What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2021-07-29 compared with 2021-04-29 · 238 added, 191 removed, 517 unchanged (45% of the section changed)

4 unchanged sentences

(in thousands, except share and per share data)

March 31, 2021 December 31, 2020

June 30, December 31,

Real estate, at cost:

7 unchanged sentences

Cash, cash equivalents and restricted cash 88,140 92,643

Acquired lease intangible assets, net 83,560 75,024

Lease intangible assets, net 99,620 75,024

Other assets, net 8,964 5,724

2 unchanged sentences

Term loan, net $ 174,217 $ 174,105

Revolving credit facility 13,000 —

Lease intangible liabilities, net 22,186 16,930

5 unchanged sentences

Common stock, $ 0.01 par value, 400,000,000 shares authorized;

28,467,117 and 28,203,545 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively

39,525,978 and 28,203,545 shares issued and outstanding, respectively

Additional paid-in capital 704,269 501,045

Retained (loss) earnings ( 12,582 ) ( 7,464 )

Distributions in excess of retained earnings ( 23,140 ) ( 7,464 )

Accumulated other comprehensive income 2,181 235

6 unchanged sentences

AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME

(in thousands, except share and per share data)

Three Months Ended

June 30, Six Months Ended

2021 2020 2021 2020

Rental revenue (including reimbursable) $ 13,798 $ 7,117 $ 25,730 $ 12,625

6 unchanged sentences

Total operating expenses 16,031 7,440 26,267 13,051

Other income (expense)

Other (expense) income

Interest expense, net ( 894 ) ( 1,098 ) ( 1,799 ) ( 2,797 )

Gain on sales of real estate, net 497 1,016 497 1,016

Gain on forfeited earnest money deposit — — — 250

Total other income (expense), net ( 905 ) ( 1,449 )

Net income (loss) before income tax expense 791 ( 1,552 )

Total other (expense) income, net ( 397 ) ( 82 ) ( 1,302 ) ( 1,531 )

Net loss before income tax expense ( 2,630 ) ( 405 ) ( 1,839 ) ( 1,957 )

Income tax expense — — ( 50 ) —

Net income (loss) 741 ( 1,552 )

Net income (loss) attributable to noncontrolling interests 40 ( 425 )

Net income (loss) attributable to common shareholders $ 701 $ ( 1,127 )

Net loss ( 2,630 ) ( 405 ) ( 1,889 ) ( 1,957 )

Net loss attributable to noncontrolling interests ( 94 ) ( 111 ) ( 54 ) ( 536 )

Preferred stock dividends — 6 — 6

Net loss attributable to common shareholders $ ( 2,536 ) $ ( 300 ) $ ( 1,835 ) $ ( 1,427 )

Amounts available to common shareholders per common share:

4 unchanged sentences

Diluted 38,018,588 11,797,645 33,236,262 11,105,709

Other comprehensive income (loss):

Net income (loss) $ 741 $ ( 1,552 )

Change in unrealized gain on derivatives, net 2,323 —

Total comprehensive income (loss) 3,064 ( 1,552 )

Comprehensive income (loss) attributable to noncontrolling interests 164 ( 425 )

Comprehensive income (loss) attributable to common shareholders $ 2,900 $ ( 1,127 )

Other comprehensive (loss) income:

Net loss $ ( 2,630 ) $ ( 405 ) $ ( 1,889 ) $ ( 1,957 )

Change in value on derivatives, net ( 265 ) — 2,058 —

Total comprehensive (loss) income $ ( 2,895 ) $ ( 405 ) $ 169 $ ( 1,957 )

Comprehensive (loss) income attributable to noncontrolling interests ( 106 ) ( 111 ) 58 ( 536 )

Comprehensive (loss) income attributable to common shareholders $ ( 2,789 ) $ ( 294 ) $ 111 $ ( 1,421 )

The accompanying notes are an integral part of these condensed consolidated financial statements.

5 unchanged sentences

Shares Par Value Shares Par Value Additional

Paid-in Capital Retained (Loss) Earnings Accumulated Other Comprehensive Income Total Stockholders’ Equity Noncontrolling Interests Total Equity

Paid-in Capital Distributions in Excess of Retained Earnings Accumulated Other Comprehensive Income Total Stockholders’ Equity Noncontrolling Interests Total Equity

Balance at December 31, 2020 — $ — 28,203,545 $ 282 $ 501,045 $ ( 7,464 ) $ 235 $ 494,098 $ 33,975 $ 528,073

Issuance of preferred stock 125 125 — — — — — 125 — 125

Offering and related costs of preferred stock — ( 21 ) — — — — — ( 21 ) — ( 21 )

Issuance of common stock in private offering — — 2,936,885 29 57,974 — — 58,003 — 58,003

OP Units converted to common stock — — 253,344 3 4,920 — — 4,923 ( 4,923 ) —

Dividends and distributions declared on common stock and OP Units — — — — — ( 5,687 ) — ( 5,687 ) ( 307 ) ( 5,994 )

Dividends declared on restricted stock — — — — — ( 132 ) — ( 132 ) — ( 132 )

Vesting of restricted stock units — — 15,190 — — — — — — —

Repurchase of common stock for tax withholding obligations — — ( 4,962 ) — ( 90 ) — — ( 90 ) — ( 90 )

Stock-based compensation — — — — 557 — 557 — 557

Other comprehensive income — — — — — — 2,199 2,199 124 2,323

Net income — — — — — 701 — 701 40 741

Balance at March 31, 2021 — $ — 28,467,117 $ 285 $ 506,432 $ ( 12,582 ) $ 2,434 $ 496,569 $ 28,909 $ 525,478

Issuance of common stock in public offering — — 10,915,688 109 203,468 — — 203,577 — 203,577

Offering and related costs of common stock — — — — ( 9,416 ) — — ( 9,416 ) — ( 9,416 )

OP Units converted to common stock — — 143,173 1 2,744 — — 2,745 ( 2,745 ) —

Dividends and distributions declared on common stock and OP Units — — — — — ( 7,890 ) — ( 7,890 ) ( 287 ) ( 8,177 )

Dividends declared on restricted stock — — — — — ( 132 ) — ( 132 ) — ( 132 )

Stock-based compensation — — — — 1,041 — 1,041 — 1,041

Other comprehensive loss — — — — — — ( 253 ) ( 253 ) ( 12 ) ( 265 )

Net loss — — — — — ( 2,536 ) — ( 2,536 ) ( 94 ) ( 2,630 )

Balance at March 31, 2020 125 $ 104 11,797,645 $ 118 $ 218,946 $ ( 1,099 ) $ — $ 218,069 $ 87,474 $ 305,543

Balance at June 30, 2021 — $ — 39,525,978 $ 395 $ 704,269 $ ( 23,140 ) $ 2,181 $ 683,705 $ 25,771 $ 709,476

The accompanying notes are an integral part of these condensed consolidated financial statements.

5 unchanged sentences

Shares Par Value Shares Par Value Additional

Paid-in Capital Retained (Loss) Earnings Accumulated Other Comprehensive Income Total Stockholders’ Equity Noncontrolling Interests Total Equity

Paid-in Capital Distributions in Excess of Retained Earnings Accumulated Other Comprehensive Income Total Stockholders’ Equity Noncontrolling Interests Total Equity

Balance at December 31, 2019 — $ — 8,860,760 $ 89 $ 164,416 $ 28 $ — $ 164,533 $ 87,899 $ 252,432

OP Units converted to common stock — — 253,344 3 4,920 — — 4,923 ( 4,923 ) —

Dividends and distributions declared on common stock and OP units — — — — — ( 5,687 ) — ( 5,687 ) ( 307 ) ( 5,994 )

Dividends declared on restricted stock — — — — — ( 132 ) — ( 132 ) — ( 132 )

Vesting of restricted stock units — — 15,190 — — — — — — —

Repurchase of common stock for tax withholding obligations — — ( 4,962 ) — ( 90 ) — — ( 90 ) — ( 90 )

Stock-based compensation — — — — 557 — 557 — 557

Other comprehensive income — — — — — — 2,199 2,199 124 2,323

Net income — — — — — 701 — 701 40 741

Issuance of preferred stock 125 125 — — — — — 125 — 125

Offering and related costs of preferred stock — ( 21 ) — — — — — ( 21 ) — ( 21 )

Issuance of common stock in private offering — — 2,936,885 29 57,974 — — 58,003 — 58,003

Offering and related costs of common stock — — — — ( 3,444 ) — — ( 3,444 ) — ( 3,444 )

Net loss — — — — — ( 1,127 ) — ( 1,127 ) ( 425 ) ( 1,552 )

Balance at March 31, 2020 125 $ 104 11,797,645 $ 118 $ 218,946 $ ( 1,099 ) $ — $ 218,069 $ 87,474 $ 305,543

Dividends declared on preferred stock — — — — — ( 6 ) — ( 6 ) — ( 6 )

Net loss — — — — — ( 294 ) — ( 294 ) ( 111 ) ( 405 )

Balance at June 30, 2020 125 $ 104 11,797,645 $ 118 $ 218,946 $ ( 1,399 ) $ — $ 217,769 $ 87,363 $ 305,132

The accompanying notes are an integral part of these condensed consolidated financial statements.

3 unchanged sentences

(in thousands, except share and per share data)

Three Months Ended

Six Months Ended

Cash flows from operating activities

Net income (loss) $ 741 $ ( 1,552 )

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Net loss $ ( 1,889 ) $ ( 1,957 )

Adjustments to reconcile net loss to net cash provided by operating activities:

Depreciation and amortization 13,004 5,462

2 unchanged sentences

Stock-based compensation expense 1,598 —

Gain on sale of real estate, net ( 497 ) ( 1,016 )

Gain on forfeited earnest money deposit — ( 250 )

3 unchanged sentences

Accounts payable, accrued expenses and other liabilities 166 1,223

Lessee improvement obligations — ( 1,125 )

Lease incentive payments ( 225 ) —

Net cash provided by operating activities 13,758 1,796

1 unchanged sentence

Acquisitions of real estate ( 205,167 ) ( 224,700 )

Real estate development ( 1,346 ) —

Real estate development and improvements ( 5,647 ) ( 615 )

Earnest money deposits 349 ( 747 )

Purchase of computer equipment ( 10 ) ( 41 )

Proceeds from sale of real estate 12,319 9,917

1 unchanged sentence

Cash flows from financing activities

Issuance of common stock in public offering, net 194,161 —

Issuance of common stock in private offering, net — 54,559

Issuance of preferred stock, net — 104

Payment of preferred stock dividends — ( 6 )

Payment of common stock dividends ( 13,577 ) —

2 unchanged sentences

Proceeds under revolving credit facility 13,000 —

Repayments under revolving credit facility ( 13,000 ) —

Repurchase of common stock for tax withholding obligations ( 90 ) —

Deferred offering costs — ( 1,526 )

Deferred financing costs — ( 75 )

Net cash provided by financing activities 179,895 53,056

24 unchanged sentences

The Company is structured as an umbrella partnership real estate investment trust (commonly referred to as an “UPREIT”) and is an internally managed real estate company that acquires, owns and manages a diversified portfolio of single-tenant, retail commercial real estate leased on a long-term basis to high credit quality tenants across the United States.

As of March 31, 2021, the Company owned 234 properties, located in 39 states with a non-binding option to purchase one property currently under development.

As of June 30, 2021, the Company owned 266 properties, located in 39 states, including two properties under development, and an additional property under development with a non-binding option to purchase, for a total of 267 properties.

Private Offering and Formation Transactions

23 unchanged sentences

In addition, an equivalent number of Class A OP Units were issued for the 255,268 shares sold by selling stockholders.

April 2021 Offering

On April 12, 2021, the Company completed a public offering of 10,915,688 shares of common stock, which included the full exercise of the underwriters’ option to purchase an additional 1,423,785 shares of common stock.

Upon closing of the offering, the Company issued 10,915,688 shares of common stock and received net proceeds of $ 194.2 million after deducting the underwriting discount and transaction costs of $ 9.4 million.

The Company contributed the net proceeds of the offering and related underwriters’ option to the Operating Partnership in exchange for 10,915,688 Class A OP Units.

Note 2 – Summary of Significant Accounting Policies

9 unchanged sentences

In the opinion of management, all adjustments of a normal recurring nature necessary for a fair presentation have been included.

The results of operations for the three months ended March 31, 2021 and 2020 are not necessarily indicative of the results for the full year.

The results of operations for the three and six months ended June 30, 2021 and 2020 are not necessarily indicative of the results for the full year.

Noncontrolling Interests

11 unchanged sentences

The Company evaluates its estimates on an ongoing basis and makes revisions to these estimates and related disclosures as experience develops or new information becomes known.

Further, the uncertainty over the ultimate impact COVID-19 will have on the global economy and the Company’s business makes any estimates and assumptions as of March 31, 2021 inherently less certain than they would be absent the current and potential impacts of COVID-19.

Further, the uncertainty over the ultimate impact COVID-19 will have on the global economy and the Company’s business makes any estimates and assumptions as of June 30, 2021 inherently less certain than they would be absent the current and potential impacts of COVID-19.

Actual results could differ from those estimates.

1 unchanged sentence

Certain reclassifications have been made to conform with current period presentation.

Transaction costs within the condensed consolidated statements of operations and comprehensive income (loss) were previously included within the caption “general and administrative.”

Transaction costs within the condensed consolidated statements of operations and comprehensive (loss) income were previously included within the caption “general and administrative.”

Risk and Uncertainties

1 unchanged sentence

President announced a National Emergency relating to the disease.

COVID-19 and the measures taken to limit its spread are negatively impacting the economy across many industries, including industries in which our tenants operate.

The impacts may continue and increase in severity as the duration of the pandemic lengthens.

COVID-19 and the measures taken to limit its spread have, and may continue to, negatively impact the economy across many industries, including industries in which our tenants operate.

The impacts may continue and increase in severity as the duration of the pandemic lengthens or new variants are identified.

As a result, the Company is not yet able to determine the full impact of COVID-19 on its operations, and therefore, whether any such impact will be material.

However, the Company’s operations and cash flows during the three months ended March 31, 2021 and 2020 were not materially impacted by COVID-19.

The Company has collected 100.0 % of all rent payments for the three months ended March 31, 2021.

In addition, the Company has not provided for any abatements or deferrals after August 1, 2020.

However, the Company’s operations and cash flows during the three and six months ended June 30, 2021 were not materially impacted by COVID-19.

The Company has collected 100.0 % of all rent payments for the three and six months ended June 30, 2021.

In addition, the Company has not provided for any rent abatements or deferrals since August 1, 2020.

The Company also adopted an optional remote-work policy and other physical distancing policies for its corporate office.

7 unchanged sentences

Under Accounting Standards Update (“ASU”) 2017-01, “Business Combinations (Topic 805):

Clarifying the Definition of a Business” (“ASU 2017-01”), an acquisition does not qualify as a business when substantially all of the fair value is concentrated in a single identifiable asset or group of similar identifiable assets or the acquisition does not include a substantive process in the form of an acquired workforce or an acquired contract that cannot be replaced without significant cost,

effort or delay.

Transaction costs related to acquisitions that qualify as asset acquisitions are capitalized as part of the cost basis of the acquired assets, while transaction costs for acquisitions that are deemed to be acquisitions of a business are expensed as incurred.

20 unchanged sentences

Computer equipment 3 years

Total depreciation and amortization expense was $ 5.9 million and $ 2.3 million during the three months ended March 31, 2021 and 2020, respectively.

Depreciation expense on real estate held for investment and computer equipment was $ 4.1 million and $ 1.6 million during the three months ended March 31, 2021 and 2020, respectively.

