10-Q

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, 2023

OR

☐ 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: 001-40814

MODIV INDUSTRIAL, INC.

(Exact name of registrant as specified in its charter)

Maryland	47-4156046
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
200 S. Virginia Street, Suite 800, Reno, NV	89501
(Address of principal executive offices)	(Zip Code)

(888) 686-6348

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Class C Common Stock, $0.001 par value per share	MDV	New York Stock Exchange
7.375% Series A Cumulative Redeemable Perpetual Preferred Stock, $0.001 par value per share	MDV.PA	New York Stock Exchange

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

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

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

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

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

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

As of October 31, 2023, there were 7,590,138 shares of Class C common stock outstanding.

MODIV INDUSTRIAL, INC.

FORM 10-Q

INDEX

PART I -	FINANCIAL INFORMATION		3
	Item 1.	Financial Statements (Unaudited)	3
		Condensed Consolidated Balance Sheets – September 30, 2023 and December 31, 2022	3
		Condensed Consolidated Statements of Operations – Three and Nine Months Ended September 30, 2023 and 2022	4
		Condensed Consolidated Statements of Comprehensive (Loss) Income – Three and Nine Months Ended September 30, 2023 and 2022	5
		Condensed Consolidated Statements of Equity – Three Months Ended September 30, 2023 and 2022	6
		Condensed Consolidated Statements of Equity – Nine Months Ended September 30, 2023 and 2022	7
		Condensed Consolidated Statements of Cash Flows – Nine Months Ended September 30, 2023 and 2022	8
		Notes to Condensed Consolidated Financial Statements	9
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	39
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	61
	Item 4.	Controls and Procedures	61
PART II -	OTHER INFORMATION		62
	Item 1.	Legal Proceedings	62
	Item 1A.	Risk Factors	62
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	62
	Item 5.	Other Information	63
	Item 6.	Exhibits	68
SIGNATURES			69

2

PART I – FINANCIAL INFORMATION

Item 1 – Financial Statements

MODIV INDUSTRIAL, INC.

Condensed Consolidated Balance Sheets

(Unaudited)

	September 30, 2023		December 31, 2022
Assets
Real estate investments:
Land	$	106,263,557	$	103,657,237
Buildings and improvements	402,036,084		329,867,099
Equipment	4,429,000		4,429,000
Tenant origination and absorption costs	15,929,385		19,499,749
Total investments in real estate property	528,658,026		457,453,085
Accumulated depreciation and amortization	(47,587,670)		(46,752,322)
Total real estate investments, net, excluding unconsolidated investment in real estate property and real estate investments held for sale, net	481,070,356		410,700,763
Unconsolidated investment in a real estate property	10,035,805		10,007,420
Total real estate investments, net, excluding real estate investments held for sale, net	491,106,161		420,708,183
Real estate investments held for sale, net	8,628,186		5,255,725
Total real estate investments, net	499,734,347		425,963,908
Cash and cash equivalents	5,641,610		8,608,649
Tenant receivables	11,211,058		7,263,202
Above-market lease intangibles, net	1,332,458		1,850,756
Prepaid expenses and other assets	4,881,383		6,100,937
Investment in preferred stock	10,060,000		—
Interest rate swap derivatives	6,156,179		4,629,702
Other assets related to real estate investments held for sale	46,158		12,765
Total assets	$	539,063,193	$	454,429,919
Liabilities and Equity
Mortgage notes payable, net	$	34,118,748	$	44,435,556
Credit facility revolver	—		3,000,000
Credit facility term loan, net	248,385,927		148,018,164
Accounts payable, accrued and other liabilities	8,893,630		7,649,806
Below-market lease intangibles, net	9,098,703		9,675,686
Interest rate swap derivatives	—		498,866
Liabilities related to real estate investments held for sale	162,349		117,881
Total liabilities	300,659,357		213,395,959
Commitments and contingencies (Note 11)
7.375% Series A cumulative redeemable perpetual preferred stock, $0.001 par value, 2,000,000 shares authorized, issued and outstanding as of September 30, 2023 and December 31, 2022	2,000		2,000
Class C common stock, $0.001 par value, 300,000,000 shares authorized; 7,920,926 shares issued and 7,577,416 shares outstanding as of September 30, 2023 and 7,762,506 shares issued and 7,512,353 shares outstanding as of December 31, 2022	7,921		7,762
Class S common stock, $0.001 par value, 100,000,000 shares authorized; no shares issued and outstanding as of September 30, 2023 and December 31, 2022	—		—
Additional paid-in-capital	289,837,352		278,339,020
Treasury stock, at cost, 343,510 shares and 250,153 shares held as of September 30, 2023 and December 31, 2022, respectively	(5,290,780)		(4,161,618)
Cumulative distributions and net losses	(132,524,459)		(117,938,876)
Accumulated other comprehensive income	2,871,866		3,502,616
Total Modiv Industrial, Inc. equity	154,903,900		159,750,904
Noncontrolling interests in the Operating Partnership	83,499,936		81,283,056
Total equity	238,403,836		241,033,960
Total liabilities and equity	$	539,063,193	$	454,429,919

See accompanying notes to condensed consolidated financial statements.

3

MODIV INDUSTRIAL, INC.

Condensed Consolidated Statements of Operations

(Unaudited)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Rental income	$	12,500,338	$	10,303,402	$	34,648,083	$	30,017,493
Operating expenses:
General and administrative	1,735,104		1,838,388		5,240,935		5,559,753
Stock compensation expense	8,469,867		549,240		9,790,206		1,740,852
Depreciation and amortization	4,175,209		3,598,592		11,403,603		10,581,765
Property expenses	1,195,224		1,415,621		4,429,936		5,009,701
Impairment of real estate investment property	—		—		3,499,438		—
Impairment of goodwill	—		—		—		17,320,857
Total operating expenses	15,575,404		7,401,841		34,364,118		40,212,928
(Loss) gain on sale of real estate investments	(1,708,801)		3,932,028		(1,708,801)		11,527,185
Operating (loss) income	(4,783,867)		6,833,589		(1,424,836)		1,331,750
Other income (expense):
Interest income	26,386		1,665		296,921		16,863
Dividend income	190,000		—		190,000		—
Income from unconsolidated investment in a real estate property	79,164		64,358		207,506		226,690
Interest expense, net of derivative settlements and unrealized gain on interest rate swaps	(2,922,918)		(2,514,838)		(6,761,779)		(5,280,167)
Increase in fair value of investment in preferred stock	440,000		—		440,000		—
Loss on early extinguishment of debt	—		—		—		(1,725,318)
Other	65,993		65,993		197,978		198,129
Other expense, net	(2,121,375)		(2,382,822)		(5,429,374)		(6,563,803)
Net (loss) income	(6,905,242)		4,450,767		(6,854,210)		(5,232,053)
Less: net loss (income) attributable to noncontrolling interest in Operating Partnership	1,368,896		(528,540)		1,535,452		1,180,275
Net (loss) income attributable to Modiv Industrial, Inc.	(5,536,346)		3,922,227		(5,318,758)		(4,051,778)
Preferred stock dividends	(921,875)		(921,875)		(2,765,625)		(2,765,625)
Net (loss) income attributable to common stockholders	$	(6,458,221)	$	3,000,352	$	(8,084,383)	$	(6,817,403)
Net (loss) income per share attributable to common stockholders:
Basic	$	(0.86)	$	0.40	$	(1.07)	$	(0.91)
Diluted	$	(0.86)	$	0.35	$	(1.07)	$	(0.91)
Weighted-average number of common shares outstanding:
Basic	7,548,052		7,449,968		7,537,505		7,486,945
Diluted	7,548,052		10,180,543		7,537,505		7,486,945
Distributions declared per common share	$	0.2875	$	0.2875	$	0.8625	$	0.9625

See accompanying notes to condensed consolidated financial statements.

4

MODIV INDUSTRIAL, INC.

Condensed Consolidated Statements of Comprehensive (Loss) Income

(Unaudited)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Net (loss) income	$	(6,905,242)	$	4,450,767	$	(6,854,210)	$	(5,232,053)
Other comprehensive loss: cash flow hedge adjustments
Add: Amortization of unrealized holding gain on interest rate swap	253,092		—		756,496		—
Unrealized holding gain on interest rate swap designated as a cash flow hedge	—		4,255,906		—		4,255,906
Comprehensive (loss) income	(6,652,150)		8,706,673		(6,097,714)		(976,147)
Net loss (income) attributable to noncontrolling interest in Operating Partnership	1,368,896		(528,540)		1,535,452		1,180,275
Other comprehensive loss attributable to noncontrolling interest in Operating Partnership: cash flow hedge adjustments
Add: Amortization of unrealized holding gain on interest rate swap	44,264		—		125,746		—
Unrealized holding gain on interest rate swap designated as a cash flow hedge	—		(637,429)		—		(637,429)
Comprehensive loss (income) attributable to noncontrolling interest in Operating Partnership	1,413,160		(1,165,969)		1,661,198		542,846
Comprehensive (loss) income attributable to Modiv Industrial, Inc.	$	(5,238,990)	$	7,540,704	$	(4,436,516)	$	(433,301)

See accompanying notes to condensed consolidated financial statements.

5

MODIV INDUSTRIAL, INC.

Condensed Consolidated Statements of Equity

Three Months Ended September 30, 2023 and 2022

(Unaudited)

	Preferred Stock			Class C			Additional Paid-in Capital					Cumulative Distributions and Net Losses		Accumulated Other Comprehensive Income (Loss)		Total Modiv Industrial, Inc. Equity		Noncontrolling Interests in the Operating Partnership		Total Equity
				Common Stock					Treasury Stock
	Shares	Amounts		Shares	Amounts				Shares	Amounts
Balance, June 30, 2023	2,000,000	$	2,000	7,874,502	$	7,875	$	280,815,445	(343,510)	$	(5,290,780)	$	(123,895,028)	$	3,080,694	$	154,720,206	$	85,373,051	$	240,093,257
Issuance of common stock - distribution reinvestments	—	—		42,230	42		552,044		—	—		—		—		552,086		—		552,086
Stock compensation expense	—	—		4,194	4		69,996		—	—		—		—		70,000		—		70,000
OP Units compensation expense	—	—		—	—		8,399,867		—	—		—		—		8,399,867		—		8,399,867
Dividends declared, preferred stock	—	—		—	—		—		—	—		(921,875)		—		(921,875)		—		(921,875)
Distributions declared, common stock	—	—		—	—		—		—	—		(2,171,210)		—		(2,171,210)		—		(2,171,210)
Distributions declared, Class C OP Units	—	—		—	—		—		—	—		—		—		—		(459,955)		(459,955)
Net loss	—	—		—	—		—		—	—		(5,536,346)		—		(5,536,346)		(1,368,896)		(6,905,242)
Amortization of unrealized holding gain on interest rate swap	—	—		—	—		—		—	—		—		(208,828)		(208,828)		(44,264)		(253,092)
Balance, September 30, 2023	2,000,000	$	2,000	7,920,926	$	7,921	$	289,837,352	(343,510)	$	(5,290,780)	$	(132,524,459)	$	2,871,866	$	154,903,900	$	83,499,936	$	238,403,836

	Preferred Stock			Class C			Additional Paid-in Capital					Cumulative Distributions and Net (Losses) Income		Accumulated Other Comprehensive Income		Total Modiv Industrial, Inc. Equity		Noncontrolling Interests in the Operating Partnership		Total Equity
				Common Stock					Treasury Stock
	Shares	Amounts		Shares	Amounts				Shares	Amounts
Balance, June 30, 2022	2,000,000	$	2,000	7,643,992	$	7,644	$	275,922,227	(187,430)	$	(3,253,902)	$	(116,491,382)	$	—	$	156,186,587	$	80,949,131	$	237,135,718
Issuance of common stock -distribution reinvestments	—	—		43,617	44		663,175		—	—		—		—		663,219		—		663,219
Stock compensation expense	—	—		10,317	10		164,990		—	—		—		—		165,000		—		165,000
OP Units compensation expense	—	—		—	—		466,740		—	—		—				466,740		—		466,740
Offering costs	—	—		—	—		(138,058)		—	—		—		—		(138,058)		—		(138,058)
Repurchase of common stock	—	—		—	—		—		(45,715)	(703,850)		—		—		(703,850)		—		(703,850)
Dividends declared - preferred stock	—	—		—	—		—		—	—		(921,875)		—		(921,875)		—		(921,875)
Distributions declared, common stock	—	—		—	—		—		—	—		(2,143,444)		—		(2,143,444)		—		(2,143,444)
Distributions declared, Class C OP Units	—	—		—	—		—		—	—		—		—		—		(377,297)		(377,297)
Net income	—	—		—	—		—		—	—		3,922,227		—		3,922,227		528,540		4,450,767
Other comprehensive income	—	—		—	—		—		—	—		—		3,618,477		3,618,477		637,429		4,255,906
Balance, September 30, 2022	2,000,000	$	2,000	7,697,926	$	7,698	$	277,079,074	(233,145)	$	(3,957,752)	$	(115,634,474)	$	3,618,477	$	161,115,023	$	81,737,803	$	242,852,826

See accompanying notes to condensed consolidated financial statements.

6

MODIV INDUSTRIAL, INC.

Condensed Consolidated Statements of Equity

Nine Months Ended September 30, 2023 and 2022

(Unaudited)

	Preferred Stock			Class C			Additional Paid-in Capital					Cumulative Distributions and Net Losses		Accumulated Other Comprehensive Income (Loss)		Total Modiv Industrial, Inc. Equity		Noncontrolling Interests in the Operating Partnership		Total Equity
				Common Stock					Treasury Stock
	Shares	Amounts		Shares	Amounts				Shares	Amounts
Balance, December 31, 2022	2,000,000	$	2,000	7,762,506	$	7,762	$	278,339,020	(250,153)	$	(4,161,618)	$	(117,938,876)	$	3,502,616	$	159,750,904	$	81,283,056	$	241,033,960
Issuance of common stock - distribution reinvestments	—	—		140,965	141		1,708,144		—	—		—		—		1,708,285		—		1,708,285
Issuance of Class C OP Units	—	—		—	—		—		—	—		—		—		—		5,175,285		5,175,285
Stock compensation expense	—	—		17,455	18		234,982		—	—		—		—		235,000		—		235,000
OP Units compensation expense	—	—		—	—		9,555,206		—	—		—		—		9,555,206		—		9,555,206
Repurchase of common stock	—	—		—	—		—		(93,357)	(1,129,162)		—		—		(1,129,162)		—		(1,129,162)
Dividends declared, preferred stock	—	—		—	—		—		—	—		(2,765,625)		—		(2,765,625)		—		(2,765,625)
Distributions declared, common stock	—	—		—	—		—		—	—		(6,501,200)		—		(6,501,200)		—		(6,501,200)
Distributions declared, Class C OP Units	—	—		—	—		—		—	—		—		—		—		(1,297,207)		(1,297,207)
Net loss	—	—		—	—		—		—	—		(5,318,758)		—		(5,318,758)		(1,535,452)		(6,854,210)
Amortization of unrealized holding gain on interest rate swap	—	—		—	—		—		—	—		—		(630,750)		(630,750)		(125,746)		(756,496)
Balance, September 30, 2023	2,000,000	$	2,000	7,920,926	$	7,921	$	289,837,352	(343,510)	$	(5,290,780)	$	(132,524,459)	$	2,871,866	$	154,903,900	$	83,499,936	$	238,403,836

	Preferred Stock			Class C			Additional Paid-in Capital					Cumulative Distributions and Net Losses		Accumulated Other Comprehensive Income		Total Modiv Industrial, Inc. Equity		Noncontrolling Interests in the Operating Partnership		Total Equity
				Common Stock					Treasury Stock
	Shares	Amounts		Shares	Amounts				Shares	Amounts
Balance, December 31, 2021	2,000,000	$	2,000	7,490,404	$	7,491	$	273,441,831	—	$	—	$	(101,624,430)	$	—	$	171,826,892	$	50,603,000	$	222,429,892
Issuance of common stock -distribution reinvestments	—	—		152,606	153		2,866,693		—	—		—		—		2,866,846		—		2,866,846
Listed offering of common stock, net	—	—		40,000	40		114,460		—	—		—		—		114,500		—		114,500
Issuance of Class C OP Units	—	—		—	—		—		—	—		—		—		—		32,809,551		32,809,551
Stock compensation expense	—	—		14,916	14		247,486		—	—		—		—		247,500		—		247,500
OP Units compensation expense	—	—		—	—		1,493,352		—	—		—		—		1,493,352		—		1,493,352
Offering costs	—	—		—	—		(1,084,748)		—	—		—		—		(1,084,748)		—		(1,084,748)
Repurchase of common stock	—	—		—	—		—		(233,145)	(3,957,752)		—		—		(3,957,752)		—		(3,957,752)
Dividends declared - preferred stock	—	—		—	—		—		—	—		(2,765,625)		—		(2,765,625)		—		(2,765,625)
Distributions declared, common stock	—	—		—	—		—		—	—		(7,192,641)		—		(7,192,641)		—		(7,192,641)
Distributions declared, Class C OP Units	—	—		—	—		—		—	—		—		—		—		(1,131,902)		(1,131,903)
Net loss	—	—		—	—		—		—	—		(4,051,778)		—		(4,051,778)		(1,180,275)		(5,232,053)
Other comprehensive income	—	—		—	—		—		—	—		—		3,618,477		3,618,477		637,429		4,255,906
Balance, September 30, 2022	2,000,000	$	2,000	7,697,926	$	7,698	$	277,079,074	(233,145)	$	(3,957,752)	$	(115,634,474)	$	3,618,477	$	161,115,023	$	81,737,803	$	242,852,826

See accompanying notes to condensed consolidated financial statements.

7

MODIV INDUSTRIAL, INC.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	Nine Months Ended September 30,
	2023		2022
Cash Flows from Operating Activities:
Net loss	$	(6,854,210)	$	(5,232,053)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	11,403,603		10,581,765
Stock compensation expense	9,790,206		1,740,852
Amortization of deferred rents	(4,528,120)		(2,593,698)
Amortization of deferred lease incentives	217,537		323,347
Write-offs and amortization of deferred financing costs and premium/discount	556,134		1,470,289
Amortization of (below) above market lease intangibles, net	(596,194)		(862,861)
Impairment of real estate investment property	3,499,438		—
Increase in fair value of investment in preferred stock	(440,000)		—
Impairment of goodwill	—		17,320,857
Write-off of purchase deposit	—		375,000
Loss (gain) on sale of real estate investments	1,708,801		(11,527,185)
Unrealized gain on interest rate swap valuation	(2,781,838)		(530,997)
Write-off of unrealized gain on interest rate swaps	—		(788,016)
Income from unconsolidated investment in a real estate property	(207,506)		(226,690)
Distributions from unconsolidated investment in a real estate property	179,121		179,531
Change in operating assets and liabilities:
Decrease in tenant receivables	242,711		90,743
(Increase) decrease in prepaid and other assets	(104,469)		284,145
Decrease in accounts payable, accrued and other liabilities	(875,048)		(1,278,266)
Net cash provided by operating activities	11,210,166		9,326,763
Cash Flows from Investing Activities:
Acquisitions of real estate investments	(122,778,215)		(127,144,029)
Additions to existing real estate investments	(1,744,462)		(3,855,719)
Collection of note receivable from early termination of lease	—		1,836,767
Net proceeds from sale of real estate investments	34,737,474		66,489,004
Purchase deposits, net	(1,259,452)		(195,614)
Refund (payment) of lease incentives	48,731		(2,100,000)
Net cash used in investing activities	(90,995,924)		(64,969,591)
Cash Flows from Financing Activities:
Borrowings from credit facility term loan	100,000,000		150,000,000
Repayments of credit facility revolver, net	(3,000,000)		(1,247,000)
Principal payments on mortgage notes payable	(10,230,160)		(130,421,220)
Payments of deferred financing costs	—		(2,186,468)
Proceeds from listed offering of common stock, net	—		114,500
Payments of offering costs	—		(1,084,748)
Repurchases of common stock	(1,129,162)		(3,957,752)
Dividends paid to preferred stockholders	(2,765,625)		(2,909,028)
Distributions paid to common stockholders	(4,786,681)		(4,339,952)
Distributions paid to Class C OP Units holders	(1,269,653)		(1,006,136)
Net cash provided by financing activities	76,818,719		2,962,196
Net decrease in cash and cash equivalents	(2,967,039)		(52,680,632)
Cash and cash equivalents, beginning of period	8,608,649		58,407,520
Cash and cash equivalents, end of period	$	5,641,610	$	5,726,888
MODIV INDUSTRIAL, INC.
Condensed Consolidated Statements of Cash Flows (continued)
(Unaudited)
	Nine Months Ended September 30,
	2023		2022
Supplemental Disclosure of Cash Flow Information:
Cash paid for interest	$	8,675,670	$	5,152,425
Supplemental Schedule of Noncash Investing and Financing Activities:
Investment in preferred stock	$	9,620,000	$	—
Accrued real estate improvements	$	2,350,000	$	512,908
Reclassification of tenant improvements from other assets to real estate investments	$	—	$	522,844
Issuance of Class C OP Units in the acquisition of a real estate investment	$	5,175,284	$	32,809,551
Reinvested distributions from common stockholders	$	1,716,399	$	2,866,846
Accrued distributions and dividends	$	33,787	$	(31,794)
Supplemental disclosure related to changes in real estate investments held for sale, net:
Real estate investments held for sale, net	$	3,372,461	$	31,510,762
Other assets related to real estate investments held for sale	$	33,393	$	788,296
Mortgage notes payable related to real estate investments held for sale, net	$	—	$	(21,699,912)
Other liabilities related to real estate investments held for sale	$	44,468	$	(383,282)

See accompanying notes to condensed consolidated financial statements.

8

MODIV INDUSTRIAL, INC.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

NOTE 1. BUSINESS AND ORGANIZATION

Modiv Industrial, Inc. (the “Company”) was incorporated on May 15, 2015 as a Maryland corporation. The Company changed its name from Modiv Inc. to Modiv Industrial, Inc., effective August 11, 2023. The Company has the authority to issue 450,000,000 shares of stock, consisting of 50,000,000 shares of preferred stock, $0.001 par value per share, of which 2,000,000 shares are designated as 7.375% Series A cumulative redeemable perpetual preferred stock (“Series A Preferred Stock”), 300,000,000 shares of Class C common stock, $0.001 par value per share, and 100,000,000 shares of Class S common stock, $0.001 par value per share. The Company's Series A Preferred Stock is listed on the New York Stock Exchange (the “NYSE”) under the symbol MDV.PA and has been trading since September 17, 2021. The Company's Class C common stock is listed on the NYSE under the symbol “MDV” and has been trading since February 11, 2022.

The Company holds its investments in real property primarily through special purpose limited liability companies which are wholly-owned subsidiaries of Modiv Operating Partnership, LP, a Delaware limited partnership (the “Operating Partnership”). The Operating Partnership was formed on January 28, 2016. The Company is the sole general partner of, and owned an approximate 68% and 73% partnership interest in, the Operating Partnership as of September 30, 2023 and December 31, 2022, respectively. The Operating Partnership's limited partners include holders of several classes of units with various vesting and enhancement terms as further described in Note 12.

As of September 30, 2023, the Company's portfolio of approximately 4.6 million square feet of aggregate leasable space consisted of investments in 44 real estate properties, comprised of: 39 industrial properties, including an approximate 72.7% tenant-in-common interest in a Santa Clara, California property (the “TIC Interest”), which represent approximately 76% of the portfolio (expressed as a percentage of annual base rent (“ABR”) as of September 30, 2023), one retail property, which represents approximately 10% of the portfolio, and four office properties (including one classified as a held for sale property), which represent approximately 14% of the portfolio.

Distribution Reinvestment Plan

On February 15, 2022, the Company's board of directors amended and restated the Company's distribution reinvestment plan (the “Second Amended and Restated DRP”) with respect to the Class C common stock to change the purchase price at which the Class C common stock is issued to stockholders who elect to participate in the Company's distribution reinvestment plan (the “DRP”). The purpose of this change was to reflect the fact that the Company's Class C common stock is now listed on the NYSE and no longer priced based on net asset value (“NAV”) per share. As more fully described in the Second Amended and Restated DRP, the purchase price for the Class C common stock under the DRP depends on whether the Company issues new shares to DRP participants or the Company or any third-party administrator obtains shares to be issued to DRP participants by purchasing them in the open market or in privately negotiated transactions. The purchase price for the Class C common stock issued directly by the Company is 97%, reflecting a 3% discount (or such other discount as may then be in effect) of the Market Price (as defined in the Second Amended and Restated DRP) of the Class C common stock. This discount is subject to change from time to time, in the Company’s sole discretion, but will be between 0% to 5% of the Market Price.

The purchase price for the Class C common stock that the Company or any third-party administrator purchases from parties other than the Company, either in the open market or in privately negotiated transactions, will be 100% of the “average price per share” (as described in the Second Amended and Restated DRP) actually paid for such shares of Class C common stock, excluding any processing fees. The Second Amended and Restated DRP also reflects the $0.05 per share processing fee that will be paid to the Company's transfer agent by DRP participants for each share of Class C common stock purchased through the DRP. The Second Amended and Restated DRP was effective beginning with distributions paid in February 2022. From February 2022 through September 30, 2023, the Company issued 351,276 shares of Class C common stock under the DRP.

9

MODIV INDUSTRIAL, INC.

Notes to Condensed Consolidated Financial Statements (continued)

(Unaudited)

Share Repurchase Program

On February 15, 2022, the Company's board of directors authorized up to $20,000,000 in repurchases of the Company's outstanding shares of common stock through December 31, 2022 (“2022 SRP”). On December 21, 2022, the Company's board of directors authorized up to $15,000,000 in repurchases of the Company's outstanding shares of common stock and Series A Preferred Stock from January 1, 2023 through December 31, 2023 (“2023 SRP”). Repurchases made pursuant to the 2023 SRP will be made from time-to-time in the open market, in privately negotiated transactions or in any other manner as permitted by federal securities laws and other legal requirements. The timing, manner, price and amount of any repurchases will be determined by the Company in its discretion and will be subject to economic and market conditions, stock price, applicable legal requirements and other factors. The program may be suspended or discontinued at any time.

Under the 2022 SRP, the Company repurchased an aggregate of 250,153 shares of its Class C common stock for an aggregate value of $4,161,618 at an average cost of $16.64 per share. Under the 2023 SRP, during the nine months ended September 30, 2023, the Company repurchased an aggregate of 93,357 shares of its Class C common stock for an aggregate value of $1,129,162 at an average cost of $12.10 per share. The Company did not repurchase any of its Class C common stock during the three months ended September 30, 2023.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial statements as contained within the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) and the rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, they do not contain all information and footnotes required by GAAP for annual financial statements pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading. Such unaudited condensed consolidated financial statements and notes are the representations of the Company’s management, which is responsible for their integrity and objectivity. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements as of December 31, 2022 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 13, 2023.

The accompanying unaudited condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and, in the opinion of management, reflect all adjustments, which are normal and recurring, necessary to fairly state the Company's financial position, results of operations and cash flows. All significant intercompany balances and transactions are eliminated in consolidation. The unaudited condensed consolidated balance sheet as of December 31, 2022 included herein was derived from the audited financial statements.

Noncontrolling Interests in the Operating Partnership

The Company accounts for the noncontrolling interests in its Operating Partnership in accordance with the related accounting guidance. Due to the Company's exclusive responsibility and discretion in the management and control of the Operating Partnership through its general partnership interest therein, the Operating Partnership, including its wholly-owned subsidiaries, are consolidated with the Company, and the limited partner interests not held by the Company are reflected as noncontrolling interests in the accompanying unaudited condensed consolidated balance sheets and statements of equity. As discussed in Note 12, other than the noncontrolling interests related to “UPREIT” transactions completed in January 2022 and April 2023, all noncontrolling interests currently represent non-voting, non-distribution accruing interests with no allocation of profits or losses, but have various conversion rights to obtain future rights to distributions and allocation of profits and losses.

Use of Estimates

The preparation of the accompanying unaudited condensed consolidated financial statements and the accompanying notes thereto in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the unaudited condensed consolidated financial statements and accompanying notes. These estimates are based on historical experience and, in some cases, assumptions based on current and future market experience. Actual results may differ from those estimates.

10

MODIV INDUSTRIAL, INC.

Notes to Condensed Consolidated Financial Statements (continued)

(Unaudited)

Real Estate Acquisitions

In accordance with ASC 805, Business Combinations, the Company evaluates each real estate acquisition to determine whether to account for the acquisition as an asset acquisition or a business combination. When it concludes that substantially all of the fair value of the gross asset is concentrated in a single identifiable asset rather than an integrated set of activities and assets, the Company recognizes the acquisition of a real estate asset rather than a business combination, and allocates the acquisition cost to tangible and intangible assets based on their relative fair values. All of the Company's real estate acquisitions for the nine months ended September 30, 2023 and the year ended December 31, 2022 have been accounted for as asset acquisitions.

Revenue Recognition

The Company accounts for leases in accordance with FASB Accounting Standards Update (“ASU”) No. 2016-02, Leases (“Topic 842”), and the related FASB ASU Nos. 2018-10, 2018-11, 2018-20 and 2019-01, which provide practical expedients, technical corrections and improvements for certain aspects of ASU No. 2016-02 (collectively “Topic 842”). As a lessor, the Company's leases with tenants generally provide for the lease of real estate properties, as well as common area maintenance, property taxes and other recoverable costs. Rental income and tenant reimbursements and other lease related property income that meet the requirements of the practical expedient provided by ASU No. 2018-11 have been combined under rental income in the Company's accompanying unaudited condensed consolidated statements of operations.

The Company recognizes rental income from tenants under operating leases on a straight-line basis over the noncancelable term of the lease when collectability of such amounts is reasonably assured. Recognition of rental income on a straight-line basis includes the effects of rental abatements, lease incentives and fixed and determinable increases in lease payments over the lease term. If the lease provides for tenant improvements, the management of the Company determines whether the tenant improvements, for accounting purposes, are owned by the tenant or by the Company.

When the Company is the owner of the tenant improvements, the tenant is not considered to have taken physical possession or have control of the physical use of the leased asset until the tenant improvements are substantially completed. When the tenant is the owner of the tenant improvements, any tenant improvement allowance (including amounts that the tenant can take in the form of cash or a credit against its rent) that is funded is treated as a lease incentive and amortized as a reduction of revenue over the lease term.

The Company records tenant reimbursements on a gross basis in instances when its tenants reimburse the Company for lessor costs, including real estate taxes, which the Company incurs. Conversely, the Company records lessor costs on a net basis when these costs are paid directly by the Company's tenants to suppliers and service providers, including taxing authorities, on the Company's behalf. To the extent any tenant responsible for these obligations under the applicable lease defaults on such lease, or if it is deemed probable that the tenant will fail to pay for these obligations, the Company records a liability for such obligations.

The Company evaluates the collectability of rents and other receivables on a regular basis based on factors including, among others, payment history, credit rating, the asset type, and current economic conditions. If the Company’s evaluation of these factors indicates it may not recover the full value of the receivable, it provides an allowance against the portion of the receivable that it estimates may not be recovered. This analysis requires the Company to determine whether there are factors indicating a receivable may not be fully collectible and to estimate the amount of the receivable that may not be collected.

Bad Debts and Allowances for Tenant and Deferred Rent Receivables

The Company's determination of the adequacy of its allowances for tenant receivables includes a binary assessment of whether or not the amounts due under a tenant’s lease agreement are probable of collection. For such amounts that are deemed probable of collection, revenue continues to be recorded on a straight-line basis over the lease term. For such amounts that are deemed not probable of collection, revenue is recorded as the lesser of (i) the amount which would be recognized on a straight-line basis or (ii) cash that has been received from the tenant, with any tenant and deferred rent receivable balances charged as a direct write-off against rental income in the period of the change in the collectability determination. In addition, for tenant and deferred rent receivables deemed probable of collection, the Company also may record an allowance under other authoritative GAAP depending upon the Company's evaluation of the individual receivables, specific credit enhancements, current economic conditions, and other relevant factors. Such allowances are recorded as increases or decreases through rental income in the Company's accompanying unaudited condensed consolidated statements of operations.

11

MODIV INDUSTRIAL, INC.

Notes to Condensed Consolidated Financial Statements (continued)

(Unaudited)

With respect to tenants in bankruptcy, management makes estimates of the expected recovery of pre-petition and post-petition claims in assessing the estimated collectability of the related receivable. In some cases, the ultimate resolution of these claims can exceed one year. When a tenant is in bankruptcy, the Company will record a bad debt allowance for the tenant’s receivable balance and generally will not recognize subsequent rental income until cash is received or until the tenant is no longer in bankruptcy and has the ability to make rental payments.

Gain or Loss on Sale of Real Estate Investments

The Company recognizes gain or loss on sale of real estate property when the Company has executed a contract for sale of the property, transferred controlling financial interest in the property to the buyer and determined that it is probable that the Company will collect substantially all of the consideration for the property. The Company's real estate property sale transactions during both the three and nine months ended September 30, 2023 and 2022 met these criteria at closing. When properties are sold, operating results of the properties remain in continuing operations, and any associated gain or loss from the disposition is included in gain or loss on sale of real estate investments in the Company’s accompanying unaudited condensed consolidated statements of operations.

Impairment of Investment in Real Estate Properties

The Company monitors events and changes in circumstances that could indicate that the carrying amounts of investments in real estate properties may not be recoverable. When indicators of potential impairment are present that indicate that the carrying amounts of investments in real estate properties may not be recoverable, management assesses whether the carrying value of the investments in real estate properties will be recovered through the future undiscounted operating cash flows expected from the use of and eventual disposition of the property. If, based on the analysis, the Company does not believe that it will be able to recover the carrying value of the investments in real estate properties, the Company records an impairment charge to the extent the carrying value exceeds the estimated fair value of the investments in real estate properties.

Treasury Stock

The Company accounts for repurchased shares of its Class C common stock as treasury stock. Treasury shares are recorded at cost and are included as a component of equity in the Company's accompanying unaudited condensed consolidated balance sheets as of September 30, 2023 and December 31, 2022.

Fair Value Disclosures

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an existing price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value hierarchy, which is based on three levels of inputs, the first two of which are considered observable and the last unobservable, that may be used to measure fair value, is as follows:

Level 1: quoted prices in active markets for identical assets or liabilities;

Level 2: inputs other than Level 1 that are observable, either directly or indirectly, 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; and

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.

12

MODIV INDUSTRIAL, INC.

Notes to Condensed Consolidated Financial Statements (continued)

(Unaudited)

The fair value for certain financial instruments is derived using valuation techniques that involve significant management judgment. The price transparency of financial instruments is a key determinant of the degree of judgment involved in determining the fair value of the Company’s financial instruments. Financial instruments for which actively quoted prices or pricing parameters are available and for which markets contain orderly transactions will generally have a higher degree of price transparency than financial instruments for which markets are inactive or consist of non-orderly trades. The Company evaluates several factors when determining if a market is inactive or when market transactions are not orderly. The following is a summary of the methods and assumptions used by management in estimating the fair value of each class of financial instrument for which it is practicable to estimate the fair value:

Cash and cash equivalents, tenant receivables, prepaid expenses and other assets and accounts payable, accrued and other liabilities: These balances approximate their fair values due to their short maturities.

Investment in preferred stock: The Company’s investment in preferred stock is presented at fair value in the accompanying unaudited condensed consolidated balance sheet using Level 3 inputs. The preferred stock investment has been recorded at fair value by incorporating both the Monte Carlo simulation model and a dividend discount model. These models incorporate risk-free rates, stock prices, yield and volatility. The development and determination of the unobservable inputs for Level 3 fair value measurements and fair value calculations are the responsibility of the Company’s management with the assistance of an independent third-party valuation specialist.

Derivative Instruments: The Company’s derivative instruments are presented at fair value in the accompanying unaudited condensed consolidated balance sheets. The valuation of these instruments is determined using a proprietary model that utilizes observable inputs. As such, the Company classifies these inputs as Level 2 inputs. The proprietary model uses the contractual terms of the derivatives, including the period to maturity, as well as observable market-based inputs, including interest rate curves and volatility. The fair values of interest rate swaps are estimated using the market standard methodology of netting the discounted fixed cash payments and the discounted expected variable cash receipts. The variable cash receipts are based on an expectation of interest rates (forward curves) derived from observable market interest rate curves. In addition, credit valuation adjustments, which consider the impact of any credit risks on the contracts, are incorporated in the fair values to account for potential nonperformance risk.

Credit facility: The fair values of the Company’s credit facility approximate the carrying value as their interest rate and other terms are comparable to those available in the marketplace for similar credit facilities.

Mortgage notes payable: The fair values of the Company’s mortgage notes payable are estimated using a discounted cash flow analysis based on management’s estimates of current market interest rates for instruments with similar characteristics, including remaining loan term, loan-to-value ratio, type of collateral and other credit enhancements. Additionally, when determining the fair value of liabilities in circumstances in which a quoted price in an active market for an identical liability is not available, the Company measures fair value using (i) a valuation technique that uses the quoted price of the identical liability when traded as an asset or quoted prices for similar liabilities when traded as assets or (ii) another valuation technique that is consistent with the principles of fair value measurement, such as the income approach or the market approach. The Company classifies these inputs as Level 3 inputs.

Related party transactions: The Company has concluded that it is not practical to determine the estimated fair value of related party transactions. Disclosure rules for fair value measurements require that for financial instruments for which it is not practicable to estimate fair value, information pertinent to those instruments be disclosed. Further information as to these financial transactions with related parties is included in Note 10.

13

MODIV INDUSTRIAL, INC.

Notes to Condensed Consolidated Financial Statements (continued)

(Unaudited)

Real Estate Investments Held for Sale

The Company generally considers a real estate investment to be “held for sale” when the following criteria are met as of the balance sheet date: (i) management commits to a plan to sell the property, (ii) the property is available for sale immediately, (iii) the property is actively being marketed for sale at a price that is reasonable in relation to its current fair value, (iv) the sale of the property within one year is considered probable and (v) significant changes to the plan to sell are not expected. Real estate that is held for sale and its related assets are classified as “real estate investments held for sale, net” and “other assets related to real estate investments held for sale,” respectively, in the accompanying unaudited condensed consolidated balance sheets. Other liabilities related to real estate investments held for sale are classified as “liabilities related to real estate investments held for sale” in the accompanying unaudited condensed consolidated balance sheets. Real estate investments classified as held for sale are no longer depreciated and are reported at the lower of their carrying value or their estimated fair value less estimated costs to sell. Operating results of properties that were classified as held for sale in the ordinary course of business are included in continuing operations in the Company’s accompanying unaudited condensed consolidated statements of operations.

Derivative Instruments and Hedging Activities

The Company enters into derivative instruments for risk management purposes to hedge its exposure to cash flow variability caused by changing interest rates on its variable rate debt. The Company does not enter into derivatives for speculative purposes. The Company records derivative instruments at fair value on its accompanying unaudited condensed consolidated balance sheets. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. If the Company elects to designate a derivative in a hedging relationship and the hedging relationship satisfies the criteria necessary to apply hedge accounting, the derivative is designated as a cash flow hedge and the unrealized holding gain or loss on the interest rate swap is presented in comprehensive (loss) income and accumulated other comprehensive income in the Company's accompanying unaudited condensed consolidated statements of comprehensive (loss) income and condensed consolidated balance sheets, respectively. If the derivative instrument does not meet the hedge accounting criteria, the change in the fair value of the derivative is recorded as a gain or loss on the interest rate swap and included in interest expense, net of derivative settlements and unrealized gain on interest rate swaps in the Company's accompanying unaudited condensed consolidated statements of operations.

The Company has entered into interest rate swaps as a fixed rate payer to mitigate its exposure to rising interest rates on its variable rate term loan. The value of interest rate swaps is primarily impacted by interest rates, market expectations about interest rates, and the remaining life of the instrument. In general, increases in interest rates, or anticipated increases in interest rates, will increase the value of the fixed rate payer position and decrease the value of the variable rate payer position. As the remaining life of the interest rate swap decreases, the value of both positions will generally move towards zero. The Company may enter into derivative contracts that are intended to economically hedge certain risks, even though hedge accounting does not apply or the Company elects not to apply hedge accounting.

Restricted Operating Partnership Unit Awards

Historically, the fair values of the restricted Operating Partnership unit awards issued or granted by the Company were based on an estimated NAV per share (unaudited) of the Company’s common stock on the date of issuance or grant, adjusted for an illiquidity discount due to the illiquid nature of the underlying equity prior to the listing of the Company's Class C common stock on the NYSE. The fair value of future grants of restricted Operating Partnership unit awards will be determined based on the NYSE's market closing price of the Company's Class C common stock on the date of grant. Operating Partnership units issued as purchase consideration in connection with the Self-Management Transaction and UPREIT Transactions (each as defined and discussed in Note 12) are recorded in equity under noncontrolling interests in the Operating Partnership in the Company's accompanying unaudited condensed consolidated balance sheets and statements of equity. For units granted to employees of the Company that are not included in the purchase consideration, the fair value of the award is amortized using the straight-line method over the requisite service period of the award, which is generally the vesting period (see Note 12). The Company has elected to record forfeitures as they occur. Compensation cost is recorded for units to be issued subject to a performance condition when it is probable that the performance condition will be met.

14

MODIV INDUSTRIAL, INC.

Notes to Condensed Consolidated Financial Statements (continued)

(Unaudited)

Immaterial Error Corrections

During the first quarter of 2023, management determined that its prior treatment of property taxes in those instances where the Company was responsible for paying property taxes and subsequently seeking tenant reimbursement should be treated differently than those instances where property taxes were paid directly by tenants to taxing authorities. Management determined that property taxes paid directly by tenants to taxing authorities should not have been recorded in the Company’s accompanying unaudited condensed consolidated statements of operations for the prior year periods in accordance with ASU 2018-20 “Leases (Topic 842) - Narrow-Scope Improvements for Lessors.” Accordingly, the Company’s accompanying unaudited condensed consolidated statements of operations for the three and nine months ended September 30, 2022 reflect an adjustment to reduce rental income and a corresponding reduction in property expenses of $648,271 and $1,784,668, respectively, for such property taxes and the Company's consolidated balance sheet as of December 31, 2022 reflects a reduction in tenant receivables with a corresponding reduction in accounts payable, accrued and other liabilities of $1,596,127. The corrections did not affect net income (loss) or net income (loss) per share for the three and nine months ended September 30, 2022 in the accompanying unaudited condensed consolidated statements of operations.

During the fourth quarter of 2022, management determined that straight-line rents receivable write-offs associated with real estate investments previously sold should be reclassified as a component of the related gain on sale of the real estate investments rather than as an offset to rental income as previously presented in the Company's statements of operations. Accordingly, the Company’s accompanying unaudited condensed consolidated statements of operations for the three and nine months ended September 30, 2022 reflect an increase in rental income and a corresponding reduction in the gain on sale of real estate investments of $739,255 and $1,546,976, respectively. The reclassification did not affect net income (loss) or net income (loss) per share for the three and nine months ended September 30, 2022 in the accompanying unaudited condensed consolidated statements of operations.

Recent Accounting Pronouncements

New Accounting Standards Recently Issued and Not Yet Adopted

In August 2023, the FASB issued ASU 2023-05, Business Combinations – Joint Venture Formations (Subtopic 805-60) (“ASU 2023-05”), which addresses the accounting for contributions made to a joint venture, upon formation, in a joint venture’s separate financial statements. At present, GAAP does not provide specific authoritative guidance on how a joint venture, upon formation, should recognize and initially measure assets contributed and liabilities assumed. ASU 2023-05 will require that a joint venture apply a new basis of accounting upon formation. By applying the new basis of accounting, a joint venture, upon formation, will recognize and initially measure its assets and liabilities at fair value (with exceptions to fair value measurement that are consistent with the business combinations guidance). The amendments in ASU 2023-05 are effective prospectively for all joint ventures formed on or after January 1, 2025. Joint ventures formed prior to January 1, 2025 may elect to apply the amendments retrospectively and early adoption is permitted. The Company does not currently anticipate any material impact from the implementation of ASU 2023-05.

15

MODIV INDUSTRIAL, INC.

Notes to Condensed Consolidated Financial Statements (continued)

(Unaudited)

NOTE 3. REAL ESTATE INVESTMENTS, NET

As of September 30, 2023, the Company’s real estate investment portfolio consisted of 44 operating properties located in 16 states comprised of: 39 industrial properties (including the Company's approximate 72.7% TIC Interest in a Santa Clara, California industrial property which is not reflected in the table below but discussed in Note 4), one retail property and four office properties (including the one held for sale property not reflected in the table below).

The following table provides summary information regarding the Company’s 42 operating properties held for investment and use as of September 30, 2023:

Property Tenant	Location	Acquisition Date	Property Type	Land, Buildings and Improvements		Equipment		Tenant Origination and Absorption Costs		Accumulated Depreciation and Amortization		Total Investment in Real Estate Property, Net
Northrop Grumman	Melbourne, FL	3/7/2017	Industrial	$	13,608,084	$	—	$	1,469,737	$	(4,361,816)	$	10,716,005
Northrop Grumman	Melbourne, FL	6/21/2018	Land	329,410		—		—		—		329,410
Husqvarna	Charlotte, NC	11/30/2017	Industrial	11,840,200		—		1,013,948		(2,095,659)		10,758,489
AvAir	Chandler, AZ	12/28/2017	Industrial	27,357,899		—		—		(4,019,833)		23,338,066
3M	DeKalb, IL	3/29/2018	Industrial	14,762,819		—		3,037,057		(5,983,018)		11,816,858
Taylor Fresh Foods	Yuma, AZ	10/24/2019	Industrial	34,194,369		—		2,894,017		(5,231,624)		31,856,762
Levins	Sacramento, CA	12/31/2019	Industrial	4,429,390		—		221,927		(820,330)		3,830,987
Labcorp	San Carlos, CA	12/31/2019	Industrial	9,672,174		—		408,225		(766,203)		9,314,196
WSP USA	San Diego, CA	12/31/2019	Industrial	9,896,800		—		539,633		(1,335,830)		9,100,603
ITW Rippey	El Dorado, CA	12/31/2019	Industrial	7,337,873		—		304,387		(1,005,487)		6,636,773
L3Harris	San Diego, CA	12/31/2019	Industrial	11,690,952		—		662,101		(1,541,628)		10,811,425
Arrow-TruLine	Archbold, OH	12/3/2021	Industrial	11,518,084		—		—		(742,619)		10,775,465
Kalera	Saint Paul, MN	1/31/2022	Industrial	6,412,509		4,429,000		—		(580,724)		10,260,785
Lindsay	Colorado Springs 1, CO	4/19/2022	Industrial	2,311,934		—		—		(85,054)		2,226,880
Lindsay	Colorado Springs 2, CO	4/19/2022	Industrial	3,314,406		—		—		(50,615)		3,263,791
Lindsay	Dacano, CO	4/19/2022	Industrial	6,889,402		—		—		(122,707)		6,766,695
Lindsay	Alachua, FL	4/19/2022	Industrial	8,518,123		—		—		(528,808)		7,989,315
Lindsay	Franklinton, NC	4/19/2022	Industrial	7,181,113		—		—		(233,143)		6,947,970
Lindsay	Canal Fulton 1, OH	4/19/2022	Industrial	11,345,533		—		—		(501,441)		10,844,092
Lindsay	Canal Fulton 2, OH	4/19/2022	Industrial	10,190,942		—		—		(459,435)		9,731,507
Lindsay	Rock Hill, SC	4/19/2022	Industrial	6,555,983		—		—		(245,356)		6,310,627
Lindsay	Gap, PA	4/13/2023	Industrial	16,580,044		—		—		(341,909)		16,238,135
Producto	Endicott, NY	7/15/2022	Industrial	2,362,310		—		—		(94,432)		2,267,878
Producto	Jamestown, NY	7/15/2022	Industrial	3,073,686		—		—		(115,606)		2,958,080
Valtir	Centerville, UT	7/26/2022	Industrial	4,685,355		—		—		(141,509)		4,543,846
Valtir	Orangeburg, SC	7/26/2022	Industrial	4,243,308		—		—		(168,370)		4,074,938
Valtir	Fort Worth, TX	7/26/2022	Industrial	3,278,522		—		—		(75,029)		3,203,493
Valtir	Lima, OH	8/4/2022	Industrial	9,921,943		—		—		(415,965)		9,505,978
Plastic Products	Princeton, MN	1/26/2023	Industrial	6,118,411		—		553,780		(413,432)		6,258,759
Stealth Manufacturing	Savage, MN	3/31/2023	Industrial	5,526,310		—		—		(91,887)		5,434,423
Summit Steel	Reading, PA	4/13/2023	Industrial	11,397,091		—		—		(182,790)		11,214,301
PBC Linear	Roscoe, IL	4/20/2023	Industrial	20,023,978		—		—		(337,592)		19,686,386
Cameron Tool	Lansing, MI	5/3/2023	Industrial	5,776,590		—		—		(85,644)		5,690,946
S.J. Electro Systems	Detroit Lakes, MN	5/5/2023	Industrial	6,314,057		—		—		(69,079)		6,244,978
S.J. Electro Systems	Plymouth, MN	5/5/2023	Industrial	2,225,635		—		—		(34,525)		2,191,110
S.J. Electro Systems	Ashland, OH	5/5/2023	Industrial	7,555,211		—		—		(79,864)		7,475,347
Titan	Alleyton, TX	5/11/2023	Industrial	17,146,503		—		—		(334,377)		16,812,126
Vistech	Piqua, OH	7/3/2023	Industrial	13,550,932		—		—		(109,232)		13,441,700
SixAxis	Andrews, SC	7/11/2023	Industrial	15,470,096		—		—		(154,425)		15,315,671

16

MODIV INDUSTRIAL, INC.

Notes to Condensed Consolidated Financial Statements (continued)

(Unaudited)

(Operating properties table continued)
Property Tenant	Location	Acquisition Date	Property Type	Land, Buildings and Improvements		Equipment		Tenant Origination and Absorption Costs		Accumulated Depreciation and Amortization		Total Investment in Real Estate Property, Net
KIA/Trophy of Carson	Carson, CA	1/18/2022	Retail	$	69,286,444	$	—	$	118,606	$	(1,814,016)	$	67,591,034
Costco	Issaquah, WA	12/20/2018	Office	27,585,942		—		2,765,136		(6,289,044)		24,062,034
Solar Turbines	San Diego, CA	12/31/2019	Office	7,186,694		—		324,221		(881,175)		6,629,740
OES (1)	Rancho Cordova, CA	12/31/2019	Office	29,632,580		—		1,616,610		(4,646,438)		26,602,752
				$	508,299,641	$	4,429,000	$	15,929,385	$	(47,587,670)	$	481,070,356

(1)    Effective December 31, 2022, the Company and Sutter Health agreed to the early termination of the Sutter Health lease. The property was then leased to the State of California's Office of Emergency Services (“OES”) effective January 4, 2023 for 12 years through December 31, 2034. OES has a purchase option which OES can exercise any time from May 1, 2024 through December 31, 2026. OES also has an early termination option which OES can exercise any time on or after December 31, 2028 by giving written notice at least 120 days prior to the date of early termination.

Impairment Charge

In March 2023, the Company recorded an impairment charge of $3,499,438 related to its property located in Nashville, Tennessee, leased to Cummins Inc. (“Cummins”) through February 29, 2024. The Company determined that an impairment charge was triggered by expectations of a shortened holding period and estimated the property's fair value based upon current market comparables. This property is held for sale as described in Real Estate Investments Held for Sale below.

Acquisitions:

Nine Months Ended September 30, 2023

During the nine months ended September 30, 2023, the Company acquired 12 industrial manufacturing real estate properties as follows:

Property Tenant	Location	Acquisition Date	Land		Buildings and Improvements		Tenant Origination and Absorption Costs		Below- Market Lease Intangibles		Acquisition Price
Plastic Products	Princeton, MN	1/26/2023	$	421,997	$	5,696,414	$	553,780	$	(285,139)	$	6,387,052
Stealth Manufacturing	Savage, MN	3/31/2023	770,752		4,755,558		—		—		5,526,310
Lindsay (1)	Gap, PA	4/13/2023	2,125,604		14,454,440		—		—		16,580,044
Summit Steel (2)	Reading, PA	4/13/2023	1,517,782		9,879,309		—		—		11,397,091
PBC Linear	Roscoe, IL	4/20/2023	699,198		19,324,780		—		—		20,023,978
Cameron Tool	Lansing, MI	5/03/2023	246,355		5,530,235		—		—		5,776,590
S.J. Electro Systems	Detroit Lakes, MN	5/05/2023	1,736,976		4,577,081		—		—		6,314,057
S.J. Electro Systems	Plymouth, MN	5/05/2023	627,903		1,597,732		—		—		2,225,635
S.J. Electro Systems	Ashland, OH	5/05/2023	251,233		7,303,978		—		—		7,555,211
Titan	Alleyton, TX	5/11/2023	2,056,161		15,090,342		—		—		17,146,503
Vistech	Piqua, OH	7/03/2023	922,310		12,628,622		—		—		13,550,932
SixAxis	Andrews, SC	7/11/2023	1,228,874		14,241,222		—		—		15,470,096
			$	12,605,145	$	115,079,713	$	553,780	$	(285,139)	$	127,953,499

(1)    In addition, the Company provided a $1,800,000 deposit to fund improvements to the previously acquired Lindsay property in Franklinton, North Carolina.

(2)    The Company issued 287,516 Class C OP Units (as defined below) valued at $5,175,284 based on an agreed upon value of $18.00 per unit for a portion of the purchase price.

During the three and nine months ended September 30, 2023, the Company recognized $3,079,272 and $5,025,967, respectively, of total revenue related to the above-acquired properties.

17

MODIV INDUSTRIAL, INC.

Notes to Condensed Consolidated Financial Statements (continued)

(Unaudited)

Acquired Properties Lease Expirations:

The noncancellable lease terms of the properties acquired during the nine months ended September 30, 2023 are as follows:

Property Tenant	Lease Expiration
Plastic Products	10/31/2028
Stealth Manufacturing	3/31/2043
Lindsay	4/30/2047
Summit Steel	4/30/2043
PBC Linear	4/30/2043
Cameron Tool	5/31/2043
S.J. Electro Systems, for all three properties acquired	5/31/2040
Titan	5/31/2043
Vistech	7/31/2048
SixAxis	7/31/2048

Nine Months Ended September 30, 2022

During the nine months ended September 30, 2022, the Company acquired one retail and 15 industrial manufacturing real estate properties for $162,313,032. These properties are located in 10 states and had a weighted average lease term of approximately 24 years.

During the three and nine months ended September 30, 2022, the Company recognized $3,071,407 and $6,703,156, respectively, of total revenue related to these properties.

Dispositions:

Nine Months Ended September 30, 2023

During the nine months ended September 30, 2023, the Company sold 14 real estate properties as follows:

Property Tenant	Location	Disposition Date	Property Type	Rentable Square Feet	Contract Sale Price		(Loss) Gain on Sale			Net Proceeds
Dollar General	Litchfield, ME	8/10/2023	Retail	9,026	$	1,247,974	$	—	(1)	$	—	(1)
Dollar General	Wilton, ME	8/10/2023	Retail	9,100	1,452,188		—		(1)	—		(1)
Dollar General	Thompsontown, PA	8/10/2023	Retail	9,100	1,111,832		—		(1)	—		(1)
Dollar General	Mt. Gilead, OH	8/10/2023	Retail	9,026	1,066,451		—		(1)	—		(1)
Dollar General	Lakeside, OH	8/10/2023	Retail	9,026	1,134,522		—		(1)	—		(1)
Dollar General	Castalia, OH	8/10/2023	Retail	9,026	1,111,832		—		(1)	—		(1)
Dollar General	Bakersfield, CA	8/10/2023	Retail	18,827	4,855,751		—		(1)	—		(1)
Dollar General	Big Spring, TX	8/10/2023	Retail	9,026	1,270,665		—		(1)	—		(1)
Dollar Tree	Morrow, GA	8/10/2023	Retail	10,906	1,293,355		—		(1)	—		(1)
PreK Education	San Antonio, TX	8/10/2023	Retail	50,000	12,888,169		—		(1)	—		(1)
Walgreens	Santa Maria, CA	8/10/2023	Retail	14,490	6,081,037		—		(1)	—		(1)
exp US Services	Maitland, FL	8/10/2023	Office	33,118	5,899,514		—		(1)	—		(1)
GSA (MSHA)	Vacaville, CA	8/10/2023	Office	11,014	2,586,710		(1,887,040)		(1)	39,014,581		(1)
EMC Shop	Rocklin, CA	8/31/2023	Flex	40,110	5,466,960		178,239			5,459,211
				241,795	$	47,466,960	$	(1,708,801)		$	44,473,792

(1)    Represents the combined net loss on sale of $1,887,040 and net proceeds of $39,014,581 for the August 10, 2023 sale of 13 properties to Generation Income Properties, Inc. (NASDAQ: GIPR) (“GIPR”).

Nine Months Ended September 30, 2022

18

MODIV INDUSTRIAL, INC.

Notes to Condensed Consolidated Financial Statements (continued)

(Unaudited)

During the nine months ended September 30, 2022, the Company sold seven real estate properties (six office properties and one flex property) comprising 343,126 square feet for aggregate contract sales prices of $68,725,000, aggregate gains on sale of $11,527,185 and aggregate net proceeds of $44,482,494, net of commissions, closing costs and repayment of the outstanding mortgages.

Asset Concentration:

As of September 30, 2023 and December 31, 2022, the Company’s real estate portfolio asset concentration (greater than 10% of total assets) was as follows:

	September 30, 2023				December 31, 2022
Property Tenant and Location	Net Carrying Value		Percentage of Total Assets		Net Carrying Value		Percentage of Total Assets
KIA, Carson, CA	$	67,591,034	12.5	%	$	68,387,431	15.0	%

Rental Income Concentration:

During the three and nine months ended September 30, 2023 and 2022, the Company’s rental income concentration (greater than 10% of rental income) was as follows:

	Three Months Ended September 30,
	2023				2022
Property Tenant and Location	Rental Income		Percentage of Total Rental Income		Rental Income		Percentage of Total Rental Income
Lindsay, nine properties acquired in: Colorado (three), Ohio (two), Pennsylvania, North Carolina, South Carolina and Florida	$	1,652,422	13.2	%	$	1,204,970	11.7	%
KIA, Carson, CA	$	1,289,545	10.3	%	$	1,306,851	12.7	%

	Nine Months Ended September 30,
	2023				2022
Property Tenant and Location	Rental Income		Percentage of Total Rental Income		Rental Income		Percentage of Total Rental Income
Lindsay, nine properties acquired in: Colorado (three), Ohio (two), Pennsylvania, North Carolina, South Carolina and Florida	$	4,474,870	12.9	%	(1)		(1)
KIA, Carson, CA	$	3,879,601	11.2	%	$	3,666,632	12.2	%

(1)    The Lindsay properties represented a source of greater than 10% of total rental income during the nine months ended September 30, 2023 but not the nine months ended September 30, 2022 since eight of the Lindsay properties were acquired on April 19, 2022 and one was acquired on April 13, 2023.

Operating Leases:

The Company’s real estate properties are primarily leased to tenants under net leases for which terms and expirations vary. The Company monitors the credit of all tenants to stay abreast of any material changes in credit quality. The Company monitors tenant credit by (1) reviewing the credit ratings of tenants (or their parent companies or lease guarantors) that are rated by nationally recognized rating agencies; (2) reviewing financial statements and related metrics and information that are publicly available or that are required to be provided pursuant to the lease; (3) monitoring news reports and press releases regarding the tenants (or their parent companies or lease guarantors), and their underlying business and industry; and (4) monitoring the timeliness of rent collections.

19

MODIV INDUSTRIAL, INC.

Notes to Condensed Consolidated Financial Statements (continued)

(Unaudited)

On January 23, 2023, the Company executed a lease extension for the property leased to Solar Turbines for an additional two years through July 31, 2025 with a 14.0% increase in rent effective August 1, 2023 and a 3.0% increase in rent effective August 1, 2024. This is the third lease extension executed by Solar Turbines, which has occupied the Company's property located in San Diego, California since 2008.

Effective April 18, 2023, the Company extended the lease term of its Levins property located in Sacramento, California from September 1, 2023 to December 31, 2024 with a 69% increase in annual rent from $4.14 per square foot to $7.00 per square foot commencing September 1, 2023.

On June 29, 2023, the Company leased its property in Rocklin, California (the “Rocklin Property”), which was previously leased to Gap, Inc., to EMC for an initial base annual rent of $441,210, and a lease term of 11.5 years through December 31, 2034. The lease included a purchase option which EMC exercised in August 2023 and EMC completed its purchase of the property on August 31, 2023, which terminated the lease (see Dispositions above).

The Company is continuing to explore potential lease extensions for certain of its other properties.

As of September 30, 2023, the future minimum contractual rent payments due to the Company under the Company’s non-cancellable operating leases, including lease amendments executed though the date of this report, if any, are as follows:

October through December 2023	$	9,727,190
2024	39,028,622
2025	38,080,113
2026	34,952,446
2027	34,600,851
Thereafter	559,280,654
	$	715,669,876

Intangible Assets, Net Related to the Company's Real Estate

As of September 30, 2023 and December 31, 2022, intangible assets, net related to the Company's real estate were as follows:

	September 30, 2023						December 31, 2022
	Tenant Origination and Absorption Costs		Above-Market Lease Intangibles		Below-Market Lease Intangibles		Tenant Origination and Absorption Costs		Above-Market Lease Intangibles		Below-Market Lease Intangibles
Cost	$	15,929,385	$	2,485,510	$	(14,364,650)	$	19,499,749	$	2,485,510	$	(14,378,808)
Accumulated amortization	(10,684,573)		(1,153,052)		5,265,947		(12,722,558)		(634,754)		4,703,122
Net	$	5,244,812	$	1,332,458	$	(9,098,703)	$	6,777,191	$	1,850,756	$	(9,675,686)

The intangible assets acquired in connection with the acquisitions have a weighted average amortization period of approximately 10.6 years as of September 30, 2023.

As of September 30, 2023, the amortization of intangible assets for the remaining three months of the current year ending December 31, 2023 and for each of the next four years and thereafter is expected to be as follows:

20

MODIV INDUSTRIAL, INC.

Notes to Condensed Consolidated Financial Statements (continued)

(Unaudited)

	Tenant Origination and Absorption Costs		Above-Market Lease Intangibles		Below-Market Lease Intangibles
October through December 2023	$	253,294	$	18,499	$	(230,099)
2024	1,013,175		73,999		(920,395)
2025	815,130		70,712		(920,395)
2026	466,644		54,278		(920,395)
2027	449,972		54,278		(920,395)
Thereafter	2,246,597		1,060,692		(5,187,024)
	$	5,244,812	$	1,332,458	$	(9,098,703)
Weighted-average remaining amortization period	8.6 years		23.2 years		10.1 years

Real Estate Investments Held For Sale

As of September 30, 2023, the Company classified its office property located in Nashville, Tennessee that is leased to Cummins as held for sale.

The Company’s Rocklin Property formerly leased to Gap, Inc. through February 28, 2023 was the only property held for sale as of December 31, 2022, and it was sold on August 31, 2023 as described in Dispositions above.

The following table summarizes the major components of assets and liabilities related to the real estate investments held for sale as of September 30, 2023 and December 31, 2022:

	September 30, 2023		December 31, 2022
Assets related to real estate investments held for sale:
Land, buildings and improvements	$	11,047,348	$	6,357,172
Tenant origination and absorption costs	1,558,739		355,252
Accumulated depreciation and amortization	(3,977,901)		(1,456,699)
Real estate investments held for sale, net	8,628,186		5,255,725
Other assets, net	46,158		12,765
Total assets related to real estate investments held for sale:	$	8,674,344	$	5,268,490
Liabilities related to real estate investments held for sale:
Other liabilities, net	$	162,349	$	117,881
Total liabilities related to real estate investments held for sale:	$	162,349	$	117,881

21

MODIV INDUSTRIAL, INC.

Notes to Condensed Consolidated Financial Statements (continued)

(Unaudited)

NOTE 4. UNCONSOLIDATED INVESTMENT IN REAL ESTATE PROPERTY

The Company’s investment in unconsolidated property as of September 30, 2023 and December 31, 2022 is as follows:

	September 30, 2023		December 31, 2022
The TIC Interest	$	10,035,805	$	10,007,420

The Company’s income from investment in unconsolidated property for the three and nine months ended September 30, 2023 and 2022 is as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
The TIC Interest	$	79,164	$	64,358	$	207,506	$	226,690

TIC Interest

During 2017, the Company, through a wholly-owned subsidiary of the Operating Partnership, acquired an approximate 72.7% interest in a 91,740 square foot industrial property in Santa Clara, California in a tenants-in-common ownership structure which requires a unanimous vote for significant decisions about the property. The remaining approximate 27.3% of undivided interest in the Santa Clara property is held by Hagg Lane II, LLC (an approximate 23.4% interest) and Hagg Lane III, LLC (an approximate 3.9% interest). The manager of both Hagg Lane II, LLC and Hagg Lane III, LLC was a member of the Company's board of directors from December 2019 to December 2021. The interest in the Santa Clara property over which the Company has the ability to exercise significant influence, but for which the Company does not have financial or operating control is accounted for using the equity method of accounting. The Company receives approximately 72.7% of the cash flow distributions and recognizes approximately 72.7% of the results of operations for this property.

During the three months ended September 30, 2023 and 2022, the Company received $54,706 and $32,378 in cash distributions, respectively, and received cash distributions of $179,121 and $179,531 during the nine months ended September 30, 2023 and 2022, respectively.

The following is summarized financial information for the Santa Clara property as of September 30, 2023 and December 31, 2022 and for the three and nine months ended September 30, 2023 and 2022:

	September 30, 2023		December 31, 2022
Assets:
Real estate investments, net	$	28,823,530	$	29,294,081
Cash and cash equivalents	532,634		300,405
Other assets	77,366		43,159
Total assets	$	29,433,530	$	29,637,645
Liabilities:
Mortgage note payable, net	$	12,717,835	$	12,936,929
Below-market lease, net	2,404,409		2,514,199
Other liabilities	508,776		424,662
Total liabilities	15,631,020		15,875,790
Total equity	13,802,510		13,761,855
Total liabilities and equity	$	29,433,530	$	29,637,645

22

MODIV INDUSTRIAL, INC.

Notes to Condensed Consolidated Financial Statements (continued)

(Unaudited)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Total revenues	$	693,170	$	679,500	$	2,036,365	$	2,071,258
Operating expenses:
Depreciation and amortization	257,844		264,820		780,802		788,732
Other expenses	193,902		190,527		572,749		565,851
Total operating expenses	451,746		455,347		1,353,551		1,354,583
Operating income	241,424		224,153		682,814		716,675
Interest expense	132,547		135,640		395,810		404,902
Net income	$	108,877	$	88,513	$	287,004	$	311,773

NOTE 5. INVESTMENT IN PREFERRED STOCK

The Company’s investment in preferred stock as of September 30, 2023 is as follows:

	September 30, 2023
Liquidation value of GIPR preferred stock	$	12,000,000
Adjustment to reduce liquidation value to fair value	(2,380,000)
Fair value of GIPR preferred stock as of August 10, 2023	9,620,000
Increase in fair value of preferred stock for the period ended September 30, 2023	440,000
Fair value of GIPR preferred stock as of September 30, 2023	$	10,060,000

As discussed in Note 3, on August 10, 2023, the Company disposed of 13 properties consisting of 11 retail properties and two office properties in a sale to GIPR. These 13 properties were sold for $42,000,000 with $30,000,000 paid in cash and the remaining $12,000,000 paid in 2,400,000 shares of GIPR's newly-created Series A Redeemable Preferred Stock (the “GIPR preferred stock”) with a liquidation preference of $5.00 per share and an annual dividend yield of 9.5% from August 10, 2023 to August 9, 2024, and an annual dividend rate of 12.0% thereafter.

The Company has elected to record its investment in preferred stock at fair value. The fair value at the date of acquisition was accounted for as an adjustment to the net proceeds from sale. The increase in fair value as of September 30, 2023 is reflected in other income (expense).

Subject to the terms and conditions of the GIPR preferred stock, GIPR may redeem the GIPR preferred stock (a) for cash, at any time, at a redemption price equal to $5.00 per share plus an amount equal to all dividends accrued and unpaid or (b) from the original issuance date until March 15, 2024, for a number of shares of GIPR common stock equal to $5.00 per share plus an amount equal to all dividends accrued and unpaid divided by the product of (i) the volume weighted average price (“VWAP”) per share of GIPR common stock for the 60 days of trading prior to GIPR’s redemption notice and (ii) 110%. Although no assurances can be made regarding the timing of the redemption of the GIPR preferred stock, the Company expects that GIPR will redeem the GIPR preferred stock for GIPR common stock as early as January 2024 at which point the Company expects it will make an immediate in-kind distribution of GIPR common stock to the Company’s stockholders. Under the terms and conditions of the GIPR preferred stock, the Company would receive between 2,200,000 and 3,000,000 shares of GIPR common stock upon redemption of the GIPR preferred stock.

23

MODIV INDUSTRIAL, INC.

Notes to Condensed Consolidated Financial Statements (continued)

(Unaudited)

NOTE 6. OTHER BALANCE SHEET DETAILS

Tenant Receivables, Net

As of September 30, 2023 and December 31, 2022, tenant receivables consisted of the following:

	September 30, 2023		December 31, 2022
Straight-line rent	$	10,793,380	$	6,607,220
Tenant rent and billed reimbursements	58,444		196,477
Accrued tenant reimbursements	359,234		459,505
Total	$	11,211,058	$	7,263,202

Prepaid Expenses and Other Assets

As of September 30, 2023 and December 31, 2022, prepaid expenses and other assets were comprised of the following:

	September 30, 2023		December 31, 2022
Deferred tenant allowance (1)	$	267,334	$	2,564,806
Prepaid expenses and other assets (2)	3,773,714		2,420,777
Deferred financing costs on credit facility revolver	840,335		1,115,354
Total	$	4,881,383	$	6,100,937

(1)    Deferred tenant balances for the Pre-K Education and Walgreens leases were disposed in the August 10, 2023 sale transaction.

(2)    The balance as of September 30, 2023 includes deposits of $1,800,000 for improvements to be made to the Lindsay property in Franklinton, North Carolina. The balance as of December 31, 2022 includes a deposit of $440,548 for completion of ongoing improvements to the Lindsay property in Dacono, Colorado.

Accounts Payable, Accrued and Other Liabilities

As of September 30, 2023 and December 31, 2022, accounts payable, accrued and other liabilities were comprised of the following:

	September 30, 2023		December 31, 2022
Accounts payable	$	557,643	$	1,001,411
Accrued expenses (1)	4,076,883		2,163,821
Accrued distributions and dividends	1,801,856		1,768,068
Accrued interest payable	321,278		285,392
Unearned rent	1,792,912		1,870,057
Lease incentive obligation	343,058		561,057
Total	$	8,893,630	$	7,649,806

(1)    The balance as of September 30, 2023 includes an accrued liability of $2,350,000 for construction in progress for improvements at the Kalera property to which the Company obtained the rights upon the rejection of Kalera's lease in its bankruptcy proceedings effective October 31, 2023 (see Note 11 for additional information).

24

MODIV INDUSTRIAL, INC.

Notes to Condensed Consolidated Financial Statements (continued)

(Unaudited)

NOTE 7. DEBT

The breakdown of debt as of September 30, 2023 and December 31, 2022 is as follows:

	September 30, 2023		December 31, 2022
Mortgage notes payable, net	$	34,118,748	$	44,435,556
Credit facility:
Revolver	—		3,000,000
Term loan, net	248,385,927		148,018,164
Total	$	282,504,675	$	195,453,720

Mortgage Notes Payable, Net

As of September 30, 2023 and December 31, 2022, the Company’s mortgage notes payable consisted of the following:

Collateral	2023 Principal Amount		2022 Principal Amount		Interest Rate (1)	Loan Maturity
Costco property	$	18,850,000	$	18,850,000	4.85%	1/01/2030
Taylor Fresh Foods property	12,350,000		12,350,000		3.85%	11/01/2029
OES property (2)	3,084,849		13,315,009		4.50%	3/09/2024
Total mortgage notes payable	34,284,849		44,515,009
Plus unamortized mortgage premium, net (3)	10,893		119,245
Less unamortized deferred financing costs	(176,994)		(198,698)
Mortgage notes payable, net	$	34,118,748	$	44,435,556

(1)Represents the contractual interest rate in effect under the mortgage note payable as of September 30, 2023 for the three mortgages that were not refinanced through a drawdown from the Credit Facility (defined and discussed below) with KeyBank National Association (“KeyBank”) in January 2022 given their prepayment penalties.

(2)During August and September 2023, the Company prepaid an aggregate of $10,000,000 principal amount of the mortgage on the OES property following the dispositions completed in August 2023. The Company intends to pay the remainder on or before the loan maturity date.

(3)Represents unamortized net mortgage premium acquired through the merger with Rich Uncles Real Estate Investment Trust I on December 31, 2019.

The following summarizes the face value, carrying amount and fair value of the Company’s mortgage notes payable (Level 3 measurement) as of September 30, 2023 and December 31, 2022:

	September 30, 2023						December 31, 2022
	Face Value		Carrying Value		Fair Value		Face value		Carrying Value		Fair Value
Mortgage notes payable	$	34,284,849	$	34,118,748	$	30,736,613	$	44,515,009	$	44,435,556	$	41,293,644

25

MODIV INDUSTRIAL, INC.

