022, Secured Overnight Financing Rate (“SOFR”) was approximately 2.98 %.

During the nine months ended September 30, 2022, we issued five mortgages, collateralized by 10 properties, which is summarized in the table below (dollars in thousands):

Aggregate Fixed Rate Debt Issued Weighted Average Interest Rate on Fixed Rate Debt

$ 41,313 (1) 4.39 %

(1) We issued $ 10.0 million of fixed rate debt in connection with the two -property portfolio acquired on May 4, 2022 with a maturity date of May 4, 2027.

(1) We issued $ 10.0 million of fixed rate debt with a maturity date of May 4, 2027, in connection with the two -property portfolio acquired on May 4, 2022.

The interest rate is fixed at 4.00 %.

We issued $ 10.0 million of fixed rate debt in connection with the three -property acquisition on May 12, 2022 with a maturity date of June 1, 2032.

We issued $ 10.0 million of fixed rate debt with a maturity date of June 1, 2032, in connection with the three -property acquisition on May 12, 2022.

The interest rate is fixed at 3.40 %.

We issued $ 16.9 million of fixed rate debt with a maturity date of August 1, 2027, in connection with the two -property acquisition on August 5, 2022.

The interest rate is fixed at 4.95 %.

We issued $ 4.4 million of swapped to fixed rate debt with a maturity date of September 16, 2029, in connection with the property acquisition on September 16, 2022.

The interest rate is swapped to a fixed rate of 5.39 %.

Variable Rate Debt Issued Interest Rate on Variable Rate Debt

1 unchanged sentence

(1) We issued $ 15.0 million of variable rate debt in connection with refinancing mortgage debt at two properties with a new maturity date of April 27, 2024 and interest rate of SOFR plus 2.50 %.

During the six months ended June 30, 2022, we extended the maturity date of two mortgages, collateralized by four properties, which is summarized in the table below (dollars in thousands):

Fixed Rate Debt Extended Interest Rate on Fixed Rate Debt Extended Extension Term

This mortgage was repaid on August 18, 2022.

During the nine months ended September 30, 2022, we extended the maturity date of three mortgages, collateralized by five properties, which is summarized in the table below (dollars in thousands):

Aggregate Fixed Rate Debt Extended Weighted Average Interest Rate on Fixed Rate Debt Extended Extension Term

$ 14,633 5.41 % 1.0 year

1 unchanged sentence

$ 7,059 (1) LIBOR + 2.75 % 1.0 year

We made payments of $ 0.7 million for deferred financing costs during the three and six months ended June 30, 2022.

We did no t make any payments for deferred financing costs during the three months ended June 30, 2021, but made payments of $ 0.6 million for deferred financing costs during the six months ended June 30, 2021.

Scheduled principal payments of mortgage notes payable for the six months ending December 31, 2022, and each of the five succeeding fiscal years and thereafter are as follows (dollars in thousands):

(1) We repaid this mortgage on August 18, 2022.

We made payments of $ 5.6 million and $ 6.2 million for deferred financing costs during the three and nine months ended September 30, 2022.

We did not make any payments for deferred financing costs during the three months ended September 30, 2021, but made payments of $ 0.6 million for deferred financing costs during the nine months ended September 30, 2021.

Scheduled principal payments of mortgage notes payable for the three months ending December 31, 2022, and each of the five succeeding fiscal years and thereafter are as follows (dollars in thousands):

Year Scheduled Principal Payments

Six Months Ending December 31, 2022 $ 72,877

Three Months Ending December 31, 2022 $ 16,030

Thereafter 91,944

11 unchanged sentences

Generally, we will estimate the fair value of our interest rate caps and interest rate swaps, in the absence of observable market data, using estimates of value including estimated remaining life, counterparty credit risk, current market yield and interest rate spreads of similar securities as of the measurement date.

At June 30, 2022 and December 31, 2021, our interest rate cap agreements and interest rate swaps were valued using Level 2 inputs.

At September 30, 2022 and December 31, 2021, our interest rate cap agreements and interest rate swaps were valued using Level 2 inputs.

The fair value of the interest rate cap agreements is recorded in other assets on our accompanying condensed consolidated balance sheets.

2 unchanged sentences

If the interest rate cap does not qualify for hedge accounting, or if it is determined the hedge is ineffective, any change in the fair value is recognized in interest expense in our consolidated statements of operations and comprehensive income.