Amortization expense on acquired in-place lease and assembled workforce intangible assets, and leasing commission costs were $ 1.8 million and $ 0.7 million during the three months ended March 31, 2021 and 2020, respectively.

Total depreciation and amortization expense was $ 7.1 million and $ 3.1 million during the three months ended June 30, 2021 and 2020, respectively.

Total depreciation and amortization expense was $ 13.0 million and $ 5.5 million during the six months ended June 30, 2021 and 2020, respectively.

Depreciation expense on real estate held for investment and computer equipment was $ 4.9 million and $ 2.2 million during the three months ended June 30, 2021 and 2020, respectively.

Depreciation expense on real estate held for investment and computer equipment was $ 9.0 million and $ 3.8 million during the six months ended June 30, 2021 and 2020, respectively.

Amortization expense on acquired in-place lease and assembled workforce intangible assets and leasing commissions were $ 2.2 million and $ 0.9 million during the three months ended June 30, 2021 and 2020, respectively.

Amortization expense on acquired in-place lease and assembled workforce intangible assets and leasing commissions were $ 4.0 million and $ 1.7 million during the six months ended June 30, 2021 and 2020, respectively.

Repairs and maintenance are charged to operations as incurred;

6 unchanged sentences

Only disposals representing a strategic shift in operations are presented as discontinued operations.

Accordingly, we have not reclassified results of operations for properties disposed during the interim period ended March 31, 2021 or held for sale as discontinued operations, as these events are a normal part of the Company’s operations and do not represent strategic shifts in the Company’s operations.

As of March 31, 2021 and December 31, 2020, there were five and three properties, respectively, classified as held for sale.

Accordingly, we have not reclassified results of operations for properties disposed during the interim period ended June 30, 2021 or held for sale as discontinued operations, as these events are a normal part of the Company’s operations and do not represent strategic shifts in the Company’s operations.

As of June 30, 2021 and December 31, 2020, there were five and three properties, respectively, classified as held for sale.

Impairment of Long-Lived Assets

5 unchanged sentences

The following table summarizes the provision for impairment during the periods indicated below (in thousands):

Three Months Ended

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

Total provision for impairment $ 3,469 $ 1,410 $ 3,539 $ 1,410

7 unchanged sentences

Restricted cash includes cash restricted for property tenant improvements and cash proceeds from the sale of assets held by qualified intermediaries in anticipation of the acquisition of replacement properties in tax-free exchanges under Section 1031 of the Code.

The Company had less than $ 0.1 million of restricted cash as of March 31, 2021, which was included in cash, cash equivalents, and restricted cash on the condensed consolidated balance sheets.

The Company had $ 2.3 million of restricted cash as of June 30, 2021, which was included in cash, cash equivalents, and restricted cash on the condensed consolidated balance sheets.

The Company had $ 14.8 million of restricted cash as of December 31, 2020.

The Company’s bank balances as of March 31, 2021 and December 31, 2020 include certain amounts over the Federal Deposit Insurance Corporation limits.

The Company’s bank balances as of June 30, 2021 and December 31, 2020 include certain amounts over the Federal Deposit Insurance Corporation limits.

Revenue Recognition and Related Matters

The Company’s rental revenue is primarily related to rent received from tenants under leases accounted for as operating leases.

Rent from leases that have fixed and determinable rent increases is recognized on a straight-line basis over the non-cancellable initial term of the lease and reasonably certain renewal periods, from the later of the date of the commencement of the lease or

the date of acquisition of the property subject to the lease.

The difference between rental revenue recognized and the cash rent due under the provisions of the lease is recorded as deferred rent receivable and included as a component of other assets in the condensed consolidated balance sheets.

2 unchanged sentences

The Company recognized variable lease revenue related to tenant reimbursements and lease termination fees for the periods presented.

Capitalized above-market and below-market lease values are amortized on a straight-line basis as a reduction or increase of rental revenue as appropriate over the remaining non-cancellable terms of the respective leases.

Capitalized above-market and below-market lease values and lease incentives are amortized on a straight-line basis as a reduction or increase of rental revenue as appropriate over the remaining non-cancellable terms of the respective leases.

An allowance for doubtful accounts is provided against the portion of accounts receivable, net including straight-line rents, which is estimated to be uncollectible, which includes a portfolio-based reserve and reserves for specific disputed amounts.

Such allowances are reviewed each period based upon recovery experience and the specific facts of each outstanding amount.

As of March 31, 2021 and December 31, 2020, there was no allowance for doubtful accounts.

As of June 30, 2021 and December 31, 2020, there was no allowance for doubtful accounts.

Stock-Based Compensation

The Company has a share-based compensation award program for our employees and directors.

Stock-based compensation expense associated with these awards is recognized in general and administrative expenses in our condensed consolidated statements of operations and comprehensive income (loss).

We classify stock-based payment awards either as equity awards or liability awards based upon an analysis of ASC 718 and ASC 480.

4 unchanged sentences

Transaction Costs

Transaction costs represent costs incurred by the Company to facilitate the private offering, formation transactions and the initial public offering.

Transaction costs represent costs incurred by the Company to facilitate the private offering, formation transactions and initial public offering.

In addition, transaction costs include the costs associated with abandoned acquisitions and other acquisition related activity.

There were no offering costs incurred during the three months ended March 31, 2021.

Offering costs for the three months ended March 31, 2020 were $ 0.7 million.

Acquisition related expenses were $ 0.2 million and $ 0.4 million for the three months ended March 31, 2021 and 2020, respectively.

There were no offering costs incurred during the three or six months ended June 30, 2021.

Offering costs for the three and six months ended June 30, 2020 were $ 0.6 million and $ 1.3 million, respectively.

Acquisition related expenses were $ 0.2 million and less than $ 0.1 million for the three months ended June 30, 2021 and 2020, respectively.

Acquisition related expenses were $ 0.3 million and $ 0.4 million for the six months ended June 30, 2021 and 2020, respectively.

The Company elected to be treated and qualify as a REIT for U.S.

1 unchanged sentence

federal income tax return for such taxable year.

To qualify as a REIT, the Company must meet certain organizational, income, asset and distribution tests.

To qualify as a REIT,

the Company must meet certain organizational, income, asset and distribution tests.

Accordingly, the Company will generally not be subject to corporate U.S.

4 unchanged sentences

In general, NETSTREIT TRS may perform services for tenants of the Company, hold assets that the Company cannot hold directly and may engage in any real estate or non-real estate-related business.

During three months ended March 31, 2021, the Company recognized state and local and franchise tax expense which is included in income tax expense in the accompanying condensed consolidated statements of operations and comprehensive income (loss).

During the three and six months ended June 30, 2021, the Company recognized franchise and other state and local tax expenses which are included in general and administrative and recognized state and federal income tax expense which is included in income tax expense in the accompanying condensed consolidated statements of operations and comprehensive (loss) income.

Earnings Per Share

20 unchanged sentences

The fair value of the Company’s cash, cash equivalents and restricted cash (including money market accounts), other assets and accounts payable, accrued expenses and other liabilities approximate their carrying value because of the short-term nature of these instruments.

Provisions for impairments recognized in the three months ended March 31, 2021 and 2020 related to assets held for sale and the impairment was determined based on the estimated or negotiated selling price, less costs of disposal, compared to the carrying value of the property.

Provisions for impairments recognized in the three and six months ended June 30, 2021 and 2020 related to assets held for sale and the impairment was determined based on the estimated or negotiated selling price, less costs of disposal, compared to the carrying value of the property.

Concentrations of Credit Risk

Financial instruments that potentially subject us to significant concentrations of credit risk consist principally of cash and cash equivalents.

The Company is exposed to credit risk with respect to cash held at various financial institutions, access to its Credit Facility, and amounts due or payable under derivative contracts.

The Company is exposed to credit risk with respect to cash held at various financial institutions, access to its Credit

Facility, and amounts due or payable under derivative contracts.

The credit risk exposure with regard to the Company’s cash, credit facilities, and derivative instruments is spread among a diversified group of investment grade financial institutions.

