What changed in this filing

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Item 1. Financial Statements

2024-11-04 compared with 2024-07-29 · 219 added, 156 removed, 677 unchanged (36% of the section changed)

4 unchanged sentences

(In thousands, except share and per share data)

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Real estate, at cost:

22 unchanged sentences

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

77,377,679 and 73,207,080 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively

81,583,917 and 73,207,080 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively

Additional paid-in capital 1,507,170 1,367,505

Distributions in excess of retained earnings ( 165,421 ) ( 112,276 )

Accumulated other comprehensive income 17,600 8,943

Accumulated other comprehensive (loss) income ( 2,453 ) 8,943

Total stockholders’ equity 1,340,112 1,264,904

8 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

1 unchanged sentence

Interest income on loans receivable 3,272 2,244 8,458 5,145

Other revenue — 550 — 550

Total revenues 41,444 33,961 118,684 95,042

8 unchanged sentences

Interest expense, net ( 7,965 ) ( 3,946 ) ( 21,749 ) ( 13,412 )

Gain on sales of real estate, net 8 615 1,006 296

(Loss) gain on sales of real estate, net ( 132 ) 373 874 669

Loss on debt extinguishment — — — ( 128 )

Other (expense) income, net ( 2,588 ) 68 ( 2,868 ) 220

Other income (expense), net 416 367 ( 2,451 ) 586

Total other (expense) income, net ( 7,681 ) ( 3,206 ) ( 23,326 ) ( 12,285 )

43 unchanged sentences

Balance at June 30, 2024 77,377,679 $ 773 $ 1,435,577 $ ( 143,734 ) $ 17,600 $ 1,310,216 $ 7,646 $ 1,317,862

Issuance of common stock in public offerings, net of issuance costs 4,183,711 43 70,109 — — 70,152 — 70,152

OP Units converted to common stock 12,102 — 204 — — 204 ( 204 ) —

Dividends and distributions declared on common stock and OP Units — — — ( 16,251 ) — ( 16,251 ) ( 92 ) ( 16,343 )

Dividends declared on restricted stock, net — — — ( 141 ) — ( 141 ) — ( 141 )

Vesting of restricted stock units 16,455 — — — — — — —

Repurchase of common stock for tax withholding obligations ( 6,030 ) — ( 96 ) — — ( 96 ) — ( 96 )

Stock-based compensation, net — — 1,376 — — 1,376 — 1,376

Other comprehensive loss — — — — ( 20,053 ) ( 20,053 ) ( 111 ) ( 20,164 )

Net loss — — — ( 5,295 ) — ( 5,295 ) ( 27 ) ( 5,322 )

Balance at September 30, 2024 81,583,917 $ 816 $ 1,507,170 $ ( 165,421 ) $ ( 2,453 ) $ 1,340,112 $ 7,212 $ 1,347,324

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

25 unchanged sentences

Balance at June 30, 2023 66,991,597 $ 670 $ 1,260,879 $ ( 90,329 ) $ 24,082 $ 1,195,302 $ 9,293 $ 1,204,595

Issuance of common stock in public offering, net of issuance costs 1,672,242 17 27,401 — — 27,418 — 27,418

OP Units converted to common stock 19,932 — 362 — — 362 ( 362 ) —

Dividends and distributions declared on common stock and OP Units — — — ( 13,768 ) — ( 13,768 ) ( 104 ) ( 13,872 )

Dividends declared on restricted stock, net — — — ( 126 ) — ( 126 ) — ( 126 )

Vesting of restricted stock units 24,088 — — — — — — —

Repurchase of common stock for tax withholding obligations ( 6,636 ) — ( 112 ) — — ( 112 ) — ( 112 )

Stock-based compensation, net — — 1,280 2 — 1,282 — 1,282

Other comprehensive income — — — — 6,412 6,412 54 6,466

Net income — — — 4,215 — 4,215 24 4,239

Balance at September 30, 2023 68,701,223 $ 687 $ 1,289,810 $ ( 100,006 ) $ 30,494 $ 1,220,985 $ 8,905 $ 1,229,890

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

3 unchanged sentences

(In thousands)

Six Months Ended

Nine Months Ended

September 30,

Cash flows from operating activities

44 unchanged sentences

Cash paid for interest, net $ 22,778 $ 12,779

Cash (received) paid for income taxes $ ( 8 ) $ 477

Cash paid for income taxes, net $ 27 $ 575

Supplemental disclosures of non-cash investing and financing activities:

2 unchanged sentences

Accrued loan origination fees on mortgage loans receivable $ 200 $ —

Mortgage loan receivable settled in exchange for acquisition of real estate $ — $ 4,673

Increase in mortgage loan receivable in exchange for disposition of real estate $ 12,714 $ 1,837

Refinancing of mortgage loan receivable $ — $ 1,327

Cash flow hedge change in fair value $ ( 8,508 ) $ 8,009

Accrued capital expenditures and real estate development and improvement costs $ 3,963 $ 9,834

Accrued lease incentives $ — $ 23

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

13 unchanged sentences

The Company also invests in property developments and mortgage loans secured by real estate.

As of June 30, 2024, the Company owned or had investments in 649 properties, located in 45 states, excluding 12 property developments where rent has yet to commence.

As of September 30, 2024, the Company owned or had investments in 671 properties, located in 45 states, excluding eight property developments where rent has yet to commence.

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 and six months ended June 30, 2024 and 2023 are not necessarily indicative of the results for the full year.

The results of operations for the three and nine months ended September 30, 2024 and 2023 are not necessarily indicative of the results for the full year.

Use of Estimates

13 unchanged sentences

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

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

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

5 unchanged sentences

Excludes properties that did not have impairment recorded during the period.

Of the total provision for impairment during the three months ended June 30, 2024, the Company recorded $ 1.1 million of additional impairment expense on four properties that were classified as held for sale in prior periods, and $ 1.9 million of impairment expense on two properties held for investment.

Of the total provision for impairment during the six months ended June 30, 2024, the Company recorded $ 1.4 million of additional impairment expense on five properties that were classified as held for sale in prior periods and $ 4.1 million of impairment expense on six properties held for investment.

Of the total provision for impairment during the three months ended September 30, 2024, the Company recorded $ 0.4 million of additional impairment expense on two properties that were classified as held for sale in prior periods and $ 5.3 million of impairment expense on three properties held for investment.

Of the total provision for impairment during the nine months ended September 30, 2024, the Company recorded $ 1.5 million of additional impairment expense on five properties that were classified as held for sale in prior periods and $ 9.4 million of impairment expense on nine properties held for investment.

Cash, Cash Equivalents and Restricted Cash

2 unchanged sentences

Restricted cash is included in cash, cash equivalents, and restricted cash in the condensed consolidated balance sheets.

The Company had $ 0.5 million of restricted cash as of June 30, 2024, and $ 11.5 million of restricted cash as of December 31, 2023.

