NETSTREIT Corp. 10-Q

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations Special Note Regarding Forward-Looking Statements This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements include, without limitation, statements concerning our business and growth strategies, investment, financing and leasing activities and trends in our business, including trends in the market for single-tenant, retail commercial real estate. Words such as “expects,” “anticipates,” “intends,” “plans,” “likely,” “will,” “believes,” “seeks,” “estimates,” and variations of such words and similar expressions are intended to identify such forward-looking statements. Such statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from the results of operations or plans expressed or implied by such forward-looking statements. Although we believe that the assumptions underlying the forward-looking statements contained herein are reasonable, any of the assumptions could be inaccurate, and therefore such statements included in this Quarterly Report on Form 10-Q may not prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by us or any other person that the results or conditions described in such statements or our objectives and plans will be achieved. For a further discussion of these and other factors that could impact future results, performance or transactions, see the information under the heading “Risk Factors” Part I, Item 1A. in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the Securities and Exchange Commission (the “SEC”) on February 10, 2026, and other reports filed with the Securities and Exchange Commission from time to time. Forward-looking statements and such risks, uncertainties and other factors speak only as of the date of this Quarterly Report on Form 10-Q. New risks and uncertainties may arise over time and it is not possible for us to predict those events or how they may affect us. We expressly disclaim any obligation or undertaking to update or revise any forward-looking statement contained herein, to reflect any change in our expectations with regard thereto, or any other change in events, conditions or circumstances on which any such statement is based, except to the extent otherwise required by law. Business Overview We are an internally managed real estate company that acquires, owns, and manages a diversified portfolio of single-tenant commercial retail properties, subject to long-term net leases with high-credit-quality tenants across the United States. We also invest in property developments and mortgage loans secured by real estate. As of March 31, 2026, we owned or had investments in 808 properties diversified by tenant, industry, and geography, comprising 138 different tenants across 28 retail sectors in 46 states. This includes four property developments where rent has not yet commenced. We focus on tenants in industries where we believe a physical location is critical to the generation of sales and profits, with a focus on necessity goods and essential services in the retail sector, including grocers, convenience stores, discount stores, home improvement, quick-service restaurants, general retail, and auto parts, all of which we refer to as defensive retail industries. As of March 31, 2026, our investments generated ABR 1 of $214.2 million. Approximately 42% of our ABR is from investment grade 2 credit rated tenants and an additional 16% of our ABR is derived from tenants with an investment grade profile 3 . Our portfolio was 99.9% occupied (excluding four properties under development) and, excluding mortgage loans receivable, had a weighted average remaining lease term (“WALT”) of 10.2 years. February 2026 Follow-On Offering In February 2026, we completed a registered public offering of 12,627,000 shares of our common stock at a public offering price of $19.00 per share, including the full exercise of the underwriters’ option to purchase additional shares. In connection with the offering, we entered into forward sale agreements for 12,627,000 shares of our common stock. We did not initially receive any proceeds from the sale of shares of common stock by the forward purchasers. As of March 31, 2026, 12,627,000 shares remain unsettled under the February 2026 forward sale agreements. We expect to physically settle the forward sale agreements (by delivery of shares of common stock) and receive proceeds from the sale of those shares upon one or more forward settlement dates, which shall occur no later than February 12, 2027. ( 1 ) Annualized base rent (“ABR”) is annualized base rent for all leases that commenced and annualized cash interest for all executed mortgage loans as of March 31, 2026. (2) We define “investment grade” tenants as tenants, or tenants that are subsidiaries of a parent entity, with a credit rating of BBB- (S&P/Fitch), Baa3 (Moody’s), or NAIC2 (National Association of Insurance Commissioners) or higher. (3) We define “investment grade profile” tenants as tenants that have investment grade credit metrics (more than $1.0 billion in annual sales and a debt to adjusted EBITDA ratio of less than 2.0x), but do not carry a published rating from S&P, Fitch, Moody’s, or NAIC. 30 Table of Contents Settlement of Forward Shares Under the January 2024 Follow-On Offering In January 2024, we completed a registered public offering of 11,040,000 shares of common stock at a public offering price of $18.00 per share. In connection with the offering, we entered into forward sale agreements for 11,040,000 shares of our common stock. We did not initially receive any proceeds from the sale of shares