Notes to Condensed Consolidated Financial Statements (continued)

(Unaudited)

Credit Facility, Net

On January 18, 2022, the Company's Operating Partnership entered into a $250,000,000 credit agreement (‘‘Credit Agreement’’) providing for a $100,000,000 four-year revolving line of credit, which may be extended by up to 12 months subject to certain conditions (the ‘‘Revolver’’), and a $150,000,000 five-year term loan (the ‘‘Term Loan’’ and together with the ‘‘Revolver,’’ the ‘‘Credit Facility’’) with KeyBank and the other lending institutions party thereto (collectively, the ‘‘Lenders’’), including KeyBank as Agent for the Lenders (in such capacity, the ‘‘Agent’’), BMO Capital Markets, Truist Bank and The Huntington National Bank as Co-Syndication Agents (the “Co-Syndication Agents”) and KeyBanc Capital Markets Inc., BMO Capital Markets, Inc., Truist Securities, Inc. and The Huntington National Bank as Joint-Lead Arrangers (the “Lead Arrangers”). The Credit Facility is available for general corporate purposes, including, but not limited to, acquisitions, repayment of existing indebtedness and capital expenditures.

On October 21, 2022, the Company exercised the accordion feature of its Credit Facility and increased the Credit Facility to $400,000,000, comprised of a $150,000,000 Revolver and a $250,000,000 Term Loan. The Credit Facility includes an updated accordion option that allows the Company to request additional Revolver and Term Loan lender commitments up to a total of $750,000,000 subject to customary conditions, including the receipt of new commitments from the Lenders. On December 20, 2022, the Credit Agreement was amended to allow the Company to draw on the additional $100,000,000 Term Loan commitment up to five times between December 20, 2022 and April 19, 2023 in exchange for a quarterly unused fee, which amounted to zero and $92,569 during the three and nine months ended September 30, 2023, respectively. The Company drew $20,000,000 and the remaining $80,000,000 of the delayed draw Term Loan during the first and second quarters of 2023, respectively. The maturities for the Company's Revolver and Term Loan remain unchanged with the Revolver’s maturity in January 2026 with options to extend for a total of 12 months, and the Term Loan’s maturity in January 2027.

The Credit Facility is priced on a leverage-based grid that fluctuates based on the Company's actual leverage ratio at the end of the prior quarter. With the Company's leverage ratio at 47% as of June 30, 2023, the spread over the Secured Overnight Financing Rate (‘‘SOFR’’), including a 10-basis point credit adjustment, is 185 basis points for the Revolver and the interest rate on the Revolver was 7.1625% on September 30, 2023; however, there was no outstanding balance on the Revolver. The Company also pays an annual unused fee of up to 25 basis points on the Revolver, depending on the daily amount of the unused commitment, and incurred total unused fees of $94,525 and $47,543 for the three months ended September 30, 2023 and 2022, respectively, and $384,164 and $119,823 for the nine months ended September 30, 2023 and 2022, respectively.

On May 10, 2022, the Company entered into a swap agreement, effective May 31, 2022, to fix SOFR at 2.258% with respect to its original $150,000,000 Term Loan as described in Note 8, which results in a fixed interest rate of 4.058% on the Term Loan based on the Company's leverage ratio of 48% as of September 30, 2023.

On October 26, 2022, the Company entered into a swap agreement, effective November 30, 2022, to fix SOFR at 3.44% with respect to its expanded Term Loan as described in Note 8, which results in a fixed interest rate of 5.240% on the additional $100,000,000 to be borrowed under the Term Loan based on the Company's leverage ratio of 48% as of September 30, 2023.

The Credit Facility includes customary representations, warranties and covenants, including covenants regarding minimum fixed charge coverage of 1.50x, minimum tangible net worth of $208,629,727 plus 85% of net offering proceeds after January 18, 2022, and maximum consolidated leverage of 60%. The Credit Facility is secured by a pledge of all of the Operating Partnership’s equity interests in certain of the single-purpose, property-owning entities (the ‘‘Subsidiary Guarantors’’) that are indirectly owned by the Company, and various cash collateral owned by the Operating Partnership and the Subsidiary Guarantors. In connection with the Credit Facility, the Company and each of the Subsidiary Guarantors entered into an Unconditional Guaranty of Payment and Performance in favor of the Agent, pursuant to which the Company and each of the Subsidiary Guarantors agreed to guarantee the full and prompt payment of the Operating Partnership’s obligations under the Credit Agreement.

While the Credit Facility allows for borrowings up to 60% of the Company's borrowing base, the Company is targeting leverage of 40% or lower over the long-term once it achieves scale; however, the Company currently has, and may continue to have, higher leverage in the near-term if it identifies attractive acquisition opportunities in advance of completing dispositions or raising additional equity.

26

MODIV INDUSTRIAL, INC.

Notes to Condensed Consolidated Financial Statements (continued)

(Unaudited)

Credit Facility Repayments and Drawdowns

On January 5, 2023, the Company repaid $3,000,000 of the outstanding balance on its Revolver with available cash on hand to reduce interest expense.

On January 25, 2023, the Company borrowed $10,000,000 under its additional $100,000,000 Term Loan commitment in advance of acquiring a property located in Princeton, Minnesota leased to Plastic Products Company, Inc. On March 29, 2023, the Company again borrowed $10,000,000 under its Term Loan commitment in advance of acquiring a property located in Savage, Minnesota leased to Stealth Manufacturing. In April 2023, additional draws aggregating $80,000,000 were made on the additional Term Loan.

In July 2023, the Company borrowed $21,000,000 under its Revolver commitment in advance of acquiring a property in Piqua, Ohio leased to NVH Acquisition Holdings, LLC (dba Vistech) and a property in Andrews, South Carolina leased to SixAxis, LLC. In August 2023, the Company repaid the $21,000,000 outstanding balance on its Revolver with proceeds from the GIPR disposition described in Note 3.

Compliance with All Debt Agreements

Pursuant to the terms of mortgage notes payable on certain of the Company’s properties and the Credit Facility, the Company and/or the subsidiary borrowers are subject to certain financial loan covenants. The Company and/or the subsidiary borrowers were in compliance with such financial loan covenants as of September 30, 2023.

Future Principal Payments

The following summarizes the future principal repayments of the Company’s mortgage notes payable and Credit Facility as of September 30, 2023:

	Mortgage Notes		Credit Facility
	Payable		Revolver		Term Loan		Total
October through December 2023	$	179,918	$	—	$	—	$	179,918
2024	3,174,547		—		—		3,174,547
2025	543,886		—		—		543,886
2026	568,369		—		—		568,369
2027	593,972		—		250,000,000		250,593,972
Thereafter	29,224,157		—		—		29,224,157
Total principal	34,284,849		—		250,000,000		284,284,849
Plus unamortized mortgage premium, net	10,893		—		—		10,893
Less deferred financing costs	(176,994)		—		(1,614,073)		(1,791,067)
Net principal	$	34,118,748	$	—	$	248,385,927	$	282,504,675

27

MODIV INDUSTRIAL, INC.

Notes to Condensed Consolidated Financial Statements (continued)

(Unaudited)

Interest Expense, Net of Derivative Settlements and Unrealized Gain on Interest Rate Swaps

The following is a reconciliation of the components of interest expense, net of derivative settlements and unrealized gain on interest rate swaps for the three and nine months ended September 30, 2023 and 2022:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Mortgage notes payable:
Interest expense	$	411,610	$	488,773	$	1,354,642	$	1,762,378
Amortization of deferred financing costs	7,235		7,235		21,705		21,694
Credit facility:
Interest expense	4,509,026		1,636,414		10,895,933		3,083,299
Unused commitment fees	94,525		47,543		384,164		119,823
Amortization of deferred financing costs	214,261		120,829		642,783		342,349
Swap derivatives:
Derivative cash settlements (1)	(1,586,641)		99,942		(4,062,442)		269,442
Unrealized loss (gain) on interest rate swap valuation for first swap (2)	167,926		—		(327,824)		(589,997)
Amortization of interest rate swap valuation (2)	(253,092)		59,000		(756,495)		59,000
Unrealized gain on interest rate swap valuation for second swap (3)	(710,258)		—		(1,697,519)		—
Other	68,326		55,102		306,832		212,179
Interest expense, net	$	2,922,918	$	2,514,838	$	6,761,779	$	5,280,167

(1)    The Company entered into two swap transaction instruments for (i) its original $150,000,000 Credit Facility Term Loan (first swap) effective May 31, 2022 and (ii) its additional $100,000,000 Term Loan commitment (second swap) effective November 30, 2022, as described in detail in Note 8.

(2)    Due to the Company's $150,000,000 derivative instrument's failure to qualify as a cash flow hedge because it was deemed ineffective for the three and nine months ended September 30, 2023 as described in Note 8, the $167,926 loss and $327,824 gain in the swap valuation for the three and nine months ended September 30, 2023, respectively, are recognized as an increase and a decrease in interest expense, respectively, and the unrealized gain on interest rate swap derivative previously recorded in accumulated other comprehensive income and noncontrolling interest in operating partnership is being amortized on a straight-line basis as a reduction to interest expense through the maturity date of the loan agreement (see Note 8 for more details).

(3)    The Company's $100,000,000 derivative instrument was not designated as a cash flow hedge and, therefore, the $710,258 and $1,697,519 gains in the valuation of this swap for the three and nine months ended September 30, 2023, respectively, are reflected as reductions in interest expense (see Note 8 for more details).

28

MODIV INDUSTRIAL, INC.

Notes to Condensed Consolidated Financial Statements (continued)

(Unaudited)

NOTE 8. INTEREST RATE SWAP DERIVATIVES

The Company, through its Operating Partnership, entered into a five-year swap agreement on May 10, 2022 to fix SOFR at 2.258% effective May 31, 2022 related to the variable interest rate on its original $150,000,000 Term Loan. The swap agreement matures on January 15, 2027 and the financial institution counterparty has a one-time option to cancel the swap on December 31, 2024. The Company granted this cancellation option because it reduced the swap rate by approximately 50 basis points. The Company designated the pay-fixed, receive-floating interest rate swap with the terms described in the table below as of July 1, 2022 as a cash flow hedge which was effective through December 31, 2022. The derivative instrument failed to qualify as a cash flow hedge during the three and nine months ended September 30, 2023 as described below.

The Company, through its Operating Partnership, entered into another five-year swap agreement on October 26, 2022 to fix SOFR at 3.440% effective November 30, 2022 related to the variable interest rate on its additional $100,000,000 Term Loan commitment. The Company did not designate the pay-fixed, receive-floating interest rate swap with the terms described in the table below as of November 30, 2022 as a cash flow hedge. The swap agreement matures on November 30, 2027 and the financial institution counterparty has a one-time option to cancel the swap on December 31, 2024. The Company granted this cancellation option because it reduced the swap rate by approximately 50 basis points. The Company has begun, and intends to further explore in 2024, various alternatives available to extend or restructure the cancellation option.

The following table summarizes the notional amount and other information related to the Company’s interest rate swaps as of September 30, 2023 and December 31, 2022:

	September 30, 2023							December 31, 2022
Interest Rate Derivative Instruments	Number of Instruments	Notional Amount (i)		Reference Rate	Weighted Average Fixed Pay Rate (ii)		Weighted Average Remaining Term	Number of Instruments	Notional Amount (i)		Reference Rate	Fixed Pay Rate (ii)		Remaining Term
Designated	—	$	—	—	—	%	0 years	1	$	150,000,000	USD - SOFR	4.06	%	4.1 years
Non-designated	2	$	250,000,000	USD - SOFR	4.43	%	3.25 years	1	$	100,000,000	USD - SOFR	5.24	%	4.1 years

(i)The notional amount of the Company’s swaps correspond to the principal balance on the Term Loan. The minimum notional amount (outstanding principal balance at the maturity date) as of September 30, 2023 and December 31, 2022 was $250,000,000.

(ii)Based on the terms of the Credit Facility, the fixed pay rate increases if the Company's leverage ratio increases above 50%.

The following table sets forth the fair value of the Company’s derivative instruments (Level 2 measurement), as well as their classification in the accompanying unaudited condensed consolidated balance sheets as of September 30, 2023 and December 31, 2022:

		September 30, 2023			December 31, 2022
Derivative Instrument	Balance Sheet Location	Number of Instruments	Fair Value		Number of Instruments	Fair Value		Change in Fair Value
Interest Rate Swaps	Asset - Interest rate swap derivatives, at fair value	2	$	6,156,179	1	$	4,629,702	$	1,526,477
Interest Rate Swaps	Liability - Interest rate swap derivatives, at fair value	—	$	—	1	$	(498,866)	$	498,866

The interest rate swap derivative on the original $150,000,000 Term Loan was designated as a cash flow hedge for financial accounting purposes from July 1, 2022 through December 31, 2022. Based on the Company's prospective effectiveness testing of the derivative instrument during each of the quarters in the nine months ended September 30, 2023, the derivative instrument failed to qualify as a cash flow hedge because the swap was deemed ineffective due to the potential for a reduced term of the swap that could result from the cancellation option described above as compared with the maturity of the Term Loan. The Company has begun, and intends to further explore in 2024, various alternatives available to extend or restructure the cancellation option.

As a result, the net change in fair values of the first Term Loan swap of $167,926 loss and $327,824 gain for the three and nine months ended September 30, 2023, respectively, were recorded as an unrealized loss and an unrealized gain, respectively, on interest rate swap valuation and reflected as an increase and a decrease, respectively, to interest expense in the Company's accompanying unaudited condensed consolidated statements of operations. The unrealized gain reflects increases during the

29

MODIV INDUSTRIAL, INC.

Notes to Condensed Consolidated Financial Statements (continued)

(Unaudited)

second and third quarters of 2023 in the forward curve for future SOFR rates through December 31, 2024 (the one-time cancellation option date). Interest expense was also reduced by the $253,092 and $756,495 amortization of the unrealized gain on this swap for the three and nine months ended September 30, 2023, respectively, as further described below.

Due to the above $150,000,000 Term Loan derivative instrument's failure to qualify as a cash flow hedge for the quarterly periods ended September 30, 2023, the unrealized gain on interest rate swap derivative of $4,105,103 as of December 31, 2022 (recorded in the Company's financial statements as follows: (i) $3,502,616 of accumulated other comprehensive income and (ii) $602,487 of noncontrolling interest in operating partnership) is being amortized on a straight-line basis as a reduction to interest expense through the maturity date of the swap agreement. There is no income tax expense resulting from this amortization.

As of September 30, 2023, the Company's unamortized unrealized gain on interest rate swap derivative in accumulated other comprehensive income and noncontrolling interest in operating partnership amounted to $3,348,608. The Company estimates that $253,092 of the remaining unrealized gain on interest rate swap derivative will be reclassified from accumulated other comprehensive income and noncontrolling interest in operating partnership as a reduction to interest expense in the Company's accompanying unaudited condensed consolidated statements of operations over the next three months.

The second interest rate swap derivative on the additional $100,000,000 Term Loan commitment was not designated as a cash flow hedge for financial accounting purposes. The increase in its fair value of $710,258 and $1,697,519 for the three and nine months ended September 30, 2023, respectively, were recorded as unrealized gains on interest rate swap valuation and reflected as reductions to interest expense in the Company's accompanying unaudited condensed consolidated statements of operations.

NOTE 9. PREFERRED STOCK AND COMMON STOCK

Preferred Stock

The Company is authorized to issue up to 50,000,000 shares of preferred stock. In connection with an underwritten public offering in September 2021 (discussed below in detail), the Company classified and designated 2,000,000 shares of its authorized preferred stock as authorized shares of Series A Preferred Stock. As of September 30, 2023 and December 31, 2022, 2,000,000 shares of authorized Series A Preferred Stock were issued and outstanding.

Series A Preferred Stock - Terms

Holders of Series A Preferred Stock are entitled to cumulative dividends in the amount of $1.84375 per share each year, which is equivalent to the rate of 7.375% of the $25.00 liquidation preference per share per annum. The Series A Preferred Stock has no stated maturity and will remain outstanding indefinitely unless redeemed, converted or otherwise repurchased. Except in limited circumstances relating to the Company's qualification as a REIT for U.S. federal income tax purposes, and as described in the articles supplementary governing the terms of the Series A Preferred Stock (the “Articles Supplementary”), the Series A Preferred Stock is not redeemable prior to September 17, 2026.

On and after September 17, 2026, at any time and from time to time, the Series A Preferred Stock will be redeemable in whole or in part, at the Company's option, at a cash redemption price of $25.00 per share, plus an amount equal to all dividends accrued and unpaid (whether or not authorized or declared), if any, to, but not including, the redemption date. In addition, upon the occurrence of a Delisting Event or a Change of Control (each as defined in the Articles Supplementary), the Company may, subject to certain conditions, at its option, redeem the Series A Preferred Stock, in whole or in part, (i) after the first date on which the Delisting Event occurred or (ii) on, or within 120 days after, the first date on which the Change of Control occurred, as applicable, by paying the liquidation preference of $25.00 per share, plus an amount equal to all dividends accrued and unpaid (whether or not authorized or declared), if any, to, but not including, the redemption date.

Upon the occurrence of a Change of Control during a continuing Delisting Event, unless the Company has elected to exercise its redemption right, holders of the Series A Preferred Stock will have certain rights to convert the Series A Preferred Stock into shares of the Company’s Class C common stock. In addition, upon the occurrence of a Delisting Event, the dividend rate will be increased on the day after the occurrence of the Delisting Event by 2.00% per annum to the rate of 9.375% of the $25.00 liquidation preference per share per annum (equivalent to $2.34375 per share each year) from and after the date of the Delisting Event. Following the cure of such Delisting Event, the dividend rate will revert to the rate of 7.375% of the $25.00 liquidation preference per share per annum. The necessary conditions to convert the Series A Preferred Stock into the Company's Class C common stock have not been met as of September 30, 2023.

30

MODIV INDUSTRIAL, INC.

Notes to Condensed Consolidated Financial Statements (continued)

(Unaudited)

The Series A Preferred Stock ranks senior to the Company's Class C common stock with respect to dividend rights and rights upon the Company’s voluntary or involuntary liquidation, dissolution or winding up.

Voting rights for holders of Series A Preferred Stock exist primarily with respect to the ability to elect two additional directors to the board of directors if six or more quarterly dividends (whether or not authorized or declared or consecutive) payable on the Series A Preferred Stock are in arrears, and with respect to voting on amendments to the Company’s charter (which includes the Articles Supplementary) that materially and adversely affect the rights of the Series A Preferred Stock or create additional classes or series of shares of the Company’s capital stock that are senior to the Series A Preferred Stock. Other than the limited circumstances described above and in the Articles Supplementary, holders of Series A Preferred Stock do not have any voting rights.

Series A Preferred Stock Dividend

Dividends on the Company's Series A Preferred Stock accrue in an amount equal to $1.84375 per share each year ($0.460938 per share each quarter) to holders of Series A Preferred Stock, which is equivalent to 7.375% of the $25.00 liquidation preference per share per annum. Dividends on the Series A Preferred Stock are cumulative and payable quarterly in arrears on the 15th day of January, April, July and October of each year (or, if not a business day, the next succeeding business day) to holders of record on the applicable record date. Any accrued and unpaid dividends payable with respect to the Series A Preferred Stock become part of the liquidation preference thereof.

On March 18, 2022, June 15, 2022, August 18, 2022 and November 7, 2022 the Company’s board of directors declared Series A Preferred Stock dividends payable of $921,875 for each quarter of 2022, which were paid on April 15, 2022, July 15, 2022, October 17, 2022 and January 17, 2023. On March 9, 2023, June 15, 2023 and August 7, 2023, the Company’s board of directors declared Series A Preferred Stock dividends payable of $921,875 for the first, second and third quarters of 2023. These amounts were accrued as of March 31, 2023, June 30, 2023 and September 30, 2023, respectively, and paid on April 17, 2023, July 17, 2023 and October 16, 2023, respectively (see Note 14).

Common Stock Listed Offering

On February 10, 2022, the Company and the Operating Partnership entered into an underwriting agreement (the “Class C Common Stock Underwriting Agreement”) with B. Riley Securities, Inc., as the underwriter listed on Schedule I thereto, pursuant to which the Company agreed to issue and sell 40,000 shares of the Company’s Class C common stock in an underwritten listed offering (the “Listed Offering”) at a price per share of $25.00. On February 15, 2022, the Company completed the Listed Offering of its Class C common stock, and in connection with the Listed Offering, the Company sold to the Company’s former Chairman of the board of directors all 40,000 shares of its Class C common stock offered in the Listed Offering at $25.00 per share for aggregate net proceeds of $114,500, after deducting the underwriting discount of $70,000, and other offering costs of $815,500. The primary purpose of the Listed Offering was to provide liquidity to the Company’s existing stockholders. The shares of Class C common stock began trading on the NYSE on February 11, 2022.

On March 30, 2022, the Company filed a Registration Statement on Form S-3 (File No. 333-263985), and on May 27, 2022, the Company filed Amendment No. 1 to the Registration Statement on Form S-3, to issue and sell from time to time, together or separately, the following securities at an aggregate public offering price that will not exceed $200,000,000: Class C common stock, preferred stock, warrants, rights and units. The Form S-3, as amended, became effective on June 2, 2022 and the Company filed a prospectus supplement for the Company's at-the-market offering of up to $50,000,000 of its Class C common stock (the “ATM Offering”) on June 6, 2022. As of September 30, 2023, no shares have been issued in connection with the Company's ATM Offering.

Common Stock Distributions

Aggregate distributions declared per share of Class C common stock were $0.29 for both the three months ended September 30, 2023 and 2022, respectively, and $0.86 and $0.96 for the nine months ended September 30, 2023 and 2022, respectively, which reflect an annualized distribution rate of $1.15 per share for both periods, along with a special 13th distribution for the year ended December 31, 2021, which was declared and paid in January 2022.

31

MODIV INDUSTRIAL, INC.

Notes to Condensed Consolidated Financial Statements (continued)

(Unaudited)

NOTE 10. RELATED PARTY TRANSACTIONS

The Company pays the members of its board of directors who are not executive officers for services rendered through cash payments and by issuing shares of Class C common stock to them. Total fees incurred and paid or accrued for board of directors' services to the Company for the three and nine months ended September 30, 2023 and 2022 are as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
Board of Directors Compensation	2023		2022		2023		2022
Payments for services rendered	$	57,500	$	67,500	$	192,500	$	202,500
Value of shares issued for services rendered	70,000		82,500		235,000		247,500
Total	$	127,500	$	150,000	$	427,500	$	450,000
Number of shares issued for services rendered	4,194		5,651		17,455		14,916

Transactions with Other Related Parties

On January 31, 2022, the Company acquired an industrial property and related equipment leased to Kalera Inc. (“Kalera”) in Saint Paul, Minnesota, for $8,079,000. Kalera was introduced to the Company by Curtis B. McWilliams, one of the Company’s independent directors. Since Mr. McWilliams was serving as an executive of Kalera at the time of the acquisition, all of the disinterested members of the Company’s board of directors approved this transaction in January 2022.

On April 4, 2023, Kalera filed a voluntary petition for bankruptcy relief under Chapter 11 of Title 11 of the United States Code. In April 2023, Mr. McWilliams was appointed as Kalera’s independent director as Kalera continues to operate its business while in bankruptcy. Mr. McWilliams has recused himself from any matters relating to the Company’s property in Saint Paul, Minnesota leased to Kalera. The status of the Kalera bankruptcy is discussed in Note 11.

Related Party Transactions with Unconsolidated Investment in a Real Estate Property

The Company's taxable REIT subsidiary serves as the asset manager of the TIC Interest property and earned asset management fees, including the Company's share of the management fee, for the three and nine months ended September 30, 2023 and 2022 as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
TIC Interest management fee	$	65,993	$	65,993	$	197,979	$	197,979
Company's share in the management fee	$	47,984	$	47,984	$	143,951	$	143,951

32

MODIV INDUSTRIAL, INC.

Notes to Condensed Consolidated Financial Statements (continued)

(Unaudited)

NOTE 11. COMMITMENTS AND CONTINGENCIES

Environmental

As an owner of real estate, the Company is subject to various environmental laws of federal, state and local governments. Although there can be no assurance, the Company is not aware of any environmental liability that could have a material adverse effect on its financial condition or results of operations. However, changes in applicable environmental laws and regulations, the uses and conditions of properties in the vicinity of the Company’s properties, the activities of its tenants and other environmental conditions of which the Company is unaware with respect to the property could result in future environmental liabilities.

Tenant Improvements

Pursuant to lease agreements, as of September 30, 2023 and December 31, 2022, the Company had obligations to pay $2,595,468 and $1,789,027, respectively, for on-site and tenant improvements to be incurred by tenants.

Kalera Mechanic's Liens

Kalera filed a voluntary petition for bankruptcy relief under Chapter 11 of Title 11 of the United States Code on April 4, 2023. During June 2023, Kalera conducted an auction of all of its assets, and the sale of Kalera’s assets to the winning bidder, Kalera’s lender, was approved by the bankruptcy court on June 30, 2023. The sale of Kalera’s assets closed on September 29, 2023 and did not include its interest in the Company's lease for the Saint Paul, Minnesota property.

Between January 2023 and the filing date of this Quarterly Report on Form 10-Q, the Company received mechanic's lien statements from the general contractor and nine subcontractors who performed work on behalf of Kalera to complete various interior improvements at the Company's property located in Saint Paul, Minnesota. The mechanic's lien statements refer to construction materials that were delivered and related work that was performed to make this facility operational and amount to $3,548,003 in the aggregate, a portion of which has been settled with one contractor. The Company has been advised that the contractors who have filed such liens are stayed from foreclosing on the Company’s property in Saint Paul, Minnesota under the pending Chapter 11 bankruptcy proceeding.

On May 22, 2023, WPC IV, LLC d/b/a WPC (“WPC”), the general contractor hired by Kalera to construct interior improvements to the Company’s property in Saint Paul, Minnesota, filed a complaint in state district court to enforce a mechanic's lien and foreclose on the Company’s property. WPC’s complaint was also filed against all of the other contractors who had filed mechanic’s lien statements. The other defendants have filed counterclaims and crossclaims. The Company’s outside counsel filed a motion to dismiss or stay this litigation on July 10, 2023 and a hearing is scheduled for December 4, 2023.

On October 31, 2023, Kalera filed a motion with the bankruptcy court to reject the Company’s lease and abandon all of its property located at the premises effective as of October 31, 2023, subject to approval of the motion by the bankruptcy court. The Company is exploring its legal options and may make certain demands and objections relating to damages the Company has incurred in connection with the Kalera bankruptcy. Because the Company’s lease will be rejected once the bankruptcy court enters an order approving Kalera's motion, the Company will be responsible for the mechanic's liens with a face amount of $3,110,443 and will seek to find a new tenant or sell the property. The Company has engaged in preliminary discussions with prospective tenants in anticipation of the lease being rejected. The accompanying condensed consolidated balance sheet as of September 30, 2023 includes the estimated amount of $2,350,000 to settle the pending mechanic's liens at less than face value, which was recorded as construction in progress for the improvements at the Company's Saint Paul, Minnesota property and a corresponding accrued liability.

Legal Matters

From time-to-time, the Company or its subsidiaries may become party to legal proceedings that arise in the ordinary course of its business. Except for the Kalera bankruptcy proceeding and the WPC foreclosure action described above, the Company, including its subsidiaries, is not a party to any legal proceeding, nor is the Company aware of any pending or threatened litigation that could have a material adverse effect on the Company’s business, operating results, cash flows or financial condition should such litigation be resolved unfavorably.

33

MODIV INDUSTRIAL, INC.

Notes to Condensed Consolidated Financial Statements (continued)

(Unaudited)

NOTE 12. OPERATING PARTNERSHIP UNITS

Class M OP Units

On September 19, 2019, the Company, the Operating Partnership, BrixInvest, LLC, a Delaware limited liability company and the Company's former sponsor (“BrixInvest”), the Company’s former external advisor, and Daisho OP Holdings, LLC, a formerly wholly owned subsidiary of BrixInvest (“Daisho”) which was spun off from BrixInvest on December 31, 2019, entered into a contribution agreement pursuant to which the Company agreed to acquire substantially all of the net assets of BrixInvest in exchange for 657,949.5 units of Class M limited partnership interest in the Operating Partnership (“Class M OP Units”) and assumed certain liabilities (the “Self-Management Transaction”). As a result of the Self-Management Transaction, the Company became self-managed and eliminated all fees for acquisitions, dispositions and management of its properties, which were previously paid to its former external advisor. The consideration transferred as of December 31, 2019 was determined to have a fair value of $50,603,000 based on a probability weighted analysis of achieving the requisite assets under management (“AUM”) and adjusted funds from operations (“AFFO”) hurdles.

The Class M OP Units were issued to Daisho on December 31, 2019 in connection with the Self-Management Transaction and are non-voting, non-dividend accruing, and were not able to be converted or exchanged prior to the one-year anniversary of the Self-Management Transaction. Investors holding units in BrixInvest received Daisho units in a ratio of 1:1 for an aggregate of 657,949.5 Daisho units. During 2020, Daisho distributed the Class M OP Units to its members. The Class M OP Units are convertible into units of Class C limited partnership interest in the Operating Partnership (“Class C OP Units”) at a conversion ratio of 1.6667 Class C OP Units for each one Class M OP Unit, subject to a reduction in the conversion ratio (which reduction will vary depending upon the amount of time held) if the exchange occurs prior to the four-year anniversary of the completion of the Self-Management Transaction.

As of September 30, 2023, no Class M OP Units had been converted to Class C OP Units. In the event that the Class M OP Units are converted into Class C OP Units prior to December 31, 2023, such Class M OP Units shall be exchanged at 70% of the Class M conversion ratio. After December 31, 2023, in the event that the Class M OP Units are converted into Class C OP Units, such Class M OP Units shall be exchanged at 100% of the Class M conversion ratio.

The Class M OP Units were eligible for an increase in the conversion ratio (conversion ratio enhancement) if the Company achieved both of the targets for AUM and AFFO per share in a given year. However, the AUM and AFFO per share hurdles for the Class M OP Units were not met for fiscal years 2022 or 2021 and the Company does not expect to meet the hurdles for fiscal year 2023.

Based on the current conversion ratio of 1.6667 Class C OP Units for each one Class M OP Unit, if a Class M OP Unit is converted on or after December 31, 2023, and based on the NYSE closing share price of $16.69 as of September 29, 2023, the last day of stock market trading for the three months ended September 30, 2023, a Class M OP Unit would be valued at $27.82. All Class M OP Units automatically convert to Class C OP Units on March 31, 2024. The automatic conversion into Class C OP Units does not require any action by Class M OP Unit holders.

Class P OP Units

The Company issued the units of Class P limited partnership interest in the Operating Partnership (“Class P OP Units”) described below in connection with the Self-Management Transaction. The Class P OP Units are intended to be treated as “profits interests” in the Operating Partnership, which are non-voting, non-dividend accruing, and are not able to be transferred or exchanged prior to the earlier of (1) March 31, 2024, (2) a change of control (as defined in the Third Amended and Restated Limited Partnership Agreement of the Operating Partnership (as amended, the “Operating Partnership Agreement”)), or (3) the date of the recipient's involuntary termination (as defined in the relevant award agreement for the Class P OP Units) (collectively, the “Lockup Period”). Following the expiration of the Lockup Period, the Class P OP Units are convertible into Class C OP Units at a conversion ratio of 1.6667 Class C OP Units for each one Class P OP Unit; provided, however, that the foregoing conversion ratio shall be subject to increase on generally the same terms and conditions as the Class M OP Units, as set forth above.

34

MODIV INDUSTRIAL, INC.

Notes to Condensed Consolidated Financial Statements (continued)

(Unaudited)

The AUM and AFFO per share hurdles for the Class P OP Units were not met for fiscal year 2022 or 2021. As of September 30, 2023, the Company does not expect to meet the hurdles for fiscal year 2023.

On December 31, 2019, the Company issued a total of 56,029 Class P OP Units to Aaron S. Halfacre, the Company’s Chief Executive Officer and President, and Raymond J. Pacini, the Company’s Chief Financial Officer, including 26,318 Class P OP Units issued in exchange for Messrs. Halfacre's and Pacini's agreements to forfeit a similar number of restricted units in BrixInvest in connection with the Self-Management Transaction. The remaining 29,711 Class P OP Units were issued to both executives as signing bonuses and as a portion of their incentive compensation for 2020 in connection with their entry into restrictive covenant agreements. The 29,711 Class P OP Units were valued based on the estimated NAV per share of $30.48 (unaudited) when issued on December 31, 2019 and the expected minimum conversion ratio of 1.6667 Class C OP Units for each one Class P OP Unit, which resulted in a valuation of $1,509,319. This amount is amortized on a straight-line basis over 51 months through March 31, 2024, the expected vesting date of the units, as a periodic charge to stock compensation expense.

During the three months ended September 30, 2023 and 2022, the Company amortized and charged $88,783 to stock compensation expense for both quarters for Class P OP Units and during the nine months ended September 30, 2023 and 2022, the Company amortized and charged $266,350 to stock compensation expense for both periods for Class P OP Units. The unamortized value of these units was $177,567 as of September 30, 2023.

Under the Operating Partnership Agreement, once the Class M OP Units or Class P OP Units are converted into Class C OP Units, they will be exchangeable for the Company’s shares of Class C common stock on a 1-for-1 basis, or for cash at the sole and absolute discretion of the Company. Class P OP Units will automatically convert to Class C OP Units on March 31, 2024. The Company recorded the ownership interests of the Class M OP Units and Class P OP Units as noncontrolling interests in the Operating Partnership, representing a combined total of approximately 13% of the equity in the Operating Partnership on December 31, 2019. As of September 30, 2023, these interests represent a combined total of approximately 10.7% of the equity in the Operating Partnership.

Class R OP Units

On January 25, 2021, the compensation committee of the Company's board of directors recommended, and the board of directors approved, the grant of 40,000 units of Class R limited partnership interest in the Operating Partnership (“Class R OP Units”) to Mr. Halfacre in recognition of his voluntary reduction in his 2020 compensation plus 170,667 Class R OP Units to Mr. Halfacre as equity incentive compensation for the next three years, and the grant of 33,333 Class R OP Units to Mr. Pacini as equity incentive compensation for the next three years. An additional 116,000 Class R OP Units were granted to the remainder of the employees of the Company for a total of 360,000 Class R OP Units granted. There are no other stock based incentive compensation programs in place for employees.

Stock compensation expense related to the Class R OP Units is based on the estimated fair value per share on the grant date, including a discount for the illiquid nature of the underlying equity, and is being recognized over the vesting period. Of the 360,000 Class R OP Units granted, due to the departure of employees, 43,657 units were forfeited through December 31, 2022. There were no forfeitures during the three and nine months ended September 30, 2023. During the first nine months of 2023, the Company recorded $1,466,659 of stock compensation expense ($488,887 per quarter) related to the 316,343 Class R OP Units outstanding.

All Class R OP Units granted vest and are mandatorily convertible into Class C OP Units on March 31, 2024 at a conversion ratio of 1:1, which conversion ratio can increase to 1:2.5 Class C OP Units if the Company generates funds from operations (“FFO”) of $1.05, or more, per weighted average fully-diluted share outstanding for the year ending December 31, 2023, excluding the units and related compensation expense of the units to be issued if the performance target is met. As of September 30, 2023, the Company concluded that achieving the 2023 FFO performance target to trigger the increased conversion ratio for the Class R OP Units is deemed probable. Therefore, the Company recorded a one-time non-cash catch-up adjustment of $7,822,197 during the three months ended September 30, 2023 to reflect the cumulative compensation expense for the 474,515 performance-based Class C OP Units expected to be issued upon conversion of the Class R OP Units based on the grant date fair value of $19.58 per share from the initial grant date in January 2021 through September 30, 2023. Compensation expense of $733,331 per quarter will be recorded for these additional units through the end of the vesting period on March 31, 2024, if achieving the FFO performance target of $1.05 per share is still deemed probable.

35

MODIV INDUSTRIAL, INC.

Notes to Condensed Consolidated Financial Statements (continued)

(Unaudited)

During the three months ended September 30, 2023 and 2022, the Company amortized and charged $8,311,084 and $377,957 to stock compensation expense, respectively, and during the nine months ended September 30, 2023 and 2022, the Company amortized and charged $9,288,856 and $1,227,002 to stock compensation expense, respectively, for the Class R OP Units for both time vesting and performance units. The remaining unamortized value of the 790,858 time vesting and performance units aggregated $2,444,441 as of September 30, 2023.

The total stock compensation expenses for the three and nine months ended September 30, 2023 and 2022 were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Class P OP Units	$	88,783	$	88,783	$	266,350	$	266,350
Class R OP Units - Time Vesting Units	488,887		377,957		1,466,659		1,227,002
Class R OP Units - Performance Units	7,822,197		—		7,822,197		—
Class C common stock issued to the board of directors for services (see Note 10)	70,000		82,500		235,000		247,500
Total	$	8,469,867	$	549,240	$	9,790,206	$	1,740,852

Class C OP Units

On January 18, 2022, the Company completed the acquisition of a KIA auto dealership property in an “UPREIT” transaction pursuant to a contribution agreement whereby the seller received 1,312,382 Class C OP Units based on the terms of the Operating Partnership Agreement and an agreed upon value of $25.00 per unit, representing approximately 47% of the property’s value. Following expiration of the lock-up period on August 11, 2022, the holder of the Class C OP Units may require the redemption of all or a portion of these units and the Company has the option to redeem the units for cash or shares of Class C common stock.

On April 13, 2023, the Company acquired an industrial manufacturing property located in Reading, Pennsylvania leased to Summit Steel whereby the seller received 287,516 Class C OP Units based on the terms of the Operating Partnership Agreement and an agreed upon value of $18.00 per unit, representing approximately 46% of the property’s value. Under the terms of the contribution agreement, these Class C OP Units are redeemable for cash or, at the Company’s option, exchangeable for shares of the Company's Class C common stock. Summit Steel cannot require the Company to redeem any or all of the Class C OP Units until one year after the closing date of the agreement. The Company refers to this acquisition and the acquisition of the KIA auto dealership property discussed above collectively as the “UPREIT Transactions.”

The above Class C OP Units received the following distributions and allocations of net (loss) income during the three and nine months ended September 30, 2023 and 2022 as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Class C OP Units distributions	$	459,955	$	377,298	$	1,269,653	$	1,006,136
Class C OP Units net (loss) income allocation	$	(1,368,896)	$	528,540	$	(1,535,452)	$	(1,180,275)

Class C OP Units may be exchanged into Class C common stock or cash (at the sole discretion of the Company) in accordance with, and subject to the terms and conditions of, the Operating Partnership Agreement. Holders of Class C OP Units wishing to exchange their Class C OP Units must submit a Notice of Exchange (as defined in the Operating Partnership Agreement) to the Operating Partnership with a copy to the Company (the general partner of the Operating Partnership) in accordance with the Operating Partnership Agreement. If the Company chooses to exchange such Class C OP Units for cash, the cash amount will be based on the average daily market price of the Class C common stock for 10 consecutive trading days immediately preceding the date of receipt by the Company of the Notice of Exchange.

36

MODIV INDUSTRIAL, INC.

Notes to Condensed Consolidated Financial Statements (continued)

(Unaudited)

NOTE 13. EARNINGS (LOSS) PER SHARE

The Company reports a dual presentation of basic earnings per share (“Basic EPS”) and diluted earnings per share (“Diluted EPS”). Basic EPS excludes dilution and is computed by dividing net income or loss by the weighted average number of common shares outstanding during the period. Diluted EPS uses the treasury stock method or the if-converted method, where applicable, to compute for the potential dilution that would occur if dilutive securities or commitments to issue common stock were exercised (see Note 12 for additional information).

The following table presents the computation of the Company's basic and diluted net (loss) income per share attributable to common stockholders for the three and nine months ended September 30, 2023 and 2022:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Numerator - Basic:
Net (loss) income	$	(6,905,242)	$	4,450,767	$	(6,854,210)	$	(5,232,053)
Less: net loss (income) attributable to noncontrolling interest in Operating Partnership	1,368,896		(528,540)		1,535,452		1,180,275
Preferred stock dividends	(921,875)		(921,875)		(2,765,625)		(2,765,625)
Net (loss) income attributable to common stockholders	$	(6,458,221)	$	3,000,352	$	(8,084,383)	$	(6,817,403)
Numerator - Diluted
Net (loss) income	$	(6,905,242)	$	4,450,767	$	(6,854,210)	$	(5,232,053)
Preferred stock dividends	(921,875)		(921,875)		(2,765,625)		(2,765,625)
Net (loss) income attributable to common stockholders	$	(7,827,117)	$	3,528,892	$	(9,619,835)	$	(7,997,678)
Denominator:
Weighted average shares outstanding - basic	7,548,052		7,449,968		7,537,505		7,486,945
Operating Partnership Units - Class C	—		1,312,382		—		—
Operating Partnership Units - Classes M, P and R	—		1,418,193		—		—
Weighted average shares outstanding - diluted	7,548,052		10,180,543		7,537,505		7,486,945
Loss (earnings) per share attributable to common stockholders:
Basic	$	(0.86)	$	0.40	$	(1.07)	$	(0.91)
Diluted	$	(0.86)	$	0.35	$	(1.07)	$	(0.91)

During the three months ended September 30, 2023, the weighted average dilutive effect of 3,580,720 shares and during the nine months ended September 30, 2023 and 2022, the weighted average dilutive effect of 3,484,881 shares and 2,730,416 shares, respectively, related to units of limited partnership interest in the Operating Partnership as discussed in Note 12 were excluded from the computation of Diluted EPS because their effect would be anti-dilutive. There were no other outstanding securities or commitments to issue common stock that would have a dilutive effect for the periods then ended.

Diluted shares also exclude the 474,515 performance-based Class C OP Units expected to be issued upon conversion of the Class R OP Units on March 31, 2024 if the 2023 FFO performance target is achieved, which is described in Note 12, because their effect would be anti-dilutive. All Class R OP Units will automatically convert to Class C OP Units on March 31, 2024.

37

MODIV INDUSTRIAL, INC.

Notes to Condensed Consolidated Financial Statements (continued)

(Unaudited)

NOTE 14. SUBSEQUENT EVENTS

The Company evaluates subsequent events until the date the accompanying unaudited condensed consolidated financial statements are issued. Significant subsequent events are described below:

Preferred Dividends

On October 16, 2023, the Company paid its Series A Preferred Stock dividends of $921,875 for the third quarter of 2023, which were declared by the Company’s board of directors on August 7, 2023.

On November 6, 2023, the Company’s board of directors declared Series A Preferred Stock dividends payable of $921,875 for the fourth quarter of 2023, which will be paid on January 16, 2024 to holders of Series A Preferred Stock of record as of December 29, 2023.

Common Stock and Class C OP Unit Distributions

On June 15, 2023, the Company’s board of directors authorized monthly distributions payable to common stockholders and the Class C OP Unit holders of record as of September 30, 2023, which were paid on October 25, 2023.

On October 10, 2023, the Company’s board of directors authorized monthly distributions payable to common stockholders and Class C OP Unit holders of record as of October 31, 2023, November 30, 2023 and December 29, 2023, which will be paid on or about November 27, 2023, December 26, 2023 and January 25, 2024, respectively. The monthly distribution amount of $0.095833 per share represents an annualized distribution rate of $1.15 per share of common stock, which is consistent with the annual dividend rate paid since October 1, 2021.

On November 6, 2023, the Company’s board of directors authorized monthly distributions of $0.095833 per share payable to common stockholders and Class C OP Unit holders of record as of January 31, 2024, February 29, 2024 and March 29, 2024, which will be paid on or about February 26, 2024, March 25, 2024 and April 25, 2024, respectively.

Kalera Mechanic's Liens

On October 31, 2023, Kalera filed a motion with the bankruptcy court to reject the Company’s lease and abandon all of its property located at the premises effective as of October 31, 2023, subject to approval of the motion by the bankruptcy court. The Company is exploring its legal options and may make certain demands and objections relating to damages the Company has incurred in connection with the Kalera bankruptcy. Because the Company’s lease will be rejected once the bankruptcy court enters an order approving Kalera's motion, the Company will be responsible for the mechanic's liens with a face amount of $3,110,443 and will seek to find a new tenant or sell the property. The Company has engaged in preliminary discussions with prospective tenants in anticipation of the lease being rejected. The accompanying condensed consolidated balance sheet as of September 30, 2023 includes the estimated amount of $2,350,000 to settle the pending mechanic’s liens at less than face value, which was recorded as construction in progress for the improvements at the Company’s Saint Paul, Minnesota property and a corresponding accrued liability.

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

You should read the following discussion and analysis of our financial condition, results of operations and cash flows together with the accompanying unaudited condensed consolidated financial statements and related notes that are included elsewhere in this Quarterly Report on Form 10-Q and our audited consolidated financial statements and notes thereto and management’s discussion and analysis of financial condition and results of operations for the fiscal year ended December 31, 2022 included in our Annual Report on Form 10-K filed with the SEC on March 13, 2023.

Management’s discussion and analysis of financial condition and results of operations are based upon our accompanying unaudited condensed consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”). The preparation of these financial statements requires our management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On a regular basis, we evaluate these estimates. These estimates are based on management’s historical industry experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results may differ from these estimates.

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and we intend that such forward-looking statements be subject to the safe harbor provisions created thereby. For this purpose, any statements made that are not historical or current facts may be deemed to be forward-looking statements. Without limiting the generality of the foregoing, words such as “anticipates,” “believes,” “seeks,” “estimates,” “expects,” “intends,” “continue,” “can,” “may,” “plans,” “potential,” “projects,” “should,” “could,” “will,” “would” or similar expressions are intended to identify forward-looking statements. Such statements include, but are not limited to, any statements about our plans, strategies, and prospects and are subject to certain risks and uncertainties, as well as known and unknown risks, which could cause actual results to differ materially from those projected or anticipated. Therefore, such statements are not intended to be a guarantee of our performance in future periods.

The forward-looking statements included herein represent our management’s current expectations and assumptions based on information available as of the date of this report. These statements involve numerous known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Readers should carefully review these risks, as well as the additional risks described in other documents we file from time-to-time with the Securities and Exchange Commission (the “SEC”) including the risks and uncertainties described in Item 1A., Risk Factors, of our Annual Report on Form 10-K for the year ended December 31, 2022. In light of the significant risks and uncertainties inherent in the forward-looking information included herein, the inclusion of such information should not be regarded as a representation by us or any other person that such results will be achieved, and readers are cautioned not to place undue reliance on such forward-looking information, which speak only as of the date of this report.

New risks and uncertainties emerge from time-to-time and it is not possible for our management to predict all risks and uncertainties, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual future results to be materially different from those expressed or implied by any forward-looking statements. The following are some, but not all, of the assumptions, risks, uncertainties and other factors that could cause our actual results to differ materially from our forward-looking statements:

•We are implementing our strategic plan to acquire industrial manufacturing properties while reducing the number of office and retail properties in our portfolio, and therefore the prior performance of our real estate investments may not be indicative of our future results.

•Disruptions in the financial markets and uncertain economic conditions could adversely affect market rental rates, commercial real estate values and our ability to secure debt financing when our debt matures, at interest rates acceptable to us or at all, to service future debt obligations, or to pay distributions to our stockholders.

•We have a substantial amount of indebtedness outstanding, which may expose us to the risk of default under our debt obligations.

39

•Increases in mortgage rates or changes in underwriting standards may make it difficult for us to finance or refinance properties, which could reduce the number of properties we can acquire, our cash flow from operations and the amount of cash available for distributions to our stockholders.

•Inflation and rising interest rates may adversely affect our financial condition and results of operations.

•Our listing on the New York Stock Exchange does not guarantee an active and liquid market for our Class C common stock, $0.001 par value per share (“Class C common stock”), and the market price and trading volume of the shares of our Class C common stock may fluctuate significantly.

•Our Class C common stock is subordinate to our 7.375% Series A Cumulative Redeemable Perpetual Preferred Stock, $0.001 par value per share (“Series A Preferred Stock”), and our existing and future debt, and our common stockholders' interests could be diluted by the issuance of additional preferred stock, future offerings of debt securities, which could be senior to our common stock, or equity securities, and by other transactions.

•Our real estate investments may include special use single-tenant properties that may be difficult to sell or re-lease upon tenant defaults or early terminations.

•Downturns relating to certain geographic regions, industries or business sectors may have a more significant adverse impact on our assets and our ability to pay distributions than if we had a more diversified investment portfolio.

•We are subject to risks related to tenant concentration, and an adverse development with respect to a large tenant could materially and adversely affect us.

•Our real estate properties and related intangible assets may be subject to impairment charges.

•We face significant competition for real estate investment opportunities, which may limit our ability to acquire suitable investments and achieve our investment objectives or pay distributions.

•Our financial condition and ability to make distributions may be adversely affected by the bankruptcy or insolvency of a tenant, a downturn in the business of a tenant or a tenant’s lease termination.

•Our charter and bylaws contain provisions, including restrictions on the ownership and transfer of our stock, that may delay, defer or prevent an acquisition of our common stock or a change in control.

•We have experienced losses in the past and we may experience additional losses in the future.

•Uninsured losses relating to real property could reduce our cash flow from operations and reduce the value of stockholders’ investment in us.

•We face risks associated with security breaches through cyber-attacks, cyber intrusions or otherwise, as well as other significant disruptions of our information technology networks and related systems.

•We may be subject to adverse legislative or regulatory tax changes.

•The eruption of war between Israel and Hamas militants and the threat of an expanded war in the Middle East, along with the ongoing war between Russia and Ukraine and the economic sanctions and other restrictive actions by the U.S. and other countries against Russia, is expected to exacerbate supply chain disruptions, increase oil prices in the world market, and may extend the inflationary period and increase interest rates in the markets in which we operate.

Except as required by law, we assume no obligation to update any forward-looking statements publicly, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

Overview

We are a real estate investment trust (“REIT”) with publicly traded shares of Class C common stock and Series A Preferred Stock. We currently own and manage single-tenant net-lease real estate properties throughout the United States, with a focus on acquisitions of critical industrial manufacturing properties with long-term leases to tenants that fuel the national economy and strengthen supply chains. Following our sale of 13 retail and office properties on August 10, 2023, as described below, since December 31, 2021, we have increased our industrial properties from 41% to 75% of our portfolio and reduced our office properties from 50% to 14% of our portfolio based on our pro forma ABR (as defined below) as of September 30, 2023.

We were formed on May 15, 2015 as a Maryland corporation and elected to be taxed as a REIT for federal income tax purposes beginning with our taxable year ended December 31, 2016. We changed our name from Modiv Inc. to Modiv Industrial, Inc. effective August 11, 2023. We intend to continue to operate so as to remain qualified as a REIT for federal income tax purposes, which requires us to annually distribute at least 90% of our taxable income (excluding net capital gains) in the form of distributions to our stockholders.

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The Company

We primarily generate revenues by leasing properties to tenants pursuant to net leases. As of September 30, 2023, our real estate investment portfolio consisted of 44 properties as further described below. The net book value of our real estate investments as of September 30, 2023 was $499,734,347.

Details of our diversified portfolio of 44 operating properties, including an approximate 72.7% tenant-in-common interest in a Santa Clara, California industrial property (the “TIC Interest”), as of September 30, 2023 are as follows:

•39 industrial properties, including the TIC Interest, which represent approximately 76% of the portfolio (expressed as a percentage of annualized base rent (“ABR”) as of September 30, 2023), one retail property which represents approximately 10% of the portfolio and four office properties (including one classified as held for sale) which represent approximately 14% of the portfolio;

•Weighted average remaining lease term (“WALT”), excluding tenant rights to extend leases, of approximately 14.0 years;

•Occupancy rate of 100%, excluding the property formerly leased to Kalera, Inc., which rejected our lease in its bankruptcy proceeding as discussed in Notes 11 and 14 of our accompanying unaudited condensed consolidated financial statements;

•Located in 16 states;

•Leased to 30 different commercial tenants doing business in 12 separate industries;

•Approximately 4.6 million square feet of aggregate leasable space, including the TIC Interest;

•An average leasable space per property of approximately 105,000 square feet; approximately 109,000 square feet per industrial property; approximately 73,000 square feet for our retail property and approximately 79,000 square feet per office property; and

•Outstanding mortgage notes payable balance of $34,284,849 for three properties and credit facility term loan balance of $250,000,000.

On August 10, 2023, we disposed of 13 properties consisting of 11 retail properties and two office properties in a sale to Generation Income Properties, Inc., a publicly-traded REIT (NASDAQ: GIPR) (“GIPR”). These 13 properties were sold for $42,000,000 with $30,000,000 paid in cash and the remaining $12,000,000 paid in 2,400,000 shares of GIPR's newly-created Series A Redeemable Preferred Stock with a liquidation preference of $5.00 per share and an annual dividend yield of 9.5% from the original issuance date to August 9, 2024 and an annual dividend rate of 12.0% thereafter.

Recent Events and Uncertainties

There are continuing significant uncertainties in the market in which we operate related to inflation and increases in interest rates, supply chain disruptions, and negative impacts associated with the violence and unrest in the Middle East, which started with the war by Hamas militants against Israel, and the ongoing Russian war against Ukraine and sanctions which have been implemented by the United States and other countries against Russia. Volatility in stock and bond markets and particularly the rapid rise in yields on U.S. Treasury securities during 2022 and 2023, the ripple effect of bank failures in the first half of 2023 and increased bank regulations, may negatively impact our operating results, liquidity and sources of borrowings.

We, our tenants and operating partners are impacted by inflation and rising interest rates. While the rate of inflation has been declining over the last few months, inflation remains above the Federal Reserve's 2% target and there is significant uncertainty over the future rate of inflation. Depending on the future course of inflation, the Federal Reserve may continue raising interest rates to try to rein in inflation, which could lead to a recession and will negatively impact our future results due to higher borrowing costs on any future floating rate borrowing. As of September 30, 2023, 100% of our $284,284,849 outstanding debt is at fixed rates with a weighted average rate of 4.52% as a result of the swap agreements entered into in May 2022 and October 2022.

In addition, although the impacts of the COVID-19 pandemic on the economy appear to have diminished and the general commercial real estate market appears to be recovering from such impacts, the longer-term macroeconomic effects on global supply chains, inflation, labor shortages and wage increases continue to impact many industries. Additionally, the COVID-19 pandemic has resulted in significant disruptions in utilization of office properties and the likely negative impacts regarding how tenants of office properties will respond when their leases are scheduled to expire.

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Possible future declines in rental rates and expectations of future rental concessions, including free rent to renew tenants early, to retain tenants who are up for renewal or to attract new tenants, may result in decreases in cash flows from office properties. We have one office lease expiring in the next 12 months with Cummins Inc. (“Cummins”) which is scheduled to expire on February 29, 2024, with 87,230 leasable square feet and representing approximately 1.6% of ABR as of September 30, 2023. This property is classified as held for sale in our accompanying unaudited condensed consolidated financial statements as discussed in Note 3 of our accompanying unaudited condensed consolidated financial statements. As tenants in office properties reevaluate their use of such properties in light of the impacts of the COVID-19 pandemic, including their ability to have workers succeed in working at home, they may determine not to renew these leases or to seek rent or other concessions as a condition of renewing their leases.

Potential future declines in economic conditions could negatively impact commercial real estate fundamentals and result in lower occupancy, lower rental rates and declining values in our real estate portfolio, which could have the following negative effects on us: the values of our investments in commercial properties could decrease below the amounts paid for such investments; and/or revenues from our properties could decrease due to fewer tenants and/or lower rental rates, making it more difficult for us to make distributions or meet our debt service obligations. We successfully negotiated lease extensions for five properties during 2022 and the first nine months of 2023; however, changing circumstances may make future lease extensions more difficult.

The debt market remains sensitive to the macro environment, such as inflation, Federal Reserve policy, bank failures in the first half of 2023, the impacts of the COVID-19 pandemic on office properties, market sentiment and regulatory factors affecting the banking and commercial mortgage-backed securities industries. In January 2022, we refinanced all but four of our properties (including the TIC Interest) with proceeds from our Credit Facility (as defined below), which includes floating rates based on the Secured Overnight Financing Rate (“SOFR”) and our leverage ratio as described below. The mortgage on our Rancho Cordova, California property which is leased to the State of California's Office of Emergency Services (“OES”) matures on March 9, 2024 and the other three mortgages do not mature until after September 2027. All four of the remaining mortgages are at fixed rates. As a result of the interest rate swap agreements entered into during 2022, 100% of our consolidated indebtedness as of September 30, 2023 held a weighted average fixed interest rate of 4.52%.

Any future uncertainties in the capital markets may cause difficulty in refinancing debt obligations prior to maturity at terms as favorable as the terms of existing indebtedness. If we are not able to refinance our indebtedness on attractive terms, or at all, at the various maturity dates, we may be forced to dispose of some of our assets. Market conditions can change quickly, potentially negatively impacting the value of real estate investments.

Liquidity and Capital Resources

Generally, our cash requirements for property acquisitions, debt payments and refinancings, capital expenditures and other investments will be funded by bank borrowings through our Credit Facility, mortgage indebtedness on our properties, real estate property sales and internally generated funds, or offerings of shares of Class C common stock. Our cash requirements for operating expenses and dividends on our Series A Preferred Stock and distributions on our Class C common stock will be funded by internally generated funds.

Credit Facility

On January 18, 2022, Modiv Operating Partnership, LP, a Delaware limited partnership (our “Operating Partnership”), entered into a $250,000,000 credit agreement (‘‘Credit Agreement’’) providing for a $100,000,000 four-year revolving line of credit, which may be extended by up to 12 months subject to certain conditions (the ‘‘Revolver’’), and a $150,000,000 five-year term loan (the ‘‘Term Loan’’ and together with the ‘‘Revolver,’’ the ‘‘Credit Facility’’) with KeyBank National Association (‘‘KeyBank’’) and the other lending institutions party thereto (collectively, the ‘‘Lenders’’), as further described in Note 7 of our accompanying unaudited condensed consolidated financial statements. The Credit Facility is available for general corporate purposes, including, but not limited to, acquisitions, repayment of existing indebtedness and capital expenditures.

On October 21, 2022, we exercised the accordion feature of our Credit Facility and increased the Credit Facility to $400,000,000, comprised of a $150,000,000 Revolver and a $250,000,000 Term Loan. The Credit Facility includes an updated accordion option that allows us to request additional Revolver and Term Loan lender commitments up to a total of $750,000,000 subject to customary conditions, including the receipt of new commitments from the Lenders. The maturities for our Revolver and Term Loan remain unchanged with the Revolver’s maturity in January 2026 with options to extend for a total of 12 months, and the Term Loan’s maturity in January 2027.

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The Credit Facility is priced on a leverage-based grid that fluctuates based on our actual leverage ratio at the end of the prior quarter. With our leverage ratio at 48% as of September 30, 2023, the spread over SOFR, including a 10-basis point credit adjustment, is 185 basis points for the Revolver. Therefore, the interest rate on the Revolver was 7.1625% on October 31, 2023; although there was no outstanding balance on the Revolver. We also pay an annual unused fee of up to 25 basis points on the Revolver, depending on the daily amount of the unused commitment, and paid total unused fees of $94,525 and $47,543 for the three months ended September 30, 2023 and 2022, respectively, and $384,164 and $119,823 for the nine months ended September 30, 2023 and 2022, respectively.

On May 10, 2022, we entered into a swap agreement, effective May 31, 2022, to fix SOFR at 2.258% with respect to our original $150,000,000 Term Loan as described in Note 8 of our accompanying unaudited condensed consolidated financial statements, which results in a fixed interest rate of 4.058% on our original $150,000,000 Term Loan based on our leverage ratio of 48% as of September 30, 2023.

On October 26, 2022, we entered into a swap agreement, effective November 30, 2022, to fix SOFR at 3.44% with respect to our expanded Term Loan as described in Note 8 of our accompanying unaudited condensed consolidated financial statements, which results in a fixed interest rate of 5.240% on the additional $100,000,000 borrowed under the Term Loan based on our leverage ratio of 48% as of September 30, 2023.

As of September 30, 2023 and December 31, 2022, the outstanding principal balance of our mortgage notes payable on the operating properties was $34,284,849 and $44,515,009, respectively, our Revolver outstanding principal balance was zero and $3,000,000, respectively, and our Term Loan outstanding principal balance was $250,000,000 and $150,000,000, respectively. As of September 30, 2023 and December 31, 2022, our approximately 72.7% pro-rata share of the TIC Interest’s mortgage note payable was $9,315,322 and $9,487,515, respectively, which is not included in our accompanying unaudited condensed consolidated balance sheets.

Credit Facility Drawdowns

During April 2023, we borrowed $80,000,000 under our $100,000,000 delayed draw Term Loan commitment, bringing the total Term Loan balance outstanding to the total commitment amount of $250,000,000. We used a portion of the proceeds from the draw on the Term Loan to acquire eight properties as described in Note 3 of our accompanying unaudited condensed consolidated financial statements.

During July 2023, we borrowed $21,000,000 on the Revolver in advance of two acquisitions of industrial manufacturing properties, and in August 2023, we prepaid the outstanding balance on the Revolver with a portion of the cash proceeds from our August 10, 2023 GIPR disposition described in Note 3 of our accompanying unaudited condensed consolidated financial statements.

While we intend for the Credit Facility to be an important source of financing, we may continue to use mortgage debt financing for certain real estate investments and acquisitions. This financing may be obtained at the time an asset is acquired or an investment is made or at such later time as determined to be appropriate. In addition, debt financing may be used from time-to-time for property improvements, lease inducements, tenant improvements and other working capital needs.

The $150,000,000 unused capacity on our Revolver as of the date of this quarterly report on Form 10-Q subject to our borrowing base covenant, along with proceeds from any future offerings of shares of Class C common stock, can be used to invest in real estate and real estate-related investments or to re-lease and reposition our properties in accordance with our investment strategy and policies, including costs and fees associated with such investments, such as capital expenditures, tenant improvement costs and leasing costs. We also may use a portion of the proceeds from our offerings for payment of principal on our outstanding indebtedness and for general corporate purposes.

Acquisitions of Real Estate Investments

We acquired a total of 12 properties for an aggregate of $129,753,499 during the first nine months of 2023 at a blended initial cap rate of 7.8% and a weighted average cap rate of 10.3%. We define “initial cap rate” for property acquisitions as the initial annual cash rent divided by the purchase price of the property. We define “weighted average cap rate” for property acquisitions as the average annual cash rent including rent escalations over the lease term, divided by the purchase price of the property.

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Share Repurchases

On December 21, 2022, our board of directors (the “Board”) authorized up to $15,000,000 in repurchases of our outstanding shares of Class C common stock and Series A Preferred Stock from January 1, 2023 through December 31, 2023 (the “2023 SRP”). Purchases made pursuant to the 2023 SRP have been and will be made from time-to-time in the open market, in privately negotiated transactions or in any other manner as permitted by federal securities laws and other legal requirements. The timing, manner, price and amount of any repurchases will be determined by us in our discretion and will be subject to economic and market conditions, stock price, applicable legal requirements and other factors. The 2023 SRP may be suspended or discontinued at any time. From January 1, 2023 to June 30, 2023, we repurchased a total of 93,357 shares of our Class C common stock for a total of $1,129,162 under the 2023 SRP for an average cost of $12.10 per share. We did not repurchase any shares of our Class C common stock during the three months ended September 30, 2023.

Cash Flow Summary

The following table summarizes our cash flow activity for the nine months ended September 30, 2023 and 2022:

	Nine Months Ended September 30,
	2023		2022
Net cash provided by operating activities	$	11,210,166	$	9,326,763
Net cash used in investing activities	$	(90,995,924)	$	(64,969,591)
Net cash provided by financing activities	$	76,818,719	$	2,962,196

Cash Flows from Operating Activities

Net cash provided by operating activities was $11,210,166 for the first nine months of 2023 compared to $9,326,763 for the first nine months of 2022, resulting in an increase in cash provided by operating activities of $1,883,403 period-over-period.

We expect our cash flows from operations will continue to be positive in the next 12 months due to an increase in our investments in operating assets as a result of our year-to-date acquisitions; however, there can be no assurance that this expectation will be realized.

Cash Flows from Investing Activities

Net cash used in investing activities was $90,995,924 for the first nine months of 2023 compared to $64,969,591 for the first nine months of 2022 resulting in an increase in cash used of $26,026,333 in investing activities, primarily due to a reduction in net sales proceeds received of $31,751,530 in 2023 for 14 properties, which were primarily smaller retail properties, compared with net sales proceeds received in 2022 for seven properties. This decrease in net proceeds from asset sales was partially offset by a decrease in funds utilized to invest in acquisitions and additions to existing real estate investments of $6,477,071, reflecting 12 property acquisitions in 2023 compared with 16 property acquisitions in 2022.

Cash Flows from Financing Activities

Net cash provided by financing activities was $76,818,719 for the first nine months of 2023 compared to $2,962,196 for the first nine months of 2022, which primarily reflects a decrease in the principal payments on notes payable that were refinanced or repaid upon sales of properties, partially offset by a decrease in our Credit Facility Term Loan borrowings of $50,000,000 period-over-period. In addition, payments of deferred financing costs and offering costs incurred for the first nine months of 2022 aggregated $3,271,216. No such charges were incurred for the first nine months of 2023.

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Funds from Operations and Adjusted Funds from Operations

In order to provide a more complete understanding of the operating performance of a REIT, the National Association of Real Estate Investment Trusts (“Nareit”) promulgated a measure known as Funds from Operations (“FFO”). FFO is defined as net income or loss computed in accordance with GAAP, excluding extraordinary items, as defined by GAAP, and gains and losses from sales of depreciable operating property, plus real estate-related depreciation and amortization (excluding amortization of deferred financing costs and depreciation of non-real estate assets), and after adjustment for unconsolidated partnerships, joint ventures, preferred dividends and real estate impairments. Because FFO calculations adjust for such items as depreciation and amortization of real estate assets and gains and losses from sales of operating real estate assets (which can vary among owners of identical assets in similar conditions based on historical cost accounting and useful-life estimates), they facilitate comparisons of operating performance between periods and between other REITs. As a result, we believe that the use of FFO, together with the required GAAP presentations, provides a more complete understanding of our performance relative to our competitors and a more informed and appropriate basis on which to make decisions involving operating, financing, and investing activities. It should be noted, however, that other REITs may not define FFO in accordance with the current Nareit definition or may interpret the current Nareit definition differently than we do, making comparisons less meaningful.

Additionally, we use Adjusted Funds From Operations (“AFFO”) as a non-GAAP financial measure to evaluate our operating performance. AFFO excludes non-routine and certain non-cash items such as revenues in excess of cash received, deferred rent, amortization of stock-based compensation, amortization of in-place lease valuation intangibles, deferred financing fees, gain or loss from the extinguishment of debt, unrealized gains (losses) on derivative instruments, and write-offs of due diligence expenses for abandoned pursuits. We also believe that AFFO is a recognized measure of sustainable operating performance of the REIT industry. Further, we believe AFFO is useful in comparing the sustainability of our operating performance with the sustainability of the operating performance of other real estate companies. Management believes that AFFO is a beneficial indicator of our ongoing portfolio performance and ability to sustain our current distribution level. More specifically, AFFO isolates the financial results of our operations. AFFO, however, is not considered an appropriate measure of historical earnings as it excludes certain significant costs that are otherwise included in reported earnings. Further, since the measure is based on historical financial information, AFFO for the period presented may not be indicative of future results or our future ability to pay our dividends. By providing FFO and AFFO, we present information that assists investors in aligning their analysis with management’s analysis of long-term operating activities.

For all of these reasons, we believe the non-GAAP measures of FFO and AFFO, in addition to income or loss from operations, net income or loss and cash flows from operating activities, as defined by GAAP, are helpful supplemental performance measures and useful to investors in evaluating the performance of our real estate portfolio. However, a material limitation associated with FFO and AFFO is that they are not indicative of our cash available to fund distributions since other uses of cash, such as capital expenditures at our properties and principal payments of debt, are not deducted when calculating FFO and AFFO. AFFO is useful in assisting management and investors in assessing our ongoing ability to generate cash flow from operations and continue as a going concern in future operating periods. Therefore, FFO and AFFO should not be viewed as a more prominent measure of performance than income or loss from operations, net income or loss or cash flows from operating activities and each should be reviewed in connection with GAAP measurements.

Neither the SEC, Nareit, nor any other applicable regulatory body has opined on the acceptability of the adjustments contemplated to adjust FFO in order to calculate AFFO and its use as a non-GAAP performance measure. In the future, the SEC or Nareit may decide to standardize the allowable exclusions across the REIT industry, and we may have to adjust the calculation and characterization of this non-GAAP measure. Furthermore, as described in Note 12 of our accompanying unaudited condensed consolidated financial statements, the conversion ratios for units of Class M limited partnership interest in the Operating Partnership (“Class M OP Units”), units of Class P limited partnership interest in the Operating Partnership (“Class P OP Units”) and units of Class R limited partnership interest in the Operating Partnership (“Class R OP Units”) can increase if the specified performance hurdles are achieved, which would increase the fully-diluted weighted average shares outstanding. The increased conversion ratio for the Class R OP Units is reflected in the fully-diluted weighted average shares outstanding below,

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The following are the calculations of FFO and AFFO for the three and nine months ended September 30, 2023 and 2022:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Net (loss) income (in accordance with GAAP)	$	(6,905,242)	$	4,450,767	$	(6,854,210)	$	(5,232,053)
Preferred stock dividends	(921,875)		(921,875)		(2,765,625)		(2,765,625)
Net (loss) income attributable to common stockholders and Class C OP Unit holders	(7,827,117)		3,528,892		(9,619,835)		(7,997,678)
FFO adjustments:
Depreciation and amortization of real estate properties	4,175,209		3,598,592		11,403,603		10,581,765
Amortization of lease incentives	40,397		176,296		217,537		323,347
Depreciation and amortization for unconsolidated investment in a real estate property	187,479		192,551		567,721		573,487
Impairment of real estate investment property	—		—		3,499,438		—
Loss (gain) on sale of real estate investments, net	1,708,801		(3,932,028)		1,708,801		(11,527,185)
FFO attributable to common stockholders and Class C OP Unit holders	(1,715,231)		3,564,303		7,777,265		(8,046,264)
AFFO adjustments:
Impairment of goodwill	—		—		—		17,320,857
Stock compensation	8,469,867		549,240		9,790,206		1,740,852
Deferred financing costs	165,709		101,783		556,134		1,470,289
Non-recurring loan prepayment penalties	—		—		—		615,336
Swap termination costs	—		—		—		733,000
Due diligence expenses, including abandoned pursuit costs	1,208		44,863		347,598		636,171
Deferred rents	(1,772,403)		(976,420)		(4,528,120)		(2,593,698)
Unrealized (gain) loss on interest rate swap valuation	(795,425)		59,000		(2,781,838)		(1,319,013)
Amortization of (below) above market lease intangibles, net	(204,011)		(214,889)		(596,194)		(862,861)
Unrealized gain on investment in preferred stock	(440,000)		—		(440,000)		—
Other adjustments for unconsolidated investment in a real estate property	11,819		(188)		35,457		(564)
AFFO attributable to common stockholders and Class C OP Unit holders	$	3,721,533	$	3,127,692	$	10,160,508	$	9,694,105
Weighted average shares outstanding:
Basic	7,548,052		7,449,968		7,537,505		7,486,945
Fully Diluted (1)	11,128,772		10,180,543		11,022,386		10,217,361
FFO Per Share:
Basic	$	(0.23)	$	0.48	$	1.03	$	(1.07)
Fully Diluted	$	(0.23)	$	0.35	$	0.71	$	(1.07)
AFFO Per Share:
Basic	$	0.49	$	0.42	$	1.35	$	1.29
Fully Diluted	$	0.33	$	0.31	$	0.92	$	0.95

(1)    Includes the Class C, Class M, Class P and Class R OP Units (time vesting and performance) to compute the weighted average number of shares.

