What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2025-02-18 compared with 2024-02-21 · 149 added, 169 removed, 327 unchanged (49% of the section changed)

16 unchanged sentences

Business Environment

While the trends of major supply chain disruptions, materials shortages, and significant increases to construction prices have largely subsided in the back half of 2023, interest rates and capital markets became the primary talking points and drivers of activity on commercial real estate development and investment.

In October 2023, the benchmark 10-year U.S.

Treasury yield peaked above 5.0% for the first time since 2007, concluding a more than 160 bps increase since May 2023.

Rates remained volatile through the end of the year with the 10-year yield finishing below 4.0%.

This volatility translated directly to capital markets and investment volume as sellers’ pricing expectations lagged real-time changes in rates.

According to CBRE, year-to-date net lease investment volume fell 55% year over year through the third quarter of 2023.

Interest rates and capital markets remained the primary talking points and activity drivers in 2024.

During 2024, the benchmark 10-year U.S.

Treasury yield moved within a range from 3.6% at the low end to 4.8% at the high end, ending the year at 4.5%.

This volatility translated directly to capital markets and investment volume as sellers’ pricing expectations lagged real-time changes in rates, with activity picking up slightly in the fourth quarter of 2024.

According to CBRE, for the year ended December 31, 2024, single-asset industrial investment volume increased by 5.1% from the comparable period in 2023 to $67.9 billion.

Total single-asset commercial real estate volume over the same period increased by 6.4% to $295.5 billion.

The industrial market experienced moderate softening on leasing activity and occupancy rates in 2024 relative to 2023.

According to CBRE, annual industrial leasing activity fell by 8.8% year-over-year to 790.3 million square feet, with lease renewals accounting for 267 million square feet of the total.

In addition, construction completions as of the fourth quarter of 2023 outpaced net absorption for the sixth consecutive quarter, causing the overall vacancy rate to increase by 50 bps quarter-over-quarter to 4.8%, the highest level since the third quarter of 2020 but still well below historical averages.

Industrial construction activity is expected to slow as rates have already forced new starts to decline significantly.

Despite slower starts and leasing activity, industrial rents nationwide grew 6.0% year-over-year, and fundamentals remain strong relative to historical levels coming off record-breaking years in 2021 and 2022.

The office market continued to struggle in 2023.

According to Cushman Wakefield, office net absorption was negative in the fourth quarter of 2023 for the eighth consecutive quarter.

Despite weakening overall demand, some office markets have seen signs of promise driven by return-to-work mandates.

According to JLL Research, these mandates vary by geography, industry, and function.

We expect office supply to decline in 2024 as leases roll and owners convert obsolete product to higher and better uses supported by state and local government initiatives.

These initiatives include California’s $400.0 million incentives for commercial-to-residential conversions and the District of Columbia’s 20-year tax abatement to property owners who add 10 or more housing units and change a building’s use.

According to CBRE, overall industrial vacancy increased to 6.0% with asking rents declining 1.3% year-over-year at the end of 2024 to finish the year at $10.94 per square foot.

However, demand from third-party logistics providers helped increase leasing activity with bulk leases increasing 2.9% year-over-year at the end of 2024.

In addition, construction starts in 2024 slowed to a post-pandemic low of 167.3 million square feet.

Low construction starts are expected to lead to a decline in available first-generation space in 2025 and 2026, which should help stabilize industrial leasing rates in the near term.

The office market saw modest recovery in 2024.

According to CBRE, office net absorption turned positive in the second, third, and fourth quarters of 2024, the first quarters of positive absorption in the past ten quarters.

Nationwide vacancy dropped slightly to 18.9%, with 32 of 57 markets tracked by CBRE showing positive net absorption in the fourth quarter of 2024.

Our expectation is for office absorption to continue improving at a slow pace with prices ticking up year-over-year in 2025.

We collected 100% of all outstanding base rent for calendar year 2024.

This is a testament to the strength of our credit underwriting and asset management teams.

We believe that we have a diverse tenant base, and specifically, we do not have significant exposure to tenants in cyclical retail, hospitality, airlines, or oil & gas industries.

Additionally, our 135 properties are located across 27 states, which we believe mitigates our exposure to economic issues, including regulations or laws implemented by state and local governments in any one geographic market or area.

We also have a cap on industry sector concentration to further diversify our portfolio and mitigate risk.

We believe we have adequate liquidity in the near term, and we believe the availability on our Credit Facility is sufficient to cover all near-term debt obligations and operating expenses and to continue our industrial growth strategy.

We believe that we have a diverse tenant base, and specifically, we do not have significant exposure to tenants in the retail, hospitality, airlines, and oil and gas industries.

Additionally, our 135 properties are located across 27 states, which we believe mitigates our exposure to regional economic and weather-related issues, including regulations or laws implemented by state and local governments in any one geographic market or area.

In the past, we have received rent modification requests from certain of our tenants, and it is possible we may receive additional requests in the future.

We believe we currently have adequate liquidity in the near term, and we believe that our cash on hand combined with the availability on our Credit Facility is sufficient to cover all near term debt obligations and operating expenses and to continue our industrial growth strategy.

As of December 31, 2024, we had $101.7 million in available liquidity via our revolving credit facility and cash on hand and were in compliance with all of our debt covenants.

We amended our Credit Facility in 2019 to increase our borrowing capacity and extend its maturity

We amended our Credit Facility in 2019 to increase our borrowing capacity and extend its maturity date.

In addition, on August 18, 2022, we added a new $150.0 million term loan component.

We have numerous ongoing conversations with lenders, and credit continues to be available for well capitalized borrowers.

Based on market observations and conversations we routinely have with lenders, we believe that credit continues to be available for well-capitalized borrowers, as demonstrated by our Operating Partnership’s issuance, on December 18, 2024, of $75.0 million of senior unsecured notes in a private placement.

We continue to monitor our portfolio and intend to maintain a reasonably conservative liquidity position for the foreseeable future.

Other Business Environment Considerations

The geopolitical landscape remains fractured due to recent world events.

Many domestic manufacturing businesses seek to limit supply chain disruptions by bringing their operations back to the U.S.

The COVID-19 pandemic is largely behind us, but a level of work-from-home trends appear to be here to stay.

Industrial demand will be further buoyed by government investment in infrastructure and advanced manufacturing operations.

The Federal Reserve recently indicated it does not expect additional rate increases, but the timing of an easing cycle remains unknown.

Many domestic manufacturing businesses seek to limit supply chain disruptions by bringing their operations back to the United States.

A level of work-from-home trends appear to be here to stay, but many employees are returning to the office, particularly following the presidential transition.

We expect that industrial demand will be further buoyed by government investment in infrastructure and advanced manufacturing operations.

