What changed in this filing

/stocks — the workspaceLOADING

Item 8. Financial Statements and Supplementary Data

2025-02-18 compared with 2024-02-21 · 242 added, 317 removed, 1110 unchanged (33% of the section changed)

54 unchanged sentences

If circumstances indicate the possibility of impairment, management prepares a projection of the undiscounted future cash flows, without interest charges, of the specific property and determines if the carrying amount of such property is recoverable.

In preparing the projection of undiscounted future cash flows, management estimates cap rates and market rental rates using information obtained from market comparability studies and other comparable sources, and applies the undiscounted cash flows against their expected holding period.

In preparing the projection of undiscounted future cash flows, management estimates cap rates, market rental rates, and tenant improvement allowances using information obtained from market comparability studies and other comparable sources, and applies the undiscounted cash flows against their expected holding period.

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

5 unchanged sentences

(iii) testing the completeness and accuracy of underlying data used in the undiscounted cash flow model;

and (iv) evaluating the reasonableness of the significant assumptions used by management related to cap rates, market rental rates and expected holding periods.

and (iv) evaluating the reasonableness of the significant assumptions used by management related to cap rates, market rental rates, tenant improvement allowances, and expected holding periods.

Evaluating management’s assumptions related to the cap rates, market rental rates and expected holding period involved evaluating whether the assumptions used by management were reasonable considering (i) the consistency with external market and industry data and (ii) whether the assumptions were consistent with evidence obtained in other areas of the audit.

/s/ PricewaterhouseCoopers LLP

Washington, District of Columbia

Washington, DC

February 18, 2025

14 unchanged sentences

Deferred rent receivable, net 45,324 41,006

Sales-type lease receivable, net 18,618 —

Other assets 14,387 12,389

4 unchanged sentences

Borrowings under Term Loan A, Term Loan B and Term Loan C, net 347,948 367,258

Senior unsecured notes, net 73,958 —

Deferred rent liability, net 21,996 29,324

8 unchanged sentences

MEZZANINE EQUITY

Series D, E and G redeemable preferred stock, net, par value $ 0.001 per share;

Series E and G redeemable preferred stock, net, par value $ 0.001 per share;

$ 25 per share liquidation preference;

48 unchanged sentences

Net income $ 24,040 $ 4,922 $ 10,782

Net loss attributable to OP Units held by Non-controlling OP Unitholders 63 23 40

Net (income) loss (available) attributable to OP Units held by Non-controlling OP Unitholders ( 42 ) 63 23

Net income available to the Company $ 23,998 $ 4,985 $ 10,805

Distributions attributable to Series D, E, F, and G preferred stock ( 12,285 ) ( 11,903 ) ( 11,488 )

Series D preferred stock offering costs write off — — ( 2,141 )

Distributions attributable to Series E, F, and G preferred stock ( 12,440 ) ( 12,285 ) ( 11,903 )

Distributions attributable to senior common stock ( 420 ) ( 430 ) ( 458 )

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

Loss on extinguishment of Series F preferred stock, net ( 14 ) ( 11 ) ( 10 )

Gain on repurchase of Series G preferred stock — 3 37

Net loss attributable to common stockholders $ ( 7,738 ) $ ( 1,529 ) $ ( 3,392 )

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

Loss attributable to common stockholders $ ( 0.19 ) $ ( 0.04 ) $ ( 0.09 )

Net income (loss) available (attributable) to common stockholders $ 11,124 $ ( 7,738 ) $ ( 1,529 )

Income (loss) per weighted average share of common stock - basic & diluted

Income (loss) available (attributable) to common stockholders $ 0.27 $ ( 0.19 ) $ ( 0.04 )

Weighted average shares of common stock outstanding

3 unchanged sentences

Weighted average shares of senior common stock outstanding - basic 398,828 409,903 436,667

Comprehensive income

Change in unrealized gain related to interest rate hedging instruments, net $ ( 4,853 ) $ 12,115 $ 2,854

Other Comprehensive (loss) gain ( 4,853 ) 12,115 2,854

Comprehensive income (loss)

Change in unrealized gain (loss) related to interest rate hedging instruments, net $ 2,702 $ ( 4,853 ) $ 12,115

Other comprehensive income (loss) 2,702 ( 4,853 ) 12,115

Net income $ 24,040 $ 4,922 $ 10,782

Comprehensive income $ 26,742 $ 69 $ 22,897

Comprehensive loss attributable to OP Units held by Non-controlling OP Unitholders 63 23 40

Comprehensive (income) loss (available) attributable to OP Units held by Non-controlling OP Unitholders ( 42 ) 63 23

Total comprehensive income available to the Company $ 26,700 $ 132 $ 22,920

11 unchanged sentences

Reclassification into interest expense — — — — — — — 871 — 871 — 871

Redemptions of OP Units — 246,039 — — — — 4,812 — — 4,812 ( 4,812 ) —

Redemption of Series D preferred stock, net — — — — — — — — ( 2,141 ) ( 2,141 ) — ( 2,141 )

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

Redemption of Series F preferred stock, net — — — — — — 174 — ( 10 ) 164 — 164

Repurchase of Series G preferred stock, net — — — — — — — — 37 37 — 37

Adjustment to OP Units held by Non-controlling OP Unitholders resulting from changes in ownership of the Operating Partnership — — — — — — 1,386 — — 1,386 ( 1,386 ) —

3 unchanged sentences

Conversion of senior common stock to common stock — 18,114 ( 24,639 ) — — — — — — — — —

Retirement of senior common stock, net — — — — — — 52 — — 52 — 52

Distributions declared to common, senior common, preferred stockholders and Non-controlling OP Unit holders — — — — — — — — ( 60,649 ) ( 60,649 ) ( 457 ) ( 61,106 )

1 unchanged sentence

Reclassification into interest expense — — — — — — — 971 — 971 — 971

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

Redemptions of OP Units — 80,825 — — — — 1,040 — — 1,040 ( 1,040 ) —

Redemption of Series F preferred stock, net — — — — — — 477 — ( 11 ) 466 — 466

Repurchase of Series G preferred stock, net — — — — — — — 3 3 — 3

Repurchase of common stock, net — ( 80,780 ) — — — — 998 — — 998 — 998

Adjustment to OP Units held by Non-controlling OP Unitholders resulting from changes in ownership of the Operating Partnership — — — — — — ( 756 ) — — ( 756 ) 756 —

3 unchanged sentences

Conversion of senior common stock to common stock — 14,676 ( 17,235 ) — — — — — — — — —

Retirement of senior common stock, net — — — — — — 52 — — 52 — 52

Distributions declared to common, senior common, preferred stockholders and Non-controlling OP Unit holders — — — — — — — — ( 63,120 ) ( 63,120 ) ( 184 ) ( 63,304 )

3 unchanged sentences

Redemption of Series F preferred stock, net ( 74,068 ) — — — — — 1,698 — ( 14 ) 1,684 — 1,684

Repurchase of Series G preferred stock, net — — — — — — — — 3 3 — 3

Repurchase of common stock, net — ( 80,780 ) — — — — 998 — — 998 — 998

Adjustment to OP Units held by Non-controlling OP Unitholders resulting from changes in ownership of the Operating Partnership — — — — — — ( 3,151 ) — — ( 3,151 ) 3,151 —

16 unchanged sentences

Amortization of deferred rent asset and liability, net ( 6,813 ) ( 7,457 ) ( 4,215 )

Increase in sales-type lease receivable ( 136 ) — —

Amortization of discount and premium on assumed debt, net 34 41 47

1 unchanged sentence

Amortization of right-of-use asset from operating leases and operating lease liabilities, net 7 27 29