The Company’s bank balances as of June 30, 2024 and December 31, 2023 included certain amounts over the Federal Deposit Insurance Corporation limits.

The Company had $ 2.9 million of restricted cash as of September 30, 2024, and $ 11.5 million of restricted cash as of December 31, 2023.

The Company’s bank balances as of September 30, 2024 and December 31, 2023 included certain amounts over the Federal Deposit Insurance Corporation limits.

Fair Value Measurement

13 unchanged sentences

Additionally, companies are required to disclose the estimated fair values of all financial instruments, even if they are not carried at their fair value.

The fair values of financial instruments are estimates based on market conditions and perceived risks as of June 30, 2024 and December 31, 2023.

The fair values of financial instruments are estimates based on market conditions and perceived risks as of September 30, 2024 and December 31, 2023.

These estimates require management’s judgment and may not be indicative of the future fair values of the assets and liabilities.

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.

Additionally, the Company believes the following financial instruments have carrying values that approximate their fair values as of June 30, 2024:

Additionally, the Company believes the following financial instruments have carrying values that approximate their fair values as of September 30, 2024:

• Borrowings under the Company’s Revolver (as defined in “Note 6 - Debt”) approximate fair value based on their nature, terms and variable interest rates.

1 unchanged sentence

• Carrying value of the Company’s mortgage note payable approximates fair value based on a discounted cash flow analysis using estimates of the amount and timing of future cash flows, market rates, and credit spreads.

Provisions for impairment recognized during the three and six months ended June 30, 2024 partially related to assets held for sale where impairment was determined based on the estimated or negotiated selling price, less costs of disposal, compared to the carrying value of the property.

The Company also recorded $ 1.9 million and $ 4.1 million of impairment expense on two and six properties held for investment, respectively, during the three and six months ended June 30, 2024.

Provisions for impairment recognized during the three and nine months ended September 30, 2024 partially related to assets held for sale where impairment was determined based on the estimated or negotiated selling price, less costs of disposal, compared to the carrying value of the property.

The Company also recorded $ 5.3 million and $ 9.4 million of impairment expense on three and nine properties held for investment, respectively, during the three and nine months ended September 30, 2024.

These properties were accounted for at fair value on a nonrecurring basis using a cash flow model (Level 3 inputs) with adjusted carrying values ranging from $ 0.2 million to $ 4.8 million.

The Company estimated the fair value using a capitalization rates ranging from 7.6 % to 12.1 % which it believes is reasonable based on current market rates.

The Company estimated the fair value using capitalization rates ranging from 5.9 % to 12.1 %, and a discount rate of 5.6 %, which it believes is reasonable based on current market rates.

As of December 31, 2023, there were two real estate assets held for investment accounted for at fair value.

1 unchanged sentence

The following table discloses estimated fair value information for the Company’s 2027 Term Loan, 2028 Term Loan, and 2029 Term Loan (each as defined in “Note 6 - Debt”) which is derived based primarily on unobservable market inputs such as interest rates and discounted cash flow analysis using estimates of the amount and timing of future cash flows, market rates and credit spreads (in thousands):

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Carrying Value (1)

6 unchanged sentences

Concentrations of Credit Risk

During the three months ended June 30, 2024, one tenant, Dollar General, accounted for 11.3 % of total revenues.

During the three months ended June 30, 2023, there were no other tenants or borrowers with rental or interest income on loans receivable that exceeded 10% of total revenues.

During the six months ended June 30, 2024, one tenant, Dollar General, accounted for 11.5 % of total revenues.

During the six months ended June 30, 2023, there were no other tenants or borrowers with rental or interest income on loans receivable that exceeded 10% of total revenues.

During the three months ended September 30, 2024, one tenant, Dollar General, accounted for 11.6 % of total revenues.

During the three months ended September 30, 2023, there were no tenants or borrowers with rental or interest income on loans receivable that exceeded 10% of total revenues.

During the nine months ended September 30, 2024, one tenant, Dollar General, accounted for 12.0 % of total revenues.

During the nine months ended September 30, 2023, there were no tenants or borrowers with rental or interest income on loans receivable that exceeded 10% of total revenues.

Other financial instruments that potentially subject the Company to significant concentrations of credit risk consist of cash held at various financial institutions, access to the Company’s credit facilities, and amounts due or payable under derivative contracts.

15 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 June 30, 2024, exclusive of mortgage loans receivable, the Company’s weighted average remaining lease term was 9.5 years.

As of September 30, 2024, exclusive of mortgage loans receivable, the Company’s weighted average remaining lease term was 9.5 years.

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

5 unchanged sentences

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

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

Three Months Ended September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

10 unchanged sentences

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

There were no material reserves, write-offs, or recoveries of uncollectible amounts during the three and six months ended June 30, 2024 and 2023.

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 June 30, 2024 are as follows (in thousands):

There were no material reserves, write-offs, or recoveries of uncollectible amounts during the three and nine months ended September 30, 2024 and 2023.

Future Minimum Base

6 unchanged sentences

Note 4 – Real Estate Investments

As of June 30, 2024, the Company owned or had investments in 649 properties, excluding 12 property developments where rent has yet to commence.

As of September 30, 2024, the Company owned or had investments in 671 properties, excluding eight property developments where rent has yet to commence.

The gross real estate investment portfolio, including properties under development, totaled approximately $ 2.1 billion and consisted of the gross acquisition cost of land, buildings, improvements, lease intangible assets and liabilities, and property development costs.

The investment portfolio is geographically dispersed throughout 45 states with gross real estate investments in Texas and Illinois representing 11.6 % and 10.0 %, respectively, of the total gross real estate investment of the Company’s investment portfolio.

During the three months ended June 30, 2024, the Company acquired 18 properties for a total purchase price of $ 95.6 million, inclusive of $ 0.6 million of capitalized acquisition costs.

During the six months ended June 30, 2024, the Company acquired 46 properties for a total purchase price of $ 190.8 million, inclusive of $ 1.8 million of capitalized acquisition costs.

During the three months ended June 30, 2023, the Company acquired 28 properties for a total purchase price of $ 96.2 million, inclusive of $ 1.0 million of capitalized acquisition costs.

During the six months ended June 30, 2023, the Company acquired 48 properties for a total purchase price of $ 163.9 million, inclusive of $ 1.7 million of capitalized acquisition costs.

During the three months ended September 30, 2024, the Company acquired 22 properties for a total purchase price of $ 111.5 million, inclusive of $ 1.1 million of capitalized acquisition costs.

During the three months ended September 30, 2023, the Company acquired 21 properties for a total purchase price of $ 95.3 million, inclusive of $ 0.8 million of capitalized acquisition costs.

During the nine months ended September 30, 2024, the Company acquired 68 properties for a total purchase price of $ 302.3 million, inclusive of $ 2.8 million of capitalized acquisition costs.