The Federal Reserve’s interest rate cuts introduced more volatility to the market, and timing of future cuts, if any, remains uncertain.

These uncertain times create both risks and opportunities for us and our tenants, and we believe we are well-capitalized and positioned to take advantage.

The London Inter-bank Offered Rate (“LIBOR”) was phased out by June 2023, and transitioned to a new standard rate, the Secured Overnight Financing Rate (“SOFR”).

During 2022, we began transitioning our variable rate debt to SOFR, and, at December 31, 2023, all of our variable rate debt was based upon SOFR.

The environmental landscape remains unpredictable due to the increase in intensity of weather patterns, including hurricanes.

We continue to monitor our properties and have not seen any significant impact to our properties in Florida, Georgia, North Carolina, South Carolina, Tennessee, and Texas from the recent hurricane season.

We continue to focus on re-leasing vacant space, renewing upcoming lease expirations, re-financing upcoming loan maturities, and acquiring additional properties with associated long-term leases.

At December 31, 2023, we had four partially vacant buildings and three fully vacant buildings.

We believe our lease expiration schedule for 2024 is manageable as it equates to 4.5% of annual lease revenue with all of the expirations due beyond the first quarter of the year.

Property acquisitions increased during the third and fourth quarters of the year ended December 31, 2023 equating to almost $24.7 million in volume.

All but one acquisition was industrial in nature, reinforcing our commitment to increase our portfolio’s industrial allocation.

At December 31, 2024, we had four partially vacant buildings and one fully vacant building.

We believe our lease expiration schedule for 2025 is manageable as it equates to 3.2% of annual lease revenue at December 31, 2024.

As of the date of this filing, our property acquisitions since the beginning of 2020 have totaled $399.4 million and all but one transaction was industrial in nature, with a weighted average lease term at acquisition of 14.1 years and a current weighted average lease term of 10.6 years.

Our ability to make new investments is highly dependent upon our ability to procure financing.

Our principal sources of financing generally include the issuance of equity securities, long-term mortgage loans secured by properties, borrowings under our $125.0 million senior unsecured revolving credit facility (“Revolver”), with KeyBank, which matures in August 2026, our $160.0 million term loan facility (“Term Loan A”), which matures in August 2027, our $60.0 million term loan facility (“Term Loan B”), which matures in February 2026, and our $150.0 million term loan facility (“Term Loan C”), which matures in February 2028.

Our principal sources of financing generally include the issuance of equity securities, long-term unsecured notes in the private placement market, long-term mortgage loans secured by properties, borrowings under our $125.0 million Revolver, with KeyBank, which matures in August 2026, our $160.0 million Term Loan A, which matures in August 2027, our $60.0 million Term Loan B, which matures in February 2026, our $150.0 million Term Loan C, which matures in February 2028, and our Operating Partnership’s $75.0 million senior unsecured notes, which mature in December 2029.

We refer to the Revolver, Term Loan A, Term Loan B, and Term Loan C, collectively, herein as the Credit Facility.

While lenders’ credit standards have tightened, we continue to look to national and regional banks, insurance companies and non-bank lenders, in addition to the collateralized mortgage backed securities market (“CMBS”), to issue mortgages to finance our real estate activities.

While lenders’ credit standards have tightened, we continue to look to private credit institutions, national and regional banks, insurance companies and non-bank lenders to finance our real estate activities.

Recent Developments

Sale Activity

During the year ended December 31, 2023, we continued to execute our capital recycling program, whereby we sold non-core properties and redeployed proceeds to fund property acquisitions in our target secondary growth markets, as well as repay outstanding debt.

We expect to continue to execute our capital recycling plan and sell non-core properties as reasonable disposition opportunities become available.

During the year ended December 31, 2023, we sold seven non-core properties, located in Baytown, Texas;

Birmingham, Alabama;

Pittsburgh, Pennsylvania;

Eatontown, New Jersey;

Taylorsville, Utah;

Columbia, South Carolina;

and Blaine, Minnesota, which are summarized in the table below (dollars in thousands):

During the year ended December 31, 2024, we continued to execute our capital recycling program, whereby we sold non-core properties and reinvested the proceeds into new real estate assets.

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

During the year ended December 31, 2024, we sold seven non-core properties, located in Columbus, Ohio;

Draper, Utah;

Richardson, Texas;

Egg Harbor, New Jersey;

Cumming, Georgia;

Lawrenceville, Georgia;

and Fridley, Minnesota, which are summarized in the table below (dollars in thousands):

Aggregate Square Footage Sold Aggregate Sales Price Aggregate Sales Costs Aggregate Impairment Charge for the Twelve Months Ended December 31, 2024 Aggregate Gain on Sale of Real Estate, net

486,927 $ 38,975 $ 1,340 $ 5,042 $ 10,300

Subsequently, on January 11, 2024, we sold our 114,786 square foot office property in Columbus, Ohio for $4.5 million.

We realized a $0.3 million loss on sale, net.

Acquisition Activity

During the year ended December 31, 2023, we acquired five properties, which are summarized below (dollars in thousands):

During the year ended December 31, 2024, we acquired seven properties, which are summarized below (dollars in thousands):

Aggregate Square Footage Weighted Average Remaining Lease Term at Time of Acquisition Aggregate Purchase Price Aggregate Capitalized Acquisition Expenses Aggregate Annualized GAAP Fixed Lease Payments

5 unchanged sentences

(1) Weighted average remaining lease term is weighted according to the annualized GAAP rent earned by each lease.

Our leases have remaining terms ranging from 3.3 years to 18.7 years.

During the year ended December 31, 2023, we had two lease terminations, which are aggregated below (dollars in thousands):

Square Footage Reduced Accelerated Rent Accelerated Rent Recognized through December 31, 2023

Our leases have remaining terms ranging from 1.0 year to 13.8 years.

During the year ended December 31, 2024, we had three lease terminations, which are aggregated below (dollars in thousands):

Aggregate Square Footage Reduced Aggregate Accelerated Rent Aggregate Accelerated Rent Recognized through December 31, 2024

93,937 $ 589 $ 589

Financing Activity

During the year ended December 31, 2023, we repaid six mortgages, collateralized by six properties, which are summarized below (dollars in thousands):

Fixed Rate Debt Repaid Interest Rate on Fixed Rate Debt Repaid

During the year ended December 31, 2024, we repaid three mortgages, collateralized by four properties, which are summarized below (dollars in thousands):

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

$ 32,464 4.59 %

During the year ended December 31, 2023, we issued three mortgages, collateralized by three properties, which are summarized below (dollars in thousands):

During the year ended December 31, 2024, we issued two mortgages, collateralized by two properties, which are summarized below (dollars in thousands):

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

$ 15,240 (1) 5.60 %

(1) We issued $9.0 million of fixed rate debt with an interest rate of 6.10% and a maturity date of September 1, 2028, in connection with three of our acquisitions during the year.

