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

Substantially all of our revenue and operating cash flow is derived from rent paid by our tenants pursuant to leases. FromAs 2025of throughDecember 2030,31, 2025, the following leases expire during the periods indicated:

(1a)Eight leases accounting for 2.1% of contractual rental income expire in 2025, and weWe believe or have been advised that tenants with respect to $560,000three leases, or $553,000 of 20252026 contractualbase rental incomerent, intend to allow their leases to expire.

If our tenants, and in particular, our significant tenants, (i) do not renew their leases upon lease expiration, (ii) default on their obligations or (iii) seek rent relief, lease renegotiation or other accommodations, our revenues would decline and, in certain cases, co-tenancy provisions (i.e., a tenant’s right to reduce their rent or terminate their lease if certain key tenants vacate a property) may be triggered possibly allowing other tenants at the same property to reduce their rental payments or terminate their leases. At the same time, we would remain responsible (and with respect to single tenant properties (i.e., properties at which such tenant is the sole lessee) solely responsible), for the payment of the mortgage obligations with respect to the related properties, would become responsible for the operating expenses (e.g., real estate taxes, maintenance and insurance) related to these properties, and, in the event of tenant defaults, would incur expenses in enforcing our rights as landlord. OurWe effortsmay find it difficult to find replacement tenantstenants, mayespecially bewith challengedrespect asto thereproperties arethat ahave limitedunusual number of tenants interested in certain types of properties,configurations, such as our theaters (i.e., Regal Cinemas) and a health and fitness center (i.e., LA Fitness) which account in the aggregate for $2.2 million, or 3.0%,2.7%, of 20252026 contractualbase rental income and the cost of reconfiguring such properties to make them more attractive to a broader set of potential tenants may be prohibitive. Finding replacement tenants for retail properties or incentivizing retail tenants to renew their leases is challenging as retail tenants often require that we pay for improvements to their facility (i.e., tenant improvements) – these improvements are often very costly and makes the prospect of entering into such lease less attractive to us.rent. Even if we find replacement tenants or renegotiate leases with current tenants, the terms of the new or renegotiated leases, after giving effect to tenant concessions or the cost of required renovations/ reconfigurations may be less favorable than current lease terms and could reduce the amount of cash available to meet expenses and pay dividends. If we are unable to re-rent properties on favorable terms with respect to properties at which tenants default on their rent obligation or do not renew their leases at lease expiration,expiration or default on their rent obligation, and our results of operations, cash flow and financial condition will be adversely affected.

Approximately 21.1%21.7% of our 20252026 contractualbase rental incomerent is derived from fivesix tenants. The default, financial distress or failure of any of these tenants, or such tenant’s determination not to renew or extend their lease, would significantly reduce our revenues.

FedEx, Northern Tool, NARDA Holdings, Inc., HavertysHavertys, Ferguson and FergusonToro Company account for approximately 5.2%,5.0%, 4.3%,3.8%, 4.2%,3.7%, 3.9%3.1%, 3.1% and 3.5%,3.0%, respectively, of our 20252026 contractualbase rental income,rent, and the weighted average remaining lease term for such tenants is 2.72.2 years, 4.33.3 years, 8.77.7 years, 3.73.0 years, 1.6 years and 2.63.0 years, respectively. The default, financial distress or bankruptcy of any of these or other significant tenants or such tenant’s determination not to renew or extend their lease, would significantly reduce our revenues, would cause interruptions in the receipt of, or the loss of, a significant amount of rental income and would require us to pay operating expenses (including real estate taxes) currently paid by the tenant. This could also result in the vacancy of the property or properties occupied by the defaulting or non-renewing tenant, which would significantly reduce our rental revenues and net income until the re-rental of the property or properties and could decrease the ultimate sale value of the property.

Approximately 46.9%51.5% of our 20252026 contractualbase rental incomerent is derived from properties located in six states — South Carolina (11.7%12.8%), Pennsylvania (10.8%), New York (9.5%8.5%), Texas (7.9%7.1%), PennsylvaniaIowa (7.9%), Maryland (5.2%6.6%) and IowaAlabama (4.7%5.7%). As a result, a decline in the economic conditions in these states or in regions where our properties are concentrated, may have an adverse effect on the rental and occupancy rates for, and the property values of, these properties, which could lead to a reduction of our rental income and/or impairment charges.

Our portfolio of properties is concentrated in the industrial andand, to a lesser extent, the retail real estate sectors,sector, and our business would be adversely affected by an economic downturn in either of such sectors.

Approximately 72.4%80.9% and 21.1%14.6% of our 20252026 contractualbase rental incomerent is derived from industrial and retail tenants, respectively, and we are vulnerable to economic declines that negatively impact these sectors of the economy, which would have an adverse effect on our results of operations, liquidity and financial condition.

At December 31, 2024,2025, the aggregate of our unbilled rent receivable and intangible lease assets is $30.6$42.8 million (including $13.6$25.5 million of intangible lease assets): fivesix tenants (i.e., NARDA Holdings, Inc., NorthernSuperior Tool,Third FamousParty Footwear,Logistics, Inc., The Lion Brewery, Charter Next Generation, Inc., Northern Tool, and Q.E.P.Famous Co., Inc.Footwear) account for 30.2%27.5% of such sum. We are required to assess the collectability of our unbilled rent receivables and the remaining useful lives of our intangible lease assets. Such assessments, which are highly subjective, take into consideration, among other things, a tenant’s payment history, financial condition, and the likelihood of collectability of future rent. If we determine that the collectability of a tenant’s unbilled rent receivable is not probable or that the useful life of a tenant’s intangible lease asset has changed, write-offs would be required. Such write-offs result in a reduction of our net income, total assets and stockholders’ equity and in certain circumstances may result in the breach of our financial covenants under the credit facility.

Declines in the value of our properties could result in impairment charges.losses.

When we are presented with indicators of impairment in the value of a particular property or group of properties, we are required to perform an impairment analysis for such property or properties. When we determine that any of our properties at which indicators of impairment exist have undiscounted cash flows below the net book value of such property, we are required to recognize an impairment charge for the difference between the fair value and the book value during the quarter in which we make such determination. Impairment chargeslosses, such as the impairment losses of $4.6 million and $1.1 million we recognized in 2025 and 2024, respectively, reduce our nettotal incomeassets, stockholder’s equity and stockholder’snet equity.income.

Our ability to fully control the maintenance of our net-leased properties may be limited.

TheGenerally, the tenants of our net-leased properties are responsible for maintenance and other day-to-day management of the properties. If a property is not adequately maintained in accordance with the terms of the applicable lease, we may incur expenses for deferred maintenance or other liabilities once the property is no longer leased. While we visit our properties on an intermittent basis, these visits are not comprehensive inspections and deferred maintenance items may go unnoticed. WhileAlthough our leases generally provide for recourse against the tenant infor thesefailure instances,to maintain the property, a bankrupt or financially-troubled tenant may be more likely to defer maintenance, and it may be more difficult to enforcerecover remediesthe againstcost of such repairs from such a tenant.

Traditional retail tenants account for 21.1%14.6% of our 20252026 contractualbase rental incomerent and the competition that such tenants face from e-commerce retail sales could adversely affect our business.

Approximately 21.1%14.6% of our 20252026 contractualbase rental incomerent is derived from retail tenants, including 4.8%3.8% from tenants engaged in selling furniture (i.e., Havertys Furniture accounts for 3.9%3.1% of 20252026 contractual rental income) and 2.1% from a tenant engaged in selling office supplies (i.e., Office Depot, a tenant at five properties, two of which are currently closed but for which the tenant continues to paybase rent and the lease expires in May 2025). Because e-commerce retailers (unlike “bricks and mortar” or “traditional” retailers) may be able to provide customers with better pricing and the ease, comfort and safety of shopping from their home or office, our retail tenants face extensive competition from e-commerce retailers. E-commerce sales decrease the need for traditional retail outlets and reduce retailers’ space and property requirements. This adversely impacts our ability to rent space at our retail properties and increases competition for retail tenants thereby reducing the rent we would receive at these properties and adversely affecting our results of operations, cash flow and financial condition.

Generally, only a portion of the principal of our mortgage indebtedness will be repaid prior to or at maturity and we do not plan to retain sufficient cash to repay such indebtedness at maturity. Accordingly, to meet these obligations if they cannot be refinanced at maturity, we will have to use funds available under our credit facility, if any, and our available cash and cash equivalents to pay our mortgage debt or seek to raise funds through the financing of unencumbered properties, sale of properties or the issuance of additional equity. From 20252026 through 2029,2030, approximately $189.0$237.3 million of our mortgage debt outstanding as of December 31, 2025, matures. If we are unsuccessful in refinancing or extending existing mortgage indebtedness or financing unencumbered properties, selling properties on favorable terms or raising additional equity, ourOur cash flow from operations will be insufficient to repay all maturing mortgage debt when payments become due, and we may be forced to dispose of properties on disadvantageous terms or convey properties secured by mortgages to the mortgagees, which would lower our revenues and the value of our portfolio.

Interest rates have been volatile as the interest rate on the ten-year treasury notes ranged from 1.51%3.26% to 5.02% during the three years ended December 31, 2024.2025. At February 28,27, 2025,2026, the interest rate on such notes was 4.22%. If we are required to refinance mortgage debt that matures over the next several years at higher interest rates than such mortgage debt currently bears, the funds available for dividends may be reduced.3.95%. The following table sets forth, as of December 31, 2024,2025, the principal balance of the mortgage payments due at maturity on our properties and the weighted average interest rate thereon (dollars in thousands):

Real estate investments are relatively illiquid. Therefore, we will be limited in our ability to reconfigure our real estate portfolio in response to economic changes. We may encounter difficulty in disposing of properties when tenants vacate either at the expiration of the applicable lease or otherwise. If we decide to sell any of our properties, our ability to sell these properties and the prices we receive on their sale may be affected by many factors, including the number of potential buyers, the number of competing properties on the market and other market conditions, as well as whether the property is leased and if it is leased, the terms of the lease.thereof. As a result, we may be unable to sell our properties for an extended period of time without incurring a loss, which would adversely affect our results of operations, liquidity and financial condition.

Most ofGenerally, our tenantstenants’ are required to obtain, for our benefit, comprehensive insurance covering our properties in amounts that are intended to be sufficient to provide for the replacement of the improvements at each property. However, the amount of insurance coverage maintained for any property may be insufficient (i) to pay the full replacement cost of the improvements at the property following a casualty event or (ii) if coverage is provided pursuant to a blanket policy and the tenant’s other properties are subject to insurance claims. In addition, the rent loss coverage under the policy may not extend for the full period of time that a tenant may be entitled to a rent abatement as a result of, or that may be required to complete restoration following, a casualty event. In addition, there are certain types of losses, such as those arising from earthquakes, floods, hurricanes and terrorist attacks, that may be uninsurable or that may not be economically insurable. Changes in zoning, building codes and ordinances, environmental considerations and other factors also may make it impossible or impracticable for us to use insurance proceeds to replace damaged or destroyed improvements at a property. If restoration is not or cannot be completed to the extent, or within the period of time, specified in certain of our leases, the tenant may have the right to terminate the lease. If any of these or similar events occur, it may reduce our revenues, the value of, or our return from, an affected property.

We have been,faced, and will continue to face, significant competition for attractive investment opportunities, and in particular, opportunities to acquire industrial properties. Our competitors include publicly-traded REITs, non-traded REITs, insurance companies, commercial and investment banking firms, private institutional funds, hedge funds, private equity funds and other investors, many of whom have greater financial and other resources than we have. We may not be able to compete successfully for investments. If we pay higher prices for investments, our returns may be lower and the value of our assets may not increase or may decrease significantly below the amount we paid for such assets. If such events occur, we may experience lower returns on our investments.

