What changed in this filing

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Item 1. Financial Statements

2025-05-07 compared with 2024-11-04 · 220 added, 247 removed, 452 unchanged (51% of the section changed)

3 unchanged sentences

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

September 30, 2024 December 31, 2023

March 31, 2025 December 31, 2024

Real estate, at cost $ 1,279,538 $ 1,211,793

7 unchanged sentences

Right-of-use assets from operating leases 3,899 3,961

Right-of-use assets from finance leases 2,938 —

Deferred rent receivable, net 45,579 45,324

Sales-type lease receivable, net 18,504 18,618

Other assets 11,494 14,387

4 unchanged sentences

Borrowings under Term Loan A, Term Loan B and Term Loan C, net 348,121 347,948

Senior unsecured notes, net 73,999 73,958

Deferred rent liability, net 22,257 21,996

Operating lease liabilities 4,003 4,063

Finance lease liabilities 2,938 —

Asset retirement obligation 5,095 5,061

Accounts payable and accrued expenses 15,769 13,198

Liabilities related to assets held for sale 169 676

Due to Adviser and Administrator (1) 3,381 2,540

6 unchanged sentences

10,750,886 and 10,750,886 shares authorized;

and 7,052,334 and 7,052,334 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively (3)

and 7,052,334 and 7,052,334 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively (3)

$ 170,041 $ 170,041

2 unchanged sentences

950,000 shares authorized;

and 399,483 and 406,425 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively (3)

and 387,857 and 389,190 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively (3)

Common stock, par value $ 0.001 per share, 62,425,567 and 62,400,887 shares authorized;

and 43,728,098 and 40,000,596 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively (3)

and 45,757,671 and 43,986,038 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively (3)

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

$ 25 per share liquidation preference;

25,914,545 and 25,972,296 shares authorized and 907,941 and 918,601 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively (3)

25,873,547 and 25,898,227 shares authorized and 909,069 and 914,553 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively (3)

Additional paid in capital 811,915 784,389

12 unchanged sentences

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

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

2024 2023 2024 2023

For the three months ended March 31,

Operating revenues

17 unchanged sentences

Other income 631 34

Total other income (expense), net $ 1,032 $ ( 5,085 ) $ ( 17,332 ) $ ( 23,338 )

Total other expense, net $ ( 8,507 ) $ ( 8,880 )

Net income $ 5,136 $ 3,526

Net (income) loss (available) attributable to OP Units held by Non-controlling OP Unitholders ( 44 ) ( 3 ) ( 35 ) 78

Net income available to OP Units held by Non-controlling OP Unitholders ( 2 ) ( 2 )

Net income available to the Company $ 5,134 $ 3,524

1 unchanged sentence

Distributions attributable to senior common stock ( 101 ) ( 105 )

Gain (loss) on extinguishment of Series F preferred stock, net 2 ( 1 ) ( 4 ) ( 12 )

Gain on repurchase of Series G preferred stock — — — 3

Net income (loss) available (attributable) to common stockholders $ 8,467 $ ( 1,419 ) $ 7,153 $ ( 9,063 )

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

Income (loss) available (attributable) to common stockholders $ 0.20 $ ( 0.04 ) $ 0.17 $ ( 0.23 )

Loss on extinguishment of Series F preferred stock, net ( 10 ) ( 3 )

Net income available to common stockholders $ 1,915 $ 304

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

Income available to common stockholders $ 0.04 $ 0.01

Weighted average shares of common stock outstanding

2 unchanged sentences

Weighted average shares of senior common stock outstanding - basic 388,686 402,856

Comprehensive income

Comprehensive (loss) income

Change in unrealized (loss) gain related to interest rate hedging instruments, net $ ( 4,016 ) $ 5,417

2 unchanged sentences

Comprehensive income $ 1,120 $ 8,943

Comprehensive (income) loss (available) attributable to OP Units held by Non-controlling OP Unitholders ( 44 ) ( 3 ) ( 35 ) 78

Comprehensive income available to OP Units held by Non-controlling OP Unitholders ( 2 ) ( 2 )

Total comprehensive income available to the Company $ 1,118 $ 8,941

4 unchanged sentences

(Dollars in Thousands)

For the nine months ended September 30,

For the three months ended March 31,

Cash flows from operating activities:

7 unchanged sentences

Amortization of deferred rent asset and liability, net ( 1,481 ) ( 1,615 )

Decrease in sales-type lease receivable 114 —

Amortization of discount and premium on assumed debt, net 7 9

1 unchanged sentence

Amortization of right-of-use asset from operating leases and operating lease liabilities, net 2 3

Bad debt expense 64 —

Operating changes in assets and liabilities

1 unchanged sentence

Decrease in deferred rent receivable ( 378 ) ( 1,149 )

Increase in accounts payable and accrued expenses 1,372 2,320

Increase (decrease) in amount due to Adviser and Administrator 507 ( 804 )

Increase (decrease) in accounts payable and accrued expenses 978 ( 725 )

Increase in amount due to Adviser and Administrator 841 366

Decrease in other liabilities ( 751 ) ( 550 )

10 unchanged sentences

Deposits on future acquisitions ( 500 ) ( 250 )

Net cash provided by (used in) investing activities $ 8,638 $ ( 3,588 )

Net cash (used in) provided by investing activities $ ( 75,644 ) $ 18,468

Cash flows from financing activities:

2 unchanged sentences

Redemption of Series F preferred stock ( 581 ) ( 58 )

Retirement of senior common stock — ( 55 )

Repurchase of Series G preferred stock — ( 12 )

Repurchase of common stock — ( 998 )

Borrowings under mortgage notes payable — 9,000

Payments for deferred financing costs ( 11 ) —

2 unchanged sentences

Repayments on revolving credit facility ( 35,700 ) ( 19,700 )

Increase in security deposits 198 141

Distributions paid for common, senior common, preferred stock and Non-controlling OP Unitholders ( 46,513 ) ( 45,445 )

Net cash used in financing activities $ ( 44,409 ) $ ( 38,819 )