Bad debt expense 64 — —

Operating changes in assets and liabilities

2 unchanged sentences

(Decrease) increase in accounts payable and accrued expenses ( 41 ) ( 11 ) 1,600

(Decrease) increase in amount due to Adviser and Administrator ( 800 ) ( 75 ) 471

(Decrease) increase in other liabilities ( 722 ) ( 942 ) 1,418

Tenant inducement payments — — ( 20 )

Decrease in amount due to Adviser and Administrator ( 16 ) ( 800 ) ( 75 )

Decrease in other liabilities ( 983 ) ( 722 ) ( 942 )

Leasing commissions paid ( 4,783 ) ( 2,312 ) ( 1,875 )

8 unchanged sentences

Payments to tenants from reserves ( 2,308 ) ( 1,518 ) ( 2,549 )

Net cash provided by (used in) investing activities $ 1,138 $ ( 82,513 ) $ ( 94,777 )

Net cash (used in) provided by investing activities $ ( 1,727 ) $ 1,138 $ ( 82,513 )

Cash flows from financing activities:

5 unchanged sentences

Repurchase of common stock — ( 998 )

Redemption of Series D perpetual preferred stock — — ( 87,739 )

Borrowings under mortgage notes payable 15,240 9,000 62,913

3 unchanged sentences

Repayments on term loan ( 20,000 ) — ( 5,000 )

Borrowings under senior unsecured notes 75,000 — —

Borrowings from revolving credit facility 83,400 123,600 111,750

3 unchanged sentences

Net cash (used in) provided by financing activities $ ( 56,287 ) $ ( 61,362 ) $ 16,150

Net increase (decrease) in cash, cash equivalents, and restricted cash $ 143 $ 2,814 $ ( 2,898 )

Net (decrease) increase in cash, cash equivalents, and restricted cash $ ( 1,061 ) $ 143 $ 2,814

Cash, cash equivalents, and restricted cash at beginning of period $ 16,135 $ 15,992 $ 13,178

1 unchanged sentence

SUPPLEMENTAL AND NON-CASH INFORMATION

Cash paid during year for interest $ 33,136 $ 27,844 $ 23,393

Cash paid for interest $ 35,666 $ 33,136 $ 27,844

Tenant funded fixed asset improvements included in deferred rent liability, net $ ( 479 ) $ ( 1,312 ) $ 17,898

Acquisition of real estate and related intangible assets $ — $ — $ 300

Derecognized carry value of property to sales-type lease receivable $ ( 14,553 ) $ — $ —

Capital improvements and leasing commissions included in accounts payable and accrued expenses $ 5,125 $ 5,475 $ 1,632

Unrealized (loss) gain related to interest rate hedging instruments, net $ ( 4,853 ) $ 12,115 $ 2,854

Unrealized gain related to interest rate hedging instruments, net $ 2,702 $ ( 4,853 ) $ 12,115

Increase in asset retirement obligation assumed in acquisition $ — $ 95 $ 979

Non-controlling OP Units issued in connection with acquisition $ — $ — $ 2,394

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

Dividends paid on Series F preferred stock via additional share issuances $ 516 $ 487 $ 389

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Gladstone Commercial Partners, LLC, a subsidiary of ours, transferred its 1 % general partnership interest in the Operating Partnership to GCLP Business Trust II in exchange for 100 trust shares.

Revision of Previously Issued Financial Statements

In connection with the preparation of its financial statements for the second quarter of 2023, the Company identified errors in the calculation of depreciation of tenant funded improvement assets at a number of its properties.

The Company had depreciated these assets through a term that was different than their useful lives, the correction of which resulted in changes to depreciation expense, a non-cash amount, and net income.

The correction of these errors had an immaterial impact on the Incentive Fee for each period presented and had no impact on any other Advisory fees.

The identified errors were included in the Company's previously issued 2021 quarterly and annual financial statements, 2022 quarterly and annual financial statements, and quarterly financial statements for the three months ended March 31, 2023.

The Company evaluated the errors and determined that the related impact was not material to the Consolidated Statements of Operations and Comprehensive Income, Consolidated Balance Sheets, Consolidated Statements of Cash Flows or Consolidated Statements of Equity for any period impacted.

The Company has revised the previously issued Consolidated Balance Sheets, Consolidated Statements of Operations and Comprehensive Income, Consolidated Statements of Equity, and Consolidated Statements of Cash Flows for the years ended December 31, 2022 and 2021 to correct for such errors and these revisions are reflected in this Form 10-K.

The Company will also correct previously reported financial information for these errors in its future filings, as applicable.

A summary of the

corrections to the impacted financial statement line items to the Company’s previously issued Consolidated Balance Sheets, Consolidated Statements of Operations and Comprehensive Income, Consolidated Statements of Equity, and Consolidated Statements of Cash Flows for each affected period is presented in Note 9, “Revision of Previously Issued Financial Statements.”

Use of Estimates

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The total amount of the remaining intangible assets acquired, which consists of in-place lease values, lease origination costs, and customer relationship intangible values, are allocated based on management’s evaluation of the specific characteristics of each tenant’s lease and our overall relationship with that respective tenant.

Characteristics to be considered by management in

determining these values include the nature and extent of our existing business relationships with the tenant, growth prospects for developing new business with the tenant, the tenant’s credit quality and our expectations of lease renewals (including those existing under the terms of the lease agreement), among other factors.

Characteristics to be considered by management in determining these values include the nature and extent of our existing business relationships with the tenant, growth prospects for developing new business with the tenant, the tenant’s credit quality and our expectations of lease renewals (including those existing under the terms of the lease agreement), among other factors.

The value of in-place leases and lease origination costs are amortized to amortization expense over the remaining term of the respective leases, which generally range from seven to 15 years.

2 unchanged sentences

Should a tenant terminate its lease, the unamortized portion of the above-market and below-market lease values would be charged to rental income and the unamortized portion of in-place lease values, lease origination costs and customer relationship intangibles will be charged to amortization expense through the revised termination date.

Sales-Type Lease Receivable

We assess lease classification at lease commencement to determine whether a lease should be accounted for as an operating, sales-type, or direct finance lease, as outlined in ASC 842 “Leases” (“ASC 842”).

For leases that meet the qualifications to be classified as a sales-type lease, we record a net investment in the lease, calculated as the sum of the present value of the future lease payments and unguaranteed residual value, discounted using the rate implicit in the lease.

A selling profit or loss, equal to the difference between the net investment in the lease and the carrying value, is recognized at lease commencement.

Allowance for Credit Losses

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326).” The new standard required more timely recognition of credit losses on loans and other financial instruments that are not accounted for at fair market value through net income.

The standard also required that financial assets measured at amortized cost be presented at the net amount anticipated to be collected, through an allowance for credit losses that is deducted from the amortized cost basis, based upon historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the financial assets.

We adopted ASU 2016-13 during the year ended December 31, 2024.

We measure and record expected credit losses for our sales-type lease receivable in our consolidated balance sheet in accordance with ASC 326 “Financial Instruments-Credit Losses” (“ASC 326” or “CECL”).

In developing the expected credit loss, we utilize a probability of default method.

We estimate the credit loss using the probability of tenant default, the loss given a tenant default, and the loss exposure.

Various factors are considered under this method, including tenant’s financial strength, historical losses, and current payment collectibility status.

The resulting allowance is recorded as a reduction to the sales-type lease receivable, net, on the consolidated balance sheets.

We evaluate the allowance quarterly basis, at minimum, or whenever we become aware of changes in the tenant or guarantor’s credit or collectibility status.

Impairment Charges

2 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.

