UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
☒
Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended September 30, 2026
☐
Transition report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934
Commission File Number 001-42301
FRONTVIEW REIT, INC.
(Exact name of registrant as specified in its charter)
Maryland
93-2133671
(State or other jurisdiction ofincorporation or organization)
(I.R.S. EmployerIdentification No.)
3131 McKinney Avenue
Suite L10
Dallas, Texas
75204
(Address of principal executive offices)
(Zip Code)
(214) 796-2445
(Registrant’s telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading
Symbol(s)
Name of each exchange on which registered
Common stock, $0.01 par value
FVR
The New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Accelerated filer
Non-accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
There were 26,723,935 shares of the Registrant’s common stock, $0.01 par value per share, outstanding as of November 4, 2026.
Table of Contents
TABLE OF CONTENTS
Page
Cautionary Note Regarding Forward-Looking Statements
1
Part I - FINANCIAL INFORMATION
Item 1.
Financial Statements - FrontView REIT, Inc.
Condensed Consolidated Balance Sheets (Unaudited)
2
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited)
3
Condensed Consolidated Statements of Equity (Unaudited)
4
Condensed Consolidated Statements of Cash Flows (Unaudited)
7
Notes to the Condensed Consolidated Financial Statements (Unaudited)
9
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
27
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
47
Item 4.
Controls and Procedures
Part II - OTHER INFORMATION
Legal Proceedings
Item 1A.
Risk Factors
Unregistered Sales of Equity Securities and Use of Proceeds
Defaults Upon Senior Securities
48
Mine Safety Disclosures
Item 5.
Other Information
Item 6.
Exhibits
49
This Quarterly Report on Form 10-Q contains forward-looking statements, which reflect our current views regarding our business, financial performance, growth prospects and strategies, market opportunities, and market trends, that are intended to be made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements include all statements that are not historical facts. In some cases, you can identify these forward-looking statements by the use of words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “could,” “seeks,” “approximately,” “projects,” “predicts,” “intends,” “plans,” “estimates,” “anticipates,” or the negative version of these words or other comparable words. All of the forward-looking statements included in this Quarterly Report on Form 10-Q are subject to various risks and uncertainties. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions, and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond our control. Although we believe that the expectations reflected in such forward-looking statements are based on reasonable assumptions, our actual results, performance, and achievements could differ materially from those expressed in or by the forward-looking statements and may be affected by a variety of risks and other factors. Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from such forward-looking statements.
Important factors that could cause results to differ materially from the forward-looking statements are described in Item 1. “Business,” Item 1A. “Risk Factors,” and Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, which was filed with the U.S. Securities and Exchange Commission (“SEC”) on February 25, 2026. The “Risk Factors” in our Annual Report on Form 10-K should not be construed as exhaustive and should be read in conjunction with other cautionary statements included elsewhere in our Annual Report on Form 10-K and this Quarterly Report on Form 10-Q.
You are cautioned not to place undue reliance on any forward-looking statements included in this Quarterly Report on Form 10-Q. All forward-looking statements are made as of the date of this Quarterly Report on Form 10-Q and the risk that actual results, performance, and achievements will differ materially from the expectations expressed in or referenced by this Quarterly Report on Form 10-Q will increase with the passage of time. We undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments, or otherwise, except as required by law.
Regulation FD Disclosures
We use any of the following to comply with our disclosure obligations under Regulation FD: SEC filings, press releases, public conference calls, or our website. We routinely post important information on our website at www.frontviewreit.com, including information that may be deemed material. We encourage our shareholders and others interested in our company to monitor these distribution channels for material disclosures. Our website address is included in this Quarterly Report on Form 10-Q as a textual reference only and the information on the website is not incorporated by reference in this Quarterly Report on Form 10-Q.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands, except share and per share amounts)
September 30,2026
December 31,2025
ASSETS
Real estate held for investment, at cost
Land
$
367,296
329,478
Buildings and improvements
478,257
417,393
Total real estate held for investment, at cost
845,553
746,871
Less: accumulated depreciation
(58,167
)
(48,204
Real estate held for investment, net
787,386
698,667
Assets held for sale
5,009
12,493
Mortgage loans receivable
10,312
10,324
Cash and cash equivalents
5,021
13,518
Investment in unconsolidated entity
2,689
—
Intangible lease assets, net
99,929
99,489
Other assets
21,879
19,952
Total assets
932,225
854,443
LIABILITIES AND EQUITY
Liabilities
Debt, net
310,284
314,251
Intangible lease liabilities, net
13,650
14,474
Accounts payable and accrued liabilities
29,028
32,494
Total liabilities
352,962
361,219
Equity
FrontView REIT, Inc. equity
Series A Convertible Preferred Stock, $0.01 par value 750,000 shares authorized, 383,333 shares issued and outstanding as of September 30, 2026 (liquidation preference $38,333)
Common stock, $0.01 par value 450,000,000 shares authorized, 26,627,909 and 22,111,165 shares issued and outstanding as of September 30, 2026 and December 31, 2025, respectively
266
221
Additional paid-in capital
540,021
420,024
Accumulated deficit
(40,736
(28,149
Accumulated other comprehensive income (loss)
4,327
(901
Total FrontView REIT, Inc. equity
503,882
391,195
Non-controlling interests
75,381
102,029
Total equity
579,263
493,224
Total liabilities and equity
The accompanying notes are an integral part of these condensed consolidated financial statements.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
For the three months ended September 30,
For the nine months ended September 30,
2026
2025
Revenues
Rental revenues
18,400
16,647
54,185
50,436
Interest income on mortgage loans
228
156
633
164
Total revenues
18,628
16,803
54,818
50,600
Operating expenses
Depreciation and amortization
8,428
7,351
24,329
24,622
Property operating expenses
2,130
2,209
6,733
7,299
General and administrative expenses
4,211
3,112
11,669
9,230
Total operating expenses
14,769
12,672
42,731
41,151
Other expenses (income)
Interest expense
4,429
4,564
12,833
13,708
Gain on sale of real estate
(3,681
(7,583
(6,906
(9,244
Impairment loss
1,551
968
4,957
Loss from unconsolidated entity
13
Income taxes
109
52
273
348
Total other expenses (income)
870
(1,416
7,181
9,769
Net income (loss)
2,989
5,547
4,906
(320
Net income (loss) attributable to non-controlling interests
458
1,532
823
(601
Net income attributable to FrontView REIT, Inc.
2,531
4,015
4,083
281
Series A Convertible Preferred Stock dividends
(381
(1,042
Net income attributable to common stockholders
2,150
3,041
Weighted average number of common shares outstanding used in earnings per share
Basic
24,547,878
20,723,471
23,226,505
19,071,703
Diluted
24,842,031
23,550,584
Earnings per share attributable to common stockholders
0.08
0.19
0.11
(0.01
Comprehensive income (loss)
Other comprehensive income (loss)
Change in fair value of interest rate swaps
2,440
37
6,409
(1,474
Realized gain (loss) on interest rate swaps
(43
5,436
5,584
11,272
(1,794
Comprehensive income (loss) attributable to non-controlling interests
835
1,542
1,961
(1,137
Comprehensive income (loss) attributable to FrontView REIT, Inc.
4,601
4,042
9,311
(657
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
(in thousands, except share amounts)
Series A Convertible Preferred Stock
Common Stock
Additional Paid-in Capital
Accumulated Deficit
Accumulated Other Comprehensive Income (Loss)
Non-controlling Interests
Total Equity
Balances, December 31, 2025
Conversion of OP Units to shares of common stock
6,132
(6,135
Issuance of 250,000 shares of Series A Convertible Preferred Stock
23,866
23,869
Stock-based compensation
1,061
Dividends and distributions declared to common stock and OP Units
(4,818
(1,337
(6,155
Dividends declared to Series A Convertible Preferred Stock
(239
Distributions declared to Preferred Units
(8
Reallocation of non-controlling interests
(1,046
1,046
1,644
413
2,057
Realized loss on interest rate swaps
(40
(10
(50
Net income
320
80
400
Balances, March 31, 2026
224
450,037
(32,886
703
96,078
514,159
Issuance of common stock in public offerings, net of issuance costs
17,155
17,164
5,602
(5,605
Stock-based compensation, net
642
655
(5,085
(1,269
(6,354
(422
(820
820
1,554
358
1,912
1,232
285
1,517
Balances, June 30, 2026
236
471,987
(37,161
2,257
91,301
528,623
Issuance of 200,000 shares of Series A Convertible Preferred Stock
19,073
19,075
17
32,345
32,362
18,251
(18,260
Conversion of Series A Convertible Preferred Stock to common stock
(1
(3
511
448
959
(5,725
(1,078
(6,803
(2,143
2,143
2,064
376
Realized gain on interest rate swaps
6
Balances, September 30, 2026
5
Accumulated Other Comprehensive Loss
Balances, December 31, 2024
173
331,482
(6,834
197,857
522,678
4,711
(4,713
615
(3,767
(2,411
(6,178
(773
773
(112
(67
(179
Net loss
(833
(504
Balances, March 31, 2025
175
336,035
(11,434
190,927
515,591
29
60,464
(60,493
200
(4,392
(1,578
(5,970
(7,321
7,321
(853
(479
(1,332
(2,901
(1,629
(4,530
Balances, June 30, 2025
204
389,378
(18,727
(965
134,061
503,951
8
17,339
(17,347
750
(4,573
(1,553
(6,126
(2,245
2,245
10
Balances, September 30, 2025
212
405,222
(19,285
(938
118,940
504,151
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
24,648
Amortization of above/below market leases
1,812
2,304
Amortization of financing transaction and discount costs
1,199
Change in fair value on derivative instruments included in interest expense
Net cash received from derivative settlements
170
778
Non-cash rental revenue adjustments
(913
(340
3,254
1,565
Changes in operating assets and liabilities:
2,192
(1,994
(1,312
Net cash provided by operating activities
29,669
25,617
CASH FLOWS FROM INVESTING ACTIVITIES
(2,732
Distributions from unconsolidated entity
30
Acquisition of real estate held for investment
(144,526
(83,797
Net proceeds from sale of real estate
43,734
57,129
Net proceeds from expropriation
4,953
Deposits on real estate held for investment
284
744
Deferred leasing costs and other additions to real estate held for investment
(5,512
(1,606
Investment in mortgage loans receivable
(10,274
Principal collections on mortgage loans receivable
3,702
Additions to other assets
(44
Net cash used in investing activities
(105,064
(32,851
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of Series A Convertible Preferred Stock
42,944
Proceeds from issuance of common stock
49,526
Proceeds from debt
57,500
50,000
Repayment of debt
(62,000
(10,000
Deferred offering costs
(1,120
Payments for shares withheld for employee tax obligations
(579
Cash dividends paid to Series A Convertible Preferred Stock
(727
Cash dividends paid to common stockholders
(14,657
(11,996
Cash distributions paid to Preferred Unit holders
(16
Cash distributions paid to non-controlling interests
(3,973
(6,253
Net cash provided by financing activities
66,898
21,735
Net (decrease) increase in cash and cash equivalents during the period
(8,497
14,501
Cash and cash equivalents, beginning of period
5,094
Cash and cash equivalents, end of period
19,595
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest
12,257
10,900
Non-cash disclosures of non-cash investing and financing activities:
Accrued real estate development and improvement costs
4,604
621
Accrued deferred leasing fees
556
111
Accrued deferred offering costs
120
Increase in mortgage loan receivable in exchange for sale of real estate
3,690
10,274
Forfeited employee grant dividends
Conversion of OP Units to common stock and additional paid-in capital
30,000
82,553
Dividends and distributions payable
7,126
6,134
4,009
10,339
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. BUSINESS DESCRIPTION
FrontView REIT, Inc. (the “Company”) was formed on June 23, 2023 as a Maryland corporation and elected to be taxed as a real estate investment trust (“REIT”) commencing with its short taxable year ended December 31, 2024. FrontView Operating Partnership LP (the “OP”) is the entity through which the Company conducts its business and owns all of the Company's properties either directly or indirectly through subsidiaries. The Company is the sole general partner of the OP. The units not owned by the Company in the OP are referred to as OP Units or non-controlling interests.
The Company is an umbrella partnership real estate investment trust (“UPREIT”) structure with a publicly-traded REIT and is an internally-managed net-lease REIT that acquires, owns and manages primarily properties with frontage that are net leased to a diversified group of tenants. The Company is differentiated by an investment approach focused on properties that are in prominent locations with direct frontage on high-traffic roads that are highly visible to consumers. As of September 30, 2026, the Company owned a well-diversified portfolio of 327 properties with direct frontage across 36 U.S. states.
The following table summarizes the outstanding equity and economic ownership interest of the Company:
September 30, 2026
December 31, 2025
Shares of Common Stock
OP Units
Total Shares
Ownership Interest
26,627,909
4,344,854
30,972,763
22,111,165
5,766,866
27,878,031
Percent Ownership of OP
86.0
%
14.0
100.0
79.3
20.7
2. ACCOUNTING POLICIES FOR FINANCIAL STATEMENTS
Basis of Presentation and Principles of Consolidation
These unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and with the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”). The condensed consolidated financial statements include the financial position, results of operations and cash flows of the Company and subsidiaries in which it has a controlling financial interest. All intercompany amounts have been eliminated in consolidation and the Company’s net income is reduced by the portion of net income attributable to non-controlling interests.
The accompanying unaudited interim condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the SEC. These unaudited interim condensed consolidated financial statements do not include all of the information and notes required by GAAP for complete financial statements, and should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto as of and for the years ended December 31, 2025 and 2024 contained in the Company’s Annual Report on Form 10-K filed with the SEC on February 25, 2026, which provide a more complete understanding of the Company's accounting policies, financial position, operating results, business properties, and other matters. In the opinion of management, all adjustments of a normal recurring nature necessary for a fair presentation have been included. The results of operations for the three and nine months ended September 30, 2026, and 2025 are not necessarily indicative of the results for the full year.
Generally, a controlling financial interest reflects ownership of a majority of the voting interests. The Company consolidates a voting interest entity (“VOE”) in which it has a controlling financial interest and a variable interest entity (“VIE”) if it possesses both the power to direct the activities of the VIE that most significantly affects its economic performance, and (a) is obligated to absorb the losses that could be significant to the VIE or (b) holds the right to receive benefits from the VIE that could be significant to the VIE. The Company has concluded that the OP is a VIE and consolidates its interest in the OP as the Company is deemed to be the primary beneficiary. The portion of the OP not owned by the Company is presented as non-controlling interests as of September 30, 2026 and December 31, 2025.
Use of Estimates
The preparation of these condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of these condensed consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. The most significant assumptions and estimates relate to the valuation of real estate and related intangible assets and liabilities upon acquisition, including the assessment of impairments, as well as depreciable lives, and the collectability of trade receivables. On an ongoing basis, management reviews the estimates and assumptions. These estimates are based on historical experience and various other assumptions that management believes to be reasonable under the circumstances. Actual results could differ from those estimates.
Impairment of Long-lived Assets
Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. The net recoverable amount represents the undiscounted estimated future cash flow expected to be earned from the long-lived asset. In the case of real estate, the undiscounted estimated future cash flows are based on expected cash flows from the use and eventual disposition of the property. The review of anticipated cash flows involves subjective assumptions of estimated occupancy, rental rates and residual value. If such impairment is present, an impairment loss is recognized based on the excess of the carrying amount of the asset over its fair value.
All investments in real estate are subject to elements of risk and are affected by, but not limited to, the general prevailing economic conditions, local real estate markets, supply and demand for leased premises, competition and governmental laws and other requirements.
The Company determined the fair value measurement using a range of significant unobservable fair value level inputs, including broker market information and recent comparable sales transactions.
The following table summarizes the Company's impairment for the respective periods:
(in thousands, except number of properties)
Number of properties
14
Stock-Based Compensation
The Company has issued restricted stock units (“RSUs”) and Long-Term Incentive Plan Units (“LTIP Units”) under its 2024 Omnibus Equity and Incentive Plan (“Equity and Incentive Plan”). The Company accounts for stock-based compensation in accordance with ASC 718, Compensation — Stock Compensation, which requires that such compensation expense be recognized based on the award's estimated grant-date fair value. For time-based awards, the value of such awards is recognized as compensation expense in general and administrative expenses in the condensed consolidated statements of operations and comprehensive income (loss) over the applicable vesting period on a straight-line basis, or at the cumulative amount vested at each balance sheet date if greater. For performance-based LTIP Units, compensation expense is recognized over the requisite service period based on the grant-date fair value determined using a Monte Carlo simulation model, which incorporates the market conditions embedded in the award. The Company records forfeitures during the period in which they occur by reversing all previously recorded stock-based compensation expense associated with the forfeited awards. Dividends declared on RSUs issued under the Equity and Incentive Plan are recorded as cumulative distributions in excess of retained earnings in the condensed consolidated balance sheets.
Earnings Per Share
Earnings per common share have been computed pursuant to the guidance in ASC 260, Earnings Per Share, which requires the classification of the Company's unvested RSUs, which contain rights to receive non-forfeitable dividends, the Company's Series A Convertible Preferred Stock, par value $0.01 per share, which contains rights to receive participating dividends, the Company's forward equity sales, which is reduced for dividends declared on the Company's common stock during the term of the agreement, as participating securities requiring the two-class method of computing earnings per share. The Series A Convertible Preferred Stock may participate in common dividends when Adjusted Funds from Operations (“AFFO”) per share, a non-GAAP financial measure, exceeds a certain threshold. For the three and nine months ended September 30, 2026, the Series A Convertible Preferred Stock did not participate in common dividends.
The two-class method is an earnings allocation formula that determines earnings per share for each class of common stock and participating securities according to dividends declared (or accumulated) and participation rights in undistributed earnings. In accordance with the two-class method, the Company's calculation of earnings per share excludes income attributable to participating securities from the numerator and allocates such income to each participating class. The weighted average number of shares of common stock outstanding and potentially dilutive securities are included in the denominator in accordance with the treasury stock method and if-converted method, as applicable. Basic earnings per share is computed by dividing net income (loss) available to common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share gives effect to all dilutive potential common shares outstanding during the period. For the periods presented, certain potentially dilutive securities have been excluded from the calculation of diluted net income (loss) per share due to their anti-dilutive effect.
Concentration of Credit Risk
During the three and nine months ended September 30, 2026, and 2025, the Company had no individual tenants or common franchises that accounted for more than 10% of rental revenues, excluding lease termination fees.
Credit risk arises from the potential that a counterparty will fail to perform its obligations. The Company is not exposed to significant credit risk as the Company maintains a number of diverse tenants which mitigates the credit risk.
Segment Reporting
The Company currently organizes and operates its business in a single reportable segment, which includes the acquisition, leasing, mortgage loan financing and ownership of net leased properties. The consolidated totals represent the aggregated results of the Company's single reportable operating segment.
The Company's chief operating decision maker (“CODM”) is the Company's executive management team, which consists of the Chief Executive Officer and Chief Financial Officer. The CODM assesses operating performance, financial results, and allocates resources based on consolidated net income (loss) as reported on the condensed consolidated statements of operations and comprehensive income (loss). Significant segment expenses and other segment items are identical to the reporting in the condensed consolidated statements of operations and comprehensive income (loss). The CODM reviews the Company's revenues, expenses and assets at the consolidated level for the entire portfolio and therefore, each property or property type is not considered an individual operating segment. The Company does not evaluate the results of operations based on geography, size, or property type.
Fair Value Measurement
ASC 820 defines fair values as the price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. In instances, where the determination of the fair value measurement is based on inputs from more than one level of the fair value hierarchy, the entire fair value measurement is classified based on the lowest-level input.
The hierarchy is measured in three levels based on the reliability of inputs:
Level 1 – Quoted prices that are available in active markets for identical assets or liabilities.
Level 2 – Pricing inputs other than quoted prices in active markets, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
All the Company's debt and interest rate swap agreements are classified within Level 2 of the fair value hierarchy.
The fair value of the Company’s debt was estimated using recent secondary markets, recent financing transactions, estimates of the fair value of the property that serves as collateral for such debt, historical risk premiums for loans of comparable quality, current SOFR and discounted estimated future cash payments to be made on such debt. The discount rates estimated reflect the Company’s judgment as to the approximate current lending rates for loans with similar maturities and assumes that the debt is outstanding through maturity.
The Company measures the fair value of its interest rate swap agreements using the market standard methodology of netting the discounted future fixed cash receipts (or payments) and the discounted expected variable cash payments (or receipts). The variable cash payments (or receipts) are based on an expectation of future interest rates derived from the observable market interest rate curves.
Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
The following table summarizes the carrying amount reported in the condensed consolidated balance sheets and the Company's estimate of the fair value of debt:
Carrying amount
311,000
315,500
Fair value
310,999
315,656
The Company has financial instruments which include cash and cash equivalents, other assets, mortgage loans receivable, and accounts payable and accrued liabilities, which are carried at amortized cost and approximate their fair value unless otherwise noted.
Investment in Unconsolidated Entity
The Company evaluates each joint venture to determine whether it is a VIE and, if so, whether the Company is the primary beneficiary. If the entity is not a VIE, the Company evaluates consolidation under the voting interest model. The Company consolidates
11
entities it controls and accounts for investments in entities over which it has significant influence, but does not control, under the equity method.
Equity method investments are initially recorded at cost and adjusted for the Company’s share of earnings or losses, contributions, and distributions. When an investee’s governing documents provide for distributions that are not proportionate to ownership interests, the Company recognizes its share of earnings or losses using the hypothetical liquidation at book value (“HLBV”) method. Under this method, the Company’s share for a period is the change in the amount it would receive if the investee liquidated its assets at recorded amounts, settled its liabilities, and distributed the proceeds in accordance with its governing documents, adjusted for contributions and distributions. Otherwise, the Company recognizes its proportionate share. Basis differences are allocated to the investee’s assets and liabilities and recognized over their lives.
The investments are presented within investment in unconsolidated entity on the condensed consolidated balance sheets, and the Company’s share of the investees’ results is presented within income (loss) from unconsolidated entity on the condensed consolidated statements of operations and comprehensive income (loss).
Distributions received are classified using the cumulative earnings approach: as operating cash inflows (returns on investment) up to cumulative equity in earnings, with any excess classified as investing cash inflows (returns of investment).
The Company reviews equity method investments for impairment when events or changes in circumstances indicate the carrying amount may not be recoverable, and recognizes an impairment loss if a decline in fair value below carrying amount is other than temporary. The Company does not separately test an investee’s underlying assets but recognizes its share of any impairment the investee records.
Reclassification of Prior Year Presentation
Certain prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported results of operations. An adjustment has been made to the condensed consolidated statements of operations and comprehensive income (loss) for the three and nine months ended September 30, 2026, and 2025, to present separate line items under revenue and to reclassify the amortization of software costs from general and administrative expenses to depreciation and amortization.
Subsequent Events
The Company evaluates subsequent events for disclosure in these condensed consolidated financial statements through the date of which these condensed consolidated financial statements were available to be issued.
Recently Issued Accounting Pronouncements
As an emerging growth company, the Company has generally elected to use the extended transition period available to private companies for complying with new or revised accounting standards. The Company continually evaluates the recently issued accounting standards to assess their potential impact and ensure compliance.
In November 2024, the FASB issued ASU 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses.” The ASU enhances annual and interim expense disclosures by requiring public business entities to provide additional information about certain expense categories included within income statement line items. The required disclosures include, in tabular format, purchases of inventory, employee compensation, depreciation, intangible asset amortization and depletion, as applicable, for each relevant income statement line item. Expenses, gains and losses already required to be disclosed under existing GAAP must also be included, and any remaining amounts must be described qualitatively. The ASU also requires disclosure of total selling expenses and the entity’s definition of selling expenses. The ASU is effective for fiscal years beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027. The Company is currently evaluating the potential impact of adopting this ASU.
In November 2025, the FASB issued ASU 2025-09, “Derivatives and Hedging (Topic 815): Hedge Accounting Improvements”. The ASU expands the eligibility of risk components for hedge designation, clarifies the presentation and disclosure requirements for hedging relationships, and simplifies the assessment of hedge effectiveness. For entities other than public business entities, the ASU is effective for annual periods beginning after December 15, 2027, including interim periods within those fiscal years. The Company is currently evaluating the potential impact of adopting this ASU, including any additional disclosure requirements.
In December 2025, the FASB issued ASU 2025-11, “Interim Reporting (Topic 270): Narrow-Scope Improvements”. The ASU clarifies and improves certain aspects of interim financial reporting, including interim disclosure requirements and the application of recognition and measurement guidance during interim periods. For entities other than public business entities, the ASU is effective for interim reporting periods within annual reporting periods beginning after December 15, 2028. The Company is currently evaluating the potential impact of adopting this ASU, including any additional disclosure requirements.
12
3. INVESTMENT IN UNCONSOLIDATED ENTITY
On August 10, 2026, the Company, through a wholly-owned subsidiary, entered into a joint venture with an unrelated third party (the “Sponsor”) to acquire, lease up, and stabilize a retail property in Dallas, Texas (the “Joint Venture”). Once the property is stabilized, the Joint Venture may sell the property to a third party, or the Company may acquire the property or the Sponsor's interest in the Joint Venture. The Company contributed $2.7 million in cash in exchange for an 87.8% membership interest. The Joint Venture used the members' capital contributions and a $4.9 million mortgage loan secured by the property to acquire the property. The Company has no further commitments.
The Joint Venture is a VOE and is governed by a two-member board of representatives, with one representative appointed by the Company and one appointed by the Sponsor. All major decisions require the unanimous approval of the board. A general manager affiliated with the Sponsor is responsible for day-to-day operations, and may be removed only for cause. Net cash flow is distributed first to the members pro rata until each member has received a return of its capital contributions plus an 8% internal rate of return, and thereafter to the members and to an affiliate of the Sponsor, which receives a promoted interest.
Although the Company holds an 87.8% membership interest, it does not have unilateral control over the Joint Venture because the Sponsor holds substantive participating rights over the Joint Venture's significant financial and operating decisions, including approval of operating budgets, financing, leasing, capital expenditures, capital calls, and the sale of the property. Accordingly, the Company does not consolidate the Joint Venture and accounts for its investment under the equity method.
The following is a summary of the Company's investment in unconsolidated entity:
Losses from Unconsolidated Entity
Ownership %
Number of Properties
Carrying Amount of Investment As of
For the three months ended
For the nine months ended (1)
(in thousands, except number of properties and percentages)
As of September 30, 2026
Joint Venture
87.8%
(13
4. REAL ESTATE HELD FOR INVESTMENT AND LEASE ARRANGEMENTS
The Company acquires, owns, and manages net-leased properties with frontage. The leases are generally net leases, where the tenants are generally responsible for the payment of real estate taxes, insurance premiums and maintenance costs related to the leased property. The leases have been classified as operating leases and generally provide for limited increases in rent as a result of fixed increases, increases in CPI, or increases in tenant’s sales volume.
As of September 30, 2026 and December 31, 2025, the Company had a portfolio of 327 and 303 real estate properties, respectively.
During the nine months ended September 30, 2026, the Company acquired 43 properties for an aggregate purchase price (including acquisition costs) of $144.5 million. In addition, one property was replatted into two distinct properties.
During the year ended December 31, 2025, the Company acquired 32 properties for an aggregate purchase price of $125.4 million.
The acquisitions were all accounted for as asset acquisitions. The Company allocated the purchase price of these properties to the fair values of the assets and liabilities assumed, which is summarized in the following table:
44,373
33,644
Buildings
75,707
71,455
Site improvements
7,653
7,178
184
122
Intangible assets:
Above-market leases
5,490
2,560
In-place leases and origination costs
13,145
14,350
146,552
129,309
Liabilities assumed:
Below-market leases intangible liabilities
(1,971
(3,745
(55
(145
Purchase price (including acquisition costs)
144,526
125,419
During the nine months ended September 30, 2026, the Company sold 20 real estate properties for $49.6 million. The Company received net proceeds of $43.7 million from the property sales and $3.7 million of mortgage loans receivable, after paying closing costs of $2.2 million and recorded a gain on sale of $6.9 million. The aggregate cost and associated accumulated depreciation and amortization of the properties sold, at the date of sale, was $42.3 million and $1.8 million, respectively.
During the year ended December 31, 2025, the Company sold 36 real estate properties for $78.1 million. The Company received net proceeds of $73.8 million from the property sales, including $9.0 million of mortgage loans receivable, after paying closing costs of $4.3 million and recorded a gain on sale of $7.0 million. The aggregate cost and associated accumulated depreciation and amortization of the properties sold, at the date of sale, was $78.4 million and $11.6 million, respectively.
During the year ended December 31, 2025, the Company received proceeds for the expropriation from the state for a portion of real estate from two properties for $5.4 million. The Company received net proceeds of $5.0 million from the expropriation from the state, after paying closing costs of $0.4 million and recorded a gain on sale of $4.7 million. The aggregate cost of the portion of properties that was expropriated was $0.3 million.
During the year ended December 31, 2025, the Company sold a partial interest in one real estate property for $2.8 million. The Company received net proceeds of $2.6 million from the sale, including $2.2 million of mortgage loan receivable, after paying closing costs of $0.2 million and recorded a gain on sale of $0.2 million. The aggregate cost of the partial interest, at the date of the sale was $2.4 million.
The depreciation expense on real estate held for investment was as follows:
Depreciation
4,286
3,607
12,151
10,957
The following table summarizes amounts reported as rental revenues on the accompanying condensed consolidated statements of operations and comprehensive income (loss):
Rental revenues:
Contractual rental amounts billed
16,747
15,325
48,487
45,863
Reimbursable income
1,913
1,804
6,022
5,904
Percentage rent
131
63
194
242
Other operating income
55
506
271
Adjustment to recognize contractual rental amounts on a straight-line basis
332
788
460
Above/below market lease amortization, net
(734
(652
(1,812
(2,304
Total rental revenues
Total estimated future minimum rents to be received under non-cancelable leases in effect as of September 30, 2026, are as follows:
Remainder of 2026
17,440
2027
68,393
2028
64,058
2029
59,443
2030
54,378
Thereafter
283,604
547,316
Since lease renewal periods are exercisable at the option of the tenant, the above amounts only include future lease payments due during the initial lease terms. Such amounts exclude any potential variable rent increases that are based on changes in the CPI or future variable rents which may be received under the leases based on a percentage of the tenant’s gross sales.
5. MORTGAGE LOANS RECEIVABLE
In connection with the sales of certain real estate properties, the Company provided seller-financing to the acquirers. The loan-to-value (LTV) of the mortgage loans receivables range from 73.1% to 87.1% at the time of origination, and the interest rates and other terms and conditions were consistent with market standards. The Company recognized the full gain on sale of a property in the amount
of $1.1 million during the nine months ended September 30, 2026 and the full gain on sale of properties in the amount of $0.4 million during the year ended December 31, 2025. The gain recognized during the nine months ended September 30, 2026 relates to the sale of a property in July 2026 for which the Company provided short-term seller financing that was repaid in full during the three months ended September 30, 2026. Given the LTVs noted above, and that the mortgage loans receivable are fully collateralized by the underlying properties, no allowance for the mortgage loans receivable was recorded at September 30, 2026. Interest income associated with these mortgage loans receivable is recognized when earned.
The following is a summary of the Company's mortgage loans receivable portfolio as of September 30, 2026 and December 31, 2025:
Loan Type
Monthly Payment (1)
Number of Secured Properties
Effective Interest Rate
Stated Interest Rate
Maturity Date
Mortgage
I/O
7.9%
11-Jun-2028
1,734
7.6%
8.1%
30-Jun-2029
5,400
8.0%
25-Aug-2028
2,240
P + I
6.5%
14-Dec-2030
938
950
Total mortgage loans receivables
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6. INTANGIBLE ASSETS AND LIABILITIES
The following is a summary of intangible lease assets and liabilities and related accumulated amortization:
(in thousands)As of September 30, 2026
Cost
Accumulated Amortization
Net Book Value
Intangible lease assets:
147,844
79,281
68,563
54,401
28,914
25,487
Leasing fees
7,434
1,555
5,879
Total intangible lease assets
209,679
109,750
Intangible lease liabilities:
Below-market leases
28,348
14,698
Total intangible lease liabilities
(in thousands)As of December 31, 2025
137,104
68,185
68,919
48,151
24,001
24,150
7,399
979
6,420
192,654
93,165
27,140
12,666
The amortization and net adjustment to rental revenue of intangible lease assets and liabilities was as follows:
Amortization:
Amortization of in-place leases and leasing fees
4,028
3,643
11,840
13,367
Net adjustment to rental revenue:
Above-market and below-market leases
734
652
The remaining weighted average amortization period for the Company’s intangible assets and liabilities as of September 30, 2026 and December 31, 2025 by category are as follows:
Years remaining as at
9.6
9.9
7.5
7.3
11.2
11.0
The estimated future amortization expense for intangible lease assets, net of intangible lease liabilities, as of September 30, 2026 are as follows:
Total
3,656
1,361
174
(706
4,485
12,535
4,942
702
(2,375
15,804
9,565
4,567
686
(1,538
13,280
7,980
3,998
666
(1,388
11,256
6,854
2,606
593
(1,123
8,930
27,973
8,013
3,058
(6,520
32,524
(13,650
86,279
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7. DEBT, NET
(in thousands, except interest rate)
Note
Maturity
Interest Rate
Revolving Credit Facility
(a)
3-Oct-2027
SOFR + 1.15% *
111,000
Term Loan
(b)
200,000
Unamortized financing transaction costs, Term Loan
(716
* The approximate SOFR rate at September 30, 2026 was 3.75%.
As of December 31, 2025
SOFR + 1.15% **
115,500
(1,249
** The approximate SOFR rate at December 31, 2025 was 3.71%.
As of September 30, 2026 and December 31, 2025, the weighted average interest rate was 5.03% and 4.87%, respectively.
The aggregate principal repayment of the Company’s debt, excluding the unamortized financing transaction costs of $0.7 million, due in each of the years under the remaining term, are as follows. The amounts below reflect the terms in effect as of September 30, 2026, however on October 15, 2026, the Company amended the Revolving Credit Facility and Term Loan to extend the maturity of both to October 3, 2028:
On October 3, 2024, the Company entered into a credit facility agreement with JPMorgan Chase Bank, N.A., which provides for an unsecured revolving line of credit of $250.0 million, including $20.0 million available for issuance of letters of credit (the “Revolving Credit Facility”). The Revolving Credit Facility has a three-year term expiring on October 3, 2027, with two 12-month extensions, subject to certain conditions including payment of 0.125% fee on the aggregate outstanding amount of the revolving commitments. Borrowings under the Revolving Credit Facility bear interest at floating rates based on Adjusted SOFR plus an applicable margin based on the Company's leverage ratio that initially ranged between 1.20% and 1.75% per annum. On September 16, 2025, the Company amended the Revolving Credit Facility to remove the 10 bps credit spread adjustment applicable to Adjusted SOFR. On October 24, 2025, the Company amended the Revolving Credit Facility to adjust the applicable margin based on the Company's leverage ratio to range between 1.15% and 1.75% per annum. As of September 30, 2026 and December 31, 2025, the applicable margin was 1.15%. The Revolving Credit Facility contains a commitment fee of 0.15% per annum if average daily usage in such quarter is over 50% of total revolving commitments and 0.25% per annum if average daily usage in such quarter is equal to or less than 50% of total revolving commitments. The commitment fee is payable quarterly in arrears on the first day of each calendar quarter and is included in interest expense on the accompanying condensed consolidated statements of operations and comprehensive income (loss).
On October 15, 2026, the Company amended the Revolving Credit Facility to extend its maturity to October 3, 2028, reduce certain interest rate margins, and replace the usage-based commitment fee with a facility fee. The facility now bears interest at SOFR plus an applicable margin. Until the Company obtains an investment-grade credit rating, the applicable margin and facility fee are based on its leverage ratio and range from 1.00% to 1.65% and 0.15% to 0.30%, respectively. Thereafter, they are based on the Company’s credit rating from S&P, Moody’s or Fitch and range from 0.675% to 1.35% and 0.125% to 0.30%, respectively. If the leverage ratio is 35% or less, a Baa2/BBB or Baa3/BBB- rating receives the applicable margin and facility fee of the next-higher rating (Baa1/BBB+ or Baa2/BBB, respectively). The Revolving Credit Facility has one remaining 12-month extension option to October 3, 2029.
On October 3, 2024, the Company entered into a credit facility agreement with JPMorgan Chase Bank N.A. as administrative agent that provided commitments for an unsecured term loan, allowing borrowings of up to $200.0 million (the “Term Loan”). The Term Loan has been fully drawn and has an initial maturity of October 3, 2027, with two 12-month extensions, subject to certain conditions including payment of a 0.125% fee on the aggregate outstanding principal amount of the Term Loan. The Term Loan bears interest at floating
rates based on Adjusted SOFR plus an applicable margin based on the Company's leverage ratio that initially ranged between 1.20% and 1.75% per annum. On September 16, 2025, the Company amended the Term Loan to remove the 10 bps credit spread adjustment applicable to Adjusted SOFR. On October 24, 2025, the Company amended the Term Loan to adjust the applicable margin based on the Company's leverage ratio to range between 1.15% to 1.75% per annum. As of September 30, 2026 and December 31, 2025, the applicable margin was 1.15%.
On October 15, 2026, the Company amended the Term Loan to extend its maturity to October 3, 2028 and reduce certain interest rate margins. The Term Loan now bears interest at SOFR plus an applicable margin. Until the Company obtains an investment-grade credit rating, the applicable margin is based on its leverage ratio and ranges from 1.15% to 1.75%. Thereafter, it is based on the Company’s credit rating from S&P, Moody’s or Fitch and ranges from 0.75% to 1.55%. If the leverage ratio is 35% or less, a Baa2/BBB or Baa3/BBB- rating receives the applicable margin of the next-higher rating (Baa1/BBB+ or Baa2/BBB, respectively). The Term Loan has one remaining 12-month extension option to October 3, 2029.
Debt Covenants
The Company is subject to various financial and operational covenants and financial reporting requirements pursuant to its Revolving Credit Facility and Term Loan agreements. These covenants require the Company to maintain certain financial ratios. If a default or event of default exists, either through default on payments or breach of covenants, the Company may be restricted from paying dividends to our stockholders in excess of dividends required to maintain our REIT qualification. As of September 30, 2026 and December 31, 2025, the Company believes it was in compliance with all of its loan covenants.
8. INTEREST RATE SWAPS
The Company uses derivative instruments to manage exposures to interest rates arising in connection with its outstanding debt arrangements. The Company has established policies and procedures that govern the risk management of these exposures. Both at inception and on an ongoing basis, the derivative instruments that qualify for hedge accounting are assessed as to their effectiveness, when applicable.
The Company is subject to the credit risk of counterparties to derivative instruments. Counterparties include a number of major banks and financial institutions. None of the concentrations of risk with an individual counterparty was considered significant as of September 30, 2026. The Company does not expect any counterparties to fail to meet their obligations. The Company records derivatives in the condensed consolidated balance sheets at fair value.
Cash Flow Hedge
On March 3, 2025, the Company entered into interest rate swap agreements to manage interest rate risk exposure on the Term Loan. The aggregate notional amount of these contracts is $200.0 million, and they mature in March 2028. The interest rate swap agreements utilized by the Company effectively modify the Company’s exposure to interest rate risk by converting a portion of the Company’s floating-rate debt to a fixed rate of 4.814%, including the applicable margin of 1.15% as of September 30, 2026, thus reducing the impact of interest-rate changes on future interest expense. The agreements involve the receipt of floating-rate amounts in exchange for fixed-rate interest payments over the life of the agreement without an exchange of the underlying principal amount.
On September 10, 2025, the Company entered into five sequential interest rate swap agreements to manage interest rate risk exposure on the Revolving Credit Facility, with the first interest rate swap agreement effective September 12, 2025. Each agreement is structured to commence immediately following the maturity of the preceding agreement. The aggregate notional amount on these contracts is $100.0 million, and they mature in six-month intervals, with the final maturity in March 2028. The interest rate swap agreements utilized by the Company effectively modify the Company’s exposure to interest rate risk by converting a portion of the Company’s floating-rate debt to a weighted average fixed rate of 3.220%, reducing the impact of interest-rate changes on future interest expense. The agreements involve the receipt of floating-rate amounts in exchange for fixed-rate interest payments over the life of the agreement without an exchange of the underlying principal amount.
The above interest rate swap agreements are designated and qualify as a cash flow hedge and as such, the gain or loss on the derivative instruments due to the change in fair value is reported as a component of AOCI and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. If a derivative is deemed to be ineffective, the change in fair value of the derivative is recognized directly in earnings. The Company did not have any ineffectiveness related to cash flow hedges during the three and nine months ended September 30, 2026 and 2025.
The cash inflows and outflows associated with the Company’s interest rate swap agreements designated as cash flow hedges are classified in cash flows from operating activities in the accompanying condensed consolidated statements of cash flows.
The Company expects a gain of $1.9 million, net of tax, related to interest rate swap agreements to be reclassified from AOCI to earnings over the next 12 months as the hedged transactions are realized.
18
The effects of designated cash flow hedges on the Company’s condensed consolidated statements of operations and comprehensive income (loss) consisted of the following for the three and nine months ended September 30, 2026 and 2025:
Amount of Gain (Loss) Recognized in OCI on Derivative (Effective Portion)
Location of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)
Amount of Gain Reclassified from Accumulated OCI into Income (Effective Portion)
(in thousands)Derivatives in Cash Flow Hedging Relationships
For the three months ended September 30
Interest rate swaps
2,554
379
Interest expense, net
114
342
For the nine months ended September 30
6,579
(696
The table below shows the fair value and location of the derivatives recognized in the Company’s condensed consolidated balance sheets as of September 30, 2026 and December 31, 2025:
Derivative Assets
Fair Value as of
(in thousands)Derivatives Designated as Hedging Instruments:
Balance Sheet Location
4,982
Derivative Liabilities
(1,759
9. EQUITY
Pursuant to the Company's Articles of Incorporation (the “Charter”), the Company is authorized to issue an aggregate of 450,000,000 shares of common stock with a par value of $0.01 per share and 50,000,000 shares of preferred stock with a par value of $0.01 per share. The Company's Board of Directors, without any action by our stockholders, may amend the Company's Charter from time to time to increase or decrease the aggregate number of shares or the number of shares of any class or series of stock that the Company has authority to issue.
The shares of the Company’s common stock entitle the holders to one vote per share on all matters upon which stockholders are entitled to vote, to receive dividends and other distributions as authorized by the Board of Directors in accordance with the Maryland General Corporation Law, and to all rights of the stockholder pursuant to the Maryland General Corporation Law.
Stock Repurchase Program
In November 2025, the Board of Directors authorized a stock repurchase program under which the Company may purchase up to $75.0 million of its outstanding common stock from time to time through November 10, 2026. The Company may make repurchases through open market transactions, block purchases, privately negotiated transactions or in such other manner in compliance with applicable securities laws and regulations. The manner, timing and amount of any repurchases will be based on an evaluation of business, market and other conditions, stock price, regulatory and contractual requirements, capital availability and other factors. The repurchase program does not require the Company to acquire any particular amount of common stock, and the program may be suspended, modified or discontinued at any time at the Company’s discretion without prior notice. As of September 30, 2026, no repurchases were made under the stock repurchase program.
ATM Equity Offering Program
On February 27, 2026, the Company established an at-the-market common equity offering program (“ATM Program”) pursuant to which the Company may, from time to time, offer and sell shares of its common stock, par value $0.01 per share, having an aggregate gross sales price of up to $75.0 million. On August 19, 2026, the Company entered into an Amended and Restated Distribution Agreement (the “Distribution Agreement”) with a syndicate of financial institutions acting as sales agents and, in certain cases, as forward sellers and forward purchasers, which increased the aggregate gross sales price of shares of common stock that may be sold under the ATM Program to $125.0 million. Sales under the ATM Program may be made (i) by the Company to, or through, the sales
19
agents or (ii) by the forward sellers on behalf of the applicable forward purchasers in connection with Forward Sale Agreements, in each case in transactions deemed to be “at-the-market” offerings or in negotiated transactions, which may include block trades. The Company will pay each sales agent a commission of up to 2.0% of the gross sales price of shares sold through it.
The Distribution Agreement permits the Company to enter into both contingent and non-contingent Forward Sale Agreements. Under a contingent Forward Sale Agreement, the Company’s obligation to sell, and the applicable forward purchaser’s obligation to purchase, the shares of common stock underlying the applicable Forward Sale Agreement at the applicable forward sale price is contingent on the forward purchaser’s exercise, or deemed exercise, of a purchase contingency (the “Contingency”), which may occur in whole or in part prior to specified contingency expiration dates. The Company may receive a contingency premium from the applicable forward purchaser in connection with a contingent Forward Sale Agreement. A non-contingent Forward Sale Agreement is not subject to the Contingency. The Company does not receive any proceeds when the forward sellers sell borrowed shares in connection with a Forward Sale Agreement. Subject to certain exceptions, the Company may elect to cash settle or net share settle all or any portion of its obligations under a Forward Sale Agreement, in which case the Company may not receive any proceeds (in the case of cash settlement) or will not receive any proceeds (in the case of net share settlement), and the Company may owe cash (in the case of cash settlement) or shares of common stock (in the case of net share settlement) to the applicable forward purchaser. As of September 30, 2026, the Company had not entered into any contingent Forward Sale Agreements.
As of September 30, 2026, the Company had sold shares of common stock having an aggregate gross sales price of approximately $50.2 million under the ATM Program, and shares of common stock having an aggregate gross sales price of up to approximately $74.8 million remained available for sale.
The following table outlines common stock activity pursuant to the ATM Program:
Shares of common stock sold (1)
9,373
2,598,148
Shares of common stock issued (2)
1,699,165
Gross proceeds
32,658
50,161
Sales agent commissions and other offering
(296
(635
Net proceeds
Forward Sale Agreements
During the nine months ended September 30, 2026, the Company entered into non-contingent Forward Sale Agreements under the ATM Program with Wells Fargo Bank, National Association, as forward purchaser, with respect to an aggregate of 1,828,760 shares of common stock consisting of 1,819,387 shares in June 2026 at a weighted-average initial forward price of $19.2660 per share and 9,373 shares in September 2026 at a weighted-average initial forward price of $20.7799 per share. The initial forward prices reflected the prices at which the forward seller sold borrowed shares, less the applicable selling commission, and were subject to reduction by $0.215 per share on each specified forward price reduction date, representing the quarterly dividend declared per share of common stock.
Settlement
The Company may physically settle the Forward Sale Agreements (by the delivery of shares of common stock) and receive net proceeds from the sale of those shares on one or more settlement dates. The Company may also elect net share or cash settlement, subject to certain conditions; the Forward Counterparty does not have the right to require cash settlement. On June 30, 2026, the Company settled 129,595 shares for $2.5 million. On September 29, 2026, the Company settled 1,699,165 shares for $32.7 million.
Accounting Treatment
The Company evaluates the Forward Sale Agreements under ASC 480, Distinguishing Liabilities from Equity, and ASC 815-40, Derivatives and Hedging: Contracts in Entity's Own Equity. The Company has concluded that its Forward Sale Agreements are not liabilities under ASC 480, as they do not obligate the Company to repurchase its shares or require the issuance of a variable number of shares with a predominantly fixed monetary value or a value that varies inversely with the fair value of the Company's common stock. The Company has further concluded that its Forward Sale Agreements are indexed to the Company's own stock and meet the conditions for equity classification under ASC 815-40 and, accordingly are not accounted for as derivatives. No amounts are recognized in the
20
condensed consolidated financial statements for Forward Sale Agreements prior to settlement. Upon physical settlement, the Company records the shares issued and the net proceeds received as an increase to common stock and additional paid-in capital.
Because the forward price under each Forward Sale Agreement is reduced for dividends declared on the Company's common stock during the term of the agreement, the Forward Sale Agreements are participating securities, and the Company applies the two-class method in computing earnings per share for periods in which Forward Sale Agreements are outstanding. Prior to settlement, shares underlying Forward Sale Agreements are excluded from the computation of basic earnings per share. For diluted earnings per share, the dilutive effect of Forward Sale Agreements is reflected using the treasury stock method, under which the Forward Sale Agreements are dilutive only in periods in which the average market price of the Company's common stock exceeds the adjusted forward sale price. See Note 13, Earnings Per Share.
Dividends
During the nine months ended September 30, 2026, the Board of Directors approved the following common stock and OP Unit quarterly dividends:
(in thousands, except per share amounts)
For the nine months ended September 30, 2026
Declaration Date
Dividend per Share
Record Date
Total Amount (1)
Payment Date
24-Feb-2026
0.215
31-Mar-2026
6,155
15-Apr-2026
5-May-2026
30-Jun-2026
6,354
15-Jul-2026
5-Aug-2026
30-Sep-2026
6,803
15-Oct-2026
0.645
19,312
During the nine months ended September 30, 2025, the Board of Directors approved the following common stock and OP Unit quarterly dividends:
For the nine months ended September 30, 2025
18-Mar-2025
31-Mar-2025
6,178
15-Apr-2025
13-May-2025
30-Jun-2025
6,102
15-Jul-2025
12-Aug-2025
30-Sep-2025
6,126
15-Oct-2025
18,406
10. SERIES A CONVERTIBLE PREFERRED STOCK
In November 2025, the Company entered into an investment agreement with certain institutional investors pursuant to which the Company agreed to sell 750,000 shares of Series A Convertible Preferred Stock, at a price of $100.00 per share, for gross proceeds of $75.0 million (the “Investment Agreement”). The sale of Series A Convertible Preferred Stock will occur in multiple tranches, from time to time, at any time until November 12, 2026.
The Series A Convertible Preferred Stock accrues cumulative dividends at an initial annual rate of 6.75% and are payable quarterly in arrears, if, as and when declared by the Board of Directors.
Each share of Series A Convertible Preferred Stock is convertible, at the option of the holder at any time, into shares of common stock at an initial conversion rate of 5.88235 shares of common stock per Series A Convertible Preferred Stock, representing an implied conversion price of $17.00 per share, subject to customary anti‑dilution adjustments. The Company may, at its option at any time that is two years after the last issuance date of Series A Convertible Preferred Stock, subject to certain conditions, convert Series A Convertible Preferred Stock into shares of common stock, if the volume weighted average price of the common stock exceeds 117.5% of the conversion price during the thirty consecutive trading days immediately prior to the date the Company notifies holders of its election to convert.
The Company may, at its option, convert Series A Convertible Preferred Stock into shares of common stock in the event of a “change of control” transaction. In a change of control where the per share consideration to be paid on common stock (the “Change of Control Conversion Price”) is less than the then-effective conversion price, the conversion rate will be adjusted so that the number of shares of common stock into which a share of Series A Convertible Preferred Stock will convert will equal the liquidation preference of
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$100.00 per share of Series A Convertible Preferred Stock (“Liquidation Preference”) divided by the Change of Control Conversion Price.
The Company may redeem the Series A Convertible Preferred Stock at any time, subject to certain conditions, beginning three years after the last issuance date of Series A Convertible Preferred Stock, at a cash redemption price per share equal to the Liquidation Preference plus accrued and unpaid regular dividends. In addition to the cash redemption price, the Company will issue a warrant to each holder (other than a Terminating Holder (as defined in the Articles Supplementary)) representing the right to purchase, at an exercise price equal to the Series A Convertible Preferred Stock conversion price as of the business day before the redemption date, a number of shares of common stock equal to the aggregate Liquidation Preference of the shares of Series A Convertible Preferred Stock to be redeemed divided by such conversion price. The Series A Convertible Preferred Stock is not redeemable at the option of the holders.
In the event of a voluntary or involuntary liquidation, dissolution, or winding up of the Company, each share of Series A Convertible Preferred Stock entitles the holder to receive, prior to any distributions to junior stock and subject to the rights of any senior stock and the rights of the Company's creditors, the greater of (i) the Liquidation Preference per share plus accrued and unpaid regular dividends, and (ii) the amount such holder would have received had such share been converted into common stock on the payment date.
The following table outlines the Series A Convertible Preferred Stock activity:
Series A Convertible Preferred Stock, beginning of period
250,000
Issuance of shares of Series A Convertible Preferred Stock
450,000
Conversion of shares of Series A Convertible Preferred Stock to common stock
(66,667
Series A Convertible Preferred Stock, end of period
383,333
Series A Convertible Preferred Stock Dividends
During the three months ended March 31, 2026, the Board of Directors approved a quarterly dividend on each share of Series A Convertible Preferred Stock outstanding as of March 31, 2026, to be paid on April 15, 2026, to holders of record as of March 31, 2026. On April 15, 2026, the Company paid such quarterly dividend in an aggregate amount of $0.3 million.
During the three months ended June 30, 2026, the Board of Directors approved a quarterly dividend on each share of Series AConvertible Preferred Stock outstanding as of June 30, 2026, to be paid on July 15, 2026, to holders of record as of June 30, 2026. On July 15, 2026, the Company paid such quarterly dividend in an aggregate amount of $0.4 million.
During the three months ended September 30, 2026, the Board of Directors approved a quarterly dividend on each share of Series A Convertible Preferred Stock outstanding as of September 30, 2026, to be paid on October 15, 2026, to holders of record as of September 30, 2026. On October 15, 2026, the Company paid such quarterly dividend in an aggregate amount of $0.4 million.
11. NON-CONTROLLING INTERESTS
Non-controlling interests are comprised of OP Units. The OP Units are economically equivalent to the Company's common stock and, subject to certain restrictions, are redeemable into the Company's common stock at the option of the respective unit holders on a one-for-one basis. Holders of the OP Units do not have voting rights in the Company. The OP Units are redeemable at the option of the holder, in which case however, the Company may issue common stock or cash, at the Company’s election. Therefore, the OP Units are
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considered to be permanent equity. Redemption of OP Units held by non-controlling interest holders are recorded by reducing non-controlling interest at historical cost basis with a corresponding increase in common stock and additional paid-in capital.
For the three months ended September 30, 2026 and 2025, there were 869,491 OP Units and 837,765 OP Units redeemed, respectively, which the Company settled by issuing 869,491 and 837,765 shares of common stock, respectively.
For the nine months ended September 30, 2026 and 2025, there were 1,422,012 OP Units and 3,965,354 OP Units redeemed, respectively, which the Company settled by issuing 1,422,012 and 3,965,354 shares of common stock, respectively.
12. STOCK-BASED COMPENSATION
RSUs
During the three months ended September 30, 2026, 23,799 RSUs vested and settled in shares of common stock. During the nine months ended September 30, 2026, and 2025, 136,840 and 11,844 RSUs vested and settled in shares of common stock, respectively. Of the 136,840 RSUs vested and settled, 32,414 shares of common stock, valued at $0.6 million, were withheld to pay applicable required employee statutory withholding taxes on the vesting date.
The amount of stock-based compensation expense related to RSUs recognized in general and administrative expenses in the accompanying condensed consolidated statements of operations and comprehensive income (loss) was $0.7 million and $0.8 million for the three months ended September 30, 2026 and 2025, respectively. The amount of stock-based compensation expense related to RSUs recognized in general and administrative expenses in the accompanying condensed consolidated statements of operations and comprehensive income (loss) was $2.2 million and $1.6 million for the nine months ended September 30, 2026, and 2025, respectively. As of September 30, 2026 and 2025, the remaining unamortized stock-based compensation expense totaled $6.2 million and $8.5 million, respectively, and these awards are expected to be recognized over a remaining weighted average period of 1.5 years and 1.9 years, respectively. Stock-based compensation expense is recognized on a straight-line basis over the total requisite service period for the entire award.
Pursuant to the Equity and Incentive Plan, the Company made service-based grants of RSUs to certain employees and non-employee directors. The RSUs have no rights as a common stockholder, but have dividend equivalent rights equal to the cash dividends paid with respect to the corresponding number of common shares to be issued in respect of the RSUs. The vesting terms of these grants are specific to the individual grant, with a maximum term of 5 years, are subject to the holder's continued service through the applicable vesting dates and the terms of the individual grant agreements. The grant date fair value of service-based RSUs were based on the market price per share of the Company's common stock on the grant date or on the 5 or 10-day volume weighted average price per share of the Company's common stock on the grant date.
The following table presents information about the Company's RSU activity:
Number of Shares
Weighted Average Grant Date Fair Value per Share
Unvested RSU grants outstanding as of beginning of period
591
15.42
Granted during the period
42
16.82
Vested during the period
(137
12.46
Forfeited during the period
(4
14.78
Unvested RSU grants outstanding as of end of period
492
16.37
LTIPs
During the three and nine months ended September 30, 2026, the Company granted LTIP Units to certain employees and non-employee directors under the Equity and Incentive Plan. Each LTIP Unit may be converted into one OP Unit upon satisfaction of vesting and other conditions set forth in the applicable award agreement and the OP Agreement, including the requirement that the holder’s capital account balance per LTIP Unit equal the capital account balance per OP Unit.
Time-Based LTIP Units
During the three and nine months ended September 30, 2026, 2,961 and 148,580 LTIP Units, respectively, were granted to directors and officers of the Company under the Equity and Incentive Plan, pursuant to time-based LTIP Unit award agreements (the “Time-Based LTIP Units”). The Time-Based LTIP Units vesting terms of these grants are specific to the individual grant, with a maximum term of 4 years, and are subject to the holder's continued service through the applicable vesting dates and the terms of the individual award agreements. Holders are entitled to receive distributions on Time-Based LTIP Units in an amount per unit equal to the distributions
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payable per OP Unit from the grant date. The grant date fair value of Time-Based LTIP Units was based on the 5-day volume weighted average price per share of the Company's common stock on the grant date.
The following table presents information about the Company’s Time-Based LTIP Unit activity:
Number of LTIP Units
Weighted Average Grant Date Fair Value per Unit
Unvested Time-Based LTIP Units at beginning of period
149
16.30
Unvested Time-Based LTIP Units as of end of period
During the three and nine months ended September 30, 2026, the Company recognized $0.2 million and $0.5 million, respectively, of compensation cost related to the Time-Based LTIP Units in general and administrative expenses in the accompanying condensed consolidated statements of operations and comprehensive income (loss). As of September 30, 2026, there was $1.9 million of unrecognized compensation cost related to unvested Time-Based LTIP Units, which is expected to be recognized over a weighted average period of 1.5 years.
Performance-Based LTIP Units
During the nine months ended September 30, 2026, 268,257 performance-based LTIP Units (at maximum) were granted to officers of the Company under the Equity and Incentive Plan, pursuant to performance-based LTIP Unit award agreements (the “Performance-Based LTIP Units”). Performance-Based LTIP Units are subject to a three-year performance period, with the number of units earned (up to a maximum of 225% of the target number) determined based on the Company’s total shareholder return (“TSR”) relative to the MSCI US REIT Index and a defined peer group over the performance period. Earned percentages range from 0% to 225% of the target number of units, with 100% earned upon achievement of the 50th percentile TSR rank.
Following certification of performance achievement by the Compensation Committee (the “Measurement Date”), earned units vest in two equal tranches, 50% on the Measurement Date and 50% on the one-year anniversary of the last day of the performance period, in each case subject to the holder’s continued service.
Prior to the Measurement Date, holders of Performance-Based LTIP Units are entitled to distributions in an amount per Performance-Based LTIP Unit equal to 10% of the distributions payable per OP Unit. The grant date fair value of Performance-Based LTIP Units was determined using a Monte Carlo simulation model incorporating assumptions for stock price volatility, risk-free interest rates, and the correlation of the Company’s TSR with peer companies.
During the three and nine months ended September 30, 2026, the Company recognized $0.2 million and $0.6 million, respectively, of compensation cost in general and administrative expenses in the accompanying condensed consolidated statements of operations and comprehensive income (loss) related to the Performance-Based LTIP Units. As of September 30, 2026, there was $2.2 million of unrecognized compensation cost related to unvested Performance-Based LTIP Units, which is expected to be recognized over a weighted average period of 1.5 years.
The following table presents information about the Company’s Performance-Based LTIP Unit activity:
Unvested Performance-Based LTIP Units at beginning of period
268
10.53
Unvested Performance-Based LTIP Units as of end of period
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13. EARNINGS PER SHARE
The following table summarizes the components used in the calculation of basic and diluted earnings per share (“EPS”):
(In thousands, except share and per share data)
Numerator:
Less: Income attributable to unvested restricted shares
(147
(142
(408
(456
Net income (loss) attributable to common shares, basic and diluted
2,003
3,873
2,633
(175
Denominator:
Weighted average common shares outstanding used in earnings per share, basic
Effect of dilutive shares for diluted net income per common share:
Unvested LTIP Units
294,153
324,079
Weighted average common shares outstanding used in earnings per share, diluted
Net income (loss) available to common stockholders per common share, basic
Net income (loss) available to common stockholders per common share,diluted
The following summarizes the number of OP Units that were anti-dilutive and not included in the computation of diluted earnings per share, for the periods presented:
As of September 30,
6,566,809
14. OTHER ASSETS
Accounts receivable, net
1,154
2,944
Deferred rent receivables
10,378
9,590
Fair value of interest rate swaps
1,991
2,180
Deferred financing transaction costs, net
895
1,562
Prepaid expenses and other assets
2,479
3,344
Total other assets
15. RELATED PARTY TRANSACTIONS
For the three and nine months ended September 30, 2026, the Company incurred outsourcing service fees of less than $0.1 million.
For the three and nine months ended September 30, 2025, the Company incurred outsourcing service fees of less than $0.1 million and $0.4 million, respectively, to North American Asset Management Corp. (“NAAM”), an affiliate of the predecessor. The services are limited to property accounting and human resources support.
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16. CONTINGENCIES
Litigation
From time to time, the Company is a party to various litigation matters incidental to the conduct of the Company’s business. While the resolution of such matters cannot be predicted with certainty, based on currently available information, the Company does not believe that the final outcome of any of these matters will have a material effect on its condensed consolidated balance sheets, condensed consolidated statements of operations and comprehensive income (loss) or liquidity.
Environmental matters
As an owner of real estate property, the Company is subject to various U.S. federal, state and municipal laws related to environmental matters. These laws could hold the Company liable for the costs of removal and remediation of certain hazardous substances or wastes released or deposited on or in its properties or disposed of at other locations. The failure to remove or remediate such substances, if any, could adversely affect the Company’s ability to sell its real estate or to borrow using real estate as collateral and could potentially result in claims or other proceedings against the Company. The Company engages third party consultants to review the environmental condition of such property as part of its due diligence review prior to acquisition and is not aware of any material non-compliance with environmental laws at any of its properties.
Property and acquisition related
In the normal course of business, the Company enters into various types of commitments to purchase real estate properties or fund development projects. These commitments are generally subject to the Company’s customary due diligence process and, accordingly, a number of specific conditions must be met before the Company is obligated to purchase the properties.
As of September 30, 2026, the Company did not have any material commitments that could not be funded for re-leasing costs, recurring capital expenditures, non-recurring building improvements, or similar types of costs.
17. SUBSEQUENT EVENTS
The Company identified the following events subsequent to September 30, 2026 that are not recognized in the accompanying condensed consolidated financial statements:
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Except where the context suggests otherwise, as used in this Quarterly Report on Form 10-Q, the terms “FVR,” “we,” “us,” “our,” and “our company” refer to FrontView REIT, Inc., a Maryland corporation incorporated on June 23, 2023, and, as required by context, FrontView Operating Partnership LP, a Delaware limited partnership, which we refer to as the or our “OP”, and to their respective subsidiaries.
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is intended to help the reader understand our results of operations and financial condition. This MD&A is provided as a supplement to, and should be read in conjunction with, our Condensed Consolidated Financial Statements and the accompanying Notes to the Condensed Consolidated Financial Statements appearing elsewhere in this Quarterly Report on Form 10-Q.
Explanatory Note and Certain Defined Terms
Unless the context otherwise requires, the following terms and phrases are used throughout this MD&A as described below:
Overview
We are an internally managed net-lease real estate investment trust (“REIT”) focused on acquiring, owning, and managing properties with frontage that are leased to a diversified tenant base. Our real estate-first investment strategy is centered around highly visible properties in prominent retail corridors with strong underlying real estate fundamentals. We target properties along high-traffic roads that offer strong consumer visibility and adaptable building formats capable of supporting various businesses over time.
As of September 30, 2026, FrontView owned a diversified portfolio of 327 direct frontage properties across 36 U.S. states, leased primarily to service and necessity based tenants across 16 industries, including medical and dental providers, quick-service and casual dining restaurants, financial institutions, cellular retailers, automotive-related, fitness, and general retail, along with several other diversified industries.
As of September 30, 2026, we had total debt of $311.0 million, Net Debt of $306.0 million, Net Debt to Annualized Adjusted EBITDAre ratio of 5.0x and a Fixed Charge Coverage Ratio of 3.5x. Net Debt, Annualized Adjusted EBITDAre and Fixed Charge
Coverage Ratio are non-GAAP financial measures, and Annualized Adjusted EBITDAre is calculated based upon EBITDA, EBITDAre, and Adjusted EBITDAre, each of which is also a non-GAAP financial measure. Refer to Non-GAAP Measures below for further details concerning our calculation of non-GAAP measures and reconciliations to the comparable GAAP measure.
Our Real Estate Investment Portfolio
To achieve an appropriate risk-adjusted return, we seek to maintain a highly diversified portfolio of properties located in prominent areas with direct frontage on high-traffic roads that are visible to consumers. We aim to ensure diversity across geographic locations, tenants, and brands, and to enable cross-diversification within each category. We discuss below our portfolio diversification based on several different metrics and information provided as of September 30, 2026.
Diversification by Tenant Brand
We typically seek tenants that operate service-oriented businesses, such as medical and dental providers, quick-service and casual dining restaurants, financial institutions, cellular retailers, automotive related, fitness, and general retail along with several other diversified industries.
As of September 30, 2026, our properties were occupied by 346 leases that operated 172 different brands, with no single tenant brand accounting for more than 2.5% of our ABR.
The following table sets forth information with respect to all of our tenant brands (based on ABR) as of September 30, 2026:
#
Tenant Concepts
# of Leases
% of ABR
Verizon
2.5
Raising Cane's
2.2
Best Buy
2.1
Bank of America
2.0
LA Fitness
Dick's
Oak Street Health
Mammoth Car Wash
1.8
IHOP
Range USA
1.7
Dollar Tree
La-Z-Boy
1.6
Adams Auto Group
PNC Bank
T-Mobile
1.5
Chili's
1.4
Fast Pace Urgent Care
Aspen Dental
AT&T
1.3
Wells Fargo
1.2
Giant Eagle
St. Joseph Hospice
Heartland Dental
Advance Auto Parts
Lowe's Home Improvement
1.1
Academy Sports
1.0
Charles Schwab
28
VASA Fitness
Wendy's
Parachute Plasma
31
Take 5 Oil Change
0.9
32
WSS
33
Wellnow
34
Walmart
35
Jared
36
Andy's Frozen Custard
Burger King
38
Edge Fitness
39
Chase Bank (1)
0.8
40
Floor & Decor
41
Stop & Shop Gas
Walgreens
43
Chipotle
44
CVS
45
Dollar General
46
Goodwill
Hawaiian Bros
Buffalo Wild Wings
Starbucks
0.7
50
Action Behavior Centers
51
7 Brew
Avis
53
Chuy's Mexican
54
Texas Roadhouse
Caliber Collision
56
Exxon
0.6
57
AutoSavvy
58
Physicians Immediate Care
59
Slim Chickens
60
Jiffy Lube
61
O'Reilly Auto Parts
62
Harbor Freight
AutoZone
64
WellMed
0.5
65
Planet Fitness
66
National Tire & Battery
67
Ebby Halliday
68
PetSmart
69
Applebee's
70
Fulton Bank
71
FitzMark
72
Longhorn Steakhouse
73
KEDPlasma
74
Stanton Optical
75
Savers
76
Miller's Ale House
77
Panera Bread
0.4
78
Burlington
79
Trinity Medical Center
Ted's Café Escondido
81
Xfinity
82
Hair Palace
83
Taco Bell
84
Grifols
85
Sonic
86
Saltgrass Steakhouse
87
Mission Pet Health
88
McAlister's Deli
89
7-Eleven
90
Amazon
91
Byrider
92
Mattress Firm
93
Diamonds Direct
94
Quick Clean Carwash
95
Arby's
96
Caliber Car Wash
97
Delta Community Credit Union
0.3
98
Southern Immediate Urgent Care
99
Chuck E Cheese
100
Panda Express
101
Rise
102
BP
103
La Petite Academy
104
Big Blue Swim School
105
Meineke
106
Pizza Hut
107
UTMB Health
108
Michigan Road Animal Hospital
Skechers
110
Sleep Number
Sherwin Williams
112
Spec's
113
Valvoline
Hook & Reel
115
Bohemian Bull
116
Marathon Veterinarian Hospital
117
Olive Garden
118
Mavis Discount Tire
119
Trophy Fuel & Wash
City BBQ
121
Citizens Bank
AMERA Gas Station
123
Roots Oil
124
H&R Block
0.2
125
pOpshelf
126
HTeaO
127
Hooters
128
Express Oil
129
Wing Daddy’s
130
Banner Health
American Family Care
132
Consumers Credit Union
133
Circle K
134
Tropical Smoothie
135
Strickland Brothers
136
Aaron's
137
BMO
138
MedExpress Urgent Care
139
Republic Bank
140
Sage Dental
141
Caribou Coffee
142
McDonald's
143
Long John Silvers
144
Pep Boys
145
Tumbleweed, Inc.
146
Urgent Team
147
America's Best
148
Chicken Salad Chick
MOD Pizza
150
Elias Diamonds
0.1
151
Zip Car Wash
152
Go Health
153
Popeyes
154
Bojangles
155
Granny's
Valero
157
Nothing Bundt Cakes
158
Jimmy John's
159
Dunkin Donuts
160
Church's Chicken
161
Falafel King
162
Firehouse Subs
163
Tutti Frutti
Auto Glass Now
165
Miracle Ear
166
Marquette Bank
0.0
167
Regions Bank ATM
168
Jaggers (2)
169
PATH USA (2)
By Golly's (2)
171
Murphy Oil (2)
172
Parkview Health System (2)
Total Portfolio
346
Diversification by Tenant Industry
The following chart shows a breakdown of our ABR by the tenant industries that comprised our portfolio as of September 30, 2026:
(in thousands, except for # of Leases, percentages, and Rent per Square Foot)
Industry
ABR
Square Feet
Rent per Square Foot
Medical and Dental Providers
10,261
14.7
322
31.84
Quick Service Restaurants
9,481
13.6
48.91
Other - Service
9,379
13.4
468
20.03
Casual Dining
6,368
9.1
199
31.93
Financial Institutions
5,920
8.5
34.60
Automotive Stores
4,576
6.6
272
16.83
Cellular Stores
4,001
5.7
43.73
Other - Necessity
3,989
436
9.16
Fitness Operators
3,339
4.8
215
15.52
Discount Retail
3,068
4.4
13.67
Convenience Stores and Gas Stations
2,311
3.3
62.73
Automotive Dealers
2,290
29.84
Car Washes
1,847
2.6
56.58
Home Improvement Stores
1,689
2.4
263
6.43
Pharmacies
1,129
21.91
Professional Services
42.35
69,821
22.83
Diversification by Geography
As of September 30, 2026, our properties were located in 36 U.S. states, with no single state exceeding 12.4% of our ABR. The following table sets forth information with respect to geographic diversification by state in our portfolio (based on ABR) as of September 30, 2026:
(in thousands, except for # of Properties, and percentages)
State
# of Properties
IL
325
12.4
TX
297
11.6
OH
203
5.8
GA
6.7
FL
180
6.2
NC
195
VA
4.1
IN
3.4
SC
3.0
TN
3.8
MI
2.7
OK
2.3
PA
3.6
NJ
NY
259
3.2
MO
AL
MD
LA
2.8
KS
KY
MN
AZ
ME
186
MS
CT
UT
WI
RI
0
AR
MA
WV
NV
IA
CO
ID
327
3,075
Property Acquisitions
Our acquisitions team presents potential transactions to the Real Estate Investment Committee for approval. The Real Estate Investment Committee is responsible for approving (i) the acquisition or disposition of any single property or capital entering into or exiting a single joint-venture in an amount greater than $5.0 million, (ii) the acquisition of real properties and capital entering into multiple joint-ventures in the aggregate amount up to $150.0 million in any one calendar quarter, and (iii) the disposition of real properties and capital exiting multiple joint-ventures in an aggregate amount up to $30.0 million in any one calendar quarter, in each case, prior to consulting with our Board of Directors. Further, the Real Estate Investment Committee is responsible for recommending that the Board of Directors approve, (i) individual property acquisitions or dispositions or capital entering into or exiting a single joint-venture in an amount that exceeds $25.0 million in value, (ii) the acquisition of properties and capital entering into multiple
joint-ventures that exceeds an aggregate amount of $150.0 million in any one calendar quarter and (iii) disposition of properties and capital exiting multiple joint-ventures that exceeds an aggregate amount of $30.0 million in any one calendar quarter.
Our Leases
Lease Maturity
Our portfolio was 99.4% leased as of September 30, 2026. Our cash flows from operations are primarily generated through our real estate investment portfolio and the monthly lease payments received under our leases with our tenants. As of September 30, 2026, the ABR weighted average remaining term of our leases was approximately 7.0 years, excluding renewal options. As of September 30, 2026, no more than 8.1% of our rental revenue was derived from leases that expire in any single year prior to 2030.
Substantially all of our leases are net, meaning our tenants are generally obligated to pay customary operating expenses associated with the leased property (such as real estate taxes, insurance, maintenance, certain repairs and capital costs).
The following table presents certain information as of September 30, 2026 based on lease expirations by year.
(in thousands, except for percentages, Rent per Square Foot, and # of Leases)
Year
357
39.67
4,704
279
16.86
207
22.76
5,622
8.1
189
29.75
6,238
8.9
188
33.18
2031
6,870
9.8
267
25.73
2032
9,517
607
15.68
2033
4,559
26.20
2034
4,158
6.0
191
21.77
23,085
33.1
947
24.38
We typically purchase properties that are subject to existing long-term net leases with a variety of remaining lease years (initial terms of 10 years or more at lease signing that often have renewal options as well). Substantially all of our leases are net leases, meaning our tenants are generally obligated to pay customary operating expenses associated with the leased property (such as real estate taxes, insurance, maintenance, and in many cases, certain repairs and capital costs, subject to caps and exclusions in leases). For the nine months ended September 30, 2026, we incurred an aggregate of approximately $0.7 million of expenses not reimbursed or paid for by our tenants.
Approximately 97.8% of our leases (based on ABR) have rent escalations, including the option terms, and generally ranging from 1.0% to 3.0% annually.
In general, when negotiating a new lease or an amendment to an existing lease in connection with an acquisition, redevelopment or new development, we seek to negotiate, among other things, relatively long lease terms and tenant renewal options; market rents; annual rent escalation provisions; landlord-favorable going dark, assignment, change of control provisions; limited or no exclusive or co-tenancy clauses that favor the tenant, and obligations for certain tenants and certain guarantors to periodically provide us with financial information.
We may seek to use master lease structures where it fits market practice in the particular property type, pursuant to which we seek to lease multiple properties to an individual tenant on an all or none basis. In a master lease structure, a tenant is responsible for a single lease payment relating to the entire portfolio of leased properties, as opposed to multiple lease payments relating to individually leased properties. The master lease structure prevents a tenant from “cherry picking” locations, where it unilaterally gives up underperforming properties while maintaining its leasehold interest in well-performing properties.
Factors that Affect Our Results of Operations and Financial Condition
Our results of operations and financial condition are affected by numerous factors, many of which are beyond our control. Key factors that impact our results of operations and financial condition include rental rates, lease renewals and occupancy, land values, acquisition volume, tenant growth, demand, expansion, construction costs, net-lease terms, market liquidity, financing arrangements and leverage, property dispositions, general and administrative expenses, inflation, interest rates, consumer confidence, the overall economic environment and the financial strength of our tenants. For a discussion of these factors, see “Management’s Discussion and
Analysis of Financial Condition and Results of Operations – Factors that Affect Our Results of Operations and Financial Condition” in our Annual Report on Form 10-K for the year ended December 31, 2025.
The following discussion includes the results of our operations for the periods presented.
Three Months Ended September 30, 2026 Compared to the Three Months Ended September 30, 2025
(unaudited, in thousands, except for percentages)For the three months ended September 30,
1,753
1,825
1,077
(79
(4)
1,099
2,097
(135
(3)
3,902
(1,551
(100)
> 100
2,286
(2,558
(46)
Rental Revenues
1,422
(80)
280
(82
(13)
Total rental revenues for the three months ended September 30, 2026 increased $1.8 million compared to September 30, 2025, due to net acquisitions, organic escalators and re-tenanting of unoccupied properties.
The $0.3 million increase in adjustment to recognize contractual rental amounts on a straight-line basis was attributable to a decrease in write-offs related to dispositions during the three months ended September 30, 2026.
Interest income on mortgage loans for the three months ended September 30, 2026 increased $0.1 million compared to September 30, 2025. The increase relates to seller financing in connection with the sale of one property during the three months ended September 30, 2026 and full quarter interest earned for certain properties entered into during the three months ended September 30, 2025.
Operating Expenses
The $1.1 million increase in depreciation and amortization for the three months ended September 30, 2026 was attributable to net acquisitions resulting in higher depreciation expense and amortization expense.
Substantially all of our leases are net leases pursuant to which our tenants generally are obligated to pay customary expenses associated with the leased property such as real estate taxes, insurance, maintenance, and in many cases, certain repairs and capital costs.
The following table presents the non-reimbursable property operating expenses for the respective periods:
(unaudited, in thousands)For the three months ended September 30,
Real estate taxes
1,587
1,653
Other property operating expenses
543
(1,913
(1,804
Less: Non-recurring items
Non-reimbursable property expenses
216
405
For the three months ended September 30, 2026 and 2025, we incurred $0.2 million and $0.4 million, respectively, in aggregate expenses that were not tenant obligations, which was mainly attributable to vacant properties.
The $1.1 million increase in general and administrative expenses for the three months ended September 30, 2026 was primarily due to an increase of $0.4 million related to stock-based compensation, $0.5 million related to employee compensation and $0.2 million related to non-recurring expenses mainly attributable to pursuit costs and professional fees.
Other expenses and income
Interest expense for the three months ended September 30, 2026 decreased $0.1 million compared to the three months ended September 30, 2025. The decrease was primarily due to a lower effective interest rate because of the hedge impacting the revolver, which was effective on September 12, 2025. As of September 30, 2026 and 2025, the weighted average interest rate was 5.03% and 5.36%, respectively.
Gain on sale of real estate for the three months ended September 30, 2026 decreased by $3.9 million compared to the three months ended September 30, 2025. The decrease was primarily attributable to the lower number of properties sold. During the three months ended September 30, 2026, we sold five properties at a net gain of approximately $3.7 million. During the three months ended September 30, 2025, we sold 15 properties at a net gain of approximately $7.6 million.
The following table presents the impairment for the respective periods:
(unaudited, in thousands, except number of properties)For the three months ended September 30,
Carrying value prior to impairment loss
9,713
8,162
During the three months ended September 30, 2025, we recorded an impairment loss of $1.6 million relating to six properties. The amount of impairment fluctuates each period based on existing facts and circumstances. The decrease in impairment loss was primarily driven by higher occupancy, which resulted in fewer vacant property dispositions to facilitate the redeployment of capital into income-producing assets.
Loss from unconsolidated entity was less than $0.1 million for the three months ended September 30, 2026. It represents our share, under the HLBV method, of the results of a joint venture formed on August 10, 2026. Once the property is stabilized, it may be sold, or we may acquire the property or our partner’s interest.
Nine Months Ended September 30, 2026 Compared to the Nine Months Ended September 30, 2025
(unaudited, in thousands, except for percentages)For the nine months ended September 30,
3,749
469
4,218
(293
(1)
(566
(8)
2,439
1,580
(875
(6)
2,338
(3,989
(75
(22)
Total other expenses
(2,588
(26)
5,226
2,624
(48
(20)
235
328
The $3.7 million increase in total rental revenues for the nine months ended September 30, 2026 was attributable to net acquisitions, organic escalators and the re-tenanting of unoccupied properties.
The $0.2 million increase in other operating income was attributable to lease termination and restructuring fees received for certain properties during the nine months ended September 30, 2026.
The $0.3 million increase in adjustment to recognize contractual rental amounts on a straight-line basis was attributable to a decrease in write-offs related to dispositions during the nine months ended September 30, 2026.
Interest income on mortgage loans receivable for the nine months ended September 30, 2026 increased $0.5 million compared to September 30, 2025. The increase relates to seller financing in connection with the sale of certain properties entered into in the latter half of 2025.
The $0.3 million decrease in depreciation and amortization for the nine months ended September 30, 2026 was primarily attributable to a decrease in write-offs of intangible lease assets related to dispositions compared to the same period in the prior year partially offset by an increase in net acquisitions.
(unaudited, in thousands)For the nine months ended September 30,
5,357
2,022
1,942
(6,022
(5,904
(189
710
1,206
The $0.6 million decrease in property operating expenses for the nine months ended September 30, 2026 was due to decreased vacancies compared to the nine months ended September 30, 2025. For the nine months ended September 30, 2026 and 2025, we incurred $0.7 million and $1.2 million, respectively, in aggregate expenses that were not tenant obligations, which was mainly attributable to vacant properties.
The $2.4 million increase in general and administrative expenses for the nine months ended September 30, 2026 was primarily due to an increase of $1.6 million related to stock-based compensation and $0.8 million related to employee compensation.
Interest expense for the nine months ended September 30, 2026 decreased $0.9 million compared to the nine months ended September 30, 2025. The decrease was primarily due to a lower effective interest rate as a result of a hedge impacting the revolver effective on September 12, 2025. As of September 30, 2026 and 2025, the weighted average interest rate was 5.03% and 5.36%, respectively.
Gain on sale of real estate for the nine months ended September 30, 2026 decreased by $2.3 million compared to the nine months ended September 30, 2025, primarily due to a lower number of properties sold. During the nine months ended September 30, 2026 we sold 20 properties at a net gain of approximately $6.9 million. During the nine months ended September 30, 2025, we sold 25 properties at a net gain of approximately $9.2 million.
(unaudited, in thousands, except for number of properties)For the nine months ended September 30,
7,165
41,279
6,197
36,322
During the nine months ended September 30, 2026, we recorded an impairment loss of $1.0 million relating to four properties. During the nine months ended September 30, 2025, we recorded an impairment loss of $5.0 million relating to 14 properties. The amount
of impairment fluctuates each period based on existing facts and circumstances. The decrease in impairment loss was driven by a stronger performing portfolio, resulting in fewer properties being impaired during the nine months ended September 30, 2026.
Loss from unconsolidated entity was less than $0.1 million for the nine months ended September 30, 2026. It represents our share, under the HLBV method, of the results of a joint venture formed on August 10, 2026. Once the property is stabilized, it may be sold, or we may acquire the property or our partner’s interest.
Liquidity is a measure of our ability to meet potential cash requirements, including our ongoing commitments to repay debt, fund our operations, acquire properties, make distributions to our stockholders, and other general business needs.
Liquidity/REIT Requirements
As a REIT, we are required to distribute to our stockholders at least 90% of our taxable income determined without regard to the dividends paid deduction and excluding net capital gain, on an annual basis. As a result, it is unlikely that we will be able to retain substantial cash balances to meet our liquidity needs from our annual taxable income. Instead, we expect to meet our liquidity needs primarily by relying upon external sources of capital, such as borrowings under our debt facilities or additional equity or preferred offerings or other capital raises, which would all be subject to a number of market and other factors in order to be successfully accessible.
Short-term Liquidity Requirements
Our short-term liquidity requirements consist primarily of funds necessary to pay for our operating expenses, including our general and administrative expenses as well as interest payments on our outstanding debt and to pay distributions. Since our portfolio has had a historically strong occupancy level and substantially all of our leases are net leases, we do not currently anticipate making significant capital expenditures or incurring other significant property operating costs (unless vacancies adjust beyond historical norms) that would materially adversely impact short-term financial liquidity.
We expect to meet our short-term liquidity requirements primarily from cash and cash equivalents balances, net cash provided by operating activities, and borrowings under our Revolving Credit Facility and Term Loan or through the issuance of debt or equity instruments subject to market conditions and Company operating performance.
Long-term Liquidity Requirements
Our long-term liquidity requirements consist primarily of funds necessary to repay debt and to invest in additional revenue generating properties. Debt capital is provided through our Revolving Credit Facility and Term Loan. The Revolving Credit Facility and Term Loan both have three-year terms with an initial maturity of October 3, 2027, with two 12-month extensions which, if exercised, would extend the maturity until October 3, 2029, subject to certain conditions. On October 15, 2026, we amended the Revolving Credit Facility and Term Loan to extend the maturity of both to October 3, 2028. The Revolving Credit Facility and the Term Loan both have one remaining 12-month extension option to October 3, 2029. See Note 7 and Note 17 of the Notes to the Condensed Consolidated Financial Statements included in this Form 10-Q for further details. The source and mix of our debt capital in the future will be impacted by market conditions. We plan to prudently balance our debt portfolio with a combination of fixed and floating rate debt and will evaluate opportunities to hedge certain interest rate risk where appropriate.
We expect to meet our long-term liquidity requirements primarily from borrowings under our Revolving Credit Facility and Term Loan, additional issuances of Series A Convertible Preferred Stock pursuant to the Investment Agreement (as defined below), any future debt and equity financings, and proceeds from limited sales of our properties. Our ability to access these capital sources may be impacted by unfavorable market conditions, particularly in the debt and equity capital markets and the real estate market in general, that are outside of our control. In addition, our success will depend on our operating performance, our borrowing restrictions, our degree of leverage, market perceptions of the Company, our access to debt, equity or other capital instruments and other factors. Our acquisition growth strategy significantly depends on our ability to obtain acquisition-financing on favorable terms. We seek to reduce the risk that long-term debt capital may be unavailable to us by strengthening our balance sheet by investing in real estate with creditworthy tenants and lease guarantors, and by maintaining an appropriate mix of debt and equity capitalization.
Capital Resources
As a new publicly traded REIT, we plan to access the public equity markets to maintain an appropriate mix of debt and equity in line with our leverage policy, primarily through follow-on equity offerings and at-the-market common equity offering programs, subject to market conditions and Company operating performance. We anticipate that the net proceeds from any public offerings will be used to repay debt, fund acquisitions, and for other general corporate purposes.
On February 27, 2026, we established an at-the-market common equity offering program (“ATM Program”), through which we may, from time to time, publicly offer and sell shares of common stock having an aggregate gross sales price of up to $75.0 million.
On August 19, 2026, the Company entered into an amended and restated distribution agreement with a syndicate of financial institutions acting as sales agents and, in certain cases, as forward sellers and forward purchasers, which increased the aggregate gross sales price of shares of common stock that may be sold under the ATM Program to $125.0 million. Sales under the ATM Program may be made (i) by the Company to, or through, the sales agents or (ii) by the forward sellers on behalf of the applicable forward purchasers in connection with Forward Sale Agreements, in each case in transactions deemed to be “at-the-market” offerings or in negotiated transactions, which may include block trades.
Financing Strategy
Our long-term financing strategy is to maintain a leverage profile that creates operational flexibility and generates superior risk-adjusted returns for our stockholders. We may finance our operations and investments using a variety of methods, including available unrestricted cash balances, property operating revenue, proceeds from property dispositions, available borrowings under our Revolving Credit Facility and Term Loan, common and preferred stock issuances and debt securities issuances, including mortgage indebtedness and senior unsecured debt. We determine the amount of equity and debt financing to be used when acquiring an asset by evaluating our cost of equity capital, terms available in the credit markets (such as interest rate, repayment provisions and maturity) and our assessment of the particular asset’s risk.
We may issue common stock when we believe that our share price is at a level that allows the offering proceeds to be accretively invested into additional properties, to permanently finance properties that were financed by our Revolving Credit Facility or Term Loan, or to repay outstanding debt at or before maturity.
For information on our Revolving Credit Facility and Term Loan, see Note 7 of the Notes to the Condensed Consolidated Financial Statements included in this Form 10-Q. For information on our Stock Repurchase Program and ATM Equity Offering Program, see Note 9 of the Notes to the Condensed Consolidated Financial Statements in this Form 10-Q.
Covenants
We are subject to various covenants and financial reporting requirements pursuant to our Revolving Credit Facility and Term Loan. The table below summarizes the applicable financial covenants. If a default or event of default exists, either through default on payments or breach of covenants, we may be restricted from paying dividends to our stockholders in excess of dividends required to maintain our REIT qualification. As of September 30, 2026, we believe we were in compliance with our covenants.
Required
Total leverage ratio
≤ 60%
Adjusted EBITDA to fixed charge coverage ratio
≥ 1.50 to 1.00
Secured leverage ratio
≤ 40%
Unencumbered NOI to unsecured interest expense ratio
≥ 1.75 to 1.00
Unsecured leverage ratio
Tangible net worth
≥ 380.0 million
Contractual Obligations
The following table provides information with respect to our contractual commitments and obligations as of September 30, 2026. Refer to the discussion in the Liquidity and Capital Resources section above for further discussion over our short and long-term obligations.
(unaudited, in thousands)
Year of Maturity
Revolving Credit Facility (1)
Term Loan (1)
Interest Expense (2)
Dividend (3)
Commitments to Fund Investments (4)
3,574
16,600
27,300
10,694
321,694
14,268
348,994
Derivative Instruments and Hedging Activities
We are exposed to interest rate risk arising from changes in interest rates on any floating-rate borrowings that we make under our Revolving Credit Facility and Term Loan or other debt or capital instruments that bear interest. Borrowings under our Revolving Credit Facility and Term Loan will bear interest at floating rates based on SOFR plus an applicable margin. Accordingly, fluctuations in market interest rates may increase or decrease our interest expense, which will in turn, decrease or increase our net income and cash flow.
On March 3, 2025, we entered into interest rate swap agreements to manage interest rate risk exposure on the Term Loan. The aggregate notional amount of these contracts is $200.0 million, and they mature in March 2028. The interest rate swap agreements utilized by us effectively modify our exposure to interest rate risk by converting a portion of our floating-rate debt to a fixed rate of 4.814%, including the applicable margin of 1.15% as of September 30, 2026, thus reducing the impact of interest-rate changes on future interest expense. The agreements involve the receipt of floating-rate amounts in exchange for fixed-rate interest payments over the life of the agreement without an exchange of the underlying principal amount.
On September 10, 2025, we entered into five sequential interest rate swap agreements to manage interest rate risk exposure on the Revolving Credit Facility, with the first interest rate swap agreement effective September 12, 2025. Each agreement is structured to commence immediately following the maturity of the preceding agreement. The aggregate notional amount on these contracts is $100.0 million, and they mature in six-month intervals, with the final maturity in March 2028. The interest rate swap agreements utilized by us effectively modifies our exposure to interest rate risk by converting a portion of our floating-rate debt to a weighted average fixed rate of 3.220%, reducing the impact of interest-rate changes on future interest expense. The agreements involve the receipt of floating-rate amounts in exchange for fixed-rate interest payments over the life of the agreement without an exchange of the underlying principal amount.
In the future, we may enter into additional interest rate swaps or other hedging arrangements. We have not entered, and do not intend to enter, into derivative or interest rate transactions for speculative purposes.
Cash Flows
Cash and cash equivalents totaled $5.0 million as of September 30, 2026, as compared to $19.6 million as of September 30, 2025. The table below shows information concerning cash flows for the nine months ended September 30, 2026, and 2025:
The change in net cash provided by operating activities during the nine months ended September 30, 2026 as compared to nine months ended September 30, 2025 was mainly due to an increase of $3.3 million in cash revenues as a result of higher occupancy in our portfolio and net acquisitions. The remainder of the change in net cash provided by operating activities relates to timing of payment of payables and accrued liabilities.
The change in net cash used in investing activities was primarily due to higher investments in property acquisitions, partially offset by proceeds from property dispositions. During the nine months ended September 30, 2026, 43 properties were acquired for an aggregate purchase price (including acquisition costs) of $144.5 million and received net proceeds of $43.7 million from the 20 properties sold. During the nine months ended September 30, 2025, 25 properties were acquired for an aggregate purchase price (including acquisition costs) of $83.8 million and received net proceeds of $57.1 million from the 25 properties sold and $5.0 million from the expropriated portion of two properties. The remainder of the change in net cash used in investing activity relates to the investment in unconsolidated entity, deferred leasing costs and other additions to real estate held for investment.
The increase in net cash provided by financing activities during the nine months ended September 30, 2026 as compared to the nine months ended September 30, 2025 was mainly due to the net proceeds from issuance of Series A Convertible Preferred Stock of $42.9 million, the net proceeds from issuance of common stock of $49.5 million and proceeds from debt of $57.5 million, offset by $62.0 million in repayment of debt, dividends and distributions paid of $19.4 million and $1.1 million of deferred offering costs. For the nine months ended September 30, 2025, the Company drew $50.0 million of debt, offset by $10.0 million in repayment of debt, and paid $18.3 million of dividends and distributions.
Non-GAAP Financial Measures
Our reported results and net earnings per diluted share are presented in accordance with GAAP. We also disclose FFO, AFFO, EBITDA, EBITDAre, Adjusted EBITDAre, Annualized Adjusted EBITDAre, Adjusted NOI, Annualized Adjusted NOI, Adjusted Cash NOI, Annualized Adjusted Cash NOI, Net Debt, Adjusted Net Debt and Fixed Charge Coverage Ratio, each of which are non-GAAP measures. We believe these non-GAAP financial measures are industry measures used by analysts and investors to compare the operating performance of REITs.
FFO is computed in accordance with the definition adopted by Nareit: net income (loss) excluding real estate depreciation and amortization, gains (losses) on sales of depreciated real estate, gains and losses from change in control, and impairments of depreciated real estate. FFO is widely used by REITs because real estate depreciation assumes property values decline predictably over time, while real estate values have historically risen or fallen with market conditions.
AFFO is FFO further adjusted to exclude non-cash revenues and expenses and items we do not consider part of our ongoing operations: straight-line rent, amortization of above/below-market lease intangibles, amortization of debt issuance costs, non-cash stock-based compensation, structuring and public company readiness costs, and other non-recurring expenses such as deal pursuit costs. Because our leases have contractual rent escalations and generally no significant free-rent periods, we believe AFFO better reflects the recurring cash earnings generated by our portfolio and our capacity to pay dividends. Adjustments for the unconsolidated entity are calculated on the same basis.
We believe FFO and AFFO help investors compare our operating performance across periods and with other REITs. They should not be considered alternatives to net income or cash flows from operating activities and may not be comparable to similarly titled measures of other REITs.
The following is a reconciliation of net income (loss) (which is the most comparable GAAP measure) to FFO and AFFO:
Reconciliation of net income (loss) to FFO and AFFO
(unaudited, in thousands, except share, per share amounts and percentages)
Less: Series A Convertible Preferred Stock dividends
Net income (loss) attributable to OP common unitholders
2,608
3,864
Depreciation and amortization (1)
Depreciation and amortization from unconsolidated entity
Funds from Operations (“FFO”)
7,383
6,866
22,283
20,015
Straight-line rent adjustments
(332
(52
(788
(460
404
Amortization of financing transaction costs from unconsolidated entity
Amortization of above/below market lease intangibles (2)
1,128
Adjustment for structuring and public company readiness costs
340
Other non-recurring expenses (3)
397
840
1,123
Adjusted Funds from Operations (“AFFO”)
9,718
8,829
28,604
26,086
FFO per share
0.25
0.78
0.72
AFFO per share
0.33
0.32
1.00
0.94
Dividends per share
Dividends per share as a percentage of AFFO
64.7
67.8
64.5
68.8
Weighted average common shares outstanding, basic
Weighted average operating partnership units outstanding
4,507,913
7,111,199
5,124,273
8,756,522
Unvested restricted stock units and LTIP units (4)
207,189
234,193
Weighted average common shares outstanding, diluted (5)
29,262,980
27,834,670
28,584,971
27,828,225
EBITDA is net income before interest, income taxes and depreciation and amortization; EBITDAre, as defined by Nareit, further excludes gains (losses) on sales of depreciable property and real estate impairments. The unconsolidated entity is reflected on the same basis. Adjusted EBITDAre further (i) reflects quarterly investments and dispositions as if completed on the first day of the quarter and excludes (ii) infrequent or unusual items, (iii) lease termination fees from certain of our tenants and (iv) non-cash stock-based compensation.
Annualized Adjusted EBITDAre is quarterly Adjusted EBITDAre multiplied by four. We believe these measures are useful indicators of operating performance and current run rate; they are not alternatives to net income or operating cash flows, may not be comparable to other companies’ measures, and actual results may differ from annualized amounts.
Adjusted NOI is Adjusted EBITDAre excluding general and administrative expenses and adjustments for the unconsolidated entity. Adjusted Cash NOI is Adjusted NOI further adjusted for non-cash revenue items, including straight-line rent and other amortization.
Annualized Adjusted NOI and Annualized Adjusted Cash NOI are the applicable quarterly amounts multiplied by four. We believe these measures are useful because they reflect only property-level income and expenses, and the annualized measures provide a meaningful estimate of our current run rate given our long-term net leases. These measures should not be considered alternatives to net income or cash flows from operating activities, may not be comparable to similarly titled measures of other companies, and actual results may differ significantly from annualized amounts.
The following table reconciles net income (which is the most comparable GAAP measure) to EBITDA, EBITDAre, Adjusted EBITDAre, Adjusted NOI and Adjusted Cash NOI:
Reconciliation of net income to EBITDA, EBITDAre, Adjusted EBITDAre, Adjusted NOI and Adjusted Cash NOI
For the three months ended September 30, 2026
8,868
Interest expense from unconsolidated entity
EBITDA
16,466
EBITDAre
12,785
Adjustments:
Current period investment activity (2)
751
Current period disposition activity (2)
(159
Non-cash compensation expense
Exclude non-recurring expenses (3)
Exclude write-offs of non-cash items
Adjusted EBITDAre
15,362
General and administrative, net of non-recurring
2,687
Adjustments for unconsolidated entity (4)
(104
Adjusted Net Operating Income (“NOI”)
17,945
Straight-line rental revenue, net
(536
Adjusted Cash NOI
17,409
Annualized Adjusted EBITDAre
61,448
Annualized Adjusted NOI
71,780
Annualized Adjusted Cash NOI
69,636
Net Debt is a non-GAAP financial measure. We define Net Debt as our Gross Debt less cash and cash equivalents. We then adjust Net Debt by the undrawn Series A Convertible Preferred Stock and unsettled forward equity to derive Adjusted Net Debt. The ratios of Net Debt to Annualized Adjusted EBITDAre and Adjusted Net Debt to Annualized Adjusted EBITDAre represent Net Debt and Adjusted Net Debt as of the end of the applicable period divided by Annualized Adjusted EBITDAre for the period, respectively. We believe that these ratios are useful to investors and analysts because they provide information about Gross Debt less cash and cash equivalents as well as Gross Debt less cash and cash equivalents, undrawn Series A Convertible Preferred Stock and unsettled forward equity, which could be useful to repay debt.
The following table reconciles total debt (which is the most comparable GAAP measure) to Net Debt and Adjusted Net Debt, and presents the ratios of Net Debt to Annualized Adjusted EBITDAre and Adjusted Net Debt to Annualized Adjusted EBITDAre:
Reconciliation of total debt to Net Debt and Adjusted Net Debt and ratio of Net Debt to Annualized Adjusted EBITDAre and Adjusted Net Debt to Annualized Adjusted EBITDAre:
Debt
Gross Debt
(5,021
Net Debt
305,979
Net value of undrawn Series A Convertible Preferred Stock
(30,000
Adjusted Net Debt
275,979
(unaudited)Leverage
Net Debt to Annualized Adjusted EBITDAre
5.0x
Adjusted Net Debt to Annualized Adjusted EBITDAre
4.5x
The Fixed Charge Coverage Ratio is Annualized Adjusted EBITDAre divided by Annualized Fixed Charges. Fixed charges are interest expense (excluding non-cash amortization of debt issuance costs, discounts and premiums), plus scheduled principal payments (excluding balloon payments), plus preferred dividends payable in cash, plus our share of the fixed charges of the unconsolidated entity.
Annualized Fixed Charges are quarterly fixed charges multiplied by four and may differ significantly from actual future amounts. We believe this ratio is useful to investors in evaluating our ability to service our obligations and obtain financing.
The following table summarizes our fixed charges, and presents Annualized Fixed Charges to Annualized Adjusted EBITDAre:
Non-cash interest
(404
Non-cash interest from unconsolidated entity
Preferred dividends
381
Fixed charges
4,445
Annualized Fixed Charges
17,780
Fixed Charge Coverage Ratio
3.5x
The preparation of the historical condensed consolidated financial statements in conformance with GAAP requires management to make estimates and assumptions that are subjective in nature and affect the reported amounts of assets, liabilities, revenues, and expenses as well as other disclosures in the condensed consolidated financial statements. We base our estimates on historical experience and on various other assumptions believed to be reasonable under the circumstances. On an ongoing basis, management evaluates its estimates and assumptions, however, our actual results could differ materially from our estimates. A summary of our significant accounting policies is included in Note 2—Accounting Policies for Financial Statements, contained in the condensed consolidated financial statements included elsewhere in this Form 10-Q. Management believes the following critical accounting policies affect its more significant estimates and assumptions used in the preparation of our condensed consolidated financial statements.
Purchase Price Allocation of Acquired Properties
Upon acquisition of real estate held for investment considered to be an asset acquisition, we capitalized the purchase price (including related acquisition costs) as part of the cost basis. We allocate the purchase price between land, buildings and improvements, site improvements, and identifiable intangible assets and liabilities such as amounts related to in-place leases and origination costs acquired, above- and below-market leases, based upon their fair values. The allocation of the purchase price requires judgment and significant estimates. The fair value of the land and building assets is determined on an as-if-vacant basis.
Above- and below-market leases are based upon a comparison between existing leases upon acquisition and current market rents for similar real estate. The fair value of above- and below-market leases is equal to the aggregate present value of the spread between the contract and the market rate of each of the in-place leases over their remaining term. The fair values of in-place leases and origination costs are determined based on the estimates of carrying costs during the expected lease-up periods and costs that would be incurred to put the existing leases in place under the same market terms and conditions.
We use multiple sources to estimate fair value, including information obtained about each property as a result of our pre-acquisition due diligence and marketing and leasing activities. We also consider information and other factors that impact the determination of fair value such as market conditions, industry conditions that the tenant operates in, characteristics of the real estate (e.g., location, size, value of comparative rental rates, traffic count) and tenant credit profile.
Impairment of Long-Lived Assets
Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. If such impairment is present, an impairment loss is recognized based on the excess of the carrying amount of the asset over its fair value. The net recoverable amount represents the undiscounted estimated future cash flow expected to be earned from the long-lived asset. In the case of real estate, the undiscounted estimated future cash flows are based on expected cash flows from the use and eventual disposition of the property. We estimate fair value using data such as operating income, estimated capitalization rates or multiples, and with regards to assets held for sale, negotiated selling price, less estimated costs of disposal.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
We are exposed to interest rate risk arising from changes in interest rates on any floating-rate borrowings we make under our Revolving Credit Facility or Term Loan or other debt or other capital instruments that bear interest. Borrowings under our Revolving Credit Facility and Term Loan will bear interest at floating rates based on SOFR plus an applicable margin. Accordingly, fluctuations in market interest rates may increase or decrease our interest expense, which will in turn, decrease or increase our net income and cash flow. During the year ended December 31, 2025, we entered into interest rate swap agreements to manage interest rate exposure on both the Term Loan and Revolving Credit Facility. Refer to the discussion in the Derivative Instruments and Hedging Activities section above for more details. Our interest rate risk management strategy is intended to stabilize cash flow requirements by maintaining interest rate swaps to convert certain variable-rate debt to a fixed rate. We have not entered, and do not intend to enter, into derivative or interest rate transactions for speculative purposes. Refinancing of any of our debt instruments would also be subject to market conditions at the time of such refinancing and our operational performance, which could require principal paydowns and equity injections due to limited financing sources being available at the time.
As of September 30, 2026 and December 31, 2025, our financial instruments were not exposed to significant market risk due to foreign currency exchange risk or other relevant market rates or prices.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act), that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. As of and for the quarter ended September 30, 2026, we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer. Based on the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective and were operating at a reasonable assurance level.
Changes in Internal Control Over Financial Reporting
There have been no changes in our internal control over financial reporting during the quarter ended September 30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Part II – OTHER INFORMATION
Item 1. Legal Proceedings.
From time to time, we are subject to various lawsuits, claims, and other legal proceedings that arise in the ordinary course of our business. We are not currently a party to legal proceedings that we believe would reasonably be expected to have a material adverse effect on our business, financial condition, or results of operations. We are not aware of any material legal proceedings to which we or any of our subsidiaries are a party or to which any of our property is subject, nor are we aware of any such legal proceedings contemplated by government agencies.
Item 1A. Risk Factors.
There have been no material changes from the risk factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on February 25, 2026.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
During the quarter ended September 30, 2026, we did not repurchase any shares of common stock pursuant to our stock repurchase program.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
None of our officers or directors adopted or terminated any contract, instruction, or written plan for the purchase or sale of our securities intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any non-Rule 10b5-1 trading arrangement.
Item 6. Exhibits
No.
Description
3.1
Articles of Amendment and Restatement of FrontView REIT, Inc. (filed as Exhibit 3.1 to the Corporation's Registration Statement on Form S-11 filed September 9, 2024 and incorporated herein by reference).
Articles Supplementary of FrontView REIT, Inc. (filed as Exhibit 3.1 to the Corporation’s Current Report on Form 8-K/A filed February 27, 2026 and incorporated herein by reference).
Certificate of Correction to Articles Supplementary of FrontView REIT, Inc. (filed as Exhibit 3.3 to the Corporation’s Quarterly Report on Form 10-Q filed May 7, 2026 and incorporated herein by reference).
Amended and Restated Bylaws of FrontView REIT, Inc. (filed as Exhibit 3.2 to the Corporation's Registration Statement on Form S-11/A filed September 24, 2024 and incorporated herein by reference).
10.1
Amended and Restated Partnership Agreement of FrontView Operating Partnership LP, dated as of October 3, 2024 (filed as Exhibit 10.1 to the Corporation’s Current Report on Form 8-K filed October 7, 2024 and incorporated herein by reference).
10.2
First Amendment, dated February 10, 2026, to the Amended and Restated Partnership Agreement of FrontView Operating Partnership LP. (filed as Exhibit 10.1 to the Corporation’s Current Report on Form 8-K/A filed February 27, 2026 and incorporated herein by reference).
10.3
Amended and Restated Distribution Agreement, dated as of August 19, 2026, by and among FrontView REIT, Inc., FrontView Operating Partnership LP, and each of Agents, Forward Sellers and Forward Purchasers named therein (including the Form of Master Forward Confirmation for Contingent Forward Transactions) (filed as Exhibit 1.1 to the Corporation’s Current Report on Form 8-K filed August 19, 2026 and incorporated herein by reference).
10.4*
Amendment No. 4 to Credit Agreement, dated as of September 10, 2026, by and among FrontView Operating Partnership LP, as borrower, FVR Subsidiary OP LP, as borrower, JPMorgan Chase Bank, N.A., as administrative agent, and the other lenders and agents party thereto.
10.5*
Amendment No. 5 to Credit Agreement, dated as of October 15, 2026, by and among FrontView Operating Partnership LP, as borrower, FVR Subsidiary OP LP, as borrower, JPMorgan Chase Bank, N.A., as administrative agent, and the other lenders and agents party thereto.
31.1*
Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*
Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*†
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*†
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*
Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH*
Inline XBRL Taxonomy Extension Schema Document.
101.CAL*
Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF*
Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB*
Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE*
Inline XBRL Taxonomy Extension Presentation Linkbase Document.
104*
Cover Page Interactive Data File (formatted in the Inline XBRL and contained in Exhibit 101).
* Filed herewith.
† In accordance with Item 601(b)(32) of Regulation S-K, this Exhibit is not deemed "filed" for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section. Such certifications will not be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the Registrant specifically incorporates it by reference.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Date: November 4, 2026
/s/ Stephen Preston
Stephen Preston
Chairman, Chief Executive Officer and President
(Principal Executive Officer)
/s/ Pierre Revol
Pierre Revol
Chief Financial Officer and President
(Principal Financial Officer)