The following table summarizes the interest rate caps at June 30, 2022 and December 31, 2021 (dollars in thousands):

June 30, 2022 December 31, 2021

The following table summarizes the interest rate caps at September 30, 2022 and December 31, 2021 (dollars in thousands):

September 30, 2022 December 31, 2021

Aggregate Cost Aggregate Notional Amount Aggregate Fair Value Aggregate Notional Amount Aggregate Fair Value

1 unchanged sentence

(1) We have entered into various interest rate cap agreements on variable rate debt with LIBOR caps ranging from 1.50 % to 2.75 %.

We have assumed or entered into interest rate swap agreements in connection with certain of our mortgage financings, whereby we will pay our counterparty a fixed rate interest rate on a monthly basis and receive payments from our counterparty equivalent to the stipulated floating rate.

We have assumed or entered into interest rate swap agreements in connection with certain of our mortgage financings and Credit Facility, whereby we will pay our counterparty a fixed rate interest rate on a monthly basis and receive payments from our counterparty equivalent to the stipulated floating rate.

The fair value of our interest rate swap agreements is recorded in other assets or other liabilities on our accompanying condensed consolidated balance sheets.

1 unchanged sentence

We record changes in fair value on a quarterly basis, using current market valuations at quarter end.

The following table summarizes our interest rate swaps at June 30, 2022 and December 31, 2021 (dollars in thousands):

June 30, 2022 December 31, 2021

The following table summarizes our interest rate swaps at September 30, 2022 and December 31, 2021 (dollars in thousands):

September 30, 2022 December 31, 2021

Aggregate Notional Amount Aggregate Fair Value Asset Aggregate Fair Value Liability Aggregate Notional Amount Aggregate Fair Value Asset Aggregate Fair Value Liability

1 unchanged sentence

The following table presents the impact of our derivative instruments in the condensed consolidated financial statements (dollars in thousands):

Amount of gain (loss) recognized in Comprehensive Income

Three Months Ended June 30, Six Months Ended June 30,

Amount of gain (loss), net, recognized in Comprehensive Income

Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

3 unchanged sentences

Total $ 6,790 $ 421 $ 13,660 $ 2,125

The following table presents the reclassifications of our derivative instruments out of accumulated other comprehensive income into interest expense in the condensed consolidated financial statements (dollars in thousands):

Amount reclassified out of Accumulated Other Comprehensive Income

Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

Interest rate caps $ ( 52 ) $ ( 145 ) $ ( 52 ) $ ( 145 )

Total $ ( 52 ) $ ( 145 ) $ ( 52 ) $ ( 145 )

The following table sets forth certain information regarding our derivative instruments (dollars in thousands):

Asset (Liability) Derivatives Fair Value at

Derivatives Designated as Hedging Instruments Balance Sheet Location June 30, 2022 December 31, 2021

Derivatives Designated as Hedging Instruments Balance Sheet Location September 30, 2022 December 31, 2021

Interest rate caps Other assets $ 4,843 $ 324

2 unchanged sentences

Total derivative liabilities, net $ 13,645 $ ( 52 )

The fair value of all mortgage notes payable outstanding as of June 30, 2022 was $ 441.5 million, as compared to the carrying value stated above of $ 462.8 million.

The fair value of all mortgage notes payable outstanding as of September 30, 2022 was $ 346.8 million , as compared to the carrying value stated above of $ 367.6 million.

The fair value is calculated based on a discounted cash flow analysis, using management’s estimate of market interest rates on long-term debt with comparable terms and loan to value ratios.

The fair value was calculated using Level 3 inputs of the hierarchy established by ASC 820, “Fair Value Measurements and Disclosures.”

Reference Rate Reform

Accounting Standards Update 2020-04, Reference Rate Reform (Topic 848) (“ASU 2020-04”) contains practical expedients for reference rate reform-related activities that impact debt, leases, derivatives, and other contracts.

The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur.

As of September 30, 2022, we elected to apply the hedge accounting expedients related to probability and the assessment of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives.

We also elected the option to not reassess a previous accounting determination, and the option to not dedesignate a hedging relationship due to a change in a critical term.

Application of these expedients preserves the presentation of derivatives consistent with past presentation.

The Company continues to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in our hedging activities occur.

Credit Facility

9 unchanged sentences

We incurred fees of approximately $ 0.5 million in connection with issuing Term Loan B.

As of June 30, 2022, there was $ 65.0 million outstanding under Term Loan B, and we used all net proceeds to repay all outstanding borrowings on the Revolver and fund acquisitions.

As of June 30, 2022, there was $ 272.0 million outstanding under our Credit Facility, at a weighted average interest rate of approximately 3.68 %, and $ 19.5 million outstanding under letters of credit, at a weighted average interest rate of 1.90 %.

As of June 30, 2022, the maximum additional amount we could draw under the Credit Facility was $ 18.4 million.

