What changed in this filing

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Item 1A. Risk Factors

2023-03-07 compared with 2022-03-14 · 131 added, 138 removed, 618 unchanged (30% of the section changed)

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• The USPS’ inability to meet its financial obligations may have a material adverse effect on our business.

• The USPS has a substantial amount of indebtedness.

• The USPS has a substantial amount of indebtedness and is subject to rising expenses.

• The USPS is subject to congressional oversight and regulation by the PRC and other agencies.

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• The USPS’ potential insolvency, inability to pay rent or bankruptcy.

• Implementation of the Ten-Year Plan proposed by the USPS.

• Our properties may have a higher risk of terrorist attacks.

• Changes in leadership, structure, operations and strategy within the USPS may disrupt our business.

• Litigation involving the USPS may disrupt our business.

• Litigation and catastrophic events involving the USPS may disrupt our business.

Risks Related to Our Business Operations

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• Postal properties are illiquid.

• An increase in the amount of USPS or U.S.

government-owned real estate may adversely affect us.

• Our real estate taxes for properties where we are not reimbursed could increase.

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• Mortgage debt obligations expose us to the possibility of foreclosure.

• Phasing out of LIBOR after June 2023 may affect our financial results.

• Failure to comply with covenants in our debt instruments could adversely affect our financial condition.

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• Our success depends on key personnel whose continued service is not guaranteed.

• Risks associated with on-going or future litigation.

• Insurance on our properties may not adequately cover all losses and uninsured losses.

• Risks associated with joint venture investments.

• Competition for skilled personnel could increase our labor costs.

• Our growth depends on external sources of capital.

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• Our properties may contain or develop harmful mold or suffer from other air quality issues.

• We are subject to risks from natural disasters and the risks associated with climate change.

• We are subject to risks from natural disasters and risks associated with climate change.

• Our properties may be subject to impairment charges.

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• Certain provisions of the Maryland General Corporation Law could inhibit changes of control.

• Certain provisions in the partnership agreement of our Operating Partnership may delay or prevent unsolicited acquisitions of us.

• Certain provisions of our Operating Partnership may delay or prevent unsolicited acquisitions of us.

• Tax protection agreements may limit our ability to sell or otherwise dispose of certain properties and may require our Operating Partnership to maintain certain debt levels that otherwise would not be required.

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• Failure to remain qualified as a REIT would cause us to be taxed as a regular corporation.

• Even if we qualify as a REIT, we may face other tax liabilities that reduce our cash flows.

• Failure to make required distributions would subject us to federal corporate income tax.

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• There are uncertainties relating to the estimate of the accumulated earnings and profits attributable to United Postal Holdings, Inc.

• A sale of assets acquired as part of the merger between us and United Postal Holdings, Inc.

within five years after the merger would result in corporate income tax.

• The ability of our Board of Directors to revoke our REIT qualification without stockholder approval.

• A sale of assets acquired as part of the merger between us and UPH within five years after the merger would result in corporate income tax.

• The ability of our Board of Directors to revoke our REIT qualification without stockholder approval may cause adverse consequences to our stockholders.

• Our transactions with our TRS will cause us to be subject to a 100% penalty tax on certain income or deductions if those transactions are not conducted on arm’s-length terms.

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• The market price of our Class A common stock has been, and may continue to be, volatile and has declined, and may continue to decline.

• Future sales of our Class A common stock, preferred stock, or securities convertible into or exchangeable or exercisable for our Class A common stock could depress the market price of our Class A common stock.

• We face cybersecurity risks and risks associated with security breaches.

• Risks associated with third-party expectations relating to environmental, social and governance factors.

The following risk factors may adversely affect our overall business, financial condition, results of operations, cash flows and prospects;

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Our Vision and Ten-Year Plan to Achieve Financial Sustainability and Service Excellence (the “Ten-Year Plan”), which includes evaluating the facility consolidations that were deferred in 2015 and potentially consolidating the facilities that remain underutilized.

Consolidation of our postal properties would materially adversely affect our operations.

The USPS has recently began to undertake, and proposes to further undertake, a number of operational reforms and cost reduction measures under the Ten-Year Plan, such as higher rates, slower deliveries for certain services, formation of large sorting and delivery centers and closure, relocation or consolidation of certain facilities and delivery units.

Consolidation of our postal properties or delivery units attached to our postal properties would materially adversely affect our operations.

Further reductions in the number of postal properties could result in entering into leases with the USPS in the future on less favorable terms than current leases, the failure of the USPS to renew leases or the termination by the USPS of existing leases for our properties and the reduction of the number of acquisition opportunities available to us.

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federal government will ultimately take effect and, if so, how such reforms would specifically affect us.

The USPS has a substantial amount of indebtedness.

The USPS has a substantial amount of indebtedness and is subject to rising expenses.

The USPS has significant outstanding debt obligations to the Federal Financing Bank (the “FFB”).

On April 1, 1999, the USPS entered into a Note Purchase Agreement, as amended (the "NPA"), with the FFB for the purpose of obtaining debt financing.

Under the NPA, FFB is required to purchase notes from the USPS meeting specified conditions, up to the established maximum amounts, within five business days of delivery.

The amount that the USPS borrows under the NPA varies from year to year depending upon the needs of the organization.

Historically, all of the USPS’ outstanding debt has been obtained through the NPA.

The most recent extension to the NPA, however, expired on August 31, 2019.

If the USPS cannot reach acceptable terms with FFB on an extension of the NPA, the USPS would need to seek debt financing through other means, either through individual agreements with FFB (on terms that may differ from those set forth in the NPA) or from other sources.

There can be no assurance that the USPS will be able to extend the term of the NPA or obtain alternative debt financing on the terms or timing that it expects, if at all.

If the USPS is unable to extend the NPA with the FFB, the USPS may not be able to refinance debt with the FFB in the future at comparable terms to those currently available.

Under the note purchase agreement between the USPS and the FFB (the "NPA"), USPS can issue short-term or long-term notes to the FFB and receive funds within two business days.

If the FFB elects not to purchase the USPS' notes, the USPS would need to issue and sell such notes potentially in the public or private debt markets to other parties or seek financing through other means.

The NPA will expire on September 30, 2025.

There can be no assurance that the USPS will be able to extend the term of the NPA beyond expiration or, if the FFB declines to purchase the notes issued by the USPS, obtain alternative sources of financing on the terms or timing that it expects or at all.

If the USPS is unable to extend the NPA beyond expiration, the USPS may not be able to refinance debt with the FFB in the future at comparable terms to those currently available.

The USPS also has a significant underfunded Postal Service Retiree Health Benefit Fund (the "PSRHBF") liability, which the USPS is required to fund in future periods.

Additionally, the USPS has underfunded retirement benefits amortization payable to the Civil Service Retirement System (the "CSRS") and Federal Employees Retirement System (the "FERS") funds, which the USPS is required to fund in future periods.

On March 8, 2022, Congress passed the Postal Service Reform Act, which may significantly alleviate the obligations of the USPS by repealing the requirement for USPS to pre-fund the PSRHBF, forgiving the USPS' $57 billion outstanding liability under the PSRHBF and requiring future postal retirees to enroll in Medicare, although the USPS’ substantial obligations under the NPA and the CSRS and FERS funds remain outstanding.

The USPS’ significant debt and unpaid retirement obligations have in the past required, and could in the future require, the USPS to dedicate a substantial portion of its cash flow from operations to payments on debt and retirement obligations, thus reducing the availability of cash flow to fund operating expenses, including lease payments, working capital, capital expenditures and other business activities.

If the USPS becomes unable to meet its debt and other obligations, the USPS may reduce its demand for leasing postal properties, which would have a material adverse effect on our business and operations.

Additionally, the USPS has significantly underfunded retirement benefits amortization payable to the Civil Service Retirement System (the "CSRS") and Federal Employees Retirement System (the "FERS") funds, which the USPS is required to fund in future periods.

On March 8, 2022, Congress passed the Postal Service Reform Act, which significantly alleviated the obligations of the USPS by repealing the requirement for USPS to pre-fund the PSRHBF, forgiving the USPS' $57 billion outstanding liability under the PSRHBF and requiring future postal retirees to enroll

in Medicare, although significant underfunded liability remains under the PSRHBF in the long term.

The USPS’ substantial obligations under the NPA and the CSRS and FERS funds also remain outstanding.

In addition, the USPS' collective bargaining agreements include provisions for mandatory cost of living adjustments, which, in recent years coupled with continued impacts to consumer inflation, have resulted in significant increase in labor costs for the USPS.

The USPS has also been exposed to rising commodity prices, primarily for diesel fuel, unleaded gasoline, and aircraft fuel for transportation of mail, and natural gas and heating oil for its facilities.

The USPS’ significant debt and unpaid health and retirement obligations have in the past required, and could in the future require, the USPS to dedicate a substantial portion of its cash flow from operations to payments on debt and health and retirement obligations, thus reducing the availability of cash flow to fund operating expenses, including lease payments, working capital, capital expenditures and other business activities.

If the USPS becomes unable to meet its debt and other obligations or control its expenses and generate sufficient liquidity for its business, the USPS may reduce its demand for leasing postal properties, which would have a material adverse effect on our business and operations.

The USPS is subject to congressional oversight and regulation by the PRC and other government agencies.

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government and, as a result, is subject to a variety of regulations and other limitations applicable to federal agencies.

The ability of the USPS to raise rates for its products and services is subject to the regulatory oversight and approval of the PRC.

The ability of the USPS to raise rates for its products and services and sell new products and services in new or existing markets is subject to the regulatory oversight and approval of the PRC.

Limitations on the USPS’ ability to take action could adversely affect its operating and financial results, and as a result, reduce demand for leasing postal properties.

Furthermore, a change in the structure, mission, or leasing requirements of the USPS, a significant reduction in the USPS’ workforce, relocation of personnel resources or postal offices, other internal reorganization or a change in the post offices occupying our properties would affect our lease renewal opportunities and have a material adverse effect on our business.

Furthermore, a change in the structure, mission or leasing requirements of the USPS, a significant reduction in the USPS’ workforce, relocation of personnel resources, delivery units or postal offices, other internal reorganization or a change in the post offices or delivery units occupying our properties would affect our lease renewal opportunities and have a material adverse effect on our business.

In addition, any change in the U.S.

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The volume of periodicals services continues to decline as consumers increasingly use electronic media for news and information.

Periodical advertising has also experienced a decline as a result of move to electronic media.

The growth in the USPS’ competitive service volumes, such as Priority Mail, Priority Mail Express, First-Class Package Service, Parcel Select, Parcel Return Service and some types of International Mail, is largely attributable to certain of the USPS’ largest customers, including UPS, FedEx and Amazon.

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There can be no assurance that the USPS will be able to avoid insolvency, make timely rental payments or avoid defaulting under or terminating its leases.

If the USPS defaults, we may experience delays in enforcing our rights as landlord and may incur substantial costs in protecting our investment.

If the USPS defaults, we may experience delays in enforcing our rights as landlord

and may incur substantial costs in protecting our investment.

Because we depend on rental payments from the USPS, the inability of the USPS to make its lease payments could adversely affect us and our ability to make distributions to our stockholders.

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The USPS has published its Ten-Year Plan to address the challenges of the shift from traditional letter-mail to package delivery, underperformance in processing, transportation, delivery and retail operations, failure to meet service performance standards and a perilous and worsening financial situation that has resulted in significant losses.

The strategic initiatives are designed to reverse projected losses and to operate at a positive net income beginning in 2023 or 2024.

Retail revenue has decreased substantially since 2015.

The strategic initiatives are designed to reverse projected losses and to operate at a positive net income in the long term.

The Ten-Year Plan includes realignment, procurement of new facilities, expansion of existing facilities and consolidation of underused facilities as well as modernization of retail lobbies to enable expanded digital, small, medium-sized business and government services, which could affect our operations if our postal properties are consolidated.

The USPS has recently begun to undertake a number of operational reforms and cost reduction measures under the Ten-Year Plan, such as higher rates, slower deliveries for certain services, formation of large sorting and delivery centers and closure, relocation or consolidation of certain facilities and delivery units.

The extent to which the implementation of this Ten-Year Plan will affect our business, liquidity, financial condition, and results of operations will depend on numerous factors that we may not be able to accurately predict or assess.

Portions of the Ten-Year Plan require Congressional approval, which we cannot predict at this time and there will be additional conversations with stakeholders about implementation and changes to the Ten-Year Plan.

USPS’ failure to implement the Ten-Year Plan or receive Congressional approval may affect its ability to maintain adequate liquidity to sustain its current operations, which may result in the USPS reducing its number of postal locations and adversely affecting our business and results of operations.

The USPS’ failure to implement the Ten-Year Plan or receive Congressional approval may affect its ability to maintain adequate liquidity to sustain its current operations, which may result in the USPS reducing its number of postal locations and adversely affecting our business and results of operations.

Because the USPS is an independent agency of the U.S.

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Terrorist attacks, to the extent that these properties are uninsured or underinsured, could have a material adverse effect on our business, financial condition and results of operations.

The ongoing COVID-19 pandemic and measures being taken to prevent its spread could negatively impact demand for USPS services and postal properties which could have a material adverse effect on our business, results of operations and financial condition.

The ongoing COVID-19 pandemic (including new or mutated variants of COVID-19) and measures being taken to prevent its spread have resulted in, and continue to have, a material and unpredictable effect on the USPS’ operations and liquidity, including a reduction in foot traffic in many postal properties, volatility in demand for mail services, significant changes in the mix of mail and packages processed through the USPS’ network and significant additional operating expenses caused by pandemic-related disruptions, which may adversely affect the USPS’ financial condition, and therefore the demand for postal properties.

Further, although the USPS received a $10 billion funding under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, there can be no assurances that this financing will be sufficient to sustain USPS operations in light of current shortfalls resulting from reduced mail volumes.

Moreover, two related bills proposed to provide the USPS with alternate funding in the amounts of $25 billion or $10 billion failed to pass in the third quarter of 2020.

Any reduction or permanent changes to mail volume could reduce demand for postal properties by the USPS and materially adversely affect our result of operations.

In addition, the USPS is dependent on the efforts of its employees, many of whom come into contact with a large number of individuals on a daily basis.

If USPS employees are unwilling or unable to report to work regularly because of the ongoing COVID-19 pandemic and measures being taken to prevent its spread or USPS services are otherwise diminished as a result of governmental response to the pandemic, the demand for USPS services or the reputation of the USPS may suffer, leading to a reduced need for or relocation of postal properties and adversely affecting our business and results of operations.

Changes in leadership, structure, operations and strategy within the USPS may disrupt our business.

In May 2020, the USPS Board of Governors unanimously appointed Louis DeJoy as the Postmaster General.

DeJoy took office on June 15, 2020.

As a part of the USPS' administrative restructuring since Mr.

DeJoy’s appointment, the USPS reassigned or displaced a number of postal executives and employees, instituted a temporary management hiring freeze and requested early retirement for certain employees not represented by a collective bargaining agreement.

Recently, the USPS also announced a modified organizational structure for the USPS, which is designed to focus on three business operating units:

(i) retail and delivery;

(ii) logistics and processing;

and (iii) commerce and business solutions, and centralization of certain administrative support functions.

As part of the modified organizational structure, logistics and mail processing operations will report into the new Logistics and Processing Operations organization separate from existing area and district reporting structures.

This includes all mail processing facilities and local transportation network offices.

These changes are being made in an effort to reduce costs and it is possible that the USPS will implement additional changes to reduce expenses.

The extent to which these changes, among others, will affect our business, liquidity, financial condition, and results of operations will depend on numerous evolving factors that we may not be able to accurately predict or assess.

The USPS is subject to legislative and other constraints which may affect its ability to maintain adequate liquidity to sustain its current operations, which may result in the USPS reducing its number of postal locations and adversely affecting our business and results of operations.

Litigation involving the USPS may disrupt our business.

Litigation and catastrophic events involving the USPS may disrupt our business.

As a result of the proposed and executed operational, managerial and strategic changes within the USPS, including the Ten-Year Plan, the USPS is the focal point of significant public criticism and litigation.

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The results of these changes or any future changes could lead to additional delays or financing shortfalls for the USPS.

The COVID-19 pandemic has also had severe impacts on the USPS and its operations, customer demands, supply chains and labor force.

The USPS will continue to be at risk of the adverse impact of another regional epidemic, global pandemic or other adverse public health developments in the future, which could reduce demand for USPS properties and adversely affect our business, financial condition and results of operations.

Risks Related to Our Business and Operations

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In addition, the current ownership of properties leased to the USPS is highly fragmented with the overwhelming majority of owners holding a single property.

As a result, we may need to expend significant resources to complete our due diligence and underwriting process on many individual properties, thereby increasing our acquisition costs, lengthening the acquisition timeline and possibly reducing the amount that we are able to pay for a particular property.

As a result, we may need to expend significant resources to source acquisition opportunities and complete our due diligence, underwriting and acquisition accounting process on many individual properties, thereby increasing our acquisition costs, lengthening the acquisition timeline and possibly reducing the amount that we are able to pay for a particular property.

Accordingly, our plan to grow our business largely by acquiring additional properties that are leased to the USPS and managing properties leased to the USPS by third parties may not succeed.

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We currently have a concentration of postal properties in certain regions and are exposed to changes in regional or local conditions in these states.

Our business may be adversely affected by regional or local conditions and events in the areas in which we operate, particularly in Wisconsin, Pennsylvania, Kansas and Alabama, where many of our postal properties are concentrated.

Our business may be adversely affected by regional or local conditions and events in the areas in which we operate, particularly in Wisconsin, Pennsylvania, Kansas, Alabama and Texas, where many of our postal properties are concentrated.

Developments or conditions in these regions that may adversely affect our occupancy levels and renewals, our rental revenues, our funds from operations or the value of our properties include the following, among others:

• downturns in economic conditions, including as a result of the COVID-19 pandemic;

• unforeseen events beyond our control, including, among others, terrorist attacks and travel related health concerns including pandemics and epidemics;

• possible reduction of the USPS workforce or relocation of postal offices by the USPS;

• unforeseen events beyond our control, including, among others, natural disasters, terrorist attacks and travel related health concerns including pandemics and epidemics;

• possible reduction of the USPS workforce, relocation of postal offices or consolidation of delivery units by the USPS;

• economic conditions that could cause an increase in our operating expenses, insurance and routine maintenance.

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If we are subject to below-market lease rates on a significant number of our properties, rental rates for our properties decrease, our existing tenants do not renew their leases or we do not sell vacated properties on favorable terms, our financial condition, results of operations, cash flow, cash available for distributions and our ability to service our debt obligations could be materially adversely affected.

In addition, under some of our leases, we retain certain obligations with respect to the property, including, among other things, the responsibility for maintenance and repair of the property and capital improvements such as roof replacement and major structural improvements.

The expenditure of any sums in connection therewith will reduce the cash available for distribution and may require us to fund deficits resulting from operating a property.

If we were to fail to meet these obligations, then the tenant could abate rent or terminate the applicable lease, which could have a material adverse effect on our business, financial condition and results of operations.

Property vacancies could result in significant capital expenditures and illiquidity.

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Substantially all of the properties we acquire are specifically suited to the particular business of the USPS and, as a result, if the USPS vacates a property, does not renew its lease or decides to relocate a postal office to another location, we may be required to renovate the property at substantial costs, decrease the rent we charge or provide other concessions in order to lease the property to another tenant.

In the event we are required or elect to sell the property, we may have difficulty selling it to a party other than the USPS.

In the event we are required or elect to sell the property, we may have difficulty selling it to a party other than the USPS, which may result in an impairment loss.

This potential illiquidity may limit our ability to quickly modify our portfolio in response to changes in economic or other conditions, which may materially and adversely affect us.

As of March 7, 2023, the leases at 100 of our properties were expired and the USPS is occupying such properties as a holdover tenant.

If we are not successful in renewing these expired leases, we will likely experience reduced occupancy, rental income and net operating income.

As of March 11, 2022, the leases at 10 of our properties (consisting of one property for which the lease expired as of December 31, 2021 which we acquired in March 2022, and nine properties for which leases expired to date in 2022), representing approximately 47,000 net leasable interior square feet and $0.4 million in annual contractual rental revenue, were expired and the USPS is occupying such properties as a holdover tenant.

If we are not successful in renewing these expired leases, we will likely experience reduced occupancy, rental income and net operating income and potential impairment loss.

As of March 7, 2023, the leases at 100 of our properties, representing approximately 320,000 net leasable interior square feet and $4.0 million in annual contractual rental revenue, were expired and the USPS is occupying such properties as a holdover tenant.

When a lease expires, the USPS becomes a holdover tenant on a month-to-month basis, typically paying the greater of estimated market rent or the rent amount under the expired lease.

While we currently anticipate that we will execute new leases for all properties that have expired or will expire, there can be no guarantee that we will be successful in executing new leases, obtaining positive rent renewal spreads or renewing the leases on terms comparable to those of the expiring leases.

While we currently anticipate that we will renew the leases that have expired or will expire, there can be no guarantee that we will be successful in renewing these leases, obtaining positive rent renewal spreads or renewing the leases on terms comparable to those of the expiring leases.

Even if we are able to renew these expired leases, the lease terms may not be comparable to those of the previous leases.

If we are not successful, we will likely experience reduced occupancy, rental income and net operating income, as well as diminished borrowing capacity under our credit facilities, which could have a material adverse effect on our financial condition, results of operations and ability to make distributions to stockholders.

If we are not successful, we will likely experience reduced occupancy, rental income and net operating income and potential impairment loss, as well as diminished borrowing capacity under our Credit Facilities, which could have a material adverse effect on our financial condition, results of operations and ability to make distributions to stockholders.

Our use of OP Units as consideration to acquire properties could result in stockholder dilution and/or limit our ability to sell such properties.

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We may be unable to realize our investment objectives by sale, other disposition or refinancing at attractive prices within any given period of time or may otherwise be unable to complete any exit strategy.

the lack of an established market for a property, changes in the financial condition or prospects of prospective purchasers, changes in national or international economic conditions and changes in laws, regulations or fiscal policies of jurisdictions in which the property is located.

In particular, our ability to dispose of one or more postal properties within a specific time period is subject to certain limitations imposed by our tax protection agreements, as well as weakness in or even the lack of an established market for a property, changes in the financial condition or prospects of prospective purchasers, changes in national or international economic conditions and changes in laws, regulations or fiscal policies of jurisdictions in which the property is located.

In addition, the Internal Revenue Code of 1986, as amended (the "Code"), imposes restrictions on a REIT’s ability to dispose of properties that are not applicable to other types of real estate companies.

In particular, the tax laws applicable to REITs effectively require that we hold our properties for investment, rather than primarily for sale in the ordinary course of business, further limiting our ability to quickly adjust our portfolio in response to changing economic, financial and investment conditions and conditions of the USPS.

An increase in the amount of USPS or U.S.

government-owned real estate may adversely affect us.

If there is a large increase in the amount of real estate owned by the USPS or other U.S.

government agencies, the USPS may relocate from our properties to such USPS or U.S.

government-owned facilities at the expiration of their respective leases.

Similarly, it may become more difficult for us to renew our leases with the USPS when they expire or identify additional properties that are leased to the USPS in order to grow our portfolio.

Our real estate taxes for properties where we are not reimbursed could increase due to property tax rate changes or reassessment.

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Foreclosures could also trigger our tax indemnification obligations under the terms of our tax protection agreements with respect to the sales of certain properties.

The elimination of LIBOR after June 2023 may affect our financial results.

On March 5, 2021, the United Kingdom Financial Conduct Authority ("FCA"), which regulates LIBOR, announced that all LIBOR tenors relevant to us will cease to be published or will no longer be representative after June 30, 2023.

The FCA's announcement coincides with the March 5, 2021 announcement of LIBOR's administrator, ICE Benchmark Administration Limited ("IBA"), indicating that, as a result of not having access to input data necessary to calculate LIBOR tenors relevant to us on a representative basis after June 30, 2023, IBA would have to cease publication of such LIBOR tenors immediately after the last publication on June 30, 2023.

In the United States, the Alternative Reference Rates Committee ("ARRC"), a committee of private sector entities with ex-officio official sector members convened by the Federal Reserve Board and the Federal Reserve Bank of New York, has recommended the Secured Overnight Financing Rate (“SOFR”) plus a recommended spread adjustment as LIBOR's replacement.

There are significant differences between LIBOR and SOFR, such as LIBOR being an unsecured lending rate while SOFR is a secured lending rate, and SOFR is an overnight rate while LIBOR reflects term rates at different maturities.

Our 2021 Credit Facilities provide that, on or about the LIBOR cessation date (subject to an early opt-in election), LIBOR shall be replaced as a benchmark rate in the 2021 Credit Facilities with a new benchmark rate, with such adjustments as set forth in the 2021 Credit Facilities.

We are monitoring and evaluating the risks related to changes in LIBOR availability, which include potential changes in interest paid on debt and amounts received and paid on the 2021 Interest Rate Swap.

In addition, the value of debt or derivative instruments tied to LIBOR may also be impacted as LIBOR is limited and discontinued and contracts must be transitioned to a new alternative rate.

We are not able to predict when LIBOR will cease to be available or when there will be enough liquidity in the SOFR markets.

If the benchmark rate in our 2021 Credit Facilities is converted to SOFR, the differences between LIBOR and SOFR, plus the recommended spread adjustment, could result in interest costs that are higher than if LIBOR remained available, which could have a material adverse effect on our operating results.

Although SOFR is the ARRC's recommended replacement rate, it is also possible that lenders may instead choose alternative replacement rates that may differ from LIBOR in ways similar to SOFR or in other ways that would result in higher interest costs for us.

It is not yet possible to predict the magnitude of LIBOR's end on our borrowing costs given the remaining uncertainty about which rates will replace LIBOR.

Covenants in our debt instruments could adversely affect our financial condition.

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Alternatively, even if a secured debt instrument is below the cross-default threshold for non-recourse secured debt under our Credit Facilities, a default under such secured debt instrument may still cause a cross default under our Credit Facilities because such secured debt instrument may not qualify as “non-recourse” under our Credit Facilities.

Another possible cross default could occur between the credit facilities that we enter into and any senior unsecured notes that we issue.

Another possible

cross default could occur between the credit facilities that we enter into and any senior unsecured notes that we issue.

Any of the foregoing default or cross-default events could cause our lenders to accelerate the timing of payments and/or prohibit future borrowings, either of which would have a material adverse effect on our business, operations, financial condition and liquidity.

Failure to hedge effectively against interest rate changes may adversely affect our financial condition, results of operations, cash flow, cash available for distribution and our ability to service our debt obligations.

Subject to maintaining our qualification as a REIT, we manage our market risk on variable rate debt through the use of interest rate swaps that fix the rate on all or a portion of our variable rate debt for varying periods up to maturity, such as the 2021 Interest Rate Swap.

Derivatives and Hedging Activities in the Notes to our Consolidated Financial Statements included herein for further details.

In the future, we may use other derivative instruments such as interest cap agreements to, in effect, cap the interest rate on all or a portion of the debt for varying periods up to maturity.

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In addition, while hedging agreements would be intended to lessen the impact of rising interest rates on us, they could also expose us to the risk that the other parties to the agreements would not perform, we could incur significant costs associated with the settlement of the agreements or that the underlying transactions could fail to qualify as highly-effective cash flow hedges under Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC"), Topic 815, Derivatives and Hedging.

The REIT provisions of the Code also limit our ability to hedge our liabilities.

Generally, income from a hedging transaction we enter into (i) to manage the risk of interest rate changes with respect to borrowings incurred or to be incurred to acquire or carry real estate assets, (ii) to manage the risk of currency fluctuations with respect to any item of income or gain that constitutes “qualifying income” for purposes of the 75% or 95% gross income tests applicable to REITs (or any property that generates such income or gain) or (iii) that hedges against transactions described in clauses (i) and (ii) and is entered into in connection with the extinguishment of debt or sale of property that is being hedged against by the transactions described in clauses (i) and (ii) does not constitute “gross income” for purposes of the 75% or 95% gross income tests, provided that we comply with certain identification requirements pursuant to the applicable sections of the Code and Treasury Regulations.

To the extent that we enter into other types of hedging transactions, the income from those transactions is likely to be treated as non-qualifying income for purposes of both gross income tests.

As a result of these rules, we may need to limit our use of otherwise advantageous hedging techniques or implement those hedges through a TRS.

The use of a TRS could increase the cost of our hedging activities or expose us to greater risks than we would otherwise want to bear.

Our success depends on key personnel whose continued service is not guaranteed, and the loss of one or more of our key personnel could adversely affect our ability to manage our business and to implement our growth strategies, or could create a negative perception of our company in the capital markets.

Our continued success and our ability to manage anticipated future growth depend, in large part, upon the efforts of key personnel, particularly Messrs.

Spodek, Garber and Klein who have extensive market knowledge and relationships and exercise substantial influence over our operational and financing activity.

Spodek, Garber and Klein who have extensive market knowledge and relationships and exercise substantial influence over our acquisition, operational and financing activities.

Among the reasons that these individuals are important to our success is that each has a national or regional industry reputation that attracts business and investment opportunities and assists us in negotiations with investors, lenders, the USPS and owners of postal properties.

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Spodek, Garber and Klein do not guarantee their continued employment with us.

Many of our other senior executives also have extensive experience and strong reputations in the real estate industry, which aid us in identifying opportunities, having opportunities brought to us and negotiating.

The loss of services of one or more members of our senior management team, or our inability to attract and retain highly qualified personnel, could adversely affect our business, diminish our investment opportunities and weaken our relationships with investors, lenders, business partners, existing and prospective tenants and industry participants, which could materially adversely affect our financial condition, results of operations, cash flow and the per share trading price of our Class A common stock.

Many of our other senior executives also have extensive experience and strong reputations in the real estate industry, particularly in the postal real estate sector, which aid us in identifying opportunities, having opportunities brought to us and negotiating.

Many of these individuals have developed specialized knowledge and skills in the postal real estate sector.

The loss of services of one or more members of our senior management team, or our inability to attract and retain highly qualified personnel, could adversely affect our business, diminish our investment opportunities and weaken our relationships with investors, lenders, owners of postal properties, business partners, existing and prospective tenants and industry participants, which could materially adversely affect our financial condition, results of operations, cash flow and the per share trading price of our Class A common stock.

We may be subject to on-going or future litigation, including existing claims relating to the entities that owned the properties previously and otherwise in the ordinary course of business, which could have a material adverse effect on our financial condition, results of operations, cash flow and the per share trading price of our Class A common stock.

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Some of these claims may result in significant defense costs and potentially significant judgments against us, some of which are not, or cannot be, insured against.

We generally intend to vigorously defend ourselves.

In addition, with respect to any claims under our leases with the USPS, the procedures for settling such disputes with the USPS under the Contract Disputes Act of 1978 could be costly, time consuming and may divert the attention of management from other operations of our business.

Specifically, the claim process first requires a contractor to file a claim with a USPS-assigned contracting officer.

After the contracting officer has issued a final decision, the contractor may appeal such decision before the Postal Service Board of Contract Appeals or the U.S.

Court of Federal Claims.

We generally intend to vigorously defend ourselves or pursue our claims.

However, we cannot be certain of the ultimate outcomes of any currently asserted claims or of those that may arise in the future.

Resolution of these types of matters against us may result in our having to pay significant fines, judgments, or settlements, which, if uninsured, or if the fines, judgments, and settlements and any related expenses exceed insured levels, could adversely impact our earnings and cash flows, thereby having an adverse effect on our financial condition, results of operations, cash flow, cash available for distribution and our ability to service our debt obligations.

Certain litigation or the resolution of certain litigation may affect the availability or cost of some of our insurance coverage, which could materially adversely affect our results of operations and cash flows, expose us to increased risks that would be uninsured and/or adversely impact our ability to attract officers and directors.

Certain litigation or the resolution of certain litigation may adversely affect our relationship with tenants, vendors and other parties involved in the disputes and impact the availability or cost of some of our insurance coverage, which could materially adversely affect our results of operations and cash flows, expose us to increased risks that would be uninsured and/or adversely impact our ability to attract officers and directors.

Insurance on our properties may not adequately cover all losses and uninsured losses if we experience a substantial or comprehensive loss of such properties.

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In those circumstances, the insurance proceeds received may not be adequate to restore our economic position with respect to the affected real property and its generation of rental revenue.

Certain types of losses, generally of a catastrophic nature, such as earthquakes, hurricanes and floods, may be uninsurable or not economically insurable by us.

In addition, in the event that we experience a substantial or comprehensive loss of one of our properties, we may not be able to rebuild such property to its existing specifications without significant capital expenditures which may exceed any amounts received pursuant to insurance policies.

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Investments in partnerships, joint ventures or other entities may, under certain circumstances, involve risks not present where a third party is not involved, including the possibility that partners or co-venturers might become bankrupt or fail to fund their share of required capital contributions.

Partners or co-venturers may have economic or other business interests or goals which are

inconsistent with our business interests or goals and may be in a position to take actions contrary to our policies or objectives, and they may have competing interests in our markets that could create conflicts of interest.

Partners or co-venturers may have economic or other business interests or goals which are inconsistent with our business interests or goals and may be in a position to take actions contrary to our policies or objectives, and they may have competing interests in our markets that could create conflicts of interest.

Such investments may also have the potential risk of impasses on decisions, such as a sale or financing, because neither we nor the partner(s) or co-venturer(s) would have full control over the partnership or joint venture.

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We may, in certain circumstances, be liable for the actions of a partner, and the activities of a partner could adversely affect our ability to maintain our qualification as a REIT or our exclusion or exemption from registration under the Investment Company Act of 1940, as amended, even if we do not control the joint venture.

Disputes between us and partners or co-venturers may result in litigation or arbitration that would increase our expenses and prevent our officers and directors from focusing their time and effort on our business.

Consequently, actions by or disputes with partners or co-venturers might result in subjecting properties owned by the partnership or joint venture to additional risk.

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We depend on our ability to attract and retain skilled management personnel in order to successfully manage the day-to-day operations of our company and execute our business plan.

As we continue to grow, we may face increased challenges in hiring and retaining qualified and skilled personnel, especially during periods of labor shortage and intense competition for talents.

As we continue to grow, we have faced and may continue to face increased challenges in hiring and retaining qualified and skilled personnel, especially during periods of labor shortage and intense competition for talents.

Competitive pressures may require that we enhance our pay and benefits package to compete effectively for such personnel.

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Our growth depends on external sources of capital that are outside of our control and may not be available to us on commercially reasonable terms or at all, which could limit our ability to, among other things, meet our capital and operating needs or make the cash distributions to our stockholders necessary to qualify and maintain our qualification as a REIT.

Depending on our ability to borrow under our 2021 Credit Facilities and other debt instruments, we may pursue significantly more secured borrowings in the future, although we have not entered into any preliminary or binding documentation with respect to any such additional secured borrowings and there is no guaranty that any lender will be willing to lend to us on the terms and timing that we expect, if at all.

In order to qualify and maintain our qualification as a REIT, we are required under the Code to, among other things, distribute annually at least 90% of our REIT taxable income, determined without regard to the dividends paid deduction and excluding any net capital gains.

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Our access to third-party sources of capital depends, in part, on:

• general market conditions;

• general market conditions and the conditions of the USPS;

• the market’s perception of our growth potential;

• our current debt levels;

• our current and expected future earnings;

• our current and expected performance and future earnings;

• our cash flow and cash distributions;

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Historically, the capital markets have been subject to significant disruptions.

If we cannot obtain capital from third-party sources, we may not be able to acquire or develop properties when strategic opportunities exist, meet the capital and

operating needs of our existing properties, satisfy our debt service obligations or make the cash distributions to our stockholders necessary to qualify and maintain our qualification as a REIT.

If we cannot obtain capital from third-party sources, we may not be able to acquire or develop properties when strategic opportunities exist, meet the capital and operating needs of our existing properties, satisfy our debt service obligations or make the cash distributions to our stockholders necessary to qualify and maintain our qualification as a REIT.

We could incur significant costs and liabilities related to environmental matters.

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In addition, the presence of contamination or the failure to remediate contamination at our properties may expose us to third-party liability for costs of remediation and/or personal or property damage or materially adversely affect our ability to sell, lease or develop our properties or to borrow using the properties as collateral.

In addition, environmental laws may create liens on contaminated sites in favor of the government for damages and costs it incurs to address such contamination.

In addition, environmental laws may create liens on

contaminated sites in favor of the government for damages and costs it incurs to address such contamination.

Moreover, if contamination is discovered on our properties, environmental laws may impose restrictions on the manner in which property may be used or businesses may be operated, and these restrictions may require substantial expenditures.

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As a result, we could potentially incur material liability for these issues.

As the owner of the buildings on our properties, we could face liability for the presence of hazardous materials, such as asbestos or lead, or other adverse conditions, such as poor indoor air quality, in our buildings.

As the owner of the buildings on our properties, we could face liability for the presence of hazardous materials, such as asbestos, lead or underground storage tanks used to store petroleum products or other potentially hazardous or toxic substances, or other adverse conditions, such as poor indoor air quality, in our buildings.

Environmental laws govern the presence, maintenance, and removal of hazardous materials in buildings, and if we do not comply with such laws, we could face fines for such noncompliance and could be required to abate, remove or otherwise address the hazardous material to achieve compliance with applicable environmental laws and regulations.

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Natural disasters and severe weather such as flooding, earthquakes, tornadoes or hurricanes may result in significant damage to our properties.

Many of our properties are located in states like Oklahoma, Texas, Missouri, and Louisiana that historically have experienced heightened risk for natural disasters like tornados and hurricanes.

Many of our properties are located in states like Oklahoma, Texas, Missouri, Louisiana and Florida that historically have experienced heightened risk for natural disasters like tornados and hurricanes.

The extent of our casualty losses and loss in operating income in connection with such events is a function of the severity of the event and the total amount of exposure in the affected area.

When we have geographic concentration of exposures, a single catastrophe (such as an

earthquake) or destructive weather event (such as a tornado or hurricane) affecting a region may have a significant negative effect on our financial condition and results of operations.

While we carry insurance to cover a substantial portion of the cost of such events, our insurance includes deductible amounts and certain items may not be covered by insurance.

When we have geographic concentration of exposures, a single catastrophe (such as an earthquake) or destructive weather event (such as a tornado or hurricane) affecting a region may have a significant negative effect on our financial condition and results of operations.

Our financial results may be adversely affected by our exposure to losses arising from natural disasters or severe weather.

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These conditions could result in physical damage to our properties or declining demand for space in our buildings or the inability of us to operate the buildings at all in the areas affected by these conditions.

Climate change also may have indirect adverse effects on our business by increasing the cost of (or making unavailable) property insurance on terms we find acceptable, increasing the cost of energy, maintenance, repair of water and/or wind damage, cost of snow removal or related costs at our properties or causing the USPS to relocate its postal offices to other locations.

Climate change also may have indirect adverse effects on our business by increasing the cost of (or making unavailable)

property insurance on terms we find acceptable, increasing the cost of energy, maintenance, repair of water and/or wind damage, cost of snow removal or related costs at our properties or causing the USPS to relocate its postal offices to other locations.

In recent years, a number of states and municipalities have adopted laws and policies on climate change and emission reduction targets.

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Our properties are insured by title policies.

We have not, however, obtained new owner’s title insurance policies in connection with the acquisition of our initial properties in the Formation Transactions and certain acquisitions subsequent to the Formation Transactions.

We have not, however, obtained new owner’s title insurance policies in connection with the acquisition of our initial properties in our formation transactions and certain acquisitions subsequent to the formation transactions.

In some instances, these insurance policies are effective as of the time of the acquisition or later refinancing.

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Local regulations, including municipal or local ordinances, zoning restrictions and restrictive covenants imposed by community developers may restrict our use of our properties and may require us to obtain approval from local officials or restrict our use of our properties and may require us to obtain approval from local officials of community standards organizations at any time with respect to our properties, including prior to developing or acquiring a property or when undertaking renovations of any of our existing properties.

Among other things, these restrictions may relate to

fire and safety, seismic or hazardous material abatement requirements.

Among other things, these restrictions may relate to fire and safety, seismic or hazardous material abatement requirements.

There can be no assurance that existing laws and regulatory policies will not adversely affect us or the timing or cost of any future development, acquisitions or renovations, or that additional regulations will not be adopted that increase such delays or result in additional costs.

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We may have difficulty implementing changes to our information technology systems.

We have made significant investments to update and improve our information technology systems and expect such investments to continue in order to meet our business needs, including for sourcing acquisition opportunities and managing the maintenance and repair of our properties.

We have made significant investments to update and improve our information technology systems and expect such investments to continue in order to meet our business needs, including for sourcing acquisition opportunities, managing the maintenance and repair of our properties and enhancing our cybersecurity.

Transitioning to new or upgraded systems can create difficulties, including potential disruptions to current processes and security complexities.

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Spodek and his affiliates held approximately 10.3% of the combined voting power of our outstanding shares of common stock as of March 7, 2023.

Pursuant to his ownership of Class A common stock and Voting Equivalency stock, Mr.

Pursuant to his ownership of Class A common stock and Class B common stock, $0.01 par value per share (the “Voting Equivalency stock”), Mr.

Spodek and his affiliates have the ability to influence the outcome of matters presented to our stockholders, including the election of our Board of Directors and approval of significant corporate transactions, including business combinations, consolidations and mergers.

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Our Operating Partnership must also pay or reimburse the reasonable expenses of any such person upon its receipt of a written affirmation of the person’s good faith belief that the standard of conduct necessary for indemnification has been met and a written undertaking to repay any amounts paid or advanced if it is ultimately determined that the person did not meet the standard of conduct for indemnification.

Our Operating Partnership will not indemnify or advance funds to any person with respect to any action initiated by the person seeking indemnification without our approval (except for any proceeding brought to enforce such person’s right to indemnification under the partnership agreement) or if the person is found to be liable to our Operating Partnership on any portion of any claim in the action.

Our Operating Partnership will not indemnify or advance funds to any person with

respect to any action initiated by the person seeking indemnification without our approval (except for any proceeding brought to enforce such person’s right to indemnification under the partnership agreement) or if the person is found to be liable to our Operating Partnership on any portion of any claim in the action.

Our charter contains certain provisions restricting the ownership and transfer of our stock that may delay, defer or prevent a change of control transaction that might involve a premium price for our Class A common stock or that our stockholders otherwise believe to be in their best interests.

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As of March 7, 2023, Mr.

Spodek and his affiliates owned approximately 43.4% of the outstanding OP Units (including LTIP Units) and approximately 4.3% of the outstanding shares of our Class A common stock and all of the Voting Equivalency stock, which together represent an approximate 11.4% beneficial economic interest in our Company on a fully diluted basis.

Spodek and his affiliates owned approximately 39.2% of the outstanding OP Units (including LTIP Units) that are not owned by us and approximately 4.1% of the outstanding shares of our Class A common stock and all of the Voting Equivalency stock, which together represent an approximate 11.2% beneficial economic interest in our Company on a fully diluted basis.

Tax protection agreements may limit our ability to sell or otherwise dispose of certain properties and may require our Operating Partnership to maintain certain debt levels that otherwise would not be required to operate our business.

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Tax protection agreements may make it economically prohibitive to sell any properties that are subject to such agreements even though it may otherwise be in our stockholders’ best interests to do so.

In addition, we may be required to maintain a minimum level of indebtedness throughout the term of any tax protection agreement regardless of whether such debt levels are otherwise required to operate our business or provide certain of our contributors the opportunity to guarantee debt or enter into a deficit restoration obligations upon a future repayment, retirement, refinancing or other reduction (other than scheduled amortization) of currently outstanding debt prior to the tenth anniversary of the completion of the Formation Transactions.

If we fail to make such opportunities available, we will be required to deliver to each such contributor a cash payment intended to approximate the contributor’s tax liability resulting from our failure to make such opportunities available to that contributor and the tax liabilities incurred as a result of such tax protection payment.

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Higher leverage also increases the risk of default on our obligations.

In addition, a change in our investment policies, including the manner in which we allocate our resources across our portfolio or the types of assets in which we seek to invest, may

increase our exposure to interest rate risk, real estate market fluctuations and liquidity risk.

In addition, a change in our investment policies, including the manner in which we allocate our resources across our portfolio or the types of assets in which we seek to invest, may increase our exposure to interest rate risk, real estate market fluctuations and liquidity risk.

Changes to our policies with regards to the foregoing could materially adversely affect our financial condition, results of operations and cash flow.

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We have elected and intend to continue to operate in a manner that will allow us to qualify to be taxed as a REIT under Sections 856-860 of the Code commencing with our short taxable year ended December 31, 2019.

Qualification as a REIT involves the application of highly technical and complex tax rules, for which there are only limited judicial and administrative

interpretations.

Qualification as a REIT involves the application of highly technical and complex tax rules, for which there are only limited judicial and administrative interpretations.

The fact that we hold substantially all our assets through a partnership further complicates the application of the REIT requirements.

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Even if we qualify as a REIT, we may be subject to some U.S.

federal, state and local income, property and excise taxes on our income or property and, in certain cases, a 100% penalty tax, in the event we sell property that we hold primarily for sale to customers in the ordinary course of business.

In addition, our TRSs are subject to tax as regular corporations in the jurisdictions in which they operate.

Even if we qualify as a REIT, we may face other tax liabilities that reduce our cash flows.

Even if we qualify for taxation as a REIT, we may be subject to certain federal, state and local taxes on our income and assets, including taxes on any undistributed income, tax on income from some activities conducted as a result of a foreclosure, and state or local income, property and transfer taxes.

In addition, under new partnership audit procedures applicable beginning in 2018, our Operating Partnership and any other partnership that we may own in the future may be liable at the entity level for any tax assessed under those procedures.

Also, our TRS will be subject to regular corporate federal, state and local taxes.

Any of these taxes would decrease cash available for distributions to stockholders.

federal, state and local income, property and excise taxes on our income or property, including tax on income from some activities conducted as a result of foreclosure, and state or local income, property and transfer taxes, and, in certain cases, a 100% penalty tax, in the event we sell property that we hold primarily for sale to customers in the ordinary course of business.

In addition, our TRS is subject to tax as a regular corporation in the jurisdictions in which it operates, which would decrease cash available for distributions to stockholders.

Failure to make required distributions would subject us to federal corporate income tax.

We have operated and intend to continue to operate so as to qualify as a REIT for federal income tax purposes.

In order to qualify as a REIT, we generally are required to distribute at least 90% of our REIT taxable income, determined without regard to the dividends paid deduction and excluding any net capital gains, each year to our stockholders.

We have operated and intend to continue to operate so as to maintain our qualification as a REIT for federal income tax purposes.

In order to maintain our qualification as a REIT, we generally are required to distribute at least 90% of our REIT taxable income, determined without regard to the dividends paid deduction and excluding any net capital gains, each year to our stockholders.

To the extent that we satisfy this distribution requirement but distribute less than 100% of our REIT taxable income, we will be subject to federal corporate income tax on our undistributed taxable income.

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We could be affected by tax liabilities or earnings and profits of our predecessor.

A portion of our predecessor, United Postal Holdings, Inc.

("UPH"), that was taxable as a C corporation merged into us as a part of Formation Transactions.

A portion of our predecessor, UPH, that was taxable as a C corporation merged into us as a part of our formation transactions.

As a result of the merger, any unpaid tax liabilities of such taxable C corporation were transferred to us.

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Spodek and his affiliates do not make such payment, we would be responsible for paying such tax liabilities, which would decrease cash available for distributions to stockholders.

There are uncertainties relating to the estimate of the accumulated earnings and profits attributable to United Postal Holdings, Inc.

Because a portion of our predecessor, UPH, was a C corporation, to qualify as a REIT, we were required to distribute to our stockholders prior to the end of the taxable year ended December 31, 2019 all of UPH’s accumulated earnings and profits attributable taxable years prior to the Formation Transactions.

There are uncertainties relating to the estimate of the accumulated earnings and profits attributable to UPH.

Based on an earnings and profits study we obtained from an accounting firm, we do not believe that we had any accumulated earnings and profits attributable to UPH.

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Spodek to own up to 15.0% in value or number of shares, whichever is more restrictive, of our outstanding shares of common stock.

Our Board of Directors may not grant an exemption

from this restriction to any proposed transferee whose ownership would result in our failing to qualify as a REIT.

Our Board of Directors may not grant an exemption from this restriction to any proposed transferee whose ownership would result in our failing to qualify as a REIT.

This as well as other restrictions on transferability and ownership will not apply, however, if our Board of Directors determines that it is no longer in our best interests to continue to qualify as a REIT.

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As a partnership, our Operating Partnership generally will not be subject to federal income tax on its income.

Instead, each of its partners, including us, will be allocated, and may be required to pay tax with respect to, its share of our Operating Partnership’s income.

each of its partners, including us, will be allocated, and may be required to pay tax with respect to, its share of our Operating Partnership’s income.

We cannot assure you, however, that the IRS will not challenge the status of our Operating Partnership or any other subsidiary partnership in which we own an interest as a partnership for federal income tax purposes, or that a court would not sustain such a challenge.

If the IRS were successful in treating our Operating Partnership or any such other subsidiary partnership as an entity taxable as a corporation for federal income tax purposes, we would fail to meet the gross income tests and certain of the asset tests applicable to REITs and, accordingly, we would likely cease to qualify as a REIT.

If the IRS were successful in treating our Operating Partnership or any such other subsidiary partnership as an entity taxable as a corporation for federal income tax purposes, we could fail to meet the gross income tests and certain of the asset tests applicable to REITs and, accordingly, we would likely cease to qualify as a REIT.

Also, the failure of our Operating Partnership or any subsidiary partnerships to qualify as a partnership could cause it to become subject to federal and state corporate income tax, which would reduce significantly the amount of cash available for debt service and for distribution to its partners, including us.

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Treasury Department, which could result in statutory changes as well as frequent revisions to regulations and interpretations.

In addition, several proposals have been made that would make substantial changes to the federal income tax laws generally.

We cannot predict whether any of these proposed changes will become law.

We and our stockholders could be adversely affected by any recent change in, or any new federal income tax law, regulation or administrative interpretation.

We and our stockholders could be adversely affected by any new federal income tax law, regulation or administrative interpretation.

General Risk Factors

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From time to time the Financial Accounting Standards Board and the SEC, which create and interpret appropriate accounting standards, may change the financial accounting and reporting standards or their interpretation and application of these standards that govern the preparation of our financial statements.

These changes could have a material impact on our

reported financial condition and results of operations.

These changes could have a material impact on our reported financial condition and results of operations.

In some cases, we could be required to apply a new or revised standard retroactively, resulting in reclassifying or restating prior period financial statements.

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Additional equity offerings may dilute the holdings of our existing stockholders or reduce the market price of our Class A common stock, or both.

Preferred stock could have a preference on liquidating distributions or a preference on dividend payments that could limit our ability to make a dividend distribution to the holders of our common stock.

Preferred stock or units could have a preference on liquidating distributions or a preference on dividend or distribution payments that could limit our ability to make a dividend distribution to the holders of our common stock and common units.

Because our decision to issue securities in any future offering will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of our future offerings.

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• pandemics and epidemics, such as the COVID-19 pandemic, and the related governmental and economic responses thereto.

In addition, while we expect to continue to make regular quarterly distributions to the holders of our Class A common stock, if sufficient cash is not available for distribution from our operations, we may have to fund distributions from working capital or net proceeds from asset sales, borrow to provide funds for such distributions, or reduce the amount of such distributions.

To the extent we borrow to fund distributions, our future interest costs would increase, thereby reducing our earnings and cash available for distribution from what they otherwise would have been.

If cash available for distribution generated by our assets is less than expected, or if such cash available for distribution decreases in future periods from expected levels, our inability to make distributions, or to make distributions at expected levels, could result in a decrease in the market price of our Class A common stock.

In the past, securities class action litigation has often been instituted against companies following periods of volatility in their stock price.

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We cannot predict whether future sales of our Class A common stock, preferred stock, or securities convertible into or exchangeable or exercisable for our Class A common stock or the availability of these securities for resale in the open market will decrease the market price of our Class A common stock.

Sales of a substantial number of these securities in the public market, including sales upon the redemption of OP Units, or the perception that these sales might occur, may cause the market price of our common shares to decline and you could lose all or a portion of your investment.

Sales of a substantial number of these securities in the public

market, including sales upon the redemption of OP Units, or the perception that these sales might occur, may cause the market price of our common shares to decline and you could lose all or a portion of your investment.

Future issuances of our Class A common stock, preferred stock, or other securities convertible into or exchangeable or exercisable for our Class A common stock, including, without limitation, OP Units, in connection with property, portfolio or business acquisitions and issuances of equity-based awards to participants in our 2019 Equity Incentive Plan, could have an adverse effect on the market price of our Class A common stock.

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In addition, future sales or issuances of our Class A common stock may be dilutive to existing stockholders.

We face cybersecurity risks and risks associated with security breaches which have the potential to disrupt our operations, cause material harm to our financial condition, result in misappropriation of assets, compromise confidential information and/or damage our business relationships and can provide no assurance that the steps we and our service providers take in response to these risks will be effective.

We face cybersecurity risks.

We face cybersecurity risks and risks associated with security breaches or disruptions, such as through cyber-attacks or cyber intrusions over the Internet, malware, computer viruses, attachments to emails, social engineering and phishing schemes or persons inside our organization.

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however, this insurance may not be sufficient to cover the financial, legal, business, or reputational losses that may result from an interruption or breach of our systems.

In response to the pandemic, some of our employees work remotely, which could introduce additional cybersecurity risks.

disruption in our operations, material harm to our financial condition, cash flows and the market price of our common shares, increased cybersecurity protection and insurance costs, regulatory enforcement, litigation and damage to our stakeholder relationships.

Some of our employees also work remotely, which could introduce additional cybersecurity risks.

There can be no assurance that our efforts to maintain the security and integrity of the information we and our service providers collect and our and their computer systems will be effective or that attempted security breaches or disruptions would not be successful or damaging with the potential for disruption in our operations, material harm to our financial condition, cash flows and the market price of our common shares, increased cybersecurity protection and insurance costs, regulatory enforcement, litigation and damage to our stakeholder relationships.

Third-party expectations relating to environmental, social and governance factors may impose additional costs and expose us to new risks.

Certain investors may use environmental, social and governance factors to guide their investment strategies and, in some cases, may choose not to invest in our securities if they believe our policies relating to corporate responsibility are inadequate.

Third-party providers of corporate responsibility ratings and reports on companies have increased in number, resulting in varied and in some cases inconsistent standards.

In addition, the criteria by which corporate responsibility practices are assessed are evolving, which could result in greater expectations of us and cause us to undertake costly initiatives to satisfy such new criteria.

We may face reputational damage in the event that our corporate responsibility procedures or standards do not meet the standards set by various constituencies.

In addition, in the event that we communicate certain initiatives and goals regarding environmental, social and governance matters, we could fail, or be perceived to fail, in our achievement of such initiatives or goals, or we could be criticized for the scope of such initiatives or goals.

If we fail to satisfy the expectations of investors, tenants and other stakeholders or our initiatives are not executed as planned, our reputation and financial results could be adversely affected.

UNRESOLVED STAFF COMMENTS

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-K

Item 1A. Risk Factors