41 unchanged sentences

We do not record any tenant recovery revenues or operating expenses associated with costs paid directly by our tenants for our net leased properties.

On January 1, 2020, we completed the integration of the accounting records of certain of our triple net leased third-party asset managed properties into our accounting system and paid property operating expenses out of our operating bank accounts.

For periods prior to January 1, 2020, we recorded property operating expenses and offsetting lease revenues for these certain triple net leased properties on a net basis.

Beginning January 1, 2020, we began to record the property operating expenses and offsetting lease revenues for these triple net leased properties on a gross basis, as we have amended our process whereby we are paying operating expenses on behalf of our tenants and receiving reimbursement;

whereas, previously these tenants were paying these expenses directly, with limited insight provided to us.

We have operated and intend to continue to operate in a manner that will allow us to qualify as a REIT under the Internal Revenue Code of 1986, as amended, and, accordingly, will not be subject to federal income taxes on amounts distributed to stockholders (except income from foreclosure property), provided that we distribute at least 90 % of our REIT taxable income to our stockholders and meet certain other conditions.

13 unchanged sentences

The liabilities are accreted to their estimated obligation over the life of the leases for the respective properties.

We accrued $ 0.1 million, $ 1.0 million, and $ 0.6 million of liabilities in connection with acquisitions for the years ended December 31, 2023, 2022, and 2021, respectively.

We did not accrue any liabilities in connection with acquisitions for the year ended December 31, 2024, and accrued $ 0.1 million and $ 1.0 million of liabilities in connection with acquisitions for the years ended December 31, 2023, and 2022, respectively.

We recorded accretion expense of $ 0.1 million in each of the years ended December 31, 2024, 2023, and 2022, to general and administrative expense.

10 unchanged sentences

Segment Reporting

We manage our operations on an aggregated, single segment basis for purposes of assessing performance and making operating decisions, and, accordingly, have only one reporting and operating segment.

In November 2023, the Financial Accounting Standards Board (“FASB”) issued accounting standard update (“ASU”) 2023-07, “Segment Reporting - Improvements to Reportable Segment Disclosures” to improve reportable segments disclosure requirements.

The ASU requires existing annual segment disclosures to also be disclosed on an interim basis and also requires additional disclosures around significant segment expenses and disclosures to identify the title and position of the chief operating decision maker (“CODM”).

The standard is effective for the fiscal year ended December 31, 2024, and interim periods thereafter.

We adopted ASU 2023-07 as of December 31, 2024.

Our current business strategy includes one reporting segment:

Real Estate Rental Operations.

We generate revenues, earnings, net income, and cash flows through our single segment as follows:

We collect rent from our customers through operating leases, including reimbursements for the majority of our property operating costs.

We expect to generate earnings growth by increasing rents, maintaining high occupancy rates, and controlling expenses.

The primary drivers of our revenue growth will be the rolling of in-place leases to current market rents when leases expire, and the acquisition of new properties.

We believe our active portfolio management, combined with the skills of our asset management team will allow us to maximize net income across our portfolio.

Our CODM is our Chief Executive Officer.

The CODM uses consolidated net income to make decisions about allocating resources to individual properties and assessing performance.

The CODM will sometimes reference other metrics, including net operating income, however, as net income is the measure most consistent with the amounts disclosed in the consolidated financial statements, only consolidated net income is disclosed.

Recently Issued Accounting Pronouncements

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

Disaggregation of Income Statement Expenses” (“ASU 2024-03”).

ASU 2024-03 requires public entities to disaggregate specific types of expenses, including disclosures for depreciation, intangible asset amortization, and selling expenses.

ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, with prospective application required and retrospective application or early adoption permitted.

We are currently evaluating the impact from adopting ASU 2024-03 on our consolidated financial statements and disclosures.

Related-Party Transactions

3 unchanged sentences

Gladstone, our chairman and chief executive officer.

Two of our executive officers, Mr.

Gladstone and Mr.

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

One of our executive officers, Mr.

Gladstone, serves as a director and executive officer of our Adviser and our Administrator.

Our president, Mr.

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

Michael LiCalsi, our general counsel and secretary, also serves as our Administrator’s president, general counsel and secretary.

Cooper, is also an 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 .

We have entered into an advisory agreement with our Adviser, as amended from time to time (the “Advisory Agreement”), and an administration agreement with our Administrator (the “Administration Agreement”).

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

At December 31, 2023 and December 31, 2022, $ 2.6 million and $ 3.4 million, respectively, was collectively due to our Adviser and Administrator.

As of December 31, 2024 and December 31, 2023, $ 2.5 million and $ 2.6 million, respectively, was collectively due to our Adviser and Administrator.

Base Management Fee

On July 14, 2020, the Company amended and restated the Fifth Amended Advisory Agreement by entering into the Sixth Amended and Restated Investment Advisory Agreement between the Company and the Adviser (the “Sixth Amended Advisory Agreement”).

The Sixth Amended Advisory Agreement replaced the Fifth Amended Advisory Agreement’s previous calculation of the base management fee with a calculation based on Gross Tangible Real Estate.

The Sixth Amended Advisory Agreement replaced the previous calculation of the base management fee with a calculation based on Gross Tangible Real Estate.

The revised Base Management Fee is payable quarterly in arrears and is calculated at an annual rate of 0.425 % ( 0.10625 % per quarter) of the prior calendar quarter’s “Gross Tangible Real Estate,” defined in the Sixth Amended Advisory Agreement as the current gross value of the Company’s property portfolio (meaning the aggregate of each property’s original acquisition price plus the cost of any subsequent capital improvements thereon).

8 unchanged sentences

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.

On January 10, 2023, the Company amended and restated the Sixth Amended Advisory Agreement by entering into the Seventh Amended and Restated Investment Advisory Agreement between the Company and the Adviser (the “Seventh Amended Advisory Agreement”).

The Company’s entrance into the Amended Agreement was approved unanimously by our Board of Directors, including specifically, our independent directors.

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.

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

The calculation of the other fees remained unchanged.

On July 11, 2023, the Company amended and restated the Seventh Amended Advisory Agreement by entering into the Eighth Amended Advisory Agreement (the “Eighth Amended Advisory Agreement”), as approved unanimously by our Board of Directors, including specifically, our independent directors.

The Eighth Amended Advisory Agreement contractually eliminated the payment of the incentive fee for the quarters ended September 30, 2023 and December 31, 2023.

In addition, the Eighth Amended Advisory Agreement also clarified that for any

future quarter whereby an incentive fee would exceed by greater than 15 % 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.

In addition, the Eighth Amended Advisory Agreement also clarified that for any future quarter whereby an incentive fee would exceed by greater than 15 % 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 remained unchanged.

For the year ended December 31, 2024, we recorded an incentive fee of $ 4.5 million, partially offset by credits related to non-contractual, unconditional, and irrevocable waivers issued by the Adviser of $ 2.3 million.

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

For the years ended December 31, 2022 and 2021, we recorded an incentive fee of $ 5.3 million and $ 4.9 million, respectively.

Our Advisor issued a waiver of the incentive fee of $ 0.02 million during the year ended December 31, 2021.

For the year ended December 31, 2022, we recorded an incentive fee of $ 5.3 million.

Our Adviser did no t waive any portion of the incentive fee for the year ended December 31, 2022.

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The Advisory Agreement may also be terminated for cause by us (with 30 days’ prior written notice and the vote of at least two-thirds of our independent directors), with no termination fee payable.

Cause is defined in the agreement to include if the Adviser breaches any material provisions thereof, the bankruptcy or insolvency of the Adviser, dissolution of the Adviser and fraud or misappropriation of funds.

Cause is defined in the Advisory Agreement to include if the Adviser breaches any material provisions thereof, the bankruptcy or insolvency of the Adviser, dissolution of the Adviser and fraud or misappropriation of funds.

Administration Agreement

9 unchanged sentences

Mortgage Financing Arrangement Agreement

We entered into an agreement with Gladstone Securities, effective June 18, 2013, for it to act as our non-exclusive agent to assist us with arranging mortgage financing for properties we own.

We entered into an agreement with Gladstone Securities, effective June 18, 2013, for it to act as our non-exclusive agent to assist us with arranging mortgage financing for our owned properties.

In connection with this engagement, Gladstone Securities will, from time to time, continue to solicit the interest of various commercial real estate lenders or recommend to us third-party lenders offering credit products or packages that are responsive to our needs.

We pay Gladstone Securities a financing fee in

connection with the services it provides to us for securing mortgage financing on any of our properties.

We pay Gladstone Securities a financing fee in connection with the services it provides to us for securing mortgage financing on any of our properties.

The amount of these financing fees, which are payable upon closing of the financing, are based on a percentage of the amount of the mortgage, generally ranging from 0.15 % to a maximum of 1.0 % of the mortgage obtained.

4 unchanged sentences

On February 20, 2020, we entered into a dealer manager agreement, as amended by that certain First Amendment on February 9, 2023 (the “Dealer Manager Agreement”), whereby Gladstone Securities will act as the exclusive dealer manager in connection with our offering (the “Offering”) of up to (i) 20,000,000 shares of our 6.00 % Series F Cumulative Redeemable Preferred Stock of the Company, par value $ 0.001 per share (the “Series F Preferred Stock”), on a “reasonable best efforts” basis (the “Primary Offering”), and (ii) 6,000,000 shares of Series F Preferred Stock pursuant to our distribution reinvestment plan (the “DRIP”) to those holders of the Series F Preferred Stock who participate in such DRIP.

The Series F Preferred Stock is registered with the SEC pursuant to a registration statement on Form S-3 (File No.

333-268549), as the same may be amended and/or supplemented (the “2022 Registration Statement”), under the Securities Act of 1933, as amended, and will be offered and sold pursuant to a prospectus supplement, dated February 9, 2023, and a base prospectus dated November 23, 2022 relating to the 2022 Registration Statement (the “Prospectus”).

During the years ended December 31, 2021, 2022 and 2023, the Series F Preferred Stock was registered with the SEC pursuant to a registration statement on Form S-3 (File No.

333-236143), and offered and sold pursuant to a prospectus supplement, dated February 20, 2020, and a base prospectus dated February 11, 2020.

The Series F Preferred Stock was previously registered with the SEC pursuant to a registration statement on Form S-3 (File No.

333-268549), as the same may be amended and/or supplemented (the “2022 Registration Statement”), under the Securities Act of 1933, and was offered and sold pursuant to a prospectus supplement, dated February 9, 2023, and a base prospectus dated November 23, 2022 relating to the 2022 Registration Statement.

The Series F Preferred Stock is currently registered with the SEC pursuant to a registration statement on Form S-3 (File No.

333-277877), as the same may be amended and/or supplemented (the “2024 Registration Statement”), under the Securities Act, and is offered and sold pursuant to a prospectus supplement dated May 1, 2024, and a base prospectus dated March 21, 2024 relating to the 2024 Registration Statement (the “Prospectus”).

During the years ended December 31, 2022 and 2023, the Series F Preferred Stock was registered with the SEC pursuant to the 2022 Registration Statement, and offered and sold pursuant to a prospectus supplement, dated February 9, 2023, and a base prospectus dated November 23, 2022.

During the year ended December 31, 2024, the Series F Preferred Stock was registered with the SEC pursuant to the 2024 Registration Statement, and offered and sold pursuant to a prospectus supplement, dated May 1, 2024, and a base prospectus dated March 21, 2024.

Under the Dealer Manager Agreement, Gladstone Securities, as dealer manager, will provide certain sales, promotional and marketing services to the Company in connection with the Offering, and the Company will pay Gladstone Securities (i) selling commissions of 6.0 % of the gross proceeds from sales of Series F Preferred Stock in the Primary Offering (the “Selling Commissions”), and (ii) a dealer manager fee of 3.0 % of the gross proceeds from sales of Series F Preferred Stock in the Primary Offering (the “Dealer Manager Fee”).

2 unchanged sentences

We paid fees of $ 0.1 million, $ 0.5 million, and $ 0.5 million to Gladstone Securities during the years ended December 31, 2024, 2023 and 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 years ended December 31, 2023, 2022 and 2021, respectively.

Earnings (loss) per Share of Common Stock

The following tables set forth the computation of basic and diluted earnings (loss) per share of common stock for the years ended December 31, 2024, 2023 and 2022, respectively.

The OP Units held by Non-controlling OP Unitholders (which may be redeemed for shares of common stock) have been excluded from the diluted earnings per share calculation, as there would be no effect on the amounts since the Non-controlling OP Unitholders’ share of income would also be added back to net income.

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

We computed basic loss per share for the years ended December 31, 2023, 2022 and 2021, respectively, using the weighted average number of shares outstanding during the periods.

Diluted loss per share for the years ended December 31, 2023, 2022 and 2021, reflects additional shares of common stock related to our convertible Senior Common Stock, if the effect would be dilutive, that would have been outstanding if 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).

We computed basic earnings (loss) per share for the years ended December 31, 2024, 2023 and 2022, respectively, using the weighted average number of shares outstanding during the periods.

Diluted earnings (loss) per share for the years ended December 31, 2024, 2023 and 2022, reflects additional shares of common stock related to our convertible Senior Common Stock, if the effect would be dilutive, that would have been outstanding if dilutive potential shares of common stock had been issued, as well as an adjustment to net income (loss) available (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 year ended December 31,

2024 2023 2022

Calculation of basic loss per share of common stock:

Net loss attributable to common stockholders $ ( 7,738 ) $ ( 1,529 ) $ ( 3,392 )

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

Net income (loss) available (attributable) to common stockholders $ 11,124 $ ( 7,738 ) $ ( 1,529 )

Denominator for basic weighted average shares of common stock (1) 41,766,263 39,943,167 38,950,734

Basic loss per share of common stock $ ( 0.19 ) $ ( 0.04 ) $ ( 0.09 )

Calculation of diluted loss per share of common stock:

Net loss attributable to common stockholders $ ( 7,738 ) $ ( 1,529 ) $ ( 3,392 )

Net loss attributable to common stockholders plus assumed conversions (2) $ ( 7,738 ) $ ( 1,529 ) $ ( 3,392 )

Basic earnings (loss) per share of common stock $ 0.27 $ ( 0.19 ) $ ( 0.04 )

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

Net income (loss) available (attributable) to common stockholders $ 11,124 $ ( 7,738 ) $ ( 1,529 )

Net income (loss) available (attributable) to common stockholders plus assumed conversions (2) $ 11,124 $ ( 7,738 ) $ ( 1,529 )

Denominator for basic weighted average shares of common stock (1) 41,766,263 39,943,167 38,950,734

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Denominator for diluted weighted average shares of common stock (2) 41,766,263 39,943,167 38,950,734

Diluted loss per share of common stock $ ( 0.19 ) $ ( 0.04 ) $ ( 0.09 )

Diluted earnings (loss) per share of common stock $ 0.27 $ ( 0.19 ) $ ( 0.04 )

(1) The weighted average number of OP Units held by Non-controlling OP Unitholders was 157,160 , 382,563 , and 294,941 for the years ended December 31, 2024, 2023, and 2022, respectively.

