Document
Exhibit 99.1
Net Lease Office Properties
Supplemental Financial Information
First Quarter 2026
Terms and Definitions
As used in this supplemental package, the terms “Net Lease Office Properties,” “NLOP,” “we,” “us” and “our” include Net Lease Office Properties, its consolidated subsidiaries and its predecessors, unless otherwise indicated. Other terms and definitions are as follows:
| REIT | Real estate investment trust | ||||
| WPC | W. P. Carey Inc., a net-lease REIT (also our “Advisor”) | ||||
| U.S. | United States | ||||
| ABR | Contractual minimum annualized base rent | ||||
| NAREIT | National Association of Real Estate Investment Trusts (an industry trade group) | ||||
| WALT | Weighted-average lease term | ||||
| CPI | Consumer price index | ||||
Important Note Regarding Non-GAAP Financial Measures
This supplemental package includes certain “non-GAAP” supplemental measures that are not defined by generally accepted accounting principles (“GAAP”), including funds from operations (“FFO”); adjusted funds from operations (“AFFO”); pro rata cash net operating income (“pro rata cash NOI”); and normalized pro rata cash NOI. FFO is a non-GAAP measure defined by NAREIT. Reconciliations of these non-GAAP financial measures to their most directly comparable GAAP measures are provided within this supplemental package. In addition, refer to the Disclosures Regarding Non-GAAP and Other Metrics section in the Appendix for a description of these non-GAAP financial measures and other metrics.
Amounts may not sum to totals due to rounding.
Net Lease Office Properties
Supplemental Information – First Quarter 2026
| Table of Contents | |||||
| Appendix | |||||
Net Lease Office Properties
First Quarter 2026
| Summary Metrics | |||||
As of or for the three months ended March 31, 2026.
| Financial Results | |||||||||||||||||||||||
| Revenues, including reimbursable costs – consolidated ($000s) | $ | 9,025 | |||||||||||||||||||||
| Net income attributable to NLOP ($000s) | 24,998 | ||||||||||||||||||||||
| Net income attributable to NLOP per diluted share | 1.69 | ||||||||||||||||||||||
Normalized pro rata cash NOI ($000s) (a) (b) | 5,994 | ||||||||||||||||||||||
AFFO attributable to NLOP ($000s) (a) (b) | 6,124 | ||||||||||||||||||||||
AFFO attributable to NLOP per diluted share (a) (b) | 0.41 | ||||||||||||||||||||||
Special cash distributions declared, gross distributions – current quarter (in thousands) (c) | $ | 148,881 | |||||||||||||||||||||
Special cash distributions declared per share – current quarter (c) | 10.05 | ||||||||||||||||||||||
| Balance Sheet and Capitalization | |||||||||||||||||||||||
| Equity market capitalization – based on quarter end share price of $11.52 ($000s) | $ | 170,658 | |||||||||||||||||||||
| Total consolidated debt ($000s) | 21,900 | ||||||||||||||||||||||
Gross assets ($000s) (d) | 321,511 | ||||||||||||||||||||||
| Total consolidated debt to gross assets | 6.8 | % | |||||||||||||||||||||
| Advisory Fees and Reimbursements Paid to WPC | |||||||||||||||||||||||
Asset management fees (e) | $ | 481 | |||||||||||||||||||||
Administrative reimbursements (f) | 1,000 | ||||||||||||||||||||||
Portfolio (Pro Rata) (b) | |||||||||||||||||||||||
ABR (in thousands) (g) | $ | 25,763 | |||||||||||||||||||||
| Number of properties | 18 | ||||||||||||||||||||||
| Number of tenants | 11 | ||||||||||||||||||||||
| Occupancy | 73.1 | % | |||||||||||||||||||||
| Weighted-average lease term (in years) | 2.9 | ||||||||||||||||||||||
| Leasable square footage (in thousands) | 1,875 | ||||||||||||||||||||||
ABR from investment grade tenants as a % of total ABR (h) | 48.3 | % | |||||||||||||||||||||
| Dispositions – number of properties sold | 6 | ||||||||||||||||||||||
| Dispositions – gross proceeds (in thousands) | $ | 153,434 | |||||||||||||||||||||
________
(a)Normalized pro rata cash NOI and AFFO are non-GAAP measures. See the Disclosures Regarding Non-GAAP and Other Metrics section in the Appendix for a description of our non-GAAP measures and for details on how certain non-GAAP measures are calculated.
(b)Presented on a pro rata basis. See the Disclosures Regarding Non-GAAP and Other Metrics section in the Appendix for a description of pro rata.
(c)In January 2026, our Board of Trustees declared a special cash distribution of $6.75 per share, totaling approximately $100.0 million. The distribution was paid on February 17, 2026 to shareholders of record as of January 30, 2026. In March 2026, our Board of Trustees declared a special cash distribution of $3.30 per share, totaling approximately $49.0 million. The distribution was paid on April 14, 2026 to shareholders of record as of March 30, 2026.
(d)Gross assets represent consolidated total assets before accumulated depreciation on buildings and improvements. Gross assets are net of accumulated amortization on in-place lease intangible assets of $29.8 million and above-market rent intangible assets of $4.1 million.
(e)Pursuant to certain advisory agreements, our Advisor provides us with strategic management services, including asset management, property disposition support, and various related services. We pay our Advisor an asset management fee that was initially set at an annual amount of $7.5 million and is being proportionately reduced following the disposition of each portfolio property.