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Property Portfolio Information

Although we only have a single segment for financial reporting purposes, given our strategic initiative to focus solely on acquiring and operating industrial manufacturing properties, we are presenting the following information regarding our property portfolio to help investors better understand our strategic direction:

The following is a breakdown of our FFO and AFFO by property type for the three and nine months ended September 30, 2023:

	Three Months Ended September 30, 2023
	Industrial Core		Tactical Non-Core (1)		Other Non-Core (2)		Non-Property & Other (3)		Consolidated
Net income (loss) (in accordance with GAAP)	$	1,341,198	$	620,498	$	(1,770,631)	$	(7,096,307)	$	(6,905,242)
Preferred stock dividends	—		—		—		(921,875)		(921,875)
Net income (loss) attributable to common stockholders and Class C OP Unit holders	1,341,198		620,498		(1,770,631)		(8,018,182)		(7,827,117)
FFO adjustments:
Depreciation and amortization of real estate properties	3,323,055		808,337		43,817		—		4,175,209
Amortization of lease incentives	9,690		—		30,707		—		40,397
Depreciation and amortization for unconsolidated investment in a real estate property	187,479		—		—		—		187,479
(Gain) loss on sale of real estate investments, net	(178,239)		—		1,887,040		—		1,708,801
FFO attributable to common stockholders and Class C OP Unit holders	4,683,183		1,428,835		190,933		(8,018,182)		(1,715,231)
AFFO adjustments:
Stock compensation	—		—		—		8,469,867		8,469,867
Deferred financing costs	167,034		(21,863)		20,538		—		165,709
Due diligence expenses, including abandoned pursuit costs	1,208		—		—		—		1,208
Deferred rents	(1,193,508)		(599,485)		20,590		—		(1,772,403)
Unrealized gain on interest rate swap valuation	—		—		—		(795,425)		(795,425)
Amortization of (below) above market lease intangibles, net	(210,608)		—		6,597		—		(204,011)
Unrealized gain on investment in preferred stock	—		—		(440,000)		—		(440,000)
Other adjustments for unconsolidated investment in a real estate property	11,819		—		—		—		11,819
AFFO attributable to common stockholders and Class C OP Unit holders	$	3,459,128	$	807,487	$	(201,342)	$	(343,740)	$	3,721,533
Weighted average shares outstanding:
Basic	7,548,052		7,548,052		7,548,052		7,548,052		7,548,052
Fully diluted (4)	11,128,772		11,128,772		11,128,772		11,128,772		11,128,772
FFO Per Share:
Basic	$	0.62	$	0.19	$	0.03	$	(1.06)	$	(0.23)
Fully Diluted (5)	$	0.42	$	0.13	$	0.02	$	(0.72)	$	(0.23)
AFFO Per Share:
Basic	$	0.46	$	0.11	$	(0.03)	$	(0.05)	$	0.49
Fully Diluted (5)	$	0.31	$	0.07	$	(0.02)	$	(0.03)	$	0.33

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	Nine Months Ended September 30, 2023
	Industrial Core		Tactical Non-Core (1)		Other Non-Core (2)		Non-Property & Other (3)		Consolidated
Net income (loss) (in accordance with GAAP)	$	3,857,478	$	1,997,373	$	(5,651,366)	$	(7,057,695)	$	(6,854,210)
Preferred stock dividends	—		—		—		(2,765,625)		(2,765,625)
Net income (loss) attributable to common stockholders and Class C OP Unit holders	3,857,478		1,997,373		(5,651,366)		(9,823,320)		(9,619,835)
FFO adjustments:
Depreciation and amortization of real estate properties	7,963,523		2,422,979		1,017,101		—		11,403,603
Amortization of lease incentives	44,044		—		173,493		—		217,537
Depreciation and amortization for unconsolidated investment in a real estate property	567,721		—		—		—		567,721
Impairment of real estate investment property	—		—		3,499,438		—		3,499,438
(Gain) loss on sale of real estate investments, net	(178,239)		—		1,887,040		—		1,708,801
FFO attributable to common stockholders and Class C OP Unit holders	12,254,527		4,420,352		925,706		(9,823,320)		7,777,265
AFFO adjustments:
Stock compensation	—		—		—		9,790,206		9,790,206
Deferred financing costs	462,598		(31,392)		124,928		—		556,134
Due diligence expenses, including abandoned pursuit costs	13,252		—		334,346		—		347,598
Deferred rents	(2,749,121)		(1,815,900)		36,901		—		(4,528,120)
Unrealized gain on interest rate swap valuation	—		—		—		(2,781,838)		(2,781,838)
Amortization of (below) above market lease intangibles, net	(628,099)		—		31,905		—		(596,194)
Unrealized gain on investment in preferred stock	—		—		(440,000)		—		(440,000)
Other adjustments for unconsolidated investment in a real estate property	35,457		—		—		—		35,457
AFFO attributable to common stockholders and Class C OP Unit holders	$	9,388,614	$	2,573,060	$	1,013,786	$	(2,814,952)	$	10,160,508
Weighted average shares outstanding:
Basic	7,537,505		7,537,505		7,537,505		7,537,505		7,537,505
Fully diluted (4)	11,022,386		11,022,386		11,022,386		11,022,386		11,022,386
FFO Per Share:
Basic	$	1.63	$	0.59	$	0.12	$	(1.30)	$	1.03
Fully Diluted (5)	$	1.11	$	0.40	$	0.08	$	(0.89)	$	0.71
AFFO Per Share:
Basic	$	1.25	$	0.34	$	0.13	$	(0.37)	$	1.35
Fully Diluted (5)	$	0.85	$	0.23	$	0.09	$	(0.26)	$	0.92

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(1)    We categorize Tactical Non-Core Assets as those assets that offer compelling value-add or opportunistic investment characteristics when measured over a near-term or interim holding period. We currently hold three such assets: (i) our tactical non-core acquisition of a leading KIA auto dealership located in a prime location in Los Angeles County in January 2022, which was structured as an UPREIT transaction resulting in a favorable equity issuance of $32,809,550 of units of Class C limited partnership interest in the Operating Partnership (“Class C OP Units”) at a cost basis of $25.00 per share; (ii) our 12 year lease to OES executed in January 2023 for one of our existing assets located in Rancho Cordova, California that includes an attractive purchase option by the tenant which we believe has a favorable probability of being executed upon in the next 24 months; and (iii) our property leased to Costco located in Issaquah, Washington which offers compelling redevelopment opportunities following Costco's lease expiration given its higher density infill location and the fact that the land is zoned for additional uses to include flex/R&D and multi-family.

(2)    Other non-core assets include (1) one legacy office property leased to Cummins classified as held for sale as of September 30, 2023 (see Note 3 of our accompanying unaudited condensed consolidated financial statements for additional details of the held for sale asset) and (2) one additional legacy office property leased to Solar Turbines. We define legacy assets as those inherited through prior mergers and acquisitions activity and such assets that were acquired by different management teams utilizing different investment objectives or underwriting criteria.

(3)     We do not allocate non-property expenses across our property-specific segments; therefore, we report these expenses separately under the Non-Property & Other caption in the table above. Such expenses can include stock compensation expense, general and administrative, unrealized gains and losses on interest rate hedges, and other comprehensive items.

(4)    Weighted average fully diluted shares outstanding includes the following:

(i)    7,548,052 and 7,537,505 shares of Class C common stock for the three and nine months ended September 30, 2023, respectively;

(ii)    1,599,898 and 1,504,059 Class C OP Units for the three and nine months ended September 30, 2023, respectively, including 1,312,382 issued in January 2022 in connection with the acquisition of the KIA auto dealership property and 287,516 and 191,677, respectively, weighted average units outstanding which were issued in April 2023 in conjunction with our acquisition of the property in Reading, Pennsylvania leased to Summit Steel & Manufacturing, LLC;

(iii)    1,189,964 Class C OP Units that would result from conversion of 657,949.5 Class M OP Units and 56,029 Class P OP Units assuming a conversion ratio of 1.6667 Class C OP Units for each Class M OP Unit and Class P OP Unit outstanding for both the three and nine months ended September 30, 2023; and

(iv)    790,858 Class C OP Units that would result from conversion of Class R OP Units, which reflects the conversion ratio of 2.5-for-1 based on the probable achievement of the FFO performance target of $1.05 per diluted share for the year ending December 31, 2023, that are eligible to be issued on March 31, 2024, as further described in Note 12 of our accompanying unaudited condensed consolidated financial statements, for both the three and nine months ended September 30, 2023.

(5)    For the intraperiod allocation, we treat all component per share amounts as fully-diluted to correspond with the consolidated FFO and AFFO results reflected above.

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The following is a breakdown of our accompanying unaudited condensed consolidated statement of operations by property type for the three and nine months ended September 30, 2023:

	Three Months Ended September 30, 2023
	Industrial Core		Tactical Non-Core (1)		Other Non-Core (2)		Non-Property & Other (3)		Consolidated
Rental income	$	8,772,104	$	2,678,424	$	1,049,810	$	—	$	12,500,338
Expenses:
General and administrative	—		—		—		1,735,104		1,735,104
Stock compensation expense	—		—		—		8,469,867		8,469,867
Depreciation and amortization	3,323,055		808,337		43,817		—		4,175,209
Property expenses	541,007		232,597		421,620		—		1,195,224
Total expenses	3,864,062		1,040,934		465,437		10,204,971		15,575,404
Operating income (loss):
Gain (loss) on sale of real estate investments	178,239		—		(1,887,040)		—		(1,708,801)
Operating income (loss)	5,086,281		1,637,490		(1,302,667)		(10,204,971)		(4,783,867)
Other (expense) income:
Interest income	—		—		—		26,386		26,386
Dividend income	—		—		—		190,000		190,000
Income from unconsolidated investment in a real estate property	79,164		—		—		—		79,164
Interest expense, net of derivative settlements and unrealized gain on interest rate swaps (4)	(3,824,247)		(1,016,992)		(467,964)		2,386,285		(2,922,918)
Increase in fair value of investment in preferred stock	—		—		—		440,000		440,000
Other (5)	—		—		—		65,993		65,993
Other (expense) income, net	(3,745,083)		(1,016,992)		(467,964)		3,108,664		(2,121,375)
Net income (loss)	1,341,198		620,498		(1,770,631)		(7,096,307)		(6,905,242)
Less: net loss attributable to noncontrolling interest in Operating Partnership	—		—		—		1,368,896		1,368,896
Net income (loss) attributable to Modiv Industrial, Inc.	1,341,198		620,498		(1,770,631)		(5,727,411)		(5,536,346)
Preferred stock dividends	—		—		—		(921,875)		(921,875)
Net income (loss) attributable to common stockholders	$	1,341,198	$	620,498	$	(1,770,631)	$	(6,649,286)	$	(6,458,221)

(1)-(3)    See footnotes (1) through (3) above.

(4)    Non-Property & Other interest expense includes a net unrealized gain on interest rate swap valuation, including amortization, of $795,424 and derivative cash settlements of $1,586,641 (see Notes 7 and 8 of our accompanying unaudited condensed consolidated financial statements for details).

(5)     Other income reflects management fees earned for managing the TIC Interest.

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	Nine Months Ended September 30, 2023
	Industrial Core		Tactical Non-Core (1)		Other Non-Core (2)		Non-Property & Other (3)		Consolidated
Rental income	$	22,075,020	$	8,199,340	$	4,373,723	$	—	$	34,648,083
Expenses:
General and administrative	—		—		—		5,240,935		5,240,935
Stock compensation expense	—		—		—		9,790,206		9,790,206
Depreciation and amortization	7,963,525		2,422,979		1,017,099		—		11,403,603
Property expenses	1,647,894		819,172		1,962,870		—		4,429,936
Impairment of real estate investment property	—		—		3,499,438		—		3,499,438
Total expenses	9,611,419		3,242,151		6,479,407		15,031,141		34,364,118
Operating income (loss):
Gain (loss) on sale of real estate investments	178,239		—		(1,887,040)		—		(1,708,801)
Operating income (loss)	12,641,840		4,957,189		(3,992,724)		(15,031,141)		(1,424,836)
Other (expense) income:
Interest income	(46)		—		—		296,967		296,921
Dividend income	—		—		—		190,000		190,000
Income from unconsolidated investment in a real estate property	207,506		—		—		—		207,506
Interest expense, net of derivative settlements and unrealized gain on interest rate swaps (4)	(8,991,820)		(2,959,816)		(1,658,642)		6,848,499		(6,761,779)
Increase in fair value of investment in preferred stock	—		—		—		440,000		440,000
Other (5)	—		—		—		197,978		197,978
Other (expense) income, net	(8,784,360)		(2,959,816)		(1,658,642)		7,973,444		(5,429,374)
Net income (loss)	3,857,480		1,997,373		(5,651,366)		(7,057,697)		(6,854,210)
Less: net loss attributable to noncontrolling interest in Operating Partnership	—		—		—		1,535,452		1,535,452
Net income (loss) attributable to Modiv Industrial, Inc.	3,857,480		1,997,373		(5,651,366)		(5,522,245)		(5,318,758)
Preferred stock dividends	—		—		—		(2,765,625)		(2,765,625)
Net income (loss) attributable to common stockholders	$	3,857,480	$	1,997,373	$	(5,651,366)	$	(8,287,870)	$	(8,084,383)

(1)-(3)    See footnotes (1) through (3) above.

(4)    Non-Property & Other interest expense includes a net unrealized gain on interest rate swap valuation, including amortization, of $2,781,838 and derivative cash settlements of $4,062,442 (see Notes 7 and 8 of our accompanying unaudited condensed consolidated financial statements for details).

(5)     Other income reflects management fees earned for managing the TIC Interest.

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The following is a breakdown of our accompanying unaudited condensed consolidated balance sheet by property type as of September 30, 2023:

	As of September 30, 2023
	Industrial Core		Tactical Non-Core (1)		Other Non-Core (2)		Non-Property & Other (3)		Consolidated
Assets
Real estate investments:
Land	$	60,391,661	$	43,387,936	$	2,483,960	$	—	$	106,263,557
Buildings and improvements	314,216,320		83,117,030		4,702,734		—		402,036,084
Equipment	4,429,000		—		—		—		4,429,000
Tenant origination and absorption costs	11,104,811		4,500,352		324,222		—		15,929,385
Total investments in real estate property	390,141,792		131,005,318		7,510,916		—		528,658,026
Accumulated depreciation and amortization	(33,956,998)		(12,749,497)		(881,175)		—		(47,587,670)
Total investments in real estate property, net, excluding unconsolidated investment in real estate property and real estate investments held for sale, net	356,184,794		118,255,821		6,629,741		—		481,070,356
Unconsolidated investment in a real estate property	10,035,805		—		—		—		10,035,805
Total real estate investments, net, excluding real estate investments held for sale, net	366,220,599		118,255,821		6,629,741		—		491,106,161
Real estate investments held for sale, net	—		—		8,628,186		—		8,628,186
Total real estate investments, net	366,220,599		118,255,821		15,257,927		—		499,734,347
Cash and cash equivalents	—		—		—		5,641,610		5,641,610
Tenant receivables	7,872,215		3,272,860		65,983		—		11,211,058
Above-market lease intangibles, net	1,332,458		—		—		—		1,332,458
Prepaid expenses and other assets (4)	3,069,326		87,688		186,671		1,537,698		4,881,383
Investment in preferred stock	—		—		—		10,060,000		10,060,000
Interest rate swap derivatives	—		—		—		6,156,179		6,156,179
Other assets related to real estate investments held for sale	—		—		46,158		—		46,158
Total assets	$	378,494,598	$	121,616,369	$	15,556,739	$	23,395,487	$	539,063,193
Liabilities and Equity
Mortgage notes payable, net	$	12,228,788	$	21,889,960	$	—	$	—	$	34,118,748
Credit facility term loan	187,841,252		36,735,226		23,809,449		—		248,385,927
Accounts payable, accrued and other liabilities	4,114,951		935,301		356,308		3,487,070		8,893,630
Below-market lease intangibles, net	9,098,703		—		—		—		9,098,703
Liabilities related to real estate investments held for sale	—		—		162,349		—		162,349
Total liabilities	213,283,694		59,560,487		24,328,106		3,487,070		300,659,357
Commitments and contingencies
Total Modiv Industrial, Inc. equity, net of due to affiliates	165,210,904		62,055,882		(8,771,367)		(63,591,519)		154,903,900
Noncontrolling interests in the Operating Partnership	—		—		—		83,499,936		83,499,936
Total equity	165,210,904		62,055,882		(8,771,367)		19,908,417		238,403,836
Total liabilities and equity	$	378,494,598	$	121,616,369	$	15,556,739	$	23,395,487	$	539,063,193

(1)-(3)    See footnotes (1) through (3) above.

(4)    Non-Property & Other prepaid expenses and other assets include deferred financing fees on our Revolver and prepaid directors and officers insurance.

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Results of Operations

As of September 30, 2023, we owned 44 operating properties (including one held for sale property and the TIC Interest). We acquired 12 and 16 operating properties during the first nine months of 2023 and 2022, respectively. We also sold 14 properties (11 retail, two office and one flex) during the first nine months of 2023 and seven properties (six office and one flex) during the first nine months of 2022. The operating results of the property that was classified as held for sale as of September 30, 2023, and the 14 properties and seven properties that were sold during the first nine months of 2023 and 2022, respectively, were included in our continuing results of operations for the three and nine months ended September 30, 2023 and 2022. We expect that rental income, depreciation and amortization expense, and interest expense will increase for the full year of 2023 as compared with the full year of 2022, as a result of the $129,753,499 of industrial manufacturing property acquisitions during the first nine months of 2023, which were partially offset by the sale of 14 properties completed in August 2023. Our results of operations for the nine months ended September 30, 2023 may not be indicative of those expected for the full year of 2023 or in future periods.

Comparison of the Three Months Ended September 30, 2023 to the Three Months Ended September 30, 2022

Rental Income

Rental income, including tenant reimbursements, for the three months ended September 30, 2023 and 2022 was $12,500,338 and $10,303,402, respectively. The increase in rental income of $2,196,936, or 21%, as compared with the third quarter of 2022 primarily reflects the rental income contribution from our acquisitions of 12 industrial manufacturing properties acquired since September 30, 2022, partially offset by the decrease in rental income from the sale of 13 properties (11 retail and two office) on August 10, 2023, one flex property on August 31, 2023 and one retail property in December 2022. Pursuant to most of our lease agreements, tenants are required to pay or reimburse all or a portion of the property operating expenses. The ABR of the 44 properties owned as of September 30, 2023 was $39,957,823.

General and Administrative

General and administrative expenses were $1,735,104 and $1,838,388 for the three months ended September 30, 2023 and 2022, respectively. The decrease of $103,284, or 6%, as compared with the third quarter of 2022 reflects decreases in compensation to employees due to personnel reductions during 2022, and directors and officers insurance, partially offset by increased costs for professional services during the third quarter of 2023.

Stock Compensation Expense

Stock compensation expense was $8,469,867 and $549,240 for the three months ended September 30, 2023 and 2022, respectively. The increase of $7,920,627 as compared with the third quarter of 2022 reflects a one-time non-cash catch-up adjustment of $7,822,197 related to our determination that it is probable that we will achieve our performance target for FFO of $1.05 per diluted share for the year ending December 31, 2023, which would result in the issuance of an additional 474,515 Class C OP Units on March 31, 2024 upon the conversion of our Class R OP Units based on a conversion ratio of 2.5 Class C OP Units for each Class R OP Unit. This one-time charge reflects a catch-up adjustment to reflect amortization of the $19.58 per share grant date fair value of the performance units from the January 25, 2021 grant date through September 30, 2023. The remaining unamortized fair value of $733,331 per quarter will be recorded as compensation expense for the performance units through the end of the vesting period on March 31, 2024, if achieving the FFO performance target of $1.05 per share is still deemed probable. The performance target was established in January 2021 and represented a 20% increase over the FFO per diluted share achieved for the year ended December 31, 2020. The remaining $98,430 increase in stock compensation expense reflects the absence of forfeitures in the third quarter of 2023 as compared to forfeitures related to an employee retirement in the third quarter of 2022.

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Depreciation and Amortization

Depreciation and amortization expense was $4,175,209 and $3,598,592 for the three months ended September 30, 2023 and 2022, respectively. The purchase price of properties acquired is allocated to tangible assets, identifiable intangibles and assumed liabilities, if any, and depreciated or amortized over their estimated useful lives. The increase of $576,617, or 16%, as compared with the third quarter of 2022 primarily reflects an increase in depreciation of real estate properties due to our acquisitions, partially offset by a reduction in amortization of intangible lease assets during the three months ended September 30, 2023.

Property Expenses

Property expenses were $1,195,224 and $1,415,621 for the three months ended September 30, 2023 and 2022, respectively. These expenses primarily relate to property taxes and repairs and maintenance expenses, the majority of which are reimbursed by tenants. The decrease of $220,397, or less than 16%, as compared with the second quarter of 2022 primarily reflects decreases in property taxes and repairs and maintenance expenses related to assets sold during 2022 and August 2023, partially offset by increases in insurance and property management fees associated with acquired properties.

(Loss) Gain on Sale of Real Estate Investments

The loss on sale of real estate investments of $(1,708,801) for the three months ended September 30, 2023 includes the $(1,887,040) loss on sale of the 13 properties (11 retail and two office) sold to GIPR on August 10, 2023, partially offset by the $178,239 gain on sale of the flex property sold on August 31, 2023. The loss includes the $2,380,000 difference between the $12,000,000 liquidation value and the $9,620,000 fair value of our investment in GIPR’s newly-created Series A Redeemable Preferred Stock received on August 10, 2023 as a portion of the sale proceeds (see Note 5 of our accompanying unaudited condensed consolidated financial statements for additional details). The gain on sale of real estate investments of $3,932,028 for the three months ended September 30, 2022 relates to the gain on sale of two office properties.

Other Income (Expense)

Interest income was $26,386 and $1,665 for the three months ended September 30, 2023 and 2022, respectively, reflecting interest earned on available cash and cash equivalents due to higher interest rates.

Dividend income was $190,000 and zero for the three months ended September 30, 2023 and 2022, respectively, reflecting dividends on the GIPR preferred stock received in August 2023.

Income from unconsolidated investment in a real estate property was $79,164 and $64,358 for the three months ended September 30, 2023 and 2022, respectively. This reflects our approximate 72.7% TIC Interest in the Santa Clara property’s results of operations for the third quarter of 2023 and 2022, respectively.

Interest expense, net of derivative settlements and unrealized gain on interest rate swaps was $2,922,918 and $2,514,838 for the three months ended September 30, 2023 and 2022, respectively (see Note 7 of our accompanying unaudited condensed consolidated financial statements for details of the components of interest expense, net of derivative settlements and unrealized gain on interest rate swaps). The increase of $408,080 in interest expense, net of derivative settlements and unrealized gain on interest rate swaps as compared with the third quarter of 2022 primarily reflects the increase in interest incurred on our Credit Facility due to larger balances outstanding, partially offset by unrealized gains on swap valuation and related amortization.

The weighted average interest rate on our $250,000,000 Term Loan inclusive of swaps was 4.33% during July and August 2023 based on our leverage ratio of 40% as of March 31, 2023 and increased to 4.53% on September 1, 2023 based on our leverage ratio of 47% as of June 30, 2023. The net unrealized gains on swap valuation of $542,332 for the three months ended September 30, 2023 reflect the changes in valuation of both our $150,000,000 first swap and $100,000,000 second swap. The first swap derivative instrument failed to qualify as a cash flow hedge beginning January 1, 2023 because the swap was deemed ineffective due to our counterparty’s one-time cancellation option on December 31, 2024, as compared with the maturity date of the Term Loan. We granted this cancellation option because it reduced the swap rate by approximately 50 basis points. The second derivative instrument was not designated as a cash flow hedge. This unrealized net gain reflects an increase during the quarter in the forward curve for future SOFR rates through December 31, 2024 (the one-time cancellation option date). The Company has begun, and intends to further explore in 2024, various alternatives available to extend or restructure the cancellation option.

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The increase in fair value of our investment in preferred stock reflects the fair value adjustment for the period from August 10, 2023 when the stock was acquired through September 30, 2023.

Other income of $65,993 and $65,993 for the three months ended September 30, 2023 and 2022, respectively, reflects our monthly management fee from the entities that own the TIC Interest property, which is equal to 0.1% of the total investment value of the property.

Comparison of the Nine Months Ended September 30, 2023 to the Nine Months Ended September 30, 2022

Rental Income

Rental income, including tenant reimbursements, for the nine months ended September 30, 2023 and 2022 was $34,648,083 and $30,017,493, respectively. The increase in rental income of $4,630,590, or 15%, as compared with the first nine months of 2022 primarily reflects the rental income contribution from our acquisitions of 12 industrial manufacturing properties acquired since September 30, 2022, partially offset by the decrease in rental income from the sale of eight properties during 2022 and 14 properties sold during August 2023. Pursuant to most of our lease agreements, tenants are required to pay or reimburse all or a portion of the property operating expenses. The ABR of the operating properties owned as of September 30, 2023 was $39,957,823.

General and Administrative

General and administrative expenses were $5,240,935 and $5,559,753 for the nine months ended September 30, 2023 and 2022, respectively. The decrease of $318,818, or 6%, as compared with the first nine months of 2022 reflects decreases in compensation to employees due to personnel reductions during 2022, directors and officers insurance and costs for technology services, offset in part by an increase in costs for professional services during the first nine months of 2023.

Stock Compensation Expense

Stock compensation expense was $9,790,206 and $1,740,852 for the nine months ended September 30, 2023 and 2022, respectively. The increase of $8,049,354 as compared with the first nine months of 2022 reflects a one-time, non-cash catch-up adjustment of $7,822,197 related to our determination that it is probable that we will achieve management’s performance target for FFO of $1.05 per diluted share for the year ending December 31, 2023, which will result in the issuance of an additional 474,515 Class C OP Units on March 31, 2024 upon the conversion of our Class R OP Units based on a conversion ratio of 2.5 Class C OP Units for each Class R OP Unit. This one-time charge reflects a catch-up adjustment to reflect amortization of the $19.58 per share fair value of the performance units from the January 25, 2021 grant date through September 30, 2023. The remaining unamortized fair value of $733,331 per quarter will be recorded as compensation expense for the performance units through the end of the vesting period on March 31, 2024, if achieving the FFO performance target of $1.05 per share is still deemed probable. The performance target was established in January 2021 and represented a 20% increase over the FFO per diluted share achieved for the year ended December 31, 2020. The remaining $227,157 increase in stock compensation expense reflects the absence of forfeitures during the nine months ended September 30, 2023 as compared to forfeitures related to an employee departure in the first quarter of 2022 and an employee retirement in the third quarter of 2022.

Depreciation and Amortization

Depreciation and amortization expense was $11,403,603 and $10,581,765 for the nine months ended September 30, 2023 and 2022, respectively. The purchase price of properties acquired is allocated to tangible assets, identifiable intangibles and assumed liabilities, if any, and depreciated or amortized over their estimated useful lives. The increase of $821,838, or 8%, as compared with the first nine months of 2022 primarily reflects an increase in depreciation of real estate properties acquired, partially offset by reductions due to properties sold in the second half of 2022 and August 2023, along with reductions in amortization of intangible lease assets during the nine months ended September 30, 2023, due to the disposition of properties with acquired leases rather than leases initiated by us.

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Property Expenses

Property expenses were $4,429,936 and $5,009,701 for the nine months ended September 30, 2023 and 2022, respectively. These expenses primarily relate to property taxes and repairs and maintenance expenses, the majority of which are reimbursed by tenants. The decrease of $579,765, or 12%, as compared with the first nine months of 2022 primarily reflects a decrease in due diligence expenses on abandoned pursuits of $288,574 and decreases in property taxes related primarily to assets sold, offset in part by increases in property management fees associated with acquired properties during the first nine months of 2023.

Impairment of Real Estate Investment Property

Impairment of real estate investment property amounted to $3,499,438 for the nine months ended September 30, 2023. During the first quarter of 2023, we determined that the impairment charge was required based on the plan to sell our property in Nashville, Tennessee which is leased to Cummins until February 29, 2024. The impairment charge represents the excess of the property's carrying value over the property's estimated sale price less estimated selling costs for the potential sale. We did not incur any impairment of real estate property charges for the first nine months of 2022.

Impairment of Goodwill

The impairment of goodwill of $17,320,857 for the nine months ended September 30, 2022 reflects the significant decline in the market value of our common stock since it began trading on the New York Stock Exchange in February 2022. For the quarter ended March 31, 2022, management considered the fact that the trading price of our common stock caused our market capitalization to be below the book value of our equity as of March 31, 2022. Our stock price was evaluated to be materially below both our historical net asset value and the book value of our equity, reflecting the negative impacts of rising inflation and interest rates, declining office occupancy rates affecting owners of real estate properties and fears of a potential recession. We, therefore, reduced the carrying value of goodwill to zero as of March 31, 2022.

(Loss) Gain on Sale of Real Estate Investments

The loss on sale of real estate investments of $(1,708,801) for the nine months ended September 30, 2023 includes the $(1,887,040) loss on sale of the 13 properties (11 retail and two office) sold to GIPR on August 10, 2023, partially offset by the $178,239 gain on sale of the flex property sold on August 31, 2023. The loss includes the $2,380,000 difference between the $12,000,000 liquidation value and the $9,620,000 fair value of our investment in GIPR's newly-created Series A Redeemable Preferred Stock received on August 10, 2023 as a portion of the sale proceeds (see Note 5 of our accompanying unaudited condensed consolidated financial statements for additional details). The gain on sale of real estate investments of $11,527,185 for the nine months ended September 30, 2022 relates to the gain on sale of seven properties (six office and one flex) sold during the first nine months of 2022 (see Note 3 of our accompanying unaudited condensed consolidated financial statements for more details of the gain on sale of real estate investments).

Other Income (Expense)

Interest income was $296,921 and $16,863 for the nine months ended September 30, 2023 and 2022, respectively, reflecting interest earned on cash proceeds from April 2023 draws on the Term Loan prior to utilizing such cash to acquire industrial manufacturing properties in May 2023.

Dividend income was $190,000 and zero for the nine months ended September 30, 2023 and 2022, respectively, reflecting dividends on the GIPR preferred stock received in August 2023.

Income from unconsolidated investment in a real estate property, which reflects our approximate 72.7% TIC Interest in the Santa Clara property's results of operations, was $207,506 and $226,690 for the nine months ended September 30, 2023 and 2022, respectively. The decrease primarily reflects changes in the timing of common area maintenance recoveries.

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Interest expense, net of derivative settlements and unrealized gain on interest rate swaps was $6,761,779 and $5,280,167 for the nine months ended September 30, 2023 and 2022, respectively (see Note 7 of our accompanying unaudited condensed consolidated financial statements for details of the components of interest expense, net). The increase of $1,481,612, or 28%, as compared with the first nine months of 2022 primarily reflects the increase in interest expense incurred due to larger balances outstanding, partially offset by the net unrealized gain on swap valuations and related amortization.

The unrealized gains on swap valuation of $2,025,343 for the nine months ended September 30, 2023 reflect the change in valuation of both our $150,000,000 first swap and $100,000,000 second swap. The first swap derivative instrument failed to qualify as a cash flow hedge beginning January 1, 2023 because the swap was deemed ineffective due to our counterparty’s one-time cancellation option on December 31, 2024, as compared with the maturity date of the Term Loan. We granted this cancellation option because it reduced the swap rate by approximately 50 basis points. The second derivative instrument was not designated as a cash flow hedge. These unrealized gains reflect increases during the nine months ended September 30, 2023 in the forward curve for future SOFR rates through December 31, 2024 (the one-time cancellation option date). The Company has begun, and intends to further explore in 2024, various alternatives available to extend or restructure the cancellation option.

The increase in fair value of our investment in preferred stock reflects the fair value adjustment for the period from August 10, 2023 when the stock was acquired through September 30, 2023.

Loss on early extinguishment of debt of $1,725,318 for the nine months ended September 30, 2022 reflects non-cash charges of $1,164,998 for deferred financing costs and prepayment penalties of $615,336 upon repayment of 20 mortgages on 27 properties with borrowings on our Credit Facility in January 2022, full repayment of our prior credit facility and mortgage repayments related to four asset sales in February 2022, as well as $733,000 of swap termination fees related to four of the mortgage refinancings, which were more than offset by the related write-off of unrealized valuation gains of $788,016.

Other income of $197,978 and $198,129 for the nine months ended September 30, 2023 and 2022, respectively, reflects our monthly management fee from the entities that own the TIC Interest property, which is equal to 0.1% of the total investment value of the property.

Capital Expenditures

Other than as discussed below, we do not have plans to incur any significant costs to renovate, improve or develop our properties. We believe that our properties are adequately insured. Pursuant to lease agreements, as of September 30, 2023 and December 31, 2022, we had obligations to pay $2,595,468 and $1,789,027, respectively, for on-site and tenant improvements to be incurred by tenants. We expect that the related improvements will be completed during the next twelve months and will be funded with cash on hand, operating cash flow or borrowings under our Revolver.

In addition, we have identified approximately $343,500 of roof and HVAC, and door replacement, paving replacement, sealing and parking lot repairs/restriping that are expected to be completed in the next 12 months. Approximately $6,500 of these improvements are expected to be recoverable from tenants through operating expense reimbursements. We will initially pay for the improvements, and the recoveries will be billed over an extended period of time according to the terms of the leases. The remaining costs of approximately $337,000 are not recoverable from tenants. These improvements will be funded from cash on hand, operating cash flows, or borrowings under our Revolver.

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Distributions

Preferred Dividends

On March 9, 2023 and March 18, 2022, our Board declared Series A Preferred Stock dividends payable of $921,875 for each of the first quarters of 2023 and 2022, which were paid on April 17, 2023 and April 15, 2022, respectively. On June 15, 2023 and June 15, 2022, our Board declared Series A Preferred Stock dividends payable of $921,875 for each of the second quarters of 2023 and 2022, which were paid on July 17, 2023 and July 15, 2022, respectively. On August 7, 2023 and August 18, 2022, our Board declared Series A Preferred Stock dividends payable of $921,875 for each of the third quarters of 2023 and 2022, which were paid on October 16, 2023 and October 17, 2022, respectively.

Common Stock Distributions

We intend to pay distributions on a monthly basis, and we paid our first distribution on August 10, 2016. The distribution rate is determined by the Board based on our financial condition and such other factors as the Board deems relevant. The Board has not pre-established a percentage range of return for distributions to stockholders. We have not established a minimum distribution level, and our charter does not require that we make distributions to our stockholders other than as necessary to meet REIT qualification requirements.

Distributions declared, distributions paid out, cash flows from operations and our sources of distribution payments were as follows for the first three quarters of 2023 and the four quarters of 2022:

									Cash Flows Provided by (Used in) Operating Activities
Period	Total Distributions Declared		Distributions Declared Per Share		Distributions Paid						Net Rental Income Received		Offering Proceeds		Quarter End Accrued Distribution
					Cash		Reinvested
2023
First Quarter	$	2,544,255	$	0.287500	$	1,943,307	$	595,585	$	2,784,869	$	2,544,255	$	—	$	851,794
Second Quarter	2,622,987		0.287500		2,038,397		566,309		4,504,239		2,622,987		—		875,408
Third Quarter	2,631,165		0.287500		2,074,630		554,505		3,921,058		2,631,165		—		879,857
2023 Total	$	7,798,407	$	0.862500	$	6,056,334	$	1,716,399	$	11,210,166	$	7,798,407	$	—
2022
First Quarter (1)	$	3,284,431	$	0.387499	$	1,418,783	$	1,492,404	$	(1,083,310)	$	3,284,431	$	—	$	854,599
Second Quarter	2,519,371		0.287500		2,070,570		711,223		6,159,782		2,519,371		—		844,183
Third Quarter	2,520,740		0.287500		1,856,735		663,219		4,250,291		2,520,740		—		841,510
Fourth Quarter	2,523,067		0.287500		1,895,194		623,313		7,322,058		2,523,067		—		846,070
2022 Totals	$	10,847,609	$	1.249999	$	7,241,282	$	3,490,159	$	16,648,821	$	10,847,609	$	—

(1)    Includes the 13th distribution for 2021 declared on January 5, 2022 for Class C common stock only and distributions to Class C OP Units.

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Distributions to stockholders are declared and paid based on monthly record dates. The distribution details are as follows:

Distribution Period	Rate Per Share Per Month		Declaration Date	Payment Date
2022
January 1-31	$	0.095833	January 27, 2022	February 25, 2022
February 1-28	$	0.095833	February 17, 2022	March 25, 2022
March 1-31	$	0.095833	February 17, 2022	April 25, 2022
April 1-30	$	0.095833	March 18, 2022	May 25, 2022
May 1-31	$	0.095833	March 18, 2022	June 27, 2022
June 1-30	$	0.095833	March 18, 2022	July 25, 2022
July 1-31	$	0.095833	June 15, 2022	August 25, 2022
August 1-31	$	0.095833	June 15, 2022	September 26, 2022
September 1-30	$	0.095833	June 15, 2022	October 25, 2022
October 1-31	$	0.095833	August 18, 2022	November 23, 2022
November 1-30	$	0.095833	August 18, 2022	December 23, 2022
December 1-31	$	0.095833	August 18, 2022	January 25, 2023
2023
January 1-31	$	0.095833	November 7, 2022	February 24, 2023
February 1-28	$	0.095833	November 7, 2022	March 24, 2023
March 1-31	$	0.095833	November 7, 2022	April 25, 2023
April 1-30	$	0.095833	March 9, 2023	May 25, 2023
May 1-31	$	0.095833	March 9, 2023	June 26, 2023
June 1-30	$	0.095833	March 9, 2023	July 25, 2023
July 1-31	$	0.095833	June 15, 2023	August 25, 2023
August 1-31	$	0.095833	June 15, 2023	September 25, 2023
September 1-30	$	0.095833	June 15, 2023	October 25, 2023
October 1-31	$	0.095833	October 10, 2023	November 27, 2023 (1)
November 1-30	$	0.095833	October 10, 2023	December 26, 2023 (1)
December 1-31	$	0.095833	October 10, 2023	January 25, 2024 (1)
2024
January 1-31	$	0.09583300	November 6, 2023	February 26, 2024 (1)
February 1-29	$	0.09583300	November 6, 2023	March 25, 2024 (1)
March 1-31	$	0.09583300	November 6, 2023	April 25, 2024 (1)

(1)    Reflects the expected payment date since the distribution has not been paid as of the filing date of this Quarterly Report on Form 10-Q.

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Election as a REIT

We elected to be taxed as a REIT for U.S. federal income tax purposes under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended. We intend to continue to qualify as a REIT. To continue to qualify and maintain status as a REIT, we must meet certain requirements relating to our organization, sources of income, nature of assets, distributions of income to our stockholders and recordkeeping. As a REIT, we generally would not be subject to federal income tax on taxable income that we distribute to our stockholders so long as we distribute at least 90% of our annual taxable income (computed without regard to the distributions paid deduction and excluding net capital gains).

If we fail to maintain our qualification as a REIT in any taxable year, we will be subject to tax, including any applicable alternative minimum tax, on our taxable income at regular corporate rates. We will not be able to deduct distributions paid to our stockholders in any year in which we fail to qualify as a REIT. We also will be disqualified for the four taxable years following the year during which qualification is lost, unless we are entitled to relief under specific statutory provisions. Such an event could materially adversely affect our net income or loss and net cash available for distribution to stockholders. However, we believe that we are organized and operate in such a manner as to continue to qualify for treatment as a REIT for federal income tax purposes. No provision for federal income taxes has been made in our accompanying unaudited condensed consolidated financial statements. We are subject to certain state and local taxes related to the operations of properties in certain locations, which have been provided for in our accompanying unaudited condensed consolidated financial statements.

Critical Accounting Policies and Estimates

Our accounting policies have been established to conform with GAAP. The preparation of financial statements in conformity with GAAP requires us to use judgment in the application of accounting policies, including making estimates and assumptions. These judgments affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. If our judgment or interpretation of the facts and circumstances relating to various transactions had been different, it is possible that different accounting policies would have been applied, thus resulting in a different presentation of the financial statements. Additionally, other companies may utilize different estimates that may impact comparability of our results of operations to those of companies in similar businesses. A discussion of the accounting policies that management considers critical in that they involve significant management judgments, assumptions and estimates is included under “Critical Accounting Policies” in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, of our Annual Report on Form 10-K, filed with the SEC on March 13, 2023. There have been no significant changes to our accounting policies during the nine months ended September 30, 2023.

Commitments and Contingencies

We may be subject to certain commitments and contingencies with regard to certain transactions (see Note 11 of our accompanying unaudited condensed consolidated financial statements for discussion of commitments and contingencies).

Related-Party Transactions and Agreements

See Note 10 of our accompanying unaudited condensed consolidated financial statements for details of the various related-party transactions and agreements.

Subsequent Events

See Note 14 of our accompanying unaudited condensed consolidated financial statements for events that occurred subsequent to September 30, 2023 through the filing date of this report.

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Recent Accounting Pronouncements

See Note 2 of our accompanying unaudited condensed consolidated financial statements for recent accounting pronouncements.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that had or are reasonably likely to have a material current or future effect on our financial condition, results of operations, liquidity, or capital resources as of September 30, 2023.

Item 3.  Quantitative and Qualitative Disclosure About Market Risk

Not applicable as we are a smaller reporting company.

Item 4.  Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the rules and forms, and that such information is accumulated and communicated to us, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, we recognize that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, as ours are designed to do, and we necessarily were required to apply our judgment in evaluating whether the benefits of the controls and procedures that we adopt outweigh their costs.

As required by Rules 13a-15(b) and 15d-15(b) of the Exchange Act, an evaluation as of September 30, 2023 was conducted under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were ineffective due to the weakness discussed below.

Notwithstanding this material weakness, management has concluded that our consolidated financial statements included in this Quarterly Report on Form 10-Q are fairly stated in all material respects in accordance with GAAP for each of the periods presented.

Material Weakness in Internal Control over Financial Reporting

In the course of reviewing the immaterial error corrections described in Note 2 of our condensed consolidated financial statements regarding corrections made during the first quarter of 2023 related to (i) accounting for property taxes paid directly by tenants to taxing authorities on a net basis as of and for the years ended December 31, 2022 and 2021, inclusive of the interim periods therein, and (ii) corrections made during the fourth quarter of 2022 related to the classification of straight-line rent receivable write-offs associated with real estate investment sales for the years ended December 31, 2022 and 2021, inclusive of the interim periods therein, it was concluded that the combination of the two immaterial error corrections constituted a material weakness as of December 31, 2022 in our ability to properly identify and evaluate applicable accounting standards involved with non-recurring transactions and recent accounting pronouncements.

The corrections did not affect net loss or net loss per share during the years ended December 31, 2022 and 2021 as previously reported in the consolidated statement of operations. The corrections also did not affect non-GAAP measures AFFO and EBITDA.

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Remediation Plan

Through the third quarter of 2023, management enhanced our internal control environment by executing refinements in our policies and procedures including but not limited to utilizing additional qualified consultants to assist us in addressing non-recurring transactions and new applicable accounting pronouncements. In addition, management is currently conducting a review and reorganization of our accounting policy documentation as it relates to our current business in an effort to ensure that it is comprehensive, in conformance with GAAP and available for key accounting personnel to reference when evaluating new transactions.

Changes in Internal Control over Financial Reporting

Other than the controls related to the remediation plan discussed above, there were no other changes in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) that occurred during the three months ended September 30, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. We will continue to implement this remediation plan to address the material control weakness described above.

PART II – OTHER INFORMATION

Item 1.  Legal Proceedings

The information disclosed under Legal Matters in Note 11 of our accompanying unaudited condensed consolidated financial statements is incorporated herein by reference.

Item 1A.  Risk Factors

There have been no material changes to the risk factors set forth under “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2022 as filed with the SEC on March 13, 2023.

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

Unregistered Sales of Equity Securities

During the three months ended September 30, 2023, we issued an aggregate of 4,194 shares of Class C common stock to non-employee members of the Board for their service as Board members during the third quarter of 2023. Such issuances were made in reliance on the exemption from registration under Section 4(a)(2) of the Securities Act.

Our Stock Repurchases

On December 21, 2022, our Board authorized up to $15,000,000 in repurchases of our outstanding shares of Class C common stock and Series A Preferred Stock from January 1, 2023 through December 31, 2023. Repurchases made pursuant to the 2023 SRP have been and will be made from time-to-time in the open market, in privately negotiated transactions or in any other manner as permitted by federal securities laws and other legal requirements. The timing, manner, price and amount of any repurchases will be determined by us in our discretion and will be subject to economic and market conditions, stock price, applicable legal requirements and other factors. The 2023 SRP may be suspended or discontinued at any time. We did not repurchase any shares of our Class C common stock during the three months ended September 30, 2023.

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Item 5.  Other Information

On August 10, 2023, we, including certain wholly-owned subsidiaries of the Operating Partnership, entered into an Agreement of Purchase and Sale (the “GIPR Sale Agreement”) with Generation Income Properties, Inc. (NASDAQ: GIPR) (“GIPR”) and its operating partnership, Generation Income Properties, L.P. (the “GIPR Operating Partnership”), pursuant to which we sold to the GIPR Operating Partnership a portfolio of 13 net leased properties (the “GIPR Portfolio”). The GIPR Portfolio consists of 11 retail properties and two office properties as discussed in Note 3 to our accompanying unaudited condensed consolidated financial statements under the heading Dispositions - Nine Months Ended September 30, 2023.

The properties comprising the GIPR Portfolio are located across seven states and aggregate approximately 200,000 rentable square feet. The GIPR Portfolio was sold for a price of $42,000,000, excluding estimated transaction costs and expenses and subject to prorations and credits as set forth in the GIPR Sale Agreement. An amount equal to $30,000,000 of the purchase price was paid in cash and $12,000,000 was paid in shares of a newly issued series of GIPR preferred stock designated as “Series A Redeemable Preferred Stock” having the rights, preferences, and redemption provisions described below (the “GIPR Preferred Stock”).

The GIPR Sale Agreement provides for an as-is/where-is purchase and sale with certain waivers, releases and covenants not to sue us and also contains additional covenants, representations and warranties, indemnifications, and other provisions that are generally customary for real estate purchase and sale agreements. In addition to customary terms relating to the purchase and sale of a portfolio of commercial properties, the material terms of the GIPR Sale Agreement include (i) subject to our receipt of the approval of our lenders to make such distribution and subject to the redemption conditions described below, our agreement to distribute the shares of common stock of GIPR (the “GIPR Common Stock”) issuable upon the potential redemption by GIPR of the GIPR Preferred Stock to our stockholders and/or the holders of units of our Operating Partnership, (ii) our agreement that we will promptly distribute or sell shares of the GIPR Common Stock owned by us following such a redemption if our ownership of GIPR Common Stock exceeds 19.9% of the aggregate number of outstanding shares of GIPR Common Stock, and (iii) an agreement by GIPR to prepare and file with the SEC a registration statement to register the distribution by us to our stockholders and to the holders of units of our Operating Partnership and/or the resale of the shares of GIPR Common Stock issuable upon redemption of the GIPR Preferred Stock.

The foregoing description of the GIPR Sale Agreement is summary in nature, does not purport to be complete, and is qualified in its entirety by reference to the full text of the GIPR Sale Agreement, a copy of which is filed as Exhibit 10.1 hereto and is incorporated by reference herein.

The GIPR Preferred Stock ranks, with respect to dividend rights and rights upon GIPR’s voluntary or involuntary liquidation, dissolution or winding up, senior to all classes or series of GIPR Common Stock. Holders of the GIPR Preferred Stock are entitled to cumulative cash dividends at the rate of 9.5% per annum of the $5.00 liquidation preference per share, equivalent to a fixed annual amount of $0.475 per share, which shall increase to a rate of 12.0% per annum of the $5.00 liquidation preference per share, equivalent to a fixed annual amount of $0.60 per share, beginning on August 10, 2024.

From the date of issuance until March 15, 2024, the GIPR Preferred Stock will be redeemable at GIPR’s option for either (i) cash, in whole or in part, at a price per share equal to the $5.00 liquidation preference, plus an amount equal to all dividends accrued and unpaid (whether or not authorized or declared), if any, until the redemption date on each share of GIPR Preferred Stock to be redeemed (the “GIPR Cash Redemption Price”) or (ii) subject to GIPR’s satisfaction of certain conditions, a number of shares of GIPR Common Stock (the “GIPR Underlying Shares”), in whole only and not in part, equal to the GIPR Cash Redemption Price, divided by the share price of the GIPR Common Stock as measured by the product of (a) the volume weighted average price (“VWAP”) of the GIPR Common Stock for the 60 trading days immediately preceding the date GIPR provides written notice of its intent to redeem the GIPR Preferred Stock and (b) 110%. The maximum number of shares of GIPR Common Stock that shall be required to redeem the shares of GIPR Series A Preferred Stock in full shall not exceed 3,000,000 shares of GIPR Common Stock (the “GIPR Ceiling”) and the minimum number of shares of GIPR Common Stock that shall be required to redeem the shares of GIPR Preferred Stock in full shall be no less than 2,200,000 shares (the “GIPR Floor”); provided that the GIPR Ceiling will not apply if at any time after August 10, 2023, and before redemption of the GIPR Preferred Stock, GIPR fails to pay a monthly dividend on the GIPR Common Stock or reduces, or announces its intent to reduce, the monthly dividend paid on shares of GIPR Common Stock to a rate lower than $0.039 per share per month. Each of the GIPR Floor and the GIPR Ceiling is subject to proportionate adjustments for any share splits (including those effected pursuant to a distribution of the GIPR Common Stock), subdivisions, reclassifications or combinations with respect to the GIPR Common Stock.

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In addition, GIPR’s right to redeem the GIPR Preferred Stock for the GIPR Underlying Shares is conditioned upon GIPR obtaining the approval of its stockholders for the issuance of such GIPR Underlying Shares as required by the rules of the Nasdaq Stock Market; such GIPR Underlying Shares being listed on Nasdaq; the SEC having declared a registration statement effective registering the distribution of such GIPR Underlying Shares by us to our stockholders and/or the resale of such GIPR Underlying Shares by us; and our receipt of approval by our lenders to distribute such GIPR Underlying Shares to our stockholders.

After March 15, 2024, GIPR may only redeem the GIPR Preferred Stock for the GIPR Cash Redemption Price, unless we agree, in our sole and absolute discretion, to a redemption of the GIPR Preferred Stock for shares of GIPR Common Stock, on terms acceptable to us.

The disposition of the GIPR Portfolio closed on August 10, 2023. Since the disposition of the GIPR Portfolio exceeded 20% of the aggregate worldwide market value of our voting and non-voting common equity as of July 31, 2023, the transaction is deemed to be a significant disposition under Regulation S-X 1-02(w). We therefore provide the following financial information related to our disposition of the GIPR Portfolio as of and for the six months ended June 30, 2023 and for the year ended December 31, 2022.

The accompanying unaudited pro forma condensed consolidated balance sheet is presented as of June 30, 2023 and the unaudited pro forma condensed consolidated statements of operations of the Company are presented for the six-month period ended June 30, 2023 and the year ended December 31, 2022 (the “Pro Forma Periods”). These financial statements include certain pro forma adjustments to illustrate the estimated effect of our disposition of the GIPR Portfolio discussed above and in Note 3 to our accompanying unaudited condensed consolidated financial statements under the heading Dispositions – Nine Months Ended September 30, 2023. This pro forma consolidated financial information is presented for informational purposes only and does not purport to be indicative of our financial results as if the transaction reflected herein had occurred on the date or been in effect during the period indicated. This pro forma consolidated financial information should not be viewed as indicative of our financial results in the future and should be read in conjunction with our financial statements as filed on Form 10-K for the year ended December 31, 2022, on Form 10-Q for the six months ended June 30, 2023 and on this Form 10-Q for the nine months ended September 30, 2023.

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Unaudited Pro Forma Condensed Consolidated Balance Sheet
As of June 30, 2023
	Modiv Industrial, Inc.		Less Assets Sold to GIPR (1)		Pro Forma Modiv Industrial, Inc.
Assets
Real estate investments:
Land	$	105,646,718	$	—	$	105,646,719
Buildings and improvements	376,619,602		—		376,619,602
Equipment	4,429,000		—		4,429,000
Tenant origination and absorption costs	16,393,977		—		16,393,977
Total investments in real estate property	503,089,297		—		503,089,297
Accumulated depreciation and amortization	(44,974,782)		—		(44,974,782)
Total investments in real estate property, net	458,114,515		—		458,114,515
Investments in unconsolidated entity	10,011,347		—		10,011,347
Total real estate investments, net	468,125,862		—		468,125,862
Real estate investments held for sale, net	47,169,589		(38,541,403)		8,628,186
Total real estate investments, net	515,295,451		(38,541,403)		476,754,048
Cash and cash equivalents	9,912,110		29,282,508		39,194,618
Investment in preferred stock	—		9,620,000		9,620,000
Tenant receivables, net	9,468,576		—		9,468,576
Above-market lease intangibles, net	1,351,949		—		1,351,949
Prepaid expenses and other assets	5,430,520		—		5,430,520
Interest rate swap derivative	5,613,847		—		5,613,847
Assets related to real estate investments held for sale	2,337,517		(2,304,732)		32,785
Total assets	$	549,409,970	$	(1,943,627)	$	547,466,343
Liabilities and Equity
Mortgage notes payable, net	$	44,243,807	$	—	$	44,435,556
Mortgage notes payable related to real estate investments held for sale, net	—		—		—
Total mortgage notes payable, net	44,243,807		—		44,243,807
Credit facility revolver	—		—		—
Credit facility term loan, net	248,263,340		—		248,263,340
Accounts payable, accrued and other liabilities	7,015,513		—		7,015,513
Below-market lease intangibles, net	9,328,801		—		9,328,801
Liabilities related to real estate investments held for sale	465,252		(359,138)		106,114
Total liabilities	309,316,713		(359,138)		308,957,575
Commitments and contingencies
7.3750% Series A cumulative redeemable perpetual preferred stock, $0.001 par value, 2,000,000 authorized, issued and outstanding as of June 30, 2023 and December 31, 2022	2,000		—		2,000
Class C common stock, $0.001 par value, 300,000,000 shares authorized; 7,874,502 shares issued and 7,530,992 shares outstanding as of June 30, 2023 and 7,762,506 shares issued and 7,512,353 shares outstanding as of December 31, 2022	7,875		—		7,875
Class S common stock, $0.001 par value, 100,000,000 shares authorized; no shares issued and outstanding as of June 30, 2023 and December 31, 2022	—		—		—
Additional paid-in-capital	280,815,445		—		280,815,445
Treasury stock, at cost, 343,510 shares and 250,153 shares held as of June 30, 2023 and December 31, 2022, respectively	(5,290,780)		—		(5,290,780)
Cumulative distributions and net losses	(123,895,028)		(1,584,489)		(125,479,517)
Accumulated other comprehensive income	3,080,694		—		3,080,694
Total Modiv Industrial, Inc. equity	154,720,206		(1,584,489)		153,135,717
Noncontrolling interests in the Operating Partnership	85,373,051		—		85,373,051
Total equity	240,093,257		(1,584,489)		238,508,768
Total liabilities and equity	$	549,409,970	$	(1,943,627)	$	547,466,343

See footnotes below.

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Unaudited Pro Forma Condensed Consolidated Statement of Operations
For the Six Months Ended June 30, 2023
	Modiv Industrial, Inc.		Less Assets Sold to GIPR (2)		Pro Forma Modiv Industrial, Inc.
Income:
Rental income	$	20,461,327	$	(1,580,434)	$	18,880,893
Tenant reimbursements	1,686,418		(300,765)		1,385,653
Total rental income	22,147,745		(1,881,199)		20,266,546
Expenses:
General and administrative	3,505,831		—		3,505,831
Stock compensation expense	1,320,339		—		1,320,339
Depreciation and amortization	7,228,394		(674,404)		6,553,990
Property expenses	3,234,712		(839,870)		2,394,842
Impairment of real estate investment property	3,499,438		—		3,499,438
Total expenses	18,788,714		(1,514,274)		17,274,440
Operating income	3,359,031		(366,925)		2,992,106
Other (expense) income:
Interest income	270,535		—		270,535
Income from investments in unconsolidated entities	128,340		—		128,340
Interest expense, net	(3,838,861)		519,823		(3,319,038)
Other	131,987		—		131,987
Other (expense) income, net	(3,307,999)		519,823		(2,788,176)
Net income	51,032		152,898		203,930
Net income attributable to noncontrolling interest in Operating Partnership	166,556		—		166,556
Net income attributable to Modiv Industrial, Inc.	217,588		152,898		370,486
Preferred stock dividends	(1,843,750)		—		(1,843,750)
Net (loss) income attributable to common stockholders	$	(1,626,162)	$	152,898	$	(1,473,264)
Net (loss) income per share attributable to common stockholders:
Basic and diluted	$	(0.22)	$	0.02	$	(0.20)
Weighted-average number of common shares outstanding:
Basic and diluted	7,532,080		7,532,080		7,532,080

See footnotes below.

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Unaudited Pro Forma Condensed Consolidated Statement of Operations
For the Year Ended December 31, 2022
	Modiv Industrial, Inc.		Less Assets Sold to GIPR (2)		Pro Forma Modiv Industrial, Inc.
Income:
Rental income	$	41,930,258	$	(3,154,930)	$	38,775,328
Tenant reimbursements	4,244,009		(717,032)		3,526,977
Total rental income	46,174,267		(3,871,962)		42,302,305
Expenses:
General and administrative	7,812,057		—		7,812,057
Stock compensation expense	2,401,022		—		2,401,022
Depreciation and amortization	14,929,574		(1,343,259)		13,586,315
Property expenses	8,899,626		(1,282,234)		7,617,392
Impairment of real estate investment property	2,080,727		—		2,080,727
Impairment of goodwill	17,320,857		—		17,320,857
Total expenses	53,443,863		(2,625,493)		50,818,370
Gain on sale of real estate properties	12,196,371		—		12,196,371
Operating income	4,926,775		(1,246,469)		3,680,306
Other (expense) income:
Interest income	21,910		—		21,910
Loss on early extinguishment on debt	(1,725,318)		—		(1,725,318)
Income from investments in unconsolidated entities	278,002		—		278,002
Interest expense, net	(8,106,658)		899,105		(7,207,553)
Other	93,971		—		93,971
Other (expense) income, net	(9,438,093)		899,105		(8,538,988)
Net loss	(4,511,318)		(347,364)		(4,858,682)
Net loss attributable to noncontrolling interest in Operating Partnership	(1,222,783)		—		(1,222,783)
Net loss attributable to Modiv Industrial, Inc.	(3,288,535)		(347,364)		(3,635,899)
Preferred stock dividends	(3,687,500)		—		(3,687,500)
Net loss attributable to common stockholders	$	(6,976,035)	$	(347,364)	$	(7,323,399)
Net loss per share attributable to common stockholders:
Basic and diluted	$	(0.93)	$	(0.05)	$	(0.98)
Weighted-average number of common shares outstanding:
Basic and diluted	7,487,204		7,487,204		7,487,204

(1)    Reflects removal of recorded balances of the 13 properties sold to GIPR in real estate held for sale, other assets related to real estate investments held for sale and liabilities related to real estate investments held for sale as of June 30, 2023 and inclusion of proceeds received in the sale including cash of $30,000,000 net of transaction expenses related to the sale and the fair value of GIPR Preferred Stock as of the closing on August 10, 2023.

(2)     Reflects removal of rental operations of the 13 properties sold to GIPR including an allocation of interest expense, net of derivative settlements, for interest incurred based upon the borrowing base value of the GIPR properties as a percentage of the total borrowing base value.

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Item 6.  Exhibits

The exhibits listed on the Exhibit Index below are included herewith or incorporated herein by reference.

EXHIBIT INDEX

The following exhibits are included, or incorporated by reference, in this Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2023 (and are numbered in accordance with Item 601 of Regulation S-K).

Exhibit	Description
3.1	Articles of Amendment and Restatement of Modiv Industrial, Inc. (f/k/a Modiv Inc.) (incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K (File No. 000-55776) filed with the Securities and Exchange Commission on July 8, 2021)
3.2	Second Amended and Restated Bylaws of Modiv Industrial, Inc. (f/k/a Modiv Inc.) (incorporated by reference to Exhibit 3.2 to our Annual Report on Form 10-K (File No. 001-40814) filed with the Securities and Exchange Commission on March 13, 2023)
3.3	Articles Supplementary designating 7.375% Series A Cumulative Redeemable Perpetual Preferred Stock, $0.001 par value per share (incorporated by reference to Exhibit 3.1 to our Current Report on Form 8-K (File No. 001-40814) filed with the Securities and Exchange Commission on September 17, 2021)
3.4	Articles of Amendment to the Articles of Amendment and Restatement of Modiv Inc. changing its name to Modiv Industrial, Inc. (incorporated by reference to Exhibit 3.4 to our Quarterly Report on Form 10-Q (File No. 001-40814) filed with the Securities and Exchange Commission on August 14, 2023)
4.1	Second Amended and Restated Distribution Reinvestment Plan (incorporated by reference to Exhibit 4.1 to our Current Report on Form 8-K (File No. 001-40814) filed with the Securities and Exchange Commission on February 15, 2022)
10.1*	Agreement of Purchase and Sale, dated August 10, 2023, among Modiv Inc., Generation Income Properties, L.P. Generation Income Properties, Inc. and each entity identified as a “Selling Entity”
31.1*	Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*	Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1**	Certifications of the Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS*	INLINE XBRL INSTANCE DOCUMENT
101.SCH*	INLINE XBRL TAXONOMY EXTENSION SCHEMA DOCUMENT
101.CAL*	INLINE XBRL TAXONOMY EXTENSION CALCULATION LINKBASE
101.DEF*	INLINE XBRL TAXONOMY EXTENSION DEFINITION LINKBASE
101.LAB*	INLINE XBRL TAXONOMY EXTENSION LABELS LINKBASE
101.PRE*	INLINE XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE
104*	COVER PAGE INTERACTIVE DATA FILE (FORMATTED AS INLINE XBRL AND CONTAINED IN EXHIBIT 101)
*	Filed herewith.
**	In accordance with Item 601(b)(32) of Regulation S-K, this Exhibit is not deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section. Such certifications will not be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Quarterly Report on Form 10-Q to be signed on its behalf by the undersigned, thereunto duly authorized.

Modiv Industrial, Inc.
(Registrant)
By:	/s/ AARON S. HALFACRE
Name:	Aaron S. Halfacre
Title:	Chief Executive Officer (principal executive officer)
By:	/s/ RAYMOND J. PACINI
Name:	Raymond J. Pacini
Title:	Chief Financial Officer (principal financial officer)

Date: November 13, 2023

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EX-10.1

EXHIBIT 10.1

AGREEMENT OF PURCHASE AND SALE

THIS AGREEMENT OF PURCHASE AND SALE (this “Agreement”) is dated as of August 10, 2023 (the “Effective Date”) between (i) Modiv Inc., a Maryland corporation (“Modiv”), (ii) each entity identified as a Seller on Schedule A attached to this Agreement (each a “Selling Entity” and jointly and severally with Modiv, “Seller”), (iii) Generation Income Properties, L.P., a Delaware limited partnership, or its assigns, and (iv) Generation Income Properties, Inc. (“GIPR” together with Generation Income Properties, L.P., collectively the “Buyer”). Modiv is the sole general partner of, and owns an approximate 71% partnership interest in, Modiv OP. Various limited partners own the remaining approximate 29% partnership interest in Modiv OP.

RECITALS

Buyer desires to purchase the Property from Seller and Seller desires to sell the Property to Buyer, all as more particularly set forth in this Agreement. Subject to the terms and conditions of this Agreement, the closing of the purchase and sale of the Property contemplated herein shall be consummated immediately following the execution of this Agreement by Seller and Buyer. As the context may indicate, references in this Agreement to “Seller” may refer only to the appropriate Selling Entity for a Site. Schedule A attached to this Agreement identifies, for each Site, the Selling Entity, the street address(es), the Allocated Purchase Price, and certain other information relating to such Site. Capitalized terms not defined elsewhere are used with the meaning given in the “Definitions” section below.

AGREEMENT

In consideration of the payments and mutual covenants and undertakings set forth in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Seller and Buyer (each a “Party” and collectively the “Parties”) agree as follows:

SUMMARY OF TERMS

Certain key terms of this Agreement are summarized below, but remain subject to the applicable detailed provisions set forth elsewhere in this Agreement.

Property:    Seller’s interest in each Site listed on Schedule A.

Purchase Price:    $42,000,000.00, as further described in Section 1.2(a).

Closing Date:    The Effective Date.

Escrow Agent:    First American Title Insurance Company

18500 Von Karman #600

Irvine, CA 92612

Attn: Brian Serikaku

Phone: 213-814-8620
Email: bmserikaku@firstam.com

Notices Addresses for the Parties:

If to Buyer:    Generation Income Properties, L.P.
c/o Generation Income Properties, Inc.
401 East Jackson Street, Suite 3300
Tampa, Florida 33602

Attn: David Sobelman
Phone: (813) 448-1234
Email: ds@gipreit.com

with a copy to:    Foley & Lardner LLP
100 North Tampa Street, Suite 2700
Tampa, Florida 33602
Attn: Curt Creely and Joshua Roling
Phone: (813) 225-4122
Email: CCreely@foley.comandJRoling@foley.com

        and

    Trenam Law
200 Central Avenue, Suite 1600
St. Petersburg, Florida 33701
Attn: Timothy Hughes
Phone: (727) 820-3965
Email: thughes@trenam.com

If to Seller:    c/o Modiv Operating Partnership, L.P.

75 McCabe Drive #19626

Reno, NV 89511

Attn: John Raney and Ray Pacini

Email: jraney@modiv.com and rpacini@modiv.com

With a copy to:    Morris, Manning & Martin, LLP

    1600 Atlanta Financial Center

    3343 Peachtree Road NE

    Atlanta, Georgia 30326

    Attn: Alyson Markovich, Esq.

    Phone: 404-504-7648

    Email: amarkovich@mmmlaw.com

    Attn: Lauren Prevost, Esq.

    Phone: 404-504-7744

    Email: lprevost@mmmlaw.com

Notice Provisions:    See Section 7.1.

[Remainder of page intentionally left blank]

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DEFINITIONS

In addition to any other terms defined elsewhere in this Agreement, the following terms, when used in this Agreement with a capital letter, have the meanings set forth below:

“Affiliate” means, with respect to a Person, any other Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with such Person.

“Allocated Purchase Price” means, for each Site, that portion of the total Purchase Price that has been allocated by the Parties to such Site, as set forth on Schedule A to this Agreement, subject to adjustment as expressly set forth in this Agreement.

“Articles Supplementary” has the meaning set forth in Section 3.13 of this Agreement.

“Broker Listing Agreement” means a written agreement entered into between a Selling Entity (or an Affiliate on behalf of such Selling Entity) and a third-party real estate broker providing for such broker to perform sale or leasing activities with respect to the Site(s) specified therein, and specifically excluding any such broker agreement related to the sale contemplated by this Agreement.

“Business Day” means any day other than a Saturday, a Sunday, or a federal holiday recognized by the Federal Reserve Bank of New York.

“Buyer Party” means Buyer, its Affiliates, any Permitted Assignee that takes an assignment of all or a portion of Buyer’s interest in this Agreement, and any of their respective officers, employees, partners, members, agents, attorneys, consultants, contractors, advisors, and other representatives advising in connection with the transactions contemplated by this Agreement, and their respective heirs, successors, personal representatives, and assigns, each being a “Buyer Party” and collectively being the “Buyer Parties.”

“CC&R Documents” means, collectively, any reciprocal easement agreements, access easements, declarations of covenants, condominium declarations and other similar documents, including any related by-laws, affecting any Site.

“Claim Notice” means a written notice delivered by one Party to the other Party setting forth a reasonably detailed description of the specific Claims being asserted, including without limitation detailed statements of (a) the amount of loss or damage being asserted, (b) the rationale for or explanation of why the Claims are alleged to be the responsibility of the Party against whom the Claims are being asserted and (c) the provisions of this Agreement alleged to have been breached or violated by such other Party.

“Claims” means any suits, actions, proceedings, investigations, demands, claims, liabilities, fines, penalties, liens, judgments, losses, injuries, damages, expenses, or costs, including without limitation reasonable and documented attorneys’ and experts’ fees and costs and investigation, remediation costs, or any other damages, losses or costs of any type or kind.

“Closing” means the consummation of the purchase and sale of the Sites as contemplated by this Agreement.

“Closing Cash Consideration” has the meaning set forth in Section 1.2(a) of this Agreement.

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“Closing Date” means the date on which the Closing occurs, as set forth or described as such in the Summary of Terms, as such date may later be changed as expressly provided in this Agreement.

“Closing Year” means the calendar year in which the Closing occurs.

“Closing Documents” means the documents, instruments (including, without limitation, any deeds or assignments), and other agreements executed and delivered by a Party at or in connection with the Closing.

“Code” means the Internal Revenue Code of 1986, as amended, or any corresponding provision(s) of any succeeding law.

“Confidentiality Agreement” means that certain letter agreement by and between GIPR and Modiv, dated as of March 2, 2023.

“Contracts” means all Work Contracts, service contracts, maintenance contracts, site equipment leases, and like contracts and agreements entered into by Seller, in Seller’s possession, relating to the day-to-day operation of the Real Property (including any amendments thereto), but as used in this Agreement the term “Contracts” excludes the Leases, any Broker Listing Agreements, Property Management Agreements, and Related Agreements.

“Control” means, with respect to any Person, the possession, directly or indirectly, of the power to direct the management and policies of such Person, whether through ownership, voting control, by contract or otherwise.

“Diligence Materials” means the documents and other materials and information regarding the Property provided by or on behalf of Seller or any Seller Party to Buyer or any Buyer Party to assist with Buyer’s evaluation and acquisition of the Property, including the Seller Deliveries.

“Environmental Laws” means any Law relating to pollution, protection of human or worker health and safety (as it relates to exposure to Hazardous Materials) or to the use, manufacture, distribution, storage, transport, reporting, disposal or release of, or exposure to, Hazardous Materials.

“Escrow Agent” means the entity specified as such in the Summary of Terms, and any successor thereto.

“Escrow Instructions” means the escrow instructions attached as Exhibit F to, and incorporated as a part of, this Agreement, as amended or otherwise modified from time to time as provided for therein.

“Existing Leases” means, for each Site, the written lease agreements identified on the rent roll attached to this Agreement as Schedule A-1 (the “Rent Roll”), including any existing written amendments, written supplements, or written guaranties relating thereto.

“Exchange Act” means the Securities Exchange Act of 1934.

“GIPR Bylaws” means the bylaws of GIPR in effect as of the Effective Date.

“GIPR Charter” means the articles of incorporation, as amended, of GIPR in effect as of the Effective Date.

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“GIPR Common Stock” means the common stock, par value $0.01 per share, of GIPR.

“GIPR Common Stock Ownership Limitation” means 19.9% of the aggregate number of outstanding shares of GIPR Common Stock.

“GIPR Preferred Stock” means the Series A Non-voting Redeemable Preferred Stock, par value of $0.01 per share, of GIPR.

“Governmental Authority” means any federal, state, county or municipal government or political subdivision; any governmental agency, authority, board, bureau, commission, department, instrumentality, or public body; any court or administrative tribunal; or any Person serving in an official or representative capacity for any of the foregoing.

“Hazardous Materials” means materials, wastes, or substances that are (a) regulated, or classified as “hazardous substances,” “hazardous materials,” “toxic substances,” “toxic pollutants,” “hazardous waste,” or like terms under federal, state or local Environmental Laws; (b) petroleum products (other than as may be present at the Property in the ordinary course of its operation or business and used in accordance with all Environmental Laws); (c) asbestos or asbestos-containing materials; (d) toxic mold in quantities harmful to human health; or (e) polychlorinated biphenyls.

“Improvements” means, for each Site, all buildings, improvements and fixtures (other than fixtures owned (or removable, in accordance with the terms of the applicable Tenant’s Lease) by a Tenant of such Site or any third party) located on the Land for such Site together with all rights of Seller in and to the rights, privileges and appurtenances pertaining thereto.

“Intangible Property” means, collectively for each Site, (i) the rents and other sums due to Seller under the Leases, and (ii) any unapplied Security Deposits, and (iii) only to the extent transferable, all of Seller’s right, title and interest in and to any intangible property owned by its Selling Entity and relating solely and specifically to such Site, including any transferable licenses, warranties and guaranties issued to Seller in connection with the Improvements and the Personal Property, Permits, certificates of occupancy, entitlements, Contracts, all Related Agreements, and all plans and drawings, if any.

“Land” means, for each Site, the fee simple parcel(s) of land described in the Seller Title Policy for such Site, together with all appurtenances, rights, privileges and easements pertaining thereto, but subject to any changes that may have occurred with respect to such parcel(s) or appurtenances since the time of Seller’s acquisition thereof (for example, but without limitation, a condemnation removing a portion of such parcel, a replatting, or an easement right being granted or received appurtenant thereto).

“Landlord” means, for any Site at any given point in time, the Person that owns such Site and thus is acting as the landlord or lessor under the Leases for such Site at such point in time.

“Laws” means all applicable federal, state, county or municipal statutes, codes, ordinances, laws, rules or regulations.

“Lease” means any individual Existing Lease or New Lease.

“Leases” means, collectively, all Existing Leases and all New Leases.

“Leasing Costs” means collectively, (i) any payments required under a Lease to be paid by the Landlord to or for the benefit of the applicable Tenant which are in the nature of a tenant

5

inducement, including without limitation capital improvement and base building costs, tenant improvement costs, and any tenant allowances, payments or reimbursements, that the Landlord is required to pay or provide under the terms of a Lease or amendment thereto, including “free rent” periods or other inducements; (ii) any leasing commissions payable by the Landlord in connection with a Lease or any amendment thereto pursuant to a Broker Listing Agreement; and (iii) all costs and expenses incurred by the Landlord in connection with the negotiation, execution and delivery of such Lease, including, without limitation, space planning and design costs, legal and professional fees.

“Modiv OP” means Modiv Operating Partnership, L.P., a Delaware limited partnership.

“New Lease” means any written lease agreements encumbering any Site procured by Seller after the Effective Date in accordance with the terms of this Agreement, including without limitation any such written agreements with new Tenants and any renewal, expansion, or relocation agreements or modifications with existing Tenants on terms other than are expressly granted to the subject Tenant under its Existing Lease, and also including any written amendments, supplements, or guaranties relating to any of the foregoing as and to the extent made in accordance with the terms of this Agreement.

“Obligations Surviving Termination” means those provisions of this Agreement that either expressly require conduct or performance following, or are expressly stated to survive, a termination of this Agreement prior to the Closing.

“Ownership Waiver” has the meaning set forth in Section 5.3(b)(v) of this Agreement.

“Ownership Waiver Certificate” has the meaning set forth in Section 5.3(a)(xiii) of this Agreement.

“Permit” means, collectively, all permits, licenses, approvals and authorizations issued by any Governmental Authority to Seller in connection with any Site.

“Permitted Assignee” means any Person that directly controls Buyer or is directly controlled by Buyer.