(1) We issued $15.2 million of fixed rate debt with an interest rate of 5.6% and a maturity date of August 31, 2029.

During the year ended December 31, 2024, we extended the maturity date of one mortgage, collateralized by one property, which is summarized in the table below (dollars in thousands):

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

$ 8,769 6.50 % 1.0 year

Variable Rate Debt Extended Interest Rate on Variable Rate Debt Extended Extension Term

$ 7,386 SOFR + 2.25% 1.3 years

On December 18, 2024, we and the Operating Partnership entered into a Note Purchase Agreement with the institutional investors named therein, in connection with a private placement of $75.0 million of the 2029 Notes.

The proceeds were used to pay down Term Loan B by $20.0 million and the Revolver by $55.0 million.

Equity Activity

1 unchanged sentence

On February 22, 2022, we entered into Amendment No.

1 to the At-the-Market Equity Offering Sales Agreement, dated December 3, 2019 (together, the “Prior Common Stock Sales Agreement”).

The amendment permitted shares of common stock

to be issued pursuant to the Prior Common Stock Sales Agreement under the 2020 Registration Statement, and future registration statements on Form S-3 (the “Prior Common Stock ATM Program”).

During the year ended December 31, 2023, we sold 0.2 million shares of common stock, raising approximately $4.0 million in net proceeds under our At-the-Market Equity Offering Sales Agreement with sales agents Robert W.

Incorporated (“Baird”), Goldman Sachs & Co.

LLC (“Goldman Sachs”), Stifel, Nicolaus & Company, Incorporated, (“Stifel”) BTIG, LLC, and Fifth Third Securities, Inc.

(“Fifth Third”).

We terminated the Common Stock Sales Agreement effective February 10, 2023 in connection with the expiration of our registration statement on Form S-3 (File No.

1 to the At-the-Market Equity Offering Sales Agreement with sales agents Baird, Goldman Sachs, Stifel, Nicolaus & Company, Incorporated, (“Stifel”) BTIG, LLC, and Fifth Third, dated December 3, 2019 (together, the “Prior Common Stock Sales Agreement”).

We terminated the Prior Common Stock Sales Agreement effective February 10, 2023 in connection with the expiration of our registration statement on Form S-3 (File No.

333-236143) (the “2020 Registration Statement”) on February 11, 2023.

On March 3, 2023, we entered into an At-the-Market Equity Offering Sales Agreement (the “2023 Common Stock Sales Agreement”), with BofA Securities, Inc.

(“BofA”), Goldman Sachs, Baird, KeyBanc Capital Markets Inc.

(“KeyBanc”), and Fifth Third (collectively the “Common Stock Sales Agents”).

On March 3, 2023, we entered into the 2023 Common Stock Sales Agreement, with the Common Stock Sales Agents.

In connection with the 2023 Common Stock Sales Agreement, we filed prospectus supplements dated March 3, 2023 and March 7, 2023, to the prospectus dated November 23, 2022, with the SEC, for the offer and sale of an aggregate offering amount of $250.0 million of common stock.

During the year ended December 31, 2024, we did not sell any shares of common stock under the 2023 Common Stock Sales Agreement.

On March 26, 2024, we entered into the 2024 Common Stock Sales Agreement, which amended the 2023 Common Stock Sales Agreement and permits shares of common stock to be issued pursuant to the 2024 Common Stock Sales Agreement under the Company’s 2024 Registration Statement, and future registration statements on Form S-3.

In connection with the 2024 Common Stock Sales Agreement, we filed a prospectus supplement with the SEC dated March 26, 2024, to the prospectus dated March 21, 2024, for the offer and sale of an aggregate offering amount of $250.0 million of common stock.

During the year ended December 31, 2024, we sold 3,699,597 shares of common stock, raising approximately $53.5 million in net proceeds under the 2024 Common Stock Sales Agreement.

Common Stock Buyback Program

During the year ended December 31, 2023, we repurchased $1.0 million worth of our common stock through our common stock repurchase program.

Amendment to Articles of Restatement

On June 23, 2021, we filed with the State Department of Assessments and Taxation of Maryland (“SDAT”) the Articles Supplementary (i) setting forth the rights, preferences and terms of our newly designated Series G Preferred Stock and (ii) reclassifying and designating 4,000,000 shares of our authorized and unissued shares of common stock as shares of Series G Preferred Stock.

Series G Preferred Stock Offering

On June 28, 2021, we completed an underwritten public offering of 4,000,000 shares of our newly designated Series G Preferred Stock at a public offering price of $25.00 per share, raising $100.0 million in gross proceeds and approximately $96.6 million in net proceeds, after payment of underwriting discounts and commissions.

We used the net proceeds from this offering to voluntarily redeem all of our then outstanding shares of our Series D Preferred Stock.

Series D Preferred Stock Redemption

On June 30, 2021, we voluntarily redeemed all 3,509,555 outstanding shares of our Series D Preferred Stock at a redemption price of $25.1458333 per share, which represented the liquidation preference per share, plus accrued and unpaid dividends through June 30, 2021, for an aggregate redemption price of approximately $88.3 million.

In connection with this redemption, we recognized a $2.1 million decrease to net income available to common stockholders pertaining to the original issuance costs incurred upon issuance of our Series D Preferred Stock.

Articles Supplementary Reclassifying Remaining Series D Preferred Stock

On August 5, 2021, we filed Articles Supplementary (the “Reclassification Articles Supplementary”) with the SDAT, pursuant to which our Board of Directors reclassified and designated the remaining 2,490,445 shares of authorized but unissued Series D Preferred Stock as additional shares of common stock.

After giving effect to the filing of the Reclassification Articles Supplementary in August 2021, our authorized capital stock consisted of 62,290,000 shares of common stock, 6,760,000 shares of Series E Preferred Stock, 26,000,000 shares of Series F Preferred Stock, 4,000,000 shares of Series G Preferred Stock, and 950,000 shares of senior common stock.

The Reclassification Articles Supplementary did not increase our authorized shares of capital stock.

Series E Preferred ATM Program

During the year ended December 31, 2023, we had an At-the-Market Equity Offering Sales Agreement (the “Series E Preferred Stock Sales Agreement”) with sales agents Baird, Goldman Sachs, Stifel, Fifth Third, and U.S.

We previously had an At-the-Market Equity Offering Sales Agreement (the “Series E Preferred Stock Sales Agreement”) with sales agents Baird, Goldman Sachs, Stifel, Fifth Third, and U.S.