During the nine months ended September 30, 2023, the Company acquired 69 properties for a total purchase price of $ 259.2 million, inclusive of $ 2.4 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 June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2024 2023 2024 2023

5 unchanged sentences

Above-market lease intangible assets — 479 — 2,022

112,542 95,311 303,306 259,245

Liabilities assumed

Accounts payable, accrued expense and other liabilities ( 1,007 ) — ( 1,007 ) —

Purchase price (including acquisition costs) $ 111,535 $ 95,311 $ 302,299 $ 259,245

As of June 30, 2024, the Company had eight property developments under construction.

During the three months ended June 30, 2024, the Company invested $ 12.0 million in property developments, including the land acquisition of two new developments with a combined initial purchase price of $ 1.2 million.

During the six months ended June 30, 2024, the Company invested $ 23.0 million in property developments, including the land acquisition of four new developments with a combined initial purchase price of $ 2.0 million.

During the six months ended June 30, 2024, the Company completed development on 14 projects and reclassified approximately $ 35.3 million from property under development to land, buildings and improvements, and other assets (leasing commissions) in the accompanying condensed consolidated balance sheets.

Rent commenced for 10 of the completed developments during the six months ended June 30, 2024, while rent is expected to commence for the other four completed developments in the third quarter of 2024.

The remaining eight developments are expected to be substantially completed with rent commencing at various points throughout 2024.

The purchase price, including acquisition costs, and subsequent development are included in property under development in the accompanying condensed consolidated balance sheets as of June 30, 2024.

During the three months ended June 30, 2023, the Company invested $ 17.7 million in property developments.

During the six months ended June 30, 2023, the Company invested $ 22.2 million in property developments, including the land acquisition of 20 new developments with an initial purchase price of $ 11.9 million.

During the six months ended June 30, 2023, the Company completed development on two projects and reclassified approximately $ 14.8 million from property under development to land, buildings and improvements in the accompanying condensed consolidated balance sheets.

Rent commenced for the completed developments in the first quarter of 2023.

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, 2023.

Additionally, during the three months ended June 30, 2024 and 2023, the Company capitalized approximately $ 0.2 million and $ 0.1 million, respectively, of interest expense associated with properties under development.

During the six months ended June 30, 2024 and 2023, the Company capitalized approximately $ 0.6 million and $ 0.3 million, respectively, of interest expense associated with properties under development.

During the three months ended June 30, 2024, the Company sold six properties for a total sales price, net of disposal costs, of $ 12.1 million, recognizing a net gain of less than $ 0.1 million.

During the three months ended June 30, 2023, the Company sold two properties for a total sales price, net of disposal costs, of $ 3.8 million, recognizing a net gain of $ 0.6 million.

During the six months ended June 30, 2024, the Company sold 18 properties for a total sales price, net of disposal costs, of $ 32.5 million, recognizing a net gain of $ 1.0 million.

During the six months ended June 30, 2023, the Company sold 10 properties for a total sales price, net of disposal costs, of $ 19.3 million, recognizing a net gain of $ 0.3 million.

As of September 30, 2024, the Company had six property developments under construction.

During the three months ended September 30, 2024, the Company invested $ 5.0 million in property developments.

During the nine months ended September 30, 2024, the Company invested $ 27.9 million in property developments, including the land acquisition of four new developments with a combined initial purchase price of $ 2.0 million.

During the nine months ended September 30, 2024, the Company completed development on 16 projects and reclassified approximately $ 47.8 million from property under development to land, buildings and improvements, and other assets (leasing commissions) in the accompanying condensed consolidated balance sheets.

Rent commenced for 14 of the completed developments during the nine months ended September 30, 2024, while rent is expected to commence for the other two completed developments in the fourth quarter of 2024.

The remaining six developments are expected to be substantially completed with rent commencing at various points throughout the fourth quarter of 2024 and the first quarter of 2025.

The purchase price, including acquisition costs, and subsequent development are included in property under development in the accompanying condensed consolidated balance sheets as of September 30, 2024.

During the three months ended September 30, 2023, the Company invested $ 33.2 million in property developments, including the land acquisition of 14 new developments with an initial purchase price of $ 9.6 million.

During the nine months ended September 30, 2023, the Company invested $ 55.5 million in property developments, including the land acquisition of 34 new developments with an initial purchase price of $ 21.6 million.

During the nine months ended September 30, 2023, the Company completed development on 12 projects and reclassified approximately $ 38.8 million from property under development to land, buildings and improvements in the accompanying condensed consolidated balance sheets.

Rent commenced for the completed developments at various points throughout 2023.

The purchase price, including acquisitions costs, and subsequent development are included in property under development in the accompanying condensed consolidated balance sheets as of September 30, 2023.

Additionally, during the three months ended September 30, 2024 and 2023, the Company capitalized approximately $ 0.1 million and $ 0.4 million, respectively, of interest expense associated with properties under development.

During both the nine months ended September 30, 2024 and 2023, the Company capitalized approximately $ 0.7 million of interest expense associated with properties under development.

During the three months ended September 30, 2024, the Company sold eight properties for a total sales price, net of disposal costs, of $ 23.0 million, recognizing a net loss of $ 0.1 million.

During the three months ended September 30, 2023, the Company sold four properties for a total sales price, net of disposal costs, of $ 7.2 million, recognizing a net gain of $ 0.4 million.

During the nine months ended September 30, 2024, the Company sold 26 properties for a total sales price, net of disposal costs, of $ 55.6 million, recognizing a net gain of $ 0.9 million.

During the nine months ended September 30, 2023, the Company sold 14 properties for a total sales price, net of disposal costs, of $ 26.5 million, recognizing a net gain of $ 0.7 million.

Investment in Mortgage Loans Receivable

The Company’s mortgage loans receivable portfolio as of June 30, 2024 and December 31, 2023 is summarized below (in thousands):

The Company’s mortgage loans receivable portfolio as of September 30, 2024 and December 31, 2023 is summarized below (in thousands):

Loan Type Monthly Payment (1)

Number of Secured Properties Effective Interest Rate (2)

Stated Interest Rate Maturity Date June 30, 2024 December 31, 2023

Stated Interest Rate Maturity Date September 30, 2024 December 31, 2023

Mortgage (3) (4)

16 unchanged sentences

I/O 1 10.25 % 10.25 % 5/15/2025 1,525 —

Mortgage (3) (4)

I/O 1 10.25 % 10.25 % 7/26/2025 1,235 —

Mortgage (3) (4)

I/O 1 10.25 % 10.25 % 8/27/2025 1,242 —

Mortgage P+I 1 7.25 % 7.25 % 7/17/2027 4,068 —

Mortgage P+I 1 7.25 % 7.25 % 7/17/2027 5,210 —

Mortgage I/O 1 13.09 % 13.09 % 11/17/2024 1,299 —

Mortgage P+I 1 7.25 % 7.25 % 9/19/2027 1,438 —

Mortgage I/O 1 7.00 % 7.00 % 9/30/2029 636 —

Total 142,361 114,530

13 unchanged sentences

Assets Held for Sale

As of June 30, 2024 and December 31, 2023, there were 25 and 23 properties, respectively, classified as held for sale.