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Real estate depreciation expense on building and tenant improvements was $ 39.5 million, $ 41.2 million, and $ 41.1 million for the years ended December 31, 2024, 2023, and 2022, respectively.

During the years ended December 31, 2023 and 2022, we acquired five and 13 properties, respectively, which are summarized below (dollars in thousands):

During the years ended December 31, 2024 and 2023, we acquired seven and five properties, respectively, which are summarized below (dollars in thousands):

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

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December 31, 2023 (2) 321,432 19.3 years $ 30,018 $ 528

(1) On May 7, 2024, we acquired a five - property, 142,125 square foot portfolio in Warfordsburg, Pennsylvania for $ 12.0 million.

The property is fully leased to one tenant and had 25.1 years of remaining lease term at the time we acquired the property.

On August 29, 2024, we acquired a 50,102 square foot property in Midland, Texas for $ 10.2 million.

The property is fully leased to one tenant and had 15.0 years of remaining lease term at the time we acquired the property.

On November 15, 2024, we acquired a 124,500 square foot property in St.

Clair, Missouri for $ 5.2 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.

(2) On April 14, 2023, we acquired a 76,089 square foot property in Riverdale, Illinois for $ 5.4 million.

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The property is fully leased to one tenant and had 20.1 years of remaining lease term at the time we acquired the property.

On November 3, 2023, we acquired a 67,709 square

foot property in Indianapolis, Indiana for $ 4.6 million.

The property is fully leased to one tenant and had 20.1 years of remaining lease term at the time we acquired the property.

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

The property is fully leased to one tenant and had 12.7 years of remaining lease term at the time we acquired the property.

On March 11, 2022, we acquired a 56,000 square foot property portfolio in Oklahoma City, Oklahoma for $ 6.0 million.

The property is fully leased to one tenant and had 7.0 years of remaining lease term at the time we acquired the portfolio.

On May 4, 2022, we acquired a 260,719 square foot, two -property portfolio in Cleveland, Ohio and Fort Payne, Alabama for $ 19.5 million.

On May 12, 2022, we acquired a 345,584 square foot, three -property portfolio in Wilmington, North Carolina, for $ 18.9 million.

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

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

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

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

This 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.

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

On October 26, 2022, we acquired a 68,674 square foot property in Denver, Colorado for $ 12.1 million.

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

On December 21, 2022, we acquired a 65,000 square foot property in Greenville, South Carolina for $ 5.0 million.

On November 3, 2023, we acquired a 67,709 square foot property in Indianapolis, Indiana for $ 4.6 million.

The property is fully leased to one tenant and had 20.1 years of remaining lease term at the time we acquired the property.

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Thereafter 400,392

Future sales-types lease payments from tenants under non-cancelable leases and reasonably certain purchase options, for each of the five succeeding fiscal years and thereafter is as follows (dollars in thousands):

Year Tenant Lease Payments

2025 $ 19,722

Difference between undiscounted cash flow and present value 1,086

Sales-type lease receivable $ 18,636

In accordance with the lease terms, substantially all operating expenses are required to be paid by the tenant;

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For the year ended December 31,

(Dollars in Thousands)

Lease revenue reconciliation 2024 2023 2022

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$ 149,388 $ 147,584 $ 148,981

Sales-Type Leases

For the year ended December 31, 2024, we had one lease classified as a sales-type lease.

We recorded a sales-type lease receivable of $ 18.6 million in the consolidate d balance sheet, net of $ 0.02 million in allowance for credit loss, and derecognized the carry value of $ 14.6 million in the consolidated balance sheet.

We recognized a $ 3.9 million selling profit from sale-type leases, net, that was included in gain on sale of real estate, net, in the consolidated statements of operations.

For the year ended December 31, 2024, t he interest income earned from sales-types leases of $ 0.1 million was included in other income in the consolidated statements of operations.

There was no sales-type lease activity in the years ended December 31, 2023 and 2022.

In developing the expected credit loss, we reviewed the tenant’s credit rating, which is AA- stable, and performed a

collectibility analysis, confirming they were current on payments as of December 31, 2024.

The sales-type lease receivable, net, approximates fair value as of December 31, 2024.

Accounts Receivable

At December 31, 2024 and 2023 , accounts receivable from tenants totaled $ 1.4 million and $ 1.5 million, respectively, included in other assets on the consolidated balance sheets.

Legal Settlements

In August 2021, we reached separate legal settlements through which we recognized $ 2.4 million, net, recorded in other income on the consolidated statement of operations and comprehensive income.

Intangible Assets

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Real Estate Dispositions

During the year ended December 31, 2023, 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.

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 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 use the sales 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

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(1) Includes a $ 5.0 million impairment charge.

(2) Includes a $ 7.7 million gain on sale of real estate, net, from seven property sales and a $ 2.8 million gain on debt extinguishment from one property sale.

(2) Includes a $ 10.3 million gain on sale of real estate, net, from seven property sales and a $ 0.3 million gain on debt extinguishment from two property sales.

(3) Includes a $ 15.7 million impairment charge.

Real Estate Held for Sale

At December 31, 2024, we had two properties classified as held for sale, located in Hickory, North Carolina and Tifton, Georgia.

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

At December 31, 2023, we had three properties classified as held for sale, located in Richardson, Texas;

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and Tifton, Georgia.

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

At December 31, 2022, we had one property classified as held for sale, located in Columbia, South Carolina.

The table below summarizes the components of the assets held for sale at December 31, 2024 reflected on the accompanying consolidated balance sheet (dollars in thousands):

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Impairment Charges

We evaluated our portfolio for triggering events to determine if any of our held and used assets were impaired during the year ended December 31, 2023 and identified two held and used assets, located in Draper, Utah and Egg Harbor, New Jersey, which were impaired by an aggregate $ 8.0 million during the quarters ended September 30, 2023 and December 31, 2023.

In performing our impairment testing, the undiscounted cash flows were below the carrying value, which resulted in us recognizing an impairment charge.

We evaluated our held for sale assets to determine if any of these assets were impaired during the year ended December 31, 2023 and identified three held for sale assets, located in Richardson, Texas, Taylorsville, Utah, and Columbus, Ohio, which were impaired by an aggregate $ 11.3 million during the three months ended June 30, 2023 and December 31, 2023.

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.

The property was sold during the year ended December 31, 2023.

During the year ended December 31, 2022, we 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.

As the undiscounted cash flows for this asset was below the carrying value, we evaluated the fair value of the asset using a third-party expert to determine the fair value for this asset, which resulted in us recognizing an impairment charge.

We also identified one held for sale asset, located in Parsippany, New Jersey, which was impaired by $ 1.4 million.

performing our held for sale assessment, the carrying value of this asset was above the fair value, less costs of sale, which resulted in us recognizing an impairment charge.

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.

We evaluated our portfolio for triggering events to determine if any of our held and used assets were impaired during the year ended December 31, 2024 and identified one held and used asset, located in Oklahoma City, Oklahoma, which was impaired by $ 1.8 million during the quarter ended December 31, 2024.

In performing our impairment testing, the undiscounted cash flows were below the carrying value, which resulted in recognizing an impairment charge.

We evaluated our held for sale assets to determine if any of these assets were impaired during the year ended December 31, 2024 and identified two held for sale assets, located in Richardson, Texas and Fridley, Minnesota, which were impaired by an aggregate $ 5.0 million during the three months ended March 31, 2024 and September 30, 2024.

In performing our held for sale assessment, the carrying value of these assets were above the fair value, less costs of sale.

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

The properties were sold during the year ended December 31, 2024.

During the year ended December 31, 2023, we identified two held and used assets, located in Draper, Utah and Egg Harbor, New Jersey, which were impaired by an aggregate $ 8.0 million during the quarters ended September 30, 2023 and December 31, 2023.

