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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2025


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission file number: 333-136110

GTJ REIT, INC.

(Exact name of registrant as specified in its charter)

     Maryland

     20-5188065

     (State or other jurisdiction of
incorporation or organization)

     (I.R.S. Employer
Identification No.)

1399 Franklin Avenue

Suite 100

Garden City, New York

11530

(Address of principal executive offices)

(Zip Code)

(516) 693-5500

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: None


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
None	None	None

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 13,345,167 shares of common stock as of November 4, 2025.

GTJ REIT, INC. AND SUBSIDIARIES

QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTER ENDED SEPTEMBER 30, 2025

TABLE OF CONTENTS


PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements	2

	Condensed Consolidated Balance Sheets at September 30, 2025 (Unaudited) and December 31, 2024	2

	Condensed Consolidated Statements of Operations (Unaudited) for the Three and Nine Months Ended September 30, 2025 and 2024	3

	Condensed Consolidated Statements of Stockholders’ Equity (Unaudited) for the Three and Nine Months Ended September 30, 2025 and 2024	4

	Condensed Consolidated Statements of Cash Flows (Unaudited) for the Nine Months Ended September 30, 2025 and 2024	5

	Notes to Condensed Consolidated Financial Statements (Unaudited)	6

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	33

Item 4.	Controls and Procedures	33

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	35

Item 1A.	Risk Factors	35

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	35

Item 3.	Defaults Upon Senior Securities	35

Item 4.	Mine Safety Disclosures	35

Item 5.	Other Information	35

Item 6.	Exhibits	36

Signatures		37

Part I – Financial Information

Item 1. Financial Statements

GTJ REIT, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(amounts in thousands, except share data)


	September 30,			December 31,
	2025			2024
	(Unaudited)
ASSETS
Real estate, at cost:
Land	$	232,141		$	230,457
Buildings and improvements		335,347			340,367
Total real estate, at cost		567,488			570,824
Less: accumulated depreciation and amortization		(120,364	)		(114,526	)
Net real estate held for investment		447,124			456,298
Cash and cash equivalents		23,015			29,380
Restricted cash		453			143
Rental income in excess of amount billed		17,794			16,227
Acquired lease intangible assets, net		4,865			5,707
Investment in unconsolidated affiliate		3,708			3,699
Right-of-use asset - operating lease, net		2,076			2,285
Other assets		19,215			19,060
Total assets	$	518,250		$	532,799
LIABILITIES AND EQUITY
Liabilities:
Mortgage notes payable, net	$	465,321		$	475,172
Secured revolving credit facility		18,400			18,400
Accounts payable and accrued expenses		4,814			5,800
Dividends payable		1,601			1,601
Acquired lease intangible liabilities, net		431			534
Right-of-use liability - operating lease		2,282			2,486
Other liabilities		7,539			7,241
Total liabilities		500,388			511,234
Commitments and contingencies (Note 9)
Equity:
Series A, Preferred stock, $.0001 par value; 500,000 shares authorized; none issued and outstanding		—			—
Series B, Preferred stock, $.0001 par value; non-voting; 6,500,000 shares authorized; none issued and outstanding		—			—
Common stock, $.0001 par value; 100,000,000 shares authorized; 13,345,167 and 13,345,980 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively		1			1
Additional paid-in capital		131,207			131,857
Distributions in excess of net income		(117,644	)		(115,264	)
Total stockholders’ equity		13,564			16,594
Noncontrolling interest		4,298			4,971
Total equity		17,862			21,565
Total liabilities and equity	$	518,250		$	532,799

The accompanying notes are an integral part of these condensed consolidated financial statements.

GTJ REIT, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

For the Three and Nine Months Ended September 30, 2025 and 2024

(Unaudited, amounts in thousands, except share and per share data)


	Three Months Ended,						Nine Months Ended,
	September 30,						September 30,
	2025			2024			2025			2024
Revenues:
Rental income	$	20,875		$	19,472		$	62,446		$	58,790
Total revenues		20,875			19,472			62,446			58,790
Operating Expenses:
Property operating expenses		4,026			3,749			12,203			11,375
General and administrative		2,556			2,472			10,551			13,592
Depreciation and amortization		3,771			3,441			11,164			10,407
Total operating expenses		10,353			9,662			33,918			35,374
Operating income before gain on sale of real estate		10,522			9,810			28,528			23,416
Gain on sale of real estate		—			—			7,669			—
Operating income		10,522			9,810			36,197			23,416
Interest expense		(6,768	)		(6,651	)		(20,422	)		(19,989	)
Equity in earnings of unconsolidated affiliate		67			54			184			164
Other income		134			584			514			1,635
Net income		3,955			3,797			16,473			5,226
Less: Net income attributable to noncontrolling interest		642			612			2,705			794
Net income attributable to common stockholders	$	3,313		$	3,185		$	13,768		$	4,432
Net income per common share attributable to common stockholders - basic earnings per share	$	0.25		$	0.24		$	1.03		$	0.33
Net income per common share attributable to common stockholders - diluted earnings per share	$	0.25		$	0.24		$	1.02		$	0.33
Weighted average common shares outstanding – basic		13,345,167			13,345,980			13,347,904			13,333,823
Weighted average common shares outstanding – diluted		13,515,742			13,530,869			13,518,479			13,518,712

The accompanying notes are an integral part of these condensed consolidated financial statements.

GTJ REIT, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

For the Three and Nine Months Ended September 30, 2025 and 2024

(Unaudited, amounts in thousands, except share data)


			Common Stock								Distributions			Total
	Preferred		Outstanding			Par		Additional-			in Excess of			Stockholders’			Noncontrolling			Total
	Stock		Shares			Value		Paid-In-Capital			Net Income			Equity			Interest			Equity
Balance at January 1, 2025	$	—		13,345,980		$	1	$	131,857		$	(115,264	)	$	16,594		$	4,971		$	21,565
Common stock dividends		—		—			—		—			(12,946	)		(12,946	)		—			(12,946	)
Stock-based compensation		—		—			—		402			—			402			—			402
Distributions to noncontrolling interest		—		—			—		—			—			—			(2,614	)		(2,614	)
Net income		—		—			—		—			2,947			2,947			561			3,508
Reallocation of equity		—		—			—		(68	)		—			(68	)		68			—
Balance at March 31, 2025	$	—		13,345,980		$	1	$	132,191		$	(125,263	)	$	6,929		$	2,986		$	9,915
Common stock dividends		—		—			—		—			(1,601	)		(1,601	)		—			(1,601	)
Repurchases - common stock		—		(110,693	)		—		(2,758	)		—			(2,758	)		—			(2,758	)
Stock-based compensation		—		109,880			—		1,256			—			1,256			—			1,256
Distributions to noncontrolling interest		—		—			—		—			—			—			(326	)		(326	)
Net income		—		—			—		—			7,508			7,508			1,502			9,010
Reallocation of equity		—		—			—		237			—			237			(237	)		—
Balance at June 30, 2025	$	—		13,345,167		$	1	$	130,926		$	(119,356	)	$	11,571		$	3,925		$	15,496
Common stock dividends		—		—			—		—			(1,601	)		(1,601	)		—			(1,601	)
Stock-based compensation		—		—			—		338			—			338			—			338
Distributions to noncontrolling interest		—		—			—		—			—			—			(326	)		(326	)
Net income		—		—			—		—			3,313			3,313			642			3,955
Reallocation of equity		—		—			—		(57	)		—			(57	)		57			—
Balance at September 30, 2025	$	—		13,345,167		$	1	$	131,207		$	(117,644	)	$	13,564		$	4,298		$	17,862

