What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-07-29 compared with 2026-04-29 · 148 added, 65 removed, 228 unchanged (48% of the section changed)

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We are a real estate investment trust, or REIT, organized under Maryland law.

As of March 31, 2026, our portfolio was comprised of 409 properties containing approximately 59,604,000 rentable square feet located in 39 states with 94.6% occupancy, leased to approximately 300 different tenants.

As of March 31, 2026, we also owned a 22% equity interest in the unconsolidated joint venture.

As of June 30, 2026, our portfolio was comprised of 409 properties containing approximately 59,609,000 rentable square feet located in 39 states with 99.1% occupancy, leased to approximately 300 different tenants.

As of June 30, 2026, we also owned a 22% equity interest in the unconsolidated joint venture.

We believe consumer expectations, long-term growth of e-commerce and modernization of and demand for supply chain resiliency will keep demand for industrial properties strong for the foreseeable future.

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Most of our leases require our tenants to be responsible for certain operating expenses, including real estate taxes, insurance and common area maintenance, thereby reducing our exposure to increases in operating expenses resulting from inflation or other factors.

Our portfolio as of March 31, 2026 is summarized below (square feet in thousands):

Our portfolio as of June 30, 2026 is summarized below (square feet in thousands):

% of Weighted

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Total / weighted average 409 59,609 99.1% 100.0% 8.1

(1) Based on annualized rental revenues as of March 31, 2026.

(1) Based on annualized rental revenues as of June 30, 2026.

Property Operations

Occupancy data for our portfolio as of March 31, 2026 and 2025 were as follows (square feet in thousands):

Occupancy data for our portfolio as of June 30, 2026 and 2025 were as follows (square feet in thousands):

All Properties Comparable Properties (1)

as of March 31,

as of June 30,

2026 2025 2026 2025

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(1) Consists of properties that we have owned continuously since January 1, 2025.

(2) Leased square feet is pursuant to existing leases as of March 31, 2026, and includes space being fitted out for occupancy, if any, and space which is leased but is not occupied, if any.

The average effective rental rates per square foot represents total rental income divided by the average rentable square feet leased during the periods specified for our properties.

For the three months ended March 31, 2026 and 2025, the average effective rental rates per square foot of our properties were as follows:

Three Months Ended March 31,

(2) Leased square feet is pursuant to existing leases as of June 30, 2026, and includes space being fitted out for occupancy, if any, and space which is leased but is not occupied, if any.

(3) During the three months ended June 30, 2026, we executed new leases for two previously vacant properties in Indiana and Hawaii totaling 2,770 square feet with commencement dates in May and July 2026, respectively.

The average effective rental rates per square foot represent total rental income divided by the average rentable square feet leased during the periods specified for our properties.

For the three and six months ended June 30, 2026 and 2025, the average effective rental rates per square foot of our properties were as follows:

Three Months Ended June 30,

Six Months Ended June 30,

2026 2025 2026 2025

All properties $ 8.13 $ 7.94 $ 8.24 $ 7.93

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Certain of our Hawaii Properties are lands leased for rents that periodically reset based on fair market values, generally every 10 years.

During the three months ended March 31, 2026, we entered into new and renewal leases as summarized in the following table, excluding the impact of rent resets (square feet in thousands):

Three Months Ended March 31, 2026

During the three and six months ended June 30, 2026, we entered into new and renewal leases as summarized in the following table, excluding the impact of rent resets (square feet in thousands):

Three Months Ended June 30, 2026

New Leases Renewals Totals

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$ 0.20 $ 0.43 $ 0.23

Six Months Ended June 30, 2026

New Leases Renewals Totals

Square feet leased during the period 3,114 2,993 6,107

Weighted average rental rate change (by rentable square feet) 71.9 % 16.0 % 33.7 %

Weighted average lease term by square feet (years) 41.1 6.2 24.0

Total leasing costs and concession commitments (1)

$ 25,727 $ 8,142 $ 33,869

Total leasing costs and concession commitments per square foot (1)

$ 8.26 $ 2.72 $ 5.55

Total leasing costs and concession commitments per square foot per year (1)

$ 0.20 $ 0.44 $ 0.23

(1) Includes commitments made for leasing expenditures and concessions, such as leasing commissions, tenant improvements or other tenant inducements.

