# Getty Realty Corp: Form 10-Q for the period ended Mar 31, 2025

- Company: [Getty Realty Corp](/companies/gty.md) (CIK 1052752)
- Form: 10-Q
- Filed: 2025-04-24
- Accepted by EDGAR: Apr 24, 2025, 20:15 ET
- Period: 2025-03-31
- Accession: 0000950170-25-058063
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1052752/000095017025058063/gty-20250331.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1052752/000095017025058063/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-03-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2025-01-01 to 2025-03-31 | $52.3m | us-gaap:Revenues |
| Operating income | 3 months, 2025-01-01 to 2025-03-31 | $26.4m | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months, 2025-01-01 to 2025-03-31 | $11.7m | us-gaap:InterestExpense |
| Net income | 3 months, 2025-01-01 to 2025-03-31 | $14.8m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2025-01-01 to 2025-03-31 | $0.25 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2025-01-01 to 2025-03-31 | $0.25 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2025-01-01 to 2025-03-31 | 55,191,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 3 months, 2025-01-01 to 2025-03-31 | $28.7m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Dividends paid | 3 months, 2025-01-01 to 2025-03-31 | $26.5m | us-gaap:PaymentsOfDividends |
| Cash and equivalents | at 2025-03-31 | $6.3m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Total assets | at 2025-03-31 | $1.97bn | us-gaap:Assets |
| Total liabilities | at 2025-03-31 | $1.01bn | us-gaap:Liabilities |
| Long-term debt | at 2025-03-31 | $901.4m | us-gaap:LongTermDebt |
| Shareholders' equity | at 2025-03-31 | $961.1m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 61,714 characters.

The following discussion and analysis of financial condition and results of operations should be read in conjunction with the sections entitled “Item 1A. Risk Factors” and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2024; and “Part I, Item 1. Financial Statements” in this Quarterly Report on Form 10-Q.

### Cautionary Note Regarding Forward-Looking Statements

Certain statements in this Quarterly Report on Form 10-Q may constitute “forward-looking statements” within the meaning of the federal securities laws that are subject to the safe harbor created under the Private Securities Litigation Reform Act of 1995, including Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Statements preceded by, followed by, or that otherwise include the words “believes,” “expects,” “seeks,” “plans,” “projects,” “estimates,” “anticipates,” “predicts” and similar expressions or future or conditional verbs such as “will,” “should,” “would,” “may” and “could” are generally forward-looking in nature and are not historical facts. All capitalized and undefined terms used in this section shall have the same meanings hereafter defined in this Quarterly Report on Form 10-Q.

Examples of forward-looking statements included in this Quarterly Report on Form 10-Q include, but are not limited to, our statements regarding:

- our network of convenience stores, express tunnel car washes, automotive service centers, and certain other freestanding retail properties, including drive-thru quick service restaurants and automotive parts retailers;
- our investment strategy and its impact on our financial performance;
- changes in market conditions affecting our tenants and their financial stability and creditworthiness, which would impact their compliance with lease obligations;
- concentration of certain tenants in similar industries or concentration of our owned and leased properties in certain geographic locations;
- the amount of revenue we expect to realize from our properties, including renewal of existing leases, sale, acquisition or redevelopment opportunities;
- our belief that our real estate assets are not carried at amounts in excess of their estimated net realizable fair value amounts;
- compliance of our properties with federal, state, and local provisions enacted or adopted pertaining to environmental matters;
- our ability to maintain our federal tax status as a REIT, effects of U.S. federal tax reform and other legislative, regulatory, and administrative developments;
- our competitive position in our industry, including the impact of existing legislation and regulations;
- the cost and potential outcomes of current and future environmental and litigation matters, including those resulting from preexisting unknown environmental contamination and matters related to our former Newark, New Jersey Terminal and the Lower Passaic River, our MTBE multi-district litigation cases in the states of Pennsylvania and Maryland, and related accruals, estimates, and assumptions regarding our liabilities, remediation costs and expected recoveries;
- impact of global political and economic uncertainties, including changes in tariff policies and trade relationships, geopolitical conflicts, and public health crises, and their potential effects on our operations, tenant performance, and financial condition;
- our ability to adequately secure our information technology systems and the regulated data stored therein, as required by law;
- the adequacy of our insurance coverage and that of our tenants on our owned and leased properties;
- our ability to attract and retain key management personnel;
- our workplace demographics, recruiting efforts, and employee compensation program;
- our use of FFO and AFFO as measures that represent our core operating performance and its utility in comparing our core operating performance between periods;
- the reasonableness of our estimates, judgments, projections, and assumptions used regarding our accounting policies and methods;
- our ability to maintain an effective system of internal control over financial reporting;
- our indemnification obligations and the indemnification obligations of others;
- the adequacy of our current and anticipated cash flows from operations, borrowings under our Credit Facility, and available cash and cash equivalents to fund our future operating expenses and capital expenditure requirements;
- our continued compliance with the covenants in our credit and notes agreements;
- our ability to pay dividends and changes to our dividend policy; and
- our dependence on external sources of capital, timing of and need for additional financing and dilution as a result of future issuances of equity securities.

These forward-looking statements are based on our current beliefs and assumptions and information currently available to us, and are subject to known and unknown risks, uncertainties and other factors including, but not limited to, the risks described in “Item 1A. Risk Factors” and “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K and this Quarterly Report on Form 10-Q as such risk factors may be updated from time to time in our public filings. Such risks and uncertainties were derived based on numerous important assumptions, which may not be realized, and may cause our actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by such forward-looking statements. Most of these factors are difficult to predict accurately and are generally beyond our control. New risk factors and uncertainties may also emerge from time to time, and there can be no assurance that we have identified all risks and uncertainties that may affect it.

As a result of these and other factors, we may experience material fluctuations in future operating results on a quarterly or annual basis, which could materially and adversely affect our business, financial condition, operating results, our growth or reinvestment strategies, our ability to pay dividends or stock price. An investment in our stock involves various risks, including those mentioned above and elsewhere in our Annual Report on Form 10-K, this Quarterly Report on Form 10-Q and those that are described from time to time in our other filings with the SEC.

You should not place undue reliance on forward-looking statements, which reflect our view only as of the date hereof. Except for our ongoing obligations to disclose material information under the federal securities laws, we undertake no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events, unless required by law.

### General

### Real Estate Investment Trust

We are a net lease REIT specializing in the acquisition, financing and development of convenience, automotive and other single tenant retail real estate. Our portfolio is comprised of convenience stores, express tunnel car washes, automotive service centers (gasoline and repair, oil and maintenance, tire and battery, and collision), and certain other freestanding retail properties, including drive-thru quick service restaurants and automotive parts retailers. As of March 31, 2025, our portfolio included 1,119 properties, including 1,088 properties owned by us and 31 properties that we leased from third-party landlords. As a REIT, we are not subject to federal corporate income tax on the taxable income we distribute to our stockholders. In order to continue to qualify for taxation as a REIT, we are required, among other things, to distribute at least 90% of our ordinary taxable income to our stockholders each year.

### Our Properties

Our 1,119 properties are located in 42 states and Washington D.C. and include a concentration in the Northeast and Mid-Atlantic regions that we believe is unique and not readily available for purchase or lease from other owners or landlords. Our typical property consists of approximately one acre of land in a larger metropolitan area and is used as a convenience store, express tunnel car wash, automotive service center, or certain other freestanding retail uses, including drive-thru quick service restaurants and automotive parts retailers. Many of our properties are located at highly trafficked urban intersections or conveniently close to highway entrances or exit ramps.

As of March 31, 2025, we leased 1,115 of our properties to tenants under triple-net leases, including 912 properties leased under 51 separate unitary or master triple-net leases, and 203 properties leased under single unit triple-net leases. These leases generally provide for an initial term of 15 or 20 years, with options for successive renewal terms of up to 20 years, and periodic rent escalations. As of March 31, 2025, our weighted average remaining lease term, excluding renewal options, was 10.0 years.

Substantially all of our properties are leased on triple-net basis to convenience store operators, petroleum distributors, express tunnel car wash operators and other automotive-related and retail tenants. Our tenants either operate their business at our properties directly or, in the case of certain convenience stores and gasoline and repair stations, sublet our properties and supply fuel to third parties that operate the businesses. For additional information regarding risks related to our tenants’ dependence on the performance of the industry, see “Item 1A. Risk Factors—Risks Related to Our Business and Operations—Significant number of our tenants depend on the same industry for their revenues” in our Annual Report on Form 10-K for the year ended December 31, 2024.

Our triple-net lease tenants are responsible for the payment of all taxes, maintenance, repairs, insurance and other operating expenses relating to our properties, and are also responsible for environmental contamination occurring during the terms of their leases. Substantially all of our tenants are also responsible for pre-existing environmental contamination that is discovered during their lease term, except contamination that was known at lease commencement, as to which we have established reserves. For additional information regarding our environmental obligations, see Note 7 – Environmental Obligations.

As of March 31, 2025, we also had three properties vacant and one property under redevelopment.

### Investment Strategy and Activity

As part of our strategy to grow and diversify our portfolio, we regularly review acquisition and financing opportunities to invest in additional convenience, automotive and other single tenant retail real estate. We primarily pursue sale leaseback transactions with existing and prospective tenants and will also provide forward commitments to acquire new-to-industry construction and acquire assets with in-place leases. Our investment activities may also include purchase money financing with respect to properties we sell, real property loans relating to our leasehold properties, and construction loans or other financing for the development of new-to-industry properties. Our investment strategy seeks to generate current income and benefit from long-term appreciation in the underlying value of our real estate. To achieve that goal, we seek to invest in well-located, freestanding properties that support automobility and provide convenience and service to consumers in major markets across the country. A key element of our investment strategy is to invest in properties that will enhance our property type, tenant, and geographic diversification.

During the three months ended March 31, 2025, we invested $11.1 million across six properties, including the acquisition of three drive-thru quick service restaurants, one express tunnel car wash and one auto service center.

During the three months ended March 31, 2024, we invested $40.6 million (net of amounts funded in prior periods) across 35 properties, including the acquisition 12 express tunnel car washes, seven auto service centers, two drive-thru quick service restaurants, and one convenience store.

### Redevelopment Strategy and Activity

We believe that certain of our properties, primarily those currently being used as gas and repair businesses, are well-suited to be redeveloped as modern convenience stores or other single tenant convenience and automotive retail uses, such as automotive parts retailers, quick service restaurants, auto service centers, and bank branches. We believe that the redeveloped properties can be leased or sold at higher values than their prior use. Since the inception of our redevelopment program in 2015, we have completed 32 redevelopment and revenue-enhancing capital expenditure projects.

As of March 31, 2025, we had one property under active redevelopment and others in various stages of feasibility planning for potential recapture from our net lease portfolio.

### Supplemental Non-GAAP Measures

We manage our business to enhance the value of our real estate portfolio and, as a REIT, place particular emphasis on minimizing risk, to the extent feasible, and generating cash sufficient to make required distributions to stockholders of at least 90% of our ordinary taxable income each year. In addition to measurements defined by accounting principles generally accepted in the United States of America (“GAAP”), we also focus on Funds From Operations (“FFO”) and Adjusted Funds From Operations (“AFFO”) to measure our performance.

FFO and AFFO are generally considered by analysts and investors to be appropriate supplemental non-GAAP measures of the performance of REITs. FFO and AFFO are not in accordance with, or a substitute for, measures prepared in accordance with GAAP. In addition, FFO and AFFO are not based on any comprehensive set of accounting rules or principles. Neither FFO nor AFFO represent cash generated from operating activities calculated in accordance with GAAP and therefore these measures should not be considered an alternative for GAAP net earnings or as a measure of liquidity. These measures should only be used to evaluate our performance in conjunction with corresponding GAAP measures.

FFO is defined by the National Association of Real Estate Investment Trusts (“NAREIT”) as GAAP net earnings before (i) depreciation and amortization of real estate assets, (ii) gains or losses on dispositions of real estate assets, (iii) impairment charges, and (iv) the cumulative effect of accounting changes.

We define AFFO as FFO excluding (i) certain revenue recognition adjustments (defined below), (ii) certain environmental adjustments (defined below), (iii) stock-based compensation, (iv) amortization of debt issuance costs and (v) other non-cash and/or unusual items that are not reflective of our core operating performance.

Other REITs may use definitions of FFO and/or AFFO that are different than ours and, accordingly, may not be comparable.

We believe that FFO and AFFO are helpful to analysts and investors in measuring our performance because both FFO and AFFO exclude various items included in GAAP net earnings that do not relate to, or are not indicative of, the core operating performance of our portfolio. Specifically, FFO excludes items such as depreciation and amortization of real estate assets, gains or losses on dispositions of real estate assets, and impairment charges. With respect to AFFO, we further exclude the impact of (i) deferred rental revenue (straight-line rent), the net amortization of intangible market lease assets and liabilities, adjustments recorded for the recognition of rental income from direct financing leases, and the amortization of deferred lease incentives (collectively, “Revenue Recognition Adjustments”), (ii) environmental accretion expenses, environmental litigation accruals, insurance reimbursements, legal settlements and judgments, and changes in environmental remediation estimates (collectively, “Environmental Adjustments”), (iii) stock-based compensation expense, (iv) amortization of debt issuance costs and (v) other items, which may include allowances for credit losses on notes and mortgages receivable and direct financing leases, losses on extinguishment of debt, retirement and severance costs, and other items that do not impact our recurring cash flow and which are not indicative of our core operating performance.

We pay particular attention to AFFO which we believe provides the most useful depiction of the core operating performance of our portfolio. By providing AFFO, we believe we are presenting information that assists analysts and investors in their assessment of our core operating performance, as well as the sustainability of our core operating performance with the sustainability of the core operating performance of other real estate companies.

A reconciliation of net earnings to FFO and AFFO is as follows (in thousands, except per share amounts):

|  | Three Months Ended March 31, 2025 | 2024 |
| --- | ---: | ---: |
| Net earnings | $14,786 | $16,723 |
| Depreciation and amortization of real estate assets | 16,041 | 12,652 |
| Gains on dispositions of real estate | (328) | (1,044) |
| Impairments | 1,169 | 1,280 |
| Funds from operations (FFO) | 31,668 | 29,611 |
| Revenue recognition adjustments |  |  |
| Deferred rental revenue (straight-line rent) | (1,949) | (1,546) |
| Amortization of intangible market lease assets and liabilities, net | (81) | (126) |
| Amortization of investment in direct financing leases | 1,093 | 1,606 |
| Amortization of lease incentives | 202 | (253) |
| Total revenue recognition adjustments | (735) | (319) |
| Environmental Adjustments |  |  |
| Accretion expense | 97 | 124 |
| Changes in environmental estimates | (208) | (295) |
| Environmental litigation accruals | — | — |
| Insurance reimbursements | (43) | (65) |
| Legal settlements and judgments | — | (41) |
| Total environmental adjustments | (154) | (277) |
| Other Adjustments |  |  |
| Stock-based compensation expense | 1,613 | 1,369 |
| Amortization of debt issuance costs | 1,405 | 563 |
| Retirement and severance costs | — | 456 |
| Total other adjustments | 3,018 | 2,388 |
| Adjusted funds from operations (AFFO) | $33,797 | $31,403 |
| Basic per share amounts: |  |  |
| Net earnings | $0.25 | $0.30 |
| FFO (a) | 0.56 | 0.53 |
| AFFO (a) | 0.60 | 0.57 |
| Diluted per share amounts: |  |  |
| Net earnings | $0.25 | $0.30 |
| FFO (a) | 0.56 | 0.53 |
| AFFO (a) | 0.59 | 0.57 |
| Weighted average common shares outstanding: |  |  |
| Basic | 55,062 | 53,961 |
| Diluted | 55,191 | 53,969 |

(a) Dividends paid and undistributed earnings allocated, if any, to unvested restricted stockholders are deducted from FFO and AFFO for the computation of the per share amounts. The following amounts were deducted:

|  | Three Months Ended March 31, 2025 | 2024 |
| --- | ---: | ---: |
| FFO | $944 | $792 |
| AFFO | 1,008 | 839 |

29

### Results of Operations

### Three months ended March 31, 2025, compared to the three months ended March 31, 2024

The following table presents select data and comparative results from our consolidated statements of operations for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024 (in thousands):

| Revenues: | For the Three Months Ended March 31, 2025 | 2024 | $ Change |
| --- | ---: | ---: | ---: |
| Revenues from rental properties | $51,706 | $47,215 | $4,491 |
| Interest on notes and mortgages receivable | 624 | 1,755 | (1,131) |
| Operating expenses: |  |  |  |
| Property costs | 1,982 | 3,703 | (1,721) |
| Impairments | 1,169 | 1,280 | (111) |
| Environmental | 116 | (17) | 133 |
| General and administrative | 6,926 | 6,656 | 270 |
| Depreciation and amortization | 16,041 | 12,652 | 3,389 |
| Other items: |  |  |  |
| Gains on dispositions of real estate | 328 | 1,044 | (716) |
| Interest expense | 11,732 | 9,135 | 2,597 |

#### Revenues from Rental Properties

The following table presents the results for revenues from rental properties for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024 (in thousands):

|  | For the Three Months Ended March 31, 2025 | 2024 | $ Change |
| --- | ---: | ---: | ---: |
| Rental income | $49,863 | $44,056 | $5,807 |
| Revenue recognition adjustments | 735 | 319 | 416 |
| Tenant reimbursement income | 1,108 | 2,840 | (1,732) |
| Total revenues from rental properties | 51,706 | 47,215 | 4,491 |

Rental income includes base rental income and additional rental income, if any, based on the aggregate volume of fuel sold at certain properties. The increase in rental income was primarily due to additional base rental income from properties acquired during the prior 12 months, as well as rent commencements from completed redevelopments and contractual rent increases for certain in-place leases, partially offset by dispositions of real estate during the same period.

In accordance with GAAP, we recognize revenues from rental properties in amounts which vary from the amount of rent contractually due during the periods presented. As a result, revenues from rental properties include revenue recognition adjustments comprised of (i) non-cash adjustments recorded for deferred rental revenue due to the recognition of rental income on a straight-line basis over the current lease term, (ii) the net amortization of intangible market lease assets and liabilities, (iii) recognition of rental income under direct financing leases using the effective interest rate method which produces a constant periodic rate of return on the net investments in the leased properties, and (iv) the amortization of deferred lease incentives.

Tenant reimbursements consist of real estate taxes and other municipal charges paid by us which are reimbursable by our tenants pursuant to the terms of triple-net lease agreements. The decrease in tenant reimbursement income was driven by a decrease in reimbursable real estate taxes due from our tenants as we transitioned certain tenants to paying real estate taxes due directly to the applicable taxing authorities.

#### Interest on Notes and Mortgages Receivable

The decrease in interest on notes and mortgages receivable was due to a decrease in average notes and mortgages receivables outstanding as collections of notes and mortgages receivable for completed development funding projects offset incremental development funding advances for the construction of new-to-industry properties.

#### Property Costs

The following table presents the results for property costs for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024 (in thousands):

|  | For the Three Months Ended March 31, 2025 | 2024 | $ Change |
| --- | ---: | ---: | ---: |
| Property operating expenses | $1,824 | $3,639 | $(1,815) |
| Leasing and redevelopment expenses | 158 | 64 | 94 |
| Total property costs | 1,982 | 3,703 | (1,721) |

Property costs are comprised of (i) property operating expenses, including rent expense, reimbursable and non-reimbursable real estate taxes and municipal charges, certain state and local taxes, and maintenance expenses, and (ii) leasing and redevelopment expenses, including professional fees, demolition costs, and redevelopment project cost write-offs, if any.

The decrease in property operating expenses was primarily due to a decrease in reimbursable real estate taxes as we transitioned certain tenants to paying real estate taxes directly to the applicable taxing authorities, as well as lower rent expense. The increase in leasing and redevelopment expenses was primarily due to an increase in professional fees related to leasing activities for potential redevelopment projects.

#### Impairments

Impairments are recorded when the carrying value of a property is reduced to fair value. Impairment charges for the three months ended March 31, 2025 and 2024 were attributable to the addition of asset retirement costs to certain properties due to changes in estimates associated with our environmental liabilities, which increased the carrying values of these properties in excess of their fair values. Impairment charges for the three months ended March 31, 2025 also included reductions in the carrying value of certain properties based on third-party indications of potential selling prices.

#### Environmental Expenses

The change in environmental expenses was primarily due to higher legal fees and changes in environmental estimates. Environmental expenses vary from period to period and, accordingly, undue reliance should not be placed on the magnitude or the direction of change in reported environmental expenses for one period, as compared to prior periods.

#### General and Administrative Expenses

The increase in general and administrative expenses was primarily due to increases in employee-related expenses, professional fees, and certain deal pursuit costs, partially offset by decreases in non-recurring retirement and severance costs and information technology expenses.

#### Depreciation and Amortization Expenses

The increase in depreciation and amortization expenses was primarily due to additional depreciation and amortization from properties acquired during the prior 12 months, partially offset by a decrease in depreciation charges related to asset retirement costs, the effect of certain assets becoming fully depreciated, lease terminations, and dispositions of real estate during the same period.

#### Gains on Dispositions of Real Estate

The gains on dispositions of real estate were primarily due to the disposition of two properties during the three months ended March 31, 2025 and one property during the three months ended March 31, 2024.

#### Interest Expense

The increase in interest expense was due to higher average borrowings and higher average interest rates during the three months ended March 31, 2025, as compared to the three months ended March 31, 2024.

### Liquidity and Capital Resources

### General

Our primary uses of liquidity include payments of operating expenses, interest on our outstanding debt, environmental remediation costs, distributions to shareholders, and future acquisitions and redevelopment projects. We have not historically incurred significant capital expenditures other than those related to acquisitions.

We expect to meet our short-term liquidity requirements through cash flow from operations, funds available under our Credit Facility, proceeds from Senior Unsecured Notes, proceeds from the settlement of shares of common stock subject to forward sales agreements under our Equity Offering and ATM Program, and available cash and cash equivalents.

As of March 31, 2025, we had $292.5 million of availability under our Credit Facility, 5.0 million shares of common stock subject to forward sales agreements which are anticipated to generate approximately $153.4 million of gross proceeds upon settlement, and available cash and cash equivalents of $6.3 million.

We anticipate meeting our longer-term capital needs through cash flow from operations, funds available under our Credit Facility, available cash and cash equivalents, the future issuance of shares of common stock or debt securities, and proceeds from future real estate asset sales.

Our cash flow activities for the three months ended March 31, 2025 and 2024, are summarized as follows (in thousands):

|  | Three Months Ended March 31, 2025 | 2024 | $ Change |
| --- | ---: | ---: | ---: |
| Net cash flow provided by operating activities | $28,677 | $29,951 | $(1,274) |
| Net cash flow used in investing activities | (10,788) | (36,794) | 26,006 |
| Net cash flow (used in) provided by financing activities | (21,117) | 14,488 | (35,605) |

### Operating Activities

The change in net cash flow provided by operating activities for the three months ended March 31, 2025 and 2024 was primarily the result of changes in revenues and expenses as discussed in “Results of Operations” above and the other changes in assets and liabilities on our consolidated statements of cash flows.

### Investing Activities

The decrease in net cash flow used in investing activities was primarily due to a $75.3 million decrease in property acquisitions and an $11.6 million decrease in issuance of notes and mortgages receivable, partially offset by a $57.3 million decrease in collections of notes and mortgages receivable.

### Financing Activities

The increase in net cash flow used in financing activities was primarily due to the repayments of our $150.0 million Term Loan and $50.0 million Series C Notes, partially offset by the issuance of $125.0 million of new Senior Unsecured Notes, an increase of $35.0 million in net borrowings under the Credit Facility, and an increase in net proceeds from the issuance of common stock under the ATM Program of $11.1 million.

### Credit Facility

In January 2025, we entered into a third amended and restated credit agreement (as amended, the “Third Restated Credit Agreement”). The Third Restated Credit Agreement provides for an unsecured revolving credit facility (the “Credit Facility”) in an aggregate principal amount of $450.0 million and includes an accordion feature to increase the revolving commitments or add one or more tranches of term loans up to an additional aggregate amount not to exceed $300.0 million, subject to certain conditions, including one or more new or existing lenders agreeing to provide commitments for such increased amount and that no default or event of default shall have occurred and be continuing under the terms of the Credit Facility.

The Credit Facility matures in January 2029, subject to two six-month extensions (for a total of 12 months) exercisable at our option. Our exercise of an extension option is subject to the absence of any default and our compliance with certain conditions, including the payment of extension fees to the lenders under the Credit Facility.

Borrowings under the Credit Facility bear interest at a rate equal to (i) the sum of a SOFR rate plus a SOFR adjustment of 0.10% plus a margin of 1.30% to 1.90%, or (ii) the sum of a base rate plus a margin of 0.30% to 0.90%, in each case with the margin based on our consolidated total indebtedness to total asset value ratio at the end of each quarterly reporting period.

The per annum rate of the unused line fee on the undrawn funds under the Credit Facility is 0.15% to 0.25% based on our daily unused portion of the available Credit Facility.

### Term Loan

In October 2023, we entered into a term loan credit agreement (the “Term Loan Agreement”) that provided for a senior unsecured term loan (the "Term Loan") in an aggregate principal amount of $150.0 million. The Term Loan was to mature in October 2025, subject to one twelve-month extension exercisable at our option.

In January 2025, we used borrowings under the Third Restated Credit Agreement to repay, in full, the Term Loan. As a result of this early repayment, we recognized approximately $0.9 million in unamortized debt issuance costs, which were expensed as interest expense on our consolidated statements of operations.

### Senior Unsecured Notes

In November 2024, we entered into a seventh amended and restated note purchase and guarantee agreement with The Prudential Insurance Company of America and certain of its affiliates (collectively, “Prudential”) (the "Seventh Amended and Restated Prudential Agreement") pursuant to which, in February 2025, we issued $50.0 million of 5.70% Series T Guaranteed Senior Notes due February 22, 2032 (the “Series T Notes”) to Prudential and used the proceeds to repay the $50.0 million of 4.75% Series C Guaranteed Senior Notes due February 25, 2025 (the “Series C Notes”) outstanding under our sixth amended and restated note purchase and guarantee agreement with Prudential (the "Sixth Amended and Restated Prudential Agreement"). The other senior unsecured notes outstanding as of March 31, 2025 under the Sixth Amended and Restated Prudential Agreement, including (i) $50.0 million of 5.47% Series D Guaranteed Senior Notes due June 21, 2028 (the “Series D Notes”), (ii) $50.0 million of 3.52% Series F Guaranteed Senior Notes due September 12, 2029 (the “Series F Notes”), (iii) $100.0 million of 3.43% Series I Guaranteed Senior Notes due November 25, 2030 (the “Series I Notes”) and (iv) $80.0 million of 3.765% Series Q Guaranteed Senior Notes due January 20, 2033 (the “Series Q Notes”), remain outstanding under the Seventh Amended and Restated Prudential Agreement.

In November 2024, we entered into an amended and restated note purchase and guarantee agreement with New York Life Insurance Company and certain of its affiliates (collectively, “New York Life”) (the “Amended and Restated New York Life Agreement”) pursuant to which, in February 2025, we issued $50.0 million of 5.52% Series R Guaranteed Senior Notes due September 12, 2029 (the “Series R Notes”) and $25.0 million of 5.70% Series S Guaranteed Senior Notes due February 22, 2032 (the “Series S Notes”) to New York Life. The other senior unsecured notes outstanding as of March 31, 2025 under our note purchase and guarantee agreement with New York Life (the “New York Life Agreement”), including (i) $25.0 million of 3.45% Series N Guaranteed Senior Notes due February 22, 2032 (the “Series N Notes”) and (ii) $25.0 million of 3.65% Series P Guaranteed Senior Notes due January 20, 2033 (the “Series P Notes”), remain outstanding under the Amended and Restated New York Life Agreement.

In February 2022, we entered into a second amended and restated note purchase and guarantee agreement with American General Life Insurance Company and certain of its affiliates (collectively, “AIG”) (the “Second Amended and Restated AIG Agreement”) pursuant to which we issued $55.0 million of 3.45% Series L Guaranteed Senior Notes due February 22, 2032 (the “Series L Notes”) to AIG. The other senior unsecured notes outstanding as of March 31, 2025 under our first amended and restated note purchase and guarantee agreement with AIG (the “First Amended and Restated AIG Agreement”), including (i) $50.0 million of 3.52% Series G Guaranteed Senior Notes due September 12, 2029 (the “Series G Notes”) and (ii) $50.0 million of 3.43% Series J Guaranteed Senior Notes due November 25, 2030 (the “Series J Notes”), remain outstanding under the Second Amended and Restated AIG Agreement.

In February 2022, we entered into a second amended and restated note purchase and guarantee agreement with Massachusetts Mutual Life Insurance Company and certain of its affiliates (collectively, “MassMutual”) (the “Second Amended and Restated MassMutual Agreement”) pursuant to which we issued $20.0 million of 3.45% Series M Guaranteed Senior Notes due February 22, 2032 (the “Series M Notes”) and, in January 2023, $20.0 million of 3.65% Series O Guaranteed Senior Notes due January 20, 2033 (the “Series O Notes”) to MassMutual. The other senior unsecured notes outstanding as of March 31, 2025 under our first amended and restated note purchase and guarantee agreement with MassMutual (the “First Amended and Restated MassMutual Agreement”), including (i) $25.0 million of 3.52% Series H Guaranteed Senior Notes due September 12, 2029 (the “Series H Notes”) and (ii) $25.0 million of 3.43% Series K Guaranteed Senior Notes due November 25, 2030 (the “Series K Notes”), remain outstanding under the Second Amended and Restated MassMutual Agreement.

In June, 2018, we entered into a note purchase and guarantee agreement with MetLife and certain of its affiliates (collectively, "MetLife") (the “MetLife Agreement”) pursuant to which we issued $50.0 million of 5.47% Series E Guaranteed Senior Notes due June 21, 2028 (the “Series E Notes”) to MetLife.

The funded and outstanding Series D Notes, Series E Notes, Series F Note, Series G Notes, Series H Notes, Series I Notes, Series J Notes, Series K Notes, Series L Notes, Series M Notes, Series N Notes, Series O Notes, Series P Notes, Series Q Notes, Series R Notes, Series S Notes and Series T Notes are collectively referred to as the "Senior Unsecured Notes".

### Debt Maturities

The amounts outstanding under our Credit Facility, Term Loan, and Senior Unsecured Notes, exclusive of extension options, are as follows ($ in thousands):

|  | Maturity Date | Interest Rate | March 31, 2025 | December 31, 2024 |
| --- | --- | ---: | ---: | ---: |
| Credit Facility (a) | January 2029 | 6.11% | $157,500 | $82,500 |
| Term Loan | October 2025 | 6.13% | — | 150,000 |
| Series C Note | February 2025 | 4.75% | — | 50,000 |
| Series D-E Notes | June 2028 | 5.47% | 100,000 | 100,000 |
| Series F-H, R Notes | September 2029 | 4.09% | 175,000 | 125,000 |
| Series I-K Notes | November 2030 | 3.43% | 175,000 | 175,000 |
| Series L-N, S-T Notes | February 2032 | 4.41% | 175,000 | 100,000 |
| Series O-Q Notes | January 2033 | 3.65% | 125,000 | 125,000 |
| Total debt |  |  | 907,500 | 907,500 |
| Unamortized debt issuance costs, net (b) |  |  | (6,090) | (3,158) |
| Total debt, net |  |  | $901,410 | $904,342 |

(a) Amounts borrowed under the Credit Facility include $150.0 million subject to interest rate swaps that fixed SOFR at a weighted average of 4.73% over a maximum period ending October 2026. Including the impact of the swaps, the effective interest rate for $150.0 million borrowings was 6.13% based on our consolidated total indebtedness.

(b) Unamortized debt issuance costs related to the Credit Facility were $4.4 million and $0.6 million as of March 31, 2025 and December 31, 2024, respectively, and are included in prepaid expenses and other assets on our consolidated balance sheets.

### Equity Offering

In July 2024, we completed a follow-on public offering of 4.0 million shares of common stock in connection with forward sales agreements. We expect to settle the forward sales agreements, typically within 12 months, via physical delivery of the outstanding shares of common stock in exchange for gross cash proceeds of approximately $121.2 million.

### ATM Program

In February 2023, we established and, in February 2024, we amended, an at-the-market equity offering program (the “ATM Program”), pursuant to which we are able to issue and sell shares of our common stock with an aggregate sales price of up to $350.0 million through a consortium of banks acting as our sales agents or acting as forward sellers on behalf of any forward purchasers pursuant to forward sales agreements. Sales of the shares of common stock may be made, as needed, from time to time in at-the-market offerings as defined in Rule 415 of the Securities Act, including by means of ordinary brokers’ transactions on the New York Stock Exchange or otherwise at market prices prevailing at the time of sale, at prices related to prevailing market prices or as otherwise agreed to with the applicable agent.

The use of forward sales agreements allow us to lock in a share price on the sale of shares at the time the forward sales agreements become effective, but defer receiving the proceeds from the sale of shares until a later date. To account for the forward sales agreements, we considered the accounting guidance governing financial instruments and derivatives. To date, we have concluded that our forward sales agreements are not liabilities as they do not embody obligations to repurchase our shares nor do they embody obligations to issue a variable number of shares for which the monetary value are predominantly fixed, varying with something other than the fair value of the shares, or varying inversely in relation to our shares.

We also evaluated whether the forward sales agreements meet the derivatives and hedging guidance scope exception to be accounted for as equity instruments. We concluded that the forward sales agreements are classifiable as equity contracts based on the following assessments: (i) none of the agreements’ exercise contingencies that are based on observable markets or indices besides those related to the market for our own stock price and operations, and (ii) none of the settlement provisions precluded the agreements from being indexed to our own stock.

We also consider the potential dilution resulting from the forward sales agreements on our earnings per share calculations. We use the treasury stock method to determine the dilution resulting from the forward sales agreements during the period of time prior to settlement.

#### ATM Direct Issuances

During the three months ended March 31, 2025 and March 31, 2024, no shares of common stock were issued under the ATM Program. Future sales, if any, will depend on a variety of factors to be determined by us from time to time, including among others, market conditions, the trading price of our common stock, determinations by us of the appropriate sources of funding for us and potential uses of funding available to us.

#### ATM Forward Agreements

During the three months ended March 31, 2025 we settled 406,727 shares and realized net proceeds of $11.0 million after deducting fees and expenses and making certain other adjustments as provided in the equity distribution agreement. We expect to settle outstanding forward sales agreements, typically within 12 months of the respective agreement dates, via physical delivery of the outstanding shares of common stock in exchange for cash proceeds, although we may elect cash settlement or net share settlement for all or a portion of our obligations under the forward sales agreements, subject to certain conditions.

The following table summarizes activity under our ATM Program in connection with forward sales agreements for the three months ended March 31, 2025 and 2024 ($ in thousands):

| Period Entered Into Forward Sales Agreements | For the Three Months Ended March 31, 2025 Shares Sold | Shares Settled | Shares Remaining | Net Proceeds Received | Anticipated Gross Proceeds Remaining |
| --- | ---: | ---: | ---: | ---: | ---: |
| Three Months Ended June 30, 2024 | 406,727 | 406,727 | — | $11,014 | $— |
| Three Months Ended December 31, 2024 | 992,696 | — | 992,696 | — | 32,277 |
| Total | 1,399,423 | 406,727 | 992,696 | $11,014 | $32,277 |

| Period Entered Into Forward Sales Agreements | For the Three Months Ended March 31, 2024 Shares Sold | Shares Settled | Shares Remaining | Net Proceeds Received | Anticipated Gross Proceeds Remaining |
| --- | ---: | ---: | ---: | ---: | ---: |
| Three Months Ended June 30, 2023 | 217,561 | — | 217,561 | $— | $7,609 |
| Three Months Ended December 31, 2023 | 831,489 | — | 831,489 | — | 24,561 |
| Total | 1,049,050 | — | 1,049,050 | $— | $32,170 |

### Dividends

We elected to be treated as a REIT under the federal income tax laws with the year beginning January 1, 2001. To qualify for taxation as a REIT, we must, among other requirements such as those related to the composition of our assets and gross income, distribute annually to our stockholders at least 90% of our taxable income, including taxable income that is accrued by us without a corresponding receipt of cash.

It is also possible that instead of distributing 100% of our taxable income on an annual basis, we may decide to retain a portion of our taxable income and to pay taxes on such amounts as permitted by the Internal Revenue Service. Payment of dividends is subject to market conditions, our financial condition, including but not limited to, our continued compliance with the provisions of the Third Restated Credit Agreement, our Senior Unsecured Notes and other factors, and therefore is not assured. In particular, the Third Restated Credit Agreement and our Senior Unsecured Notes prohibit the payment of dividends during certain events of default.

Regular quarterly dividends paid to our stockholders for the three months ended March 31, 2025 were $26.5 million, or $0.47 per share. There can be no assurance that we will continue to pay dividends at historical rates.

### Critical Accounting Policies and Estimates

The consolidated financial statements included in this Quarterly Report on Form 10-Q have been prepared in conformity with GAAP. The preparation of consolidated financial statements in accordance with GAAP requires us to make estimates, judgments and assumptions that affect the amounts reported on our consolidated financial statements. Although we have made estimates, judgments and assumptions regarding future uncertainties relating to the information included on our consolidated financial statements, giving due consideration to the accounting policies selected and materiality, actual results could differ from these estimates, judgments and assumptions and such differences could be material.

Estimates, judgments and assumptions underlying the accompanying consolidated financial statements include, but are not limited to, real estate, receivables, deferred rent receivable, direct financing leases, depreciation and amortization, impairment of long-lived assets, environmental remediation obligations, litigation, accrued liabilities, income taxes and the allocation of the purchase price of properties acquired to the assets acquired and liabilities assumed. The information included on our consolidated financial statements that is based on estimates, judgments and assumptions is subject to significant change and is adjusted as circumstances change and as the uncertainties become more clearly defined.

Our accounting policies are described in Note 1 in “Item 8. Financial Statements and Supplementary Data” in our Annual Report on Form 10-K for the year ended December 31, 2024. The SEC’s Financial Reporting Release (“FRR”) No. 60, *Cautionary Advice Regarding Disclosure About Critical Accounting Policies (“*FRR 60”), suggests that companies provide additional disclosure on those accounting policies considered most critical. FRR 60 considers an accounting policy to be critical if it is important to our financial condition and results of operations and requires significant judgment and estimates on the part of management in its application. We believe that our most critical accounting policies relate to revenue recognition and deferred rent receivable, direct financing leases, impairment of long-lived assets, environmental remediation obligations, litigation, income taxes, and the allocation of the purchase price of properties acquired to the assets acquired and liabilities assumed (collectively, our “Critical Accounting Policies”), each of which is discussed in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2024.

### Environmental Matters

### General

We are subject to numerous federal, state and local laws and regulations, including matters relating to the protection of the environment such as the remediation of known contamination and the retirement and decommissioning or removal of long-lived assets including buildings containing hazardous materials, USTs and other equipment. Environmental costs are principally attributable to remediation costs which are incurred for, among other things, removing USTs, excavation of contaminated soil and water, installing, operating, maintaining and decommissioning remediation systems, monitoring contamination and governmental agency compliance reporting required in connection with contaminated properties.

We enter into leases and various other agreements which contractually allocate responsibility between the parties for known and unknown environmental liabilities at or relating to the subject properties. Under applicable law, we are contingently liable for these environmental obligations in the event that our tenant does not satisfy them, and we are required to accrue for environmental liabilities that we believe are allocable to others under our leases if we determine that it is probable that our tenant will not meet its environmental obligations. It is possible that our assumptions regarding the ultimate allocation method and share of responsibility that we used to allocate environmental liabilities may change, which may result in material adjustments to the amounts recorded for environmental litigation accruals and environmental remediation liabilities. We assess whether to accrue for environmental liabilities based upon relevant factors including our tenants’ histories of paying for such obligations, our assessment of their financial capability, and their intent to pay for such obligations. However, there can be no assurance that our assessments are correct or that our tenants who have paid their obligations in the past will continue to do so. We may ultimately be responsible to pay for environmental liabilities as the property owner if our tenant fails to pay them.

The estimated future costs for known environmental remediation requirements are accrued when it is probable that a liability has been incurred and a reasonable estimate of fair value can be made. The accrued liability is the aggregate of our estimate of the fair value of cost for each component of the liability, net of estimated recoveries from state UST remediation funds considering estimated recovery rates developed from prior experience with the funds.

For substantially all of our triple-net leases, our tenants are contractually responsible for compliance with environmental laws and regulations, removal of USTs at the end of their lease term (the cost of which is mainly the responsibility of our tenant but in certain cases partially paid for by us) and remediation of any environmental contamination that arises during the term of their tenancy. Our tenants are also responsible for their pre-existing environmental contamination that is discovered during their lease term, except contamination that was known at lease commencement, as to which we have established reserves.

For the subset of our triple-net leases which cover properties previously leased to Marketing (substantially all of which commenced in 2012), the allocation of responsibility differs from our other triple-net leases as it relates to preexisting known and unknown contamination. Under the terms of our leases covering properties previously leased to Marketing, we agreed to be responsible for environmental contamination that was known at the time the lease commenced, and for unknown environmental contamination which existed prior to commencement of the lease and which is discovered (other than as a result of a voluntary site investigation) during the first 10 years of the lease term (or a shorter period for a minority of such leases) (a “Lookback Period”). After expiration of the applicable Lookback Period, responsibility for all newly discovered contamination at these properties, even if it relates to periods prior to commencement of the lease or sale, is the contractual responsibility of our tenant or buyer as the case may be.

Based on the expiration of the Lookback Periods, together with other factors which have significantly mitigated our potential liability for preexisting environmental obligations, including the absence of any contractual obligations relating to properties which have been sold, quantifiable trends associated with types and ages of USTs at issue, expectations regarding future UST replacements, and historical trends and expectations regarding discovery of preexisting unknown environmental contamination and/or attempted pursuit of us therefor, we concluded that there is no material continued risk of having to satisfy contractual obligations relating to preexisting unknown environmental contamination at certain properties. Accordingly, as of March 31, 2025, we had removed $24.2 million of unknown reserve liabilities which had previously been accrued for these properties. There were no removals of unknown reserve liabilities for the three months ended March 31, 2025.

We continue to anticipate that our tenants under leases where the Lookback Periods have expired will replace USTs in the years ahead as these USTs near the end of their expected useful lives. At many of these properties the USTs in use are fabricated with older generation materials and technologies and we believe it is prudent to expect that upon their removal preexisting unknown environmental contamination will be identified. Although contractually these tenants are now responsible for preexisting unknown environmental contamination that is discovered during UST replacements, because the applicable Lookback Periods have expired before the end of the initial term of these leases, together with other relevant factors, we believe there remains continued risk that we will be responsible for remediation of preexisting environmental contamination associated with future UST removals at certain properties. Accordingly, we believe it is appropriate at this time to maintain $11.8 million of unknown reserve liabilities for certain properties with respect to which the Lookback Periods have expired as of March 31, 2025.

In the course of UST removals and replacements at certain properties previously leased to Marketing where we retained responsibility for preexisting unknown environmental contamination until expiration of the applicable Lookback Period, environmental contamination has been and continues to be discovered. As a result, we developed an estimate of fair value for the prospective future environmental liability resulting from preexisting unknown environmental contamination and accrued for these estimated costs. These estimates are based primarily upon quantifiable trends which we believe allow us to make reasonable estimates of fair value for the future costs of environmental remediation resulting from the anticipated removal and replacement of USTs. Our accrual of this liability represents our estimate of the fair value of the cost for each component of the liability, net of estimated recoveries from state UST remediation funds considering estimated recovery rates developed from prior experience. In arriving at our accrual, we analyzed the ages and expected useful lives of USTs at properties where we would be responsible for preexisting unknown environmental contamination and we projected a cost to closure for remediation of such contamination.

We measure our environmental remediation liabilities at fair value based on expected future net cash flows, adjusted for inflation, and then discount them to present value. We adjust our environmental remediation liabilities quarterly to reflect changes in projected expenditures, changes in present value due to the passage of time and reductions in estimated liabilities as a result of actual expenditures incurred during each quarter. As of March 31, 2025, we had accrued a total of $20.6 million for our prospective environmental remediation obligations. This accrual consisted of (i) $8.8 million of known reserve liabilities which was our estimate of reasonably estimable environmental remediation liability, including obligations to remove USTs for which we are responsible, net of estimated recoveries and (ii) $11.8 million of unknown reserve liabilities, which was our estimate of future environmental liabilities related to preexisting unknown contamination. As of December 31, 2024, we had accrued a total of $20.9 million for our prospective environmental remediation obligations. This accrual consisted of (i) $9.1 million of known reserve liabilities and (ii) $11.8 million of unknown reserve liabilities, which was our estimate of future environmental liabilities related to preexisting unknown contamination.

Environmental liabilities are accreted for the change in present value due to the passage of time and, accordingly, $0.1 million of net accretion expense was recorded for each of the three months ended March 31, 2025 and 2024, respectively, which is included in environmental expenses. In addition, during the three months ended March 31, 2025 and 2024, we recorded credits to environmental expenses aggregating $0.2 million and $0.3 million, respectively, where decreases in estimated remediation costs exceeded the depreciated carrying value of previously capitalized asset retirement costs. Environmental expenses also include project management fees, legal fees and environmental litigation accruals.

During each of the three months ended March 31, 2025 and 2024, we increased the carrying values of certain of our properties by $0.6 million due to changes in estimated environmental remediation costs. The recognition and subsequent changes in estimates in environmental liabilities and the increase or decrease in carrying values of the properties are non-cash transactions which do not appear on our consolidated statements of cash flows.

Capitalized asset retirement costs are being depreciated over the estimated remaining life of the UST, a 10-year period if the increase in carrying value is related to environmental remediation obligations or such shorter period if circumstances warrant, such as the remaining lease term for properties we lease from others. Depreciation and amortization expense related to capitalized asset retirement costs on our consolidated statements of operations was $0.5 million and $0.7 million for the three months ended March 31, 2025 and 2024, respectively. Capitalized asset retirement costs were $33.1 million (consisting of $25.0 million of known environmental obligations and $8.1 million of reserves for future environmental obligations related to preexisting unknown contamination) as of March 31, 2025, and $33.2 million (consisting of $25.0 million of known environmental obligations and $8.2 million of reserves for future environmental obligations related to preexisting unknown contamination) as of December 31, 2024. We recorded impairment charges aggregating $0.5 million and $0.4 million for the three months ended March 31, 2025 and 2024, respectively, for capitalized asset retirement costs.

For additional information regarding risks related to our potential environmental exposure, see “Item 1A. Risk Factors—Risks Related to Our Business and Operations—“We incur significant operating costs and, from time to time, may have significant liability accruals as a result of environmental laws and regulations, which costs and accruals could significantly increase, and reduce our profitability or have a material adverse effect on our business, financial condition, results of operations, liquidity, ability to pay dividends or stock price” in our Annual Report on Form 10-K for the year ended December 31, 2024.

In July 2012, we purchased a 10-year pollution legal liability insurance policy covering substantially all of our properties at that time for discovery of preexisting unknown environmental liabilities and for new environmental events. The policy had a $50.0 million aggregate limit and was subject to various self-insured retentions and other conditions and limitations. This policy expired in July 2022, although claims made prior to such expiration remain subject to coverage. In September 2022, we purchased a 5-year pollution legal liability insurance policy to cover a subset of our properties which we believe present the greatest risk for discovery of preexisting unknown environmental liabilities and for new environmental events. The policy has a $25.0 million in aggregate limit and is subject to various self-insured retentions and other conditions and limitations. Our intention in purchasing this policy was to obtain protection for certain properties which we believe have the greatest risk of significant environmental events.

In light of the uncertainties associated with environmental expenditure contingencies, we are unable to estimate ranges in excess of the amount accrued with any certainty; however, we believe that it is possible that the fair value of future actual net expenditures could be substantially higher than amounts currently recorded by us. Adjustments to accrued liabilities for environmental remediation obligations will be reflected on our consolidated financial statements as they become probable and a reasonable estimate of fair value can be made.

### Environmental Litigation

We are subject to various legal proceedings and claims which arise in the ordinary course of our business. As of March 31, 2025 and December 31, 2024, we had $0.1 million accrued for these matters which we believe were appropriate based on information then currently available. It is possible that our assumptions regarding the ultimate allocation method and share of responsibility that we used to allocate environmental liabilities may change, which may result in our providing an accrual, or adjustments to the amounts recorded, for environmental litigation accruals. Matters related to our former Newark, New Jersey Terminal and the Lower Passaic River, and our MTBE litigations in the states of Pennsylvania and Maryland, in particular, could cause a material adverse effect on our business, financial condition, results of operations, liquidity, ability to pay dividends or stock price. For additional information with respect to these and other pending environmental lawsuits and claims, see “Item 3. Legal Proceedings” in our Annual Report on Form 10-K for the year ended December 31, 2024, and “Part II, Item 1. Legal Proceedings” and Note 4 in “Part I, Item 1. Financial Statements” in this Quarterly Report on Form 10-Q.

## Market risk

As filed, 1,836 characters.

We are exposed to interest rate risk, primarily as a result of borrowings under our Credit Facility, which bears interest at a rate equal to (i) the sum of a SOFR rate plus a SOFR adjustment of 0.10% plus a margin of 1.30% to 1.90% or (ii) the sum of a base rate plus a margin of 0.30% to 0.90%, in each case with the margin based on our consolidated total indebtedness to total asset value ratio at the end of each quarterly reporting period. Of the $157.5 million outstanding as of March 31, 2025 under the Credit Facility, $150.0 million is subject to interest rate swaps that fixed SOFR at a weighted average of 4.73% until October 2026. Including the impact of the swaps, the effective interest rate for these borrowings was 6.13% based on our consolidated total indebtedness as of March 31, 2025.

Based on the remaining outstanding variable borrowings under the Credit Facility of $7.5 million as of March 31, 2025, an increase in market interest rates of 1.0% for 2025 would decrease our 2025 net income and cash flows by approximately $0.1 million. Our exposure to fluctuations in interest rates will increase or decrease in the future with increases or decreases in the outstanding amount under our Credit Facility and with increases or decreases in amounts outstanding under borrowing agreements entered into with interest rates floating at market rates.

In order to minimize our exposure to credit risk associated with financial instruments, we place our temporary cash investments, if any, with high credit quality institutions. Temporary cash investments, if any, are currently held in an overnight bank time deposit with JPMorgan Chase Bank, N.A. and these balances, at times, may exceed federally insurable limits.

See “Part II. Item. 1A. Risk Factors” in this Quarterly Report on Form 10-Q for additional information.

## Controls and procedures

As filed, 1,977 characters.

### Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed or furnished pursuant to the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

As required by Rules 13a-15(b) and 15d-15(b) of the Exchange Act, we have carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were effective as of March 31, 2025, at the reasonable assurance level.

### Internal Control Over Financial Reporting

During the first three months of 2025, there were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

## Risk factors

As filed, 5,465 characters.

There have been no material changes to the information previously disclosed in “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024. There have been no material changes in the risk factors described in Item 1A. "Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, aside from the risk factor included below:

**Global political and economic uncertainties, including changes in tariff policies and trade relationships, geopolitical conflicts, and public health crises, and their related impact on macroeconomic conditions may adversely impact the market on which our common stock trades, our tenants’ businesses and the markets in which we operate, our operations and our results of operations.**

We, and our tenants’ businesses may be disrupted by global political and economic uncertainties, including changes in trade relationships and tariff policies, geopolitical conflicts, and public health crises, that could result in adverse macroeconomic conditions. In April 2025, the Trump administration imposed a 10% tariff on all countries and individualized reciprocal higher tariffs on countries with which the United States has the largest trade deficits, to which certain countries have responded by imposing retaliatory tariffs on U.S. imports. Escalated geopolitical tensions resulting from such changes in trade policies and tariffs have significantly disrupted the markets and increased the risk of a major economic recession or slowdown. The extent of the impact of such tariffs and changes in trade policies or other regulatory changes enacted by the current administration is uncertain and unpredictable, and may significantly adversely affect the global economy, the market price of our common stock, and our and our tenants’ businesses. Further, the extent to which public health crises such as pandemics or epidemics impact our business, operations and financial results is uncertain, and will depend on numerous factors that we may not be able to accurately predict, including governmental, business, and individual actions taken in response to any such outbreak and the extent and duration of the adverse impact on the global economy. Such outbreaks may disrupt the supply of products or services from third-party vendors or result in shortages of raw materials necessary to operate our tenants’ businesses or prolonged closure, which may adversely impact their businesses, financial condition and liquidity, and may cause one or more of our tenants to be unable to meet their obligations to us in full, or at all, or to otherwise seek modifications of such obligations. Moreover, general decline in business activity and demand for real estate transactions could adversely affect our ability or desire to grow our portfolio of properties and the financial impact of any such outbreak could negatively impact our future compliance with the financial covenants of our various borrowings, resulting in a default and potentially an acceleration of indebtedness, which non-compliance could negatively impact our ability to make additional borrowings under our Credit Facility and pay dividends.

Additionally, geopolitical conflicts, such as terrorist attacks or other acts of violence or war (including the conflicts in Russia and Ukraine and the Middle East) and the related adverse impact on macroeconomic conditions as a result of such conflicts could negatively affect our business or the businesses of our tenants. Such geopolitical conflicts may also directly or indirectly impact the physical facilities, networks or the business or the financial condition of us or those of our tenants, vendors or financial institutions with which we have a relationship or conduct business. The consequences of such conflicts are unpredictable, and we may not be able to foresee events that could have a material adverse effect on us. More generally, any of these events resulting from global political and economic uncertainties could cause consumer confidence and spending to decrease, result in an economic recession or increase volatility of the financial markets and economy of the United States and worldwide. Any of these occurrences could have a material adverse effect on our business, financial condition, results of operations, liquidity, ability to pay dividends or stock price.

**Adverse developments in general business, economic or political conditions could have a material adverse effect on us.**

Adverse developments in general business and economic conditions, including through inflation, recession, or other kinds of negative economic change, either in the economy generally or in those regions in which a large portion of our business is conducted, could have a material adverse effect on us and significantly increase certain of the risks to which we are subject. Among other effects, adverse economic conditions, including those resulting from changes in trade policies or tariffs, could depress real estate values, impact our ability to re-lease or sell our properties and have an adverse effect on our tenants’ level of sales and financial performance generally. As our revenues are substantially dependent on the economic success of our tenants, any factors that adversely impact our tenants could also have a material adverse effect on our business, financial condition and results of operations, liquidity, ability to pay dividends or stock price.

Filed Apr 24, 2025.
Source: SEC EDGAR, the filing index for accession 0000950170-25-058063. Last ingested by Listed: Oct 24, 2026, 15:03 ET. No prices; not investment advice.