			Common Stock								Distributions			Total
	Preferred		Outstanding			Par		Additional-			in Excess of			Stockholders’			Noncontrolling			Total
	Stock		Shares			Value		Paid-In-Capital			Net Income			Equity			Interest			Equity
Balance at January 1, 2024	$	—		13,326,965		$	1	$	132,217		$	(107,330	)	$	24,888		$	6,726		$	31,614
Common stock dividends		—		—			—		—			(10,395	)		(10,395	)		—			(10,395	)
Stock-based compensation		—		—			—		313			—			313			—			313
Distributions to noncontrolling interest		—		—			—		—			—			—			(2,082	)		(2,082	)
Net income		—		—			—		—			2,980			2,980			563			3,543
Reallocation of equity		—		—			—		(52	)		—			(52	)		52			—
Balance at March 31, 2024	$	—		13,326,965		$	1	$	132,478		$	(114,745	)	$	17,734		$	5,259		$	22,993
Common stock dividends		—		—			—		—			(1,602	)		(1,602	)		—			(1,602	)
Repurchases - common stock		—		(107,425	)		—		(2,693	)		—			(2,693	)		—			(2,693	)
Stock-based compensation		—		126,440			—		1,160			—			1,160			—			1,160
Distributions to noncontrolling interest		—		—			—		—			—			—			(323	)		(323	)
Net (loss)		—		—			—		—			(1,733	)		(1,733	)		(381	)		(2,114	)
Reallocation of equity		—		—			—		226			—			226			(226	)		—
Balance at June 30, 2024	$	—		13,345,980		$	1	$	131,171		$	(118,080	)	$	13,092		$	4,329		$	17,421
Common stock dividends		—		—			—		—			(1,601	)		(1,601	)		—			(1,601	)
Stock-based compensation		—		—			—		412			—			412			—			412
Distributions to noncontrolling interest		—		—			—		—			—			—			(323	)		(323	)
Net income		—		—			—		—			3,185			3,185			612			3,797
Reallocation of equity		—		—			—		(69	)		—			(69	)		69			—
Balance at September 30, 2024	$	—		13,345,980		$	1	$	131,514		$	(116,496	)	$	15,019		$	4,687		$	19,706

The accompanying notes are an integral part of these condensed consolidated financial statements.

GTJ REIT, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Nine Months Ended September 30, 2025 and 2024

(Unaudited, amounts in thousands)


	Nine Months Ended
	September 30,
	2025			2024
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	16,473		$	5,226
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		8,479			7,832
Amortization of intangibles and deferred charges		4,269			4,079
Gain on sale of real estate		(7,669	)		—
Stock-based compensation		1,996			1,885
Non-cash lease expense		5			13
Rental income in excess of amount billed		(1,644	)		(51	)
Distributions from unconsolidated affiliate		175			164
Income from equity investment in unconsolidated affiliate		(184	)		(164	)
Changes in operating assets and liabilities:
Other assets		(1,754	)		(2,927	)
Accounts payable and accrued expenses		(950	)		(350	)
Other liabilities		234			1,423
Net cash provided by operating activities		19,430			17,130
CASH FLOWS FROM INVESTING ACTIVITIES:
Expenditures for improvements to real estate		(3,360	)		(1,368	)
Deposit for property acquisition		(1,000	)		(1,380	)
Expenditures for property acquisitions		(3,577	)		—
Return of capital from unconsolidated affiliate		—			11
Proceeds from property disposition, net		15,767			—
Net cash provided by (used in) investing activities		7,830			(2,737	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment of mortgage principal		(2,081	)		(2,145	)
Financing costs from mortgage notes payable		(490	)		(3,624	)
Proceeds from mortgage notes payable		25,000			125,000
Payment of mortgage notes payable at maturity		(33,649	)		—
Payment of revolving credit facility		—			(40,000	)
Payment of term loan payable		—			(50,000	)
Repurchase of common stock		(2,758	)		(2,693	)
Cash distributions to noncontrolling interest		(3,189	)		(2,668	)
Cash dividends paid		(16,148	)		(13,330	)
Net cash (used in) provided by financing activities		(33,315	)		10,540
Net (decrease) increase in cash and cash equivalents, including restricted cash		(6,055	)		24,933
Cash and cash equivalents including restricted cash of $143 and $1,400, respectively, at the beginning of period		29,523			29,313
Cash and cash equivalents including restricted cash of $453 and $376, respectively, at the end of period	$	23,468		$	54,246
SUPPLEMENTAL DISCLOSURE CASH FLOW INFORMATION:
Cash paid for interest	$	18,942		$	18,122
Non-cash expenditures for real estate	$	211		$	327
Right-of-use asset and liability	$	2,282		$	2,551

The accompanying notes are an integral part of these condensed consolidated financial statements.

GTJ REIT, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. ORGANIZATION AND DESCRIPTION OF BUSINESS:

GTJ REIT, Inc. (the “Company” or “GTJ REIT”) was incorporated on June 26, 2006, under the Maryland General Corporation Law. The Company is focused primarily on the acquisition, ownership, management, and operation of commercial real estate located in New York, New Jersey, Connecticut, Delaware, North Carolina and Florida. Any references to square footage, property count, or occupancy percentages, and any amounts derived from these values in these notes to the condensed consolidated financial statements, are outside the scope of our independent registered public accounting firm’s review.

The Company has elected to be treated as a real estate investment trust, or REIT, under the Internal Revenue Code of 1986, as amended (the “Code”). The Company elected December 31 as its fiscal year end. Under the REIT operating structure, the Company is permitted to deduct the dividends paid to its stockholders when determining its taxable income. Assuming dividends equal or exceed the Company’s taxable income, the Company generally will not be required to pay federal corporate income taxes on such income.

On January 17, 2013, the Company closed on a business combination with Wu/Lighthouse Portfolio, LLC, in which a limited partnership (the “Operating Partnership”) owned and controlled by the Company, acquired all outstanding ownership interests of a portfolio consisting of 25 commercial properties (the “Acquired 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 exchanged for the Acquired Properties was increased to 33.78% due to post-closing adjustments. The subsequent redemptions 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 to the outstanding limited partnership interest in the Operating Partnership to 16.92% as of September 30, 2025. As a result of this transaction, the Company’s then existing 7 properties and the subsequent acquisition of 21 properties and the sale of 3 properties from 2014 through September 30, 2025, the Company currently owns a 83.08% interest in a total of 50 properties consisting of approximately 6.6 million square feet of primarily industrial properties on approximately 408 acres of land in New York, New Jersey, Connecticut, Delaware, North Carolina and Florida. The Operating Partnership also owns, through a joint venture, a 50% interest in a state-of-the-art industrial building in Piscataway, New Jersey. At September 30, 2025, subject to certain anti-dilutive and other provisions contained in the governing agreements, the limited partnership interest in the Operating Partnership may be converted in the aggregate, into approximately 1.5 million shares of the Company’s common stock or approximately 1.2 million shares of the Company’s Series B preferred stock based upon the class of units owned.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Basis of Presentation:

The accompanying unaudited condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and include the financial statements of the Company, its wholly owned subsidiaries, and the Operating Partnership, as the Company makes all operating and financial decisions for (i.e., exercises control over) the Operating Partnership. All material intercompany transactions have been eliminated. The ownership interests of the other investors in the Operating Partnership are presented as noncontrolling interests.

The accompanying unaudited condensed consolidated interim financial information has been prepared according to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted in accordance with such rules and regulations. The Company’s management believes that the disclosures presented in these unaudited condensed consolidated financial statements are adequate to make the information presented not misleading. In management’s opinion, all adjustments and eliminations, consisting only of normal recurring adjustments, necessary to present fairly the financial position and results of operations for the reported periods have been included. The results of operations for such interim periods are not necessarily indicative of the results for the full year. The accompanying unaudited condensed consolidated interim financial information should be read in conjunction with the Company’s December 31, 2024, audited consolidated financial statements, as previously filed with the SEC on Form 10-K on March 20, 2025.

Use of Estimates:

The preparation of the Company’s condensed consolidated financial statements in conformity with GAAP requires management to make estimates, judgments, and assumptions that affect the reported amounts of assets and liabilities, and related disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amount of revenues and expenses during the reporting period. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. All of these estimates reflect management’s best judgment about current economic and market conditions and their effects based on information available as of the date of these condensed consolidated financial statements. If such conditions persist longer or deteriorate further than expected, it is reasonably possible that the judgments and estimates could change, which may result in impairments of certain assets. Significant estimates include the useful lives of long-lived assets including property, equipment and intangible assets, impairment of assets, collectability of receivables, contingencies, stock-based compensation, and fair value of assets and liabilities acquired in business combinations and asset acquisitions.

Reclassification:

None of the prior year amounts have been reclassified for consistency with the current year presentation.

Real Estate:

Real estate assets are stated at cost, less accumulated depreciation and amortization. All costs related to the improvement or replacement of real estate properties, including interest expense on development properties, are capitalized. Acquisition related costs are capitalized for asset acquisitions. Additions, renovations, and improvements that improve the value 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. The Company had no real estate under development as of September 30, 2025 and December 31, 2024.

Upon the acquisition of real estate properties, the accumulated cost 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) on a relative fair value basis in accordance with GAAP. The Company utilizes 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 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 values of in-place leases are amortized over the remaining term of the respective leases and are included in depreciation and amortization in the accompanying condensed consolidated statements of operations. If a tenant terminates its lease 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. The total net impact to rental revenues due to the amortization of above and below-market leases was a net increase of $0.1 million and approximately $0.4 million for the nine months ended September 30, 2025 and September 30, 2024, respectively. The total amortization of in-place leases was $0.9 million and $0.8 million for the nine months ended September 30, 2025 and September 30, 2024, respectively.

As of September 30, 2025, above-market and in-place leases of $0.6 million and $4.3 million (net of accumulated amortization), respectively, are included in acquired lease intangible assets, net in the accompanying condensed consolidated balance sheets. As of December 31, 2024, above-market and in-place leases of approximately $0.7 million and $5.0 million (net of accumulated amortization), respectively, are included in acquired lease intangible assets, net in the accompanying condensed consolidated balance sheets. As of September 30, 2025 and December 31, 2024, approximately $0.4 and $0.5 million (net of accumulated amortization), respectively, relating to below-market leases are included in acquired lease intangible liabilities, net in the accompanying condensed consolidated balance sheets.

The following table presents the projected impact for the remainder of 2025, the next five years and thereafter related to the net decrease to rental revenue from the amortization of the acquired above-market and below-market lease intangibles and the increase to amortization expense of the in-place lease intangibles for properties owned at September 30, 2025 (in thousands):



	Net increase (decrease) to rental revenues			Increase to amortization expense
Remainder of 2025	$	54		$	288
2026		(14	)		907
2027		4			673
2028		4			549
2029		(46	)		481
2030		(63	)		458
Thereafter		(108	)		909
	$	(169	)	$	4,265

Investment in Unconsolidated Affiliate:

The Company has an investment in an entity that is accounted for under the equity method of accounting. The equity method of accounting is used when an investor has influence, but not control, over the investee. The Company records its share of the profits and losses of the investee in the period when these profits and losses are also reflected in the accounts of the investee.

On February 28, 2018, the Company purchased a 50% interest in Two CPS Developers LLC (the “Investee”) for $5.25 million. The Company has the ability to exercise significant influence over the Investee, does not have a controlling interest in the Investee, and the Investee is not a variable interest entity. Therefore, the Company accounts for this investment under the equity method of accounting. The Company recorded income of $0.2 million from this investment for both the nine months ended September 30, 2025 and September 30, 2024.

The total assets and liabilities of the Company’s investment in unconsolidated affiliate as of September 30, 2025 were $15.5 million and $8.2 million, respectively. Total revenues and expenses of the Company's investment in unconsolidated affiliate were $1.4 million and $1.0 million, respectively, for the nine months ended September 30, 2025 and September 30, 2024. The total assets and liabilities of the Company’s investment in unconsolidated affiliate as of December 31, 2024 were $15.9 million and $8.6 million, respectively.

Depreciation and Amortization:

The Company uses the straight-line method for depreciation and amortization. Properties and property improvements are depreciated over their estimated useful lives, which range from 5 to 40 years. Furniture, fixtures, and equipment are depreciated over estimated useful lives that range from 5 to 10 years. Tenant improvements are amortized over the shorter of the remaining non-cancellable term of the related leases or their useful lives.

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. Significant management judgment is involved in determining if impairment indicators exist, assessing investments for recoverability, and, if required, measuring the fair value of the real estate investments. 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 the Company’s 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 was no impairment relating to its long-lived assets at September 30, 2025 and December 31, 2024.

Deferred Charges:

Deferred charges consist principally of leasing commissions, which are amortized over the life of the related tenant leases, and financing costs, relating to the Company’s secured revolving credit facility, which are amortized over the terms of the respective debt agreements. These deferred charges are included in other assets on the condensed consolidated balance sheets. If leases or loans are terminated, the unamortized charges are expensed.

Debt Issuance Costs:

Debt issuance costs relate to the Company’s mortgage notes payable, which are amortized over the term of the respective debt agreements. These debt issuance costs are included in mortgage notes payable, net on the condensed consolidated balance sheets. If mortgage notes payable are extinguished, the unamortized charges are expensed.

Reportable Segments:

The Company manages its operations on an aggregated, single segment basis for purposes of assessing performance and making operating decisions and, accordingly, has only one reporting and operating segment. Our primary activities include acquiring, leasing and managing industrial properties across various geographic markets within the United States. We manage our operations on a consolidated basis to assess performance and make strategic operating decisions. Although we have target markets, we do not operate individual markets independently from our overall portfolio nor do we distinguish our business or group our operations on a geographical basis for purposes of assessing overall performance. Our Chief Operating Decision Maker (“CODM”) is a joint team of our Chief Executive Officer, Chief Operating Officer and Chief Financial Officer.

The CODM uses consolidated net income as the primary measure to assess overall company performance and to allocate resources. Consolidated net income is presented in our Consolidated Financial Statements and provides a comprehensive view of the Company’s financial performance, including both property and non-property financial results. The CODM reviews significant expenses associated with the Company’s single operating segment, including property-related and corporate-level expenses, which are presented in the consolidated statements of operations.

The CODM also assesses the performance of the segment based upon funds from operations (“FFO”) and net operating income (“NOI”). FFO is calculated in accordance with the standards established by the National Association of Real Estate Investment Trusts. FFO represents GAAP net income (loss), excluding gains (or losses) from sales of property, excluding impairment write-downs of depreciated property, plus real estate-related depreciation and amortization. NOI is defined as rental income, which includes billings for common area maintenance, real estate taxes and insurance, less property operating expenses, real estate tax expense and insurance expense.

Revenue Recognition:

Rental income includes the base rent that each tenant is required to pay in accordance with the terms of their respective leases reported on a straight-line basis over the term of the lease. In order for management to determine, in its judgment, that the unbilled rent receivable applicable to each specific property is collectible, management reviews billed and unbilled rent receivables and takes into consideration the tenant’s payment history and financial condition. If the Company determines that the collectability of a tenant’s lease payments is not probable, then the write-off of the entire tenant receivable, including straight-line rent receivable, is presented as a reduction of revenue rather than an operating expense on the condensed consolidated statements of operations. Rental income related to tenants where the collectability of lease payments is not deemed probable will be recorded on a cash basis. Some of the leases provide for additional contingent rental revenue in the form of percentage rents and increases based upon the consumer price index, subject to certain maximums and minimums. For the nine months ended September 30, 2025, the Company determined that the collectability of lease payments was probable and, therefore, did not record a write-off of any tenant receivables. For the nine months ended September 30, 2024, the Company determined that collectability of one former tenant's outstanding lease payments was not probable and, therefore, the Company recorded a write-off of the entire tenant receivable in the amount of $0.1 million and placed the tenant on the cash basis as of March 31, 2024. In addition, the Company received $0.6 million in February 2024 in full settlement of amounts due from a previous tenant that was placed on the cash basis during 2023.

Substantially all of the Company’s properties are subject to long-term net leases under which the tenant is typically responsible to pay for its pro rata share of real estate taxes, insurance, and ordinary maintenance and repairs for the property.

Property operating expense recoveries from tenants of common area maintenance, real estate taxes, and other recoverable costs are included in revenues in the period that the related expenses are incurred.

Tenant receivables at September 30, 2025 and December 31, 2024 were $2.4 million and $1.2 million, respectively, and are included in other assets in the accompanying condensed consolidated balance sheets.

Future minimum contractual lease payments to be received by the Company (without taking into account straight-line rent, amortization of intangibles and tenant reimbursements) as of September 30, 2025, under operating leases for the remainder of 2025, the next five years, and thereafter are as follows (in thousands):


Remainder of 2025	$	16,849
2026		68,025
2027		61,704
2028		55,112
2029		47,013
2030		41,241
Thereafter		189,373
Total	$	479,317

Lease Accounting:

As lessor, the Company elected to utilize the practical expedient provided by Accounting Standards Update (“ASU”) 2018-11 related to the separation of lease and non-lease components and as a result, revenues related to leases are reported on one line within the condensed consolidated statements of operations.

The Company elected not to evaluate whether certain sales taxes and other similar taxes are lessor costs or lessee costs. Instead, these costs will be accounted for as if they are lessee costs. Consequently, the Company excludes from the consideration in the contract and from variable payments not included in the consideration in the contract all collections from lessees of taxes within the scope of the election and provides certain disclosures. The accounting policy election includes sales, use, value added, and some excise taxes but excludes real estate taxes.

The following table presents additional disclosures regarding the Company’s rental income for the nine months ended September 30, 2025 and 2024 (in thousands):


	2025		2024
Fixed lease revenue	$	51,635	$	48,669
Variable lease revenue		10,811		10,121
Total lease revenue	$	62,446	$	58,790

As lessee, the Company elected to utilize the practical expedient in the implementation of ASU 2016-02 related to not separating non-lease components from the associated lease component. As lessee, the Company is a party to an office lease, effective October 1, 2021, having a term of ten years, with future lease obligations aggregating $2.5 million and $2.8 million as of September 30, 2025 and December 31, 2024, respectively (see Note 9). The Company has recorded a right-of-use asset and corresponding right-of-use liability at the present value of the remaining future minimum lease payments, based upon an incremental borrowing rate of 3.86%, of approximately $3.1 million as of October 1, 2021.

The following table presents the future lease obligations of the Company’s office lease for the remainder of 2025, the next five years, and thereafter (in thousands):


Remainder of 2025	$	91
2026		374
2027		385
2028		397
2029		409
2030		421
Thereafter		469
Total future minimum lease payments		2,546
Less imputed interest		264
Total right-of-use liability - operating lease	$	2,282

The following table presents additional disclosures regarding the Company’s office lease for the nine months ended September 30, 2025 and 2024 (in thousands):


	2025		2024
Operating lease costs	$	272	$	264
Variable lease costs		12		13
Total lease costs	$	284	$	277

Earnings Per Share Information:

The Company presents both basic and diluted earnings per share. Basic earnings per share excludes dilution and is computed by dividing net income attributable to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock, where such exercise or conversion would result in a lower per share amount. Restricted stock and stock options were included in the computation of diluted earnings per share.

Cash and Cash Equivalents:

The Company considers all highly liquid investments with original maturities of three months or less at the date of purchase to be cash equivalents.

Restricted Cash:

Restricted cash reserves are required under certain loan agreements and include reserves used to pay real estate taxes, leasing costs and capital improvements.

Fair Value Measurement:

The Company determines fair value in accordance with Accounting Standards Codification (“ASC”) Topic 820, “Fair Value Measurement.” This standard defines fair value, provides guidance for measuring fair value and requires certain disclosures.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Where available, fair value is based on observable market prices or parameters or derived from such prices or parameters. Where observable prices or inputs are not available, valuation models are applied. These valuation techniques involve some level of management estimation and judgment, the degree of which is dependent on the price transparency for the instruments or market and the instruments’ complexity.

Assets and liabilities disclosed at fair values are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Hierarchical levels, which are defined by ASC 820-10-35, are directly related to the amount of subjectivity associated with the inputs to fair valuation of these assets and liabilities. Determining which category an asset or liability falls within the hierarchy requires significant judgment, and the Company evaluates its hierarchy disclosures each quarter. The three-tier fair value hierarchy is as follows:

Level 1 — Valuations based on quoted prices for identical assets and liabilities in active markets.

Level 2 — Valuations based on observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.

Level 3 — Valuations based on unobservable inputs reflecting management’s own assumptions, consistent with reasonably available assumptions made by other market participants. These valuations require significant judgment.

Income Taxes:

The Company is organized and conducts its operations to qualify as a REIT for federal income tax purposes. Accordingly, the Company is generally not subject to federal income taxation on the portion of its distributable income that qualifies as REIT taxable income, to the extent that it distributes at least 90% of its REIT taxable income to its stockholders and complies with certain other requirements as defined in the Code.

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

The Company accounts for income taxes under the asset and liability method as required by the provisions of ASC 740-10-30. Under this method, deferred tax assets and liabilities are established 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. The Company provides a valuation allowance for deferred tax assets for which it does not consider realization of such assets to be more likely than not.

ASC 740-10-65 addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the financial statements. Under ASC 740-10-65, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. ASC 740-10-65 also provides guidance on de-recognition, classification, interest and penalties on income taxes, and accounting in interim periods and requires increased disclosures. As of September 30, 2025, and December 31, 2024, the Company had determined that no liabilities are required in connection with uncertain tax positions. As of September 30, 2025, the Company’s tax returns for the prior three years are subject to review by the Internal Revenue Service. Any interest and penalties would be expensed as incurred.

Concentrations of Credit Risk:

Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash and cash equivalents, which from time-to-time exceed the federal depository insurance coverage. Beginning January 1, 2013, all interest and noninterest bearing transaction accounts deposited at an insured depository institution are insured by the Federal Deposit Insurance Corporation up to the standard maximum deposit amount of $250,000. Management believes that the Company is not exposed to any significant credit risk due to the credit worthiness of these financial institutions.

For the nine months ended September 30, 2025, rental income of $8.7 million derived from five leases with the City of New York represented 14% of the Company’s rental income. For the nine months ended September 30, 2024, rental income of $7.1 million derived from five leases with the City of New York represented 12% of the Company’s rental income.

For the nine months ended September 30, 2025, rental income of $8.5 million derived from six leases with Federal Express represented 14% of the Company’s rental income. For the nine months ended September 30, 2024, rental income of $8.7 million derived from six leases with Federal Express represented 15% of the Company’s rental income.

For the nine months ended September 30, 2025, rental income of $5.8 million derived from one lease with Avis Rent-A-Car Systems, Inc. ("Avis") represented 9% of the Company’s rental income. For the nine months ended September 30, 2024, rental income of $5.8 million derived from one lease with Avis represented 10% of the Company’s rental income.

Stock-Based Compensation:

The Company has a stock-based compensation plan which is described below in Note 6. The Company accounts for stock-based compensation in accordance with ASC Topic 718, “Compensation – Stock Compensation,” which establishes accounting for stock-based awards exchanged for employee services. Under the provisions of ASC Topic 718, share-based compensation cost is measured at the grant date or service-inception date (if it precedes the grant date), based on the fair value of the award. Share-based compensation is expensed at the grant date (for awards or portion of awards that vested immediately), or ratably over the respective vesting periods, determined from the start of the grant date or service-inception date through the date of vesting.

Recently Issued Accounting Pronouncements:

In December 2023, the Financial Accounting Standards Board ("FASB") issued ASU 2023-09, “Income Taxes (Topic 740) – Improvements to Income Tax Disclosures.” The guidance requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as information on the income taxes paid. The guidance is intended to benefit investors by providing more detailed income tax disclosures that would be useful in making capital allocation decisions. ASU 2023-09 applies to all entities subject to income taxes. For public business entities, the new requirements will be effective for annual periods beginning after December 15, 2024. For entities other than public business entities, the requirements will be effective for annual periods beginning after December 15, 2025. The guidance will be applied on a prospective basis, with the option to apply the standard retrospectively. Early adoption is permitted. The Company is currently assessing the impact this guidance will have on its consolidated financial statements.

In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280) – Improvements to Reportable Segment Disclosures,” which amends disclosure requirements about a public company’s reportable segments and addresses requests from investors for additionally detailed information about a reportable segment’s expenses. A public entity should apply the amendments provided by ASU 2023-07 retrospectively to all prior periods presented in the financial statements. Upon transition, the segment expense categories and amounts disclosed in the prior periods should be based on the significant segment expense categories identified and disclosed in the period of adoption. The amendments are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The Company adopted the amendment during the year ended December 31, 2024 and it did not have a material impact to the consolidated financial statements.

3. REAL ESTATE:

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.

The following table summarizes the Company’s allocation of the purchase price, including closing costs, of assets acquired during the year ended December 31, 2024:


	Purchase Price Allocation
Land	$	5,437
Building and improvements		27,625
Acquired lease intangible assets		1,089
Other assets		1,403
Total consideration	$	35,554

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, 2025.

The following table summarizes the Company’s allocation of the purchase price, including closing costs, of assets acquired during the nine months ended September 30, 2025:


	Purchase Price Allocation
Land	$	3,937
Land improvements		16
Acquired lease intangible assets/liabilities (1)		(2	)
Other assets		6
Total consideration	$	3,957

(1)

Acquired lease intangible assets/liabilities include both in-place and below-market lease allocations.

On April 23, 2025, the Company 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.

4. MORTGAGE NOTES PAYABLE:

The following table sets forth a summary of the Company’s mortgage notes payable (in thousands):


				Principal			Principal
				Outstanding as of			Outstanding as of
Loan	Interest Rate			September 30, 2025			December 31, 2024			Maturity
Allstate Life Insurance Company		4.00	%	—				33,945		5/1/2025
United States Life Insurance Company		3.82	%		39,000			39,000		1/1/2028
United States Life Insurance Company		4.25	%		31,614			32,059		4/1/2028
Transamerica Life Insurance Company		3.45	%		7,632			7,809		4/1/2030
American General Life Insurance Company		6.12	%		122,846			124,009		4/1/2031
American International Group 2022		4.63	%		225,000			225,000		9/1/2032
Transamerica Life Insurance Company 2023		5.40	%		25,000			25,000		8/1/2033
John Hancock Life Insurance Company (U.S.A)		5.65	%		25,000			—		5/1/2035
	Subtotal				476,092			486,822
	Unamortized loan costs				(10,771	)		(11,650	)
	Total			$	465,321		$	475,172

People’s United Bank Loan Agreement:

In connection with the acquisition in 2014 of an 84,000 square foot parking lot in Long Island City, Queens, NY, a wholly owned subsidiary of the Operating Partnership entered into a mortgage loan agreement with People’s United Bank in the aggregate amount of $15.5 million. The loan had a ten-year term and bore interest at 4.18%. Payments for the first seven years were interest only. Payments over the remaining three years of the term were based on a 25-year amortization schedule, with a balloon payment of $14.4 million due at maturity. On October 15, 2024, the Company paid the outstanding mortgage indebtedness to People's United Bank in the amount of $14.4 million.

Allstate Loan Agreement:

On March 13, 2015, in connection with the acquisition of six properties in Piscataway, NJ, the Operating Partnership closed on a $39.1 million cross-collateralized mortgage (the “Allstate Loan”) from Allstate Life Insurance Company, Allstate Life Insurance Company of New York and American Heritage Life Insurance Company. The Allstate Loan Agreement provided a secured facility with a 10-year term loan. During the first three years of the term of the loan, it required interest-only payments at the rate of 4% per annum. Following this period until the loan matured, payments were based on a 30-year amortization schedule, with a balloon payment of $33.7 million due on its original maturity date of April 1, 2025. On March 21, 2025, the Company signed an extension agreement which extended the maturity date of the loan from April 1, 2025 to May 1, 2025 and increased the interest rate to 6.25% per annum for the extension period. The loan was paid in full on April 17, 2025.

United States Life Insurance Company Loan Agreement:

On December 20, 2017 (the “Closing Date”), four wholly owned subsidiaries of the Operating Partnership (collectively, the “U.S. Life Borrowers”) entered in a loan agreement (the “U.S. Life Loan Agreement”) with the United States Life Insurance Company in the City of New York (the “Lender”).

The U.S. Life Loan Agreement provides for a secured loan facility in the principal amount of $39.0 million (the “Loan Facility”). The Loan Facility is a 10-year term loan that requires interest-only payments at the rate of 3.82% per annum. During the period from February 1, 2018 to December 1, 2027, payments of interest only on the principal balance of the U.S. Life Note (as defined below) will be payable in arrears, with the entire principal balance due and payable on January 1, 2028, the loan maturity date. Subject to certain conditions, the U.S. Life Borrowers may prepay the outstanding loan amount in whole on or after January 1, 2023, by providing advance notice of the prepayment to the Lender and remitting a prepayment premium equal to the greater of 1% of the then outstanding principal amount of the Loan Facility or the then present value of the U.S. Life Note (as defined below). The U.S. Life Borrowers paid the Lender a one-time application fee of $50,000 in connection with the Loan Facility. The U.S. Life Borrowers’ obligation to pay the principal, interest and other amounts under the Loan Facility is evidenced by the secured promissory note executed by the U.S. Life Borrowers as of the Closing Date (the “U.S. Life Note”). The U.S. Life Note is secured by certain mortgages encumbering the U.S. Life Borrowers’ properties (a total of four properties) located in New York, New Jersey and Delaware. In the event of default, the initial rate of interest on the U.S. Life Note will increase to the greatest of (i) 18% per annum, (ii) a per annum rate equal to 4% over the prime established rate, or (iii) a per annum rate equal to 5% over the original interest rate, all subject to the applicable state or federal laws. The U.S. Life Note contains other terms and provisions that are customary for instruments of this nature.

United States Life Insurance Company Loan Agreement:

On March 21, 2018, four wholly owned subsidiaries of the Operating Partnership refinanced the current outstanding debt on certain properties by entering into a loan agreement with the United States Life Insurance Company in the City of New York. The loan agreement provides for a secured loan facility in the principal amount of $33.0 million. The loan facility is a ten-year term loan that requires interest-only payments at the rate of 4.25% per annum on the principal balance for the first five years of the term and principal and interest payments (amortized over a 30-year period) during the second five years of the term. The entire principal balance is due and payable on April 1, 2028, the loan maturity date.

Transamerica Life Insurance Company Loan Agreement:

On March 24, 2020, two wholly owned subsidiaries of the Operating Partnership entered into a loan agreement with Transamerica Life Insurance Company. The loan agreement provides for a cross-defaulted, cross-collateralized portfolio of commercial mortgage loans in the aggregate principal amount of $8.4 million. The loan is evidenced by secured promissory notes. Each note is made by one of the borrowers and the combined principal amounts of the notes are equal to the amount of the loan.

The term of each note is ten years and requires (i) interest-only payments at the rate of 3.45% per annum on the principal balance of the note until April 1, 2022 and (ii) principal and interest payments (amortized over a 25-year period commencing at the end of the interest-only period) from May 1, 2022 through March 1, 2030. The entire principal balance of each note is due and payable on April 1, 2030, the loan maturity date. Subject to the terms of the loan agreement, each note may be prepaid in whole upon not less than 30 days’ prior written notice to the lender. Subject to certain exceptions, upon prepayment, the borrowers must remit a prepayment premium equal to the greater of (i) 1% of the prepayment amount and (ii) a yield protection amount calculated in accordance with the terms of the notes. If a default exists, the outstanding principal balance of the notes shall, at the option of the lender, bear interest at a rate equal to the lesser of (i) 10% per annum over the note rate and (ii) the highest rate of interest permitted to be paid or collected by applicable law with respect to the loan. The notes contain other terms and provisions that are customary for instruments of this nature.

American General Life Insurance Company:

On March 15, 2024, three wholly owned subsidiaries of the Operating Partnership refinanced the current outstanding debt on certain properties by entering into a loan agreement with American General Life Insurance Company. The loan agreement provides for a cross-defaulted, cross-collateralized portfolio of commercial mortgage loans in the aggregate principal amount of $125.0 million.

The loan is a seven-year term loan that requires payments based on a 30-year amortization schedule at the rate of 6.12% per annum with the entire principal balance plus any accrued and unpaid interest due and payable on April 1, 2031. Subject to certain conditions, the outstanding loan amounts can be prepaid in whole on or before October 1, 2030, by providing advance notice of prepayment to the lender and remitting a prepayment premium equal to the greater of (i) 1.0% of the then outstanding principal

amount of the loan or (ii) the then present value of the monthly payments of interest only which would be due from the prepayment date through October 1, 2030 based on the principal amount of the loan being prepaid on the prepayment date and assuming an interest rate per annum in the amount, if any, by which the interest rate exceeds the Yield Maintenance Treasury Rate (as defined in the Loan Agreement).

The Company used a portion of the proceeds from the refinancing to pay off $90 million of indebtedness that was outstanding under its senior secured credit facility with Keybank National Association, consisting of $40 million under the revolving credit facility and $50 million under the term loan.

American International Group 2022 Loan Agreement:

On August 5, 2022, certain subsidiaries of the Operating Partnership (collectively, the “Borrowers”) refinanced the current outstanding debt on certain properties (the "prior AIG Loan Agreements") by entering into new loan agreements (collectively the “American International Group 2022 Loan Agreement”) with AIG Asset Management (U.S.), LLC, as administrative agent, and the other lenders, American General Life Insurance Company, the Variable Annuity Life Insurance Company and the United States Life Insurance Company in the City of New York in a transaction that was accounted for as a loan modification. In connection with the modification, the Company incurred loan related costs of approximately $7.9 million, inclusive of a prepayment fee of $5.1 million under the prior AIG Loan Agreements.

The American International Group 2022 Loan Agreement provides for secured loans in the aggregate principal amount of $225.0 million (collectively, the “2022 AIG Loans”), consisting of a loan secured by certain properties in New York in the principal amount of $144.3 million and a loan secured by certain properties in Connecticut and New Jersey in the principal amount of $80.7 million. The 2022 AIG Loans require the Borrowers to make monthly interest-only payments at the rate of 4.63% per annum with the entire principal balance plus any accrued and unpaid interest due and payable on September 1, 2032. The 2022 AIG Loans are secured by certain mortgages encumbering 25 properties in New York, New Jersey and Connecticut.

Transamerica Life Insurance Company 2023 Loan Agreement:

On July 31, 2023, three wholly owned subsidiaries of the Operating Partnership entered into a loan agreement with Transamerica Life Insurance Company. The loan agreement provides for a cross-defaulted, cross-collateralized portfolio of commercial mortgage loans in the aggregate principal amount of $25.0 million. The loan is evidenced by secured promissory notes. Each note is made by one of the borrowers and the combined principal amounts of the notes are equal to the amount of the loan.

The term of each note is ten years and requires (i) interest-only payments at the rate of 5.4% per annum on the principal balance of the note until August 1, 2026 and (ii) principal and interest payments (amortized over a 30-year period commencing at the end of the interest-only period) from September 1, 2026 through July 1, 2033. The entire principal balance of each note is due and payable on August 1, 2033, the loan maturity date. Subject to the terms of the loan agreement, each note may be prepaid in whole upon not less than 30 days’ prior written notice to the lender. Subject to certain exceptions, upon prepayment, the borrowers must remit a prepayment premium equal to the greater of (i) 1% of the prepayment amount and (ii) a yield protection amount calculated in accordance with the terms of the notes. If a default exists, the outstanding principal balance of the notes shall, at the option of the lender, bear interest at a rate equal to the lesser of (i) 10% per annum over the note rate and (ii) the highest rate of interest permitted to be paid or collected by applicable law with respect to the loan. The notes contain other terms and provisions that are customary for instruments of this nature.

John Hancock Life Insurance Company (U.S.A.):

On April 17, 2025, three wholly owned subsidiaries of the Operating Partnership entered into a loan agreement with John Hancock Life Insurance Company (USA). The loan agreement provides for a cross-defaulted, cross-collateralized portfolio of commercial mortgage loans in the aggregate principal amount of $25.0 million. The loan is evidenced by secured promissory notes. Each note is made by one of the borrowers and the combined principal amounts of the notes are equal to the amount of the loan. The proceeds of the loan were used in connection with the payoff of the Company's mortgage loan with Allstate Life Insurance Company.

The term of each note is ten years and requires interest-only payments at the rate of 5.65% per annum on the principal balance of the note until May 1, 2035, the loan maturity date. Subject to the terms of the loan agreement, on or after June 1, 2029, each note may be prepaid in whole upon not less than 30 days' nor more than 90 days' prior written notice to the lender. Subject to certain exceptions, upon prepayment, the borrowers must remit a prepayment premium equal to the greater of (i) 1% of the principal balance of the note immediately prior to such prepayment and (ii) a yield protection amount calculated in accordance with the terms of the notes. If a default exists, the outstanding principal balance of the notes shall bear interest at a rate equal to 7% per annum over the

note rate, but in no event to exceed the highest rate permitted under the laws of the jurisdiction where the property secured by the mortgage is situated. The notes contain other terms and provisions that are customary for instruments of this nature.

In connection with all loan agreements, the Company is required to comply with certain covenants. As of September 30, 2025, the Company was in compliance with all covenants.

Principal Repayments:

As of September 30, 2025, scheduled principal repayments for the remainder of 2025, the next five years and thereafter are as follows (in thousands):


Remainder of 2025	$	611
2026		2,641
2027		3,019
2028		71,697
2029		2,656
2030		9,073
Thereafter		386,395
Total	$	476,092

5. SECURED REVOLVING CREDIT FACILITY & TERM LOAN PAYABLE:

Key Bank Loan Agreement:

On December 2, 2015, the Operating Partnership entered into a Credit Agreement (the “Key Bank Credit Agreement”) with Keybank National Association and Keybanc Capital Markets Inc., as lead arranger (collectively, “Key Bank”). The Key Bank Credit Agreement contemplated a $50.0 million revolving line of credit facility, with an initial term of two years, with a one-year extension option, subject to certain other customary conditions. Through the exercise of additional extension options, the Operating Partnership extended the maturity date of the secured revolving credit facility through June 30, 2022.

On October 22, 2021, the Operating Partnership entered into a First Amended and Restated Credit Agreement (the “Amended and Restated Credit Agreement”) with Key Bank and the other lenders parties thereto (collectively, the “Lenders”). The maturity date of the secured revolving credit facility was extended from June 30, 2022 under the Amended and Restated Credit Agreement. The Amended and Restated Credit Agreement provided for a $60 million senior secured credit facility (the “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, subject to certain other customary conditions (the “Revolver”) and (ii) a $50 million term loan facility, with an initial term of four years and a one-year extension option and subject to certain other customary conditions, which was funded in a single advance on October 22, 2021 (the “Term Loan”). 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. Loan costs paid in connection with the Credit Facility were $0.5 million.

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 Revolver, collectively in an aggregate amount that would not cause the Credit Facility to exceed $125 million (the “Accordion”). Accordion commitments can be committed at closing or any time thereafter and the Accordion commitments will be syndicated on a best-efforts basis.

The Operating Partnership agreed to pay to the Lenders an unused fee under the Revolver in the amount calculated as 0.20% for usage less than 50% and 0.15% for usage 50% or greater, calculated as a per diem rate, multiplied by the excess of the total commitment over the outstanding principal amount of the loans under the total Revolver commitment at the time of the calculation. The Operating Partnership has the right to reduce the amount of loan commitments under the Revolver or terminate the Revolver in accordance with the terms and conditions of the Amended and Restated Credit Agreement.

Due to the revolving nature of the Revolver, amounts prepaid under the Revolver may be borrowed again, provided availability under the Amended and Restated Credit Agreement permits. Amounts repaid under the Term Loan may not be re-borrowed. The Amended and Restated Credit Agreement contemplates (i) mandatory prepayments by the Operating Partnership of any borrowings under the Credit Facility in excess of the total allowable commitment, among other events, and (ii) optional prepayments, at any time without any fees or penalty, in whole or in part, subject to payments of any amounts due associated with the prepayment of LIBOR rate contracts.

The Operating Partnership’s obligations under the Credit Facility are secured by (i) perfected first priority lien and security interest to be held by Key Bank for the benefit of the Lenders in certain of the property, rights and interests of the Operating Partnership, the guarantors and their subsidiaries now existing and as may be acquired, and (ii) any new real estate or any interest therein or to refinance indebtedness secured thereby, financed by the Credit Facility, in whole or in part, which shall be subject to approval by Key Bank in its reasonable discretion, which will serve as additional collateral for the Credit Facility. Any subsidiaries that are not prohibited from being guarantors shall be guarantors. The parties to the Amended and Restated Credit Agreement also entered into several side agreements, including, the Joinder Agreements, the Assignment of Interests, the Acknowledgments, the Mortgages, the Guaranty, and other agreements and instruments to facilitate the transactions contemplated under the Amended and Restated Credit Agreement. Such agreements contain terms and provisions that are customary for instruments of this nature.

The Operating Partnership’s continuing ability to borrow under the Credit Facility will be subject to its ongoing compliance with various affirmative and negative covenants, including, among others, with respect to maximum consolidated leverage ratio, minimum consolidated fixed charge coverage ratio, minimum liquidity, minimum consolidated tangible net worth, minimum debt yield, maximum distributions, minimum occupancy, permitted investments and restrictions on indebtedness. The Amended and Restated Credit Agreement contains events of default and remedies customary for loan transactions of this sort including, among others, those related to a default in the payment of principal or interest, an inaccuracy of a representation or warranty, and a default with regard to performance of certain covenants. The Amended and Restated Credit Agreement includes customary representations and warranties of the Operating Partnership, which must continue to be true and correct in all material respects as a condition to future draws. In addition, the Amended and Restated Credit Agreement also includes customary events of default (in certain cases subject to customary cure), in the event of which, amounts outstanding under the Credit Facility may be accelerated.

The contemplated uses of proceeds under the Amended and Restated Credit Agreement include the (i) payment of closing costs in connection with the Amended and Restated Credit Agreement, (ii) repayment of indebtedness, (iii) acquisitions, development and capital improvements, (iv) general corporate and working capital purposes, and (v) purchase contract deposits and, subject to the terms and conditions of the Amended and Restated Credit Agreement, stock repurchases.

On August 5, 2022 (the “Closing Date”), 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 Revolver from $10 million to $40 million, (ii) extend the maturity date of the Revolver from October 22, 2024 to August 5, 2025, (iii) extend the maturity date of the Term Loan 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. In connection with the First Amendment, the Company incurred loan related costs of $0.5 million, which are included as a component of other assets in the accompanying condensed consolidated balance sheet.

As amended by the First Amendment, the Amended and Restated Credit Agreement provides for a $90 million Credit Facility, consisting of (i) a $40 million Revolver, with an initial term of three years from the Closing Date and two one-year extension options, subject to certain other customary conditions and (ii) a $50 million Term Loan, with an initial term of four years from the Closing Date and a one-year extension option and subject to certain other customary conditions, which was funded in a single advance on October 22, 2021. In connection with the release of certain encumbered properties as collateral upon disposition, the net disposition proceeds must be used to pay down the Credit Facility and any amounts applied to reduce the outstanding amount of the Revolver will result in a pro rata reduction in the amount available under the Revolver (subject to certain conditions).

As amended by the First Amendment, loans drawn down by the Operating Partnership under the Credit Facility must specify, at the Operating Partnership’s option, whether they are base rate loans, daily simple SOFR rate loans or term SOFR rate loans. Borrowings under the Credit Facility bear interest at a rate equal to, at the Operating Partnership’s option, either (1) daily simple SOFR plus 0.1% (but in no case shall the rate be less than zero), (2) term SOFR plus 0.1% (but in no case shall the rate be less than zero) (“Adjusted Term SOFR”), or (3) a base rate determined by reference to the greatest of (a) the fluctuating annual rate of interest announced from time to time by Key Bank as its “prime rate,” (b) 0.50% above the federal funds effective rate, (c) Adjusted Term SOFR for a one month tenor plus 1.0% and (d) 1.0%, and in each case of clauses (1), (2) and (3), plus an applicable margin, depending upon the overall leverage of the properties and whether the loan is under the Revolver or Term Loan facilities. Base rate loans and SOFR rate loans may be converted to loans of the other type, subject to certain conversion conditions.

On March 15, 2024, the outstanding balances of $50.0 million under the Term Loan and $40.0 million under the Revolver were both paid in full.

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

Outstanding borrowings under the Revolver with Key Bank were $18.4 million as of both September 30, 2025 and December 31, 2024, which were SOFR rate borrowings. Unamortized loan costs for the Revolver were $0.1 million as of September 30, 2025 and December 31, 2024, and are included in other assets in the accompanying condensed consolidated balance sheets.

Amortization of loan costs with Key Bank were less than $0.1 million for both the three months ended September 30, 2025 and 2024. Amortization of loan costs with Key Bank were $0.1 million and $0.4 million for the nine months ended September 30, 2025 and 2024, respectively. Amortization of loan costs is included in interest expense in the accompanying condensed consolidated statements of operations.

As of September 30, 2025, the Operating Partnership was in compliance with all covenants required in connection with the Amended and Restated Credit Agreement.

6. STOCKHOLDERS’ EQUITY:

Preferred Stock:

The Company is authorized to issue 10,000,000 shares of preferred stock, $.0001 par value per share. Voting and other rights and preferences may be determined from time to time by the Board of Directors (the “Board”) of the Company. The Company has designated 500,000 shares of preferred stock as Series A preferred stock, $.0001 par value per share. In addition, the Company has designated 6,500,000 shares of preferred stock as Series B preferred stock, $.0001 par value per share. There are no voting rights associated with the Series B preferred stock. There was no Series A preferred stock or Series B preferred stock outstanding as of September 30, 2025, or December 31, 2024.

Common Stock:

The Company is authorized to issue 100,000,000 shares of common stock, $.0001 par value per share. As of September 30, 2025, and December 31, 2024, the Company had a total of 13,345,167 and 13,345,980 shares of common stock issued and outstanding, respectively.

On June 25, 2025, the Company withheld 34,850 shares of common stock pursuant to its 2017 Incentive Award Plan (the "2017 Plan") from certain officers of the Company and a member of the Board at a price of $21.75 per share for a total consideration of approximately $0.8 million to satisfy tax withholding obligations payable upon the vesting of restricted stock.

On June 4, 2025, the Company purchased 75,843 shares of common stock pursuant to its share redemption program at a purchase price of $26.37 per share for a total consideration of approximately $2.0 million.

On June 26, 2024, the Company withheld 30,797 shares of common stock pursuant to the 2017 Plan from certain officers of the Company and a member of the Board at a price of $22.50 per share for a total consideration of approximately $0.7 million to satisfy tax withholding obligations payable upon the vesting of restricted stock.

On June 5, 2024, the Company purchased 76,628 shares of common stock pursuant to its share redemption program at a purchase price of $26.10 per share for a total consideration of approximately $2.0 million.

Dividend Distributions:

The following table presents dividends declared by the Company on its common stock during the nine months ended September 30, 2025:


Declaration	Record	Payment	Dividend
Date	Date	Date	Per Share
March 11, 2025	March 31, 2025	April 10, 2025	$	0.85	(1)
March 11, 2025	March 31, 2025	April 17, 2025	$	0.12
June 5, 2025	June 30, 2025	July 11, 2025	$	0.12
August 5, 2025	September 30, 2025	October 10, 2025	$	0.12

(1)

This represents a 2024 supplemental dividend.

Noncontrolling Interest:

On September 19, 2023, the Operating Partnership, pursuant to a certain Order dated September 19, 2023 of the United States Bankruptcy Court for the Eastern District of New York, purchased 15,202 Common and Class B limited partner units of the Operating Partnership for cash consideration of $32,214,363 from the Chapter 7 estate of a limited partner.

Stock Based Compensation:

The Company had a 2007 Incentive Award Plan (the “2007 Plan”) that had the intended purpose of furthering the growth, development, and financial success of the Company and obtaining and retaining the services of those individuals considered essential to the long-term success of the Company. The 2007 Plan provided for awards in the form of restricted shares, incentive stock options, non-qualified stock options and stock appreciation rights. The aggregate number of shares of common stock which may have been awarded under the 2007 Plan was 1,000,000 shares. The 2007 Plan expired by its terms on June 11, 2017.

The 2017 Plan was adopted by the Board and became effective on April 24, 2017, subject to the approval of the Company’s stockholders, which was obtained on June 8, 2017. The 2017 Plan has the intended purpose of furthering the growth, development, and financial success of the Company and obtaining and retaining the services of those individuals considered essential to the long-term success of the Company. The 2017 Plan provides for awards in the form of stock, stock units, incentive stock options, non-qualified stock options and stock appreciation rights. The aggregate number of shares of common stock which may be awarded under the 2017 Plan is 2,000,000 shares. On July 25, 2020, the Board approved an amendment to the 2017 Plan to permit the transfer of awards that have been exercised, or the shares of common stock underlying such awards which have been issued, and all restrictions applicable to such shares of common stock have lapsed. As of September 30, 2025, the Company had 794,571 shares available for future issuance under the 2017 Plan. Dividends paid on restricted shares are recorded as dividends on shares of the Company’s common stock whether or not they are vested. In accordance with ASC 718-10-35, the Company measures the compensation costs for these shares as of the date of the grant and the expense is recognized in earnings at the grant date (for the portion that vests immediately) and then ratably over the respective vesting periods.

On November 8, 2016, 200,000 non-qualified stock options were granted to key officers of the Company and had a three-year vesting period. For this grant, the exercise price was $10.40 per share and was equal to the value per share based upon a valuation of the shares conducted by an independent third party for the purpose of valuing shares of the Company’s common stock. The fair value of these stock options was based upon the Black-Scholes option pricing model, calculated at the grant date.

On July 1, 2022, 400,000 non-qualified stock options were granted to key officers of the Company and had a three-year vesting period. For this grant, the exercise price was $18.15 per share and was equal to the value per share based upon a valuation of the shares conducted by an independent third party for the purpose of valuing shares of the Company’s common stock. The fair value of these stock options was based upon the Black-Scholes option pricing model, calculated at the grant date.

All options expire ten years from the date of grant. There was $0.2 million and $0.3 million of stock compensation expense relating to these options for the nine months ended September 30, 2025 and September 30, 2024, respectively.

The following table presents shares issued by the Company under the 2007 Plan and the 2017 Plan:


Shares Issued Under the 2007 Plan
Grant	Total		Value		Approximate
Date	Shares Issued		Per Share		Value of Shares		Vesting Period
April 30, 2012		55,149	$	6.80	$	375,000	3 Years	(2)
June 7, 2012		5,884	$	6.80	$	40,000	Immediately	(1)
March 21, 2013		46,876	$	6.40	$	300,000	3 Years	(2)
March 21, 2013		3,126	$	6.40	$	20,000	Immediately	(1)
June 6, 2013		9,378	$	6.40	$	60,000	Immediately	(1)
June 4, 2014		44,704	$	6.80	$	304,000	5 years	(2)
June 19, 2014		8,820	$	6.80	$	60,000	Immediately	(1)
March 26, 2015		43,010	$	9.30	$	400,000	5 years	(2)
June 19, 2015		16,436	$	10.65	$	175,000	Immediately	(1)
March 24, 2016		47,043	$	10.40	$	489,000	5 years	(2)
June 9, 2016		14,424	$	10.40	$	150,000	Immediately	(1)
May 22, 2017		34,482	$	11.60	$	400,000	9 years	(2)
May 31, 2017		7,929	$	11.60	$	92,000	Immediately	(3)
June 8, 2017		15,516	$	11.60	$	180,000	Immediately	(1)

Shares Issued Under the 2017 Plan
Grant	Total		Value		Approximate
Date	Shares Issued		Per Share

GTJ REIT, INC. 10-Q