During the three months ended March 31, 2021, the Company’s rental revenues were derived from 63 separate tenants leasing 234 total properties.

During this period there were no tenants with rental revenue that exceeded 10% of total rental revenue.

During the three months ended March 31, 2020, the Company’s rental revenues were derived from 48 separate tenants leasing 117 total properties.

During the three months ended June 30, 2021 and 2020, the Company’s rental revenues were derived from 64 separate tenants leasing 270 total properties and 53 separate tenants leasing 162 properties, respectively.

During these periods there were no tenants with rental revenue that exceeded 10% of total rental revenue.

During the six months ended June 30, 2021 and 2020, the Company’s rental revenues were derived from 65 separate tenants leasing 271 total properties and 53 separate tenants leasing 162 properties, respectively.

During this period there were no tenants with rental revenue that exceeded 10% of total rental revenue.

14 unchanged sentences

The Company acquires, owns and manages commercial single-tenant lease properties, with the majority being long-term triple-net leases where the tenant is generally responsible for all improvements and contractually obligated to pay all operating costs (such as real estate taxes, utilities and repairs and maintenance costs).

As of March 31, 2021, the Company owned 234 single-tenant retail net leased properties spanning 39 states, with tenants representing 59 different brands or concepts across 23 retail sectors.

As of March 31, 2021, the remaining terms of leases range from 2 - 33 years.

As of June 30, 2021, the Company owned 266 single-tenant retail net leased properties spanning 39 states, with tenants representing 59 different brands or concepts across 23 retail sectors.

As of June 30, 2021, the remaining terms of leases range from 2 - 33 years.

The Company’s property leases have been classified as operating leases and some have scheduled rent increases throughout the lease term.

All lease-related income is reported as a single line item, rental revenue (including reimbursable), in the condensed consolidated statements of operations and comprehensive income (loss) and is presented net of provision for doubtful accounts.

There were no provisions for doubtful accounts during the three months ended March 31, 2021 and 2020.

All lease-related income is reported as a single line item, rental revenue (including reimbursable), in the condensed consolidated statements of operations and comprehensive (loss) income and is presented net of provision for doubtful accounts.

There were no provisions for doubtful accounts during the three and six months ended June 30, 2021 and 2020.

The following table provides a disaggregation of lease income recognized under ASC 842 (in thousands):

Three Months Ended

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

Rental revenue

2 unchanged sentences

Variable lease income (2)

1,067 354 1,856 645

Other rental revenue:

Above/below market lease amortization, net 237 130 427 122

Lease incentives ( 3 ) — ( 3 ) —

Rental revenue (including reimbursables) $ 13,798 $ 7,117 $ 25,730 $ 12,625

1 unchanged sentence

(2) Variable lease income primarily includes tenant reimbursements for real estate taxes, insurance, common area maintenance, and lease termination fees.

Scheduled future minimum base rental payments (excluding base rental payments from properties classified as held for sale and straight line rent adjustments for all properties) due to be received under the remaining non-cancelable term of the operating leases in place as of March 31, 2021 are as follows (in thousands):

Future Minimum Base

5 unchanged sentences

Note 4 – Real Estate Investments

During the three months ended March 31, 2021, the Company acquired 31 properties for a total purchase price of $ 88.2 million, inclusive of $ 1.1 million of capitalized acquisition costs.

During the three months ended March 31, 2020, the Company acquired 24 properties for a total purchase price of $ 74.2 million, inclusive of $ 0.7 million of capitalized acquisition costs.

During the six months ended June 30, 2021, the Company acquired 66 properties for a total purchase price of $ 205.2 million, inclusive of $ 2.3 million of capitalized acquisition costs.

During the six months ended June 30, 2020, the Company acquired 68 properties for a total purchase price of $ 224.7 million, inclusive of $ 2.5 million of capitalized acquisition costs.

The acquisitions were all accounted for as asset acquisitions.

An allocation of the purchase price and acquisition costs paid for the completed acquisitions is as follows (in thousands):

Three Months Ended

Six Months Ended June 30,

Land $ 49,634 $ 73,540

4 unchanged sentences

Above-market lease intangible assets 6,487 526

Assumed receivables 44 —

Construction-in-progress assets — 270

Fuel equipment — 156

211,227 235,495

3 unchanged sentences

Purchase price (including acquisition costs) $ 205,167 $ 224,700

During the three months ended March 31, 2021, the Company invested a combined total of $ 1.3 million in a development project in Yuma, Arizona.

The Company has a non-binding purchase option to acquire the property upon completion.

The Company’s total investment is expected to be $ 4.4 million with the sole tenant in the property commencing lease payments in 2022.

These amounts are included in property under development in the accompanying condensed consolidated balance sheets as of March 31, 2021.

During the three months ended March 31, 2020, the Company acquired a property in North Little Rock, Arkansas and commenced development of a build-to-suit project.

The total cost for the project was $ 1.6 million which was completed in December 2020.

Rent commenced in January 2021.

During the six months ended June 30, 2021, the Company invested a total of $ 1.9 million in a development project in Yuma, Arizona.

The Company has a non-binding purchase option to acquire the property upon completion with the sole tenant commencing lease payments in 2022.

These amounts are included in property under development in the accompanying condensed consolidated balance sheets as of June 30, 2021.

During the six months ended June 30, 2021, the Company also invested a total of $ 3.4 million, including the purchase price of $ 3.2 million, in two properties in Fond Du Lac, Wisconsin.

Upon acquisition, the Company commenced development of two build-to-suit projects, which are expected to be completed in September 2021.

The purchase price, including acquisitions costs, and subsequent development are included in property under development in the accompanying condensed consolidated balance sheets as of June 30, 2021.

During the six months ended June 30, 2020, the Company acquired two properties in North Little Rock, Arkansas and commenced development of two build-to-suit projects.

The total combined cost for the projects was $ 2.5 million which were completed in July and December 2020, respectively.

Rent commenced in July 2020 and January 2021, respectively.

These amounts were included in buildings and improvements in the accompanying condensed consolidated balance sheets as of December 31, 2020.

There were no dispositions for the three months ended March 31, 2021.

During the three months ended March 31, 2020, the Company sold one property for a total sales price, net of disposal costs, of $ 0.5 million, recognizing no gain or loss on the sale.

During the six months ended June 30, 2021, the Company sold five properties for a total sales price, net of disposal costs, of $ 12.3 million, recognizing a gain of $ 0.5 million on the sales.

During the six months ended June 30, 2020, the Company sold two properties for a total sales price, net of disposal costs, of $ 9.9 million, recognizing a gain of $ 1.0 on the sales.

During 2019, the Company entered into an agreement to sell one property to a third-party and received a nonrefundable $ 0.3 million earnest money deposit, which upon the third-party’s failure to perform under the purchase and sale agreement in the first quarter of 2020, was recognized as a gain.

1 unchanged sentence

Intangible assets and liabilities consisted of the following (in thousands):

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

Amount Accumulated Amortization Net Carrying Amount Gross

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Assembled workforce 873 ( 446 ) 427 873 ( 299 ) 574

Lease incentives 225 ( 3 ) 222 — — —

Total Intangible assets $ 108,770 $ ( 9,150 ) $ 99,620 $ 79,950 $ ( 4,926 ) $ 75,024

Below-market leases $ 24,001 $ ( 1,815 ) $ 22,186 $ 17,951 $ ( 1,021 ) $ 16,930

The remaining weighted average amortization period for the Company’s intangible assets and liabilities as of March 31, 2021 and as of December 31, 2020 by category were as follows:

The remaining weighted average amortization period for the Company’s intangible assets and liabilities as of June 30, 2021 and as of December 31, 2020 by category were as follows:

Years Remaining

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

In-place leases 10.3 11.1

2 unchanged sentences

Assembled workforce 1.5 2.0

The Company records amortization of in-place lease assets to amortization expense, and records net amortization of above-market and below-market lease intangibles to rental revenue.