During the three months ended March 31, 2026, we completed rent resets for approximately 122,000 square feet of land at our Hawaii Properties at rental rates that were 30.6% higher than prior rental rates.

The following table provides the annualized rental revenues scheduled to reset at our Hawaii Properties as of March 31, 2026:

During the six months ended June 30, 2026, we completed rent resets for approximately 153,000 square feet of land at our Hawaii Properties at rental rates that were 33.7% higher than prior rental rates.

The following table provides the annualized rental revenues scheduled to reset at our Hawaii Properties as of June 30, 2026:

Rental Revenues

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Total $ 22,599

As of March 31, 2026, our remaining lease expirations by year were as follows (square feet in thousands):

As of June 30, 2026, our remaining lease expirations by year were as follows (square feet in thousands):

% of Total Cumulative

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Weighted average remaining lease term (years)

(1) Leased square feet is pursuant to existing leases as of March 31, 2026, and includes space being fitted out for occupancy, if any, and space which is leased but is not occupied, if any.

As of March 31, 2026, FedEx and Amazon leased 22.7% and 8.1% of our total leased square feet, respectively, and represented 27.7% and 7.6% of our total annualized rental revenues, respectively.

As of March 31, 2026, $16,556, or 3.7%, of our annualized rental revenues were included in leases scheduled to expire by March 31, 2027 and 5.4% of our rentable square feet were vacant.

(1) Leased square feet is pursuant to existing leases as of June 30, 2026, and includes space being fitted out for occupancy, if any, and space which is leased but is not occupied, if any.

As of June 30, 2026, FedEx and Amazon leased 22.5% and 7.7% of our total leased square feet, respectively, and represented 27.8% and 7.4% of our total annualized rental revenues, respectively.

As of June 30, 2026, $14,211, or 3.1%, of our annualized rental revenues were included in leases scheduled to expire by June 30, 2027 and 0.9% of our rentable square feet were vacant.

Rental rates for which available space may be leased in the future will depend on prevailing market conditions when lease extensions, lease renewals or new leases are negotiated.

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RESULTS OF OPERATIONS

Three Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025 (dollars and share amounts in thousands, except per share data)

Three Months Ended June 30, 2026 Compared to Three Months Ended June 30, 2025 (dollars and share amounts in thousands, except per share data)

Comparable (1)

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Total other expenses 52,764 51,105 1,659 3.2%

Interest income 1,044 1,968 (924) (47.0)%

Interest and other income 3,379 2,024 1,355 66.9%

Interest expense (61,112) (67,914) 6,802 (10.0)%

Loss on extinguishment of debt (3,830) (5,070) 1,240 (24.5)%

Loss before income taxes and equity in earnings of unconsolidated joint venture (25,731) (34,508) 8,777 25.4%

Income tax expense (59) (30) (29) 96.7%

Equity in earnings (losses) of unconsolidated joint venture 2,871 (1,042) 3,913 375.5%

Equity in earnings of unconsolidated joint venture 2,702 4,144 (1,442) (34.8)%

Net loss (23,088) (30,394) 7,306 24.0%

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Net loss per share attributable to common shareholders (basic and diluted) $ (0.22) $ (0.32) $ 0.10 31.3%

(1) Consists of properties that we have owned continuously since January 1, 2025.

(1) Consists of properties that we have owned continuously since April 1, 2025.

(2) See our definition of net operating income, or NOI, and our reconciliation of net loss to NOI below under the heading “Non-GAAP Financial Measures”.

References to changes in the income and expense categories below relate to the comparison of results for the three months ended March 31, 2026 compared to the three months ended March 31, 2025.

References to changes in the income and expense categories below relate to the comparison of results for the three months ended June 30, 2026 compared to the three months ended June 30, 2025.

Rental income.

