What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-07-23 compared with 2025-04-28 · 180 added, 109 removed, 268 unchanged (52% of the section changed)

13 unchanged sentences

Business Overview

We are an internally managed real estate company that acquires, owns, and manages a diversified portfolio of single-tenant retail commercial properties, subject to long-term net leases with high-credit-quality tenants across the United States.

We are an internally managed real estate company that acquires, owns, and manages a diversified portfolio of single-tenant commercial retail properties, subject to long-term net leases with high-credit-quality tenants across the United States.

We also invest in property developments and mortgage loans secured by real estate.

As of March 31, 2025, we owned or had investments in 695 properties diversified by tenant, industry, and geography, including 101 different tenants, across 26 retail sectors in 45 states.

This excludes four property developments where rent has not yet commenced.

As of June 30, 2025, we owned or had investments in 707 properties diversified by tenant, industry, and geography, comprising 106 different tenants across 27 retail sectors in 45 states.

This includes two property developments where rent has not yet commenced.

We focus on tenants in industries where a physical location is critical to the generation of sales and profits, with a focus on necessity goods and essential services in the retail sector, including home improvement, auto parts, drug stores and pharmacies, general retail, grocers, convenience stores, discount stores, and quick-service restaurants, all of which we refer to as defensive retail industries.

As of March 31, 2025, our investments generated ABR 1 of $168.7 million.

As of June 30, 2025, our investments generated ABR 1 of $172.9 million.

Approximately 52% of our ABR is from investment grade 2 credit rated tenants and an additional 17% of our ABR is derived from tenants with an investment grade profile 3 .

Our portfolio was 99.9% occupied and, excluding mortgage loans receivable, had a weighted average remaining lease term (“WALT”) of 9.8 years, which we believe provides a strong, stable source of recurring cash flow.

( 1 ) Annualized base rent (“ABR”) is annualized base rent for all leases that commenced and annualized cash interest for all executed mortgage loans as of March 31, 2025.

1 Annualized base rent (“ABR”) is annualized base rent for all leases that commenced and annualized cash interest for all executed mortgage loans as of June 30, 2025.

2 We define “investment grade” tenants as tenants, or tenants that are subsidiaries of a parent entity, with a credit rating of BBB- (S&P/Fitch), Baa3 (Moody’s), or NAIC2 (National Association of Insurance Commissioners) or higher.

11 unchanged sentences

Among other changes, each of the PNC Credit Agreement, Wells Fargo Credit Agreement, and Truist Credit Agreement were also amended to remove certain financial covenants and provide for revised, improved pricing when we meet certain investment grade rating and leverage targets.

2024 ATM Program

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

During 2025, we entered into forward sale agreements with respect to an aggregate 2,190,299 shares of its common stock under the 2024 ATM Program at a weighted average price of $16.40 per share.

As of June 30, 2025, 1,085,000 shares remain unsettled under the forward sale agreements.

We 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 the stated maturity dates of April 30, 2026 and June 11, 2026.

The following table details information related to activity under the 2024 ATM Program for the three and six months ended June 30, 2025 (in thousands, except share and per share data).

There was no activity during the three months ended March 31, 2025;

therefore, the amounts presented are the same for the three- and six-month periods.

Three and Six Months Ended June 30, 2025 (1)

Shares of common stock issued

Weighted average price per share $ 16.32

Gross proceeds $ 28,694

Sales commissions and offering costs $ 342

(1) Includes 1,105,299 shares of common stock that were physically settled at a weighted-average price of $16.37 per share under the forward sale agreements with respect to the 2024 ATM Program.

Results of Operations

We continued to grow our assets held for investment during the three months ended March 31, 2025 through the acquisition of properties, property developments, and investment in mortgage loans receivable, with an underwritten weighted-average capitalization rate of approximately 7.7%.

This growth was financed through the amendment of our PNC Credit Agreement and receipt of proceeds of $175.0 million under the 2030 Term Loan B, the usage of cash balances as a result of borrowings on our Revolver, the usage of restricted cash balances as a result of tax-free exchanges under Section 1031 of the Internal Revenue Code of 1986, and cash flows from operations during the three months ended March 31, 2025.

During the three months ended March 31, 2025, we acquired 18 properties for a total purchase price of $77.5 million, inclusive of $0.9 million of capitalized acquisition costs.

We continued to grow our assets held for investment during the first half of 2025 through the acquisition of properties, property developments, and investment in mortgage loans receivable, with an underwritten weighted-average capitalization rate of approximately 7.7%.

This growth was financed through the amendment of our PNC Credit Agreement and receipt of proceeds of $175.0 million under the 2030 Term Loan B, settlement of shares of common stock through our forward sale agreements in an amount of $17.9 million, the issuance of common stock under the 2024 ATM Program in an amount of $10.5 million, the usage of cash balances as a result of borrowings on our Revolver, the usage of restricted cash balances as a result of tax-free exchanges under Section 1031 of the Internal Revenue Code of 1986, and cash flows from operations during the six months ended June 30, 2025.

During the three months ended June 30, 2025, we acquired 23 properties for a total purchase price of $96.5 million, inclusive of $1.0 million of capitalized acquisition costs.

The acquisitions were all accounted for as asset acquisitions.

These properties are located in nine states with a WALT of approximately 15.9 years.

During the six months ended June 30, 2025, we acquired 41 properties for a total purchase price of $174.0 million, inclusive of $1.9 million of capitalized acquisition costs.

The acquisitions were all accounted for as asset acquisitions.

These properties are located in 20 states with a WALT of approximately 12.9 years.

As of March 31, 2025, we had three property developments under construction.

During the three months ended March 31, 2025, we invested $0.7 million in our property developments.

During the three months ended March 31, 2025, we completed development on one project and reclassified approximately $3.8 million from property under development to land, buildings and improvements, and other assets (leasing commissions) in the accompanying condensed consolidated balance sheets.