(f)Pursuant to certain advisory agreements, we will reimburse our Advisor a base administrative amount of approximately $4.0 million annually, for certain administrative services, including day-to-day management services, investor relations, accounting, tax, legal, and other administrative matters. In May 2026, our Board of Trustees approved a reduction in the base administrative reimbursement to our Advisor from $4.0 million annually to $2.0 million annually, effective July 1, 2026.
(g)See the Disclosures Regarding Non-GAAP and Other Metrics section in the Appendix for a description of ABR.
(h)Percentage of portfolio is based on ABR, as of March 31, 2026. Includes tenants or guarantors with investment grade ratings (41.1%) and subsidiaries of non-guarantor parent companies with investment grade ratings (7.2%). Investment grade refers to an entity with a rating of BBB- or higher from Standard & Poor’s Ratings Services or Baa3 or higher from Moody’s Investors Service. See the Disclosures Regarding Non-GAAP and Other Metrics section in the Appendix for a description of ABR.
Net Lease Office Properties | 1 | ||||||||
Net Lease Office Properties
First Quarter 2026
| Components of Net Asset Value | |||||
In thousands.
Three Months Ended March 31, 2026 | |||||
Normalized Pro Rata Cash NOI (a) (b) | $ | 5,994 | |||
| Balance Sheet – Selected Information | As of March 31, 2026 | ||||
| Assets | |||||
Book value of select real estate (c) | $ | 15,771 | |||
| Cash and cash equivalents | 70,609 | ||||
| Other assets, net: | |||||
| Restricted cash, including escrow | $ | 3,413 | |||
| Straight-line rent adjustments | 3,165 | ||||
| Accounts receivable | 1,322 | ||||
| Deferred charges | 491 | ||||
| Prepaid expenses | 334 | ||||
| Taxes receivable | 141 | ||||
| Other | 566 | ||||
| Total other assets, net | $ | 9,432 | |||
| Liabilities | |||||
| Non-recourse mortgage | $ | 21,900 | |||
| Dividends payable | 48,886 | ||||
| Accounts payable, accrued expenses and other liabilities: | |||||
| Accounts payable and accrued expenses | $ | 2,020 | |||
| Prepaid and deferred rents | 1,708 | ||||
| Accrued taxes payable | 759 | ||||
| Tenant security deposits | 434 | ||||
| Other | 6,236 | ||||
| Total accounts payable, accrued expenses and other liabilities | $ | 11,157 | |||
________
(a)Normalized pro rata cash NOI is a non-GAAP measure. See the Disclosures Regarding Non-GAAP and Other Metrics section in the Appendix for a description of our non-GAAP measures and for details on how they are calculated.
(b)Presented on a pro rata basis. See the Disclosures Regarding Non-GAAP and Other Metrics section in the Appendix for a description of pro rata.
(c)Represents the value of real estate appropriately not captured in normalized pro rata cash NOI, such as vacant assets.
Net Lease Office Properties | 2 | ||||||||
Net Lease Office Properties
First Quarter 2026
| Consolidated Statement of Income | |||||
In thousands, except share and per share amounts.
Three Months Ended March 31, 2026 | |||||
| Revenues | |||||
| Lease revenues | $ | 7,341 | |||
| Income from finance leases | 637 | ||||
| Other lease-related income | 1,047 | ||||
| 9,025 | |||||
| Operating Expenses | |||||
| Depreciation and amortization | 2,280 | ||||
General and administrative (a) | 1,933 | ||||
| Property expenses, excluding reimbursable tenant costs | 703 | ||||
| Reimbursable tenant costs | 595 | ||||
Asset management fees (b) | 481 | ||||
| 5,992 | |||||
| Other Income and Expenses | |||||
| Gain on sale of real estate, net | 32,620 | ||||
Other gains and (losses) (c) | (10,209) | ||||
| Interest expense | (386) | ||||
| 22,025 | |||||
| Income before income taxes | 25,058 | ||||
| Provision for income taxes | (17) | ||||
| Net Income | 25,041 | ||||
| Net income attributable to noncontrolling interests | (43) | ||||
| Net Income Attributable to NLOP | $ | 24,998 | |||
| Basic and Diluted Earnings Per Share | $ | 1.69 | |||
| Weighted-Average Shares Outstanding | |||||
| Basic and Diluted | 14,814,075 | ||||
________
(a)Includes $1.0 million of administrative reimbursements to our Advisor.
(b)Amount comprises fees paid to Advisor for strategic management services, including asset management, property disposition support, and various related services.
(c)Amount includes a non-cash allowance for credit loss recorded on a net investment in a sales-type lease of $11.0 million.
Net Lease Office Properties | 3 | ||||||||
Net Lease Office Properties
First Quarter 2026
| FFO and AFFO, Consolidated | |||||
In thousands, except share and per share amounts.
Three Months Ended March 31, 2026 | |||||
| Net income attributable to NLOP | $ | 24,998 | |||
| Adjustments: | |||||
| Gain on sale of real estate, net | (32,620) | ||||
| Depreciation and amortization of real property | 2,280 | ||||
Proportionate share of adjustments for noncontrolling interests (a) | (52) | ||||
| Total adjustments | (30,392) | ||||
FFO (as defined by NAREIT) Attributable to NLOP (b) | (5,394) | ||||
| Adjustments: | |||||
Other (gains) and losses (c) | 10,998 | ||||
Above- and below-market rent intangible lease amortization, net | 332 | ||||
| Straight-line and other leasing and financing adjustments | 163 | ||||
| Other amortization and non-cash items | 38 | ||||
Proportionate share of adjustments for noncontrolling interests (a) | (13) | ||||
| Total adjustments | 11,518 | ||||
AFFO Attributable to NLOP (b) | $ | 6,124 | |||
| Summary | |||||
FFO (as defined by NAREIT) attributable to NLOP (b) | $ | (5,394) | |||
FFO (as defined by NAREIT) attributable to NLOP per diluted share (b) | $ | (0.36) | |||
AFFO attributable to NLOP (b) | $ | 6,124 | |||
AFFO attributable to NLOP per diluted share (b) | $ | 0.41 | |||
| Diluted weighted-average shares outstanding | 14,814,075 | ||||
________
(a)Adjustments disclosed elsewhere in this reconciliation are on a consolidated basis. This adjustment reflects our FFO or AFFO on a pro rata basis.
(b)FFO and AFFO are non-GAAP measures. See the Disclosures Regarding Non-GAAP and Other Metrics section in the Appendix for a description of our non-GAAP measures.
(c)Amount includes a non-cash allowance for credit loss recorded on a net investment in a sales-type lease of $11.0 million.
Net Lease Office Properties | 4 | ||||||||
Net Lease Office Properties
First Quarter 2026
| Consolidated Balance Sheets | |||||
In thousands, except share and per share amounts.
| March 31, 2026 | December 31, 2025 | ||||||||||
| Assets | |||||||||||
| Investments in real estate: | |||||||||||
| Land, buildings and improvements | $ | 226,533 | $ | 218,799 | |||||||
| Net investments in finance leases | — | 41,878 | |||||||||
| In-place lease intangible assets and other | 41,519 | 45,160 | |||||||||
| Above-market rent intangible assets | 7,314 | 10,760 | |||||||||
| Investments in real estate | 275,366 | 316,597 | |||||||||
| Accumulated depreciation and amortization | (97,425) | (102,926) | |||||||||
| Assets held for sale, net | — | 96,269 | |||||||||
| Net investments in real estate | 177,941 | 309,940 | |||||||||
| Cash and cash equivalents | 70,609 | 119,621 | |||||||||
| Other assets, net | 9,432 | 23,810 | |||||||||
| Total assets | $ | 257,982 | $ | 453,371 | |||||||
| Liabilities and Equity | |||||||||||
| Non-recourse mortgage | $ | 21,900 | $ | 21,900 | |||||||
| Accounts payable, accrued expenses and other liabilities | 11,157 | 56,104 | |||||||||
| Below-market rent intangible liabilities, net | 2,055 | 1,990 | |||||||||
| Dividends payable | 48,886 | 75,552 | |||||||||
| Total liabilities | 83,998 | 155,546 | |||||||||
Preferred stock, $0.001 par value, 5,000,000 shares authorized; none issued | — | — | |||||||||
Common stock, $0.001 par value, 45,000,000 shares authorized; 14,814,075 shares issued and outstanding | 15 | 15 | |||||||||
| Additional paid-in capital | 855,813 | 855,813 | |||||||||
| Distributions in excess of accumulated earnings | (685,801) | (561,917) | |||||||||
| Total shareholders' equity | 170,027 | 293,911 | |||||||||
| Noncontrolling interests | 3,957 | 3,914 | |||||||||
| Total equity | 173,984 | 297,825 | |||||||||
| Total liabilities and equity | $ | 257,982 | $ | 453,371 | |||||||
Net Lease Office Properties | 5 | ||||||||
Net Lease Office Properties
First Quarter 2026
| Capitalization and Debt Overview | |||||
Capitalization
In thousands, except share and per share amounts. As of March 31, 2026.
| Total Enterprise Value | Shares | Share Price | Market Value | |||||||||||||||||||||||
| Equity | ||||||||||||||||||||||||||
| Common equity | 14,814,075 | $ | 11.52 | $ | 170,658 | |||||||||||||||||||||
| Total Equity Market Capitalization | 170,658 | |||||||||||||||||||||||||
| Outstanding Balance | ||||||||||||||||||||||||||
| Debt | ||||||||||||||||||||||||||
| Non-recourse mortgage | 21,900 | |||||||||||||||||||||||||
| Total Debt | 21,900 | |||||||||||||||||||||||||
| Less: Cash and cash equivalents | (70,609) | |||||||||||||||||||||||||
| Net Debt | (48,709) | |||||||||||||||||||||||||
| Total Enterprise Value | $ | 121,949 | ||||||||||||||||||||||||
Debt Overview
Dollars in thousands. Pro rata. As of March 31, 2026.
| Maturity Date | Fixed / Floating | Interest Rate | Total Outstanding Balance | |||||||||||||||||||||||||||||
| Mortgage (Tenant Listed) | ||||||||||||||||||||||||||||||||
| Intuit | 7/6/2026 | Fixed | 7.0 | % | $ | 21,900 | ||||||||||||||||||||||||||
Net Lease Office Properties | 6 | ||||||||
Net Lease Office Properties
First Quarter 2026
| Dispositions | |||||
Dollars in thousands. Pro rata.
| Tenant | Property Location(s) | Gross Sale Price | ABR (a) | Closing Date | Gross Square Footage | |||||||||||||||||||||||||||
| 4Q23 | ||||||||||||||||||||||||||||||||
| Raytheon | Tucson, AZ | $ | 24,575 | $ | 1,978 | Dec-23 | 143,650 | |||||||||||||||||||||||||
| Carhartt | Dearborn, MI | 9,806 | 748 | Dec-23 | 58,722 | |||||||||||||||||||||||||||
| BCBSM | Eagan, MN | 2,500 | 298 | Dec-23 | 29,916 | |||||||||||||||||||||||||||
| AVL | Plymouth, MI | 6,200 | 575 | Dec-23 | 70,000 | |||||||||||||||||||||||||||
| 4Q23 Total | 43,081 | 3,599 | 302,288 | |||||||||||||||||||||||||||||
| 1Q24 | ||||||||||||||||||||||||||||||||
Undisclosed – UK insurance company (b) | Newport, United Kingdom | 10,497 | 1,761 | Jan-24 | 80,664 | |||||||||||||||||||||||||||
TotalEnergies (b) | Stavanger, Norway | 33,072 | 5,185 | Mar-24 | 275,725 | |||||||||||||||||||||||||||
| 1Q24 Total | 43,569 | 6,946 | 356,389 | |||||||||||||||||||||||||||||
| 2Q24 | ||||||||||||||||||||||||||||||||
Exelon (c) | Warrenville, IL | 19,830 | 2,935 | Apr-24 | 146,745 | |||||||||||||||||||||||||||
Vacant (formerly AVT Technology Solutions) (c) | Tempe, AZ | 13,160 | — | Apr-24 | 132,070 | |||||||||||||||||||||||||||
| FedEx | Collierville, TN | 62,500 | 5,491 | Apr-24 | 390,380 | |||||||||||||||||||||||||||
| DMG MORI | Hoffman Estates, IL | 35,984 | 2,458 | Apr-24 | 104,598 | |||||||||||||||||||||||||||
| BCBSM (2 properties) | Eagan, MN | 60,700 | 4,663 | Jun-24 | 347,472 | |||||||||||||||||||||||||||
| 2Q24 Total | 192,174 | 15,547 | 1,121,265 | |||||||||||||||||||||||||||||
| 3Q24 | ||||||||||||||||||||||||||||||||
| CVS Health | Scottsdale, AZ | 71,500 | 4,252 | Aug-24 | 354,888 | |||||||||||||||||||||||||||
| Henniges Automotive (Xileh) | Auburn Hills, MI | 9,000 | 711 | Sep-24 | 55,490 | |||||||||||||||||||||||||||
| 3Q24 Total | 80,500 | 4,963 | 410,378 | |||||||||||||||||||||||||||||
| 4Q24 | ||||||||||||||||||||||||||||||||
E.On (b) | Houghton le Spring, United Kingdom | 3,924 | 3,819 | Oct-24 | 217,339 | |||||||||||||||||||||||||||
| Vacant (formerly BCBSM) | Eagan, MN | 11,650 | — | Nov-24 | 227,666 | |||||||||||||||||||||||||||
| Merative | Hartland, WI | 6,750 | 669 | Dec-24 | 81,082 | |||||||||||||||||||||||||||
| Charter Communications | Bridgeton, MO | 7,350 | 820 | Dec-24 | 78,080 | |||||||||||||||||||||||||||
| CVS Caremark | Chandler, AZ | 15,000 | 1,645 | Dec-24 | 183,000 | |||||||||||||||||||||||||||
| Cofinity / Aetna | Southfield, MI | 2,500 | 1,833 | Dec-24 | 94,453 | |||||||||||||||||||||||||||
| 4Q24 Total | 47,174 | 8,786 | 881,620 | |||||||||||||||||||||||||||||
| Total 2023-2024 Dispositions | 406,498 | 39,841 | 3,071,940 | |||||||||||||||||||||||||||||
Net Lease Office Properties | 7 | ||||||||
Net Lease Office Properties
First Quarter 2026
| Dispositions (continued) | |||||
Dollars in thousands. Pro rata.
| Tenant / Lease Guarantor | Property Location(s) | Gross Sale Price | ABR (a) | Closing Date | Gross Square Footage | |||||||||||||||||||||||||||
| 1Q25 | ||||||||||||||||||||||||||||||||
| Emerson | Houston, TX | 4,180 | 1,108 | Mar-25 | 52,144 | |||||||||||||||||||||||||||
Nokia (b) | Krakow, Poland | 5,595 | 779 | Mar-25 | 53,400 | |||||||||||||||||||||||||||
| 1Q25 Total | 9,775 | 1,887 | 105,544 | |||||||||||||||||||||||||||||
| 2Q25 | ||||||||||||||||||||||||||||||||
| Vacant (formerly McKesson Corporation) | The Woodlands, TX | 16,300 | — | May-25 | 204,063 | |||||||||||||||||||||||||||
| 2Q25 Total | 16,300 | — | 204,063 | |||||||||||||||||||||||||||||
| 3Q25 | ||||||||||||||||||||||||||||||||
| JPMorgan Chase | Tampa, FL | 25,180 | 3,053 | Jul-25 | 176,150 | |||||||||||||||||||||||||||
| Acosta | Jacksonville, FL | 10,550 | 1,541 | Aug-25 | 88,062 | |||||||||||||||||||||||||||
Siemens (b) (c) | Oslo, Norway | 45,694 | 4,842 | Sep-25 | 165,905 | |||||||||||||||||||||||||||
| MISO | Eagan, MN | 11,500 | 1,148 | Sep-25 | 60,463 | |||||||||||||||||||||||||||
| 3Q25 Total | 92,924 | 10,584 | 490,580 | |||||||||||||||||||||||||||||
| 4Q25 | ||||||||||||||||||||||||||||||||
| Thermo Fisher Scientific | Morrisville, NC | 33,000 | 4,063 | Nov-25 | 219,812 | |||||||||||||||||||||||||||
| Securitas | Plymouth, MN | 5,654 | 1,218 | Nov-25 | 182,250 | |||||||||||||||||||||||||||
| JPMorgan Chase | Tampa, FL | 13,650 | 1,934 | Dec-25 | 135,733 | |||||||||||||||||||||||||||
| Veritas | Roseville, MN | 14,625 | 2,255 | Dec-25 | 136,125 | |||||||||||||||||||||||||||
| Vacant (formerly Master Lock) | Oak Creek, WI | 2,576 | — | Dec-25 | 120,883 | |||||||||||||||||||||||||||
| Pioneer Credit Recovery | Moorestown, NJ | 6,069 | 931 | Dec-25 | 65,567 | |||||||||||||||||||||||||||
| JPMorgan Chase | Fort Worth, TX | 33,000 | 4,850 | Dec-25 | 386,154 | |||||||||||||||||||||||||||
| Northrop Grumman | Plymouth, MN | 25,000 | 2,679 | Dec-25 | 191,336 | |||||||||||||||||||||||||||
| 4Q25 Total | 133,574 | 17,930 | 1,437,860 | |||||||||||||||||||||||||||||
| Total 2025 Dispositions | 252,573 | 30,401 | 2,238,047 | |||||||||||||||||||||||||||||
| 1Q26 | ||||||||||||||||||||||||||||||||
| Venice, CA | 39,600 | 3,108 | Jan-26 | 67,681 | ||||||||||||||||||||||||||||
| KBR | Houston, TX | 66,000 | 21,300 | Jan-26 | 1,064,788 | |||||||||||||||||||||||||||
| ICF | Martinsville, VA | 3,880 | 1,830 | Feb-26 | 93,333 | |||||||||||||||||||||||||||
| S&ME | Raleigh, NC | 8,743 | 545 | Feb-26 | 31,120 | |||||||||||||||||||||||||||
| Vacant (formerly Bankers Financial) | St. Petersburg, FL | 22,500 | — | Feb-26 | 167,581 | |||||||||||||||||||||||||||
| North American Lighting | Farmington Hills, MI | 12,711 | 1,084 | Mar-26 | 75,286 | |||||||||||||||||||||||||||
| 1Q26 Total | 153,434 | 27,867 | 1,499,789 | |||||||||||||||||||||||||||||
| Total 2026 Dispositions | 153,434 | 27,867 | 1,499,789 | |||||||||||||||||||||||||||||
| Total Dispositions | $ | 812,505 | $ | 98,109 | 6,809,776 | |||||||||||||||||||||||||||
________
(a)ABR is pro forma for any agreed to and signed future rent restructurings.
(b)Amount reflects the applicable exchange rate on the date of the transaction.
(c)We transferred ownership of these properties and the related non-recourse mortgage loans to the respective mortgage lender or buyer (as applicable). Gross proceeds from these dispositions represent the mortgage principal outstanding on the respective dates of transfer.
Net Lease Office Properties | 8 | ||||||||
Net Lease Office Properties
First Quarter 2026
| Capital Expenditures and Leasing Activity | |||||
Capital Expenditures
In thousands. For the three months ended March 31, 2026.
Tenant Improvements and Leasing Costs (none during the first quarter of 2026) | |||||
| Maintenance Capital Expenditures (Tenant Listed) | |||||
| North American Lighting | $ | 570 | |||
| KBR | 74 | ||||
| 644 | |||||
| Total: Tenant Improvements and Leasing Costs, and Maintenance Capital Expenditures | $ | 644 | |||
Leasing Activity
Note: There was no leasing activity during the first quarter of 2026.
Net Lease Office Properties | 9 | ||||||||
Net Lease Office Properties
First Quarter 2026
| Tenant List | |||||
Dollars in thousands. Pro rata. As of March 31, 2026.
| Tenant | State / Country | ABR | ABR % | Square Footage | Number of Properties | Weighted-Average Lease Term (Years) | ||||||||||||||||||||||||||||||||
| Iowa Board of Regents | Iowa | $ | 4,056 | 15.7 | % | 191,700 | 1 | 4.6 | ||||||||||||||||||||||||||||||
| Omnicom | California | 3,961 | 15.4 | % | 120,000 | 1 | 2.5 | |||||||||||||||||||||||||||||||
| RRD | Illinois | 3,461 | 13.4 | % | 167,215 | 1 | 1.5 | |||||||||||||||||||||||||||||||
| Intuit | Texas | 2,577 | 10.0 | % | 166,033 | 1 | 0.2 | |||||||||||||||||||||||||||||||
| Grande Communications | Texas | 2,407 | 9.4 | % | 134,009 | 5 | 2.4 | |||||||||||||||||||||||||||||||
| Cenlar FSB | Pennsylvania | 2,158 | 8.4 | % | 105,584 | 1 | 2.3 | |||||||||||||||||||||||||||||||
| iHeart Communications | Texas | 2,091 | 8.1 | % | 120,147 | 1 | 8.8 | |||||||||||||||||||||||||||||||
| Arbella Insurance | Massachusetts | 1,850 | 7.2 | % | 132,160 | 1 | 1.2 | |||||||||||||||||||||||||||||||
| Safelite | New Mexico | 1,555 | 6.0 | % | 94,649 | 1 | 3.2 | |||||||||||||||||||||||||||||||
Arcfield (a) | Pennsylvania | 1,000 | 3.9 | % | 88,578 | 1 | 0.0 | |||||||||||||||||||||||||||||||
| APCO | Georgia | 647 | 2.5 | % | 50,600 | 1 | 4.9 | |||||||||||||||||||||||||||||||
Total (b) | $ | 25,763 | 100.0 | % | 1,370,675 | 15 | 2.9 | |||||||||||||||||||||||||||||||
________
(a)This property is vacant as of the date of this filing.
(b)See the Disclosures Regarding Non-GAAP and Other Metrics section in the Appendix for a description of pro rata.
Net Lease Office Properties | 10 | ||||||||
Net Lease Office Properties
First Quarter 2026
| Lease Expirations | |||||
Dollars in thousands. Pro rata. As of March 31, 2026.
Year of Lease Expiration (a) | Number of Leases Expiring | Number of Tenants with Leases Expiring | ABR | ABR % | Square Footage | Square Footage % | ||||||||||||||||||||||||||||||||
| Remaining 2026 | 2 | 2 | $ | 3,577 | 13.9 | % | 254,611 | 13.6 | % | |||||||||||||||||||||||||||||
| 2027 | 2 | 2 | 5,311 | 20.6 | % | 299,375 | 16.0 | % | ||||||||||||||||||||||||||||||
| 2028 | 4 | 3 | 8,527 | 33.1 | % | 359,593 | 19.2 | % | ||||||||||||||||||||||||||||||
| 2029 | 1 | 1 | 1,555 | 6.0 | % | 94,649 | 5.0 | % | ||||||||||||||||||||||||||||||
| 2030 | 1 | 1 | 4,056 | 15.8 | % | 191,700 | 10.2 | % | ||||||||||||||||||||||||||||||
| 2031 | 1 | 1 | 646 | 2.5 | % | 50,600 | 2.7 | % | ||||||||||||||||||||||||||||||
| 2035 | 1 | 1 | 2,091 | 8.1 | % | 120,147 | 6.4 | % | ||||||||||||||||||||||||||||||
| Vacant | — | — | — | — | % | 504,649 | 26.9 | % | ||||||||||||||||||||||||||||||
Total (b) | 12 | $ | 25,763 | 100.0 | % | 1,875,324 | 100.0 | % | ||||||||||||||||||||||||||||||
________
(a)Assumes tenants do not exercise any renewal options or purchase options.
(b)See the Disclosures Regarding Non-GAAP and Other Metrics section in the Appendix for a description of pro rata.
Net Lease Office Properties | 11 | ||||||||
Net Lease Office Properties
First Quarter 2026
| Property List | |||||
Dollars in thousands. Pro rata. As of March 31, 2026.
| Encumbered Status | |||||||||||||||||||||||||||||||||||
| # | Tenant | Industry | Credit (a) | City | State | Square Footage | ABR | Rent Increase Type | Date of Next Increase | WALT (b) | In-Place Mortgage Debt | ||||||||||||||||||||||||
| 1 | Iowa Board of Regents (c) | Government Related Services | IG | Coralville | Iowa | 191,700 | $4,056 | CPI: 0.0% Floor / No Cap | N/A | 4.6 | $— | ||||||||||||||||||||||||
| 2 | Omnicom | Advertising | IG | Playa Vista | California | 120,000 | $3,961 | None | N/A | 2.5 | $— | ||||||||||||||||||||||||
| 3 | RRD | Commercial Printing | Non-IG | Warrenville | Illinois | 167,215 | $3,461 | Fixed: 2.00% annually | Sep-26 | 1.5 | $— | ||||||||||||||||||||||||
| 4 | Intuit | Internet Software & Services | IG | Plano | Texas | 166,033 | $2,577 | Fixed: 'One-time $2.00/SF in '21 | N/A | 0.2 | $21,900 | ||||||||||||||||||||||||
| 5 | Cenlar FSB | Regional Banks | Non-IG | Yardley | Pennsylvania | 105,584 | $2,158 | Fixed: 2.50% annually | Jan-27 | 2.3 | $— | ||||||||||||||||||||||||
| 6 | iHeart Communications | Broadcasting | Non-IG | San Antonio | Texas | 120,147 | $2,091 | Fixed: 2.00% annually | Feb-27 | 8.8 | $— | ||||||||||||||||||||||||
| 7 | Arbella Insurance | Property & Casualty Insurance | IG | Quincy | Massachusetts | 132,160 | $1,850 | Fixed: 'One-time $1.00/SF in '22 | N/A | 1.2 | $— | ||||||||||||||||||||||||
| 8 | Safelite | Specialized Consumer Services | Non-IG | Rio Rancho | New Mexico | 94,649 | $1,555 | Fixed: 2.00% annually | Jan-27 | 3.2 | $— | ||||||||||||||||||||||||
| 9 | Grande Communications | Cable & Satellite | Non-IG | San Marcos | Texas | 47,000 | $1,101 | CPI: 0.0% Floor / 3.0% Cap | Aug-26 | 2.4 | $— | ||||||||||||||||||||||||
| 10 | Arcfield (d) | Aerospace & Defense | Non-IG | King of Prussia | Pennsylvania | 88,578 | $1,000 | Fixed: One-time 17.50% in '23 | N/A | 0.0 | $— | ||||||||||||||||||||||||
| 11 | APCO | Property & Casualty Insurance | Non-IG | Norcross | Georgia | 50,600 | $647 | Fixed: 2.50% annually | Mar-27 | 4.9 | $— | ||||||||||||||||||||||||
| 12 | Grande Communications | Cable & Satellite | Non-IG | Waco | Texas | 30,699 | $484 | CPI: 0.0% Floor / 3.0% Cap | Aug-26 | 2.4 | $— | ||||||||||||||||||||||||
| 13 | Grande Communications | Cable & Satellite | Non-IG | Corpus Christi | Texas | 20,717 | $363 | CPI: 0.0% Floor / 3.0% Cap | Aug-26 | 2.4 | $— | ||||||||||||||||||||||||
| 14 | Grande Communications | Cable & Satellite | Non-IG | Odessa | Texas | 21,193 | $242 | CPI: 0.0% Floor / 3.0% Cap | Aug-26 | 2.4 | $— | ||||||||||||||||||||||||
| 15 | Grande Communications | Cable & Satellite | Non-IG | San Marcos | Texas | 14,400 | $217 | CPI: 0.0% Floor / 3.0% Cap | Aug-26 | 2.4 | $— | ||||||||||||||||||||||||
| 16 | Vacant (formerly BCBSM) (d) | N/A | N/A | Eagan | Minnesota | 442,542 | $0 | N/A | N/A | 0.0 | $— | ||||||||||||||||||||||||
| 17 | Vacant (formerly undisclosed) (d) | N/A | N/A | Houston | Texas | 49,821 | $0 | N/A | N/A | 0.0 | $— | ||||||||||||||||||||||||
| 18 | Vacant (formerly BCBSM) (d) | N/A | N/A | Eagan | Minnesota | 12,286 | $0 | N/A | N/A | 0.0 | $— | ||||||||||||||||||||||||
Total (e) | 1,875,324 | $25,763 | 2.9 | $21,900 | |||||||||||||||||||||||||||||||
________
(a)“IG” refers to investment grade rated tenants.
(b)Assumes parties do not exercise any renewal or purchase options pursuant to their applicable leases.
(c)We own a 90% controlling interest in this consolidated property.
(d)Denotes property that is vacant as of the date of this filing.
(e)See the Disclosures Regarding Non-GAAP and Other Metrics section in the Appendix for a description of pro rata.
Net Lease Office Properties | 12 | ||||||||
Net Lease Office Properties
Appendix
First Quarter 2026
Net Lease Office Properties | 13 | ||||||||
Net Lease Office Properties
First Quarter 2026
| Normalized Pro Rata Cash NOI | |||||
In thousands.
Three Months Ended March 31, 2026 | |||||
| Consolidated Lease Revenues and Other | |||||
| Total lease revenues – as reported | $ | 7,341 | |||
| Income from finance leases – as reported | 637 | ||||
| Less: Consolidated Reimbursable and Non-Reimbursable Property Expenses | |||||
| Non-reimbursable property expenses – as reported | 703 | ||||
| Reimbursable property expenses – as reported | 595 | ||||
| 6,680 | |||||
| Adjustments for Pro Rata Ownership of Real Estate Joint Ventures: | |||||
| Less: Pro rata share of NOI attributable to noncontrolling interests | (133) | ||||
| (133) | |||||
| 6,547 | |||||
| Adjustments for Pro Rata Non-Cash Items: | |||||
| Add: Above- and below-market rent intangible lease amortization | 332 | ||||
| Add: Straight-line and other leasing and financing adjustments | 163 | ||||
| Add: Other non-cash items | 39 | ||||
| 534 | |||||
Pro Rata Cash NOI (a) | 7,081 | ||||
Adjustment to normalize for intra-period dispositions (b) | (1,087) | ||||
Normalized Pro Rata Cash NOI (a) | $ | 5,994 | |||
Net Lease Office Properties | 14 | ||||||||
Net Lease Office Properties
First Quarter 2026
The following table presents a reconciliation from Net income attributable to NLOP to Normalized pro rata cash NOI:
Three Months Ended March 31, 2026 | |||||
| Net Income Attributable to NLOP | |||||
| Net income attributable to NLOP – as reported | $ | 24,998 | |||
| Adjustments for Consolidated Operating Expenses | |||||
| Add: Operating expenses – as reported | 5,992 | ||||
| Less: Property expenses, excluding reimbursable tenant costs – as reported | (703) | ||||
| 5,289 | |||||
| Adjustments for Other Consolidated Revenues and Expenses: | |||||
| Less: Other lease-related income – as reported | (1,047) | ||||
| Less: Reimbursable property expenses – as reported | (595) | ||||
| Less: Other income and (expenses) – as reported | (22,025) | ||||
| Add: Provision for income taxes – as reported | 17 | ||||
| (23,650) | |||||
| Other Adjustments: | |||||
Adjustment to normalize for intra-period dispositions (b) | (1,087) | ||||
| Add: Above- and below-market rent intangible lease amortization | 332 | ||||
| Add: Straight-line and other leasing and financing adjustments | 163 | ||||
| Add: Property expenses, excluding reimbursable tenant costs, non-cash | 39 | ||||
| Less: Adjustments for pro rata ownership | (90) | ||||
| (643) | |||||
Normalized Pro Rata Cash NOI (a) | $ | 5,994 | |||
________
(a)Pro rata cash NOI and normalized pro rata cash NOI are non-GAAP measures. See the Disclosures Regarding Non-GAAP and Other Metrics section that follows for a description of our non-GAAP measures and for details on how pro rata cash NOI and normalized pro rata cash NOI are calculated.
(b)For properties disposed of during the period, the adjustment eliminates our pro rata share of cash NOI for the period.
Net Lease Office Properties | 15 | ||||||||
Net Lease Office Properties
First Quarter 2026
| Disclosures Regarding Non-GAAP and Other Metrics | |||||
Non-GAAP Financial Disclosures
FFO and AFFO
Due to certain unique operating characteristics of real estate companies, as discussed below, NAREIT, an industry trade group, has promulgated a non-GAAP measure known as FFO, which we believe to be an appropriate supplemental measure, when used in addition to and in conjunction with results presented in accordance with GAAP, to reflect the operating performance of a REIT. The use of FFO is recommended by the REIT industry as a supplemental non-GAAP measure. FFO is not equivalent to, nor a substitute for, net income or loss as determined under GAAP.
We define FFO, a non-GAAP measure, consistent with the standards established by the White Paper on FFO approved by the Board of Governors of NAREIT, as restated in December 2018. The White Paper defines FFO as net income or loss computed in accordance with GAAP, excluding gains or losses from the sale of certain real estate, impairment charges on real estate or other assets incidental to the company’s main business, gains or losses on changes in control of interests in real estate, and depreciation and amortization from real estate assets; and after adjustments for unconsolidated partnerships and jointly owned investments. Adjustments for unconsolidated partnerships and jointly owned investments are calculated to reflect FFO on the same basis.
We also modify the NAREIT computation of FFO to adjust GAAP net income for certain non-cash charges, such as amortization of real estate-related intangibles, deferred income tax benefits and expenses, straight-line rent and related reserves, other non-cash rent adjustments, non-cash allowance for credit losses on finance leases, stock-based compensation, non-cash environmental accretion expense, amortization of discounts and premiums on debt, and amortization of deferred financing costs. Our assessment of our operations is focused on long-term sustainability and not on such non-cash items, which may cause short-term fluctuations in net income but have no impact on cash flows. Additionally, we exclude non-core income and expenses, such as gains or losses from extinguishment of debt, merger and acquisition expenses, and spin-off expenses. We also exclude realized and unrealized gains/losses on foreign currency exchange rate movements, which are not considered fundamental attributes of our business plan and do not affect our overall long-term operating performance. We refer to our modified definition of FFO as AFFO. We exclude these items from GAAP net income to arrive at AFFO because they are not the primary drivers in our decision-making process and excluding these items provides investors with a view of our portfolio performance over time and makes it more comparable to other REITs. AFFO also reflects adjustments for jointly owned investments. We use AFFO as one measure of our operating performance when we formulate corporate goals and evaluate the effectiveness of our strategies.
We believe that AFFO is a useful supplemental measure for investors to consider because we believe it will help them better assess the sustainability of our operating performance without the potentially distorting impact of these short-term fluctuations. However, there are limits on the usefulness of AFFO to investors. For example, impairment charges and unrealized foreign currency losses that we exclude may become actual realized losses upon the ultimate disposition of the properties in the form of lower cash proceeds or other considerations. We use our FFO and AFFO measures as supplemental financial measures of operating performance. We do not use our FFO and AFFO measures as, nor should they be considered to be, alternatives to net income computed under GAAP, alternatives to net cash provided by operating activities computed under GAAP, or indicators of our ability to fund our cash needs.
Pro Rata Cash NOI
Cash net operating income (“cash NOI”) is a non-GAAP financial measure that is intended to reflect the performance of our properties. We define cash NOI as cash rents from our properties less non-reimbursable property expenses. Cash NOI excludes amortization of intangibles and straight-line rent adjustments that are included in GAAP lease revenues. We present cash NOI on a pro rata basis (“pro rata cash NOI”) to account for our share of income related to noncontrolling interests. We believe that pro rata cash NOI is a helpful measure that both investors and management can use to evaluate the financial performance of our properties and it allows for comparison of our operating performance between periods and to other REITs. Pro rata cash NOI should not be considered as an alternative to net income as an indication of our financial performance or to cash flows as a measure of liquidity or our ability to fund all needs. The method by which we calculate and present cash NOI and/or pro rata cash NOI may not be directly comparable to the way other REITs present such metrics.
Normalized Pro Rata Cash NOI
Normalized pro rata cash NOI is pro rata cash NOI as defined above adjusted primarily to exclude our pro rata share of cash NOI from properties disposed of during the most recent quarter. We believe this measure provides a helpful representation of our net operating income from our in-place leased properties.
Net Lease Office Properties | 16 | ||||||||
Net Lease Office Properties
First Quarter 2026
Other Metrics
Pro Rata Metrics
This supplemental package contains certain metrics prepared on a pro rata basis. We refer to these metrics as pro rata metrics. We have one investment in which our economic ownership is less than 100%. On a full consolidation basis, we report 100% of the assets, liabilities, revenues and expenses of this investment that is deemed to be under our control, even though our ownership is less than 100%. On a pro rata basis, we generally present our proportionate share, based on our economic ownership of this jointly owned investment, of the assets, liabilities, revenues and expenses of this investment. Multiplying our jointly owned investment’s financial statement line items by our percentage ownership and adding or subtracting those amounts from our totals, as applicable, may not accurately depict the legal and economic implications of holding an ownership interest of less than 100% in our jointly owned investment.
ABR
ABR represents contractual minimum annualized base rent for our properties. If there is a rent abatement, we annualize the first monthly contractual base rent following the free rent period. ABR is presented on a pro rata basis.
Net Lease Office Properties | 17 | ||||||||