In performing our impairment testing, the undiscounted cash flows were below the carrying value, which resulted in an impairment charge.

We also identified three held for sale assets, located in Richardson, Texas, Taylorsville, Utah, and Columbus, Ohio, which were impaired by an aggregate $ 11.3 million during the three months ended June 30, 2023 and December 31, 2023.

In performing our held for sale assessment, the carrying value of these assets were above the fair value, less costs of sale, which resulted in us recognizing an impairment charge.

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

We continue to evaluate our properties on a quarterly basis for changes that could create the need to record impairment.

Future impairment losses may result, and could be significant, should market conditions deteriorate in the markets in which we hold our assets or we are unable to secure leases at terms that are favorable to us, which could impact the estimated cash flow of our properties over the period in which we plan to hold our properties.

impact the estimated cash flow of our properties over the period in which we plan to hold our properties.

Additionally, changes in management’s decisions to either own and lease long-term or sell a particular asset will have an impact on this analysis.

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The estimated sales price was determined using executed purchase and sale agreements.

Mortgage Notes Payable and Credit Facility

Mortgage Notes Payable, Credit Facility, and Senior Unsecured Notes

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 December 31, 2023 and December 31, 2022 are summarized below (dollars in thousands):

Our mortgage notes payable, Credit Facility, and Senior Unsecured Notes as of December 31, 2024 and December 31, 2023 are summarized below (dollars in thousands):

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

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Fixed rate mortgage loans 44 $ 264,243 $ 298,122 (1) (2)

Variable rate mortgage loans 1 7,260 — SOFR + 2.25 %

Premiums and discounts, net — ( 8 ) ( 42 ) N/A N/A

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(3) 8/18/2026

Deferred financing costs, revolving credit facility — — — N/A N/A

Total revolver 88 $ 1,900 $ 75,750

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Total term loan, net N/A $ 347,948 $ 367,258

Total mortgage notes payable and credit facility 132 $ 738,861 $ 749,206 (5)

Senior unsecured notes — $ 75,000 $ — 6.47 % 12/18/2029

Deferred financing costs, senior unsecured notes — ( 1,042 ) — N/A N/A

Total senior unsecured notes, net N/A $ 73,958 $ —

Total mortgage notes payable, credit facility.

and senior unsecured notes 133 $ 693,385 $ 738,861 (5)

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

(2) We have 41 mortgage notes payable with maturity dates ranging from June 18, 2024 through August 1, 2037.

(3) The weighted average interest rate on the mortgage notes outstanding at December 31, 2023, was approximately 4.19 %.

(2) We have 40 mortgage notes payable with maturity dates ranging from September 30, 2025 through August 1, 2037.

(3) As of December 31, 2024, SOFR was approximately 4.49 %.

(4) The weighted average interest rate on the mortgage notes outstanding at December 31, 2024, was approximately 4.30 %.

(5) The weighted average interest rate on all debt outstanding at December 31, 2024, was approximately 5.28 %.

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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 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

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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 issued an aggregate $ 75.0 million in senior unsecured notes in a private placement, at a fixed interest rate of 6.47 % and a maturity date of December 18, 2029 (the “2029 Notes”).

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

Scheduled principal payments of mortgage notes payable for each of the five succeeding fiscal years and thereafter are as follows (dollars in thousands):

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We have entered into interest rate cap agreements that cap the interest rate on certain of our variable-rate debt and we have assumed or entered into interest rate swap agreements in which we hedged our exposure to variable interest rates by agreeing to pay fixed interest rates to our respective counterparty.

We have adopted the fair value measurement provisions for our financial

instruments recorded at fair value.

We have adopted the fair value measurement provisions for our financial instruments recorded at fair value.

The fair value guidance establishes a three-tier value hierarchy, which prioritizes the inputs used in measuring fair value.

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$ 48 (1) $ 60,000 $ — $ 65,000 $ 684

(1) We have entered into various interest rate cap agreements on new variable rate debt with SOFR caps ranging from 1.49 % to 1.75 %.

We have entered into interest rate swap agreements in connection with certain of our acquisitions, whereby we will pay our counterparty a fixed 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 are recorded in other liabilities on our accompanying consolidated balance sheets.

(1) We have entered into an interest rate cap agreement on variable rate debt with a SOFR cap of 5.50 %.

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 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 liabilities on our accompanying consolidated balance sheets.

We have designated our interest rate swaps as cash flow hedges, and we record changes in the fair value of the respective interest rate swap agreement to accumulated other comprehensive income on the consolidated balance sheets.

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The following tables present the impact of our derivative instruments in the consolidated financial statements (dollars in thousands):

Amount of gain, net, recognized in Comprehensive Income

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

2024 2023 2022

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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 December 31, 2024, the maximum additional amount we could draw under the Credit Facility was $ 90.7 million.

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The amount outstanding under the Credit Facility approximates fair value as of December 31, 2024.

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 amount outstanding approximates fair value as of December 31, 2024.

Commitments and Contingencies

Ground Leases

We are obligated as lessee under four ground leases.

We are obligated as lessee under three ground leases.

Future minimum rental payments due under the terms of these leases as of December 31, 2024, are as follows (dollars in thousands):

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Letters of Credit

As of December 31, 2023, there was $ 2.0 million outstanding under letters of credit.

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

As of December 31, 2024, there were no outstanding letters of credit.

Equity and Mezzanine Equity

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Senior Common Stock 1.05 1.05 1.05

Series D Preferred Stock — — 0.8750 (1)

Series E Preferred Stock 1.656252 1.656252 1.656252

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Series G Preferred Stock 1.50 1.50 1.50

(1) We redeemed all outstanding shares of our Series D Preferred Stock on June 30, 2021.

(2) Series G Preferred Stock was issued on June 28, 2021.

For federal income tax purposes, distributions paid to stockholders may be characterized as ordinary income, capital gains, return of capital or a combination of the foregoing.

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For the year ended December 31, 2024 — % 100.00000 % — %

Series D Preferred Stock

For the year ended December 31, 2021 100.00000 % — % — %

For the year ended December 31, 2022 — % — % — %

For the year ended December 31, 2023 — % — % — %

Series E Preferred Stock

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Common Stock ATM Program

On December 3, 2019, we entered into an At-the-Market Equity Offering Sales Agreement (the “Common Stock Sales Agreement”), with Robert W.

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

1 to the 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”) (collectively the “Common Stock Sales Agents”), pursuant to which we sold shares of our common stock in an aggregate offering price of up to $ 250.0 million (the “Common Stock ATM Program”).

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 Baird, Goldman Sachs, Stifel, and 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.

(“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.

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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 Amendment No.

1 to the 2023 Common Stock Sales Agreement (the “2024 Common Stock Sales Agreement”).

The amendment permitted shares of common stock to be issued pursuant to the 2024 Common Stock Sales Agreement under the Company’s Registration Statement on Form S-3 (File No.

333-277877) (the “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.

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Mezzanine Equity

Our 7.00 % Series D Cumulative Redeemable Preferred Stock (“Series D Preferred Stock”), 6.625 % Series E Cumulative Redeemable Preferred Stock (“Series E Preferred Stock”) and 6.00 % Series G Cumulative Redeemable Preferred Stock (“Series G Preferred Stock”), are classified as mezzanine equity in our consolidated balance sheet because all three are redeemable at the option of the stockholder upon a change of control of greater than 50 % in accordance with ASC 480-10-S99 “Distinguishing Liabilities from Equity,” which requires mezzanine equity classification for preferred stock issuances with redemption features which are outside of the control of the issuer.