Rent is expected to commence for the completed development in the second quarter of 2025.

The remaining three developments are expected to be substantially completed with rent commencing at various points throughout 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 March 31, 2025.

During the three months ended March 31, 2025, we sold 16 properties for a total sales price, net of disposal costs, of $38.6 million, recognizing a net gain of $2.1 million.

As of June 30, 2025, we had two property developments under construction.

During the three and six months ended June 30, 2025, we invested $1.4 million and $2.2 million, respectively, in property developments.

During the six months ended June 30, 2025, we completed development on two projects and reclassified approximately $6.5 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 both of the completed developments in the second quarter of 2025.

The remaining two developments are expected to be substantially completed with rent commencing at various points throughout 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 June 30, 2025.

During the three months ended June 30, 2025, we sold 20 properties for a total sales price, net of disposal costs, of $55.6 million, recognizing a net gain of $3.5 million on the sales.

During the six months ended June 30, 2025, we sold 36 properties for a total sales price, net of disposal costs, of $94.2 million, recognizing a net gain of $5.6 million on the sales.

Investment in Mortgage Loans Receivable

During the three months ended March 31, 2025, we invested an additional $10.5 million in fully collateralized mortgage loans receivable with stated interest rates ranging from 9.75% to 10.25%.

In addition, during the three months ended March 31, 2025, we collected $4.8 million in principal on our mortgage loans receivable.

During the three and six months ended June 30, 2025, we invested an additional $15.3 million and $25.7 million, respectively, in fully collateralized mortgage loans receivable with stated interest rates ranging from 7.00% to 10.25%.

In addition, during the three and six months ended June 30, 2025, we collected $7.4 million and $12.1 million, respectively in principal on our mortgage loans receivable.

The mortgage loans receivable are collateralized by real estate, primarily leased by investment grade credit rated tenants.

The funds provided under the loans, in addition to discount and loan origination costs, net of loan origination fees of less than $0.1 million, are included in mortgage loans receivable, net in the accompanying condensed consolidated balance sheets as of March 31, 2025.

See discussion of our mortgage loans receivable portfolio included in “Note 4 – Real Estate Investments” of our condensed consolidated financial statements, included in “Item 1 – Financial Statements (unaudited)”.

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We continually monitor the commercial real estate and credit markets carefully and, if required, will make decisions to adjust our business strategy accordingly.

Three Months Ended March 31, 2025 Compared with Three Months Ended March 31, 2024

Three Months Ended June 30, 2025 Compared with Three Months Ended June 30, 2024

The following table sets forth our operating results for the periods indicated (in thousands):

2 unchanged sentences

Interest income on loans receivable 3,128 2,703

Other revenue 245 —

Total revenues 48,286 39,567

9 unchanged sentences

Gain on sales of real estate, net 3,533 8

Loss on debt extinguishment (46) —

Other expense, net (205) (280)

Other income (expense), net 81 (2,588)

Total other expense, net

Net income before income taxes 1,716 1,069

(9,024) (10,184)

Net income (loss) before income taxes 3,302 (2,294)

Income tax expense (13) (12)

Net income $ 1,700 $ 1,052

Revenue for the three months ended March 31, 2025 increased by $8.2 million to $45.9 million from $37.7 million for the three months ended March 31, 2024, which is attributed to an increase in the number of our operating leases and properties securing our mortgage loans.

Net income (loss) $ 3,289 $ (2,306)

Revenue for the three months ended June 30, 2025 increased by $8.7 million to $48.3 million from $39.6 million for the three months ended June 30, 2024, which is attributed to an increase in the number of our operating leases and properties securing our mortgage loans.

The increase includes additional cash rental receipts of $6.7 million, an increase of $0.4 million related to interest income on mortgage loans receivable, combined net increases of property expense reimbursements of $1.0 million, and an increase of $0.6 million in straight-line rental revenue.

Total operating expenses.

Total expenses increased by $3.5 million to $34.6 million for the three months ended March 31, 2025 as compared to $31.1 million for the three months ended March 31, 2024.

The increase is primarily attributed to an increase in the number of operating properties, with the most significant increases being depreciation and amortization expense and property-specific reimbursable expenses.

Total expenses increased by $4.3 million to $36.0 million for the three months ended June 30, 2025 as compared to $31.7 million for the three months ended June 30, 2024.

The increase is primarily attributed to an increase in the number of operating properties, with the most significant increases being depreciation and amortization expense, provisions for impairment, property-specific reimbursable expenses, and payroll-related costs.

Total operating expenses include the following:

• Property expenses.

Property expenses increased $0.7 million to $4.8 million for the three months ended March 31, 2025 from $4.1 million for the three months ended March 31, 2024.

The increase is primarily attributed to an increase in the number of operating properties, including combined net increases of reimbursable property expenses of $0.5 million, of which $0.4 million and $0.2 million were related to reimbursable property taxes and reimbursable common area maintenance costs, respectively, partially offset by a decrease of $0.1 million of reimbursable insurance costs, and combined net increases of non-reimbursable property expenses of $0.2 million primarily related to property insurance and property taxes.

Property expenses increased $0.5 million to $4.5 million for the three months ended June 30, 2025 from $4.0 million for the three months ended June 30, 2024.

The increase is primarily attributed to the increase in the number of operating properties, including combined net increases of reimbursable property expenses of $0.3 million, of which $0.4 million were related to reimbursable property taxes, partially offset by a decrease of $0.1 million of other reimbursable costs, and combined net increases of non-reimbursable property expenses of $0.2 million, primarily related to property insurance.

• General and administrative expenses.

General and administrative expenses decreased $0.5 million to $5.2 million for the three months ended March 31, 2025 from $5.7 million for the three months ended March 31, 2024.