“Person” means any individual, partnership, joint venture, corporation, trust, limited liability company, unincorporated association, or other entity and any government or any department or agency thereof, whether acting in an individual, fiduciary or other capacity.

“Personal Property” means, for each Site, all equipment, machinery, furniture, fittings, apparatus, appliances, furnishings, and other tangible personal property owned by its Selling Entity as of the Effective Date or acquired by its Selling Entity prior to the Closing and located within or upon the Real Property, if any; provided, that for additional clarity the term “Personal Property” expressly excludes the property owned by any Tenant occupying space in the Site and any property owned by any utilities company, property management company, or other third party.

“Property” means, collectively, all right, title and interest of Seller in and to each Site.

“Property Management Agreement” means a written agreement entered into between a Selling Entity and a services provider pursuant to which such services provider performs property management activities for the Selling Entity with respect to the Site(s) specified therein.

“Purchase Price” means the purchase price for the Property specified in the Summary of Terms, subject to adjustment as expressly set forth in this Agreement.

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“Real Estate Taxes” means all real estate Taxes and assessments applicable to the Real Property for the applicable period of calculation, including all installments of special Taxes or assessments.

“Real Property” means, for each Site, the Land and the Improvements.

“Registration Rights Agreement” means the registration rights agreement between GIPR and Modiv relating to the registration of the GIPR Preferred Stock comprising the Share Consideration for resale under the Securities Act substantially in the form set forth on Exhibit K hereto.

“Registration Statement” has the meaning set forth in Section 3.14(a).

“Related Agreement” means, for a Site, an agreement, in Seller’s possession, ancillary to the ownership, use or occupancy of such Site that is not recorded but is generally intended to be transferred to a new owner if the ownership of a Site changes, which term is intended to include (for example but not by way of limitation) a telecommunications license or access agreement, a billboard lease, and any other such ancillary agreement to which the Selling Entity may be a direct or successor party, but excluding any Leases, Contracts, Broker Listing Agreements, or Property Management Agreements.

“Restricted Person” means any Person, group, or nation that is (a) named by any Executive Order, the United States Treasury Department, or other Governmental Authority as a terrorist, “Prohibited Person” or “Specially Designated National and Blocked Person;” (b) named as a Person, group, or nation that is banned, blocked, prohibited, or restricted pursuant to any law that is enforced or administered by the Office of Foreign Assets Control; or (c) acting in violation of Executive Order No. 13224, the Patriot Act, or any other Laws relating to terrorism or money laundering.

“ROFR” means any right of first offer, right of first refusal or similar preemptive right to purchase with respect to any Site (or portion thereof), which right, if not waived (or deemed waived) by the holder thereof prior to the Closing, would be exercisable in connection with the transaction contemplated under this Agreement.

“Rule 3-14 Audit” shall have the meaning set forth in Section 7.24 of this Agreement.

“SEC” shall mean the United States Securities and Exchange Commission (including the staff thereof).

“Securities Act” means the Securities Act of 1933, as amended.

“Security Deposits” means any and all security deposits, guaranties, letters of credit and other similar credit enhancements providing additional security for any Leases and in Seller’s possession or control or for which Seller is responsible under the Leases.

“Seller Deliveries” means, for each Site, the information and documents contained in the electronic diligence “war room(s)” or website(s) or otherwise made available to the Buyer Parties listed on Schedule B attached to this Agreement as of the Effective Date, to which Buyer and the Buyer Parties have been provided access in connection with this Agreement.

“Seller Party” means Seller, its Affiliates, Seller’s property and asset managers, any lender to Seller, the partners, trustees, shareholders, members, managers, controlling persons, directors, officers, attorneys, employees and agents of each of them, and their respective heirs,

7

successors, personal representatives, and assigns, each being a “Seller Party” and collectively being the “Seller Parties.”

“Seller Title Policy” means the policy of title insurance insuring a Selling Entity’s interest in the related Site, which policy is to be included in the Seller Deliveries applicable to such Site.

“Share Consideration” means 2,400,000 newly issued shares of GIPR Preferred Stock to be issued to Seller or its assigns.

“Site” means all right, title and interest of a Selling Entity in and to the Real Property, Personal Property and Intangible Property owned thereby, and all of such Selling Entity’s right, title and interest in, to and under the related Leases arising from and after the Closing Date.

“Solvent” has the meaning set forth in Section 4.2(r) of this Agreement.

“Survey” means, collectively, any existing survey of the Real Property of a Site that is included in the Seller Deliveries and any new or updated survey of the Real Property of a Site that is obtained by Buyer.

“Tax” or “Taxes” means any federal, state, local or foreign real property, personal property, sales, use, room, occupancy, ad valorem or similar taxes, assessments, levies, charges or fees imposed by any governmental authority on Seller with respect to each Site (or any portion thereof), including any interest, penalty or fine with respect thereto, but expressly excluding any federal, state, local or foreign income, capital gain, gross receipts, capital stock, franchise, profits, estate, gift or generation skipping tax, transfer, documentary stamp, recording or similar tax, levy, charge or fee incurred with respect to the transactions contemplated herein.

“Tax Return” means any return, declaration, report, claim for refund, information return (including FinCEN Form 114 and any analogous or similar report under applicable Laws), estimate, designation, claim for refund, request for extension of time, schedule, notice, notification, form, election, certificate or other document, statement or information (including any related or supporting information, exhibits, supplements, schedules, notices, elections, certificates, attachments and any amendment thereto) filed, submitted, required to be filed, or submitted to any Governmental Authority in connection with the determination, assessment, collection or payment of any Tax or in connection with the administration, implementation or enforcement of or compliance with any Law relating to any Tax, whether in tangible or electronic form.

“Tenant” means a direct tenant of a portion of a Site under such Tenant’s Lease.

“Title Company” means Escrow Agent when acting or referred to in its capacity as the title insurance provider for this transaction.

“Title Policy” or “Title Policies” mean individually or collectively a 2021 ALTA Owner’s Policy of Title Insurance issued by the Title Company in the amount of the Allocated Purchase Price subject only to the pre-printed standard jacket exceptions and exclusions from coverage contained in such policy and the applicable Permitted Exceptions (as hereinafter defined).

“Trading Day” means any day on which The Nasdaq Stock Market LLC is open for trading.

8

“Treasury Regulations” means the U.S. Department of the Treasury regulations promulgated under the Code.

“Underlying Shares” means the shares of GIPR Common Stock issuable upon the redemption of the Share Consideration.

“Work Contracts” means each contract or agreement, in Seller’s possession, entered into by a Selling Entity with respect to completion of tenant improvement work or base building work in accordance with a Lease or with respect to completion of other construction and capital improvement projects at a Site, including, without limitation, agreements with architects, engineers and other design professionals.

ARTICLE 1
PURCHASE AND SALE OF THE PROPERTY

Section 1.1Purchase and Sale. Subject to the provisions, terms, covenants and conditions set forth in this Agreement, Seller agrees to sell to Buyer, and Buyer agrees to purchase from Seller, all of Seller’s right, title and interest in and to the Property, but specifically excluding any (a) rights to use any legal or trade names of Seller or any of Seller’s Affiliates in any manner (but specifically including the rights (including trademarks) to use the names of the Sites as presently constituted), (b) insurance, indemnity, or other Claims or rights of Seller under or with respect to the Leases, Contracts, Related Agreements or Property relating to Seller’s ownership of the subject Property prior to the Closing on that Property and (ii) subject to Section 5.4 hereof, Claims of a continuing nature related to a Site being conveyed at the Closing (e.g., a continuing Tenant default under a Lease assumed by Buyer pursuant to this Agreement in connection with the Closing)), and (c) any Sites that are excluded from the sale under this Agreement after the Effective Date pursuant to the provisions of this Agreement providing for such potential exclusion.

Section 1.2Purchase Price. Subject to the terms and conditions of this Agreement, at Closing, Buyer will pay the Allocated Purchase Price corresponding to such Site, as described in this Section 1.2. All payments to be made in cash pursuant to the terms of this Section 1.2 will be made in immediately available funds delivered into escrow with the Escrow Agent.

(a)The Purchase Price shall consist of: (1) an amount in cash equal to Thirty Million Dollars and No/100 ($30,000,000) (the “Closing Cash Consideration”), plus (2) the Share Consideration.

(b)Intentionally Omitted.

(c)Intentionally Omitted.

(d)Buyer will deliver the Closing Cash Consideration portion of the Purchase Price, as adjusted for any prorations, credits and adjustments to be made pursuant to the terms of this Agreement, including, without limitation, pursuant to Sections 5.4, and 5.6 below, in immediately available funds to the Escrow Agent, not later than the Closing Date, to be paid to Seller at Closing.

(e)Seller acknowledges and agrees that, subject to Section 3.7, the ownership of the Share Consideration, and the Underlying Shares, if any, will be by Modiv and Modiv’s rights and obligations as a shareholder of Buyer shall be subject to the limitations, provisions and restrictions provided in the Buyer Charter and the Buyer Bylaws.

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Section 1.3Escrow Instructions. This Agreement, including the Escrow Instructions, will constitute the instructions for the Escrow Agent’s handling of the purchase and sale transaction contemplated herein. Seller and Buyer will execute such supplemental escrow instructions as may reasonably be required by Escrow Agent to enable Escrow Agent to comply with the terms of this Agreement. If any conflict exists between this Agreement and the provisions of any supplemental escrow instructions, the terms of this Agreement will control unless a contrary intent is expressly indicated in the supplemental instructions and such supplemental instructions are signed by both Buyer and Seller.

Section 1.4ROFR. Seller and Buyer acknowledge and agree that certain Tenants pursuant to a Lease, have a ROFR that is triggered by an offer or agreement by Seller to sell the related Site to Buyer (each Tenant with a ROFR, a “ROFR Tenant”), each ROFR and ROFR Tenant being identified as such on Schedule 1.4 attached hereto. Any obligations of Seller under this Agreement to sell any Site that is subject to a ROFR are subject to the rights of the related ROFR Tenant with respect to such ROFR, such that the execution of this Agreement by Seller and Buyer does not (and is not intended by the Parties to) cause a breach of such ROFR Tenant’s Lease, or a violation of or interference with such Tenant’s ROFR. Prior to the Effective Date, Seller provided each ROFR Tenant with a notice with respect to the proposed sale of its Site (a “ROFR Notice”) pursuant to this Agreement in substantially the manner required under such ROFR Tenant’s Lease (or in such manner as may otherwise be acceptable to such ROFR Tenant). Prior to the Effective Date, Seller simultaneously sent a copy of each ROFR Notice to Buyer and promptly forwarded to Buyer any response received from a ROFR Tenant in connection with any ROFR Notice. If a ROFR Tenant does not timely and properly exercise a ROFR in accordance with the terms of its Lease (a “ROFR Failure”), or a ROFR Tenant gives Seller written notice of such ROFR Tenant’s election not to exercise its ROFR with respect to the proposed sale under this Agreement (a “ROFR Waiver”), the transaction contemplated by this Agreement will proceed with respect to such Site, subject to the other terms and conditions of this Agreement. It is a condition precedent to Buyer’s obligation to close on a Site that is subject to a ROFR that Seller has provided either written notice to Buyer that a ROFR Failure has occurred or a ROFR Waiver Notice to Buyer with respect to such Site prior to such Closing. As of the Effective Date, Seller has provided either written notice to Buyer that a ROFR Failure has occurred or a ROFR Waiver Notice to Buyer with respect to any Site that is subject to a ROFR.

Section 1.5Intentionally Omitted.

Section 1.6All or Nothing Purchase and Sale. Except as may be expressly provided to the contrary in this Agreement, this Agreement provides Buyer with the right to either purchase all, or none, of the Property (and Seller the obligation to convey all of the Property) but does not give Buyer the right to purchase less than all of the Property (or Seller the right to convey less than all of the Property), regardless of the reason.

ARTICLE 2
BUYER’S INVESTIGATIONS; AS-IS SALE.

Section 1.1Buyer’s Investigations.

(a)Prior to the Effective Date, Seller has delivered to Buyer, or made available to Buyer by diligence website or other electronic means to which Buyer has been given access, the Seller Deliveries. Seller will have no obligation to deliver or disclose to Buyer any of Seller’s attorney-client privileged materials, appraisals, internal memoranda, or internal evaluations of the Property. Except as may be otherwise expressly set forth in this Agreement or the other instruments to be delivered by Seller at or prior to any Closing, Seller makes no representations or warranties of any kind regarding the accuracy, thoroughness or completeness of, or

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conclusions drawn in the information contained in the Seller Deliveries or any other Diligence Materials. As of the Effective Date, Buyer has conclusively determined its satisfaction with any investigations of the Property and Buyer is deemed to have reviewed, accepted, and approved of the entirety of the Property.

(b)If this Agreement is terminated for any reason, Buyer will promptly return to Seller all Diligence Materials delivered to Buyer in physical form in connection with the Property, if any.

Section 1.2Title and Survey Matters.

(a)Title Policies. Buyer has satisfied itself prior to the Effective Date that the Title Company will be willing to issue such Title Policies together with any requested endorsements or extended coverage in a form acceptable to Buyer.

(b)Intentionally Omitted.

(c)Permitted Exceptions. As used herein: “Permitted Exceptions” means the following, with respect to each Property: (a) the lien of any real estate taxes and assessments not yet due and payable, provided that the same are prorated in accordance with this Agreement; (b) such matters set forth in the pro forma Title Policy or any matters set forth in the Survey; and (c) all other matters of the public records of the applicable jurisdiction in which the Property is located, including, but not limited to, all building, signage and zoning ordinances, laws, regulations and restrictions by or of municipal and other governmental authorities. After Closing, Seller shall have no liability to Buyer, and Buyer and its successors and assigns shall make no claim against Seller for the Permitted Exceptions. This Section 2.2(c) shall survive the Closing.

(d)Prior to the Effective Date, Buyer has, at Buyer’s expense, obtained and approved a new or updated Survey of a Site performed by a registered surveyor and certified to Buyer, the Title Company, and any other party required by Buyer.

(e)Notwithstanding the foregoing provisions of this Section 2.2, prior to or at the Closing, Seller will, subject to the provisions of this Section 2.2(e), deliver to Title Company Seller’s form of “Owner’s Certification” regarding work performed and other customary matters applicable to such Site in a form reasonably acceptable to Buyer and Seller, which Title Company has confirmed is sufficient to remove such “standard printed exceptions” as may be removed from a title policy by such an undertaking, and which may (to the extent acceptable to Title Company) be undertaken in one or more such documents applicable to one or more Sites (individually and collectively, as the case may be, an “Owner’s Affidavit”).

Section 1.3Entry, Insurance and Indemnity.

(a)Prior to the Effective Date, Seller has provided Buyer with access to the Sites (subject to reasonable Seller restrictions, the rights of any Tenants and the provisions of this Section 2.3).

(b)Prior to the Effective Date, Buyer has conclusively satisfied itself as to the environmental condition of each Site and no additional environmental testing, including a Phase II is required by Buyer or permitted by Seller.

(c)Prior to the Effective Date and up to Closing, Buyer has and will maintain commercial general liability insurance on current ISO forms (or their functional equivalent) insuring against any liability arising out of the Buyer Parties activities in, upon, about or with

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respect to the Property, with limits of at least $1,000,000 per occurrence and $5,000,000 aggregate (which limits may include applicable excess or umbrella coverage). Buyer’s policy must insure the contractual liability of Buyer’s indemnification and defense obligations under this Agreement and must (i) name Seller and the other Seller Parties as additional insureds with respect to all Claims arising out of the activities of the Buyer Parties in, upon, about or with respect to the Property, (ii) contain a cross-liability provision, and (iii) be primary and noncontributing with any other insurance available to Seller and the other Seller Parties. Buyer has provided Seller with evidence that Buyer has such insurance coverages in force prior to any entry by a Buyer Party upon any of the Sites, and such insurance must be maintained in force by Buyer at all times prior to the termination of this Agreement or the Closing. Buyer has and will also require that any Buyer Party entering upon any Site also maintains insurance substantially consistent with all of the foregoing requirements, provided that the occurrence and aggregate limits for a consultant performing non-invasive work may be as low as $1,000,000 and $5,000,000, respectively.

(d)Buyer will pay all costs incurred in connection with Buyer’s due diligence activities regarding the Property, will promptly repair and restore any damage caused to any Site by such activities, and will not permit any mechanics or other liens to be filed against any Site as a result of such activities. BUYER WILL INDEMNIFY, DEFEND AND HOLD THE SELLER PARTIES HARMLESS FROM AND AGAINST ANY CLAIMS ARISING OUT OF ANY ACTIVITIES OF THE BUYER PARTIES IN, UPON, ABOUT OR WITH RESPECT TO THE PROPERTY PRIOR TO CLOSING; PROVIDED, HOWEVER, THAT BUYER WILL NOT BE RESPONSIBLE FOR INDEMNIFYING SELLER FOR THE MERE DISCOVERY OF ANY PRE-EXISTING ADVERSE CONDITION ON ANY SITE (ENVIRONMENTAL OR OTHERWISE) OR THE EXTENT SUCH ADVERSE CONDITION IS CAUSED BY THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SELLER, ANY SELLER PARTY, OR THE APPLICABLE TENANT. Buyer’s indemnity and insurance obligations under this Article 2 are not limited by any other limitation on damages or remedies under this Agreement, including without limitation the liquidated damages provisions contained in Article 6. The provisions of this Section will survive the Closing or any earlier termination of this Agreement.

Section 1.4AS-IS SALE. BUYER SPECIFICALLY ACKNOWLEDGES AND AGREES THAT EXCEPT FOR SELLER’S REPRESENTATIONS, WARRANTIES AND COVENANTS AS EXPRESSLY SET FORTH IN THIS AGREEMENT AND ANY APPLICABLE CLOSING DOCUMENTS (“SELLER’S EXPRESS AGREEMENTS”), (A) SELLER IS SELLING AND BUYER IS PURCHASING ALL OF THE PROPERTY “AS IS, WHERE IS AND WITH ALL FAULTS,” AND (B) BUYER IS NOT RELYING ON ANY REPRESENTATIONS, WARRANTIES, COVENANTS OR AGREEMENTS OF ANY KIND WHATSOEVER, WHETHER ORAL OR WRITTEN, EXPRESS OR IMPLIED, STATUTORY OR OTHERWISE, FROM SELLER OR ANY SELLER PARTY AS TO ANY MATTER CONCERNING OR RELATING TO THE PROPERTY, OR SET FORTH, CONTAINED OR ADDRESSED IN THE DILIGENCE MATERIALS, INCLUDING WITHOUT LIMITATION AS TO: (I) THE COMPLETENESS OF THE DILIGENCE MATERIALS; (II) THE QUALITY, NATURE, HABITABILITY, MERCHANTABILITY, FITNESS, USE, OPERATION, VALUE, MARKETABILITY, ADEQUACY OR PHYSICAL CONDITION OF ANY OF THE PROPERTY OR ANY ASPECT OR PORTION THEREOF (INCLUDING WITHOUT LIMITATION ANY STRUCTURAL ELEMENT, FOUNDATION, ROOF, APPURTENANCE, ACCESS, LANDSCAPING, PARKING FACILITIES, ELECTRICAL, MECHANICAL, HVAC, COMMUNICATION, PLUMBING, SEWAGE, OR UTILITY SYSTEM, EQUIPMENT, FACILITY, APPLIANCE, SOIL, GEOLOGY AND GROUNDWATER); (III) THE DIMENSIONS OR LOT SIZE OF ANY OF THE REAL PROPERTY OR THE SQUARE FOOTAGE OF ANY IMPROVEMENTS THEREON OR OF ANY TENANT’S OR OCCUPANT’S SPACE THEREIN OR ANY COMMON AREAS

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THEREOF; (IV) THE DEVELOPMENT OR INCOME POTENTIAL, OR RIGHTS OF OR RELATING TO, ANY OF THE PROPERTY, OR THE SUITABILITY, VALUE, ADEQUACY, OR FITNESS OF ANY OF THE PROPERTY FOR ANY PARTICULAR PURPOSE; (V) THE ZONING OR OTHER LEGAL STATUS OF ANY OF THE PROPERTY OR ANY OTHER PUBLIC OR PRIVATE RESTRICTIONS ON THE USE OF ANY OF THE PROPERTY; (VI) THE COMPLIANCE OF ANY OF THE PROPERTY OR ITS OPERATION WITH ANY APPLICABLE LAWS (INCLUDING, WITHOUT LIMITATION, THE AMERICANS WITH DISABILITIES ACT) OR ANY COVENANTS, CONDITIONS, RESTRICTIONS OR OTHER MATTERS IN ANY MANNER AFFECTING ANY OF THE PROPERTY AND WHETHER IMPOSED OR ASSERTED BY ANY GOVERNMENTAL AUTHORITY OR ANY OTHER PERSON; (VII) THE ABILITY OF BUYER TO OBTAIN ANY NECESSARY GOVERNMENTAL APPROVALS, LICENSES OR PERMITS FOR THE CURRENT USE OR BUYER’S INTENDED USE, DEVELOPMENT OR REDEVELOPMENT OF ANY OF THE PROPERTY; (VIII) THE PRESENCE OR ABSENCE OF HAZARDOUS MATERIALS OR OTHER HAZARDOUS CONDITIONS ON, IN, UNDER, ABOVE OR ABOUT ANY OF THE PROPERTY OR ANY ADJOINING OR NEIGHBORING PROPERTIES; (IX) THE QUALITY OF ANY LABOR OR MATERIALS USED IN ANY IMPROVEMENTS; (X) THE CONDITION OF TITLE TO ANY OF THE PROPERTY; (XI) ANY LEASES OR ANY CONTRACTS OR OTHER AGREEMENTS AFFECTING ANY OF THE PROPERTY OR THE INTENTIONS OF ANY PERSON WITH RESPECT TO THE NEGOTIATION AND/OR EXECUTION OF ANY LEASES, CONTRACTS OR AGREEMENTS WITH RESPECT TO ANY OF THE PROPERTY OR ANY PORTION THEREOF; OR (XII) THE ECONOMICS OF, OR THE INCOME AND EXPENSES, REVENUE OR EXPENSE PROJECTIONS OR OTHER FINANCIAL MATTERS RELATING TO, THE OWNERSHIP, LEASING, OR OPERATION OF ANY OF THE PROPERTY. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, BUYER ACKNOWLEDGES AND AGREES THAT, EXCEPT FOR SELLER’S EXPRESS AGREEMENTS, BUYER IS NOT RELYING ON ANY REPRESENTATIONS, WARRANTIES, COVENANTS OR AGREEMENTS OF SELLER, ANY OTHER SELLER PARTY, OR ANY AGENT OR BROKER OF SELLER, WHETHER IMPLIED, PRESUMED OR EXPRESSLY PROVIDED AT LAW OR OTHERWISE, OR ARISING BY VIRTUE OF ANY STATUTE, COMMON LAW OR OTHER RIGHT OR REMEDY IN FAVOR OF BUYER. BUYER FURTHER ACKNOWLEDGES AND AGREES THAT SELLER IS UNDER NO DUTY TO MAKE ANY INQUIRY REGARDING ANY MATTER THAT MAY OR MAY NOT BE KNOWN TO SELLER, ANY OTHER SELLER PARTY, OR ANY OTHER AGENT OR BROKER OF SELLER.

IF BUYER PURCHASES ANY OF THE PROPERTY, ANY REPORTS, REPAIRS OR WORK REQUIRED OF OR BY BUYER WITH RESPECT THERETO ARE THE SOLE RESPONSIBILITY OF BUYER FROM AND AFTER THE CLOSING, AND BUYER AGREES THAT THERE IS NO OBLIGATION ON THE PART OF SELLER EITHER BEFORE OR AFTER ANY CLOSING TO MAKE ANY CHANGES, ALTERATIONS OR REPAIRS TO ANY OF THE PROPERTY OR, EXCEPT AS SET FORTH IN THIS AGREEMENT OR ANY OTHER APPLICABLE CLOSING DOCUMENT TO CURE ANY VIOLATIONS OF ANY LAWS. FOLLOWING CLOSING AND SATISFACTION OF SELLER’S OBLIGATIONS HEREUNDER, BUYER IS SOLELY RESPONSIBLE FOR OBTAINING THE ISSUANCE OR RE-ISSUANCE OF ANY CERTIFICATE OF OCCUPANCY OR ANY OTHER APPROVAL OR PERMIT NECESSARY FOR TRANSFER OR OCCUPANCY OF ANY OF THE PROPERTY OR ANY PORTION THEREOF AND FOR ANY IMPROVEMENTS, REPAIRS OR ALTERATIONS NECESSARY TO OBTAIN THE SAME, ALL AT BUYER’S SOLE COST AND EXPENSE.

ANY INFORMATION PROVIDED OR TO BE PROVIDED WITH RESPECT TO THE PROPERTY IS SOLELY FOR BUYER’S CONVENIENCE AND WAS OR WILL BE

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OBTAINED FROM A VARIETY OF SOURCES AND SELLER HAS NOT MADE ANY INDEPENDENT INVESTIGATION OR VERIFICATION OF SUCH INFORMATION AND MAKES NO REPRESENTATIONS AS TO THE ACCURACY OR COMPLETENESS OF SUCH INFORMATION. EXCEPT FOR ACTS INVOLVING FRAUD OR INTENTIONAL MISREPRESENTATION BY SELLER, SELLER SHALL NOT BE LIABLE FOR ANY NEGLIGENT MISREPRESENTATION OR ANY FAILURE TO INVESTIGATE THE PROPERTY NOR SHALL SELLER BE BOUND IN ANY MANNER BY ANY VERBAL OR WRITTEN STATEMENTS, REPRESENTATIONS, APPRAISALS, ENVIRONMENTAL ASSESSMENT REPORTS, OR OTHER INFORMATION PERTAINING TO THE PROPERTY OR THE OPERATION THEREOF, FURNISHED BY SELLER OR BY ANY MANAGER, LEASING AGENT, REAL ESTATE BROKER, AGENT, REPRESENTATIVE, AFFILIATE, DIRECTOR, OFFICER, SHAREHOLDER, EMPLOYEE, SERVANT, CONSTITUENT PARTNER OR MEMBER OF SELLER, AFFILIATE OF SELLER, OR OTHER PERSON OR ENTITY ACTING ON SELLER’S BEHALF.

THE PROVISIONS OF THIS SECTION WILL SURVIVE THE CLOSING OR ANY EARLIER TERMINATION OF THIS AGREEMENT.

Section 1.5Release by Buyer. Without limiting the provisions of Section 2.4, but subject to Seller’s Express Agreements and the express rights and remedies reserved to Buyer in this Agreement, if Closing occurs as to any Site, then with respect to such Site, from and after such Closing, Buyer, for itself and the other Buyer Parties (including without limitation any Permitted Assignee), waives all rights to recover from, and forever releases, discharges and covenants not to sue, Seller and the other Seller Parties with respect to any and all Claims, whether direct or indirect, known or unknown, foreseen or unforeseen, that may exist or arise on account of or in any way be connected with such Site (including without limitation the physical, operational, environmental, and structural condition of such Site) or any Laws applicable thereto, including without limitation any Claims or other matters relating to the use, presence, discharge or release of Hazardous Materials on, under, in, above or about such Site. Buyer assumes the risk that Buyer’s investigations of such Site may not reveal all aspects, conditions and matters of or affecting such Site. Buyer acknowledges, agrees, represents and warrants that: (a) Buyer is an experienced, knowledgeable and sophisticated purchaser of properties similar to the Property; (b) Buyer expressly agrees to and accepts, and fully understands, each and all of the provisions of this Agreement and the waivers, releases, and limitations of liability contained in this Agreement; and (c) each and all of the waivers, releases, limitations of liability, and other provisions contained in this Agreement are fair and reasonable, particularly in light of the sophistication, experience and knowledge of the Parties. Buyer acknowledges and agrees that Seller has agreed to enter into this Agreement in consideration for and in reliance upon each and all of the waivers, releases, limitations of liability, and other provisions contained in this Agreement and any of Buyer’s closing documents, that the Purchase Price is based in part on Buyer’s acceptance of and agreement to each and all of the waivers, releases, limitations of liability and other provisions contained in this Agreement, and that Seller would not have agreed to execute this Agreement or sell the Property to Buyer on terms that did not include each and all of the waivers, releases, limitations of liability, and other provisions contained in this Agreement.

SUBJECT TO SELLER’S EXPRESS AGREEMENTS AND THE EXPRESS RIGHTS AND REMEDIES RESERVED TO BUYER IN THIS AGREEMENT, THE WAIVERS, RELEASES, AND OTHER PROVISIONS CONTAINED IN SECTIONS 2.4 AND 2.5 EXTEND TO ALL CLAIMS OF ANY NATURE AND KIND WHATSOEVER, KNOWN OR UNKNOWN, PAST, PRESENT OR FUTURE, SUSPECTED OR NOT SUSPECTED, EXCEPT FOR ACTUAL FRAUD COMMITTED BY SELLER IN CONNECTION WITH A COMPLETED SALE OF ANY SITE TO BUYER. TO THE FULLEST EXTENT PERMISSIBLE BY APPLICABLE LAW, BUYER WAIVES ANY PROVISIONS OF APPLICABLE LAW THAT OTHERWISE MIGHT OPERATE TO LIMIT OR PROHIBIT

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ANY OF SUCH WAIVERS, RELEASES AND OTHER PROVISIONS. THE PROVISIONS OF THIS SECTION WILL SURVIVE THE CLOSING OR ANY EARLIER TERMINATION OF THIS AGREEMENT.

ARTICLE 3
COVENANTS

Section 1.1ROFR Waiver.

(a)Seller shall use commercially reasonable efforts in accordance with Section 1.4 to obtain, prior to the Closing, a ROFR Waiver from each applicable ROFR Tenant with respect to each applicable ROFR.

Section 1.2Intentionally Omitted.

Section 1.3Intentionally Omitted.

Section 1.4Contracts.

(a)Any material Contracts in Seller’s possession existing on the Effective Date have been provided to Buyer as a part of the Seller Deliveries and Buyer has delivered a written notice to Seller setting forth which, if any, of the Contracts Buyer elects to have Seller terminate and which Contracts Buyer elects to have Seller assign to Buyer at the Closing. The Contracts Buyer elects to have Seller assign to Buyer at the Closing are set forth on Schedule 4.1(m). Seller will deliver notices of termination prior to or at Closing terminating those Contracts that Buyer so timely notifies Seller to terminate, and Seller will be responsible for any termination penalties or fees associated with the termination of such Contracts. At Closing, Seller will assign to Buyer, to the extent assignable, and Buyer will assume, all Contracts so required or elected by Buyer for each Site pursuant to the Assignment of Contracts described in Section 5.3 below. Any amounts paid or payable under any Contracts being assigned to Buyer will be appropriately prorated between the Parties at Closing.

(b)Between the Effective Date and the Closing Date, Seller will not, without Buyer’s prior written consent, enter into any new Contract, or amend or terminate (except as directed by Buyer pursuant to Section 3.4(a) above) any existing Contract, unless that Contract (as may be so amended) either will not extend beyond Closing or is terminable without material penalty upon no more than thirty (30) days’ notice (with Seller being responsible at the Closing for any penalty for any new Contract). If Buyer fails to either give or expressly refuse such consent within five (5) Business Days after receiving the written request from Seller, such consent shall conclusively be deemed to have been given. Buyer’s consent may be granted or withheld in Buyer’s sole but commercially reasonable discretion with respect to any such new Contract, amendment or termination that is proposed for a Site between the Effective Date and Closing of the applicable Site. Seller will promptly provide to Buyer a copy of any written notice (including a notice of default) given or received under a Work Contract after the Effective Date following Seller’s receipt or delivery thereof, provided, that Seller shall not be required to provide any such notices that relate to a Contract which Buyer has elected for Seller to terminate pursuant to Section 3.4(a) above.

(c)Seller will cause any Broker Listing Agreements and any Property Management Agreements to be terminated with respect to the Sites affected thereby prior to or as of the Closing Date for the subject Site, and Seller will be solely responsible for any termination fees or other payments due under any such terminated agreements.

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Section 1.5Lease Modification and Enforcement. Prior to the Closing Date, Seller shall use commercially reasonable efforts consistent with past practice to enforce each Tenant’s obligation under its Lease, and subject to the terms and provisions of each applicable Lease and consistent with past practice, may apply all or any portion of any Security Deposits then held by Seller toward any loss or damage incurred by Seller by reason of any defaults by the applicable Tenant. Notwithstanding the foregoing, in the event that an applicable Tenant is engaged in illegal activities or hazardous activities which put the life, health or safety of other Tenants or invitees of the applicable Site at risk or are reasonably likely to bring such Tenant’s premises or the applicable Site into disrepute, Seller shall not terminate any Lease without the prior written consent of Buyer, which consent shall not be unreasonably withheld or delayed. Seller will provide to Buyer a copy of any written notice (including any notice of default) given to or received from any Tenant after the Effective Date promptly following Seller’s delivery or receipt thereof. After the Effective Date, Seller shall not enter into any modification of any Existing Lease or New Lease or accept any voluntary surrender of any Existing Lease or New Lease without the prior written consent of Buyer, which consent shall not be unreasonably withheld or delayed.

Section 1.6Leasing Costs. At or prior to Closing for any Site, Seller will pay all Leasing Costs that are or become due and payable prior to Closing affecting such Site. If there are any unpaid Leasing Costs as of any Closing Date, then at such Closing, Buyer will receive a credit towards the Purchase Price for any such unpaid amounts known as of the Closing Date on account of the then-current term of any Existing Lease or New Lease affecting such Site, Buyer will assume such obligations pursuant to the Assignment of Leases described in Section 5.3 below, and Seller will have no further responsibility for such costs or allowances for which Buyer is credited. Additionally, upon the occurrence of Closing as to any Site, pursuant to the Assignment of Leases, Buyer will assume any then outstanding obligations for Leasing Costs for which Buyer is responsible under this Agreement. To the extent that Seller is liable for any Leasing Costs that are not known, billed or discovered until after the Closing Date, Seller shall continue to be responsible therefor for a period of six (6) months following the Closing Date (provided, that any such Claims shall survive such six (6) month period so long as a Claim Notice with respect thereto was delivered to Seller prior to the expiration of such period) and shall either reimburse Buyer for any such Leasing Costs or pay directly such Leasing Cost to the party to whom such amounts are due and shall indemnify Buyer from an against any Claims arising as a result of Seller’s failure to make such payments; provided, however, in no event shall Seller be responsible for cost overruns constituting Leasing Costs to the extent such cost overruns arise on account of matters occurring after the Closing Date. As of the Effective Date, there are no Leasing Costs currently due and payable by Seller with regard to any Lease. The provisions of this Section will survive the Closing.

Section 1.7Distribution.

(a)Subject to receipt of approval from Modiv’s lenders to make a distribution of the Underlying Shares to Modiv’s shareholders and/or Modiv OP unit holders and any applicable regulatory approvals or legal restrictions,as soon as reasonably practicable and subject to GIPR’s cooperation, following the issuance to Modiv or an Affiliate of Modiv of the Underlying Shares pursuant to a redemption of the Share Consideration under the Articles Supplementary, Modiv or its Affiliate, as the case may be, shall declare a dividend of, or otherwise distribute, all the Underlying Shares to the shareholders of Modiv and/or Modiv OP unit holders. From the date of issuance to Modiv or an Affiliate of Modiv of the Underlying Shares until the distribution to Modiv’s shareholders and/or Modiv OP unit holders as described in the foregoing, Modiv shall provide notice to Buyer in advance of granting any ownership waivers to any Person exempting such Person from an ownership limit with respect to the outstanding shares of Modiv’s capital stock. For the avoidance of doubt, if all of the Underlying Shares are issued to Modiv OP, then this Section shall require Modiv OP to distribute the Underlying Shares to the Modiv OP unit

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holders, including Modiv, which shall, as soon as reasonably practicable, distribute such shares to the shareholders of Modiv.

(b)Buyer and Modiv on behalf of itself and its Affiliates agree to cooperate with each other, and any distribution agent or transfer agent used, in connection with the distribution contemplated by Section 3.7(a).

(c)If the issuance of the Underlying Shares to Modiv or an Affiliate of Modiv causes the aggregate number of shares of GIPR Common Stock owned by Modiv and its Affiliates and any other persons or entities whose beneficial ownership of shares of GIPR Common Stock would be aggregated with Modiv’s for purposes of Section 13(d) of the Exchange Act, including shares held by any “group” of which Modiv is a member (collectively with Modiv and its Affiliates, the “Modiv Group”) to exceed the GIPR Common Stock Ownership Limitation, Modiv, on behalf of itself and its Affiliates, agrees that it will promptly distribute or sell that number of shares of GIPR Common Stock that would result in the number of shares of GIPR Common Stock beneficially owned by the Modiv Group to not exceed the GIPR Common Stock Ownership Limitation.

Section 1.8Voluntary New Exceptions. Between the Effective Date and the Closing Date, Seller shall not grant any voluntary new liens or other title encumbrances upon any Site, which (i) are not caused by or the result of any act or fault of Buyer or any Affiliate of Buyer, (ii) are not items that constitute Permitted Exceptions, or (iii) are not disclosed in any prior Title Commitment (but subject to rights of Buyer with respect to such prior Title Commitment or update), in each case without Buyer’s prior written consent.

Section 1.9Tax Contests.

(a)Taxable Period Terminating Prior to the Closing Date. Seller shall (i) retain the right to commence, continue and settle any proceedings to contest any Taxes for any Site for any taxable period which terminates prior to the Closing Date, provided that Buyer’s consent, not to be unreasonably withheld, shall be required with respect to any such settlement that is reasonably likely to result in increased Taxes for any period after the Closing Date and (ii) be entitled to any refunds or abatements of Taxes awarded in such proceedings for such periods prior to the Closing Date, except to the extent any portion thereof is payable to any Tenant.

(b)Taxable Period Including the Closing Date. Following Closing, Buyer, at its sole cost and expense, shall have the right to commence, continue and settle any proceedings to contest any Taxes for any Site for any taxable period which includes the Closing Date. Any refunds or abatements awarded in such proceedings shall be used first to reimburse Buyer for the reasonable costs and expenses incurred by Buyer in contesting such Taxes, and the remainder of such refunds or abatements shall be prorated between Seller and Buyer as of 12:01 a.m. on the Closing Date for such Site, based upon actual days in the applicable taxable period prior to and after the Closing Date. Promptly upon receipt of any such refund or abatement, Buyer shall pay the applicable prorated net amount to Seller.

(c)Taxable Period Commencing After Closing Date. Following Closing, Buyer shall (i) have the right to commence, continue and settle any proceedings to contest any Taxes for any taxable period which commences after such Closing Date and (ii) be entitled to any refunds or abatements of Taxes awarded in such proceedings for such periods.

(d)Cooperation. Seller and Buyer shall promptly inform the other of the initiation of any audit, contest or other proceeding relating to Taxes for any Site and shall use commercially reasonable efforts to cooperate with the Party contesting any Taxes pursuant to, and in accordance with, this Section 3.9 (at no material cost or expense to the non-contesting

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Party, other than any cost or expense which the requesting Party agrees to reimburse pursuant to an agreement mutually acceptable to the Parties).

(e)Survival. This Section 3.9 shall survive the Closing.

Section 1.10Notice of Litigation and Violations. If, prior to any Closing, any Selling Entity receives written notice of (i) any new litigation not disclosed on Schedule C with respect to any Site subject to such Closing, or (ii) any new violation not disclosed on Schedule C of any applicable fire, health, building, use, occupancy or zoning laws, regulations, ordinances and codes with respect to any Site subject to such Closing, Seller shall promptly deliver written notice of such matter to Buyer.

Section 1.11Capital Improvements. Other than (i) the tenant improvement work and the capital improvements set forth on Schedule C and being performed pursuant to a Work Contract identified on Schedule 4.1(m), (ii) any capital maintenance/repair work, any work required to repair or restore any Site after a casualty or condemnation, and (iii) any other work necessary to protect the safety and/or health of Tenants, invitees, guests or other persons after the Effective Date, Seller shall not undertake any capital improvements or construction projects at any Site without Buyer’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed.

Section 1.12Cooperation. Seller agrees to use commercially reasonable efforts to cooperate with Buyer in connection with the transition of the ownership and management of the Sites, including using commercially reasonable efforts to arrange meetings with the current property managers responsible for day-to-day management, arrange meetings with local sub-prop managers and landlord representatives (e.g., leasing brokers), arrange operational site visits with local maintenance teams, assisting with service and maintenance contracts transition and providing access to updated diligence documents. This Section 3.12 shall survive the Closing.

Section 1.13Articles Supplementary. GIPR agrees to prepare Articles Supplementary to the GIPR Charter setting forth the rights, preferences and obligations of the GIPR Preferred Stock (the “Articles Supplementary”) in substantially the form attached as Exhibit M hereto, and to file such Articles Supplementary with the Maryland State Department of Assessments and Taxation (“SDAT”) prior to the Closing, which Articles Supplementary will be effective under the Maryland General Corporation Law and will comply with all applicable requirements under the Maryland General Corporation Law at Closing.

Section 1.14Registration Statement; Records for Audits.

(a)As promptly as practicable after the Closing, GIPR agrees, at its own expense, to prepare and file with the SEC a registration statement on the appropriate form to register the distribution by Modiv to its shareholders and/or Modiv OP unit holders and/or resale of the Underlying Shares issuable upon the redemption of the Share Consideration (the “Registration Statement”). Modiv agrees to use commercially reasonable efforts, at GIPR’s sole cost and expense (other than with respect to Modiv’s attorneys’ fees if Modiv chooses to engage its own attorneys to assist with the review of the Registration Statement and any amendments or supplements), to cooperate with GIPR, as reasonably requested by GIPR, in connection with GIPR’s preparation and filing with the SEC of the Registration Statement, including using commercially reasonable efforts to cooperate in connection with filing any amendments to the Registration Statement, responding to the SEC’s comments on the Registration Statement, and seeking effectiveness of the Registration Statement. Modiv acknowledges that the SEC may deem Modiv to be an underwriter in the Registration Statement and consents to being named as an underwriter if so required by the SEC. GIPR shall use its reasonable best efforts to cause the Registration Statement to be declared effective as soon as reasonably practicable after its initial

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filing and then maintain the effectiveness of such Registration Statement, if applicable, until the distribution by Modiv and/or resale registered thereunder is completed. Substantially concurrently with the filing of the Registration Statement, GIPR shall submit to The Nasdaq Capital Market a listing of additional shares notification form, and any other documents or information requested by The Nasdaq Capital Market, with respect to the listing of the Underlying Shares on The Nasdaq Capital Market and shall use its reasonable best efforts to effect the listing of the Underlying Shares on The Nasdaq Capital Market as soon as reasonably practicable. GIPR also shall use its reasonable best efforts to maintain the listing of the Underlying Shares on The Nasdaq Capital Market.

(b)Without limiting the generality of Section 7.24, if required by rules of the SEC, as determined by legal counsel to Buyer, Seller shall provide to GIPR all Records (as defined in Section 7.24) reasonably requested by GIPR in order to permit GIPR to prepare a Rule 3-14 Audit with respect to each Site for inclusion, or incorporation by reference, in any registration statement contemplated by this Agreement or the Registration Rights Agreement, and the Seller shall provide and/or reasonably cooperate in obtaining any and all such other data and financial information which shall be required by applicable Law in connection with fulfilling GIPR’s disclosure obligations as a public company subject to the rules and regulations of the SEC.

Section 1.15Intentionally Omitted.

ARTICLE 4
REPRESENTATIONS AND WARRANTIES

Section 1.1Representations and Warranties of Seller. Seller makes the following representations and warranties to Buyer and GIPR as of the Effective Date and (except as may be disclosed in writing to Buyer after the Effective Date or to the extent such representation and warranty could only be true as of the Effective Date) again as of the Closing Date:

(a)Modiv and each Selling Entity is duly organized and validly existing and in good standing under the laws of its state of formation and, to the extent legally required to do so, Seller (or the applicable Selling Entity) is duly qualified to transact business in each State in which any Site being sold pursuant to this Agreement by such Person is located; and the execution, delivery and performance of this Agreement and all Closing Documents to be executed and delivered by Seller pursuant to this Agreement are within the organizational power of Seller and have been, or will prior to Closing be, duly authorized by the board of directors of Modiv and no other corporate action on the part of Seller is necessary to authorize the execution and delivery by Buyer of this Agreement and all Closing Documents.

(b)Seller has not filed any voluntary petition in bankruptcy or suffered the filing of any involuntary petition by Seller’s creditors or suffered the appointment of a receiver to take possession of the Property or any material portion thereof. Seller has not made a general assignment for the benefit of creditors or admitted in writing its inability to pay its debts as they generally come due or made an offer of settlement, extension or composition to its creditors generally.

(c)To Seller’s knowledge, there are no actions or proceedings pending or threatened in writing against Seller that Seller reasonably expects would affect the validity or enforceability of this Agreement or any of the Closing Documents to be executed and delivered by Seller pursuant to this Agreement. To Seller’s knowledge, the execution, delivery and performance of this Agreement and the Closing Documents by Seller and the consummation of the transaction contemplated by this Agreement by Seller will not: (a) conflict with or result in a breach of any terms, conditions or provisions of the organizational documents governing any Seller; (b) result in a breach or acceleration of or constitute a default or event of termination (with or without the

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giving of notice, the passage of time or otherwise) under the provisions of any agreement or instrument by which Seller is bound; (c) require the consent or approval of any third party, including any governmental authority (other than any such consents or approvals that have been, or will prior to the Closing be, obtained) or (d) result in a violation or breach of any Laws applicable to any Seller or by which Seller or any Site is bound which, in each case, would reasonably be expected to have a material adverse effect upon Seller’s ability to consummate the transaction contemplated by this Agreement.

(d)To Seller’s knowledge, the Rent Roll attached hereto is, as of the last day of the month preceding the month in which the Effective Date occurs, true, accurate and complete in all material respects. To Seller’s knowledge, attached hereto as Schedule 4.1(d) is, as of the last day of the month preceding the month in which the Effective Date occurs, a true and complete report setting forth (i) all arrearages in excess of thirty (30) days under the Leases and (ii) any prepaid rents under the Leases or credits which reduce future rents (the “Delinquency Report and List of Prepaid Rents”).

(e)Except as may be set forth on Schedule 3.3 with respect to a Site, Seller has not received written notice of any currently pending or threatened condemnation of all or any portion of any Site.

(f)Other than each Broker Listing Agreement (true, complete and accurate copies of which have been delivered to Buyer) which shall all be terminated by Seller prior to or as of Closing in accordance with Section 3.4(c), there are no agreements with brokers entered into by Seller and relating to any Site by which Seller, or such Site is bound with respect to the leasing of any portion of the Property and that will be binding upon Buyer or such Site after the Closing.

(g)Except as may be set forth on Schedule C with respect to a Site, Seller has not received written notice of any litigation that is currently pending or threatened against Seller or an Affiliate of Seller with respect to the Property.

(h)Except as may be set forth on Schedule C with respect to a Site or in any Existing Lease for any Site, to Seller’s knowledge, as of the Effective Date, there are no Leasing Costs currently due and payable by Seller with regard to any Lease.

(i)Except as may be set forth in the Existing Leases for a Site or a document recorded against the Real Property of a Site, Seller has not granted any ROFR, option or right of first refusal to any party to acquire Seller’s ownership interest in any portion of the Property. As of the Effective Date and as of the Closing of any applicable Site, Seller will have delivered, or caused to be delivered, copies of all material correspondence with any ROFR Tenant related to such Tenant’s ROFR.

(j)Seller has delivered or made available to Buyer true, complete and accurate copies of the Existing Leases, each of the Existing Leases constitutes the entire agreement between the applicable Selling Entity and the applicable Tenant regarding such Tenant’s Lease and occupancy of the related Site and each Selling Entity is the current landlord under the applicable Existing Lease with the authority to enforce the terms and conditions of the applicable Existing Lease against the applicable Tenant. To Seller’s knowledge, there are no lease agreements for space at any Site to which any Selling Entity is party, other than the Existing Leases. Attached hereto as Schedule A-2 is a true, complete and accurate list of all security deposits held by Seller, indicating whether in the form of cash or letter of credit.

(k)Except as may be set forth on Schedule 4.1(d) with respect to a Site, Seller has not given to any Tenant written notice that such Tenant is in default of or breach under its respective Lease, or received from any Tenant written notice that the Landlord is in default of or breach

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under its respective Lease, except for any prior breaches or defaults that, to Seller’s knowledge, have been cured in all material respects.

(l)Seller has not received any written notice that it is in default of any monetary or other obligations of Seller under any CC&R Documents, which default has not been cured in all material respects.

(m)To Seller’s knowledge, attached hereto as Schedule 4.1(m) is a true, correct and complete list of each Contract by Site that Buyer has elected to assume in accordance with Section 3.4. The copies of the Contracts identified on Schedule 4.1(m) and delivered to Buyer are complete and accurate copies of the Contracts (including any amendments thereto) in Seller’s files that Seller relies upon in connection with its ownership and operation of the respective Sites. Except as may be set forth on Schedule C with respect to a Site, to Seller’s knowledge, Seller has not received nor given written notice of any existing default or breach under any Contract that, to Seller’s knowledge, has not been cured in all material respects. To Seller’s knowledge, other than the Contracts, Leases and Related Agreements, there are no contracts or agreements to which Seller or its Affiliates is a party and which, subject to Section 3.4, will be binding on Buyer from and after the Closing Date. To Seller’s knowledge, as of the Effective Date, there are no Related Agreements for any Site.

(n)No Selling Entity is acting on behalf of an “employee benefit plan” within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended, a “plan” within the meaning of Section 4975 of the Code, or an entity deemed to hold “plan assets” within the meaning of 29 C.F.R § 2510.3-101 of any such employee benefit plan or plans.

(o)Seller is not a “foreign person,” “foreign partnership,” “foreign trust” or “foreign estate” as those terms are defined in Section 1445 of the Internal Revenue Code, and Seller is a “United States person” within the meaning of Section 7701(a)(30) of the Code.

(p)Except as may be set forth on Schedule C with respect to a Site, to Seller’s knowledge, Seller has not received any written notice from any Governmental Authority that the Real Property for any Site is presently in material violation of any applicable Environmental or other Laws relating to such Real Property or received any written notice of any existing, pending or threatened material claims, actions, suits, liabilities, proceedings or investigations related to Hazardous Material with respect to any such Real Property that would reasonably be expected to result in material liability to the owner thereof.

(q)Other than the tenant improvement work and the capital improvements set forth on Schedule C, there are no capital improvements or construction projects (which, for the avoidance of doubt, does not include ordinary course capital maintenance/repair work) occurring at the Sites for which Buyer shall be responsible after the Closing.

(r)To Seller’s knowledge, except as set forth on Schedule C, Seller is not currently protesting or challenging the assessed value of its Site for Real Estate Tax purposes.

(s)Any information supplied or to be supplied in writing by or on behalf of Seller or, any of its Affiliates, for inclusion or incorporation by reference in any document filed or to be filed with the SEC by GIPR, at the time of such filing, shall not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading.

(t)Seller has timely filed all Tax Returns required to be filed by it, except where the failure to file would not have a material adverse effect, and timely paid all Taxes required to be

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paid with respect to the ownership and operation of each Property, and each such Tax Return is true, correct and complete in all material respects.

(u)Intentionally Omitted.

(v)To Seller’s knowledge, no Lease requires services to be provided to a tenant other than those usually or customarily rendered in connection with the rental of space for occupancy only within the meaning of Treasury Regulations Section 1.512(b)-1(c)(5), the Rents and any other amounts payable under each Lease will not result in more than a de minimis amount of “impermissible tenant service income” within the meaning of Section 856(d)(2)(C) and Section 857(d)(7) of the Code.

(w)The Seller is (i) an “accredited investor” (within the meaning of Rule 501 of Regulation D under the Securities Act) and (ii) is acquiring the GIPR Preferred Stock comprising the Share Consideration only for its own account and not for the account of others, and not on behalf of any other account or person or with a view to, or for offer or sale in connection with, any distribution thereof in violation of the Securities Act. The Seller is not an entity formed for the specific purpose of acquiring the GIPR Preferred Stock comprising the Share Consideration.

(x)The Seller acknowledges and agrees that the GIPR Preferred Stock comprising the Share Consideration and the Underlying Shares (if any) are being offered in a transaction not involving any public offering within the meaning of the Securities Act and that the GIPR Preferred Stock comprising the Share Consideration and the Underlying Shares (if any) have not been registered under the Securities Act and that the Buyer is not required to register the GIPR Preferred Stock comprising the Share Consideration or the Underlying Shares (if any), except as set forth herein and in the Registration Rights Agreement and the Articles Supplementary, respectively. The Seller acknowledges and agrees that the GIPR Preferred Stock comprising the Share Consideration and the Underlying Shares (if any) may not be offered, resold, transferred, pledged or otherwise disposed of by the Seller absent an effective registration statement under the Securities Act, except (i) to the Buyer or a subsidiary thereof, (ii) pursuant to an applicable exemption from the registration requirements of the Securities Act, (iii) an ordinary course pledge such as a broker lien over account property generally, (iv) to non-U.S. persons pursuant to offers and sales that occur outside the United States within the meaning of Regulation S under the Securities Act, and, in each of clauses (i)-(iii), in accordance with any applicable securities laws of the states and other jurisdictions of the United States, and that any certificates or account entries representing the GIPR Preferred Stock comprising the Share Consideration issued to Modiv shall contain a restrictive legend to such effect, as set forth in Section 5.5 hereof. The Seller acknowledges and agrees that the GIPR Preferred Stock comprising the Share Consideration will be subject to these securities law transfer restrictions, and as a result of these transfer restrictions, the Seller may not be able to readily offer, resell, transfer, pledge or otherwise dispose of such GIPR Preferred Stock and may be required to bear the financial risk of an investment in such GIPR Preferred Stock for an indefinite period of time. The Seller acknowledges and agrees that the GIPR Preferred Stock comprising the Share Consideration will not be immediately eligible for offer, resale, transfer, pledge or disposition pursuant to Rule 144 promulgated under the Securities Act until at least six months following the Closing Date. The Seller acknowledges and agrees that it has been advised to consult legal counsel prior to making any offer, resale, pledge or transfer of any of the GIPR Preferred Stock comprising the Share Consideration and the Underlying Shares (if any).

(y)The Seller further acknowledges that there have not been, and the Seller hereby agrees that it is not relying on, any representations, warranties, covenants or agreements made to the Seller by the Buyer or its subsidiaries or any of their respective affiliates or any control persons, officers, directors, employees, partners, agents or representatives, or any other person or entity, expressly or by implication, other than those representations, warranties, covenants and

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agreements of the Buyer set forth in this Agreement, the Registration Rights Agreement and the related transaction documents.

(z)In making its decision to purchase the GIPR Preferred Stock comprising the Share Consideration and the Underlying Shares (if any), the Seller has relied solely upon an independent investigation made by the Seller of the Buyer and its subsidiaries, the Buyer’s representations in Section 4.2 of this Agreement, and the Seller’s review of this Agreement, the Registration Rights Agreement, the Articles Supplementary, and the related transaction documents. The Seller acknowledges and agrees that it has had access to, has received, and has had an adequate opportunity to review, such information as the Seller deems necessary in order to make an investment decision with respect to the GIPR Preferred Stock comprising the Share Consideration and the Underlying Shares (if any), including the GIPR SEC Documents, and the Seller has made its own assessment and is satisfied concerning the relevant financial, tax and other economic considerations relevant to the Seller’s investment in the GIPR Preferred Stock comprising the Share Consideration and the Underlying Shares (if any). The Seller represents and agrees that the Seller and the Seller’s professional advisor(s), if any, have had the full opportunity to ask such questions, receive such answers and obtain such information as the Seller and its professional advisor(s), if any, have deemed necessary to make an investment decision with respect to the GIPR Preferred Stock comprising the Share Consideration and the Underlying Shares (if any).

(aa)The Seller acknowledges that the GIPR Preferred Stock comprising the Share Consideration and the Underlying Shares (if any) to Modiv (i) are not being offered by any form of general solicitation or general advertising (within the meaning of Regulation D under the Securities Act) and (ii) are not being offered in a manner involving a public offering under, or in a distribution in violation of, the Securities Act, or any state securities laws.

(ab)The Seller acknowledges that it is aware that there are substantial risks incident to an investment in and ownership of the GIPR Preferred Stock comprising the Share Consideration and the Underlying Shares (if any), including those set forth in the GIPR SEC Documents. The Seller has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in the GIPR Preferred Stock comprising the Share Consideration and the Underlying Shares (if any), and the Seller has had an opportunity to seek, and has sought, such accounting, legal, business and tax advice as the Seller has considered necessary to make an informed investment decision.

(ac)The Seller understands and agrees that no federal or state agency has passed upon or endorsed the merits of the offering of the GIPR Preferred Stock and the issuance of the Underlying Shares (if any) to Modiv, or made any findings or determination as to the fairness of this investment.

(ad)The Seller is not (i) a person or entity named on the List of Specially Designated Nationals and Blocked Persons administered by OFAC or in any Executive Order issued by the President of the United States and administered by OFAC, or a person or entity prohibited by any OFAC sanctions program, (ii) a Designated National as defined in the Cuban Assets Control Regulations, 31 C.F.R. Part 515 or (iii) a non-U.S. shell bank or providing banking services indirectly to a non-U.S. shell bank. The Seller agrees to provide law enforcement agencies, if requested thereby, such records as required by applicable law, provided that the Seller is permitted to do so under applicable law. The Seller represents that if it is a financial institution subject to the Bank Secrecy Act (31 U.S.C. Section 5311 et seq.), as amended by the USA PATRIOT Act of 2001 and its implementing regulations (collectively, the “BSA/PATRIOT Act”), and that the Seller maintains policies and procedures reasonably designed to comply with applicable obligations under the BSA/PATRIOT Act.

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(ae)Except as expressly set forth in Section 5.7 of this Agreement, no broker or finder is entitled to any brokerage or finder’s fee or commission from the Seller solely in connection with the transactions contemplated by the Agreement.

(af)At all times prior to the Closing Date, the Seller has no binding commitment to dispose of, or otherwise transfer (directly or indirectly), any of the GIPR Preferred Stock comprising the Share Consideration or the Underlying Shares (if any).

For purposes of this Agreement and any Closing Documents, whenever the phrases “to the best of Seller’s knowledge”, or the “knowledge” of Seller or words of similar import are used, they shall be deemed to refer to the current, actual, conscious knowledge only, and not any implied, imputed or constructive knowledge of Ray Pacini, the Chief Financial Officer of Modiv, Inc., the general partner of the sole member of each Selling Entity (the “Seller Knowledge Party”), who Seller represents has sufficient knowledge about the Properties in connection with the making of the foregoing representations. Notwithstanding the foregoing, the Seller Knowledge Party shall have no duty to inquire about such knowledge matters. Such individual(s) will have no personal liability under this Agreement or otherwise with respect to the Property.

Section 1.2Representations and Warranties of Buyer. Buyer makes the following representations and warranties to Seller as of the Effective Date and (except as may be disclosed in writing to Seller after the Effective Date) again as of the Closing Date (provided that, with respect to such representations and warranties “Buyer” refers to each of the Buyers unless the context clearly indicates that the representation or warranty is applicable to a specific Buyer):

(a)Buyer is duly organized and validly existing and in good standing under the laws of its state of formation and, to the extent legally required to do so, Buyer (or its Permitted Assignee) is or will prior to Closing be duly qualified to transact business in each State in which any Site being acquired by such Person is located; and, subject to the Ownership Waiver, the execution, delivery and performance of this Agreement and all Closing Documents to be executed and delivered by Buyer pursuant to this Agreement are within the organizational power of Buyer and have been, or will prior to Closing be, duly authorized by the board of directors of GIPR and no other corporate action on the part of Buyer is necessary to authorize the execution and delivery by Buyer of this Agreement and the payment of the Closing Cash Consideration and the Share Consideration at Closing. The copies of the GIPR organizational documents (e.g., the Articles of Amendment and Restatement, as amended, and Bylaws of GIPR and the Amended and Restated Agreement of Limited Partnership of Generation Income Properties, L.P., as amended), included in the GIPR SEC documents are true, complete and correct and have not been amended, modified or rescinded, and each of which is in full force and effect.

(b)Buyer has not filed any voluntary petition in bankruptcy or suffered the filing of any involuntary petition by Buyer’s creditors or suffered the appointment of a receiver to take possession of any of Buyer’s property. Buyer has not made a general assignment for the benefit of creditors or admitted in writing its inability to pay its debts as they generally come due or made an offer of settlement, extension or composition to its creditors generally.

(c)There are no actions or proceedings pending or, to Buyer’s knowledge, threatened against Buyer that Buyer reasonably expects would affect the validity or enforceability of this Agreement or any of the Closing Documents to be executed and delivered by Buyer pursuant to this Agreement. Subject to the Ownership Waiver, the execution, delivery and performance of this Agreement and the Closing Documents by Buyer and the consummation of the transaction contemplated by this Agreement by Buyer will not: (a) conflict with or result in a breach of any terms, conditions or provisions of the organizational documents governing Buyer; (b) result in a breach or acceleration of or constitute a default or event of termination (with or without the giving of notice, the passage of time or otherwise) under the provisions of any agreement or

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instrument by which Buyer is bound; (c) require the consent or approval of any third party, including any governmental authority (other than any such consents or approvals that have been obtained) except (i) the filing with the SEC of such reports under, and other compliance with the Exchange Act and the Securities Act or any state securities laws as may be required in connection with this Agreement and the transactions contemplated thereby, (ii) the filing of the Articles Supplementary with the Maryland SDAT, (iii) such filings as may be required in connection with state and local transfer taxes, (iv)  such filings as may be required under the rules and regulations of the Nasdaq Capital Market in connection with this Agreement and the transactions contemplated hereby and (v) for any such filings and approvals which, individually or in the aggregate, would not reasonably be expected to have a material adverse effect on Buyer and its Affiliates taken as a whole, or (d) result in a violation or breach of any Laws applicable to any Buyer or by which Seller or any Site is bound.

(d)Intentionally Omitted.

(e)Buyer (i) is an experienced and knowledgeable purchaser of real property, (ii) is represented by competent counsel, and (iii) understands and accepts the terms and provisions of this Agreement, including without limitation all releases, waivers, limitations, and assumptions of risk and liability set forth in this Agreement.

(f)The Share Consideration, when issued, sold and delivered in accordance with the terms and for the consideration set forth in this Agreement and the Articles Supplementary, as the case may be, and subject to the Ownership Waiver, will be validly issued, fully paid and nonassessable and free of restrictions on transfer other than restrictions on transfer under the GIPR Charter, applicable state and federal securities laws and liens or encumbrances created by or imposed by Seller or its assigns. Assuming the accuracy of the Seller’s representations and warranties set forth in Section 4.1, the Share Consideration will be issued to Modiv in compliance with all applicable federal and state securities laws, and the rules and regulations of The Nasdaq Capital Market. The GIPR Common Stock issuable upon redemption of the Share Consideration has been duly reserved for issuance, and upon issuance in accordance with the terms of the Articles Supplementary, will be validly issued, fully paid and nonassessable and free of restrictions on transfer other than restrictions on transfer under the GIPR Charter, applicable federal and state securities laws and liens or encumbrances created by or imposed by Seller or its assigns. Assuming the accuracy of the Seller’s representations and warranties set forth in Section 4.1, any GIPR Common Stock issuable upon redemption of the Share Consideration will be issued to Modiv in compliance with all applicable federal and state securities laws, and the rules and regulations of The Nasdaq Capital Market.

(g)As of their respective filing dates (or, if amended or superseded by a filing prior to the date of this Agreement, then on the date of such filing), all forms, documents, certifications, statements, schedules, reports (including the financial statements referenced in Section 4.2(j)) filed with the SEC since January 1, 2022, including any amendments thereto (the “GIPR SEC Documents”), (i) complied in all material respects with the requirements of the Securities Act or the Exchange Act, as the case may be, and (ii) did not, or with respect to GIPR SEC Documents filed after the date hereof, will not, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements made therein, in light of the circumstances under which they were made, not misleading.

(h)None of the GIPR SEC Documents is, to Buyer or GIPR’s knowledge, the subject of ongoing SEC review or threatened review, and GIPR does not have any outstanding and unresolved comments from the SEC with respect to any GIPR SEC Documents. None of the GIPR SEC Documents is the subject of any confidential treatment request by GIPR.

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(i)GIPR has made available to Seller complete and correct copies of all non-public written correspondence between the SEC, on the one hand, and GIPR, on the other hand, since January 1, 2022. No GIPR subsidiary is separately subject to the periodic reporting requirements of Section 13(a) or Section 15(d) of the Exchange Act.

(j)At all applicable times, GIPR has complied in all material respects with the applicable provisions of the Sarbanes-Oxley Act.

(k)The consolidated audited and unaudited financial statements of GIPR and GIPR’s subsidiaries included, or incorporated by reference, in the GIPR SEC Documents, including the related notes and schedules, (i) complied as to form as of their respective dates in all material respects with the then-applicable accounting requirements of the Securities Act and the Exchange Act, (ii) have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) applied on a consistent basis during the periods involved (except as may be indicated in the notes thereto, or, in the case of the unaudited financial statements, for normal and recurring year-end adjustments and as may be permitted by the SEC on Form 10-Q or any successor form under the Exchange Act, which such adjustments are not, individually or in the aggregate, material to GIPR) and (iii) fairly present in all material respects (subject, in the case of unaudited financial statements, for normal and recurring year-end adjustments, none of which is material, individually or in the aggregate), the consolidated financial position of GIPR and GIPR’s subsidiaries, taken as a whole, as of their respective dates and the consolidated statements of operations and comprehensive (loss) income, stockholders’ equity and cash flows of GIPR and GIPR’s subsidiaries for the periods presented therein.

(l)GIPR has established and maintains and evaluates “disclosure controls and procedures” (as such term is defined in Rule 13a-15 and 15d-15 under the Exchange Act) and “internal control over financial reporting” (as such term is defined in Rule 13a-15 and 15d-15 under the Exchange Act); such disclosure controls and procedures are designed to ensure that material information relating to GIPR and its subsidiaries, is made known to GIPR’s Chief Executive Officer and its Chief Financial Officer by others within those entities, and such disclosure controls and procedures are effective to perform the functions for which they were established. GIPR has disclosed to GIPR’s auditors and audit committee, based on the most recent evaluation by its chief executive officer and its chief financial officer prior to the date of this Agreement, (A) any significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect in any material respect GIPR’s ability to record, process, summarize and report financial information and (B) any fraud, whether or not material, that involves management or other employees who have a significant role in internal control over financial reporting.

(m)Neither GIPR nor any of its subsidiaries has any material liabilities or obligations, direct or contingent (including any off-balance sheet obligations), required to be disclosed in the GIPR SEC Documents, not described in the GIPR SEC Documents (excluding the exhibits thereto).

(n)Neither GIPR nor any GIPR subsidiary is required to be registered as an investment company under the Investment Company Act of 1940.

(o)GIPR and GIPR’s subsidiaries (and, to the knowledge of GIPR, any of their respective officers and directors) have not violated or are in violation of the U.S. Foreign Corrupt Practices Act of 1977 as amended, the U.K. Bribery Act 2010, or any applicable law or regulation implementing the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, or committed an offense under any other applicable anti-bribery or anti-corruption laws. Neither GIPR nor any GIPR subsidiary nor, to the knowledge of Buyer, any director, officer or representative of GIPR or any GIPR subsidiary

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has (i) used any corporate funds for any unlawful contributions, gifts, entertainment or other unlawful expenses related to political activity, (ii) made or taken any action in furtherance of any direct or indirect unlawful payment, promise to pay or authorization or approval of the payment or giving of money, property or gifts of anything of value, directly or indirectly to any foreign or domestic government official or employee, and (iii) made, offered or taken an act in furtherance of any direct or indirect unlawful bribe, rebate, payoff, kickback or other unlawful payment to any foreign or domestic government official or employee.

(p)Commencing with GIPR’s taxable year ended on December 31, 2021, GIPR has been organized and operated in conformity with the requirements for qualification and taxation as a “real estate investment trust” under Section 856 of the Code (a “REIT”), and all applicable regulations under the Code, and its actual method of operation through the date hereof has enabled it to meet, and its ownership, organization and proposed method of operation will enable it to continue to meet, the requirements for qualification and taxation as a REIT under the Code and all applicable regulations under the Code for its taxable year ending December 31, 2021 and thereafter. GIPR intends to continue to qualify as a REIT under the Code and all applicable regulations of the Code for all subsequent years, and GIPR, after reasonable inquiry and diligence, does not know of any event that would reasonably be expected to cause GIPR to fail to qualify as a REIT at any time.

(q)Intentionally Omitted.

(r)Neither GIPR nor Buyer is entering into this Agreement with the intent to hinder, delay or defraud either present or future creditors of GIPR, Buyer or any of their subsidiaries. Immediately following the Closing after giving effect to the transactions contemplated by this Agreement, GIPR, Buyer and their respective subsidiaries, taken as a whole, will be Solvent. As used herein, “Solvent” means with respect to any Person on a particular date, that on such date (a) the fair value of the property of such Person is greater than the total amount of liabilities, including, contingent liabilities, of such Person, (b) the present fair salable value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured, (c) such Person has not incurred, and does not intend to incur, debts or liabilities beyond such Person’s ability to pay such debts and liabilities as they mature and (d) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Person’s property would constitute an unreasonably small capital. The amount of contingent liabilities at any time shall be computed under this Section 4.2(r) as the amount that, in the light of all the facts and circumstances existing at such time, represents the amount that is probable to become an actual or matured liability.

(s)Any information supplied or to be supplied in writing by or on behalf of Buyer or, any of its Affiliates, for inclusion or incorporation by reference in any document filed or to be filed with the SEC by Seller or its Affiliate, at the time of such filing, shall not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading.

For purposes of this Agreement and any Closing Documents, whenever the phrases “to the best of Buyer’s knowledge”, the “knowledge” of Buyer or the “actual knowledge” of Buyer or words of similar import are used, they shall be deemed to refer to the current, actual, conscious knowledge only, and not any implied, imputed or constructive knowledge of David Sobelman, the Chief Executive Officer and President of Buyer, Allison Davies, the Chief Financial Officer of Buyer, or Emily Hewland, the Director of Capital Markets of Buyer (the “Buyer Knowledge Parties”), who Buyer represents have sufficient knowledge in connection with the making of the foregoing representations. Notwithstanding the foregoing, the Buyer Knowledge Parties shall

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have no duty to inquire about such knowledge matters. Such individuals will have no personal liability under this Agreement or otherwise with respect to the Property.

Section 1.3OFAC and Source of Funds. Buyer and Seller each represents and warrants to the other, and to Escrow Agent, and (solely with respect to Seller) to GIPR, that (a) such Party is not a Restricted Person; (b) such Party is not knowingly acting, directly or indirectly, for, on behalf of, or in conjunction with any Restricted Person and is not engaging in, instigating or facilitating this transaction for or on behalf of any Restricted Person; (c) such Party is not engaging in this transaction, directly or indirectly, in violation of any laws relating to drug trafficking, money laundering or predicate crimes to money laundering; and (d) none of the funds of such Party to be utilized in this transaction have been or will be derived from any unlawful activity with the result that such Party, its funds, or the Property is subject to potential seizure, forfeiture or other such remedy or that this Agreement or the transactions hereunder are or will be in violation of any applicable laws or regulations. Notwithstanding the foregoing, neither Seller nor Buyer is making any representation or warranty under this Section 4.3 regarding any public shareholders it may have unless any such individual shareholder holds greater than five percent (5%) of such Party’s publicly-held shares. The provisions of this Section will survive the Closing (in this sole instance, without regard to the limitations contained in Section 4.5) or any earlier termination of this Agreement.

Section 1.4Intentionally Omitted.

