What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-08-05 compared with 2026-05-05 · 181 added, 105 removed, 341 unchanged (46% of the section changed)

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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 5, 2026:

As of August 5, 2026:

• we owned 152 properties totaling 17.8 million square feet of rentable space, located in 27 states;

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Business Environment

The first quarter of 2026 had a business environment that was resilient in the face of turbulent macroeconomic conditions, including conflict in the Middle East.

The second quarter of 2026 had a business environment that was resilient in the face of turbulent macroeconomic conditions, including conflict in the Middle East.

After similar macroeconomic conditions in 2025 (marked by geopolitical conflict, inflation, and domestic policy uncertainty), businesses and consumers seem to have adjusted and continued with normal operations.

With no Federal Reserve rate decisions during the first quarter 2026, the 10-year treasury yield was impacted primarily by the Iran conflict.

Right before the conflict began at the end of February 2026, the 10-year yield briefly dropped below 4.0% before climbing back above 4.4% for the first time since July 2025.

It has since settled in the 4.3% range.

Despite this volatility, businesses and consumers continue to press forward and make decisions, providing optimism for the remainder of the year so long as negative macroeconomic conditions do not escalate further.

According to Cushman & Wakefield plc (“Cushman”), industrial demand remained positive into 2026, with approximately 40.0 million square feet of net absorption recorded in the first quarter of 2026, representing a 52% increase year-over-year and the strongest start to a year since 2023.

The national industrial vacancy rate declined 10 basis points from its late-2025 peak to 7.0%, indicating that market conditions have stabilized and may be past peak vacancy.

National industrial rent growth measured 2.1% year-over-year, reflecting modest improvement from late 2025 levels.

While growth moderated, approximately 60% of U.S.

markets tracked by Cushman reported positive year-over-year rent growth during the first quarter of 2026.

New construction deliveries totaled 54.0 million square feet, representing a 27% decline year-over-year and the lowest level since mid-2017, reflecting continued moderation in new supply.

We collected 100% of all outstanding base rents for the three months ended March 31, 2026.

With no Federal Reserve rate changes during the second quarter of 2026, the 10-year treasury yield increased modestly, moving from the 4.3% range to the 4.5% range during the quarter.

Despite this uptick, businesses and consumers continue to press forward and make decisions, providing optimism for the remainder of the year so long as negative macroeconomic conditions do not escalate.

According to Colliers International Group, Inc.

(“Colliers”), industrial real estate demand remained positive in the second quarter of 2026, with approximately 59.0 million square feet of net absorption recorded in the quarter, more than double the year-over-year total.

Also, according to Colliers, the vacancy rate either declined or stabilized during the quarter in a majority of markets tracked, resulting in second quarter 2026 national industrial vacancy rate of 7.3%.

This indicates that industrial market conditions have stabilized and may be past peak vacancy.

National industrial rent growth remained essentially flat as coastal markets corrected from outsized rent growth during pandemic-era expansion and most markets entering a period of pricing stability.

With vacancy leveling off and absorption remaining strong, rents are expected to remain stable through the remainder of 2026.

We collected 100% of all outstanding base rents for the six months ended June 30, 2026.

We believe this reflects the strength of our credit underwriting and ongoing asset management.

Our tenant base remains diversified, with limited exposure to tenants in the retail, hospitality, airlines, and oil and gas industries.

Additionally, our properties are located across 27 states, which we believe helps limit our exposure to regional economic, regulatory, or weather-related issues risks in any one geographic market or area.

Additionally, our properties are located across 27 states, which we believe helps limit our exposure to regional economic, regulatory, or weather-related risks in any one geographic market or area.

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

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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 March 31, 2026.

We are in compliance with all of our debt covenants as of June 30, 2026.

Based on market observations and conversations we routinely have with lenders, we believe that credit continues to be available for well-capitalized borrowers.

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Broader economic and geopolitical uncertainty continues to influence tenant decision making, particularly for industrial users evaluating supply chain resiliency, inventory strategy, and domestic production needs.

Uncertainty surrounding the future path of monetary policy, including the anticipated transition in Federal Reserve leadership in 2026, may contribute to volatility in interest rates and capital markets conditions.

Uncertainty surrounding the future path of monetary policy, including the change in Federal Reserve leadership in 2026, may contribute to volatility in interest rates and capital markets conditions.

Geopolitical conflict, particularly in the Middle East, continues to create risk for global trade flows, energy markets, and supply chains.

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These dynamics may affect tenant operating costs and timing of leasing decisions.

