InvenTrust Properties (IVT) - 2025 Q2 - Quarterly Report

Part I - Financial Information This section presents the unaudited condensed consolidated financial statements and management's discussion and analysis for InvenTrust Properties Corp Item 1. Financial Statements This section presents the unaudited condensed consolidated financial statements, including balance sheets, income statements, equity, and cash flows, with detailed notes Condensed Consolidated Balance Sheets This section provides a snapshot of the Company's financial position at specific dates, detailing assets, liabilities, and equity Condensed Consolidated Balance Sheets (in thousands) | Metric | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :-------------------------------- | :----------------------------- | :------------------------------- | | Assets | | | | Net investment properties | $2,199,641 | $2,326,901 | | Cash, cash equivalents, and restricted cash | $294,039 | $91,221 | | Total assets | $2,709,484 | $2,635,950 | | Liabilities | | | | Debt, net | $746,335 | $740,415 | | Total liabilities | $887,198 | $875,945 | | Stockholders' Equity | | | | Total stockholders' equity | $1,822,286 | $1,760,005 | - Total assets increased by $73.5 million from December 31, 2024, to June 30, 2025, primarily driven by a significant increase in cash, cash equivalents, and restricted cash[12] - Net investment properties decreased by $127.26 million, while cash, cash equivalents, and restricted cash increased by $202.818 million[12][23] Condensed Consolidated Statements of Operations and Comprehensive Income This section details the Company's financial performance over specific periods, including income, expenses, and net income Condensed Consolidated Statements of Operations and Comprehensive Income (in thousands) | Metric (in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total income | $73,551 | $67,423 | $147,322 | $134,221 | | Total operating expenses | $61,114 | $56,740 | $120,378 | $111,862 | | Total other (expense) income, net | $83,505 | $(9,185) | $75,790 | $(17,961) | | Net income | $95,942 | $1,498 | $102,734 | $4,398 | | Net income per common share - basic | $1.24 | $0.02 | $1.32 | $0.06 | | Comprehensive income | $93,606 | $570 | $96,570 | $7,472 | - Net income for the three months ended June 30, 2025, significantly increased to $95.9 million from $1.5 million in the prior year, primarily due to a $90.9 million gain on the sale of investment properties[15][114] - Lease income, net, increased by $6.1 million (three months) and $13.0 million (six months) compared to the prior year, driven by acquired properties and Same Property performance[106][107] Condensed Consolidated Statements of Equity This section outlines changes in the Company's equity over time, including net income, distributions, and stock-based compensation Condensed Consolidated Statements of Equity (in thousands) | Metric (in thousands) | June 30, 2025 | March 31, 2025 | January 1, 2025 | | :-------------------- | :------------ | :------------- | :-------------- | | Total Stockholders' Equity | $1,822,286 | $1,744,806 | $1,760,005 | | Net income | $95,942 | $6,792 | — | | Distributions declared | $(18,447) | $(18,438) | — | | Stock-based compensation, net | $2,321 | $275 | — | - Total stockholders' equity increased from $1,760.0 million at January 1, 2025, to $1,822.3 million at June 30, 2025, primarily due to net income of $102.7 million, partially offset by distributions declared[17][15] - Common shares outstanding increased from 77,450,794 at January 1, 2025, to 77,606,396 at June 30, 2025, mainly due to stock-based compensation[17] Condensed Consolidated Statements of Cash Flows This section details the Company's cash inflows and outflows from operating, investing, and financing activities Condensed Consolidated Statements of Cash Flows (in thousands) | Cash Flow Activity (in thousands) | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash provided by operating activities | $68,866 | $61,462 | | Net cash provided by (used in) investing activities | $185,207 | $(77,245) | | Net cash used in financing activities | $(51,255) | $(46,851) | | Net increase (decrease) in cash, cash equivalents, and restricted