Section 1.5Survival of Representations and Warranties After Closing. Neither Party may make a Claim after the Closing on any of the representations or warranties made by one Party (the “Maker”) to the other Party (the “Recipient”) in this Agreement or in any Closing Document to the extent that such representations or warranties were, are, or have become inaccurate or incorrect in any material respects (whether one or more, the “Inaccuracy”) and the Recipient has, receives or obtains actual knowledge of the Inaccuracy prior to Closing, excepting acts involving fraud or intentional misrepresentation by a Maker. In furtherance of the foregoing, except for acts involving fraud or intentional misrepresentation by Seller, Buyer shall be deemed to have actual knowledge of an inaccuracy prior to Closing if such Inaccuracy is disclosed from any source, including but not limited to by or on behalf of Seller, any matter disclosed in the Diligence Materials, any Title Commitment, any disclosure made by a property manager, tenant, vendor or agent of Seller, any Survey or any third party report prepared for Buyer in connection with the transaction contemplated herein. The representations and warranties made by each Party in this Agreement or any Closing Document will survive the Closing only until the date that is twelve (12) months following the date of Closing; provided that the representations and warranties of Seller made with respect to any Lease will expire upon receipt of a Tenant Estoppel Certificate to the extent such Tenant Estoppel Certificate confirms Seller’s representations and warranties made herein with respect to any Lease (the “Expiration Date”). Notwithstanding anything to the contrary contained in this Agreement, there shall be no survival limitation, except statutory limitations, with respect to acts involving fraud or intentional misrepresentation on behalf of Seller or those express representations made by Seller in Section 4.1(a), (b), (n), (o), and (u), and the Expiration Date with respect to all such acts or express representations shall be the expiration date of the applicable statutory limitation period. Notwithstanding anything to the contrary contained in this Agreement, there shall be no survival limitation, except statutory limitations, with respect to acts involving fraud or intentional misrepresentation on behalf of Buyer or those express representations made by Buyer in Section 4.2(a), (b), (f) and (p) and the Expiration Date with respect to all such acts or express representations shall be the expiration date of the applicable statutory limitation period. Any Claims for, relating to or arising from an Inaccuracy discovered after Closing are limited in all respects to any actual damages the Recipient, as applicable, sustained as a result of the Inaccuracy; provided, that upon obtaining actual knowledge of such Inaccuracy, the Recipient shall have an obligation to mitigate any such damages that are within the reasonable control of

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the Recipient. In no event will Maker be liable to Recipient for any lost profits or consequential, indirect, special or punitive damages suffered by Recipient, as a result of any Inaccuracy. If an Inaccuracy is discovered after Closing and the Recipient, desires to pursue any remedy against the Maker with respect to such Inaccuracy, then the Recipient, must give the Maker a Claim Notice detailing the Inaccuracy upon or prior to the applicable Expiration Date. Any Claims that a Recipient might otherwise have or have had against a Maker with respect to any Inaccuracy, whether such Inaccuracy or such Claims are known or unknown, will not be valid or effective if a Claim Notice detailing the Inaccuracy has not been given to the Maker on or prior to the applicable Expiration Date. For the avoidance of doubt, following the applicable Expiration Date, each Party shall be deemed to be fully discharged and released (without the need for separate releases or other documentation) from any liability or obligation to the other Party (and to its other Buyer Parties or Seller Parties, as applicable), with respect to any Inaccuracy, known or unknown, not detailed in a Claim Notice delivered to a Party on or prior to the applicable Expiration Date. Further, any Claims that Recipient, may have at any time against Maker for any matter with respect to which a Claim Notice has been given to the Maker on or prior to the applicable Expiration Date may be the subject of subsequent litigation brought by the Recipient, but only if such litigation is commenced against and duly served upon the Maker on or prior to the date that is sixty (60) days following the applicable Expiration Date (the “Claim Bar Date”). For the avoidance of doubt but subject to Section 6.4, following the Claim Bar Date, the Maker shall be deemed to be fully discharged and released (without the need for separate releases or other documentation) from any liability or obligation to Recipient (and to its other Buyer Parties or Seller Parties, as applicable), with respect to any Claim, known or unknown, except for any Claim for which both (a) a Claim Notice was given by Recipient, to the Maker on or prior to the applicable Expiration Date, and (b) litigation upon the Claim has been commenced by Recipient, and duly served upon Seller prior to or upon the applicable Claim Bar Date. This Section (and Section 4.4 above) collectively provide the sole remedies of Recipient with respect to any Inaccuracy and Recipient expressly waives any other rights or remedies such Recipient, might otherwise have at law or in equity with respect to any Inaccuracy in any representation or warranty of the Maker. The provisions of this Section will survive the Closing or any earlier termination of this Agreement.

ARTICLE 5
CLOSING, DELIVERIES AND PRORATIONS

Section 1.1Closing. The Closing and the delivery of all items to be delivered by the Parties at the Closing will be performed through an escrow closing conducted by Escrow Agent on the Closing Date. Except as may otherwise be expressly provided in this Agreement, the Closing Date may not be accelerated or extended without the prior written approval of both Seller and Buyer.

Section 1.2Estoppel Certificate. As of the Effective Date, Buyer has obtained and approved from each Tenant an estoppel certificate (each such estoppel certificate, an “Estoppel Certificate” and collectively, the “Estoppel Certificates”).

Section 1.3Closing Documents.

(a)On or before the Closing Date for a Site, Seller will deposit the following into escrow with respect to such Site (as applicable), with all documents having been duly executed and, if to be recorded, acknowledged by Seller:

(i)a Special Warranty Deed (or the state-specific counterpart thereof) in the form attached to this Agreement as Exhibit B (the “Deed”) executed by the applicable Selling Entity, with Buyer or the applicable designee, if applicable, as grantee;

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(ii)an Assignment and Assumption of Lease in the form attached to this Agreement as Exhibit C executed by the applicable Selling Entity, with Buyer or the applicable designee, if applicable, as the counterparty (the “Assignment of Leases”);

(iii)a Bill of Sale and Assignment of Intangible Property in the form attached to this Agreement as Exhibit D executed by the applicable Selling Entity, with Buyer or the applicable designee, if applicable, as the counterparty (the “General Assignment”);

(iv)if applicable, an Assignment and Assumption of Contracts in the form attached to this Agreement as Exhibit E executed by the applicable Selling Entity, with Buyer or the applicable designee, if applicable, as the counterparty (the “Assignment of Contracts”);

(v)such disclosures, filings (including any transfer tax filings and related documentation) and reports (including Tax reporting and withholding certificates) as are required of Seller by applicable state and local law in connection with the conveyance of the applicable Site;

(vi)a form notice to be given to the applicable Tenants stating that the Site has been sold to Buyer and that, after the Closing, all rents should be paid to or as directed by Buyer or the applicable designee, if applicable;

(vii)a confirmation pursuant to Section 1445(b)(2) of the Code that Seller is not a “foreign person” within the meaning of Section 1445(f)(3) of the Code;

(viii)an Owner’s Affidavit;;

(ix)Seller’s counterpart signature to the closing statement prepared by Escrow Agent which shall include the applicable prorations and adjustments calculated in accordance with the terms of this Agreement (the “Closing Statement”);

(x)resolutions, certificates of good standing and such other organizational documents as the Title Company may reasonably require to evidence such Seller’s authority to consummate the transactions contemplated hereby;

(xi)Tenant files in Seller’s possession (which files may, if not readily deliverable to Buyer as of the Closing Date, be delivered to Buyer within a reasonable time following the Closing Date);

(xii)the Registration Rights Agreement, duly executed by an authorized officer of Modiv;

(xiii)a duly executed certificate of representations for purposes of the Ownership Waiver in a form substantially similar to the form attached hereto as Exhibit L (the “Ownership Waiver Certificate”); and

(xiv)such other documents as may be specifically required under this Agreement, and such other customary documents as are necessary and appropriate to effect the Closing and are reasonably acceptable to Seller.

(b)On or before the Closing Date, Buyer will deposit the following into escrow with respect to each Site, with all documents having been duly executed and, if to be recorded, acknowledged by Buyer:

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(i)the Purchase Price, as adjusted and reflected in the closing settlement statement agreed upon by Buyer and Seller;

(ii)counterparts of the Assignment of Leases, the General Assignment, and the Assignment of Contracts (if any);

(iii)such disclosures, filings (including any transfer tax filings and related documentation) and reports (including Tax reporting and withholding certificates) as are required of Buyer by applicable state and local law in connection with the conveyance of the applicable Site;

(iv)an opinion of Foley & Lardner LLP, tax counsel to GIPR, in substantially the form attached hereto as Exhibit I to the effect that GIPR has been organized in conformity with the requirements for qualification and taxation as a REIT under the Code, and GIPR’s actual method of operation through the date of this Agreement has enabled it to meet, and its proposed method of operation will enable it to continue to meet, the requirements for qualification and taxation as a REIT under the Code and all applicable regulations under the Code for its taxable year ending December 31, 2021 and thereafter, which opinion shall be based upon a customary representation letter and shall be subject to customary assumptions, limitations and qualifications;

(v)a certified copy of a resolution of the board of directors of GIPR signed by the chief executive officer of GIPR (i) exempting Modiv or its assigns from the Aggregate Share Ownership Limit (as defined in Section 4.05(b)(vii) of the GIPR Charter) and establishing Modiv or its assigns as an Excepted Holder (as defined in Section 4.05(a)(vi) of the GIPR Charter) for the full amount of the Share Consideration in a form reasonably acceptable to Seller (the “Ownership Waiver”) and (ii) approving this Agreement, the Articles Supplementary, the filing of the Articles Supplementary with the SDAT and the authorization and issuance of the Share Consideration and the authorization and reservation of the Underlying Shares;

(vi)the Registration Rights Agreement, duly executed by an authorized officer of GIPR; and

(vii)such other documents as may be specifically required under this Agreement, and such other customary documents as are necessary and appropriate to effect the Closing and are reasonably acceptable to Buyer.

(c)The Parties agree that the form documents attached as exhibits to this Agreement are acceptable to accomplish the conveyances contemplated by this Agreement. The acceptance by Buyer of a Deed to a Site (and the other Closing Documents applicable to such Site required to be delivered by Seller) at the Closing of such Site shall be deemed to be a full performance and discharge of every obligation on the part of Seller to be performed under this Agreement with respect to such Site, other than those that are specifically stated in this Agreement to survive the Closing. The Parties may agree, each in their reasonable discretion, to utilize “blanket” documents applicable to multiple Sites for certain of the Closing Documents other than the Deeds.

Section 1.4Prorations. All normal and customarily proratable items of income and expense relating to the Property will be adjusted between Seller and Buyer for each Site, on a Site-by-Site basis, for the Closing as provided below. Closing Date prorations will be made as of 12:01 A.M. local time on the day of the Closing as if Buyer was the owner of the Site for the entire Closing Date.

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(a)Collected base rents, additional rent and any separate amounts for Real Estate Taxes, common area maintenance charges, insurance, and other expenses related to the Site paid by the Tenants to Seller under the Leases (collectively, “Rents”) for the month of Closing will be prorated as of the Closing Date on the basis of the actual number of days of the month (or other applicable time period) which shall have elapsed as of the Closing Date. Buyer shall receive all collected Rent attributable to dates from and after the Closing Date. Seller shall receive all collected Rent attributable to dates prior to the Closing Date.

(b)All Leasing Costs shall be prorated as provided for in Section 3.6.

(c)Real Estate Taxes for such site that first become delinquent (and thus are customarily paid) in the Closing Year (the “Closing Year Taxes”) will be prorated by the Parties at Closing, with due adjustment being made for any portion of the Closing Year Taxes that is paid or payable to the taxing authority(ies) either (i) directly by the applicable Tenant; (ii) by the Landlord but is collected from (or reimbursed by) the applicable Tenant in lump sums that correlate directly to the payment amounts; (iii) by the Landlord but is collected from (or reimbursed by) the applicable Tenant through monthly estimated tax impound payments collected by the Landlord; (iv) by the Landlord but is not separately reimbursed or impounded by the applicable Tenant because the Lease for such Tenant is a “gross lease;” or (v) by the Landlord but relates to leasable space at the Property that as of the Closing Date is not subject to a Lease. Notwithstanding the foregoing, if, on or after the Effective Date, a Site or any portion thereof shall be or shall have become affected by any special assessment for public improvements for work completed prior to the Effective Date, Seller shall pay at the Closing all unpaid installments currently due and payable.

(d)At Closing, Seller shall provide to Buyer a schedule of all past due rents and other fees owed to Seller by any Tenant (including but not limited to any CAM Expenses (as hereinafter defined), tax payments, insurance payments, or late fees) (the “Past Due Rents”) and Buyer shall purchase the Past Due Rents from Seller at Closing.

(e)Except as set forth in Section 5.4(d), all other items of common area maintenance charges, insurance, or other expenses related to each Site for the Closing Year (“CAM Expenses”), including but not limited to any utility charges, maintenance charges, and charges under any Contracts, Related Agreements or Permitted Exceptions, will be prorated by the Parties at Closing, with due adjustment being made for any portion of the CAM Expenses that is paid or payable either (i) directly by the applicable Tenant; (ii) by the Landlord but is collected from (or reimbursed by) the applicable Tenant in lump sums that correlate directly to the payment amounts; (iii) by the Landlord but is collected from (or reimbursed by) the applicable Tenant through monthly estimated impound payments collected by the Landlord; (iv) by the Landlord but is not separately reimbursed or impounded by the applicable Tenant because the Lease for such Tenant is a “gross lease;” or (v) by the Landlord but relates to leasable space at the Property that as of the Closing Date is not subject to a Lease. For any utilities that are in the name of Seller, Buyer and Seller will cooperate to arrange for final utility readings as close to the Closing Date as possible and the issuance of a final bill to Seller, with Buyer being designated the billing party in lieu of Seller from and after the Closing Date. Seller will be entitled to receive and retain any deposits of Seller held by utility companies with respect to the Property.

(f)Except to the extent considered Leasing Costs, in which case such costs shall be prorated between Buyer and Seller as set forth in Section 3.6, Seller will pay the costs of all capital improvement work related to a Site that are or become due and payable prior to the Closing Date, except as agreed differently in writing (email being sufficient) between Buyer and Seller with respect to work in progress capital improvements. Buyer will assume such capital improvement work obligations pursuant to Section 3.11 above, and Seller will have no further responsibility for such costs. The provisions of this Section shall survive the Closing.

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(g)Each of Seller and Buyer acknowledge and agree that none of the insurance policies, fidelity bonds and other insurance contracts maintained by Seller in respect of the Property (the “Seller Insurance Policies”) shall be assigned to Buyer, and Buyer shall be responsible for arranging for its own insurance for the Property as of the Closing Date. Accordingly, no proration or adjustment shall be made between Seller and Buyer with respect to the Seller Insurance Policies.

(h)To the extent not addressed by Section 5.4(e), charges under Contracts assigned at Closing, Related Agreements assigned at Closing, Permitted Exceptions, and all other costs and expenses incurred in connection with the ownership and operation of the Property that are customarily prorated shall be prorated as of the Closing Date, with Seller paying all such expenses accruing with respect to any time period prior to the Closing Date and Buyer paying all such operating expenses accruing with respect to any time period after the Closing Date.

(i)No later than three (3) Business Days prior to the Closing Date, the Parties shall jointly prepare a proration schedule setting forth the prorations to be made at such Closing pursuant to this Section 5.4, which proration schedule shall be reflected on the Closing Statement.

(j)If for any reason sufficient information is not available for a Site at Closing to allow Seller to provide the proration amounts contemplated in this Section 5.4 or if the proration schedule is otherwise inaccurate or incomplete, Seller or Buyer (as applicable) will provide appropriate reconciliations (and reasonable supporting information) to the other Party within one hundred eighty (180) days after the Closing Date; and unless the other Party reasonably objects thereto within (30) days of their receipt, thereupon Seller will pay to Buyer any amounts due Buyer, and Buyer will pay to Seller any amounts due Seller, as may be indicated by such supplemental reconciliations (net of any amounts that may have been estimated or determined by Seller and Buyer and paid or credited for such purposes at the Closing between such Parties). To the extent there is any dispute between the Parties with respect to such reconciliations, the Parties will work in good faith to resolve such dispute and if the Parties cannot agree on the reconciliation within twenty (20) Business Days after receipt of an objection notice, then the Parties shall attempt to resolve such dispute through mediation. Unless expressly otherwise agreed by the Parties, the reconciliation credits or payments made between Buyer and Seller as provided in this Section 5.4 will be final as between the Parties. Seller will be responsible for preparing and providing any final full-year reconciliations of Real Estate Taxes and CAM Expenses pertaining to calendar year 2022 and Buyer will be responsible for preparing and providing any final full-year reconciliations of Real Estate Taxes and CAM Expenses pertaining to calendar year 2023 that may be required to be provided to any Tenant pursuant to its Lease and for settling any adjustments required with each such Tenant as a result of such reconciliations (provided, that Buyer may utilize the reconciliations and supporting information received from Seller for such purpose), and thereupon Seller will pay to Buyer any amounts due Buyer, and Buyer will pay to Seller any amounts due Seller, as may be indicated by such supplemental reconciliations.

(k)If any Tenant pays percentage rent under its Lease, Buyer will remit to Seller, within thirty (30) days of receipt from such Tenant, Seller’s proportionate share of any percentage rental paid by such Tenant under its Lease with respect to the “lease year” or other applicable fiscal period under such Lease in which Closing occurs (such applicable fiscal period being the “Payment Period”), which proportionate share due to Seller will be determined based on the number of days (excluding the Closing Date) Seller owned the related Site during such Payment Period compared to the number of days (including the Closing Date) Buyer owned the related Site during such Payment Period.

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(l)Seller will supply the relevant information to Buyer not later than five (5) Business Days prior to Closing for, and the Parties will cooperate in the calculation, review and finalization of, the adjustments and prorations contemplated by this Section for the Closing. The Purchase Price amounts, prorations, closing costs, and any other credits and adjustments will be reflected on a closing settlement statement prepared by Escrow Agent and executed by Buyer and Seller for the Closing on an aggregate basis and, if desired by either Party, with Site-specific information included therewith. If a net amount is owed by Seller to Buyer at Closing for the adjustments and prorations contemplated by this Section, such amount will be credited against the Purchase Price being paid at Closing. If a net amount is owed by Buyer to Seller at Closing for the adjustments and prorations contemplated by this Section, such amount will be paid to Seller together with the Purchase Price at Closing.

(m)Unless a payment of Rents (other than base rent) is otherwise expressly captioned or directed by the paying Tenant, any Rents received by either Party from a Tenant following the Closing on such Tenant’s Site will be applied (i) first, between the Parties, to any Rents due from such Tenant for the month of Closing, but only to the extent received during the month in which the Closing occurs, (ii) next, to Buyer, to any delinquent Rents and Rents then due or to become due within the month in which received from such Tenant for periods following the month of Closing, and (iii) finally, to Seller, to any delinquent Rents due from such Tenant for periods prior to Closing, in each case in inverse order of maturity. From and after Closing, Buyer will use commercially reasonable and good faith efforts on Seller’s behalf for a period of not less than twelve (12) months following the Closing Date to collect and remit to Seller any delinquent Rents owed to Seller from a Tenant, provided that Buyer will have no obligation to institute any litigation against or evict any Tenant in connection with such efforts. If after Closing either Party receives any Rents or other amounts that properly belong to the other Party based upon the Closing prorations or the provisions of this Section 5.4, such amounts will be promptly remitted by the receiving Party to such other Party (net of reasonable and actual costs of collection).

(n)If there are any items, matters, payments, or other obligations owed to Seller by a Tenant or third party that would not customarily be conveyed by a seller to a buyer in a sale transaction of this nature (“Excluded Seller Receivable Items”), such Excluded Seller Receivable Items will be retained by Seller and not conveyed (either in whole or in part) to Buyer together with the related Site pursuant to this Agreement. Any such Excluded Seller Receivable Items that are known by Seller as of the Effective Date will be set forth on Schedule D attached to this Agreement. In addition, if there is any capitalized expense incurred by Seller with respect to a Site that is being amortized and reimbursed by the Tenant over a number of years, then to the extent such expense will not be fully reimbursed by the Tenant as of the Closing Date (such unreimbursed amount being an “Unreimbursed Capital Expense Amount”), such Unreimbursed Capital Expense Amount will be paid by Buyer to Seller at Closing, and Buyer will thereafter have the sole right to collect and receive all remaining reimbursement payments from the applicable Tenant. Any such Unreimbursed Capital Expense Amounts that are known by Seller as of the Effective Date will be set forth on Schedule E attached to this Agreement. The inadvertent exclusion of any matter that should properly have been listed on Schedule D or Schedule E, particularly any such matter of which the Parties do not have actual knowledge when this Agreement is executed, shall not be deemed dispositive that such matter was not intended to be treated as an Excluded Seller Receivable Item or an Unreimbursed Capital Expense Amount.

(o)The provisions of this Section 5.4 that by their terms are to occur after a Closing will survive the Closing.

Section 1.5Legends. GIPR shall be entitled to place the following legends on the book entries and/or certificates evidencing any shares of the GIPR Preferred Stock comprising the Share Consideration to be received by Modiv pursuant to the transactions contemplated by

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this Agreement and to issue appropriate stop transfer instructions to the transfer agent for the GIPR Preferred Stock:

(i)“THE SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH TRANSFER MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN EXEMPTION PROVIDING THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.”

(ii)“THIS CERTIFICATE AND THE SHARES REPRESENTED HEREBY, ARE ISSUED AND SHALL BE HELD SUBJECT TO ALL OF THE PROVISIONS OF THE ARTICLES OF INCORPORATION, AS AMENDED, OF THE CORPORATION (“CHARTER”) AND THE BYLAWS OF THE CORPORATION AND ANY AMENDMENTS THERETO, INCLUDING CERTAIN RESTRICTIONS ON BENEFICIAL OWNERSHIP AND CONSTRUCTIVE OWNERSHIP AND TRANSFER FOR THE PURPOSE, AMONG OTHERS, OF THE CORPORATION'S MAINTENANCE OF ITS QUALIFICATION AS A REAL ESTATE INVESTMENT TRUST UNDER THE INTERNAL REVENUE CODE. SUBJECT TO CERTAIN FURTHER RESTRICTIONS AND EXCEPT AS EXPRESSLY PROVIDED IN THE CORPORATION'S CHARTER, (I) NO PERSON MAY BENEFICIALLY OWN OR CONSTRUCTIVELY OWN SHARES OF THE CORPORATION'S COMMON STOCK IN EXCESS OF 9.8 PERCENT (IN VALUE OR NUMBER OF SHARES, WHICHEVER IS MORE RESTRICTIVE) OF THE OUTSTANDING SHARES OF COMMON STOCK OF THE CORPORATION UNLESS SUCH PERSON IS AN EXCEPTED HOLDER (IN WHICH CASE THE EXCEPTED HOLDER LIMIT SHALL BE APPLICABLE); (II) NO PERSON MAY BENEFICIALLY OWN OR CONSTRUCTIVELY OWN SHARES OF CAPITAL STOCK OF THE CORPORATION IN EXCESS OF 9.8 PERCENT (IN VALUE) OF THE TOTAL OUTSTANDING SHARES OF CAPITAL STOCK OF THE CORPORATION, UNLESS SUCH PERSON IS AN EXCEPTED HOLDER (IN WHICH CASE THE EXCEPTED HOLDER LIMIT SHALL BE APPLICABLE); (III) NO PERSON MAY BENEFICIALLY OWN OR CONSTRUCTIVELY OWN CAPITAL STOCK THAT WOULD RESULT IN THE CORPORATION BEING "CLOSELY HELD" UNDER SECTION 856(H) OF THE CODE OR OTHERWISE CAUSE THE CORPORATION TO FAIL TO QUALIFY AS A REIT; AND (IV) NO PERSON MAY TRANSFER SHARES OF CAPITAL STOCK IF SUCH TRANSFER WOULD RESULT IN THE CAPITAL STOCK OF THE CORPORATION BEING OWNED BY FEWER THAN 100 PERSONS. ANY PERSON WHO BENEFICIALLY OWNS OR CONSTRUCTIVELY OWNS OR ATTEMPTS TO BENEFICIALLY OWN OR CONSTRUCTIVELY OWN SHARES OF CAPITAL STOCK WHICH CAUSES OR WILL CAUSE A PERSON TO BENEFICIALLY OWN OR CONSTRUCTIVELY OWN SHARES OF CAPITAL STOCK IN EXCESS OR IN VIOLATION OF THE ABOVE LIMITATIONS MUST IMMEDIATELY NOTIFY THE CORPORATION. IF THE RESTRICTIONS ON TRANSFER OR OWNERSHIP PROVIDED IN (I), (II) OR (III) ABOVE ARE VIOLATED, THE SHARES OF CAPITAL STOCK IN EXCESS OR IN VIOLATION OF THE ABOVE LIMITATIONS WILL BE AUTOMATICALLY TRANSFERRED TO A TRUSTEE OF A TRUST FOR THE BENEFIT OF ONE OR MORE CHARITABLE BENEFICIARIES. IN ADDITION, THE CORPORATION MAY REDEEM SHARES UPON THE TERMS AND CONDITIONS SPECIFIED BY THE BOARD OF DIRECTORS IN ITS SOLE DISCRETION IF THE BOARD OF DIRECTORS DETERMINES THAT OWNERSHIP OR A TRANSFER OR OTHER

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EVENT MAY VIOLATE THE RESTRICTIONS DESCRIBED ABOVE. FURTHERMORE, IF THE OWNERSHIP RESTRICTION PROVIDED IN (IV) ABOVE WOULD BE VIOLATED OR UPON THE OCCURRENCE OF CERTAIN EVENTS, ATTEMPTED TRANSFERS IN VIOLATION OF THE RESTRICTIONS DESCRIBED ABOVE MAY BE VOID AB INITIO. ALL CAPITALIZED TERMS IN THIS LEGEND HAVE THE MEANINGS DEFINED IN THE CHARTER OF THE CORPORATION, AS THE SAME MAY BE AMENDED FROM TIME TO TIME, A COPY OF WHICH, INCLUDING THE RESTRICTIONS ON TRANSFER AND OWNERSHIP, WILL BE FURNISHED TO EACH HOLDER OF CAPITAL STOCK OF THE CORPORATION ON REQUEST AND WITHOUT CHARGE. REQUESTS FOR SUCH A COPY MAY BE DIRECTED TO THE SECRETARY OF THE CORPORATION AT ITS PRINCIPAL OFFICE.”

(iii)Any legend required by the securities laws of any state to the extent such laws are applicable to the Share Consideration represented by the certificate, instrument, or book entry so legended.

Once the registration statement relating to the registration of the GIPR Preferred Stock comprising the Share Consideration for resale is declared effective by the SEC pursuant to the terms of the Registration Rights Agreement, or, in the opinion of securities counsel to GIPR, the GIPR Preferred Stock may be sold pursuant to Rule 144 under the Securities Act without volume or manner-of-sale restrictions and without the requirement for GIPR to be in compliance with the current public information requirements pursuant to Rule 144, GIPR agrees to cooperate with Seller, Seller’s counsel and any permitted transferee to remove the restrictive legends relating to the GIPR Preferred Stock, including but not limited to providing any legal opinion that may be required by the transfer agent for the GIPR Preferred Stock.

Section 1.6Closing Costs. At Closing, Seller will pay (a) the costs of releasing all liens and other encumbrances that are required by this Agreement to be released by Seller and of recording such releases; (b) one-half of the fees and costs due Escrow Agent for its sale escrow services under this Agreement; (c) one half of any state, county and local documentary, franchise or transfer taxes assessed on the conveyance by Seller to Buyer of the respective Site based the amount of the Allocated Purchase Price for such Site; (d) intentionally omitted; (e) its own legal fees and fees for advisory services in connection herewith; (f) all costs of ordering the title insurance commitments and the premium for the Title Policies, excluding extended coverage and a GAP endorsement; (g) the cost of recording the Deeds and any other Closing Documents to the extent such costs are customarily paid by sellers in the applicable jurisdiction in which such Site is located and (h) all other costs this Agreement expressly requires Seller to pay. At Closing, Buyer will pay (i) costs of title endorsements to the Title Policies, lender policies or other coverage requested by Buyer (except as set forth in clause (f) above); (ii) one half of any state, county and local documentary, franchise or transfer taxes assessed on the conveyance by Seller to Buyer of the respective Site based on the amount of the Allocated Purchase Price for such Site; (iii) the cost of any new or updated Survey obtained by Buyer; (iv) the cost of recording the Deeds and any other Closing Documents to the extent such costs are customarily paid by buyers in the applicable jurisdiction in which such Site is located; (v) one-half of the fees and costs due Escrow Agent for its sale escrow services under this Agreement; (vi) the cost of any extended title insurance coverage and endorsements and (vii) all other costs this Agreement expressly requires Buyer to pay. Except as otherwise expressly provided for in this Agreement, Seller and Buyer will each be solely responsible for and bear all of their own respective transaction costs and expenses, including without limitation all expenses of legal counsel, accountants, and other advisors and consultants incurred at any time in connection with pursuing or consummating the transactions contemplated by this Agreement. Any other closing costs and charges not specifically designated as the responsibility of either Party in this Agreement will be paid by the Parties with respect to each Site according to the usual and customary allocation/apportionment

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of such costs by Escrow Agent in the jurisdiction in which such Site is located. Buyer and Seller agree that there is little or no Personal Property included within the Property and no portion of the Purchase Price for any Site will be allocated or attributable to Personal Property.

Section 1.7Brokers. Except for Robert W. Baird & Co. as financial advisor to Buyer (whose fee will be paid solely by Buyer), Buyer and Seller each state and confirm to the other that no broker, finder or comparable Person was utilized in arranging or bringing about this transaction and that there are no claims or rights for brokerage fees, commissions, finders’ fees, or comparable fees or compensation due to any other Person in connection with the transactions contemplated by this Agreement. If any other Person asserts a claim for a commission, fee or other compensation based upon any contact, dealings or communication with Buyer or Seller, then the Party through whom such Person makes its claim will indemnify, defend and hold harmless the other Party from such claim and any and all costs, damages, liabilities or expenses (including without limitation, reasonable attorneys’ fees and disbursements) incurred by the other Party in connection with such claim. This Section 5.7 is intended only to set forth the agreements of the Parties and in no event shall any broker or financial advisor be deemed to be a third-party beneficiary of, or have any rights or obligations under, this Agreement. The provisions of this Section will survive the Closing or any earlier termination of this Agreement.

Section 1.8Bulk Sales Laws. The Parties acknowledge their belief that so-called “bulk sales laws”, other sales tax statutes or similar Laws that impose successor liability upon the grantee of real property as to which a prior owner failed to pay income, franchise, sales, gross, receipts or similar taxes should generally not be applicable to the transactions contemplated under this Agreement, except with respect to Sites located in the Commonwealth of Pennsylvania. Notwithstanding the foregoing, if any such “bulk sales laws,” other sales tax statutes or similar Laws are asserted by a Governmental Authority to be applicable to the purchase and sale of any Sites that are subject to the jurisdiction of such Governmental Authority (including, for the avoidance of doubt, Sites located in Pennsylvania), Seller shall indemnify, defend and hold Buyer harmless from and against any Claim relating to the Parties’ alleged failure to comply with such “bulk sales laws” or similar Laws, and if any taxes, interest or penalties are assessed against or imposed upon Buyer by such Governmental Authority as a result of such Governmental Authority’s final determination that the Parties failed to comply with such applicable “bulk sales laws” or similar Laws, then Seller will, within thirty (30) days of receiving a demand therefor from Buyer accompanied by reasonable supporting documentation, pay and indemnify and hold harmless Buyer from and against the assessment or imposition of such taxes, interest or penalties upon Buyer. The provisions of this Section will survive the Closing.

Section 1.9Intentionally Omitted.

Section 1.10Intentionally Omitted.

ARTICLE 6
DEFAULT; REMEDIES

Section 1.1Intentionally Omitted.

Section 1.2Intentionally Omitted.

Section 1.3Limitations on Liability.

(a)In no event will either Party be liable to the other Party for any lost profits or consequential, indirect, special or punitive damages suffered by a Party as a result of any failure, breach or default, either before or after Closing, by the other Party under this Agreement or any

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of the Closing Documents, and each Party expressly waives any right to recover any lost profits or consequential, indirect, special or punitive damages caused to such Party by the other Party.

(b)Notwithstanding anything to the contrary set forth in this Agreement or any of the Closing Documents, (i) neither Party will have any liability whatsoever with respect to any Claims suffered or incurred by, asserted or assessed against, or imposed upon the other Party under or with respect to this Agreement, the Property, or any Closing Document, except to the extent (and only to the extent) that such Claims exceed $50,000.00 (the “Threshold Amount”) and (ii) in no event will the total aggregate liability of either Buyer or any Buyer Parties or Seller or any Seller Parties for any or all Claims with respect to the entirety of the Property and the transactions contemplated by this Agreement and the Closing Documents exceed two percent (2%) of the Purchase Price (the “Maximum Amount”). Neither Party shall make any Claims or deliver any Claim Notice unless such Party in good faith believes the Claims would exceed the Threshold Amount, and neither Party shall seek or receive for such Claims any remedies or awards that individually or in the aggregate would exceed the Maximum Amount.

Section 1.4Survival. The terms, provisions and limitations of this Article 6 will survive Closing or any earlier termination of this Agreement.

ARTICLE 7
MISCELLANEOUS

Section 1.1Notices. Any notices required or permitted to be given under this Agreement must be given in writing and delivered to the recipient’s notice address as provided in this Agreement either (a) in person, (b) by certified mail, postage prepaid, return receipt requested, (c) by a commercial overnight courier that guarantees next Business Day delivery and provides a delivery confirmation to the sender, or (d) by email; provided, that any emailed notice purporting to either terminate this Agreement or provide notice of an asserted failure, breach or default by the other Party must be followed by a hard copy thereof given within two (2) Business Days after and that is delivered in accordance with one of the preceding subsections (a)-(c), unless receipt of such hard copy is expressly waived by a reply email from the recipient Party in response to such notice email. The notice addresses for the Parties are as set forth in the Summary of Terms. Either Party may specify a different or additional domestic (United States) notice address for itself as such Party may from time to time desire by giving notice thereof in writing as provided above to the other Party. If sent by email, a notice shall be deemed given upon the date when such email is transmitted by the sending Party to the receiving Party’s notice address, and shall be deemed received on that same date unless such notice is transmitted by the sender after 5:00 p.m. Central Time, in which case receipt by the receiving Party shall be deemed to be upon the next Business Day. If personally delivered, a notice shall be deemed given and received upon the date of such delivery. If sent by overnight courier service, a notice shall be deemed given upon the date of deposit with such courier and deemed received upon the date of delivery or refusal of delivery at the notice address. If sent by certified mail, a notice shall be deemed given and received on the fourth Business Day after deposit into the US Mail. Notices from or signed by the legal counsel for a Party will be equally effective as a notice from such Party itself.

Section 1.2Entire Agreement. This Agreement, together with the Exhibits and Schedules hereto, contains all agreements, representations, warranties and covenants made by Buyer and Seller and constitutes the entire understanding between the Parties with respect to the purchase and sale of the Property. All Exhibits and Schedules to this Agreement are fully incorporated as a part of this Agreement. Any prior correspondence, memoranda, letters of intent, or other agreements between the Parties, including without limitation any oral or written statements made by the Seller Parties or the Buyer Parties, are not binding on or enforceable against either Party, and are entirely superseded and replaced by this Agreement; provided,

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however, that any prior or non-disclosure agreement, right of entry or confidentiality agreement between Seller or any Seller Party and Buyer or any Buyer Party will remain of full force and effect and will not be superseded by this Agreement.

Section 1.3Confidentiality. The parties hereby agree that all information provided to the other party in connection with this Agreement and the consummation of the transactions contemplated hereby, shall be treated in accordance with the Confidentiality Agreement. Buyer and Seller shall comply with, and shall cause their respective Representatives to comply with, all of their respective obligations under the Confidentiality Agreement, which shall survive the termination of this Agreement in accordance with the terms set forth therein. For clarity, the Parties agree that the foregoing provisions shall not limit or preclude the disclosures regarding this Agreement that are expressly permitted pursuant to Section 7.21 below.

Section 1.4Time. Time is of the essence in the performance of each of the Parties’ respective obligations under this Agreement; provided, however, that if a deadline or date for performance, or for the giving or receipt of a notice, falls on a day that is not a Business Day, such deadline or date shall be deemed extended to the next Business Day.

Section 1.5Attorneys’ Fees. In addition to the remedies provided in Article 6 above, if there is any litigation, action or other proceeding between the Parties (“Action”) to enforce any provisions or rights arising under or in connection with this Agreement or the Closing Documents, the Party that is determined to have substantially prevailed in such Action will also be entitled to an award against the substantially non-prevailing Party for all costs and expenses, including but not limited to reasonable attorneys’ fees, reasonably incurred by the prevailing Party in connection with the prosecution or defense of such Action. The provisions of this Section 7.5 will survive Closing or any earlier termination of this Agreement.

Section 1.6Merger of Obligations. Obligations and other provisions that are expressly provided in this Agreement to survive or be performed after the Closing will not merge with the transfer of legal title to the Property but will remain in effect until fulfilled or expired per their terms; all other obligations of the Parties will merge with and be extinguished upon the transfer of legal title to the Real Property to Buyer at Closing.

Section 1.7Assignment. Subject to the provisions of this Section, Buyer may, by written notice given to Seller not less than ten (10) days prior to the Closing, assign Buyer’s right to receive the conveyance of any Site or Sites under this Agreement to one or more Permitted Assignees. Buyer’s rights and obligations under this Agreement are not otherwise transferable, assignable or delegable, directly or indirectly, without the prior written consent of Seller, which consent may be given or withheld in Seller’s sole and absolute discretion. Any transfer, assignment or delegation (to a Permitted Assignee or otherwise) must be made pursuant to a written agreement meeting the requirements of this Section, which agreement will include (without limitation) provisions stating that (a) the transfer, assignment or delegation does not release, diminish or otherwise affect the obligations of the original Buyer under this Agreement, including the original Buyer’s obligations to pay the Purchase Price at Closing and to indemnify Seller and the other Seller Parties in accordance with the terms hereof, and (b) the Permitted Assignee (or other approved transferee, assignee or delegee) expressly agrees for the benefit of Seller and the Seller Parties that (i) such Person is assuming all obligations of the original Buyer under this Agreement, other than obligations relating solely to any Site(s) not being acquired by such Person (if any); and (ii) the conveyance of the Site or Sites to such Person will be subject to all of the terms, provisions, conditions and limitations set forth in this Agreement to the same extent as if such Person was the original Buyer executing this Agreement. Seller will not be obligated to assume any additional cost, liability or obligation as a result of any transfer, assignment or delegation by Buyer pursuant to this Section (other than to a de minimis extent). Any attempted transfer, assignment or delegation by Buyer in contravention of this Section will

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be null and void. Subject to the limitations described herein, this Agreement will inure to the benefit of and be binding upon the Parties and their respective successors and assigns.

Section 1.8Intentionally left blank.

Section 1.9Governing Law; Jurisdiction and Venue. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF MARYLAND, EXCEPT AS TO REAL PROPERTY MATTERS DIRECTLY RELATED TO A SINGLE INDIVIDUAL SITE AND WHICH MUST NECESSARILY BE GOVERNED BY THE LAWS OF THE STATE IN WHICH THE RESPECTIVE REAL PROPERTY OF SUCH SITE IS LOCATED (the “Property State”), WHICH MATTERS AS TO A SPECIFIC SITE WILL BE GOVERNED BY THE LAW OF THE RESPECTIVE PROPERTY STATE FOR SUCH SITE. For the purposes of any suit, action or proceeding involving this Agreement, each Party expressly submits to the jurisdiction of the Circuit Court for Baltimore City, Maryland, or, if that Court does not have jurisdiction, the United States District Court for the District of Maryland, Baltimore Division, and consents that any order, process, notice of motion or other application to or by any such court or a judge thereof may be served within or without such court’s jurisdiction by registered mail or by personal service, provided that a reasonable time for appearance is allowed, and each Party agrees that such courts will have jurisdiction over any such suit, action or proceeding commenced by any Party. Each Party irrevocably waives any objection that it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Agreement brought in any federal or state court sitting in the State of Maryland and further irrevocably waives any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. The foregoing provisions are not intended to establish the State of Maryland as the exclusive forum for any suit, action or proceeding involving this Agreement, but merely to establish the consent and agreement of each Party to such non-exclusive jurisdiction and venue in the event of any contest or dispute over such matters.

Section 1.10Waiver of Trial by Jury. TO THE FULLEST EXTENT PERMISSIBLE UNDER APPLICABLE LAW, EACH PARTY WAIVES, IRREVOCABLY AND UNCONDITIONALLY, TRIAL BY JURY IN ANY ACTION BROUGHT ON, UNDER OR BY VIRTUE OF OR RELATING IN ANY WAY TO THIS AGREEMENT, ANY OF THE CLOSING DOCUMENTS, THE PROPERTY, OR ANY CLAIMS OR ACTIONS PERTAINING TO ANY OF THE FOREGOING.

/s/ RJP	/s/ DS
Seller Initials	Buyer Initials

Section 1.11Interpretation of Agreement. The Article, Section and other headings of this Agreement are for convenience of reference only and shall not be construed to affect the meaning of any provision contained in this Agreement. Where the context so requires, (a) the use of the singular shall include the plural and vice versa and the use of the masculine shall include the feminine and the neuter; (b) the words “herein”, “hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular Article, Section or other subdivision; and (c) the words “including” and “include” and other words of similar import will be deemed to be followed by the phrase “without limitation.” All monetary amounts expressed in “dollars” or designated by a “$”, “USD” or “US$” symbol or abbreviation refer to a monetary amount payable within the United States in the current lawful, dollar-denominated official currency of the United States of America. The terms and provisions of this Agreement represent the result of negotiations by the Parties, and each Party has been represented by counsel of, and to the extent of, such Party’s own choosing, and neither Party has

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acted under any duress or compulsion, whether legal, economic or otherwise. Consequently, the terms and provisions of this Agreement shall be interpreted and construed in accordance with their usual and customary meanings, and the Parties each waive the application of any rule of law that might otherwise be applicable that ambiguous or conflicting terms or provisions contained in this Agreement shall be interpreted or construed against the Party that prepared (or whose attorney prepared) the executed Agreement or any earlier draft of this Agreement or the provision in question.

Section 1.12Amendments; No Waiver. No modification, waiver, amendment or discharge of or under this Agreement will be valid unless contained in a writing signed by the Parties. No waiver by Seller or Buyer of a breach of any of the terms, covenants or conditions of this Agreement will be construed or held to be a waiver of any succeeding or preceding breach of the same or any other term, covenant or condition contained in this Agreement.

Section 1.13No Recording. Neither this Agreement nor any memorandum or short form thereof may be recorded by Buyer or any Buyer Party. Any such recording of this Agreement or a memorandum or short form hereof by Buyer or any Buyer Party will constitute an immediate Buyer Default under this Agreement, and in addition to Seller’s other remedies therefor, Seller may conclusively establish the complete release and removal of such recorded document simply by recording a copy of this provision of this Agreement.

Section 1.14No Third Party Beneficiary. Except as may be expressly stated herein, the provisions of this Agreement do not and are not intended to benefit any third parties.

Section 1.15Severability. If, in any action to enforce this Agreement, any one or more of the covenants, agreements, conditions, provisions, or terms of this Agreement is, in any respect or to any extent (in whole or in part), held to be invalid, illegal or unenforceable for any reason, all remaining portions thereof that are not so held, and all other covenants, agreements, conditions, provisions, and terms of this Agreement, will not be affected by such holding, but will remain valid and in force to the fullest extent permitted by law.

Section 1.16Drafts Not an Offer. The submission of a draft of this Agreement by one Party to another is not intended by either Party to be an offer to enter into a legally binding contract with respect to the purchase and sale of the Property. The Parties will not be legally bound in any manner with respect to a purchase and sale of the Property unless and until each of Seller and Buyer have duly executed this Agreement and the Parties have delivered that fully executed Agreement to Escrow Agent.

Section 1.17Consent Standards. Unless expressly provided otherwise in this Agreement, any consent, determination, election or approval required to be obtained, or permitted to be given, by or on behalf of either Party under this Agreement will be given, withheld or made (as the case may be) by such Party in the exercise of such Party’s commercially reasonable discretion and within a commercially reasonable period of time.

Section 1.18Counterparts; Signatures. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which taken together will constitute one and the same Agreement. Signatures to this Agreement sent by email (including “.pdf”), or delivered by other electronic means will be valid and effective to bind the Party so signing.

Section 1.19Exculpation. In no event whatsoever will any Seller Parties or Buyer Parties have any recourse with respect to this Agreement or any of the Closing Documents against, and no liability will be asserted with respect to this Agreement or any Closing Documents against, any of Seller’s or Buyer’s respective members, partners, shareholders,

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trustees, employees, agents, directors, officers, or other owners, principals, representatives, or Affiliates, or the respective constituents thereof (collectively, the “Exculpated Persons”), and in no event whatsoever will any of the Exculpated Persons have or be deemed to have undertaken or assumed any personal liability for any obligations entered into by Seller or Buyer, as applicable, under this Agreement or any of the Closing Documents, and regardless of whether any such Persons negotiated or executed this Agreement or any of the Closing Documents on behalf of either Seller or Buyer, as applicable.

Section 1.20Allocation of Post-Closing Liability. Subject to any obligations and liabilities that this Agreement may expressly allocate to the contrary, the Parties agree that, as between Buyer and Seller, after the Closing (a) Seller (rather than Buyer) will remain liable for obligations asserted by or owed to third parties with respect to events that occurred during, and undertakings, acts, and omissions of Seller during, Seller’s ownership or operation of such Site prior to the Closing, and (b) Buyer (rather than Seller) will be liable for obligations asserted by or owed to third parties with respect to events that occur during, and undertakings, acts or omissions of Buyer during, Buyer’s ownership or operation of such Site on and after such Closing. The Parties expressly agree that the provisions of this Section will not apply to allocate to Seller (i) any Claim asserted by or on behalf of any Tenant after Closing to the extent such Claim relates to or arises from the physical or environmental condition of or about any Site, regardless of whether such condition is determined to have existed prior to Closing, except for any physical or environmental condition that arises from or is caused by the negligence or intentional misconduct of Seller which occurred prior to the Effective Date and was unknown to Buyer; provided, however, that the term “negligence” shall not include negligence imputed as a matter of Law to Seller solely by reason of Seller’s interest in the Property or Seller’s failure to act in respect of matters which are or were the obligation of the Tenant under the Lease, or (ii) any Claim asserted by a Tenant after Closing that was not expressly asserted or reserved in the Estoppel Certificate delivered by such Tenant for the Closing pursuant to Section 5.2 above. The Parties will each promptly advise the other of any such matters asserted against one Party that such Party reasonably believes should be the responsibility of the other Party, and the non-responsible Party will reasonably cooperate with the responsible Party (at no material expense to the non-responsible Party) to promptly address any such matters that may be so asserted. The provisions of this Section are intended solely to apply between Buyer and Seller and do not and are not intended to inure to or benefit any third parties. The provisions of this Section shall survive the Closing.

Section 1.21Public Disclosures. Prior to any issuance of any securities filing, press release, investor presentation or other public statement with respect to the transactions contemplated by this Agreement or the other Party thereto, each Party will, and will cause its Affiliates and external manager to, use reasonable efforts to give a copy of the proposed Public Disclosure to the other Party for its review and comment. If no objection or comments are received from the non-disclosing Party within twenty-four (24) hours after the non-disclosing Party receives such proposed Public Disclosure for review, consent to such Public Disclosure shall be deemed given by the reviewing Party. The disclosing Party shall review and use reasonable efforts to address any comments received by the non-disclosing Party prior to making such Public Disclosure. Such public disclosure shall not disparage or make any statements that could reasonably be expected to harm the reputation or business of the Property, any Site, the operation, management or leasing of the Property or any Site, the other Party; its Affiliates or its or their respective directors, managers, officers, employees, agents and partners; provided that the foregoing shall not affect the rights or obligations of such Party to testify truthfully in any suite, action or proceeding, including truthful statements made in a dispute, suit action or proceeding arising under or in connection with this Agreement or any of the transactions contemplated hereby, or make truthful statements that are reasonably necessary to comply with applicable law. The provisions of this Section shall survive the Closing or any earlier termination of this Agreement.

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Section 1.22Non-Solicitation. Buyer agrees, on behalf of itself and all Buyer Parties, that, for a period commencing on the date hereof and concluding on the first anniversary of the Closing Date, neither Buyer nor any Buyer Party shall directly or indirectly, solicit or cause to be solicited for purposes of employment, offer to hire or engage as a consultant, hire or engage as a consultant any person that is employed by Seller or any Seller Party when such person was first introduced to Buyer or any Buyer Party in connection with the transaction contemplated by this Agreement. Nothing in this Section 7.22 shall be deemed to prohibit (a) any general solicitation for employment not specifically directed at employees of Seller or any Seller Party, including but not limited to advertisements and searches conducted by a headhunter agency in which neither Buyer nor any Buyer Party pre-approved the contact list, or any hiring or employment resulting from such solicitation (b) the employment by Buyer or any Buyer Party of any person who has been terminated by Seller or any Seller Party prior to the commencement of employment discussions between Buyer or any Buyer Party and such person or (c) the employment by Buyer or any Buyer Party of any individual who initiated contact with Buyer or any Buyer Party regarding such employment. The provisions of this Section 7.22 shall survive Closing.

Section 1.23State-Specific Provisions. In order to give effect to certain provisions of state law that may be applicable to certain Sites, the provisions contained in this Section 7.23 are hereby incorporated into this Agreement and made a part hereof, but solely as regards, and solely applicable to, the Sites located in the respective State:

(a)As to Sites located in Florida:

(i)Seller hereby notifies Buyer that Radon is a naturally occurring radioactive gas that, when it has accumulated in a building in sufficient quantities, may present health risks to persons who are exposed to it over time. Levels of radon that exceed federal and state guidelines have been found in buildings in Florida. Additional information regarding radon testing may be obtained from your county health department. The foregoing notification is provided pursuant to Section 404.056(6) of the Florida Statutes.

(b)As to Sites located in Texas:

(i)The Parties acknowledge and agree that the ninety (90) day period establishing the Claim Bar Date as provided in Section 4.5 above is shorter than the time period set forth in Tex. Civ. Prac. & Rem. Code Ann. § 16.070 (Vernon 2012). To the fullest extent permitted by law, each Party relinquishes its rights under Section 16.070. In the event the ninety (90) day time period establishing the Claim Bar Date is held invalid or unenforceable by a court of competent jurisdiction, the Parties agree that: (x) the Claim Bar Date shall instead be the date that is two (2) years and one (1) day after the date of Closing; and (y) such holding shall not affect any other covenants, agreements, conditions, provisions or terms of Section 4.5 or this Agreement.

(c)As to Sites located in California:

(i)Section 1542 Waiver. As a further part of the provisions of Section 2.5, but not as a limitation thereon, Buyer hereby agrees, represents and warrants that the matters released therein are not limited to matters which are known or disclosed. In this connection and to the extent permitted by law, Buyer hereby agrees, represents and warrants that Buyer realizes and acknowledges that factual matters unknown to it may have given or may hereafter give rise to causes of action, claims, demands, debts, controversies, damages, costs, losses, liabilities and expenses which are presently unknown, unanticipated and unsuspected, and Buyer further agrees, represents and warrants that the waivers and releases therein have been negotiated and agreed upon in

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light of that realization and that, except as otherwise expressly provided in this Agreement, Buyer nevertheless hereby intends to release, discharge and acquit Seller from any such unknown causes of action, claims, demands, debts, controversies, damages, costs, losses, liabilities and expenses which might in any way be included in the waivers and matters released as set forth in Sections 2.4 and 2.5 and this 7.23(c)(i) of this Agreement (the “Subject Provisions”). Buyer expressly waives any and all rights conferred upon it by the provisions of California Civil Code Section 1542, which provides:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE AND THAT, IF KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY.

The Subject Provisions are material and included as a material portion of the consideration given to Seller by Buyer in exchange for Seller's performance under this Agreement. Seller has given Buyer material concessions regarding this transaction in exchange for Buyer agreeing to the Subject Provisions. The Subject Provisions, including without limitation the release contained therein, shall survive the Closing and the delivery and recording of the Deed in perpetuity. Buyer has initialed this Section below to further indicate Buyer’s awareness and acceptance of each and every provision of the Subject Provisions. Notwithstanding the foregoing, the release provided for in this Section 7.23(c)(i) shall be effective as of the Closing only, and shall not be deemed to release Seller from (i) its actual fraud (ii) any of Seller’s covenants, representations and warranties set forth in this Agreement or in the documents and instruments delivered by Seller at the Closing which by their terms expressly survive the Closing or (iii) third party contractual claims relating solely to the period of time prior to the Closing and any claim for personal injury or property damage directly caused by Seller or any Affiliate or agent thereof arising prior to the Closing.

_________/s/ DS_______________
Buyer's Initials

(ii)Natural Hazard Disclosure. Seller may be required by California law to disclose if any of the Property lies within the following natural hazard areas or zones: (a) a special flood hazard area designated by the Federal Emergency Management Agency; (b) an area of potential flooding; (c) a very high fire hazard severity zone; (d) a wildland area that may contain substantial forest fire risks and hazards; (e) an earthquake fault or special studies zone; or (f) a seismic hazard zone. Seller shall employ Escrow Agent (or an affiliate thereof) or another third party selected by Seller (the “Natural Hazard Expert”) to examine the maps and other information specifically made available to the public by government agencies and provide a natural hazard disclosure statement prepared by the Natural Hazard Expert (the “NHD Statement”) and the report of the Natural Hazard Expert (the “NHD Report”) containing the results of its examination to Buyer in writing prior to the Closing Date and Buyer has signed and returned a copy of the NHD Statement to Seller. Buyer acknowledges and agrees that Buyer’s receipt of the NHD Statement and NHD Report as aforesaid fully and completely discharges Seller from its disclosure obligations referred to herein, and, for the purposes of this Agreement, the provisions of the Civil Code Section 1103.4 regarding the non-liability of Seller for errors and/or omissions not within its personal knowledge shall be deemed to apply, and the Natural Hazard Expert shall be deemed to be an expert dealing with matters within

44

the scope of its expertise with respect to the examination and written report regarding the natural hazards referred to above. Buyer further acknowledges and agrees that the matters set forth in the NHD Statement or NHD Report may change on or prior to the Closing Date and that Seller has no obligation to update, modify, or supplement the NHD Statement or NHD Report.

_________/s/ DS_____________

Buyer’s Initials

(iii)Special Taxes Disclosure. Seller may be required by California law to disclose if any special Taxes, improvement bonds, assessments, or other such Taxes or assessments (collectively, “Special Taxes”) affect the Property. Seller shall employ Escrow Agent (or an affiliate thereof) or another third party selected by Seller (the “Special Tax Expert”) to prepare or obtain appropriate disclosure reports, Notice of Special Tax documents, or other documentation (the “Special Tax Disclosures”) based upon information made available to the public by government agencies regarding Special Taxes affecting the Property. Buyer acknowledges and agrees that Seller has delivered the Special Tax Disclosures to Buyer in writing prior to the Effective Date of this Agreement, and that Buyer has signed and returned a copy of each “Notice of Special Tax” to Seller. Buyer acknowledges and agrees that the Special Tax Disclosures previously delivered to Buyer as aforesaid fully and completely discharge Seller from any and all disclosure obligations relating to Special Taxes. Buyer further acknowledges and agrees that the matters set forth in the Special Tax Disclosures may change on or prior to the Closing and that Seller has no obligation to update, modify, or supplement the Special Tax Disclosures.

_________/s/ _DS____________

Buyer’s Initials

(iv)The provisions of Section 7.23(c)(iii) of this Agreement will survive the Closing and the delivery and recording of the Deed in perpetuity. Buyer has initialed these Sections above to further indicate Buyer’s awareness and acceptance of each and every provision of each such Section of this Agreement.

(v)The following provisions are added to the end of Section 6.2 above:

THE AMOUNT PAID TO AND RETAINED BY SELLER AS LIQUIDATED DAMAGES PURSUANT TO THE FOREGOING PROVISIONS SHALL BE SELLER’S SOLE AND EXCLUSIVE REMEDY IF BUYER FAILS TO CLOSE THE PURCHASE OF THE PROPERTY. THE PARTIES HERETO EXPRESSLY AGREE AND ACKNOWLEDGE THAT SELLER’S ACTUAL DAMAGES IN THE EVENT OF A DEFAULT BY BUYER WOULD BE EXTREMELY DIFFICULT OR IMPRACTICABLE TO ASCERTAIN AND THAT THE AMOUNT OF THE DEPOSIT REPRESENTS THE PARTIES’ REASONABLE ESTIMATE OF SUCH DAMAGES. THE PAYMENT OF SUCH AMOUNT AS LIQUIDATED DAMAGES IS NOT INTENDED AS A FORFEITURE OR PENALTY WITHIN THE MEANING OF CALIFORNIA CIVIL CODE SECTIONS 3275 OR 3369, BUT IS INTENDED TO CONSTITUTE LIQUIDATED DAMAGES TO SELLER PURSUANT TO CALIFORNIA CIVIL CODE SECTIONS 1671, 1676 AND 1677. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS SECTION 6.2, SELLER AND BUYER AGREE THAT THIS LIQUIDATED DAMAGES PROVISION IS NOT INTENDED AND SHOULD NOT BE DEEMED OR CONSTRUED TO LIMIT IN ANY WAY BUYER’S INDEMNITY OBLIGATIONS UNDER THIS AGREEMENT.

45

           /s/ RJP /s/ DS

Seller’s Initials Buyer’s Initials

(d)As to Sites located in the State of Pennsylvania, Section 7.7 is hereby omitted in its entirety and replaced with the following:

Subject to the provisions of this Section, Buyer may, by written notice given to Seller not less than fifteen (15) Business Days prior to the subject Closing, assign Buyer’s right to receive the conveyance of any Site or Sites under this Agreement to one or more Permitted Assignees. Buyer’s rights and obligations under this Agreement are not otherwise transferable, assignable or delegable, directly or indirectly, without the prior written consent of Seller, which consent may be given or withheld in Seller’s sole and absolute discretion. Any transfer, assignment or delegation (to a Permitted Assignee or otherwise) must be made pursuant to a written agreement meeting the requirements of this Section, which agreement will include (without limitation) provisions stating that (a) the transfer, assignment or delegation does not release, diminish or otherwise affect the obligations of the original Buyer under this Agreement, including the original Buyer’s obligations to pay the Purchase Price at Closing and to indemnify Seller and the other Seller Parties in accordance with the terms hereof; and (b) the Permitted Assignee (or other approved transferee, assignee or delegee) expressly agrees for the benefit of Seller and the Seller Parties that (i) such Person is assuming all obligations of the original Buyer under this Agreement, other than obligations relating solely to any Site(s) not being acquired by such Person (if any); and (ii) the conveyance of the Site or Sites to such Person will be subject to all of the terms, provisions, conditions and limitations set forth in this Agreement to the same extent as if such Person was the original Buyer executing this Agreement. Notwithstanding anything contained in this Agreement to the contrary, Seller agrees that Buyer is entering into this Agreement with respect to those Sites located in the Commonwealth of Pennsylvania for the benefit of a certain to-be-named nominee (which nominee shall be an affiliate of Buyer), and that at the Closing, Buyer intends to assign to such nominee, for no additional consideration, all of its right, title and interest in this Agreement related to such Sites located in Pennsylvania and Buyer has no intent to obtain legal or equitable title to such Sites. The nominee shall be formed and disclosed to the Seller prior to Closing and will purchase the applicable Sites solely from its own funds. To the extent any transfer tax or similar tax is owed in connection with the assignment of this Agreement to such nominee, such tax shall be the sole at the sole cost and expense of Buyer. In such instance, Buyer shall have the right to partially assign this Agreement without Seller’s prior written consent. Upon such assignment of this Agreement to said nominee and the assumption by said nominee of Buyer’s obligations hereunder with respect to the Sites located in Pennsylvania, (i) Buyer shall be released and have no liability under this Agreement, and (ii) the term “Buyer” as used in this Agreement will be deemed to be said nominee. Subject to the limitations described herein, this Agreement will inure to the benefit of and be binding upon the Parties and their respective successors and assigns.

(e)As to Sites located in Georgia, Seller shall provide the following documents pursuant to Section 5.3:

(i)A sworn certificate that Seller is a resident of Georgia (“Affidavit of Seller’s Residence”), and this sale or transfer is not subject to withholding tax pursuant to O.C.G.A § 48-7-128, which certificate may be disclosed to the Commission of Revenue of the State of Georgia.

(ii)The Escrow Agent must file a form PT-61 electronically with the Georgia Superior Court Clerk’s Cooperative Authority upon filing of the Limited Warranty Deed.

46

(iii)To the extent Seller is an out-of-state domestic entity, and does not provide the Affidavit of Seller’s Residence, the Seller shall withhold 3% of the purchase price as withholding tax and remit the same to the Commission of the Georgia Department of Revenue.

(iv)Pursuant to O.C.G.A § 44-14-602, Seller shall provide a Broker’s lien waiver at Closing.

(f)As to Sites located in Maine:

(i)The term Environmental Laws shall include, without limitation, the State of Maine’s Hazardous Waste, Septage and Solid Waste Management Act, as amended, (38 M.R.S.A. §§ 1301-1319-Y) and the regulations promulgated thereunder, and the Maine Uncontrolled Hazardous Substance Sites Law, as amended (38 M.R.S.A. §§1361-1371);

(ii)Seller will execute and deliver to Buyer a notice pursuant to 38 M.R.S. § 563 with respect to underground oil storage facilities or above-ground oil storage facilities with underground piping on the Premises;

(iii)In addition to the representations of Seller contained in Section 4.1, the Seller further represents that:

(A)To Seller’s knowledge and except as otherwise set forth in the Seller’s Diligence Materials, any Site within the State of Maine is not located in whole or in part within 250 feet of the normal high-water line of a great pond, river, saltwater body or coastal wetland and each Site within the State of Maine is serviced by public water and public sewer services.

(B)To Seller’s knowledge and except as otherwise set forth in Seller’s Diligence Materials, any Site within the State of Maine is not subject to any special real estate tax classification, including tree growth, farmland, or open space, or to any tax increment financing arrangement or other arrangement for payments in lieu of taxes.

Section 1.24Cooperation for SEC Filings.

The Seller understands and acknowledges that GIPR will be required to file audited financial statements accompanied by pro forma financial statements presented in accordance with Article 11 of Regulation S-X under the Securities Act (“Pro Formas”) related to each acquired Site the (collectively, the “Rule 3-14 Audit”) with the SEC on the earlier of (i) the filing of a registration statement under the Securities Act pursuant to this Agreement, the Articles Supplementary or the Registration Rights Agreement and (ii) a date within seventy-one (71) days of the date a current report on Form 8-K for the Closing is filed with the SEC (the “Rule 3-14 Audit”). Seller shall promptly provide GIPR with all Records (as hereinafter defined) as reasonably requested by GIPR in order to permit GIPR to prepare and timely file (i) the Rule 3-14 Audit and (ii) any registration statement contemplated by this Agreement (including the Registration Statement), the Articles Supplementary or the Registration Rights Agreement. Seller agrees to use commercially reasonable and good faith efforts to provide such Records at least thirty (30) days prior to the filing deadline for the respective Rule 3-14 Audit; provided, that if any request is made within the foregoing thirty (30) day period, Seller shall use commercially reasonable and good faith efforts to promptly provide the applicable Records within three (3) Business Days of such request. As used in this Section 7.24, “Records” shall mean the financial statements, including balance sheets, income statements, stockholders’ equity statements and

47

cash flow statements and related notes prepared in accordance with United States generally accepted accounting standards, and any and all books, records, correspondence, financial data, bank statements, Leases, delinquency reports and all other documents and matters in the possession of each such Selling Entity or its agents and relating to receipts, expenditures, contributions and distributions reasonably necessary to complete (i) an audit pertaining to such Selling Entity’s Site for the most recent full calendar year and the interim period of the current calendar year and (ii) Pro Formas pertaining to such Selling Entity’s Site for the most recent full calendar year and the interim period of the current calendar year.

[SIGNATURES COMMENCE ON THE NEXT PAGE]

48

IN WITNESS WHEREOF, Buyer and Seller have caused this Agreement to be executed and delivered by their duly authorized representatives as of the Effective Date written above.

BUYER:
Generation Income Properties, L.P., a Delaware limited partnership By: Generation Income Properties, Inc., its Sole General Partner
By:	/s/ DAVID SOBELMAN
Name:	David Sobelman
Title:	Chief Executive Officer

Generation Income Properties, Inc.,

a Maryland corporation

By:	/s/ DAVID SOBELMAN
Name:	David Sobelman
Title:	Chief Executive Officer

[SIGNATURES CONTINUE ON THE NEXT PAGE]

[BUYER SIGNATURE PAGE]

IN WITNESS WHEREOF, Buyer and Seller have caused this Agreement to be executed and delivered by their duly authorized representatives as of the Effective Date written above.

SELLER:
Modiv Inc., a Maryland Corporation By: /s/ RAYMOND J. PACINI Name: Raymond J. Pacini Title: Chief Financial Officer ALL THE ENTITIES LISTED BELOW, each, a California or Nevada limited liability company RU WAG Santa Maria, LLC RU DG Big Spring, LLC RU DT Morrow GA, LLC RU Pre K San Antonio, LLC RU GSA Vacaville, LLC RU DG Bakersfield, LLC RU Exp Maitland FL, LLC RU DG OHPAME6, LLC
By:	Modiv Operating Partnership, LP, a Delaware limited partnership, its sole Member By: Modiv Inc., a Maryland corporation, its general partner By: /s/ RAYMOND J. PACINI Name: Raymond J. Pacini Title: Chief Financial Officer

[SELLER SIGNATURE PAGE]

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Aaron S. Halfacre, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of the registrant, Modiv Industrial, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 13, 2023	/s/ AARON S. HALFACRE
	Name:	Aaron S. Halfacre
	Title:	Chief Executive Officer
		(Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Raymond J. Pacini, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of the registrant, Modiv Industrial, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 13, 2023	/s/ RAYMOND J. PACINI
	Name:	Raymond J. Pacini
	Title:	Chief Financial Officer
		(Principal Financial Officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATIONS OF PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER

PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(18 U.S.C. § 1350)

Each of the undersigned officers of Modiv Industrial, Inc. (the “Company”) hereby certifies, for purposes of Section 1350 of Chapter 63 of Title 18 of the United States Code, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to his knowledge:

(i)the accompanying Quarterly Report on Form 10-Q of the Company for the quarter ended September 30, 2023 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended, and

(ii)the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

	/s/ AARON S. HALFACRE
	Name:	Aaron S. Halfacre
	Title:	Chief Executive Officer
		(Principal Executive Officer)
	/s/ RAYMOND J. PACINI
	Name:	Raymond J. Pacini
Date: November 13, 2023	Title:	Chief Financial Officer
		(Principal Financial Officer)

The foregoing certification is being furnished with the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2023 pursuant to 18 U.S.C. § 1350. It is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and it is not to be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing, except to the extent the Company specifically incorporates this certification by reference.

XML

Cover Page - shares	9 Months Ended
	Sep. 30, 2023	Oct. 31, 2023
Document Information [Line Items]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2023
Document Transition Report	false
Entity File Number	001-40814
Entity Registrant Name	MODIV INDUSTRIAL, INC.
Entity Incorporation, State or Country Code	MD
Entity Tax Identification Number	47-4156046
Entity Address, Address Line One	200 S. Virginia Street, Suite 800
Entity Address, City or Town	Reno
Entity Address, State or Province	NV
Entity Address, Postal Zip Code	89501
City Area Code	888
Local Phone Number	686-6348
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		7,590,138
Amendment Flag	false
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q3
Entity Central Index Key	0001645873
Current Fiscal Year End Date	--12-31
Common Stock
Document Information [Line Items]
Title of 12(b) Security	Class C Common Stock, $0.001 par value per share
Trading Symbol	MDV
Security Exchange Name	NYSE
Series A Cumulative Redeemable Preferred Stock
Document Information [Line Items]
Title of 12(b) Security	7.375% Series A Cumulative Redeemable Perpetual Preferred Stock, $0.001 par value per share
Trading Symbol	MDV.PA
Security Exchange Name	NYSE

XML

Condensed Consolidated Balance Sheets - USD ($)	Sep. 30, 2023	Dec. 31, 2022
Real estate investments:
Land	$ 106,263,557	$ 103,657,237
Buildings and improvements	402,036,084	329,867,099
Equipment	4,429,000	4,429,000
Tenant origination and absorption costs	15,929,385	19,499,749
Total investments in real estate property	528,658,026	457,453,085
Accumulated depreciation and amortization	(47,587,670)	(46,752,322)
Total real estate investments, net, excluding unconsolidated investment in real estate property and real estate investments held for sale, net	481,070,356	410,700,763
Unconsolidated investment in a real estate property	10,035,805	10,007,420
Total real estate investments, net, excluding real estate investments held for sale, net	491,106,161	420,708,183
Real estate investments held for sale, net	8,628,186	5,255,725
Total real estate investments, net	499,734,347	425,963,908
Cash and cash equivalents	5,641,610	8,608,649
Tenant receivables	11,211,058	7,263,202
Above-market lease intangibles, net	1,332,458	1,850,756
Prepaid expenses and other assets	4,881,383	6,100,937
Investment in preferred stock	10,060,000	0
Interest rate swap derivatives	6,156,179	4,629,702
Other assets related to real estate investments held for sale	46,158	12,765
Total assets	539,063,193	454,429,919
Liabilities and Equity
Mortgage notes payable, net	34,118,748	44,435,556
Credit facility revolver	0	3,000,000
Credit facility term loan, net	248,385,927	148,018,164
Accounts payable, accrued and other liabilities	8,893,630	7,649,806
Below-market lease intangibles, net	9,098,703	9,675,686
Interest rate swap derivatives	0	498,866
Liabilities related to real estate investments held for sale	162,349	117,881
Total liabilities	300,659,357	213,395,959
Commitments and contingencies
Additional paid-in-capital	289,837,352	278,339,020
Treasury stock, at cost, 343,510 shares and 250,153 shares held as of September 30, 2023 and December 31, 2022, respectively	(5,290,780)	(4,161,618)
Cumulative distributions and net losses	(132,524,459)	(117,938,876)
Accumulated other comprehensive income	2,871,866	3,502,616
Total Modiv Industrial, Inc. equity	154,903,900	159,750,904
Noncontrolling interests in the Operating Partnership	83,499,936	81,283,056
Total equity	238,403,836	241,033,960
Total liabilities and equity	539,063,193	454,429,919
Series A cumulative redeemable perpetual preferred stock
Liabilities and Equity
7.375% Series A cumulative redeemable perpetual preferred stock, $0.001 par value, 2,000,000 shares authorized, issued and outstanding as of September 30, 2023 and December 31, 2022	2,000	2,000
Class C common stock
Liabilities and Equity
Common stock, value outstanding	7,921	7,762
Class S common stock
Liabilities and Equity
Common stock, value outstanding	$ 0	$ 0

XML

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	9 Months Ended	12 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
Treasury Stock
Treasury stock (in shares)	343,510	250,153
Series A cumulative redeemable perpetual preferred stock
Preferred Stock
Preferred stock, dividend rate, percentage	7.375%	7.375%
Preferred stock, par value (in usd per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized (in shares)	2,000,000	2,000,000
Preferred stock, shares outstanding (in shares)	2,000,000	2,000,000
Preferred stock, shares issued (in shares)	2,000,000	2,000,000
Class C common stock
Common Stock
Common stock, par value (in usd per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	300,000,000	300,000,000
Common stock, shares issued (in shares)	7,920,926	7,762,506
Common stock, shares outstanding (in shares)	7,577,416	7,512,353
Class S common stock
Common Stock
Common stock, par value (in usd per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	100,000,000	100,000,000
Common stock, shares issued (in shares)	0	0
Common stock, shares outstanding (in shares)	0	0

XML

Condensed Consolidated Statements of Operations - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Income Statement [Abstract]
Rental income	$ 12,500,338	$ 10,303,402	$ 34,648,083	$ 30,017,493
Operating expenses:
General and administrative	1,735,104	1,838,388	5,240,935	5,559,753
Stock compensation expense	8,469,867	549,240	9,790,206	1,740,852
Depreciation and amortization	4,175,209	3,598,592	11,403,603	10,581,765
Property expenses	1,195,224	1,415,621	4,429,936	5,009,701
Impairment of real estate investment property	0	0	3,499,438	0
Impairment of goodwill	0	0	0	17,320,857
Total operating expenses	15,575,404	7,401,841	34,364,118	40,212,928
(Loss) gain on sale of real estate investments	(1,708,801)	3,932,028	(1,708,801)	11,527,185
Operating (loss) income	(4,783,867)	6,833,589	(1,424,836)	1,331,750
Other income (expense):
Interest income	26,386	1,665	296,921	16,863
Dividend income	190,000	0	190,000	0
Income from unconsolidated investment in a real estate property	79,164	64,358	207,506	226,690
Interest expense, net of derivative settlements and unrealized gain on interest rate swaps	(2,922,918)	(2,514,838)	(6,761,779)	(5,280,167)
Increase in fair value of investment in preferred stock	440,000	0	440,000	0
Loss on early extinguishment of debt	0	0	0	(1,725,318)
Other	65,993	65,993	197,978	198,129
Other expense, net	(2,121,375)	(2,382,822)	(5,429,374)	(6,563,803)
Net (loss) income	(6,905,242)	4,450,767	(6,854,210)	(5,232,053)
Less: net loss (income) attributable to noncontrolling interest in Operating Partnership	1,368,896	(528,540)	1,535,452	1,180,275
Net (loss) income attributable to Modiv Industrial, Inc.	(5,536,346)	3,922,227	(5,318,758)	(4,051,778)
Preferred stock dividends	(921,875)	(921,875)	(2,765,625)	(2,765,625)
Net (loss) income attributable to common stockholders	$ (6,458,221)	$ 3,000,352	$ (8,084,383)	$ (6,817,403)
Net (loss) income per share attributable to common stockholders:
Net income (loss) per share attributable to common stockholders, basic (in usd per share)	$ (0.86)	$ 0.40	$ (1.07)	$ (0.91)
Net income (loss) per share attributable to common stockholders, diluted (in usd per share)	$ (0.86)	$ 0.35	$ (1.07)	$ (0.91)
Weighted-average number of common shares outstanding:
Weighted-average number of common shares outstanding, basic (in shares)	7,548,052	7,449,968	7,537,505	7,486,945
Weighted-average number of common shares outstanding, diluted (in shares)	7,548,052	10,180,543	7,537,505	7,486,945
Distributions declared per common share (in usd per share)	$ 0.2875	$ 0.2875	$ 0.8625	$ 0.9625

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Condensed Consolidated Statements of Comprehensive (Loss) Income - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Statement of Comprehensive Income [Abstract]
Net (loss) income	$ (6,905,242)	$ 4,450,767	$ (6,854,210)	$ (5,232,053)
Other comprehensive loss: cash flow hedge adjustments
Add: Amortization of unrealized holding gain on interest rate swap	253,092	4,255,906	756,496	4,255,906
Comprehensive (loss) income	(6,652,150)	8,706,673	(6,097,714)	(976,147)
Net loss (income) attributable to noncontrolling interest in Operating Partnership	1,368,896	(528,540)	1,535,452	1,180,275
Other comprehensive loss attributable to noncontrolling interest in Operating Partnership: cash flow hedge adjustments
Add: Amortization of unrealized holding gain on interest rate swap	44,264	(637,429)	125,746	(637,429)
Comprehensive loss (income) attributable to noncontrolling interest in Operating Partnership	1,413,160	(1,165,969)	1,661,198	542,846
Comprehensive (loss) income attributable to Modiv Industrial, Inc.	$ (5,238,990)	$ 7,540,704	$ (4,436,516)	$ (433,301)

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Condensed Consolidated Statements of Equity - USD ($)	Total	Class C common stock	Operating Partnership Units - Class C	Total Modiv Industrial, Inc. Equity	Preferred Stock	Common Stock Class C common stock	Additional Paid-in Capital	Treasury Stock	Cumulative Distributions and Net (Losses) Income	Accumulated Other Comprehensive Income (Loss)	Noncontrolling Interests in the Operating Partnership	Noncontrolling Interests in the Operating Partnership Operating Partnership Units - Class C
Beginning balance (in shares) at Dec. 31, 2021					2,000,000
Beginning balance at Dec. 31, 2021	$ 222,429,892			$ 171,826,892	$ 2,000	$ 7,491	$ 273,441,831	$ 0	$ (101,624,430)	$ 0	$ 50,603,000
Beginning balance (in shares) at Dec. 31, 2021						7,490,404
Beginning balance (in shares) at Dec. 31, 2021								0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock -distribution reinvestments (in shares)						152,606
Issuance of common stock -distribution reinvestments	2,866,846		$ 32,809,551	2,866,846		$ 153	2,866,693					$ 32,809,551
Listed offering of common stock, net (in shares)						40,000
Listed offering of common stock, net	114,500			114,500		$ 40	114,460
Stock compensation expense (in shares)						14,916
Stock compensation expense	247,500			247,500		$ 14	247,486
OP Units compensation expense	1,493,352			1,493,352			1,493,352
Offering costs	(1,084,748)			(1,084,748)			(1,084,748)
Repurchase of common stock (in shares)								(233,145)
Repurchase of common stock	(3,957,752)			(3,957,752)				$ (3,957,752)
Dividends declared, preferred stock	(2,765,625)			(2,765,625)					(2,765,625)
Distributions declared, common stock	(7,192,641)			(7,192,641)					(7,192,641)
Distributions declared, Class C OP Units			(1,131,903)									(1,131,902)
Net (loss) income	(5,232,053)			(4,051,778)					(4,051,778)		(1,180,275)
Other comprehensive income	4,255,906			3,618,477						3,618,477	637,429
Ending balance (in shares) at Sep. 30, 2022					2,000,000
Ending balance at Sep. 30, 2022	242,852,826			161,115,023	$ 2,000	$ 7,698	277,079,074	$ (3,957,752)	(115,634,474)	3,618,477	81,737,803
Ending balance (in shares) at Sep. 30, 2022						7,697,926
Ending balance (in shares) at Sep. 30, 2022								(233,145)
Beginning balance (in shares) at Jun. 30, 2022					2,000,000
Beginning balance at Jun. 30, 2022	237,135,718			156,186,587	$ 2,000	$ 7,644	275,922,227	$ (3,253,902)	(116,491,382)	0	80,949,131
Beginning balance (in shares) at Jun. 30, 2022						7,643,992
Beginning balance (in shares) at Jun. 30, 2022								(187,430)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock -distribution reinvestments (in shares)						43,617
Issuance of common stock -distribution reinvestments	663,219			663,219		$ 44	663,175
Stock compensation expense (in shares)						10,317
Stock compensation expense	165,000			165,000		$ 10	164,990
OP Units compensation expense	466,740			466,740			466,740
Offering costs	(138,058)			(138,058)			(138,058)
Repurchase of common stock (in shares)								(45,715)
Repurchase of common stock	(703,850)			(703,850)				$ (703,850)
Dividends declared, preferred stock	(921,875)			(921,875)					(921,875)
Distributions declared, common stock	(2,143,444)			(2,143,444)					(2,143,444)
Distributions declared, Class C OP Units			(377,297)									(377,297)
Net (loss) income	4,450,767			3,922,227					3,922,227		528,540
Other comprehensive income	4,255,906			3,618,477						3,618,477	637,429
Ending balance (in shares) at Sep. 30, 2022					2,000,000
Ending balance at Sep. 30, 2022	242,852,826			161,115,023	$ 2,000	$ 7,698	277,079,074	$ (3,957,752)	(115,634,474)	3,618,477	81,737,803
Ending balance (in shares) at Sep. 30, 2022						7,697,926
Ending balance (in shares) at Sep. 30, 2022								(233,145)
Beginning balance (in shares) at Dec. 31, 2022					2,000,000
Beginning balance at Dec. 31, 2022	$ 241,033,960			159,750,904	$ 2,000	$ 7,762	278,339,020	$ (4,161,618)	(117,938,876)	3,502,616	81,283,056
Beginning balance (in shares) at Dec. 31, 2022		7,512,353				7,762,506
Beginning balance (in shares) at Dec. 31, 2022	(250,153)							(250,153)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock -distribution reinvestments (in shares)						140,965
Issuance of common stock -distribution reinvestments	$ 1,708,285		5,175,285	1,708,285		$ 141	1,708,144					5,175,285
Stock compensation expense (in shares)						17,455
Stock compensation expense	235,000			235,000		$ 18	234,982
OP Units compensation expense	9,555,206			9,555,206			9,555,206
Repurchase of common stock (in shares)								(93,357)
Repurchase of common stock	(1,129,162)			(1,129,162)				$ (1,129,162)
Dividends declared, preferred stock	(2,765,625)			(2,765,625)					(2,765,625)
Distributions declared, common stock	(6,501,200)			(6,501,200)					(6,501,200)
Distributions declared, Class C OP Units			(1,297,207)									(1,297,207)
Net (loss) income	(6,854,210)			(5,318,758)					(5,318,758)		(1,535,452)
Amortization of unrealized holding gain on interest rate swap	(756,496)			(630,750)						(630,750)	(125,746)
Ending balance (in shares) at Sep. 30, 2023					2,000,000
Ending balance at Sep. 30, 2023	$ 238,403,836			154,903,900	$ 2,000	$ 7,921	289,837,352	$ (5,290,780)	(132,524,459)	2,871,866	83,499,936
Ending balance (in shares) at Sep. 30, 2023		7,577,416				7,920,926
Ending balance (in shares) at Sep. 30, 2023	(343,510)							(343,510)
Beginning balance (in shares) at Jun. 30, 2023					2,000,000
Beginning balance at Jun. 30, 2023	$ 240,093,257			154,720,206	$ 2,000	$ 7,875	280,815,445	$ (5,290,780)	(123,895,028)	3,080,694	85,373,051
Beginning balance (in shares) at Jun. 30, 2023						7,874,502
Beginning balance (in shares) at Jun. 30, 2023								(343,510)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of common stock -distribution reinvestments (in shares)						42,230
Issuance of common stock -distribution reinvestments	552,086			552,086		$ 42	552,044
Stock compensation expense (in shares)						4,194
Stock compensation expense	70,000			70,000		$ 4	69,996
OP Units compensation expense	8,399,867			8,399,867			8,399,867
Dividends declared, preferred stock	(921,875)			(921,875)					(921,875)
Distributions declared, common stock	(2,171,210)			(2,171,210)					(2,171,210)
Distributions declared, Class C OP Units			$ (459,955)									$ (459,955)
Net (loss) income	(6,905,242)			(5,536,346)					(5,536,346)		(1,368,896)
Amortization of unrealized holding gain on interest rate swap	(253,092)			(208,828)						(208,828)	(44,264)
Ending balance (in shares) at Sep. 30, 2023					2,000,000
Ending balance at Sep. 30, 2023	$ 238,403,836			$ 154,903,900	$ 2,000	$ 7,921	$ 289,837,352	$ (5,290,780)	$ (132,524,459)	$ 2,871,866	$ 83,499,936
Ending balance (in shares) at Sep. 30, 2023		7,577,416				7,920,926
Ending balance (in shares) at Sep. 30, 2023	(343,510)							(343,510)

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Condensed Consolidated Statements of Cash Flows - USD ($)	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Cash Flows from Operating Activities:
Net loss	$ (6,854,210)	$ (5,232,053)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	11,403,603	10,581,765
Stock compensation expense	9,790,206	1,740,852
Amortization of deferred rents	(4,528,120)	(2,593,698)
Amortization of deferred lease incentives	217,537	323,347
Write-offs and amortization of deferred financing costs and premium/discount	556,134	1,470,289
Amortization of (below) above market lease intangibles, net	(596,194)	(862,861)
Impairment of real estate investment property	3,499,438	0
Increase in fair value of investment in preferred stock	(440,000)	0
Impairment of goodwill	0	17,320,857
Write-off of purchase deposit	0	375,000
Loss (gain) on sale of real estate investments	1,708,801	(11,527,185)
Unrealized gain on interest rate swap valuation	(2,781,838)	(530,997)
Write-off of unrealized gain on interest rate swaps	0	(788,016)
Income from unconsolidated investment in a real estate property	(207,506)	(226,690)
Distributions from unconsolidated investment in a real estate property	179,121	179,531
Change in operating assets and liabilities:
Decrease in tenant receivables	242,711	90,743
(Increase) decrease in prepaid and other assets	(104,469)	284,145
Decrease in accounts payable, accrued and other liabilities	(875,048)	(1,278,266)
Net cash provided by operating activities	11,210,166	9,326,763
Cash Flows from Investing Activities:
Acquisitions of real estate investments	(122,778,215)	(127,144,029)
Additions to existing real estate investments	(1,744,462)	(3,855,719)
Collection of note receivable from early termination of lease	0	1,836,767
Net proceeds from sale of real estate investments	34,737,474	66,489,004
Purchase deposits, net	(1,259,452)	(195,614)
Refund (payment) of lease incentives	48,731	(2,100,000)
Net cash used in investing activities	(90,995,924)	(64,969,591)
Cash Flows from Financing Activities:
Borrowings from credit facility term loan	100,000,000	150,000,000
Repayments of credit facility revolver, net	(3,000,000)	(1,247,000)
Principal payments on mortgage notes payable	(10,230,160)	(130,421,220)
Payments of deferred financing costs	0	(2,186,468)
Proceeds from listed offering of common stock, net	0	114,500
Payments of offering costs	0	(1,084,748)
Repurchases of common stock	(1,129,162)	(3,957,752)
Dividends paid to preferred stockholders	(2,765,625)	(2,909,028)
Net cash provided by financing activities	76,818,719	2,962,196
Net decrease in cash and cash equivalents	(2,967,039)	(52,680,632)
Cash and cash equivalents, beginning of period	8,608,649	58,407,520
Cash and cash equivalents, end of period	5,641,610	5,726,888
Supplemental Disclosure of Cash Flow Information:
Cash paid for interest	8,675,670	5,152,425
Supplemental Schedule of Noncash Investing and Financing Activities:
Investment in preferred stock	9,620,000	0
Accrued real estate improvements	2,350,000	512,908
Reclassification of tenant improvements from other assets to real estate investments	0	522,844
Issuance of Class C OP Units in the acquisition of a real estate investment	5,175,284	32,809,551
Reinvested distributions from common stockholders	1,716,399	2,866,846
Accrued distributions and dividends	33,787	(31,794)
Supplemental disclosure related to changes in real estate investments held for sale, net:
Real estate investments held for sale, net	3,372,461	31,510,762
Other assets related to real estate investments held for sale	33,393	788,296
Mortgage notes payable related to real estate investments held for sale, net	0	(21,699,912)
Other liabilities related to real estate investments held for sale	44,468	(383,282)
Common Stock
Cash Flows from Financing Activities:
Distributions paid	(4,786,681)	(4,339,952)
Operating Partnership Units - Class C
Cash Flows from Financing Activities:
Distributions paid	$ (1,269,653)	$ (1,006,136)

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BUSINESS AND ORGANIZATION

9 Months Ended

Sep. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

BUSINESS AND ORGANIZATION

BUSINESS AND ORGANIZATION

Modiv Industrial, Inc. (the “Company”) was incorporated on May 15, 2015 as a Maryland corporation. The Company changed its name from Modiv Inc. to Modiv Industrial, Inc., effective August 11, 2023. The Company has the authority to issue 450,000,000 shares of stock, consisting of 50,000,000 shares of preferred stock, $0.001 par value per share, of which 2,000,000 shares are designated as 7.375% Series A cumulative redeemable perpetual preferred stock (“Series A Preferred Stock”), 300,000,000 shares of Class C common stock, $0.001 par value per share, and 100,000,000 shares of Class S common stock, $0.001 par value per share. The Company's Series A Preferred Stock is listed on the New York Stock Exchange (the “NYSE”) under the symbol MDV.PA and has been trading since September 17, 2021. The Company's Class C common stock is listed on the NYSE under the symbol “MDV” and has been trading since February 11, 2022.

The Company holds its investments in real property primarily through special purpose limited liability companies which are wholly-owned subsidiaries of Modiv Operating Partnership, LP, a Delaware limited partnership (the “Operating Partnership”). The Operating Partnership was formed on January 28, 2016. The Company is the sole general partner of, and owned an approximate 68% and 73% partnership interest in, the Operating Partnership as of September 30, 2023 and December 31, 2022, respectively. The Operating Partnership's limited partners include holders of several classes of units with various vesting and enhancement terms as further described in Note 12.

As of September 30, 2023, the Company's portfolio of approximately 4.6 million square feet of aggregate leasable space consisted of investments in 44 real estate properties, comprised of: 39 industrial properties, including an approximate 72.7% tenant-in-common interest in a Santa Clara, California property (the “TIC Interest”), which represent approximately 76% of the portfolio (expressed as a percentage of annual base rent (“ABR”) as of September 30, 2023), one retail property, which represents approximately 10% of the portfolio, and four office properties (including one classified as a held for sale property), which represent approximately 14% of the portfolio.

Distribution Reinvestment Plan

On February 15, 2022, the Company's board of directors amended and restated the Company's distribution reinvestment plan (the “Second Amended and Restated DRP”) with respect to the Class C common stock to change the purchase price at which the Class C common stock is issued to stockholders who elect to participate in the Company's distribution reinvestment plan (the “DRP”). The purpose of this change was to reflect the fact that the Company's Class C common stock is now listed on the NYSE and no longer priced based on net asset value (“NAV”) per share. As more fully described in the Second Amended and Restated DRP, the purchase price for the Class C common stock under the DRP depends on whether the Company issues new shares to DRP participants or the Company or any third-party administrator obtains shares to be issued to DRP participants by purchasing them in the open market or in privately negotiated transactions. The purchase price for the Class C common stock issued directly by the Company is 97%, reflecting a 3% discount (or such other discount as may then be in effect) of the Market Price (as defined in the Second Amended and Restated DRP) of the Class C common stock. This discount is subject to change from time to time, in the Company’s sole discretion, but will be between 0% to 5% of the Market Price.

The purchase price for the Class C common stock that the Company or any third-party administrator purchases from parties other than the Company, either in the open market or in privately negotiated transactions, will be 100% of the “average price per share” (as described in the Second Amended and Restated DRP) actually paid for such shares of Class C common stock, excluding any processing fees. The Second Amended and Restated DRP also reflects the $0.05 per share processing fee that will be paid to the Company's transfer agent by DRP participants for each share of Class C common stock purchased through the DRP. The Second Amended and Restated DRP was effective beginning with distributions paid in February 2022. From February 2022 through September 30, 2023, the Company issued 351,276 shares of Class C common stock under the DRP.

Share Repurchase Program

On February 15, 2022, the Company's board of directors authorized up to $20,000,000 in repurchases of the Company's outstanding shares of common stock through December 31, 2022 (“2022 SRP”). On December 21, 2022, the Company's board of directors authorized up to $15,000,000 in repurchases of the Company's outstanding shares of common stock and Series A Preferred Stock from January 1, 2023 through December 31, 2023 (“2023 SRP”). Repurchases made pursuant to the 2023 SRP will be made from time-to-time in the open market, in privately negotiated transactions or in any other manner as permitted by federal securities laws and other legal requirements. The timing, manner, price and amount of any repurchases will be determined by the Company in its discretion and will be subject to economic and market conditions, stock price, applicable legal requirements and other factors. The program may be suspended or discontinued at any time.

Under the 2022 SRP, the Company repurchased an aggregate of 250,153 shares of its Class C common stock for an aggregate value of $4,161,618 at an average cost of $16.64 per share. Under the 2023 SRP, during the nine months ended September 30, 2023, the Company repurchased an aggregate of 93,357 shares of its Class C common stock for an aggregate value of $1,129,162 at an average cost of $12.10 per share. The Company did not repurchase any of its Class C common stock during the three months ended September 30, 2023.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

9 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial statements as contained within the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) and the rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, they do not contain all information and footnotes required by GAAP for annual financial statements pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading. Such unaudited condensed consolidated financial statements and notes are the representations of the Company’s management, which is responsible for their integrity and objectivity. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements as of December 31, 2022 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 13, 2023.

The accompanying unaudited condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and, in the opinion of management, reflect all adjustments, which are normal and recurring, necessary to fairly state the Company's financial position, results of operations and cash flows. All significant intercompany balances and transactions are eliminated in consolidation. The unaudited condensed consolidated balance sheet as of December 31, 2022 included herein was derived from the audited financial statements.

Noncontrolling Interests in the Operating Partnership

The Company accounts for the noncontrolling interests in its Operating Partnership in accordance with the related accounting guidance. Due to the Company's exclusive responsibility and discretion in the management and control of the Operating Partnership through its general partnership interest therein, the Operating Partnership, including its wholly-owned subsidiaries, are consolidated with the Company, and the limited partner interests not held by the Company are reflected as noncontrolling interests in the accompanying unaudited condensed consolidated balance sheets and statements of equity. As discussed in Note 12, other than the noncontrolling interests related to “UPREIT” transactions completed in January 2022 and April 2023, all noncontrolling interests currently represent non-voting, non-distribution accruing interests with no allocation of profits or losses, but have various conversion rights to obtain future rights to distributions and allocation of profits and losses.

Use of Estimates

The preparation of the accompanying unaudited condensed consolidated financial statements and the accompanying notes thereto in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the unaudited condensed consolidated financial statements and accompanying notes. These estimates are based on historical experience and, in some cases, assumptions based on current and future market experience. Actual results may differ from those estimates.

Real Estate Acquisitions

In accordance with ASC 805, Business Combinations, the Company evaluates each real estate acquisition to determine whether to account for the acquisition as an asset acquisition or a business combination. When it concludes that substantially all of the fair value of the gross asset is concentrated in a single identifiable asset rather than an integrated set of activities and assets, the Company recognizes the acquisition of a real estate asset rather than a business combination, and allocates the acquisition cost to tangible and intangible assets based on their relative fair values. All of the Company's real estate acquisitions for the nine months ended September 30, 2023 and the year ended December 31, 2022 have been accounted for as asset acquisitions.

Revenue Recognition

The Company accounts for leases in accordance with FASB Accounting Standards Update (“ASU”) No. 2016-02, Leases (“Topic 842”), and the related FASB ASU Nos. 2018-10, 2018-11, 2018-20 and 2019-01, which provide practical expedients, technical corrections and improvements for certain aspects of ASU No. 2016-02 (collectively “Topic 842”). As a lessor, the Company's leases with tenants generally provide for the lease of real estate properties, as well as common area maintenance, property taxes and other recoverable costs. Rental income and tenant reimbursements and other lease related property income that meet the requirements of the practical expedient provided by ASU No. 2018-11 have been combined under rental income in the Company's accompanying unaudited condensed consolidated statements of operations.

The Company recognizes rental income from tenants under operating leases on a straight-line basis over the noncancelable term of the lease when collectability of such amounts is reasonably assured. Recognition of rental income on a straight-line basis includes the effects of rental abatements, lease incentives and fixed and determinable increases in lease payments over the lease term. If the lease provides for tenant improvements, the management of the Company determines whether the tenant improvements, for accounting purposes, are owned by the tenant or by the Company.

When the Company is the owner of the tenant improvements, the tenant is not considered to have taken physical possession or have control of the physical use of the leased asset until the tenant improvements are substantially completed. When the tenant is the owner of the tenant improvements, any tenant improvement allowance (including amounts that the tenant can take in the form of cash or a credit against its rent) that is funded is treated as a lease incentive and amortized as a reduction of revenue over the lease term.

The Company records tenant reimbursements on a gross basis in instances when its tenants reimburse the Company for lessor costs, including real estate taxes, which the Company incurs. Conversely, the Company records lessor costs on a net basis when these costs are paid directly by the Company's tenants to suppliers and service providers, including taxing authorities, on the Company's behalf. To the extent any tenant responsible for these obligations under the applicable lease defaults on such lease, or if it is deemed probable that the tenant will fail to pay for these obligations, the Company records a liability for such obligations.

The Company evaluates the collectability of rents and other receivables on a regular basis based on factors including, among others, payment history, credit rating, the asset type, and current economic conditions. If the Company’s evaluation of these factors indicates it may not recover the full value of the receivable, it provides an allowance against the portion of the receivable that it estimates may not be recovered. This analysis requires the Company to determine whether there are factors indicating a receivable may not be fully collectible and to estimate the amount of the receivable that may not be collected.

Bad Debts and Allowances for Tenant and Deferred Rent Receivables

The Company's determination of the adequacy of its allowances for tenant receivables includes a binary assessment of whether or not the amounts due under a tenant’s lease agreement are probable of collection. For such amounts that are deemed probable of collection, revenue continues to be recorded on a straight-line basis over the lease term. For such amounts that are deemed not probable of collection, revenue is recorded as the lesser of (i) the amount which would be recognized on a straight-line basis or (ii) cash that has been received from the tenant, with any tenant and deferred rent receivable balances charged as a direct write-off against rental income in the period of the change in the collectability determination. In addition, for tenant and deferred rent receivables deemed probable of collection, the Company also may record an allowance under other authoritative GAAP depending upon the Company's evaluation of the individual receivables, specific credit enhancements, current economic conditions, and other relevant factors. Such allowances are recorded as increases or decreases through rental income in the Company's accompanying unaudited condensed consolidated statements of operations.

With respect to tenants in bankruptcy, management makes estimates of the expected recovery of pre-petition and post-petition claims in assessing the estimated collectability of the related receivable. In some cases, the ultimate resolution of these claims can exceed one year. When a tenant is in bankruptcy, the Company will record a bad debt allowance for the tenant’s receivable balance and generally will not recognize subsequent rental income until cash is received or until the tenant is no longer in bankruptcy and has the ability to make rental payments.

Gain or Loss on Sale of Real Estate Investments

The Company recognizes gain or loss on sale of real estate property when the Company has executed a contract for sale of the property, transferred controlling financial interest in the property to the buyer and determined that it is probable that the Company will collect substantially all of the consideration for the property. The Company's real estate property sale transactions during both the three and nine months ended September 30, 2023 and 2022 met these criteria at closing. When properties are sold, operating results of the properties remain in continuing operations, and any associated gain or loss from the disposition is included in gain or loss on sale of real estate investments in the Company’s accompanying unaudited condensed consolidated statements of operations.

Impairment of Investment in Real Estate Properties

The Company monitors events and changes in circumstances that could indicate that the carrying amounts of investments in real estate properties may not be recoverable. When indicators of potential impairment are present that indicate that the carrying amounts of investments in real estate properties may not be recoverable, management assesses whether the carrying value of the investments in real estate properties will be recovered through the future undiscounted operating cash flows expected from the use of and eventual disposition of the property. If, based on the analysis, the Company does not believe that it will be able to recover the carrying value of the investments in real estate properties, the Company records an impairment charge to the extent the carrying value exceeds the estimated fair value of the investments in real estate properties.

Treasury Stock

The Company accounts for repurchased shares of its Class C common stock as treasury stock. Treasury shares are recorded at cost and are included as a component of equity in the Company's accompanying unaudited condensed consolidated balance sheets as of September 30, 2023 and December 31, 2022.

Fair Value Disclosures

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an existing price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value hierarchy, which is based on three levels of inputs, the first two of which are considered observable and the last unobservable, that may be used to measure fair value, is as follows:

Level 1: quoted prices in active markets for identical assets or liabilities;

Level 2: inputs other than Level 1 that are observable, either directly or indirectly, 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; and

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 fair value for certain financial instruments is derived using valuation techniques that involve significant management judgment. The price transparency of financial instruments is a key determinant of the degree of judgment involved in determining the fair value of the Company’s financial instruments. Financial instruments for which actively quoted prices or pricing parameters are available and for which markets contain orderly transactions will generally have a higher degree of price transparency than financial instruments for which markets are inactive or consist of non-orderly trades. The Company evaluates several factors when determining if a market is inactive or when market transactions are not orderly. The following is a summary of the methods and assumptions used by management in estimating the fair value of each class of financial instrument for which it is practicable to estimate the fair value:

Cash and cash equivalents, tenant receivables, prepaid expenses and other assets and accounts payable, accrued and other liabilities: These balances approximate their fair values due to their short maturities.

Investment in preferred stock: The Company’s investment in preferred stock is presented at fair value in the accompanying unaudited condensed consolidated balance sheet using Level 3 inputs. The preferred stock investment has been recorded at fair value by incorporating both the Monte Carlo simulation model and a dividend discount model. These models incorporate risk-free rates, stock prices, yield and volatility. The development and determination of the unobservable inputs for Level 3 fair value measurements and fair value calculations are the responsibility of the Company’s management with the assistance of an independent third-party valuation specialist.

Derivative Instruments: The Company’s derivative instruments are presented at fair value in the accompanying unaudited condensed consolidated balance sheets. The valuation of these instruments is determined using a proprietary model that utilizes observable inputs. As such, the Company classifies these inputs as Level 2 inputs. The proprietary model uses the contractual terms of the derivatives, including the period to maturity, as well as observable market-based inputs, including interest rate curves and volatility. The fair values of interest rate swaps are estimated using the market standard methodology of netting the discounted fixed cash payments and the discounted expected variable cash receipts. The variable cash receipts are based on an expectation of interest rates (forward curves) derived from observable market interest rate curves. In addition, credit valuation adjustments, which consider the impact of any credit risks on the contracts, are incorporated in the fair values to account for potential nonperformance risk.

Credit facility: The fair values of the Company’s credit facility approximate the carrying value as their interest rate and other terms are comparable to those available in the marketplace for similar credit facilities.

Mortgage notes payable: The fair values of the Company’s mortgage notes payable are estimated using a discounted cash flow analysis based on management’s estimates of current market interest rates for instruments with similar characteristics, including remaining loan term, loan-to-value ratio, type of collateral and other credit enhancements. Additionally, when determining the fair value of liabilities in circumstances in which a quoted price in an active market for an identical liability is not available, the Company measures fair value using (i) a valuation technique that uses the quoted price of the identical liability when traded as an asset or quoted prices for similar liabilities when traded as assets or (ii) another valuation technique that is consistent with the principles of fair value measurement, such as the income approach or the market approach. The Company classifies these inputs as Level 3 inputs.

Related party transactions: The Company has concluded that it is not practical to determine the estimated fair value of related party transactions. Disclosure rules for fair value measurements require that for financial instruments for which it is not practicable to estimate fair value, information pertinent to those instruments be disclosed. Further information as to these financial transactions with related parties is included in Note 10.

Real Estate Investments Held for Sale

The Company generally considers a real estate investment to be “held for sale” when the following criteria are met as of the balance sheet date: (i) management commits to a plan to sell the property, (ii) the property is available for sale immediately, (iii) the property is actively being marketed for sale at a price that is reasonable in relation to its current fair value, (iv) the sale of the property within one year is considered probable and (v) significant changes to the plan to sell are not expected. Real estate that is held for sale and its related assets are classified as “real estate investments held for sale, net” and “other assets related to real estate investments held for sale,” respectively, in the accompanying unaudited condensed consolidated balance sheets. Other liabilities related to real estate investments held for sale are classified as “liabilities related to real estate investments held for sale” in the accompanying unaudited condensed consolidated balance sheets. Real estate investments classified as held for sale are no longer depreciated and are reported at the lower of their carrying value or their estimated fair value less estimated costs to sell. Operating results of properties that were classified as held for sale in the ordinary course of business are included in continuing operations in the Company’s accompanying unaudited condensed consolidated statements of operations.

Derivative Instruments and Hedging Activities

The Company enters into derivative instruments for risk management purposes to hedge its exposure to cash flow variability caused by changing interest rates on its variable rate debt. The Company does not enter into derivatives for speculative purposes. The Company records derivative instruments at fair value on its accompanying unaudited condensed consolidated balance sheets. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. If the Company elects to designate a derivative in a hedging relationship and the hedging relationship satisfies the criteria necessary to apply hedge accounting, the derivative is designated as a cash flow hedge and the unrealized holding gain or loss on the interest rate swap is presented in comprehensive (loss) income and accumulated other comprehensive income in the Company's accompanying unaudited condensed consolidated statements of comprehensive (loss) income and condensed consolidated balance sheets, respectively. If the derivative instrument does not meet the hedge accounting criteria, the change in the fair value of the derivative is recorded as a gain or loss on the interest rate swap and included in interest expense, net of derivative settlements and unrealized gain on interest rate swaps in the Company's accompanying unaudited condensed consolidated statements of operations.

The Company has entered into interest rate swaps as a fixed rate payer to mitigate its exposure to rising interest rates on its variable rate term loan. The value of interest rate swaps is primarily impacted by interest rates, market expectations about interest rates, and the remaining life of the instrument. In general, increases in interest rates, or anticipated increases in interest rates, will increase the value of the fixed rate payer position and decrease the value of the variable rate payer position. As the remaining life of the interest rate swap decreases, the value of both positions will generally move towards zero. The Company may enter into derivative contracts that are intended to economically hedge certain risks, even though hedge accounting does not apply or the Company elects not to apply hedge accounting.

Restricted Operating Partnership Unit Awards

Historically, the fair values of the restricted Operating Partnership unit awards issued or granted by the Company were based on an estimated NAV per share (unaudited) of the Company’s common stock on the date of issuance or grant, adjusted for an illiquidity discount due to the illiquid nature of the underlying equity prior to the listing of the Company's Class C common stock on the NYSE. The fair value of future grants of restricted Operating Partnership unit awards will be determined based on the NYSE's market closing price of the Company's Class C common stock on the date of grant. Operating Partnership units issued as purchase consideration in connection with the Self-Management Transaction and UPREIT Transactions (each as defined and discussed in Note 12) are recorded in equity under noncontrolling interests in the Operating Partnership in the Company's accompanying unaudited condensed consolidated balance sheets and statements of equity. For units granted to employees of the Company that are not included in the purchase consideration, the fair value of the award is amortized using the straight-line method over the requisite service period of the award, which is generally the vesting period (see Note 12). The Company has elected to record forfeitures as they occur. Compensation cost is recorded for units to be issued subject to a performance condition when it is probable that the performance condition will be met.

Immaterial Error Corrections

During the first quarter of 2023, management determined that its prior treatment of property taxes in those instances where the Company was responsible for paying property taxes and subsequently seeking tenant reimbursement should be treated differently than those instances where property taxes were paid directly by tenants to taxing authorities. Management determined that property taxes paid directly by tenants to taxing authorities should not have been recorded in the Company’s accompanying unaudited condensed consolidated statements of operations for the prior year periods in accordance with ASU 2018-20 “Leases (Topic 842) - Narrow-Scope Improvements for Lessors.” Accordingly, the Company’s accompanying unaudited condensed consolidated statements of operations for the three and nine months ended September 30, 2022 reflect an adjustment to reduce rental income and a corresponding reduction in property expenses of $648,271 and $1,784,668, respectively, for such property taxes and the Company's consolidated balance sheet as of December 31, 2022 reflects a reduction in tenant receivables with a corresponding reduction in accounts payable, accrued and other liabilities of $1,596,127. The corrections did not affect net income (loss) or net income (loss) per share for the three and nine months ended September 30, 2022 in the accompanying unaudited condensed consolidated statements of operations.

During the fourth quarter of 2022, management determined that straight-line rents receivable write-offs associated with real estate investments previously sold should be reclassified as a component of the related gain on sale of the real estate investments rather than as an offset to rental income as previously presented in the Company's statements of operations. Accordingly, the Company’s accompanying unaudited condensed consolidated statements of operations for the three and nine months ended September 30, 2022 reflect an increase in rental income and a corresponding reduction in the gain on sale of real estate investments of $739,255 and $1,546,976, respectively. The reclassification did not affect net income (loss) or net income (loss) per share for the three and nine months ended September 30, 2022 in the accompanying unaudited condensed consolidated statements of operations.

Recent Accounting Pronouncements

New Accounting Standards Recently Issued and Not Yet Adopted

In August 2023, the FASB issued ASU 2023-05, Business Combinations – Joint Venture Formations (Subtopic 805-60) (“ASU 2023-05”), which addresses the accounting for contributions made to a joint venture, upon formation, in a joint venture’s separate financial statements. At present, GAAP does not provide specific authoritative guidance on how a joint venture, upon formation, should recognize and initially measure assets contributed and liabilities assumed. ASU 2023-05 will require that a joint venture apply a new basis of accounting upon formation. By applying the new basis of accounting, a joint venture, upon formation, will recognize and initially measure its assets and liabilities at fair value (with exceptions to fair value measurement that are consistent with the business combinations guidance). The amendments in ASU 2023-05 are effective prospectively for all joint ventures formed on or after January 1, 2025. Joint ventures formed prior to January 1, 2025 may elect to apply the amendments retrospectively and early adoption is permitted. The Company does not currently anticipate any material impact from the implementation of ASU 2023-05.

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REAL ESTATE INVESTMENTS, NET

9 Months Ended

Sep. 30, 2023

Real Estate [Abstract]

REAL ESTATE INVESTMENTS, NET

REAL ESTATE INVESTMENTS, NET

As of September 30, 2023, the Company’s real estate investment portfolio consisted of 44 operating properties located in 16 states comprised of: 39 industrial properties (including the Company's approximate 72.7% TIC Interest in a Santa Clara, California industrial property which is not reflected in the table below but discussed in Note 4), one retail property and four office properties (including the one held for sale property not reflected in the table below).

The following table provides summary information regarding the Company’s 42 operating properties held for investment and use as of September 30, 2023:

Property Tenant	Location	Acquisition Date	Property Type	Land, Buildings and Improvements		Equipment		Tenant Origination and Absorption Costs		Accumulated Depreciation and Amortization		Total Investment in Real Estate Property, Net
Northrop Grumman	Melbourne, FL	3/7/2017	Industrial	$	13,608,084	$	—	$	1,469,737	$	(4,361,816)	$	10,716,005
Northrop Grumman	Melbourne, FL	6/21/2018	Land	329,410		—		—		—		329,410
Husqvarna	Charlotte, NC	11/30/2017	Industrial	11,840,200		—		1,013,948		(2,095,659)		10,758,489
AvAir	Chandler, AZ	12/28/2017	Industrial	27,357,899		—		—		(4,019,833)		23,338,066
3M	DeKalb, IL	3/29/2018	Industrial	14,762,819		—		3,037,057		(5,983,018)		11,816,858
Taylor Fresh Foods	Yuma, AZ	10/24/2019	Industrial	34,194,369		—		2,894,017		(5,231,624)		31,856,762
Levins	Sacramento, CA	12/31/2019	Industrial	4,429,390		—		221,927		(820,330)		3,830,987
Labcorp	San Carlos, CA	12/31/2019	Industrial	9,672,174		—		408,225		(766,203)		9,314,196
WSP USA	San Diego, CA	12/31/2019	Industrial	9,896,800		—		539,633		(1,335,830)		9,100,603
ITW Rippey	El Dorado, CA	12/31/2019	Industrial	7,337,873		—		304,387		(1,005,487)		6,636,773
L3Harris	San Diego, CA	12/31/2019	Industrial	11,690,952		—		662,101		(1,541,628)		10,811,425
Arrow-TruLine	Archbold, OH	12/3/2021	Industrial	11,518,084		—		—		(742,619)		10,775,465
Kalera	Saint Paul, MN	1/31/2022	Industrial	6,412,509		4,429,000		—		(580,724)		10,260,785
Lindsay	Colorado Springs 1, CO	4/19/2022	Industrial	2,311,934		—		—		(85,054)		2,226,880
Lindsay	Colorado Springs 2, CO	4/19/2022	Industrial	3,314,406		—		—		(50,615)		3,263,791
Lindsay	Dacano, CO	4/19/2022	Industrial	6,889,402		—		—		(122,707)		6,766,695
Lindsay	Alachua, FL	4/19/2022	Industrial	8,518,123		—		—		(528,808)		7,989,315
Lindsay	Franklinton, NC	4/19/2022	Industrial	7,181,113		—		—		(233,143)		6,947,970
Lindsay	Canal Fulton 1, OH	4/19/2022	Industrial	11,345,533		—		—		(501,441)		10,844,092
Lindsay	Canal Fulton 2, OH	4/19/2022	Industrial	10,190,942		—		—		(459,435)		9,731,507
Lindsay	Rock Hill, SC	4/19/2022	Industrial	6,555,983		—		—		(245,356)		6,310,627
Lindsay	Gap, PA	4/13/2023	Industrial	16,580,044		—		—		(341,909)		16,238,135
Producto	Endicott, NY	7/15/2022	Industrial	2,362,310		—		—		(94,432)		2,267,878
Producto	Jamestown, NY	7/15/2022	Industrial	3,073,686		—		—		(115,606)		2,958,080
Valtir	Centerville, UT	7/26/2022	Industrial	4,685,355		—		—		(141,509)		4,543,846
Valtir	Orangeburg, SC	7/26/2022	Industrial	4,243,308		—		—		(168,370)		4,074,938
Valtir	Fort Worth, TX	7/26/2022	Industrial	3,278,522		—		—		(75,029)		3,203,493
Valtir	Lima, OH	8/4/2022	Industrial	9,921,943		—		—		(415,965)		9,505,978
Plastic Products	Princeton, MN	1/26/2023	Industrial	6,118,411		—		553,780		(413,432)		6,258,759
Stealth Manufacturing	Savage, MN	3/31/2023	Industrial	5,526,310		—		—		(91,887)		5,434,423
Summit Steel	Reading, PA	4/13/2023	Industrial	11,397,091		—		—		(182,790)		11,214,301
PBC Linear	Roscoe, IL	4/20/2023	Industrial	20,023,978		—		—		(337,592)		19,686,386
Cameron Tool	Lansing, MI	5/3/2023	Industrial	5,776,590		—		—		(85,644)		5,690,946
S.J. Electro Systems	Detroit Lakes, MN	5/5/2023	Industrial	6,314,057		—		—		(69,079)		6,244,978
S.J. Electro Systems	Plymouth, MN	5/5/2023	Industrial	2,225,635		—		—		(34,525)		2,191,110
S.J. Electro Systems	Ashland, OH	5/5/2023	Industrial	7,555,211		—		—		(79,864)		7,475,347
Titan	Alleyton, TX	5/11/2023	Industrial	17,146,503		—		—		(334,377)		16,812,126
Vistech	Piqua, OH	7/3/2023	Industrial	13,550,932		—		—		(109,232)		13,441,700
SixAxis	Andrews, SC	7/11/2023	Industrial	15,470,096		—		—		(154,425)		15,315,671

(Operating properties table continued)
Property Tenant	Location	Acquisition Date	Property Type	Land, Buildings and Improvements		Equipment		Tenant Origination and Absorption Costs		Accumulated Depreciation and Amortization		Total Investment in Real Estate Property, Net
KIA/Trophy of Carson	Carson, CA	1/18/2022	Retail	$	69,286,444	$	—	$	118,606	$	(1,814,016)	$	67,591,034
Costco	Issaquah, WA	12/20/2018	Office	27,585,942		—		2,765,136		(6,289,044)		24,062,034
Solar Turbines	San Diego, CA	12/31/2019	Office	7,186,694		—		324,221		(881,175)		6,629,740
OES (1)	Rancho Cordova, CA	12/31/2019	Office	29,632,580		—		1,616,610		(4,646,438)		26,602,752
				$	508,299,641	$	4,429,000	$	15,929,385	$	(47,587,670)	$	481,070,356

(1)    Effective December 31, 2022, the Company and Sutter Health agreed to the early termination of the Sutter Health lease. The property was then leased to the State of California's Office of Emergency Services (“OES”) effective January 4, 2023 for 12 years through December 31, 2034. OES has a purchase option which OES can exercise any time from May 1, 2024 through December 31, 2026. OES also has an early termination option which OES can exercise any time on or after December 31, 2028 by giving written notice at least 120 days prior to the date of early termination.

Impairment Charge

In March 2023, the Company recorded an impairment charge of $3,499,438 related to its property located in Nashville, Tennessee, leased to Cummins Inc. (“Cummins”) through February 29, 2024. The Company determined that an impairment charge was triggered by expectations of a shortened holding period and estimated the property's fair value based upon current market comparables. This property is held for sale as described in Real Estate Investments Held for Sale below.

Acquisitions:

Nine Months Ended September 30, 2023

During the nine months ended September 30, 2023, the Company acquired 12 industrial manufacturing real estate properties as follows:

Property Tenant	Location	Acquisition Date	Land		Buildings and Improvements		Tenant Origination and Absorption Costs		Below- Market Lease Intangibles		Acquisition Price
Plastic Products	Princeton, MN	1/26/2023	$	421,997	$	5,696,414	$	553,780	$	(285,139)	$	6,387,052
Stealth Manufacturing	Savage, MN	3/31/2023	770,752		4,755,558		—		—		5,526,310
Lindsay (1)	Gap, PA	4/13/2023	2,125,604		14,454,440		—		—		16,580,044
Summit Steel (2)	Reading, PA	4/13/2023	1,517,782		9,879,309		—		—		11,397,091
PBC Linear	Roscoe, IL	4/20/2023	699,198		19,324,780		—		—		20,023,978
Cameron Tool	Lansing, MI	5/03/2023	246,355		5,530,235		—		—		5,776,590
S.J. Electro Systems	Detroit Lakes, MN	5/05/2023	1,736,976		4,577,081		—		—		6,314,057
S.J. Electro Systems	Plymouth, MN	5/05/2023	627,903		1,597,732		—		—		2,225,635
S.J. Electro Systems	Ashland, OH	5/05/2023	251,233		7,303,978		—		—		7,555,211
Titan	Alleyton, TX	5/11/2023	2,056,161		15,090,342		—		—		17,146,503
Vistech	Piqua, OH	7/03/2023	922,310		12,628,622		—		—		13,550,932
SixAxis	Andrews, SC	7/11/2023	1,228,874		14,241,222		—		—		15,470,096
			$	12,605,145	$	115,079,713	$	553,780	$	(285,139)	$	127,953,499

(1)    In addition, the Company provided a $1,800,000 deposit to fund improvements to the previously acquired Lindsay property in Franklinton, North Carolina.

(2)    The Company issued 287,516 Class C OP Units (as defined below) valued at $5,175,284 based on an agreed upon value of $18.00 per unit for a portion of the purchase price.

During the three and nine months ended September 30, 2023, the Company recognized $3,079,272 and $5,025,967, respectively, of total revenue related to the above-acquired properties.

Acquired Properties Lease Expirations:

The noncancellable lease terms of the properties acquired during the nine months ended September 30, 2023 are as follows:

Property Tenant	Lease Expiration
Plastic Products	10/31/2028
Stealth Manufacturing	3/31/2043
Lindsay	4/30/2047
Summit Steel	4/30/2043
PBC Linear	4/30/2043
Cameron Tool	5/31/2043
S.J. Electro Systems, for all three properties acquired	5/31/2040
Titan	5/31/2043
Vistech	7/31/2048
SixAxis	7/31/2048

Nine Months Ended September 30, 2022

During the nine months ended September 30, 2022, the Company acquired one retail and 15 industrial manufacturing real estate properties for $162,313,032. These properties are located in 10 states and had a weighted average lease term of approximately 24 years.

During the three and nine months ended September 30, 2022, the Company recognized $3,071,407 and $6,703,156, respectively, of total revenue related to these properties.

Dispositions:

Nine Months Ended September 30, 2023

During the nine months ended September 30, 2023, the Company sold 14 real estate properties as follows:

Property Tenant	Location	Disposition Date	Property Type	Rentable Square Feet	Contract Sale Price		(Loss) Gain on Sale			Net Proceeds
Dollar General	Litchfield, ME	8/10/2023	Retail	9,026	$	1,247,974	$	—	(1)	$	—	(1)
Dollar General	Wilton, ME	8/10/2023	Retail	9,100	1,452,188		—		(1)	—		(1)
Dollar General	Thompsontown, PA	8/10/2023	Retail	9,100	1,111,832		—		(1)	—		(1)
Dollar General	Mt. Gilead, OH	8/10/2023	Retail	9,026	1,066,451		—		(1)	—		(1)
Dollar General	Lakeside, OH	8/10/2023	Retail	9,026	1,134,522		—		(1)	—		(1)
Dollar General	Castalia, OH	8/10/2023	Retail	9,026	1,111,832		—		(1)	—		(1)
Dollar General	Bakersfield, CA	8/10/2023	Retail	18,827	4,855,751		—		(1)	—		(1)
Dollar General	Big Spring, TX	8/10/2023	Retail	9,026	1,270,665		—		(1)	—		(1)
Dollar Tree	Morrow, GA	8/10/2023	Retail	10,906	1,293,355		—		(1)	—		(1)
PreK Education	San Antonio, TX	8/10/2023	Retail	50,000	12,888,169		—		(1)	—		(1)
Walgreens	Santa Maria, CA	8/10/2023	Retail	14,490	6,081,037		—		(1)	—		(1)
exp US Services	Maitland, FL	8/10/2023	Office	33,118	5,899,514		—		(1)	—		(1)
GSA (MSHA)	Vacaville, CA	8/10/2023	Office	11,014	2,586,710		(1,887,040)		(1)	39,014,581		(1)
EMC Shop	Rocklin, CA	8/31/2023	Flex	40,110	5,466,960		178,239			5,459,211
				241,795	$	47,466,960	$	(1,708,801)		$	44,473,792

(1)    Represents the combined net loss on sale of $1,887,040 and net proceeds of $39,014,581 for the August 10, 2023 sale of 13 properties to Generation Income Properties, Inc. (NASDAQ: GIPR) (“GIPR”).

Nine Months Ended September 30, 2022

During the nine months ended September 30, 2022, the Company sold seven real estate properties (six office properties and one flex property) comprising 343,126 square feet for aggregate contract sales prices of $68,725,000, aggregate gains on sale of $11,527,185 and aggregate net proceeds of $44,482,494, net of commissions, closing costs and repayment of the outstanding mortgages.

Asset Concentration:

As of September 30, 2023 and December 31, 2022, the Company’s real estate portfolio asset concentration (greater than 10% of total assets) was as follows:

	September 30, 2023				December 31, 2022
Property Tenant and Location	Net Carrying Value		Percentage of Total Assets		Net Carrying Value		Percentage of Total Assets
KIA, Carson, CA	$	67,591,034	12.5	%	$	68,387,431	15.0	%

Rental Income Concentration:

During the three and nine months ended September 30, 2023 and 2022, the Company’s rental income concentration (greater than 10% of rental income) was as follows:

	Three Months Ended September 30,
	2023				2022
Property Tenant and Location	Rental Income		Percentage of Total Rental Income		Rental Income		Percentage of Total Rental Income
Lindsay, nine properties acquired in: Colorado (three), Ohio (two), Pennsylvania, North Carolina, South Carolina and Florida	$	1,652,422	13.2	%	$	1,204,970	11.7	%
KIA, Carson, CA	$	1,289,545	10.3	%	$	1,306,851	12.7	%

	Nine Months Ended September 30,
	2023				2022
Property Tenant and Location	Rental Income		Percentage of Total Rental Income		Rental Income		Percentage of Total Rental Income
Lindsay, nine properties acquired in: Colorado (three), Ohio (two), Pennsylvania, North Carolina, South Carolina and Florida	$	4,474,870	12.9	%	(1)		(1)
KIA, Carson, CA	$	3,879,601	11.2	%	$	3,666,632	12.2	%

(1)    The Lindsay properties represented a source of greater than 10% of total rental income during the nine months ended September 30, 2023 but not the nine months ended September 30, 2022 since eight of the Lindsay properties were acquired on April 19, 2022 and one was acquired on April 13, 2023.

Operating Leases:

The Company’s real estate properties are primarily leased to tenants under net leases for which terms and expirations vary. The Company monitors the credit of all tenants to stay abreast of any material changes in credit quality. The Company monitors tenant credit by (1) reviewing the credit ratings of tenants (or their parent companies or lease guarantors) that are rated by nationally recognized rating agencies; (2) reviewing financial statements and related metrics and information that are publicly available or that are required to be provided pursuant to the lease; (3) monitoring news reports and press releases regarding the tenants (or their parent companies or lease guarantors), and their underlying business and industry; and (4) monitoring the timeliness of rent collections.

On January 23, 2023, the Company executed a lease extension for the property leased to Solar Turbines for an additional two years through July 31, 2025 with a 14.0% increase in rent effective August 1, 2023 and a 3.0% increase in rent effective August 1, 2024. This is the third lease extension executed by Solar Turbines, which has occupied the Company's property located in San Diego, California since 2008.

Effective April 18, 2023, the Company extended the lease term of its Levins property located in Sacramento, California from September 1, 2023 to December 31, 2024 with a 69% increase in annual rent from $4.14 per square foot to $7.00 per square foot commencing September 1, 2023.

On June 29, 2023, the Company leased its property in Rocklin, California (the “Rocklin Property”), which was previously leased to Gap, Inc., to EMC for an initial base annual rent of $441,210, and a lease term of 11.5 years through December 31, 2034. The lease included a purchase option which EMC exercised in August 2023 and EMC completed its purchase of the property on August 31, 2023, which terminated the lease (see Dispositions above).

The Company is continuing to explore potential lease extensions for certain of its other properties.

As of September 30, 2023, the future minimum contractual rent payments due to the Company under the Company’s non-cancellable operating leases, including lease amendments executed though the date of this report, if any, are as follows:

October through December 2023	$	9,727,190
2024	39,028,622
2025	38,080,113
2026	34,952,446
2027	34,600,851
Thereafter	559,280,654
	$	715,669,876

Intangible Assets, Net Related to the Company's Real Estate

As of September 30, 2023 and December 31, 2022, intangible assets, net related to the Company's real estate were as follows:

	September 30, 2023						December 31, 2022
	Tenant Origination and Absorption Costs		Above-Market Lease Intangibles		Below-Market Lease Intangibles		Tenant Origination and Absorption Costs		Above-Market Lease Intangibles		Below-Market Lease Intangibles
Cost	$	15,929,385	$	2,485,510	$	(14,364,650)	$	19,499,749	$	2,485,510	$	(14,378,808)
Accumulated amortization	(10,684,573)		(1,153,052)		5,265,947		(12,722,558)		(634,754)		4,703,122
Net	$	5,244,812	$	1,332,458	$	(9,098,703)	$	6,777,191	$	1,850,756	$	(9,675,686)

The intangible assets acquired in connection with the acquisitions have a weighted average amortization period of approximately 10.6 years as of September 30, 2023.

As of September 30, 2023, the amortization of intangible assets for the remaining three months of the current year ending December 31, 2023 and for each of the next four years and thereafter is expected to be as follows:

	Tenant Origination and Absorption Costs		Above-Market Lease Intangibles		Below-Market Lease Intangibles
October through December 2023	$	253,294	$	18,499	$	(230,099)
2024	1,013,175		73,999		(920,395)
2025	815,130		70,712		(920,395)
2026	466,644		54,278		(920,395)
2027	449,972		54,278		(920,395)
Thereafter	2,246,597		1,060,692		(5,187,024)
	$	5,244,812	$	1,332,458	$	(9,098,703)
Weighted-average remaining amortization period	8.6 years		23.2 years		10.1 years

Real Estate Investments Held For Sale

As of September 30, 2023, the Company classified its office property located in Nashville, Tennessee that is leased to Cummins as held for sale.

The Company’s Rocklin Property formerly leased to Gap, Inc. through February 28, 2023 was the only property held for sale as of December 31, 2022, and it was sold on August 31, 2023 as described in Dispositions above.

The following table summarizes the major components of assets and liabilities related to the real estate investments held for sale as of September 30, 2023 and December 31, 2022:

	September 30, 2023		December 31, 2022
Assets related to real estate investments held for sale:
Land, buildings and improvements	$	11,047,348	$	6,357,172
Tenant origination and absorption costs	1,558,739		355,252
Accumulated depreciation and amortization	(3,977,901)		(1,456,699)
Real estate investments held for sale, net	8,628,186		5,255,725
Other assets, net	46,158		12,765
Total assets related to real estate investments held for sale:	$	8,674,344	$	5,268,490
Liabilities related to real estate investments held for sale:
Other liabilities, net	$	162,349	$	117,881
Total liabilities related to real estate investments held for sale:	$	162,349	$	117,881

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UNCONSOLIDATED INVESTMENT IN REAL ESTATE PROPERTY

9 Months Ended

Sep. 30, 2023

Investments, Debt and Equity Securities [Abstract]

UNCONSOLIDATED INVESTMENT IN REAL ESTATE PROPERTY

UNCONSOLIDATED INVESTMENT IN REAL ESTATE PROPERTY

The Company’s investment in unconsolidated property as of September 30, 2023 and December 31, 2022 is as follows:

	September 30, 2023		December 31, 2022
The TIC Interest	$	10,035,805	$	10,007,420

The Company’s income from investment in unconsolidated property for the three and nine months ended September 30, 2023 and 2022 is as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
The TIC Interest	$	79,164	$	64,358	$	207,506	$	226,690

TIC Interest

During 2017, the Company, through a wholly-owned subsidiary of the Operating Partnership, acquired an approximate 72.7% interest in a 91,740 square foot industrial property in Santa Clara, California in a tenants-in-common ownership structure which requires a unanimous vote for significant decisions about the property. The remaining approximate 27.3% of undivided interest in the Santa Clara property is held by Hagg Lane II, LLC (an approximate 23.4% interest) and Hagg Lane III, LLC (an approximate 3.9% interest). The manager of both Hagg Lane II, LLC and Hagg Lane III, LLC was a member of the Company's board of directors from December 2019 to December 2021. The interest in the Santa Clara property over which the Company has the ability to exercise significant influence, but for which the Company does not have financial or operating control is accounted for using the equity method of accounting. The Company receives approximately 72.7% of the cash flow distributions and recognizes approximately 72.7% of the results of operations for this property.

During the three months ended September 30, 2023 and 2022, the Company received $54,706 and $32,378 in cash distributions, respectively, and received cash distributions of $179,121 and $179,531 during the nine months ended September 30, 2023 and 2022, respectively.

The following is summarized financial information for the Santa Clara property as of September 30, 2023 and December 31, 2022 and for the three and nine months ended September 30, 2023 and 2022:

	September 30, 2023		December 31, 2022
Assets:
Real estate investments, net	$	28,823,530	$	29,294,081
Cash and cash equivalents	532,634		300,405
Other assets	77,366		43,159
Total assets	$	29,433,530	$	29,637,645
Liabilities:
Mortgage note payable, net	$	12,717,835	$	12,936,929
Below-market lease, net	2,404,409		2,514,199
Other liabilities	508,776		424,662
Total liabilities	15,631,020		15,875,790
Total equity	13,802,510		13,761,855
Total liabilities and equity	$	29,433,530	$	29,637,645

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Total revenues	$	693,170	$	679,500	$	2,036,365	$	2,071,258
Operating expenses:
Depreciation and amortization	257,844		264,820		780,802		788,732
Other expenses	193,902		190,527		572,749		565,851
Total operating expenses	451,746		455,347		1,353,551		1,354,583
Operating income	241,424		224,153		682,814		716,675
Interest expense	132,547		135,640		395,810		404,902
Net income	$	108,877	$	88,513	$	287,004	$	311,773

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INVESTMENT IN PREFERRED STOCK

9 Months Ended

Sep. 30, 2023

Equity Method Investments and Joint Ventures [Abstract]

INVESTMENT IN PREFERRED STOCK

INVESTMENT IN PREFERRED STOCK

The Company’s investment in preferred stock as of September 30, 2023 is as follows:

	September 30, 2023
Liquidation value of GIPR preferred stock	$	12,000,000
Adjustment to reduce liquidation value to fair value	(2,380,000)
Fair value of GIPR preferred stock as of August 10, 2023	9,620,000
Increase in fair value of preferred stock for the period ended September 30, 2023	440,000
Fair value of GIPR preferred stock as of September 30, 2023	$	10,060,000

As discussed in Note 3, on August 10, 2023, the Company disposed of 13 properties consisting of 11 retail properties and two office properties in a sale to GIPR. These 13 properties were sold for $42,000,000 with $30,000,000 paid in cash and the remaining $12,000,000 paid in 2,400,000 shares of GIPR's newly-created Series A Redeemable Preferred Stock (the “GIPR preferred stock”) with a liquidation preference of $5.00 per share and an annual dividend yield of 9.5% from August 10, 2023 to August 9, 2024, and an annual dividend rate of 12.0% thereafter.

The Company has elected to record its investment in preferred stock at fair value. The fair value at the date of acquisition was accounted for as an adjustment to the net proceeds from sale. The increase in fair value as of September 30, 2023 is reflected in other income (expense).

Subject to the terms and conditions of the GIPR preferred stock, GIPR may redeem the GIPR preferred stock (a) for cash, at any time, at a redemption price equal to $5.00 per share plus an amount equal to all dividends accrued and unpaid or (b) from the original issuance date until March 15, 2024, for a number of shares of GIPR common stock equal to $5.00 per share plus an amount equal to all dividends accrued and unpaid divided by the product of (i) the volume weighted average price (“VWAP”) per share of GIPR common stock for the 60 days of trading prior to GIPR’s redemption notice and (ii) 110%. Although no assurances can be made regarding the timing of the redemption of the GIPR preferred stock, the Company expects that GIPR will redeem the GIPR preferred stock for GIPR common stock as early as January 2024 at which point the Company expects it will make an immediate in-kind distribution of GIPR common stock to the Company’s stockholders. Under the terms and conditions of the GIPR preferred stock, the Company would receive between 2,200,000 and 3,000,000 shares of GIPR common stock upon redemption of the GIPR preferred stock

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OTHER BALANCE SHEET DETAILS

9 Months Ended

Sep. 30, 2023

Payables and Accruals [Abstract]

OTHER BALANCE SHEET DETAILS

OTHER BALANCE SHEET DETAILS

Tenant Receivables, Net

As of September 30, 2023 and December 31, 2022, tenant receivables consisted of the following:

	September 30, 2023		December 31, 2022
Straight-line rent	$	10,793,380	$	6,607,220
Tenant rent and billed reimbursements	58,444		196,477
Accrued tenant reimbursements	359,234		459,505
Total	$	11,211,058	$	7,263,202

Prepaid Expenses and Other Assets

As of September 30, 2023 and December 31, 2022, prepaid expenses and other assets were comprised of the following:

	September 30, 2023		December 31, 2022
Deferred tenant allowance (1)	$	267,334	$	2,564,806
Prepaid expenses and other assets (2)	3,773,714		2,420,777
Deferred financing costs on credit facility revolver	840,335		1,115,354
Total	$	4,881,383	$	6,100,937

(1)    Deferred tenant balances for the Pre-K Education and Walgreens leases were disposed in the August 10, 2023 sale transaction.

(2)    The balance as of September 30, 2023 includes deposits of $1,800,000 for improvements to be made to the Lindsay property in Franklinton, North Carolina. The balance as of December 31, 2022 includes a deposit of $440,548 for completion of ongoing improvements to the Lindsay property in Dacono, Colorado.

Accounts Payable, Accrued and Other Liabilities

As of September 30, 2023 and December 31, 2022, accounts payable, accrued and other liabilities were comprised of the following:

	September 30, 2023		December 31, 2022
Accounts payable	$	557,643	$	1,001,411
Accrued expenses (1)	4,076,883		2,163,821
Accrued distributions and dividends	1,801,856		1,768,068
Accrued interest payable	321,278		285,392
Unearned rent	1,792,912		1,870,057
Lease incentive obligation	343,058		561,057
Total	$	8,893,630	$	7,649,806

(1)    The balance as of September 30, 2023 includes an accrued liability of $2,350,000 for construction in progress for improvements at the Kalera property to which the Company obtained the rights upon the rejection of Kalera's lease in its bankruptcy proceedings effective October 31, 2023 (see Note 11 for additional information).

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DEBT

9 Months Ended

Sep. 30, 2023

Debt Disclosure [Abstract]

DEBT

DEBT

The breakdown of debt as of September 30, 2023 and December 31, 2022 is as follows:

	September 30, 2023		December 31, 2022
Mortgage notes payable, net	$	34,118,748	$	44,435,556
Credit facility:
Revolver	—		3,000,000
Term loan, net	248,385,927		148,018,164
Total	$	282,504,675	$	195,453,720

Mortgage Notes Payable, Net

As of September 30, 2023 and December 31, 2022, the Company’s mortgage notes payable consisted of the following:

Collateral	2023 Principal Amount		2022 Principal Amount		Interest Rate (1)	Loan Maturity
Costco property	$	18,850,000	$	18,850,000	4.85%	1/01/2030
Taylor Fresh Foods property	12,350,000		12,350,000		3.85%	11/01/2029
OES property (2)	3,084,849		13,315,009		4.50%	3/09/2024
Total mortgage notes payable	34,284,849		44,515,009
Plus unamortized mortgage premium, net (3)	10,893		119,245
Less unamortized deferred financing costs	(176,994)		(198,698)
Mortgage notes payable, net	$	34,118,748	$	44,435,556

(1)Represents the contractual interest rate in effect under the mortgage note payable as of September 30, 2023 for the three mortgages that were not refinanced through a drawdown from the Credit Facility (defined and discussed below) with KeyBank National Association (“KeyBank”) in January 2022 given their prepayment penalties.

(2)During August and September 2023, the Company prepaid an aggregate of $10,000,000 principal amount of the mortgage on the OES property following the dispositions completed in August 2023. The Company intends to pay the remainder on or before the loan maturity date.

(3)Represents unamortized net mortgage premium acquired through the merger with Rich Uncles Real Estate Investment Trust I on December 31, 2019.

The following summarizes the face value, carrying amount and fair value of the Company’s mortgage notes payable (Level 3 measurement) as of September 30, 2023 and December 31, 2022:

	September 30, 2023						December 31, 2022
	Face Value		Carrying Value		Fair Value		Face value		Carrying Value		Fair Value
Mortgage notes payable	$	34,284,849	$	34,118,748	$	30,736,613	$	44,515,009	$	44,435,556	$	41,293,644

Credit Facility, Net

On January 18, 2022, the Company's Operating Partnership entered into a $250,000,000 credit agreement (‘‘Credit Agreement’’) providing for a $100,000,000 four-year revolving line of credit, which may be extended by up to 12 months subject to certain conditions (the ‘‘Revolver’’), and a $150,000,000 five-year term loan (the ‘‘Term Loan’’ and together with the ‘‘Revolver,’’ the ‘‘Credit Facility’’) with KeyBank and the other lending institutions party thereto (collectively, the ‘‘Lenders’’), including KeyBank as Agent for the Lenders (in such capacity, the ‘‘Agent’’), BMO Capital Markets, Truist Bank and The Huntington National Bank as Co-Syndication Agents (the “Co-Syndication Agents”) and KeyBanc Capital Markets Inc., BMO Capital Markets, Inc., Truist Securities, Inc. and The Huntington National Bank as Joint-Lead Arrangers (the “Lead Arrangers”). The Credit Facility is available for general corporate purposes, including, but not limited to, acquisitions, repayment of existing indebtedness and capital expenditures.

On October 21, 2022, the Company exercised the accordion feature of its Credit Facility and increased the Credit Facility to $400,000,000, comprised of a $150,000,000 Revolver and a $250,000,000 Term Loan. The Credit Facility includes an updated accordion option that allows the Company to request additional Revolver and Term Loan lender commitments up to a total of $750,000,000 subject to customary conditions, including the receipt of new commitments from the Lenders. On December 20, 2022, the Credit Agreement was amended to allow the Company to draw on the additional $100,000,000 Term Loan commitment up to five times between December 20, 2022 and April 19, 2023 in exchange for a quarterly unused fee, which amounted to zero and $92,569 during the three and nine months ended September 30, 2023, respectively. The Company drew $20,000,000 and the remaining $80,000,000 of the delayed draw Term Loan during the first and second quarters of 2023, respectively. The maturities for the Company's Revolver and Term Loan remain unchanged with the Revolver’s maturity in January 2026 with options to extend for a total of 12 months, and the Term Loan’s maturity in January 2027.

The Credit Facility is priced on a leverage-based grid that fluctuates based on the Company's actual leverage ratio at the end of the prior quarter. With the Company's leverage ratio at 47% as of June 30, 2023, the spread over the Secured Overnight Financing Rate (‘‘SOFR’’), including a 10-basis point credit adjustment, is 185 basis points for the Revolver and the interest rate on the Revolver was 7.1625% on September 30, 2023; however, there was no outstanding balance on the Revolver. The Company also pays an annual unused fee of up to 25 basis points on the Revolver, depending on the daily amount of the unused commitment, and incurred total unused fees of $94,525 and $47,543 for the three months ended September 30, 2023 and 2022, respectively, and $384,164 and $119,823 for the nine months ended September 30, 2023 and 2022, respectively.

On May 10, 2022, the Company entered into a swap agreement, effective May 31, 2022, to fix SOFR at 2.258% with respect to its original $150,000,000 Term Loan as described in Note 8, which results in a fixed interest rate of 4.058% on the Term Loan based on the Company's leverage ratio of 48% as of September 30, 2023.

On October 26, 2022, the Company entered into a swap agreement, effective November 30, 2022, to fix SOFR at 3.44% with respect to its expanded Term Loan as described in Note 8, which results in a fixed interest rate of 5.240% on the additional $100,000,000 to be borrowed under the Term Loan based on the Company's leverage ratio of 48% as of September 30, 2023.

The Credit Facility includes customary representations, warranties and covenants, including covenants regarding minimum fixed charge coverage of 1.50x, minimum tangible net worth of $208,629,727 plus 85% of net offering proceeds after January 18, 2022, and maximum consolidated leverage of 60%. The Credit Facility is secured by a pledge of all of the Operating Partnership’s equity interests in certain of the single-purpose, property-owning entities (the ‘‘Subsidiary Guarantors’’) that are indirectly owned by the Company, and various cash collateral owned by the Operating Partnership and the Subsidiary Guarantors. In connection with the Credit Facility, the Company and each of the Subsidiary Guarantors entered into an Unconditional Guaranty of Payment and Performance in favor of the Agent, pursuant to which the Company and each of the Subsidiary Guarantors agreed to guarantee the full and prompt payment of the Operating Partnership’s obligations under the Credit Agreement.

While the Credit Facility allows for borrowings up to 60% of the Company's borrowing base, the Company is targeting leverage of 40% or lower over the long-term once it achieves scale; however, the Company currently has, and may continue to have, higher leverage in the near-term if it identifies attractive acquisition opportunities in advance of completing dispositions or raising additional equity.

Credit Facility Repayments and Drawdowns

On January 5, 2023, the Company repaid $3,000,000 of the outstanding balance on its Revolver with available cash on hand to reduce interest expense.

On January 25, 2023, the Company borrowed $10,000,000 under its additional $100,000,000 Term Loan commitment in advance of acquiring a property located in Princeton, Minnesota leased to Plastic Products Company, Inc. On March 29, 2023, the Company again borrowed $10,000,000 under its Term Loan commitment in advance of acquiring a property located in Savage, Minnesota leased to Stealth Manufacturing. In April 2023, additional draws aggregating $80,000,000 were made on the additional Term Loan.

In July 2023, the Company borrowed $21,000,000 under its Revolver commitment in advance of acquiring a property in Piqua, Ohio leased to NVH Acquisition Holdings, LLC (dba Vistech) and a property in Andrews, South Carolina leased to SixAxis, LLC. In August 2023, the Company repaid the $21,000,000 outstanding balance on its Revolver with proceeds from the GIPR disposition described in Note 3.

Compliance with All Debt Agreements

Pursuant to the terms of mortgage notes payable on certain of the Company’s properties and the Credit Facility, the Company and/or the subsidiary borrowers are subject to certain financial loan covenants. The Company and/or the subsidiary borrowers were in compliance with such financial loan covenants as of September 30, 2023.

Future Principal Payments

The following summarizes the future principal repayments of the Company’s mortgage notes payable and Credit Facility as of September 30, 2023:

	Mortgage Notes		Credit Facility
	Payable		Revolver		Term Loan		Total
October through December 2023	$	179,918	$	—	$	—	$	179,918
2024	3,174,547		—		—		3,174,547
2025	543,886		—		—		543,886
2026	568,369		—		—		568,369
2027	593,972		—		250,000,000		250,593,972
Thereafter	29,224,157		—		—		29,224,157
Total principal	34,284,849		—		250,000,000		284,284,849
Plus unamortized mortgage premium, net	10,893		—		—		10,893
Less deferred financing costs	(176,994)		—		(1,614,073)		(1,791,067)
Net principal	$	34,118,748	$	—	$	248,385,927	$	282,504,675

Interest Expense, Net of Derivative Settlements and Unrealized Gain on Interest Rate Swaps

The following is a reconciliation of the components of interest expense, net of derivative settlements and unrealized gain on interest rate swaps for the three and nine months ended September 30, 2023 and 2022:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Mortgage notes payable:
Interest expense	$	411,610	$	488,773	$	1,354,642	$	1,762,378
Amortization of deferred financing costs	7,235		7,235		21,705		21,694
Credit facility:
Interest expense	4,509,026		1,636,414		10,895,933		3,083,299
Unused commitment fees	94,525		47,543		384,164		119,823
Amortization of deferred financing costs	214,261		120,829		642,783		342,349
Swap derivatives:
Derivative cash settlements (1)	(1,586,641)		99,942		(4,062,442)		269,442
Unrealized loss (gain) on interest rate swap valuation for first swap (2)	167,926		—		(327,824)		(589,997)
Amortization of interest rate swap valuation (2)	(253,092)		59,000		(756,495)		59,000
Unrealized gain on interest rate swap valuation for second swap (3)	(710,258)		—		(1,697,519)		—
Other	68,326		55,102		306,832		212,179
Interest expense, net	$	2,922,918	$	2,514,838	$	6,761,779	$	5,280,167

(1)    The Company entered into two swap transaction instruments for (i) its original $150,000,000 Credit Facility Term Loan (first swap) effective May 31, 2022 and (ii) its additional $100,000,000 Term Loan commitment (second swap) effective November 30, 2022, as described in detail in Note 8.

(2)    Due to the Company's $150,000,000 derivative instrument's failure to qualify as a cash flow hedge because it was deemed ineffective for the three and nine months ended September 30, 2023 as described in Note 8, the $167,926 loss and $327,824 gain in the swap valuation for the three and nine months ended September 30, 2023, respectively, are recognized as an increase and a decrease in interest expense, respectively, and the unrealized gain on interest rate swap derivative previously recorded in accumulated other comprehensive income and noncontrolling interest in operating partnership is being amortized on a straight-line basis as a reduction to interest expense through the maturity date of the loan agreement (see Note 8 for more details).

(3)    The Company's $100,000,000 derivative instrument was not designated as a cash flow hedge and, therefore, the $710,258 and $1,697,519 gains in the valuation of this swap for the three and nine months ended September 30, 2023, respectively, are reflected as reductions in interest expense (see Note 8 for more details)

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INTEREST RATE SWAP DERIVATIVES

9 Months Ended

Sep. 30, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

INTEREST RATE SWAP DERIVATIVES

INTEREST RATE SWAP DERIVATIVES

The Company, through its Operating Partnership, entered into a five-year swap agreement on May 10, 2022 to fix SOFR at 2.258% effective May 31, 2022 related to the variable interest rate on its original $150,000,000 Term Loan. The swap agreement matures on January 15, 2027 and the financial institution counterparty has a one-time option to cancel the swap on December 31, 2024. The Company granted this cancellation option because it reduced the swap rate by approximately 50 basis points. The Company designated the pay-fixed, receive-floating interest rate swap with the terms described in the table below as of July 1, 2022 as a cash flow hedge which was effective through December 31, 2022. The derivative instrument failed to qualify as a cash flow hedge during the three and nine months ended September 30, 2023 as described below.

The Company, through its Operating Partnership, entered into another five-year swap agreement on October 26, 2022 to fix SOFR at 3.440% effective November 30, 2022 related to the variable interest rate on its additional $100,000,000 Term Loan commitment. The Company did not designate the pay-fixed, receive-floating interest rate swap with the terms described in the table below as of November 30, 2022 as a cash flow hedge. The swap agreement matures on November 30, 2027 and the financial institution counterparty has a one-time option to cancel the swap on December 31, 2024. The Company granted this cancellation option because it reduced the swap rate by approximately 50 basis points. The Company has begun, and intends to further explore in 2024, various alternatives available to extend or restructure the cancellation option.