of common stock by the forward purchasers. On February 6, 2026, we physically settled 4,000,000 shares of common stock at a weighted-average price of $16.98 per share in accordance with the forward sale agreements. We received net proceeds from the settlement of $67.8 million, net of underwriting discounts and offering costs of $4.2 million. As of March 31, 2026, 4,840,000 shares remain unsettled under the January 2024 forward sale agreements. We expect to physically settle the forward sale agreements (by delivery of shares of common stock) and receive proceeds from the sale of those shares upon one or more forward settlement dates, which shall occur no later than December 31, 2026. ATM Program During the three months ended March 31, 2026, we entered into forward sale agreements with respect to an aggregate 3,956,031 shares of common stock under the existing $300.0 million at-the-market equity program established in August 2024 (the “2024 ATM Program”) at a weighted-average price of $18.81 per share. As of March 31, 2026, 12,469,918 shares remain unsettled under forward sale agreements associated with our existing $300.0 million at-the-market equity program (the “2023 ATM Program”) and the 2024 ATM Program. We may physically settle the forward sale agreements (by delivery of shares of common stock) and receive proceeds from the sale of those shares on one or more forward settlement dates, which shall occur no later than the stated maturity dates ranging from September 2026 to March 2027. As of March 31, 2026, the remaining availability under the 2024 ATM Program was $49.9 million. 2032 Term Loan Draw Subject to the terms of the term loan agreement agented by PNC Bank, National Association (the “PNC Term Loan Agreement”), we drew an additional $50.0 million under the $250.0 million senior unsecured term loan (the “2032 Term Loan”) on January 2, 2026, bringing the total outstanding principal amount to $150.0 million. The $150.0 million outstanding under the 2032 Term Loan is hedged with an all-in fixed interest rate of 4.66%. We have $100.0 million remaining under the PNC Term Loan Agreement delayed draw term loan commitment. Results of Operations Overall We continued to grow our assets held for investment during the three months ended March 31, 2026 through the acquisition of properties, property developments, and investment in mortgage loans receivable, with an underwritten weighted-average cash yield of approximately 7.5%. This growth was financed through the $50.0 million draw under the 2032 Term Loan, settlement of shares of common stock through our January 2024 Follow-On Offering in an amount of $67.8 million, the usage of cash balances as a result of borrowings on our senior unsecured revolving credit facility (the “Revolver”), the usage of restricted cash balances as a result of tax-free exchanges under Section 1031 of the Internal Revenue Code of 1986, and cash flows from operations during the three months ended March 31, 2026. Acquisitions During the three months ended March 31, 2026, we acquired 56 properties for a total purchase price of $234.0 million, inclusive of $3.0 million of capitalized acquisition costs. The acquisitions were all accounted for as asset acquisitions. These properties are located in 17 states with a WALT of approximately 14.1 years. Development As of March 31, 2026, we had four property developments under construction, which are expected to be substantially completed with rent commencing at various points throughout 2026 and early 2027. During the three months ended March 31, 2026, we invested $5.4 million in property developments, including the land acquisition of one new development with an initial purchase price of $2.3 million. The purchase price, including acquisition costs, and subsequent development are included in property under development in the accompanying condensed consolidated balance sheets as of March 31, 2026. 31 Table of Contents Dispositions During the three months ended March 31, 2026, we sold five properties for a total sales price, net of disposal costs, of $10.4 million, recognizing a net gain of $0.1 million. Investment in Mortgage Loans Receivable During the three months ended March 31, 2026, we invested an additional $5.1 million in fully collateralized mortgage loans receivable with stated interest rates ranging from 9.50% to 9.75%. In addition, during the three months ended March 31, 2026, we collected $11.2 million in principal on our mortgage loans receivable. We sold one mortgage loan receivable at a discount in an effort to manage tenant exposure, recognizing non-credit related provisions for impairment of $0.6 million for the three months ended March 31, 2026. See discussion of our mortgage loans receivable portfolio included in “Note 4 – Real Estate Investments” of our condensed consolidated financial statements, included in “Item 1 – Financial Statements (unaudited)”. Three Months Ended March 31, 2026 Compared with Three Months Ended March 31, 2025 The following table sets forth our operating results for the periods indicated (in thousands): Three Months Ended March 31, 2026 2025 Revenues Rental revenue (including reimbursable) $ 54,027 $ 42,590 Interest income on loans receivable 3,035 3,075 Other revenue — 245 Total revenues 57,062 45,910 Operating expenses Property 5,404 4,803 General and administrative 5,755 5,169 Depreciation and amortization 24,463 20,923 Provisions for impairment 2,062 3,616 Transaction costs, net (60) 47 Total operating expenses 37,624 34,558 Other (expense) income Interest expense, net (14,266) (11,460) Gain on sales