Rental income increased primarily due to increases from our net leasing activity and increases in real estate tax reimbursements at certain of our properties.

Rental income increased primarily due to increases from our net leasing activity and increases in real estate tax reimbursements at certain of our properties, partially offset by a $2,575 bad debt reserve for six of our Hawaii properties.

Real estate taxes.

Real estate taxes increased primarily due to a refund received during the three months ended March 31, 2025 as a result of a successful real estate tax appeal at one of our Mainland Properties and higher tax rates at certain of our properties during the three months ended March 31, 2026.

Real estate taxes increased primarily due to a refund received during the three months ended June 30, 2025 as a result of a successful real estate tax appeal at one of our Mainland Properties and higher tax rates at certain of our properties during the three months ended June 30, 2026.

Other operating expenses .

The decrease in other operating expenses is primarily due to decreases in repairs and maintenance expenses, other professional fees and insurance expenses, partially offset by increases in snow removal expenses at certain of our properties.

The decrease in other operating expenses is primarily due to decreases in payroll costs reimbursable to RMR during the three months ended June 30, 2026.

Depreciation and amortization.

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General and administrative.

The increase in general and administrative expenses is primarily due to increases in accrued incentive management fees, legal costs and trustee share award expense during the three months ended March 31, 2026 compared to the three months ended March 31, 2025.

Interest income.

The decrease in interest income is primarily due to lower cash balances and lower interest rates during the 2026 period as compared to the 2025 period.

The increase in general and administrative expenses is primarily due to increases in accrued incentive management fees and trustee and RMR employee share award expenses during the three months ended June 30, 2026 compared to the three months ended June 30, 2025.

Interest and other income.

The increase in interest and other income is primarily due to the discontinuation of hedge accounting upon repayment of the Mountain Floating Rate Loan during the three months ended June 30, 2026, partially offset by decreases primarily due to lower average cash balances and lower interest rates during the 2026 period as compared to the 2025 period.

Interest expense.

The decrease in interest expense is primarily due to the repayment of the ILPT Floating Rate Loan in June 2025 and the discontinuation of hedge accounting for the related interest rate cap.

As a result, no further amortization of the related interest rate cap was recognized during the 2026 period.

Additionally, amortization of interest rate cap costs of our consolidated joint venture decreased during the 2026 period.

The decrease in interest expense is primarily due to the discontinuation of hedge accounting for interest rate caps related to the ILPT Floating Rate Loan and the Mountain Floating Rate Loan, resulting in no further amortization of interest rate cap costs and a lower outstanding principal balance compared to the 2025 period.

Loss on extinguishment of debt.

During the three months ended June 30, 2026, we recognized a loss on extinguishment of debt in connection with the repayment of the Mountain Floating Rate Loan and $204,999 of amortizing fixed rate debt .

During the three months ended June 30, 2025, we recognized a loss on extinguishment of debt in connection with the repayment of the ILPT Floating Rate Loan.

Income tax expense.

Income tax expense reflects state income taxes payable in certain jurisdictions.

Equity in earnings (losses) of unconsolidated joint venture.

Equity in earnings (losses) of unconsolidated joint venture represents the change in the fair value of our investment in the unconsolidated joint venture.

Equity in earnings of unconsolidated joint venture.

Equity in earnings of unconsolidated joint venture represents the change in the fair value of our investment in the unconsolidated joint venture.

Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025 (dollars and share amounts in thousands, except per share data)

Comparable (1)

Non-Comparable

Properties Results Properties Results Consolidated Properties Results

Six Months Ended Six Months Ended Six Months Ended

2026 2025 Change Change 2026 2025 Change 2026 2025 Change Change

Rental income $ 230,542 $ 223,077 $ 7,465 3.3% $ — $ 925 $ (925) $ 230,542 $ 224,002 $ 6,540 2.9%

Operating expenses:

Real estate taxes 32,922 29,746 3,176 10.7% — 70 (70) 32,922 29,816 3,106 10.4%

Other operating expenses 18,668 18,910 (242) (1.3)% 49 217 (168) 18,717 19,127 (410) (2.1)%

Total operating expenses 51,590 48,656 2,934 6.0% 49 287 (238) 51,639 48,943 2,696 5.5%

Net operating income (2)

$ 178,952 $ 174,421 $ 4,531 2.6% $ (49) $ 638 $ (687) 178,903 175,059 3,844 2.2%

Other expenses:

Depreciation and amortization 81,567 82,961 (1,394) (1.7)%

General and administrative 21,462 17,900 3,562 19.9%

Total other expenses 103,029 100,861 2,168 2.1%

Interest and other income 4,423 3,992 431 10.8%

Interest expense (122,814) (137,727) 14,913 (10.8)%

Loss on extinguishment of debt (3,830) (5,070) 1,240 (24.5)%

Loss before income taxes and equity in earnings of unconsolidated joint venture (46,347) (64,607) 18,260 28.3%

Income tax expense (173) (58) (115) 198.3%

Equity in earnings of unconsolidated joint venture 5,573 3,102 2,471 79.7%

Net loss (40,947) (61,563) 20,616 33.5%

Net loss attributable to noncontrolling interests

17,057 18,721 (1,664) (8.9)%

Net loss attributable to common shareholders $ (23,890) $ (42,842) $ 18,952 44.2%

Weighted average common shares outstanding (basic and diluted) 66,201 65,881 320 0.5%

Net loss per share attributable to common shareholders (basic and diluted)

$ (0.36) $ (0.65) $ 0.29 44.6%

(1) Consists of properties that we have owned continuously since January 1, 2025.

(2) See our definition of NOI and our reconciliation of net loss to NOI below under the heading “Non-GAAP Financial Measures”.

References to changes in the income and expense categories below relate to the comparison of results for the six months ended June 30, 2026 compared to the six months ended June 30, 2025.

Rental income.

Real estate taxes .

Real estate taxes increased primarily due to a refund received during the six months ended June 30, 2025 as a result of a successful real estate tax appeal at one of our Mainland Properties and higher tax rates at certain of our properties during the six months ended June 30, 2026.

Other operating expenses .

The decrease in other operating expenses is primarily due to decreases in payroll costs reimbursable to RMR and repairs and maintenance expenses during the six months ended June 30, 2026.

Depreciation and amortization.

The decrease in depreciation and amortization primarily reflects the impact of certain acquired real estate leases fully amortizing and the disposition of two properties since January 1, 2025, partially offset by increased depreciation related to improvements made to certain of our properties since January 1, 2025.

General and administrative.

The increase in general and administrative expenses is primarily due to increases in accrued incentive management fees, business management fees and trustee and RMR employee share award expenses during the six months ended June 30, 2026 compared to the six months ended June 30, 2025.

Interest and other income.

The increase in interest and other income is primarily due to the discontinuation of hedge accounting upon repayment of the Mountain Floating Rate Loan during the six months ended June 30, 2026, partially offset by decreases due to lower average cash balances and lower interest rates during the 2026 period as compared to the 2025 period.

Interest expense.

Loss on extinguishment of debt .

During the six months ended June 30, 2026, we recognized a loss on extinguishment of debt in connection with the repayment of the Mountain Floating Rate Loan and $204,999 of amortizing loans.

During the six months ended June 30, 2025, we recognized a loss on extinguishment of debt in connection with the repayment of the ILPT Floating Rate Loan.

Income tax expense.

Income tax expense reflects state income taxes payable in certain jurisdictions.

Equity in earnings of unconsolidated joint venture.

Equity in earnings of unconsolidated joint venture represents the change in the fair value of our investment in the unconsolidated joint venture.

Non-GAAP Financial Measures (dollars in thousands, except per share data)

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Other real estate companies and REITs may calculate NOI differently than we do.

The following table presents the reconciliation of net loss to NOI for the three months ended March 31, 2026 and 2025:

Three Months Ended

The following table presents the reconciliation of net loss to NOI for the three and six months ended June 30, 2026 and 2025:

Three Months Ended June 30,

Six Months Ended June 30,

2026 2025 2026 2025

Net loss $ (23,088) $ (30,394) $ (40,947) $ (61,563)

Equity in (earnings) losses of unconsolidated joint venture (2,871) 1,042

Equity in earnings of unconsolidated joint venture (2,702) (4,144) (5,573) (3,102)

Income tax expense 59 30 173 58

Loss before income taxes and equity in earnings of unconsolidated joint venture (25,731) (34,508) (46,347) (64,607)

Loss on extinguishment of debt 3,830 5,070 3,830 5,070

Interest expense 61,112 67,914 122,814 137,727

Interest income (1,044) (1,968)

Interest and other income (3,379) (2,024) (4,423) (3,992)

General and administrative 11,998 9,662 21,462 17,900

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Other real estate companies and REITs may calculate FFO attributable to common shareholders and Normalized FFO attributable to common shareholders differently than we do.

The following table presents our calculation of FFO attributable to common shareholders and Normalized FFO attributable to common shareholders and reconciliations of net loss attributable to common shareholders to FFO attributable to common shareholders and Normalized FFO attributable to common shareholders for the three months ended March 31, 2026 and 2025:

Three Months Ended

Three Months Ended June 30,

Six Months Ended June 30,

2026 2025 2026 2025

Net loss attributable to common shareholders $ (14,463) $ (21,310) $ (23,890) $ (42,842)

Equity in (earnings) losses of unconsolidated joint venture (2,871) 1,042

Equity in earnings of unconsolidated joint venture (2,702) (4,144) (5,573) (3,102)

Depreciation and amortization 40,766 41,443 81,567 82,961

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Incentive management fees (1)

2,834 1,311 4,401 2,278

Loss on extinguishment of debt 3,830 5,070 3,830 5,070

Normalized FFO adjustments attributable to noncontrolling interest (1,494) — (1,494) —

Normalized FFO attributable to common shareholders $ 20,807 $ 13,808 $ 42,790 $ 27,298

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Our principal sources of funds to meet our operating and capital obligations, pay our debt service obligations and make distributions to our shareholders are rents from tenants at our properties.

As of March 31, 2026, investment grade rated tenants, subsidiaries of investment grade rated entities or our Hawaii land leases represented 76.9% of our annualized rental revenues and only 3.7% of our annualized rental revenues were from leases expiring over the next 12 months.

As of June 30, 2026, investment grade rated tenants, subsidiaries of investment grade rated entities or our Hawaii land leases represented 78.7% of our annualized rental revenues and only 3.1% of our annualized rental revenues were from leases expiring over the next 12 months.

We believe that these sources of funds will be sufficient to meet our operating and capital obligations, pay our debt service obligations and make distributions to our shareholders for the next 12 months and for the foreseeable future thereafter.

The following is a summary of our sources and uses of cash flows for the periods presented, as reflected in our condensed consolidated statements of cash flows:

Three Months Ended March 31,

Six Months Ended June 30,

Cash and cash equivalents and restricted cash and cash equivalents at beginning of period $ 183,031 $ 242,480

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Cash and cash equivalents and restricted cash and cash equivalents at end of period $ 181,813 $ 159,065

The increase in net cash from operating activities for the three months ended March 31, 2026 compared to the 2025 period is primarily due to higher cash flows and reimbursements from our properties and lower interest expense, excluding the impact of settlement of our interest rate caps.

The decrease in net cash used in investing activities for the three months ended March 31, 2026 compared to the 2025 period is primarily due to reduced interest rate cap purchase costs and real estate improvements in 2026.

The increase in net cash used in financing activities for the three months ended March 31, 2026 compared to the 2025 period is due to increases in distributions to common shareholders in 2026.

The increase in net cash from operating activities for the six months ended June 30, 2026 compared to the 2025 period is primarily due to higher cash flows and reimbursements from our properties and lower interest expense, excluding the impact of settlement of our interest rate caps.

The decrease in net cash used in investing activities for the six months ended June 30, 2026 compared to the 2025 period is primarily due to reduced interest rate cap purchase costs, decreased real estate improvements and proceeds from the sale of our consolidated joint venture’s interest rate cap in 2026.

These decreases were partially offset by reduced proceeds from the settlement of our interest rate caps.

The change in net cash used in financing activities for the six months ended June 30, 2026, is due to proceeds received from our consolidated joint venture’s $1,620,000 fixed rate mortgage loan during the 2026 period compared to the repayment of the ILPT Floating Rate Loan during the 2025 period.

Proceeds from the $1,620,000 fixed rate mortgage loan were used to repay the Mountain Floating Rate Loan and $204,999 of our consolidated joint venture’s amortizing debt during the 2026 period.

During the 2025 period, our consolidated joint venture used proceeds of $1,160,000 from its fixed rate mortgage loan to repay the ILPT Floating Rate Loan.

In addition to these debt transactions during the 2026 and 2025 periods, our distributions to noncontrolling interests and common shareholders increased in 2026.

Our Operating Liquidity and Resources

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Our Investing and Financing Liquidity and Resources

As of March 31, 2026, we had cash and cash equivalents, excluding restricted cash and cash equivalents, of $99,500.

As of June 30, 2026, we had cash and cash equivalents, excluding restricted cash and cash equivalents, of $135,326.

To maintain our qualification for taxation as a REIT under the Internal Revenue Code of 1986, as amended, we generally are required to distribute at least 90% of our REIT taxable income annually, subject to specified adjustments and excluding any net capital gain.

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Capital Expenditures

As of March 31, 2026, committed, but unspent, tenant related obligations based on existing leases were $4,868, of which $3,900 is expected to be spent during the next 12 months.

As of June 30, 2026, committed, but unspent, tenant related obligations based on existing leases were $12,599, of which $12,115 is expected to be spent during the next 12 months.

For further information regarding our capital expenditures, see Note 3 to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

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We control this consolidated joint venture and therefore account for the properties owned by this joint venture on a consolidated basis in our condensed consolidated financial statements.

Our consolidated joint venture made cash distributions of $38,000 during the three and six months ended June 30, 2026, of which $14,820 was distributed to the unrelated third party investor.

The remaining $23,180 distributed to us was reclassified from restricted cash and cash equivalents to cash and cash equivalents in our condensed consolidated balance sheets.

We also own a 22% equity interest in the unconsolidated joint venture.

We account for the unconsolidated joint venture using the equity method of accounting under the fair value option.

The unconsolidated joint venture made aggregate cash distributions to us of $1,188 and $990 for the three months ended March 31, 2026 and 2025, respectively.

The unconsolidated joint venture made aggregate cash distributions to us of $1,188 and $990 for the three months ended June 30, 2026 and 2025, and $2,376 and $1,980 for the six months ended June 30, 2026 and 2025, respectively.

For further information regarding our consolidated joint venture and the unconsolidated joint venture, see Note 3 to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

As of March 31, 2026, we had an aggregate principal amount of $4,209,229 of indebtedness, primarily including:

As of June 30, 2026, we had an aggregate principal amount of $4,221,000 of indebtedness, primarily including:

(1) our $1,160,000 mortgage loan;

(2) the Mountain Floating Rate Loan;

(2) our $700,000 mortgage loan;

(3) our $650,000 mortgage loan;

(5) our consolidated joint venture’s $91,000 mortgage loan;

and (6) $208,229 of our consolidated joint venture’s amortizing mortgage loans, with maturity dates between 2027 and 2038.

and (4) our consolidated joint venture’s $1,711,000 in aggregate mortgage loans, with maturity dates between 2029 and 2032.

In June 2025, we obtained a $1,160,000 fixed rate, interest only mortgage loan secured by 101 of our properties.

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We used the net proceeds from our $1,160,000 mortgage loan and cash on hand to repay in full the ILPT Floating Rate Loan.

The Mountain Floating Rate Loan is secured by 82 properties, matures in March 2027 and requires that interest be paid at an annual rate of SOFR plus a weighted average premium of 2.77%.

In March 2026, our consolidated joint venture exercised the third of its three, one-year extension options for the maturity date of this loan.

In connection with the exercise of the extension, our consolidated joint venture purchased a one-year interest rate cap for $3,720 with a SOFR strike rate equal to 3.29%, which replaced the previous interest rate cap with a SOFR strike rate equal to 3.10%.

The weighted average interest rates under the Mountain Floating Rate Loan were 5.90% and 5.82% for three months ended March 31, 2026 and 2025, respectively, including the impact of our interest rate caps.

In April 2026, our consolidated joint venture priced a $1,620,000 five year, fixed rate, interest only mortgage loan to be secured by 90 of its properties.

This mortgage loan is expected to close on or about May 8, 2026 and our consolidated joint venture expects to use the net proceeds from this mortgage loan to repay in full the Mountain Floating Rate Loan and $204,999 of its amortizing fixed rate debt secured by eight properties.

The agreements and related documents governing our $1,160,000 mortgage loan, the Mountain Floating Rate Loan, our $700,000 mortgage loan and our $650,000 mortgage loan contain customary covenants, provide for acceleration of payment of all amounts due thereunder upon the occurrence and continuation of certain events of default and, in the case of the $650,000 mortgage loan, also require us to maintain a minimum consolidated net worth of at least $250,000 and liquidity of at least $15,000.

As of March 31, 2026, we believe that we were in compliance with all of the covenants and other terms under the agreements governing these loans.

In May 2026, our consolidated joint venture obtained a $1,620,000 fixed rate, interest only mortgage loan secured by 90 of its properties.

This mortgage loan matures in May 2031 and requires that interest be paid at an annual rate of 5.71%.

Subject to a 24 month prepayment lockout period and the satisfaction of certain other conditions, our consolidated joint venture has the option to prepay its $1,620,000 mortgage loan in full or in part with a premium prior to November 2030 and at par with no premium beginning from November 2030.

Our consolidated joint venture used the proceeds from this mortgage loan to repay in f ull the Mountain Floating Rate Loan, and $204,999 of its amortizing fixed rate debt.

The Mountain Floating Rate Loan was secured by 82 properties, was scheduled to mature in March 2027 and required that interest be paid at an annual rate of SOFR plus a weighted average premium of 2.77%.

The amortizing fixed rate debt repaid was secured by eight properties with a weighted average interest rate of 3.66%.

In connection with the repayment of the Mountain Floating Rate Loan and $204,999 of amortizing fixed rate debt, we recognized a $3,830 loss on extinguishment of debt.

The agreements and related documents governing our $1,160,000 mortgage loan, our $700,000 mortgage loan, our $650,000 mortgage loan and our consolidated joint venture’s $1,620,000 mortgage loan contain customary covenants, provide for acceleration of payment of all amounts due thereunder upon the occurrence and continuation of certain events of default and, in the case of the $650,000 mortgage loan, also require us to maintain a minimum consolidated net worth of at least $250,000 and liquidity of at least $15,000.

As of June 30, 2026, we believe that we were in compliance with all of the covenants and other terms under the agreements governing these loans.

For further information regarding our indebtedness and historical weighted average interest rates of our floating rate loans, see Notes 5 and 6 to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Distributions

During the three months ended March 31, 2026, we declared and paid a regular quarterly distribution to common shareholders totaling $3,333 using cash on hand.

On April 9, 2026, we declared a regular quarterly distribution to common shareholders of record on April 21, 2026 of $0.05 per share, or approximately $3,333.

We expect to pay this distribution on or about May 14, 2026 using cash on hand.

During the six months ended June 30, 2026, we declared and paid regular quarterly distributions to common shareholders totaling $6,666 using cash on hand.

On July 9, 2026, we declared a regular quarterly distribution to common shareholders of record on July 20, 2026 of $0.10 per share, or approximately $6,675.

We expect to pay this distribution on or about August 13, 2026 using cash on hand.

Related Person Transactions

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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