EPRT 10-K & 10-Q changes, risk factors and insider trading

Geographic, industry and tenant concentrations expose us to greater economic or regulatory risks than if we owned a more diverse portfolio. Our business includes substantial holdings in the following states as of December 31, 20242025 (based on annualized base rent): Texas (12.6%12.7%), Florida (7.4%), Georgia (7.3%), Florida (6.4%6.5%), Ohio (5.7%5.4%) and Wisconsin (5.0%4.6%). We are susceptible to adverse developments in the economic or regulatory environments of the geographic areas in which we own substantial assets (or in which we may develop a substantial concentration of assets in the future), such as business layoffs or downsizing, industry slowdowns, relocations of businesses, severe weather events, public health crises, increases in real estate and other taxes or costs of complying with governmental regulations.

Our results of operations depend to a significant degree on our ability to continue to lease our properties, including renewing expiring leases, leasing vacant space and re-leasing space in properties where leases are expiring. As of December 31, 2024,2025, our occupancy was 99.7% and leases representing approximately 5.8%5.2% of our annualized base rent as of such date will expire prior to 2030.January 1, 2031. Current tenants may decline to renew leases and we may not be able to find replacement tenants. We cannot guarantee that leases that are renewed or new leases will have terms that are as economically favorable to us as the expiring leases, or that substantial rent abatements, tenant improvement allowances, early termination rights or below-market renewal options will not be offered to retain tenants or attract new tenants or that we will be able to lease a property at all. We may experience significant costs in connection with re-leasing a significant number of our properties, which could materially and adversely affect us.

Most of our portfolio is leased to tenants operating service-oriented or experience-based businesses at our properties. As of December 31, 2024,2025, the largest industries in our portfolio were restaurants (including quick service, casual dining and family dining), car washes, early childhood education, medical and dental services, early childhood education, , entertainment (including movie theaters), automotive service, convenience stores, and equipment rental and sales, and convenience stores.sales. As of December 31, 2024,2025, tenants operating in those industries represented approximately 84.3%82.8% of our annualized base rent. EquipmentShare, Crunch Fitness, Whistle Express Car Wash, Chicken N Pickle, Allsup's/YesWay, CaptainPrimrose D's,School, Super Star Car Wash, PopsJohn Mart,Deere, TidalCaptain Wave Auto Spa, Festival Foods,D's, and RedFlagstop RobinCar Gourmet Burgers & BrewsWash represent the largest concepts in our portfolio. These types of businesses depend on the willingness of consumers to physically patronize their businesses and use discretionary income to purchase their products or services. To the extent that consumer behavior changes in a manner that reduces patronage of service-based and/or experience-based businesses, for example due to public health concerns, many of our tenants would be adversely affected and their ability to meet their obligations to us could be impaired. Additional adverse economic conditions and other developments that discourage consumer spending, such as high unemployment levels, wage stagnation, interest rates, inflation, tax rates and fuel and energy costs, may have an adverse impact on the results of operations and financial conditions of our tenants and their ability to pay rent to us.

Our Board, in its sole and absolute discretion, may exempt a person, prospectively or retroactively, from these ownership limits if certain conditions are satisfied. The restrictions on ownership and transfer of our stock may, among other things: discourage a tender offer or other transaction or a change in management or of control that might involve a premium price for our common stock or that our stockholders otherwise believe to be in their best interests; or result in the transfer of shares acquired in excess of the ownership restrictions to a trust for the benefit of one or more charitable beneficiaries and, as a result, the forfeiture by the acquirer of the benefits of owning the additional shares.

Our bylaws designate the Circuit Court for Baltimore City, MarylandMaryland, as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit stockholders' ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees and could discourage lawsuits against us and our directors, officers and employees.

Our investment and financing policies are exclusively determined by our Board. Accordingly, our stockholders do not control these policies. Further, our organizational documents do not limit the amount or percentage of indebtedness, funded or otherwise, that we may incur. Although we are not required by our organizational documents to maintain a particular leverage ratio and may not be able to do so, we generally intend to target a level of pro forma net debt (which includes recourse and non-recourse borrowings and any outstanding preferred stock issuance less unrestricted cash and cash equivalentsequivalents, restricted cash available for future investment and estimated proceeds from unsettled forward equity sale agreements assuming full physical settlement) that, over time, is less than six5.5 times our Annualized Adjusted EBITDAre. However, from time to time, our ratio of pro forma net debt to our Annualized Adjusted EBITDAre may equal or exceed six5.5 times. Our Board may alter or eliminate our current policy on borrowing at any time without stockholder approval. If this policy changed, we could become more highly leveraged, which could result in an increase in our debt service and 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. Changes to our policies with regard to the foregoing could materially and adversely affect us.

As permitted by Maryland law, our charter limits the liability of our directors and officers to us and our stockholders for money damages to the maximum extent permitted by Maryland law. Therefore, our directors and officers are subject to monetary liability resulting only from: actual receipt of an improper benefit or profit in money, property or services; or active and deliberate dishonesty by the director or officer that was established by a final judgment asand beingwas material to the cause of action adjudicated.

As a result, we and our stockholders have rights against our directors and officers that are more limited than might otherwise exist. Accordingly, if actions taken by any of our directors or officers impede the performance of our company, your and our ability to recover damages from such director or officer will be limited. In addition, our charter requires us to indemnify our directors and officers for actions taken by them in those and certain other capacities to the maximum extent permitted by Maryland law.law and to advance their expenses before the final disposition of the proceeding.

Conflicts of interest could arise in the future as a result ofbetween the relationshipsinterests betweenof us and our stockholders, on the one hand, and the interests of our Operating Partnership and its limited partners, on the other. Under the terms of the partnership agreement of our Operating Partnership, if there is a conflict between the interests of our stockholders, on one hand, and any limited partners, on the other, we will endeavor in good faith to resolve the conflict in a manner not adverse to either our stockholders or any limited partners; provided, however, that so long as we own a controlling economic interest in our Operating Partnership, any conflict that cannot be resolved in a manner not adverse to either our stockholders or any limited partners shall be resolved in favor of our stockholders.

We elected to be taxed as a REIT for U.S. federal income tax purposes beginning with our taxable year ended December 31, 2018, and we believe that our current organization and operations have allowed and will continue to allow us to qualify as a REIT. We have not requested and do not plan to request a ruling from the Internal Revenue Service, or IRS, that we qualify as a REIT, and the statements in this Annual Report are not binding on the IRS or any court. Therefore, we cannot assure you that we will remain qualified as a REIT in the future. If we lose our REIT status, we will face significant tax consequences that would substantially reduce our cash available for distribution to our stockholders for each of the years involved because: we would not be allowed a deduction for distributions to stockholders in computing our taxable income and would be subject to U.S. federal income tax at the corporate rate; we also could be subject to increased state and local taxes; and unless we are entitled to relief under applicable statutory provisions, we could not elect to be taxed as a REIT for four taxable years following the year during which we were disqualified.

Qualification as a REIT involves the application of highly technical and complex Code provisions for which there are only limited judicial and administrative interpretations. The determination of various factual matters and circumstances not entirely within our control may affect our ability to continue to qualify as a REIT. In order to continue to qualify as a REIT, we must satisfy a number of requirements, including requirements regarding the ownership of our stock, requirements regarding the composition of our assets and a requirement that at least 95% of our gross income in any year must be derived from qualifying sources, such as “rents from real property.” Also, we must make distributions to stockholders aggregating annually at least 90% of our REIT taxable income, determined without regard to the dividends paid deduction and excluding any net capital gains. In addition, legislation, new regulations, administrative interpretations or court decisions may materially and adversely affect our investors, our ability to continue to qualify as a REIT for U.S. federal income tax purposes or the desirability of an investment in a REIT relative to other investments.