The following amounts in the accompanying condensed consolidated statements of operations and comprehensive income (loss) related to the amortization of intangibles assets and liabilities for all property and ground leases (in thousands):

Three Months Ended March 31,

Lease incentives 13.2 —

The Company records amortization of in-place lease assets and assembled workforce intangible assets to amortization expense, and records net amortization of above-market and below-market lease intangibles as well as amortization of lease incentives to rental revenue.

The following amounts in the accompanying condensed consolidated statements of operations and comprehensive (loss) income related to the amortization of intangibles assets and liabilities for all property and ground leases (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

2021 2020 2021 2020

Amortization:

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Below-market lease liabilities 431 218 803 343

Lease incentives ( 3 ) — ( 3 ) —

$ 234 $ 130 $ 423 $ 122

The following table provides the projected amortization of in-place lease assets and assembled workforce intangible assets to amortization expense, and the net amortization of above-market and below-market lease intangibles to rental revenue as of March 31, 2021, for the next five years and thereafter (in thousands):

The following table provides the projected amortization of in-place lease assets and assembled workforce intangible assets to amortization expense, and the net amortization of above-market, below-market, and lease incentive lease intangibles to rental revenue as of June 30, 2021, for the next five years and thereafter (in thousands):

Remainder of 2021

5 unchanged sentences

Below-market lease liabilities 982 1,964 1,957 1,939 1,919 13,425 22,186

Lease incentives ( 8 ) ( 17 ) ( 17 ) ( 17 ) ( 17 ) ( 146 ) ( 222 )

Net adjustment to rental revenue $ 379 $ 757 $ 750 $ 736 $ 717 $ 3,538 $ 6,877

1 unchanged sentence

Debt consists of the following (in thousands):

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

Term Loan (due December 23, 2024) $ 175,000 $ 175,000

Revolver (due December 23, 2023) 13,000 —

Total debt 188,000 175,000

Unamortized discount and debt issuance costs ( 783 ) ( 895 )

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The Term Loan matures on December 23, 2024 and the Revolver matures on December 23, 2023, subject to extension up to one year .

The Administrative Agent released the collateral in connection with the Company’s satisfaction of the Collateral Release Requirements in the fourth quarter of 2020, therefore interest rates under the Credit Facility are based on the Company’s consolidated total leverage ratio, and are determined by (A) in the case of Term Loan either (i) LIBOR, plus a margin ranging from 1.15 % to 1.60 %, based on the Company’s consolidated total leverage ratio, or (ii) a Base Rate (as defined in the Credit Facility), plus a margin ranging from 0.15 % to 0.60 %, based on the Company’s consolidated total leverage ratio and (B) in the case of Revolving Loans either (i) LIBOR, plus a margin ranging from 1.20 % to 1.80 %, based on the Company’s consolidated total leverage ratio, or (ii) a Base Rate (as defined in the Credit Facility), plus a margin ranging from 0.20 % to 0.80 %, based on the Company’s consolidated total leverage ratio.

The Credit Facility is unsecured as the Administrative Agent released the collateral in connection with the Company’s satisfaction of the collateral release requirements in the fourth quarter of 2020.

Therefore interest rates under the Credit Facility are based on the Company’s consolidated total leverage ratio, and are determined by (A) in the case of Term Loan either (i) LIBOR, plus a margin ranging from 1.15 % to 1.60 %, based on the Company’s consolidated total leverage ratio, or (ii) a Base Rate (as defined in the Credit Facility), plus a margin ranging from 0.15 % to 0.60 %, based on the Company’s consolidated total leverage ratio and (B) in the case of Revolving Loans either (i) LIBOR, plus a margin ranging from 1.20 % to 1.80 %, based on the Company’s consolidated total leverage ratio, or (ii) a Base Rate (as defined in the Credit Facility), plus a margin ranging from 0.20 % to 0.80 %, based on the Company’s consolidated total leverage ratio.

Interest is payable monthly or at the end of the applicable interest period in arrears on any outstanding borrowings.

Prior to the collateral release, the Credit Facility was secured by a first priority perfected security interest in and lien on all existing and future equity interests of the Company’s direct and indirect subsidiaries of any Eligible Property (as defined in the Credit Facility) owned by the Company or any of the Company’s subsidiaries.

The Credit Facility also provided that the Administrative Agent has the option to release the collateral securing the Credit Facility upon delivery of satisfactory evidence from the Company that Collateral Release Requirements (as defined in the Credit Facility) have been met, which requirements include, among others, conditions related to the unencumbered asset value and asset diversification of the Company.

For so long as the Credit Facility was secured, which was through the period ended September 30, 2020, the interest rates under the Credit Facility were based on the Company’s consolidated total leverage ratio, and are determined by (A) in the case of Term Loan either (i) LIBOR, plus a margin ranging from 1.25 % to 2.25 %, based on the Company’s consolidated total leverage

ratio, or (ii) a Base Rate (as defined in the Credit Facility), plus a margin ranging from 0.25 % to 1.25 %, based on the Company’s consolidated total leverage ratio and (B) in the case of Revolving Loans either (i) LIBOR, plus a margin ranging from 1.35 % to 2.30 %, based on the Company’s consolidated total leverage ratio, or (ii) a Base Rate (as defined in the Credit Facility), plus a margin ranging from 0.35 % to 1.30 %, based on the Company’s consolidated total leverage ratio.

The stated interest rate as of June 30, 2021 was 1.25 %.

The Company is required to pay a Revolver facility fee at an annual rate of 0.15 % of the unused capacity if usage exceeds 50% of the total available facility, or 0.25 % of the unused facility if usage does not exceed 50%.

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Deferred financing costs are being amortized over the remaining terms of each respective loan.

Term Loan deferred financing costs of $ 1.1 million, of which $ 0.8 million and $ 0.9 million is unamortized at March 31, 2021 and December 31, 2020, respectively, is included within Term Loan, net on the condensed consolidated balance sheets.

Revolver deferred financing costs of $ 1.6 million, of which $ 1.1 million and $ 1.2 million is unamortized at March 31, 2021 and December 31, 2020, respectively, is included within other assets, net on the condensed consolidated balance sheets.

Total deferred financing costs amortized on the Term Loan and Revolver for the three months ended March 31, 2021 and 2020 were $ 0.2 million and $ 0.2 million, respectively.

This is included in interest expense, net on the Company’s condensed consolidated statements of operations and comprehensive income (loss).

For the three months ended March 31, 2021 and 2020, the Term Loan had a weighted average interest rate, exclusive of amortization of deferred financing costs and the effects of the interest rate hedge, of 1.30 % and 3.23 %, respectively.

The Company incurred interest expense in connection with the Term Loan for the three months ended March 31, 2021 and 2020 of $ 0.6 million and $ 1.4 million, respectively.

Term Loan deferred financing costs of $ 1.1 million, of which $ 0.8 million and $ 0.9 million is unamortized at June 30, 2021 and December 31, 2020,

respectively, is included within Term Loan, net on the condensed consolidated balance sheets.

Revolver deferred financing costs of $ 1.6 million, of which $ 1.0 million and $ 1.2 million is unamortized at June 30, 2021 and December 31, 2020, respectively, is included within other assets, net on the condensed consolidated balance sheets.

Total deferred financing costs amortized on the Term Loan and Revolver for the three months ended June 30, 2021 and 2020 were $ 0.2 million and $ 0.2 million, respectively and $ 0.3 and $ 0.3 for the six months ended June 30, 2021 and 2020, respectively.

This is included in interest expense, net on the Company’s condensed consolidated statements of operations and comprehensive (loss) income.

For the three months ended June 30, 2021 and 2020, the Term Loan had a weighted average interest rate, exclusive of amortization of deferred financing costs and the effects of the interest rate hedge, of 1.30 % and 1.87 %, respectively and 1.28 % and 2.55 % for the six months ended June 30, 2021 and 2020, respectively.

The Company incurred interest expense in connection with the Term Loan for the three months ended June 30, 2021 and 2020 of $ 0.6 million and $ 0.8 million, respectively and $ 1.2 million and $ 2.2 million for the six months ended June 30, 2021 and 2020, respectively.

The estimated fair value of the Company’s Term Loan has been derived based on market observable inputs such as interest rates and discounted cash flow analysis using estimates of the amount and timing of future cash flows.

These measurements are classified as Level 2 within the fair value hierarchy.

The Company determined that the carrying value materially approximated the estimated fair value of the Term Loan as of March 31, 2021 and December 31, 2020.

The Company incurred interest expense, exclusive of facility fees for unused capacity, on borrowings under the Revolver of less than $ 0.1 million for the three months ended March 31, 2021, with a weighted average interest rate of 1.29 %.

As of December 31, 2020, the Company had no borrowings under the Revolver.

The Company also incurred interest expense in connection with unused capacity for the three months ended March 31, 2021 and 2020 of $ 0.2 million and $ 0.1 million, respectively.

The Company was in compliance with all of its debt covenants as of March 31, 2021 and expects to be in compliance for the following twelve-month period.

The Company determined that the carrying value materially approximated the estimated fair value of the Term Loan as of June 30, 2021 and December 31, 2020.

The Company incurred interest expense, exclusive of facility fees for unused capacity, on borrowings under the Revolver of less than $ 0.1 million for the three months ended June 30, 2021 with a weighted average interest rate of 0.33 %.

No interest was incurred for the three months ended June 30, 2020.

For the six months ended June 30, 2021, interest expense was less than $ 0.1 million, with a weighted average interest rate of 1.24 %.

No interest was incurred for the six months ended June 30, 2020.

As of June 30, 2021 and December 31, 2020, the Company had no borrowings under the Revolver.

The Company also incurred interest expense in connection with unused capacity for the three months ended June 30, 2021 and 2020 of $ 0.2 million and $ 0.2 million, respectively and $ 0.3 million and $ 0.3 million for the six months ended June 30, 2021 and 2020, respectively.

For the three and six months ended June 30, 2021, the Company capitalized less than $ 0.1 million of interest expense associated with properties under development.

No interest expense was capitalized for the three and six months ended June 30, 2020.

The Company was in compliance with all of its debt covenants as of June 30, 2021 and expects to be in compliance for the following twelve-month period.

Debt Maturity

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Effective September 28, 2020, such derivatives were initiated to hedge the variable cash flows associated with Term Loan.

Accordingly, the interest rate for the variable rate Term Loan is based on the hedged fixed rate (one-month) of 0.21 % compared to the variable Term Loan one-month LIBOR rate as of March 31, 2021 of 0.11 %, plus a margin of 1.15 %.

Accordingly, the interest rate for the variable rate Term Loan is based on the hedged fixed rate (one-month) of 0.21 % compared to the variable Term Loan one-month LIBOR rate as of June 30, 2021 of 0.10 %, plus a margin of 1.15 %.

The maturity date of the interest rate swaps coincide with the maturity date of the Term Loan.

6 unchanged sentences

Number of Instruments Notional

Interest Rate Derivatives March 31, 2021 December 31, 2020 March 31, 2021 December 31, 2020

Interest Rate Derivatives June 30, 2021 December 31, 2020 June 30, 2021 December 31, 2020

Interest rate swaps 4 4 $ 175,000 $ 175,000

The following table presents the fair value of the Company's derivative financial instruments as well as their classification on the condensed consolidated balance sheets as of March 31, 2021 and December 31, 2020 (in thousands):

The following table presents the fair value of the Company's derivative financial instruments as well as their classification on the condensed consolidated balance sheets as of June 30, 2021 and December 31, 2020 (in thousands):

Derivative Assets

1 unchanged sentence

Derivatives Designated as Hedging Instruments:

Balance Sheet Location March 31, 2021 December 31, 2020

Balance Sheet Location June 30, 2021 December 31, 2020

Interest rate swaps Other assets, net $ 2,311 $ 253

The following table presents the effect of the Company's interest rate swaps on the condensed consolidated statements of operations and comprehensive loss for the three months ended March 31, 2021 and 2020 (in thousands):

Amount of Gain Recognized in OCI on Derivative (Effective Portion) Location of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) Amount of (Loss) Reclassified from Accumulated OCI into Income

The following table presents the effect of the Company's interest rate swaps on the condensed consolidated statements of operations and comprehensive (loss) income for the three and six months ended June 30, 2021 and 2020 (in thousands):

Amount of Gain (Loss) Recognized in OCI on Derivative (Effective Portion) Location of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) Amount of (Loss) Reclassified from Accumulated OCI into Income

(Effective Portion)

Derivatives in Cash Flow Hedging Relationships 2021 2020 2021 2020

For the Three Months Ended March 31

For the Three Months Ended June 30

Interest Rate Products $ ( 311 ) $ — Interest expense, net $ ( 45 ) $ —

The Company did not exclude any amounts from the assessment of hedge effectiveness for the three months ended March 31, 2021 and 2020.

For the Six Months Ended June 30

Interest Rate Products $ 1,979 $ — Interest expense, net $ ( 79 ) $ —

The Company did not exclude any amounts from the assessment of hedge effectiveness for the three and six months ended June 30, 2021 and 2020.

During the next twelve months, the Company estimates that an additional $ 0.1 million will be reclassified as an increase to interest expense.

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Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by itself and its counterparties.

However, as of March 31, 2021, the Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of its derivatives.

However, as of June 30, 2021, the Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of its derivatives.

As a result, the Company has determined that its derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy.

The table below presents the Company’s derivative liabilities measured at fair value on a recurring basis as of March 31, 2021, aggregated by the level in the fair value hierarchy within which those measurements fall (in thousands):

The table below presents the Company’s derivative liabilities measured at fair value on a recurring basis as of June 30, 2021, aggregated by the level in the fair value hierarchy within which those measurements fall (in thousands):

Fair Value Hierarchy Level

Description Level 1 Level 2 Level 3 Total Fair Value

March 31, 2021

June 30, 2021

Derivative assets $ — $ 2,311 $ — $ 2,311

3 unchanged sentences

Other assets, net consist of the following (in thousands):

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

Earnest money deposits $ 285 $ 634

Deferred offering costs 526 —

Deferred financing costs, net 997 1,198

5 unchanged sentences

Accounts payable, accrued expenses and other liabilities consists of the following (in thousands):

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

Accrued expenses $ 2,861 $ 2,035

5 unchanged sentences

Note 9 – Shareholders’ Equity, Partners’ Capital and Preferred Equity

During the three months ended March 31, 2021, portions of restricted stock unit awards granted to certain of the Company’s officers and directors vested.

The vesting of these awards, granted pursuant to the Omnibus Incentive Plan, resulted in federal and state income tax liabilities for the recipients.

As permitted by the terms of the Omnibus Incentive Plan and the award grants, certain executive officers elected to surrender approximately five thousand shares of common stock valued at approximately $ 0.1 million, solely to pay the associated statutory tax withholding during the year ended December 31, 2021.

The Company contributed the net proceeds of the offering and related underwriters’ option to the Operating Partnership in exchange for 10,915,688 Class A OP Units.

During the six months ended June 30, 2021, portions of restricted stock unit awards granted to certain of the Company’s officers and directors vested.

The vesting of these awards, granted pursuant to the Omnibus Incentive Plan (as defined in “Note 10 - Stock-Based Compensation”), resulted in federal and state income tax liabilities for the recipients.

year ended December 31, 2021.

The surrendered shares are included in repurchase of shares of common stock on the condensed consolidated statements of cash flows.

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The shares of Series A Preferred Stock may be redeemed solely at the Company’s option for consideration equal to $ 1,000 per share, plus accrued and unpaid dividends thereon to and including the date fixed for redemption, plus a redemption premium as follows (i) until December 31, 2021, $ 100 and (ii) thereafter, no redemption premium.

In May 2020, the Company declared a preferred dividend of $ 51.33 per share of Series A Preferred Stock to holders of record as of June 15, 2020.

The preferred dividend was settled in cash on June 30, 2020.

The Company redeemed all 125 outstanding shares of Series A Preferred Stock upon the completion of the initial public offering.

During the three months ended March 31, 2021, the Company declared and paid the following common stock dividends (in thousands, except per share data):

During the six months ended June 30, 2021, the Company declared and paid the following common stock dividends (in thousands, except per share data):

Declaration Date Dividend Per Share Record Date Total Amount Payment Date

March 3, 2021 $ 0.20 March 15, 2021 $ 5,687 March 30, 2021

April 27, 2021 0.20 June 1, 2021 $ 7,890 June 15, 2021

$ 0.40 $ 13,577

The holders of OP Units are entitled to an equal distribution per Class A and B OP Unit held as of each record date.

Accordingly, the Operating Partnership paid distributions of $ 0.3 million to holders of OP Units as of March 30, 2021.

There were no dividends or distributions declared or paid for the three months ended March 31, 2020

Accordingly, during the six months ended June 30, 2021, the Operating Partnership paid distributions of $ 0.6 million to holders of OP Units.

There were no dividends or distributions declared or paid for the three and six months ended June 30, 2020.

Noncontrolling Interests

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OP Units are convertible into common stock as the OP Units may be redeemed for cash or, at the Company’s election, exchanged for shares of the Company’s common stock on a one-for-one basis.

As of March 31, 2021 and December 31, 2020, noncontrolling interests represented 5.0 % and 5.9 %, respectively of OP Units.

During the three months ended March 31, 2021, OP Unit holders redeemed 253,344 OP units into shares of common stock on a one-for-one basis.

There were no redemptions for the three months ended March 31, 2020.

As of June 30, 2021 and December 31, 2020, noncontrolling interests represented 3.3 % and 5.9 %, respectively of OP Units.

During the three months ended June 30, 2021, OP Unit holders redeemed 143,173 OP units into shares of common stock on a one-for-one basis.

During the six months ended June 30, 2021, OP Unit holders redeemed 396,517 OP units into shares of common stock on a one-for-one basis.

There were no redemptions for the three and six months ended June 30, 2020.

Note 10 – Stock-Based Compensation

3 unchanged sentences

The Omnibus Incentive Plan is administered by the Compensation Committee of the Board of Directors.

As of March 31, 2021, the only stock-based compensation granted by the Company were restricted stock units.

The total amount of stock-based compensation costs recognized in general and administrative expense in the accompanying condensed consolidated statements of operations and comprehensive income (loss) was $ 0.6 million for the three months ended March 31, 2021.

No stock-based compensation expense was recognized for the three months ended March 31, 2020.

As of June 30, 2021, the only stock-based compensation granted by the Company were restricted stock units.

The total amount of stock-based compensation costs recognized in general and administrative expense in the accompanying condensed consolidated statements of operations and comprehensive (loss) income was $ 1.0 million and $ 1.6 million for the three and six months ended June 30, 2021.

No stock-based compensation expense was recognized for the three and six months ended June 30, 2020.

All awards of unvested restricted stock units are expected to fully vest over the next one to five years .

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The vesting terms of these grants are specific to the individual grant and vest in equal annual installments over the next three to five years .

The following table summarizes performance-based restricted stock unit activity for the period ended March 31, 2021:

The following table summarizes performance-based restricted stock unit activity for the period ended June 30, 2021:

Shares Weighted Average Grant Date Fair Value per Share

1 unchanged sentence

Vested during the period ( 15,190 ) 19.75

Unvested restricted stock grants outstanding as of March 31, 2021 192,613 $ 19.75

For the three months ended March 31, 2021, the Company recognized $ 0.3 million in stock-based compensation expense associated with performance-based restricted stock units.

As of March 31, 2021 and December 31, 2020, the remaining unamortized stock-based compensation expense totaled $ 2.2 million and $ 2.6 million, respectively and as of March 31, 2021, these awards are expected to be recognized over a remaining weighted average period of 2.5 years.

Unvested restricted stock grants outstanding as of June 30, 2021 192,613 $ 19.75

For the three and six months ended June 30, 2021, the Company recognized $ 0.3 million and $ 0.6 million, respectively, in stock-based compensation expense associated with performance-based restricted stock units.

As of June 30, 2021 and December 31, 2020, the remaining unamortized stock-based compensation expense totaled $ 1.9 million and $ 2.6 million, respectively and as of June 30, 2021, these awards are expected to be recognized over a remaining weighted average period of 2.3 years.

These units are subject to graded vesting and stock-based compensation expense is recognized ratably over the requisite service period for each vesting tranche in the award.

3 unchanged sentences

The vesting terms of these grants are specific to the individual grant and vest in equal annual installments over the next one to five years .

The following table summarizes service-based restricted stock unit activity for the period ended March 31, 2021:

The following table summarizes service-based restricted stock unit activity for the period ended June 30, 2021:

Shares Weighted Average Grant Date Fair Value per Share

1 unchanged sentence

Granted during the period 161,185 17.47

Unvested restricted stock grants outstanding as of March 31, 2021 330,978 $ 17.74

For the three months ended March 31, 2021, the Company recognized $ 0.2 million in stock-based compensation expense associated with service-based restricted stock units.

As of March 31, 2021 and December 31, 2020, the remaining unamortized stock-based compensation expense totaled $ 5.4 million and $ 2.8 million, respectively and as of March 31, 2021, these awards are expected to be recognized over a remaining weighted average period of 3.5 years.

Unvested restricted stock grants outstanding as of June 30, 2021 330,978 $ 17.74

For the three and six months ended June 30, 2021, the Company recognized $ 0.5 million and $ 0.7 million, respectively, in stock-based compensation expense associated with service-based restricted stock units.

As of June 30, 2021 and December 31, 2020, the remaining unamortized stock-based compensation expense totaled $ 5.0 million and $ 2.8 million, respectively and as of June 30, 2021, these awards are expected to be recognized over a remaining weighted average period of 3.3 years.

Stock-based compensation expense is recognized on a straight-line basis over the total requisite service period for the entire award.

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Stock-based compensation expense associated with unvested market-based share awards is recognized on a straight-line basis over the minimum required service period, which is three years .

The following table summarizes market-based restricted stock unit activity for the period ended March 31, 2021:

The following table summarizes market-based restricted stock unit activity for the period ended June 30, 2021:

Shares Weighted Average Grant Date Fair Value per Share

1 unchanged sentence

Granted during the period 135,766 17.77

Unvested restricted stock grants outstanding as of March 31, 2021 135,766 $ 17.77

For the three months ended March 31, 2021, the Company recognized less than $ 0.1 million in stock-based compensation expense associated market-based restricted stock units.

As of March 31, 2021, the remaining unamortized stock-based compensation expense totaled $ 2.4 million and as of March 31, 2021, these awards are expected to be recognized over a remaining weighted average period of 2.9 years.

Unvested restricted stock grants outstanding as of June 30, 2021 135,766 $ 17.77

For the three and six months ended June 30, 2021, the Company recognized $ 0.2 million in stock-based compensation expense associated market-based restricted stock units.

As of June 30, 2021, the remaining unamortized stock-based compensation expense totaled $ 2.2 million and as of June 30, 2021, these awards are expected to be recognized over a remaining weighted average period of 2.7 years.

Note 11 – Earnings Per Share

Net income per common share has been computed pursuant to the guidance in the FASB ASC Topic 260, Earnings per Share.

Basic earnings per share is computed by dividing net income attributable to common stockholders by the weighted-average number of common shares outstanding for the period.

Diluted earnings per share is similarly calculated except that the denominator is increased by using the treasury stock method to determine the potential dilutive effect of the Company’s outstanding unvested restricted stock units and using the if-converted method to determine the potential dilutive effect of the Company’s Class A and B OP Units.

Net loss per common share has been computed pursuant to the guidance in the FASB ASC Topic 260, Earnings per Share.

