Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)

MANAGEMENT'S DISCUSSION AND ANALYSIS OFFINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussions contain forward-looking statements that involve numerous risks and uncertainties. Our actual results could differ materially from those discussed in the forward-looking statements as a result of these risks and uncertainties, including those set forth in this report under "Forward-Looking Statements" and under "Risk Factors." You should read the following discussion in conjunction with our consolidated financial statements and notes appearing elsewhere in this filing. Past performance is not a guarantee of future results. Factors that could cause actual results to differ materially from those reflected in the forward-looking statements include, but are not limited to, those discussed in "Risk Factors" and elsewhere in this report and the risks discussed in our other filings with the SEC. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's analysis, judgment, belief or expectation only as of the date hereof. Although we believe that our expectations are based on reasonable assumptions, we can give no assurance that our expectations will materialize. We undertake no obligation to

publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof, unless otherwise required by law.

Executive Summary

We are a fully integrated, self-administered and self-managed REIT, engaged in the acquisition, ownership, and management of commercial real estate. As of December 31, 2025, we owned 51 properties, which are predominately industrial/warehouse locations leased on a net lease basis. The Company typically evaluates a tenant's credit quality by reviewing its financial information, rating agency reports and credit reports, when available, and other sources of information that can be useful in determining a tenant's creditworthiness and financial condition.

On January 17, 2013, we acquired all outstanding ownership interests of a portfolio consisting of 25 commercial properties located in New York, New Jersey, and Connecticut in exchange for 33.29% of the outstanding limited partnership interest in the Operating Partnership. The outstanding limited partnership interest in the Operating Partnership was increased to 33.78% due to post-closing adjustments. The subsequent redemption of certain shares of GTJ REIT common stock and purchases of a portion of the outstanding limited partnership interest have resulted in a net decrease in the outstanding limited partnership interest in the Operating Partnership to 16.92% as of December 31, 2025. As a result of this acquisition, the Company's then existing 7 properties, the subsequent acquisition of 22 properties and the sale of 3 properties from 2014 through 2025, the Company beneficially owns an 83.08% interest in a total of 51 properties consisting of approximately 6.7 million square feet of primarily industrial properties on approximately 448 acres of land in New York, New Jersey, Connecticut, Delaware, North Carolina and Florida as of December 31, 2025.

We continue to seek opportunities to acquire properties. We will seek to acquire properties within geographic areas that will satisfy our primary investment objectives of providing our stockholders with stable cash flow, preservation of capital and growth of income and principal without taking undue risk. Because a significant factor in the valuation of income-producing property is the potential for future income, we anticipate that the majority of properties that we will acquire will have both the potential for growth in value and provide for cash distributions to stockholders.

Critical Accounting Estimates

Management's discussion and analysis of financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP"). The preparation of financial statements in conformity with GAAP requires the use of estimates and assumptions that could affect the reported amounts in our consolidated financial statements. Actual results could differ from these estimates. A summary of our significant accounting policies is presented in Note 2 of the "Notes to Consolidated Financial Statements" set forth in Item 8 hereof. Set forth below is a summary of the accounting policies that management believes are critical to the preparation of the consolidated financial statements included in this report. Certain of the accounting policies used in the preparation of these consolidated financial statements are particularly important for an understanding of the financial position and results of operations presented in the historical consolidated financial statements included in this report and require the application of significant judgment by management and, as a result, are subject to a degree of uncertainty.

Revenue Recognition:

We recognize our rental revenue on a straight-line basis over the term of the lease unless another systematic and rational basis is more representative of the time pattern in which the use benefit is derived from the leased property. Rental revenue related to tenants where the collectability of lease payments is not deemed probable will be recorded on a cash basis and the write-off of the entire tenant receivable, including straight-line rent receivable, is presented as a reduction of revenue rather than as an operating expense on the statement of operations. In those instances in which we fund tenant improvements and the improvements are deemed to be owned by us, revenue recognition will commence when the improvements are substantially completed and possession or control of the space is turned over to the tenant. When we determine that the tenant allowances are lease incentives, we commence revenue recognition when possession or control of the space is turned over to the tenant for tenant work to begin. The properties are being leased to tenants under operating leases.

Property operating expense recoveries from tenants of common area maintenance, real estate taxes, insurance, and other recoverable costs are recognized in rental income in the period the related expenses are incurred. Property operating expenses paid directly by tenants to third parties are excluded from rental income.

Real Estate:

Real estate assets are stated at cost, less accumulated depreciation and amortization. All costs related to the improvement or replacements of real estate properties are capitalized. Additions, renovations and improvements that enhance and/or extend the useful life of a property are also capitalized. Expenditures for ordinary maintenance, repairs and improvements that do not materially prolong the normal useful life of an asset are charged to operations as incurred.

The Company capitalizes all direct costs of real estate under development until the end of the development period. In addition, the Company capitalizes the indirect cost of insurance and real estate taxes allocable to real estate under development during the development period. The Company also capitalizes interest using the avoided cost method for real estate under development during the development period. The Company will cease the capitalization of these costs when development activities are substantially completed and the property is available for occupancy by tenants, but no later than one year from the completion of major construction activity at which time the property is placed in service and depreciation commences. If the Company suspends substantially all activities related to development of a qualifying asset, the Company will cease capitalization of these costs until activities are resumed.

Upon the acquisition of real estate properties, the relative fair value of the real estate purchased is allocated to the acquired tangible assets (generally consisting of land, buildings and building improvements, and tenant improvements) and identified intangible assets and liabilities (generally consisting of above-market and below-market leases and the origination value of in-place leases) in accordance with GAAP. We utilize methods similar to those used by independent appraisers in estimating the fair value of acquired assets and liabilities. The fair value of the tangible assets of an acquired property considers the value of the property "as-if-vacant." In allocating the purchase price to identified intangible assets and liabilities of an acquired property, the value of above-market and below-market leases is estimated based on the differences between contractual rentals and the estimated market rents over the applicable lease term discounted back to the date of acquisition utilizing a discount rate adjusted for the credit risk associated with the respective tenants. Fixed-rate renewal options have been included in the calculation of the fair value of acquired leases where applicable. The value of in-place leases is based on the Company's evaluation of the specific characteristics of each tenant's lease. The aggregate value of in-place leases is measured based upon factors which include the avoided costs associated with lack of revenue over a market-oriented lease-up period, current market conditions, avoided leasing commissions, and other avoided costs common in similar leasing transactions.

Mortgage notes payable assumed in connection with acquisitions are recorded at their fair value using current market interest rates for similar debt at the time of acquisitions.

The capitalized above-market lease values are amortized as a reduction of rental revenue over the remaining term of the respective leases and the capitalized below-market lease values are amortized as an increase to rental revenue over the remaining term of the respective leases. The value of in-place leases is based on our evaluation of the specific characteristics of each tenant's lease. Factors considered include estimates of carrying costs during expected lease-up periods, current market conditions, and costs to execute similar leases. The value of in-place leases is amortized over the remaining term of the respective leases. If a tenant vacates its space prior to its contractual expiration date, any unamortized balance of the related intangible assets or liabilities is recorded as income or expense in the period.

Real Estate Impairment:

Management reviews each real estate investment for impairment whenever events or circumstances indicate that the carrying value of a real estate investment may not be recoverable. The review of recoverability is based on an estimate of the undiscounted future cash flows that are expected to result from the real estate investment's use and eventual disposition. Such cash flow analyses consider assumptions such as expected future market rents, future revenue, market capitalization rates and holding periods, as well as the effects of leasing demand, competition and other factors. If an impairment event exists due to the projected inability to recover the carrying value of a real estate investment, an impairment loss is recorded to the extent that the carrying value exceeds estimated fair value. Management is required to make subjective assessments as to whether there are impairments in the value of its real estate holdings. These assessments could have a direct impact on net income, because an impairment loss is recognized in the period that the assessment is made. Management has determined that there were no impairment charges relating to its remaining long-lived assets during the years ended December 31, 2025 and December 31, 2024, respectively.

Income Taxes:

We are organized and conduct our operations to qualify as a REIT for Federal income tax purposes. Accordingly, we will generally not be subject to Federal income taxation on that portion of our distributable income that qualifies as REIT taxable income,

to the extent that we distribute at least 90% of our REIT taxable income to our stockholders and comply with certain other requirements as defined under the Code.

We also participate in certain activities conducted by entities which elected to be treated as taxable subsidiaries under the Code. As such we are subject to federal, state and local taxes on the income from these activities.

For our taxable subsidiaries, we account for income taxes under the asset and liability method, as required by the provisions of Accounting Standards Codification ("ASC") 740-10-30. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. We provide a valuation allowance for deferred tax assets for which we do not consider realization of such assets to be more likely than not.

Stock-Based Compensation:

We account for stock-based compensation in accordance with ASC 718, which establishes accounting for stock-based awards exchanged for employee services. Under the provisions of ASC 718, share-based compensation cost is measured at the grant date, based on the fair value of the award, and the expense is recognized in earnings at the grant date (for the portion that vests immediately) or ratably over the respective vesting periods. The impact of the forfeiture of stock-based awards is recognized as forfeitures occur.

Summary of Operations

Results of Operations:

Year Ended December 31, 2025 as compared with Year Ended December 31, 2024

The following table sets forth our results of operations for the years indicated (in thousands):

Revenues

Total revenues increased $5.3 million, or 7%, to approximately $84.1 million for the year ended December 31, 2025 from $78.8 million for the year ended December 31, 2024. This increase is primarily attributable to increased rental income attributable to higher rental rates in 2025 compared to 2024, the Company's acquisition of a property in Haines City, Florida in the fourth quarter of 2025, the Company's acquisition of a property in Charlotte, North Carolina in the first quarter of 2025 and the acquisition of a property in Fort Myers, Florida in the fourth quarter of 2024, partially offset by the Company's sale of a property in Piscataway, New Jersey in the second quarter of 2025.

Operating Expenses

Operating expenses decreased $0.8 million, or 2%, to $45.0 million for the year ended December 31, 2025 from $45.8 million for the year ended December 31, 2024 primarily due to decreased general and administrative expenses, partially offset by increased property operating expenses and depreciation and amortization expense. The decrease in general and administrative expenses is primarily attributable to lower executive compensation in 2025 compared to 2024. The increase in property operating expenses is primarily attributable to increased insurance expense, utility expense and repair and maintenance expenses in 2025 compared to 2024, and property operating expenses attributable to the Company's property in Fort Myers, Florida acquired in the fourth quarter of 2024, partially offset by the property operating expenses attributable to the sale of a property in Piscataway, New Jersey in the second quarter of 2025. The increase in depreciation and amortization expense is primarily attributable to the Company's property in Fort Myers, Florida, which was acquired in the fourth quarter of 2024, partially offset by the sale of a property in Piscataway, New Jersey in the second quarter of 2025.

Gain on Sale of Real Estate

Gain on sale of real estate is attributable to the sale of a property located in Piscataway, New Jersey for $16.0 million on April 23, 2025.

Interest Expense

Interest expense increased $0.8 million, or 3%, to $27.4 million for the year ended December 31, 2025 from $26.6 million for the year ended December 31, 2024. The increase is primarily as a result of various debt refinancings in 2025 and additional borrowings from the Company's credit facility with Key Bank in the fourth quarter of 2025.

Other Income, Net

Other income consists primarily of interest income. The decrease of $1.3 million in 2025 compared to 2024 is primarily due to lower interest rates in 2025 compared to 2024.

Liquidity and Capital Resources

We derive substantially all of our revenues from rents received from tenants under existing leases on each of our properties. These revenues include fixed base rents and recoveries of certain property operating expenses that we have incurred and that we pass through to the individual tenants.

Our primary cash disbursements consist of property operating expenses (which include real estate taxes, repairs and maintenance, insurance, and utilities), general and administrative expenses (which include compensation costs, office expenses, professional fees and other administrative expenses), leasing and acquisition costs (which include third-party costs paid to brokers and consultants), and principal payments and interest expense on our mortgage loans.

Our sources of liquidity and capital include cash flow from operations, cash and cash equivalents, borrowings under our revolving credit facility, refinancing existing mortgage loans, obtaining loans secured by our unencumbered properties, and property sales.

On December 2, 2015, the Company (through its Operating Partnership) entered into the Key Bank Credit Agreement with Key Bank for a $50.0 million revolving credit facility with an initial term of two years, with a one-year extension option, subject to certain other customary conditions (the "Key Bank Credit Agreement"). The Company, through the extension option and various amendments to the Key Bank Credit Agreement, extended the maturity date of the revolving credit facility to June 30, 2022.

On October 22, 2021, the Operating Partnership entered into a First Amended and Restated Credit Agreement with Key Bank and the other lenders parties thereto (the "First Amended and Restated Credit Agreement"). The First Amended and Restated Credit Agreement provided for a $60 million senior secured credit facility consisting of (i) a $10 million revolving line of credit facility, with an initial term of three years and two one-year extension options and (ii) a $50 million term loan facility, with an initial term of four years and a one-year extension option, which was funded in a single advance on October 22, 2021. Up to $10 million of the total commitments under the credit facility will be available for the issuance of letters of credit and swing line loans.

So long as no default or event of default has occurred and is continuing, the Operating Partnership shall have the right, from time to time, to request an increase in the size of the term loan, request an additional incremental term loan facility, or increase

commitments under the revolving line of credit facility, collectively in an aggregate amount that would not cause the Credit Facility to exceed $125 million.

On August 5, 2022, the Operating Partnership entered into a First Amendment (the "First Amendment") to the First Amended and Restated Credit Agreement with Key Bank, as agent and lender, First Financial Bank, as lender, and the Company and certain direct and indirect subsidiaries of the Company as guarantors. The First Amendment amended the First Amended and Restated Credit Agreement to, among other things, (i) increase the amount available under the revolving line of credit facility from $10 million to $40 million, (ii) extend the maturity date of the revolving line of credit facility from October 22, 2024 to August 5, 2025, (iii) extend the maturity date of the term loan facility from October 22, 2025 to August 5, 2026, (iv) replace the interest rate option based on LIBOR with interest rate options based on the Secured Overnight Financing Rate ("SOFR"), including term SOFR and daily simple SOFR, and (v) add certain subsidiaries of the Operating Partnership as guarantors, and mortgages encumbering properties owned by such subsidiaries as collateral.

On August 5, 2022, certain subsidiaries of the Operating Partnership refinanced the AIG Loan (as defined below) on certain properties by entering into new loan agreements (collectively the "New AIG Loan Agreements") with AIG Asset Management (U.S.), LLC, as administrative agent, and the other lenders from time to time party thereto. The New AIG Loan Agreements provide for secured loans in the aggregate principal amount of $225.0 million.

In addition, on March 15, 2024, certain subsidiaries of the Operating Partnership refinanced the outstanding debt of certain properties by entering into a new loan agreement (the "Loan Agreement") with American General Life Insurance Company. The Loan Agreement provides for a secured loan in the aggregate principal amount of $125.0 million. The Company used a portion of the proceeds to pay off $90.0 million of indebtedness that was outstanding under its senior secured credit facility with Key Bank, consisting of $40.0 million under the revolving line of credit facility and $50.0 million under the term loan facility.

On July 25, 2025, the Company exercised its option to extend the maturity date of the revolving line of credit facility for one year to August 5, 2026.

On December 2, 2025, the Operating Partnership entered into a letter agreement (the "Letter Agreement") supplementing the First Amended and Restated Credit Agreement. The Letter Agreement and related documents establish a $20 million term loan facility under the First Amended and Restated Credit Agreement with an initial maturity date of August 5, 2026, and a one-year extension option, subject to certain other customary conditions (the "Term Loan"). The terms and conditions of the Term Loan are consistent with the terms and conditions of the Company's prior term loan with KeyBank that was paid in full on March 15, 2024. The Term Loan bears interest at the same rate as set forth in the First Amended and Restated Credit Agreement for the Company's revolving line of credit facility. In connection with the Term Loan, the Operating Partnership paid a fee equal to 25 basis points on the $20 million principal amount under the Term Loan.

As supplemented by the Letter Agreement, the First Amended and Restated Credit Agreement provides for a $60 million senior secured credit facility, consisting of (i) a $40 million revolving line of credit facility and (ii) the $20 million Term Loan.

Our available liquidity at December 31, 2025 was approximately $33.9 million, consisting of cash and cash equivalents and our available borrowing capacity under our revolving line of credit facility. As of December 31, 2025, the Company had $34.9 million outstanding borrowings under its revolving line of credit facility with Key Bank.

We expect to meet substantially all of our operating cash requirements, dividend payments required to maintain our REIT status and an estimated $2.6 million of 2026 principal mortgage debt amortization from cash flows from operations. To the extent that cash flow from operations is not adequate to cover all of our operating needs, we will be required to use our available cash and cash equivalents to satisfy operating requirements. Additionally, in the normal course of our business, we may sell properties or interests in properties when we determine that it is in our best interests, which also generates additional liquidity. As it relates to maturing debt, we may not have sufficient liquidity on hand to repay such indebtedness, and, therefore, we expect to refinance at least a portion of this indebtedness or select other alternatives based upon market conditions as these loans mature; however, there can be no assurance that we will be able to obtain financing at acceptable terms.

Net Cash Flows

Year Ended December 31, 2025 vs. Year Ended December 31, 2024

Operating Activities

Net cash provided by operating activities was $28.5 million for the year ended December 31, 2025 compared to $26.3 million for the year ended December 31, 2024. Cash provided by operating activities included (i) income before depreciation,

amortization, stock compensation, gain on sale of real estate, rental income in excess of amounts billed, non-cash lease expense and income from equity investment in unconsolidated affiliate of $29.6 million, partially offset by (ii) an increase in other assets of approximately $0.5 million primarily due to increased deferred leasing costs, (iii) a decrease in accounts payable and accrued expenses of $0.3 million and (iv) a decrease in other liabilities of $0.3 million.

Net cash provided by operating activities was $26.3 million for the year ended December 31, 2024. Cash provided by operating activities included (i) income before depreciation, amortization, stock compensation, rental income in excess of amounts billed, non-cash lease expense and income from equity investment in unconsolidated affiliate of $26.5 million, (ii) an increase in other liabilities of $1.2 million primarily due to increased prepaid rent, (iii) an increase in accounts payable and accrued expenses of $0.4 million and (iv) distributions from unconsolidated affiliate of $0.2 million, partially offset by (v) an increase in other assets of $2.0 million primarily due to increased deferred leasing costs.

Investing Activities

Net cash used in investing activities was $29.0 million for the year ended December 31, 2025. Cash used in investing activities resulted from (i) the acquisition of two properties for $40.1 million and (ii) property improvements of approximately $4.7 million, partially offset by (iii) net proceeds from the disposition of one property of $15.8 million.

Net cash used in investing activities was $37.9 million for the year ended December 31, 2024. Cash used in investing activities resulted from (i) the acquisition of one property for $35.6 million, (ii) property improvements of $2.0 million and (iii) deposits for one property acquisition of $0.4 million, partially offset by (iv) return of capital from unconsolidated affiliate of $0.1 million.

Financing Activities

Net cash provided by financing activities was $0.3 million for the year ended December 31, 2025. Cash provided by financing activities resulted from (i) proceeds of mortgage loan payable of $25.0 million with John Hancock Life Insurance Company, (ii) proceeds of term loan payable with Key Bank of $20.0 million and (iii) proceeds from the Company's revolving line of credit facility with Key Bank, net of repayments, of $16.5 million, partially offset by (iv) the repayment of the Company's indebtedness with Allstate Life Insurance Company of $33.6 million, (v) the payment of mortgage principal of $2.8 million, (vi) the payment of the Company's fourth quarter 2024 dividend, 2024 supplemental dividend and 2025 quarterly dividends totaling $17.7 million, (vii) distributions to non-controlling interests of $3.6 million, (viii) repurchases of the Company's common stock of $2.8 million, (ix) financing costs of $0.5 million for mortgage note payable with John Hancock Life Insurance Company and (x) financing costs of $0.2 million to Key Bank for term loan payable and the extension of the Company's credit line facility.

Net cash provided by financing activities was $11.8 million for the year ended December 31, 2024. Cash provided by financing activities resulted from (i) proceeds of mortgage loan payable of $125.0 million with American General Life Insurance Company, partially offset by (ii) the repayment of the Company's outstanding term loan payable of $50.0 million with Key Bank, (iii) the repayment of the Company's mortgage loan payable with People's United Bank of $14.4 million, (iv) the repayment, net of borrowing, of the Company's revolving line of credit facility with Key Bank of $21.6 million, (v) the payment of mortgage principal of approximately $3.0 million, (vi) the payment of the Company's fourth quarter 2023 dividend, 2023 supplemental dividend and 2024 quarterly dividends totaling $14.9 million, (vii) distributions to non-controlling interests of $3.0 million, (viii) repurchases of the Company's common stock of $2.7 million and (ix) financing costs of $3.6 million for mortgage note payable with American General Life Insurance Company.

Non-GAAP Financial Measures

Funds from Operations and Adjusted Funds from Operations

We consider Funds from Operations ("FFO") and Adjusted Funds from Operations ("AFFO"), each of which are non-GAAP measures, to be additional measures of an equity REIT's operating performance. We report FFO in addition to our net income and net cash provided by operating activities. Management has adopted the definition suggested by the National Association of Real Estate Investment Trusts ("NAREIT") and defines FFO to equal net income computed in accordance with GAAP, excluding gains or losses from sales of property, excluding impairment write-downs of depreciated property, plus real estate-related depreciation and amortization. We believe these measurements provide a more complete understanding of our performance when compared year over year and better reflect the impact on our operations from trends in occupancy rates, rental rates, operating costs and general and administrative expenses which may not be immediately apparent from net income.

Management considers FFO a meaningful, additional measure of operating performance because it primarily excludes the assumption that the value of our real estate assets diminishes predictably over time and industry analysts have accepted it as a performance measure. FFO is presented to assist investors in analyzing our performance. It is helpful because it excludes various items included in net income that are not indicative of our operating performance, such as gains or losses from sales of property, impairment write-downs and depreciation and amortization. Management believes AFFO to be a meaningful, additional measure of operating performance because it provides information consistent with the Company's analysis of its operating performance by excluding non-cash income and expense items such as straight-lined rent, amortization of other intangible assets and financing costs, our realized gain from an investment in a limited partnership, write-off of property related to casualty loss and stock compensation expense, which are not indicative of the results of our operating portfolio.

However, FFO and AFFO:

FFO and AFFO as defined by us may not be comparable to similarly titled items reported by other real estate investment trusts due to possible differences in the application of the NAREIT definition used by such REITs.

The following table provides a reconciliation of net income attributable to common stockholders in accordance with GAAP to FFO and AFFO for the years ended December 31, 2025 and 2024 (All amounts are net of noncontrolling interest).

The reconciliation of net income attributable to common stockholders in accordance with GAAP to FFO and AFFO (in thousands):

The Company believes FFO and AFFO to be the most appropriate supplemental disclosure of operating performance for a REIT due to its widespread acceptance and use within the REIT and analyst communities. FFO and AFFO provide a uniform supplemental basis for evaluating the earnings performance of REITs considering the unique capital structure of each REIT.

Acquisitions and Dispositions

Fort Myers, Florida

On December 23, 2024, the Company (through its Operating Partnership) acquired for cash a property located at 9111 Cheetos Circle, Fort Myers, Florida, consisting of approximately 10.5 acres of land and a 104,120 square foot building for $35.0 million, exclusive of closing costs. The property is leased to Frito-Lay (a wholly owned subsidiary of Pepsico) pursuant to a 10-year lease agreement expiring on December 31, 2034.

Charlotte, North Carolina

On January 29, 2025, the Company (through its Operating Partnership) acquired for cash a 5.36 acre lot in Charlotte, North Carolina for $3.9 million, exclusive of closing costs. The property is currently leased to Excel Inc. (d/b/a DHL Supply Chain) pursuant to a lease expiring on December 31, 2027.

Piscataway, New Jersey

On April 23, 2025, the Company (through its Operating Partnership) sold the property located at 25 Corporate Place South, Piscataway, New Jersey for $16.0 million, resulting in an aggregate gain of $7.7 million, net of $0.2 million in closing costs.

Haines City, Florida

On December 2, 2025, the Company (through its Operating Partnership) acquired a property located at 2998 Bannon Island Road, Haines City, Florida. The purchase price was $36.3 million, exclusive of closing costs, and is a 174,000 square foot newly constructed building located in the I-4 corridor of Central Florida. The building is leased to NVR, Inc., a homebuilder with brand names such as Ryan Homes, NVHomes & Heartland Homes. The Company utilized $16.5 million of its line of credit facility with KeyBank in connection with this acquisition.

Cash Payments for Financing

Payment of interest under our mortgage notes payable will consume a portion of our cash flow, reducing taxable income and consequently, the resulting distributions to be made to our stockholders.

Trend in Financial Resources

We expect to receive additional rent payments over time due to scheduled increases in rent set forth in the leases on our real properties. It should be noted, however, that the additional rent payments are expected to result in an approximately equal obligation to make additional distributions to stockholders, and will therefore, not result in a material increase in working capital.

Environmental Matters

As of December 31, 2025, three of the Company's six former bus depot sites received final regulatory closure, satisfying outstanding clean-up obligations related to legacy site contamination issues. Three sites continue with on-going cleanup, monitoring and reporting activities. The Company has determined that there is no accrued liability needed for these on-going activities on the accompanying consolidated balance sheets.

Inflation

Inflation has increased substantially in the United States during the past few years. In response, the Federal Reserve increased interest rates throughout 2023, and, although the Federal Reserve lowered interest rates in September 2024, November 2024, December 2024, September 2025, October 2025 and December 2025, it may raise interest rates in the future. Higher interest rates imposed by the Federal Reserve to address inflation may increase our interest expense on our variable rate borrowings. In addition, increased inflation could have a negative impact on the Company's property operating expenses, as these costs could increase at a rate higher than the Company's rents. Our properties have tenants whose leases include expense reimbursements and other provisions to minimize the effect of inflation. However, rising costs could adversely affect our tenants' businesses, and there is no guarantee our tenants would be able to absorb these expense increases and continue to pay us their portion of property operating expenses and rent.