FrontView REIT, Inc.

DECEMBER 31, 2024 AND 2023

1. BUSINESS DESCRIPTION

All amounts expressed in these consolidated financial statements are in U.S. currency and in thousands, except per unit amounts, number of properties and where indicated.

FrontView REIT, Inc. (the “Company” or “Successor”) 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. Upon the closing of the initial public offering ("IPO") on October 3, 2024, the Company is the sole managing member of the OP. The units not owned by the Company in the OP are referred to as OP Units or non-controlling interests.

FrontView REIT, Inc. 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 December 31, 2024, the Company owned a well-diversified portfolio of 307 properties with direct frontage across 35 U.S. states.

NADG NNN Property Fund LP (the “Predecessor”) was formed on January 6, 2016, to provide investors with the opportunity to invest in a portfolio of high quality, primarily single tenant net leased properties located in the United States (“U.S.”). NADG NNN Operating LP (the “Sub OP”) was the entity through which the Predecessor conducted its business and owned (either directly or through subsidiaries) all of the Predecessor’s properties. The Predecessor had a 72.89% ownership interest in the Sub OP as of December 31, 2023. The remaining ownership was referred to as convertible non-controlling preferred interests (“Preferred Unit Holders”).

On October 20, 2023, the Predecessor purchased the remaining 50% interest in NADG NNN 50/50 LP (the “Joint Venture”) for a purchase price of $26,910. The acquisition was accounted for as an asset acquisition and resulted in a gain of $12,988, which is recorded in gain on acquisition of equity method investment in the year ended December 31, 2023 consolidated statements of income (loss).

Prior to October 2, 2024, the Predecessor was externally managed by North American Realty Services LLLP (“NARS”) and affiliates. NARS and the Predecessor were related parties (see Note 13) and the Company’s Co-CEOs and COO were employees of NARS.

Formation Transactions

On October 2, 2024, the Predecessor effected a 250-for-one split ("Stock Split") withno fractional units being issued that was approved by the Predecessor's general partner and executive committee, on its then outstanding 30 common units. After adjusting for the Stock Split, the Predecessor had 7,520 OP Units.

On October 2, 2024, the Company, through a series of REIT contribution transactions and completion of the internalization of the external management functions (“Internalization”), created an umbrella partnership real estate investment trust (“UPREIT”) structure with a publicly-traded REIT that is internally managed and owns all of its assets and conducts all of its business through the OP. Pursuant to the contribution agreements, (1)Common Unit Holders of the Predecessor exchanged their common units (or interest in the entity that owns the common units) for OP Units or Common Stock of the Company on aone-for-one basisand (2) existing Preferred Unit Holders exchanged their interests in the Predecessor’s Sub OP (or interest in the entity that owns the preferred interests in the Predecessor’s Sub OP) for OP Units.

2. ACCOUNTING POLICIES FOR FINANCIAL STATEMENTS

a)

Basis of presentation and principles of consolidation

These 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 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 noncontrolling interests.

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 December 31, 2024.

b)

Use of estimates

The preparation of these 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 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 on-going basis, the Company's chief operating decision makers reviews its estimates and assumptions. These estimates are based on historical experience and various other assumptions that the Company's chief operating decision makers believes to be reasonable under the circumstances. Actual results could differ from those estimates.

c)

Real estate held for investment

Real estate held for investment is stated at cost, less accumulated depreciation and impairment losses. Upon acquisition of real estate held for investment considered to be an asset acquisition, the purchase price and related acquisition costs (collectively, “the purchase price”) is capitalized as part of the cost basis. The purchase price is allocated 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 relative fair values. The allocation of the purchase price requires judgment and significant estimates. The fair values of the land and building assets are 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 values of the above- and below-market leases are amortized to rental revenues over the remaining term of the related leases.

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.

In the event a tenant terminates its lease, the unamortized portion of the related intangible values is written off immediately.

Depreciation and amortization are calculated using the straight-line method over the estimated useful lives of the asset:

Repairs and maintenance are charged to operations as incurred; major renewals and betterments that extend the useful life or improve the operating capacity of the asset are capitalized.

d)

Assets held for sale

The Company classifies assets held for sale when all of the following criteria are met: (1) management commits to a plan to sell the property, (2) the property is available for immediate sale in its present condition, subject only to terms that are usual and customary for sale of real estate properties, (3) an active program to locate a buyer and conduct other actions required to complete the sale has been initiated, (4) the sale of the property is probable and is expected to qualify as a completed sale, (5) the property is actively marketed for sale at a price that is reasonable in relation to its fair value, and (6) actions required to complete the sale indicate that it is unlikely that any significant changes will be made or that the plan to sell will be withdrawn.