of real estate, net 119 2,075 Loss on debt extinguishment — (46) Other income (expense), net 434 (205) Total other expense, net (13,713) (9,636) Net income before income taxes 5,725 1,716 Income tax expense (14) (16) Net income $ 5,711 $ 1,700 Revenue. Revenue for the three months ended March 31, 2026 increased by $11.2 million to $57.1 million from $45.9 million for the three months ended March 31, 2025, which is primarily attributed to an increase in the number of our operating leases. The increase includes additional cash rental receipts of $9.5 million, an increase of $1.2 million in straight-line rental revenue, combined net increases of property expense reimbursements of $0.5 million, and a net decrease of $0.3 million in reserves for uncollectible amounts, offset by a decrease in other revenue of $0.2 million related to a lease termination fee during the three months ended March 31, 2025 and other combined net decreases of $0.1 million. Total operating expenses. Total expenses increased by $3.0 million to $37.6 million for the three months ended March 31, 2026 as compared to $34.6 million for the three months ended March 31, 2025. The increase is primarily attributed to an increase in the number of operating properties, with the most significant increase being depreciation and amortization expense. Total operating expenses include the following: 32 Table of Contents • Property expenses. Property expenses increased by $0.6 million to $5.4 million for the three months ended March 31, 2026 from $4.8 million for the three months ended March 31, 2025. The increase is primarily attributed to an increase in the number of operating properties, including combined net increases of reimbursable property expenses of $0.5 million, of which $0.5 million and $0.1 million were related to reimbursable property taxes and reimbursable insurance costs, respectively, partially offset by a decrease of $0.2 million of reimbursable common area maintenance costs, and combined net increases of non-reimbursable property expenses of $0.2 million primarily related to common area maintenance costs and property insurance. • General and administrative expenses. General and administrative expenses increased by $0.6 million to $5.8 million for the three months ended March 31, 2026 from $5.2 million for the three months ended March 31, 2025. The increase is primarily related to an increase of $0.4 million of payroll expense and an increase of $0.3 million in stock based compensation expense, offset by other combined net decreases of $0.1 million. While our general and administrative expenses will continue to rise in some measure as our portfolio grows, we expect that such expenses as a percentage of our portfolio ABR and total assets will decrease over time due to efficiencies and economies of scale. • Depreciation and amortization. Depreciation and amortization expense increased by $3.6 million to $24.5 million for the three months ended March 31, 2026 from $20.9 million for the three months ended March 31, 2025. The increase in depreciation and amortization is proportionate to the increase in the size of the portfolio over the comparable period with associated increases primarily in building depreciation expense of $2.1 million, in-place lease amortization expense of $0.8 million, and building improvements depreciation expense of $0.7 million. • Provisions for impairment. For the three months ended March 31, 2026, we recorded provisions for impairment of $2.1 million on nine properties and one mortgage loan receivable, the majority of which were either previously classified as held-for-sale, newly classified as held-for-sale, or disposed during three months ended March 31, 2026. Of those properties impaired, two properties were held for investment as of March 31, 2026. For the three months ended March 31, 2025, we recorded provisions for impairment of $3.6 million on 13 properties, the majority of which were newly classified as held-for-sale during the three months ended March 31, 2025. Of those properties impaired, one property was held for investment as of March 31, 2025. These disposals relate to management’s continuous assessment of our portfolio in an effort to improve returns and manage risk exposure. Interest expense. Interest expense increased by $2.8 million to $14.3 million for the three months ended March 31, 2026 from $11.5 million for the three months ended March 31, 2025. The increase is primarily attributed to an increase of $2.2 million of interest incurred on our $200.0 million senior unsecured term loan (the “2031 Term Loan”), an increase of $1.7 million of interest incurred on our 2032 Term Loan, and in increase of $0.3 million in loan fee amortization, most of which is related to the 2031 Term Loan and 2032 Term Loan. The increase was partially offset by $1.2 million of reduced interest incurred on our Revolver, primarily due to a decrease in average borrowings outstanding during the respective periods, and $0.3 million of reduced interest incurred on our $200.0 million senior unsecured term loan (the “2028 Term Loan”), our $250.0 million senior unsecured term loan (the “2029 Term Loan”), our $175.0 million senior unsecured term loan (the “2030 Term Loan A”), and our $175.0 million senior unsecured term loan (the “2030 Term Loan B”), primarily related to the interest rate reduction as a result of receiving a credit rating at the end of 2025. Gain on sales of real estate, net. Net gain on sales of real estate decreased by $2.0 million to $0.1 million for the three months ended March 31, 2026 from $2.1 million for the three months ended March 31, 2025. For the three months ended March 31, 2026, five properties were sold for a sales price, net of disposal costs, of $10.4 million. For the three months ended March 31, 2025, 16 properties were sold for a sales price, net of disposal costs, of $38.6 million. Other income (expense), net. Other income (expense), net increased by $0.6 million to $0.4 million of other income, net for the three months ended March 31, 2026 from $0.2 million of other expense, net for the three months ended March 31, 2025. The net increase to income is primarily related to a $0.3 million increase in interest income on bank accounts and a $0.4 million decrease in third-party debt issuance costs that were expensed during the three months ended March 31, 2025 as a result of the January 2025 debt transaction. Net income. Net income increased by $4.0 million to $5.7 million for the three months ended March 31, 2026 from $1.7 million for the three months ended March 31, 2025. Net income increased primarily due to additional rental revenues, primarily due to the growth in the size of our real estate investment portfolio, and decreased provisions for impairment, partially offset by increases in depreciation expense, interest expense, general and administrative expense, property expense, and a decrease in gain on sales of real estate. 33 Table of Contents Liquidity and Capital Resources Our primary capital requirements include funding property acquisitions and developments, investing in mortgage loans receivable, making required debt interest payments, and covering working capital needs, operating expenses, and capital expenditures. Our capital resources primarily consist of cash from operations, sales of equity securities, and available borrowing facilities. As of March 31, 2026, we had total outstanding debt of $1.2 billion, including $200.0 million outstanding principal amount under the 2028 Term Loan, $250.0 million outstanding principal amount under the 2029 Term Loan, $175.0 million outstanding principal amount under the 2030 Term Loan A, $175.0 million outstanding principal amount under the 2030 Term Loan B, $200.0 million outstanding principal amount under the 2031 Term Loan, $150.0 million outstanding principal amount under the 2032 Term Loan, and $88.0 million outstanding on the Revolver. Additionally, as of March 31, 2026, we had $194.4 million and $29.9 million of unsettled forward equity under our 2024 ATM Program and prior at-the-market equity program, respectively. As of March 31, 2026, $49.9 million of shares of our common stock were available for future issuances under the 2024 ATM Program. Lastly, we had $81.7 million, $71.2 million, and $228.4 million of unsettled forward equity under the January 2024, July 2025, and February 2026 follow-on offering forward sale agreements, respectively, as of March 31, 2026. As of March 31, 2026, we had an aggregate of 34,201,865 unsettled shares under forward sale agreements with a weighted-average net settlement price of $17.71. We believe the availability of proceeds from our debt, proceeds from the settlement of unsettled outstanding forward sale agreements, future issuances of shares of our common stock under our 2024 ATM Program, or subsequent at-the-market sale programs, as well as our cash flows from operations and available borrowing capacity under the Revolver, will be adequate to support our ongoing operations and to fund our debt service requirements, capital expenditures, and working capital requirements for at least the next 12 months. We anticipate funding our long-term capital needs through cash provided from operations, borrowings under our 2032 Term Loan, borrowings under our Revolver, and issuances of common stock. Contractual Obligations and Commitments As of March 31, 2026, our contractual debt obligations primarily include the maturity of our 2028 Term Loan with the scheduled principal payment due on February 11, 2028, the maturity of our 2029 Term Loan with the scheduled principal payment due on July 3, 2026, the maturities of our 2030 Term Loan A, 2030 Term Loan B, and Revolver with the scheduled principal payments due on January 15, 2029, the maturity of our 2031 Term Loan with the scheduled principal payment due on March 25, 2031, and the maturity of our 2032 Term Loan with the scheduled principal payment due on September 24, 2032. During the three months ended March 31, 2026, we borrowed $98.0 million and repaid $10.0 million on our Revolver. 34 Table of Contents The following table provides information with respect to our commitments as of March 31, 2026 (in thousands): Payment Due by Period Total From April 1, 2026 to December 31, 2026 2027 - 2028 2029 - 2030 Thereafter Contractual Obligations 2028 Term Loan – Principal $ 200,000 $ — $ 200,000 $ — $ — 2028 Term Loan – Variable interest (1) 13,377 5,395 7,982 — — 2029 Term Loan – Principal 250,000 250,000 — — — 2029 Term Loan – Variable interest (1) 3,017 3,017 — — — 2030 Term Loan A – Principal 175,000 — — 175,000 — 2030 Term Loan A – Variable interest (1) 16,365 4,412 11,712 241 — 2030 Term Loan B – Principal 175,000 — — 175,000 — 2030 Term Loan B – Variable interest (1) 23,591 6,360 16,884 347 — 2031 Term Loan – Principal 200,000 — — — 200,000 2031 Term Loan – Variable interest (1) 43,728 6,611 17,549 17,549 2,019 2032 Term Loan – Principal 150,000 — — — 150,000 2032 Term Loan – Variable interest (1) 45,308 5,263 13,972 13,972 12,101 Ticking Fee (2) 98 98 — — — Revolver – Borrowings 88,000 — — 88,000 — Revolver – Variable interest 11,017 2,970 7,885 162 — Facility Fee (3) 