Financial Performance - Total operating revenue for Q3 2025 was $40.841 million, a 3.3% increase from $39.533 million in Q2 2025[3] - Net income available to common stockholders for Q3 2025 was $983,000, or $0.02 per share, down 32.5% from $1.457 million, or $0.03 per share in Q2 2025[3][8] - Core FFO available to common stockholders for Q3 2025 was $16.400 million, a 1.8% increase compared to $16.114 million in Q2 2025, equating to $0.35 per share[4][7] Asset Management - Total assets increased by 4.5% to $1.265 billion as of September 30, 2025, up from $1.210 billion as of June 30, 2025[4] - Acquired a six-facility portfolio for $54.8 million, with a weighted average cap rate of 9.53%[10] - Sold a non-core industrial property for $3.0 million as part of a capital recycling strategy[10] - Completed leasing activity on 734,464 square feet of property with remaining lease terms ranging from 0.7 to 11.4 years[10] Revenue Collection - The company collected 100% of cash rents due during Q3 2025 and October 2025[10] - Collected 100% of cash rents due in October[15] Financing Activities - The company issued 1,891,807 shares under its ATM program for net proceeds of $23.0 million[10] - Increased credit facility from $505.0 million to $600.0 million, with revolver maturity extended to October 2029[15] - Repaid $3.1 million in fixed rate mortgage debt at an interest rate of 4.59%[15] Distributions - Declared monthly cash distributions totaling $0.30 per share on common stock and Non-controlling OP Units for October, November, and December 2025[15] Operational Insights - The company anticipates continued growth in same store rents, which have increased by 2% annually in recent years[11] - Core FFO is adjusted for non-recurring expenses and acquisition-related costs, providing a supplemental measure of operating performance[16] - The presentation of FFO and Core FFO does not represent cash flows from operating activities as per GAAP[17] Forward-Looking Statements - Forward-looking statements regarding income stability and portfolio growth involve risks and uncertainties[18] - Factors affecting actual results include capital raising ability, economic downturns, and tenant performance[18]

Property Management and Occupancy - As of September 30, 2025, the company owned 151 properties totaling 17.7 million square feet of rentable space, with an occupancy rate of 99.1%[120] - The company collected 100% of all outstanding base rents for the nine months ended September 30, 2025, demonstrating strong credit underwriting and asset management[123] - The company has no lease expirations for the remainder of 2025, indicating stability in rental income[127] - The company’s available vacant space represented only 0.9% of total square footage, with annual carrying costs of approximately $1.7 million[126] - The largest tenant contributed only 5.3% of total lease revenue for the nine months ended September 30, 2025, indicating a diversified portfolio[146] Financial Performance - Total operating revenues for Q3 2025 were $40,841,000, an increase of 4.1% compared to $39,235,000 in Q3 2024[163] - Net income for Q3 2025 was $4,137,000, a decrease of 64.7% from $11,721,000 in Q3 2024[163] - Funds from Operations (FFO) available to common stockholders for Q3 2025 was $16,264,000, up 1.1% from $16,084,000 in Q3 2024[163] - Total operating revenues for the nine months ended September 30, 2025, increased to $117,875,000, a 5.2% increase from $112,013,000 in 2024[165] - Net income available to common stockholders and Non-controlling OP Unitholders decreased to $4,358,000 for the nine months ended September 30, 2025, down 39.4% from $7,188,000 in 2024[175] - Funds from Operations (FFO) available to common stockholders and Non-controlling OP Unitholders increased to $46,763,000 for the nine months ended September 30, 2025, a 6.1% increase from $44,060,000 in 2024[165] Lease Activity - During the nine months ended September 30, 2025, the company executed 13 leases totaling 857,481 square feet with a weighted average remaining lease term of 7.3 years and annualized GAAP fixed lease payments of $13.1 million[131] - The company acquired 19 industrial properties during the nine months ended September 30, 2025, with a total purchase price of $207.9 million and a weighted average remaining lease term of 15.9 years[130] - The company sold two non-core properties for an aggregate sales price of $8.0 million during the nine months ended September 30, 2025, with an aggregate gain on sale of real estate of $0.4 million[129] - Lease revenues from same store properties for the nine months ended September 30, 2025, increased to $96,573,000, a 3.1% increase from $93,639,000 in 2024[167] Capital and Financing - The company amended its Credit Facility, increasing the Revolver from $125.0 million to $155.0 million, with fees of approximately $0.5 million incurred[134] - The company raised approximately $61.0 million in net proceeds by selling 4,412,814 shares of common stock under the 2024 Common Stock Sales Agreement during the nine months ended September 30, 2025[140] - The 2024 Registration Statement allows the company to issue up to $1.3 billion of securities, replacing the previous 2022 Registration Statement[141] - The company has the ability to raise up to $1.0 billion of additional equity capital through future public offerings under the 2024 Registration Statement[180] - As of September 30, 2025, the company had $495.4 million outstanding under its Credit Facility at a weighted average interest rate of approximately 5.55%[189] Expenses and Costs - Total operating expenses for Q3 2025 were $26,021,000, down 8.8% from $28,546,000 in Q3 2024[163] - The base management fee for Q3 2025 was $1,701,000, reflecting an increase of 11.3% from $1,528,000 in Q3 2024[163] - The incentive fee for Q3 2025 was $709,000, a decrease of 38.1% compared to $1,146,000 in Q3 2024[163] - Property operating expenses for the nine months ended September 30, 2025, increased to $21,568,000, a 17.4% increase from $18,373,000 in 2024[170] - Interest expense for the nine months ended September 30, 2025, increased to $29,900,000, a 5.8% increase from $28,259,000 in 2024[172] Cash Flow and Liquidity - Net cash provided by operating activities for the nine months ended September 30, 2025, was $72.4 million, compared to $34.2 million for the same period in 2024[183] - Net cash used in investing activities during the nine months ended September 30, 2025, was $218.3 million, primarily for 19 property acquisitions[184] - Net cash provided by financing activities for the nine months ended September 30, 2025, was $155.4 million, mainly from the issuance of $62.2 million of equity[185] - Available liquidity as of September 30, 2025, was $24.6 million, consisting of approximately $18.4 million in cash and cash equivalents and $6.2 million in available borrowing capacity[176] Interest Rate and Risk Management - Interest rate risk is a primary concern, with the company utilizing derivative contracts to cap interest rates and manage exposure[200] - A 3% decrease in SOFR would result in a net income increase of $6,247,000, while a 3% increase would decrease net income by the same amount[203] - The company aims to limit the impact of interest rate changes on earnings and cash flows by borrowing primarily at fixed rates or low-margin variable rates[207] Other Income and Adjustments - Other income for the nine months ended September 30, 2025, increased to $590,000, a 708.2% increase from $73,000 in 2024[174] - The company incurred fees of approximately $4.2 million related to amending and upsizing its Credit Facility[186] - The company has eliminated the payment of the incentive fee for the quarters ended March 31, 2023, June 30, 2023, September 30, 2023, and December 31, 2023, as per the amended Advisory Agreement[156][157]

Core Insights - The Invesco KBW Premium Yield Equity REIT ETF (KBWY) targets income-focused investors with a high trailing 12-month yield of 9.99% and an SEC 30-Day Yield of 8.85% [1][20] - The ETF has a total expense ratio of 0.35% and manages approximately $241 million in assets [1] - KBWY has underperformed compared to its benchmark, the Vanguard Real Estate Index Fund ETF (VNQ), with a total return of 69.19% since inception, significantly lower than VNQ's 198.98% [10][11] Investment Strategy - KBWY tracks a modified-dividend yield-weighted index of small- and mid-cap domestic equity REITs that have competitive dividend yields [2] - The index is reconstituted annually and rebalanced quarterly, with holdings capped at 8% [2] Portfolio Composition - The fund is primarily invested in U.S. companies, with about 75% of its asset value in micro-cap stocks [4] - The portfolio is concentrated, with the top 10 holdings representing 47.5% of the asset value [7] - Key sectors include diversified REITs, healthcare REITs, and office REITs, while retail and residential REITs are downplayed [4] Performance Metrics - KBWY has lagged behind VNQ by 4 percentage points in annualized return since inception [10] - The fund has a higher maximum drawdown of -57.69% compared to VNQ's -42.40% [11] - Over the last three years, KBWY's total return was 4.66%, significantly lower than VNQ's 32.06% [12] Distribution History - Distribution trends have been irregular, with the annual sum of distributions for 2024 projected at $1.56 per share, nearly the same as in 2014 [13] - The fund has experienced a decline in dividend growth, with a 5-year CAGR of -7.82% [18] Competitive Landscape - KBWY stands out for its high yield compared to other U.S. equity REIT ETFs, but it has the worst total return since March 2019 [19] - The fund's expense ratio is competitive at 0.35%, similar to other ETFs in the space [18]

Financial Performance - Total operating revenue for Q2 2025 was $39.5 million, a 5.4% increase from $37.5 million in Q1 2025[3] - Net income available to common stockholders for Q2 2025 was $1.5 million, or $0.03 per share, down 24.0% from $1.9 million, or $0.04 per share in Q1 2025[8] - Core funds from operations (Core FFO) for Q2 2025 was $16.1 million, a 5.4% increase compared to $15.3 million in Q1 2025, equating to $0.35 per share[7] Asset Management - The company acquired two fully-occupied facilities for $79.3 million, with a weighted average cap rate of 8.88%[9] - The company sold one non-core office property for $5.1 million and one non-core industrial property for $18.5 million as part of its capital recycling strategy[9] - Total assets increased to $1.21 billion, up 4.3% from $1.16 billion in Q1 2025[4] Cash Management - The company collected 100% of cash rents due during April, May, and June 2025[9] - Collected 100% of cash rents due in July[15] - The company repaid $7.2 million in variable rate mortgage debt at an interest rate of SOFR + 2.25%[9] - Issued 750,426 shares of common stock under its ATM program for net proceeds of $10.4 million[9] - Issued 50,540 shares of common stock under the ATM program for net proceeds of $0.7 million[15] - Declared monthly cash distributions totaling $0.30 per share on common stock and Non-controlling OP Units[15] Operational Insights - The company anticipates continued growth in same store rents, which have increased by 2% annually in recent years[11] - Leased or renewed 143,844 square feet with remaining lease terms ranging from 5.3 to 11.4 years[15] Performance Metrics - Core FFO is adjusted for acquisition-related expenses and non-recurring items, providing a meaningful supplemental measure of operating performance[16] - The company emphasizes that FFO and Core FFO do not represent cash flows from operating activities as per GAAP[17] Forward-Looking Statements - Forward-looking statements regarding income stability and portfolio growth involve risks and uncertainties[18]

Property Management and Occupancy - As of June 30, 2025, the company owned 143 properties totaling 17.0 million square feet of rentable space, with an occupancy rate of 98.7%[111]. - The company collected 100% of all outstanding base rents for the six months ended June 30, 2025, demonstrating strong credit underwriting and asset management[115]. - The company has a manageable lease expiration schedule for the remainder of 2025, equating to 1.5% of lease revenue as of June 30, 2025[121]. - The average remaining lease term of the portfolio is 7.0 years, providing stability in rental income[111]. - For the six months ended June 30, 2025, the largest tenant contributed only 5.3% of total lease revenue, indicating a diversified tenant portfolio[136]. - Texas accounted for 16.8% of lease revenue for the three months ended June 30, 2025, with $6.6 million, up from 12.5% in the same period of 2024[137]. Financial Performance - Total operating revenues for Q2 2025 were $39,533,000, an increase of 6.7% from $37,057,000 in Q2 2024[153]. - Net income for Q2 2025 was $4,634,000, representing a significant increase of 189.6% compared to $1,600,000 in Q2 2024[153]. - Funds from Operations (FFO) available to common stockholders for Q2 2025 was $15,338,000, up 6.2% from $14,437,000 in Q2 2024[153]. - Total operating revenues for the six months ended June 30, 2025, increased to $77.034 million, a 5.8% increase from $72.779 million in 2024[155]. - Net income for the six months ended June 30, 2025, rose to $9.773 million, representing a 90.7% increase from $5.125 million in 2024[155]. - Funds from Operations (FFO) available to common stockholders for the six months ended June 30, 2025, increased to $30.501 million, a 9.0% increase from $27.976 million in 2024[155]. Capital Management and Financing - The company entered into a 2024 Common Stock Sales Agreement, allowing for the issuance of up to $250.0 million in common stock, raising approximately $38.0 million in net proceeds from the sale of 2,521,007 shares during the six months ended June 30, 2025[130]. - The 2024 Registration Statement, effective March 21, 2024, permits the issuance of up to $1.3 billion in securities, replacing the previous 2022 Registration Statement[131]. - The company has the ability to raise up to $1.0 billion of additional equity capital through future public offerings under the 2024 Registration Statement[170]. - The company issued $20.0 million in unsecured Term Loan D, which has a maturity date of May 30, 2027[178]. - The company raised net proceeds of $38.0 million from common equity and $0.4 million from Series F Preferred Stock during the six months ended June 30, 2025[169]. Property Acquisitions and Sales - During the six months ended June 30, 2025, the company executed a capital recycling program, selling one non-core property for $5.05 million, resulting in an aggregate gain of $377,000[123]. - The company acquired ten industrial properties during the same period, totaling 874,871 square feet with a weighted average remaining lease term of 14.3 years and a purchase price of $153.07 million[124]. - Net cash used in investing activities was $155.8 million for the six months ended June 30, 2025, primarily due to ten property acquisitions[174]. Expenses and Cost Management - Total operating expenses for Q2 2025 decreased by 3.2% to $25,146,000 from $25,973,000 in Q2 2024[153]. - Property operating expenses increased by 25.0% to $7,258,000 in Q2 2025 from $5,807,000 in Q2 2024[153]. - General and administrative expenses increased for the six months ended June 30, 2025, primarily due to higher audit expenses and costs associated with the termination of the Series F Preferred Stock offering[161]. - Interest expense increased for the six months ended June 30, 2025, primarily due to higher costs on variable rate debt and new interest expense on the 2029 Notes[162]. Market Conditions and Future Outlook - National industrial rents increased by 2.6% year over year in the second quarter of 2025, indicating steady demand and sustainable long-term growth[113]. - The company continues to monitor market conditions and expects industrial demand to be supported by government investment in infrastructure and advanced manufacturing[117]. - Future interest rate changes may affect the company's liquidity and expansion plans, particularly related to Revolver and Term Loans[196]. - The company aims to limit the impact of interest rate changes on earnings and cash flows by primarily borrowing at fixed rates or low-margin variable rates[196]. - The company is exposed to market risks including interest rate fluctuations, which may affect the value of real estate and refinancing capabilities[197]. Liquidity and Financial Position - The company has adequate liquidity, with cash on hand and availability under its Credit Facility sufficient to cover near-term obligations[116]. - Available liquidity as of June 30, 2025, was $38.7 million, consisting of approximately $11.7 million in cash and cash equivalents and $27.0 million in available borrowing capacity under the Credit Facility[166]. - The company had mortgage notes payable totaling $259.5 million, with a weighted average interest rate of 4.22% and a remaining average maturity of 3.1 years as of June 30, 2025[171]. - The company anticipates being able to refinance $35.4 million of mortgage debt due in 2026 through various financing options[172]. Shareholder and Governance Matters - The Board of Directors renewed the Advisory Agreement and Administration Agreement for an additional year, through August 31, 2026[142]. - The company reclassified 26,000,000 shares of common stock to Series F Preferred Stock, reducing common stock shares from 86,290,000 to 60,290,000[132]. - The Series F Preferred Stock offering raised $0.4 million in net proceeds during the six months ended June 30, 2025[132]. - The net incentive fee paid to the Adviser decreased due to a larger portion of the fee being waived for the three and six months ended June 30, 2025[161].

Financial Performance - Total operating revenue for Q1 2025 was $37.5 million, a slight increase of 0.3% from $37.4 million in Q4 2024[3] - Net income available to common stockholders for Q1 2025 was $1.9 million, or $0.04 per share, down 51.8% from $4.0 million, or $0.09 per share in Q4 2024[3][8] - Core FFO available to common stockholders for Q1 2025 was $15.3 million, a decrease of 0.2% compared to $15.3 million in Q4 2024, equating to $0.34 per share[7][4] Asset Management - Total assets increased to $1.16 billion, up 6.0% from $1.09 billion in Q4 2024[4] - The company acquired six fully-occupied properties for $73.7 million, with a weighted average cap rate of 8.39%[10] - The company renewed or leased 67,709 square feet of space with a remaining lease term of 3.0 years[10] Cash Management - The company successfully collected 100% of cash rents for Q1 2025 and April 2025[10][12] - Monthly cash distributions for common stock were maintained at $0.30 per share[10] - Declared monthly cash distributions totaling $0.30 per share on common stock and Non-controlling OP Units for April, May, and June 2025[17] Capital Strategy - The company plans to continue its capital recycling strategy by selling non-core assets and reinvesting in target growth markets[12] - Repaid $7.2 million in variable rate mortgage debt at an interest rate of SOFR + 2.25%[17] - The company anticipates continued access to debt and equity markets for added liquidity amid economic uncertainties[12] Financial Metrics - Core FFO is adjusted for acquisition-related expenses and non-recurring expense adjustments, differing from NAREIT's definition[16] - FFO is a non-GAAP measure that excludes gains or losses from property sales and impairment losses, providing context for financial performance[15] - The company believes Core FFO is a meaningful supplemental measure of its operating performance[18] Forward-Looking Statements - Forward-looking statements regarding income stability and portfolio growth involve risks and uncertainties, including capital raising and economic downturns[20] - The company cautions against undue reliance on forward-looking statements, which may change based on new information or events[20]

Property Management and Occupancy - As of March 31, 2025, the company owned 139 properties totaling 16.5 million square feet of rentable space, with an occupancy rate of 98.7%[105] - The company collected 100% of all outstanding base rents for the three months ended March 31, 2025, demonstrating strong credit underwriting and asset management[109] - The company has a manageable lease expiration schedule for the remainder of 2025, equating to 2.5% of lease revenue as of March 31, 2025[114] - The largest tenant contributed only 5.4% of total lease revenue for the three months ended March 31, 2025, indicating a diversified tenant base[128] - The breakdown of total lease revenue by industry classification shows that the Automotive sector generated $5,532,000 (14.7%) in 2025, compared to $5,302,000 (14.8%) in 2024[128] - Texas was the leading state for lease revenue, contributing $5,328,000 (14.2%) in 2025, up from $4,526,000 (12.7%) in 2024[128] Financial Performance - For the three months ended March 31, 2025, total lease revenue was $37,501,000, an increase from $35,721,000 in the same period of 2024, representing a growth of 5.0%[128] - Total operating revenues for the three months ended March 31, 2025, increased to $37,501,000, a 5.0% increase from $35,721,000 in 2024[146] - Lease revenues from same store properties rose to $32,007,000, reflecting a 6.6% increase from $30,039,000 in the prior year[148] - Net income available to common stockholders and Non-controlling OP Unitholders surged to $1,917,000, a 526.5% increase from $306,000 in the same period last year[146] - Funds from Operations (FFO) available to common stockholders and Non-controlling OP Unitholders increased to $15,160,000, an 11.9% rise from $13,542,000 in 2024[146] - Basic FFO per share for the three months ended March 31, 2025, was $0.34, consistent with the same period in 2024[178] Property Acquisitions and Sales - The company acquired six industrial properties during the three months ended March 31, 2025, with a total aggregate purchase price of $73.725 million and a weighted average remaining lease term of 10.8 years[118] - The company sold a 60,000 square foot property in Hickory, North Carolina for $5.1 million, realizing a gain of $0.4 million on the sale[116] - Property acquisitions since the beginning of 2020 have totaled $472.7 million, primarily in the industrial sector, with a weighted average lease term of 13.6 years[114] Debt and Liquidity - The weighted average interest rate of the company's mortgage debt was 4.23% as of March 31, 2025, with a weighted average remaining term of 3.3 years[105] - The company has adequate liquidity to cover near-term debt obligations and operating expenses, with cash on hand and availability on its Credit Facility[110] - Available liquidity as of March 31, 2025, was $80.5 million, consisting of $10.4 million in cash and cash equivalents and $70.1 million in borrowing capacity[156] - As of March 31, 2025, the company had mortgage notes payable totaling $269.1 million, with a weighted-average interest rate of 4.29%[161] - The company had mortgage debt totaling $17.5 million due in 2025 and $35.4 million due in 2026, with plans to refinance the 2026 mortgages through various financing options[162] - The company has contractual obligations totaling $884.1 million as of March 31, 2025, with $59.98 million due within one year[170] Capital Raising - The company raised approximately $27.7 million in net proceeds from the sale of 1,770,581 shares of common stock during the three months ended March 31, 2025[123] - The company raised net proceeds of $27.7 million from common equity during the three months ended March 31, 2025[159] Management and Governance - The company has a management team with extensive experience in real estate and mortgage loans, led by Mr. David Gladstone[129] - The Advisory Agreement was renewed for an additional year through August 31, 2025, during the July 2024 board meeting[132] - The base management fee is calculated at an annual rate of 0.425% of the prior calendar quarter's Gross Tangible Real Estate[133] - The company is externally managed, with all personnel employed by its Adviser and Administrator, which are controlled by Mr. David Gladstone[131] Operating Expenses - Property operating expenses totaled $6,900,000, a 17.3% increase from $5,884,000 in the previous year, primarily due to inflationary cost increases[150] - Interest expense decreased to $9,138,000, a 3.8% reduction from $9,497,000 in the prior year[146] Cash Flow Activities - Net cash provided by operating activities for the three months ended March 31, 2025, was $17.7 million, an increase from $15.0 million for the same period in 2024, primarily driven by lease revenues[163] - Net cash used in investing activities for the three months ended March 31, 2025, was $75.6 million, mainly due to six property acquisitions and capital improvements, compared to $18.5 million provided in the same period in 2024[165] - Net cash provided by financing activities for the three months ended March 31, 2025, was $58.2 million, primarily from the issuance of $28.4 million in equity and net borrowings on the credit facility[166] Market and Risk Factors - The primary market risk faced by the company is interest rate risk, which is mitigated through interest rate swaps and caps[179] - As of March 31, 2025, the effective average SOFR was 4.41%[181] - A 3% decrease in SOFR would result in a net income increase of $1.779 million, while a 3% increase would lead to a net income decrease of $1.779 million[182] - The fair value of the company's outstanding mortgage debt was $255.9 million as of March 31, 2025[183] - A 1% increase in interest rates would decrease the fair value of debt instruments by $7.0 million, while a 1% decrease would increase it by $7.2 million[183] - The company aims to manage interest rate risk by primarily borrowing at fixed rates or variable rates with the lowest margins available[185] - The company may utilize derivative financial instruments such as interest rate swaps and caps to mitigate interest rate risk[185] - The value of the company's real estate is subject to fluctuations based on local and regional economic conditions[186] - Changes in the creditworthiness of lessees and borrowers may affect the company's ability to refinance debt[186]