Even if we continue to qualify as a REIT for U.S. federal income tax purposes, 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 as a dealer. In addition, any taxable REIT subsidiaries will be subject to tax as regular corporations in the jurisdictions in which they operate.

If our Operating Partnership fails to qualify as a partnership for U.S. federal income tax purposes, we will cease to qualify as a REIT and suffer other adverse consequences.

We believe that our Operating Partnership will be treated as a partnership for U.S. federal income tax purposes and, as a result, will generally not be subject to U.S. federal income tax on its income. Instead, for U.S. federal income tax purposes each of the partners of the Operating Partnership, including us, will be allocated, and may be required to pay tax with respect to, such partner's share of its income. Our Operating Partnership will generally be required to determine and pay an imputed underpayment of tax (plus interest and penalties) resulting from an adjustment of the Operating Partnership's items of income, gain, loss, deduction or credit at the partnership level. We cannot assure you that the IRS will not challenge the tax classification of our Operating Partnership or any other subsidiary partnership in which we own an interest, or that a court will 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 U.S. federal income tax purposes, we will fail to meet the gross income tests and certain of the asset tests applicable to REITs and, accordingly, we will likely cease to qualify as a REIT. Also, the failure of our Operating Partnership or any subsidiary partnerships to qualify as a disregarded entity or partnership could cause it to become subject to U.S. federal and state corporate income tax, which will reduce significantly the amount of cash available for debt service and for distribution to its partners, including us.

To continue to qualify as a REIT, we generally must distribute to our stockholders at least 90% of our REIT taxable income each year, determined without regard to the dividends-paid deduction and excluding any net capital gains, and we will be subject to U.S. corporate income tax on our undistributed taxable income to the extent that we distribute less than 100% of our REIT taxable income, determined without regard to the dividends-paid deduction and including any net capital gains, each year. In addition, we will be subject to a 4% nondeductible excise tax on the amount, if any, by which distributions paid by us in any calendar year are less than the sum of 85% of our ordinary income, 95% of our capital gain net income and 100% of our undistributed income from prior years.

A significant portion of our investments were obtained through sale-leaseback transactions, where we purchase owner-occupied real estate and lease it back to the seller. We expect that a majority of our future investments will be obtained this way. The IRS may take the position that specific sale-leaseback transactions that we treat as leases are not true leases for U.S. federal income tax purposes but, instead, should be re-characterized as financing arrangements or loans.

The maximum tax rate applicable to income from "qualified dividends" payable to U.S. stockholders that are individuals, trusts and estates is 20%. Dividends payable by REITs, however, generally are not eligible for the 20% rate except to the extent the REIT dividends are attributable to "qualified dividends" received by the REIT itself. However, for non-corporate U.S. stockholders, dividends payable by REITs that are not designated as capital gain dividends or otherwise treated as "qualified dividends" generally are eligible for a deduction of 20% of the amount of such dividends, for taxable years beginning before January 1, 2026.dividends. More favorable rates will nevertheless continue to apply for regular corporate "qualified dividends." Although these rules do not adversely affect the taxation of REITs or dividends payable by REITs, if the 20% rate continues to apply to regular corporate qualified dividends, investors who are individuals, trusts and estates may regard investments in REITs to be relatively less attractive than investments in the stocks of non-REIT corporations.

The tax imposed on REITs engaging in “prohibited transactions” may limit our ability to engage in transactions which would be treated as sales for U.S. federal income tax purposes.

Because the IRS, the United States Treasury Department and Congress frequently review U.S. federal income tax legislation, we cannot predict whether, when or to what extent new U.S. federal tax laws, regulations, interpretations or rulings will be adopted. Any of such legislative actions may prospectively or retroactively modify our tax treatment and, therefore, may adversely affect taxation of us and/or our investors. For example, the Tax Cuts and Jobs Act of 2017 (the “TCJA”) hasand the 2025 One Big Beautiful Bill Act have significantly changed the U.S. federal income taxation of U.S. businesses and their owners, including REITs and their stockholders. You are urged to consult with your tax advisor with respect to the status of legislative, regulatory, judicial or administrative developments and proposals and their potential effect on an investment in our securities.

In the future, we may attempt to increase our capital resources by making additional offerings of debt or preferred equity securities, including by causing our Operating Partnership or its subsidiaries to issue additional debt securities, or by otherwise incurring additional indebtedness. Upon liquidation, holders of our debt securities, other lenders and creditors, and any holders of preferred stock with a liquidation preferencepreference, will receive distributions of our available assets prior to our stockholders. Additionally, any convertible or exchangeable securities that we issue in the future may have rights, preferences and privileges more favorable than those of our common stock and may result in dilution to owners of our common stock. Our stockholders are not entitled to preemptive rights or other protections against dilution. Our preferred stock, if issued, could have a preference on liquidating distributions or a preference on distribution payments that could limit our right to make distributions to our stockholders. 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. Our stockholders bear the risk of our future offerings reducing per share trading price of our common stock.

In addition, the regulatory framework around data custody, data privacy and breaches varies by jurisdiction and is an evolving area of law with increasingly complex and rigorous regulatory standards enacted to protect business and personal data in the United States. We may not be able to limit our liability or damages in the event of such a loss. Data protection legislation is becoming increasingly common in the United States at both the federal and state level and may require us to further modify our data processing practices and policies. Compliance with existing, proposed and recently enacted laws and regulations can be costly; any failure to comply with these regulatory standards could subject us to legal and reputational risks. Misuse of or failure to secure personal information could also result in violation of data privacy laws and regulations, proceedings against the Companyus by governmental entities or others, fines and penalties, or damage to our reputation and credibility with regulators, tenants and investors.

We were organized on January 12, 2018 as a Maryland corporation. We elected to be taxed as a REIT for U.S. federal income tax purposes beginning with the year ended December 31, 2018, and we believe that our current organization, operations and intended distributions will allow us to continue to so qualify. Our common stock is listed on the New York Stock ExchangeNYSE under the symbol “EPRT”.

Our primary business objective is to maximize stockholder value by generating attractive risk-adjusted returns through owning, managing and growing a diversified portfolio of commercially desirable properties. As of December 31, 2024,2025, we had a portfolio of 2,1042,300 properties (inclusive of one undeveloped land parcel and 150 properties which secure our investments in mortgage loans receivable) that was diversified by tenant, industry, concept and geography, had annualized base rent of $460.6$555.0 million and was 99.7% occupied. Our portfolio is built based on the following core investment attributes:

Diversification. As of December 31, 2024,2025, our portfolio was 99.7% occupied by 413 tenants operating 592659 different brands, or concepts, in 16 industries across 4948 states, with none of our tenants contributing more than 4.2%3.4% of our annualized base rent. Our goal is that, over time, no more than 5% of our annualized base rent will be derived from any single-tenant or more than 1% from any single property.

Significant Use of Sale-Leaseback Investments. We seek to acquire properties owned and operated by middle-market businesses and lease the properties back to the operators pursuant to our standard lease form. During the year ended December 31, 2024,2025, approximately 97.2%95% of our investments were sale-leaseback transactions.

As of December 31, 2024,2025, the net investment value of our income property portfolio totaled $5.6$6.6 billion, consisting of investments in 2,1042,300 properties (inclusive of one undeveloped land parcel and 150 properties which secure our investments in mortgage loans receivable), with annualized base rent of $460.6$555.0 million. Substantially all of our cash from operations is generated by our investment portfolio.

The liquidity requirements for operating our Company consist primarily of funding our investment activities, servicing our outstanding indebtedness and paying our general and administrative expenses and dividends as declared by our Board. The occupancy level of our portfolio is high (99.7% as of December 31, 20242025) and, because substantially all of our leases are triple-net (whereby our tenants are generally responsible for all maintenance, costs for operating the property, and insurance and property taxes associated with the leased properties), our liquidity requirements are not significantly impacted by property costs. When a property becomes vacant, we are required to pay the property costs not paid by a tenant, as well as those property costs accruing during the time it takes to locate a new tenant or to sell the property. As of December 31, 2024,2025, sevensix of our investment properties were vacant, significantly less than 1% of our portfolio, and all remaining properties were subject to a lease (excluding one undeveloped land parcel) or mortgage loan receivable. We expect to incur property costs from time to time in periods during which properties that become vacant are being marketed for lease or sale. In addition, we may recognize an expense for certain property costs, such as real estate taxes billed in arrears, if we believe the tenant is likely to vacate the property before making payment on those obligations. The amount of such property costs can vary quarter-to-quarter based on the timing of property vacancies and the level of underperforming properties; however, we do not expect that such costs will be significant to our operations.

We intend to continue to grow through additional investments in stand-alone single-tenant properties. To accomplish this objective, we seek to invest in real estate utilizing a combination of debt and equity capital and with cash from operations that we do not distribute to our stockholders. When we sell properties, we generally reinvest the cash proceeds from our sales in new single-tenant properties. Our short-term liquidity requirements also include the funding needs associated with 10474 properties where we have agreed to reimburse the tenant for certain development, construction, or renovation costs or to provide construction financing in exchange for contractual payments of interest or increased rent that generally increases in proportion with our level of funding. As of December 31, 2024,2025, we agreed to provide construction financing or reimburse the tenant for certain development, construction and renovation costs in an aggregate amount of $627.3$388.4 million, and, as of such date, we have funded $472.5$273.9 million of this commitment. We expect to fund the remaining commitment totaling approximately $154.8$114.5 million by December 31, 2025.2026.

Additionally, as of February 7,6, 2025,2026, we were under contract to acquire 131 propertiesproperty with an aggregate purchase price of $41.9$9.6 million, subject to completion of our due diligence procedures and satisfaction of customary closing conditions. We expect to meet our short-term liquidity requirements, including our construction financing and tenant reimbursement obligations and potential investment in future single-tenant properties, primarily with our cash and cash equivalents, net cash from operating activities, issuance of common stock subject to outstanding forward purchase commitments, borrowings under the Revolving Credit Facility and potentially through proceeds generated from asset sales and our October 2024 ATM Program, under which we may issueoffer and sell common stock with an aggregate gross sales price of up to $671.1$338.5 million as of February 7,6, 2025.2026.

An additional liquidity need is funding the required level of distributions, generally 90% of our REIT taxable income (determined without regard to the dividends paid deduction and excluding any net capital gain), that are among the requirements for us to continue to qualify for taxation as a REIT. Holders of OP Units and LTIP Units are entitled to distributions per unit equivalent to those paid by us per share of common stock. During the year ended December 31, 2024,2025, our Board declared total cash distributions of $1.16$1.205 per share of common stock/OP Unit/LTIP Unit totaling $208.1$243.7 million and $55.6$65.4 million is payable as of December 31, 2024.2025. To continue to qualify for taxation as a REIT, we must make distributions to our stockholders aggregating annually at least 90% of our REIT taxable income, determined without regard to the dividends paid deduction and excluding any net capital gain. As a result of this requirement, we cannot rely on retained earnings to fund our business needs to the same extent as other entities that are not REITs. If we do not have sufficient funds available to us from our operations to fund our business needs, we will need to find alternative ways to fund those needs. Such alternatives may include, among other things, selling properties (whether or not the sales price is optimal or otherwise meets our strategic long-term objectives), incurring additional indebtedness or issuing equity securities in public or private transactions. The availability and attractiveness of the terms of these potential sources of financing cannot be assured.

Generally, our short-term debt capital needs are provided through the use of our Revolving Credit Facility. We manage our long-term leverage position through the issuance of long-term fixed-rate debt on an unsecured or secured basis. Generally, we will seek to issue long-term debt on an unsecured basis as we believe this facilitates greater flexibility in the management of our portfolio and our ability to retain optionality in our overall financing and growth strategy. By seeking to match the expected cash inflows from our long-term income producing investments with the expected cash outflows for our long-term debt, we seek to "lock in," for as long as is economically feasible, the expected positive spread between our scheduled cash inflows from our investments and the cash outflows on our debt obligations. In this way, we seek to reduce the risk that increases in interest rates would adversely impact our cash flows and results of operations. Our ability to execute leases that contain annual rent escalations also contributes to our ability to manage the risk of a rising interest rate environment. We use various financial instruments designed to mitigate the impact of interest rate fluctuations on our cash flows and earnings, including hedging strategies such as interest rate swaps and caps, depending on our analysis of the interest rate environment and the costs and risks of such strategies. Although we are not required to maintain a particular leverage ratio and may not be able to do so, we generally consider that, over time, a level of pro forma net debt (which includes recourse and non-recourse borrowings and any outstanding preferred stock less cash and cash equivalents andequivalents, restricted cash available for future investment and estimated proceeds from unsettled forward equity contracts assuming full physical settlement) that is less than six5.5 times our annualized adjusted EBITDAre is prudent for a real estate company like ours.

The Company and the Operating Partnership have filed a registration statement on Form S-3 with the SEC registering, among other securities, debt securities of the Operating Partnership, which, unless otherwise specified, will be fully and unconditionally guaranteed by the Company. At December 31, 2024,2025, the Operating Partnership had issued and outstanding $400.0$800.0 million of senior notes. The obligations of the Operating Partnership under thethese senior notes are guaranteed on a senior basis by the Company. The guarantee is full and unconditional, and the Operating Partnership is a consolidated subsidiary of the Company.

Through our Operating Partnership, we are party to an Amended and Restated Credit Agreement with a group of lenders, which was most recently amended on February 6, 2025 (the "Amended Credit Agreement"), and provides for revolving loans of up to $1.0 billion (the "Revolving Credit Facility") and an additional $1.3 billion of term loans, consisting of a $400.0 million term loan (the "2028 Term Loan"), a $450.0 million term loan (the “2029 Term Loan”) and a $450.0 million term loan (the "2030 Term Loan" and, together with the 2028 Term Loan and 2029 Term Loan, the “CF Term Loans”). All principal amounts available under the CF Term Loans were drawn prioras toof December 31, 2024.2025.

The Revolving Credit Facility has a fully-extended maturity date of February 6, 2030, after giving effect to two extension options of six months each, exercisable by the Operating Partnership, subject to the satisfaction of certain conditions. The 2028 Term Loan matures on January 25, 2028, the 2029 Term Loan has an original maturity of three years, plus extension options at the Operating Partnership's election, which can extend the maturity to February 24, 2029 and the 2030 Term Loan has an original maturity of three years, plus extension options at the Operating Partnership's election, which can extend the maturity to January 11, 2030. The loans under each of the Revolving Credit Facility and the CF Term Loans initially bear interest at an annual rate of applicable Adjusted Term SOFR (as defined in the Amended Credit Agreement) plus an applicable margin (which applicable margin varies between the Revolving Credit Facility and the CF Term Loans). The Adjusted Term SOFR is a rate with a term equivalent to the interest period applicable to the relevant borrowing. In addition, the Operating Partnership is required to pay a revolving facility fee throughout the term of the Revolving Credit Facility. The applicable margin and the revolving facility fee rate are a spread and rate, as applicable, set according to the credit ratings provided by S&P, Moody's and/or Fitch.

Each of the Revolving Credit Facility and the CF Term Loans is freely pre-payable at any time. Outstanding credit extensions under the Revolving Credit Facility are mandatorily payable if the amount of such credit extensions exceeds the revolving facility limit. The Operating Partnership may re-borrow amounts paid down on the Revolving Credit Facility prior to its maturity. Loans repaid under the CF Term Loans cannot be reborrowed. The Amended Credit Agreement has an accordion feature to increase, subject to certain conditions, the maximum availability of credit (either through increased revolving commitments or additional term loans) by up to $1.0 billion.

The Operating Partnership is the borrower under the Amended Credit Agreement, and we and certain of the subsidiaries of the Operating Partnership that own a direct or indirect interest in an eligible real property asset are guarantors under the Amended Credit Agreement. Under the terms of the Amended Credit Agreement, we are subject to customary restrictive financial and nonfinancial covenants which, among other things, require us to maintain certain leverage ratios, cash flow and debt service coverage ratios andratios, secured borrowing ratios. As of December 31, 2024,2025, we were in compliance with these covenants.

The Amended Credit Agreement also restricts our ability to pay distributions to our stockholders under certain circumstances. However, we may make distributions to the extent necessary to maintain our qualification as a REIT under the Code. In addition to the financial covenants described above, the Amended Credit Agreement contains customary affirmative and negative covenants that, among other things and subject to exceptions, limit or restrict our ability to incur indebtedness and liens, consummate mergers or other fundamental changes, dispose of assets, make certain restricted payments, make certain investments, modify our organizational documents, transact with affiliates, change our fiscal periods, provide negative pledge clauses, make subsidiary distributions, enter into certain new lines of business or engage in certain activities, and fail to meet the requirements for taxation as a REIT.

Through our Operating Partnership, we are party to a $430.0 million term loan (the “2027 Term Loan”) that matures in February 2027. The borrowings under the 2027 Term Loan,Loan as amended, bearbears interest at an annual rate of applicable Adjusted Term SOFR (as defined in the Credit Agreement) plus an applicable margin. The applicable Adjusted Term SOFR is athe rate withfor a term equivalent to the interest period applicable to the relevant borrowing. The applicable margin was initially a spread set according to a leverage-based pricing grid. In May 2022, the Operating Partnership made an irrevocable election to have the applicable margin beis a spread set according to the Company’s corporate credit ratings provided by S&P, Moody’s and/or Fitch. The 2027 Term Loan is pre-payable at any time by the Operating Partnership without penalty. The 2027 Term Loan has an accordion feature to increase, subject to certain conditions, the maximum availability of the facility up to an aggregate of $500.0 million.

OnIn June 22, 2021, the Operating Partnership issued $400.0 million aggregate principal amount of 2.950% Senior Notes due 2031 (the "2031 Notes"), resulting in net proceeds of $396.6 million. In August 2025, the Operating Partnership issued $400.0 million aggregate principal amount of 5.400% Senior Notes due 2035 (the "2035 Notes" and, together with the 2031 Notes, the "Senior Notes"), resulting in net proceeds of $390.7 million. The 2031Senior Notes were issued by the Operating Partnership and the obligations of the Operating Partnership under the 2031Senior Notes are fully and unconditionally guaranteed on a senior basis by the Company.

The indenture and supplemental indenture creating the 2031Senior Notes contain customary restrictive covenants, including limitations on our ability to incur additional secured and unsecured indebtedness. As of December 31, 2024,2025, we were in compliance with these covenants.

We grant shares of restricted common stock ("RSAs") and, restricted stock units ("RSUs"), and long-term incentive plan units ("LTIP Units") in our Operating Partnership to our directors, executive officers and other employees that vest over multiple periods, subject to the recipient's continued service. We also grant performance-based RSUs and performance-based LTIP Units to our executive officers, the final number of which is determined based on objective andand, with respect to performance-based RSUs issued prior to 2024, subjective performance conditions and which vest over a multi-year period, subject to the recipient's continued service. WeLTIP accountUnits forare RSAsa class of partnership units issued by our Operating Partnership which are convertible into OP Units upon satisfaction of certain conditions, including, depending upon the particular award, those relating to vesting periods or performance criteria, and RSUscontinued in accordance with ASC 718, Compensation – Stock Compensation, which requires that such compensation be recognized in the financial statements based on its estimated grant-date fair value. The value of such awards is recognized as compensation expense in general and administrative expenses in the accompanying consolidated statements of operations over the applicable service periods.service.

Rental revenue. Rental revenue increased by $85.9$101.8 million for the year ended December 31, 2024,2025 as compared to the year ended December 31, 2023.2024. The increase in rental revenue was driven primarily by the growth in the size of our real estate investment portfolio, which generated additional revenues. Our real estate investment portfolio which grew byfrom 2171,947 rental properties, orrepresenting 12%,$5.2 sincebillion in total real estate investments, net, as of December 31, 2023.2024 Ato portion2,142 rental properties, representing $6.2 billion in total real estate investments, net, as of ourDecember 31, 2025. Our real estate investments were acquired throughout the periods presented and were not all owned by us for the entirety of the applicable periods; accordingly, a significant portion of the increase in rental revenue between periods is related to recognizing revenue in 20242025 from acquisitions that were made during 20232024 and 2024.2025.

Interest on loans and direct financing lease receivables. Interest on loans and direct financing lease receivables increased by $5.3$8.2 million duringfor the year ended December 31, 2024,2025, as compared to the year ended December 31, 2023, primarily2024, due to thean increase in ourinvestments mortgagein loans receivable portfolio during 2024,2025, which ledleading to a higher average daily balance of loans receivable outstanding during the year ended December 31, 2024.2025.

Other revenue, net. Other revenue forincreased by $1.6 million during the year ended December 31, 2024 decreased by $1.1 million,2025, as compared to the year ended December 31, 2023,2024, primarily due to the receipt of insurancenon-recurring claimlease proceeds and higher loan prepaymenttermination fees received during the year ended December 31, 2023.2025.

General and administrative. General and administrative expense increased by $4.5$5.7 million for the year ended December 31, 2024,2025, as compared to the year ended December 31, 2023,2024. The increase was primarily duerelated to an increase in non-cash share-based compensation, salary expense and professional fees incurred during the year ended December 31, 2024.2025.

Depreciation and amortization. Depreciation and amortization expense increased by $19.9$31.4 million for the year ended December 31, 2024,2025, as compared to the year ended December 31, 2023.2024. Depreciation and amortization expense increased in proportion to the general increase in the size of our real estate investment portfolio during the year ended December 31, 2024.2025.

Provision for impairment of real estate. Impairment charges on real estate investments were $14.8$12.0 million and $3.5$14.8 million for the years ended December 31, 20242025 and 2023,2024, respectively. During the years ended December 31, 20242025 and 2023,2024, we recorded a provision for impairment of real estate on 2214 and eight22 of our real estate investments, respectively.

Change in provision for credit losses. DuringThe the year ended December 31, 2024, our provision for credit losses increased by $0.2 million, compared to a $0.1 million decreasechange in our provision for credit losses in our loan portfolio decreased by $0.1 million during the year ended December 31, 2023.2025, as compared to the year ended December 31, 2024. Under ASC 326, we are required to re-evaluate the expected loss on our portfolio of loans and direct financing lease receivables at each balance sheet date. Changes in our provision for creditloan losses are driven by revisions to global and asset-specificloan-specific assumptions in our creditloan loss model and by changes in the size of our loan and direct financing lease portfolio.

Gain on dispositions of real estate, net. Gain on dispositions of real estate, net, decreasedincreased by $18.2$6.9 million for the year ended December 31, 2024,2025, as compared to the year ended December 31, 2023.2024. We disposed of 60 and 46 real estate properties during the year ended December 31, 2025 and 2024, compared to 52 real estate properties during the year ended December 31, 2023. Overall, our 2024 dispositions had a lower sales price in relation to their net book value as compared to our 2023 dispositions.respectively.

Interest income. Interest income increaseddecreased by $1.1$0.5 million for the year ended December 31, 2024,2025, as compared to the year ended December 31, 2023.2024. The increasedecrease in interest income was primarily due to ana increasedecrease in interest rates on our short-term investments during the year ended December 31, 20242025 as compared to the year ended December 31, 2023.2024.

Income tax expense. Income tax expense decreasedincreased by approximately $8,000$16,000 for the year ended December 31, 2024,2025, as compared to the year ended December 31, 2023.2024. We are organized and operate as a REIT and are generally not subject to U.S. federal corporate income taxes on our REIT taxable income that is currently distributed to our stockholders. However, the Operating Partnership is subject to taxation in certain state and local jurisdictions that impose income taxes on a partnership.

Our reported results are presented in accordance with GAAP. We also disclose the following non-GAAP financial measures: funds from operations ("“FFO"”), core funds from operations ("“Core FFO"”), adjusted funds from operations ("“AFFO"”), earnings before interest, taxes, depreciation and amortization ("“EBITDA"”), EBITDA further adjusted to exclude gains (or losses) on sales of depreciable property and real estate impairment losses ("“EBITDAre"”), adjusted EBITDAre, annualized adjusted EBITDAre, net debt, net operating income ("“NOI"”), cash NOI (“Cash NOI”) and cash NOIgeneral and administrative expense ("Cash NOIG&A"). We believe these non-GAAP financial measures are industry measures used by analysts and investors to compare the operating performance of REITs.

We compute Core FFO by adjusting FFO, as defined by NAREIT, to exclude certain GAAP income and expense amounts that we believe are infrequent and unusual in nature and/or not related to our core real estate operations. Exclusion of these items from similar FFO-type metrics is common within the equity REIT industry, and management believes that presentation of Core FFO provides investors with a metric to assist in their evaluation of our operating performance across multiple periods and in comparison to the operating performance of our peers, because it removes the effect of unusual items that are not expected to impact our operating performance on an ongoing basis. Core FFO is used by management in evaluating the performance of our core business operations. Items included in calculating FFO that may be excluded in calculating Core FFO include certain transaction related gains, losses, income or expensesexpense or other non-core amounts as they occur.

To derive AFFO, we modify our computation of Core FFO to include other adjustments to GAAP net income related to certain items that we believe are not indicative of our operating performance, including straight-line rental revenue, non-cash interest expense,interest, non-cash compensation expense, other amortization expense, other non-cash chargesadjustments and capitalized interest expense. Such items may cause short-term fluctuations in net income but have no impact on operating cash flows or long-term operating performance. We believe that AFFO is an additional useful supplemental measure for investors to consider when assessing our operating performance without the distortions created by non-cash items and certain other revenues and expenses.

(1)Includes $0.1the million loss on debt extinguishment, $0.9 millionrecognition of insurance recovery income and $0.4$2.4 million of cash and non-cash separationcompensation costsexpense withthat was not incurred due to the departuresdeparture of a junioran executive and a Board member during the year ended December 31, 2023.2025.

(2)Adjustment is made to i) exclude non-core adjustments made in computing Core FFO, if any, ii) exclude changes in our provision for credit losses and iii) eliminate the impact of seasonal fluctuation in certain non-cash compensation expense recorded in the period.

We compute NOI as total revenues less property expenses. NOI excludes all other items of expense and income included in the financial statements in calculating net income or lossloss, in accordance with GAAP. Cash NOI further excludes non-cash items included in total revenues and property expenses, such as straight-line rental revenue and other amortization and non-cash charges.adjustments. We believe NOI and Cash NOI provide useful and relevant information because they reflect only those revenue and expense items that are incurred at the property level and present such items on an unlevered basis.

ThereExcept as set forth below, there have been no material changes to the risk factors as disclosed in the section entitled “Risk Factors” beginning on page 16 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 and filed with the SEC on February 11, 2026. The following additional risk factor should be read in conjunction with the risk factors previously disclosed in such Annual Report. These risk factors may not describe every risk facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and results of operations.

We are an internally managed real estate company that acquires, owns and manages primarily single-tenant properties that are net leased on a long-term basis to middle-market companies operating service-oriented or experience-based businesses. We generally invest in and lease freestanding, single-tenant commercial real estate facilities where a tenant services its customers and conducts activities that are essential to the generation of the tenant’s sales and profits. As of MarchJune 31,30, 2026, 91.6% of our $584.2$604.9 million of annualized base rent was attributable to properties operated by tenants in service-oriented and experience-based businesses. "Annualized base rent" means annualized contractually specified cash base rent in effect on MarchJune 31,30, 2026 for all of our leases (including those accounted for as loans or direct financing leases) commenced as of that date and annualized cash interest on our mortgage loans receivable as of that date.

Our primary business objective is to maximize stockholder value by generating attractive risk-adjusted returns through owning, managing and growing a diversified portfolio of commercially desirable properties. As of MarchJune 31,30, 2026, we had a portfolio of 2,4172,493 properties (inclusive of one undeveloped land parcel and 150152 properties which secure our investments in mortgage loans receivable) that was diversified by tenant, industry, concept and geography, had annualized base rent of $584.2$604.9 million and was 99.7%99.6% occupied. Our portfolio is built based on the following core investment attributes:

Diversification. As of MarchJune 31,30, 2026, our portfolio was 99.7%99.6% occupied by tenants operating 662715 different brands, or concepts, across 48 states, with none of our tenants contributing more than 3.2%3.1% of our annualized base rent. Our goal is that, over time, no more than 5% of our annualized base rent will be derived from any single tenant or more than 1% from any single property.

Long Lease Term. As of MarchJune 31,30, 2026, our leases had a weighted average remaining lease term of 14.614.3 years (based on annualized base rent), with 2.8%2.3% of our annualized base rent attributable to leases expiring prior to January 1, 2029. Our properties generally are subject to long-term net leases that we believe provide us a stable base of revenue from which to grow our portfolio.

Significant Use of Sale-Leaseback Investments. We seek to acquire properties owned and operated by middle-market businesses and lease the properties back to the operators pursuant to our standard lease form. During the threesix months ended MarchJune 31,30, 2026, 100%92% of our investments were sale-leaseback transactions.

Significant Use of Master Leases. As of MarchJune 31,30, 2026, 65.3%64.6% of our annualized base rent was attributable to master leases.

Contractual Base Rent Escalation. As of MarchJune 31,30, 2026, 97.6%97.1% of our leases (based on annualized base rent) provided for increases in future base rent at a weighted average rate of 1.7%1.9% per year.

Smaller, Low Basis Single-Tenant Properties. We generally invest in freestanding “small-box” single- tenant properties. As of MarchJune 31,30, 2026, our average investment per property was $3.0$3.1 million (which equals our aggregate investment in our properties (including transaction costs, lease incentives and amounts funded for construction in progress) divided by the number of properties owned at such date), and we believe investments of similar size allow us to grow our portfolio without concentrating a large amount of capital in individual properties and limit our exposure to events that may adversely affect a particular property. Additionally, we believe that many of our properties are generally fungible and appropriate for multiple commercial uses, which reduces the risk that a particular property may become obsolete and enhances our ability to sell a property if we choose to do so.

Healthy Rent Coverage Ratio and Tenant Financial Reporting. As of MarchJune 31,30, 2026, our portfolio’s weighted average rent coverage ratio was 3.5x, and 99.0%99.2% of our leases (based on annualized base rent) obligate the tenant to periodically provide us with specified unit-level financial reporting. "Rent coverage ratio" means, as of a specified date, the ratio of (x) tenant-reported or, when unavailable, management's estimate (based on tenant-reported financial information) of annual earnings before interest, taxes, depreciation, amortization and cash rent attributable to the leased property (or properties, in the case of a master lease) to (y) the annualized base rental obligation.

Carefully Constructed Portfolio of Properties Leased to Service-Oriented or Experience-Based Tenants. We have strategically constructed a portfolio that is diversified by tenant, industry, concept and geography and generally avoids exposure to businesses that we believe are subject to pressure from e-commerce. Our properties are generally subject to long-term net leases that we believe provide us with a stable and predictable base of revenue from which to grow our portfolio. As of MarchJune 31,30, 2026, we had a portfolio of 2,4172,493 properties, with annualized base rent of $584.2$604.9 million, which was purposefully selected by our management team in accordance with our focused and disciplined investment strategy. Our portfolio is diversified with our tenants operating 662715 different concepts across 48 states. No single tenant contributed more than 3.2%3.1% of our annualized base rent as of MarchJune 31,30, 2026, consistent with our strategy of having a scaled portfolio that, over time, allows us to derive no more than 5% of our annualized base rent from any single tenant or more than 1% from any single property.

Our senior management team has been responsible for our focused and disciplined investment strategy and for developing and implementing our investment sourcing, underwriting, closing and asset management infrastructure, which we believe can support significant investment growth without a proportionate increase in our operating expenses. During the threesix months ended MarchJune 31,30, 2026, 100%92% of our new investments in real estate were attributable to internally originated sale-leaseback transactions and 57%64% of our new investments were consummated with parties who had previously engaged in one or more transactions that involved a member of our senior management team (including operators and tenants and other participants in the net lease industry, such as brokers, intermediaries and financing sources). The substantial experience, knowledge and relationships of our senior leadership team provide us with an extensive network of contacts that we believe allows us to originate attractive investment opportunities and effectively grow our business.

Extensive Tenant Financial Reporting Supports Active Asset Management. We seek to enter into lease agreements that obligate our tenants to periodically provide us with corporate and/or unit-level financial reporting, which we believe enhances our ability to actively monitor our investments, manage credit risk, negotiate lease renewals and proactively manage our portfolio to protect stockholder value. As of MarchJune 31,30, 2026, leases contributing 99.0%99.2% of our annualized base rent required tenants to provide us with specified unit-level financial information, and leases contributing 98.6%98.7% of our annualized base rent required tenants to provide us with corporate-level financial reporting.

Focus on Relationship-Based Sourcing to Grow Our Portfolio by Originating Sale-Leaseback Transactions. We plan to continue our disciplined growth by originating sale-leaseback transactions and opportunistically making acquisitions of properties subject to net leases that contribute to our portfolio’s tenant, industry and geographic diversification. During the threesix months ended MarchJune 31,30, 2026, 100%92% of our new investments in real estate were attributable to internally originated sale-leaseback transactions and 57%64% of our new investments were consummated with parties who had previously engaged in one or more transactions that involved a member of our senior management team (including operators and tenants and other participants in the net lease industry, such as brokers, intermediaries and financing sources). In addition, we seek to enhance our relationships with our tenants to facilitate investment opportunities, including selectively agreeing to reimburse certain of our tenants for development costs at our properties in exchange for contractually specified rent that generally increases proportionally with our funding. We believe our senior management team’s reputation, in-depth market knowledge and extensive network of longstanding relationships in the net lease industry provide us access to an ongoing pipeline of attractive investment opportunities.

Internal Growth Through Long-Term Triple-Net Leases That Provide for Periodic Rent Escalations. We seek to enter into long-term (typically with initial terms of 15 years or more and tenant renewal options), triple-net leases that provide for periodic contractual rent escalations. As of MarchJune 31,30, 2026, our leases had a weighted average remaining lease term of 14.614.3 years (based on annualized base rent), with only 2.8%2.3% of our annualized base rent attributable to leases expiring prior to January 1, 2029, and 97.6%97.1% of our leases (based on annualized base rent) provided for increases in future base rent at a weighted average of 1.7%1.9% per year.

The following table sets forth select information about our investment activity for the previous eight quarters beginning with the quarter ended JuneSeptember 30, 2024 through the quarter ended MarchJune 31,30, 2026 (dollars in thousands):

The following table sets forth select information about our disposition activity for the previous eight quarters beginning with the quarter ended JuneSeptember 30, 2024 through the quarter ended MarchJune 31,30, 2026 (dollars in thousands):

(2) Annualized base rent at time of sale divided by the gross sale price (excluding transaction costs) for the property. Excludes properties sold pursuant to an existing tenant purchase option or properties purchased by the tenant.

As of MarchJune 31,30, 2026, the net investment value of our income property portfolio totaled $6.9$7.1 billion, consisting of investments in 2,4172,493 properties (inclusive of one undeveloped land parcel and 150152 properties which secure our investments in mortgage loans receivable), with annualized base rent of $584.2$604.9 million. Substantially all of our cash from operations is generated by our investment portfolio.

The liquidity requirements for operating our Company consist primarily of funding our investment activities, servicing our outstanding indebtedness and paying our general and administrative expenses and dividends and distributions as declared by our board of directors. The occupancy level of our portfolio is high (99.7%99.6% as of MarchJune 31,30, 2026) and, because substantially all of our leases are triple-net (whereby our tenants are generally responsible for all maintenance costs for operating the property, and insurance and property taxes associated with the leased properties), our liquidity requirements are not significantly impacted by property costs. When a property becomes vacant, we are required to pay the property costs not paid by a tenant, as well as those property costs accruing during the time it takes to locate a new tenant or to sell the property. As of MarchJune 31,30, 2026, sevennine of our investment properties were vacant, less than 1% of our portfolio, and all remaining properties were subject to a lease (excluding one undeveloped land parcel) or mortgage loan receivable. We expect to incur property costs from time to time in periods during which properties that become vacant are being marketed for lease or sale. In addition, we may recognize an expense for certain property costs, such as real estate taxes billed in arrears, if we believe the tenant is likely to vacate the property before making payment on those obligations. The amount of such property costs can vary quarter-to-quarter based on the timing of property vacancies and the level of underperforming properties; however, we do not expect that such costs will be significant to our operations.

We intend to continue to grow through additional investments in stand-alone single tenant properties. To accomplish this objective, we seek to invest in real estate utilizing a combination of debt and equity capital and with cash from operations that we do not distribute to our stockholders. When we sell properties, we generally reinvest the cash proceeds in new single tenant properties. Our short-term liquidity requirements also include the funding needs associated with 6967 properties where we have agreed to reimburse the tenant for certain development, construction, or renovation costs or to provide construction financing in exchange for contractual payments of interest or increased rent that generally increases in proportion with our level of funding. As of MarchJune 31,30, 2026, we agreed to provide construction financing or reimburse the tenant for certain development, construction and renovation costs in an aggregate amount of $340.6$331.5 million, and, as of such date, we have funded $234.3$209.7 million of this commitment. We expect to fund the remaining commitment totaling $106.3$121.8 million by MarchJune 31,30, 2027.

Additionally, as of AprilJuly 17, 2026, we were under contract to acquire threeseven properties with an aggregate purchase price of $12.4$31.8 million, subject to completion of our due diligence procedures and satisfaction of customary closing conditions. We expect to meet our short-term liquidity requirements, including our construction financing and tenant reimbursement obligations and potential investment in future single tenant properties, primarily with our cash and cash equivalents, net cash from operating activities, issuance of common stock subject to outstanding forward sale agreements, borrowings under the Revolving Credit Facility and potentially through proceeds generated from asset sales and our October 2024 ATM Program, under which we may offer and sell common stock with an aggregate gross sales price of up to $330.7$279.9 million as of AprilJuly 17, 2026.

An additional liquidity need is funding the required level of distributions, generally 90% of our REIT taxable income (determined without regard to the dividends paid deduction and excluding any net capital gain), that are among the requirements for us to continue to qualify for taxation as a REIT. Holders of OP Units and LTIP Units are entitled to distributions per unit equivalent to those paid by us per share of common stock. During the threesix months ended MarchJune 31,30, 2026, our board of directors declared total cash distributions of $0.31$0.63 per share of common stock/OP Unit/LTIP Unit totaling $67.6$137.7 million and $67.6$70.2 million was payable as of MarchJune 31,30, 2026. To continue to qualify for taxation as a REIT, we must make distributions to our stockholders aggregating annually at least 90% of our REIT taxable income, determined without regard to the dividends paid deduction and excluding any net capital gain. As a result of this requirement, we cannot rely on retained earnings to fund our business needs to the same extent as other entities that are not REITs. If we do not have sufficient funds available to us from our operations to fund our business needs, we will need to find alternative ways to fund those needs. Such alternatives may include, among other things, selling properties (whether or not the sales price is optimal or otherwise meets our strategic long-term objectives), incurring additional indebtedness or issuing equity securities in public or private transactions. The availability and attractiveness of the terms of these potential sources of financing cannot be assured.

As of MarchJune 31,30, 2026, all of our long-term debt was fixed-rate debt or was effectively converted to a fixed-rate for the term of the debt though hedging strategies, and our weighted average debt maturity was 4.04.6 years.years (after giving effect to extension options exercisable at our Operating Partnership's election). As we continue to invest in real estate properties and grow our real estate portfolio, we intend to manage our long-term debt maturities to reduce the risk that a significant amount of our debt will mature in any single year in the future.

Future sources of debt capital may include public issuances of senior unsecured notes, term loan borrowings and mortgage financing of a single-asset or a portfolio of assets. These sources of debt capital may offer us the opportunity to lower our cost of funding and further diversify our sources of debt capital. Over time, we may choose to issue preferred equity as a part of our overall strategy for funding our business. As our outstanding debt matures, we may refinance it as it comes due or choose to repay it using cash and cash equivalents or borrowings under our Revolving Credit Facility. We believe that the cash generated by our operations, together with our cash and cash equivalents at MarchJune 31,30, 2026, our borrowing availability under the Revolving Credit Facility, issuance of common stock subject to outstanding forward sale agreements, and our potential access to additional sources of capital, will be sufficient to fund our operations for the next 12 months, including investing in the real estate for which we currently have commitments, and the longer-term period thereafter.

The Company and the Operating Partnership have filed a registration statement on Form S-3 with the SEC registering, among other securities, debt securities of the Operating Partnership, which, unless otherwise specified, will be fully and unconditionally guaranteed by the Company. At MarchJune 31,30, 2026, the Operating Partnership had issued and outstanding $800.0$1.2 millionbillion of senior notes. The obligations of the Operating Partnership under the Senior Notes are guaranteed on a senior basis by the Company. The guarantee is full and unconditional, and the Operating Partnership is a consolidated subsidiary of the Company.

The following table summarizes our outstanding indebtedness as of MarchJune 31,30, 2026 and December 31, 2025:

Through our Operating Partnership, we are party to an Amended and Restated Credit Agreement with a group of lenders, which was most recently amended on February 6, 2025 (the "Amended Credit Agreement"), and provides for revolving loans of up to $1.0 billion (the "Revolving Credit Facility") and an additional $1.3 billion of term loans, consisting of a $400.0 million term loan (the "2028 Term Loan"), a $450.0 million term loan (the “2029 Term Loan”) and a $450.0 million term loan (the "2030 Term Loan" and, together with the 2028 Term Loan and 2029 Term Loan, the “CF Term Loans”). All principal amounts available under the CF Term Loans were drawn as of MarchJune 31,30, 2026.

The Revolving Credit Facility has a fully-extended maturity date of February 6, 2030, after giving effect to two extension options of six months each, exercisable by the Operating Partnership, subject to the satisfaction of certain conditions. The 2028 Term Loan matures on January 25, 2028, the 2029 Term Loan has an original maturity of three years, plus extension options at the Operating Partnership's election, which can extend the maturity to February 24, 2029 and the 2030 Term Loan has an original maturity of three years, plus extension options at the Operating Partnership's election, which can extend the maturity to January 11, 2030. The loans under each of the Revolving Credit Facility and the CF Term Loans initially bear interest at an annual rate of applicable Adjusted Term SOFR (as defined in the Amended Credit Agreement) plus an applicable margin (which applicable margin varies between the Revolving Credit Facility and the CF Term Loans). The Adjusted Term SOFR is a rate with a term equivalent to the interest period applicable to the relevant borrowing. In addition, the Operating Partnership is required to pay a revolving facility fee throughout the term of the Revolving Credit Facility. The applicable margin and the revolving facility fee rate are a spread and rate, as applicable, set according to the credit ratings provided by S&P, Moody's and/or Fitch.

The Operating Partnership is the borrower under the Amended Credit Agreement, and we and certain of the subsidiaries of the Operating Partnership that own a direct or indirect interest in an eligible real property asset are guarantors under the Amended Credit Agreement. Under the terms of the Amended Credit Agreement, we are subject to customary restrictive financial and nonfinancial covenants which, among other things, require us to maintain certain leverage ratios, cash flow and debt service coverage ratios, secured borrowing ratios. As of MarchJune 31,30, 2026, we were in compliance with these covenants.

The Operating Partnership is the borrower under the 2027 Term Loan, and we and certain of the subsidiaries of the Operating Partnership that own a direct or indirect interest in an eligible real property asset are guarantors under the facility. Under the terms of the 2027 Term Loan, we are subject to customary restrictive financial and nonfinancial covenants which, among other things, require us to maintain certain leverage ratios, cash flow and debt service coverage ratios, and secured borrowing ratios. As of MarchJune 31,30, 2026, we were in compliance with these covenants.

OnIn June 22, 2021, the Operating Partnership issued $400 million aggregate principal amount of 2.950% Senior Notes due 2031 (the "2031 Notes"), resulting in net proceeds of $396.6 million. OnIn August 21, 2025, the Operating Partnership issued $400.0 million aggregate principal amount of 5.400% Senior Notes due 2035 (the "2035 Notes"), and,resulting in net proceeds of $390.7 million. In June 2026, the Operating Partnership issued $400.0 million aggregate principal amount of 5.380% Senior Notes due 2036 (the "2036 Notes", and together with the 2031 Notes and the 2035 Notes, the "Senior Notes"), resulting in net proceeds of $390.7$389.9 million. The Senior Notes were issued by the Operating Partnership and the obligations of the Operating Partnership under the Senior Notes are fully and unconditionally guaranteed by the Company.

The indenture and supplemental indentureindentures creating the Senior Notes contain customary restrictive covenants, including limitations on our ability to incur additional secured and unsecured indebtedness. As of MarchJune 31,30, 2026, we were in compliance with these covenants.

Comparison of the threesix months ended MarchJune 31,30, 2026 and 2025

As of MarchJune 31,30, 2026, we had $15.2$126.2 million of cash and cash equivalents and $1.0$8.1 million of restricted cash, as compared to $47.0$20.8 million of cash and cash equivalents and no$0.3 million restricted cash as of MarchJune 31,30, 2025.

Cash Flows for the threesix months ended MarchJune 31,30, 2026

During the threesix months ended MarchJune 31,30, 2026, net cash provided by operating activities was $99.8$209.9 million and our net income was $60.0$134.4 million. Our cash flows from operating activities are primarily dependent upon the occupancy level of our portfolio, the rental rates specified in our leases, the interest on our loans and direct financing lease receivables, the collectability of rent and interest and the level of our operating expenses and general and administrative costs. Our cash inflows from operating activities reflect adjustments to net income for non-cash items of $46.9$85.2 million, including increases for i) depreciation and amortization of tangible, intangible and right of use real estate assets and amortization of deferred financing costs and other non-cash interest expense of $45.5$94.7 million, ii) our provision for impairment of real estate of $16.8$18.2 million, iii) non-cash equity-based compensation expense of $4.2$7.6 million, iv) adjustments to rental revenue for tenant credit of $1.4$4.3 million and v) the change in our provision for credit losses of $0.6$3.3 million, reduced by i) our $5.3$10.0 million gain on dispositions of real estate, net and ii) $16.3$32.9 million related to the recognition of straight-line rent receivables. An additional inflow was from our increase in accrued liabilities and other payables of $2.9$2.1 million, offset by the outflow caused by the increase in our rent receivables, prepaid expenses and other assets, net of $10.0$11.8 million.

Net cash used in investing activities during the threesix months ended MarchJune 31,30, 2026 was $373.0$586.2 million. Our net cash used in investing activities generally reflects our investment in real estate, including capital expenditures, construction in progress and lease incentives, and in mortgage loans receivable, which totaled $388.8$684.0 million in the aggregate. These cash outflows were partially offset by $9.8$63.5 million of proceeds from sales of investments, net of disposition costs, and $6.1$34.3 million of principal collections on our loans and direct financing lease receivables.

Net cash provided by financing activities of $219.0$440.2 million during the threesix months ended MarchJune 31,30, 2026 reflected net cash inflows of $192.7 million from the issuance of common stockstock, $389.9 million in net proceeds from the issuance of 2036 Notes and $290.0$460.0 million of borrowings under the Revolving Credit Facility. These cash inflows were partially offset by the payment of $65.4$133.0 million in dividends,dividends and distributions, the repayment of $190.0$460.0 million of borrowings under the Revolving Credit Facility, the payment of $0.2$0.8 million of deferred financing costs, the payment of $0.5 million of offering costs, and the payment of $8.2 million in taxes related to the net settlement of equity awards upon vesting.

We had no off-balance sheet arrangements as of MarchJune 31,30, 2026.

The following table provides information with respect to our contractual obligations as of MarchJune 31,30, 2026:

As of MarchJune 31,30, 2026, we had a portfolio of 2,4172,493 properties, inclusive of one undeveloped land parcel and 150152 properties that secure our investments in mortgage loans receivable, that was diversified by tenant, concept, industry and geography and had annualized base rent of $584.2$604.9 million. Our tenants operate 662715 different concepts across 48 states. None of our tenants represented more than 3.2%3.1% of our portfolio at MarchJune 31,30, 2026, and our top ten largest tenants represented 15.8%15.2% of our annualized base rent as of that date.

As of MarchJune 31,30, 2026, 97.5%97.6% of our leases (based on annualized base rent) were triple-net, where the tenant is typically responsible for all improvements and is contractually obligated to pay all operating expenses, such as maintenance, insurance, utility and tax expense, related to the leased property. Due to the triple-net structure of our leases, we do not expect to incur significant capital expenditures relating to our triple-net leased properties, and the potential impact of inflation on our operating expenses is reduced.

As of MarchJune 31,30, 2026, our top ten tenants included tennine different concepts. The following table details information about our tenants and the related concepts as of MarchJune 31,30, 2026 (dollars in thousands):

(2)Excludes one undeveloped land parcel and sevennine vacant properties.

Our tenants operate their businesses across 662715 concepts. (i.e., brands). The following table provides information about the top ten concepts in our portfolio as of MarchJune 31,30, 2026 (dollars in thousands):

(1)Excludes one undeveloped land parcel and sevennine vacant properties.

Our tenants’ business concepts are diversified across various industries. The following table summarizes those industries as of MarchJune 31,30, 2026 (dollars in thousands except per sq. ft amounts):

(1)Excludes one undeveloped land parcel and sevennine vacant properties.

Our 2,4172,493 properties are located in 48 states. The following table details the geographical locations of our properties as of MarchJune 31,30, 2026 (dollars in thousands):

As of MarchJune 31,30, 2026, the weighted average remaining term of our leases was 14.614.3 years (based on annualized base rent), with only 2.8%2.3% of our annualized base rent attributable to leases expiring prior to January 1, 2029. The following table sets forth our lease expirations for leases in place as of MarchJune 31,30, 2026 (dollars in thousands):

(1)Expiration year of contracts in place as of MarchJune 31,30, 2026, excluding any tenant option renewal periods that have not been exercised.

(2)Excludes one undeveloped land parcel and sevennine vacant properties.

Generally, we seek to acquire investments with healthy rent coverage ratios, and as of MarchJune 31,30, 2026, the weighted average rent coverage ratio of our portfolio was 3.5x. Our portfolio’s unit-level rent coverage ratios (by annualized base rent and excluding leases that do not report unit-level financial information) as of MarchJune 31,30, 2026 are displayed below:

Tenant financial distress is typically caused by consistently poor or deteriorating operating performance, near-term liquidity issues or unexpected liabilities. To assess the probability of tenant insolvency, we utilize Moody’s Analytics RiskCalc, which is a model for predicting private company defaults based on Moody’s Analytics Credit Research Database, which incorporates both market and company-specific risk factors. The following table illustrates the portions of our annualized base rent as of MarchJune 31,30, 2026 attributable to leases with tenants having specified implied credit ratings based on their Moody’s RiskCalc scores:

Comparison of the three months ended MarchJune 31,30, 2026 and 2025

Rental revenue. Rental revenue increased by $27.6$22.0 million for the three months ended MarchJune 31,30, 2026 as compared to the three months ended MarchJune 31,30, 2025. The increase in rental revenue was driven primarily by the growth in our real estate investment portfolio, which grew by 277287 rental properties, or 14%, since MarchJune 31,30, 2025. A portion of our real estate investments were acquired throughout the periods presented and were not all owned by us for the entirety of the applicable periods; accordingly, a significant portion of the increase in rental revenue between periods is related to recognizing revenue in 2026 from acquisitions that were made during 2025 and earlyyear-to-date 2026.

Interest on loans and direct financing lease receivables. Interest on loans and direct financing lease receivables increased by $1.1$2.2 million for the three months ended MarchJune 31,30, 2026 as compared to the three months ended MarchJune 31,30, 2025, primarily due to the increase in our mortgage loans receivable portfolio during 2026, which led to a higher average daily balance of loans receivable outstanding during the three months ended MarchJune 31,30, 2026.

Other revenue, net. Other revenue increased by $0.7$0.6 million during the three months ended MarchJune 31,30, 2026 as compared to the three months ended MarchJune 31,30, 2025, primarily due to non-recurring leaseloan terminationprepayment fees and other fees received during the three months ended MarchJune 31,30, 2026.