2,794 753 2,000 41 — Mortgage Note – Principal 7,999 134 7,865 — — Mortgage Note – Interest 591 269 322 — — Property development under contract 22,313 10,547 11,766 — — Additional principal under mortgage loans receivable 6,422 5,236 1,186 — — Tenant improvement allowances 8,254 4,165 4,089 — — Corporate office lease obligations 4,473 491 1,359 1,434 1,189 Total $ 1,447,347 $ 305,721 $ 304,571 $ 471,746 $ 365,309 (1) We have various interest rate derivative contracts to fix the variable base interest rate (SOFR) on our term loans. Accordingly, the projected interest rate obligations for the variable rate term loans are based on the weighted-average hedged fixed rates, plus the applicable margins. See “Note 6 – Debt” and “Note 7 – Derivative Financial Instruments” for further discussion on our debt and interest rate hedges. (2) We are subject to a ticking fee of 0.20% on the undrawn amount under our 2032 Term Loan. (3) We are subject to a facility fee of 0.20% on our Revolver. In August 2021, we entered into a lease agreement related to our corporate office space, which is classified as an operating lease. We began operating out of the office in February 2022. The lease has a remaining noncancellable term of 6.3 years that expires on July 31, 2032 and is renewable at our option for two additional periods of five years. Annual rent expense, excluding operating expenses, is approximately $0.5 million during the initial term. Additionally, in the normal course of business, we enter into various types of commitments to purchase real estate properties, fund development projects, or extend funds under mortgage loans receivable. These commitments are generally subject to our customary due diligence process and, accordingly, a number of specific conditions must be met before we are obligated to purchase or extend funding. As of March 31, 2026, we had commitments to fund property developments, extend funds under mortgage loans receivable, and commitments to fund tenant improvement allowances totaling $22.3 million, $6.4 million, and $8.3 million, respectively. Commitments to fund property developments are expected to occur over the next nine months, commitments to fund mortgage loans receivable are expected to occur over the next 18 months, and commitments to fund tenant improvement allowances are expected to occur over the next two years. Debt See discussion of our debt and interest rate hedges included in “Note 6 – Debt” and “Note 7 – Derivative Financial Instruments” in “Item 1 – Financial Statements (unaudited).” 35 Table of Contents Historical Cash Flow Information Three Months Ended March 31, 2026 Compared with Three Months Ended March 31, 2025 Three Months Ended March 31, 2026 2025 (In thousands) (Unaudited) Net cash provided by (used in): Operating activities $ 26,312 $ 22,091 Investing activities (211,692) (48,308) Financing activities 181,971 26,102 Cash Flows Provided By Operating Activities. Net cash provided by operating activities increased by $4.2 million for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The increase was largely attributed to the increase in the size of our real estate investment portfolio with an increase in rental receipts of $9.5 million, partially offset by an increase in cash paid for interest of $2.7 million, an increase in operating expenses paid associated with our larger portfolio, and changes in working capital accounts. Cash Flows Used In Investing Activities. Net cash used in investing activities increased by $163.4 million for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The increase was primarily due to an increase in acquisitions of real estate of $156.2 million, a decrease in proceeds from the sale of real estate of $28.2 million, and an increase in real estate development and improvements of $2.9 million, partially offset by a decrease in earnest money deposits of $6.5 million, an increase in principal collections on mortgage loans receivable of $6.4 million, an increase in proceeds received from the sale of mortgage loans receivable of $5.6 million, and a decrease in cash invested in mortgage loans receivable of $5.4 million. Cash Flows Provided By Financing Activities. Net cash provided by financing activities increased by $155.9 million for the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The increase was primarily attributed to a decrease in net repayments of $212.5 million under our Revolver, an increase of $67.8 million of proceeds received from the issuance of common stock under our January 2024 Follow-On Offering, and a decrease in deferred financing costs of $6.3 million, partially offset by a decrease in net term loan proceeds of $125.0 million, an increase in payments of common stock dividends of $4.2 million, and an increase in the repurchase of common stock for tax withholding obligations of $1.1 million. Income Taxes We have elected to be treated and qualify as a REIT for U.S. federal income tax purposes. To qualify as a REIT, we must meet certain organizational, income, asset and distribution tests. Accordingly, we will generally not be subject to corporate U.S. federal or state income tax to the extent that we make qualifying distributions of all of our taxable income to our stockholders and provided we satisfy on a continuing basis, through actual investment and operating results, the REIT requirements, including certain asset, income, distribution and share ownership tests. We intend to make sufficient distributions during 2026 to receive a full dividends paid deduction. We maintain a taxable REIT subsidiary (“TRS”) which may be subject to U.S. federal, state, and local income taxes on its taxable income. In general, our TRS may perform services for our tenants, hold assets that we cannot hold directly, and may engage in any real estate or non-real estate-related business. We recognize franchise and other state and local tax expenses in general and administrative expenses and federal income tax in income tax expense in the accompanying condensed consolidated statements of operations and comprehensive income (loss). Recent Accounting Pronouncements A discussion of recent accounting pronouncements and their possible effects on our condensed consolidated financial statements is included in “Note 2 – Summary of Significant Accounting Policies” in “Item 1 – Financial Statements (unaudited).” 36 Table of Contents Critical Accounting Policies and Estimates Our accounting policies have been established to conform with U.S. generally accepted accounting principles (“GAAP”). The preparation of financial statements in conformity with U.S. GAAP requires us to use judgment in the application of accounting policies, including making estimates and assumptions. These judgments affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Management believes that we have made these estimates and assumptions in an appropriate manner and in a way that accurately reflects our financial condition. We continually test and evaluate these estimates and assumptions using our historical knowledge of the business, as well as other factors, to ensure that they are reasonable for reporting purposes. However, actual results may differ from these estimates and assumptions. If our judgment or interpretation of the facts and circumstances relating to the various transactions had been different, it is possible that different accounting policies would have been applied, thus resulting in a different presentation of the financial statements. Additionally, other companies may utilize different estimates that may impact comparability of our results of operations to those of companies in similar businesses. A summary of our critical accounting policies is included in the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2025, which is accessible on the SEC’s website at www.sec.gov. There have been no material changes to these policies during the periods covered by this quarterly report. Non-GAAP Financial Measures Our reported results are presented in accordance with GAAP. We also disclose the following non-GAAP financial measures: Funds From Operations (“FFO”), Core FFO, Adjusted FFO (“AFFO”), earnings before interest expense, income tax expense, and depreciation and amortization (“EBITDA”), EBITDA further adjusted to exclude gains (or losses) from the sales of depreciable property and real estate impairment losses (“EBITDA re ”), Adjusted EBITDAre, Annualized Adjusted EBITDA re , Net Debt, Adjusted Net Debt, property-level net operating income (“Property-Level NOI”), property-level cash net operating income (“Property-Level Cash NOI”), and property-level cash net operating income estimated run rate (“Property-Level Cash NOI Estimated Run Rate”), all of which are detailed below. We believe these non-GAAP financial measures are industry measures used by analysts and investors to compare the operating performance of REITs. FFO, Core FFO, and AFFO The National Association of Real Estate Investment Trusts (“NAREIT”), an industry trade group, has promulgated a widely accepted non-GAAP financial measure of operating performance known as FFO. Our FFO is net income in accordance with GAAP, excluding gains (or losses) resulting from dispositions of properties, plus depreciation and amortization and impairment charges on depreciable real property. Core FFO is a non-GAAP financial measure defined as FFO adjusted to remove the effect of unusual and non-recurring items that are not expected to impact our operating performance or operations on an ongoing basis. These include non-recurring executive transition costs, severance and related charges, other non-recurring losses (gains), debt related transaction costs, and other losses (gains). AFFO is a non-GAAP financial measure defined as Core FFO adjusted for GAAP net income related to non-cash revenues and expenses, such as straight-line rent, amortization of above- and below-market lease-related intangibles, amortization of lease incentives, capitalized interest expense and earned development interest, non-cash interest expense, non-cash compensation expense, amortization of deferred financing costs, amortization of above/below-market assumed debt, and amortization of loan origination costs. Historical cost accounting for real estate assets implicitly assumes that the value of real estate assets diminishes predictably over time. In fact, real estate values historically have risen or fallen with market conditions. FFO is intended to be a standard supplemental measure of operating performance that excludes historical cost depreciation and valuation adjustments from net income. We consider FFO to be useful in evaluating potential property acquisitions and measuring operating performance. We further consider FFO, Core FFO, and AFFO to be useful in determining funds available for payment of distributions. FFO, Core FFO, and AFFO do not represent net income or cash flows from operations as defined by GAAP. You should not consider FFO, Core FFO, and AFFO to be alternatives to net income as a reliable measure of our operating performance nor should you consider FFO, Core FFO, and AFFO to be alternatives to cash flows from operating, investing, or financing activities (as defined by GAAP) as measures of liquidity. 