We were in compliance with all covenants under the Credit Facility as of June 30, 2022.

The amount outstanding under the Credit Facility approximates fair value as of June 30, 2022.

As of September 30, 2022, there was $ 60.0 million outstanding under Term Loan B, and we used all net proceeds to repay all outstanding borrowings on the Revolver and fund acquisitions.

On August 18, 2022, we amended, extended and upsized our Credit Facility, increasing our Revolver from $ 100.0 million to $ 120.0 million (and its term to August 2026), adding the new $ 140.0 million Term Loan C, decreasing the principal balance of Term Loan B to $ 60.0 million and extending the maturity date of Term Loan A to August 2027.

Term Loan C has a maturity date of February 18, 2028 and a SOFR spread ranging from 125 to 195 basis points, depending on our leverage.

On September 27, 2022 we further increased the Revolver to $ 125.0 million and Term Loan C to $ 150.0 million, as permitted under the terms of the Credit Facility.

We entered into multiple interest rate swap agreements on Term Loan C, which swap the interest rate to fixed rates from 3.15 % to 3.75 %.

We incurred fees of approximately $ 4.2 million in connection with extending and upsizing our Credit Facility.

As of September 30, 2022, there was $ 150.0 million outstanding under Term Loan C, and we used all net proceeds to repay all outstanding borrowings on the Revolver, pay off mortgage debt, and fund acquisitions.

The Credit Facility’s current bank syndicate is comprised of KeyBank, Fifth Third Bank, The Huntington National Bank, Bank of America, Synovus Bank, United Bank, First Financial Bank, and S&T Bank.

As of September 30, 2022, there was $ 377.8 million outstanding under our Credit Facility, at a weighted average interest rate of approximately 4.43 %, and $ 17.1 million outstanding under letters of credit, at a weighted average interest rate of 1.75 %.

As of September 30, 2022, the maximum additional amount we could draw under the Credit Facility was $ 56.0 million.

We were in compliance with all covenants under the Credit Facility as of September 30, 2022.

The amount outstanding under the Credit Facility approximates fair value as of September 30, 2022.

Commitments and Contingencies

1 unchanged sentence

We are obligated as lessee under four ground leases.

Future minimum rental payments due under the terms of these leases for the six months ending December 31, 2022 and each of the five succeeding fiscal years and thereafter is as follows (dollars in thousands):

Future minimum rental payments due under the terms of these leases for the three months ending December 31, 2022 and each of the five succeeding fiscal years and thereafter is as follows (dollars in thousands):

Year Future Lease Payments Due Under Operating Leases

Six Months Ending December 31, 2022 $ 245

Three Months Ending December 31, 2022 $ 123

Thereafter 6,301

2 unchanged sentences

Present value of lease payments $ 5,360

Rental expense incurred for properties with ground lease obligations during the three and six months ended June 30, 2022 and 2021 was $ 0.1 million and $ 0.2 million, respectively and during the three and six months ended June 30, 2021 was $ 0.1 million and $ 0.2 million, respectively.

Rental expense incurred for properties with ground lease obligations during the three and nine months ended September 30, 2022 was $ 0.1 million and $ 0.3 million, respectively, and during the three and nine months ended September 30, 2021 was $ 0.1 million and $ 0.4 million, respectively.

Our ground leases are treated as operating leases and rental expenses are reflected in property operating expenses on the condensed consolidated statements of operations and comprehensive income.

1 unchanged sentence

Letters of Credit

As of June 30, 2022, there was $ 19.5 million outstanding under letters of credit.

As of September 30, 2022, there was $ 17.1 million outstanding under letters of credit.

These letters of credit are not reflected on our condensed consolidated balance sheets.

1 unchanged sentence

Stockholders’ Equity

The following table summarizes the changes in our equity for the three and six months ended June 30, 2022 and 2021 (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

The following table summarizes the changes in our equity for the three and nine months ended September 30, 2022 and 2021 (in thousands):

Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

21 unchanged sentences

Comprehensive income 6,790 421 13,660 2,125

Reclassification into interest expense 52 145 52 145

Balance, end of period $ 12,366 $ ( 2,075 ) $ 12,366 $ ( 2,075 )

14 unchanged sentences

Comprehensive income 6,790 421 13,660 2,125

Reclassification into interest expense 52 145 52 145

Adjustment to OP Units held by Non-controlling OP Unitholders resulting from changes in ownership of the Operating Partnership 1,613 ( 21 ) 1,396 ( 3,665 )

4 unchanged sentences

Distributions declared to Non-controlling OP Unit holders ( 114 ) ( 97 ) ( 307 ) ( 382 )

Issuance of Non-controlling OP Units as consideration in real estate acquisitions, net 2,394 — 2,394 —

Redemptions of OP Units — — — ( 4,812 )

Adjustment to OP Units held by Non-controlling OP Unitholders resulting from changes in ownership of the Operating Partnership ( 1,613 ) 21 ( 1,396 ) 3,665

Net loss attributable to OP units held by Non-controlling OP Unitholders ( 10 ) ( 21 ) ( 8 ) ( 63 )

Net (loss) income (attributable) available to OP units held by Non-controlling OP Unitholders ( 4 ) 21 ( 12 ) ( 42 )

Balance, end of period $ 1,938 $ 1,283 $ 1,938 $ 1,283

1 unchanged sentence

Distributions

We paid the following distributions per share for the three and six months ended June 30, 2022 and 2021:

For the three months ended June 30, For the six months ended June 30,

We paid the following distributions per share for the three and nine months ended September 30, 2022 and 2021:

For the three months ended September 30, For the nine months ended September 30,

2022 2021 2022 2021

9 unchanged sentences

Common Stock ATM Program

During the six months ended June 30, 2022, we sold 1.5 million shares of common stock, raising $ 31.7 million in net proceeds under our At-the-Market Equity Offering Sales Agreements with sales agents Robert W.

During the nine months ended September 30, 2022, we sold 2.0 million shares of common stock, raising $ 40.6 million in net proceeds under our At-the-Market Equity Offering Sales Agreements with sales agents Robert W.

Incorporated, Goldman Sachs & Co.

4 unchanged sentences

333-236143) and future registration statements on Form S-3 (the “Common Stock ATM Program”).

As of June 30, 2022, we had remaining capacity to sell up to $ 35.5 million of common stock pursuant to the Common Stock ATM Program under the 2020 Universal Shelf (as defined below).

As of September 30, 2022, we had remaining capacity to sell up to $ 26.5 million of common stock pursuant to the Common Stock ATM Program under the 2020 Universal Shelf (as defined below).

Mezzanine Equity

3 unchanged sentences

In addition, our Series E Preferred Stock and Series G Preferred Stock are redeemable at the option of the applicable shareholder in the event a delisting event occurs.

We will periodically evaluate the likelihood that a delisting event or change of control of greater than 50 % will take place, and if we deem this probable, we would adjust the Series E Preferred Stock, and Series G Preferred Stock presented in mezzanine equity to their redemption value, with the offset to gain (loss) on extinguishment.

We will periodically evaluate the likelihood that a delisting event or change of control of greater than 50 % will take place, and if we deem this probable, we adjust the Series E Preferred Stock, and Series G Preferred Stock presented in mezzanine equity to their redemption value, with the offset to gain (loss) on extinguishment.

We currently believe the likelihood of a change of control of greater than 50%, or a delisting event, is remote.

Universal Shelf Registration Statements

Universal Shelf Registration Statement

On January 29, 2020, we filed a universal registration statement on Form S-3, File No.

3 unchanged sentences

Of the $ 800.0 million of available capacity under our 2020 Universal Shelf, approximately $ 636.5 million is reserved for the sale of our Series F Preferred Stock, and $ 63.0 million is reserved for our Common Stock ATM Program.

As of June 30, 2022, we had the ability to issue up to $ 658.7 million of securities under the 2020 Universal Shelf.

As of September 30, 2022, we had the ability to issue up to $ 648.6 million of securities under the 2020 Universal Shelf.

Series F Preferred Stock

On February 20, 2020, we filed with the Maryland Department of Assessments and Taxation Articles Supplementary (i) setting forth the rights, preferences and terms of the Series F Preferred Stock and (ii) reclassifying and designating 26,000,000 shares of our authorized and unissued shares of common stock as shares of Series F Preferred Stock.

of our authorized and unissued shares of common stock as shares of Series F Preferred Stock.

The reclassification decreased the number of shares classified as common stock from 86,290,000 shares immediately prior to the reclassification to 60,290,000 shares immediately after the reclassification.

We sold 126,028 shares of our Series F Preferred Stock, raising $ 2.9 million in net proceeds during the six months ended June 30, 2022.

As of June 30, 2022, we had remaining capacity to sell up to $ 622.6 million of Series F Preferred Stock.

We sold 164,400 shares of our Series F Preferred Stock, raising $ 3.7 million in net proceeds during the nine months ended September 30, 2022.

As of September 30, 2022, we had remaining capacity to sell up to $ 621.6 million of Series F Preferred Stock.