As of September 30, 2024 and December 31, 2023, there were 24 and 23 properties, respectively, classified as held for sale.

During the three months ended September 30, 2024, the Company determined that eight properties previously classified as held for sale no longer met the held for sale criteria as of September 30, 2024.

The Company reclassified the properties' combined carrying value of $ 23.9 million out of assets held for sale and recorded catch-up depreciation of approximately $ 1.5 million during the three months ended September 30, 2024.

Provisions for Impairment

The Company recorded provisions for impairment of $ 3.8 million and $ 2.8 million on 12 properties and six properties for the three months ended June 30, 2024 and 2023, respectively.

The Company recorded provisions for impairment of $ 7.5 million and $ 2.8 million on 23 properties and six properties for the six months ended June 30, 2024 and 2023, respectively .

The Company recorded provisions for impairment of $ 9.8 million and $ 1.5 million on 18 properties and seven properties for the three months ended September 30, 2024 and 2023, respectively.

The Company recorded provisions for impairment of $ 17.3 million and $ 4.4 million on 40 properties and 10 properties for the nine months ended September 30, 2024 and 2023, respectively.

Note 5 – Intangible Assets and Liabilities

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

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Amount Accumulated Amortization Net Carrying Amount Gross

5 unchanged sentences

Below-market leases $ 33,139 $ ( 9,798 ) $ 23,341 $ 33,196 $ ( 7,843 ) $ 25,353

The remaining weighted average amortization period for the Company’s intangible assets and liabilities as of June 30, 2024 and as of December 31, 2023 by category were as follows:

The remaining weighted average amortization period for the Company’s intangible assets and liabilities as of September 30, 2024 and as of December 31, 2023 by category were as follows:

Years Remaining

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

In-place leases 8.7 8.8

4 unchanged sentences

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

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

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

6 unchanged sentences

$ 170 $ 121 $ 363 $ 517

The following table provides the projected amortization of in-place lease assets to amortization expense and the net amortization of above-market, below-market, and lease incentive lease intangible assets and liabilities to rental revenue as of June 30, 2024, for the next five years and thereafter (in thousands):

The following table provides the projected amortization of in-place lease assets to amortization expense and the net amortization of above-market, below-market, and lease incentive lease intangible assets and liabilities to rental revenue as of September 30, 2024, for the next five years and thereafter (in thousands):

Remainder of 2024

9 unchanged sentences

Maturity Date Fully Extended Maturity Date (1)

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

2027 Term Loan (3)

12 unchanged sentences

(1) Date represents the fully extended maturity date available to the Company, subject to certain conditions, under each related debt instrument.

( 2 ) Rate represents the effective interest rate as of June 30, 2024 and includes the effect of interest rate swap agreements, as described further in “Note 6 - Debt” and “Note 7 - Derivative Financial Instruments.”

(3) Loan is a floating-rate loan which resets daily at daily SOFR plus a SOFR adjustment of 0.10 % plus the applicable margin which was 1.15 % as of June 30, 2024.

( 2 ) Rate represents the effective interest rate as of September 30, 2024 and includes the effect of interest rate swap agreements, as described further in “Note 6 - Debt” and “Note 7 - Derivative Financial Instruments.”

(3) Loan is a floating-rate loan which resets daily at daily SOFR plus a SOFR adjustment of 0.10 % plus the applicable margin which was 1.15 % as of September 30, 2024.

The Company has entered into five interest rate swap agreements that effectively convert the floating rate to a fixed rate.

The hedged fixed rate reset effective November 27, 2023 to 1.87 % and will reset again effective December 23, 2024 to 2.40 %.

(4) Loan is a floating-rate loan which resets monthly at one-month term SOFR plus a SOFR adjustment of 0.10 % plus the applicable margin which was 1.15 % as of June 30, 2024.

(4) Loan is a floating-rate loan which resets monthly at one-month term SOFR plus a SOFR adjustment of 0.10 % plus the applicable margin which was 1.15 % as of September 30, 2024.

The Company has entered into three interest rate swap agreements that effectively convert the floating rate to a fixed rate.

(5) Loan is a floating-rate loan which resets daily at daily SOFR plus a SOFR adjustment of 0.10 % plus the applicable margin which was 1.15 % as of June 30, 2024.

(5) Loan is a floating-rate loan which resets daily at daily SOFR plus a SOFR adjustment of 0.10 % plus the applicable margin which was 1.15 % as of September 30, 2024.

The Company has entered into four interest rate swap agreements that effectively convert the floating rate to a fixed rate.

(6) The annual interest rate of the Revolver assumes daily SOFR as of June 30, 2024 of 5.34 % plus a SOFR adjustment of 0.10 % plus the applicable margin which was 1.00 % as of June 30, 2024.

(6) The annual interest rate of the Revolver assumes daily SOFR as of September 30, 2024 of 4.84 % plus a SOFR adjustment of 0.10 % plus the applicable margin which was 1.00 % as of September 30, 2024.

(7) The Company records deferred financing costs associated with the Revolver in other assets, net on its condensed consolidated balance sheets.

3 unchanged sentences

The 2029 Term Loan contains a 12-month delayed draw feature and $ 150.0 million was drawn on July 3, 2023.

Subject to the terms of the 2029 Term Loan Agreement, the Company drew an additional $ 100.0 million under the 2029 Term Loan on March 1, 2024.

The 2029 Term Loan is prepayable at the Company’s option in whole or in part without premium or penalty.

1 unchanged sentence

The extension options are at the Company’s election and are subject to certain conditions.

Subject to the terms of the 2029 Term Loan Agreement, the Company drew an additional $ 100.0 million under the 2029 Term Loan on March 1, 2024.

The interest rate applicable to the 2029 Term Loan is determined by the Company’s Investment Grade Rating (as defined in the 2029 Term Loan Agreement).

37 unchanged sentences

Mortgage Note Payable

As of June 30, 2024, the Company had total gross mortgage indebtedness of $ 8.3 million, which was collateralized by related real estate and a tenant’s lease with an aggregate net book value of $ 12.4 million.

As of September 30, 2024, the Company had total gross mortgage indebtedness of $ 8.3 million, which was collateralized by related real estate and a tenant’s lease with an aggregate net book value of $ 12.3 million.

The Company incurred debt issuance costs of less than $ 0.1 million and recorded a debt discount of $ 0.6 million, both of which are recorded as a reduction of the principal balance in mortgage note payable, net in the Company’s condensed consolidated balance sheets.

2 unchanged sentences

Payments on the 2027 Term Loan, 2028 Term Loan, and 2029 Term Loan are interest only through maturity.

As of June 30, 2024, scheduled debt maturities, including balloon payments, are as follows (in thousands):

As of September 30, 2024, scheduled debt maturities, including balloon payments, are as follows (in thousands):

Scheduled Principal Balloon Payment (1)

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Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

9 unchanged sentences

Total interest expense, net $ 7,965 $ 3,946 $ 21,749 $ 13,412

(1) Includes facility fees and non-utilization fees of approximately $ 0.2 million and $ 0.1 million for the three months ended June 30, 2024 and 2023, respectively, and facility fees of $ 0.3 million and $ 0.3 million for the six months ended June 30, 2024 and 2023, respectively.