37 Table of Contents FFO, Core FFO, and AFFO do not measure whether cash flow is sufficient to fund our cash needs, including debt service obligations, capital improvements, and distributions to stockholders. FFO, Core FFO, and AFFO do not represent cash flows from operating, investing, or financing activities as defined by GAAP. Further, FFO, Core FFO, and AFFO as disclosed by other REITs might not be comparable to our calculations of FFO, Core FFO, and AFFO. The following table sets forth a reconciliation of FFO, Core FFO, and AFFO for the periods presented to net income before allocation to noncontrolling interests, as computed in accordance with GAAP (in thousands): Three Months Ended March 31, 2026 2025 (Unaudited) Net income $ 5,711 $ 1,700 Depreciation and amortization of real estate 24,387 20,850 Provisions for impairment 1,488 3,616 Gain on sales of real estate, net (119) (2,075) FFO 31,467 24,091 Adjustments: Non-recurring executive transition costs, severance, and related charges — 76 Loss on debt extinguishment and other related costs — 403 Other loss 574 — Core FFO 32,041 24,570 Adjustments: Straight-line rent adjustments (2,153) (954) Amortization of deferred financing costs 971 664 Amortization of above/below-market assumed debt 29 29 Amortization of loan origination costs and discounts (133) (77) Amortization of lease-related intangibles 47 (70) Earned development interest 116 43 Capitalized interest expense (88) (50) Non-cash interest expense 705 705 Non-cash compensation expense 1,689 1,388 AFFO $ 33,224 $ 26,248 EBITDA, EBITDAre, Adjusted EBITDAre, and Annualized Adjusted EBITDAre We compute EBITDA as earnings before interest expense, income tax expense, and depreciation and amortization. In 2017, NAREIT issued a white paper recommending that companies that report EBITDA also report EBITDA re . We compute EBITDA re in accordance with the definition adopted by NAREIT. NAREIT defines EBITDA re as EBITDA (as defined above) excluding gains (or losses) from the sales of depreciable property and impairment charges on depreciable real property. Adjusted EBITDA re is a non-GAAP financial measure defined as EBITDA re further adjusted to exclude straight-line rent, non-cash compensation expense, non-recurring executive transition costs, severance and related charges, debt related transaction costs, transaction costs, other non-recurring loss (gain), net, other non-recurring expenses (income) including lease termination fees, as well as adjustments for construction in process and for intraquarter activities. Annualized Adjusted EBITDA re is Adjusted EBITDA re multiplied by four. We present EBITDA, EBITDA re , Adjusted EBITDA re , and Annualized Adjusted EBITDA re as they are measures commonly used in our industry. We believe that these measures are useful to investors and analysts because they provide supplemental information concerning our operating performance, exclusive of certain non-cash items and other costs. We use EBITDA, EBITDA re , Adjusted EBITDA re , and Annualized Adjusted EBITDA re as measures of our operating performance and not as measures of liquidity. 38 Table of Contents EBITDA, EBITDA re , Adjusted EBITDA re , and Annualized Adjusted EBITDA re do not include all items of revenue and expense included in net income, they do not represent cash generated from operating activities and they are not necessarily indicative of cash available to fund cash requirements; accordingly, they should not be considered alternatives to net income as a performance measure or cash flows from operations as a liquidity measure and should be considered in addition to, and not in lieu of, GAAP financial measures. Additionally, our computation of EBITDA, EBITDA re , Adjusted EBITDA re , and Annualized Adjusted EBITDA re may differ from the methodology for calculating these metrics used by other equity REITs and, therefore, may not be comparable to similarly titled measures reported by other equity REITs. The following table sets forth a reconciliation of EBITDA and EBITDA re for the periods presented to net income before allocation to noncontrolling interests, as computed in accordance with GAAP (in thousands): Three Months Ended March 31, 2026 2025 (Unaudited) Net income $ 5,711 $ 1,700 Depreciation and amortization of real estate 24,387 20,850 Amortization of lease-related intangibles 47 (70) Non-real estate depreciation and amortization 76 73 Interest expense, net 14,266 11,460 Income tax expense 14 16 Amortization of loan origination costs and discounts (133) (77) EBITDA 44,368 33,952 Adjustments: Provisions for impairment 1,488 3,616 Gain on sales of real estate, net (119) (2,075) EBITDA re $ 45,737 $ 35,493 39 Table of Contents The following table sets forth a reconciliation of EBITDA, EBITDA re , Adjusted EBITDA re, and Annualized Adjusted EBITDA re for the period presented to net income before allocation to noncontrolling interests, as computed in accordance with GAAP (in thousands): Three Months Ended March 31, 2026 (Unaudited) Net income $ 5,711 Depreciation and amortization of real estate 24,387 Amortization of lease-related intangibles 47 Non-real estate depreciation and amortization 76 Interest expense, net 14,266 Income tax expense 14 Amortization of loan origination costs and discounts (133) EBITDA 44,368 Adjustments: Provisions for impairment 1,488 Gain on sales of real estate, net (119) EBITDA re 45,737 Adjustments: Straight-line rent adjustments (2,153) Other loss 574 Other income, net (31) Transaction costs, net (60) Non-cash compensation expense 1,689 Adjustment for construction in process (1) 208 Adjustment for intraquarter investment activities (2) 2,964 Adjusted EBITDA re $ 48,928 Annualized Adjusted EBITDA re (3) $ 195,712 Adjusted Net Debt / Annualized Adjusted EBITDA re 6.3x Adjusted Net Debt / Annualized Adjusted EBITDA re 3.2x Pro Forma Adjusted Net Debt / Annualized Adjusted EBITDA re 3.2x (1) Adjustment reflects the estimated cash yield on developments in process as of March 31, 2026. (2) Adjustment assumes all re-leasing activity, investments in and dispositions of real estate, including developments completed during the three months ended March 31, 2026, had occurred on January 1, 2026. (3) We calculate Annualized Adjusted EBITDA re by multiplying Adjusted EBITDA re by four. Net Debt, Adjusted Net Debt, and Pro Forma Adjusted Net Debt We calculate Net Debt as the principal amount of our total debt outstanding, excluding deferred financing costs, net discounts, and debt issuance costs, less cash, cash equivalents, and restricted cash available for future investment. We then adjust Net Debt by the net value of unsettled forward equity as of period end to derive Adjusted Net Debt. Further, we adjust Adjusted Net Debt by the value of any unsettled forward equity and at-the-market sales occurring subsequent to the period to derive Pro Forma Adjusted Net Debt. We believe excluding cash, cash equivalents, and restricted cash available for future investment from the principal amount of our total debt outstanding, together with the exclusion of the net value of unsettled forward equity as of period end and the net value of unsettled forward equity and at-the-market sales subsequent to the period, all of which could be used to repay debt, provides a useful estimate of the net contractual amount of borrowed capital to be repaid. We believe these adjustments are additional beneficial disclosures to investors and analysts. 40 Table of Contents The following table reconciles the principal amount of total debt to Net Debt, Adjusted Net Debt, and Pro Forma Adjusted Net Debt (in thousands): As of March 31, 2026 (Unaudited) Principal amount of total debt $ 1,245,999 Less: Cash, cash equivalents, and restricted cash (11,058) Net Debt 1,234,941 Less: Net value of unsettled forward equity (1) (605,622) Adjusted Net Debt 629,319 Less: Subsequent ATM sales (2) (5,952) Pro Forma Adjusted Net Debt $ 623,367 (1) There were 34,201,865 unsettled shares under forward sale agreements as of March 31, 2026 with a weighted-average net settlement price of $17.71. (2) There were 307,984 unsettled shares under new forward equity contracts executed subsequent to the period with a weighted-average net settlement price of $19.33. Property-Level NOI, Property-Level Cash NOI, and Property-Level Cash NOI - Estimated Run Rate Property-Level NOI, Property-Level Cash NOI, and Property-Level Cash NOI - Estimated Run Rate are non-GAAP financial measures which we use to assess our operating results. We compute Property-Level NOI as net income (computed in accordance with GAAP), excluding general and administrative expenses, interest expense, net, income tax expense, amortization of loan origination costs and discounts, transaction costs, depreciation and amortization, gains (or losses) on sales of depreciable property, real estate impairment losses, interest income on mortgage loans receivable, debt related transaction costs, and other expense (income), net, including lease termination fees. We further adjust Property-Level NOI for non-cash revenue components of straight-line rent and amortization of lease-intangibles to derive Property-Level Cash NOI. We further adjust Property-Level Cash NOI for intraquarter acquisitions, dispositions, and completed development to derive Property-Level Cash NOI - Estimated Run Rate. We believe Property-Level NOI, Property-Level Cash NOI, and Property-Level Cash NOI - Estimated Run Rate provide useful and relevant information because they reflect only those income and expense items that are incurred at the property level and present such items on an unlevered basis. Property-Level NOI, Property-Level Cash NOI, and Property-Level Cash NOI - Estimated Run Rate are not measurements of financial performance under GAAP and may not be comparable to similarly titled measures of other companies. You should not consider our measures as alternatives to net income or cash flows from operating activities determined in accordance with GAAP. 41 Table of Contents The following table sets forth a reconciliation of Property-Level NOI, Property-Level Cash NOI, and Property-Level Cash NOI - Estimated Run Rate for the period presented (in thousands): Three Months Ended March 31, 2026 (Unaudited) Net income $ 5,711 General and administrative 5,755 Depreciation and amortization 24,463 Provisions for impairment 2,062 Transaction costs, net (60) Interest expense, net 14,266 Gain on sales of real estate, net (119) Income tax expense 14 Amortization of loan origination costs and discounts (133) Interest income on mortgage loans receivable (3,035) Other income, net (465) Property-Level NOI 48,459 Straight-line rent adjustments (2,153) Amortization of lease-related intangibles 47 Property-Level Cash NOI $ 46,353 Adjustment for intraquarter acquisitions, dispositions, and completed development (1) 3,117 Property-Level Cash NOI Estimated Run Rate $ 49,470 (1) Adjustment assumes all re-leasing activity, investments in and dispositions of real estate, including developments completed during the three months ended March 31, 2026, had occurred on January 1, 2026.