At the same time, ongoing onshoring and reshoring initiatives, supported by policy incentives and supply chain security considerations, continue to drive investment in domestic manufacturing and logistics infrastructure.

At the same time, ongoing onshoring and reshoring initiatives in the U.S., supported by federal policy incentives and supply chain security considerations, continue to drive investment in domestic manufacturing and logistics infrastructure.

While these trends may support long-term industrial demand, they typically require extended planning and capital investment and may take time to translate into leasing activity.

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Severe weather and climate-related events may impact certain markets;

however, recent periods have resulted in no disruption to our portfolio.

however, recent periods have resulted in no such related disruptions to our portfolio.

Operationally, we remain focused on maintaining high occupancy through lease renewals and releasing activity, managing upcoming lease expirations, and addressing upcoming debt maturities.

Currently, we have six partially vacant buildings and no fully vacant buildings.

Our available vacant space at March 31, 2026 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 $2.7 million.

Our available vacant space at June 30, 2026 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 $2.5 million.

We continue to actively seek new tenants for these properties.

We believe our lease expiration schedule for the remainder of 2026 is manageable, equating to 9.9% of our lease revenue at March 31, 2026.

We believe our lease expiration schedule for the remainder of 2026 is manageable, equating to 7.1% of our lease revenue at June 30, 2026.

A majority of these expirations are currently in discussions for renewal, which we believe reduces near-term rollover risk.

Property acquisitions since the beginning of 2021 have totaled $477.0 million and all but one acquisition transaction was industrial in nature, with a weighted average lease term of 15.3 years at time of acquisition and a weighted average lease term of 12.8 years at the time of this filing.

Property acquisitions since the beginning of 2021 have totaled $499.7 million and all but one acquisition transaction was industrial in nature, with a weighted average lease term of 14.9 years at time of the acquisition and a weighted average lease term of 12.2 years at the time of this filing.

Our ability to make new investments depends on our access to capital and financing markets.

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Sale Activity

During the three months ended March 31, 2026, we did not sell any properties, but we sold a portion of a land parcel, located in Ocala, Florida, which is summarized in the table below (dollars in thousands):

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

During the six months ended June 30, 2026, we continued to execute our capital recycling program, whereby we sell properties and redeploy 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 properties as reasonable disposition opportunities become available.

We sold one property, located in Charlotte, North Carolina, and a portion of a land parcel, located in Ocala, Florida, during the six months ended June 30, 2026, which are 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

161,458 $ 14,899 $ 283 $ 3,676

Acquisition Activity

During the six months ended June 30, 2026, we acquired one industrial property, which is 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

153,890 5.9 years $ 23,004 $ 254 $ 1,538

On July 28, 2026, we purchased a 146,650 square foot industrial property in Red Bud, Illinois for $6.6 million.

This property is fully leased to one tenant on an 8.4 year lease.

Land Acquisition

On June 25, 2026, we acquired a parcel of unimproved land adjacent to our Clintonville, Wisconsin property for $0.7 million.

The land will be used to construct an approximately 86,000 square foot expansion of the current facility.

Leasing Activity

During the three months ended March 31, 2026, we executed five 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

During the six months ended June 30, 2026, we executed eight leases, which are summarized below (dollars in thousands):

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

966,057 5.6 years $ 8,853 $ 4,268 $ 1,186

During the three months ended March 31, 2026, we had one lease termination, which is summarized below (dollars in thousands):

Aggregate Square Footage Reduced Aggregate Accelerated Rent Aggregate Accelerated Rent Recognized through March 31, 2026

During the six months ended June 30, 2026, we had two lease terminations, which are summarized below (dollars in thousands):

Aggregate Square Footage Reduced Square Footage Remaining Aggregate Accelerated Rent Aggregate Accelerated Rent Recognized through June 30, 2026

85,230 14,513 $ 1,580 $ —

Financing Activity

During the three months ended March 31, 2026, we repaid two mortgages, collateralized by two properties, which are summarized in the table below (dollars in thousands):

During the six months ended June 30, 2026, we repaid two mortgages, collateralized by two properties, which are summarized in the table below (dollars in thousands):

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

$ 1,512 6.58%

During the three months ended March 31, 2026, we extended the maturity date of one mortgage, collateralized by two properties, which is summarized in the table below (dollars in thousands):

During the six months ended June 30, 2026, we extended the maturity date of one mortgage, collateralized by two properties, which is summarized in the table below (dollars in thousands):

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

$ 7,771 3.78% 1.0 year

Appointment of Officer

On March 20, 2026, the Board of Directors appointed Arthur “Buzz” Cooper as the Company’s Chief Executive Officer, effective immediately.

Election of Director

Effective June 1, 2026, George “Chip” Stelljes, III was elected to our Board of Directors, where he was also appointed to serve on the Compensation Committee, the Ethics, Nominating & Corporate Governance Committee, and the Valuation Committee.

Equity Activities

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1 to the 2023 Common Stock Sales Agreement (as amended time to time, the “2024 Common Stock Sales Agreement”).

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

The amendment permitted shares of common stock to be issued pursuant to the

2024 Common Stock Sales Agreement under the Company’s Registration Statement on Form S-3 (File No.

333-277877) (the “2024 Registration Statement”), and future registration statements on Form S-3.

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2, the Common Stock Sales Agents are BofA, Goldman Sachs, KeyBanc, Fifth Third, and Huntington.

During the three months ended March 31, 2026, we did not sell shares of common stock under the 2024 Common Stock Sales Agreement, as amended.

During the six months ended June 30, 2026, we did not sell shares of common stock under the 2024 Common Stock Sales Agreement, as amended.

Universal Shelf Registration Statement

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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, 2026 and December 31, 2025, 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, 2026 and December 31, 2025, 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, 2026 and December 31, 2025, 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, 2026 and December 31, 2025, 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, 2026, our largest tenant comprised only 5.1% 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, 2026 and 2025 (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, 2026, our largest tenant comprised only 5.0% 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, 2026 and 2025 (dollars in thousands):

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

2026 2025 2026 2025

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 $ 7,353 16.6 % $ 5,556 14.2 % $ 14,720 17.4 % $ 11,088 14.3 %

Diversified/Conglomerate Manufacturing 5,247 11.9 3,131 7.9 8,351 9.7 5,919 7.7

Diversified/Conglomerate Services 4,995 11.4 5,062 12.8 10,021 11.7 10,306 13.4

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Telecommunications 3,521 8.0 3,658 9.3 6,940 8.1 7,131 9.3

Diversified/Conglomerate Manufacturing 3,107 7.4 2,790 7.4

Personal, Food & Miscellaneous Services 2,410 5.5 2,616 6.6 5,043 5.9 5,232 6.8

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Personal & Non-Durable Consumer Products 1,906 4.3 1,829 4.6 3,743 4.4 3,657 4.7

Healthcare 1,826 4.4 1,833 4.9

Machinery 1,828 4.2 1,815 4.6 3,645 4.2 3,651 4.7

Chemicals, Plastics & Rubber 1,374 3.3 1,375 3.7

Healthcare 1,719 3.9 1,704 4.3 3,544 4.1 3,538 4.6

Containers, Packaging & Glass 1,370 3.1 1,157 2.9 2,696 3.1 2,313 3.0

Chemicals, Plastics & Rubber 1,326 3.0 1,327 3.4 2,700 3.1 2,700 3.5

Childcare 573 1.3 573 1.4 1,147 1.3 1,146 1.5

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Oil & Gas 248 0.6 248 0.6 497 0.6 497 0.6

Aerospace & Defense 213 0.5 — — 213 0.2 — —

Education 134 0.3 173 0.4 278 0.3 299 0.4

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Total $ 43,989 100.0 % $ 39,533 100.0 % $ 85,898 100.0 % $ 77,034 100.0 %

The tables below reflect the breakdown of total lease revenue by state for the three months ended March 31, 2026 and 2025 (dollars in thousands):

State Lease Revenue for the three months ended March 31, 2026 Percentage of Lease Revenue Number of Leases for the three months ended March 31, 2026 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

The tables below reflect the breakdown of total lease revenue by state for the three and six months ended June 30, 2026 and 2025 (dollars in thousands):

State Lease Revenue for the three months ended June 30, 2026 Percentage of Lease Revenue Number of Leases for the three months ended June 30, 2026 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

Texas $ 6,587 15.0 % 17 $ 6,623 16.8 % 17

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Florida 4,531 10.3 9 4,482 11.3 9

North Carolina 4,225 9.6 8 2,110 5.3 9

Ohio 2,894 6.6 14 2,924 7.4 15

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Alabama 2,176 4.9 6 2,175 5.5 6

Wisconsin 1,980 4.5 3 1,268 3.2 3

Indiana 1,956 4.4 12 1,244 3.1 10

All Other States 9,336 21.2 40 9,376 23.8 39

Total $ 43,989 100.0 % 142 $ 39,533 100.0 % 134

State Lease Revenue for the six months ended June 30, 2026 Percentage of Lease Revenue Number of Leases for the six months ended June 30, 2026 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