(1) Includes facility fees and non-utilization fees of approximately $ 0.2 million for both the three months ended September 30, 2024 and 2023, and facility fees of $ 0.5 million for both the nine months ended September 30, 2024 and 2023.

(2) Includes the effects of interest rate hedges in place as of such date.

Deferred financing, discount, and debt issuance costs are amortized over the remaining terms of each respective borrowing and are included in interest expense, net in the Company’s condensed consolidated statements of operations and comprehensive (loss) income.

During the three months ended June 30, 2024 and 2023, term loans had a weighted average interest rate, exclusive of amortization of deferred financing costs and the effects of interest rate hedges, of 6.66 % and 6.41 %, respectively.

During the six months ended June 30, 2024 and 2023, term loans had a weighted average interest rate, exclusive of amortization of deferred financing costs and the effects of interest rate hedges, of 6.69 % and 6.09 %, respectively.

During the three months ended June 30, 2024 and 2023, the Company incurred interest expense on revolving credit facilities with a weighted average interest rate, exclusive of amortization of deferred financing costs and facility fees, of 6.49 % and 5.94 %, respectively.

During the six months ended June 30, 2024 and 2023, the Company incurred interest expense on revolving credit facilities with a weighted average interest rate, exclusive of amortization of deferred financing costs and facility fees, of 6.51 % and 5.92 %, respectively.

During the three months ended September 30, 2024 and 2023, term loans had a weighted average interest rate, exclusive of amortization of deferred financing costs and the effects of interest rate hedges, of 6.62 % and 6.53 %, respectively.

During the nine months ended September 30, 2024 and 2023, term loans had a weighted average interest rate, exclusive of amortization of deferred financing costs and the effects of interest rate hedges, of 6.67 % and 5.09 %, respectively.

During the three months ended September 30, 2024 and 2023, the Company incurred interest expense on revolving credit facilities with a weighted average interest rate, exclusive of amortization of deferred financing costs and facility fees, of 6.45 % and 7.05 %, respectively.

During the nine months ended September 30, 2024 and 2023, the Company incurred interest expense on revolving credit facilities with a weighted average interest rate, exclusive of amortization of deferred financing costs and facility fees, of 6.49 % and 5.98 %, respectively.

The estimated fair values of the Company’s term loans have 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.

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Refer to “Note 2 - Summary of Significant Accounting Policies” for additional detail on fair value measurements.

The Company was in compliance with all of its debt covenants as of June 30, 2024 and expects to be in compliance for the twelve-month period ending December 31, 2024.

The Company was in compliance with all of its debt covenants as of September 30, 2024 and expects to be in compliance for the twelve-month period ending December 31, 2024.

Note 7 – Derivative Financial Instruments

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Effective July 3, 2023, such derivatives were initiated to hedge the variable cash flows associated with the 2029 Term Loan.

The interest rate for the variable rate 2029 Term Loan is based on the hedged fixed rate of 3.74 % compared to the variable 2029 Term Loan daily SOFR rate as of June 30, 2024 of 5.34 %, plus a SOFR adjustment of 0.10 % and applicable margin of 1.15 %.

The interest rate for the variable rate 2029 Term Loan is based on the hedged fixed rate of 3.74 % compared to the variable 2029 Term Loan daily SOFR rate as of September 30, 2024 of 4.83 %, plus a SOFR adjustment of 0.10 % and applicable margin of 1.15 %.

The maturity dates of the interest rate swaps coincide with the fully extended maturity date of the 2029 Term Loan.

Effective September 1, 2022, such derivatives were initiated to hedge the variable cash flows associated with the 2028 Term Loan.

The interest rate for the variable rate 2028 Term Loan is based on the hedged fixed rate of 2.63 % compared to the variable 2028 Term Loan one-month SOFR rate as of June 30, 2024 of 5.33 %, plus a SOFR adjustment of 0.10 % and applicable margin of 1.15 %.

The interest rate for the variable rate 2028 Term Loan is based on the hedged fixed rate of 2.63 % compared to the variable 2028 Term Loan one-month SOFR rate as of September 30, 2024 of 5.20 %, plus a SOFR adjustment of 0.10 % and applicable margin of 1.15 %.

The maturity dates of the interest rate swaps coincide with the maturity date of the 2028 Term Loan.

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In anticipation of the amendment and restatement of the 2024 Term Loan, additional derivatives, effective November 27, 2023 and December 23, 2024 at hedged fixed rates of 1.87 % and 2.40 %, respectively, were initiated to hedge the variable cash flows associated with the 2027 Term Loan through the fully extended maturity date.

The interest rate on the variable 2027 Term Loan includes a daily SOFR rate as of June 30, 2024 of 5.31 %, plus a SOFR adjustment of 0.10 % and applicable margin of 1.15 %.

The interest rate on the variable 2027 Term Loan includes a daily SOFR rate as of September 30, 2024 of 4.83 %, plus a SOFR adjustment of 0.10 % and applicable margin of 1.15 %.

Amounts will subsequently be reclassified to earnings when the hedged item affects earnings.

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Number of Instruments Notional

Interest Rate Derivatives June 30, 2024 December 31, 2023 June 30, 2024 December 31, 2023

Interest Rate Derivatives September 30, 2024 December 31, 2023 September 30, 2024 December 31, 2023

Interest rate swaps 12 12 $ 650,000 $ 650,000

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 June 30, 2024 and December 31, 2023 (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 September 30, 2024 and December 31, 2023 (in thousands):

Derivative Assets

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Derivatives Designated as Hedging Instruments:

Balance Sheet Location June 30, 2024 December 31, 2023

Balance Sheet Location September 30, 2024 December 31, 2023

Interest rate swaps Other assets, net $ 7,936 $ 14,442

2 unchanged sentences

Derivatives Designated as Hedging Instruments:

Balance Sheet Location June 30, 2024 December 31, 2023

Balance Sheet Location September 30, 2024 December 31, 2023

Interest rate swaps Accounts payable, accrued expenses and other liabilities $ 5,076 $ 3,073

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, 2024 and 2023 (in thousands):

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 nine months ended September 30, 2024 and 2023 (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 Gain (Loss) Reclassified from Accumulated OCI into Income

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Derivatives in Cash Flow Hedging Relationships 2024 2023 2024 2023

For the Three Months Ended June 30

For the Three Months Ended September 30

Interest Rate Products $ ( 15,274 ) $ 11,814 Interest expense, net $ 4,890 $ 5,218

For the Six Months Ended June 30

For the Nine Months Ended September 30

Interest Rate Products $ 2,933 $ 18,388 Interest expense, net $ 14,389 $ 11,513

The Company did not exclude any amounts from the assessment of hedge effectiveness for the three and six months ended June 30, 2024 and 2023.