Our 6.625 % Series E Cumulative Redeemable Preferred Stock (“Series E Preferred Stock”) and 6.00 % Series G Cumulative Redeemable Preferred Stock (“Series G Preferred Stock”), are classified as mezzanine equity in our consolidated balance sheet because both are redeemable at the option of the stockholder upon a change of control of greater than 50 % in accordance with ASC 480-10-S99 “Distinguishing Liabilities from Equity,” which requires mezzanine equity classification for preferred stock issuances with redemption features which are outside of the control of the issuer.

A change in control of the Company, outside of our control, is only possible if a tender offer is accepted by over 90 % of our stockholders.

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

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 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 State Department of Assessments and Taxation of Maryland (“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, our authorized capital stock consists 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 Stock ATM Program

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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.

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

7 unchanged sentences

Of the $ 800.0 million of available capacity under our 2020 Registration Statement, approximately $ 636.5 million was reserved for the sale of our Series F Preferred Stock.

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 may 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 0.2 million shares of our Series F Preferred Stock, raising $ 5.6 million in net proceeds during the year ended December 31, 2023.

Amendment to Articles of Restatement

On June 23, 2021, we filed with the 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.

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

Amendments to Operating Partnership Agreement

3 unchanged sentences

On June 23, 2021, the Operating Partnership adopted the Third Amendment to its Second Amended and Restated Agreement of Limited Partnership, including Exhibit SGP thereto (collectively, the “Third Amendment”), establishing the rights, privileges, and preferences of 6.00 % Series G Cumulative Redeemable Preferred Units, a newly-designated class of limited partnership interests (the “Series G Term Preferred Units”).

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

Partnership of the net proceeds of the offering of Series G Preferred Stock.

Generally, the Series G Preferred Units provided for under the Third Amendment have preferences, distribution rights, and other provisions substantially equivalent to those of the Series G Preferred Stock.

2 unchanged sentences

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.

As of December 31, 2024 and 2023, there were 39,474 and 310,643 outstanding OP Units held by Non-controlling OP Unitholders, respectively.

Revision of Previously Issued Financial Statements

As discussed in Note 1, the Company identified errors in its calculation of the depreciation of tenant funded improvement assets at a number of its properties.

A summary of the corrections to the impacted financial statement line items in the Company’s previously issued Consolidated Statements of Operations and Comprehensive Income, Consolidated Balance Sheets, Consolidated Statements of Equity, and Consolidated Statements of Cash Flows for the years ended December 31, 2021 and December 31, 2022 included in previously filed Annual Reports on Form 10-K, is as follows:

Consolidated Statements of Operations and Comprehensive Income

Year Ended December 31, 2021

As Previously Reported Adjustments As Revised

Operating expenses

Depreciation and amortization $ 60,311 $ ( 1,162 ) $ 59,149

Total operating expense before incentive fee waiver $ 102,816 $ ( 1,162 ) $ 101,654

Total operating expenses $ 102,800 $ ( 1,162 ) $ 101,638

Net income $ 9,733 $ 1,162 $ 10,895

Net income available to the Company $ 9,773 $ 1,162 $ 10,935

Net loss attributable to common stockholders $ ( 4,554 ) $ 1,162 $ ( 3,392 )

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

Loss attributable to common stockholders $ ( 0.12 ) $ 0.03 $ ( 0.09 )

Comprehensive income

Net income $ 9,733 $ 1,162 $ 10,895

Total comprehensive income available to the Company $ 12,627 $ 1,162 $ 13,789

Consolidated Statements of Operations and Comprehensive Income

Year Ended December 31, 2022

As Previously Reported Adjustments As Revised

Operating expenses

Depreciation and amortization $ 61,664 $ ( 1,510 ) $ 60,154

Total operating expense before incentive fee waiver $ 117,758 $ ( 1,510 ) $ 116,248

Total operating expenses $ 117,758 $ ( 1,510 ) $ 116,248

Net income $ 9,272 $ 1,510 $ 10,782

Net income available to the Company $ 9,295 $ 1,510 $ 10,805

Net loss attributable to common stockholders $ ( 3,039 ) $ 1,510 $ ( 1,529 )

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

Loss attributable to common stockholders $ ( 0.08 ) $ 0.04 $ ( 0.04 )

Comprehensive income

Net income $ 9,272 $ 1,510 $ 10,782

Total comprehensive income available to the Company $ 21,410 $ 1,510 $ 22,920

Consolidated Balance Sheets

As of December 31, 2021

As Previously Reported Adjustments As Revised

accumulated depreciation $ 266,672 $ 385 $ 267,057

Total real estate, net $ 958,586 $ ( 385 ) $ 958,201

TOTAL ASSETS $ 1,143,352 $ ( 385 ) $ 1,142,967

Distributions in excess of accumulated earnings $ ( 468,523 ) $ ( 385 ) $ ( 468,908 )

TOTAL STOCKHOLDERS' EQUITY $ 201,303 $ ( 385 ) $ 200,918

TOTAL EQUITY $ 202,562 $ ( 385 ) $ 202,177

TOTAL LIABILITIES, MEZZANINE EQUITY AND EQUITY $ 1,143,352 $ ( 385 ) $ 1,142,967

Consolidated Balance Sheets

As of December 31, 2022

As Previously Reported Adjustments As Revised

accumulated depreciation $ 286,994 $ ( 844 ) $ 286,150

Total real estate, net $ 1,000,303 $ 844 $ 1,001,147

Real estate and related assets held for sale $ 3,013 $ 280 $ 3,293

TOTAL ASSETS $ 1,201,509 $ 1,124 $ 1,202,633

Distributions in excess of accumulated earnings $ ( 530,228 ) $ 1,124 $ ( 529,104 )

TOTAL STOCKHOLDERS' EQUITY $ 202,780 $ 1,124 $ 203,904

TOTAL EQUITY $ 204,570 $ 1,124 $ 205,694

TOTAL LIABILITIES, MEZZANINE EQUITY AND EQUITY $ 1,201,509 $ 1,124 $ 1,202,633

Consolidated Statements of Equity

As of December 31, 2021

Distributions in Excess of Accumulated Earnings Total Stockholders' Equity Total Equity

As Previously Reported Adjustments As Revised As Previously Reported Adjustments As Revised As Previously Reported Adjustments As Revised

Balance at December 31, 2020 $ ( 409,041 ) $ ( 1,548 ) $ ( 410,589 ) $ 213,183 $ ( 1,548 ) $ 211,635 $ 216,037 $ ( 1,548 ) $ 214,489

Net income 9,773 1,162 10,935 9,773 1,162 10,935 9,733 1,162 10,895

Balance at December 31, 2021 $ ( 468,523 ) $ ( 385 ) $ ( 468,908 ) $ 201,303 $ ( 385 ) $ 200,918 $ 202,562 $ ( 385 ) $ 202,177

Consolidated Statements of Equity

As of December 31, 2022

Distributions in Excess of Accumulated Earnings Total Stockholders' Equity Total Equity

As Previously Reported Adjustments As Revised As Previously Reported Adjustments As Revised As Previously Reported Adjustments As Revised

Balance at December 31, 2021 $ ( 468,523 ) $ ( 385 ) $ ( 468,908 ) $ 201,303 $ ( 385 ) $ 200,918 $ 202,562 $ ( 385 ) $ 202,177

Net income 9,295 1,510 10,805 9,295 1,510 10,805 9,272 1,510 10,782

Balance at December 31, 2022 $ ( 530,228 ) $ 1,124 $ ( 529,104 ) $ 202,780 $ 1,124 $ 203,904 $ 204,570 $ 1,124 $ 205,694

Consolidated Statements of Cash Flows

Year Ended December 31, 2021

As Previously Reported Adjustments As Revised

Cash flows from operating activities:

Net income $ 9,733 $ 1,162 $ 10,895

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization 60,311 ( 1,162 ) 59,149

Consolidated Statements of Cash Flows

Year Ended December 31, 2022

As Previously Reported Adjustments As Revised

Cash flows from operating activities:

Net income $ 9,272 $ 1,510 $ 10,782

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization 61,664 ( 1,510 ) 60,154

Subsequent Events

18 unchanged sentences

Equity Activity

Subsequent to December 31, 2023 and through February 21, 2024, we raised $ 0.2 million in net proceeds from the sale of 7,580 sales of Series F Preferred Stock.

Sale Activity

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.

Subsequent to December 31, 2024 and through February 18, 2025, we raised $ 3.3 million in net proceeds from the sale of 205,651 shares of common stock under our 2024 Common Stock Sales Agreement and we raised $ 0.1 million in net proceeds from the sale of 6,500 shares of Series F Preferred Stock.

GLADSTONE COMMERCIAL CORPORATION

64 unchanged sentences

Medical Office Building — 257 1,062 118 277 1,160 1,437 527 910 1989 12/13/2007

Lawrenceville, Georgia (3)

Medical Office Building — 678 2,807 ( 892 ) 525 2,068 2,593 931 1,662 2005 12/13/2007

Snellville, Georgia (3)

4 unchanged sentences

Medical Office Building — 296 1,228 135 319 1,340 1,659 609 1,050 1994 12/13/2007

Cumming, Georgia (3)

Reading, Pennsylvania (3)

Industrial Building — 491 6,202 357 491 6,559 7,050 2,756 4,294 2007 1/29/2008

Pineville, North Carolina (3)

Initial Cost Total Cost

9 unchanged sentences

Improvements Date

Medical Office Building — 738 3,055 2,884 741 5,936 6,677 4,075 2,602 2004 12/13/2007

Reading, Pennsylvania (3)

Industrial Building — 669 3,028 293 669 3,321 3,990 1,502 2,488 1985 4/30/2008

Fridley, Minnesota

Office Building — 1,354 8,074 1,824 1,383 9,869 11,252 4,516 6,736 1985 / 2006

Pineville, North Carolina (3)

Industrial Building — 669 3,028 293 669 3,321 3,990 1,398 2,592 1985 4/30/2008

Marietta, Ohio (3)

22 unchanged sentences

Industrial Building 7,171 963 15,647 — 963 15,647 16,610 5,588 11,022 2005 11/8/2012

Egg Harbor, New Jersey (3)

Office Building — 1,627 3,017 ( 950 ) 1,065 2,629 3,694 1,296 2,398 1985 3/28/2013

Vance, Alabama (3)

12 unchanged sentences

Retail Building — 1,448 3,349 — 1,448 3,349 4,797 1,206 3,591 2005 5/8/2014

Columbus, Ohio (3)

Office Building — 990 8,017 ( 514 ) 555 7,938 8,493 4,272 4,221 1986 5/13/2014

Taylor, Pennsylvania (3)

10 unchanged sentences

Industrial Building 6,239 460 10,225 ( 20 ) 459 10,206 10,665 3,120 7,545 2004 12/23/2014

Richardson, Texas

Office Building 9,794 2,728 15,372 ( 3,157 ) 1,823 13,120 14,943 6,299 8,644 1985 / 2008

Dublin, Ohio (3)

Office Building — 1,338 5,058 1,086 1,338 6,144 7,482 2,477 5,005 1980 /Various

Office Building 8,027 3,248 13,129 ( 6,543 ) 1,504 8,330 9,834 4,181 5,653 2008 5/29/2015

Hapeville, Georgia (3)

Initial Cost Total Cost

Location of Property Encumbrances Land Buildings &

Improvements Improvement

Costs Capitalized

Subsequent to

Acquisition Land Buildings &

Improvements Total

(1) Accumulated

Depreciation (2) Net Real

Construction/

Improvements Date

Office Building — 2,272 8,778 263 2,272 9,041 11,313 3,096 8,217 1999 / 2007

12 unchanged sentences

Maitland, Florida

Initial Cost Total Cost

Location of Property Encumbrances Land Buildings &

Improvements Improvement

Costs Capitalized

Subsequent to

Acquisition Land Buildings &

Improvements Total

(1) Accumulated

Depreciation (2) Net Real

Construction/

Improvements Date

Office Building 6,738 2,095 9,339 9 2,095 9,348 11,443 2,885 8,558 1999 7/31/2017

52 unchanged sentences

Houston, Texas

Initial Cost Total Cost

Location of Property Encumbrances Land Buildings &

Improvements Improvement

Costs Capitalized

Subsequent to

Acquisition Land Buildings &

Improvements Total

(1) Accumulated

Depreciation (2) Net Real

Construction/

Improvements Date

Industrial Building 8,878 1,714 14,170 3 1,717 14,170 15,887 2,042 13,845 2000 / 2018

12 unchanged sentences

Pittsburgh, Pennsylvania

Initial Cost Total Cost

Location of Property Encumbrances Land Buildings &

Improvements Improvement

Costs Capitalized

Subsequent to

Acquisition Land Buildings &

Improvements Total

(1) Accumulated

Depreciation (2) Net Real

Construction/

Improvements Date

Industrial Building 6,118 1,422 10,094 251 1,422 10,345 11,767 1,876 9,891 1994 12/21/2020

52 unchanged sentences

Dallas Forth Worth, Texas

Industrial Building 4,596 1,269 6,617 — 1,268 6,618 7,886 354 7,532 1999 7/28/2023

Allentown, Pennsylvania (3)

Industrial Building — 987 5,506 53 988 5,558 6,546 227 6,319 1974 / 2016

Indianapolis, Indiana (3)

Industrial Building — 928 3,102 ( 2 ) 926 3,102 4,028 119 3,909 1997 11/3/2023

Warfordsburg, Pennsylvania (3)

Industrial Building — 414 2,925 — 414 2,925 3,339 82 3,257 1991 / 1999

Warfordsburg, Pennsylvania (3)

Industrial Building — 77 542 — 77 542 619 15 604 1991 / 1999

Warfordsburg, Pennsylvania (3)

Industrial Building — 576 4,079 — 576 4,079 4,655 114 4,541 1991 / 1999

Warfordsburg, Pennsylvania (3)

Industrial Building — 101 716 — 101 716 817 20 797 1991 / 1999

Warfordsburg, Pennsylvania (3)

Initial Cost Total Cost

10 unchanged sentences

Industrial Building — 1 6 — 1 6 7 — 7 1991 / 1999

Allentown, Pennsylvania (3)

Midland, Texas (3)

Industrial Building — 525 7,772 — 525 7,772 8,297 81 8,216 2024 8/29/2024

Indianapolis, Indiana (3)

Clair, Missouri (3)

Industrial Building — 1,168 3,493 — 1,169 3,492 4,661 15 4,646 2014 11/15/2024

14 unchanged sentences

(2) The real estate figure includes $ 40.4 million of real estate held for sale as of December 31, 2023.

(3) The real estate figure includes $ 12.3 million of real estate held for sale as of December 31, 2022.

The following table reconciles the change in the balance of accumulated depreciation during the years ended December 31, 2024, 2023 and 2022, respectively (in thousands):

6 unchanged sentences

(2) The accumulated depreciation figure includes $ 12.9 million of real estate held for sale as of December 31, 2023.

(3) The accumulated depreciation figure includes $ 9.0 million of real estate held for sale as of December 31, 2022.

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

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 8. Financial Statements and Supplementary Data