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Item 3. Quantitative and Qualitative Disclosures About Market Risk

2026-08-06 compared with 2026-05-07 · 79 added, 50 removed, 6 unchanged (96% of the section changed)

1 unchanged sentence

We are exposed to economic risks from interest rates and foreign currency exchange rates.

A portion of these risks is hedged, but the risks may affect our financial statements.

A portion of these risks

is hedged, but the risks may affect our financial statements.

Interest Rates

We are exposed to interest rate changes primarily as a result of our revolving credit facilities and commercial paper programs, term loans, mortgages payable, and long-term notes and bonds used to maintain liquidity and expand our real estate investment portfolio and operations.

Our interest rate risk management objective is to limit the impact of interest rate changes on earnings and cash flow and to lower our overall borrowing costs.

To achieve these objectives, we primarily issue long-term notes and bonds, primarily at fixed rates.

In order to mitigate and manage the effects of interest rate risks on our operations, we may utilize a variety of financial instruments, including interest rate swaps, interest rate swaptions, interest rate locks and caps.

The use of these types of instruments to hedge our exposure to changes in interest rates carries additional risks, including counterparty credit risk, the enforceability of hedging contracts and the risk that unanticipated and significant changes in interest rates will cause a significant loss of basis in the contract.

To limit counterparty credit risk, we will seek to enter into such agreements with major financial institutions with favorable credit ratings.

There can be no assurance that we will be able to adequately protect against the foregoing risks or realize an economic benefit that exceeds the related amounts incurred in connection with engaging in such hedging activities.

We do not enter into any derivative transactions for speculative or trading purposes.

The following table presents, by year of expected maturity, the principal amounts, average interest rates and estimated fair values of our fixed and variable rate debt as of March 31, 2026.

This information is presented to evaluate the expected cash flows and sensitivity to interest rate changes.

We are exposed to interest rate changes primarily as a result of our revolving credit facilities and commercial paper

programs, term loans, mortgages payable, and long-term notes and bonds used to maintain liquidity and expand

our real estate investment portfolio and operations.

Our interest rate risk management objective is to limit the impact

of interest rate changes on earnings and cash flow and to lower our overall borrowing costs.

To achieve these

objectives, we primarily issue long-term notes and bonds, primarily at fixed rates.

In order to mitigate and manage the effects of interest rate risks on our operations, we may utilize a variety of

financial instruments, including interest rate swaps, interest rate swaptions, interest rate locks and caps.

these types of instruments to hedge our exposure to changes in interest rates carries additional risks, including

counterparty credit risk, the enforceability of hedging contracts and the risk that unanticipated and significant

changes in interest rates will cause a significant loss of basis in the contract.

To limit counterparty credit risk, we will

seek to enter into such agreements with major financial institutions with favorable credit ratings.

There can be no

assurance that we will be able to adequately protect against the foregoing risks or realize an economic benefit that

exceeds the related amounts incurred in connection with engaging in such hedging activities.

We do not enter into

any derivative transactions for speculative or trading purposes.

The following table presents, by year of expected maturity, the principal amounts, average interest rates and

estimated fair values of our fixed and variable rate debt as of June 30, 2026 .

This information is presented to

evaluate the expected cash flows and sensitivity to interest rate changes.

Expected Maturity Data

The following table summarizes the maturity of our debt as of March 31, 2026 (dollars in millions):

Consolidated Fixed Rate

Debt Consolidated Variable Rate Debt End of Period Interest Rate (3)

Year Principal Due

Term Loans Mortgages Payable Senior Unsecured Notes and Bonds Subtotal RI Credit Facilities

Fund Credit Facilities

Commercial Paper Total Consolidated Debt Principal Fixed Rate Debt (4)

Variable Rate Debt

2026 $ — $ 11.6 $ 1,550.0 $ 1,561.6 $ — $ — $ 414.9 $ 1,976.5 4.48% 2.80%

2027 500.0 22.4 2,358.9 2,881.3 1,342.3 — — 4,223.6 2.81 3.17

2028 1,189.5 1.3 2,499.8 3,690.6 — — — 3,690.6 3.55 —

2029 — 1.3 3,674.4 3,675.7 426.9 125.0 — 4,227.6 3.85 4.51

2030 — 0.9 2,446.4 2,447.3 — — — 2,447.3 3.74 —

693.9 — 12,699.1 13,393.0 — — — 13,393.0 4.16 —

$ 2,383.4 $ 37.5 $ 25,228.6 $ 27,649.5 $ 1,769.2 $ 125.0 $ 414.9 $ 29,958.6 3.88% 3.42%

The following table summarizes the maturity of our debt as of June 30, 2026 (dollars in millions):

Consolidated Fixed Rate Debt

Consolidated Variable Rate Debt

End of Period

Interest Rate (3)

Year Principal

Fair Value (2)

$ 2,383.4 $ 37.1 $ 24,162.7 $ 26,583.2 $ 1,769.2 $ 125.0 $ 414.9 $ 28,892.3

(1) Excludes net discounts recorded on mortgages payable, net discounts recorded on notes payable, and deferred financing costs on term loans, mortgages payable, and notes payable.

(2) We base the estimated fair value of our fixed rate mortgages and private senior notes payable as of March 31, 2026, on the relevant forward interest rate curve, plus an applicable credit-adjusted spread.

We base the estimated fair value of the publicly traded fixed rate senior notes and bonds as of March 31, 2026, on the indicative market prices and recent trading activity of our senior notes and bonds payable.

We believe that the carrying values of the credit facilities, commercial paper borrowings, and term loans reasonably approximate their estimated fair values as of March 31, 2026.

(3) Calculated as the weighted average interest rate as of March 31, 2026.

The weighted average interest rates reflect the effective fixed rate for floating rate debt that is fixed through interest rate swaps.

(4) In connection with our merger with Spirit in January 2024, we effectively assumed Spirit’s existing term loans and fixed rate swaps, which carry a weighted average fixed interest rate of 3.3% for our term loan maturing in August 2027.

In November 2025, we entered into interest rate swaps, which fixed our per annum interest rate at 4.3% for our term loan initially maturing in January 2028.

In March 2026, we closed a $693.9 million unsecured term loan due January 2036 at a fixed rate of 4.9%.

Concurrently, we executed a cross-currency swap on $500.0 million of proceeds for approximately €431.0 million, achieving an effective blended borrowing rate of 4.34%.

The table above incorporates only those exposures that exist as of March 31, 2026.

It does not consider those exposures or positions that could arise after that date.

As a result, our ultimate realized gain or loss, with respect to interest rate fluctuations, would depend on the exposures that arise during the period, our hedging strategies at the time, and interest rates.

As of March 31, 2026, our outstanding mortgages payable, notes, and bonds had fixed interest rates.

Interest on our credit facilities and commercial paper borrowings and term loans is variable.

However, the variable interest rate feature on certain term loans has been mitigated by interest rate swap agreements, while one term loan bears a fixed contractual rate.

As of March 31, 2026, a 1% change in interest rates on our variable-rate debt would change our interest rate costs by $23.1 million.

(1) Excludes net discounts recorded on mortgages payable, net discounts recorded on notes payable, and deferred financing costs on term loans,

mortgages payable, and notes payable.

(2) We base the estimated fair value of our 2026 Term Loan Facility, mortgages and private senior notes payable as of June 30, 2026 , on the

relevant forward interest rate curve, plus an applicable credit-adjusted spread.

We base the estimated fair value of the publicly traded fixed

rate senior notes and bonds, and other term loans as discussed in note 7 , Term Loans as of June 30, 2026 , on the indicative market prices

and recent trading activity of our senior notes and bonds payable.

We believe that the carrying values of the credit facilities, and commercial

paper borrowings reasonably approximate their estimated fair values as of June 30, 2026 .

(3) Calculated as the weighted average interest rate as of June 30, 2026 .

The weighted average interest rates reflect the effective fixed rate for

floating rate debt that is fixed through interest rate swaps.

(4) In connection with our merger with Spirit in January 2024, we effectively assumed Spirit’s existing term loans and fixed rate swaps, which carry

a weighted average fixed interest rate of 3.3% for our term loan maturing in August 2027.

In November 2025, we entered into interest rate

swaps, which fixed our per annum interest rate at 4.3% for our term loan initially maturing in January 2028.

In March 2026, we closed a

$693.9 million unsecured term loan due January 2036 at a fixed rate of 4.9% .

Concurrently, we executed a cross-currency swap on

$500.0 million of proceeds for approximately €431.0 million , achieving an effective blended borrowing rate of 4.34% .

In June 2026, the Fund

fully drew on its $380.0 million unsecured delayed draw term loan, which initially matures in April 2028, and is subject to interest rate swaps

that fix the effective interest rate at 4.92% .

The table above incorporates only those exposures that exist as of June 30, 2026 .

It does not consider those

exposures or positions that could arise after that date.

As a result, our ultimate realized gain or loss, with respect to

interest rate fluctuations, would depend on the exposures that arise during the period, our hedging strategies at the

time, and interest rates.

As of June 30, 2026 , our outstanding mortgages payable, notes, and bonds had fixed interest rates.

Interest on our

credit facilities and commercial paper borrowings and term loans is variable.

However, the variable interest rate

feature on certain term loans has been mitigated by interest rate swap agreements, while one term loan bears a

fixed contractual rate.

As of June 30, 2026 , a 1% change in interest rates on our variable-rate debt would change

our interest rate costs by $27.6 million .

Foreign Currency Exchange Rates

We are exposed to foreign currency exchange variability related to investments in and earnings from our foreign investments.

Foreign currency market risk is the possibility that our results of operations or financial position could be better or worse than planned because of changes in foreign currency exchange rates.

We primarily hedge our foreign currency risk by borrowing in the currencies in which we invest thereby providing a natural hedge.

We continuously evaluate and manage our foreign currency risk through the use of derivative financial instruments, including currency exchange swaps, and foreign currency forward contracts with financial counterparties where practicable.

Such derivative instruments are viewed as risk management tools and are not used for speculative or trading purposes.

Additionally, our inability to redeploy rent receipts from our international operations on a timely basis subjects us to foreign exchange risk.

We are exposed to foreign currency exchange variability related to investments in and earnings from our foreign

Foreign currency market risk is the possibility that our results of operations or financial position could

be better or worse than planned because of changes in foreign currency exchange rates.

We primarily hedge our

foreign currency risk by borrowing in the currencies in which we invest thereby providing a natural hedge.

continuously evaluate and manage our foreign currency risk through the use of derivative financial instruments,

including currency exchange swaps, and foreign currency forward contracts with financial counterparties where

Such derivative instruments are viewed as risk management tools and are not used for speculative or

trading purposes.

Additionally, our inability to redeploy rent receipts from our international operations on a timely

basis subjects us to foreign exchange risk.

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 3. Quantitative and Qualitative Disclosures About Market Risk