The Company did not exclude any amounts from the assessment of hedge effectiveness for the three and nine months ended September 30, 2024 and 2023.

During the next twelve months, the Company estimates that an additional $ 3.8 million will be reclassified as a decrease 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 June 30, 2024, 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 September 30, 2024, 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 assets measured at fair value on a recurring basis as of June 30, 2024 and December 31, 2023, aggregated by the level in the fair value hierarchy within which those measurements fall (in thousands):

The table below presents the Company’s derivative assets measured at fair value on a recurring basis as of September 30, 2024 and December 31, 2023, 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

June 30, 2024

September 30, 2024

Derivative assets $ — $ 7,936 $ — $ 7,936

Derivative liabilities $ — $ 5,076 $ — $ 5,076

December 31, 2023

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

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Accounts receivable, net $ 10,801 $ 10,074

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

June 30, 2024 December 31, 2023

September 30, 2024 December 31, 2023

Accrued expenses $ 8,787 $ 8,826

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The Company contributed the net proceeds to the Operating Partnership in exchange for 1,364,815 Class A OP Units.

On September 14, 2023, the Company entered into a forward confirmation with respect to 7,500,000 shares of its common stock under the 2021 ATM Program.

• On June 26, 2024, the Company partially physically settled 4,000,000 shares of common stock at a price of $ 16.43 per share under such forward confirmation for net proceeds of approximately $ 65.3 million, net of sales commissions and offering costs of $ 0.7 million.

As of June 30, 2024, 1,983,711 shares remain unsettled under the forward confirmation.

• In August 2023, the Company issued 109,725 shares of common stock at a weighted average price of $ 17.18 per share for net proceeds of approximately $ 1.8 million, net of sales commissions and offering costs of $ 0.1 million.

The Company contributed the net proceeds to the Operating Partnership in exchange for 109,725 Class A OP Units.

• In September 2023, the Company issued 46,228 shares of common stock at a weighted average price of $ 17.09 per share for net proceeds of approximately $ 0.8 million, net of sales commissions and offering costs of less than $ 0.1 million.

The Company contributed the net proceeds to the Operating Partnership in exchange for 46,228 Class A OP Units.

On September 14, 2023, the Company entered into a forward sale agreement with respect to 7,500,000 shares of its common stock under the 2021 ATM Program.

• On September 28, 2023, the Company partially physically settled 1,516,289 shares of common stock at a price of $ 16.49 per share under such forward sale agreement for net proceeds of approximately $ 24.8 million, net of sales commissions and offering costs of $ 0.2 million.

The Company contributed the net proceeds to the Operating Partnership in exchange for 1,516,289 Class A OP Units.

• On June 26, 2024, the Company partially physically settled 4,000,000 shares of common stock at a price of $ 16.43 per share under such forward sale agreement for net proceeds of approximately $ 65.3 million, net of sales commissions and offering costs of $ 0.7 million.

The Company contributed the net proceeds to the Operating Partnership in exchange for 4,000,000 Class A OP Units.

• On September 26, 2024, the Company physically settled 1,983,711 shares of common stock at a price of $ 16.41 per share under such forward sale agreement for net proceeds of approximately $ 32.3 million, net of sales commissions and offering costs of $ 0.4 million.

The Company contributed the net proceeds to the Operating Partnership in exchange for 1,983,711 Class A OP Units.

As of September 30, 2024, the Company had fully settled the forward sale agreement.

On October 25, 2023, the Company entered into a $ 300.0 million at-the-market equity program (the “2023 ATM Program”) through which, from time to time, it may sell shares of its common stock in registered transactions.

Effective October 24, 2023, in connection with the establishment of the new at-the-market offering program, the 2021 ATM Program was terminated.

On March 28, 2024, the Company entered into a forward confirmation with respect to 107,500 shares of its common stock under the 2023 ATM Program, at a public offering price of $ 18.29 per share.

107,500 shares remain unsettled under the forward confirmation as of June 30, 2024.

The Company may physically settle this forward confirmation (by the 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 April 12, 2025.

On March 28, 2024, the Company entered into a forward sale agreement with respect to 107,500 shares of its common stock under the 2023 ATM Program, at a public offering price of $ 18.29 per share.

As of September 30, 2024, 107,500 shares remain unsettled under the forward sale agreement.

The Company may physically settle this forward sale agreement (by the 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 April 12, 2025.

During April 2024, the Company entered into forward sale agreements with respect to an aggregate 1,635,600 shares of its common stock under the 2023 ATM Program at a weighted average price of $ 17.63 per share.

The Company did not initially receive any proceeds from the sale of shares of common stock by the forward purchaser.

The Company expects 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 April 12, 2025.

The Company may also elect to cash settle or net share settle all or a portion of its obligations under a forward sale agreement if it concludes it is in its best interest to do so.

No physical settlement has occurred through the date on which these condensed consolidated financial statements were issued.

If the Company elects to cash settle a forward sale agreement, it may not receive any proceeds and it may owe cash to the relevant forward counterparty in certain circumstances.

As of June 30, 2024, the Company has $ 222.7 million remaining gross proceeds available for future issuances of shares of common stock under the 2023 ATM Program, inclusive of unsettled shares under forward confirmation.

The following table presents information about the 2023 ATM Program and the 2021 ATM Program (in thousands):

Maximum Sales Authorization Gross Sales through June 30, 2024

As of September 30, 2024, 1,635,600 shares remain unsettled under the forward sale agreements.

The Company may physically settle the forward sale agreements (by the 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 April 12, 2025.

On August 12, 2024, the Company entered into a $ 300.0 million at-the-market equity program (the “2024 ATM Program”) through which, from time to time, it may sell shares of its common stock in registered transactions.

Effective August 12, 2024, in connection with the establishment of the new at-the-market offering program, the 2023 ATM Program was terminated.

As context requires, the 2024 ATM Program, the 2023 ATM Program, and the 2021 ATM Program are referred herein as the "ATM Programs."

During August and September 2024, the Company entered into forward sale agreements with respect to 152,547 shares of its common stock under the 2024 ATM Program, at a public offering price of $ 17.13 per share.

The following table presents information about the ATM Programs (in thousands):

Maximum Sales Authorization Gross Settlements through September 30, 2024 (1)

Program Name Date Established Date Terminated

2021 ATM Program September 2021 October 2023 $ 250,000 $ 249,122

2023 ATM Program (2)

September 2021 October 2023 $ 250,000 $ 216,391

October 2023 August 2024 $ 300,000 $ 77,323

2024 ATM Program (3)

October 2023 — $ 300,000 $ 77,323

(1) As of June 30, 2024, 1,983,711 shares remain unsettled under the forward confirmation at the available net settlement price of $ 16.44 .

(2) As of June 30, 2024, 1,743,100 shares remain unsettled under the forward confirmation as of June 30, 2024 at the available net settlement price of $ 17.54 .

August 2024 — $ 300,000 $ —

(1) Represents shares of common stock issued by the Company under the ATM Programs, including settlements of forward sale agreements.

(2) As of September 30, 2024, 1,743,100 shares remain unsettled under the forward sale agreements at the available net settlement price of $ 17.53 .

(3) As of September 30, 2024, 152,547 shares remain unsettled under the forward sale agreements at the available net settlement price of $ 16.95 .

January 2024 Follow-On Offering

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The Company did not initially receive any proceeds from the sale of shares of common stock by the forward purchasers.

The Company may also elect to cash settle or net share settle all or a portion of its obligations under a forward sale agreement if it concludes it is in its best interest to do so.

If the Company elects to cash settle a forward sale agreement, it may not receive any proceeds and it may owe cash to the relevant forward counterparty in certain circumstances.

As of June 30, 2024, 11,040,000 shares remain unsettled under the January 2024 forward sale agreements.

On September 26, 2024, the Company partially physically settled 2,200,000 shares of common stock at a price of $ 17.22 per share in accordance with the forward sale agreements.

The Company received net proceeds from the settlement of $ 37.8 million, net of underwriting discounts and offering costs of $ 1.8 million.

The Company contributed the net proceeds to the Operating Partnership in exchange for 2,200,000 Class A OP Units.

As of September 30, 2024, 8,840,000 shares remain unsettled under the January 2024 forward sale agreements.

Surrendered Shares on Vested Stock Unit Awards

During the six months ended June 30, 2024 and 2023, portions of restricted stock unit awards (“RSUs”) granted to certain of the Company’s officers, directors, and employees vested.

During the nine months ended September 30, 2024 and 2023, portions of restricted stock unit awards (“RSUs”) granted to certain of the Company’s officers, directors, and employees vested.

The vesting of these awards, granted pursuant to the NETSTREIT Corp.

2019 Omnibus Incentive Plan (the “Omnibus Incentive Plan”), resulted in federal and state income tax liabilities for the recipients.

During the six months ended June 30, 2024 and 2023, as permitted by the terms of the Omnibus Incentive Plan and the award grants, certain executive officers and employees elected to surrender an approximate total of 71 thousand and 18 thousand RSUs, respectively, valued at approximately $ 1.2 million and $ 0.4 million, respectively, solely to pay the associated statutory tax withholding.

During the nine months ended September 30, 2024 and 2023, as permitted by the terms of the Omnibus Incentive Plan and the award grants, certain executive officers and employees elected to surrender an approximate total of 77 thousand and 25 thousand RSUs, respectively, valued at approximately $ 1.3 million and $ 0.5 million, respectively, solely to pay the associated statutory tax withholding.

The surrendered RSUs are included in the row entitled “repurchase of common stock for tax withholding obligations” in the condensed consolidated statements of cash flows.

During the six months ended June 30, 2024, the Company declared and paid the following common stock dividends (in thousands, except per share data):

Six Months Ended June 30, 2024

During the nine months ended September 30, 2024, the Company declared and paid the following common stock dividends (in thousands, except per share data):

Nine Months Ended September 30, 2024

Declaration Date Dividend Per Share Record Date Total Amount Payment Date

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April 23, 2024 0.205 June 3, 2024 15,042 June 14, 2024

July 23, 2024 0.210 September 3, 2024 16,251 September 13, 2024

$ 0.620 $ 46,324

During the six months ended June 30, 2023, the Company declared and paid the following common stock dividends (in thousands, except per share data):

Six Months Ended June 30, 2023

During the nine months ended September 30, 2023, the Company declared and paid the following common stock dividends (in thousands, except per share data):

Nine Months Ended September 30, 2023

Declaration Date Dividend Per Share Record Date Total Amount Payment Date

1 unchanged sentence

April 25, 2023 0.200 June 1, 2023 12,173 June 15, 2023

July 24, 2023 0.205 September 1, 2023 13,768 September 15, 2023

$ 0.605 $ 37,591

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

Accordingly, during each of the six months ended June 30, 2024 and 2023, the Operating Partnership paid distributions of $ 0.2 million to holders of OP Units.

Accordingly, during each of the nine months ended September 30, 2024 and 2023, the Operating Partnership paid distributions of $ 0.3 million to holders of OP Units.

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 June 30, 2024 and December 31, 2023, noncontrolling interests represented 0.6 % and 0.7 %, respectively, of OP Units.

During the three months ended June 30, 2024 and 2023, OP Unit holders redeemed 35,121 and no OP Units, respectively, into shares of common stock on a one -for-one basis.

During the six months ended June 30, 2024 and 2023, OP Unit holders redeemed 42,240 and 5,694 OP Units, respectively, into shares of common stock on a one -for-one basis.

As of September 30, 2024 and December 31, 2023, noncontrolling interests represented 0.5 % and 0.7 %, respectively, of OP Units.

During the three months ended September 30, 2024 and 2023, OP Unit holders redeemed 12,102 and 19,932 OP Units, respectively, into shares of common stock on a one -for-one basis.

During the nine months ended September 30, 2024 and 2023, OP Unit holders redeemed 54,342 and 25,626 OP Units, respectively, into shares of common stock on a one -for-one basis.

Note 10 – Stock-Based Compensation

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

As of June 30, 2024, the only stock-based compensation granted by the Company were RSUs.

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 $ 1.5 million for the three months ended June 30, 2024 and $ 1.3 million for the three months ended June 30, 2023.

Stock-based compensation expense was $ 3.3 million for the six months ended June 30, 2024 and $ 2.3 million for the six months ended June 30, 2023.

As of September 30, 2024, the only stock-based compensation granted by the Company were RSUs.

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 $ 1.4 million and $ 1.3 million for the three months ended

September 30, 2024 and 2023, respectively.

Stock-based compensation expense was $ 4.7 million and $ 3.6 million for the nine months ended September 30, 2024 and 2023, respectively.

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 are expected to fully vest during the current year.

The following table summarizes performance-based RSU activity for the period ended June 30, 2024:

The following table summarizes performance-based RSU activity for the period ended September 30, 2024:

Shares Weighted Average Grant Date Fair Value per Share

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Vested during the period — —

Unvested RSU grants outstanding as of June 30, 2024 30,379 $ 19.75

For both the three and six months ended June 30, 2024, the Company recognized less than $ 0.1 million in stock-based compensation expense associated with performance-based RSUs.

As of June 30, 2024 and December 31, 2023, the remaining unamortized stock-based compensation expense totaled less than $ 0.1 million, and as of June 30, 2024, these awards are expected to be recognized over a remaining weighted average period of 0.5 years.

Unvested RSU grants outstanding as of September 30, 2024 30,379 $ 19.75

For both the three and nine months ended September 30, 2024, the Company recognized less than $ 0.1 million in stock-based compensation expense associated with performance-based RSUs.

As of September 30, 2024 and December 31, 2023, the remaining unamortized stock-based compensation expense totaled less than $ 0.1 million, and as of September 30, 2024, these awards are expected to be recognized over a remaining weighted average period of 0.2 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.