Bancorp Investments, Inc., pursuant to which we could, from time to time, offer to sell shares of our Series E Preferred Stock, in an aggregate offering price of up to $100.0 million (the “Series E Preferred ATM Program”).

We did not sell any shares of our Series E Preferred

Stock pursuant to the Series E Preferred Stock Sales Agreement during the year ended December 31, 2023.

We terminated the Series E Preferred Stock Sales Agreement effective February 10, 2023 in connection with the expiration of the 2020 Registration Statement on February 11, 2023.

We did not sell any shares of our Series E Preferred Stock pursuant to the Series E Preferred Stock Sales Agreement during the year ended December 31, 2024, as we terminated the Series E Preferred Stock Sales Agreement effective February 10, 2023 in connection with the expiration of the 2020 Registration Statement on February 11, 2023.

Universal Shelf Registration Statement

On January 11, 2019, we filed a registration statement on Form S-3 (File No.

333-229209), and an amendment thereto on Form-S-3/A on January 24, 2019 (collectively referred to as the “2019 Registration Statement”).

The 2019 Registration Statement became effective on February 13, 2019 and replaced our prior shelf registration statement.

The 2019 Registration Statement allowed us to issue up to $500.0 million of securities and expired on February 13, 2022.

On January 29, 2020, we filed the 2020 Registration Statement.

3 unchanged sentences

The 2020 Registration Statement expired on February 11, 2023.

On November 23, 2022, we filed an automatic registration statement on Form S-3 (File No.

333-268549) (the “2022 Registration Statement”).

There is no limit on the aggregate amount of the securities that we may offer pursuant to the 2022 Registration Statement.

On November 23, 2022, we filed the 2022 Registration Statement.

There was no limit on the aggregate amount of the securities that we could offer pursuant to the 2022 Registration Statement.

On March 13, 2024, we filed the 2024 Registration Statement, which was declared effective on March 21, 2024.

The 2024 Registration Statement allows us to issue up to $1.3 billion of securities and replaced the 2022 Registration Statement.

Preferred Series F Continuous Offering

1 unchanged sentence

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 246,775 shares of our Series F Preferred Stock, raising $5.6 million in net proceeds, during the year ended December 31, 2023.

We sold 47,328 shares of our Series F Preferred Stock, raising $1.1 million in net proceeds, pursuant to the 2024 Registration Statement, during the year ended December 31, 2024.

Amendments to Operating Partnership Agreement

In connection with the authorization of the Series F Preferred Stock in February of 2020, the Operating Partnership controlled by the Company through its ownership of GCLP Business Trust II, the general partner of the Operating Partnership, adopted the Second Amendment to its Second Amended and Restated Agreement of Limited Partnership (collectively, the “Amendment”), as amended from time to time, establishing the rights, privileges and preferences of 6.00% Series F Cumulative Redeemable Preferred Units, a newly-designated class of limited partnership interests (the “Series F Preferred Units”).

as amended from time to time, establishing the rights, privileges and preferences of 6.00% Series F Cumulative Redeemable Preferred Units, a newly-designated class of limited partnership interests (the “Series F Preferred Units”).

The Amendment provides for the Operating Partnership’s establishment and issuance of an equal number of Series F Preferred Units as are issued shares of Series F Preferred Stock by the Company in connection with the offering upon the Company’s contribution to the Operating Partnership of the net proceeds of the offering.

7 unchanged sentences

The Seventh Amended Advisory Agreement contractually eliminated the payment of the incentive fee for the quarters ended March 31, 2023 and June 30, 2023.

The calculation of the other fees was unchanged.

The calculation of the other fees remained unchanged.

On July 11, 2023, the Company entered into the Eighth Amended Advisory Agreement, as approved unanimously by our Board of Directors, including specifically, our independent directors.

1 unchanged sentence

In addition, the Eighth Amended Advisory Agreement also clarified that for any future quarter whereby an incentive fee would exceed by greater than 15% of the average quarterly incentive fee paid, the measurement would be versus the last four quarters where an incentive fee was actually paid.

The calculation of the other fees remains unchanged.

The calculation of the other fees remained unchanged.

For the year ended December 31, 2023, the contractually eliminated incentive fee would have been $4.6 million.

1 unchanged sentence

As of December 31, 2024 and 2023, we owned approximately 99.9% and 99.2%, respectively, 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 year ended December 31, 2023, we redeemed 80,825 OP units for an equivalent amount of common stock.

During the years ended December 31, 2024 and 2023, we redeemed 271,169 and 80,825 OP units, respectively, 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 the Company’s common stock, with the distributions on the OP Units held by the Company being utilized to make distributions to the Company’s common stockholders.

1 unchanged sentence

Our Adviser and Administrator

Gladstone Management Corporation, a Delaware corporation (our “Adviser”) is led by a management team with extensive experience purchasing real estate.

Our Adviser and Gladstone Administration, LLC, a Delaware limited liability company (our “Administrator”) are controlled by Mr.

The Adviser is led by a management team with extensive experience purchasing real estate.

Our Adviser and Administrator are controlled by Mr.

Gladstone, who is also our chairman and chief executive officer.

Gladstone also serves as the chairman and chief executive officer of both our Adviser and Administrator.

Brubaker, our chief operating officer, is also the vice chairman and chief operating officer of our Adviser and Administrator.

Cooper, our president, is also an executive managing director of our Adviser.

Our Administrator employs our chief financial officer, treasurer, chief compliance officer, and general counsel and secretary (who also serves as our Administrator’s president, general counsel, and secretary) and their respective staffs.

Our Adviser and Administrator also provide investment advisory and administrative services, respectively, to certain of our affiliates, including, but not limited to, Gladstone Capital Corporation (“Gladstone Capital”) and Gladstone Investment Corporation (“Gladstone Investment”), both publicly-traded business development companies, as well as Gladstone Land Corporation (“Gladstone Land”), a publicly-traded REIT that primarily invests in farmland.

Cooper, our president, also serves as executive vice president of commercial and industrial real estate of our Adviser.

Our Adviser and Administrator also provide investment advisory and administrative services, respectively, to certain of our affiliates, including, but not limited to, Gladstone Capital and Gladstone Investment, both publicly-traded business development companies, Gladstone Land, a publicly-traded REIT that primarily invests in farmland, and Gladstone Alternative, a non-diversified, closed-end management investment company that operates as an “interval fund” that is also our affiliate.

With the exception of Mr.

Gerson, our chief financial officer, Jay Beckhorn, our treasurer, and Mr.

Cooper, our president, all of our executive officers and all of our directors serve as either directors or executive officers, or both, of Gladstone Capital and Gladstone Investment.

Cooper, our president, all of our executive officers and all of our directors serve as either directors or executive officers, or both, of Gladstone Capital, Gladstone Investment, and Gladstone Alternative.