For properties classified as held for sale, the Company suspends depreciation and amortization of the real estate properties, including the related intangible lease assets and liabilities, as well as straight-line revenue recognition of the associated lease. Properties held for sale are carried as the lower of cost or fair value, less estimated selling costs. If the estimated fair value less selling costs is lower than the carrying value, the difference will be recorded as an impairment on assets held for sale in the consolidated statements of income (loss). As of December 31, 2024, there were four properties classified as held for sale of which three had impairment loss recorded in the amount of $3,891. As of December 31, 2023, there weretwo properties classified as held for sale of which one had an impairment loss recorded in the amount of $229. The Company estimated the fair value of the assets held for sale using Level 2 and Level 3 inputs based on the negotiated selling price, less costs of disposal, received from a third party and a capitalized fair value approach, less costs of disposal, based on market rents and capitalization rates from comparable transactions, respectively. The results of operations for properties disposed of or classified as held for sale were not reclassified as discontinued operations as these events are a normal part of the Company’s operations and do not represent strategic shifts in the Company’s operations.

e)

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.

During the years ended December 31, 2024 and December 31, 2023, the Company recorded impairment losses of $591 and $178, respectively, on real estate held for investment with remaining carrying value of $1,942 and $1,036, respectively, which declined due to the tenants' vacancy. The Company determined the fair value measurement using a range of significant unobservable inputs, including broker market information and recent comparable sales transactions.

f)

Revenue recognition and accounts receivable

The Company accounts for leases in accordance with ASC 842 , Leases ("ASC 842"). For property related contracts that contain leases, revenue is recognized when the lessee takes possession of or controls the physical use of the leased assets. At the time of lease assumption or inception of a new lease, including new leases that arise from amendments, the Company assesses the terms and conditions of the lease to determine the property lease classification.

A lease is classified as an operating lease if none of the following criteria are met: (i) ownership transfers to the lessee at the end of the lease term, (ii) the lessee has a purchase option that is reasonably expected to be exercised, (iii) the lease term is for a major part of the economic life of the leased property, (iv) the present value of the future lease payments and any residual value guaranteed by the lessee that is not already reflected in the lease payments equals or exceeds substantially all of the fair value of the leased property, and (v) the leased property is of such a specialized nature that it is expected to have no future alternative use to the Company at the end of the lease term. If one or more of these criteria are met, the lease will generally be classified as a sales-type lease, unless the lease contains a residual value guarantee from a third party other than the lessee, in which case, it would be classified as a direct financing lease under certain circumstances.

As of December 31, 2024 and December 31, 2023, generally all of the Company's leases with tenants are accounted for as operating leases. Minimum rents are recognized on a straight-line basis over the term of the respective leases and reasonably certain renewal periods. The difference between rental revenue recognized and the cash rent due under the provisions of the lease is recorded as deferred rent receivable and included as a component of other assets in the consolidated balance sheets. If the Company determines that collectibility of the lease payments is not probable, the Company records an adjustment to rental revenues to reduce the outstanding receivables where collectibility is not probable including deferred rent receivables. Future revenue recognized is limited to amounts paid by the lessee.

The Company's property leases have been classified as operating leases and some have scheduled rent increases throughout the lease term. The Company's leases typically provide the tenant with one or more multi-year renewal options to extend their leases, subject to generally the same terms and conditions, including rent increases, consistent with the initial lease term.

Variable rental amounts include rent increases that are based on changes in the Consumer Price Index (“CPI”), percentage rent or lease terminations. Variable rental amounts are not recognized until the specific events that trigger the variable payments have occurred.

For the periods from January 1, 2024 to October 2, 2024, October 3, 2024 to December 31, 2024, and the year ended December 31, 2023, the Company hadno individual tenants or common franchises that accounted for more than 10% of rental revenues, excluding lease termination fees.

In accordance with ASC 842, provisions for uncollectible rent are recorded as an offset to rental revenues in the accompanying consolidated statements of income (loss).

g)

Cash, cash equivalents and restricted cash

Cash and cash equivalents comprise amounts held in operating bank and money market accounts.

Restricted cash includes cash proceeds from sale of assets included in the asset backed securitization in anticipation of replacement properties and a maintenance reserve required as part of the asset backed securitization. As of December 31, 2024, the Company hadno restricted cash. As of December 31, 2023, the Company had$5,532 of restricted cash.

h)

Financing transaction and discount costs

Financing transaction costs incurred in connection with obtaining debt are deferred and amortized over the term of the related debt. For any debt acquired at a discount, where the fair value of debt is less than the carrying amount, the fair value discount is amortized over the term of the related debt using the effective interest method. The amortization of financing transaction costs and fair value discount is charged to interest expense on the accompanying consolidated statements of income (loss). The unamortized balance of deferred financing transaction costs and fair value discount associated with the ABS Notes, secured revolving facility and secured term loans are shown as a reduction of debt on the accompanying consolidated balance sheets. The unamortized balance of deferred financing transaction costs associated with the revolving credit facility and term loan are reported within other assets and debt, net, respectively, in the consolidated balance sheets.

i)

Initial public offering costs

Prior to the close of the IPO on October 3, 2024, the Predecessor incurred and capitalized certain direct, incremental legal, professional, accounting and other third-party fees in connection with the IPO. The deferred IPO costs were offset against IPO proceeds, and reclassified as a component of additional paid-in capital on the consolidated balance sheets and consolidated statements of equity upon consummation of the offering. As of December 31, 2023, deferred IPO costs totaled $3,186 and were included within other assets on the consolidated balance sheets.

j)

Non-controlling interests

Non-controlling interests represents the interests held in the OP of 37.9% as of December 31, 2024, by third parties and related parties involved in the Internalization which are accounted for as a separate component of equity.

The Company periodically adjusts the carrying value of non-controlling interests to reflect their share of the book value of the OP. Such adjustments are recorded to additional paid-in capital as a reallocation of non-controlling interests in the consolidated statements of equity.

The OP units may be redeemed at the option of the holder or through certain change of control transactions and liquidation events. Approval of the Company’s Board of Directors would be required to effect any change in control transaction or liquidation event and the Company has the right to reject any redemption request received from OP unitholders. Additionally, the Company has the right to settle any approved redemption request of OP units through the issuance of Common Stock or cash, at the option of the Company. Therefore, the OP units are classified within permanent equity. The redemption value of OP units are calculated based on the market value of the Company’s Common Stock or the approved tender offer in the event of a change of control transaction.

k)

Stock-Based Compensation

The Company has issued restricted stock units ("RSUs") under its 2024 Omnibus Equity and Incentive Plan ("Equity and Incentive Plan"). The Company accounts for stock-based incentives in accordance with ASC 718, Compensation - Stock Compensation, which requires that such compensation expense be recognized based on the awards estimated grant date fair value. The value of such awards is recognized as compensation expense in general and administrative expenses in the consolidated statements of income (loss) over the appropriate vesting period on a straight-line basis or at the cumulative amount vested at each balance sheet date, if greater. The Company records forfeitures during the period in which they occur by reversing all previously recorded stock compensation expense associated with the forfeited shares. Dividends declared on RSUs issued under the Equity and Incentive Plan are recorded as cumulative distributions in excess of retained earnings in the consolidated balance sheets.

l)

Income taxes

The Company has elected to be treated as a real estate investment trust (“REIT”) under Sections 856 to 860 of the Internal Revenue Code of 1986, as amended (the “Code”) and expects to continue to qualify as a REIT. To qualify as a REIT, the Company is subject to various requirements including that it must distribute at least 90% of its taxable income to its shareholders as dividends. As a REIT, the Company will be subject to federal income tax on its undistributed REIT taxable income and net capital gain and to a 4% non-deductible excise tax on any amount by which distributions it pays with respect to any calendar year are less than the sum of (1)85% of its ordinary income, (2)95% of its capital gain net income and (3)100% of its undistributed taxable income from prior years. The Company intends to operate in such a manner so as to qualify as a REIT, but no assurance can be given that the Company will operate in a manner so as to qualify as a REIT. If the Company fails to meet these requirements, it could be subject to federal income tax on all of the Company’s taxable income at regular corporate rates for that year. The Company would not be able to deduct distributions paid to shareholders in any year in which it fails to qualify as a REIT. Additionally, the Company will also be disqualified from electing to be taxed as a REIT for the four taxable years following the year during which qualification was lost unless the Company is entitled to relief under specific statutory provisions. As of December 31, 2024, the Company believes it is in compliance with all applicable REIT requirements.

For the years ended December 31, 2024 and 2023, the Company has distributed 100% of its taxable income and, therefore, is not required to pay any federal income tax in its own right.

The Company is subject to state and local income or franchise taxes in certain jurisdictions in which some of its properties are located and records these within income taxes in the accompanying consolidated statements of income (loss).

Taxable income from certain non-REIT activities is managed through a taxable REIT subsidiary (“TRS”) and is subject to applicable federal, state, and local income and margin taxes. The Company had no significant taxes associated with its TRS for the years ended December 31, 2024 and 2023.

The Company is required to file income tax returns with federal and state taxing authorities. As of December 31, 2024, the Company’s U.S. federal and state income tax returns remain subject to examination by the respective taxing authorities for the 2023 tax year.

m)

Earnings per Share

Earnings per common share has been computed pursuant to the guidance in ASC 260, Earnings Per Share, which requires the classification of the Company's unvested shares of restricted Common Stock, which contain rights to receive non-forfeitable dividends as participating securities requiring the two-class method of computing earnings per share. 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 the income attributable to unvested shares of restricted Common Stock from the numerator of the calculation and the weighted average shares of Common Stock and potentially dilutive securities in accordance with the treasury stock method and /or if converted method.

n)

Concentration of credit risk

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.

o)

Segment reporting

The Company currently operates in asingle reportable segment, which includes the acquisition, leasing and ownership of net leased properties. The Company's chief operating decision maker ("CODM") is the Company's executive management team, which consists of the Co-Chief Executive Officers. The CODM assesses, measures, and reviews the operating and financial results 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.

p)

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.

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 LIBOR/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.

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 fair value of the Company’s aggregate debt:

All of the Company's debt was entered into in the quarter ended December 31, 2024, post IPO. Given all of the Company's debt accrues interest at a variable rate as of December 31, 2024, the carrying amounts approximate fair value.

The Company has financial instruments which include cash, cash equivalents and restricted cash, other assets, and accounts payable and accrued liabilities, which are carried at amortized cost and approximate their fair value unless otherwise noted.

q)

Subsequent events

The Company evaluates subsequent events for disclosure in these consolidated financial statements through the date of the independent auditor’s report which is the date on which these consolidated financial statements were available to be issued.

r)

Recently adopted accounting pronouncements

In September 2016, FASB issued ASU 2016-13, “Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”). ASU 2016-13 requires entities to use a forward-looking approach based on current expected credit losses (“CECL”) to estimate credit losses on certain types of financial instruments, including Accounts Receivables. This may result in the earlier recognition of allowances for losses. ASU 2016-13 was effective for the Company beginning January 1, 2023. The adoption of ASU 2016-13 did not have a material impact on the Company’s financial position, results of operations and cash flows.

In March 2020, the FASB issued an Accounting Standards Update (“ASU”) 2020-04, “Reference Rate Reform (Topic 848) – Facilitation of the Effects of Reference Rate Reform on Financial Reporting”, which provides temporary, optional expedients and exceptions to the GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from London Interbank Offered Rate (“LIBOR”) and other interbank offered rates to alternative reference rates. Further, in January 2021, the FASB issued ASU 2021-01, “Reference Rate Reform (Topic 848) – Scope”, to clarify that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivative instruments that use an interest rate for margining, discounting or contract price alignment that is modified as a result of the reference rate reform. On December 31, 2022, the FASB issued ASU 2022-06, “Reference Rate Reform (Topic 848) – Deferral of the Sunset Date of Topic 848”, which extends the sunset (or expiration) date of Topic 848 from December 31, 2022 to December 31, 2024. The Company modified its debt, cap and floor agreements from LIBOR to SOFR during 2023 and has elected to use the optional expedient for contract modifications. The Company has concluded that the amendments should be treated as non-substantial modifications of the existing contracts, resulting in no impact to the Company's consolidated financial statements.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting – Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which requires a public entity to disclose significant segment expenses and other segment items in interim and annual periods and expands the ASC 280 disclosure requirements for interim periods. The ASU also explicitly requires public entities with a single reportable segment to provide all segment disclosures under ASC 280, including the new disclosures under ASU 2023-07. The amendments in ASU 2023-07 were effective for the Company beginning January 1, 2024. The Company hasone reportable segment and the required disclosure updates have been reflected in the Segment Reporting section elsewhere in Note 2.

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.” This ASU enhances expense disclosures on both an annual and interim basis by requiring public business entities to disclose additional information about specific expense categories in the notes to the consolidated financial statements. This ASU requires public entities to disclose, ina tabular format, purchases of inventory, employee compensation, depreciation, intangible asset amortization and depletion, as applicable, for each income statement line item that contains those expenses. Specific expenses, gains and losses that are already disclosed under existing US GAAP are also required to be included in the disaggregated income statement expense line-item disclosures, and any remaining amounts will need to be described qualitatively. Additionally, the ASU requires disclosure of the total amount of selling expenses and the entity’s definition of selling expenses. This 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 evaluating the impact of adopting this ASU.

3. 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 December 31, 2024 and 2023, the Company has a portfolio of 307 and 283 real estate properties, respectively. The average remaining lease term for real estate properties owned by the Company as of December 31, 2024 and 2023 was approximately 7.4 years and 7.4 years, respectively.

During the year ended December 31, 2024, the Company acquired 29 properties for an aggregate purchase price of $104,184. The majority of properties acquired during the year ended December 31, 2024, were leased at acquisition with an average remaining lease term of approximately 11.3 years.

During the year ended December 31, 2023, the Company acquired 26 properties for an aggregate purchase price of $75,039, including acquisition costs totaling $1,380. All properties acquired during the year ended December 31, 2023, were leased at acquisition with an average remaining lease term of approximately 8.2 years. Additionally, the Company acquired the remaining 50% interest in the Joint Venture held by the Joint Venture Partner, which consists of 54 properties as of the date of acquisition.

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:

During the year ended December 31, 2024, the Company sold five real estate properties for $11,005. The Company received net proceeds of $10,079 after paying closing costs of $926 and recorded a gain on sale of $337. The aggregate cost and associated accumulated depreciation and amortization of the properties sold, at the date of sales, were $10,248 and $739 respectively.

The depreciation expense on real estate held for investment was as follows:

The following table summarizes amounts reported as rental revenues on the accompanying consolidated statements of income (loss):

Total estimated future minimum rents to be received under non-cancelable tenant leases in effect as of December 31, 2024, are as follows:

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.

4. INTANGIBLE ASSETS AND LIABILITIES

The following is a summary of intangible lease assets and liabilities and related accumulated amortization:

The amortization and net adjustment to rental revenue of intangibles lease assets and liabilities was as follows:

The remaining weighted average amortization period for the Company’s intangibles assets and liabilities as of December 31, 2024 and 2023 by category are as follows:

The estimated future amortization expense for intangible lease assets, net of intangible lease liabilities, are as follows:

5. DEBT, NET

• The approximate SOFR rate at December 31, 2024 was 4.37%, plus a 10 basis point adjustment (“Adjusted SOFR”).

** The approximate one-month Term SOFR rate (as defined below) at December 31, 2023 was 5.38%, plus a 10 basis point adjustment (“Adjusted Term SOFR”).

As of December 31, 2024 and 2023, the weighted average interest rate was 5.65% and 5.17%, respectively.

The aggregate principal repayment of the Company’s debt, excluding the unamortized financing transaction costs of $1,962, due in each of the years under the remaining term, are as follows:

(a)

Asset Backed Securities

On December 9, 2019, the Predecessor and the Joint Venture issued 3.37% Series 2019-1, Class A (rated by Standard & Poors and Kroll Bond Rating Agency) Net-Lease Mortgage Notes (the “ABS Notes”) for gross proceeds of $192,935 and $71,065, respectively, pursuant to the Master Indenture Agreement, among the 95 and 40 properties directly or indirectly owned, as of that date, by the Predecessor and Joint Venture, respectively (collectively, the “Issuers”), and the Indenture Trustee. On October 20, 2023, the Predecessor acquired the remaining 50% interest in the Joint Venture held by the JV Partner and assumed debt at fair value of $66,907, net of a discount of $2,824.

As of December 31, 2023, the ABS Notes are secured by 129 properties directly owned by the Predecessor having a carrying value of $316,322, an assignment of leases and rents and are guaranteed by the Predecessor in the aggregate.

For the years ended December 31, 2024 and 2023, amortization of financing transaction costs recorded by the Company were $1,249 and $1,256, respectively. For the years ended December 31, 2024 and 2023, amortization of discount costs recorded by the Company were $2,440 and $384, respectively.

On December 30, 2024, the Company used the proceeds from the JPMorgan Chase Bank, Revolving Credit Facility and JPMorgan Chase Bank, Term Loan to repay the outstanding borrowings on the ABS Notes in the amount of $252,953.

(b)

CIBC Bank USA Credit Facility

The Predecessor entered into a credit facility agreement with CIBC Bank USA, which provides for a secured revolving line of credit of $65,000 (the “CIBC Revolving Credit Facility”). The CIBC Revolving Credit Facility had athree-year term expiring on March 8, 2024, withtwo one-year extensions. On March 8, 2024 the Company exercised its option to extend the term forone year to mature on March 8, 2025. The extension was in management’s control as the Predecessor was compliant with the required covenants and can pay the extension fee. The CIBC Revolving Credit Facility bore interest at a rate equal to LIBOR subject to a floor of 0.25% plus 2.25%. Interest only payments are due until maturity. The CIBC Revolving Credit Facility was also subject to an unused commitment fee equal to (1)0.25% of the unused loan amount if utilization is less than 50% of the CIBC Revolving Credit Facility or (2)0.15% of the unused loan amount if the utilization is greater than or equal to 50% of the CIBC Revolving Credit Facility. The unused commitment fee was payable quarterly in arrears on the first day of each calendar quarter and is included in interest expense on the accompanying consolidated statements of income (loss).

On July 31, 2021, the CIBC Revolving Credit Facility was amended to increase the maximum commitment under the revolving line of credit to $202,500. In addition, Montgomery Bank, OceanFirst Bank N.A., Hancock Whitney Bank, Bank of Blue Valley, South State Bank N.A. and Woodforest National Bank were added as additional lenders under the CIBC Revolving Credit Facility.

On March 17, 2023, the Predecessor amended the credit agreement for the CIBC Revolving Credit Facility to replace U.S. dollar LIBOR with the Term Secured Overnight Financing Rate (“Term SOFR”) plus an adjustment of 0.11% as of March 17, 2023. Under this amendment, the loan bears interest at a rate equal to Adjusted Term SOFR plus 2.25%.

The CIBC Revolving Credit Facility was secured by certain of the Predecessor’s properties having a carrying value of $354,571 as of December 31, 2023 and an assignment of rents and leases. The Predecessor was required to maintain minimum liquidity reserves of no less than the greater of: (1) $4,000 and (2) an amount equal to 4% of the principal amount outstanding under the CIBC Revolving Credit Facility, but up to a maximum of $8,000 pursuant to the terms of its guarantee.

For the years ended December 31, 2024 and 2023, the Company recorded amortization of financing transaction costs of $653 and $1,152, respectively, relating to the CIBC Revolving Credit Facility.

On October 3, 2024, the Company used the net proceeds of the IPO to repay the outstanding borrowings on the CIBC Bank USA Credit Facility, in the amount of $150,501, inclusive of accrued interest of $496.

(c)

CIBC Bank USA Term Loan

On October 20, 2023, the Predecessor purchased the remaining 50% interest in the Joint Venture from the Joint Venture Partner. The Predecessor assumed a loan (the “CIBC Term Loan”) with CIBC Bank USA, which provides for a secured loan of $17,000. The CIBC Term Loan had a maturity date of March 31, 2027 and bore interest at a rate equal to Term SOFR plus

1.80%. The CIBC Term Loan was secured by certain of the Predecessor's properties having a carrying value of $28,506 as of December 31, 2023 and an assignment of rents and leases.

On October 3, 2024, the Company used the net proceeds of the IPO to repay the outstanding borrowings on the CIBC Term Loan in the amount of $16,041, inclusive of accrued interest of $71.

(d)

JPMorgan Chase Bank, Revolving Credit Facility

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 $250,000, including $20,000 available for issuance of letters of credit (the “ Revolving Credit Facility”). The Revolving Credit Facility has athree-year term expiring on October 3, 2027, withtwo 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 bears interest at floating rates based on adjusted SOFR plus an applicable margin based on the Company's leverage ratio ranging between 1.20% and 1.75% per annum. As of December 31, 2024, the applicable margin was 1.20%. 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. 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 consolidated statements of income (loss).

(e)

JPMorgan Chase Bank, Term Loan

On October 3, 2024, the Company entered into a Term Loan Agreement ("Term Loan") with JPMorgan Chase Bank N.A. as administrative agent, provided commitments for an unsecured Term Loan, allowing borrowings of up to $200,000. The Term Loan is available to be drawn until October 2025 and has an initial maturity of October 3, 2027, withtwo 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 ranging between 1.20% and 1.75% per annum. As of December 31, 2024, the applicable margin was 1.20%.

On December 30, 2024, the Company borrowed $200,000 and used proceeds to repay the ABS Notes.

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. As of December 31, 2024, the Company believes it was in compliance with all of its loan 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.

6. PARTNERS’ CAPITAL

Partner’s Capital is comprised of Common Units issued to investors by the Predecessor. As of December 31, 2023, investors had subscribed for 30 Common Units for a total committed capital of $306,978. As of December 31, 2023, all Common Units subscribed for had been issued. Upon completion of the contribution agreements described in Note 1, the Predecessor's Partner's Capital converted to non-controlling interests (see Note 8).

7. EQUITY

On October 3, 2024, the Company completed its IPO and issued 13,200 shares of Common Stock at an initial public offering price of $19.00 per share ("IPO Price") and received net proceeds of $233,871, which were net of underwriter fees and commissions of $16,929. The Company repaid the outstanding principal and accrued interest of the CIBC Revolving Credit Facility of $150,501 and CIBC Term Loan of $16,041 with the net proceeds. The remaining net proceeds were used for general business and working capital purposes, including acquisitions. As part of the IPO, the underwriters were granted an option, exercisable within 30 days from October 3, 2024, to purchase up to an additional 1,980 shares of Common Stock at the IPO Price, less underwriting discounts and commissions. On October 23, 2024, the underwriters partially exercised their option by purchasing an additional 1,091 shares of Common Stock. The Company received net proceeds of $19,327, which were net of underwriter fees and commissions of $1,399.

Pursuant to the Company's Articles of Incorporation (the "Charter"), the Company is authorized to issue an aggregate of 450,000 shares of Common Stock with a par value of $0.01 per share and 50,000 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 toone 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.

On November 12, 2024, the Board of Directors declared a quarterly dividend of $0.215 per share of Common Stock and OP Unit to holders of record as of December 31, 2024, payable on or before January 15, 2025.

8. NON-CONTROLLING INTERESTS

In connection with the REIT contribution transactions and Internalization, non-controlling interests are comprised of the Predecessor's Common Units, the Convertible non-controlling preferred interests, OP units issued in the Internalization (Note 9), and Preferred 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, however, the Company may issue Common Stock or cash, at the Company's election. Therefore the OP Units are 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 period from October 3, 2024 to December 31, 2024, there were 1,223 OP Units redeemed which the Company settled by issuing 1,223 shares of Common Stock.

9. INTERNALIZATION

On October 2, 2024, the Company completed the Internalization and the Company's management team and corporate staff, who were previously employed by NARS, became employees of a subsidiary of the OP, the management and other fees in the Predecessor's Sub OP agreement were terminated, and acquired the assets necessary to operate and manage the portfolio of properties. The purchase price of the Internalization was 931 OP Units with a fair value of $17,698. This was allocated to:

(a) Termination of the management arrangement of $16,498, which is included in internalization expense on the accompanying consolidated statements of income (loss);

(b) Assembled work force of $1,200, which is included in other assets in the accompanying consolidated balance sheets;

(c) Right-of-use lease asset and liability of an operating lease of office space of $644, which are included inother assets andaccounts payable and accrued liabilities, respectively in the accompanying consolidated balance sheets.

During the year ended December 31, 2024, the Company recorded amortization of the assembled work force of $100. This is included in depreciation and amortization in the accompanying consolidated statements of income (loss).

10. STOCK-BASED COMPENSATION

For the period from October 3, 2024 through December 31, 2024, the Company granted one-time RSUs. The total amount of stock-based compensation expense recognized in general and administrative expenses in the accompanying consolidated statements of income (loss) was $608 for the period from October 3, 2024 through December 31, 2024. As of December 31, 2024, the remaining unamortized stock-based compensation expense totaled $9,961, and as of December 31, 2024, these awards are expected to be recognized over a remaining weighted average period of 2.5 years. Stock-based compensation expense is recognized on a straight-line basis over the total requisite service period for the entire award.

One-time grant of RSUs

Pursuant to the Equity and Incentive Plan, the Company has made one-time grant of service-based RSUs on October 2, 2024 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 in accordance with the terms of the individual grant agreements. These grants vest over a remaining weighted average period of 2.5 years. The weighted average value of grants during the year ended December 31, 2024, was $19.00, which was based on the market price per share of the Company's Common Stock on the grant date.

The following table presents one-time grant of RSU activity during the year ended December 31, 2024:

11. EARNINGS PER SHARE

The following table summarizes the components used in the calculation of basic and diluted earnings per share ("EPS"):

(1)

Represents the weighted average effects of 556 unvested restricted stock units of Common Stock as of December 31, 2024, which will be excluded from the computation of earnings per share until they vest.

(2)

Represents the weighted average effects of 10,532 OP Units outstanding at December 31, 2024.

12. OTHER ASSETS

Other assets consist of the following:

13. RELATED PARTY TRANSACTIONS

Predecessor transactions

Related parties consist of the Predecessor's general partner and the Sponsor, their employees, officers, directors and parties related to them and entities under their control. In addition to disclosures elsewhere in these consolidated financial statements:

(a)

During the year ended December 31, 2023, the Predecessor incurred structuring fees and placement fees (“Issue Costs”) of (1)$2 payable to NAPG Equities Inc. (“Equities”) in respect of Common Units issued to Canadian investors, and (2) $243 payable to North American Property Group (“NAPG”) and $81 payable to NARS, in each case, in respect of Common Units issued to U.S. investors. Equities and NAPG are owned by one of the directors of the Predecessor's general partner, and NARS is a partnership affiliated with the Predecessor's general partner. A director of NARS is also a director of the Predecessor's general partner. As of December 31, 2023, the Predecessor paid all Issue Costs to Equities, NAPG, and NARS.

(b)

During the years ended December 31, 2024 and 2023, the Predecessor incurred asset management fees of $3,124 and $4,139, respectively, acquisition fees of $0 and $1,080 respectively, and property management fees and direct costs of $1,561 and $1,616, respectively, payable to NARS. As of December 31, 2024 and 2023, the Company had a payable to NARS relating to these fees of $4,105 and $2,055, respectively, which is included in accounts payable and accrued liabilities on the accompanying consolidated balance sheets.

(c)

The affiliate of the Predecessor (the "Sponsor") holds 1 Common Unit in the Predecessor. During the period from January 1, 2024 through October 2, 2024 and the year ended December 31, 2023, the Predecessor paid aggregate distributions to the Sponsor (in the same amount per Common Unit as are paid to all other investors) in the amount of $25 and $290, respectively, and to other related parties holding an aggregate of 1 Common Unit in the amount of $26 and $303, respectively. After adjusting for the effects of the Stock Split, the Sponsor and other related parties held 125 and 131 OP Units, respectively.

(d)

On October 2, 2024, the Company completed the Internalization and issued 931 OP Units as consideration (See Note 9).

Successor transactions

(a)

For the period from October 3, 2024 through December 31, 2024, the Company incurred outsourcing service fees of $141 to North American Asset Management Corp. ("NAAM"), an affiliate of the Predecessor. The services are limited to property accounting and human resources support. As of December 31, 2024, the Company paid all service fees to NAAM.

14. INCOME TAXES

For federal income tax purposes, distributions to stockholders are characterized as ordinary dividends, capital gain distributions, or return of capital distributions. Return of capital distributions will reduce stockholders' basis in their shares, but not below zero. The following table shows the character of the Company's common stock distributions paid on a percentage basis:

15. 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 consolidated balance sheets, consolidated statements of 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 December 31, 2024, 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.

16. SUBSEQUENT EVENTS

The Company identified the following events subsequent to December 31, 2024 that are not recognized in the accompanying consolidated financial statements:

(a)

On January 15, 2025, the Company paid distributions in the aggregate amount of $6,101.

(b)

On March 18, 2025, the Board of Directors declared a quarterly distribution of $0.215 per share on the Company's Common Stock and OP Units for the quarter ended March 31, 2025, which will be payable on or before April 15, 2025 to stockholders and unitholders of record as of March 31, 2025.

(c)

Subsequent to December 31, 2024, the Company continued to expand its operations through the acquisition of approximately $44,725 of additional rental property and associated intangible assets and liabilities.

(d)

Subsequent to December 31, 2024, the Company sold one property with a carrying value of approximately $2,004 for total proceeds of $2,050. The Company incurred additional expenses related to the sales of approximately $34, resulting in a gain on sale of real estate of approximately $12.

(e)

Subsequent to December 31, 2024, the Company borrowed $39,000 on the Revolving Credit Facility, the proceeds of which were used to fund investments and for other general corporate purposes

(f)

On March 4, 2025, the Company entered into a $200,000 1-month Term SOFR interest rate swap at a fixed rate of 3.66%. The interest rate swap matures in February 2028.

SCHED