Net (decrease) increase in cash, cash equivalents, and restricted cash $ ( 1,605 ) $ 6,082

Increase (decrease) in security deposits 347 ( 47 )

Distributions paid to common, senior common, preferred stock and Non-controlling OP Unitholders ( 16,487 ) ( 15,181 )

Net cash provided by (used in) financing activities $ 58,247 $ ( 34,708 )

Net increase (decrease) in cash, cash equivalents, and restricted cash $ 287 $ ( 1,217 )

Cash, cash equivalents, and restricted cash at beginning of period $ 15,074 $ 16,135

1 unchanged sentence

SUPPLEMENTAL AND NON-CASH INFORMATION

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

Unrealized gain related to interest rate hedging instruments, net $ ( 4,568 ) $ 7,218

Right-of-use asset from operating leases $ ( 686 ) $ —

Operating lease liabilities $ 795 $ —

Unrealized (loss) gain related to interest rate hedging instruments, net $ ( 4,016 ) $ 5,417

Right-of-use asset from finance leases $ 2,938 $ —

Finance lease liabilities $ ( 2,938 ) $ —

Capital improvements and leasing commissions included in accounts payable and accrued expenses $ 6,718 $ 6,868

Dividends paid on Series F preferred stock via additional share issuances $ 130 $ 131

(1) Prior period conformed to current presentation.

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

For the nine months ended September 30,

For the three months ended March 31,

Cash and cash equivalents $ 10,383 $ 10,451

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Securities and Exchange Commission (the “SEC”) on February 18, 2025.

The results of operations for the three and nine months ended September 30, 2024 are not necessarily indicative of the results that may be expected for other interim periods or for the full 2024 fiscal year.

The results of operations for the three months ended March 31, 2025 are not necessarily indicative of the results that may be expected for other interim periods or for the full 2025 fiscal year.

Use of Estimates

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A summary of all of our significant accounting policies is provided in Note 1, “Organization, Basis of Presentation and Significant Accounting Policies,” to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2024.

There were no material changes to our critical accounting policies during the three and nine months ended September 30, 2024.

There were no material changes to our critical accounting policies during the three months ended March 31, 2025.

Segment Reporting

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 2023, the FASB issued ASU 2023-07, “Segment Reporting - Improvements to Reportable Segment Disclosures.” The new standard improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

The standard requires expanded disclosures regarding significant segments expense categories and a measure of profit or loss for each reportable segment.

ASU 2023-08 is effective for fiscal years beginning after December 15, 2023.

We are currently evaluating the impact from adopting ASU 2023-07, but we anticipate adopting this standard will not have a material impact to our consolidated financial statements.

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

David Gladstone, our chairman and chief executive officer.

Two of our executive officers, Mr.

Gladstone and Mr.

Terry Lee 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.

3 unchanged sentences

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

As of September 30, 2024 and December 31, 2023, $ 3.1 million and $ 2.6 million, respectively, was collectively due to our Adviser and Administrator.

As of March 31, 2025 and December 31, 2024, $ 3.4 million and $ 2.5 million, respectively, was collectively due to our Adviser and Administrator.

Our entrance into the Advisory Agreement and each amendment thereto has been approved unanimously by our board of directors (“Board of Directors”).

5 unchanged sentences

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

For the three and nine months ended September 30, 2024, we recorded a base management fee of $ 1.5 million and $ 4.6 million, respectively.

For the three and nine months ended September 30, 2023, we recorded a base management fee of $ 1.6 million and $ 4.8 million, respectively.

For the three months ended March 31, 2025, we recorded a base management fee of $ 1.6 million.

For the three months ended March 31, 2024, we recorded a base management fee of $ 1.5 million.

Incentive Fee

1 unchanged sentence

We refer to this as the hurdle rate.

The Adviser will receive 15.0 % of the amount of our pre-incentive fee Core FFO that exceeds the hurdle rate.

The Adviser will receive 15.0 % of the amount of our pre-incentive fee Core FFO that exceeds the new hurdle rate.

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

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

Core FFO, as defined in the Advisory Agreement, is GAAP net income (loss) available (attributable) 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 (attributable) 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 Advisory Agreement by entering into the Seventh Amended and Restated Investment Advisory Agreement between the Company and the Adviser (the “Seventh Amended Advisory Agreement”), as 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 for the quarters ended March 31, 2023 and June 30, 2023.

The calculation of the other fees was unchanged.

The calculation of all other fees was unchanged.

On July 11, 2023, the Company amended and restated the Advisory Agreement by entering into the Eighth Amended and Restated Investment Advisory Agreement between the Company and the Adviser (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 was unchanged.

For the three months ended September 30, 2024, we recorded an incentive fee of $ 1.1 million, partially offset by credits related to non-contractual, unconditional, and irrevocable waivers issued by the Adviser of $ 0.4 million.

For the nine months ended September 30, 2024, we recorded an incentive fee of $ 3.6 million, partially offset by credits related to non-contractual, unconditional, and irrevocable waivers issued by the Adviser of $ 1.4 million.

For the three and nine months ended September 30, 2023, the contractually eliminated incentive fee would have been $ 0.9 million and $ 3.4 million, respectively.

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 all other fees was unchanged.

For the three months ended March 31, 2025, we recorded an incentive fee of $ 0.6 million.

The Adviser did not waive any portion of the incentive fee for the three months ended March 31, 2025.

For the three months ended March 31, 2024, we recorded an incentive fee of $ 1.2 million, partially offset by credits related to non-contractual, unconditional, and irrevocable waivers issued by the Adviser of $ 0.8 million.

Capital Gain Fee

3 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 three and nine months ended September 30, 2024 or 2023.

No capital gain fee was recognized during the three months ended March 31, 2025 or 2024.

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 for actual services performed.

For the three and nine months ended September 30, 2024, we recorded an administration fee of $ 0.7 million and $ 2.0 million, respectively.

For the three and nine months ended September 30, 2023, we recorded an administration fee of $ 0.6 million and $ 1.7 million, respectively.

For the three months ended March 31, 2025, we recorded an administration fee of $ 0.6 million.

For the three months ended March 31, 2024, we recorded an administration fee of $ 0.6 million.

Gladstone Securities

4 unchanged sentences

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.

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.

1 unchanged sentence

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

We did not pay financing fees to Gladstone Securities during the three months ended September 30, 2024 and paid financing fees to Gladstone Securities of $ 0.01 million during the nine months ended September 30, 2024, which are included in mortgage notes payable, net, in the condensed consolidated balance sheets, or 0.13 % of the mortgage principal secured.

We paid financing fees to Gladstone Securities of $ 0.03 million and $ 0.1 million during the three and nine months ended September 30, 2023, which are included in mortgage notes payable, net, in the condensed consolidated balance sheets, or 0.38 % and 0.29 % of the mortgage principal secured.

We did not pay financing fees to Gladstone Securities during the three months ended March 31, 2025 and 2024.

Our Board of Directors renewed the agreement for an additional year, through August 31, 2025, at its July 2024 meeting.

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

We paid fees of $ 0.01 million and $ 0.07 million to Gladstone Securities during the three and nine months ended September 30, 2024, respectively, in connection with the Offering.

We paid fees of $ 0.1 million and $ 0.5 million to Gladstone Securities during the three and nine months ended September 30, 2023, respectively, in connection with the Offering.

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 three and nine months ended September 30, 2024 and 2023.

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

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

We computed basic earnings (loss) per share for the three and nine months ended September 30, 2024 and 2023 using the weighted average number of shares outstanding during the respective periods.

Diluted earnings (loss) per share for the three and nine months ended September 30, 2024 and 2023 reflects additional shares of common stock related to our convertible senior common stock (the “Senior Common Stock”), if the effect of conversion would be dilutive, that would have been outstanding if such dilutive potential shares of common stock had been issued, as well as an adjustment to net 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 three months ended September 30, For the nine months ended September 30,

2024 2023 2024 2023

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

Net income (loss) available (attributable) to common stockholders $ 8,467 $ ( 1,419 ) $ 7,153 $ ( 9,063 )

We paid fees of $ 0.03 million to Gladstone Securities during the three months ended March 31, 2025 in connection with the Offering.

We paid fees of $ 0.02 million to Gladstone Securities during the three months ended March 31, 2024 in connection with the Offering.

Earnings Per Share of Common Stock

The following tables set forth the computation of basic and diluted earnings per share of common stock for the three months ended March 31, 2025 and 2024.

The operating partnership units in the Operating Partnership (“OP Units”) held by holders who do not control the Operating Partnership (“Non-controlling OP Unitholders”) (which may be redeemed for shares of common stock) have been excluded from the diluted earnings per share calculations, 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 income per share calculation.

We computed basic earnings per share for the three months ended March 31, 2025 and 2024 using the weighted average number of shares outstanding during the respective periods.

Diluted earnings per share for the three months ended March 31, 2025 and 2024 reflects additional shares of common stock related to our convertible senior common stock (the “Senior Common Stock”), if the effect of conversion would be dilutive, that would have been outstanding if such dilutive potential shares of common stock had been issued, as well as an adjustment to net income available to common stockholders as applicable to common stockholders that would result from their assumed issuance (dollars in thousands, except per share amounts).

For the three months ended March 31,

Calculation of basic earnings per share of common stock:

Net income available to common stockholders $ 1,915 $ 304

Denominator for basic weighted average shares of common stock (1) 44,607,012 40,003,481

Basic earnings (loss) per share of common stock $ 0.20 $ ( 0.04 ) $ 0.17 $ ( 0.23 )

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

Net income (loss) available (attributable) to common stockholders $ 8,467 $ ( 1,419 ) $ 7,153 $ ( 9,063 )

Net income (loss) available (attributable) to common stockholders plus assumed conversions (2) $ 8,467 $ ( 1,419 ) $ 7,153 $ ( 9,063 )

Basic earnings per share of common stock $ 0.04 $ 0.01

Calculation of diluted earnings per share of common stock:

Net income available to common stockholders $ 1,915 $ 304

Net income available to common stockholders plus assumed conversions (2) $ 1,915 $ 304

Denominator for basic weighted average shares of common stock (1) 44,607,012 40,003,481

1 unchanged sentence

Denominator for diluted weighted average shares of common stock (2) 44,607,012 40,003,481

Diluted earnings (loss) per share of common stock $ 0.20 $ ( 0.04 ) $ 0.17 $ ( 0.23 )

(1) The weighted average number of OP Units held by Non-controlling OP Unitholders was 39,474 and 196,675 for the three and nine months ended September 30, 2024, respectively, and 391,468 and 391,468 for the three and nine months ended September 30, 2023, respectively.

(2) We excluded convertible shares of Senior Common Stock of 339,299 and 345,132 from the calculation of diluted earnings per share for the three and nine months ended September 30, 2024 and 2023, respectively, because they were anti-dilutive.

Diluted earnings per share of common stock $ 0.04 $ 0.01

(1) The weighted average number of OP Units held by Non-controlling OP Unitholders was 39,474 for the three months ended March 31, 2025 and 310,643 for the three months ended March 31, 2024.

(2) We excluded convertible shares of Senior Common Stock of 329,404 and 342,247 from the calculation of diluted earnings per share for the three months ended March 31, 2025 and 2024, respectively, because these shares were anti-dilutive.

Real Estate and Intangible Assets

The following table sets forth the components of our investments in real estate as of September 30, 2024 and December 31, 2023, respectively, excluding real estate held for sale (dollars in thousands):

September 30, 2024 December 31, 2023

The following table sets forth the components of our investments in real estate as of March 31, 2025 and December 31, 2024, respectively, excluding real estate held for sale (dollars in thousands):

March 31, 2025 December 31, 2024

Land (1) $ 145,313 $ 139,743

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(1) This amount includes $ 2,711 of land value subject to land lease agreements which we may purchase at our option for a nominal fee.

Real estate depreciation expense on building and tenant improvements was $ 9.8 million and $ 29.8 million for the three and nine months ended September 30, 2024, respectively.

Real estate depreciation expense on building and tenant improvements was $ 8.9 million and $ 31.2 million for the three and nine months ended September 30, 2023, respectively.

We acquired six industrial properties during the nine months ended September 30, 2024, and acquired three industrial properties during the nine months ended September 30, 2023.

Real estate depreciation expense on building and tenant improvements was $ 9.8 million for the three months ended March 31, 2025.

Real estate depreciation expense on building and tenant improvements was $ 9.8 million for the three months ended March 31, 2024.

We acquired six industrial properties during the three months ended March 31, 2025, and did not acquire any properties during the three months ended March 31, 2024.

The acquisitions are summarized below (dollars in thousands):

Nine Months Ended Square Footage Lease Term Purchase Price Capitalized Acquisition Expenses

September 30, 2024 (1) 192,227 21.0 years $ 22,122 $ 435

September 30, 2023 (2) 183,803 18.7 years $ 17,539 $ 349

(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.

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

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

On July 10, 2023, we

acquired a 7,714 square foot property in Dallas-Fort Worth, Texas for $ 3.0 million.

Three Months Ended Aggregate Square Footage Weighted Average Remaining Lease Term at Time of Acquisition Aggregate Purchase Price Aggregate Capitalized Acquisition Expenses

March 31, 2025 (1) 355,778 10.8 years $ 73,725 $ 475

(1) On February 19, 2025, we acquired a five -property, 215,474 square foot portfolio in Houston, Texas for $ 29.5 million.

The property is fully leased to one tenant and had 10.0 years of remaining lease term at the time we acquired the property.

On July 28, 2023, we acquired a 100,000 square foot property in Dallas-Fort Worth, Texas for $ 9.2 million.

On March 28, 2025, we acquired a 140,304 square foot property in Dallas-Fort Worth, Texas for $ 44.3 million.

The property is fully leased to one tenant and had 11.3 years of remaining lease term at the time we acquired the property.

We determined the fair value of assets acquired and liabilities assumed related to the properties acquired during the nine months ended September 30, 2024 and 2023 as follows (dollars in thousands):

Nine Months Ended September 30, 2024 Nine Months Ended September 30, 2023

Acquired assets and liabilities Purchase price Purchase price

We determined the fair value of assets acquired and liabilities assumed related to the properties acquired during the three months ended March 31, 2025 as follows (dollars in thousands):

Three Months Ended March 31, 2025

Acquired assets and liabilities Purchase price

Land $ 5,570 (1)

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Customer Relationships 2,032

Above Market Leases 90 (1) —

Below Market Leases ( 2,115 ) (2)

Total Purchase Price $ 73,725

(1) This amount includes $ 90 of loans receivable included in Other assets on the condensed consolidated balance sheets.

(1) The Dallas-Fort Worth, Texas property acquired is subject to a ground lease, therefore there is no land asset included on the condensed consolidated balance sheets.

(2) This amount includes $ 250 of loans receivable included in Other liabilities on the condensed consolidated balance sheets.

Future Lease Payments

Future operating lease payments from tenants under non-cancelable leases, excluding tenant reimbursement of expenses, for the three months ending December 31, 2024 and each of the five succeeding fiscal years and thereafter is as follows (dollars in thousands):

Future operating lease payments from tenants under non-cancelable leases, excluding tenant reimbursement of expenses, for the nine months ending December 31, 2025 and each of the five succeeding fiscal years and thereafter is as follows (dollars in thousands):

Year Tenant Lease Payments

Three Months Ending December 31, 2024 $ 29,904

Nine Months Ending December 31, 2025 $ 94,158

Thereafter 356,456

Future sales-types lease payments from tenants under non-cancelable leases and reasonably certain purchase options for the nine months ending December 31, 2025 and each of the five succeeding fiscal years and thereafter is as follows (dollars in thousands):

Year Tenant Lease Payments

Nine Months Ending December 31, 2025 $ 19,199

Difference between undiscounted cash flow and present value 677

Sales-type lease receivable $ 18,522

In accordance with the lease terms, substantially all operating expenses are required to be paid by the tenant directly, or reimbursed to us from the tenant;

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Lease Revenue Reconciliation

The table below sets forth the allocation of lease revenue between fixed contractual payments and variable lease payments for the three and nine months ended September 30, 2024 and 2023, respectively (dollars in thousands):

For the three months ended September 30,

Lease revenue reconciliation 2024 2023 $ Change % Change

Fixed lease payments $ 34,663 $ 31,945 $ 2,718 8.5 %

Variable lease payments 4,572 4,519 53 1.2 %

$ 39,235 $ 36,464 $ 2,771 7.6 %

For the nine months ended September 30,

The table below sets forth the allocation of lease revenue between fixed contractual payments and variable lease payments for the three months ended March 31, 2025 and 2024, respectively (dollars in thousands):

For the three months ended March 31,

Lease revenue reconciliation 2025 2024 $ Change % Change

2 unchanged sentences

$ 37,501 $ 35,721 $ 1,780 5.0 %

Sales-Type Leases

For the three months ended March 31, 2025, we had one lease classified as a sales-type lease.

We recorded a sales-type lease receivable of $ 18.5 million in the condensed consolidated balance sheets, net of $ 0.02 million in allowance for credit loss.

For the three months ended March 31, 2025, the interest income earned from sales-type leases of $ 0.4 million was included in other income in the condensed consolidated statements of operations.

There was no sales-type lease activity in the three months ended March 31, 2024.

In developing the expected credit loss, we reviewed the tenant’s credit rating, which is AA- stable, performed a collectability analysis, and confirmed they were current on payments as of March 31, 2025.

The sales-type lease receivable, net, approximates fair value as of March 31, 2025.

Intangible Assets

The following table summarizes the carrying value of intangible assets, liabilities and the accumulated amortization for each intangible asset and liability class as of September 30, 2024 and December 31, 2023, respectively, excluding real estate held for sale (dollars in thousands):

September 30, 2024 December 31, 2023

The following table summarizes the carrying value of intangible assets, liabilities and the accumulated amortization for each intangible asset and liability class as of March 31, 2025 and December 31, 2024, respectively, excluding real estate held for sale (dollars in thousands):

March 31, 2025 December 31, 2024

Lease Intangibles Accumulated Amortization Lease Intangibles Accumulated Amortization

6 unchanged sentences

Below market leases and deferred revenue ( 58,481 ) 36,224 ( 56,616 ) 34,620

Total amortization expense related to in-place leases, leasing costs and customer relationship lease intangible assets was $ 3.6 million and $ 12.9 million for the three and nine months ended September 30, 2024, respectively, and $ 3.6 million and $ 12.9 million for the three and nine months ended September 30, 2023, respectively, and is included in depreciation and amortization expense in the condensed consolidated statements of operations and comprehensive income.

Total amortization related to above-market lease values was $ 0.1 million and $ 0.4 million for the three and nine months ended September 30, 2024, respectively, and $ 0.1 million and $ 0.4 million for the three and nine months ended September 30, 2023, respectively, and is included in lease revenue in the condensed consolidated statements of operations and comprehensive income.

Total amortization related to below-market lease values was $ 1.7 million and $ 5.5 million for the three and nine months ended September 30, 2024, respectively, and $ 1.8 million and $ 6.2 million for the three and nine months ended September 30, 2023, respectively, and is included in lease revenue in the condensed consolidated statements of operations and comprehensive income.

The weighted average amortization periods in years for the intangible assets acquired and liabilities assumed during the nine months ended September 30, 2024 and 2023, were as follows:

Intangible Assets & Liabilities September 30, 2024 September 30, 2023

Total amortization expense related to in-place leases, leasing costs and customer relationship lease intangible assets was $ 3.4 million for the three months ended March 31, 2025 and $ 3.5 million for the three months ended March 31, 2024, and is included in depreciation and amortization expense in the condensed consolidated statements of operations and comprehensive income.

Total amortization related to above-market lease values was $ 0.1 million for the three months ended March 31, 2025 and $ 0.1 million for the three months ended March 31, 2024, and is included in lease revenue in the condensed consolidated statements of operations and comprehensive income.

Total amortization related to below-market lease values was $ 1.6 million for the three months ended March 31, 2025 and $ 1.7 million for the three months ended March 31, 2024, and is included in lease revenue in the condensed consolidated statements of operations and comprehensive income.

We acquired six industrial properties during the three months ended March 31, 2025, and did not acquire any properties during the three months ended March 31, 2024.

The weighted average amortization periods in years for the intangible assets acquired and liabilities assumed during the three months ended March 31, 2025, were as follows:

Intangible Assets & Liabilities March 31, 2025

In-place leases 10.7

1 unchanged sentence

Customer relationships 15.7

Above market leases 25.1 0.0

Below market leases 10.7

All intangible assets & liabilities 12.0

1 unchanged sentence

Real Estate Dispositions

We sold six properties during the nine months ended September 30, 2024 and five properties during the nine months ended September 30, 2023.

During the nine months ended September 30, 2024, we continued to execute our capital recycling program, whereby we sold non-core properties.

We expect to continue to execute our capital recycling program 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 nine months ended September 30, 2024, we sold six non-core properties, located in Columbus, Ohio;

Draper, Utah;

Richardson, Texas;

Egg Harbor, New Jersey;

Cumming, Georgia;

and Lawrenceville, Georgia, 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 Nine Months Ended September 30, 2024 Aggregate Gain on Sale of Real Estate, net

412,767 $ 36,325 $ 1,193 $ 493 $ 10,554

Our dispositions during the nine months ended September 30, 2024 were not classified as discontinued operations because they did not represent a strategic shift in operations, nor will such dispositions have a major effect on our operations and financial results.

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

The table below summarizes the components of operating income from real estate and related assets disposed of during the three and nine months ended September 30, 2024 and 2023 (dollars in thousands):

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

2024 2023 2024 2023

Operating revenue $ 80 $ 959 $ 1,400 $ 3,424

Operating expense 4 9,149 (2) 969 (3) 14,902 (5)

Other income (expense), net 10,319 (1) ( 224 ) 10,636 (4) ( 748 )

Income (expense) from real estate and related assets sold $ 10,395 $ ( 8,414 ) $ 11,067 $ ( 12,226 )

(1) Includes a $ 10.3 million gain on sale of real estate, net, on the sale of two properties.

(2) Includes a $ 6.8 million impairment charge on one property.

(3) Includes a $ 0.5 million impairment charge on one property.

(4) Includes a $ 10.6 million gain on sale of real estate, net, on the sale of six properties and a $ 0.3 million gain on debt extinguishment, net, on the sale of two of those properties.

(5) Includes a $ 10.0 million impairment charge on three properties.

We did not sell any properties during the three months ended March 31, 2025 and sold three properties during the three months ended March 31, 2024.

Real Estate Held for Sale

At September 30, 2024, we had two properties classified as held for sale, located in Fridley, Minnesota and Tifton, Georgia.

At March 31, 2025, we had two properties classified as held for sale, located in Tifton, Georgia and Hickory, North Carolina.

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;

Columbus, Ohio;

and Tifton, Georgia.

The table below summarizes the components of the assets and liabilities held for sale at September 30, 2024 and December 31, 2023 reflected on the accompanying condensed consolidated balance sheets (dollars in thousands):

September 30, 2024 December 31, 2023

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

The table below summarizes the components of the assets and liabilities held for sale at March 31, 2025 and December 31, 2024, reflected on the accompanying condensed consolidated balance sheets (dollars in thousands):

March 31, 2025 December 31, 2024

Assets Held for Sale

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Lease intangibles, net 26 26

Deferred rent receivable, net — 7

Total Assets Held for Sale $ 4,363 $ 4,363

Liabilities Held for Sale

Deferred rent liability, net $ 169 $ 676

Total Liabilities Held for Sale $ 169 $ 676

Impairment Charges

We evaluated our portfolio for triggering events to determine if any of our held and used assets were impaired during the nine months ended September 30, 2024 and did not recognize an impairment charge.

We recognized impairment charges of $ 5.0 million on two held for sale assets, located in Richardson, Texas and Fridley, Minnesota during the nine months ended September 30, 2024.

In performing our held for sale assessments, 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.

We recognized an impairment charge of $ 9.0 million during the nine months ended September 30, 2023 on two held and used assets, located in Columbus, Ohio and Draper, Utah, and recognized an impairment charge of $ 4.6 million on two held for sale assets, located in Richardson, Texas and Taylorsville, Utah.

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

Mortgage Notes Payable and Credit Facility

We evaluated our portfolio for triggering events to determine if any of our held and used assets were impaired during the three months ended March 31, 2025 and did not recognize an impairment charge.

We did not recognize any impairment charges on our two held for sale assets during the three months ended March 31, 2025.

We did not recognize an impairment charge on our held and used assets during the three months ended March 31, 2024.

We recognized an impairment charge of $ 0.5 million on one held for sale asset, located in Richardson, Texas, during the three months ended March 31, 2024.

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.

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 September 30, 2024 and December 31, 2023 are summarized below (dollars in thousands):

Our mortgage notes payable, Credit Facility, and our Operating Partnership’s $ 75.0 million senior unsecured notes (the “2029 Notes”) as of March 31, 2025 and December 31, 2024 are summarized below (dollars in thousands):

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

September 30, 2024 September 30, 2024 December 31, 2023 September 30, 2024 September 30, 2024

March 31, 2025 March 31, 2025 December 31, 2024 March 31, 2025 March 31, 2025

Mortgage and other secured loans:

Fixed rate mortgage loans 44 $ 261,898 $ 264,243 (1) (2)

Variable rate mortgage loans 1 7,308 — N/A (2)

Variable rate mortgage loans 1 7,201 7,260 SOFR + 2.25 %

Premiums and discounts, net — ( 1 ) ( 8 ) N/A N/A

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Total term loan, net N/A $ 348,121 $ 347,948

Total mortgage notes payable and credit facility 132 $ 692,647 $ 738,861 (5)

(1) As of September 30, 2024, interest rates on our fixed rate mortgage notes payable varied from 2.80 % to 6.63 %.

(2) As of September 30, 2024, we had 39 mortgage notes payable with maturity dates ranging from January 1, 2025 through August 1, 2037.

(3) The weighted average interest rate on the mortgage notes outstanding as of September 30, 2024 was approximately 4.23 %.

(4) As of September 30, 2024, the Secured Overnight Financing Rate (“SOFR”) was approximately 4.96 %.

(5) The weighted average interest rate on all debt outstanding as of September 30, 2024 was approximately 5.47 %.

(6) The amount we may draw under our Credit Facility is based on a percentage of the fair value of a combined pool of 87 unencumbered properties as of September 30, 2024.

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

Deferred financing costs, senior unsecured notes — ( 1,001 ) ( 1,042 ) N/A N/A

Total senior unsecured notes, net N/A $ 73,999 $ 73,958

Total mortgage notes payable, credit facility, and senior unsecured notes 139 $ 740,746 $ 693,385 (5)

(1) As of March 31, 2025, interest rates on our fixed rate mortgage notes payable varied from 2.80 % to 6.63 %.

(2) As of March 31, 2025, we had 40 mortgage notes payable with maturity dates ranging from September 30, 2025 through August 1, 2037.

(3) As of March 31, 2025, the Secured Overnight Financing Rate (“SOFR”) was approximately 4.41 %.

(4) The weighted average interest rate on the mortgage notes outstanding as of March 31, 2025 was approximately 4.29 %.

(5) The weighted average interest rate on all debt outstanding as of March 31, 2025 was approximately 5.28 %.

(6) The amount we may draw under our Credit Facility is based on a percentage of the fair value of a combined pool of 94 unencumbered properties as of March 31, 2025.

N/A - Not Applicable

Mortgage Notes Payable

As of September 30, 2024, we had 39 mortgage notes payable, collateralized by a total of 45 properties with a net book value of $ 453.3 million.

As of March 31, 2025, we had 40 mortgage notes payable, collateralized by a total of 45 properties with a net book value of $ 428.8 million.

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

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

As of September 30, 2024, we did not have any mortgages subject to recourse.

As of March 31, 2025, we did not have any mortgages subject to recourse.

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

During the nine months ended September 30, 2024, we repaid two mortgages, collateralized by two properties, which are summarized in the table below (dollars in thousands):

Fixed Rate Debt Repaid Interest Rate on Fixed Rate Debt Repaid

$ 17,674 5.05 %

During the nine months ended September 30, 2024, we extended the maturity date of one mortgage, collateralized by one property, which is summarized in the table below (dollars in thousands):

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

$ 7,386 SOFR + 2.25 % 1.3 years

We did not make any payments for deferred financing costs during the three months ended September 30, 2024 and we made payments of $ 0.04 million for deferred financing costs during the nine months ended September 30, 2024.

We made payments of $ 0.3 million and $ 0.4 million for deferred financing costs during the three and nine months ended September 30, 2023, respectively.

Scheduled principal payments of mortgage notes payable for the three months ending December 31, 2024, and each of the five succeeding fiscal years and thereafter are as follows (dollars in thousands):

We made payments of $ 0.01 million for deferred financing costs during the three months ended March 31, 2025.

We did not make any payments for deferred financing costs during the three months ended March 31, 2024.

Scheduled principal payments of mortgage notes payable for the nine months ending December 31, 2025, and each of the five succeeding fiscal years and thereafter are as follows (dollars in thousands):

Year Scheduled Principal Payments

Three Months Ending December 31, 2024 $ 2,383

Nine Months Ending December 31, 2025 $ 17,509

Thereafter 14,993

11 unchanged sentences

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

At September 30, 2024 and December 31, 2023, our interest rate cap agreements and interest rate swaps were valued using Level 2 inputs.

At March 31, 2025 and December 31, 2024, our interest rate cap agreements and interest rate swaps were valued using Level 2 inputs.

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

3 unchanged sentences

During the next 12 months, we estimate that an additional $ 1.3 million will be reclassified out of accumulated other comprehensive income into interest expense in our condensed consolidated statements of operations and comprehensive income, as a reduction to interest expense.

The following table summarizes the interest rate caps at September 30, 2024 and December 31, 2023 (dollars in thousands):

September 30, 2024 December 31, 2023

The following table summarizes the interest rate caps at March 31, 2025 and December 31, 2024 (dollars in thousands):

March 31, 2025 December 31, 2024

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

$ — (1) $ — $ — $ 60,000 $ —

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

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

This cap matured in March 2025.

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.

3 unchanged sentences

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

The following table summarizes our interest rate swaps at September 30, 2024 and December 31, 2023 (dollars in thousands):

September 30, 2024 December 31, 2023

The following table summarizes our interest rate swaps at March 31, 2025 and December 31, 2024 (dollars in thousands):

March 31, 2025 December 31, 2024

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

1 unchanged sentence

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

Amount of gain, net, recognized in Comprehensive Income

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

2024 2023 2024 2023

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

Three Months Ended March 31,

Derivatives in cash flow hedging relationships

4 unchanged sentences

Amount reclassified out of Accumulated Other Comprehensive Income

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

2024 2023 2024 2023

Three Months Ended March 31,

Interest rate caps $ 15 $ 106

2 unchanged sentences

Asset (Liability) Derivatives Fair Value at

Derivatives Designated as Hedging Instruments Balance Sheet Location September 30, 2024 December 31, 2023

Derivatives Designated as Hedging Instruments Balance Sheet Location March 31, 2025 December 31, 2024

Interest rate caps Other assets $ — $ —

2 unchanged sentences

Total derivative liabilities, net $ 4,929 $ 8,946

The fair value of all mortgage notes payable outstanding as of September 30, 2024 was $ 247.5 million, as compared to the carrying value stated above of $ 271.6 million.

The fair value of all mortgage notes payable outstanding as of March 31, 2025 was $ 255.9 million, as compared to the carrying value stated above of $ 267.3 million.

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

8 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 September 30, 2024, there was $ 423.3 million outstanding under our Credit Facility, at a weighted average interest rate of approximately 6.27 %, and no outstanding letters of credit.

As of September 30, 2024, the maximum additional amount we could draw under the Credit Facility was $ 70.2 million.

We were in compliance with all covenants under the Credit Facility as of September 30, 2024.

The amount outstanding under the Credit Facility approximates fair value as of September 30, 2024.

As of March 31, 2025, there was $ 401.3 million outstanding under our Credit Facility, at a weighted average interest rate of approximately 5.72 %, and $ 2.1 million outstanding letters of credit, at a weighted average interest rate of 1.35 %.

As of March 31, 2025, the maximum additional amount we could draw under the Credit Facility was $ 70.1 million.

We were in compliance with all covenants under the Credit Facility as of March 31, 2025.

The amount outstanding under the Credit Facility approximates fair value as of March 31, 2025.

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 March 31, 2025.

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

Commitments and Contingencies

Ground Leases

We are obligated as lessee under three ground leases.

Future minimum rental payments due under the terms of these leases for the three months ending December 31, 2024 and each of the five succeeding fiscal years and thereafter are as follows (dollars in thousands):

We are obligated as lessee under four ground leases.

Future minimum rental payments due under the terms of these leases for the nine months ending December 31, 2025 and each of the five succeeding fiscal years and thereafter are as follows (dollars in thousands):

Year Future Lease Payments Due Under Operating Leases

Three Months Ending December 31, 2024 $ 115

Nine Months Ending December 31, 2025 $ 343

Thereafter 2,974

2 unchanged sentences

Present value of lease payments $ 4,003

Rental expense incurred for properties with ground lease obligations during the three and nine months ended September 30, 2024 was $ 0.1 million and $ 0.2 million, respectively.

Rental expense incurred for properties with ground lease obligations during the three and nine months ended September 30, 2023 was $ 0.1 million and $ 0.3 million, respectively.

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

Year Future Lease Payments Due Under Finance Leases

Nine Months Ending December 31, 2025 $ 116

Thereafter 7,098

Total anticipated lease payments $ 8,098

amount representing interest ( 5,160 )

Present value of lease payments $ 2,938

Rental expense incurred for properties with ground lease obligations during the three months ended March 31, 2025 was $ 0.1 million.

Rental expense incurred for properties with ground lease obligations during the three months ended March 31, 2024 was $ 0.1 million.

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

One of our ground leases is treated as a finance lease and rental expense is reflected in interest expenses on the condensed consolidated statements of operations and comprehensive income.

Our ground leases have a weighted average remaining lease term of 23.0 years and a weighted average discount rate of 5.79 %.

Letters of Credit

As of September 30, 2024, there were no outstanding letters of credit.

As of March 31, 2025, there were $ 2.1 million outstanding letters of credit related to mortgage requirements at our Maitland, Florida properties.

Equity and Mezzanine Equity

Stockholders’ Equity

The following table summarizes the changes in our equity for the three and nine months ended September 30, 2024 and 2023 (dollars in thousands):

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

2024 2023 2024 2023

The following table summarizes the changes in our equity for the three months ended March 31, 2025 and 2024 (dollars in thousands):

Three Months Ended March 31,

Senior Common Stock

4 unchanged sentences

Issuance of common stock, net 1 —

Repurchase of common stock, net — — — ( 1 )

Balance, end of period $ 45 $ 40

7 unchanged sentences

Issuance of common stock and Series F preferred stock, net 26,971 197

Repurchase of common stock, net — — — 998

Redemption of OP Units — — 3,865 —

Redemption of Series F preferred stock, net 571 55

Retirement of senior common stock, net — — — 52

Adjustment to OP Units held by Non-controlling OP Unitholders resulting from changes in ownership of the Operating Partnership ( 16 ) ( 43 )

14 unchanged sentences

Issuance of common stock and Series F preferred stock, net 26,972 197

Repurchase of common stock, net — — — 997

Redemption of OP Units — — 3,865 —

Redemption of Series F preferred stock, net 561 52

Retirement of senior common stock, net — — — 52

Distributions declared to common, senior common, and preferred stockholders ( 16,605 ) ( 15,220 )

7 unchanged sentences

Distributions declared to Non-controlling OP Unit holders ( 12 ) ( 93 )

Redemptions of OP Units — — ( 3,865 ) —

Adjustment to OP Units held by Non-controlling OP Unitholders resulting from changes in ownership of the Operating Partnership 16 43

3 unchanged sentences

Distributions

We paid the following distributions per share for the three and nine months ended September 30, 2024 and 2023:

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

2024 2023 2024 2023

We paid the following distributions per share for the three months ended March 31, 2025 and 2024:

For the three months ended March 31,

Common Stock and Non-controlling OP Units $ 0.30 $ 0.30

10 unchanged sentences

(“Fifth Third”), 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 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.

We terminated the Prior Common Stock Sales Agreement effective as of February 10, 2023 in connection with the expiration of the 2020 Registration Statement on February 11, 2023.

3 unchanged sentences

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

During the nine months ended September 30, 2024, we did not sell any shares of common stock under the 2023 Common Stock Sales Agreement.

During the three months ended March 31, 2025, 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.

2 unchanged sentences

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 nine months ended September 30, 2024, we sold 3,450,500 shares of common stock, raising approximately $ 49.5 million in net proceeds under the 2024 Common Stock Sales Agreement.

During the three months ended March 31, 2025, we sold 1,770,581 shares of common stock, raising approximately $ 27.7 million in net proceeds under the 2024 Common Stock Sales Agreement.

Mezzanine Equity

6 unchanged sentences

Universal Shelf Registration Statements

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 replaces the 2022 Registration Statement.

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

Series F Preferred Stock

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 30,180 shares of our Series F Preferred Stock, raising $ 0.7 million in net proceeds, during the nine months ended September 30, 2024.

We sold 13,500 shares of our Series F Preferred Stock, raising $ 0.3 million in net proceeds, during the three months ended March 31, 2025.

Non-controlling Interest in Operating Partnership

As of September 30, 2024 and December 31, 2023, we owned approximately 99.9 % and 99.2 %, re spectively, of the outstanding OP Units.

During the nine months ended September 30, 2024, we redeemed 271,169 OP Units for an equivalent amount of common stock.

As of March 31, 2025 and December 31, 2024, we owned approximately 99.9 % and 99.9 %, re spectively, of the outstanding OP Units.

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

As of September 30, 2024 and December 31, 2023, there were 39,474 and 310,643 outstanding OP Units held by Non-controlling OP Unitholders, respectively.

As of March 31, 2025 and December 31, 2024, there were 39,474 and 39,474 outstanding OP Units held by Non-controlling OP Unitholders, respectively.

Subsequent Events

Distributions

On October 8, 2024, our Board of Directors declared the following monthly distributions for the months of October, November and December of 2024:

On April 8, 2025, our Board of Directors declared the following monthly distributions for the months of April, May and June of 2025:

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

October 22, 2024 October 31, 2024 $ 0.10 $ 0.138021 $ 0.125

November 20, 2024 November 29, 2024 0.10 0.138021 0.125

December 20, 2024 December 31, 2024 0.10 0.138021 0.125

April 21, 2025 April 30, 2025 $ 0.10 $ 0.138021 $ 0.125

May 21, 2025 May 30, 2025 0.10 0.138021 0.125

June 20, 2025 June 30, 2025 0.10 0.138021 0.125

$ 0.30 $ 0.414063 $ 0.375

2 unchanged sentences

Payment Date Distribution per Share

October November 4, 2024 $ 0.0875

November December 4, 2024 0.0875

December January 3, 2025 0.0875

April May 5, 2025 $ 0.0875

May June 5, 2025 0.0875

June July 3, 2025 0.0875

Series F Preferred Stock Distributions

Record Date Payment Date Distribution per Share

October 24, 2024 November 4, 2024 $ 0.125

November 27, 2024 December 4, 2024 0.125

December 23, 2024 January 3, 2025 0.125

April 25, 2025 May 5, 2025 $ 0.125

May 27, 2025 June 5, 2025 0.125

June 25, 2025 July 3, 2025 0.125

Equity Activity

Subsequent to September 30, 2024 and through November 4, 2024, we raised $ 2.9 million in net proceeds from the sale of 182,368 shares of common stock under our 2024 Common Stock Sales Agreement and we raised $ 0.1 million in net proceeds from the sale of 4,000 shares of Series F Preferred Stock.

Subsequent to March 31, 2025 and through May 7, 2025, we raised $ 7.2 million in net proceeds from the sale of 525,192 shares of common stock under our 2024 Common Stock Sales Agreement and we raised $ 0.1 million in net proceeds from the sale of 2,200 shares of Series F Preferred Stock.

Sale Activity

On April 1, 2025, we sold our 60,000 square foot property in Hickory, North Carolina for $ 5.1 million.

We realized a $ 0.4 million gain on sale.

On April 30, 2025, we completed the transaction to sell our 676,031 square foot property in Tifton, Georgia for $ 18.5 million, incurring $ 0.4 million in closing costs.

During the year ended December 31, 2024, we recorded a sales-type lease receivable related and derecognized the carry value of this property, recognizing a $ 3.9 million selling profit from sales-type lease, net, that was included in the gain on sale of real estate, net, in the consolidated statement of operations.

Financing Activity

On October 21, 2024, we fully repaid one mortgage with an outstanding balance of $ 14.8 million collateralized by two properties.

This mortgage had a fixed interest rate of 4.04 %.

On October 21, 2024, we issued $ 15.2 million of fixed rate mortgage debt, collateralized by two properties, at an interest rate of 5.60 % and a maturity date of August 31, 2029.

On April 30, 2025, we fully repaid one mortgage with an outstanding balance of $ 7.2 million collateralized by one property.

This mortgage had a variable interest rate of SOFR + 2.25 %.

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

What changed 10-Q

Item 1. Financial Statements