Texas $ 13,193 15.4 % 17 $ 11,953 15.5 % 17

Pennsylvania 10,742 12.5 11 10,552 13.7 11

Florida 8,921 10.4 9 8,866 11.5 9

North Carolina 6,289 7.3 8 4,509 5.9 9

Ohio 5,955 6.9 14 6,008 7.8 15

Georgia 5,045 5.9 12 4,466 5.8 8

Michigan 4,913 5.7 10 3,510 4.6 7

Alabama 4,346 5.1 6 4,343 5.6 6

Wisconsin 3,960 4.6 3 1,732 2.2 3

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

fees (although we may be able to pass all or some of such fees on to our tenants and borrowers).

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

In addition, we are also responsible for all fees charged by third parties that are directly related to our business, which include real estate brokerage fees, mortgage placement fees, lease-up fees and transaction structuring fees (although we may be able to pass all or some of such fees on to our tenants and borrowers).

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

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

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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, 2026 or 2025.

No capital gain fee was recognized during the three and six months ended June 30, 2026 or 2025.

Termination Fee

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Securities and Exchange Commission (the “SEC”) on February 18, 2026 (our “2025 Form 10-K”).

There were no material changes to our critical accounting policies or estimates during the three months ended March 31, 2026.

There were no material changes to our critical accounting policies or estimates during the six months ended June 30, 2026.

Results of Operations

The weighted average yield on our total portfolio, which was 8.6% and 8.5% as of March 31, 2026 and 2025, 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 8.4% and 8.5% as of June 30, 2026 and 2025, 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, 2026 and 2025 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, 2026 and 2025 is below (dollars in thousands, except per share amounts) :

For the three months ended June 30,

2026 2025 $ Change % Change

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General and administrative 1,181 1,400 (219) (15.6) %

Impairment charge — 9 (9) (100.0) %

Total operating expense before incentive fee waiver $ 26,259 $ 25,855 $ 404 1.6 %

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Gain on sale of real estate, net 1,894 377 1,517 402.4 %

Other (expense) income (24) 631 (655) (103.8) %

Other income (expense) 21 (72) 93 (129.2) %

Total other (expense) income, net $ (9,482) $ (9,753) $ 271 (2.8) %

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Distributions attributable to senior common stock (99) (101) 2 (2.0) %

Gain (loss) on extinguishment of Series F preferred stock 4 (10) 14 (140.0) %

(Loss) gain on extinguishment of Series F preferred stock (7) 9 (16) (177.8) %

Net income available to common stockholders and Non-controlling OP Unitholders $ 5,128 $ 1,457 $ 3,671 252.0 %

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(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,

2026 2025 $ Change % Change

Operating revenues

Lease revenue $ 85,898 $ 77,034 $ 8,864 11.5 %

Total operating revenues $ 85,898 $ 77,034 $ 8,864 11.5 %

Operating expenses

Depreciation and amortization $ 29,753 $ 27,492 $ 2,261 8.2 %

Property operating expenses 14,192 14,158 34 0.2 %

Base management fee 3,480 3,207 273 8.5 %

Incentive fee 1,195 1,348 (153) (11.4) %

Administration fee 1,293 1,212 81 6.7 %

General and administrative 2,187 2,284 (97) (4.2) %

Impairment charge — 9 (9) (100.0) %

Total operating expense before incentive fee waiver $ 52,100 $ 49,710 $ 2,390 4.8 %

Incentive fee waiver (619) (709) 90 (12.7) %

Total operating expenses $ 51,481 $ 49,001 $ 2,480 5.1 %

Other (expense) income

Interest expense $ (22,851) $ (19,196) $ (3,655) 19.0 %

Gain on sale of real estate, net 3,676 377 3,299 875.1 %

Other (expense) income (3) 559 (562) (100.5) %

Total other expense, net $ (19,178) $ (18,260) $ (918) 5.0 %

Net income $ 15,239 $ 9,773 $ 5,466 55.9 %

Distributions attributable to Series E, F, and G preferred stock (6,078) (6,193) 115 (1.9) %

Distributions attributable to senior common stock (197) (202) 5 (2.5) %

Loss on extinguishment of Series F preferred stock (3) (1) (2) 200.0 %

Net income available to common stockholders and Non-controlling OP Unitholders $ 8,961 $ 3,377 $ 5,584 165.4 %

Net income available to common stockholders and Non-controlling OP Unitholders per weighted average share and unit - basic & diluted $ 0.18 $ 0.07 $ 0.11 157.1 %

FFO available to common stockholders and Non-controlling OP Unitholders - basic (1) $ 35,038 $ 30,501 $ 4,537 14.9 %

FFO available to common stockholders and Non-controlling OP Unitholders - diluted (1) $ 35,235 $ 30,703 $ 4,532 14.8 %

FFO per weighted average share of common stock and Non-controlling OP Unit - basic (1) $ 0.72 $ 0.67 $ 0.05 7.5 %

FFO per weighted average share of common stock and Non-controlling OP Unit - diluted (1) $ 0.72 $ 0.67

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

Same Store Analysis

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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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$ 43,989 $ 39,533 $ 4,456 11.3 %

For the six months ended June 30,

(Dollars in Thousands)

Lease Revenues 2026 2025 $ Change % Change

Same Store Properties $ 63,404 $ 62,650 $ 754 1.2 %

Acquired & Disposed Properties 12,450 3,487 8,963 257.0 %

Properties with Vacancy 10,044 10,897 (853) (7.8) %

$ 85,898 $ 77,034 $ 8,864 11.5 %

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, 2026, as compared to the three months ended March 31, 2025, 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, 2025.

Lease revenues increased for acquired and disposed of properties for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025, primarily due to an increase in recovery revenue from property expenses and an increase in rental rates on the 13 properties acquired subsequent to March 31, 2025.

Lease revenues decreased for our properties with vacancy for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025, mainly due to a decrease in recovery revenue from lower property expenses.

Lease revenues from same store properties increased for the three and six months ended June 30, 2026, as compared to the three and six months ended June 30, 2025, due to an increase in recovery revenue from property expenses and an increase in rental rates from leasing activity subsequent to the six months ended June 30, 2025.

Lease revenues increased for acquired and disposed of properties for the three and six months ended June 30, 2026, as compared to the three and six months ended June 30, 2025, primarily due to lease revenue from the 10 properties acquired subsequent to June 30, 2025.

This was coupled with a termination fee recognized on the property sold during the three months ended June 30, 2026.

Lease revenues decreased for our properties with vacancy for the three and six months ended June 30, 2026, as compared to the three and six months ended June 30, 2025, mainly due to a decrease in recovery revenue from lower property expenses.

Operating Expenses

Depreciation and amortization expense increased for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025, due to an increase in depreciation and amortization expense on the 13 properties acquired subsequent to March 31, 2025, partially offset by the reduced depreciation and amortization expense from the two property sales subsequent to March 31, 2025.

For the three months ended March 31,

Depreciation and amortization expense increased for the three and six months ended June 30, 2026, as compared to the three and six months ended June 30, 2025, due to an increase in depreciation and amortization expense on the 10 properties acquired subsequent to June 30, 2025, partially offset by the reduced depreciation and amortization expense from the two property sales subsequent to June 30, 2025.

For the three months ended June 30,

(Dollars in Thousands)

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$ 7,157 $ 7,258 $ (101) (1.4) %

For the six months ended June 30,

(Dollars in Thousands)

Property Operating Expenses 2026 2025 $ Change % Change

Same Store Properties $ 9,016 $ 8,655 $ 361 4.2 %

Acquired & Disposed Properties 380 168 212 126.2 %

Properties with Vacancy 4,796 5,335 (539) (10.1) %

$ 14,192 $ 14,158 $ 34 0.2 %

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, 2026, from the comparable 2025 period, was a result of general cost increases due to the inflationary environment and increased property maintenance expenses during the three months ended March 31, 2026.

The increase in property operating expenses for acquired and disposed of properties for the three months ended March 31, 2026, from the comparable 2025 period, is a result of an increase in property operating expenses from the 13 properties acquired subsequent to March 31, 2025, partially offset by lower property operating expenses at the two property sales subsequent to March 31, 2025.

The decrease in property operating expenses for properties with vacancy for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025, is mainly due to a decrease in overall property expenses at vacant properties.

The base management fee paid to the Adviser increased for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025, due to an increase in Gross Tangible Real Estate over the three months ended March 31, 2026 from property acquisitions as compared to Gross Tangible Real Estate during the three months ended March 31, 2025.

The increase in property operating expenses for same store properties for the three and six months ended June 30, 2026, from the comparable 2025 period, was a result of general cost increases due to the inflationary environment and increased property maintenance expenses during the three and six

months ended June 30, 2026.

The increase in property operating expenses for acquired and disposed of properties for the three and six months ended June 30, 2026, from the comparable 2025 period, is a result of an increase in property operating expenses from the 10 properties acquired subsequent to June 30, 2025, partially offset by lower property operating expenses at the two properties sold subsequent to June 30, 2025.

The decrease in property operating expenses for properties with vacancy for the three and six months ended June 30, 2026, as compared to the three and six months ended June 30, 2025, is mainly due to a decrease in overall property expenses at vacant properties.

The base management fee paid to the Adviser increased for the three and six months ended June 30, 2026, as compared to the three and six months ended June 30, 2025, due to an increase in Gross Tangible Real Estate over the three and six months ended June 30, 2026 from property acquisitions as compared to Gross Tangible Real Estate during the three and six months ended June 30, 2025.

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 months ended March 31, 2026, as compared to the three months ended March 31, 2025, due to the Adviser unconditionally waiving the full incentive fee for the three months ended March 31, 2026.

The net incentive fee paid to the Adviser increased for the three months ended June 30, 2026, as compared to the three months ended June 30, 2025, due to the Adviser unconditionally waiving only a portion of the incentive fee for the three months ended June 30, 2026, but waiving the full incentive fee for the three months ended June 30, 2025.

The net incentive fee paid to the Adviser decreased for the six months ended June 30, 2026, as compared to the six months ended June 30, 2025, due to a lower gross incentive fee calculated for the six months ended June 30, 2026.

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 increased slightly for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025, due to our Administrator allocating a larger portion of expenses to us.

The administration fee paid to the Administrator increased slightly for the three and six months ended June 30, 2026, as compared to the three and six months ended June 30, 2025, due to our Administrator allocating a larger 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 months ended March 31, 2026, as compared to the three months ended March 31, 2025, mainly due to higher accounting and legal expenses.

General and administrative expenses decreased for the three and six months ended June 30, 2026, as compared to the three and six months ended June 30, 2025, mainly due to expensing Series F Preferred Stock prepaid offering costs in the prior period following the termination of the primary offering.

Other Income and Expenses

Interest expense increased for the three months ended March 31, 2026, as compared to the three months ended March 31, 2025.

Interest expense increased for the three and six months ended June 30, 2026, as compared to the three and six months ended June 30, 2025.

This increase was primarily the result of increased interest costs on variable rate debt, as a result of larger amounts drawn on the Credit Facility, as well as new interest expense on the 2030 Notes.

We sold a portion of a land parcel during the three months ended March 31, 2026, and as a result, incurred a gain on sale of real estate, net.

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

We recognized other expense during the three months ended March 31, 2026, due to nonrecurring items that occurred during the period.

We recognized other income during the three months ended March 31, 2025, due to interest income earned from sales-types leases and nonrecurring income items.

We sold one property and a portion of a land parcel during the six months ended June 30, 2026, and as a result, incurred a gain on sale of real estate, net.

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

We recognized other income during the three months ended June 30, 2026 and other expense during the six months ended June 30, 2026, due to nonrecurring items that occurred during the periods.

We recognized other expense during the three months ended June 30, 2025, due to incurring closing costs associated with the completion of the sale transaction at our Tifton, Georgia property and recognized other income during the six months ended June 30, 2025 due to interest income earned from sales-types leases and nonrecurring income items.

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, 2026, as compared to the three months ended March 31, 2025, primarily due to an increase in rental rates from leasing and acquisition activity, a lower net incentive fee, and a gain on sale, net.

Net income available to common stockholders and Non-controlling OP Unitholders increased for the three and six months ended June 30, 2026, as compared to the three and six months ended June 30, 2025, primarily due to an increase in rental rates from leasing and acquisition activity, a termination fee recognized in the current period, and a higher gain on sale, net.

This was partially offset by an increase in interest expense, an increase in depreciation expense from acquisition activity, and other income recognized in the prior period from sales-types leases.

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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, 2026 was $83.3 million, consisting of approximately $8.0 million in cash and cash equivalents and available borrowing capacity of $75.3 million under our Credit Facility.

Our available borrowing capacity under the Credit Facility increased to $77.0 million as of May 5, 2026.

Our available liquidity as of June 30, 2026 was $80.8 million, consisting of approximately $10.4 million in cash and cash equivalents and available borrowing capacity of $70.4 million under our Credit Facility.

Our available borrowing capacity under the Credit Facility decreased to $68.8 million as of August 5, 2026.

Future Capital Needs

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Equity Capital

During the three months ended March 31, 2026, we did not sell any common equity under the 2024 Common Stock Sales Agreement.

As of May 5, 2026, 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 use our 2024 Common Stock Sales Agreement as a source of liquidity for the remainder of 2026.

As of March 31, 2026, we had 36 mortgage notes payable in the aggregate principal amount of $247.2 million, collateralized by a total of 42 properties with a remaining weighted average maturity of 2.5 years.

The weighted-average interest rate on the mortgage notes payable as of March 31, 2026 was 4.20%.

During the six months ended June 30, 2026, we did not sell any common equity under the 2024 Common Stock Sales Agreement.

As of August 5, 2026, 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 use our 2024 Common Stock Sales Agreement as a source of liquidity, if needed, for the remainder of 2026.

As of June 30, 2026, we had 36 mortgage notes payable in the aggregate principal amount of $245.2 million, collateralized by a total of 42 properties with a remaining weighted average maturity of 2.2 years.

The weighted-average interest rate on the mortgage notes payable as of June 30, 2026 was 4.20%.

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, 2026, we had mortgage debt in the aggregate principal amount of $23.7 million payable during the remainder of 2026 and $102.7 million payable during 2027.

The 2026 principal amount payable includes both amortizing principal payments and four balloon principal payments.

As of June 30, 2026, we had mortgage debt in the aggregate principal amount of $21.6 million payable during the remainder of 2026 and $102.7 million payable during 2027.

The 2026 principal amount payable includes both amortizing principal payments and three balloon principal payments.

We anticipate being able to refinance our mortgages that come due during 2026 and 2027 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, 2026, was $17.9 million, as compared to net cash provided by operating activities of $17.7 million for the three months ended March 31, 2025.

Net cash provided by operating activities during the six months ended June 30, 2026, was $35.5 million, as compared to net cash provided by operating activities of $53.5 million for the six months ended June 30, 2025.

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 provided by investing activities during the three months ended March 31, 2026, was $1.3 million, which primarily consisted of proceeds from the sale of a portion of a land parcel and receipt of lender held escrows, partially offset by capital improvements performed at certain of our properties.

Net cash used in investing activities during the three months ended March 31, 2025, was $75.5 million, which primarily consisted of six property acquisitions, capital improvements performed at certain of our properties, and deposits paid for future acquisitions.

Net cash used in investing activities during the six months ended June 30, 2026, was $11.0 million, which primarily consisted of one property acquisition, a land parcel acquisition, and capital improvements performed at certain of our properties, partially offset by proceeds from one property sale and the sale of a portion of a land parcel.

Net cash used in investing activities during the six months ended June 30, 2025, was $155.5 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.

Financing Activities

Net cash used in financing activities during the three months ended March 31, 2026, was $22.3 million, which primarily consisted of net borrowings on our credit facility, $4.4 million of mortgage principal repayments, Series F Preferred Stock redemptions, and distributions paid to common, senior common and preferred shareholders.

Net cash provided by financing activities for the three months ended March 31, 2025, was $58.1 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 debt repayments and distributions paid to common, senior common and preferred shareholders.

Net cash used in financing activities during the six months ended June 30, 2026, was $25.3 million, which primarily consisted of $6.4 million of mortgage principal repayments, Series F Preferred Stock redemptions, and distributions paid to common, senior common, and preferred stockholders, partially offset by net borrowings on our credit facility and receipts from lender reserves.

Net cash provided by financing activities for the six months ended June 30, 2025, was $102.8 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, partially offset by $12.0 million of mortgage principal repayments and distributions paid to common, senior common, and preferred stockholders.

Credit Facility

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

On September 27, 2022, we further increased the Revolver to $125.0 million and the Term Loan C to $150.0 million, as permitted

under the terms of the Credit Facility.

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

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

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The increased credit availability was used, in part, to fund a nine-property portfolio acquisition that closed on September 30, 2025.

On October 10, 2025, we amended, extended, and upsized our Credit Facility, increasing our Revolver from $155.0 million to $200.0 million (and its term to October 2029), decreasing the principal balance of Term Loan A from $160.0 million to $125.0 million (and extending its term to October 2029), increasing the principal balance of Term Loan B from $60.0 million to $143.3 million (and its term to February 2030), decreasing the principal balance of Term Loan C from $150.0 million to $131.7 million, and repaying the full principal balance of our unsecured term loan (“Term Loan D”).

The SOFR spread increased by 10 basis points, ranging from 140 to 210 basis points for the Revolver and 135 to 205 basis points for the Term Loans, depending on our leverage.

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The Credit Facility’s new (and current) bank syndicate is comprised of KeyBank, Fifth Third Bank, The Huntington National Bank, Bank of America, Synovus Bank, PNC Bank, National Association (“PNC Bank”), Webster Bank, National Association (“Webster Bank”), and S&T Bank.

As of March 31, 2026, there was $434.3 million outstanding under our Credit Facility at a weighted average interest rate of approximately 5.23% and $4.2 million outstanding letters of credit, at a weighted average interest rate of 1.60%.

As of May 5, 2026, the maximum additional amount we could draw under the Credit Facility was $77.0 million.

We were in compliance with all covenants under the Credit Facility as of March 31, 2026.

As of June 30, 2026, there was $451.6 million outstanding under our Credit Facility at a weighted average interest rate of approximately 5.09% and $4.2 million outstanding letters of credit, at a weighted average interest rate of 1.45%.

As of August 5, 2026, the maximum additional amount we could draw under the Credit Facility was $68.8 million.

We were in compliance with all covenants under the Credit Facility as of June 30, 2026.

Unsecured Term Loan D

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Contractual Obligations

The following table reflects our material contractual obligations as of March 31, 2026 (dollars in thousands):

The following table reflects our material contractual obligations as of June 30, 2026 (dollars in thousands):

Payments Due by Period

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$ 1,009,637 $ 124,944 $ 299,127 $ 564,277 $ 21,289

(1) Debt obligations represent borrowings under our Revolver, which represents $34.3 million of the debt obligation due in 2026, Term Loan A, which represents $125.0 million of the debt obligation due in 2029, Term Loan B, which represents $143.3 million of the debt obligation due in 2030, Term Loan C, which represents $131.7 million of the debt obligation due in 2028, the 2029 Notes, which represents $75.0 million of the debt obligation due in 2029, the 2030 Notes, which represents $85.0 million of the debt obligation due in 2030, and mortgage notes payable that were outstanding as of March 31, 2026.

(1) Debt obligations represent borrowings under our Revolver, which represents $51.6 million of the debt obligation due in 2026, Term Loan A, which represents $125.0 million of the debt obligation due in 2029, Term Loan B, which represents $143.3 million of the debt obligation due in 2030, Term Loan C, which represents $131.7 million of the debt obligation due in 2028, the 2029 Notes, which represents $75.0 million of the debt obligation due in 2029, the 2030 Notes, which represents $85.0 million of the debt obligation due in 2030, and mortgage notes payable that were outstanding as of June 30, 2026.

This figure does not include $0.02 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.

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The balance and interest rate on our Revolver, Term Loan A, Term Loan B, and 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, 2026.

thus, the interest payment obligation calculated for purposes of this table was based upon rates and balances as of June 30, 2026.

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

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Off-Balance Sheet Arrangements

We did not have any material off-balance sheet arrangements as of March 31, 2026.

We did not have any material off-balance sheet arrangements as of June 30, 2026.

Funds from Operations

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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 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.

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.

In addition, because most REITs provide FFO available to common stockholders, Basic FFO and Diluted FFO per share information to the investment community, we believe these are useful supplemental measures when comparing us to other REITs.

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, 2026 and 2025, 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, 2026 and 2025, 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 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)

2026 2025 2026 2025

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 (3,135) (3,186) (6,275) (6,395)

Gain (loss) on extinguishment of Series F preferred stock, net 4 (10)

(Loss) gain on extinguishment of Series F preferred stock, net (7) 9 (3) (1)

Net income available to common stockholders and Non-controlling OP Unitholders $ 5,128 $ 1,457 $ 8,961 $ 3,377

Real estate depreciation and amortization $ 14,957 $ 14,249 $ 29,753 $ 27,492

Impairment charge — 9 — 9

Gain on sale of real estate, net (1,894) (377) (3,676) (377)

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Distributions attributable to preferred and senior common stock (3,135) (3,186) (6,275) (6,395)

Gain (loss) on extinguishment of Series F preferred stock, net 4 (10)

(Loss) gain on extinguishment of Series F preferred stock, net (7) 9 (3) (1)

Net income available to common stockholders and Non-controlling OP Unitholders $ 5,128 $ 1,457 $ 8,961 $ 3,377

Real estate depreciation and amortization $ 14,957 $ 14,249 $ 29,753 $ 27,492

Impairment charge — 9 — 9

Income impact of assumed conversion of senior common stock 99 101 197 202

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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