cash | $202,818 | $(62,634) | | Cash, cash equivalents, and restricted cash at end of period | $294,039 | $37,129 | - Net cash provided by investing activities dramatically shifted from a $77.2 million outflow in H1 2024 to a $185.2 million inflow in H1 2025, primarily due to $299.4 million in proceeds from the sale of investment properties in 2025[23][143] - Operating cash flows increased by $7.4 million, driven by higher NOI and decreased interest expense[142][143] Notes to Condensed Consolidated Financial Statements This section provides detailed explanations and additional information supporting the condensed consolidated financial statements 1. Organization This note describes InvenTrust Properties Corp.'s business as a REIT focused on multi-tenant retail properties in Sun Belt markets - InvenTrust Properties Corp. operates as a real estate investment trust (REIT) focused on owning, leasing, redeveloping, acquiring, and managing a multi-tenant retail platform, primarily in Sun Belt markets[29][92][93] - As of June 30, 2025, the Company's retail portfolio consisted of 67 properties with a Gross Leasable Area (GLA) of 10,556 thousand square feet, an increase from 64 properties and 10,484 thousand square feet in 2024[32][100] 2. Basis of Presentation This note outlines the accounting principles and estimates used in preparing the interim financial statements - The financial statements are prepared in accordance with GAAP for interim financial information, requiring management estimates and assumptions in areas like asset impairment, purchase price allocation, debt fair value, and accounts receivable collectibility[28][33] - ASU No. 2024-03, 'Disaggregation of Income Statement Expenses,' effective for annual periods after December 15, 2026, is expected to primarily impact disclosure requirements with no material effect on financial position, results of operations, or cash flows[34] 3. Revenue Recognition This note details the components of lease income and future minimum lease payments Lease Income Components (in thousands) | Lease Income Component (in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Minimum base rent | $47,158 | $43,189 | $94,224 | $85,636 | | Real estate tax recoveries | $9,394 | $8,294 | $17,993 | $16,399 | | Common area maintenance, insurance, and other recoveries | $9,110 | $8,041 | $18,509 | $15,895 | | Ground rent income | $5,002 | $4,749 | $10,078 | $9,486 | | Lease income, net | $73,130 | $67,056 | $146,519 | $133,549 | - Total future minimum lease payments as of June 30, 2025, amount to $1,151.2 million, with the largest portion ($422.0 million) due thereafter 2029[36] 4. Acquired Properties This note provides details on the retail properties acquired by the Company during the reporting periods Acquired Properties H1 2025 (in thousands) | Month Acquired | Property | Market | Square Feet | Gross Acquisition Price (in thousands) | Assumption of Mortgage Debt (in thousands) | | :------------- | :---------------------- | :----------- | :---------- | :------------------------------------- | :----------------------------------------- | | Apr-25 | Plaza Escondida | Tucson, AZ | 91 | $23,000 | $7,981 | | Apr-25 | Carmel Village | Charlotte, NC | 54 | $19,925 | — | | Jun-25 | West Ashley Station | Charleston, SC | 79 | $26,600 | — | | Jun-25 | Twelve Oaks Shopping Center | Savannah, GA | 106 | $35,850 | — | | Total H1 2025 | | | 330 | $105,375 | $7,981 | Acquired Properties H1 2024 (in thousands) | Month Acquired | Property | Market | Square Feet | Gross Acquisition Price (in thousands) | Assumption of Mortgage Debt (in thousands) | | :------------- | :---------------------- | :----------- | :---------- | :------------------------------------- | :----------------------------------------- | | Feb-24 | The Plant | Phoenix, AZ | 57 | $29,500 | $13,000 | | Apr-24 | Moores Mill | Atlanta, GA | 70 | $28,000 | — | | Jun-24 | Maguire Groves | Orlando, FL | 33 | $16,100 | — | | Total H1 2024 | | | 160 | $73,600 | $13,000 | - The Company acquired four retail properties in H1 2025 for a total gross acquisition price of $105.4 million, compared to three properties for $73.6 million in H1 2024, indicating increased acquisition activity[38][40][41] 5. Disposed Properties This note outlines the properties disposed of by the Company and the resulting gains on sale Disposed Properties H1 2025 (in thousands) | Month Disposed | Property | Market | Square Feet | Gross Disposition Price (in thousands) | Gain on Sale (in thousands) | | :------------- | :-------------------------------- | :--------- | :---------- | :------------------------------------- | :-------------------------- | | Jun-25 | California portfolio disposition | California | 746 | $306,000 | $90,909 | - In H1 2025, the Company disposed of five properties in California as a portfolio sale for $306.0 million, recognizing a significant gain of $90.9 million; no properties were disposed of in H1 2024[42][43] 6. Debt This note details the Company's debt structure, including mortgages, term loans, senior notes, and compliance with covenants Debt Structure (in thousands) | Debt Type (in thousands) | June 30, 2025 Amount | December 31, 2024 Amount | | :----------------------- | :------------------- | :----------------------- | | Mortgages Payable | $88,267 | $93,380 | | Term Loan | $400,000 | $400,000 | | Senior Notes | $250,000 | $250,000 | | Revolving Line of Credit | — | — | | Finance Lease Liability | $10,984 | N/A | | Debt, net | $746,335 | $740,415 | - The Company's debt structure includes mortgages payable, unsecured term loans, senior notes, an unsecured revolving line of credit, and a newly recognized finance lease liability of $10.984 million as of June 30, 2025[44][51][52] - All $400.0 million of variable-rate term loan debt has been swapped to fixed rates through maturity, mitigating interest rate risk[49][150] - The Company was in compliance with all loan covenants as of June 30, 2025, and December 31, 2024[45] 7. Fair Value Measurements This note provides fair value information for financial instruments, including derivative interest rate swaps and debt Fair Value of Derivative Interest Rate Swaps (in thousands) | Financial Instrument | Fair Value as of June 30, 2025 (in thousands) | Fair Value as of December 31, 2024 (in thousands) | | :------------------- | :------------------------------------ | :---------------------------------------- | | Derivative interest rate swaps | $8,262 | $14,426 | Fair Value of Debt (in thousands) | Financial Instrument | Carrying Value (June 30, 2025) | Estimated Fair Value (June 30, 2025) | Market Interest Rate (June 30, 2025) | | :------------------- | :----------------------------- | :----------------------------------- | :----------------------------------- | | Mortgages payable | $83,835 | $88,267 | 6.30% | | Senior notes | $250,000 | $245,719 | 5.47% | | Term Loan | $400,385 | $400,000 | 4.83% | - The fair value of derivative interest rate swaps decreased from $14.4 million at December 31, 2024, to $8.3 million at June 30, 2025[55] 8. Earnings Per Share and Equity Transactions This note details earnings per share calculations and information on equity programs like ATM and share repurchase Earnings Per Share (except per share) | EPS Metric | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income per common share - basic | $1.24 | $0.02 | $1.32 | $0.06 | | Net income per common share - diluted | $1.23 | $0.02 | $1.31 | $0.06 | | Weighted average common shares outstanding - diluted | 78,292,422 | 68,327,263 | 78,226,681 | 68,299,657 | - Diluted EPS significantly increased to $1.23 for the three months ended June 30, 2025, from $0.02 in the prior year, reflecting the substantial increase in net income[60] - The Company has an At-The-Market (ATM) Program with $236.7 million of common stock remaining available for issuance and a Share Repurchase Program (SRP) of up to $150.0 million, under which no shares have been repurchased as of June 30, 2025[61][62][138] 9. Stock-Based Compensation This note outlines the stock-based compensation expense and shares available under incentive and employee stock plans Stock-Based Compensation Expense (in thousands) | Stock-Based Compensation Expense (in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :---------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Incentive Award Plan, net | $2,680 | $2,532 | $5,408 | $4,688 | | Employee Stock Purchase Plan | $38 | $34 | $76 | $69 | | Total Stock-based compensation, net | $2,718 | $2,566 | $5,484 | $4,757 | - Stock-based compensation expense increased to $2.7 million for the three months ended June 30, 2025, from $2.6 million in the prior year, and to $5.5 million for the six months ended June 30, 2025, from $4.8 million in the prior year[66] - As of June 30, 2025, 2,514,805 shares were available for future issuance under the Incentive Award Plan, and 3,263,953 shares remained available under the Employee Stock Purchase Plan (ESPP)[63][65] 10. Segment Information This note identifies the Company's single reportable segment and key non-GAAP performance measures like NOI Property Operating Expenses (in thousands) | Operating Expenses (in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Repairs and maintenance | $3,833 | $3,040 | $7,208 | $5,974 | | Payroll, benefits, and office | $2,610 | $2,572 | $5,365 | $5,247 | | Utilities and waste removal | $2,527 | $2,250 | $4,989 | $4,378 | | Property insurance | $1,586 | $1,585 | $2,916 | $3,127 | | Security, legal, and other expenses | $920 | $796 | $1,745 | $1,516 | | Total Property operating expenses | $11,476 | $10,243 | $22,223 | $20,242 | - The Company operates as a single reportable segment: multi-tenant retail; Net Operating Income (NOI) is a key non-GAAP measure used by management to assess performance[32][68][69] - Capital investments and leasing costs increased to $18.1 million for the six months ended June 30, 2025, from $16.5 million in the prior year[70] 11. Commitments and Contingencies This note discusses legal claims, the Company's captive insurance, and future minimum lease obligations - The Company is subject to various legal claims in the ordinary course of business, but management does not expect a material adverse effect on financial condition, results of operations, or cash flows[74][155] - In January 2025, the Company's wholly-owned captive insurance company began underwriting the first layer of general liability insurance for retail properties, having paid $516 thousand in claims during H1 2025[75][76] Lease Terms and Discount Rates | Lease Type | Weighted-average remaining lease term | Weighted-average discount rate | | :-------------------------------- | :---------------------------------- | :----------------------------- | | Operating leases | 5.0 years | 4.49% | | Finance lease | 66.6 years | 6.80% | Future Minimum Lease Payments (in thousands) | Future Minimum Lease Payments (in thousands) | Operating Leases | Finance Lease | | :----------------------------------- | :--------------- | :------------ | | Remaining 2025 | $247 | $275 | | 2026 | $517 | $550 | | 2027 | $529 | $578 | | 2028 | $522 | $605 | | 2029 | $493 | $605 | | Thereafter | $293 | $71,816 | | Total expected minimum lease obligation | $2,601 | $74,429 | 12. Subsequent Events This note reports on significant events that occurred after the balance sheet date but before the financial statements were issued - On July 1, 2025, the Company acquired Marketplace at Encino Park (92,000 sq ft) in San Antonio, TX, for $38.5 million[83] - On July 17, 2025, the Company acquired West Broad Marketplace (386,000 sq ft) in Richmond, VA, for $86.0 million[84] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on the Company's financial condition, operations, and liquidity, analyzing strategy, recent developments, and key non-GAAP measures Overview This section introduces InvenTrust Properties Corp. as a Sun Belt retail REIT and outlines its strategic objectives and key performance indicators - InvenTrust Properties Corp. is a Sun Belt, multi-tenant essential retail REIT focused on grocery-anchored neighborhood and community centers, and high-quality power centers[92] - The Company's strategy involves acquiring properties in Sun Belt markets with favorable demographics, opportunistically disposing of properties, and maintaining a flexible capital structure[92][93] - Key financial and nonfinancial indicators used for evaluation include NOI, Same Property NOI, Nareit FFO, Core FFO, EBITDA, Adjusted EBITDA, occupancy rates, leasing activity, operating expenses, G&A, debt ratios, and liquidity[95] Recent Developments This section highlights recent acquisitions and debt extinguishment activities undertaken by the Company - The Company acquired four retail properties in Q2 2025: Plaza Escondida ($23.0 million), Carmel Village ($19.9 million), West Ashley Station ($26.6 million), and Twelve Oaks Shopping Center ($35.9 million)[96][97][98] - On May 9, 2025, the Company extinguished a $13.0 million mortgage payable secured by The Plant using available liquidity[99] Our Retail Portfolio This section provides key metrics and performance indicators for the Company's total and Same Property retail portfolio Total Retail Portfolio Metrics | Metric | June 30, 2025 | June 30, 2024 | | :------------------ | :------------ | :------------ | | No. of properties | 67 | 64 | | GLA (square feet) | 10,556 | 10,484 | | Economic occupancy | 95.5% | 93.7% | | Leased occupancy | 97.3% | 96.4% | | ABR PSF | $20.18 | $19.71 | Same Property Retail Portfolio Metrics | Same Property Metric | June 30, 2025 | June 30, 2024 | | :------------------- | :------------ | :------------ | | No. of properties | 57 | 57 | | GLA (square feet) | 9,442 | 9,416 | | Economic occupancy | 95.4% | 93.9% | | Leased occupancy | 97.3% | 96.5% | | ABR PSF | $19.98 | $19.28 | - Both economic and leased occupancy rates improved year-over-year for the total portfolio and Same Properties, indicating strong tenant demand[100][103] Results of Operations This section analyzes the Company's income, operating expenses, and other financial results for the reporting periods Total Income (in thousands) | Income (in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Lease income, net | $73,130 | $67,056 | $146,519 | $133,549 | | Other property income | $421 | $367 | $803 | $672 | | Total income | $73,551 | $67,423 | $147,322 | $134,221 | Total Operating Expenses (in thousands) | Operating Expenses (in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Depreciation and amortization | $30,738 | $28,790 | $61,352 | $56,958 | | Property operating | $11,476 | $10,243 | $22,223 | $20,242 | | Real estate taxes | $10,194 | $9,046 | $19,550 | $18,027 | | General and administrative | $8,706 | $8,661 | $17,253 | $16,635 | | Total operating expenses | $61,114 | $56,740 | $120,378 | $111,862 | Other (Expense) Income, Net (in thousands) | Other (Expense) Income (in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Interest expense, net | $(8,346) | $(9,640) | $(16,668) | $(19,274) | | Gain on sale of investment properties | $90,909 | — | $90,909 | — | | Other income and expense, net | $942 | $455 | $1,549 | $1,313 | | Total other (expense) income, net | $83,505 | $(9,185) | $75,790 | $(17,961) | - Lease income, net, increased by $6.1 million (Q2) and $13.0 million (YTD) primarily due to acquired properties and increased minimum base/ground rent from Same Properties[106][107][109] - Interest expense, net, decreased by $1.3 million (Q2) and $2.6 million (YTD) due to the extinguishment of a $72.5 million pooled mortgage payable in September 2024[113] Net Operating Income (NOI) This section analyzes the Company's Net Operating Income and Same Property NOI, key indicators of property-level performance Net Operating Income (in thousands) | Metric (in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net income | $95,942 | $1,498 | $102,734 | $4,398 | | NOI | $49,900 | $45,747 | $101,769 | $91,522 | | Same Property NOI | $42,626 | $40,667 | $85,061 | $80,584 | - Same Property NOI increased by $2.0 million (4.8%) for the three months and $4.5 million (5.6%) for the six months ended June 30, 2025, driven by increased occupancy, higher ABR PSF, and favorable lease spreads[120][121] - NOI from other investment properties (non-Same Property) increased significantly, reflecting the impact of recent acquisitions and dispositions[119] Funds From Operations (FFO) This section presents Nareit FFO and Core FFO, key non-GAAP measures for evaluating REIT operating performance Funds From Operations (in thousands, except per share) | Metric (in thousands, except per share) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :-------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Nareit FFO Applicable to Common Shares and Dilutive Securities | $35,484 | $30,068 | $72,642 | $60,914 | | Core FFO Applicable to Common Shares and Dilutive Securities | $34,336 | $29,134 | $70,565 | $59,115 | | Nareit FFO per diluted share | $0.45 | $0.44 | $0.93 | $0.89 | | Core FFO per diluted share | $0.44 | $0.43 | $0.90 | $0.87 | - Nareit FFO increased by 18.0% (Q2) and 19.2% (YTD), while Core FFO increased by 17.9% (Q2) and 19.4% (YTD), demonstrating strong operational performance[125] - The increase in FFO is primarily driven by higher net income, adjusted for depreciation and amortization of real estate assets and the gain on sale of investment properties[123][125] Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) This section provides EBITDA and Adjusted EBITDA, non-GAAP measures used to assess the Company's operating profitability EBITDA and Adjusted EBITDA (in thousands) | Metric (in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | EBITDA | $135,166 | $40,060 | $181,030 | $80,895 | | Adjusted EBITDA | $42,154 | $38,306 | $86,158 | $77,479 | - EBITDA significantly increased to $135.2 million (Q2) and $181.0 million (YTD) in 2025, largely due to the gain on sale of investment properties[130] - Adjusted EBITDA, which excludes non-operating items like gains on property sales, also showed a healthy increase, rising by 10.0% (Q2) and 11.2% (YTD)[130] Liquidity and Capital Resources This section discusses the Company's sources and uses of capital, including operating cash flows, property sales, and investments Capital Investments and Leasing Costs (in thousands) | Capital Investments and Leasing Costs (in thousands) | Three months ended June 30, 2025 | Three months ended June 30, 2024 | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :--------------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Tenant improvements | $1,370 | $3,163 | $2,257 | $5,461 | | Leasing costs | $1,042 | $662 | $1,851 | $1,653 | | Property improvements | $3,975 | $2,323 | $7,187 | $4,452 | | Development and redevelopment direct costs | $3,518 | $2,599 | $5,312 | $3,637 | | Total capital investments and leasing costs | $10,731 | $9,427 | $18,104 | $16,520 | - The Company's primary sources of capital include operating cash flows, property sales, mortgage borrowings, corporate borrowings, and equity offerings, while uses include property investments, distributions, debt service, and share repurchases[137][141] - Cash provided by operating activities increased by $7.4 million for the six months ended June 30, 2025, primarily due to increased NOI and decreased interest expense[142][143] - Cash provided by investing activities significantly increased by $262.5 million, driven by $299.4 million from property sales, partially offset by $97.4 million in acquisitions and $18.1 million in capital investments[142][143] Off Balance Sheet Arrangements This section confirms that the Company has no off-balance sheet arrangements - The Company has no off-balance sheet arrangements[144] Contractual Obligations This section details the Company's future payment obligations for fixed-rate debt, interest, and lease liabilities Contractual Obligations (in thousands) | Obligation Type (in thousands) | Remaining 2025 | 2026 | 2027 | 2028 | 2029 | Thereafter | Total | | :----------------------------- | :------------- | :------- | :------- | :------ | :------- | :--------- | :-------- | | Fixed rate, principal | $22,880 | $200,000 | $226,000 | — | $181,500 | $107,887 | $738,267 | | Interest | $15,160 | $27,891 | $17,089 | $14,853 | $11,081 | $14,989 | $101,063 | | Operating leases | $247 | $517 | $529 | $522 | $493 | $293 | $2,601 | | Finance lease | $275 | $550 | $578 | $605 | $605 | $71,816 | $74,429 | | Grand total | $38,562 | $228,958 | $244,196 | $15,980 | $193,679 | $194,985 | $916,360 | Critical Accounting Estimates This section confirms no material changes to the Company's critical accounting estimates from the prior annual report - There have been no material changes to the Company's critical accounting estimates compared to those described in its Annual Report on Form 10-K for the year ended December 31, 2024[149] Item 3. Quantitative and Qualitative Disclosures About Market Risk This section addresses the Company's exposure to market risks, primarily interest rate risk, and its management strategy through derivative instruments - The Company is exposed to interest rate risk from variable-rate debt and the pricing of new fixed-rate debt; its objective is to limit the impact of interest rate changes on earnings and cash flows[150] - As of June 30, 2025, all $400.0 million of the Company's outstanding variable-rate debt has been swapped to a fixed rate through the maturity dates, effectively hedging against interest rate fluctuations[150] Interest Rate Swaps (in thousands) | Interest Rate Swaps | Notional Amount (in thousands) | Fair Value as of June 30, 2025 (in thousands) | Fair Value as of December 31, 2024 (in thousands) | | :------------------ | :----------------------------- | :-------------------------------------------- | :---------------------------------------------- | | 5.5 year Term Loan | $100,000 | $(334) | $656 | | 5 year Term Loan | $100,000 | $2,620 | $4,212 | | 5 year Term Loan | $100,000 | $2,630 | $4,226 | | 5.5 year Term Loan | $50,000 | $1,648 | $2,634 | | 5.5 year Term Loan | $50,000 | $1,698 | $2,698 | | Total | $400,000 | $8,262 | $14,426 | Item 4. Controls and Procedures This section confirms the effectiveness of disclosure controls and procedures and reports on changes in internal control over financial reporting - As of June 30, 2025, the Company's management concluded that disclosure controls and procedures were effective at a reasonable assurance level[153] - There were no material changes to the Company's internal control over financial reporting during the quarter ended June 30, 2025[154] Part II - Other Information This section provides additional information not covered in the financial statements, including legal proceedings and risk factors Item 1. Legal Proceedings This section confirms the Company's involvement in ordinary course legal proceedings, with no anticipated material adverse effect on financials - The Company is subject to various legal proceedings and claims in the ordinary course of business[155] - Management believes the final outcome of these matters will not have a material adverse effect on the Company's financial condition, results of operations, or liquidity[155] Item 1A. Risk Factors This section reports no material changes to risk factors from the prior annual report, except for potential impacts of tariff activity and global trade policies - No material changes to risk factors from the Annual Report on Form 10-K for the fiscal year ended December 31, 2024[156] - An update includes the potential effects of uncertain and evolving tariff activity and changes in global trade policies on the economy and the Company's business, including tenant operations and ability to pay rent[156] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section reports no unregistered sales of equity securities or use of proceeds during the period - No unregistered sales of equity securities or use of proceeds occurred during the period[157] Item 3. Defaults Upon Senior Securities This section confirms no defaults upon senior securities occurred during the reporting period - No defaults upon senior securities occurred during the period[158] Item 4. Mine Safety Disclosures This section states that mine safety disclosures are not applicable to the Company - Mine safety disclosures are not applicable to the Company[159] Item 5. Other Information This section indicates that there is no other information to report - No other information to report[160] Item 6. Exhibits This section lists all exhibits filed as part of the Quarterly Report on Form 10-Q, including organizational documents and certifications - The exhibits include various Articles of Amendment and Restatement, Bylaws, Certifications of Principal Executive and Financial Officers (302 and 906), and XBRL financial information[161] Signatures This section contains the duly authorized signatures of the Company's Principal Executive and Financial Officers, certifying the report - The report is signed by Daniel J. Busch, President, Chief Executive Officer (Principal Executive Officer), and Michael Phillips, Executive Vice President, Chief Financial Officer and Treasurer (Principal Financial Officer), on July 30, 2025[165]