Basic earnings per share is computed by dividing net loss attributable to common stockholders by the weighted-average number of common shares outstanding for the period.

The Company has noncontrolling interests in the form of OP Units which are convertible into common stock and represent potentially dilutive securities, as the OP Units may be redeemed for cash or, at the Company’s election, exchanged for shares of the Company’s common stock on a one-for-one basis.

The following table is a reconciliation of the numerator and denominator used in the computation of basic and diluted net income per common share for the three months ended March 31, 2021 and 2020.

Three Months Ended March 31,

The following table is a reconciliation of the numerator and denominator used in the computation of basic and diluted net income per common share for the three and six months ended June 30, 2021 and 2020.

Three Months Ended June 30, Six Months Ended June 30,

(in thousands, except share and per share data) 2021 2020 2021 2020

Net income (loss) $ 741 $ ( 1,552 )

Net (income) loss attributable to noncontrolling interest ( 40 ) 425

Net loss $ ( 2,630 ) $ ( 405 ) $ ( 1,889 ) $ ( 1,957 )

Net loss attributable to noncontrolling interest 94 111 54 536

Cumulative preferred stock dividends and redemption premium — ( 6 ) — ( 6 )

Net income attributable to common shares, basic 701 ( 1,131 )

Net (income) loss attributable to noncontrolling interest ( 40 ) 425

Net income (loss) attributable to common shares, diluted $ 741 $ ( 1,556 )

Weighted average common shares outstanding, basic 28,348,975 11,797,645

Effect of dilutive shares for diluted net income per common share:

OP Units 1,616,005 —

Unvested RSUs 87,960 —

Weighted average common shares outstanding, diluted 30,052,940 11,797,645

Net income available to common stockholders per common share, basic $ 0.02 $ ( 0.10 )

Net income available to common stockholders per common share, diluted $ 0.02 $ ( 0.10 )

For the the three months ended March 31, 2020, diluted net loss per common share does not assume the conversion of the OP Units as such conversion would be antidilutive.

Additionally, unvested RSUs for the three months ended March 31, 2020 are excluded as they were considered contingently issuable shares.

As of March 31, 2021 and December 31, 2020, there were 1,498,538 and 1,751,882 of OP Units outstanding, respectively.

Net loss attributable to common shares, basic ( 2,536 ) ( 300 ) ( 1,835 ) ( 1,427 )

Net loss attributable to noncontrolling interest 94 111 54 536

Net loss attributable to common shares, diluted $ ( 2,630 ) $ ( 411 ) $ ( 1,889 ) $ ( 1,963 )

Weighted average common shares outstanding, basic and diluted 38,018,588 11,797,645 33,236,262 11,105,709

Net loss available to common stockholders per common share, basic $ ( 0.07 ) $ ( 0.03 ) $ ( 0.06 ) $ ( 0.13 )

Net loss available to common stockholders per common share, diluted $ ( 0.07 ) $ ( 0.03 ) $ ( 0.06 ) $ ( 0.13 )

For the periods presented, diluted net loss per common share does not assume the conversion of OP Units or unvested RSUs as such conversion would be antidilutive.

For the three months ended June 30, 2021 diluted net loss per common share does not assume the conversion of 1,438,969 OP Units or 332,781 unvested RSUs and for the three months ended June 30, 2020 does not assume the conversion of 4,449,019 OP Units.

For the six months ended June 30, 2021 diluted net loss per common share does not assume the conversion of 1,527,160 OP Units or 210,370 unvested RSUs and for the six months ended June 30, 2020 does not assume the conversion of 4,449,019 OP Units.

As of June 30, 2021 and December 31, 2020, there were 1,355,365 and 1,751,882 of OP Units outstanding, respectively.

Note 12 – Commitments and Contingencies

6 unchanged sentences

In the normal course of business, the Company enters into various types of commitments to purchase real estate properties or fund development projects.

These commitments are generally subject to the Company’s customary due diligence process and, accordingly, a number of specific conditions must be met before the Company is obligated or receives an option to purchase the properties.

As of March 31, 2021, the Company had commitments to fund properties under development totaling $ 4.4 million, of which $ 1.3 million has been funded to date and the remaining is expected to be funded over the next twelve months.

As of March 31, 2021, the Company did not have any other material commitments for re-leasing costs, recurring capital expenditures, non-recurring building improvements, or similar types of costs.

During the period ended March 31, 2021, the Company executed the Alignment of Interest Program (the “Program”) which allows employees to elect to receive a portion of their 2021 bonus in unvested restricted stock units in the first quarter of 2022 and would vest over a four-year service period beginning April 1, 2021.

As of June 30, 2021, the Company had commitments to fund properties under development totaling $ 10.4 million, of which $ 5.3 million has been funded to date and the remaining is expected to be funded over the next eight months .

As of June 30, 2021, the Company did not have any other material commitments for re-leasing costs, recurring capital expenditures, non-recurring building improvements, or similar types of costs.

During March 2021, the Company executed the Alignment of Interest Program (the “Program”) which allows employees to elect to receive a portion of their 2021 bonus in unvested restricted stock units in the first quarter of 2022 and would vest over a four-year service period beginning April 1, 2021.

The Program is deemed to be a liability-classified award which will be fair valued and accrued over the applicable service period beginning April 1, 2021.

The total estimated fair value of the Program as of March 31, 2021 is approximately $ 1.0 million.

The total estimated fair value of the Program as of June 30, 2021 is approximately $ 1.0 million.

The award will be remeasured to fair value each reporting period.

For the three and six months ended June 30, 2021, the Company recognized less than $ 0.1 million in stock-based compensation expense associated with liability-classified awards.

Note 13 – Related-Party Transactions

Effective with the Private Offering and commencement of the Company’s operations on December 23, 2019, the Company executed a facilities agreement with a subsidiary of EB Arrow.

Under the facilities agreement, the Company shares in office rent and office related expenses primarily based on employee headcount.

For the three months ended March 31, 2021 and 2020, the Company incurred less than $ 0.1 million in related expenses.

Effective with the Private Offering and commencement of the Company’s operations on December 23, 2019, the Company executed a facilities agreement with a subsidiary of EB Arrow Holdings, LLC (“EB Arrow”), which was subsequently amended in April 2021.

Under the facilities agreement, the Company shares in office rent by paying a fixed monthly rate and office related expenses based on employee headcount.

For the three months ended June 30, 2021 and 2020, the Company incurred less than $ 0.1 million in related expenses.

For the six months ended June 30, 2021 and 2020, the Company incurred approximately $ 0.1 million in related expenses.

Note 14 – Subsequent Events

The Company has evaluated all events that occurred subsequent to March 31, 2021 through the date on which these condensed consolidated financial statements were issued to determine whether any of these events required disclosure in the financial statements.

Public Offering

Upon closing of the offering, the Company issued 10,915,688 shares of common stock and received net proceeds of $ 194.3 million after deducting the underwriting discount and estimated transaction costs.

The Company contributed the net proceeds of the offering and related underwriters’ option to the Operating Partnership in exchange for 10,915,688 Class A OP Units.

On April 12, 2021, the Company used the net proceeds from the public offering to pay down $ 13.0 million of outstanding borrowings under the Revolver.

OP Unit Conversions to Common Stock

There were 22,605 OP Units redeemed for shares of common stock on a one-for-one basis subsequent to March 31, 2021.

The Company has evaluated all events that occurred subsequent to June 30, 2021 through the date on which these condensed consolidated financial statements were issued to determine whether any of these events required disclosure in the financial statements.

Common Stock Dividend

On April 27, 2021, the Company's Board of Directors declared a cash dividend of $ 0.20 per share for the second quarter of 2021.

The dividend will be paid on June 15, 2021 to shareholders of record on June 1, 2021.

On July 27, 2021, the Company's Board of Directors declared a cash dividend of $ 0.20 per share for the third quarter of 2021 which will be paid on September 15, 2021 to shareholders of record on September 1, 2021.

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

What changed 10-Q

Item 1. Financial Statements