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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 one to five years .

The following table summarizes service-based RSU activity for the period ended June 30, 2024:

The following table summarizes service-based RSU activity for the period ended September 30, 2024:

Shares Weighted Average Grant Date Fair Value per Share

3 unchanged sentences

Vested during the period ( 169,502 ) 19.58

Unvested RSU grants outstanding as of June 30, 2024 344,167 $ 18.39

For the three and six months ended June 30, 2024, the Company recognized $ 0.9 million and $ 1.9 million, respectively, in stock-based compensation expense associated with service-based RSUs.

As of June 30, 2024 and December 31, 2023, the remaining unamortized stock-based compensation expense totaled $ 4.8 million and $ 3.4 million, respectively, and as of June 30, 2024, these awards are expected to be recognized over a remaining weighted average period of 2.1 years.

Unvested RSU grants outstanding as of September 30, 2024 327,712 $ 18.40

For the three and nine months ended September 30, 2024, the Company recognized $ 0.8 million and $ 2.6 million, respectively, in stock-based compensation expense associated with service-based RSUs.

As of September 30, 2024 and December 31, 2023, the remaining unamortized stock-based compensation expense totaled $ 4.0 million and $ 3.4 million, respectively, and as of September 30, 2024, these awards are expected to be recognized over a remaining weighted average period of 1.9 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 RSU activity for the period ended June 30, 2024:

The following table summarizes market-based RSU activity for the period ended September 30, 2024:

Shares Weighted Average Grant Date Fair Value per Share

3 unchanged sentences

Vested during the period ( 46,660 ) 20.36

Unvested RSU grants outstanding as of June 30, 2024 305,671 $ 18.76

For the three and six months ended June 30, 2024, the Company recognized $ 0.5 million and $ 1.1 million, respectively, in stock-based compensation expense associated with market-based RSUs.

As of June 30, 2024 and December 31, 2023, the remaining unamortized stock-based compensation expense totaled $ 3.4 million and $ 2.1 million, respectively, and as of June 30, 2024, these awards are expected to be recognized over a remaining weighted average period of 2.2 years.

Unvested RSU grants outstanding as of September 30, 2024 305,671 $ 18.76

For the three and nine months ended September 30, 2024, the Company recognized $ 0.5 million and $ 1.6 million, respectively, in stock-based compensation expense associated with market-based RSUs.

As of September 30, 2024 and December 31, 2023, the remaining unamortized stock-based compensation expense totaled $ 3.0 million and $ 2.1 million, respectively, and as of September 30, 2024, these awards are expected to be recognized over a remaining weighted average period of 2.0 years.

Alignment of Interest Program

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The award will be remeasured to fair value each reporting period until the unvested RSUs are granted.

For the three and six months ended June 30, 2024, the Company recognized approximately $ 0.1 million and $ 0.2 million, respectively, in stock-based compensation expense associated with these awards.

For the three and nine months ended September 30, 2024, the Company recognized approximately $ 0.1 million and $ 0.3 million, respectively, in stock-based compensation expense associated with these awards.

Previous awards under the Program that have been granted are included within service-based RSUs above.

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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 (loss) income per common share for the three and six months ended June 30, 2024 and 2023.

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

The following table is a reconciliation of the numerator and denominator used in the computation of basic and diluted net (loss) income per common share for the three and nine months ended September 30, 2024 and 2023.

Three Months Ended September 30, Nine Months Ended September 30,

(In thousands, except share and per share data) 2024 2023 2024 2023

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Net (loss) income available to common stockholders per common share, diluted $ ( 0.07 ) $ 0.06 $ ( 0.09 ) $ 0.08

For the three months ended June 30, 2024 and 2023, diluted net loss per common share does not assume the conversion of 440,654 and 507,773 OP Units, respectively, 69,023 and 152,785 unvested RSUs, respectively, and 254,299 unsettled shares under open forward equity contracts for the three months ended June 30, 2024, as such conversion would be antidilutive.

For the six months ended June 30, 2024, diluted net loss per common share does not assume the conversion of 459,520 OP Units, 118,790 unvested RSUs, or 462,103 unsettled shares under open forward equity contracts, as such conversion would be antidilutive.

As of June 30, 2024 and December 31, 2023, there were 437,058 and 479,298 of OP Units outstanding, respectively.

For the three months ended September 30, 2024, diluted net loss per common share does not assume the conversion of 433,942 OP Units, 115,703 unvested RSUs, or 10,219 unsettled shares under open forward equity contracts as such conversion would be antidilutive.

For the nine months ended September 30, 2024, diluted net loss per common share does not assume the conversion of 450,952 OP Units, 117,761 unvested RSUs, or 311,475 unsettled shares under open forward equity contracts, as such conversion would be antidilutive.

As of September 30, 2024 and December 31, 2023, there were 424,956 and 479,298 of OP Units outstanding, respectively.

Note 12 – Commitments and Contingencies

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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 to purchase or extend funding.

As of June 30, 2024, the Company had tenant improvement allowance commitments totaling approximately $ 4.1 million, which is expected to be funded within the next two years .

Additionally, as of June 30, 2024, the Company had commitments to fund properties under development totaling $ 16.1 million, which is expected to be funded over the next 18 months.

The Company also had commitments to extend funds under mortgage notes receivable of $ 15.3 million as of June 30, 2024, which is expected to occur over the next 12 months.

As of September 30, 2024, the Company had tenant improvement allowance commitments totaling approximately $ 5.1 million, which is expected to be funded within the next two years .

Additionally, as of September 30, 2024, the Company had commitments to fund properties under development totaling $ 11.2 million, which is expected to be funded over the next nine months .

The Company also had commitments to extend funds under mortgage notes receivable of $ 13.5 million as of September 30, 2024, which is expected to occur over the next 12 months.

In August 2021, the Company entered into a lease agreement on a new corporate office space, which is classified as an operating lease.

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Annual rent expense, excluding operating expenses, is approximately $ 0.5 million during the initial term.

As of June 30, 2024, 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.

As of September 30, 2024, 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.

Note 13 – Subsequent Events

The Company has evaluated all events that occurred subsequent to June 30, 2024 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.

The Company has evaluated all events that occurred subsequent to September 30, 2024 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 July 23, 2024, the Company's Board of Directors declared a cash dividend of $ 0.21 per share for the third quarter of 2024.

The dividend will be paid on September 13, 2024 to stockholders of record on September 3, 2024.

On October 18, 2024, the Company's Board of Directors declared a cash dividend of $ 0.21 per share for the fourth quarter of 2024.

The dividend will be paid on December 13, 2024 to shareholders of record on December 2, 2024.

Revolver Activity

In July 2024, the Company borrowed $ 6.0 million under the Revolver which will be used for general corporate purposes, including the acquisition of properties in the Company’s pipeline.

In October 2024, the Company paid $ 32.0 million on the Revolver.

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