The decrease is primarily related to a decrease in employee severance of $0.8 million, including cash severance of $0.5 million and expense associated with the accelerated vesting of stock-based compensation of $0.3 million, and a decrease of $0.1 million of payroll expense.

The decrease is partially offset by a $0.2 million increase in bonus expense and other combined increases of $0.2 million.

General and administrative expenses increased $0.2 million to $5.5 million for the three months ended June 30, 2025 from $5.3 million for the three months ended June 30, 2024.

The increases within general and administrative expense were primarily related to an increase of $0.5 million of bonus expense, an increase of $0.2 million of stock-based compensation, an increase of $0.1 million of payroll expense, and other combined net increases of $0.1 million.

These expenses were partially offset by decreases of $0.6 million of severance expenses and $0.1 million of legal expenses.

While our general and administrative expenses will continue to rise in some measure as our portfolio grows, we expect that such expenses as a percentage of our portfolio will decrease over time due to efficiencies and economies of scale.

• Depreciation and amortization.

Depreciation and amortization expense increased $3.4 million to $20.9 million for the three months ended March 31, 2025 from $17.5 million for the three months ended March 31, 2024.

Depreciation and amortization expense increased $3.0 million to $21.5 million for the three months ended June 30, 2025 from $18.5 million for the three months ended June 30, 2024.

The increase in depreciation and amortization is proportionate to the increase in the size of the portfolio over the comparable period with associated increases primarily in building depreciation expense of $1.7 million, building improvements depreciation expense of $0.8 million, and in-place lease amortization expense of $0.5 million.

• Provisions for impairment.

For the three months ended March 31, 2025, we recorded provisions for impairment of $3.6 million on 13 properties, the majority of which were newly classified as held-for-sale during the three months ended March 31, 2025.

Of those properties impaired, one property was held for investment as of March 31, 2025.

For the three months ended March 31, 2024, we recorded provisions for impairment of $3.7 million on 12 properties, the majority of which were either previously classified as held-for-sale, newly classified as held-for-sale, or disposed of during three months ended March 31, 2024.

These disposals relate to management’s continuous assessment of our portfolio in an effort to improve returns and manage risk exposure.

Interest expense.

Interest expense increased by $5.3 million to $11.5 million for the three months ended March 31, 2025 from $6.2 million for the three months ended March 31, 2024.

The increase is primarily attributed to an increase of $1.9 million of interest incurred on our new 2030 Term Loan B, an increase of $0.8 million of interest incurred on our 2029 Term Loan, a $1.7 million increase in amortization of deferred losses on interest rate swaps, a decrease of $0.3 million of capitalized interest on our property developments, and an increase of $0.3 million of interest incurred on our Revolver primarily due to an increase in average borrowings outstanding during the respective periods.

• Provision for impairment.

For the three months ended June 30, 2025, we recorded provisions for impairment of $4.4 million on nine properties, all of which were either previously classified as held-for-sale, newly classified as held-for-sale, or disposed of during three months ended June 30, 2025.

For the three months ended June 30, 2024, we recorded provisions for impairment of $3.8 million on 12 properties, the majority of which were classified as held-for-sale or disposed of during the three months ended June 30, 2024.

Two of the properties were held for investment as of June 30, 2024.

Property disposals relate to management’s continuous assessment of the Company’s portfolio in an effort to improve returns and manage risk exposure.

Interest expense, net.

Interest expense increased by $5.0 million to $12.6 million for the three months ended June 30, 2025 from $7.6 million for the three months ended June 30, 2024.

The increase is attributed to an increase of $2.5 million of interest related to our term loans, primarily related to our new 2030 Term Loan B, $0.4 million of interest incurred under our Revolver, primarily due to an increase in average borrowings outstanding, an increase of $1.7 million in amortization of deferred losses on interest rate swaps, an increase of $0.2 million in amortization of loan fees associated with the January 2025 debt transactions, and an increase of $0.2 million of capitalized interest on our property developments.

Gain on sales of real estate, net.

Net gain on sales of real estate increased by $1.1 million to $2.1 million for the three months ended March 31, 2025 from $1.0 million for the three months ended March 31, 2024.

The table below summarizes the properties sold for the periods indicated (in thousands):

Three Months Ended

Number of properties sold 16 12

Sales price, net of disposal costs $ 38,563 $ 20,466

Net gain on sales of real estate increased by $3.5 million for the three months ended June 30, 2025 from less than $0.1 million for the three months ended June 30, 2024.

For the three months ended June 30, 2025, 20 properties were sold for a sales price, net of disposal costs, of $55.6 million.

For the three months ended June 30, 2024, six properties were sold for a sales price, net of disposal costs, of $12.1 million.

Other income (expense), net.

Other income (expense), net increased by $2.7 million to $0.1 million of net other income for the three months ended June 30, 2025 from $2.6 million of net expense for the three months ended June 30, 2024.

The net decrease to expense is primarily related to events that occurred during the three months ended June 30, 2024, including a transfer fraud loss of $2.8 million, net of insurance recoveries, $0.5 million of losses associated with property damages related to flooding, partially offset by $0.5 million of proceeds received from the settlement of a lease escrow agreement during the three months ended June 30, 2024.

Net income (loss).

Net income increased $5.6 million to net income of $3.3 million for the three months ended June 30, 2025 from a net loss of $2.3 million for the three months ended June 30, 2024.

Net income increased primarily due to additional rental revenues associated with the growth of our real estate investment portfolio, an increase in the net gain on the sales of real estate, and the occurrence of a transfer fraud loss in the prior year.

These increases are partially offset by increases in interest expense and depreciation and amortization expense.

Six Months Ended June 30, 2025 Compared with Six Months Ended June 30, 2024

The following table sets forth our operating results for the periods indicated (in thousands):

Six Months Ended

Rental revenue (including reimbursable) $ 87,748 $ 72,053

Interest income on loans receivable 6,203 5,187

Other revenue 245 —

Total revenues 94,196 77,240

Operating expenses

Property 9,287 8,084

General and administrative 10,644 10,978

Depreciation and amortization 42,429 36,084

Provisions for impairment 8,038 7,498

Transaction costs 120 175

Total operating expenses 70,518 62,819

Other (expense) income

Interest expense, net (24,098) (13,784)

Gain on sales of real estate, net 5,608 1,006

Loss on debt extinguishment (46) —

Other expense, net

(124) (2,868)

Total other expense, net (18,660) (15,646)

Net income (loss) before income taxes

5,018 (1,225)

Income tax expense (29) (29)

Net income (loss)

$ 4,989 $ (1,254)

Revenue for the six months ended June 30, 2025 increased by $17.0 million to $94.2 million from $77.2 million for the six months ended June 30, 2024, which is attributed to an increase in the number of our operating leases and properties securing our mortgage loans.

The increase includes additional cash rental receipts of $13.5 million, an increase of $1.1 million related to interest income on mortgage loans receivable, combined net increases of property expense reimbursements of $1.1 million, an increase of $1.0 million in straight-line rental revenue, and an increase of $0.2 million of other revenue related to settlement proceeds associated with a lease termination.

Total operating expenses.

Total expenses increased by $7.7 million to $70.5 million for the six months ended June 30, 2025 as compared to $62.8 million for the six months ended June 30, 2024.

Total operating expenses include the following:

• Property expenses.

Property expenses increased $1.2 million to $9.3 million for the six months ended June 30, 2025 from $8.1 million for the six months ended June 30, 2024.

The increase is primarily attributed to the increase in the number of operating properties, including combined net increases of reimbursable property expenses of $0.8 million, of which $0.7 million were related to reimbursable property taxes, and combined net increases of non-reimbursable property expenses of $0.4 million, of which $0.3 million were related to property insurance.

• General and administrative expenses.

General and administrative expenses decreased $0.4 million to $10.6 million for the six months ended June 30, 2025 from $11.0 million for the six months ended June 30, 2024.

The decrease is primarily due to a decrease of employee severance of $1.4 million, partially offset by an increase of $0.7 million of bonus expense and an increase of $0.2 million of stock-based compensation.

• Depreciation and amortization.

Depreciation and amortization expense increased $6.3 million to $42.4 million for the six months ended June 30, 2025 from $36.1 million for the six months ended June 30, 2024.

The increase in depreciation and amortization is proportionate to the increase in the size of the portfolio over the comparable period with associated increases primarily in building depreciation expense of $3.5 million, building improvements depreciation expense of $1.6 million, and in-place lease amortization expense of $1.1 million.

• Provision for impairment.

For the six months ended June 30, 2025, we recorded provisions for impairment of $8.0 million on 21 properties, the majority of which were either previously classified as held-for-sale, newly classified as held-for-sale, or disposed of during six months ended June 30, 2025.

One of the properties was held for investment as of June 30, 2025.

For the six months ended June 30, 2024, we recorded provisions for impairment of $7.5 million on 23 properties, the majority of which were either previously classified as held-for-sale, newly classified as held-for-sale, or disposed of during six months ended June 30, 2024.

Six properties were held for investment as of June 30, 2024.

Property disposals relate to management’s continuous assessment of the Company’s portfolio in an effort to improve returns and manage risk exposure.

Interest expense, net.

Interest expense increased by $10.3 million to $24.1 million for the six months ended June 30, 2025 from $13.8 million for the six months ended June 30, 2024.

The increase is primarily attributed to an increase of $5.3 million of interest related to our term loans, of which $4.2 million, $0.8 million, and $0.4 million is related to our new 2030 Term Loan B, our 2029 Term Loan, and our 2030 Term Loan A, respectively.

Additional increases are related to $0.8 million of interest incurred under our Revolver, primarily due to an increase in average borrowings outstanding, an increase of $3.4 million in amortization of deferred losses on interest rate swaps, an increase of $0.3 million in amortization of loan fees associated with the January 2025 debt transactions, and an increase of $0.5 million of capitalized interest on our property developments.

Gain on sales of real estate, net.

Net gain on sales of real estate increased by $4.6 million to $5.6 million for the six months ended June 30, 2025 from $1.0 million for the six months ended June 30, 2024.

For the six months ended June 30, 2025, 36 properties were sold for a sales price, net of disposal costs, of $94.2 million.

For the six months ended June 30, 2024, 18 properties were sold for a sales price, net of disposal costs, of $32.5 million.

Other expense, net.

The change in other expense, net is primarily related to a $0.4 million decrease in losses associated with property damages on one property with foundation issues in 2024.

The decrease is offset by a $0.4 million increase in third-party debt issuance costs expensed during the three months ended March 31, 2025 as a result of the January 2025 debt transaction.

Net income increased by $0.6 million to $1.7 million for the three months ended March 31, 2025 from $1.1 million for the three months ended March 31, 2024.

Net income increased primarily due to increased gains on sales of real estate, decreased general and administrative expenses, and additional rental revenues, primarily due to the growth in the size of our real estate investment portfolio, in addition to increased interest income associated with our mortgage loans receivable, partially offset by increases in interest expense, depreciation and amortization expense, and property expenses.

Other expense, net decreased by $2.8 million to $0.1 million for the six months ended June 30, 2025 from $2.9 million for the six months ended June 30, 2024.

The net decrease to expense is primarily related to events that occurred during the six months ended June 30, 2024, including a transfer fraud loss of $2.8 million, net of insurance recoveries, and $0.9 million of losses associated with property damages related to flooding and foundation issues, offset by $0.5 million of proceeds received from the settlement of a lease escrow agreement during the six months ended June 30, 2024 and $0.4 million of third-party debt issuance costs expensed as a result of the January 2025 debt transaction.

Net income (loss).

Net income increased $6.3 million to net income of $5.0 million for the six months ended June 30, 2025 from a net loss of $1.3 million for the six months ended June 30, 2024.

Net income increased due to additional rental revenues associated with the growth of our real estate investment portfolio, in addition to increased interest income associated with our mortgage loans receivable, an increase in the net gain on the sales of real estate, a decrease of employee severance, and the occurrence of a transfer fraud loss in the prior year.

The increase in net income is partially offset by increases in interest expense and depreciation and amortization expense.

Liquidity and Capital Resources

1 unchanged sentence

Our capital resources primarily consist of cash from operations, sales of equity securities, and available borrowing facilities.

As of March 31, 2025, we had $175.0 million outstanding principal amount under the 2030 Term Loan A, $200.0 million outstanding principal amount under the 2028 Term Loan, $250.0 million outstanding principal amount under the 2029 Term Loan, $175.0 million outstanding principal amount under the 2030 Term Loan B, and $114.5 million of borrowings outstanding under the Revolver.

Additionally, as of March 31, 2025, we had $30.4 million and $2.6 million of unsettled forward equity under our prior at-the-market equity program and our $300.0 million at-the-market equity program entered into in August 2024 (the “2024 ATM Program”), respectively.

As of March 31, 2025, $300.0 million of remaining gross proceeds were available for future issuances of shares of our common stock under the 2024 ATM Program, inclusive of unsettled shares under forward sale agreements.

Lastly, we had $151.5 million of unsettled forward equity under the January 2024 follow-on offering forward sale agreements as of March 31, 2025.

As of June 30, 2025, we had $200.0 million outstanding principal amount under the 2028 Term Loan, $250.0 million outstanding principal amount under the 2029 Term Loan, $175.0 million outstanding principal amount under the 2030 Term Loan A, $175.0 million outstanding principal amount under the 2030 Term Loan B, and $127.0 million of borrowings outstanding under the Revolver.

Additionally, as of June 30, 2025, we had $30.3 million and $20.3 million of unsettled forward equity under our prior at-the-market equity program and our $300.0 million at-the-market equity program entered into in August 2024 (the “2024 ATM Program”), respectively.

As of June 30, 2025, $271.3 million of remaining gross proceeds were available for future issuances of shares of our common stock under the 2024 ATM Program, inclusive of unsettled shares under forward sale agreements.

Lastly, we had $151.0 million of unsettled forward equity under the January 2024 follow-on offering forward sale agreements as of June 30, 2025.

On January 15, 2025, we amended our PNC Credit Agreement to provide for:

6 unchanged sentences

Contractual Obligations and Commitments

As of March 31, 2025, our contractual debt obligations primarily include the maturities of our 2030 Term Loan A and 2030 Term Loan B with the scheduled principal payments due on January 15, 2029, the maturity of our 2028 Term Loan with the scheduled principal payment due on February 11, 2028, the maturity of our 2029 Term Loan with the scheduled principal payment due on July 3, 2026, and the repayment of borrowings on our Revolver with a contractual maturity of January 15, 2029.

During the three months ended March 31, 2025, we borrowed $89.5 million at a weighted average interest rate of 5.36% and also repaid $214.0 million on our Revolver.

The following table provides information with respect to our commitments as of March 31, 2025 (in thousands):

As of June 30, 2025, our contractual debt obligations primarily include the maturity of our 2028 Term Loan with the scheduled principal payment due on February 11, 2028, the maturity of our 2029 Term Loan with the scheduled principal payment due on July 3, 2026, the maturities of our 2030 Term Loan A and 2030 Term Loan B with the scheduled principal payments due on January 15, 2029, and the repayment of borrowings on our Revolver with a contractual maturity of January 15, 2029.

During the six months ended June 30, 2025, we borrowed $143.0 million at a weighted average interest rate of 5.42% and also repaid $255.0 million on our Revolver.

The following table provides information with respect to our commitments as of June 30, 2025 (in thousands):

Payment Due by Period

Total From April 1, 2025 to December 31, 2025 2026 - 2027 2028 - 2029 Thereafter

Total From July 1, 2025 to December 31, 2025 2026 - 2027 2028 - 2029 Thereafter

Contractual Obligations

12 unchanged sentences

Revolver – Borrowings 127,000 — — 127,000 —

114,500 — — 114,500 —

Revolver – Variable interest 24,583 3,496 13,868 7,219 —

23,680 4,702 12,481 6,497 —

Facility Fee (5)

4 unchanged sentences

Additional principal under mortgage loans receivable 13,951 9,511 4,440 — —

10,893 9,673 1,220 — —

Tenant improvement allowances 4,089 1,349 2,740 — —

Corporate office lease obligations 4,955 321 1,323 1,396 1,915

5,113 479 1,323 1,396 1,915

Total $ 1,080,125 $ 39,855 $ 335,090 $ 703,265 $ 1,915

(1) We have three interest rate derivative contracts to fix the base interest rate (daily simple SOFR) on our 2028 Term Loan.

Accordingly, the projected interest rate obligations for the variable rate 2028 Term Loan are based on the hedged fixed rate of 2.63% compared to the variable 2028 Term Loan daily simple SOFR rate as of March 31, 2025 of 4.32%, plus a SOFR adjustment of 0.10% and applicable margin of 1.15% based on the $200.0 million 2028 Term Loan outstanding through the maturity date of February 11, 2028.

Accordingly, the projected interest rate obligations for the variable rate 2028 Term Loan are based on the weighted-average hedged fixed rate of 2.63% compared to the variable 2028 Term Loan daily simple SOFR rate as of June 30, 2025 of 4.32%, plus a SOFR adjustment of 0.10% and applicable margin of 1.15% based on the $200.0 million 2028 Term Loan outstanding through the maturity date of February 11, 2028.

(2) We have four interest rate derivative contracts to fix the base interest rate (daily simple SOFR) on our 2029 Term Loan.

Accordingly, the projected interest rate obligations for the variable rate 2029 Term Loan are based on the hedged fixed rate of 3.74% compared to the variable 2029 Term Loan daily simple SOFR rate as of March 31, 2025 of 4.36%, plus a SOFR adjustment of 0.10% and applicable margin of 1.15% based on the $250.0 million of the 2029 Term Loan outstanding through the contractual maturity date of July 3, 2026.

Accordingly, the projected interest rate obligations for the variable rate 2029 Term Loan are based on the weighted-average hedged fixed rate of 3.74% compared to the variable 2029 Term Loan daily simple SOFR rate as of June 30, 2025 of 4.40%, plus a SOFR adjustment of 0.10% and applicable margin of 1.15% based on the $250.0 million of the 2029 Term Loan outstanding through the contractual maturity date of July 3, 2026.

(3) We have four interest rate derivative contracts to fix the base interest rate (daily simple SOFR) on our 2030 Term Loan A.

Accordingly, the projected interest rate obligations for the variable rate 2030 Term Loan A are based on the hedged fixed rate of 2.40%, compared to the variable 2030 Term Loan A daily simple SOFR rate as of March 31, 2025 of 4.31%, plus a SOFR adjustment of 0.10% and applicable margin of 1.15% based on the $175.0 million 2030 Term Loan A outstanding through the contractual maturity date of January 15, 2029.

Accordingly, the projected interest rate obligations for the variable rate 2030 Term Loan A are based on the weighted-average hedged fixed rate of 2.40%, compared to the variable 2030 Term Loan A daily simple SOFR rate as of June 30, 2025 of 4.29%, plus a SOFR adjustment of 0.10% and applicable margin of 1.15% based on the $175.0 million 2030 Term Loan A outstanding through the contractual maturity date of January 15, 2029.

(4) We have seven interest rate derivative contracts to fix the base interest rate (daily simple SOFR) on our 2030 Term Loan B.

Accordingly, the projected interest rate obligations for the variable rate 2030 Term Loan B are based on the hedged fixed rate of 3.87%, compared to the variable 2030 Term Loan B daily simple SOFR rate as of March 31, 2025 of 4.35%, plus a SOFR adjustment of 0.10% and applicable margin of 1.15% based on the $175.0 million 2030 Term Loan B outstanding through the contractual maturity date of January 15, 2029.

Accordingly, the projected interest rate obligations for the variable rate 2030 Term Loan B are based on the weighted-average hedged fixed rate of 3.87%, compared to the variable 2030 Term Loan B daily simple SOFR rate as of June 30, 2025 of 4.36%, plus a SOFR adjustment of 0.10% and applicable margin of 1.15% based on the $175.0 million 2030 Term Loan B outstanding through the contractual maturity date of January 15, 2029.

(5) We are subject to a facility fee of 0.15% on our Revolver.

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These commitments are generally subject to our customary due diligence process and, accordingly, a number of specific conditions must be met before we are obligated to purchase or extend funding.

As of March 31, 2025, we had commitments to fund properties under development and extend funds under mortgage loans receivable totaling $7.0 million and $10.9 million, respectively, which is expected to be funded over the next 12 months.

As of June 30, 2025, we had commitments to fund property developments and extend funds under mortgage loans receivable totaling $6.6 million and $14.0 million, respectively, which is expected to be funded over the next 18 months.

See discussion of our debt and interest rate hedges included in “Note 6 – Debt” and “Note 7 – Derivative Financial Instruments” in “Item 1 – Financial Statements (unaudited).”

Historical Cash Flow Information

Three Months Ended March 31, 2025 Compared with Three Months Ended March 31, 2024

Three Months Ended

Six Months Ended June 30, 2025 Compared with Six Months Ended June 30, 2024

Six Months Ended

(In thousands) (Unaudited)

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Cash Flows Provided By Operating Activities.

Net cash provided by operating activities increased by $10.4 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024.

The increase was largely attributed to the increase in the size of our real estate investment portfolio with an increase in rental receipts of $6.8 million, additional interest received under our mortgage loans receivable, partially offset by an increase in cash interest paid of $3.5 million, increases in operating and general and administrative expenses paid associated with our larger portfolio, and changes in working capital accounts.

Net cash provided by operating activities increased by $15.7 million for the six months ended June 30, 2025 compared to the six months ended June 30, 2024.

The increase was largely attributed to the increase in the size of our real estate investment portfolio with an increase in rental receipts of $13.5 million, additional interest received under our mortgage loans receivable, and changes in working capital accounts, partially offset by an increase in cash paid for interest of $7.4 million, and an increase in operating expenses paid associated with our larger portfolio.

Cash Flows Used In Investing Activities.

Net cash used in investing activities decreased by $48.9 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024.

The decrease was primarily due to an increase of $18.1 million in proceeds from the sale of real estate, a decrease of $17.7 million in acquisitions of real estate, a decrease of $9.5 million in real estate development and improvements, and an increase of $4.8 million in principal collections on mortgage loans receivable, partially offset by an increase of $0.9 million in earnest money deposits.

Net cash used in investing activities decreased by $107.2 million for the six months ended June 30, 2025 compared to the six months ended June 30, 2024.

The decrease was primarily due to an increase of $53.2 million in proceeds from the sale of real estate, a decrease of $26.5 million in real estate development and improvements, a decrease of $16.8 million in acquisitions of real estate, an increase of $9.8 million in principal collections on mortgage loans receivable, and a decrease in cash invested in mortgage loans receivable of $0.9 million.

Cash Flows Provided By Financing Activities.

Net cash provided by financing activities decreased by $51.9 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024.

The decrease was primarily attributed to an increase in net repayments of $119.5 million under our Revolver, an increase in payments of common stock dividends of $2.2 million, and an increase in deferred financing costs of $6.3 million.

The decrease is partially offset by an increase in net term loan proceeds of $75.0 million, a decrease in the repurchase of common stock for tax withholding obligations of $0.5 million, a decrease in payment of restricted stock dividends of $0.2 million, and a decrease in deferred offering costs of $0.3 million.

Net cash provided by financing activities decreased by $101.3 million for the six months ended June 30, 2025 compared to the six months ended June 30, 2024.

The decrease was primarily attributed to an increase in net repayments of $130.0 million under our Revolver and $36.9 million of less proceeds received due to fewer issuances of common stock in connection with our ATM Programs and forward sale agreements.

Additional items contributing to the decrease are an increase of $6.3 million in deferred financing costs and an increase in payments of common stock dividends of $4.2 million.

The decrease is partially offset by an increase in net term loan proceeds of $75.0 million, a decrease in the repurchase of common stock for tax withholding obligations of $0.6 million, and a decrease in deferred offering costs of $0.4 million.

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

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We also disclose the following non-GAAP financial measures:

Funds From Operations (“FFO”), Core FFO, Adjusted FFO (“AFFO”), earnings before interest expense, income tax expense, and depreciation and amortization (“EBITDA”), EBITDA further adjusted to exclude gains (or losses) from the sales of depreciable property and real estate impairment losses (“EBITDA re ”), Adjusted EBITDA re , Annualized Adjusted EBITDA re , Net Debt, Adjusted Net Debt, property-level net operating income (“Property-Level NOI”), property-level cash net operating income (“Property-Level Cash NOI”), property-level cash net operating income estimated run rate (“Property-Level Cash NOI Estimated Run Rate”), and total property-level cash net operating income estimated run rate (“Total Property-Level Cash NOI Estimated Run Rate”), all of which are detailed below.

Funds From Operations (“FFO”), Core FFO, Adjusted FFO (“AFFO”), earnings before interest expense, income tax expense, and depreciation and amortization (“EBITDA”), EBITDA further adjusted to exclude gains (or losses) from the sales of depreciable property and real estate impairment losses (“EBITDA re ”), Adjusted EBITDA re , Annualized Adjusted EBITDA re , Net Debt, Adjusted Net Debt, property-level net operating income (“Property-Level NOI”), property-level cash net operating income (“Property-Level Cash NOI”), and property-level cash net operating income estimated run rate (“Property-Level Cash NOI - Estimated Run Rate”), all of which are detailed below.

We believe these non-GAAP financial measures are industry measures used by analysts and investors to compare the operating performance of REITs.

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Core FFO is a non-GAAP financial measure defined as FFO adjusted to remove the effect of unusual and non-recurring items that are not expected to impact our operating performance or operations on an ongoing basis.

These include non-recurring executive transition costs, severance and related charges, other loss (gain), net, and loss on debt extinguishments and other related costs.

These include non-recurring executive transition costs, severance and related charges, other non-recurring losses (gains), and losses on debt extinguishments and other related costs.

AFFO is a non-GAAP financial measure defined as Core FFO adjusted for GAAP net income related to non-cash revenues and expenses, such as straight-line rent, amortization of above- and below-market lease-related intangibles, amortization of lease incentives, capitalized interest expense and earned development interest, non-cash interest expense, non-cash compensation expense, amortization of deferred financing costs, amortization of above/below-market assumed debt, and amortization of loan origination costs.

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Further, FFO, Core FFO, and AFFO as disclosed by other REITs might not be comparable to our calculations of FFO, Core FFO, and AFFO.

The following table sets forth a reconciliation of FFO, Core FFO, and AFFO for the periods presented to net income before allocation to noncontrolling interests, as computed in accordance with GAAP (in thousands):

Three Months Ended March 31,

Net income $ 1,700 $ 1,052

The following table sets forth a reconciliation of FFO, Core FFO, and AFFO for the periods presented to net income (loss) before allocation to noncontrolling interests, as computed in accordance with GAAP (in thousands):

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

2025 2024 2025 2024

(Unaudited) (Unaudited)

Net income (loss) $ 3,289 $ (2,306) $ 4,989 $ (1,254)

Depreciation and amortization of real estate 21,433 18,465 42,283 35,926

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Additionally, our computation of EBITDA, EBITDA re , Adjusted EBITDA re , and Annualized Adjusted EBITDA re may differ from the methodology for calculating these metrics used by other equity REITs and, therefore, may not be comparable to similarly titled measures reported by other equity REITs.

The following table sets forth a reconciliation of EBITDA and EBITDA re for the periods presented to net income before allocation to noncontrolling interests, as computed in accordance with GAAP (in thousands):

Three Months Ended March 31,

Net income $ 1,700 $ 1,052

The following table sets forth a reconciliation of EBITDA and EBITDA re for the periods presented to net income (loss) before allocation to noncontrolling interests, as computed in accordance with GAAP (in thousands):

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

2025 2024 2025 2024

(Unaudited) (Unaudited)

Net income (loss) $ 3,289 $ (2,306) $ 4,989 $ (1,254)

Depreciation and amortization of real estate 21,433 18,465 42,283 35,926

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$ 38,356 $ 27,568 $ 73,849 $ 54,965

The following table sets forth a reconciliation of EBITDA, EBITDA re , Adjusted EBITDA re, and Annualized Adjusted EBITDA re for the period presented to net income before allocation to noncontrolling interests, as computed in accordance with GAAP (in thousands):

Three Months Ended March 31, 2025

The following table sets forth a reconciliation of EBITDA, EBITDA re , Adjusted EBITDA re , and Annualized Adjusted EBITDA re for the period presented to net income before allocation to noncontrolling interests, as computed in accordance with GAAP (dollars in thousands):

Three Months Ended June 30, 2025

Net income $ 3,289

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Straight-line rent adjustments (1,183)

Loss on debt extinguishment and other related costs 403

Non-recurring executive transition costs, severance, and related charges 3

Other non-recurring expenses, net 364

Other non-recurring income, net (229)

Transaction costs 73

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Annualized Adjusted EBITDA re (3)

Adjusted Net Debt / Annualized Adjusted EBITDA re

(1) Adjustment reflects the estimated cash yield on developments in process as of March 31, 2025.

(2) Adjustment assumes all re-leasing activity, investments in and dispositions of real estate, including developments completed during the three months ended March 31, 2025, had occurred on January 1, 2025.

Adjusted Net Debt / Annualized Adjusted EBITDAre

(1) Adjustment reflects the estimated cash yield on developments in process as of June 30, 2025.

(2) Adjustment assumes all re-leasing activity, investments in and dispositions of real estate, including developments completed during the three months ended June 30, 2025 had occurred on April 1, 2025.

(3) We calculate Annualized Adjusted EBITDA re by multiplying Adjusted EBITDA re by four.

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The following table reconciles the principal amount of total debt to Net Debt and Adjusted Net Debt (in thousands):

March 31, 2025

June 30, 2025

Principal amount of total debt $ 935,124

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Adjusted Net Debt $ 713,763

(1) There were 10,735,647 unsettled shares under forward sale agreements as of March 31, 2025 at the available weighted-average net settlement price of $17.18.

Property-Level NOI, Property-Level Cash NOI, Property-Level Cash NOI - Estimated Run Rate, and Total Cash NOI - Estimated Run Rate

Property-Level NOI, Property-Level Cash NOI, Property-Level Cash NOI - Estimated Run Rate, and Total Cash NOI - Estimated Run Rate are non-GAAP financial measures which we use to assess our operating results.

We compute Property-Level NOI as net income (computed in accordance with GAAP), excluding general and administrative expenses, interest expense (or income), income tax expense, amortization of loan origination costs and discounts, transaction costs, depreciation and amortization, gains (or losses) on sales of depreciable property, real estate impairment losses, interest income on mortgage loans receivable, loss on debt extinguishment, and other expense (income), net, including lease termination fees.

(1) There were 11,820,647 unsettled shares under forward equity contracts as of June 30, 2025 at the available weighted-average net settlement price of $17.06.

Property-Level NOI, Property-Level Cash NOI, and Property-Level Cash NOI - Estimated Run Rate

Property-Level NOI, Property-Level Cash NOI, and Property-Level Cash NOI - Estimated Run Rate are non-GAAP financial measures which we use to assess our operating results.

We compute Property-Level NOI as net income (computed in accordance with GAAP), excluding general and administrative expenses, interest expense, net, income tax expense, amortization of loan origination costs and discounts, transaction costs, depreciation and amortization, gains (or losses) on sales of depreciable property, real estate impairment losses, interest income on mortgage loans receivable, losses on debt extinguishments, and other expense (income), net, including lease termination fees.

We further adjust Property-Level NOI for non-cash revenue components of straight-line rent and amortization of lease-intangibles to derive Property-Level Cash NOI.

We further adjust Property-Level Cash NOI for intraquarter acquisitions, dispositions, and completed development to derive Property-Level Cash NOI - Estimated Run Rate.

We further adjust Property-Level Cash NOI - Estimated Run Rate for interest income on mortgage loans receivable and intraquarter mortgage loan activity to derive Total Cash NOI - Estimated Run Rate.

We believe Property-Level NOI, Property-Level Cash NOI, Property-Level Cash NOI - Estimated Run Rate, and Total Cash NOI - Estimated Run Rate provide useful and relevant information because they reflect only those income and expense items that are incurred at the property level and present such items on an unlevered basis.

Property-Level NOI, Property-Level Cash NOI, Property-Level Cash NOI - Estimated Run Rate, and Total Cash NOI - Estimated Run Rate are not measurements of financial performance under GAAP and may not be comparable to similarly titled measures of other companies.

We believe Property-Level NOI, Property-Level Cash NOI, and Property-Level Cash NOI - Estimated Run Rate provide useful and relevant information because they reflect only those income and expense items that are incurred at the property level and present such items on an unlevered basis.

Property-Level NOI, Property-Level Cash NOI, and Property-Level Cash NOI - Estimated Run Rate are not measurements of financial performance under GAAP and may not be comparable to similarly titled measures of other companies.

You should not consider our measures as alternatives to net income or cash flows from operating activities determined in accordance with GAAP.

The following table sets forth a reconciliation of Property-Level NOI, Property-Level Cash NOI, Property-Level Cash NOI - Estimated Run Rate, and Total Cash NOI - Estimated Run Rate for the period presented (in thousands):

Three Months Ended March 31, 2025

The following table sets forth a reconciliation of Property-Level NOI, Property-Level Cash NOI, and Property-Level Cash NOI - Estimated Run Rate for the period presented (in thousands):

Three Months Ended June 30, 2025

Net income $ 3,289

General and administrative 5,169

General and administrative expense 5,475

Depreciation and amortization 21,506

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Amortization of loan origination costs and discounts 27

Loss on debt extinguishment 46

Interest income on mortgage loans receivable (3,128)

Other expense, net 495

Other income, net (337)

Property-Level NOI 40,445

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Property-Level Cash NOI - Estimated Run Rate $ 39,415

Interest income on mortgage loans receivable 3,075

Adjustments for intraquarter mortgage loan activity (2)

Total Cash NOI - Estimated Run Rate $ 41,458

(1) Adjustment assumes all re-leasing activity, investments in and dispositions of real estate, including developments completed during the three months ended March 31, 2025, had occurred on January 1, 2025.

(2) Adjustment assumes all loan activity completed during the three months ended March 31, 2025 had occurred on January 1, 2025.

(1) Adjustment assumes all re-leasing activity, investments in and dispositions of real estate, including developments completed during the three months ended June 30, 2025 had occurred on April 1, 2025.

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis