InvenTrust Properties Corp.: Form 10-Q for the period ended Sep 30, 2025

Certain statements in this "Management’s Discussion and Analysis of Financial Condition and Results of Operations" and elsewhere in this Quarterly Report on Form 10-Q for the quarter ended September 30, 2025 (this "Quarterly Report"), other than purely historical information, are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended ("Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended ("Exchange Act"). These statements include statements about InvenTrust Properties Corp.'s (the "Company", "InvenTrust", "we", "our", or "us") plans, objectives, strategies, financial performance and outlook, trends, the amount and timing of future cash distributions, prospects or future events; and involve known and unknown risks that are difficult to predict.

As a result, our actual financial results, performance, achievements, or prospects may differ materially from those expressed or implied by these forward-looking statements. In some cases, forward-looking statements can be identified by the use of words such as "may," "could," "expect," "intend," "plan," "seek," "anticipate," "believe," "estimate," "guidance," "predict," "potential," "continue," "likely," "will," "would," "illustrative," and "should" and variations of these terms and similar expressions, or the negatives of these terms or similar expressions. Such forward-looking statements are necessarily based upon estimates and assumptions that, while we consider reasonable based on our knowledge and understanding of the business and industry, are inherently uncertain. These statements are expressed in good faith and are not guarantees of future performance or results. Our actual results could differ materially from those expressed in the forward-looking statements and readers should not rely on forward-looking statements in making investment decisions.

There are a number of risks, uncertainties and other important factors, many of which are beyond our control, that could cause our actual results to differ materially from the forward-looking statements contained in this Quarterly Report. Such risks, uncertainties and other important factors, include, among others, the risks, uncertainties, and factors set forth in our filings with the Securities and Exchange Commission ("SEC"), including our Annual Report on Form 10-K for the year ended December 31, 2024 (the "Annual Report"), and as updated in this Quarterly Report and other quarterly and current reports, which are on file with the SEC and are available at the SEC's website (www.sec.gov (http://www.sec.gov)).

Our operations are subject to a number of risks and uncertainties including but not limited to:

• our ability to collect rent from tenants or to rent space on favorable terms or at all;
• declaration of bankruptcy by our retail tenants;
• the economic success and viability of our anchor retail tenants;
• our ability to identify, execute and complete acquisition opportunities and to integrate and successfully operate any retail properties acquired in the future and manage the risks associated with such retail properties;
• our ability to manage the risks of expanding, developing or redeveloping our retail properties;
• loss of members of our senior management team or other key personnel;
• changes in the competitive environment in the leasing market and any other market in which we operate;
• shifts in consumer retail shopping from brick-and-mortar stores to e-commerce;
• the impact of leasing and capital expenditures to improve our retail properties to retain and attract tenants;
• our ability to refinance or repay maturing debt or to obtain new or additional financing on attractive terms;
• the impact on our business and financial condition of incurring additional debt or issuing new debt or equity securities in the future;
• future increases in interest rates;
• rising inflation;
• the effects of uncertain and evolving tariff activity and changes in global trade policies on the overall state of the economy and on our business, including the impact on our tenants' business, operations and ability to pay rent;
• natural or man-made disasters, severe weather and climate-related events, such as hurricanes, wildfires, earthquakes, tsunamis, tornadoes, droughts, blizzards, hailstorms, floods, mudslides, oil spills, nuclear incidents, and outbreaks of pandemics or contagious diseases, or fear of such outbreaks;
• our status as a real estate investment trust ("REIT") for federal tax purposes; and
• changes in federal, state or local tax law, including legislative, administrative, regulatory or other actions affecting REITs.

These factors are not necessarily all of the important factors that could cause our actual results, performance or achievements to differ materially from those expressed in or implied by any of our forward-looking statements. Other unknown or unpredictable factors also could harm our business, financial condition, results of operations, cash flows and overall value.

All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements set forth above. Forward-looking statements are only as of the date they are made; we do not undertake or assume any obligation to update publicly any of these forward-looking statements to reflect actual results, new information, future events, changes in assumptions or changes in other factors affecting forward-looking statements, except to the extent required by applicable law. If we update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.

The following discussion and analysis should be read in conjunction with our condensed consolidated financial statements and the related notes included in this Quarterly Report. All square feet and dollar amounts are stated in thousands, except per share amounts and per square foot metrics, unless otherwise noted.

Overview

Strategy and Outlook

InvenTrust Properties Corp. is a premier Sun Belt, multi-tenant essential retail REIT that owns, leases, redevelops, acquires, and manages grocery-anchored neighborhood and community centers, as well as high-quality power centers that often have a grocery component. We pursue our business strategy by acquiring retail properties in Sun Belt markets, opportunistically disposing of retail properties, and maintaining a flexible capital structure.

InvenTrust focuses on Sun Belt markets with favorable demographics, including above-average growth in population, employment, income, and education levels. We believe these conditions create favorable demand characteristics for grocery-anchored and necessity-based retail centers, which will position us to capitalize on potential future rent increases while enjoying sustained occupancy at our centers. Our strategically located field offices are within a two-hour drive of over 95% of our properties which affords us the ability to respond to the needs of our tenants and provides us with in-depth local market knowledge. We believe that our Sun Belt portfolio of high quality grocery-anchored assets is a distinct differentiator for us in the marketplace.

Macroeconomic Trends

Our business, and the business and operations of our tenants, depend on the overall state of the economy, and we and they could be negatively impacted by slower economic growth and the potential for a recession. Although certain indicators have suggested that inflation has made downward progress, the economy continues to be impacted by elevated inflation rates and faces further inflation risk. Uncertain and evolving tariffs and trade issues continue to contribute to overall uncertainty with respect to the economy and may adversely impact our tenants' operations. Additionally, other potential challenging macroeconomic conditions, and the resulting impact on the economy and consumer spending, could negatively impact our and our tenants' business.

Evaluation of Financial Condition

In addition to measures of operating performance determined in accordance with U.S. generally accepted accounting principles ("GAAP"), management evaluates our financial condition and operating performance by focusing on the following financial and nonfinancial indicators, discussed in further detail herein:

• Net Operating Income ("NOI") and Same Property NOI, supplemental non-GAAP measures;
• Nareit Funds From Operations ("Nareit FFO") Applicable to Common Shares and Dilutive Securities, a supplemental non-GAAP measure;
• Core Funds From Operations ("Core FFO") Applicable to Common Shares and Dilutive Securities, a supplemental non-GAAP measure;
• Earnings Before Interest, Taxes, Depreciation, and Amortization ("EBITDA"), a supplemental non-GAAP measure;
• Adjusted EBITDA, a supplemental non-GAAP measure;
• Economic and leased occupancy and rental rates;
• Leasing activity and lease rollover;
• Operating expense levels and trends;
• General and administrative expense levels and trends;
• Debt maturities and leverage ratios; and
• Liquidity levels.

Recent Developments

Acquisitions

On July 1, 2025, the Company acquired The Marketplace at Encino Park, a 92,000 square foot neighborhood center anchored by Sprouts Farmers Market in San Antonio, Texas, for a gross acquisition price of $38.5 million. The Company used cash on hand to fund the acquisition.

On July 17, 2025, the Company acquired West Broad Marketplace, a 386,000 square foot community center anchored by Wegmans in Richmond, Virginia, for a gross acquisition price of $86.0 million. The Company used cash on hand to fund the acquisition.

On August 7, 2025, the Company acquired Asheville Market, a 130,000 square foot community center anchored by Whole Foods Market in Asheville, North Carolina, for a gross acquisition price of $45.7 million. The Company used cash on hand and assumed a mortgage payable of $22.3 million to fund the acquisition.

On September 4, 2025, the Company acquired Rea Farms, a 183,000 square foot community center anchored by Harris Teeter in Charlotte, North Carolina, for a gross acquisition price of $80.0 million. The Company used cash on hand to fund the acquisition.

Debt

On August 25, 2025, the Company entered into an amendment to its revolving credit facility, which modified the applicable interest rate thereunder by removing the credit spread adjustment to SOFR, in addition to other modifications. As of September 30, 2025, the Company had available liquidity of $500.0 million under its revolving credit facility.

On August 25, 2025, the Company entered into an amendment (the "Term Loan Amendment") to its $400.0 million Term Loan Credit Agreement (the "Amended Term Loan Agreement"), which provides for, among other things, an extension of the maturity dates of each tranche. The Amended Term Loan Agreement consists of a $200.0 million 5-year tranche maturing on August 26, 2030, and a $200.0 million 5.5-year tranche maturing February 24, 2031. The Term Loan Amendment also modified the interest rates, with each tranche bearing interest at a rate equal to, at the Company's option, term SOFR, daily simple SOFR or the adjusted base rate (with no credit spread adjustment) plus a margin ranging from 115 to 160 basis points (in the case of SOFR loans) and 15 to 60 basis points (in the case of base rate loans), in each case, based on the Company’s leverage ratio.

Interest Rate Swaps

During the three months ended September 30, 2025, in connection with the execution of the Term Loan Amendment, the Company entered into four forward-starting interest rate swap agreements that address the periods between the termination dates of the effective swaps and the maturity dates of the Amended Term Loan Agreement.

Our Retail Portfolio

The following table summarizes our retail portfolio as of September 30, 2025 and 2024:

(a) Economic occupancy is defined as the percentage of occupied GLA divided by total GLA (excluding Specialty Leases) for which a tenant is obligated to pay rent under the terms of its lease agreement as of the rent commencement date, regardless of the actual use or occupancy by that tenant of the area being leased. Actual use may be less than economic occupancy. Specialty Leases include small shop leases with terms of less than one year and leases of common area space with terms of any length.

(b) Leased occupancy is defined as economic occupancy plus the percentage of signed but not yet commenced GLA divided by total GLA.

(c) Annualized Base Rent ("ABR") is computed as base rent for the last month of the period multiplied by twelve. Base rent is inclusive of ground rent and exclusive of Specialty Lease rent. ABR per square foot ("PSF") is computed as ABR divided by the occupied square footage as of the end of the period.

Summary by Same Property

Properties classified as same property were owned for the entirety of both periods presented ("Same Properties"). The following table summarizes the Same Properties of our retail portfolio for the three and nine months ended September 30, 2025 and 2024.

Lease Expirations

Our retail business is neither highly dependent on specific retailers nor subject to lease rollover concentration. We believe this minimizes risk to our retail portfolio from significant revenue variances over time.

Results of Operations

Comparison of results for the three and nine months ended September 30, 2025 and 2024

We generate substantially all of our earnings from property operations. Since January 1, 2024, we have acquired fifteen retail properties and disposed of six.

The following table presents the increases in income for the three and nine months ended September 30, 2025 and 2024.

Lease income, net, for the three months ended September 30, 2025 increased $5.9 million when compared to the same period in 2024, as a result of increases from properties acquired of $10.9 million, decreases from properties disposed of $7.2 million, and the following activity related to our Same Properties:

• $1.7 million of increased minimum base and ground rent attributable to increased occupancy and ABR PSF,
• $0.4 million of increased common area maintenance and real estate tax recoveries, and
• $0.3 million of net increases in all other lease income, partially offset by:
• $0.2 million of net changes in credit losses and related reversals.

Lease income, net, for the nine months ended September 30, 2025 increased $18.9 million when compared to the same period in 2024, as a result of increases from properties acquired of $24.1 million, decreases from properties disposed of $11.8 million, and the following activity related to our Same Properties:

• $5.0 million of increased minimum base and ground rent attributable to increased occupancy and ABR PSF,
• $2.6 million of increased common area maintenance and real estate tax recoveries, and
• $0.8 million of net increases in all other lease income, partially offset by:
• $0.9 million of decreased lease termination income,
• $0.7 million of net decreased straight-line rent adjustments, and
• $0.2 million of net changes in credit losses and related reversal.

The following table presents the increases in operating expenses for the three and nine months ended September 30, 2025 and 2024.

Depreciation and amortization for the three months ended September 30, 2025 increased $4.6 million when compared to the same period in 2024, as a result of:

• $8.2 million of increases from properties acquired, partially offset by:
• $2.6 million of decreases from properties disposed, and
• $1.0 million of net decreases from our Same Properties.

Depreciation and amortization for the nine months ended September 30, 2025 increased $9.0 million when compared to the same period in 2024, as a result of:

• $17.7 million of increases from properties acquired, partially offset by:
• $4.6 million of net decreases from our Same Properties, and
• $4.1 million of decreases from properties disposed.

Property operating expenses for the three months ended September 30, 2025 increased $0.3 million when compared to the same period in 2024, as a result of:

• $2.1 million of increases from properties acquired, partially offset by:
• $1.6 million of decreases from properties disposed, and
• $0.2 million of decreased repair and maintenance costs from our Same Properties.

Property operating expenses for the nine months ended September 30, 2025 increased $2.2 million when compared to the same period in 2024, as a result of:

• $4.7 million of increases from properties acquired, and
• $0.8 million of increased repair and maintenance costs from our Same Properties, partially offset by:
• $3.3 million of decreases from properties disposed.

Real estate taxes for the three months ended September 30, 2025 decreased $0.2 million when compared to the same period in 2024, as a result of:

• $1.1 million of decreases from properties disposed, partially offset by:
• $0.9 million of increases from properties acquired.

Real estate taxes for the nine months ended September 30, 2025 increased $1.4 million when compared to the same period in 2024, as a result of:

• $2.3 million of increases from properties acquired, and
• $0.9 million of net increases from our Same Properties, partially offset by:
• $1.8 million of decreases from properties disposed.

General and administrative expenses for the three and nine months ended September 30, 2025 increased $0.2 million and $0.8 million, respectively, when compared to the same periods in 2024, as a result of increased stock-based compensation costs.

The following table presents the changes in other income and expense for the three and nine months ended September 30, 2025 and 2024.

Interest expense, net, for the three months ended September 30, 2025 decreased $0.5 million when compared to the same period in 2024, primarily as a result of:

• decreased interest expense of $1.1 million related to the $72.5 million pooled mortgage payable extinguished in September 2024, partially offset by:
• increased interest expense of $0.3 million related to the August 2025 extension of our term loan maturities,
• increased interest expenses of $0.1 million on our finance lease, and
• increased amortization of debt discounts and financing costs of $0.2 million.

Interest expense, net, for the nine months ended September 30, 2025 decreased $3.1 million when compared to the same period in 2024, primarily as a result of:

• decreased interest expense of $3.8 million related to the $72.5 million pooled mortgage payable extinguished in September 2024, partially offset by:
• increased interest expense of $0.3 million related to the August 2025 extension of our term loan maturities, and
• increased amortization of debt discounts and financing costs of $0.4 million.

During the three and nine months ended September 30, 2024, we recorded an impairment of real estate assets of $3.9 million on one retail property after receiving and accepting a letter of intent to purchase the property for less than its carrying value.

During the three months ended September 30, 2025, we recognized a gain of $0.1 million on completion of a partial condemnation at one retail property. In addition, during the nine months ended September 30, 2025, we completed a portfolio sale of five properties in California for an aggregate gross disposition price of $306.0 million and recognized a gain of $90.9 million on the sale.

During the three and nine months ended September 30, 2024, we recognized a gain of $0.3 million on completion of a partial condemnation at one retail property.

Other income and expense, net, increased $1.4 million and $1.7 million during the three months ended and nine months ended September 30, 2025, respectively, primarily as a result of increased interest income.

Net Operating Income

We evaluate the performance of our retail properties based on NOI, which excludes general and administrative expenses, depreciation and amortization, other income and expense, net, impairment of real estate assets, gains (losses) from sales of properties, gains (losses) on extinguishment of debt, interest expense, net, lease termination income and expense, and GAAP rent adjustments such as amortization of market lease intangibles, amortization of lease incentives, and straight-line rent adjustments ("GAAP Rent Adjustments"). We bifurcate NOI into Same Property NOI and NOI from other investment properties based on whether the retail properties meet our Same Property criteria. NOI from other investment properties includes adjustments for the Company's captive insurance company.

We believe the supplemental non-GAAP measure of NOI, and the bifurcation into same property NOI and NOI from other investment properties, are important measures in assessing operating performance and provide added comparability across periods when evaluating the Company's financial condition and operating performance that is not readily apparent from Net income in accordance with GAAP.

Comparison of Same Property results for the three and nine months ended September 30, 2025 and 2024

A total of 58 and 56 retail properties met our Same Property criteria for the three and nine months ended September 30, 2025 and 2024, respectively.

Reconciliation of Net Income (Loss) to Non-GAAP Measures

The following table reconciles net income (loss), the most directly comparable GAAP measure, to NOI and Same Property NOI:

(a) Adjustments to NOI include lease termination income and expense and GAAP Rent Adjustments.

Comparison of the components of Same Property NOI

The following table presents the changes in Same Property NOI for the three months ended September 30, 2025 and 2024:

Same Property NOI increased by $2.7 million, or 6.4%, when comparing the three months ended September 30, 2025 to the same period in 2024, and was primarily a result of increased occupancy, increased ABR PSF from fixed annual rent escalations, and favorable lease spreads.

The following table presents the changes in Same Property NOI for the nine months ended September 30, 2025 and 2024:

Same Property NOI increased by $7.2 million, or 5.9%, when comparing the nine months ended September 30, 2025 to the same period in 2024, and was primarily a result of increased occupancy, increased ABR PSF from fixed annual rent escalations, favorable lease spreads, and leases with advantageous fixed recovery terms.

Funds From Operations

The National Association of Real Estate Investment Trusts ("Nareit"), an industry trade group, has promulgated a widely accepted non-GAAP financial measure of operating performance known as Funds From Operations ("Nareit FFO"). Our Nareit FFO is net income (or loss) in accordance with GAAP, excluding gains (or losses) resulting from dispositions of properties, plus depreciation and amortization and impairment charges on depreciable real property.

Core FFO is an additional supplemental non-GAAP financial measure of our operating performance. In particular, Core FFO provides an additional measure to compare the operating performance of different REITs without having to account for certain remaining amortization assumptions within Nareit FFO and other unique revenue and expense items, which some may consider not pertinent to measuring a particular company's ongoing operating performance. In that regard, we use Core FFO as an input to our compensation plan to determine cash bonuses.

See our Annual Report for expanded descriptions of Nareit FFO and Core FFO.

The following table reconciles net income (loss), the most directly comparable GAAP measure, to Nareit FFO Applicable to Common Shares and Dilutive Securities and Core FFO Applicable to Common Shares and Dilutive Securities:

(a) Reflects items which are not pertinent to measuring ongoing operating performance, such as miscellaneous and settlement income.

(b) For purposes of calculating non-GAAP per share metrics, we apply the same denominator used in calculating diluted earnings per share in accordance with GAAP.

Earnings Before Interest, Taxes, Depreciation, and Amortization

Our measure of EBITDA is net income (or loss) in accordance with GAAP, excluding interest expense, net, income tax expense (or benefit), and depreciation and amortization.

Adjusted EBITDA is an additional supplemental non-GAAP financial measure of our operating performance. In particular, Adjusted EBITDA provides an additional measure to compare the operating performance of different REITs without having to account for certain remaining amortization assumptions within EBITDA, certain gains or losses remaining within EBITDA, and other unique revenue and expense items which some may consider not pertinent to measuring a particular company's ongoing operating performance.

Our adjustments to EBITDA to arrive at Adjusted EBITDA include removing the impact of (i) gains (or losses) resulting from dispositions of properties, (ii) impairment charges on depreciable real property, (iii) amortization of market-lease intangibles and inducements, (iv) straight-line rent adjustments, (v) gains (or losses) resulting from debt extinguishments, and (vi) other non-operating revenue and expense items which, in our judgment, are not pertinent to measuring ongoing operating performance.

The following table reconciles net income (loss), the most directly comparable GAAP measure, to EBITDA and Adjusted EBITDA:

(a) Reflects items which are not pertinent to measuring ongoing operating performance, such as miscellaneous and settlement income.

Liquidity and Capital Resources

Capital Investments and Leasing Costs

Retail properties generally require capital investments, including value-enhancing development and redevelopment projects and leasing commissions.

The following table summarizes the capital resources used for capital investments and leasing costs on a cash basis:

(a) Indirect costs include capitalized interest, real estate taxes, insurance, and payroll costs.

(b) As of September 30, 2025 and 2024, total accrued capital investments and leasing costs were $4,900 and $5,008, respectively.

Short-Term Liquidity and Capital Resources

On a short-term basis, our principal uses for funds are to pay our operating and corporate expenses, interest and principal on our indebtedness, property capital expenditures, and to make distributions to our stockholders.

Our ability to maintain adequate liquidity for our operations in the future is dependent upon a number of factors, including our revenue, macroeconomic conditions, our ability to contain costs, including capital expenditures, and to collect rents and other receivables, and various other factors, many of which are beyond our control. We will continue to monitor our liquidity position and may seek to raise funds through debt or equity financing in the future to fund operations, significant investments or acquisitions that are consistent with our strategy. Our ability to raise these funds may also be diminished by other macroeconomic factors.

Long-Term Liquidity and Capital Resources

Our objectives are to maximize revenue generated by our retail platform, to further enhance the value of our retail properties to produce attractive current yield and long-term returns for our stockholders, and to generate sustainable and predictable cash flow from our operations to distribute to our stockholders.

Any future determination to pay distributions will be at the discretion of our board of directors (the "Board") and will depend on our financial condition, capital requirements, restrictions contained in current or future financing instruments, and such other factors as our Board deems relevant.

Capital Sources and Uses

Our primary sources and uses of capital are as follows:

The Company maintains an at-the-market equity offering program (the "ATM Program") pursuant to which we may sell shares of our common stock up to an aggregate purchase price of $250.0 million. In connection with the ATM Program, we may sell shares of our common stock to or through sales agents, or may enter into separate forward sale agreements with one of the agents, or one of their respective affiliates, as a forward purchaser. During the three and nine months ended September 30, 2025, no shares were issued under the ATM Program. As of September 30, 2025, $236.7 million of common stock remains available for issuance under the ATM Program.

We believe our status as an NYSE-listed issuer will facilitate supplementing our capital sources by selling equity securities of the Company under the ATM Program or otherwise if and when we believe appropriate to do so. Also, from time to time, we may seek to acquire amounts of our outstanding common stock through cash purchases or exchanges for other securities. Such purchases or exchanges, if any, will depend on our liquidity requirements, contractual restrictions, and other factors. At this time, we believe our current sources of liquidity are sufficient to meet our short- and long-term cash demands.

Distributions

During the nine months ended September 30, 2025, we declared distributions to our stockholders totaling $55.3 million and paid cash distributions of $54.4 million. As we execute on our retail strategy and continue to evaluate our business, results of operations and cash flows, our Board will continue to evaluate our distribution on a periodic basis.

Summary of Cash Flows

Cash provided by operating activities of $112.7 million and $99.9 million for the nine months ended September 30, 2025 and 2024, respectively, was generated primarily from property operations. Cash provided by operating activities increased by $12.8 million primarily as a result of acquiring fifteen retail properties while only disposing of six since January 1, 2024, decreased cash paid for mortgage interest, and general working capital fluctuations due to timing of receipts and payments.

Cash used in investing activities of $54.3 million for the nine months ended September 30, 2025 was the result of:

• $323.3 million for acquisitions of investment properties,
• $30.5 million for capital investments and leasing costs, and other investing activities, offset by:
• $299.5 million from the sale of investment properties.

Cash used in investing activities of $108.3 million for the nine months ended September 30, 2024 was the result of:

• $83.0 million for acquisitions of investment properties, and
• $25.8 million for capital investments, leasing costs, and other investing activities, offset by:
• $0.5 million in net proceeds received from the sale of investment properties.

Cash used in financing activities of $73.2 million for the nine months ended September 30, 2025 was the result of:

• $54.4 million to pay distributions,
• $16.8 million for pay-offs of mortgage debt, payment of mortgage principal, and payment of financing costs, and
• $2.5 million for the payment of tax withholdings for stock-based compensation and other offering costs, offset by
• $0.5 million in net proceeds from our Employee Stock Purchase Plan.

Cash provided by financing activities of $111.4 million for the nine months ended September 30, 2024 was the result of:

• $247.3 million in net proceeds from the underwritten public offering of our common stock, net of underwriting discounts and commissions, and
• $0.3 million in net proceeds from our ESPP, offset by:
• $45.3 million to pay distributions,
• $1.5 million for additional costs incurred in relation to sales of our common stock,
• $1.2 million for the payment of tax withholdings for stock-based compensation, and
• $88.2 million for pay-offs of mortgage debt.

We consider all demand deposits, money market accounts, and investments in certificates of deposit and repurchase agreements with a maturity of three months or less, at the date of purchase, to be cash equivalents. We maintain our cash and cash equivalents at major financial institutions. The combined account balances at one or more institutions generally exceed the Federal Depository Insurance Corporation ("FDIC") insurance coverage. We periodically assess the credit risk associated with these financial institutions. We believe insignificant credit risk exists related to deposits in excess of FDIC insurance coverage.

Off Balance Sheet Arrangements

None.

Contractual Obligations

We have obligations related to our mortgage loans, senior notes, term loan, revolving credit facility, and ground lease as described in "Note 6. Debt" in the condensed consolidated financial statements.

The following table presents our obligations to make future payments under debt and lease agreements as of September 30, 2025, exclusive of debt discounts and financing costs, which are not future cash obligations.

(a) Includes variable rate debt swapped to fixed rates through interest rate swaps.

(b) Includes leases on corporate office spaces.

(c) Includes payments related to the finance lease liability related to the ground lease at West Ashley Station.

Critical Accounting Estimates

Our financial statements are prepared in accordance with GAAP, which requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. The Company bases these estimates, judgments and assumptions on historical experience and various other factors that the Company believes to be reasonable under the circumstances. Actual results may differ from these estimates.

There have been no material changes to our critical accounting estimates as compared to the critical accounting estimates described in our "Management’s Discussion and Analysis of Financial Condition and Results of Operations" set forth in our Annual Report.

Interest Rate Risk

The Company is subject to market risk associated with changes in interest rates both in terms of variable-rate debt and the price of new fixed-rate debt upon maturity of existing debt. The Company's interest rate risk management objectives are to limit the impact of interest rate changes on earnings and cash flows. As of September 30, 2025, the Company's debt included outstanding variable-rate debt of $400.0 million, all of which has been swapped to a fixed rate through the maturity dates.

The following table summarizes the Company's effective interest rate swaps as of September 30, 2025 and December 31, 2024:

(a) Interest rates reflect the Company's current credit spread of 1.15%.

The following table summarizes the Company's forward-starting interest rate swaps as of September 30, 2025:

(a) Interest rates reflect the Company's current credit spread of 1.15%.

Gains or losses resulting from marking-to-market derivatives each reporting period are recognized as an increase or decrease in comprehensive income on the condensed consolidated statements of operations and comprehensive income (loss).

The information presented herein does not consider all exposures or positions that could arise in the future. Therefore, the information represented herein has limited predictive value. As a result, the ultimate realized gain or loss with respect to interest rate fluctuations will depend on the exposures that arise during the period, the hedging strategies at the time, and the related interest rates.

Disclosure Controls and Procedures

As required by Rule 13a-15(b) and Rule 15d-15(b) under the Exchange Act, the Company's management, including its Principal Executive Officer and Principal Financial Officer, evaluated as of September 30, 2025 the effectiveness of the Company's disclosure controls and procedures as defined in Exchange Act Rules 13a-15(e) and Rule 15d-15(e). Based on that evaluation, the Principal Executive Officer and Principal Financial Officer concluded that the Company's disclosure controls and procedures, as of September 30, 2025, were effective at a reasonable assurance level for the purpose of ensuring that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the rules and forms of the SEC and is accumulated and communicated to management, including its Principal Executive Officer and Principal Financial Officer, as appropriate, to allow timely decisions regarding required disclosures.

Changes in Internal Control Over Financial Reporting

There were no changes to the Company's internal control over financial reporting during the quarter ended September 30, 2025, that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

As of September 30, 2025, there have been no material changes from the risk factors previously disclosed in response to Item 1A. to Part I of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024 other than the potential effects of uncertain and evolving tariff activity and changes in global trade policies on the overall state of the economy and on our business, including the impact on our tenants' business, operations and ability to pay rent, which are discussed elsewhere in this Quarterly Report, including in "Management's Discussion and Analysis of Financial Condition and Results of Operations" above.