In addition, with the exception of Messrs.

6 unchanged sentences

Advisory Agreement

Under the terms of the Amended Advisory Agreement, we continue to be responsible for all expenses incurred for our direct benefit.

Under the terms of the Eighth Amended Advisory Agreement, we continue to be responsible for all expenses incurred for our direct benefit.

Examples of these expenses include legal, accounting, interest, directors’ and officers’ insurance, stock transfer services, stockholder-related fees, consulting and related fees.

1 unchanged sentence

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

Our Board of Directors reviews and considers renewing the agreement with our Adviser each July.

Our Board of Directors reviews and considers renewing the agreement with our Adviser annually, typically during the month of July.

During its July 2024 meeting, our Board of Directors reviewed and renewed the Advisory Agreement and Administration Agreement for an additional year, through August 31, 2025.

6 unchanged sentences

The Seventh Amended Advisory Agreement contractually eliminated the payment of the incentive fee, as applicable, for the quarters ended March 31, 2023 and June 30, 2023.

The calculation of the other fees remains unchanged.

The calculation of the other fees remained unchanged.

On July 11, 2023, we entered into the Eighth Amended Advisory Agreement, as approved unanimously by our Board of Directors, including specifically, our independent directors.

1 unchanged sentence

The calculation of the other fees remains unchanged.

The calculation of the other fees remained unchanged.

Incentive Fee

Pursuant to the Advisory Agreement, the calculation of the incentive fee rewards the Adviser in circumstances where our quarterly Core FFO (defined at the end of this paragraph), before giving effect to any incentive fee, or pre-incentive fee Core FFO, exceeds 2.0% quarterly, or 8.0% annualized, of adjusted total equity (after giving effect to the base management fee but before giving effect to the incentive fee).

before giving effect to the incentive fee).

We refer to this as the new hurdle rate.

7 unchanged sentences

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 years ended December 31, 2023, 2022, and 2021.

No capital gains fee was recognized during the years ended December 31, 2024, 2023, and 2022.

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.

Critical Accounting Policies

Critical Accounting Estimates

The preparation of our financial statements in accordance with GAAP, requires management to make judgments that are subjective in nature to make certain estimates and assumptions.

3 unchanged sentences

Allocation of Purchase Price

When we acquire real estate with an existing lease, we allocate the purchase price to (i) the acquired tangible assets and liabilities, consisting of land, building, tenant improvements and long-term debt and (ii) the identified intangible assets and liabilities, consisting of the value of above-market and below-market leases, in-place leases, unamortized lease origination costs, tenant relationships and capital lease obligations.

costs, tenant relationships and capital lease obligations.

We allocate the fair values in accordance with Accounting Standard Codification 360, Property Plant and Equipment.

20 unchanged sentences

If any of the factors above indicate the possibility of impairment, we prepare a projection of the undiscounted future cash flows, without interest charges, of the specific property and determine if the carrying amount of such property is recoverable.

In preparing the projection of undiscounted future cash flows, we estimate cap rates and market rental rates using information that we obtain from market comparability studies and other comparable sources, and apply the undiscounted cash flows against our expected holding period.

In preparing the projection of undiscounted future cash flows, we estimate cap rates, market rental rates, and tenant improvement allowances using information that we obtain from market comparability studies and other comparable sources, and apply the undiscounted cash flows against our expected holding period.

If impairment were indicated, the carrying value of the property would be written down to its estimated fair value based on our best estimate of the property’s discounted future cash flows using market derived cap rates, discount rates and market rental rates applied against our expected hold period.

20 unchanged sentences

Impairment charge 6,822 19,296 (12,474) (64.6) %

Total operating expense before incentive fee waiver $ 105,071 $ 116,103 $ (11,032) (9.5) %

Incentive fee waiver (2,263) — (2,263) 100.0 %

Total operating expenses $ 102,808 $ 116,103 $ (13,295) (11.5) %

Other (expense) income

Other income (expense)

Interest expense $ (37,395) $ (37,330) $ (65) 0.2 %

8 unchanged sentences

Gain on repurchase of Series G preferred stock — 3 (3) (100.0) %

Net loss attributable to common stockholders and Non-controlling OP Unitholders $ (7,801) $ (1,552) $ (6,249) 402.6 %

Net loss attributable to common stockholders and Non-controlling OP Unitholders per weighted average share and unit - basic & diluted $ (0.19) $ (0.04) $ (0.15) 375.0 %

Net income (loss) available (attributable) to common stockholders and Non-controlling OP Unitholders $ 11,166 $ (7,801) $ 18,967 (243.1) %

Net income (loss) available (attributable) to common stockholders and Non-controlling OP Unitholders per weighted average share and unit - basic & diluted $ 0.27 $ (0.19) $ 0.46 (242.1) %

FFO available to common stockholders and Non-controlling OP Unitholders - basic (1) $ 59,245 $ 58,784 $ 461 0.8 %

6 unchanged sentences

For the purposes of the following discussion, same store properties are properties we owned as of January 1, 2023, which have not been subsequently vacated or disposed.

Acquired and disposed properties are properties which were either acquired, disposed of or classified as held for sale at any point subsequent to December 31, 2021.

Acquired and disposed properties are properties which were either acquired,

disposed of or classified as held for sale at any point subsequent to December 31, 2022.

Properties with vacancy are properties that were fully vacant or had greater than 5% vacancy, based on square footage, at any point subsequent to January 1, 2023.

8 unchanged sentences

Lease revenues consist of rental income and operating expense recoveries earned from our tenants.

Lease revenues from same store properties increased for the year ended December 31, 2023, due to an increase in recovery revenue from property operating expenses, accelerated rent from a tenant lease termination, and income recognized from tenant funded projects which were determined to be lessor assets.

Lease revenues decreased for acquired and disposed of properties for the year ended December 31, 2023, as compared to the year ended December 31, 2022, primarily due to accelerated rent from three lease terminations, all related to properties we sold or are currently held for sale.

This was coupled with a decrease in lease revenues from the 12 properties sold during and subsequent to December 31, 2022 and one held for sale property that went vacant in early 2023.

This was partially offset with our acquisition of five properties during the year ended December 31, 2023, and the inclusion of a full year of lease revenues recorded in 2023 for 13 properties acquired during the year ended December 31, 2022.

Lease revenues increased for properties with vacancy for the year ended December 31, 2023 due to an increase in rental revenue from partially leasing vacant space and an increase in variable lease payments due to an increase in property operating expenses.

Lease revenues from same store properties increased for the year ended December 31, 2024, due to an increase in recovery revenue from property operating expenses and a settlement received at one of our properties related to deferred maintenance during the current period, partially offset by accelerated rent attributable to a lease termination in the prior period.

Lease revenues decreased for acquired and disposed of properties for the year ended December 31, 2024, as compared to the year ended December 31, 2023, primarily due to the loss of recovery revenue from the 14 properties sold during and subsequent to December 31, 2023.

This was partially offset with our acquisition of seven properties during the year ended December 31, 2024, and the inclusion of a full year of lease revenues recorded in 2024 for five properties acquired during the year ended December 31, 2023.

Lease revenues increased for properties with vacancy for the year ended December 31, 2024 due to an increase in variable lease payments due to an increase in property operating expenses.

Operating Expenses

Depreciation and amortization decreased for the year ended December 31, 2023, as compared to the year ended December 31, 2022, due to reduced depreciation and amortization expense for the seven properties sold during the year ended December 31, 2023, coupled with the correction of certain errors in the calculation of the depreciation of certain tenant funded improvement assets, as outlined in Note 9.

This was partially offset by a full year of depreciation and amortization for the 13 properties acquired during the year ended December 31, 2022, as well as increased depreciation and amortization expense from the five properties acquired during the year ended December 31, 2023.

Depreciation and amortization decreased for the year ended December 31, 2024, as compared to the year ended December 31, 2023, due to reduced depreciation and amortization expense for the seven properties sold during the year ended December 31, 2024.

This was partially offset by a full year of depreciation and amortization for the five properties acquired during the year ended December 31, 2023, as well as increased depreciation and amortization expense from the seven properties acquired during the year ended December 31, 2024.

For the year ended December 31,

6 unchanged sentences

Property operating expenses consist of franchise taxes, management fees, insurance, ground lease payments, property maintenance and repair expenses paid on behalf of tenants at certain of our properties.

Property operating expenses increased for same store properties for the year ended December 31, 2023, as compared to the year ended December 31, 2022, as a result of tenants requiring more employees to return on site, as well as general cost increases due to the inflationary environment.

The decrease in property operating expenses on acquired and disposed of properties for the year ended December 31, 2023, as compared to the year ended December 31, 2022, is a result of a decrease in property operating expenses in relation to properties held for sale or sold during the year that are or were fully vacant.

Property operating expenses increased for same store properties for the year ended December 31, 2024, as compared to the year ended December 31, 2023, as a result of general cost increases due to the inflationary environment.

The decrease in property operating expenses on acquired and disposed of properties for the year ended December 31, 2024, as compared to the year ended December 31, 2023, is a result of a decrease in property operating expenses in relation to properties held for sale or sold during the year that were fully vacant.

The increase in property operating expenses for properties with vacancy for the year ended December 31, 2024, as compared to the year ended December 31, 2023, is a result of general cost increases due to the inflationary environment.

The base management fee paid to the Adviser increased minimally for the year ended December 31, 2023, as compared to the year ended December 31, 2022, due to an increase in gross tangible real estate, the main component of the base management fee calculation under the Sixth Amended Advisory Agreement.

The base management fee paid to the Adviser decreased for the year ended December 31, 2024, as compared to the year ended December 31, 2023, due to a decrease in gross tangible real estate, the main component of the base management fee calculation under the Sixth Amended Advisory Agreement, due to property sales.

The calculation of the base management fee is described in detail above within “Advisory and Administration Agreements.”

The incentive fee paid to the Adviser decreased for the year ended December 31, 2023, as compared to the year ended December 31, 2022, due to the payment of the incentive fee being contractually eliminated for the quarters ended March 31, 2023 and June 30, 2023, as outlined in the Seventh Amended Advisory Agreement, and for the quarters ended September 30, 2023 and December 31, 2023, as outlined in the Eighth Amended Advisory Agreement.

The incentive fee paid to the Adviser increased for the year ended December 31, 2024, as compared to the year ended December 31, 2023, due to the payment of the incentive fee being contractually eliminated for the quarters ended March 31, 2023 and June 30, 2023, as outlined in the Seventh Amended Advisory Agreement, and for the quarters ended September 30,

2023 and December 31, 2023, as outlined in the Eighth Amended Advisory Agreement.

We recorded an incentive fee, which was partially waived, during the year ended December 31, 2024.

The calculation of the incentive fee is described in detail above within “Advisory and Administration Agreements.”

2 unchanged sentences

The calculation of the administration fee is described in detail above within “ Advisory and Administration Agreements.”

General and administrative expenses increased for the year ended December 31, 2023, as compared to the year ended December 31, 2022, primarily as a result of an increase in professional fees.

We recorded an impairment charge during the year ended December 31, 2023 on five properties, as we had determined the carrying value of these properties was in excess of the fair market value and not recoverable.

General and administrative expenses decreased for the year ended December 31, 2024, as compared to the year ended December 31, 2023, primarily as a result of a decrease in legal fee expenses.

We recorded an impairment charge during the year ended December 31, 2024 on three properties, as we had determined the carrying value of these properties was in excess of the fair market value and not recoverable.

Accordingly, we impaired these properties to fair market value.

We recorded an impairment charge on two properties during the year ended December 31, 2022.

We recorded an impairment charge on five properties during the year ended December 31, 2023.

Other Income and Expenses

Interest expense increased for the year ended December 31, 2023, as compared to the year ended December 31, 2022.

This increase is primarily the result of increased interest costs on variable rate debt, as global interest rates have increased, coupled with the maturity of several interest rate caps that were replaced by swaps.

The gain on sale of real estate, net, during the year ended December 31, 2023 is a result of the sale of seven properties.

The gain on sale of real estate, net, during the year ended December 31, 2022 was a result of the sale of five properties.

We also recognized a gain on debt extinguishment during the year ended December 31, 2023 in conjunction with one of our sales;

no debt extinguishment occurred during the year ended December 31, 2022.

Other income decreased minimally during the year ended December 31, 2023, as compared to the year ended December 31, 2022, due to nonrecurring income items that occurred during the year ended December 31, 2022.

Net Income Available to Common Stockholders and Non-controlling OP Unitholders

Net income available to common stockholders and Non-controlling OP Unitholders decreased for the year ended December 31, 2023, as compared to the year ended December 31, 2022, primarily due to an increase in interest expense due to higher borrowing costs on variable rate debt due to global interest rate expansion, coupled with impairment charges.

This was partially offset by the contractual elimination of the incentive fee for the year ended December 31, 2023 and reduced depreciation and amortization expense due to the correction of certain errors in the calculation of the depreciation of certain tenant funded improvement assets, as outlined in Note 9.

Interest expense increased slightly for the year ended December 31, 2024, as compared to the year ended December 31, 2023.

This increase is primarily the result of increased interest costs on variable rate debt, as global interest rates increased through most of the period in reaction to growing inflation, partially offset by reduced interest expense on mortgage debt that was repaid during and subsequent to December 31, 2023.

The gain on sale of real estate, net, during the year ended December 31, 2024 is a result of the sale of seven properties and a selling profit from sales-type leases related to one lease.

The gain on sale of real estate, net, during the year ended December 31, 2023 was a result of the sale of seven properties.

The gain on debt extinguishment, net, during the year ended December 31, 2024 was recognized in conjunction with two of our sales.

The gain on debt extinguishment, net, during the year ended December 31, 2023 was recognized in conjunction with one of our sales.

Other income increased minimally during the year ended December 31, 2024, as compared to the year ended December 31, 2023, due to nonrecurring income items that occurred during the year ended December 31, 2024.

Net Income (Loss) Available (Attributable) to Common Stockholders and Non-controlling OP Unitholders

Net income available to common stockholders and Non-controlling OP Unitholders increased for the year ended December 31, 2024, as compared to net loss attributable to common stockholders and Non-controlling OP Unitholders the year ended December 31, 2023, primarily due to lower impairment charges coupled with a higher gain on sale of real estate, net.

This was partially offset by the incentive fee payable to the Adviser in the current period, which was contractually eliminated in the prior period, and a lower gain on debt extinguishment, net, in the current period.

A discussion of the results of operations for the year ended December 31, 2022 is found in Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 21, 2024, which is available free of charge on the SEC's website at www.sec.gov and on the investors section of our website at www.GladstoneCommercial.com.

2 unchanged sentences

Our available liquidity as of December 31, 2024, was $101.7 million, including $11.0 million in cash and cash equivalents and an available borrowing capacity of $90.7 million under our Revolver.

Our available borrowing capacity under the Revolver has increased to $51.5 million as of February 21, 2024.

Our available borrowing capacity under the Revolver has decreased to $90.6 million as of February 18, 2025.

Future Capital Needs

We actively seek conservative investments that are likely to produce income to allow us to pay distributions to our stockholders and Non-controlling OP Unitholders.

We intend to use the proceeds received from future equity raised and debt capital borrowed to continue to invest in industrial and office real property, or pay down outstanding borrowings under our Revolver.

We actively seek conservative investments that we expect are likely to produce income to allow us to pay distributions to our stockholders and Non-controlling OP Unitholders.

We intend to use the proceeds received from future equity raised and debt capital borrowed to continue to invest in industrial properties, which is our strategic focus, or to a lessor extent, office real

property, or pay down outstanding borrowings under our Revolver.

Accordingly, to ensure that we are able to effectively execute our business strategy, we routinely review our liquidity requirements and continually evaluate all potential sources of liquidity.

Our short-term liquidity needs include proceeds necessary to fund our distributions to stockholders, pay the debt service costs on our existing long-term mortgages, refinancing maturing debt and fund our current operating costs.

Our short-term liquidity needs include proceeds necessary to fund our distributions to stockholders, pay the debt service costs on our existing long-term mortgages, bank debt, and long-term private debt, refinancing maturing debt and fund our current operating costs.

Our long-term liquidity needs include proceeds necessary to grow and maintain our portfolio of investments.

We believe that our available liquidity is sufficient to fund our distributions to stockholders, pay the debt service costs on our existing long-term mortgages and fund our current operating costs in the near term.

We also believe we will be able to refinance our mortgage debt as it matures.

We also believe we will be able to refinance our mortgage debt, bank debt, and long-term private debt as they mature.

Additionally, to satisfy our short-term obligations, we may request credits to our management fees that are issued from our Adviser, although our Adviser is under no obligation to provide any such credits, either in whole or in part.

We further believe that our cash flow from operations, coupled with the financing capital available to us in the future, are sufficient to fund our long-term liquidity needs.

We further believe that our cash flow from operations, coupled with the financing capital available to us in the future, is sufficient to fund our long-term liquidity needs.

Equity Capital

4 unchanged sentences

$ 54,591 3,746,925

As of February 21, 2024, there is no limit on the aggregate amount of the securities that we may offer pursuant to the 2022 Registration Statement.

As of February 18, 2025, we had the ability to raise up to $1.0 billion of additional equity capital through the sale and issuance of securities that are registered under the 2024 Registration Statement, in one or more future public offerings.

We expect to continue to use our 2024 Common Stock Sales Agreement as a source of liquidity in 2025.

As of December 31, 2024, we had 40 mortgage notes payable in the aggregate principal amount of $271.5 million, collateralized by a total of 45 properties with a remaining weighted average maturity of 3.6 years.

4 unchanged sentences

The 2025 principal amounts payable include both amortizing principal payments and two balloon principal payments.

We anticipate being able to refinance our mortgages that come due during 2024 and 2025 with a combination of new mortgage debt, availability under our Credit Facility and the issuance of additional equity securities.

We have successfully repaid $58.9 million of debt over the past 12 months with either new mortgage debt or by generating additional availability by adding properties to our unsecured pool under our Credit Facility.

We anticipate being able to refinance our mortgages that come due during 2025 and 2026 with a combination of new mortgage debt, availability under our Credit Facility, the issuance of long-term unsecured notes in the private placement market, the issuance of additional equity securities under our 2024 Common Stock Sales Agreement, the sale and issuance of other equity securities (including our Series F Preferred Stock) that are registered under the 2024 Registration Statement, or the sale and issuance of unregistered equity or debt securities.

We have successfully repaid $32.5 million of mortgage debt over the past 12 months with either new mortgage debt or by generating additional availability by adding properties to our unsecured pool under our Credit Facility.

As of December 31, 2024, we also had $75.0 million of the 2029 Notes outstanding.

Operating Activities

Net cash provided by operating activities during the year ended December 31, 2024, was $57.0 million, as compared to net cash provided by operating activities of $60.4 million for the year ended December 31, 2023.

This change was primarily a result of an increase in interest expense due to higher interest rates on variable rate debt.

This change was primarily a result of incurring an Incentive Fee in 2024, which was contractually eliminated in the prior year.

The majority of cash from operating activities is generated from the rental payments and operating expense recoveries that we receive from our tenants.

We utilize this cash to fund our property-level operating expenses and use the excess cash primarily for debt and interest payments on our mortgage notes payable, interest payments on our Credit Facility, distributions to our stockholders, management fees to our Adviser, administration fees to our Administrator and other entity-level operating expenses.

this cash to fund our property-level operating expenses and use the excess cash primarily for debt and interest payments on our mortgage notes payable, interest payments on our Credit Facility, distributions to our stockholders, management fees to our Adviser, administration fees to our Administrator and other entity-level operating expenses.

Investing Activities

Net cash used in investing activities during the year ended December 31, 2024, was $1.7 million, which primarily consisted of the acquisition of seven properties, coupled with the capital improvements performed at certain of our properties, partially offset by proceeds from the sale of real estate.

Net cash provided by investing activities during the year ended December 31, 2023, was $1.1 million, which primarily consisted of proceeds from the sale of real estate, partially offset by the acquisition of five properties, coupled with the capital improvements performed at certain of our properties.

Net cash used in investing activities during the year ended December 31, 2022, was $82.5 million, which primarily consisted of the acquisition of 13 properties, coupled with the capital improvements performed at certain of our properties, partially offset by proceeds from sale of real estate.

Financing Activities

Net cash used in financing activities during the year ended December 31, 2023, was $61.4 million, which primarily consisted of proceeds from our common and preferred equity offerings, mortgage borrowings on new acquisitions and a net increase in Credit Facility borrowings, partially offset by the repayment of outstanding mortgage debt and distributions paid to our stockholders and Non-controlling OP Unitholders.

Net cash provided by financing activities for the year ended December 31, 2022, was $16.2 million, which primarily consisted of proceeds from our common and preferred stock offerings, mortgage

borrowings on new acquisitions and a net increase in borrowings on our Credit Facility, partially offset by the repayment of outstanding mortgage debt and distributions paid to our stockholders and Non-controlling OP Unitholders.

Net cash used in financing activities during the year ended December 31, 2024, was $56.3 million, which primarily consisted of proceeds from our common and preferred equity offerings, mortgage borrowings, and borrowings under unsecured notes, partially offset by the repayment of outstanding mortgage debt, net decrease in Credit Facility borrowings and distributions paid to our stockholders and Non-controlling OP Unitholders.

Net cash used in financing activities for the year ended December 31, 2023, was $61.4 million, which primarily consisted of proceeds from our common and preferred equity offerings, mortgage borrowings on new acquisitions and a net increase in Credit Facility borrowings, partially offset by the repayment of outstanding mortgage debt and distributions paid to our stockholders and Non-controlling OP Unitholders.

Credit Facility

10 unchanged sentences

We entered into multiple interest rate cap agreements on Term Loan B, which cap LIBOR from 1.50% to 1.75%.

During 2022, we began transitioning our variable rate debt to SOFR, and, at December 31, 2023, all of our variable rate debt was based upon SOFR.

We transitioned our variable rate debt to SOFR, and, at December 31, 2024, all of our variable rate debt was based upon SOFR.

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.

6 unchanged sentences

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 December 31, 2023, there was $445.8 million outstanding under our Credit Facility at a weighted average interest rate of approximately 6.84% and $2.0 million outstanding under letters of credit at a weighted average interest rate of 1.50%.

As of December 31, 2024, there was $351.9 million outstanding under our Credit Facility at a weighted average interest rate of approximately 5.79% and no outstanding letters of credit.

As of February 18, 2025, the maximum additional amount we could draw under the Credit Facility was $90.6 million.

1 unchanged sentence

Contractual Obligations

The following table reflects our material contractual obligations as of December 31, 2023 (in thousands):

The following table reflects our material contractual obligations as of December 31, 2024 (dollars in thousands):

Payments Due by Period

5 unchanged sentences

$ 829,746 $ 63,285 $ 395,600 $ 317,137 $ 53,724

(1) Debt obligations represent borrowings under our Revolver, which represents $75.8 million of the debt obligation due in 2026, Term Loan A, which represents $160.0 million of the debt obligation due in 2027, Term Loan B, which represents $60.0 million of the debt obligation due in 2026, Term Loan C, which represents $150.0 million of the debt obligation due in 2028 and mortgage notes payable that were outstanding as of December 31, 2023.

This figure does not include $(0.04) million of premiums and (discounts), net, and $5.0 million of deferred financing costs, net, which are reflected in mortgage

notes payable, net, borrowings under Revolver, and borrowings under Term Loan A, Term Loan B and Term Loan C, net, on the consolidated balance sheet.

(2) Interest on debt obligations includes estimated interest on our borrowings under our Revolver, Term Loan A, Term Loan B, Term Loan C and mortgage notes payable.

(1) Debt obligations represent borrowings under our Revolver, which represents $1.9 million of the debt obligation due in 2026, Term Loan A, which represents $160.0 million of the debt obligation due in 2027, Term Loan B, which represents $40.0 million of the debt obligation due in 2026, Term Loan C, which represents $150.0 million of the debt obligation due in 2028, the 2029 Notes, which represents $75.0 million of the debt obligation due in 2029, and mortgage notes payable that were outstanding as of December 31, 2024.

This figure does not include $(0.01) million of premiums and (discounts), net, and $5.0 million of deferred financing costs, net, which are reflected in mortgage notes payable, net, borrowings under Revolver, and borrowings under Term Loan A, Term Loan B, Term Loan C, net, and the 2029 Notes, net, on the consolidated balance sheet.

(2) Interest on debt obligations includes estimated interest on our borrowings under our Revolver, Term Loan A, Term Loan B, Term Loan C, senior unsecured notes, and mortgage notes payable.

The balance and interest rate on our Revolver and Term Loan A, Term Loan B, Term Loan C is variable;

thus, the interest payment obligation calculated for purposes of this table was based upon rates and balances as of December 31, 2024.

(3) Operating lease obligations represent the ground lease payments due on four of our properties.

(4) Purchase obligations consist of tenant and capital improvements at eight of our properties.

(3) Operating lease obligations represent the ground lease payments due on three of our properties.

(4) Purchase obligations consist of tenant and capital improvements at ten of our properties.

Off-Balance Sheet Arrangements

18 unchanged sentences

Distributions attributable to preferred and senior common stock (12,860) (12,715)

Loss on extinguishment of Series F preferred stock (11) (10)

Loss on extinguishment of Series F preferred stock, net (14) (11)

Gain on repurchase of Series G preferred stock — 3

Net loss attributable to common stockholders and Non-controlling OP Unitholders $ (7,801) $ (1,552)

Net income (loss) available (attributable) to common stockholders and Non-controlling OP Unitholders $ 11,166 $ (7,801)

Real estate depreciation and amortization 55,786 57,856

10 unchanged sentences

Distributions attributable to preferred and senior common stock (12,860) (12,715)

Loss on extinguishment of Series F preferred stock (11) (10)

Loss on extinguishment of Series F preferred stock, net (14) (11)

Gain on repurchase of Series G preferred stock — 3

Net loss attributable to common stockholders and Non-controlling OP Unitholders $ (7,801) $ (1,552)

Net income (loss) available (attributable) to common stockholders and Non-controlling OP Unitholders $ 11,166 $ (7,801)

Real estate depreciation and amortization 55,786 57,856

11 unchanged sentences

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

What changed 10-K

Item 7. Management’s Discussion and Analysis