Non-controlling Interest in Operating Partnership

As of June 30, 2022 and December 31, 2021, we owned approximately 99.3 % and 99.3 %, re spectively, of the outstanding OP Units.

During the six months ended June 30, 2021 , we redeemed 246,039 OP Units for an equivalent amount of common stock.

As of September 30, 2022 and December 31, 2021, we owned approximately 99.0 % and 99.3 %, re spectively, of the outstanding OP Units.

On September 20, 2022 , we issued 134,474 OP Units as partial consideration to acquire our 49,375 square foot property located in Fort Payne, Alabama for $ 5.6 million .

During the nine months ended September 30, 2021 , we redeemed 246,039 OP Units for an equivalent amount of common stock.

The Operating Partnership is required to make distributions on each OP Unit in the same amount as those paid on each share of our common stock, with the distributions on the OP Units held by us being utilized to make distributions to our common stockholders.

As of June 30, 2022 and December 31, 2021, there were 256,994 and 256,994 outstanding OP Units held by Non-controlling OP Unitholders, respectively.

As of September 30, 2022 and December 31, 2021, there were 391,468 and 256,994 outstanding OP Units held by Non-controlling OP Unitholders, respectively.

Subsequent Events

Distributions

On July 12, 2022, our Board of Directors declared the following monthly distributions for the months of July, August and September of 2022:

On October 11, 2022, our Board of Directors declared the following monthly distributions for the months of October, November and December of 2022:

Record Date Payment Date Common Stock and Non-controlling OP Unit Distributions per Share Series E Preferred Distributions per Share Series G Preferred Distributions per Share

July 22, 2022 July 29, 2022 $ 0.12540 $ 0.138021 $ 0.125

August 23, 2022 August 31, 2022 0.12540 0.138021 0.125

September 22, 2022 September 30, 2022 0.12540 0.138021 0.125

October 21, 2022 October 31, 2022 $ 0.12540 $ 0.138021 $ 0.125

November 18, 2022 November 30, 2022 0.12540 0.138021 0.125

December 20, 2022 December 30, 2022 0.12540 0.138021 0.125

$ 0.37620 $ 0.414063 $ 0.375

2 unchanged sentences

Payment Date Distribution per Share

July August 5, 2022 $ 0.0875

August September 6, 2022 0.0875

September October 5, 2022 0.0875

October November 4, 2022 $ 0.0875

November December 5, 2022 0.0875

December January 6, 2023 0.0875

Series F Preferred Stock Distributions

Record Date Payment Date Distribution per Share

July 27, 2022 August 5, 2022 $ 0.125

August 25, 2022 September 6, 2022 0.125

September 27, 2022 October 5, 2022 0.125

October 26, 2022 November 4, 2022 $ 0.125

November 23, 2022 December 5, 2022 0.125

December 28, 2022 January 6, 2023 0.125

Equity Activity

Subsequent to June 30, 2022 and through August 1, 2022, we raised $ 7.4 million in net proceeds from the sale of 396,027 shares of common stock under our Common Stock ATM Program and $ 0.4 million in net proceeds from the sale of 16,808 shares of Series F Preferred Stock.

Subsequent to September 30, 2022 and through November 7, 2022, we raised $ 0.2 million in net proceeds from the sale of 8,500 shares of Series F Preferred Stock.

Sale Activity

On July 1, 2022, we sold our property in Jupiter, Florida for $ 19.0 million, resulting in a gain on sale, net of $ 8.0 million.

On October 28, 2022, we sold one of our properties in Columbus, Ohio for $ 2.3 million, resulting in a loss on sale, net, of $ 0.02 million.

Acquisition Activity

On October 26, 2022, we purchased a 68,674 square foot industrial property in Denver, Colorado for $ 12.0 million.

This property is fully leased to one tenant on a 20.0 year lease.

Financing Activity

On July 5, 2022, we repaid $ 3.6 million in fixed rate mortgage debt, collateralized by one property, at an interest rate of 5.05 %.

On July 27, 2022, we extended the maturity date of $ 11.0 million in fixed rate mortgage debt, collateralized by one property, for 1.0 year at an interest rate of 5.50 %.

On August 1, 2022, we repaid $ 6.6 million in fixed rate mortgage debt, collateralized by one property, at an interest rate of 4.53 %.

On October 26, 2022, we issued $ 6.6 million of swapped to fixed rate debt in connection with property acquisition on the same date, with a term of 6.9 years and interest rate swapped to 5.90 %.

Election of Director

Effective October 11, 2022, Paula Novara was elected to our Board of Directors.

Novara also serves as head of human resources, facilities and office management and IT of the Adviser and certain of its affiliates.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements