What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-08-06 compared with 2025-05-07 · 212 added, 134 removed, 296 unchanged (54% of the section changed)

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These statements may relate to, among other things, future events or our future performance or financial condition.

In some cases, you can identify forward-looking statements by terminology such as “may,” “might,” “believe,” “will,” “provided,” “anticipate,” “future,” “could,” “growth,” “plan,” “intend,” “expect,” “should,” “would,” “if,” “seek,” “possible,” “potential,” “likely” or the negative of such terms or comparable terminology.

In some cases, you can identify forward-looking statements by terminology such as “may,” “might,” “believe,” “will,” “provide,” “anticipate,” “future,” “could,” “growth,” “plan,” “intend,” “expect,” “should,” “would,” “if,” “seek,” “possible,” “potential,” “likely” or the negative of such terms or comparable terminology.

These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our business, financial condition, liquidity, results of operations, funds from operations or prospects to be materially different from any future business, financial condition, liquidity, results of operations, funds from operations or prospects expressed or implied by such forward-looking statements.

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All references to annualized generally accepted accounting principles (“GAAP”) rent are rents that each tenant pays in accordance with the terms of its respective lease reported evenly over the non-cancelable term of the lease.

As of May 7, 2025:

As of August 6, 2025:

• we owned 143 properties totaling 17.0 million square feet of rentable space, located in 27 states;

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Business Environment

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

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

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

During the first quarter of 2025, the 10-year U.S.

Treasury yield ranged between 4.2% and 4.8%.

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

This volatility translated directly to capital markets and investment volume as sellers’ pricing expectations lagged real-time changes in rates, with activity picking up slightly in the fourth quarter of 2024 and the first quarter of 2025.

According to Cushman & Wakefield plc (“Cushman”), industrial leasing demand softened slightly in the first quarter of 2025 but remains active and resilient.

New leasing activity totaled just under 140 million square feet in completed deals during the first quarter of 2025, marking a 6.4% decline year over year.

In addition, according to Cushman, the U.S.

industrial sector absorbed 23.1 million square feet of positive absorption in the quarter, down from 42.4 million square feet, quarter over quarter, but on par when comparing year over year.

Finally, industrial rents increased 4.3% year over year, and completions trended lower for the third straight quarter.

The office market saw modest recovery in 2024 and continued signs of improvement in the first quarter of 2025.

According to Cushman, net absorption was negative in the first quarter of 2025, but the four-quarter rolling absorption total was its strongest in over two years, improving by 30% quarter over quarter and 48% year over year.

Net absorption in the first quarter of 2025 was positive for one third of U.S.

We collected 100% of all outstanding base rents for the three months ended March 31, 2025.

The overall business environment remained unpredictable in the second quarter of 2025.

The “Liberation Day” tariff announcements of April 2, 2025 fueled an initial drop in treasury rates followed by more recent increases as the Federal Reserve decided to keep its benchmark rate constant.

Despite tariff uncertainty and a persistently elevated interest rate environment, consumer demand has remained resilient, as demonstrated by recent bank earnings.

Tenant demand is unpredictable, and some tenants want to lock in space now, while others want to delay decision-making as long as possible.

Until we have greater certainty around the timing and magnitude of future rate changes, we expect conditions to remain largely consistent with the current environment.

According to Cushman & Wakefield plc (“Cushman”), industrial demand moderately improved through the June 2025 year to date period with 309.0 million square feet of new leasing activity compared to 307.9 million square feet during the same period last year.

Also, according to Cushman, the share of build to suit opportunities increased from 16.8% of total construction product during the June 2024 year to date period to 30.4% during the same period in 2025.

The speculative share in the second quarter of 2025 also dropped to its lowest level since the second quarter of 2020.

These dramatic changes are generally indicative of tenants adapting their supply chains to fit the current environment.

Finally, national industrial rents increased 2.6% year over year in the second quarter of 2025, according to Cushman, consistent with steady demand and more sustainable long term growth relative to the post-COVID boom.

The office market continues to see modest recovery in 2025.

According to Cushman, net absorption was negative again in the second quarter of 2025, but the four-quarter rolling absorption average moved up 49% year over year.

Finally, 35 markets posted positive net absorption over the past four quarters according to Cushman, indicating that office fundamentals are moving favorably in many locations.

We collected 100% of all outstanding base rents for the six months ended June 30, 2025.

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

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

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

We are in compliance with all of our debt covenants as of March 31, 2025.

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

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

We are in compliance with all of our debt covenants as of June 30, 2025.

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

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During the first quarter of 2025, the United States began a “reciprocal tariff” plan in an effort to increase the competitiveness of domestic manufacturing.

The short- and long-term impacts of such tariffs are yet to be known, but we feel we are well positioned in our industrial portfolio as we monitor the broader market conditions.

The full impact of such tariffs is yet to be known, but we believe we are well positioned in our industrial portfolio as we monitor the broader market conditions.

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

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

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

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

Currently, we have four partially vacant buildings and one fully vacant building.

Our available vacant space at March 31, 2025 represented 1.6% of our total square footage and the annual carrying costs on the vacant space, including real estate taxes and property operating expenses, are approximately $2.0 million.

Our available vacant space at June 30, 2025 represented 1.3% of our total square footage and the annual

carrying costs on the vacant space, including real estate taxes and property operating expenses, are approximately $1.9 million.

We continue to actively seek new tenants for these properties.

We believe our lease expiration schedule for the remainder of 2025 is manageable, as it equates to 2.5% of our lease revenue at March 31, 2025.

Property acquisitions since the beginning of 2020 have totaled $472.7 million and all but one transaction was industrial in nature, with a weighted average lease term of 13.6 years and a weighted average lease term of 10.4 years at the time of this filing.

We believe our lease expiration schedule for the remainder of 2025 is manageable, as it equates to 1.5% of our lease revenue at June 30, 2025.

Property acquisitions since the beginning of 2020 have totaled $551.6 million and all but one acquisition transaction was industrial in nature, with a weighted average lease term of 14.1 years and a weighted average lease term of 11.2 years at the time of this filing.

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

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

As of March 31, 2025, there was $40.0 million outstanding under Term Loan B.

Our principal sources of financing generally include the issuance of equity securities, long-term unsecured notes in the private placement market, long-term mortgage loans secured by properties, borrowings under our $125.0 million senior unsecured revolving credit facility (“Revolver”), with KeyBank National Association (“KeyBank”), which matures in August 2026, our $160.0 million term loan facility (“Term Loan A”), which matures in August 2027, our $60.0 million term loan facility (“Term Loan B”), which matures in February 2026, our $150.0 million term loan facility (“Term Loan C”) which matures in February 2028, our Operating Partnership’s Term Loan D, a $20.0 million unsecured term loan which matures in May 2027, and our Operating Partnership’s $75.0 million senior unsecured notes (the “2029 Notes”) which mature in December 2029.

As of June 30, 2025, there was $40.0 million outstanding under Term Loan B.

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

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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.

During the six months ended June 30, 2025, 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 six months ended June 30, 2025, we sold one non-core property, located in Hickory, North Carolina, which is summarized in the table below (dollars in thousands):

Aggregate Square Footage Sold Aggregate Sales Price Aggregate Sales Costs Aggregate Gain on Sale of Real Estate, net

60,000 $ 5,050 $ 310 $ 377

On April 30, 2025, we completed the transaction to sell our 676,031 square foot property in Tifton, Georgia for $18.5 million, incurring $0.3 million in closing costs, which are included in other income in the condensed consolidated statement of operations for the three and six months ended June 30, 2025.

During the year ended December 31, 2024, we recorded a sales-type lease receivable and derecognized the carrying 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.

Acquisition Activity

During the three months ended March 31, 2025, we acquired six industrial properties located in Houston, Texas and Dallas-Fort Worth, Texas, which are summarized below (dollars in thousands):

During the six months ended June 30, 2025, we acquired ten industrial properties located in Houston, Texas;

Dallas-Fort Worth, Texas;

Germantown, Wisconsin;

and Harrison Township, Michigan, which are summarized below (dollars in thousands):

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

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Leasing Activity

During and subsequent to the three months ended March 31, 2025, we executed one lease, which is summarized below (dollars in thousands):

Aggregate Square Footage Weighted Average Remaining Lease Term Aggregate Annualized GAAP Fixed Lease Payments

During the six months ended June 30, 2025, we executed two leases, which are summarized below (dollars in thousands):

Aggregate Square Footage Weighted Average Remaining Lease Term Aggregate Annualized GAAP Fixed Lease Payments Aggregate Leasing Commissions

123,017 1.3 years $ 1,240 $ 4

Financing Activity

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%.

During the six months ended June 30, 2025, we repaid one mortgage, collateralized by one property, which is summarized in the table below (dollars in thousands):

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

$ 7,181 SOFR + 2.25%

Equity Activities

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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 $250.0 million of common stock.

During the three months ended March 31, 2025, we did not sell any shares of common stock under the 2023 Common Stock Sales Agreement.

During the six months ended June 30, 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.

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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 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.

During the six months ended June 30, 2025, we sold 2,521,007 shares of common stock, raising approximately $38.0 million in net proceeds under the 2024 Common Stock Sales Agreement.

Universal Shelf Registration Statements

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

We sold 15,700 shares of our Series F Preferred Stock, raising $0.4 million in net proceeds, during the six months ended June 30, 2025.

The primary offering for our Series F Preferred Stock terminated according to its terms on June 1, 2025.

We expensed $0.3 million in prepaid offering costs due to the termination.

Non-controlling Interest in Operating Partnership

Gladstone Commercial Corporation conducts substantially all of its operations through a subsidiary, Gladstone Commercial Limited Partnership, a Delaware limited partnership (the “Operating Partnership”).

As of March 31, 2025 and December 31, 2024, we owned approximately 99.9% and 99.9%, respectively, of the outstanding operating partnership units in the Operating Partnership (“OP Units”).

As of March 31, 2025 and December 31, 2024, there were 39,474 and 39,474 outstanding OP Units held by holders who do not control the Operating Partnership (“Non-controlling OP Unitholders”), respectively.

As of June 30, 2025 and December 31, 2024, we owned approximately 99.9% and 99.9%, respectively, of the outstanding operating partnership units in the Operating Partnership (“OP Units”).

As of June 30, 2025 and December 31, 2024, there were 39,474 and 39,474 outstanding OP Units held by holders who do not control the Operating Partnership (“Non-controlling OP Unitholders”), respectively.

Diversity of Our Portfolio

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By diversifying our portfolio, our Adviser intends to reduce the adverse effect on our portfolio of a single under-performing investment or a downturn in any particular industry or geographic market.

For the three months ended March 31, 2025, our largest tenant comprised only 5.4% of total lease revenue.

The table below reflects the breakdown of our total lease revenue by tenant industry classification for the three months ended March 31, 2025 and 2024 (dollars in thousands):

For the three months ended March 31,

Industry Classification Lease Revenue Percentage of Lease Revenue Lease Revenue Percentage of Lease Revenue

For the six months ended June 30, 2025, our largest tenant comprised only 5.3% of total lease revenue.

The table below reflects the breakdown of our total lease revenue by tenant industry classification for the three and six months ended June 30, 2025 and 2024 (dollars in thousands):

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

2025 2024 2025 2024

Industry Classification Lease Revenue Percentage of Lease Revenue Lease Revenue Percentage of Lease Revenue Lease Revenue Percentage of Lease Revenue Lease Revenue Percentage of Lease Revenue

Automotive $ 5,556 14.2 % $ 5,418 14.6 % $ 11,088 14.3 % $ 10,721 14.7 %

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Personal, Food & Miscellaneous Services 2,616 6.6 2,370 6.4 5,232 6.8 4,718 6.5

Beverage, Food & Tobacco 3,324 8.4 1,467 4.0 4,835 6.3 2,932 4.0

Banking 2,245 5.7 2,382 6.4 4,516 5.9 4,696 6.5

Personal & Non-Durable Consumer Products 1,829 4.6 1,878 5.1 3,657 4.7 3,794 5.2

Machinery 1,815 4.6 1,868 5.0 3,651 4.7 3,476 4.8

Healthcare 1,704 4.3 2,504 6.8 3,538 4.6 4,727 6.5

Personal & Non-Durable Consumer Products 1,829 4.9 1,916 5.4

Beverage, Food & Tobacco 1,511 4.0 1,464 4.1

Chemicals, Plastics & Rubber 1,327 3.4 1,326 3.6 2,700 3.5 2,643 3.6

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Total $ 39,533 100.0 % $ 37,057 100.0 % $ 77,034 100.0 % $ 72,779 100.0 %

The tables below reflect the breakdown of total lease revenue by state for the three months ended March 31, 2025 and 2024 (dollars in thousands):

State Lease Revenue for the three months ended March 31, 2025 Percentage of Lease Revenue Number of Leases for the three months ended March 31, 2025 Lease Revenue for the three months ended March 31, 2024 Percentage of Lease Revenue Number of Leases for the three months ended March 31, 2024

The tables below reflect the breakdown of total lease revenue by state for the three and six months ended June 30, 2025 and 2024 (dollars in thousands):

State Lease Revenue for the three months ended June 30, 2025 Percentage of Lease Revenue Number of Leases for the three months ended June 30, 2025 Lease Revenue for the three months ended June 30, 2024 Percentage of Lease Revenue Number of Leases for the three months ended June 30, 2024

Texas $ 6,623 16.8 % 17 $ 4,614 12.5 % 14

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Ohio 2,924 7.4 15 3,066 8.3 15

Georgia 2,259 5.7 8 3,364 9.1 11

Alabama 2,175 5.5 6 2,184 5.9 6

North Carolina 2,110 5.3 9 2,351 6.3 10

Colorado 1,872 4.7 4 1,870 5.0 4

Michigan 1,766 4.5 7 1,707 4.6 6

Wisconsin 1,268 3.2 3 454 1.2 2

All Other States 8,748 22.2 45 9,072 24.5 48

Total $ 39,533 100.0 % 134 $ 37,057 100.0 % 136

State Lease Revenue for the six months ended June 30, 2025 Percentage of Lease Revenue Number of Leases for the six months ended June 30, 2025 Lease Revenue for the six months ended June 30, 2024 Percentage of Lease Revenue Number of Leases for the six months ended June 30, 2024

Texas $ 11,953 15.5 % 17 $ 9,143 12.6 % 14

Pennsylvania 10,552 13.7 11 7,815 10.7 11

Florida 8,866 11.5 9 8,551 11.7 9

Ohio 6,008 7.8 15 6,252 8.6 15

North Carolina 4,509 5.9 9 4,684 6.4 10

Georgia 4,466 5.8 8 6,320 8.7 11

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

Our Administrator employs our chief financial officer, treasurer, chief compliance officer, general counsel and secretary, Mr.

Michael LiCalsi (who also serves as our Administrator’s president, general counsel, and secretary, as well as executive vice president of administration of our Adviser) and their respective staffs.

Our Administrator employs our chief financial officer, treasurer, chief compliance officer, chief administrative officer, co-general counsels, co-secretaries, and their respective staffs.

Michael LiCalsi, our chief administrative officer, co-general counsel, and co-secretary, also serves in the same roles for our Adviser and Administrator (in addition to serving as president of our Administrator).

Erich Hellmold, our co-general counsel and co-secretary, also serves in the same roles for our Adviser and Administrator.

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

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Cooper and Gerson, all of our executive officers and all of our directors, serve as either directors or executive officers, or both, of Gladstone Land Corporation.

Cooper and Gerson generally spend all of their time focused on the Company, and do not put forth any material efforts in assisting affiliated companies.

Cooper and Gerson generally spend all of their

time focused on the Company, and do not put forth any material efforts in assisting affiliated companies.

In the future, our Adviser may provide investment advisory services to other companies, both public and private.

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Base Management Fee

On July 14, 2020, we amended and restated the Advisory Agreement, which 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 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 Advisory Agreement as the current gross value of our property portfolio (meaning the aggregate of each property’s original acquisition price plus the cost of any subsequent capital improvements thereon).

The calculations of the other fees in the Amended Agreement was unchanged.

The base management fee is payable quarterly in arrears and 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 Advisory Agreement as the current gross value of our property portfolio (meaning the aggregate of each property’s original acquisition price plus the cost of any subsequent capital improvements thereon).

Our Adviser does not charge acquisition or disposition fees when we acquire or dispose of properties as is common in other externally managed REITs;

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Incentive Fee

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

before giving effect to the incentive fee).

We refer to this as the new hurdle rate.

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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 months ended March 31, 2025 or 2024.

No capital gain fee was recognized during the three and six months ended June 30, 2025 or 2024.

Termination Fee

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Administration Agreement

Under the terms of the Administration Agreement, we pay separately for our allocable portion of our Administrator’s overhead expenses in performing its obligations to us including, but not limited to, rent and our allocable portion of the salaries and benefits expenses of our Administrator’s employees, including, but not limited to, our chief financial officer, treasurer, chief compliance officer, general counsel and secretary (who also serves as our Administrator’s president, general counsel and secretary), and their respective staffs.

LiCalsi also serves as our Administrator’s president, co-general counsel and co-secretary), and their respective staffs.

Our allocable portion of the Administrator’s expenses are generally derived by multiplying our Administrator’s total expenses by the appropriate percentage of time the Administrator’s employees perform services for us in relation to their time spent performing services for all companies serviced by our Administrator under contractual agreements.

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

Application of these accounting policies involves the exercise of judgment regarding the use of assumptions as to future uncertainties, and as a result, actual results could materially differ

from these estimates.

Application of these accounting policies involves the exercise of judgment regarding the use of assumptions as to future uncertainties, and as a result, actual results could materially differ from these estimates.

A summary of all of our significant accounting policies is provided in Note 1 to our consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2024, filed by us with the U.S.

Securities and Exchange Commission (the “SEC”) on February 18, 2025 (our “2024 Form 10-K”).

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

There were no material changes to our critical accounting policies or estimates during the six months ended June 30, 2025.

Results of Operations

The weighted average yield on our total portfolio, which was 8.5% and 8.5% as of March 31, 2025 and 2024, respectively, is calculated by taking the annualized straight-line rents plus operating expense recoveries, reflected as lease revenue on our condensed consolidated statements of operations and other comprehensive income, less property operating expenses, of each acquisition since inception, as a percentage of the acquisition cost plus subsequent capital improvements.

The weighted average yield on our total portfolio, which was 8.5% and 8.6% as of June 30, 2025 and 2024, respectively, is calculated by taking the annualized straight-line rents plus operating expense recoveries, reflected as lease revenue on our condensed consolidated statements of operations and other comprehensive income, less property operating expenses, of each acquisition since inception, as a percentage of the acquisition cost plus subsequent capital improvements.

The weighted average yield does not account for the interest expense incurred on the mortgages placed on our properties or other types of existing indebtedness.

A comparison of our operating results for the three months ended March 31, 2025 and 2024 is below (dollars in thousands, except per share amounts) :

For the three months ended March 31,

A comparison of our operating results for the three and six months ended June 30, 2025 and 2024 is below (dollars in thousands, except per share amounts) :

For the three months ended June 30,

2025 2024 $ Change % Change

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Interest expense $ (10,058) $ (9,463) $ (595) 6.3 %

Gain (loss) on sale of real estate, net 377 (47) 424 (902.1) %

Other (expense) income (72) 26 (98) (376.9) %

Total other expense, net $ (9,753) $ (9,484) $ (269) 2.8 %

Net income $ 4,634 $ 1,600 $ 3,034 189.6 %

Distributions attributable to Series E, F, and G preferred stock (3,085) (3,116) 31 (1.0) %

Distributions attributable to senior common stock (101) (105) 4 (3.8) %

Gain (loss) on extinguishment of Series F preferred stock 9 (4) 13 (325.0) %

Net income (loss) available (attributable) to common stockholders and Non-controlling OP Unitholders $ 1,457 $ (1,625) $ 3,082 (189.7) %

Net income (loss) available (attributable) to common stockholders and Non-controlling OP Unitholders per weighted average share and unit - basic & diluted $ 0.03 $ (0.04) $ 0.07 (175.0) %

FFO available to common stockholders and Non-controlling OP Unitholders - basic (1) $ 15,338 $ 14,437 $ 901 6.2 %

FFO available to common stockholders and Non-controlling OP Unitholders - diluted (1) $ 15,439 $ 14,542 $ 897 6.2 %

FFO per weighted average share of common stock and Non-controlling OP Units - basic (1) $ 0.33 $ 0.36 $ (0.03) (8.3) %

FFO per weighted average share of common stock and Non-controlling OP Units - diluted (1) $ 0.33 $ 0.36 $ (0.03) (8.3) %

(1) Refer to the “Funds from Operations” section below within the Management’s Discussion and Analysis section for the definition of FFO.

For the six months ended June 30,

2025 2024 $ Change % Change

Operating revenues

Lease revenue $ 77,034 $ 72,779 $ 4,255 5.8 %

Total operating revenues $ 77,034 $ 72,779 $ 4,255 5.8 %

Operating expenses

Depreciation and amortization $ 27,492 $ 29,341 $ (1,849) (6.3) %

Property operating expenses 14,158 11,692 2,466 21.1 %

Base management fee 3,207 3,051 156 5.1 %

Incentive fee 1,348 2,416 (1,068) (44.2) %

Administration fee 1,212 1,225 (13) (1.1) %

General and administrative 2,284 2,093 191 9.1 %

Impairment charge 9 493 (484) (98.2) %

Total operating expense before incentive fee waiver $ 49,710 $ 50,311 $ (601) (1.2) %

Incentive fee waiver (709) (1,021) 312 (30.6) %

Total operating expenses $ 49,001 $ 49,290 $ (289) (0.6) %

Other income (expense)

Interest expense $ (19,196) $ (18,960) $ (236) 1.2 %

Gain on sale of real estate, net 377 236 141 59.7 %

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Other income 559 60 499 831.7 %

Total other income (expense), net $ (8,507) $ (8,880) $ 373 (4.2) %

Total other expense, net $ (18,260) $ (18,364) $ 104 (0.6) %

Net income $ 9,773 $ 5,125 $ 4,648 90.7 %

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Loss on extinguishment of Series F preferred stock (1) (7) 6 (85.7) %

Net income available to common stockholders and Non-controlling OP Unitholders $ 1,917 $ 306 $ 1,611 526.5 %

Net income available to common stockholders and Non-controlling OP Unitholders per weighted average share and unit - basic & diluted $ 0.04 $ 0.01 $ 0.03 300.0 %

Net income (loss) available (attributable) to common stockholders and Non-controlling OP Unitholders $ 3,377 $ (1,322) $ 4,699 (355.4) %

Net income (loss) available (attributable) to common stockholders and Non-controlling OP Unitholders per weighted average share and unit - basic & diluted $ 0.07 $ (0.03) $ 0.10 (333.3) %

FFO available to common stockholders and Non-controlling OP Unitholders - basic (1) $ 30,501 $ 27,976 $ 2,525 9.0 %

FFO available to common stockholders and Non-controlling OP Unitholders - diluted (1) $ 30,703 $ 28,187 $ 2,516 8.9 %

FFO per weighted average share of common stock and Non-controlling OP Units - basic (1) $ 0.34 $ 0.34 $ — — %

FFO per weighted average share of common stock and Non-controlling OP Units - diluted (1) $ 0.34 $ 0.34

FFO per weighted average share of common stock and Non-controlling OP Unit - basic (1) $ 0.67 $ 0.69 $ (0.02) (2.9) %

FFO per weighted average share of common stock and Non-controlling OP Unit - diluted (1) $ 0.67 $ 0.69

$ (0.02) (2.9) %

(1) Refer to the “Funds from Operations” section below within the Management’s Discussion and Analysis section for the definition of FFO.

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Operating Revenues

For the three months ended March 31,

For the three months ended June 30,

(Dollars in Thousands)

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$ 39,533 $ 37,057 $ 2,476 6.7 %

For the six months ended June 30,

(Dollars in Thousands)

Lease Revenues 2025 2024 $ Change % Change

Same Store Properties $ 64,201 $ 60,337 $ 3,864 6.4 %

Acquired & Disposed Properties 4,561 4,031 530 13.1 %

Properties with Vacancy 8,272 8,411 (139) (1.7) %

$ 77,034 $ 72,779 $ 4,255 5.8 %

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

Lease revenues from same store properties increased for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024, due to an increase in recovery revenue from property expenses and an increase in rental rates from leasing activity subsequent to the three months ended March 31, 2024.

Lease revenues decreased for acquired and disposed of properties for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024, primarily due to the loss of rental and variable lease payments from the seven property sales during and subsequent to March 31, 2024, minimally offset by lease revenue from the 13 properties acquired subsequent to March 31, 2024.

Lease revenues decreased for our properties with vacancy for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024, mainly due to a loss of rental revenue from increased vacancy, partially offset by an increase in variable lease payments.

Lease revenues from same store properties increased for the three and six months ended June 30, 2025, as compared to the three and six months ended June 30, 2024, due to an increase in recovery revenue from property expenses and an increase in rental rates from leasing activity subsequent to the three months ended June 30, 2024.

Lease revenues increased for acquired and disposed of properties for the three and six months ended June 30, 2025, as compared to the three and six months ended June 30, 2024, primarily due to an increase in recovery revenue from property expenses and an increase in rental rates on the 12 properties acquired subsequent to June 30, 2024, partially offset by accelerated rent on a lease termination during the three and six months ended June 30, 2024.

Lease revenues decreased for our properties with vacancy for the three and six months ended June 30, 2025, as compared to the three and six months ended June 30, 2024, mainly due to a loss of rental revenue from increased vacancy, partially offset by an increase in variable lease payments.

Operating Expenses

Depreciation and amortization expense decreased for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024, due to the reduced depreciation and amortization expense from the four property sales subsequent to March 31, 2024, partially offset by an increase in depreciation and amortization expense on the 13 properties acquired subsequent to March 31, 2024.

For the three months ended March 31,

Depreciation and amortization expense decreased for the three and six months ended June 30, 2025, as compared to the three and six months ended June 30, 2024, due to the reduced depreciation and amortization expense from the five property sales subsequent to June 30, 2024, partially offset by an increase in depreciation and amortization expense on the 12 properties acquired subsequent to June 30, 2024.

For the three months ended June 30,

(Dollars in Thousands)

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$ 7,258 $ 5,807 $ 1,451 25.0 %

For the six months ended June 30,

(Dollars in Thousands)

Property Operating Expenses 2025 2024 $ Change % Change

Same Store Properties $ 10,142 $ 7,695 $ 2,447 31.8 %

Acquired & Disposed Properties 162 651 (489) (75.1) %

Properties with Vacancy 3,854 3,346 508 15.2 %

$ 14,158 $ 11,692 $ 2,466 21.1 %

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

The increase in property operating expenses for same store properties for the three months ended March 31, 2025, from the comparable 2024 period, was a result of general cost increases due to the inflationary environment during the three months ended March 31, 2025.

The decrease in property operating expenses for acquired and disposed of properties for the three months ended March 31, 2025, from the comparable 2024 period, is a result of a decrease in property operating expenses from the seven property sales during and subsequent to March 31, 2024, minimally offset by the property operating expense from the 13 properties acquired subsequent to March 31, 2024.

The increase in property operating expenses for properties with vacancy for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024, is a result of increased maintenance expense.

The base management fee paid to the Adviser increased slightly for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024, due to an increase in Gross Tangible Real Estate over the three months ended March 31, 2025 from property acquisitions as compared to Gross Tangible Real Estate during the three months ended March 31, 2024.

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

The net incentive fee paid to the Adviser increased for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024, due to the Adviser waiving a portion of the incentive fee for the three months ended March 31, 2024.

The Adviser did not wave the incentive fee during the three months ended March 31, 2025.

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

The administration fee paid to the Administrator decreased slightly for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024, due to our Administrator allocating a smaller portion of expenses to us.

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

General and administrative expenses decreased for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024, mainly due to a reduction in legal expenses.

The increase in property operating expenses for same store properties for the three and six months ended June 30, 2025, from the comparable 2024 period, was a result of

general cost increases due to the inflationary environment during the three and six months ended June 30, 2025.

The decrease in property operating expenses for acquired and disposed of properties for the three and six months ended June 30, 2025, from the comparable 2024 period, is a result of a decrease in property operating expenses from the seven property sales during and subsequent to June 30, 2024, minimally offset by the property operating expense from the 12 properties acquired subsequent to June 30, 2024.

The increase in property operating expenses for properties with vacancy for the three months ended June 30, 2025, as compared to the three months ended June 30, 2024, is primarily a result of increased real estate expense and other general cost increases due to the inflationary environment.

The base management fee paid to the Adviser increased for the three and six months ended June 30, 2025, as compared to the three and six months ended June 30, 2024, due to an increase in Gross Tangible Real Estate over the three and six months ended June 30, 2025 from property acquisitions as compared to Gross Tangible Real Estate during the three and six months ended June 30, 2024.

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

The net incentive fee paid to the Adviser decreased for the three and six months ended June 30, 2025, as compared to the three and six months ended June 30, 2024, due to the Adviser waiving a larger portion of the incentive fee for the three and six months ended June 30, 2025.

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

The administration fee paid to the Administrator decreased slightly for the three and six months ended June 30, 2025, as compared to the three and six months ended June 30, 2024, due to our Administrator allocating a smaller portion of expenses to us.

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

General and administrative expenses increased for the three and six months ended June 30, 2025, as compared to the three and six months ended June 30, 2024, mainly due to higher audit expenses and expensing Series F Preferred Stock prepaid offering costs due to the termination of the primary offering.

Other Income and Expenses

Interest expense decreased for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024.

This decrease was primarily the result of decreased costs associated with the maturity of several interest rate caps in the previous period as well as reduced interest expense on mortgage debt that was repaid in during and subsequent to March 31, 2024.

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

We sold three non-core office properties during the three months ended March 31, 2024, and as a result, incurred a gain on sale of real estate, net, and a gain on debt extinguishment, net.

Other income increased for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024, due to interest income earned from sales-types leases and nonrecurring income items that occurred in the three months ended March 31, 2025.

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

Net income available to common stockholders and Non-controlling OP Unitholders increased for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024, primarily due to an increase in recovery revenue from property expenses, an increase in rental rates from leasing activity, no impairment charge in the current period, and lower interest expense in the period.

This was partially offset by a higher net incentive fee payable to the Adviser accrued in the current period and no gain on sale, net, and gain on debt extinguishment, net.

Interest expense increased for the three and six months ended June 30, 2025, as compared to the three and six months ended June 30, 2024.

This increase was primarily the result of increased interest costs on variable rate debt, as a result of larger amounts drawn on the Revolver, as well as new interest expense on the 2029 Notes.

We sold one non-core office property during the six months ended June 30, 2025, and as a result, incurred a gain on sale of real estate, net.

We sold four non-core office properties during the six months ended June 30, 2024, and as a result, incurred a gain on sale of real estate, net, and a gain on debt extinguishment, net.

Other income decreased for the three months ended June 30, 2025, as compared to the three months ended June 30, 2024, due to incurring $0.3 million in closing costs associated with the completion of the sale transaction at our Tifton, Georgia property.

Other income increased for the six months ended June 30, 2025, as compared to the six months ended June 30, 2024, due to interest income earned from sales-types leases and nonrecurring income items.

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

Net income (loss) available (attributable) to common stockholders and Non-controlling OP Unitholders increased for the three and six months ended June 30, 2025, as compared to the three and six months ended June 30, 2024, primarily due to an increase in recovery revenue from property expenses, an increase in rental rates from leasing activity, a decrease in the net incentive fee payable to the Adviser, and lower depreciation expense.

This was partially offset by higher general and administrative fees during the period.

Liquidity and Capital Resources

Our sources of liquidity include cash flows from operations, cash and cash equivalents, borrowings under our Credit Facility, and additional issuances of equity and/or debt securities.

Our available liquidity as of March 31, 2025 was $80.5 million, consisting of approximately $10.4 million in cash and cash equivalents and available borrowing capacity of $70.1 million under our Credit Facility.

Our available borrowing capacity under the Credit Facility increased to $80.6 million as of May 7, 2025.

Our available liquidity as of June 30, 2025 was $38.7 million, consisting of approximately $11.7 million in cash and cash equivalents and available borrowing capacity of $27.0 million under our Credit Facility.

Our available borrowing capacity under the Credit Facility decreased to $25.1 million as of August 6, 2025.

Future Capital Needs

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Equity Capital

During the three months ended March 31, 2025, we raised net proceeds of $27.7 million of common equity under the 2024 Common Stock Sales Agreement.

We raised net proceeds of $0.3 million from sales of our Series F Preferred Stock during the three months ended March 31, 2025.

As of May 7, 2025, we had the ability to raise up to $1.0 billion of additional equity capital through the sale and issuance of securities that are registered under the 2024 Registration Statement, in one or more future public offerings.

During the six months ended June 30, 2025, we raised net proceeds of $38.0 million of common equity under the 2024 Common Stock Sales Agreement.

We raised net proceeds of $0.4 million from sales of our Series F Preferred Stock during the six months ended June 30, 2025.

As of August 6, 2025, we had the ability to raise up to $1.0 billion of additional equity capital through the sale and issuance of securities that are registered under the 2024 Registration Statement, in one or more future public offerings.

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

As of March 31, 2025, we had 40 mortgage notes payable in the aggregate principal amount of $269.1 million, collateralized by a total of 45 properties with a remaining weighted average maturity of 3.3 years.

The weighted-average interest rate on the mortgage notes payable as of March 31, 2025 was 4.29%.

As of June 30, 2025, we had 39 mortgage notes payable in the aggregate principal amount of $259.5 million, collateralized by a total of 44 properties with a remaining weighted average maturity of 3.1 years.

The weighted-average interest rate on the mortgage notes payable as of June 30, 2025 was 4.22%.

We continue to see banks and other non-bank lenders willing to issue mortgages for properties comparable to those held in our portfolio on terms that are commercially reasonable.

As of March 31, 2025, we had mortgage debt in the aggregate principal amount of $17.5 million payable during the remainder of 2025 and $35.4 million payable during 2026.

The 2025 principal amount payable includes both amortizing principal payments and two balloon principal payments due during the remaining nine months of 2025.

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

As of June 30, 2025, we had mortgage debt in the aggregate principal amount of $7.9 million payable during the remainder of 2025 and $35.4 million payable during 2026.

The 2025 principal amount payable includes both amortizing principal payments and one balloon principal payment due during the remaining six months of 2025.

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

Operating Activities

Net cash provided by operating activities during the three months ended March 31, 2025, was $17.7 million, as compared to net cash provided by operating activities of $15.0 million for the three months ended March 31, 2024.

Net cash provided by operating activities during the six months ended June 30, 2025, was $53.5 million, as compared to net cash provided by operating activities of $28.6 million for the six months ended June 30, 2024.

The majority of cash from operating activities is generated from the lease revenues that we receive from our tenants.

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Investing Activities

Net cash used in investing activities during the three months ended March 31, 2025, was $75.6 million, which primarily consisted of six property acquisitions, capital improvements performed at certain of our properties, and deposits paid for future acquisitions.

Net cash provided by investing activities during the three months ended March 31, 2024, was $18.5 million, which primarily consisted of proceeds from three property sales, offset by capital improvements performed at certain of our properties.

Net cash used in investing activities during the six months ended June 30, 2025, was $155.8 million, which primarily consisted of ten property acquisitions and capital improvements performed at certain of our properties, partially offset by proceeds from one property sale.

Net cash provided by investing activities during the six months ended June 30, 2024, was $5.8 million, which primarily consisted of proceeds from four property sales, partially offset by a five-property acquisition, coupled with capital improvements performed at certain of our properties.

Financing Activities

Net cash provided by financing activities during the three months ended March 31, 2025, was $58.2 million, which primarily consisted of the issuance of $28.4 million of equity and net borrowings on our credit facility, partially offset by $2.4 million of mortgage principal repayments and distributions paid to common, senior common and preferred shareholders.

Net cash used in financing activities for the three months ended March 31, 2024, was $34.7 million, which primarily consisted of $19.8 million of mortgage debt repayments, and distributions paid to common, senior common and preferred shareholders, partially offset by the issuance of $0.2 million of equity and net borrowings on our Credit Facility.

Net cash provided by financing activities during the six months ended June 30, 2025, was $103.1 million, which primarily consisted of the issuance of $39.0 million of equity, net borrowings on our credit facility, and $20.0 million in borrowings on Term Loan D, our new unsecured term loan, partially offset by $12.0 million of mortgage principal repayments and distributions paid to common, senior common and preferred shareholders.

Net cash used in financing activities for the six months ended June 30, 2024, was $36.1 million, which primarily consisted of $22.1 million of mortgage debt repayments, and distributions paid to common, senior common and preferred shareholders, partially offset by the issuance of $11.4 million of equity and net borrowings on our Credit Facility.

Credit Facility

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

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

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

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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 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 May 7, 2025, the maximum additional amount we could draw under the Credit Facility was $80.6 million.

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

As of June 30, 2025, there was $444.4 million outstanding under our Credit Facility at a weighted average interest rate of approximately 5.76% and $2.1 million outstanding letters of credit, at a weighted average interest rate of 1.35%.

As of August 6, 2025, the maximum additional amount we could draw under the Credit Facility was $25.1 million.

We were in compliance with all covenants under the Credit Facility as of June 30, 2025.

Unsecured Term Loan D

On May 30, 2025, we and the Operating Partnership entered into a Term Loan Agreement with KeyBank, in connection with the $20.0 million Term Loan D.

Term Loan D is unsecured and has a maturity date of May 30, 2027 and a SOFR spread ranging from 155 to 200 basis points throughout the life of the loan.

The amount outstanding approximates fair value as of June 30, 2025.

The proceeds were used to pay down the Revolver.

Senior Unsecured Notes

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 amount outstanding approximates fair value as of June 30, 2025.

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

Contractual Obligations

The following table reflects our material contractual obligations as of March 31, 2025 (dollars in thousands):

The following table reflects our material contractual obligations as of June 30, 2025 (dollars in thousands):

Payments Due by Period

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$ 926,907 $ 110,060 $ 605,144 $ 179,279 $ 32,424

(1) Debt obligations represent borrowings under our Revolver, which represents $51.3 million of the debt obligation due in 2026, Term Loan A, which represents $160.0 million of the debt obligation due in 2027, Term Loan B, which represents $40.0 million of the debt obligation due in 2026, Term Loan C, which represents $150.0 million of the debt obligation due in 2028, the 2029 Notes, which represents $75.0 million of the debt obligation due in 2029, and mortgage notes payable that were outstanding as of March 31, 2025.

This figure does not include $(0.001) million of premiums and (discounts), net and $4.7 million of deferred financing costs, net, which are reflected in mortgage notes payable, net, borrowings under

Term Loan A, Term Loan B, Term Loan C, net, and senior unsecured notes, net, on the condensed consolidated balance sheets.

(2) Interest on debt obligations includes estimated interest on borrowings under our Revolver, Term Loan A, Term Loan B, Term Loan C, the 2029 notes, and mortgage notes payable.

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

thus, the interest payment obligation calculated for purposes of this table was based upon rates and balances as of March 31, 2025.

(1) Debt obligations represent borrowings under our Revolver, which represents $94.4 million of the debt obligation due in 2026, Term Loan A, which represents $160.0 million of the debt obligation due in 2027, Term Loan B, which represents $40.0 million of the debt obligation due in 2026, Term Loan C, which represents $150.0 million of the debt obligation due in 2028, Term Loan D, which represents $20.0 million of the debt obligation due in 2027, the 2029 Notes, which represents $75.0 million of the debt obligation due in 2029, and mortgage notes payable that were outstanding as of June 30, 2025.

This figure does not include $6,378 of premiums and (discounts), net and $4.5 million of deferred financing costs, net, which are reflected in mortgage notes payable, net, borrowings under Term Loan A, Term Loan B, Term Loan C, net, borrowings under unsecured Term Loan D, net, and senior unsecured notes, net, on the condensed consolidated balance sheets.

(2) Interest on debt obligations includes estimated interest on borrowings under our Revolver, Term Loan A, Term Loan B, Term Loan C, Term Loan D, the 2029 Notes, and mortgage notes payable.

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

thus, the interest payment obligation calculated for purposes of this table was based upon rates and balances as of June 30, 2025.

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

(4) Purchase obligations consist of tenant and capital improvements at 10 of our properties.

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

Off-Balance Sheet Arrangements

We did not have any material off-balance sheet arrangements as of March 31, 2025.

We did not have any material off-balance sheet arrangements as of June 30, 2025.

Funds from Operations

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FFO available to common stockholders and holders of Non-controlling interests in the Operating Partnership (“Non-controlling OP Unitholders”) is FFO adjusted to subtract distributions made to holders of preferred stock and senior common stock.

We believe that net income available to common stockholders is the most directly comparable GAAP measure to FFO available to common stockholders and Non-controlling OP Unitholders.

Basic funds from operations per share (“Basic FFO per share”), and diluted funds from operations per share (“Diluted FFO per share”), is FFO available to common stockholders and Non-controlling OP Unitholders divided by the number of weighted average shares of the aggregate of shares of common stock and OP Units held by Non-controlling OP Unitholders outstanding and FFO available to common stockholders and Non-controlling OP Unitholders divided by the number of weighted average shares of the aggregate of shares of common stock and OP Units held by Non-controlling OP Unitholders outstanding on a diluted basis, respectively, during a period.

We believe that net income (loss) available (attributable) to common stockholders is the most directly comparable GAAP measure to FFO available to common stockholders and Non-controlling OP Unitholders.

diluted basis, respectively, during a period.

We believe that FFO available to common stockholders, Basic FFO per share and Diluted FFO per share are useful to investors because they provide investors with a further context for evaluating our FFO results in the same manner that investors use net income and earnings per share (“EPS”), in evaluating net income available to common stockholders.

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We believe that net income is the most directly comparable GAAP measure to FFO, Basic EPS is the most directly comparable GAAP measure to Basic FFO per share, and that Diluted EPS is the most directly comparable GAAP measure to Diluted FFO per share.

The following table provides a reconciliation of our FFO available to common stockholders for the three months ended March 31, 2025 and 2024, respectively, to the most directly comparable GAAP measure, net income available to common stockholders, and a computation of basic and diluted FFO per weighted average share of common stock:

For the three months ended March 31,

(Dollars in Thousands, Except for Per Share Amounts)

The following table provides a reconciliation of our FFO available to common stockholders for the three and six months ended June 30, 2025 and 2024, respectively, to the most directly comparable GAAP measure, net income (loss) available (attributable) to common stockholders, and a computation of basic and diluted FFO per weighted average share of common stock:

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

(Dollars in Thousands, Except for Per Share Amounts) (Dollars in Thousands, Except for Per Share Amounts)

2025 2024 2025 2024

Calculation of basic FFO per share of common stock and Non-controlling OP Unit

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Distributions attributable to preferred and senior common stock (3,186) (3,221) (6,395) (6,440)

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

Net income available to common stockholders and Non-controlling OP Unitholders $ 1,917 $ 306

Gain (loss) on extinguishment of Series F preferred stock, net 9 (4) (1) (7)

Net income (loss) available (attributable) to common stockholders and Non-controlling OP Unitholders $ 1,457 $ (1,625) $ 3,377 $ (1,322)

Real estate depreciation and amortization $ 14,249 $ 16,015 $ 27,492 $ 29,341

Impairment charge 9 — 9 493

Loss on sale of real estate, net — 47 — —

Gain on sale of real estate, net (377) — (377) (236)

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Distributions attributable to preferred and senior common stock (3,186) (3,221) (6,395) (6,440)

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

Net income available to common stockholders and Non-controlling OP Unitholders $ 1,917 $ 306

Gain (loss) on extinguishment of Series F preferred stock, net 9 (4) (1) (7)

Net income (loss) available (attributable) to common stockholders and Non-controlling OP Unitholders $ 1,457 $ (1,625) $ 3,377 $ (1,322)

Real estate depreciation and amortization $ 14,249 $ 16,015 $ 27,492 $ 29,341

1 unchanged sentence

Income impact of assumed conversion of senior common stock 101 105 202 211

Loss on sale of real estate, net — 47 — —

Gain on sale of real estate, net (377) — (377) (236)

8 unchanged sentences

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis