What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2024-02-07 compared with 2023-02-08 · 165 added, 221 removed, 455 unchanged (46% of the section changed)

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Infill locations are geographic locations surrounded by high concentrations of already developed land and existing buildings.

As of December 31, 2022, we owned a total of 252 buildings aggregating approximately 15.3 million square feet, 46 improved land parcels consisting of approximately 161.4 acres and three properties under redevelopment that, upon completion, will consist of one building of approximately 34,000 square feet and two improved land parcels aggregating approximately 12.1 acres.

As of December 31, 2023, we owned a total of 259 buildings aggregating approximately 16.0 million square feet, 45 improved land parcels consisting of approximately 152.4 acres, seven properties under development or redevelopment and approximately 62.7 acres of land entitled for future development.

As of December 31, 2023, our buildings and improved land parcels were approximately 98.5% and 94.6% leased, respectively, to 580 customers, the largest of which accounted for approximately 3.6% of our total annualized base rent.

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We target functional properties in infill locations that may be shared by multiple tenants and that cater to customer demand within the various submarkets in which we operate.

We selected our target markets by drawing upon the experience of our executive management investing and operating in over 50 global industrial markets located in North America, Europe and Asia, the fundamentals of supply and demand, and in anticipation of trends in logistics patterns resulting from population changes, regulatory and physical constraints, changes in technology, e-commerce, the economic and environmental benefits of reducing vehicle miles traveled and other factors.

We selected our target markets by drawing upon the experience of our executive management investing and operating in over 50 global industrial markets located in North America, Europe and Asia, the fundamentals of supply and demand, and in anticipation of trends in logistics patterns resulting from population changes, regulatory, geopolitical and physical constraints, changes in technology, e-commerce, the economic and environmental benefits of reducing vehicle miles traveled and other factors.

We believe that our target markets have attractive long term investment attributes.

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We have no current intention to acquire undeveloped or unimproved industrial land or to pursue greenfield ground up development.

Nevertheless, we pursue redevelopment, renovation and expansion opportunities of properties that we own, acquire properties and improved land parcels with the intent to redevelop in the near-term, and acquire adjacent land to expand our existing facilities.

Nevertheless, we pursue development, redevelopment, renovation and expansion opportunities of properties that

we own, acquire properties and improved land parcels with the intent to redevelop in the near-term, and acquire adjacent land to expand our existing facilities.

We expect that we will continue to acquire the significant majority of our investments as equity interests in individual properties or portfolios of properties.

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Acquisition Activity

During 2022, we acquired 20 industrial properties for a total purchase price of approximately $414.8 million.

During 2023, we acquired seven industrial properties for a total purchase price of approximately $484.0 million.

The properties were acquired from unrelated third parties using existing cash on hand, net proceeds from dispositions, net proceeds from the issuance of common stock and debt.

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Buildings Square

Feet Purchase Price

Feet Improved Land Acreage Purchase Price

(in thousands) 1

Improved Land Acreage

Countyline #29 & #30 Hialeah, FL February 9, 2022 2 407,000 $ 73,200 3.8 % —

33rd Place Bellevue, WA February 23, 2022 2 29,000 13,040 3.4 % 1.2

NE 91st Redmond, WA April 8, 2022 2 32,000 9,780 4.1 % —

87 Doremus Newark, NJ April 18, 2022 — — 17,300 5.3 % 9.7

3660 Thomas Road Santa Clara, CA May 4, 2022 1 135,000 54,600 2.5 % —

127 Doremus Avenue Newark, NJ May 19, 2022 — — 11,900 6.9 % 2.4

3660 Fee Ana Anaheim, CA May 24, 2022 — — 15,000 4.7 % 2.1

332 Hindry Avenue Inglewood, CA May 25, 2022 1 19,000 9,280 2.4 % —

8320-8400 Isis Avenue Los Angeles, CA May 25, 2022 1 40,000 17,902 3.2 % —

Teagarden San Leandro, CA June 1, 2022 5 104,000 34,600 3.5 % —

293 Roanoke Avenue Newark, NJ June 7, 2022 — — 13,000 5.4 % 1.8

8660 Willows Road Redmond, WA June 17, 2022 — — 19,900 4.3 % 3.5

8050 NW 90th St Medley, FL July 5, 2022 — — 20,000 5.6 % 6.7

4857 W 147th St Hawthorne, CA August 2, 2022 — — 6,500 5.0 % 1.3

19500 South Alameda St Rancho Dominguez, CA August 3, 2022 — — 32,075 5.5 % 3.0

3091 East Coronado St Anaheim, CA September 6, 2022 — — 7,325 5.0 % 1.2

7045 NW 46th St Miami, FL October 24, 2022 1 16,000 4,703 5.2 % —

5401 West 104th St Los Angeles, CA November 1, 2022 1 26,000 17,000 2.5 % —

629 Henry Elizabeth, NJ November 29, 2022 1 23,000 15,350 5.4 % —

14805 S Maple Ave Rancho Dominguez, CA December 30, 2022 — — 22,358 6.2 % 2.8

Countyline Phase IV 3

Hialeah, FL February 23, 2023 — — 121.0 $ 173,600 5.7 %

9th Street Long Island City, NY March 6, 2023 1 45,000 — 23,000 5.2 %

Morton Newark, CA March 30, 2023 4 603,000 — 186,000 4.6 %

25th Place NE Washington DC May 23, 2023 1 33,000 — 13,400 5.3 %

East Garry Avenue 4

Santa Ana, CA September 6, 2023 — — 4.9 14,800 5.1 %

Santa Fe Redondo Beach, CA October 10, 2023 2 112,000 — 45,700 5.3 %

Van Dyke Red Hook, Brooklyn, NY October 11, 2023 1 96,000 — 27,500 6.4 %

Total/Weighted Average 9 889,000 125.9 $ 484,000 5.2 %

1 Excludes intangible liabilities and mortgage premiums, if any.

The total aggregate initial investment was approximately $422.3 million, including $13.0 million in capitalized closing costs and acquisition costs and $14.1 million in assumed intangible liabilities and $19.6 million in other credits related to near term capital expenditures at the Countyline #29 & #30 properties.

1 Excludes intangible liabilities.

The total aggregate initial investment was approximately $512.5 million, including $6.1 million in capitalized closing costs and acquisition costs and $42.9 million in assumed intangible liabilities and $20.5 million in other credits related to near term capital expenditures, free rent and tenant improvements at multiple properties.

2 Stabilized capitalization rates, referred to herein as stabilized cap rates, are calculated, at the time of acquisition, as annualized cash basis net operating income for the property stabilized to market occupancy (generally 95%) divided by the total acquisition cost for the property.

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These stabilized cap rates are subject to risks, uncertainties, and assumptions and are not guarantees of future performance, which may be affected by known and unknown risks, trends, uncertainties, and factors that are beyond our control, including risks related to our ability to meet our estimated forecasts related to stabilized cap rates and those risk factors contained in this Annual Report on Form 10-K and in our other public filings.

Redevelopment Activity

As of December 31, 2022, we had three properties under redevelopment that, upon completion, will consist of one building of approximately 34,000 square feet and two improved land parcels aggregating approximately 12.1 acres.

The following table summarizes certain information with respect to the properties under redevelopment as of December 31, 2022:

3 Countyline Phase IV is a 121-acre project entitled for 2.2 million square feet of industrial distribution buildings located in Miami’s Countyline Corporate Park (“Countyline”), immediately adjacent to our seven buildings within Countyline.

Countyline Phase IV, a landfill redevelopment adjacent to Florida’s Turnpike and the southern terminus of I-75, is expected to contain ten LEED-certified industrial distribution buildings at completion.

4 East Garry Avenue is a 4.9-acre property that was placed into redevelopment upon acquisition.

The property is expected to contain one approximately 92,000 square foot LEED-certified industrial distribution building at completion.

Development and Redevelopment Activity

As of December 31, 2023, we had seven properties under development or redevelopment that, upon completion, will consist of six buildings aggregating approximately 1.0 million square feet and one approximately 2.8-acre improved land parcel.

Additionally, we owned approximately 62.7 acres of land entitled for future development that, upon completion, will consist of six buildings aggregating approximately 1.1 million square feet.

The following table summarizes certain information with respect to the properties under development or redevelopment and the land entitled for future development as of December 31, 2023:

Property Name Total Expected

Investment (in

Amount Spent to Date (in thousands) Estimated

Spend (in thousands) Estimated

Investment (in thousands) 1

Amount Spent to Date (in thousands) 2

Stabilized Cap

Estimated Post-Development Acreage Estimated Post-Development Square Feet Estimated

Estimated Post-Development Square Feet Estimated Post-Development Acreage Estimated

Stabilization

Quarter % Pre-leased December 31, 2023

$ 25,961 $ 24,863 $ 1,098 4.9 % 7.2 N/A Q3 2023 — %

Properties under development or redevelopment:

Countyline Phase IV

Countyline Building 38 4

$ 88,800 $ 71,431 5.0 % 506,215 — Q2 2024 100.0 %

Countyline Building 39 4

43,802 34,604 5.8 % 178,201 — Q3 2024 — % 5

Countyline Building 40 4

41,968 33,220 6.0 % 186,107 — Q4 2024 76.7 %

28,071 23,857 4.4 % — 2.8 Q4 2024 — %

18,095 10,694 6.1 % 31,378 — Q4 2024 — %

East Garry Avenue

40,553 19,839 5.1 % 91,500 — Q1 2025 100.0 %

Paterson Plank III

25,303 20,116 5,187 4.4 % 4.9 N/A Q4 2023 — %

35,042 25,940 4.3 % 47,316 — Q1 2025 — %

Total/Weighted Average $ 296,331 $ 219,585 5.2 % 1,040,717 2.8 71.1 %

1 Total expected investment for the properties include the initial purchase price, buyer’s due diligence and closing costs, estimated near-term redevelopment expenditures, capitalized interest and leasing costs necessary to achieve stabilization.

Land entitled for future development:

Countyline Phase IV

Countyline Phase IV Land 4

295,700 101,044 6.0 % 1,137,121 — 2025-2027 n/a

Total $ 295,700 $ 101,044 6.0 % 1,137,121 — n/a

1 Excludes below-market lease adjustments recorded at acquisition.

Total expected investment for the properties includes the initial purchase price, buyer’s due diligence and closing costs, estimated near-term redevelopment expenditures, capitalized interest and leasing costs necessary to achieve stabilization.

2 Excludes below-market lease adjustments recorded at acquisition.

3 Estimated stabilized cap rates are calculated as estimated annualized cash basis net operating income for the properties stabilized to market occupancy (generally 95%) divided by the total acquisition cost for the property.

We define cash basis net operating income for the property as net operating income excluding straight-line rents and amortization of lease intangibles.

These estimated stabilized cap rates are subject to risks, uncertainties, and assumptions and are not guarantees of future performance, which may be affected by known and unknown risks, trends, uncertainties, and factors that are beyond our control, including risks related to our ability to meet our estimated forecasts related to stabilized cap rates and those risk factors contained in this Annual Report on Form 10-K and in our other public filings.

During 2022, we completed redevelopment of three properties aggregating approximately 0.6 million square feet.

The following table summarizes certain information with respect to the redevelopment properties completed during the year ended December 31, 2022:

stabilized cap rates and those risk factors contained in this Annual Report on Form 10-K and in our other public filings.

4 Collectively, “Countyline Phase IV”, a 121-acre project entitled for 2.2 million square feet of industrial distribution buildings located in Countyline, immediately adjacent to our seven buildings within Countyline.

5 In January 2024, we pre-leased 100% of Countyline Building 39.

The ten-year lease is an expansion of an existing tenant and will commence upon completion of the building.

During 2023, we completed development and redevelopment of two properties.

The following table summarizes certain information with respect to the completed development and redevelopment properties during the year ended December 31, 2023:

Property Name Location Total

Investment (in thousands) 1

Investment (in

Stabilized Cap

Square Feet Completion Quarter

America's Gateway Miami, FL $ 7,500 6.6 % 51,800 Q1 2022

Countyline #29 & #30 Hialeah, FL 75,539 3.8 % 407,084 Q2/Q3 2022

73rd Street Miami, FL 20,200 8.1 % 128,844 Q3 2022

Post-Development Square Feet Post-Development Acreage Completion Quarter

Berryessa San Jose, CA $ 26,296 4.9 % — 6.3 Q2 2023

Countyline Building 41 Hialeah, FL 41,200 5.1 % 190,907 — Q4 2023

Total/Weighted Average $ 67,496 5.0 % 190,907 6.3

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We capitalized interest associated with redevelopment and expansion activities of approximately $2.6 million, $0.7 million and $1.6 million during the years ended December 31, 2022, 2021 and 2020, respectively.

We capitalized interest associated with development, redevelopment and expansion activities of approximately $8.5 million, $2.6 million and $0.7 million during the years ended December 31, 2023, 2022 and 2021, respectively.

Disposition Activity

During the year ended December 31, 2022, we sold three properties located in the Northern New Jersey/New York City market for a total aggregate sales price of approximately $159.7 million, resulting in a gain of approximately $107.1 million

and one property located in the Seattle market for a sales price of approximately $8.6 million, resulting in a gain of approximately $5.1 million.

During the year ended December 31, 2023, we sold two properties located in the Northern New Jersey/New York City market for a total aggregate sales price of approximately $43.2 million, resulting in a gain of approximately $21.9 million, one property located in the Washington, D.C.

market for a sales price of approximately $18.0 million, resulting in a gain of approximately $9.7 million and one property located in the Los Angeles market for a sales price of approximately $15.9 million, resulting in a gain of approximately $6.6 million.

The following summarizes the condensed results of operations of the properties sold during the year ended December 31, 2023 for the years ended December 31, 2023, 2022 and 2021 (dollars in thousands):

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Income from operations $ 2,464 $ 1,398 $ 1,992

Credit Facility

On June 29, 2022, we entered into the First Amendment (the “First Amendment”) to the Sixth Amended and Restated Senior Credit Agreement which (i) increased the borrowing capacity of the revolving credit facility by $150.0 million to $400.0 million, (ii) decreased the accordion feature by $150.0 million to $500.0 million, and (iii) provided for the calculation of interest, pricing and fees based on SOFR instead of LIBOR.

O n September 2, 2022, we entered into the Second Amendment (the “Second Amendment”) to the Sixth Amended and Restated Senior Credit Agreement (as amended by the First Amendment and the Second Amendment, the “Amended Facility”) to add an additional $100.0 million term loan that matures in January 2028.

We drew the full amount available under the term loan upon entry into the Second Amendment.

See “Note 6 - Debt” in our notes to consolidated financial statements for more information regarding the Amended Facility.

Senior Unsecured Notes

On August 1, 2022, we prepaid a $50.0 million tranche of 7-year senior unsecured notes using borrowings from our revolving credit facility.

The notes bore interest at 4.23% and had an original maturity date of September 1, 2022.

Public Offering

On February 13, 2023, we completed a public offering of 5,750,000 shares of common stock at a price per share of $62.50, which included the underwriters’ full exercise of their option to purchase an additional 750,000 shares.

The net proceeds of the offering were approximately $355.9 million after deducting the underwriting discount and offering costs of approximately $3.5 million.

We used the net proceeds for acquisitions.

We have an at-the-market equity offering program (the "$500 Million ATM Program") pursuant to which we may issue and sell shares of our common stock having an aggregate offering price of up to $500.0 million ($305.8 million remaining as of December 31, 2023) in amounts and at times as we determine from time to time.

We intend to use the net proceeds from the offering of the shares under the $300 Million ATM Program, if any, for general corporate purposes, which may include future acquisitions, redevelopments and repayment of indebtedness, including borrowings under our revolving credit facility.

During 2022, we issued an aggregate of 1,286,125 shares of common stock at a weighted average offering price of $61.31 per share under the $300 Million ATM Program, resulting in net proceeds of approximately $77.7 million and paying total compensation to the applicable sales agents of approximately $1.1 million.

Prior to the implementation of the $500 Million ATM Program, we had a previous at-the-market equity program (the "$300 Million ATM Program"), which was substantially utilized as of September 5, 2023 and which is no longer active.

We intend to use the net proceeds from the offering of the shares under the $500 Million ATM Program, if any, for general corporate purposes, which may include future acquisitions, developments and redevelopments and repayment of indebtedness, including borrowings under our revolving credit facility.

During 2023, we issued an aggregate of 5,152,279 shares of common stock at a weighted average offering price of $61.15 per share under the $300 Million ATM Program and the $500 Million ATM Program, resulting in net proceeds of approximately $310.5 million and paying total compensation to the applicable sales agents of approximately $4.6 million.

Share Repurchase Program

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September 30, 2023 Common Stock $ 0.45 August 1, 2023 September 29, 2023 October 13, 2023

December 31, 2022 Common stock $ 0.40 November 1, 2022 December 30, 2022 January 13, 2023

December 31, 2023 Common Stock $ 0.45 October 31, 2023 December 15, 2023 January 5, 2024

Contractual Commitments

As of February 7, 2023, we have outstanding contracts with third-party sellers to acquire four industrial properties for a total aggregate purchase price of $259.5 million, as described under the heading “Material Cash Commitments” in this Annual Report on Form 10-K.

There is no assurance that we will acquire the properties under contract because the proposed acquisitions are subject to the completion of satisfactory due diligence and various closing conditions.

Current operating conditions in our six markets for our business are excellent.

As of February 6, 2024, we had one outstanding contract with a third-party seller to acquire one industrial property for a total purchase price of approximately $12.0 million, as described under the heading “Material Cash Commitments” in this Annual Report on Form 10-K.

There is no assurance that we will acquire the property under contract because the proposed acquisition is subject to the completion of satisfactory due diligence and various closing conditions.

Current operating conditions in our six markets for our business have slowed over the last year, yet remain good within our submarkets.

We believe that on average, the rental rates we are likely to achieve on new or renewed leases for our 2024 expirations will be above the rates currently paid for the same space.

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Those conditions, not knowable in advance, will determine our results.

We will continue to sell assets and redeploy the capital to enhance NAV per share or return the capital to shareholders.

We will continue to sell assets and redeploy the capital to enhance NAV per share growth or return the capital to shareholders.

We entered 2024 with our balance sheet exceedingly well positioned for growth as we have no balance outstanding on our $400.0 million revolving credit facility and a cash balance of approximately $165.4 million.

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Our outlook is subject to the risks set forth in this Annual Report on Form 10-K, including the risks set form in “Item 1A - Risk Factors”.

economy experienced a significant increase in inflation rates throughout 2022.

A wide variety of industries and sectors are affected by increasing commodity prices.

economy experienced a significant increase in inflation rates throughout 2022 and 2023.

A wide variety of industries and sectors have been, and will continue to be, affected by increasing commodity prices.

In recent years, inflation has increased construction costs, including tenant improvements and capital projects, goods and labor, and operating costs.

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In addition, leases with respect to approximately 72.5% of our total rentable square feet expire within five years which enables us to seek to replace existing leases with new leases at the then-existing market rate.

Supplemental Material U.S.

Federal Income Tax Considerations

The following discussion supplements and updates the disclosures under “Material U.S.

Federal Income Tax Considerations” in the prospectus dated February 10, 2021 contained in our Registration Statement on Form S-3 filed with the Securities and Exchange Commission on February 10, 2021 (such disclosure, the “Base Disclosure”).

Capitalized terms used in this section that are not otherwise defined shall have the same meaning as when used in the Base Disclosure.

On December 29, 2022, the IRS promulgated final Treasury Regulations under Sections 897, 1441, 1445, and 1446 of the Code that were, in part, intended to coordinate various withholding regimes for non-U.S.

stockholders.

The new Treasury Regulations provide that:

The withholding rules applicable to ordinary REIT dividends paid to a non-U.S.

stockholder (generally, a 30% rate of withholding on gross amounts unless otherwise reduced by treaty or effectively connected with such non-U.S.

stockholder’s trade or business within the United States and proper certifications are provided) will apply to (a) that portion of any distribution paid by us that is not designated as a capital gain dividend, a return of basis or a distribution in excess of the non-U.S.

stockholder’s adjusted basis in its stock that is treated as gain from the disposition of such stock and (b) any portion of a capital gain dividend paid by us that is not treated as gain attributable to the sale or exchange of a U.S.

real property interest by reason of the recipient not owning more than 10% of a class of our stock that is regularly traded on an established securities market during the one-year period ending on the date of the capital gain dividend.

The withholding rules under Foreign Investment in Real Property Tax Act (“FIRPTA”) will apply to a distribution paid by us in excess of a non-U.S.

stockholder’s adjusted basis in our stock, unless the interest in our stock is not a U.S.

real property interest (for example, because we are a domestically controlled qualified investment entity) or the distribution is paid to a “withholding qualified holder.” A “withholding qualified holder” means a qualified holder (as defined below) and a foreign partnership all of the interests of which are held by qualified holders, including through one or more partnerships.

The withholding rules under FIRPTA will apply to any portion of a capital gain dividend paid to a non-U.S.

stockholder that is attributable to the sale or exchange of a U.S.

real property interest, unless it is paid to a withholding qualified holder.

In the case of FIRPTA withholding under clause (ii) above, the applicable withholding rate is currently 15%, and in the case of FIRPTA withholding under clause (iii) above, the withholding rate is currently 21%.

For purposes of FIRPTA withholding under clause (iii), whether a capital gain dividend is attributable to the sale or exchange of a U.S.

real property interest is determined taking into account the general exception from FIRPTA distribution treatment for distributions paid to certain non-U.S.

stockholders under which any distribution paid by us to a non-U.S.

stockholder with respect to any class of stock which is regularly traded on an established securities market located in the United States is not treated as gain recognized from the sale or exchange of a U.S.

real property interest if such non-U.S.

stockholder did not own more than 10% of such class of stock at any time during the one-year period ending on the date of such distribution.

To the extent inconsistent, these Treasury Regulations supersede the discussion on withholding contained in the Base Disclosure under the heading “ Material U.S.

Federal Income Tax Considerations—U.S.

Taxation of Non-U.S.

Stockholders .” However, if, notwithstanding these Treasury Regulations, we encounter difficulties in properly characterizing a distribution for purposes of the withholding rules, we may decide to withhold on such distribution at the highest possible U.S.

federal withholding rate that we determine could apply.

Additionally, the second paragraph under the heading “ Material U.S.

Federal Income Tax Considerations—U.S.

Taxation of Non-U.S.

Stockholders—Distributions by Us ” is hereby deleted and replaced with the following:

Distributions in excess of our current and accumulated earnings and profits (not attributable to gains from disposition of U.S.

real property interests) that exceed the non-U.S.

stockholder’s basis in its capital stock will be taxable to a non-U.S.

stockholder as gain from the sale of such stock, which is discussed below.

Distributions in excess of our current or accumulated earnings and profits and not attributable to gains from our sales or exchanges of U.S.

real property interests will not be taxable to a non-U.S.

stockholder to the extent they do not exceed the adjusted basis of the non-U.S.

stockholder in its capital stock (determined separately for each share of capital stock).

Instead, they will reduce the adjusted basis of the non-U.S.

stockholder in such capital stock.

To the extent that such distributions exceed the adjusted basis of a non-U.S.

stockholder’s capital stock, they will be treated as gain from the sale or disposition of the non-U.S.

stockholder’s capital stock and may be subject to tax as described in the “ —Sale of Stock ” portion of this section below.

The new Treasury Regulations also provide new guidance regarding qualified foreign pension funds.

Accordingly, the fourth paragraph under the heading “ Material U.S.

Federal Income Tax Considerations—U.S.

Taxation of Non-U.S.

Stockholders—Sale of Stock ” is hereby deleted and replaced with the following:

For purposes of the effectively connected income provisions of FIRPTA, and subject to the discussion below regarding “qualified holders,” neither a “qualified foreign pension fund” (as defined below) nor any entity all of the interests of which are held by a qualified foreign pension fund is treated as a foreign person, thereby exempting such entities from tax under FIRPTA.

A “qualified foreign pension fund” is an organization or arrangement (i) created or organized in a foreign country, (ii) established by a foreign country (or one or more political subdivisions thereof) or one or more employers to provide retirement or pension benefits to current or former employees (including self-employed

individuals) or their designees or, in consideration for, services rendered, (iii) which does not have a single participant or beneficiary that has a right to more than 5% of its assets or income, (iv) which is subject to government regulation and with respect to which annual information about its beneficiaries is provided, or is otherwise available, to relevant local tax authorities, and (v) with respect to which, under its local laws, (A) contributions that would otherwise be subject to tax are deductible or excluded from its gross income or taxed at a reduced rate, or (B) taxation of its investment income is deferred, or such income is excluded from its gross income or taxed at a reduced rate.

Under Treasury Regulations, subject to the discussion below regarding “qualified holders,” a “qualified controlled entity” also is not treated as a foreign person for purposes of the effectively connected income provisions of FIRPTA.

A qualified controlled entity generally includes a trust or corporation organized under the laws of a foreign country all of the interests of which are held by one or more qualified foreign pension funds either directly or indirectly through one or more qualified controlled entities.

Treasury Regulations further provide that a qualified foreign pension fund or qualified controlled entity will not be exempt from FIRPTA with respect to dispositions of U.S.

real property interests or REIT distributions attributable to the same unless the qualified foreign pension fund or qualified controlled entity is a “qualified holder.” To be a qualified holder, a qualified foreign pension fund or qualified controlled entity must satisfy one of two alternative tests at the time of the disposition of the U.S.

real property interest or the REIT distribution.

Under the first test, a qualified foreign pension fund or qualified controlled entity is a qualified holder if it owned no U.S.

real property interests as of the earliest date during an uninterrupted period ending on the date of the disposition or distribution during which it qualified as a qualified foreign pension fund or qualified controlled entity.

Alternatively, if a qualified foreign pension fund or qualified controlled entity held U.S.

real property interests as of the earliest date during the period described in the preceding sentence, it can be a qualified holder only if it satisfies certain testing period requirements.

Treasury Regulations also provide that a foreign partnership all of the interests of which are held by qualified holders, including through one or more partnerships, may certify its status as such and will not be treated as a foreign person for purposes of withholding under FIRPTA.

We intend to comply with these Treasury Regulations as applicable for any non-U.S.

stockholders.

Financial Condition and Results of Operations

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These revenues include fixed base rents and recoveries of certain property operating expenses that we have incurred and that we pass through to the individual tenants.

Approxi ma tely 93.5% of our leased space includes fixed rental increases or Consumer Price Index-based rental increases.

Approxi m ately 95.7% of our leased space includes fixed rental increases or Consumer Price Index-based rental increases.

Lease terms typically range from three to ten years.

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The analysis of our results below for the years ended December 31, 2023 and 2022 includes the changes attributable to same store properties.

The same store pool for the comparison of the years ended December 31, 2022 and 2021 includes all properties that were owned and in operation as of December 31, 2022 and since January 1, 2021 and excludes properties that were either disposed of prior to, held for sale to a third party or in redevelopment as of December 31, 2022.

The same store pool for the comparison of the years ended December 31, 2023 and 2022 includes all properties that were owned and in operation as of December 31, 2023 and since January 1, 2022 and excludes properties that were either disposed of prior to, held for sale to a third party or in development or redevelopment as of December 31, 2023.

As of December 31, 2023, the same store pool consisted of 224 buildings aggregating approximately 13.1 million square feet representing approximately 81.5% of our total square feet owned and 36 improved land parcels consisting of approximately 113.7 acres representing approximately 74.6% of our total acreage owned.

As of December 31, 2022, the non-same store properties, which we acquired, redeveloped, or sold during 2022 and 2021 or were held for sale (if any) or in redevelopment as of December 31, 2022, consisted of 55 buildings aggregating approximately 3.1 million square feet, 22 improved land parcels consisting of approximately 69.9 acres and three properties under redevelopment that, upon completion, will consist of one building of approximately 34,000 square feet and two improved land parcels aggregating approximately 12.1 acres.

As of December 31, 2023, the non-same store properties, which we acquired, developed or redeveloped, or sold during 2023 and 2022 or were held for sale or in development or redevelopment as of December 31, 2023, consisted of 35 buildings aggregating approximately 3.0 million square feet, nine improved land parcels consisting of approximately 38.7 acres, seven properties under development or redevelopment and approximately 62.7 acres of land entitled for future development.

As of December 31, 2023 and 2022, our consolidated same store pool occupancy was approximately 98.5% and 98.8%, respectively.

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Gain on sales of real estate investments 38,156 112,166 (74,010) (66.0) %

Total other income (expense) 89,125 (605) 89,730 n/a

Total other income (expense) 18,324 89,125 (70,801) (79.4) %

Net income $ 151,457 $ 198,014 $ (46,557) (23.5) %

5 unchanged sentences

See “Note 2 - Significant Accounting Policies” in our notes to consolidated financial statements for more information regarding our adoption of this standard.

2 Includes 2021 and 2022 acquisitions and dispositions, 22 improved land parcels and three properties under redevelopment as of December 31, 2022.

2 Includes 2022 and 2023 acquisitions and dispositions, nine improved land parcels, seven properties under development or redevelopment and approximately 62.7 acres of land entitled for future development.

3 Includes straight-line rents and amortization of lease intangibles.

See “Non-GAAP Financial Measures” in this Annual Report on Form 10-K for a definition and reconciliation of net operating income and same store net operating income from net income and a discussion of why we believe net operating income and same store net operating income are useful supplemental measures of our operating performance.

Total revenues increased approximately $54.3 million for the year ended December 31, 2022 compared to the prior year due primarily to increased revenue on new and renewed leases, property acquisitions during 2022 and 2021 and an increase in occupancy rate.

Total revenues increased approximately $47.4 million for the year ended December 31, 2023 compared to the prior year due primarily to increased revenue on new and renewed leases and property acquisitions during 2023 and 2022.

Cash rents on new and renewed leases totaling approximately 2.1 million square feet and 11.4 acres commencing during the year ended December 31, 2023 increased approximately 55.5% compared to the prior year.

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Total property operating expenses increased approximately $10.2 million during the year ended December 31, 2023 compared to the prior year.

The increase in total property operating expenses was primarily due to an increase of approximately $8.7 million attributable to property acquisitions during 2022 and 2021 as well increases in insurance premiums, real estate taxes related to annual rate increases and utilities expenses incurred at certain of our properties.

The increase in total property operating expenses was primarily due to an increase of approximately $7.3 million attributable to property acquisitions during 2023 and 2022 as well as increases in insurance premiums and real estate taxes related to annual rate increases.

Depreciation and amortization.

Depreciation and amortization increased approximately $15.1 million during the year ended December 31, 2022 compared to the prior year primarily due to property acquisitions during 2022 and 2021 and the sale of four properties during the year ended December 31, 2022.

Depreciation and amortization increased approximately $7.5 million during the year ended December 31, 2023 compared to the prior year primarily due to property acquisitions during 2023 and 2022.

General and administrative expenses.

General and administrative expenses increased approximately $4.2 million for the year ended December 31, 2022 compared to the prior year primarily due to increased restricted stock amortization and other compensation expenses, including an increase in bonus expense and an increase in the number of employees and salaries compared to the prior year.

General and administrative expenses increased approximately $6.7 million for the year ended December 31, 2023 compared to the prior year primarily due to increased compensation expenses including increased restricted stock amortization, LTIP expense and bonus expense, and an increase in the number of employees and salaries compared to the prior year.

Acquisition costs and other.

Acquisition costs and other increased approximately $1.3 million during the year ended December 31, 2022 compared to the prior year primarily due to environmental remediation at our Avenue A property of approximately $1.0 million.

Acquisition costs and other decreased approximately $1.2 million during the year ended December 31, 2023 compared to the prior year primarily due to environmental remediation at our Avenue A property of approximately $1.0 million during the year ended December 31, 2022 .

Interest and other income.

Interest and other income for the year ended December 31, 2022 remained consistent with the prior year.

Interest and other income increased approximately $4.2 million during the year ended December 31, 2023 compared to the prior year primarily due to higher interest rates on our cash and cash equivalent balances.

Interest expense, including amortization.

Interest expense increased approximately $0.9 million for the year ended December 31, 2023 compared to the prior year.

This increase was primarily due to borrowing the full amount available under the new $100.0 million unsecured term loan on September 2, 2022, more borrowings on our revolving credit facility throughout the year ended December 31, 2022 compared to the prior year and higher average interest rates on the unsecured term loans and revolving credit facility throughout the year ended December 31, 2022 compared to the prior year.

The increase was partially offset by the repayment of $50.0 million of senior unsecured notes on August 1, 2022 that bore interest at 4.23% and repayment of all borrowings on the revolving credit facility as of December 31, 2022.

This was primarily due to higher average interest rates on the unsecured term loans and credit facility, partially offset by an increase in capitalized interest for the development and redevelopment properties during the year ended December 31, 2023.

Gain on sales of real estate investments.

Gain on sales of real estate investments increased approximately $95.5 million for the year ended December 31, 2022 compared to the prior year.

We recognized an aggregate gain of approximately $112.2 million from the sale of four properties during the year ended December 31, 2022, as compared to an aggregate gain of approximately $16.6 million from the sale of two properties in the prior year.

Gain on sales of real estate investments decreased approximately $74.0 million for the year ended December 31, 2023 compared to the prior year.

We recognized an aggregate gain of approximately $38.2 million from the sale of four properties during the year ended December 31, 2023, as compared to an aggregate gain of approximately $112.2 million from the sale of four properties in the prior year.

Comparison of the Year Ended December 31, 2022 to the Year Ended December 31, 2021:

Discussion of the year ended December 31, 2021 compared to the year ended December 31, 2020 was included in our Annual Report on Form 10-K for the year ended December 31, 2021 on page 37 under Part II, Item 7, “Management's Discussion and Analysis of Financial Condition and Results of Operations”, which was filed with the Securities and Exchange Commission on February 9, 2022.

Discussion of the year ended December 31, 2022 compared to the year ended December 31, 2021 was included in our Annual Report on Form 10-K for the year ended December 31, 2022 on page 39 under Part II, Item 7, “Management's Discussion and Analysis of Financial Condition and Results of Operations”, which was filed with the SEC on February 8, 2023.

Liquidity and Capital Resources

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• maintain a fixed charge coverage ratio in excess of 2.0x;

• maintain a debt-to-adjusted EBITDA ratio below 6.0x;

• maintain a net debt-to-adjusted EBITDA ratio below 5.0x;

• limit the principal amount of our outstanding floating rate debt to less than 20% of our total consolidated indebtedness;

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We intend to preserve a flexible capital structure with a long-term goal to maintain our investment grade rating and be in a position to issue additional unsecured debt and perpetual preferred stock.

Fitch Ratings assigned us an issuer rating of BBB with a stable outlook.

Fitch Ratings assigned us an issuer rating of BBB with a positive outlook.

A security rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time by the assigning rating agency.

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We believe that our net cash provided by operations will be adequate to fund operating requirements, pay interest on any borrowings and fund distributions in accordance with the REIT requirements of the federal income tax laws.

In the near-term, we intend to fund future investments in properties with cash on hand, term loans, senior unsecured notes, mortgages, borrowings under our revolving credit facility, perpetual preferred and common stock issuances and, from time to time, property dispositions.

We expect to meet our long-term liquidity requirements, including with respect to other investments in industrial properties, property acquisitions, property redevelopments, renovations and expansions and scheduled debt maturities, through borrowings under our revolving credit facility, periodic issuances of common stock, perpetual preferred stock, and long-term unsecured and secured debt, and, from time to time, with proceeds from the disposition of properties.

In the near-term, we intend to fund future investments in properties, property developments and redevelopments and scheduled debt maturities with cash on hand, term loans, senior unsecured notes, borrowings under our revolving credit facility, perpetual preferred and common stock issuances and, from time to time, property dispositions.

We expect to meet our long-term liquidity requirements, including with respect to other investments in industrial properties, property acquisitions, property developments and redevelopments, renovations and expansions and scheduled debt maturities, through borrowings under our revolving credit facility, periodic issuances of common stock, perpetual preferred stock, and long-term unsecured and secured debt, and, from time to time, with proceeds from the disposition of properties.

The success of our acquisition strategy may depend, in part, on our ability to obtain and borrow under our revolving credit facility and to access additional capital through issuances of equity and debt securities.

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Equity Sources of Liquidity

The net proceeds of the offering were approximately $355.9 million after deducting the underwriting discount and offering costs of approximately $3.5 million.

We used the net proceeds for acquisitions.

The following sets forth certain information regarding our current at-the-market common stock offering program as of December 31, 2023:

ATM Stock Offering Program Date Implemented Maximum Aggregate Offering Price (in thousands) Aggregate Common Stock Available (in thousands)

$300 Million ATM Program June 11, 2021 $ 300,000 $ 142,583

The table below sets forth the activity under our at-the-market common stock offering programs during the years ended December 31, 2022 and 2021, respectively:

$500 Million ATM Program September 6, 2023 $ 500,000 $ 305,815

The following table sets forth the activity under our at-the-market common stock offering programs during the years ended December 31, 2023 and 2022, respectively:

For the Year Ended

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As of December 31, 2023, we had $100.0 million of senior unsecured notes that mature in July 2024, $50.0 million of senior unsecured notes that mature in July 2026, $50.0 million of senior unsecured notes that mature in October 2027, $100.0 million of senior unsecured notes that mature in July 2028, $100.0 million of senior unsecured notes that mature in December 2029, $125.0 million of senior unsecured notes that mature in August 2030, and $50.0 million of senior unsecured notes that mature in July 2031 (collectively, the “Senior Unsecured Notes”).

We are a party to the Amended Facility, which consists of a $400.0 million revolving credit facility that matures in August 2025, a $100.0 million term loan that matures in January 2027 and a $100.0 million term loan that matures in January 2028.

On September 2, 2022, upon our entry into the Second Amendment to the Amended Facility, we drew the full amount available under the $100.0 million term loan that matures in January 2028.

As of December 31, 2022 and December 31, 2021, there were no borrowings outstanding on the revolving credit facility and $200.0 million and $100.0 million, respectively, of borrowings outstanding on the term loans.

Our Sixth Amended and Restated Senior Credit Agreement (as amended, the “Amended Facility”) consists of a $400.0 million revolving credit facility that matures in August 2025, a $100.0 million term loan that matures in January 2027 and a $100.0 million term loan that matures in January 2028.

As of both December 31, 2023 and December 31, 2022, there were no borrowings outstanding on the revolving credit facility and $200.0 million of borrowings outstanding on the term loans.

The aggregate amount of the Amended Facility may be increased by up to an additional $500.0 million to a maximum amount not to exceed $1.1 billion, subject to the approval of the administrative agent and the identification of lenders willing to make available additional amounts.

Outstanding borrowings under the Amended Facility are limited to the lesser of (i) the sum of the $400.0 million revolving credit facility, the $100.0 million term loan maturing in January 2027 and the $100.0 million term loan maturing in January 2028, or (ii) 60.0% of the value of the unencumbered properties.

Interest on the Amended Facility, including the term loans, is generally to be paid based upon, at our option, either (i) SOFR plus the applicable SOFR margin or (ii) the applicable base rate, which is the greatest of the administrative agent’s prime rate, 0.50% above the federal funds effective rate, thirty-day SOFR plus the applicable SOFR margin for SOFR rate loans under the Amended Facility plus 1.25%, or 1.25% per annum.

Interest on the Amended Facility, including the term loans, is generally to be paid based upon, at our option, either (i) the Secured Overnight Financing Rate (“SOFR”) plus the applicable SOFR margin or (ii) the applicable base rate, which is the greatest of the administrative agent’s prime rate, 0.50% above the federal funds effective rate, thirty-day SOFR plus the applicable SOFR margin for SOFR rate loans under the Amended Facility plus 1.25%, or 1.25% per annum.

The applicable SOFR margin will range from 1.10% to 1.55% (1.10% as of December 31, 2023) for the revolving credit facility and 1.25% to 1.75% (1.25% as of December 31, 2023) for the term loans, depending on the ratio of our outstanding consolidated indebtedness to the value of our consolidated gross asset value and includes a 10 basis points SOFR credit adjustment.

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Fixed Charge Coverage 8

Total Debt-to-Adjusted EBITDA 9

Net Debt-to-Adjusted EBITDA 9

Weighted Average Maturity of Total Debt (years) 4.3 5.3

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Also includes 508,663 and 417,665 shares held in the Deferred Compensation Plan as of December 31, 2023 and 2022, respectively.

2 Closing price of a share of our common stock on the New York Stock Exchange on December 30, 2022 and 2021, respectively, in dollars per share.

3 Total debt-to-total investments in properties is calculated as total debt, including premiums and net of deferred financing costs, divided by total investments in properties.

4 Total debt-to-total market capitalization is calculated as total debt, including premiums and net of deferred financing costs, divided by total market capitalization.

5 Floating rate debt as a percentage of total debt is calculated as floating rate debt, including premiums and net of deferred financing costs, divided by total debt, including premiums and net of deferred financing costs.

2 Closing price of a share of our common stock on the New York Stock Exchange on December 29, 2023 and December 30, 2022, respectively, in dollars per share.

3 Total debt-to-total investments in properties is calculated as total debt, net of deferred financing costs, divided by total investments in properties.

4 Total debt-to-total market capitalization is calculated as total debt, net of deferred financing costs, divided by total market capitalization.

5 Floating rate debt as a percentage of total debt is calculated as floating rate debt, net of deferred financing costs, divided by total debt, net of deferred financing costs.

6 Earnings before interest, taxes, gains (losses) from sales of property, depreciation and amortization, acquisition costs and stock-based compensation (“Adjusted EBITDA”) for the years ended December 31, 2023 and 2022, respectively.

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See “Non-GAAP Financial Measures” in this Annual Report on Form 10-K for a definition and reconciliation of Adjusted EBITDA from net income and a discussion of why we believe Adjusted EBITDA is a useful supplemental measure of our operating performance.

9 Total debt-to-Adjusted EBITDA is calculated as total debt, including premiums and net of deferred financing costs, divided by annualized Adjusted EBITDA.

9 Net debt-to-Adjusted EBITDA is calculated as total debt, net of deferred financing costs and cash and cash equivalents, divided by annualized Adjusted EBITDA.

The following table sets forth the cash dividends paid or payable per share during the years ended December 31, 2022 and 2021:

The following tables set forth the cash dividends paid or payable per share during the years ended December 31, 2023 and 2022:

For the Three

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September 30, 2023 Common Stock $ 0.45 August 1, 2023 September 29, 2023 October 13, 2023

December 31, 2022 Common stock $ 0.40 November 1, 2022 December 30, 2022 January 13, 2023

December 31, 2023 Common Stock $ 0.45 October 31, 2023 December 15, 2023 January 5, 2024

For the Three

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June 30, 2022 Common Stock $ 0.34 May 3, 2022 June 30, 2022 July 14, 2022

September 30, 2021 Common stock $ 0.34 August 3, 2021 October 1, 2021 October 15, 2021

September 30, 2022 Common Stock $ 0.40 August 2, 2022 September 30, 2022 October 14, 2022

December 31, 2022 Common Stock $ 0.40 November 1, 2022 December 30, 2022 January 13, 2023

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Cash From Investing Activities.

Net cash used in investing activities was approximately $337.7 million and $666.4 million for the years ended December 31, 2022 and 2021, respectively, which consisted primarily of cash paid for property acquisitions of approximately $407.6 million and $645.0 million, respectively, additions to capital improvements of approximately $92.2 million and $62.6 million, respectively, partially offset by net proceeds from sales of real estate investments of approximately $162.1 million and $41.1 million, respectively.

Net cash used in investing activities was approximately $570.4 million and $337.7 million for the years ended December 31, 2023 and 2022, respectively, which consisted primarily of cash paid for property acquisitions of approximately $466.8 million and $407.6 million, respectively, additions to capital improvements of approximately $176.6 million and $92.2 million, respectively, and was partially offset by proceeds from dispositions of approximately $73.1 million and $162.1 million, respectively.

Cash From Financing Activities.

Net cash provided by financing activities was approximately $528.9 million for the year ended December 31, 2023, which consisted primarily of approximately $666.3 million in net proceeds from the issuance of common stock, partially offset by approximately $135.9 million in equity dividend payments.

Net cash provided by financing activities was approximately $17.7 million for the year ended December 31, 2022, which consisted primarily of borrowing the full amount available under the new $100.0 million unsecured term loan and approximately $77.7 million in net proceeds from the issuance of common stock, partially offset by payment of a $50.0 million tranche of the Senior Unsecured Notes, and approximately $107.4 million in equity dividend payments.

Net cash provided by financing activities was approximately $631.2 million for the year ended December 31, 2021, which consisted primarily of approximately $456.7 million in net proceeds from the issuance of common stock and the issuance of approximately $275.0 million of senior unsecured notes, partially offset by approximately $84.6 million in equity dividend payments and approximately $11.3 million in mortgage loan payments.

Critical Accounting Policies And Estimates

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Capitalization of Costs.

We capitalize costs directly related to the redevelopment, renovation and expansion of our investment in real estate.

We capitalize costs directly related to the development, redevelopment, renovation and expansion of our investment in real estate.

Costs associated with such projects are capitalized as incurred.

If the project is abandoned, these costs are expensed during the period in which the redevelopment or expansion project is abandoned.

If the project is abandoned, these costs are expensed during the period in which the development, redevelopment or expansion project is abandoned.

Costs considered for capitalization include, but are not limited to, construction costs, interest, real estate taxes and insurance, if appropriate.

costs are capitalized only during the period in which activities necessary to ready an asset for its intended use are in progress.

These costs are capitalized only during the period in which activities necessary to ready an asset for its

intended use are in progress.

In the event that the activities to ready the asset for its intended use are suspended, the capitalization period will cease until such activities are resumed.

Costs incurred for maintaining and repairing properties, which do not extend their useful lives, are expensed as incurred.

Interest is capitalized based on actual capital expenditures from the period when redevelopment, renovation or expansion commences until the asset is ready for its intended use, at the weighted average borrowing rate during the period.

Interest is capitalized based on actual capital expenditures from the period when development, redevelopment, renovation or expansion commences until the asset is ready for its intended use, at the weighted average borrowing rate during the period.

Property Acquisitions.

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We monitor the liquidity and creditworthiness of our tenants on an on-going basis by reviewing their financial condition periodically as appropriate.

Each period we review our outstanding accounts receivable, including straight-line rents, for doubtful accounts and provide allowances as needed.

Each period we review our outstanding accounts receivable, including straight-line rents, for doubtful accounts and provide

allowances as needed.

We also record lease termination fees when a tenant has executed a definitive termination agreement with us and the payment of the termination fee is not subject to any conditions that must be met or waived before the fee is due to us.

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Material Cash Commitments

As of February 7, 2023, we had four outstanding contracts with third-party sellers to acquire four industrial properties for a total purchase price of $259.5 million.

There is no assurance that we will acquire the properties under contract because the proposed acquisitions are subject to the completion of satisfactory due diligence and various closing conditions.

One of our purchase contracts is for the acquisition, for a total purchase price of approximately $173.6 million, of a 121-acre project entitled for 2.2 million square feet of industrial distribution buildings in Miami’s Countyline Corporate Park (“Countyline”), immediately adjacent to our seven fully-leased buildings within Countyline.

The project, a landfill redevelopment adjacent to Florida’s Turnpike and the southern terminus of I-75, is 29.8% pre-leased with one 191,000 square

foot rear-load industrial distribution building and one 506,000 square foot cross-dock industrial distribution building under construction.

The pre-leased buildings are expected to generate an estimated stabilized cap rate of 5.0% and the remaining eight entitled buildings an estimated stabilized cap rate of 6.0% upon completion.

At expected completion in 2025 the project is expected to contain ten LEED-certified industrial distribution buildings totaling approximately 2.2 million square feet for a total expected investment of approximately $491.1 million.

Management’s Discussion and Analysis of Financial Condition and Results of Operations – 2022 Developments – Acquisition Activity” for more information regarding stabilized capitalization rates, including in footnote 2 to the table contained in that section.

As of February 6, 2024, we had one outstanding contract with a third-party seller to acquire one industrial property for a total purchase price of approximately $12.0 million.

There is no assurance that we will acquire the property under contract because the proposed acquisition is subject to due diligence and various closing conditions.

The following table summarizes our material cash commitments due by period as of December 31, 2023 (dollars in thousands):

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Further, our computation of FFO, Adjusted EBITDA, NOI, same store NOI and cash-basis same store NOI may not be comparable to FFO, Adjusted EBITDA, NOI, same store NOI and cash-basis same store NOI reported by other companies.

We compute FFO in accordance with standards established by the National Association of Real Estate Investment Trusts (“Nareit”), which defines FFO as net income (loss) (determined in accordance with GAAP), excluding gains (losses) from sales of property and impairment write-downs of depreciable real estate, plus depreciation and amortization on real estate assets and after adjustments for unconsolidated partnerships and joint ventures (which are calculated to reflect FFO on the same basis).

We compute FFO in accordance with standards established by Nareit, which defines FFO as net income (loss) (determined in accordance with GAAP), excluding gains (losses) from sales of property and impairment write-downs of depreciable real estate, plus depreciation and amortization on real estate assets and after adjustments for unconsolidated partnerships and joint ventures (which are calculated to reflect FFO on the same basis).

We believe that presenting FFO provides useful information to investors regarding our operating performance because it is a measure of our operations without regard to specified non-cash items, such as real estate depreciation and amortization and gain or loss on sale of assets.

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As a result, we believe that the use of FFO, together with the required GAAP presentations, provide a more complete understanding of our operating performance.

The following table reflects the calculation of FFO reconciled from net income for the three months and years ended December 31, 2022, 2021 and 2020:

The following table reflects the calculation of FFO reconciled from net income for the three months and years ended December 31, 2023, 2022 and 2021 (dollars in thousands except per share data):

For the Three Months Ended December 31, For the Three Months Ended December 31,

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$ 57,557 $ 58,880 $ (1,323) (2.2) % $ 58,880 $ 32,259 $ 26,621 82.5 %

Gain on sales of real estate investments (36,118) (13,442) (22,676) 168.7 % (13,442) — (13,442) n/a

Gain on sales of real estate investments (25,899) (36,118) 10,219 (28.3) % (36,118) (13,442) (22,676) 168.7 %

Depreciation and amortization 18,583 18,536 47 0.3 % 18,536 13,707 4,829 35.2 %

Non-real estate depreciation (16) (22) 6 (27.3) % (22) (11) (11) n/a

Non-real estate depreciation (40) (16) (24) 150.0 % (16) (22) 6 (27.3) %

Allocation to participating securities 1

(243) (192) (51) 26.6 % (192) (126) (66) 52.4 %

Funds from operations attributable to common stockholders 2

FFO attributable to common stockholders

$ 49,958 $ 41,090 $ 8,868 21.6 % $ 41,090 $ 32,376 $ 8,714 26.9 %

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$ 0.58 $ 0.54 $ 0.04 7.4 % $ 0.54 $ 0.44 $ 0.10 22.7 %

Weighted average basic common shares

Basic weighted average common shares outstanding

85,550,842 76,048,579 76,048,579 73,380,519

Weighted average diluted common shares

Diluted weighted average common shares outstanding

85,647,463 76,145,382 76,145,382 73,735,244

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(876) (656) (220) 33.5 % (656) (428) (228) 53.3 %

Funds from operations attributable to common stockholders 2

$ 150,883 $ 120,812 $ 30,071 24.9 % $ 120,812 $ 98,338 $ 22,474 22.9 %

FFO attributable to common stockholders $ 185,497 $ 150,883 $ 34,614 22.9 % $ 150,883 $ 120,812 $ 30,071 24.9 %

Basic FFO per common share $ 2.23 $ 2.00 $ 0.23 11.5 % $ 2.00 $ 1.71 $ 0.29 17.0 %

Diluted FFO per common share $ 2.22 $ 2.00 $ 0.22 11.0 % $ 2.00 $ 1.71 $ 0.29 17.0 %

Weighted average basic common shares 75,498,107 70,534,202 70,534,202 67,762,927

Weighted average diluted common shares 75,586,480 70,793,670 70,793,670 68,170,066

1 To be consistent with our policies of determining whether instruments granted in share-based payment transactions are participating securities and accounting for earnings per share, the FFO per common share is adjusted for FFO distributed through declared dividends (if any) and allocated to all participating securities (weighted average common shares outstanding and unvested restricted shares outstanding) under the two-class method.

Under this method, allocations were made to 356,796, 288,976 and 203,729 of weighted average unvested restricted shares outstanding for

the three months ended December 31, 2022, 2021 and 2020, respectively, and 322,866, 245,075 and 341,673 of weighted average unvested restricted shares outstanding for the years ended December 31, 2022, 2021 and 2020, respectively.

2 Includes performance share award expense of approximately $1.3 million, $1.3 million and $2.9 million for the three months ended December 31, 2022, 2021 and 2020, respectively, and approximately $4.5 million, $5.3 million and $6.6 million for the years ended December 31, 2022, 2021 and 2020, respectively.

See “Note 10 – Stockholders’ Equity” in our notes to consolidated financial statements for more information regarding our performance share awards.

Basic weighted average common shares outstanding

83,169,028 75,498,107 75,498,107 70,534,202

Diluted weighted average common shares outstanding

83,371,099 75,586,480 75,586,480 70,793,670

shares outstanding and unvested restricted shares outstanding) under the two-class method.

Under this method, allocations were made to 419,230, 356,796 and 288,976 of weighted average unvested restricted shares outstanding for the three months ended December 31, 2023, 2022 and 2021, respectively, and 393,059, 322,866 and 245,075 of weighted average unvested restricted shares outstanding for the years ended December 31, 2023, 2022 and 2021, respectively.

FFO increased by approximately $8.9 million and $34.6 million for the three months and year ended December 31, 2023, respectively, compared to the same periods from the prior year due primarily to property acquisitions during 2022 and 2023 as well as same store NOI growth of approximately $3.0 million and $15.8 million for the three months and year ended December 31, 2023, respectively, compared to the same periods from the prior year.

The FFO increase was partially offset by increased weighted average common shares outstanding and increased general and administrative expenses due to increased restricted stock amortization and other compensation expenses, including an increase in bonus expense and an increase in the number of employees and salaries for the three months and year ended December 31, 2022 compared to the same periods from the prior year.

Acquisition costs and other also increased for the year ended December 31, 2022 due to environmental remediation at our Avenue A property.

Additionally, for the three months ended December 31, 2022, we wrote off $2.0 million in below market leases related to early lease terminations at multiple properties.

The FFO increase was partially offset by increased weighted average common shares outstanding, increased interest expense due to higher average interest rates on the unsecured term loans and credit facility and increased general and administrative expenses.

In addition, approximately $0.2 million and $0.6 million of bad debt expense related to DirectBuy Home Improvement was recorded for the three months and year ended December 31, 2023, respectively.

During the three months ended December 31, 2022, we wrote off $2.0 million in below market leases related to early lease terminations at multiple properties and during the year ended December 31, 2022, acquisition costs and other increased due to environmental remediation at our Avenue A property.

We compute Adjusted EBITDA as earnings before interest, taxes, depreciation and amortization, gain on sales of real estate investments, acquisition costs and stock-based compensation.

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As we are currently in a growth phase, acquisition costs are excluded from Adjusted EBITDA to allow for the comparison of our operating performance to that of stabilized companies.

The following table reflects the calculation of Adjusted EBITDA reconciled from net income for the three months and years ended December 31, 2022, 2021 and 2020:

The following table reflects the calculation of Adjusted EBITDA reconciled from net income for the three months and years ended December 31, 2023, 2022 and 2021 (dollars in thousands):

For the Three Months Ended December 31, For the Three Months Ended December 31,

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Net income $ 57,557 $ 58,880 $ (1,323) (2.2) % $ 58,880 $ 32,259 $ 26,621 82.5 %

Gain on sales of real estate investments (36,118) (13,442) (22,676) 168.7 % (13,442) — (13,442) n/a

Gain on sales of real estate investments (25,899) (36,118) 10,219 (28.3) % (36,118) (13,442) (22,676) 168.7 %

Depreciation and amortization 18,583 18,536 47 0.3 % 18,536 13,707 4,829 35.2 %

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Stock-based compensation 3,343 2,653 690 26.0 % 2,653 2,547 106 4.2 %

Acquisition costs and other 374 — 374 n/a — 85 (85) n/a

Acquisition costs and other 92 374 (282) (75.4) % 374 — 374 n/a

Adjusted EBITDA $ 59,383 $ 51,782 $ 7,601 14.7 % $ 51,782 $ 40,278 $ 11,504 28.6 %

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We compute cash-basis same store NOI as same store NOI excluding straight-line rents and amortization of lease intangibles.

The same store pool includes all properties that were owned and in operation as of December 31, 2022 and since January 1, 2021 and excludes properties that were either disposed of prior to, held for sale to a third party or in redevelopment as of December 31, 2022.

The same store pool includes all properties that were owned and in operation as of December 31, 2023 and since January 1, 2022 and excludes properties that were either disposed of prior to, held for sale to a third party or in development or redevelopment as of December 31, 2023.

As of December 31, 2023, the same store pool consisted of 224 buildings aggregating approximately 13.1 million square feet representing approximately 81.5% of our total square feet owned and 36 improved land parcels containing approximately 113.7 acres representing approximately 74.6% of our total acreage owned.

The same store pool for the comparison of the three months and years ended December 31, 2021 and 2020 includes all properties that were owned and in operation as of December 31, 2021 and since January 1, 2020 and excludes properties that were either disposed of prior to, held for sale to a third-party or in redevelopment as of December 31, 2021.

The same store pool for the comparison of the three months and years ended December 31, 2022 and 2021 includes all properties that were owned and in operation as of December 31, 2022 and since January 1, 2021 and excludes properties that were either disposed of prior to, held for sale to a third-party or in development or redevelopment as of December 31, 2022.

As of December 31, 2022, the same store pool consisted of 197 buildings aggregating approximately 12.1 million square feet representing approximately 79.4% of our total square feet owned and 24 improved land parcels containing approximately 91.5 acres representing approximately 56.7% of our total acreage owned.

1 unchanged sentence

By presenting same store NOI and cash-basis same store NOI, the operating results on a same store basis are directly comparable from period to period.

The following table reflects the calculation of NOI, same store NOI and cash-basis same store NOI reconciled from net income for the three months and years ended December 31, 2022, 2021 and 2020:

The following table reflects the calculation of NOI, same store NOI and cash-basis same store NOI reconciled from net income for the three months and years ended December 31, 2023, 2022 and 2021 (dollars in thousands):

For the Three Months Ended December 31, For the Three Months Ended December 31,

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General and administrative 9,730 8,193 1,537 18.8 % 8,193 7,716 477 6.2 %

Acquisition costs and other 374 — 374 n/a — 85 (85) n/a

Total other income and expenses (29,059) (8,372) (20,687) 247.1 % (8,372) 4,127 (12,499) n/a

Acquisition costs and other 92 374 (282) (75.4) % 374 — 374 n/a

Total other income and expenses (21,127) (29,059) 7,932 (27.3) % (29,059) (8,372) (20,687) 247.1

Net operating income 64,835 56,924 7,911 13.9 % 56,924 45,310 11,614 25.6 %

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$ 3,043 6.2 % $ 40,997 5

$ 2,484 6.4 %

Less straight-line rents and amortization of lease intangibles 6

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1 Includes approximately $0.2 million, $0.6 million and $0.1 million of lease termination income for the three months ended December 31, 2023, 2022 and 2021, respectively.

2 Includes 2021 and 2022 acquisitions and dispositions, 22 improved land parcels, three properties under redevelopment and four completed redevelopment properties as of December 31, 2022.

3 Includes 2020 and 2021 acquisitions and dispositions, 17 improved land parcels, four properties under redevelopment and one completed redevelopment property as of December 31, 2022.

4 Includes approximately $0.1 million of lease termination income for the three months ended December 31, 2022, 2021 and 2020.

3 Includes 2021 and 2022 acquisitions and dispositions, 22 improved land parcels and three properties under development or redevelopment.

4 Includes $0.2 million and $0.6 million of lease termination income for the three months ended December 31, 2023 and 2022, respectively.

5 Includes $0.1 million of lease termination income for both the three months ended December 31, 2022 and 2021.

6 Includes straight-line rents and amortization of lease intangibles for the same store pool only.

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General and administrative 37,935 31,192 6,743 21.6 % 31,192 26,964 4,228 15.7 %

Acquisition costs 1,465 172 1,293 751.7 % 172 271 (99) (36.5) %

Total other income and expenses (89,125) 605 (89,730) n/a 605 (11,642) 12,247 n/a

Acquisition costs and other 218 1,465 (1,247) (85.1) % 1,465 172 1,293 751.7 %

Total other income and expenses (18,324) (89,125) 70,801 (79.4) % (89,125) 605 (89,730) n/a

Net operating income 244,505 207,309 37,196 17.9 % 207,309 165,682 41,627 25.1 %

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$ 15,827 8.6 % $ 159,157 5

$ 10,954 7.4 %

Less straight-line rents and amortization of lease intangibles 6

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1 Includes approximately $0.6 million, $0.9 million and $1.0 million of lease termination income for the years ended December 31, 2023, 2022 and 2021, respectively.

2 Includes 2021 and 2022 acquisitions and dispositions, 22 improved land parcels consisting of approximately 69.9 acres, three properties under redevelopment and four completed redevelopment properties as of December 31, 2022.

3 Includes 2020 and 2021 acquisitions and dispositions, 17 improved land parcels consisting of approximately 47.5 acres, four properties under redevelopment and one completed redevelopment property as of December 31, 2022.

4 Includes approximately $0.4 million, $0.8 million and $3.7 million of lease termination income for the years ended December 31, 2022, 2021 and 2020, respectively.

3 Includes 2021 and 2022 acquisitions and dispositions, 22 improved land parcels and three properties under development or redevelopment.

4 Includes approximately $0.3 million and $0.9 million of lease termination income for the years ended December 31, 2023 and 2022, respectively.

5 Includes approximately $0.4 million and $0.8 million of lease termination income for the years ended December 31, 2022 and 2021, respectively.

6 Includes straight-line rents and amortization of lease intangibles for the same store pool only.

Cash-basis same store NOI increased by approximately $3.8 million for the three months ended December 31, 2022 compared to the same period from the prior year primarily due to increased rental revenue on new and renewed leases and contractual rent increases included in pre-existing leases.

Cash-basis same store NOI increased by approximately $5.3 million for the three months ended December 31, 2023 compared to the same period from the prior year primarily due to increased rental revenue on new and renewed leases and contractual rent increases on pre-existing leases.

For the three months ended December 31, 2023 and 2022, total contractual rent abatements of approximately $0.3 million and $1.3 million, respectively, were given to certain tenants in the same store pool and approximately $0.2 million and $0.6 million, respectively, in lease termination income was received from certain tenants in the same store pool.

In addition, approximately $0.3 million of the increase in cash-basis same store NOI for the three months ended December 31, 2023 related to properties that were acquired vacant or with near term expirations in 2021.

Cash-basis same store NOI increased by approximately $14.6 million for the year ended December 31, 2022 compared to the prior year primarily due to increased rental revenue on new and renewed leases and increased occupancy.

Cash-basis same store NOI increased by approximately $22.4 million for the year ended December 31, 2023 compared to the prior year primarily due to increased rental revenue on new and renewed leases.

For the years ended December 31, 2023 and 2022, total contractual rent abatements of approximately $3.2 million and $4.3 million, respectively, were given to certain tenants in the same-store pool and approximately $0.3 million and $0.9 million, respectively, in lease termination income was received from certain tenants in the same store pool.

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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 7. Management’s Discussion and Analysis