We depend on the services of Matthew J. Gould, chairman of our board of directors, Fredric H. Gould, vice chairman of our board of directors, Patrick J. Callan, Jr., our president and chief executive officer, Lawrence G. Ricketts, Jr., our executive vice president and chief operating officer, Isaac Kalish, our chief financial officer and senior vice president and David W. Kalish, our senior vice president-financial,president-finance, and other members of senior management to carry out our business and investment strategies. Of the foregoing executive officers, only Messrs. Callan and Ricketts devote all of their business time to us. Other members of senior management provide services to us either on a full-time or part-time, as-needed basis. The loss of the services of any of our senior management or other key personnel, the inability or failure of the members of senior management providing services to us on a part-time basis to devote sufficient time or attention to our activities or our inability to recruit and retain qualified personnel in the future, could impair our ability to carry out our business and investment strategies.

Our business may be adversely affected by market and economic volatility experienced by the U.S. and global economies, the real estate industry as a whole and/or the local economies in the markets in which our properties are located. Such adverse conditions may be due to, among other issues, rising inflation and interest rates, volatility in the public equity and debt markets, labor market challenges and international economic and other conditions, including pandemics, geopolitical instability (such as the conflicts in Ukraine and the Middle East),instability, sanctions and other conditions beyond our control. These current conditions, or similar conditions existing in the future, may adversely affect our results of operations, financial condition and ability to pay dividends as a result of one or more of the following, among other potential consequences:

We are a self-administered and self-managed REIT focused on acquiring, owning and managing a geographically diversified portfolio consisting primarily of industrial and,properties. As of February 1, 2026 and after giving effect to athe lesserten extent,industrial retailproperties properties,we manyacquired ofin whichJanuary are2026, subjectwe toown long-term113 leases.properties Mostwith approximately 12.5 million square feet, including 79 industrial properties with approximately 11.0 million square feet, and we anticipate that our industrial properties will generate approximately 81.6% of our leases2026 arebase “net leases” under which the tenant, directly or indirectly, is responsible for paying the real estate taxes, insurance and ordinary maintenance and repairs of the property. As of December 31, 2024, we own, in 31 states, 102 properties, including two properties owned by consolidated joint ventures and two properties owned through unconsolidated joint ventures.rent.

In addition to the challenges and uncertainties as also described under “Cautionary Note Regarding Forward-Looking Statements”, and “Item 1A. Risk Factors”, and “— Challenges and Uncertainties as a Result of the Volatile Economic Environment”, we, among other things, face additional challenges and uncertainties, including the possibility we will not be able to: lease our properties on terms favorable to us or at all; collect amounts owed to us by our tenants; renew or re-let, on acceptable terms, leases that are expiring or otherwise terminating; acquire or dispose of properties on acceptable terms; or grow, through acquisitions or otherwise, our property portfolio so as to generate additional rental and net income. If we are unable to address these challenges successfully, we may be unable to sustain our current level of dividend payments.

We monitor, on an ongoing basis, our expiring leases and generally approach tenants with expiring leases (including those subject to renewal options) at least a year prior to lease expiration to determine their interest in renewing their leases. During the three years ending December 31, 2027,2028, 5770 leases for 4964 tenants at 3647 properties representing $22.0$30.9 million, or 30.5%,37.4%, of 20252026 contractualbase rental incomerent expire.

In 20242025, we:

Lease Termination FeeFees

In March 2024, a consolidated joint venture in Lakewood, Colorado, in which we holdheld a 90% interest, received a lease termination fee of $250,000 from a tenant due to the early termination of its lease in connection with the sale of the related restaurant parcel. We anticipate recognizing, during the quarter ending March 31, 2026, aggregate lease termination fees of approximately $1.3 million, and that in the aggregate, we will replace such tenancies on economic terms more favorable to us than those of the terminating tenancies.

Depreciation and amortization. The decreaseincrease is due primarily to:

The decreaseincrease was offset by:

The increase was offset primarily by a $202,000$1.1 million decrease related to properties sold in 20232024 and 2024.2025.

A substantial portion of real estate expenses (i.e., $16.6 million and $14.8 million in 2025 and 2024, respectively) are rebilled to tenants and are included in Rental income, net, on the consolidated statements of income.

Impairment loss.losses. During 2025, we recorded an aggregate impairment loss of $4.6 million at our St. Louis Park, Minnesota and Beachwood, Ohio properties. During 2024, we recorded a $1.1 million impairment loss at our former Hamilton, Ohio property tenanted by LA Fitness.property. (See Note 5 to our consolidated financial statements).

Equity in earnings (loss)from sale of unconsolidated joint ventures.venture properties. The 20232025 periodresults includesreflect our 50% share of (i)the angain $850,000 impairment charge and (ii) $103,000 debt prepayment charge, related toon the early payoff of the mortgage, in connection with the salesales of our formertwo Manahawkin,Savannah, New JerseyGeorgia joint venture propertyproperties (thewhich “Manahawkin Property”). The Manahawkin Property waswere sold in DecemberAugust 20232025. - see(See Note 7 to our consolidated financial statements.statements).

Other income. The change in 20242025 is due to ana increasedecrease of $778,000$478,000 in interest income primarily from investmentsthe decrease in amounts available for investment in short-term U.S. treasury bills.

The increase in 20242025 is due primarily to the increaseincreases in the weighted average interest rate on the principal amount of mortgage debt outstanding.outstanding and weighted average interest rate. Among other things, the mortgages (i) that we refinanced generally bore a higher interest rate than the mortgages we paid off and (ii) obtained in connection with acquisitions generally bore a higher rate of interest than the mortgages on properties we sold.

TheDuring 2025, the weighted average interest rate was 6.69% for 20236.07% and the weighted average principal amount outstanding was $15.7$3.4 millionmillion.

(1a) The weighted average number of diluted common shares used to compute FFO and AFFO applicable to common stock includes unvested restricted shares that are excluded from the computation of diluted EPS.

The $969,000,$1.1 million, or 2.5%,3.0%, decreasenet increase in FFO is due primarily to:

Offsetting the decreaseincrease is a:

The $1.4 million,$399,000, or 3.4%,1.0%, decreasenet increase in AFFO is primarily due primarily to the factors impacting FFO as described immediately above, otherincluding thana the$371,000 decrease (ito $508,000) decrease in general and administrative expenses due to the exclusion of the amortization of restricted stock and RSU compensation and excluding the (i) $1.3 million proceeds from a litigation settlement and (ii) $184,000 decrease in lease termination fee income.

We intend to make debt amortization payments from operating cash flow and, though no assurance can be given that we will be successful in this regard, generally intend to refinance, extend or payoff the mortgage loans which mature in 20252026 through 2027.2028. We intend to repay the amounts not refinanced or extended from our existing funds and sources of funds, including our available cash, proceeds from one or more property sales, the sale of our common stock and our credit facility (to the extent available).

Our credit facility provides that subject to borrowing base requirements, we can borrow up to $100.0 million for the acquisition of commercial real estate, repayment of mortgage debt, and renovation and operating expense purposes; provided, that if used for renovation and operating expense purposes, the amount outstanding for such purposes will not exceed the lesser of $40.0 million and 40% of the borrowing base. See “—Liquidity and Capital Resources”. The facility matures December 31, 2026 and we anticipate that it will be renewed prior thereto. The facility bears interest equal to 30-day SOFR plus the applicable margin. The applicable margin ranges from 175 basis points if our ratio of total debt to total value (as calculated pursuant to the facility) is equal to or less than 50%, increasing to a maximum of 275 basis points if such ratio is greater than 60%. The applicable margin was 175 basis points for each of 20242025 and 2023.2024. There is an unused facility fee of 0.25% per annum on the difference between the outstanding loan balance and $100.0 million. The credit facility requires the maintenance of $3.0 million in average deposit balances. AsFor 2025, the weighted average interest rate on the facility was approximately 6.07% and as of February 28,27, 2025,2026, the rate on the facility was 6.06%.5.42%.

We are exposed to inflation risk as income from long-term leases is the primary source of our cash flows from operations. Approximately 72%Many of our leases contain provisions, including provisions providing for periodic fixed rate rent increases), intended to mitigate the impact of inflation. These provisions generally increase rental rates during the terms of the leases either at fixed rates or indexed escalations (based on the Consumer Price Index or other measures). In addition, many of our leases require the tenant to pay, or reimburse us for our payment of, all or a majority of the property’s operating expenses, including real estate taxes, utilities, insurance and building repairs, which may also mitigate our risks associated with rising costs. However, these rent escalation or reimbursement provisions may not adequately offset the effects of inflation.

Inflation maywill also affect the overall cost of our unhedgedfloating rate debt (i.e., primarily debt incurred pursuant to our credit facility) and affects the mortgage debt we may incur in the future. (The interest rate risk associated with substantially all of our current mortgage debt is eithergenerally mitigated through long-term fixed interest rate loans and interest rate hedges). Increasing interest rates on acquisition mortgage debt limits the acquisition opportunities we can pursue and reduces the prices at which we sell our properties.

Our main source of revenue is rental income from our tenants. Rental income primarily includes: (i) base rents that our tenants pay in accordance with the terms of their respective leases reported on a straight-line basis over the non-cancellable term of each lease and (ii) reimbursements by tenants of certain real estate operating expenses. Since many of our leases provide for rental increases at specified intervals, straight-line basis accounting requires us to record as an asset and include in revenues, unbilled rent receivables which we will only receive if the tenant makes all rent payments required through the expiration of the term of the lease. Accordingly, our management must determine, in its judgment, that the unbilled rent receivable applicable to each specific tenant is collectable. We review unbilled rent receivables on a quarterly basis and take into considerationconsideration, among other things, the tenant’s payment history and the financial condition of the tenant. In the event that the collectability of an unbilled rent receivable is unlikely, we are required to write-off the receivable, which has an adverse effect on net income for the year in which the direct write-off is taken, and will decrease total assets and stockholders’ equity.

We review our real estate portfolio on a quarterly basis to ascertain if there are any indicators of impairment to the value of any of our real estate assets, including deferred costs and intangibles, to determine if there is any need for an impairment charge. In reviewing the portfolio, we examineexamine, among other things, the type of asset, the current financial statements or other available financial information of the tenant, the economic situation in the area in which the asset is located, the economic situation in the industry in which the tenant is involved and the timeliness of the payments made by the tenant under its lease, as well as any current correspondence that may have been had with the tenant, including property inspection reports. For each real estate asset owned for which indicators of impairment exist, we perform a recoverability test by comparing the sum of the estimated undiscounted future cash flows attributable to the asset to its carrying amount. Management’s assumptions and estimates include projected rental rates during the holding period and property capitalization rates in order to estimate undiscounted future cash flows. If the undiscounted cash flows are less than the asset’s carrying amount, an impairment loss is recorded to the extent that the estimated fair value is less than the asset’s carrying amount. The estimated fair value is determined using a discounted cash flow model of the expected future cash flows through the useful life of the property. Real estate assets that are expected to be disposed of are valued at the lower of carrying amount or fair value less costs to sell on an individual asset basis. We generally do not obtain any independent appraisals in determining value but rely on our own analysis and valuations. Any impairment charge taken with respect to any part of our real estate portfolio will reduce our net income and reduce assets and stockholders’ equity to the extent of the amount of any impairment charge, but it will not affect our cash flow or our distributions until such time as we dispose of the property.

We grant shares of restricted stock and restricted stock units (“RSUs”) to eligible plan participants, subject to the recipient’s continued service over a specified period and, with respect to the RSUs, the satisfaction of specified conditions over a specified period. The RSUs vest based upon satisfaction of specified metrics with respect to the (i) average of our annual total stockholder return (“TSR Awards”) and/or (ii) average annual return of capital (“ROC Awards”), in each case as calculated pursuant to the applicable award agreement. We account for the restricted stock awards and RSUs 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. Grant date fair value is determined with respect to the (i) restricted stock awards, by the closing stock price on the date of grant, (ii) TSR Awards, by using a Monte Carlo simulation relying upon various assumptions and (iii) ROC Awards, by the closing stock price on the date of grant, subject to quarterly adjustment based upon management’s projections as to the achievability of the specified metrics related to the ROC Awards (the “ROC Metrics”). There is substantial subjectivity in (i) the inputs selected for the Monte Carlo simulation used in determining the grant date fair value of the TSR Awards and the use of different inputs would change the expense we recognize with respect to such awards and (ii) management’s projections as to the achievability of the ROC Metrics and changes in such projections will cause fluctuations in our results of operations. See Note 1110 to our consolidated financial statements.

Challenges and uncertainties facing the St. Louis Park, Minnesota property As reported in our Annual Report on Form 10-K for the year ended December 31, 2025, we recorded an impairment charge of $3.3 million with respect to our retail property located at St. Louis Park, Minnesota. At MarchJune 31,30, 2026, approximately 75% of the property is vacant. Based on the lease in effect at AprilJuly 1, 2026, we expect this property to generate rental income (excluding tenant reimbursements) of $505,000approximately and$500,000 for 2026 and, in 2025, we generated $917,000 of rental income (excluding tenant reimbursements) from this property. We estimate that this property will incur unreimbursed real estate expenses of approximately $400,000$260,000 during the ninesix months ending December 31, 2026. We are pursuing the sale and/or lease of this property and may be required to take additional impairment(s) with respect thereto.

We acquire, own and manage a geographically diversified portfolio consisting primarily of industrial properties.properties (and in particular, warehouse and distribution facilities). As of MarchJune 31,30, 2026, we own 111109 properties with approximately 12.412.2 million square feet,feet (including 7980 industrial properties with approximately 11.0 million square feet) located in 33 states. Based on square footage, our overall occupancy rate at MarchJune 31,30, 2026 is approximately 98.8%.97.6% and the occupancy rate by property type is: 98.3% for our industrial properties, 87.8% for our retail properties and 100% for our other properties.

Our Base Rent is approximately $83.2$84.0 million; Base Rent represents the base rent payable to us during the twelve months ending MarchJune 31,30, 2027 under leases in effect at AprilJuly 1, 2026 (excluding tenant reimbursements and after giving effect to any abatements, concessions, deferrals or adjustments). It excludes an aggregate of $2.2 million$619,000 representing the Base Rent of threetwo retail properties which werewe sold orin areJuly anticipated2026 toand beanticipate soldselling duringin theAugust three2026 months(i.e., endingMonroeville, JunePennsylvania 30,and 2026.Chicago, Illinois).

The following table sets forth information about our properties by industry sector as of MarchJune 31,30, 2026:

The following table sets forth scheduled expirations of leases at our properties as of MarchJune 31,30, 2026 for the years indicated below:

Property Transactions During the Three Months Ended MarchJune 31,30, 2026

AcquisitionsAcquisition

During the threesix months ended MarchJune 31,30, 2026 and year ended December 31, 2025, these properties (the “Illinois/Texas Properties”) contributed $616,000$858,000 and $2.5$2.6 million of rental incomeincome, net, $308,000$183,000 and $1.6$1.7 million of operating expenses (including $197,000$264,000 and $758,000$816,000 of depreciation and amortization expense), and $84,000$148,000 and $345,000$372,000 of mortgage interest expense, respectively.

The changechanges in same store rental income isduring the three and six months ended June 30, 2026 are due primarily to increases of:

The increases were offset during the three and six months ended June 30, 2026 by decreases in rental income of:

Depreciation and amortization. The increaseincreases isin the three and six months ended June 30, 2026 are due primarily to (i) $2.3$2.1 million and $4.4 million, respectively, from the properties acquired since January 1, 2025, and (ii) $101,000 from improvements at several properties.2025.

The increaseincreases waswere offset primarily by (i) the inclusion, in the corresponding 2025 period,periods, of $303,000$410,000 and $708,000, respectively, from the properties sold since January 1, 2025, and (ii) decreases of $91,000 related to tenant origination costs at several properties that prior to March 31, 2026 were fully amortized.2025.

Real estate expenses. The increaseincreases isin the three and six months ended June 30, 2026 are due primarily to (i) $919,000$819,000 and $1.7 million, respectively, from the properties acquired since January 1, 2025, and (ii) $290,000$186,000 and $455,000, respectively, primarily related to common area maintenance and utilitiesinsurance expense at several properties, none of which were individually significant.

The increase was offset by (i) the inclusion, in the corresponding 2025 period,periods, of $309,000$757,000 and $1.1 million, respectively, from the properties sold since January 1, 2025, and (ii) decreases of $226,000$210,000 and $370,000, respectively, related to real estate tax expense primarily at our El Paso, Texas property for which we collected a refund on taxes paid in a prior year.

A substantial portion of real estate expenses is rebilled to tenants and is included in Rental income, net, on the consolidated statements of income. The portion of real estate expenses not reimbursed by our tenants was $1.1 million$690,000 and $776,000$1.8 million for the three and six months ended MarchJune 31,30, 20262026, respectively, and $780,000 and $1.6 million for the three and six months ended June 30, 2025, respectively.

State tax expense (benefit). During the threesix months ended MarchJune 31,30, 2025, our state tax expense was offset by a $135,000 refund from Tennessee related to franchise taxes paid in 2023, as the state amended the method of calculating such taxes, resulting in an overpayment in such year.

The following table compares gain on sale of real estate, netnet, for the periods indicated:

The increaseincreases in mortgage interest isin the three and six months ended June 30, 2026 are due to increases in the weighted average principal amount of mortgage debt outstanding and, to a lesser extent, the weighted average interest rate.

The increaseincreases in credit line interest isin the three and six months ended June 30, 2026 are due to the increaseincreases in the weighted average principal amount outstanding.of credit line debt outstanding, offset by the decrease in the weighted average interest rate.

Our sources of liquidity and capital include cash flow from operations, cash and cash equivalents, borrowings under our credit facility, refinancing existing mortgage loans, obtaining mortgage loans secured by our unencumbered properties, issuance of our equity securities and property sales. Our available liquidity at MayAugust 1,3, 2026, was $79.8$110.6 million, including $5.3$15.4 million of cash and cash equivalents (including the creditNew facility’sCredit Facility’s required minimum $3.0 million average deposit maintenance balance) and up to $74.5$95.2 million available under our credit facility. At May 1, 2026, the facility is available for the acquisition of commercial real estate, repayment of mortgage debt, and up to $38.5 million for renovation and operating expense purposes.thereunder.

At MarchJune 31,30, 2026, we had 6160 outstanding mortgages payable secured by 7473 properties in the aggregate principal amount of $534.7$533.4 million (before netting unamortized deferred financing costs of $4.7$4.6 million and mortgage intangibles of $496,000$462,000). These mortgages represent first liens on individual real estate investments with an aggregate carrying value of $830.8$828.0 million, before accumulated depreciation of $140.0$134.6 million. After giving effect to an interest rate swap agreements,swap, the mortgage payments bear interest at fixed rates ranging from 3.05% to 6.42% (a 4.91%4.94% weighted average interest rate) and mature between 2026 and 2047 (a 5.65.4 year weighted average remaining term to maturity).

The following table sets forth, as of MarchJune 31,30, 2026, information with respect to our mortgage debt:

We intend to make debt amortization payments from operating cash flow and,and although no assurance can be given that we will be successful in this regard, generally intend to refinance, extend or pay off the mortgage loans which mature from 2026 through 2029. We generally intend to repay the amounts not refinanced or extended from our existing funds and other sources of funds, including our available cash, proceeds from the sale of our common stock and our credit facility (to the extent available).

Typically, weWe utilize funds from our credit facilityfacility, as needed, to acquire a property and, thereafter secure long-term, fixed rate mortgage debt on such property. We apply the proceeds from the mortgage loan to repay borrowings under the credit facility, thus providing us with the ability to re-borrow under the credit facility for the acquisition of additional properties.

Three months ended MarchJune 31,30, 2026 and 2025

The $1.4$1.1 million, or 14.1%,11.6%, increase in FFO for the three months ended MarchJune 31,30, 2026 from the corresponding 2025 period is due primarily to: the $2.5 million increase in rental income.