The following table summarizes the notional amount and other information related to the Company’s interest rate swaps as of September 30, 2023 and December 31, 2022:

	September 30, 2023							December 31, 2022
Interest Rate Derivative Instruments	Number of Instruments	Notional Amount (i)		Reference Rate	Weighted Average Fixed Pay Rate (ii)		Weighted Average Remaining Term	Number of Instruments	Notional Amount (i)		Reference Rate	Fixed Pay Rate (ii)		Remaining Term
Designated	—	$	—	—	—	%	0 years	1	$	150,000,000	USD - SOFR	4.06	%	4.1 years
Non-designated	2	$	250,000,000	USD - SOFR	4.43	%	3.25 years	1	$	100,000,000	USD - SOFR	5.24	%	4.1 years

(i)The notional amount of the Company’s swaps correspond to the principal balance on the Term Loan. The minimum notional amount (outstanding principal balance at the maturity date) as of September 30, 2023 and December 31, 2022 was $250,000,000.

(ii)Based on the terms of the Credit Facility, the fixed pay rate increases if the Company's leverage ratio increases above 50%.

The following table sets forth the fair value of the Company’s derivative instruments (Level 2 measurement), as well as their classification in the accompanying unaudited condensed consolidated balance sheets as of September 30, 2023 and December 31, 2022:

		September 30, 2023			December 31, 2022
Derivative Instrument	Balance Sheet Location	Number of Instruments	Fair Value		Number of Instruments	Fair Value		Change in Fair Value
Interest Rate Swaps	Asset - Interest rate swap derivatives, at fair value	2	$	6,156,179	1	$	4,629,702	$	1,526,477
Interest Rate Swaps	Liability - Interest rate swap derivatives, at fair value	—	$	—	1	$	(498,866)	$	498,866

The interest rate swap derivative on the original $150,000,000 Term Loan was designated as a cash flow hedge for financial accounting purposes from July 1, 2022 through December 31, 2022. Based on the Company's prospective effectiveness testing of the derivative instrument during each of the quarters in the nine months ended September 30, 2023, the derivative instrument failed to qualify as a cash flow hedge because the swap was deemed ineffective due to the potential for a reduced term of the swap that could result from the cancellation option described above as compared with the maturity of the Term Loan. The Company has begun, and intends to further explore in 2024, various alternatives available to extend or restructure the cancellation option.

As a result, the net change in fair values of the first Term Loan swap of $167,926 loss and $327,824 gain for the three and nine months ended September 30, 2023, respectively, were recorded as an unrealized loss and an unrealized gain, respectively, on interest rate swap valuation and reflected as an increase and a decrease, respectively, to interest expense in the Company's accompanying unaudited condensed consolidated statements of operations. The unrealized gain reflects increases during the

second and third quarters of 2023 in the forward curve for future SOFR rates through December 31, 2024 (the one-time cancellation option date). Interest expense was also reduced by the $253,092 and $756,495 amortization of the unrealized gain on this swap for the three and nine months ended September 30, 2023, respectively, as further described below.

Due to the above $150,000,000 Term Loan derivative instrument's failure to qualify as a cash flow hedge for the quarterly periods ended September 30, 2023, the unrealized gain on interest rate swap derivative of $4,105,103 as of December 31, 2022 (recorded in the Company's financial statements as follows: (i) $3,502,616 of accumulated other comprehensive income and (ii) $602,487 of noncontrolling interest in operating partnership) is being amortized on a straight-line basis as a reduction to interest expense through the maturity date of the swap agreement. There is no income tax expense resulting from this amortization.

As of September 30, 2023, the Company's unamortized unrealized gain on interest rate swap derivative in accumulated other comprehensive income and noncontrolling interest in operating partnership amounted to $3,348,608. The Company estimates that $253,092 of the remaining unrealized gain on interest rate swap derivative will be reclassified from accumulated other comprehensive income and noncontrolling interest in operating partnership as a reduction to interest expense in the Company's accompanying unaudited condensed consolidated statements of operations over the next three months.

The second interest rate swap derivative on the additional $100,000,000 Term Loan commitment was not designated as a cash flow hedge for financial accounting purposes. The increase in its fair value of $710,258 and $1,697,519 for the three and nine months ended September 30, 2023, respectively, were recorded as unrealized gains on interest rate swap valuation and reflected as reductions to interest expense in the Company's accompanying unaudited condensed consolidated statements of operations.

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PREFERRED STOCK AND COMMON STOCK

9 Months Ended

Sep. 30, 2023

Equity [Abstract]

PREFERRED STOCK AND COMMON STOCK

PREFERRED STOCK AND COMMON STOCK

Preferred Stock

The Company is authorized to issue up to 50,000,000 shares of preferred stock. In connection with an underwritten public offering in September 2021 (discussed below in detail), the Company classified and designated 2,000,000 shares of its authorized preferred stock as authorized shares of Series A Preferred Stock. As of September 30, 2023 and December 31, 2022, 2,000,000 shares of authorized Series A Preferred Stock were issued and outstanding.

Series A Preferred Stock - Terms

Holders of Series A Preferred Stock are entitled to cumulative dividends in the amount of $1.84375 per share each year, which is equivalent to the rate of 7.375% of the $25.00 liquidation preference per share per annum. The Series A Preferred Stock has no stated maturity and will remain outstanding indefinitely unless redeemed, converted or otherwise repurchased. Except in limited circumstances relating to the Company's qualification as a REIT for U.S. federal income tax purposes, and as described in the articles supplementary governing the terms of the Series A Preferred Stock (the “Articles Supplementary”), the Series A Preferred Stock is not redeemable prior to September 17, 2026.

On and after September 17, 2026, at any time and from time to time, the Series A Preferred Stock will be redeemable in whole or in part, at the Company's option, at a cash redemption price of $25.00 per share, plus an amount equal to all dividends accrued and unpaid (whether or not authorized or declared), if any, to, but not including, the redemption date. In addition, upon the occurrence of a Delisting Event or a Change of Control (each as defined in the Articles Supplementary), the Company may, subject to certain conditions, at its option, redeem the Series A Preferred Stock, in whole or in part, (i) after the first date on which the Delisting Event occurred or (ii) on, or within 120 days after, the first date on which the Change of Control occurred, as applicable, by paying the liquidation preference of $25.00 per share, plus an amount equal to all dividends accrued and unpaid (whether or not authorized or declared), if any, to, but not including, the redemption date.

Upon the occurrence of a Change of Control during a continuing Delisting Event, unless the Company has elected to exercise its redemption right, holders of the Series A Preferred Stock will have certain rights to convert the Series A Preferred Stock into shares of the Company’s Class C common stock. In addition, upon the occurrence of a Delisting Event, the dividend rate will be increased on the day after the occurrence of the Delisting Event by 2.00% per annum to the rate of 9.375% of the $25.00 liquidation preference per share per annum (equivalent to $2.34375 per share each year) from and after the date of the Delisting Event. Following the cure of such Delisting Event, the dividend rate will revert to the rate of 7.375% of the $25.00 liquidation preference per share per annum. The necessary conditions to convert the Series A Preferred Stock into the Company's Class C common stock have not been met as of September 30, 2023.

The Series A Preferred Stock ranks senior to the Company's Class C common stock with respect to dividend rights and rights upon the Company’s voluntary or involuntary liquidation, dissolution or winding up.

Voting rights for holders of Series A Preferred Stock exist primarily with respect to the ability to elect two additional directors to the board of directors if six or more quarterly dividends (whether or not authorized or declared or consecutive) payable on the Series A Preferred Stock are in arrears, and with respect to voting on amendments to the Company’s charter (which includes the Articles Supplementary) that materially and adversely affect the rights of the Series A Preferred Stock or create additional classes or series of shares of the Company’s capital stock that are senior to the Series A Preferred Stock. Other than the limited circumstances described above and in the Articles Supplementary, holders of Series A Preferred Stock do not have any voting rights.

Series A Preferred Stock Dividend

Dividends on the Company's Series A Preferred Stock accrue in an amount equal to $1.84375 per share each year ($0.460938 per share each quarter) to holders of Series A Preferred Stock, which is equivalent to 7.375% of the $25.00 liquidation preference per share per annum. Dividends on the Series A Preferred Stock are cumulative and payable quarterly in arrears on the 15th day of January, April, July and October of each year (or, if not a business day, the next succeeding business day) to holders of record on the applicable record date. Any accrued and unpaid dividends payable with respect to the Series A Preferred Stock become part of the liquidation preference thereof.

On March 18, 2022, June 15, 2022, August 18, 2022 and November 7, 2022 the Company’s board of directors declared Series A Preferred Stock dividends payable of $921,875 for each quarter of 2022, which were paid on April 15, 2022, July 15, 2022, October 17, 2022 and January 17, 2023. On March 9, 2023, June 15, 2023 and August 7, 2023, the Company’s board of directors declared Series A Preferred Stock dividends payable of $921,875 for the first, second and third quarters of 2023. These amounts were accrued as of March 31, 2023, June 30, 2023 and September 30, 2023, respectively, and paid on April 17, 2023, July 17, 2023 and October 16, 2023, respectively (see Note 14).

Common Stock Listed Offering

On February 10, 2022, the Company and the Operating Partnership entered into an underwriting agreement (the “Class C Common Stock Underwriting Agreement”) with B. Riley Securities, Inc., as the underwriter listed on Schedule I thereto, pursuant to which the Company agreed to issue and sell 40,000 shares of the Company’s Class C common stock in an underwritten listed offering (the “Listed Offering”) at a price per share of $25.00. On February 15, 2022, the Company completed the Listed Offering of its Class C common stock, and in connection with the Listed Offering, the Company sold to the Company’s former Chairman of the board of directors all 40,000 shares of its Class C common stock offered in the Listed Offering at $25.00 per share for aggregate net proceeds of $114,500, after deducting the underwriting discount of $70,000, and other offering costs of $815,500. The primary purpose of the Listed Offering was to provide liquidity to the Company’s existing stockholders. The shares of Class C common stock began trading on the NYSE on February 11, 2022.

On March 30, 2022, the Company filed a Registration Statement on Form S-3 (File No. 333-263985), and on May 27, 2022, the Company filed Amendment No. 1 to the Registration Statement on Form S-3, to issue and sell from time to time, together or separately, the following securities at an aggregate public offering price that will not exceed $200,000,000: Class C common stock, preferred stock, warrants, rights and units. The Form S-3, as amended, became effective on June 2, 2022 and the Company filed a prospectus supplement for the Company's at-the-market offering of up to $50,000,000 of its Class C common stock (the “ATM Offering”) on June 6, 2022. As of September 30, 2023, no shares have been issued in connection with the Company's ATM Offering.

Common Stock Distributions

Aggregate distributions declared per share of Class C common stock were $0.29 for both the three months ended September 30, 2023 and 2022, respectively, and $0.86 and $0.96 for the nine months ended September 30, 2023 and 2022, respectively, which reflect an annualized distribution rate of $1.15 per share for both periods, along with a special 13th distribution for the year ended December 31, 2021, which was declared and paid in January 2022.

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RELATED PARTY TRANSACTIONS

9 Months Ended

Sep. 30, 2023

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

RELATED PARTY TRANSACTIONS

The Company pays the members of its board of directors who are not executive officers for services rendered through cash payments and by issuing shares of Class C common stock to them. Total fees incurred and paid or accrued for board of directors' services to the Company for the three and nine months ended September 30, 2023 and 2022 are as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
Board of Directors Compensation	2023		2022		2023		2022
Payments for services rendered	$	57,500	$	67,500	$	192,500	$	202,500
Value of shares issued for services rendered	70,000		82,500		235,000		247,500
Total	$	127,500	$	150,000	$	427,500	$	450,000
Number of shares issued for services rendered	4,194		5,651		17,455		14,916

Transactions with Other Related Parties

On January 31, 2022, the Company acquired an industrial property and related equipment leased to Kalera Inc. (“Kalera”) in Saint Paul, Minnesota, for $8,079,000. Kalera was introduced to the Company by Curtis B. McWilliams, one of the Company’s independent directors. Since Mr. McWilliams was serving as an executive of Kalera at the time of the acquisition, all of the disinterested members of the Company’s board of directors approved this transaction in January 2022.

On April 4, 2023, Kalera filed a voluntary petition for bankruptcy relief under Chapter 11 of Title 11 of the United States Code. In April 2023, Mr. McWilliams was appointed as Kalera’s independent director as Kalera continues to operate its business while in bankruptcy. Mr. McWilliams has recused himself from any matters relating to the Company’s property in Saint Paul, Minnesota leased to Kalera. The status of the Kalera bankruptcy is discussed in Note 11.

Related Party Transactions with Unconsolidated Investment in a Real Estate Property

The Company's taxable REIT subsidiary serves as the asset manager of the TIC Interest property and earned asset management fees, including the Company's share of the management fee, for the three and nine months ended September 30, 2023 and 2022 as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
TIC Interest management fee	$	65,993	$	65,993	$	197,979	$	197,979
Company's share in the management fee	$	47,984	$	47,984	$	143,951	$	143,951

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COMMITMENTS AND CONTINGENCIES

9 Months Ended

Sep. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

Environmental

As an owner of real estate, the Company is subject to various environmental laws of federal, state and local governments. Although there can be no assurance, the Company is not aware of any environmental liability that could have a material adverse effect on its financial condition or results of operations. However, changes in applicable environmental laws and regulations, the uses and conditions of properties in the vicinity of the Company’s properties, the activities of its tenants and other environmental conditions of which the Company is unaware with respect to the property could result in future environmental liabilities.

Tenant Improvements

Pursuant to lease agreements, as of September 30, 2023 and December 31, 2022, the Company had obligations to pay $2,595,468 and $1,789,027, respectively, for on-site and tenant improvements to be incurred by tenants.

Kalera Mechanic's Liens

Kalera filed a voluntary petition for bankruptcy relief under Chapter 11 of Title 11 of the United States Code on April 4, 2023. During June 2023, Kalera conducted an auction of all of its assets, and the sale of Kalera’s assets to the winning bidder, Kalera’s lender, was approved by the bankruptcy court on June 30, 2023. The sale of Kalera’s assets closed on September 29, 2023 and did not include its interest in the Company's lease for the Saint Paul, Minnesota property.

Between January 2023 and the filing date of this Quarterly Report on Form 10-Q, the Company received mechanic's lien statements from the general contractor and nine subcontractors who performed work on behalf of Kalera to complete various interior improvements at the Company's property located in Saint Paul, Minnesota. The mechanic's lien statements refer to construction materials that were delivered and related work that was performed to make this facility operational and amount to $3,548,003 in the aggregate, a portion of which has been settled with one contractor. The Company has been advised that the contractors who have filed such liens are stayed from foreclosing on the Company’s property in Saint Paul, Minnesota under the pending Chapter 11 bankruptcy proceeding.

On May 22, 2023, WPC IV, LLC d/b/a WPC (“WPC”), the general contractor hired by Kalera to construct interior improvements to the Company’s property in Saint Paul, Minnesota, filed a complaint in state district court to enforce a mechanic's lien and foreclose on the Company’s property. WPC’s complaint was also filed against all of the other contractors who had filed mechanic’s lien statements. The other defendants have filed counterclaims and crossclaims. The Company’s outside counsel filed a motion to dismiss or stay this litigation on July 10, 2023 and a hearing is scheduled for December 4, 2023.

On October 31, 2023, Kalera filed a motion with the bankruptcy court to reject the Company’s lease and abandon all of its property located at the premises effective as of October 31, 2023, subject to approval of the motion by the bankruptcy court. The Company is exploring its legal options and may make certain demands and objections relating to damages the Company has incurred in connection with the Kalera bankruptcy. Because the Company’s lease will be rejected once the bankruptcy court enters an order approving Kalera's motion, the Company will be responsible for the mechanic's liens with a face amount of $3,110,443 and will seek to find a new tenant or sell the property. The Company has engaged in preliminary discussions with prospective tenants in anticipation of the lease being rejected. The accompanying condensed consolidated balance sheet as of September 30, 2023 includes the estimated amount of $2,350,000 to settle the pending mechanic's liens at less than face value, which was recorded as construction in progress for the improvements at the Company's Saint Paul, Minnesota property and a corresponding accrued liability.

Legal Matters

From time-to-time, the Company or its subsidiaries may become party to legal proceedings that arise in the ordinary course of its business. Except for the Kalera bankruptcy proceeding and the WPC foreclosure action described above, the Company, including its subsidiaries, is not a party to any legal proceeding, nor is the Company aware of any pending or threatened litigation that could have a material adverse effect on the Company’s business, operating results, cash flows or financial condition should such litigation be resolved unfavorably.

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OPERATING PARTNERSHIP UNITS

9 Months Ended

Sep. 30, 2023

Business Combination and Asset Acquisition [Abstract]

OPERATING PARTNERSHIP UNITS

OPERATING PARTNERSHIP UNITS

Class M OP Units

On September 19, 2019, the Company, the Operating Partnership, BrixInvest, LLC, a Delaware limited liability company and the Company's former sponsor (“BrixInvest”), the Company’s former external advisor, and Daisho OP Holdings, LLC, a formerly wholly owned subsidiary of BrixInvest (“Daisho”) which was spun off from BrixInvest on December 31, 2019, entered into a contribution agreement pursuant to which the Company agreed to acquire substantially all of the net assets of BrixInvest in exchange for 657,949.5 units of Class M limited partnership interest in the Operating Partnership (“Class M OP Units”) and assumed certain liabilities (the “Self-Management Transaction”). As a result of the Self-Management Transaction, the Company became self-managed and eliminated all fees for acquisitions, dispositions and management of its properties, which were previously paid to its former external advisor. The consideration transferred as of December 31, 2019 was determined to have a fair value of $50,603,000 based on a probability weighted analysis of achieving the requisite assets under management (“AUM”) and adjusted funds from operations (“AFFO”) hurdles.

The Class M OP Units were issued to Daisho on December 31, 2019 in connection with the Self-Management Transaction and are non-voting, non-dividend accruing, and were not able to be converted or exchanged prior to the one-year anniversary of the Self-Management Transaction. Investors holding units in BrixInvest received Daisho units in a ratio of 1:1 for an aggregate of 657,949.5 Daisho units. During 2020, Daisho distributed the Class M OP Units to its members. The Class M OP Units are convertible into units of Class C limited partnership interest in the Operating Partnership (“Class C OP Units”) at a conversion ratio of 1.6667 Class C OP Units for each one Class M OP Unit, subject to a reduction in the conversion ratio (which reduction will vary depending upon the amount of time held) if the exchange occurs prior to the four-year anniversary of the completion of the Self-Management Transaction.

As of September 30, 2023, no Class M OP Units had been converted to Class C OP Units. In the event that the Class M OP Units are converted into Class C OP Units prior to December 31, 2023, such Class M OP Units shall be exchanged at 70% of the Class M conversion ratio. After December 31, 2023, in the event that the Class M OP Units are converted into Class C OP Units, such Class M OP Units shall be exchanged at 100% of the Class M conversion ratio.

The Class M OP Units were eligible for an increase in the conversion ratio (conversion ratio enhancement) if the Company achieved both of the targets for AUM and AFFO per share in a given year. However, the AUM and AFFO per share hurdles for the Class M OP Units were not met for fiscal years 2022 or 2021 and the Company does not expect to meet the hurdles for fiscal year 2023.

Based on the current conversion ratio of 1.6667 Class C OP Units for each one Class M OP Unit, if a Class M OP Unit is converted on or after December 31, 2023, and based on the NYSE closing share price of $16.69 as of September 29, 2023, the last day of stock market trading for the three months ended September 30, 2023, a Class M OP Unit would be valued at $27.82. All Class M OP Units automatically convert to Class C OP Units on March 31, 2024. The automatic conversion into Class C OP Units does not require any action by Class M OP Unit holders.

Class P OP Units

The Company issued the units of Class P limited partnership interest in the Operating Partnership (“Class P OP Units”) described below in connection with the Self-Management Transaction. The Class P OP Units are intended to be treated as “profits interests” in the Operating Partnership, which are non-voting, non-dividend accruing, and are not able to be transferred or exchanged prior to the earlier of (1) March 31, 2024, (2) a change of control (as defined in the Third Amended and Restated Limited Partnership Agreement of the Operating Partnership (as amended, the “Operating Partnership Agreement”)), or (3) the date of the recipient's involuntary termination (as defined in the relevant award agreement for the Class P OP Units) (collectively, the “Lockup Period”). Following the expiration of the Lockup Period, the Class P OP Units are convertible into Class C OP Units at a conversion ratio of 1.6667 Class C OP Units for each one Class P OP Unit; provided, however, that the foregoing conversion ratio shall be subject to increase on generally the same terms and conditions as the Class M OP Units, as set forth above.

The AUM and AFFO per share hurdles for the Class P OP Units were not met for fiscal year 2022 or 2021. As of September 30, 2023, the Company does not expect to meet the hurdles for fiscal year 2023.

On December 31, 2019, the Company issued a total of 56,029 Class P OP Units to Aaron S. Halfacre, the Company’s Chief Executive Officer and President, and Raymond J. Pacini, the Company’s Chief Financial Officer, including 26,318 Class P OP Units issued in exchange for Messrs. Halfacre's and Pacini's agreements to forfeit a similar number of restricted units in BrixInvest in connection with the Self-Management Transaction. The remaining 29,711 Class P OP Units were issued to both executives as signing bonuses and as a portion of their incentive compensation for 2020 in connection with their entry into restrictive covenant agreements. The 29,711 Class P OP Units were valued based on the estimated NAV per share of $30.48 (unaudited) when issued on December 31, 2019 and the expected minimum conversion ratio of 1.6667 Class C OP Units for each one Class P OP Unit, which resulted in a valuation of $1,509,319. This amount is amortized on a straight-line basis over 51 months through March 31, 2024, the expected vesting date of the units, as a periodic charge to stock compensation expense.

During the three months ended September 30, 2023 and 2022, the Company amortized and charged $88,783 to stock compensation expense for both quarters for Class P OP Units and during the nine months ended September 30, 2023 and 2022, the Company amortized and charged $266,350 to stock compensation expense for both periods for Class P OP Units. The unamortized value of these units was $177,567 as of September 30, 2023.

Under the Operating Partnership Agreement, once the Class M OP Units or Class P OP Units are converted into Class C OP Units, they will be exchangeable for the Company’s shares of Class C common stock on a 1-for-1 basis, or for cash at the sole and absolute discretion of the Company. Class P OP Units will automatically convert to Class C OP Units on March 31, 2024. The Company recorded the ownership interests of the Class M OP Units and Class P OP Units as noncontrolling interests in the Operating Partnership, representing a combined total of approximately 13% of the equity in the Operating Partnership on December 31, 2019. As of September 30, 2023, these interests represent a combined total of approximately 10.7% of the equity in the Operating Partnership.

Class R OP Units

On January 25, 2021, the compensation committee of the Company's board of directors recommended, and the board of directors approved, the grant of 40,000 units of Class R limited partnership interest in the Operating Partnership (“Class R OP Units”) to Mr. Halfacre in recognition of his voluntary reduction in his 2020 compensation plus 170,667 Class R OP Units to Mr. Halfacre as equity incentive compensation for the next three years, and the grant of 33,333 Class R OP Units to Mr. Pacini as equity incentive compensation for the next three years. An additional 116,000 Class R OP Units were granted to the remainder of the employees of the Company for a total of 360,000 Class R OP Units granted. There are no other stock based incentive compensation programs in place for employees.

Stock compensation expense related to the Class R OP Units is based on the estimated fair value per share on the grant date, including a discount for the illiquid nature of the underlying equity, and is being recognized over the vesting period. Of the 360,000 Class R OP Units granted, due to the departure of employees, 43,657 units were forfeited through December 31, 2022. There were no forfeitures during the three and nine months ended September 30, 2023. During the first nine months of 2023, the Company recorded $1,466,659 of stock compensation expense ($488,887 per quarter) related to the 316,343 Class R OP Units outstanding.

All Class R OP Units granted vest and are mandatorily convertible into Class C OP Units on March 31, 2024 at a conversion ratio of 1:1, which conversion ratio can increase to 1:2.5 Class C OP Units if the Company generates funds from operations (“FFO”) of $1.05, or more, per weighted average fully-diluted share outstanding for the year ending December 31, 2023, excluding the units and related compensation expense of the units to be issued if the performance target is met. As of September 30, 2023, the Company concluded that achieving the 2023 FFO performance target to trigger the increased conversion ratio for the Class R OP Units is deemed probable. Therefore, the Company recorded a one-time non-cash catch-up adjustment of $7,822,197 during the three months ended September 30, 2023 to reflect the cumulative compensation expense for the 474,515 performance-based Class C OP Units expected to be issued upon conversion of the Class R OP Units based on the grant date fair value of $19.58 per share from the initial grant date in January 2021 through September 30, 2023. Compensation expense of $733,331 per quarter will be recorded for these additional units through the end of the vesting period on March 31, 2024, if achieving the FFO performance target of $1.05 per share is still deemed probable.

During the three months ended September 30, 2023 and 2022, the Company amortized and charged $8,311,084 and $377,957 to stock compensation expense, respectively, and during the nine months ended September 30, 2023 and 2022, the Company amortized and charged $9,288,856 and $1,227,002 to stock compensation expense, respectively, for the Class R OP Units for both time vesting and performance units. The remaining unamortized value of the 790,858 time vesting and performance units aggregated $2,444,441 as of September 30, 2023.

The total stock compensation expenses for the three and nine months ended September 30, 2023 and 2022 were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Class P OP Units	$	88,783	$	88,783	$	266,350	$	266,350
Class R OP Units - Time Vesting Units	488,887		377,957		1,466,659		1,227,002
Class R OP Units - Performance Units	7,822,197		—		7,822,197		—
Class C common stock issued to the board of directors for services (see Note 10)	70,000		82,500		235,000		247,500
Total	$	8,469,867	$	549,240	$	9,790,206	$	1,740,852

Class C OP Units

On January 18, 2022, the Company completed the acquisition of a KIA auto dealership property in an “UPREIT” transaction pursuant to a contribution agreement whereby the seller received 1,312,382 Class C OP Units based on the terms of the Operating Partnership Agreement and an agreed upon value of $25.00 per unit, representing approximately 47% of the property’s value. Following expiration of the lock-up period on August 11, 2022, the holder of the Class C OP Units may require the redemption of all or a portion of these units and the Company has the option to redeem the units for cash or shares of Class C common stock.

On April 13, 2023, the Company acquired an industrial manufacturing property located in Reading, Pennsylvania leased to Summit Steel whereby the seller received 287,516 Class C OP Units based on the terms of the Operating Partnership Agreement and an agreed upon value of $18.00 per unit, representing approximately 46% of the property’s value. Under the terms of the contribution agreement, these Class C OP Units are redeemable for cash or, at the Company’s option, exchangeable for shares of the Company's Class C common stock. Summit Steel cannot require the Company to redeem any or all of the Class C OP Units until one year after the closing date of the agreement. The Company refers to this acquisition and the acquisition of the KIA auto dealership property discussed above collectively as the “UPREIT Transactions.”

The above Class C OP Units received the following distributions and allocations of net (loss) income during the three and nine months ended September 30, 2023 and 2022 as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Class C OP Units distributions	$	459,955	$	377,298	$	1,269,653	$	1,006,136
Class C OP Units net (loss) income allocation	$	(1,368,896)	$	528,540	$	(1,535,452)	$	(1,180,275)

Class C OP Units may be exchanged into Class C common stock or cash (at the sole discretion of the Company) in accordance with, and subject to the terms and conditions of, the Operating Partnership Agreement. Holders of Class C OP Units wishing to exchange their Class C OP Units must submit a Notice of Exchange (as defined in the Operating Partnership Agreement) to the Operating Partnership with a copy to the Company (the general partner of the Operating Partnership) in accordance with the Operating Partnership Agreement. If the Company chooses to exchange such Class C OP Units for cash, the cash amount will be based on the average daily market price of the Class C common stock for 10 consecutive trading days immediately preceding the date of receipt by the Company of the Notice of Exchange.

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EARNINGS (LOSS) PER SHARE

9 Months Ended

Sep. 30, 2023

Earnings Per Share [Abstract]

EARNINGS (LOSS) PER SHARE

EARNINGS (LOSS) PER SHARE

The Company reports a dual presentation of basic earnings per share (“Basic EPS”) and diluted earnings per share (“Diluted EPS”). Basic EPS excludes dilution and is computed by dividing net income or loss by the weighted average number of common shares outstanding during the period. Diluted EPS uses the treasury stock method or the if-converted method, where applicable, to compute for the potential dilution that would occur if dilutive securities or commitments to issue common stock were exercised (see Note 12 for additional information).

The following table presents the computation of the Company's basic and diluted net (loss) income per share attributable to common stockholders for the three and nine months ended September 30, 2023 and 2022:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Numerator - Basic:
Net (loss) income	$	(6,905,242)	$	4,450,767	$	(6,854,210)	$	(5,232,053)
Less: net loss (income) attributable to noncontrolling interest in Operating Partnership	1,368,896		(528,540)		1,535,452		1,180,275
Preferred stock dividends	(921,875)		(921,875)		(2,765,625)		(2,765,625)
Net (loss) income attributable to common stockholders	$	(6,458,221)	$	3,000,352	$	(8,084,383)	$	(6,817,403)
Numerator - Diluted
Net (loss) income	$	(6,905,242)	$	4,450,767	$	(6,854,210)	$	(5,232,053)
Preferred stock dividends	(921,875)		(921,875)		(2,765,625)		(2,765,625)
Net (loss) income attributable to common stockholders	$	(7,827,117)	$	3,528,892	$	(9,619,835)	$	(7,997,678)
Denominator:
Weighted average shares outstanding - basic	7,548,052		7,449,968		7,537,505		7,486,945
Operating Partnership Units - Class C	—		1,312,382		—		—
Operating Partnership Units - Classes M, P and R	—		1,418,193		—		—
Weighted average shares outstanding - diluted	7,548,052		10,180,543		7,537,505		7,486,945
Loss (earnings) per share attributable to common stockholders:
Basic	$	(0.86)	$	0.40	$	(1.07)	$	(0.91)
Diluted	$	(0.86)	$	0.35	$	(1.07)	$	(0.91)

During the three months ended September 30, 2023, the weighted average dilutive effect of 3,580,720 shares and during the nine months ended September 30, 2023 and 2022, the weighted average dilutive effect of 3,484,881 shares and 2,730,416 shares, respectively, related to units of limited partnership interest in the Operating Partnership as discussed in Note 12 were excluded from the computation of Diluted EPS because their effect would be anti-dilutive. There were no other outstanding securities or commitments to issue common stock that would have a dilutive effect for the periods then ended.

Diluted shares also exclude the 474,515 performance-based Class C OP Units expected to be issued upon conversion of the Class R OP Units on March 31, 2024 if the 2023 FFO performance target is achieved, which is described in Note 12, because their effect would be anti-dilutive. All Class R OP Units will automatically convert to Class C OP Units on March 31, 2024.

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Subsequent Events

9 Months Ended

Sep. 30, 2023

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

The Company evaluates subsequent events until the date the accompanying unaudited condensed consolidated financial statements are issued. Significant subsequent events are described below:

Preferred Dividends

On October 16, 2023, the Company paid its Series A Preferred Stock dividends of $921,875 for the third quarter of 2023, which were declared by the Company’s board of directors on August 7, 2023.

On November 6, 2023, the Company’s board of directors declared Series A Preferred Stock dividends payable of $921,875 for the fourth quarter of 2023, which will be paid on January 16, 2024 to holders of Series A Preferred Stock of record as of December 29, 2023.

Common Stock and Class C OP Unit Distributions

On June 15, 2023, the Company’s board of directors authorized monthly distributions payable to common stockholders and the Class C OP Unit holders of record as of September 30, 2023, which were paid on October 25, 2023.

On October 10, 2023, the Company’s board of directors authorized monthly distributions payable to common stockholders and Class C OP Unit holders of record as of October 31, 2023, November 30, 2023 and December 29, 2023, which will be paid on or about November 27, 2023, December 26, 2023 and January 25, 2024, respectively. The monthly distribution amount of $0.095833 per share represents an annualized distribution rate of $1.15 per share of common stock, which is consistent with the annual dividend rate paid since October 1, 2021.

On November 6, 2023, the Company’s board of directors authorized monthly distributions of $0.095833 per share payable to common stockholders and Class C OP Unit holders of record as of January 31, 2024, February 29, 2024 and March 29, 2024, which will be paid on or about February 26, 2024, March 25, 2024 and April 25, 2024, respectively.

Kalera Mechanic's Liens

On October 31, 2023, Kalera filed a motion with the bankruptcy court to reject the Company’s lease and abandon all of its property located at the premises effective as of October 31, 2023, subject to approval of the motion by the bankruptcy court. The Company is exploring its legal options and may make certain demands and objections relating to damages the Company has incurred in connection with the Kalera bankruptcy. Because the Company’s lease will be rejected once the bankruptcy court enters an order approving Kalera's motion, the Company will be responsible for the mechanic's liens with a face amount of $3,110,443 and will seek to find a new tenant or sell the property. The Company has engaged in preliminary discussions with prospective tenants in anticipation of the lease being rejected. The accompanying condensed consolidated balance sheet as of September 30, 2023 includes the estimated amount of $2,350,000 to settle the pending mechanic’s liens at less than face value, which was recorded as construction in progress for the improvements at the Company’s Saint Paul, Minnesota property and a corresponding accrued liability.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

9 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

Basis of Presentation and Principles of Consolidation

Basis of Presentation and Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial statements as contained within the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) and the rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, they do not contain all information and footnotes required by GAAP for annual financial statements pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading. Such unaudited condensed consolidated financial statements and notes are the representations of the Company’s management, which is responsible for their integrity and objectivity. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements as of December 31, 2022 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 13, 2023.

The accompanying unaudited condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and, in the opinion of management, reflect all adjustments, which are normal and recurring, necessary to fairly state the Company's financial position, results of operations and cash flows. All significant intercompany balances and transactions are eliminated in consolidation. The unaudited condensed consolidated balance sheet as of December 31, 2022 included herein was derived from the audited financial statements.

Noncontrolling Interests in the Operating Partnership

Noncontrolling Interests in the Operating Partnership

The Company accounts for the noncontrolling interests in its Operating Partnership in accordance with the related accounting guidance. Due to the Company's exclusive responsibility and discretion in the management and control of the Operating Partnership through its general partnership interest therein, the Operating Partnership, including its wholly-owned subsidiaries, are consolidated with the Company, and the limited partner interests not held by the Company are reflected as noncontrolling interests in the accompanying unaudited condensed consolidated balance sheets and statements of equity. As discussed in Note 12, other than the noncontrolling interests related to “UPREIT” transactions completed in January 2022 and April 2023, all noncontrolling interests currently represent non-voting, non-distribution accruing interests with no allocation of profits or losses, but have various conversion rights to obtain future rights to distributions and allocation of profits and losses.

Use of Estimates

Use of Estimates

The preparation of the accompanying unaudited condensed consolidated financial statements and the accompanying notes thereto in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the unaudited condensed consolidated financial statements and accompanying notes. These estimates are based on historical experience and, in some cases, assumptions based on current and future market experience. Actual results may differ from those estimates.

Real Estate Acquisitions

Real Estate Acquisitions

In accordance with ASC 805, Business Combinations, the Company evaluates each real estate acquisition to determine whether to account for the acquisition as an asset acquisition or a business combination. When it concludes that substantially all of the fair value of the gross asset is concentrated in a single identifiable asset rather than an integrated set of activities and assets, the Company recognizes the acquisition of a real estate asset rather than a business combination, and allocates the acquisition cost to tangible and intangible assets based on their relative fair values. All of the Company's real estate acquisitions for the nine months ended September 30, 2023 and the year ended December 31, 2022 have been accounted for as asset acquisitions.

Revenue Recognition

Revenue Recognition

The Company accounts for leases in accordance with FASB Accounting Standards Update (“ASU”) No. 2016-02, Leases (“Topic 842”), and the related FASB ASU Nos. 2018-10, 2018-11, 2018-20 and 2019-01, which provide practical expedients, technical corrections and improvements for certain aspects of ASU No. 2016-02 (collectively “Topic 842”). As a lessor, the Company's leases with tenants generally provide for the lease of real estate properties, as well as common area maintenance, property taxes and other recoverable costs. Rental income and tenant reimbursements and other lease related property income that meet the requirements of the practical expedient provided by ASU No. 2018-11 have been combined under rental income in the Company's accompanying unaudited condensed consolidated statements of operations.

The Company recognizes rental income from tenants under operating leases on a straight-line basis over the noncancelable term of the lease when collectability of such amounts is reasonably assured. Recognition of rental income on a straight-line basis includes the effects of rental abatements, lease incentives and fixed and determinable increases in lease payments over the lease term. If the lease provides for tenant improvements, the management of the Company determines whether the tenant improvements, for accounting purposes, are owned by the tenant or by the Company.

When the Company is the owner of the tenant improvements, the tenant is not considered to have taken physical possession or have control of the physical use of the leased asset until the tenant improvements are substantially completed. When the tenant is the owner of the tenant improvements, any tenant improvement allowance (including amounts that the tenant can take in the form of cash or a credit against its rent) that is funded is treated as a lease incentive and amortized as a reduction of revenue over the lease term.

The Company records tenant reimbursements on a gross basis in instances when its tenants reimburse the Company for lessor costs, including real estate taxes, which the Company incurs. Conversely, the Company records lessor costs on a net basis when these costs are paid directly by the Company's tenants to suppliers and service providers, including taxing authorities, on the Company's behalf. To the extent any tenant responsible for these obligations under the applicable lease defaults on such lease, or if it is deemed probable that the tenant will fail to pay for these obligations, the Company records a liability for such obligations.

The Company evaluates the collectability of rents and other receivables on a regular basis based on factors including, among others, payment history, credit rating, the asset type, and current economic conditions. If the Company’s evaluation of these factors indicates it may not recover the full value of the receivable, it provides an allowance against the portion of the receivable that it estimates may not be recovered. This analysis requires the Company to determine whether there are factors indicating a receivable may not be fully collectible and to estimate the amount of the receivable that may not be collected.

Bad Debts and Allowances for Tenant and Deferred Rent Receivables, Gain or Loss on Sale of Real Estate Investments

Bad Debts and Allowances for Tenant and Deferred Rent Receivables

The Company's determination of the adequacy of its allowances for tenant receivables includes a binary assessment of whether or not the amounts due under a tenant’s lease agreement are probable of collection. For such amounts that are deemed probable of collection, revenue continues to be recorded on a straight-line basis over the lease term. For such amounts that are deemed not probable of collection, revenue is recorded as the lesser of (i) the amount which would be recognized on a straight-line basis or (ii) cash that has been received from the tenant, with any tenant and deferred rent receivable balances charged as a direct write-off against rental income in the period of the change in the collectability determination. In addition, for tenant and deferred rent receivables deemed probable of collection, the Company also may record an allowance under other authoritative GAAP depending upon the Company's evaluation of the individual receivables, specific credit enhancements, current economic conditions, and other relevant factors. Such allowances are recorded as increases or decreases through rental income in the Company's accompanying unaudited condensed consolidated statements of operations.

With respect to tenants in bankruptcy, management makes estimates of the expected recovery of pre-petition and post-petition claims in assessing the estimated collectability of the related receivable. In some cases, the ultimate resolution of these claims can exceed one year. When a tenant is in bankruptcy, the Company will record a bad debt allowance for the tenant’s receivable balance and generally will not recognize subsequent rental income until cash is received or until the tenant is no longer in bankruptcy and has the ability to make rental payments.

Gain or Loss on Sale of Real Estate Investments

The Company recognizes gain or loss on sale of real estate property when the Company has executed a contract for sale of the property, transferred controlling financial interest in the property to the buyer and determined that it is probable that the Company will collect substantially all of the consideration for the property. The Company's real estate property sale transactions during both the three and nine months ended September 30, 2023 and 2022 met these criteria at closing. When properties are sold, operating results of the properties remain in continuing operations, and any associated gain or loss from the disposition is included in gain or loss on sale of real estate investments in the Company’s accompanying unaudited condensed consolidated statements of operations.

Impairment of Investment in Real Estate Properties

Impairment of Investment in Real Estate Properties

The Company monitors events and changes in circumstances that could indicate that the carrying amounts of investments in real estate properties may not be recoverable. When indicators of potential impairment are present that indicate that the carrying amounts of investments in real estate properties may not be recoverable, management assesses whether the carrying value of the investments in real estate properties will be recovered through the future undiscounted operating cash flows expected from the use of and eventual disposition of the property. If, based on the analysis, the Company does not believe that it will be able to recover the carrying value of the investments in real estate properties, the Company records an impairment charge to the extent the carrying value exceeds the estimated fair value of the investments in real estate properties.

Treasury Stock

Treasury Stock

The Company accounts for repurchased shares of its Class C common stock as treasury stock. Treasury shares are recorded at cost and are included as a component of equity in the Company's accompanying unaudited condensed consolidated balance sheets as of September 30, 2023 and December 31, 2022.

Fair Value Disclosures

Fair Value Disclosures

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an existing price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value hierarchy, which is based on three levels of inputs, the first two of which are considered observable and the last unobservable, that may be used to measure fair value, is as follows:

Level 1: quoted prices in active markets for identical assets or liabilities;

Level 2: inputs other than Level 1 that are observable, either directly or indirectly, 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; and

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 fair value for certain financial instruments is derived using valuation techniques that involve significant management judgment. The price transparency of financial instruments is a key determinant of the degree of judgment involved in determining the fair value of the Company’s financial instruments. Financial instruments for which actively quoted prices or pricing parameters are available and for which markets contain orderly transactions will generally have a higher degree of price transparency than financial instruments for which markets are inactive or consist of non-orderly trades. The Company evaluates several factors when determining if a market is inactive or when market transactions are not orderly. The following is a summary of the methods and assumptions used by management in estimating the fair value of each class of financial instrument for which it is practicable to estimate the fair value:

Cash and cash equivalents, tenant receivables, prepaid expenses and other assets and accounts payable, accrued and other liabilities: These balances approximate their fair values due to their short maturities.

Investment in preferred stock: The Company’s investment in preferred stock is presented at fair value in the accompanying unaudited condensed consolidated balance sheet using Level 3 inputs. The preferred stock investment has been recorded at fair value by incorporating both the Monte Carlo simulation model and a dividend discount model. These models incorporate risk-free rates, stock prices, yield and volatility. The development and determination of the unobservable inputs for Level 3 fair value measurements and fair value calculations are the responsibility of the Company’s management with the assistance of an independent third-party valuation specialist.

Derivative Instruments: The Company’s derivative instruments are presented at fair value in the accompanying unaudited condensed consolidated balance sheets. The valuation of these instruments is determined using a proprietary model that utilizes observable inputs. As such, the Company classifies these inputs as Level 2 inputs. The proprietary model uses the contractual terms of the derivatives, including the period to maturity, as well as observable market-based inputs, including interest rate curves and volatility. The fair values of interest rate swaps are estimated using the market standard methodology of netting the discounted fixed cash payments and the discounted expected variable cash receipts. The variable cash receipts are based on an expectation of interest rates (forward curves) derived from observable market interest rate curves. In addition, credit valuation adjustments, which consider the impact of any credit risks on the contracts, are incorporated in the fair values to account for potential nonperformance risk.

Credit facility: The fair values of the Company’s credit facility approximate the carrying value as their interest rate and other terms are comparable to those available in the marketplace for similar credit facilities.

Mortgage notes payable: The fair values of the Company’s mortgage notes payable are estimated using a discounted cash flow analysis based on management’s estimates of current market interest rates for instruments with similar characteristics, including remaining loan term, loan-to-value ratio, type of collateral and other credit enhancements. Additionally, when determining the fair value of liabilities in circumstances in which a quoted price in an active market for an identical liability is not available, the Company measures fair value using (i) a valuation technique that uses the quoted price of the identical liability when traded as an asset or quoted prices for similar liabilities when traded as assets or (ii) another valuation technique that is consistent with the principles of fair value measurement, such as the income approach or the market approach. The Company classifies these inputs as Level 3 inputs.

Related party transactions: The Company has concluded that it is not practical to determine the estimated fair value of related party transactions. Disclosure rules for fair value measurements require that for financial instruments for which it is not practicable to estimate fair value, information pertinent to those instruments be disclosed. Further information as to these financial transactions with related parties is included in Note 10.

Real Estate Investments Held for Sale

Real Estate Investments Held for Sale

The Company generally considers a real estate investment to be “held for sale” when the following criteria are met as of the balance sheet date: (i) management commits to a plan to sell the property, (ii) the property is available for sale immediately, (iii) the property is actively being marketed for sale at a price that is reasonable in relation to its current fair value, (iv) the sale of the property within one year is considered probable and (v) significant changes to the plan to sell are not expected. Real estate that is held for sale and its related assets are classified as “real estate investments held for sale, net” and “other assets related to real estate investments held for sale,” respectively, in the accompanying unaudited condensed consolidated balance sheets. Other liabilities related to real estate investments held for sale are classified as “liabilities related to real estate investments held for sale” in the accompanying unaudited condensed consolidated balance sheets. Real estate investments classified as held for sale are no longer depreciated and are reported at the lower of their carrying value or their estimated fair value less estimated costs to sell. Operating results of properties that were classified as held for sale in the ordinary course of business are included in continuing operations in the Company’s accompanying unaudited condensed consolidated statements of operations.

Derivative Instruments and Hedging Activities

Derivative Instruments and Hedging Activities

The Company enters into derivative instruments for risk management purposes to hedge its exposure to cash flow variability caused by changing interest rates on its variable rate debt. The Company does not enter into derivatives for speculative purposes. The Company records derivative instruments at fair value on its accompanying unaudited condensed consolidated balance sheets. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, such as interest rate risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. If the Company elects to designate a derivative in a hedging relationship and the hedging relationship satisfies the criteria necessary to apply hedge accounting, the derivative is designated as a cash flow hedge and the unrealized holding gain or loss on the interest rate swap is presented in comprehensive (loss) income and accumulated other comprehensive income in the Company's accompanying unaudited condensed consolidated statements of comprehensive (loss) income and condensed consolidated balance sheets, respectively. If the derivative instrument does not meet the hedge accounting criteria, the change in the fair value of the derivative is recorded as a gain or loss on the interest rate swap and included in interest expense, net of derivative settlements and unrealized gain on interest rate swaps in the Company's accompanying unaudited condensed consolidated statements of operations.

The Company has entered into interest rate swaps as a fixed rate payer to mitigate its exposure to rising interest rates on its variable rate term loan. The value of interest rate swaps is primarily impacted by interest rates, market expectations about interest rates, and the remaining life of the instrument. In general, increases in interest rates, or anticipated increases in interest rates, will increase the value of the fixed rate payer position and decrease the value of the variable rate payer position. As the remaining life of the interest rate swap decreases, the value of both positions will generally move towards zero. The Company may enter into derivative contracts that are intended to economically hedge certain risks, even though hedge accounting does not apply or the Company elects not to apply hedge accounting.

Restricted Operating Partnership Unit Awards

Restricted Operating Partnership Unit Awards

Historically, the fair values of the restricted Operating Partnership unit awards issued or granted by the Company were based on an estimated NAV per share (unaudited) of the Company’s common stock on the date of issuance or grant, adjusted for an illiquidity discount due to the illiquid nature of the underlying equity prior to the listing of the Company's Class C common stock on the NYSE. The fair value of future grants of restricted Operating Partnership unit awards will be determined based on the NYSE's market closing price of the Company's Class C common stock on the date of grant. Operating Partnership units issued as purchase consideration in connection with the Self-Management Transaction and UPREIT Transactions (each as defined and discussed in Note 12) are recorded in equity under noncontrolling interests in the Operating Partnership in the Company's accompanying unaudited condensed consolidated balance sheets and statements of equity. For units granted to employees of the Company that are not included in the purchase consideration, the fair value of the award is amortized using the straight-line method over the requisite service period of the award, which is generally the vesting period (see Note 12). The Company has elected to record forfeitures as they occur. Compensation cost is recorded for units to be issued subject to a performance condition when it is probable that the performance condition will be met.

Immaterial Error Corrections

Immaterial Error Corrections

During the first quarter of 2023, management determined that its prior treatment of property taxes in those instances where the Company was responsible for paying property taxes and subsequently seeking tenant reimbursement should be treated differently than those instances where property taxes were paid directly by tenants to taxing authorities. Management determined that property taxes paid directly by tenants to taxing authorities should not have been recorded in the Company’s accompanying unaudited condensed consolidated statements of operations for the prior year periods in accordance with ASU 2018-20 “Leases (Topic 842) - Narrow-Scope Improvements for Lessors.” Accordingly, the Company’s accompanying unaudited condensed consolidated statements of operations for the three and nine months ended September 30, 2022 reflect an adjustment to reduce rental income and a corresponding reduction in property expenses of $648,271 and $1,784,668, respectively, for such property taxes and the Company's consolidated balance sheet as of December 31, 2022 reflects a reduction in tenant receivables with a corresponding reduction in accounts payable, accrued and other liabilities of $1,596,127. The corrections did not affect net income (loss) or net income (loss) per share for the three and nine months ended September 30, 2022 in the accompanying unaudited condensed consolidated statements of operations.

During the fourth quarter of 2022, management determined that straight-line rents receivable write-offs associated with real estate investments previously sold should be reclassified as a component of the related gain on sale of the real estate investments rather than as an offset to rental income as previously presented in the Company's statements of operations. Accordingly, the Company’s accompanying unaudited condensed consolidated statements of operations for the three and nine months ended September 30, 2022 reflect an increase in rental income and a corresponding reduction in the gain on sale of real estate investments of $739,255 and $1,546,976, respectively. The reclassification did not affect net income (loss) or net income (loss) per share for the three and nine months ended September 30, 2022 in the accompanying unaudited condensed consolidated statements of operations.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

New Accounting Standards Recently Issued and Not Yet Adopted

In August 2023, the FASB issued ASU 2023-05, Business Combinations – Joint Venture Formations (Subtopic 805-60) (“ASU 2023-05”), which addresses the accounting for contributions made to a joint venture, upon formation, in a joint venture’s separate financial statements. At present, GAAP does not provide specific authoritative guidance on how a joint venture, upon formation, should recognize and initially measure assets contributed and liabilities assumed. ASU 2023-05 will require that a joint venture apply a new basis of accounting upon formation. By applying the new basis of accounting, a joint venture, upon formation, will recognize and initially measure its assets and liabilities at fair value (with exceptions to fair value measurement that are consistent with the business combinations guidance). The amendments in ASU 2023-05 are effective prospectively for all joint ventures formed on or after January 1, 2025. Joint ventures formed prior to January 1, 2025 may elect to apply the amendments retrospectively and early adoption is permitted. The Company does not currently anticipate any material impact from the implementation of ASU 2023-05.

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REAL ESTATE INVESTMENTS, NET (Tables)

9 Months Ended

Sep. 30, 2023

Real Estate [Abstract]

Schedule of Real Estate Properties

The following table provides summary information regarding the Company’s 42 operating properties held for investment and use as of September 30, 2023:

Property Tenant	Location	Acquisition Date	Property Type	Land, Buildings and Improvements		Equipment		Tenant Origination and Absorption Costs		Accumulated Depreciation and Amortization		Total Investment in Real Estate Property, Net
Northrop Grumman	Melbourne, FL	3/7/2017	Industrial	$	13,608,084	$	—	$	1,469,737	$	(4,361,816)	$	10,716,005
Northrop Grumman	Melbourne, FL	6/21/2018	Land	329,410		—		—		—		329,410
Husqvarna	Charlotte, NC	11/30/2017	Industrial	11,840,200		—		1,013,948		(2,095,659)		10,758,489
AvAir	Chandler, AZ	12/28/2017	Industrial	27,357,899		—		—		(4,019,833)		23,338,066
3M	DeKalb, IL	3/29/2018	Industrial	14,762,819		—		3,037,057		(5,983,018)		11,816,858
Taylor Fresh Foods	Yuma, AZ	10/24/2019	Industrial	34,194,369		—		2,894,017		(5,231,624)		31,856,762
Levins	Sacramento, CA	12/31/2019	Industrial	4,429,390		—		221,927		(820,330)		3,830,987
Labcorp	San Carlos, CA	12/31/2019	Industrial	9,672,174		—		408,225		(766,203)		9,314,196
WSP USA	San Diego, CA	12/31/2019	Industrial	9,896,800		—		539,633		(1,335,830)		9,100,603
ITW Rippey	El Dorado, CA	12/31/2019	Industrial	7,337,873		—		304,387		(1,005,487)		6,636,773
L3Harris	San Diego, CA	12/31/2019	Industrial	11,690,952		—		662,101		(1,541,628)		10,811,425
Arrow-TruLine	Archbold, OH	12/3/2021	Industrial	11,518,084		—		—		(742,619)		10,775,465
Kalera	Saint Paul, MN	1/31/2022	Industrial	6,412,509		4,429,000		—		(580,724)		10,260,785
Lindsay	Colorado Springs 1, CO	4/19/2022	Industrial	2,311,934		—		—		(85,054)		2,226,880
Lindsay	Colorado Springs 2, CO	4/19/2022	Industrial	3,314,406		—		—		(50,615)		3,263,791
Lindsay	Dacano, CO	4/19/2022	Industrial	6,889,402		—		—		(122,707)		6,766,695
Lindsay	Alachua, FL	4/19/2022	Industrial	8,518,123		—		—		(528,808)		7,989,315
Lindsay	Franklinton, NC	4/19/2022	Industrial	7,181,113		—		—		(233,143)		6,947,970
Lindsay	Canal Fulton 1, OH	4/19/2022	Industrial	11,345,533		—		—		(501,441)		10,844,092
Lindsay	Canal Fulton 2, OH	4/19/2022	Industrial	10,190,942		—		—		(459,435)		9,731,507
Lindsay	Rock Hill, SC	4/19/2022	Industrial	6,555,983		—		—		(245,356)		6,310,627
Lindsay	Gap, PA	4/13/2023	Industrial	16,580,044		—		—		(341,909)		16,238,135
Producto	Endicott, NY	7/15/2022	Industrial	2,362,310		—		—		(94,432)		2,267,878
Producto	Jamestown, NY	7/15/2022	Industrial	3,073,686		—		—		(115,606)		2,958,080
Valtir	Centerville, UT	7/26/2022	Industrial	4,685,355		—		—		(141,509)		4,543,846
Valtir	Orangeburg, SC	7/26/2022	Industrial	4,243,308		—		—		(168,370)		4,074,938
Valtir	Fort Worth, TX	7/26/2022	Industrial	3,278,522		—		—		(75,029)		3,203,493
Valtir	Lima, OH	8/4/2022	Industrial	9,921,943		—		—		(415,965)		9,505,978
Plastic Products	Princeton, MN	1/26/2023	Industrial	6,118,411		—		553,780		(413,432)		6,258,759
Stealth Manufacturing	Savage, MN	3/31/2023	Industrial	5,526,310		—		—		(91,887)		5,434,423
Summit Steel	Reading, PA	4/13/2023	Industrial	11,397,091		—		—		(182,790)		11,214,301
PBC Linear	Roscoe, IL	4/20/2023	Industrial	20,023,978		—		—		(337,592)		19,686,386
Cameron Tool	Lansing, MI	5/3/2023	Industrial	5,776,590		—		—		(85,644)		5,690,946
S.J. Electro Systems	Detroit Lakes, MN	5/5/2023	Industrial	6,314,057		—		—		(69,079)		6,244,978
S.J. Electro Systems	Plymouth, MN	5/5/2023	Industrial	2,225,635		—		—		(34,525)		2,191,110
S.J. Electro Systems	Ashland, OH	5/5/2023	Industrial	7,555,211		—		—		(79,864)		7,475,347
Titan	Alleyton, TX	5/11/2023	Industrial	17,146,503		—		—		(334,377)		16,812,126
Vistech	Piqua, OH	7/3/2023	Industrial	13,550,932		—		—		(109,232)		13,441,700
SixAxis	Andrews, SC	7/11/2023	Industrial	15,470,096		—		—		(154,425)		15,315,671

(Operating properties table continued)
Property Tenant	Location	Acquisition Date	Property Type	Land, Buildings and Improvements		Equipment		Tenant Origination and Absorption Costs		Accumulated Depreciation and Amortization		Total Investment in Real Estate Property, Net
KIA/Trophy of Carson	Carson, CA	1/18/2022	Retail	$	69,286,444	$	—	$	118,606	$	(1,814,016)	$	67,591,034
Costco	Issaquah, WA	12/20/2018	Office	27,585,942		—		2,765,136		(6,289,044)		24,062,034
Solar Turbines	San Diego, CA	12/31/2019	Office	7,186,694		—		324,221		(881,175)		6,629,740
OES (1)	Rancho Cordova, CA	12/31/2019	Office	29,632,580		—		1,616,610		(4,646,438)		26,602,752
				$	508,299,641	$	4,429,000	$	15,929,385	$	(47,587,670)	$	481,070,356

(1)    Effective December 31, 2022, the Company and Sutter Health agreed to the early termination of the Sutter Health lease. The property was then leased to the State of California's Office of Emergency Services (“OES”) effective January 4, 2023 for 12 years through December 31, 2034. OES has a purchase option which OES can exercise any time from May 1, 2024 through December 31, 2026. OES also has an early termination option which OES can exercise any time on or after December 31, 2028 by giving written notice at least 120 days prior to the date of early termination.

Schedule of Acquisitions

During the nine months ended September 30, 2023, the Company acquired 12 industrial manufacturing real estate properties as follows:

Property Tenant	Location	Acquisition Date	Land		Buildings and Improvements		Tenant Origination and Absorption Costs		Below- Market Lease Intangibles		Acquisition Price
Plastic Products	Princeton, MN	1/26/2023	$	421,997	$	5,696,414	$	553,780	$	(285,139)	$	6,387,052
Stealth Manufacturing	Savage, MN	3/31/2023	770,752		4,755,558		—		—		5,526,310
Lindsay (1)	Gap, PA	4/13/2023	2,125,604		14,454,440		—		—		16,580,044
Summit Steel (2)	Reading, PA	4/13/2023	1,517,782		9,879,309		—		—		11,397,091
PBC Linear	Roscoe, IL	4/20/2023	699,198		19,324,780		—		—		20,023,978
Cameron Tool	Lansing, MI	5/03/2023	246,355		5,530,235		—		—		5,776,590
S.J. Electro Systems	Detroit Lakes, MN	5/05/2023	1,736,976		4,577,081		—		—		6,314,057
S.J. Electro Systems	Plymouth, MN	5/05/2023	627,903		1,597,732		—		—		2,225,635
S.J. Electro Systems	Ashland, OH	5/05/2023	251,233		7,303,978		—		—		7,555,211
Titan	Alleyton, TX	5/11/2023	2,056,161		15,090,342		—		—		17,146,503
Vistech	Piqua, OH	7/03/2023	922,310		12,628,622		—		—		13,550,932
SixAxis	Andrews, SC	7/11/2023	1,228,874		14,241,222		—		—		15,470,096
			$	12,605,145	$	115,079,713	$	553,780	$	(285,139)	$	127,953,499

(1)    In addition, the Company provided a $1,800,000 deposit to fund improvements to the previously acquired Lindsay property in Franklinton, North Carolina.

(2)    The Company issued 287,516 Class C OP Units (as defined below) valued at $5,175,284 based on an agreed upon value of $18.00 per unit for a portion of the purchase price.

The noncancellable lease terms of the properties acquired during the nine months ended September 30, 2023 are as follows:

Property Tenant	Lease Expiration
Plastic Products	10/31/2028
Stealth Manufacturing	3/31/2043
Lindsay	4/30/2047
Summit Steel	4/30/2043
PBC Linear	4/30/2043
Cameron Tool	5/31/2043
S.J. Electro Systems, for all three properties acquired	5/31/2040
Titan	5/31/2043
Vistech	7/31/2048
SixAxis	7/31/2048

Schedule of Dispositions and Real Estate Investments Held for Sale

During the nine months ended September 30, 2023, the Company sold 14 real estate properties as follows:

Property Tenant	Location	Disposition Date	Property Type	Rentable Square Feet	Contract Sale Price		(Loss) Gain on Sale			Net Proceeds
Dollar General	Litchfield, ME	8/10/2023	Retail	9,026	$	1,247,974	$	—	(1)	$	—	(1)
Dollar General	Wilton, ME	8/10/2023	Retail	9,100	1,452,188		—		(1)	—		(1)
Dollar General	Thompsontown, PA	8/10/2023	Retail	9,100	1,111,832		—		(1)	—		(1)
Dollar General	Mt. Gilead, OH	8/10/2023	Retail	9,026	1,066,451		—		(1)	—		(1)
Dollar General	Lakeside, OH	8/10/2023	Retail	9,026	1,134,522		—		(1)	—		(1)
Dollar General	Castalia, OH	8/10/2023	Retail	9,026	1,111,832		—		(1)	—		(1)
Dollar General	Bakersfield, CA	8/10/2023	Retail	18,827	4,855,751		—		(1)	—		(1)
Dollar General	Big Spring, TX	8/10/2023	Retail	9,026	1,270,665		—		(1)	—		(1)
Dollar Tree	Morrow, GA	8/10/2023	Retail	10,906	1,293,355		—		(1)	—		(1)
PreK Education	San Antonio, TX	8/10/2023	Retail	50,000	12,888,169		—		(1)	—		(1)
Walgreens	Santa Maria, CA	8/10/2023	Retail	14,490	6,081,037		—		(1)	—		(1)
exp US Services	Maitland, FL	8/10/2023	Office	33,118	5,899,514		—		(1)	—		(1)
GSA (MSHA)	Vacaville, CA	8/10/2023	Office	11,014	2,586,710		(1,887,040)		(1)	39,014,581		(1)
EMC Shop	Rocklin, CA	8/31/2023	Flex	40,110	5,466,960		178,239			5,459,211
				241,795	$	47,466,960	$	(1,708,801)		$	44,473,792

(1)    Represents the combined net loss on sale of $1,887,040 and net proceeds of $39,014,581 for the August 10, 2023 sale of 13 properties to Generation Income Properties, Inc. (NASDAQ: GIPR) (“GIPR”).

The following table summarizes the major components of assets and liabilities related to the real estate investments held for sale as of September 30, 2023 and December 31, 2022:

	September 30, 2023		December 31, 2022
Assets related to real estate investments held for sale:
Land, buildings and improvements	$	11,047,348	$	6,357,172
Tenant origination and absorption costs	1,558,739		355,252
Accumulated depreciation and amortization	(3,977,901)		(1,456,699)
Real estate investments held for sale, net	8,628,186		5,255,725
Other assets, net	46,158		12,765
Total assets related to real estate investments held for sale:	$	8,674,344	$	5,268,490
Liabilities related to real estate investments held for sale:
Other liabilities, net	$	162,349	$	117,881
Total liabilities related to real estate investments held for sale:	$	162,349	$	117,881

Schedules of Asset and Rental Income Concentration

As of September 30, 2023 and December 31, 2022, the Company’s real estate portfolio asset concentration (greater than 10% of total assets) was as follows:

	September 30, 2023				December 31, 2022
Property Tenant and Location	Net Carrying Value		Percentage of Total Assets		Net Carrying Value		Percentage of Total Assets
KIA, Carson, CA	$	67,591,034	12.5	%	$	68,387,431	15.0	%

During the three and nine months ended September 30, 2023 and 2022, the Company’s rental income concentration (greater than 10% of rental income) was as follows:

	Three Months Ended September 30,
	2023				2022
Property Tenant and Location	Rental Income		Percentage of Total Rental Income		Rental Income		Percentage of Total Rental Income
Lindsay, nine properties acquired in: Colorado (three), Ohio (two), Pennsylvania, North Carolina, South Carolina and Florida	$	1,652,422	13.2	%	$	1,204,970	11.7	%
KIA, Carson, CA	$	1,289,545	10.3	%	$	1,306,851	12.7	%

	Nine Months Ended September 30,
	2023				2022
Property Tenant and Location	Rental Income		Percentage of Total Rental Income		Rental Income		Percentage of Total Rental Income
Lindsay, nine properties acquired in: Colorado (three), Ohio (two), Pennsylvania, North Carolina, South Carolina and Florida	$	4,474,870	12.9	%	(1)		(1)
KIA, Carson, CA	$	3,879,601	11.2	%	$	3,666,632	12.2	%

(1)    The Lindsay properties represented a source of greater than 10% of total rental income during the nine months ended September 30, 2023 but not the nine months ended September 30, 2022 since eight of the Lindsay properties were acquired on April 19, 2022 and one was acquired on April 13, 2023.

Schedule of Rental Payments for Operating Leases

As of September 30, 2023, the future minimum contractual rent payments due to the Company under the Company’s non-cancellable operating leases, including lease amendments executed though the date of this report, if any, are as follows:

October through December 2023	$	9,727,190
2024	39,028,622
2025	38,080,113
2026	34,952,446
2027	34,600,851
Thereafter	559,280,654
	$	715,669,876

Schedule of Intangible Assets

As of September 30, 2023 and December 31, 2022, intangible assets, net related to the Company's real estate were as follows:

	September 30, 2023						December 31, 2022
	Tenant Origination and Absorption Costs		Above-Market Lease Intangibles		Below-Market Lease Intangibles		Tenant Origination and Absorption Costs		Above-Market Lease Intangibles		Below-Market Lease Intangibles
Cost	$	15,929,385	$	2,485,510	$	(14,364,650)	$	19,499,749	$	2,485,510	$	(14,378,808)
Accumulated amortization	(10,684,573)		(1,153,052)		5,265,947		(12,722,558)		(634,754)		4,703,122
Net	$	5,244,812	$	1,332,458	$	(9,098,703)	$	6,777,191	$	1,850,756	$	(9,675,686)

Schedule of Intangible Assets Amortization

As of September 30, 2023, the amortization of intangible assets for the remaining three months of the current year ending December 31, 2023 and for each of the next four years and thereafter is expected to be as follows:

	Tenant Origination and Absorption Costs		Above-Market Lease Intangibles		Below-Market Lease Intangibles
October through December 2023	$	253,294	$	18,499	$	(230,099)
2024	1,013,175		73,999		(920,395)
2025	815,130		70,712		(920,395)
2026	466,644		54,278		(920,395)
2027	449,972		54,278		(920,395)
Thereafter	2,246,597		1,060,692		(5,187,024)
	$	5,244,812	$	1,332,458	$	(9,098,703)
Weighted-average remaining amortization period	8.6 years		23.2 years		10.1 years

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UNCONSOLIDATED INVESTMENT IN REAL ESTATE PROPERTY (Tables)

9 Months Ended

Sep. 30, 2023

Investments, Debt and Equity Securities [Abstract]

Schedule of Investments

The Company’s investment in unconsolidated property as of September 30, 2023 and December 31, 2022 is as follows:

	September 30, 2023		December 31, 2022
The TIC Interest	$	10,035,805	$	10,007,420

Schedule of Properties Equity In Earnings

The Company’s income from investment in unconsolidated property for the three and nine months ended September 30, 2023 and 2022 is as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
The TIC Interest	$	79,164	$	64,358	$	207,506	$	226,690

Schedule of Summarized Financial Information

The following is summarized financial information for the Santa Clara property as of September 30, 2023 and December 31, 2022 and for the three and nine months ended September 30, 2023 and 2022:

	September 30, 2023		December 31, 2022
Assets:
Real estate investments, net	$	28,823,530	$	29,294,081
Cash and cash equivalents	532,634		300,405
Other assets	77,366		43,159
Total assets	$	29,433,530	$	29,637,645
Liabilities:
Mortgage note payable, net	$	12,717,835	$	12,936,929
Below-market lease, net	2,404,409		2,514,199
Other liabilities	508,776		424,662
Total liabilities	15,631,020		15,875,790
Total equity	13,802,510		13,761,855
Total liabilities and equity	$	29,433,530	$	29,637,645

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Total revenues	$	693,170	$	679,500	$	2,036,365	$	2,071,258
Operating expenses:
Depreciation and amortization	257,844		264,820		780,802		788,732
Other expenses	193,902		190,527		572,749		565,851
Total operating expenses	451,746		455,347		1,353,551		1,354,583
Operating income	241,424		224,153		682,814		716,675
Interest expense	132,547		135,640		395,810		404,902
Net income	$	108,877	$	88,513	$	287,004	$	311,773

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INVESTMENT IN PREFERRED STOCK (Tables)

9 Months Ended

Sep. 30, 2023

Equity Method Investments and Joint Ventures [Abstract]

Schedule of Investment in Preferred Stock

The Company’s investment in preferred stock as of September 30, 2023 is as follows:

	September 30, 2023
Liquidation value of GIPR preferred stock	$	12,000,000
Adjustment to reduce liquidation value to fair value	(2,380,000)
Fair value of GIPR preferred stock as of August 10, 2023	9,620,000
Increase in fair value of preferred stock for the period ended September 30, 2023	440,000
Fair value of GIPR preferred stock as of September 30, 2023	$	10,060,000

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OTHER BALANCE SHEET DETAILS (Tables)

9 Months Ended

Sep. 30, 2023

Payables and Accruals [Abstract]

Schedule of Supplemental Detail Disclosures for Consolidated Balance Sheet

As of September 30, 2023 and December 31, 2022, tenant receivables consisted of the following:

	September 30, 2023		December 31, 2022
Straight-line rent	$	10,793,380	$	6,607,220
Tenant rent and billed reimbursements	58,444		196,477
Accrued tenant reimbursements	359,234		459,505
Total	$	11,211,058	$	7,263,202

As of September 30, 2023 and December 31, 2022, prepaid expenses and other assets were comprised of the following:

	September 30, 2023		December 31, 2022
Deferred tenant allowance (1)	$	267,334	$	2,564,806
Prepaid expenses and other assets (2)	3,773,714		2,420,777
Deferred financing costs on credit facility revolver	840,335		1,115,354
Total	$	4,881,383	$	6,100,937

(1)    Deferred tenant balances for the Pre-K Education and Walgreens leases were disposed in the August 10, 2023 sale transaction.

(2)    The balance as of September 30, 2023 includes deposits of $1,800,000 for improvements to be made to the Lindsay property in Franklinton, North Carolina. The balance as of December 31, 2022 includes a deposit of $440,548 for completion of ongoing improvements to the Lindsay property in Dacono, Colorado.

As of September 30, 2023 and December 31, 2022, accounts payable, accrued and other liabilities were comprised of the following:

	September 30, 2023		December 31, 2022
Accounts payable	$	557,643	$	1,001,411
Accrued expenses (1)	4,076,883		2,163,821
Accrued distributions and dividends	1,801,856		1,768,068
Accrued interest payable	321,278		285,392
Unearned rent	1,792,912		1,870,057
Lease incentive obligation	343,058		561,057
Total	$	8,893,630	$	7,649,806

(1)    The balance as of September 30, 2023 includes an accrued liability of $2,350,000 for construction in progress for improvements at the Kalera property to which the Company obtained the rights upon the rejection of Kalera's lease in its bankruptcy proceedings effective October 31, 2023 (see Note 11 for additional information).

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DEBT (Tables)

9 Months Ended

Sep. 30, 2023

Debt Disclosure [Abstract]

Schedule of Long-Term Debt Instruments

The breakdown of debt as of September 30, 2023 and December 31, 2022 is as follows:

	September 30, 2023		December 31, 2022
Mortgage notes payable, net	$	34,118,748	$	44,435,556
Credit facility:
Revolver	—		3,000,000
Term loan, net	248,385,927		148,018,164
Total	$	282,504,675	$	195,453,720

Schedule of Debt

As of September 30, 2023 and December 31, 2022, the Company’s mortgage notes payable consisted of the following:

Collateral	2023 Principal Amount		2022 Principal Amount		Interest Rate (1)	Loan Maturity
Costco property	$	18,850,000	$	18,850,000	4.85%	1/01/2030
Taylor Fresh Foods property	12,350,000		12,350,000		3.85%	11/01/2029
OES property (2)	3,084,849		13,315,009		4.50%	3/09/2024
Total mortgage notes payable	34,284,849		44,515,009
Plus unamortized mortgage premium, net (3)	10,893		119,245
Less unamortized deferred financing costs	(176,994)		(198,698)
Mortgage notes payable, net	$	34,118,748	$	44,435,556

(1)Represents the contractual interest rate in effect under the mortgage note payable as of September 30, 2023 for the three mortgages that were not refinanced through a drawdown from the Credit Facility (defined and discussed below) with KeyBank National Association (“KeyBank”) in January 2022 given their prepayment penalties.

(2)During August and September 2023, the Company prepaid an aggregate of $10,000,000 principal amount of the mortgage on the OES property following the dispositions completed in August 2023. The Company intends to pay the remainder on or before the loan maturity date.

(3)Represents unamortized net mortgage premium acquired through the merger with Rich Uncles Real Estate Investment Trust I on December 31, 2019.

Schedule of Carrying Values and Estimated Fair Values of Debt Instruments

The following summarizes the face value, carrying amount and fair value of the Company’s mortgage notes payable (Level 3 measurement) as of September 30, 2023 and December 31, 2022:

	September 30, 2023						December 31, 2022
	Face Value		Carrying Value		Fair Value		Face value		Carrying Value		Fair Value
Mortgage notes payable	$	34,284,849	$	34,118,748	$	30,736,613	$	44,515,009	$	44,435,556	$	41,293,644

Schedule of Maturities of Long-term Debt

The following summarizes the future principal repayments of the Company’s mortgage notes payable and Credit Facility as of September 30, 2023:

	Mortgage Notes		Credit Facility
	Payable		Revolver		Term Loan		Total
October through December 2023	$	179,918	$	—	$	—	$	179,918
2024	3,174,547		—		—		3,174,547
2025	543,886		—		—		543,886
2026	568,369		—		—		568,369
2027	593,972		—		250,000,000		250,593,972
Thereafter	29,224,157		—		—		29,224,157
Total principal	34,284,849		—		250,000,000		284,284,849
Plus unamortized mortgage premium, net	10,893		—		—		10,893
Less deferred financing costs	(176,994)		—		(1,614,073)		(1,791,067)
Net principal	$	34,118,748	$	—	$	248,385,927	$	282,504,675

Schedule of Interest Expense

The following is a reconciliation of the components of interest expense, net of derivative settlements and unrealized gain on interest rate swaps for the three and nine months ended September 30, 2023 and 2022:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Mortgage notes payable:
Interest expense	$	411,610	$	488,773	$	1,354,642	$	1,762,378
Amortization of deferred financing costs	7,235		7,235		21,705		21,694
Credit facility:
Interest expense	4,509,026		1,636,414		10,895,933		3,083,299
Unused commitment fees	94,525		47,543		384,164		119,823
Amortization of deferred financing costs	214,261		120,829		642,783		342,349
Swap derivatives:
Derivative cash settlements (1)	(1,586,641)		99,942		(4,062,442)		269,442
Unrealized loss (gain) on interest rate swap valuation for first swap (2)	167,926		—		(327,824)		(589,997)
Amortization of interest rate swap valuation (2)	(253,092)		59,000		(756,495)		59,000
Unrealized gain on interest rate swap valuation for second swap (3)	(710,258)		—		(1,697,519)		—
Other	68,326		55,102		306,832		212,179
Interest expense, net	$	2,922,918	$	2,514,838	$	6,761,779	$	5,280,167

(1)    The Company entered into two swap transaction instruments for (i) its original $150,000,000 Credit Facility Term Loan (first swap) effective May 31, 2022 and (ii) its additional $100,000,000 Term Loan commitment (second swap) effective November 30, 2022, as described in detail in Note 8.

(2)    Due to the Company's $150,000,000 derivative instrument's failure to qualify as a cash flow hedge because it was deemed ineffective for the three and nine months ended September 30, 2023 as described in Note 8, the $167,926 loss and $327,824 gain in the swap valuation for the three and nine months ended September 30, 2023, respectively, are recognized as an increase and a decrease in interest expense, respectively, and the unrealized gain on interest rate swap derivative previously recorded in accumulated other comprehensive income and noncontrolling interest in operating partnership is being amortized on a straight-line basis as a reduction to interest expense through the maturity date of the loan agreement (see Note 8 for more details).

(3)    The Company's $100,000,000 derivative instrument was not designated as a cash flow hedge and, therefore, the $710,258 and $1,697,519 gains in the valuation of this swap for the three and nine months ended September 30, 2023, respectively, are reflected as reductions in interest expense (see Note 8 for more details)

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INTEREST RATE SWAP DERIVATIVES (Tables)

9 Months Ended

Sep. 30, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of the Notional Amount and Other Information Related to Interest Rate Swaps

The following table summarizes the notional amount and other information related to the Company’s interest rate swaps as of September 30, 2023 and December 31, 2022:

	September 30, 2023							December 31, 2022
Interest Rate Derivative Instruments	Number of Instruments	Notional Amount (i)		Reference Rate	Weighted Average Fixed Pay Rate (ii)		Weighted Average Remaining Term	Number of Instruments	Notional Amount (i)		Reference Rate	Fixed Pay Rate (ii)		Remaining Term
Designated	—	$	—	—	—	%	0 years	1	$	150,000,000	USD - SOFR	4.06	%	4.1 years
Non-designated	2	$	250,000,000	USD - SOFR	4.43	%	3.25 years	1	$	100,000,000	USD - SOFR	5.24	%	4.1 years

(i)The notional amount of the Company’s swaps correspond to the principal balance on the Term Loan. The minimum notional amount (outstanding principal balance at the maturity date) as of September 30, 2023 and December 31, 2022 was $250,000,000.

(ii)Based on the terms of the Credit Facility, the fixed pay rate increases if the Company's leverage ratio increases above 50%.

Schedule of the Fair Value of Derivative Instruments and Their Classification

The following table sets forth the fair value of the Company’s derivative instruments (Level 2 measurement), as well as their classification in the accompanying unaudited condensed consolidated balance sheets as of September 30, 2023 and December 31, 2022:

		September 30, 2023			December 31, 2022
Derivative Instrument	Balance Sheet Location	Number of Instruments	Fair Value		Number of Instruments	Fair Value		Change in Fair Value
Interest Rate Swaps	Asset - Interest rate swap derivatives, at fair value	2	$	6,156,179	1	$	4,629,702	$	1,526,477
Interest Rate Swaps	Liability - Interest rate swap derivatives, at fair value	—	$	—	1	$	(498,866)	$	498,866

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RELATED PARTY TRANSACTIONS (Tables)

9 Months Ended

Sep. 30, 2023

Related Party Transactions [Abstract]

Schedule of Related Party Transactions

Total fees incurred and paid or accrued for board of directors' services to the Company for the three and nine months ended September 30, 2023 and 2022 are as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
Board of Directors Compensation	2023		2022		2023		2022
Payments for services rendered	$	57,500	$	67,500	$	192,500	$	202,500
Value of shares issued for services rendered	70,000		82,500		235,000		247,500
Total	$	127,500	$	150,000	$	427,500	$	450,000
Number of shares issued for services rendered	4,194		5,651		17,455		14,916

The Company's taxable REIT subsidiary serves as the asset manager of the TIC Interest property and earned asset management fees, including the Company's share of the management fee, for the three and nine months ended September 30, 2023 and 2022 as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
TIC Interest management fee	$	65,993	$	65,993	$	197,979	$	197,979
Company's share in the management fee	$	47,984	$	47,984	$	143,951	$	143,951

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OPERATING PARTNERSHIP UNITS (Tables)

9 Months Ended

Sep. 30, 2023

Business Combination and Asset Acquisition [Abstract]

Schedule of Share-Based Payment Arrangement, Expensed and Capitalized, Amount

The total stock compensation expenses for the three and nine months ended September 30, 2023 and 2022 were as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Class P OP Units	$	88,783	$	88,783	$	266,350	$	266,350
Class R OP Units - Time Vesting Units	488,887		377,957		1,466,659		1,227,002
Class R OP Units - Performance Units	7,822,197		—		7,822,197		—
Class C common stock issued to the board of directors for services (see Note 10)	70,000		82,500		235,000		247,500
Total	$	8,469,867	$	549,240	$	9,790,206	$	1,740,852

Schedule of Distributions and Allocations of Net (Loss) Gain

The above Class C OP Units received the following distributions and allocations of net (loss) income during the three and nine months ended September 30, 2023 and 2022 as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Class C OP Units distributions	$	459,955	$	377,298	$	1,269,653	$	1,006,136
Class C OP Units net (loss) income allocation	$	(1,368,896)	$	528,540	$	(1,535,452)	$	(1,180,275)

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EARNINGS (LOSS) PER SHARE (Tables)

9 Months Ended

Sep. 30, 2023

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted

The following table presents the computation of the Company's basic and diluted net (loss) income per share attributable to common stockholders for the three and nine months ended September 30, 2023 and 2022:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Numerator - Basic:
Net (loss) income	$	(6,905,242)	$	4,450,767	$	(6,854,210)	$	(5,232,053)
Less: net loss (income) attributable to noncontrolling interest in Operating Partnership	1,368,896		(528,540)		1,535,452		1,180,275
Preferred stock dividends	(921,875)		(921,875)		(2,765,625)		(2,765,625)
Net (loss) income attributable to common stockholders	$	(6,458,221)	$	3,000,352	$	(8,084,383)	$	(6,817,403)
Numerator - Diluted
Net (loss) income	$	(6,905,242)	$	4,450,767	$	(6,854,210)	$	(5,232,053)
Preferred stock dividends	(921,875)		(921,875)		(2,765,625)		(2,765,625)
Net (loss) income attributable to common stockholders	$	(7,827,117)	$	3,528,892	$	(9,619,835)	$	(7,997,678)
Denominator:
Weighted average shares outstanding - basic	7,548,052		7,449,968		7,537,505		7,486,945
Operating Partnership Units - Class C	—		1,312,382		—		—
Operating Partnership Units - Classes M, P and R	—		1,418,193		—		—
Weighted average shares outstanding - diluted	7,548,052		10,180,543		7,537,505		7,486,945
Loss (earnings) per share attributable to common stockholders:
Basic	$	(0.86)	$	0.40	$	(1.07)	$	(0.91)
Diluted	$	(0.86)	$	0.35	$	(1.07)	$	(0.91)

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BUSINESS AND ORGANIZATION - Narrative (Details)			3 Months Ended		9 Months Ended		11 Months Ended	12 Months Ended	20 Months Ended
	Aug. 10, 2023 property	Feb. 15, 2022 USD ($) $ / shares	Sep. 30, 2023 ft² property $ / shares shares	Sep. 30, 2022 shares	Sep. 30, 2023 USD ($) ft² property $ / shares shares	Sep. 30, 2022 property shares	Dec. 31, 2022 USD ($) $ / shares shares	Dec. 31, 2022 $ / shares shares	Sep. 30, 2023 ft² property $ / shares shares	Dec. 21, 2022 USD ($)	Sep. 30, 2021 shares
Business And Organization [Line Items]
Issued common stock (in shares)			450,000,000		450,000,000				450,000,000
Preferred stock, shares authorized (in shares)											50,000,000
Number of square feet of aggregate leasable space (in square foot) | ft²			4,600,000		4,600,000				4,600,000
Number of real estate properties | property			44		44				44
Number of real estate properties sold | property	13				14	7
Tenant-in-common
Business And Organization [Line Items]
Ownership percentage			72.70%		72.70%				72.70%
Industrial Core
Business And Organization [Line Items]
Number of real estate properties | property			39		39				39
Number of real estate properties sold | property						1
Industrial Property Including Tenant-In-Common Interest
Business And Organization [Line Items]
Investment allocation, percentage			76.00%		76.00%				76.00%
Retail
Business And Organization [Line Items]
Number of square feet of aggregate leasable space (in square foot) | ft²			241,795		241,795				241,795
Number of real estate properties | property			1		1				1
Investment allocation, percentage			10.00%		10.00%				10.00%
Office
Business And Organization [Line Items]
Number of real estate properties | property			4		4				4
Investment allocation, percentage			14.00%		14.00%				14.00%
Number of real estate properties sold | property					1	6
Operating Partnership
Business And Organization [Line Items]
Ownership interest (as a percent)					68.00%			73.00%
Series A Preferred Stock
Business And Organization [Line Items]
Preferred stock, shares authorized (in shares)			2,000,000		2,000,000		2,000,000	2,000,000	2,000,000
Preferred stock, dividend rate, percentage					7.375%
Authorized amount | $										$ 15,000,000
Series A Preferred Stock | Maximum
Business And Organization [Line Items]
Preferred stock, dividend rate, percentage					9.375%
Common Stock
Business And Organization [Line Items]
Common stock, shares authorized (in shares)			300,000,000		300,000,000		300,000,000	300,000,000	300,000,000
Common stock, par value (in usd per share) | $ / shares			$ 0.001		$ 0.001		$ 0.001	$ 0.001	$ 0.001
Purchase price of common stock, percent		97.00%
Purchase price of common stock, discount percent		3.00%
Purchase price of common stock, average price per share, percent		100.00%
Per share processing fee (in usd per share) | $ / shares		$ 0.05
Common Stock | Minimum
Business And Organization [Line Items]
Purchase price as a percentage of market price		0.00%
Common Stock | Maximum
Business And Organization [Line Items]
Purchase price as a percentage of market price		5.00%
Treasury Stock
Business And Organization [Line Items]
Common stock, shares authorized (in shares)			100,000,000		100,000,000		100,000,000	100,000,000	100,000,000
Common stock, par value (in usd per share) | $ / shares			$ 0.001		$ 0.001		$ 0.001	$ 0.001	$ 0.001
Preferred Stock
Business And Organization [Line Items]
Preferred stock, shares authorized (in shares)			50,000,000		50,000,000				50,000,000
Preferred stock, par value (in usd per share) | $ / shares			$ 0.001		$ 0.001				$ 0.001
Common Stock
Business And Organization [Line Items]
Authorized amount | $		$ 20,000,000
Common Stock | Common Stock
Business And Organization [Line Items]
Issuance of common stock -distribution reinvestments (in shares)			42,230	43,617	140,965	152,606
Common Stock | Common Stock
Business And Organization [Line Items]
Issuance of common stock -distribution reinvestments (in shares)									351,276
Treasury Stock
Business And Organization [Line Items]
Repurchase of common stock (in shares)					93,357		250,153
Repurchase of common stock | $					$ 1,129,162		$ 4,161,618
Average cost per share of stock shares repurchased (in usd per share) | $ / shares					$ 12.10		$ 16.64

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Accounting Policies [Line Items]
Rental income	$ 12,500,338	$ 10,303,402	$ 34,648,083	$ 30,017,493
Tenant receivables	$ 11,211,058		$ 11,211,058		$ 7,263,202
Revision of Prior Period, Reclassification, Adjustment
Accounting Policies [Line Items]
Tenant receivables					$ 1,596,127
Revision of Prior Period, Reclassification, Adjustment | Reduce In Rental Income
Accounting Policies [Line Items]
Rental income		(648,271)
Revision of Prior Period, Reclassification, Adjustment | Reduction In Property Expenses
Accounting Policies [Line Items]
Rental income				(1,784,668)
Revision of Prior Period, Reclassification, Adjustment | Increase In Rental Income
Accounting Policies [Line Items]
Rental income		$ 739,255
Revision of Prior Period, Reclassification, Adjustment | Reduction In Gain on Sale of Real Estate Investments
Accounting Policies [Line Items]
Rental income				$ 1,546,976

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REAL ESTATE INVESTMENTS, NET - Narrative (Details)		1 Months Ended	3 Months Ended		9 Months Ended
	Aug. 10, 2023 property	Mar. 31, 2023 USD ($)	Sep. 30, 2023 USD ($) property state	Sep. 30, 2022 USD ($) property states	Sep. 30, 2023 USD ($) property state	Sep. 30, 2022 USD ($) states property	Aug. 01, 2024	Aug. 01, 2023	Jun. 29, 2023 USD ($)	Apr. 18, 2023 $ / ft²	Apr. 17, 2023 $ / ft²	Jan. 23, 2023	Dec. 31, 2017
Real Estate [Line Items]
Number of real estate properties			44		44
Number of states in which entity operates | state			16		16
Number of real estate properties sold	13				14	7
Number of real estate, held-for-investments			42		42
Properties acquired			12		12
Number of states where properties located | states				10		10
Weighted-average remaining amortization period			10 years 7 months 6 days		10 years 7 months 6 days
Tennessee
Real Estate [Line Items]
Impairment of real estate | $		$ 3,499,438
Acquisitions for 2022
Real Estate [Line Items]
Term of contract				24 years		24 years
Kia and Kalera
Real Estate [Line Items]
Revenue related to acquisition | $			$ 3,079,272	$ 3,071,407	$ 5,025,967	$ 6,703,156
Solar Turbines, San Diego, CA
Real Estate [Line Items]
Operating leases extension												2 years
Renewal term, increase in rent (percent)								14.00%
Solar Turbines, San Diego, CA | Forecast
Real Estate [Line Items]
Renewal term, increase in rent (percent)							3.00%
The EMC Shop
Real Estate [Line Items]
Initial base annual rent | $									$ 441,210
Levins
Real Estate [Line Items]
Increase in percentage of annual rent rate										69.00%
Annual rent rate | $ / ft²										7.00	4.14
The TIC Interest | Rich Uncles Real Estate Investment Trust
Real Estate [Line Items]
Ownership percentage			72.70%		72.70%								72.70%
Industrial Core
Real Estate [Line Items]
Number of real estate properties			39		39
Number of real estate properties sold						1
Properties acquired				15		15
Retail
Real Estate [Line Items]
Number of real estate properties			1		1
Properties acquired				1		1
Office
Real Estate [Line Items]
Number of real estate properties			4		4
Number of real estate properties sold					1	6
Office | EMC Shop, Rocklin, CA
Real Estate [Line Items]
Term of contract									11 years 6 months

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REAL ESTATE INVESTMENTS, NET - Schedule of Real Estate Properties (Details)	9 Months Ended
	Sep. 30, 2023 USD ($) property	Jul. 11, 2023 USD ($)	Jul. 03, 2023 USD ($)	Jun. 29, 2023	May 11, 2023 USD ($)	May 05, 2023 USD ($)	May 03, 2023 USD ($)	Apr. 20, 2023 USD ($)	Apr. 13, 2023 USD ($)	Mar. 31, 2023 USD ($)	Jan. 26, 2023 USD ($)	Dec. 31, 2022 USD ($)
Real Estate [Line Items]
Number of real estate, held-for-investments | property	42
Land, Buildings and Improvements	$ 508,299,641
Equipment	4,429,000											$ 4,429,000
Tenant Origination and Absorption Costs	15,929,385											19,499,749
Accumulated Depreciation and Amortization	(47,587,670)											(46,752,322)
Total real estate investments, net, excluding unconsolidated investment in real estate property and real estate investments held for sale, net	481,070,356											$ 410,700,763
Lindsay Gap, PA
Real Estate [Line Items]
Tenant Origination and Absorption Costs									$ 0
Plastic Products, Princeton, MN
Real Estate [Line Items]
Tenant Origination and Absorption Costs											$ 553,780
Stealth Manufacturing, Savage, MN
Real Estate [Line Items]
Tenant Origination and Absorption Costs										$ 0
Summit Steel, Reading, PA
Real Estate [Line Items]
Tenant Origination and Absorption Costs									$ 0
PBC Linear, Roscoe, IL
Real Estate [Line Items]
Tenant Origination and Absorption Costs								$ 0
Cameron Tool, Lansing, MI
Real Estate [Line Items]
Tenant Origination and Absorption Costs							$ 0
S J Electro Systems Detroit Lakes, MN
Real Estate [Line Items]
Tenant Origination and Absorption Costs						$ 0
S J Electro Systems Plymouth, MN
Real Estate [Line Items]
Tenant Origination and Absorption Costs						0
S J Electro Systems Ashland, TX
Real Estate [Line Items]
Tenant Origination and Absorption Costs						$ 0
Titan, Alleyton, TX
Real Estate [Line Items]
Tenant Origination and Absorption Costs					$ 0
Vistech, Piqua, OH
Real Estate [Line Items]
Tenant Origination and Absorption Costs			$ 0
SixAxis, Andrews, SC
Real Estate [Line Items]
Tenant Origination and Absorption Costs		$ 0
Industrial | Northrop Grumman, Melbourne, FL 1
Real Estate [Line Items]
Land, Buildings and Improvements	13,608,084
Equipment	0
Tenant Origination and Absorption Costs	1,469,737
Accumulated Depreciation and Amortization	(4,361,816)
Total real estate investments, net, excluding unconsolidated investment in real estate property and real estate investments held for sale, net	10,716,005
Industrial | Husqvarna, Charlotte, NC
Real Estate [Line Items]
Land, Buildings and Improvements	11,840,200
Equipment	0
Tenant Origination and Absorption Costs	1,013,948
Accumulated Depreciation and Amortization	(2,095,659)
Total real estate investments, net, excluding unconsolidated investment in real estate property and real estate investments held for sale, net	10,758,489
Industrial | AvAir, Chandler, AZ
Real Estate [Line Items]
Land, Buildings and Improvements	27,357,899
Equipment	0
Tenant Origination and Absorption Costs	0
Accumulated Depreciation and Amortization	(4,019,833)
Total real estate investments, net, excluding unconsolidated investment in real estate property and real estate investments held for sale, net	23,338,066
Industrial | 3M, DeKalb, IL
Real Estate [Line Items]
Land, Buildings and Improvements	14,762,819
Equipment	0
Tenant Origination and Absorption Costs	3,037,057
Accumulated Depreciation and Amortization	(5,983,018)
Total real estate investments, net, excluding unconsolidated investment in real estate property and real estate investments held for sale, net	11,816,858
Industrial | Taylor Fresh Foods
Real Estate [Line Items]
Land, Buildings and Improvements	34,194,369
Equipment	0
Tenant Origination and Absorption Costs	2,894,017
Accumulated Depreciation and Amortization	(5,231,624)
Total real estate investments, net, excluding unconsolidated investment in real estate property and real estate investments held for sale, net	31,856,762
Industrial | Levins, Sacramento, CA
Real Estate [Line Items]
Land, Buildings and Improvements	4,429,390
Equipment	0
Tenant Origination and Absorption Costs	221,927
Accumulated Depreciation and Amortization	(820,330)
Total real estate investments, net, excluding unconsolidated investment in real estate property and real estate investments held for sale, net	3,830,987
Industrial | Labcorp, San Carlos, CA
Real Estate [Line Items]
Land, Buildings and Improvements	9,672,174
Equipment	0
Tenant Origination and Absorption Costs	408,225
Accumulated Depreciation and Amortization	(766,203)
Total real estate investments, net, excluding unconsolidated investment in real estate property and real estate investments held for sale, net	9,314,196
Industrial | WSP USA, San Diego, CA
Real Estate [Line Items]
Land, Buildings and Improvements	9,896,800
Equipment	0
Tenant Origination and Absorption Costs	539,633
Accumulated Depreciation and Amortization	(1,335,830)
Total real estate investments, net, excluding unconsolidated investment in real estate property and real estate investments held for sale, net	9,100,603
Industrial | ITW Rippey, El Dorado, CA
Real Estate [Line Items]
Land, Buildings and Improvements	7,337,873
Equipment	0
Tenant Origination and Absorption Costs	304,387
Accumulated Depreciation and Amortization	(1,005,487)
Total real estate investments, net, excluding unconsolidated investment in real estate property and real estate investments held for sale, net	6,636,773
Industrial | L3Harris, San Diego, CA
Real Estate [Line Items]
Land, Buildings and Improvements	11,690,952
Equipment	0
Tenant Origination and Absorption Costs	662,101
Accumulated Depreciation and Amortization	(1,541,628)
Total real estate investments, net, excluding unconsolidated investment in real estate property and real estate investments held for sale, net	10,811,425
Industrial | Arrow-TruLine
Real Estate [Line Items]
Land, Buildings and Improvements	11,518,084
Equipment	0
Tenant Origination and Absorption Costs	0
Accumulated Depreciation and Amortization	(742,619)
Total real estate investments, net, excluding unconsolidated investment in real estate property and real estate investments held for sale, net	10,775,465
Industrial | Kalera, Saint Paul, MN
Real Estate [Line Items]
Land, Buildings and Improvements	6,412,509
Equipment	4,429,000
Tenant Origination and Absorption Costs	0
Accumulated Depreciation and Amortization	(580,724)
Total real estate investments, net, excluding unconsolidated investment in real estate property and real estate investments held for sale, net	10,260,785
Industrial | Lindsay, Colorado Springs 1, CO
Real Estate [Line Items]
Land, Buildings and Improvements	2,311,934
Equipment	0
Tenant Origination and Absorption Costs	0
Accumulated Depreciation and Amortization	(85,054)
Total real estate investments, net, excluding unconsolidated investment in real estate property and real estate investments held for sale, net	2,226,880
Industrial | Lindsay, Colorado Springs 2, CO
Real Estate [Line Items]
Land, Buildings and Improvements	3,314,406
Equipment	0
Tenant Origination and Absorption Costs	0
Accumulated Depreciation and Amortization	(50,615)
Total real estate investments, net, excluding unconsolidated investment in real estate property and real estate investments held for sale, net	3,263,791
Industrial | Lindsay, Dacano, CO
Real Estate [Line Items]
Land, Buildings and Improvements	6,889,402
Equipment	0
Tenant Origination and Absorption Costs	0
Accumulated Depreciation and Amortization	(122,707)
Total real estate investments, net, excluding unconsolidated investment in real estate property and real estate investments held for sale, net	6,766,695
Industrial | Lindsay, Alachua, FL
Real Estate [Line Items]
Land, Buildings and Improvements	8,518,123
Equipment	0
Tenant Origination and Absorption Costs	0
Accumulated Depreciation and Amortization	(528,808)
Total real estate investments, net, excluding unconsolidated investment in real estate property and real estate investments held for sale, net	7,989,315
Industrial | Lindsay, Franklinton, NC
Real Estate [Line Items]
Land, Buildings and Improvements	7,181,113
Equipment	0
Tenant Origination and Absorption Costs	0
Accumulated Depreciation and Amortization	(233,143)
Total real estate investments, net, excluding unconsolidated investment in real estate property and real estate investments held for sale, net	6,947,970
Industrial | Lindsay, Canal Fulton 1, OH
Real Estate [Line Items]
Land, Buildings and Improvements	11,345,533
Equipment	0
Tenant Origination and Absorption Costs	0
Accumulated Depreciation and Amortization	(501,441)
Total real estate investments, net, excluding unconsolidated investment in real estate property and real estate investments held for sale, net	10,844,092
Industrial | Lindsay, Canal Fulton 2, OH
Real Estate [Line Items]
Land, Buildings and Improvements	10,190,942
Equipment	0
Tenant Origination and Absorption Costs	0
Accumulated Depreciation and Amortization	(459,435)
Total real estate investments, net, excluding unconsolidated investment in real estate property and real estate investments held for sale, net	9,731,507
Industrial | Lindsay, Rock Hill, SC
Real Estate [Line Items]
Land, Buildings and Improvements	6,555,983
Equipment	0
Tenant Origination and Absorption Costs	0
Accumulated Depreciation and Amortization	(245,356)
Total real estate investments, net, excluding unconsolidated investment in real estate property and real estate investments held for sale, net	6,310,627
Industrial | Lindsay Gap, PA
Real Estate [Line Items]
Land, Buildings and Improvements	16,580,044
Equipment	0
Tenant Origination and Absorption Costs	0
Accumulated Depreciation and Amortization	(341,909)
Total real estate investments, net, excluding unconsolidated investment in real estate property and real estate investments held for sale, net	16,238,135
Industrial | Producto, Endicott, NY
Real Estate [Line Items]
Land, Buildings and Improvements	2,362,310
Equipment	0
Tenant Origination and Absorption Costs	0
Accumulated Depreciation and Amortization	(94,432)
Total real estate investments, net, excluding unconsolidated investment in real estate property and real estate investments held for sale, net	2,267,878
Industrial | Producto, Jamestown, NY
Real Estate [Line Items]
Land, Buildings and Improvements	3,073,686
Equipment	0
Tenant Origination and Absorption Costs	0
Accumulated Depreciation and Amortization	(115,606)
Total real estate investments, net, excluding unconsolidated investment in real estate property and real estate investments held for sale, net	2,958,080
Industrial | Valtir, Centerville, UT
Real Estate [Line Items]
Land, Buildings and Improvements	4,685,355
Equipment	0
Tenant Origination and Absorption Costs	0
Accumulated Depreciation and Amortization	(141,509)
Total real estate investments, net, excluding unconsolidated investment in real estate property and real estate investments held for sale, net	4,543,846
Industrial | Valtir, Orangeburg, SC
Real Estate [Line Items]
Land, Buildings and Improvements	4,243,308
Equipment	0
Tenant Origination and Absorption Costs	0
Accumulated Depreciation and Amortization	(168,370)
Total real estate investments, net, excluding unconsolidated investment in real estate property and real estate investments held for sale, net	4,074,938
Industrial | Valtir, Fort Worth, TX
Real Estate [Line Items]
Land, Buildings and Improvements	3,278,522
Equipment	0
Tenant Origination and Absorption Costs	0
Accumulated Depreciation and Amortization	(75,029)
Total real estate investments, net, excluding unconsolidated investment in real estate property and real estate investments held for sale, net	3,203,493
Industrial | Valtir, Lima, OH
Real Estate [Line Items]
Land, Buildings and Improvements	9,921,943
Equipment	0
Tenant Origination and Absorption Costs	0
Accumulated Depreciation and Amortization	(415,965)
Total real estate investments, net, excluding unconsolidated investment in real estate property and real estate investments held for sale, net	9,505,978
Industrial | Plastic Products, Princeton, MN
Real Estate [Line Items]
Land, Buildings and Improvements	6,118,411
Equipment	0
Tenant Origination and Absorption Costs	553,780
Accumulated Depreciation and Amortization	(413,432)
Total real estate investments, net, excluding unconsolidated investment in real estate property and real estate investments held for sale, net	6,258,759
Industrial | Stealth Manufacturing, Savage, MN
Real Estate [Line Items]
Land, Buildings and Improvements	5,526,310
Equipment	0
Tenant Origination and Absorption Costs	0
Accumulated Depreciation and Amortization	(91,887)
Total real estate investments, net, excluding unconsolidated investment in real estate property and real estate investments held for sale, net	5,434,423
Industrial | Summit Steel, Reading, PA
Real Estate [Line Items]
Land, Buildings and Improvements	11,397,091
Equipment	0
Tenant Origination and Absorption Costs	0
Accumulated Depreciation and Amortization	(182,790)
Total real estate investments, net, excluding unconsolidated investment in real estate property and real estate investments held for sale, net	11,214,301
Industrial | PBC Linear, Roscoe, IL
Real Estate [Line Items]
Land, Buildings and Improvements	20,023,978
Equipment	0
Tenant Origination and Absorption Costs	0
Accumulated Depreciation and Amortization	(337,592)
Total real estate investments, net, excluding unconsolidated investment in real estate property and real estate investments held for sale, net	19,686,386
Industrial | Cameron Tool, Lansing, MI
Real Estate [Line Items]
Land, Buildings and Improvements	5,776,590
Equipment	0
Tenant Origination and Absorption Costs	0
Accumulated Depreciation and Amortization	(85,644)
Total real estate investments, net, excluding unconsolidated investment in real estate property and real estate investments held for sale, net	5,690,946
Industrial | S J Electro Systems Detroit Lakes, MN
Real Estate [Line Items]
Land, Buildings and Improvements	6,314,057
Equipment	0
Tenant Origination and Absorption Costs	0
Accumulated Depreciation and Amortization	(69,079)
Total real estate investments, net, excluding unconsolidated investment in real estate property and real estate investments held for sale, net	6,244,978
Industrial | S J Electro Systems Plymouth, MN
Real Estate [Line Items]
Land, Buildings and Improvements	2,225,635
Equipment	0
Tenant Origination and Absorption Costs	0
Accumulated Depreciation and Amortization	(34,525)
Total real estate investments, net, excluding unconsolidated investment in real estate property and real estate investments held for sale, net	2,191,110
Industrial | S J Electro Systems Ashland, TX
Real Estate [Line Items]
Land, Buildings and Improvements	7,555,211
Equipment	0
Tenant Origination and Absorption Costs	0
Accumulated Depreciation and Amortization	(79,864)
Total real estate investments, net, excluding unconsolidated investment in real estate property and real estate investments held for sale, net	7,475,347
Industrial | Titan, Alleyton, TX
Real Estate [Line Items]
Land, Buildings and Improvements	17,146,503
Equipment	0
Tenant Origination and Absorption Costs	0
Accumulated Depreciation and Amortization	(334,377)
Total real estate investments, net, excluding unconsolidated investment in real estate property and real estate investments held for sale, net	16,812,126
Industrial | Vistech, Piqua, OH
Real Estate [Line Items]
Land, Buildings and Improvements	13,550,932
Equipment	0
Tenant Origination and Absorption Costs	0
Accumulated Depreciation and Amortization	(109,232)
Total real estate investments, net, excluding unconsolidated investment in real estate property and real estate investments held for sale, net	13,441,700
Industrial | SixAxis, Andrews, SC
Real Estate [Line Items]
Land, Buildings and Improvements	15,470,096
Equipment	0
Tenant Origination and Absorption Costs	0
Accumulated Depreciation and Amortization	(154,425)
Total real estate investments, net, excluding unconsolidated investment in real estate property and real estate investments held for sale, net	15,315,671
Land | Northrop Grumman, Melbourne, FL 2
Real Estate [Line Items]
Land, Buildings and Improvements	329,410
Equipment	0
Tenant Origination and Absorption Costs	0
Accumulated Depreciation and Amortization	0
Total real estate investments, net, excluding unconsolidated investment in real estate property and real estate investments held for sale, net	329,410
Retail | KIA/Trophy of Carson, Carson, CA
Real Estate [Line Items]
Land, Buildings and Improvements	69,286,444
Equipment	0
Tenant Origination and Absorption Costs	118,606
Accumulated Depreciation and Amortization	(1,814,016)
Total real estate investments, net, excluding unconsolidated investment in real estate property and real estate investments held for sale, net	67,591,034
Office | Costco, Issaquah, WA
Real Estate [Line Items]
Land, Buildings and Improvements	27,585,942
Equipment	0
Tenant Origination and Absorption Costs	2,765,136
Accumulated Depreciation and Amortization	(6,289,044)
Total real estate investments, net, excluding unconsolidated investment in real estate property and real estate investments held for sale, net	24,062,034
Office | Solar Turbines, San Diego, CA
Real Estate [Line Items]
Land, Buildings and Improvements	7,186,694
Equipment	0
Tenant Origination and Absorption Costs	324,221
Accumulated Depreciation and Amortization	(881,175)
Total real estate investments, net, excluding unconsolidated investment in real estate property and real estate investments held for sale, net	6,629,740
Office | OES, Rancho Cordova, CA
Real Estate [Line Items]
Land, Buildings and Improvements	29,632,580
Equipment	0
Tenant Origination and Absorption Costs	1,616,610
Accumulated Depreciation and Amortization	(4,646,438)
Total real estate investments, net, excluding unconsolidated investment in real estate property and real estate investments held for sale, net	$ 26,602,752
Term of contract												12 years
Lessor, operating lease, early termination period in days	120 days
Office | EMC Shop, Rocklin, CA
Real Estate [Line Items]
Term of contract				11 years 6 months

XML

REAL ESTATE INVESTMENTS, NET - Acquisition (Details)		9 Months Ended
	Apr. 13, 2023 USD ($) property $ / shares shares	Sep. 30, 2023 USD ($) property	Jul. 11, 2023 USD ($)	Jul. 03, 2023 USD ($)	May 11, 2023 USD ($)	May 05, 2023 USD ($)	May 03, 2023 USD ($)	Apr. 20, 2023 USD ($)	Mar. 31, 2023 USD ($)	Jan. 26, 2023 USD ($)	Dec. 31, 2022 USD ($)	Sep. 30, 2022 USD ($)	Apr. 19, 2022 property
Real Estate [Line Items]
Number of real estate properties | property		44
Land		$ 106,263,557									$ 103,657,237
Equipment		4,429,000									4,429,000
Tenant origination and absorption costs		15,929,385									19,499,749
Acquisition Price		528,658,026									$ 457,453,085
Summit Steel and Manufacturing, Inc. | Common Stock
Real Estate [Line Items]
Stock issued during period, value, purchase of assets		5,175,284
Acquisitions for 2023
Real Estate [Line Items]
Land		12,605,145
Buildings and Improvements		115,079,713
Tenant origination and absorption costs		553,780
Below- Market Lease Intangibles		(285,139)
Acquisition Price		$ 127,953,499
Plastic Products, Princeton, MN
Real Estate [Line Items]
Land										$ 421,997
Buildings and Improvements										5,696,414
Tenant origination and absorption costs										553,780
Below- Market Lease Intangibles										(285,139)
Acquisition Price										$ 6,387,052
Stealth Manufacturing, Savage, MN
Real Estate [Line Items]
Land									$ 770,752
Buildings and Improvements									4,755,558
Tenant origination and absorption costs									0
Below- Market Lease Intangibles									0
Acquisition Price									$ 5,526,310
Lindsay Gap, PA
Real Estate [Line Items]
Land	$ 2,125,604
Buildings and Improvements	14,454,440
Tenant origination and absorption costs	0
Below- Market Lease Intangibles	0
Acquisition Price	16,580,044
Summit Steel, Reading, PA
Real Estate [Line Items]
Land	1,517,782
Buildings and Improvements	9,879,309
Tenant origination and absorption costs	0
Below- Market Lease Intangibles	0
Acquisition Price	$ 11,397,091
PBC Linear, Roscoe, IL
Real Estate [Line Items]
Land								$ 699,198
Buildings and Improvements								19,324,780
Tenant origination and absorption costs								0
Below- Market Lease Intangibles								0
Acquisition Price								$ 20,023,978
Cameron Tool, Lansing, MI
Real Estate [Line Items]
Land							$ 246,355
Buildings and Improvements							5,530,235
Tenant origination and absorption costs							0
Below- Market Lease Intangibles							0
Acquisition Price							$ 5,776,590
S J Electro Systems Detroit Lakes, MN
Real Estate [Line Items]
Land						$ 1,736,976
Buildings and Improvements						4,577,081
Tenant origination and absorption costs						0
Below- Market Lease Intangibles						0
Acquisition Price						6,314,057
S J Electro Systems Plymouth, MN
Real Estate [Line Items]
Land						627,903
Buildings and Improvements						1,597,732
Tenant origination and absorption costs						0
Below- Market Lease Intangibles						0
Acquisition Price						2,225,635
S J Electro Systems Ashland, TX
Real Estate [Line Items]
Land						251,233
Buildings and Improvements						7,303,978
Tenant origination and absorption costs						0
Below- Market Lease Intangibles						0
Acquisition Price						$ 7,555,211
Titan, Alleyton, TX
Real Estate [Line Items]
Land					$ 2,056,161
Buildings and Improvements					15,090,342
Tenant origination and absorption costs					0
Below- Market Lease Intangibles					0
Acquisition Price					$ 17,146,503
Vistech, Piqua, OH
Real Estate [Line Items]
Land				$ 922,310
Buildings and Improvements				12,628,622
Tenant origination and absorption costs				0
Below- Market Lease Intangibles				0
Acquisition Price				$ 13,550,932
SixAxis, Andrews, SC
Real Estate [Line Items]
Land			$ 1,228,874
Buildings and Improvements			14,241,222
Tenant origination and absorption costs			0
Below- Market Lease Intangibles			0
Acquisition Price			$ 15,470,096
SJE
Real Estate [Line Items]
Number of real estate properties | property		3
Acquisitions for 2022
Real Estate [Line Items]
Acquisition Price												$ 162,313,032
Lindsay Precast, LLC
Real Estate [Line Items]
Number of real estate properties | property	1	9											8
Lindsay, Franklinton, NC | North Carolina
Real Estate [Line Items]
Replacement reserve escrow		$ 1,800,000
Summit Steel and Manufacturing, Inc. | Summit Steel and Manufacturing, Inc. | Common Stock
Real Estate [Line Items]
Equity interest issued and issuable, number of shares (in shares) | shares	287,516
Equity interest issued and issuable (in usd per share) | $ / shares	$ 18.00

XML

REAL ESTATE INVESTMENTS, NET - Dispositions (Details)			3 Months Ended		9 Months Ended
	Aug. 31, 2023 USD ($) ft²	Aug. 10, 2023 USD ($) ft²	Sep. 30, 2023 USD ($) ft²	Sep. 30, 2022 USD ($) ft²	Sep. 30, 2023 USD ($) ft²	Sep. 30, 2022 USD ($) ft²
Real Estate [Line Items]
Rentable Square Feet | ft²			4,600,000		4,600,000
(Loss) gain on sale of real estate investments			$ (1,708,801)	$ 3,932,028	$ (1,708,801)	$ 11,527,185
Retail
Real Estate [Line Items]
Rentable Square Feet | ft²			241,795		241,795
Contract Sale Price			$ 47,466,960		$ 47,466,960
(Loss) gain on sale of real estate investments					(1,708,801)
Net Proceeds					$ 44,473,792
Retail | Dollar General, Litchfield, ME
Real Estate [Line Items]
Rentable Square Feet | ft²		9,026
Contract Sale Price		$ 1,247,974
(Loss) gain on sale of real estate investments		0
Net Proceeds		$ 0
Retail | Dollar General, Wilton, ME
Real Estate [Line Items]
Rentable Square Feet | ft²		9,100
Contract Sale Price		$ 1,452,188
(Loss) gain on sale of real estate investments		0
Net Proceeds		$ 0
Retail | Dollar General, Thompsontown, PA
Real Estate [Line Items]
Rentable Square Feet | ft²		9,100
Contract Sale Price		$ 1,111,832
(Loss) gain on sale of real estate investments		0
Net Proceeds		$ 0
Retail | Dollar General, Mt. Gilead, OH
Real Estate [Line Items]
Rentable Square Feet | ft²		9,026
Contract Sale Price		$ 1,066,451
(Loss) gain on sale of real estate investments		0
Net Proceeds		$ 0
Retail | Dollar General, Lakeside, OH
Real Estate [Line Items]
Rentable Square Feet | ft²		9,026
Contract Sale Price		$ 1,134,522
(Loss) gain on sale of real estate investments		0
Net Proceeds		$ 0
Retail | Dollar General, Castalia, OH
Real Estate [Line Items]
Rentable Square Feet | ft²		9,026
Contract Sale Price		$ 1,111,832
(Loss) gain on sale of real estate investments		0
Net Proceeds		$ 0
Retail | Dollar General, Bakersfield
Real Estate [Line Items]
Rentable Square Feet | ft²		18,827
Contract Sale Price		$ 4,855,751
(Loss) gain on sale of real estate investments		0
Net Proceeds		$ 0
Retail | Dollar General, Big Spring, TX
Real Estate [Line Items]
Rentable Square Feet | ft²		9,026
Contract Sale Price		$ 1,270,665
(Loss) gain on sale of real estate investments		0
Net Proceeds		$ 0
Retail | Dollar Tree, Morrow
Real Estate [Line Items]
Rentable Square Feet | ft²		10,906
Contract Sale Price		$ 1,293,355
(Loss) gain on sale of real estate investments		0
Net Proceeds		$ 0
Retail | PreK Education, San Antonio
Real Estate [Line Items]
Rentable Square Feet | ft²		50,000
Contract Sale Price		$ 12,888,169
(Loss) gain on sale of real estate investments		0
Net Proceeds		$ 0
Retail | Walgreens Santa Maria
Real Estate [Line Items]
Rentable Square Feet | ft²		14,490
Contract Sale Price		$ 6,081,037
(Loss) gain on sale of real estate investments		0
Net Proceeds		$ 0
Office and Flex
Real Estate [Line Items]
Rentable Square Feet | ft²				343,126		343,126
Contract Sale Price				$ 68,725,000		$ 68,725,000
(Loss) gain on sale of real estate investments						11,527,185
Office
Real Estate [Line Items]
Net Proceeds						$ 44,482,494
Office | exp US Services, Maitland, FL
Real Estate [Line Items]
Rentable Square Feet | ft²		33,118
Contract Sale Price		$ 5,899,514
(Loss) gain on sale of real estate investments		0
Net Proceeds		$ 0
Office | GSA MSHA, Vacaville
Real Estate [Line Items]
Rentable Square Feet | ft²		11,014
Contract Sale Price		$ 2,586,710
(Loss) gain on sale of real estate investments		(1,887,040)
Net Proceeds		$ 39,014,581
Flex | EMC Shop, Rocklin, CA
Real Estate [Line Items]
Rentable Square Feet | ft²	40,110
Contract Sale Price	$ 5,466,960
(Loss) gain on sale of real estate investments	178,239
Net Proceeds	$ 5,459,211

XML

REAL ESTATE INVESTMENTS, NET - Concentration Risk (Details)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2023 USD ($) property	Sep. 30, 2022 USD ($)	Sep. 30, 2023 USD ($) property	Sep. 30, 2022 USD ($)	Dec. 31, 2022 USD ($)	Apr. 13, 2023 property	Apr. 19, 2022 property
Concentration Risk [Line Items]
Net Carrying Value	$ 481,070,356		$ 481,070,356		$ 410,700,763
Rental income	$ 12,500,338	$ 10,303,402	$ 34,648,083	$ 30,017,493
Number of real estate properties | property	44		44
Lindsay Precast, LLC
Concentration Risk [Line Items]
Number of real estate properties | property	9		9			1	8
Lindsay Colorado Properties
Concentration Risk [Line Items]
Number of real estate properties | property	3		3
Lindsay Ohio Properties
Concentration Risk [Line Items]
Number of real estate properties | property	2		2
Asset | Real Estate Property | KIA Dealership in Carson, California
Concentration Risk [Line Items]
Net Carrying Value	$ 67,591,034		$ 67,591,034		$ 68,387,431
Percentage of Total Assets			12.50%		15.00%
Rental Income | Real Estate Property | KIA Dealership in Carson, California
Concentration Risk [Line Items]
Percentage of Total Assets	10.30%	12.70%	11.20%	12.20%
Rental income	$ 1,289,545	$ 1,306,851	$ 3,879,601	$ 3,666,632
Rental Income | Real Estate Property | Lindsay
Concentration Risk [Line Items]
Percentage of Total Assets	13.20%	11.70%	12.90%
Rental income	$ 1,652,422	$ 1,204,970	$ 4,474,870

XML

REAL ESTATE INVESTMENTS, NET - Rental Payments for Operating Leases (Details)	Sep. 30, 2023 USD ($)
Real Estate [Abstract]
October through December 2023	$ 9,727,190
2024	39,028,622
2025	38,080,113
2026	34,952,446
2027	34,600,851
Thereafter	559,280,654
Total	$ 715,669,876

XML

REAL ESTATE INVESTMENTS, NET - Intangible Assets (Details) - USD ($)	Sep. 30, 2023	Dec. 31, 2022
Tenant Origination and Absorption Costs
Real Estate [Line Items]
Cost	$ 15,929,385	$ 19,499,749
Accumulated amortization	(10,684,573)	(12,722,558)
Net	5,244,812	6,777,191
Above-Market Lease Intangibles
Real Estate [Line Items]
Cost	2,485,510	2,485,510
Accumulated amortization	(1,153,052)	(634,754)
Net	1,332,458	1,850,756
Below-Market Lease Intangibles
Below-Market Lease Intangibles
Cost	(14,364,650)	(14,378,808)
Accumulated amortization	5,265,947	4,703,122
Net	$ (9,098,703)	$ (9,675,686)

XML

REAL ESTATE INVESTMENTS, NET - Intangible Assets Amortization (Details) - USD ($)	Sep. 30, 2023	Dec. 31, 2022
Below-Market Lease Intangibles
Weighted-average remaining amortization period	10 years 7 months 6 days
Tenant Origination and Absorption Costs
Real Estate [Line Items]
October through December 2023	$ 253,294
2024	1,013,175
2025	815,130
2026	466,644
2027	449,972
Thereafter	2,246,597
Net	$ 5,244,812	$ 6,777,191
Below-Market Lease Intangibles
Weighted-average remaining amortization period	8 years 7 months 6 days
Above-Market Lease Intangibles
Real Estate [Line Items]
October through December 2023	$ 18,499
2024	73,999
2025	70,712
2026	54,278
2027	54,278
Thereafter	1,060,692
Net	$ 1,332,458	1,850,756
Below-Market Lease Intangibles
Weighted-average remaining amortization period	23 years 2 months 12 days
Below-Market Lease Intangibles
Below-Market Lease Intangibles
October through December 2023	$ (230,099)
2024	(920,395)
2025	(920,395)
2026	(920,395)
2027	(920,395)
Thereafter	(5,187,024)
Net	$ (9,098,703)	$ (9,675,686)
Weighted-average remaining amortization period	10 years 1 month 6 days

XML

REAL ESTATE INVESTMENTS, NET - Real Estate Investments Held for Sale (Details) - USD ($)	Sep. 30, 2023	Dec. 31, 2022
Assets related to real estate investments held for sale:
Real estate investments held for sale, net	$ 8,628,186	$ 5,255,725
Other assets, net	46,158	12,765
Liabilities related to real estate investments held for sale:
Other liabilities, net	162,349	117,881
Disposal Group, Held-for-sale, Not Discontinued Operations
Assets related to real estate investments held for sale:
Land, buildings and improvements	11,047,348	6,357,172
Tenant origination and absorption costs	1,558,739	355,252
Accumulated depreciation and amortization	(3,977,901)	(1,456,699)
Real estate investments held for sale, net	8,628,186	5,255,725
Other assets, net	46,158	12,765
Total assets related to real estate investments held for sale:	8,674,344	5,268,490
Liabilities related to real estate investments held for sale:
Other liabilities, net	162,349	117,881
Total liabilities related to real estate investments held for sale:	$ 162,349	$ 117,881

XML

UNCONSOLIDATED INVESTMENT IN REAL ESTATE PROPERTY - Investments (Details) - USD ($)	Sep. 30, 2023	Dec. 31, 2022
The TIC Interest
Schedule of Equity Method Investments [Line Items]
Investment in unconsolidated entity	$ 10,035,805	$ 10,007,420

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UNCONSOLIDATED INVESTMENT IN REAL ESTATE PROPERTY - Entities Equity in Earnings (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Schedule of Equity Method Investments [Line Items]
The TIC Interest	$ 79,164	$ 64,358	$ 207,506	$ 226,690
The TIC Interest
Schedule of Equity Method Investments [Line Items]
The TIC Interest	$ 79,164	$ 64,358	$ 207,506	$ 226,690

XML

UNCONSOLIDATED INVESTMENT IN REAL ESTATE PROPERTY - Narrative (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2023 USD ($) ft²	Sep. 30, 2022 USD ($)	Sep. 30, 2023 USD ($) ft²	Sep. 30, 2022 USD ($)	Dec. 31, 2017 ft²
Schedule of Equity Method Investments [Line Items]
Number of square feet of aggregate leasable space (in square foot)	4,600,000		4,600,000
Rich Uncles Real Estate Investment Trust
Schedule of Equity Method Investments [Line Items]
Number of square feet of aggregate leasable space (in square foot)					91,740
Ownership percentage by noncontrolling owners					27.30%
Dividends | $	$ 54,706	$ 32,378	$ 179,121	$ 179,531
Rich Uncles Real Estate Investment Trust | Hagg Lane II, LLC
Schedule of Equity Method Investments [Line Items]
Ownership percentage by noncontrolling owners					23.40%
Rich Uncles Real Estate Investment Trust | Hagg Lane III, LLC
Schedule of Equity Method Investments [Line Items]
Ownership percentage by noncontrolling owners					3.90%
Rich Uncles Real Estate Investment Trust | The TIC Interest
Schedule of Equity Method Investments [Line Items]
Ownership percentage	72.70%		72.70%		72.70%

XML

UNCONSOLIDATED INVESTMENT IN REAL ESTATE PROPERTY - Summarized Financial Information (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Jun. 30, 2023	Dec. 31, 2022	Jun. 30, 2022	Dec. 31, 2021
Assets
Total assets	$ 539,063,193		$ 539,063,193			$ 454,429,919
Liabilities:
Total liabilities	300,659,357		300,659,357			213,395,959
Total equity	238,403,836	$ 242,852,826	238,403,836	$ 242,852,826	$ 240,093,257	241,033,960	$ 237,135,718	$ 222,429,892
Total liabilities and equity	539,063,193		539,063,193			454,429,919
Operating expenses:
Operating (loss) income	(4,783,867)	6,833,589	(1,424,836)	1,331,750
Net (loss) income	(6,905,242)	4,450,767	(6,854,210)	(5,232,053)
The TIC Interest
Assets
Real estate investments, net	28,823,530		28,823,530			29,294,081
Cash and cash equivalents	532,634		532,634			300,405
Other assets	77,366		77,366			43,159
Total assets	29,433,530		29,433,530			29,637,645
Liabilities:
Mortgage note payable, net	12,717,835		12,717,835			12,936,929
Below-market lease, net	2,404,409		2,404,409			2,514,199
Other liabilities	508,776		508,776			424,662
Total liabilities	15,631,020		15,631,020			15,875,790
Total equity	13,802,510		13,802,510			13,761,855
Total liabilities and equity	29,433,530		29,433,530			$ 29,637,645
Total revenues	693,170	679,500	2,036,365	2,071,258
Operating expenses:
Depreciation and amortization	257,844	264,820	780,802	788,732
Other expenses	193,902	190,527	572,749	565,851
Total operating expenses	451,746	455,347	1,353,551	1,354,583
Operating (loss) income	241,424	224,153	682,814	716,675
Interest expense	132,547	135,640	395,810	404,902
Net (loss) income	$ 108,877	$ 88,513	$ 287,004	$ 311,773

XML

INVESTMENT IN PREFERRED STOCK - Summary of Investment in Preferred Stock (Details) - USD ($)		2 Months Ended	3 Months Ended		9 Months Ended
	Aug. 10, 2023	Sep. 30, 2023	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Equity Method Investments and Joint Ventures [Abstract]
Liquidation value of GIPR preferred stock		$ 12,000,000	$ 12,000,000		$ 12,000,000
Adjustment to reduce liquidation value to fair value	$ (2,380,000)
Investment In Preferred Stock [Roll Forward]
Fair value of GIPR preferred stock as of August 10, 2023					0
Increase in fair value of preferred stock for the period ended September 30, 2023		440,000	440,000	$ 0	440,000	$ 0
Fair value of GIPR preferred stock as of September 30, 2023	$ 9,620,000	$ 10,060,000	$ 10,060,000		$ 10,060,000

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INVESTMENT IN PREFERRED STOCK - Narrative (Details)		1 Months Ended	9 Months Ended
	Aug. 10, 2023 USD ($) property $ / shares shares	Jan. 31, 2024 shares	Sep. 30, 2023 USD ($) property $ / shares	Sep. 30, 2022 USD ($) property	Sep. 14, 2021 $ / shares
Schedule of Equity Method Investments [Line Items]
Number of real estate properties sold | property	13		14	7
Net proceeds from sale of real estate investments | $			$ 34,737,474	$ 66,489,004
Series A Preferred Stock
Schedule of Equity Method Investments [Line Items]
Preferred stock, liquidation preference per share (in usd per share)			$ 25.00		$ 25.00
Preferred stock, dividend rate, percentage			7.375%
Preferred stock, redemption (in USD per share)			$ 25.00
Series A Preferred Stock | Maximum
Schedule of Equity Method Investments [Line Items]
Preferred stock, dividend rate, percentage			9.375%
Office
Schedule of Equity Method Investments [Line Items]
Number of real estate properties sold | property			1	6
Retail And Office
Schedule of Equity Method Investments [Line Items]
Net proceeds from sale of real estate investments | $	$ 30,000,000
GIPR
Schedule of Equity Method Investments [Line Items]
Preferred stock, redemption (in USD per share)			$ 5.00
Redemption notice period			60 days
Conversion percentage			1.10
GIPR | Minimum | Forecast
Schedule of Equity Method Investments [Line Items]
Common stock received (in shares) | shares		2,200,000
GIPR | Maximum | Forecast
Schedule of Equity Method Investments [Line Items]
Common stock received (in shares) | shares		3,000,000
GIPR | Retail
Schedule of Equity Method Investments [Line Items]
Number of real estate properties sold | property	11
GIPR | Office
Schedule of Equity Method Investments [Line Items]
Number of real estate properties sold | property	2
GIPR | Retail And Office
Schedule of Equity Method Investments [Line Items]
Net proceeds from sale of real estate investments including stock | $	$ 42,000,000
GIPR | Retail And Office | Series A Preferred Stock
Schedule of Equity Method Investments [Line Items]
Net proceeds from sale of real estate investment, value of shares | $	$ 12,000,000
Net proceeds from sale of real estate investment, value of (in shares) | shares	2,400,000
Preferred stock, liquidation preference per share (in usd per share)	$ 5.00
Annualized distribution rate (in usd per share)	$ 0.095
Preferred stock, dividend rate, percentage	12.00%

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OTHER BALANCE SHEET DETAILS (Details) - USD ($)	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Accounts Receivable, after Allowance for Credit Loss [Abstract]
Straight-line rent	$ 10,793,380		$ 6,607,220
Tenant rent and billed reimbursements	58,444		196,477
Accrued tenant reimbursements	359,234		459,505
Total	11,211,058		7,263,202
Prepaid Expense and Other Assets [Abstract]
Deferred tenant allowance	267,334		2,564,806
Prepaid expenses and other assets	3,773,714		2,420,777
Deferred financing costs on credit facility revolver	840,335		1,115,354
Total	4,881,383		6,100,937
Accounts Payable and Accrued Liabilities [Abstract]
Accounts payable	557,643		1,001,411
Accrued expenses	4,076,883		2,163,821
Accrued distributions and dividends	1,801,856		1,768,068
Accrued interest payable	321,278		285,392
Unearned rent	1,792,912		1,870,057
Lease incentive obligation	343,058		561,057
Total	8,893,630		7,649,806
Accrued real estate improvements	2,350,000	$ 512,908
Lindsay, Franklinton, NC | North Carolina
Prepaid Expense and Other Assets [Abstract]
Replacement reserve escrow	$ 1,800,000
Lindsay, Dacano, CO | Colorado
Prepaid Expense and Other Assets [Abstract]
Replacement reserve escrow			$ 440,548

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DEBT - Schedule of Long-Term Debt Instruments (Details) - USD ($)	Sep. 30, 2023	Dec. 31, 2022
Debt Disclosure [Abstract]
Mortgage notes payable, net	$ 34,118,748	$ 44,435,556
Credit facility revolver	0	3,000,000
Credit facility term loan, net	248,385,927	148,018,164
Net principal	$ 282,504,675	$ 195,453,720

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DEBT - Schedule of Debt (Details) - USD ($)	2 Months Ended
	Sep. 30, 2023	Dec. 31, 2022
Short Term Debt [LineItems]
Mortgage notes payable	$ 284,284,849
Plus unamortized mortgage premium, net	10,893
Less unamortized deferred financing costs	(1,791,067)
Net principal	282,504,675	$ 195,453,720
Debt instrument prepaid amount	10,000,000
Mortgages
Short Term Debt [LineItems]
Mortgage notes payable	34,284,849	44,515,009
Plus unamortized mortgage premium, net	10,893	119,245
Less unamortized deferred financing costs	(176,994)	(198,698)
Net principal	34,118,748	44,435,556
Costco property
Short Term Debt [LineItems]
Mortgage notes payable	$ 18,850,000	18,850,000
Interest rate	4.85%
Taylor Fresh Foods property
Short Term Debt [LineItems]
Mortgage notes payable	$ 12,350,000	12,350,000
Interest rate	3.85%
OES property
Short Term Debt [LineItems]
Mortgage notes payable	$ 3,084,849	$ 13,315,009
Interest rate	4.50%

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DEBT - Summary of Mortgage Notes Payable (Details) - USD ($)	Sep. 30, 2023	Dec. 31, 2022
Debt Instrument [Line Items]
Total	$ 284,284,849
Carrying Value	282,504,675	$ 195,453,720
Mortgages
Debt Instrument [Line Items]
Total	34,284,849	44,515,009
Carrying Value	34,118,748	44,435,556
Fair Value	$ 30,736,613	$ 41,293,644

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DEBT - Narrative (Details)					1 Months Ended	3 Months Ended				4 Months Ended	9 Months Ended
	Jun. 30, 2023	Jan. 05, 2023 USD ($)	Oct. 21, 2022 USD ($)	Jan. 18, 2022 USD ($)	Aug. 31, 2023 USD ($)	Sep. 30, 2023 USD ($)	Jun. 30, 2023 USD ($)	Mar. 31, 2023 USD ($)	Sep. 30, 2022 USD ($)	Apr. 19, 2023	Sep. 30, 2023 USD ($)	Sep. 30, 2022 USD ($)	Jul. 31, 2023 USD ($)	Mar. 29, 2023 USD ($)	Jan. 25, 2023 USD ($)	Dec. 31, 2022 USD ($)	Dec. 20, 2022 USD ($)	Nov. 30, 2022 USD ($)	May 31, 2022 USD ($)
Debt Instrument [Line Items]
Net principal						$ 282,504,675					$ 282,504,675					$ 195,453,720
Leverage ratio, target						40.00%					40.00%
Interest Rate Swaps
Debt Instrument [Line Items]
Debt instrument, stated interest rate																		3.44%	2.258%
Reference rate																		5.24%
Credit Agreement
Debt Instrument [Line Items]
Debt service coverage ratio, minimum						0.0150					0.0150
Proceeds from issuance of debt (percent)											85.00%
Maximum percentage of current borrowing capacity						60.00%					60.00%
Credit Agreement | Interest Rate Cap
Debt Instrument [Line Items]
Reference rate																			4.058%
Credit Agreement | Adjusted Base Rate
Debt Instrument [Line Items]
Variable rate, unused fee, maximum											0.0025
Credit Agreement | Adjusted Base Rate | Leverage Ratio, Equal To 46%
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate											0.10%
Credit Agreement | SOFR
Debt Instrument [Line Items]
Line of credit facility, interest rate at period end						7.1625%					7.1625%
Line of Credit
Debt Instrument [Line Items]
Line of credit, current													$ 21,000,000	$ 10,000,000	$ 10,000,000
Line of Credit | Revolving Credit Facility
Debt Instrument [Line Items]
Prepayment of debt		$ 3,000,000			$ 21,000,000
Line of Credit | Credit Agreement
Debt Instrument [Line Items]
Maximum borrowing capacity			$ 400,000,000	$ 250,000,000
Expiration period			12 months	4 years
Expiration period, option to extend				12 months
Option to extend			$ 750,000,000
Unused borrowing capacity fee						$ 94,525			$ 47,543		$ 384,164	$ 119,823
Covenant compliance, leverage ratio, actual	47.00%
Net principal						$ 0					$ 0
Reference rate						48.00%					48.00%
Minimum tangible net worth						$ 208,629,727					$ 208,629,727
Line of Credit | Credit Agreement | SOFR
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate											1.85%
Line of Credit | Credit Agreement | Revolving Credit Facility
Debt Instrument [Line Items]
Maximum borrowing capacity			150,000,000	$ 100,000,000
Line of Credit | Credit Agreement | Term Loan
Debt Instrument [Line Items]
Maximum borrowing capacity			$ 250,000,000												$ 100,000,000		$ 100,000,000	$ 100,000,000
Debt instrument, maximum number of time draws										5
Unused borrowing capacity fee						0					$ 92,569
Proceeds from credit facility							$ 80,000,000	$ 20,000,000
Mortgage Notes Payable
Debt Instrument [Line Items]
Debt instrument, term				5 years
Line of credit, current						150,000,000					150,000,000
Mortgage Notes Payable | Credit Agreement
Debt Instrument [Line Items]
Debt instrument, face amount				$ 150,000,000		$ 150,000,000					$ 150,000,000								$ 150,000,000

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DEBT - Maturities of Long-term Debt (Details) - USD ($)	Sep. 30, 2023	Dec. 31, 2022
Debt Instrument [Line Items]
October through December 2023	$ 179,918
2024	3,174,547
2025	543,886
2026	568,369
2027	250,593,972
Thereafter	29,224,157
Total principal	284,284,849
Plus unamortized mortgage premium, net	10,893
Less unamortized deferred financing costs	(1,791,067)
Net principal	282,504,675	$ 195,453,720
Mortgage Notes Payable
Debt Instrument [Line Items]
October through December 2023	179,918
2024	3,174,547
2025	543,886
2026	568,369
2027	593,972
Thereafter	29,224,157
Total principal	34,284,849
Plus unamortized mortgage premium, net	10,893
Less unamortized deferred financing costs	(176,994)
Net principal	34,118,748
Mortgage Notes Payable | Credit Facility
Debt Instrument [Line Items]
October through December 2023	0
2024	0
2025	0
2026	0
2027	250,000,000
Thereafter	0
Total principal	250,000,000
Plus unamortized mortgage premium, net	0
Less unamortized deferred financing costs	(1,614,073)
Net principal	248,385,927
Revolving Credit Facility | Credit Facility
Debt Instrument [Line Items]
October through December 2023	0
2024	0
2025	0
2026	0
2027	0
Thereafter	0
Total principal	0
Plus unamortized mortgage premium, net	0
Less unamortized deferred financing costs	0
Net principal	$ 0

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DEBT - Interest Expense (Details)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2023 USD ($) instrument	Sep. 30, 2022 USD ($)	Sep. 30, 2023 USD ($) instrument	Sep. 30, 2022 USD ($)	Dec. 31, 2022 USD ($) instrument	Jan. 25, 2023 USD ($)	Dec. 20, 2022 USD ($)	Nov. 30, 2022 USD ($)	Oct. 21, 2022 USD ($)	May 31, 2022 USD ($)	Jan. 18, 2022 USD ($)
Debt Instrument [Line Items]
Interest expense, net of derivative settlements and unrealized gain on interest rate swaps	$ 2,922,918	$ 2,514,838	$ 6,761,779	$ 5,280,167
Amortization of unrealized holding gain on interest rate swap	(253,092)		(756,496)
Other	68,326	55,102	306,832	212,179
Interest Rate Swaps
Debt Instrument [Line Items]
Unrealized loss (gain) on interest rate swap valuation for swaps			(3,348,608)		$ (4,105,103)
Amortization of unrealized holding gain on interest rate swap	$ 253,092		$ 756,495
Interest Rate Swaps | Non-designated
Debt Instrument [Line Items]
Number of Instruments | instrument	2		2		1
Credit Facility
Debt Instrument [Line Items]
Interest expense, net of derivative settlements and unrealized gain on interest rate swaps	$ 4,509,026	1,636,414	$ 10,895,933	3,083,299
Amortization of deferred financing costs	214,261	120,829	642,783	342,349
Unused commitment fees	94,525	47,543	384,164	119,823
Derivative cash settlements	(1,586,641)		(4,062,442)
Derivative cash settlements		99,942		269,442
Credit Facility | First Interest Rate Swap
Debt Instrument [Line Items]
Unrealized loss (gain) on interest rate swap valuation for swaps	167,926	0	(327,824)	(589,997)
Credit Facility | Second Interest Rate Swap
Debt Instrument [Line Items]
Unrealized loss (gain) on interest rate swap valuation for swaps	(710,258)	0	(1,697,519)	0
Additional notional amount	100,000,000		100,000,000
Interest Rate Swaps
Debt Instrument [Line Items]
Amortization of unrealized holding gain on interest rate swap	(253,092)	59,000	(756,495)	59,000
Mortgage Notes Payable | Credit Agreement
Debt Instrument [Line Items]
Debt instrument, face amount	150,000,000		150,000,000							$ 150,000,000	$ 150,000,000
Line of Credit | Credit Agreement
Debt Instrument [Line Items]
Maximum borrowing capacity									$ 400,000,000		$ 250,000,000
Mortgage Notes Payable
Debt Instrument [Line Items]
Interest expense, net of derivative settlements and unrealized gain on interest rate swaps	411,610	488,773	1,354,642	1,762,378
Amortization of deferred financing costs	$ 7,235	$ 7,235	$ 21,705	$ 21,694
Term Loan | Line of Credit | Credit Agreement
Debt Instrument [Line Items]
Maximum borrowing capacity						$ 100,000,000	$ 100,000,000	$ 100,000,000	$ 250,000,000

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INTEREST RATE SWAP DERIVATIVES - Narrative (Details) - USD ($)			3 Months Ended		9 Months Ended		12 Months Ended
	Nov. 30, 2022	May 31, 2022	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022	Jul. 31, 2023	Mar. 29, 2023	Jan. 25, 2023	Dec. 20, 2022	Oct. 21, 2022	Jan. 18, 2022
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Change in unrealized gain (loss) fair value of the hedged derivative instrument			$ (167,926)
Reduction of interest expense			(253,092)		$ (756,496)
Less: net loss (income) attributable to noncontrolling interest in Operating Partnership			(1,368,896)	$ 528,540	(1,535,452)	$ (1,180,275)
Mortgage Notes Payable
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Line of credit, current			150,000,000		150,000,000
Line of Credit
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Line of credit, current								$ 21,000,000	$ 10,000,000	$ 10,000,000
Credit Agreement | Mortgage Notes Payable
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Debt instrument, face amount		$ 150,000,000	150,000,000		150,000,000								$ 150,000,000
Credit Agreement | Line of Credit
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Maximum borrowing capacity												$ 400,000,000	$ 250,000,000
Credit Agreement | Line of Credit | Term Loan
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Maximum borrowing capacity	$ 100,000,000									$ 100,000,000	$ 100,000,000	$ 250,000,000
Interest Rate Swaps
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Term of swap agreement	5 years	5 years
Debt instrument, stated interest rate	3.44%	2.258%
Decrease in interest rate	(0.50%)	(0.50%)
Change in unrealized gain (loss) fair value of the hedged derivative instrument			710,258		1,697,519
Unrealized gain (loss) on cash flow hedging instruments					3,348,608		$ 4,105,103
Reduction of interest expense			253,092		756,495
Other comprehensive income (loss) before reclassifications, tax							3,502,616
Less: net loss (income) attributable to noncontrolling interest in Operating Partnership					253,092		$ 602,487
First Interest Rate Swap | Credit Facility
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Unrealized gain (loss) on cash flow hedging instruments			(167,926)	0	327,824	589,997
Second Interest Rate Swap | Credit Facility
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Unrealized gain (loss) on cash flow hedging instruments			710,258	$ 0	1,697,519	$ 0
Additional notional amount			$ 100,000,000		$ 100,000,000

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INTEREST RATE SWAP DERIVATIVES - Derivative Instruments (Details)	Sep. 30, 2023 USD ($) instrument	Dec. 31, 2022 USD ($) instrument
Receivables with Imputed Interest [Line Items]
Leverage ratio, fixed pay rate increase	50.00%
Interest Rate Swaps | Designated
Receivables with Imputed Interest [Line Items]
Number of Instruments | instrument	0	1
Notional amount	$ 0	$ 150,000,000
Weighted Average Fixed Pay Rate	0.00%	4.06%
Weighted Average Remaining Term	0 years	4 years 1 month 6 days
Interest Rate Swaps | Non-designated
Receivables with Imputed Interest [Line Items]
Number of Instruments | instrument	2	1
Notional amount	$ 250,000,000	$ 100,000,000
Weighted Average Fixed Pay Rate	4.43%	5.24%
Weighted Average Remaining Term	3 years 3 months	4 years 1 month 6 days
Minimum
Receivables with Imputed Interest [Line Items]
Notional amount	$ 250,000,000	$ 250,000,000

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INTEREST RATE SWAP DERIVATIVES - Statement of Financial Position (Details)	9 Months Ended
	Sep. 30, 2023 USD ($) instrument	Dec. 31, 2022 USD ($) instrument
Derivatives, Fair Value [Line Items]
Fair Value	$ 6,156,179	$ 4,629,702
Fair Value	$ 0	$ (498,866)
Interest Rate Swaps | Liability
Derivatives, Fair Value [Line Items]
Number of Instruments | instrument	0	1
Fair Value	$ 0	$ (498,866)
Change in Fair Value	$ 498,866
Interest Rate Swaps | Asset
Derivatives, Fair Value [Line Items]
Number of Instruments | instrument	2	1
Fair Value	$ 6,156,179	$ 4,629,702
Change in Fair Value	$ 1,526,477

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PREFERRED STOCK AND COMMON STOCK (Details)												3 Months Ended		9 Months Ended		12 Months Ended
	Aug. 07, 2023 USD ($)	Jun. 15, 2023 USD ($)	Mar. 09, 2023 USD ($)	Nov. 07, 2022 USD ($)	Aug. 18, 2022 USD ($)	Jun. 15, 2022 USD ($)	Jun. 06, 2022 USD ($)	Mar. 30, 2022 USD ($)	Mar. 18, 2022 USD ($)	Feb. 15, 2022 USD ($) $ / shares shares	Feb. 10, 2022 $ / shares shares	Sep. 30, 2023 USD ($) director $ / shares shares	Sep. 30, 2022 $ / shares	Sep. 30, 2023 USD ($) director $ / shares shares	Sep. 30, 2022 USD ($) $ / shares	Dec. 31, 2021 $ / shares	Dec. 31, 2022 shares	Sep. 30, 2021 shares	Sep. 14, 2021 $ / shares
Subsidiary, Sales of Stock [Line Items]
Preferred stock, shares authorized (in shares) | shares																		50,000,000
Proceeds from listed offering of common stock, net | $														$ 0	$ 114,500
Debt issuance costs | $												$ 1,791,067		$ 1,791,067
Distributions declared per common share (in usd per share) | $ / shares												$ 0.2875	$ 0.2875	$ 0.8625	$ 0.9625
Maximum
Subsidiary, Sales of Stock [Line Items]
Authorized offering amount | $								$ 200,000,000
Series A Preferred Stock
Subsidiary, Sales of Stock [Line Items]
Preferred stock, shares authorized (in shares) | shares												2,000,000		2,000,000			2,000,000
Preferred stock, shares issued (in shares) | shares												2,000,000		2,000,000			2,000,000
Preferred stock, shares outstanding (in shares) | shares												2,000,000		2,000,000			2,000,000
Preferred stock, dividends per share, declared (in usd per share) | $ / shares														$ 1.84375
Preferred stock, dividend rate, percentage														7.375%
Preferred stock, liquidation preference per share (in usd per share) | $ / shares												$ 25.00		$ 25.00					$ 25.00
Preferred stock, redemption (in USD per share) | $ / shares												$ 25.00		$ 25.00
Number of days after change of control												120 days		120 days
Preferred stock, dividend rate, per-dollar-amount (in usd per share) | $ / shares														$ 2.34375
Number of additional board of directors that can be elected | director												2		2
Cumulative dividends per quarter (in USD per share) | $ / shares														$ 0.460938
Dividends, preferred stock | $	$ 921,875	$ 921,875	$ 921,875	$ 921,875	$ 921,875	$ 921,875			$ 921,875
Series A Preferred Stock | Maximum
Subsidiary, Sales of Stock [Line Items]
Preferred stock, dividend rate, percentage														9.375%
Series A Preferred Stock | Dividend Rate
Subsidiary, Sales of Stock [Line Items]
Preferred stock, dividend rate, percentage														2.00%
Common Stock
Subsidiary, Sales of Stock [Line Items]
Debt issuance costs | $										$ 815,500
Common stock, shares issued (in shares) | shares												7,920,926		7,920,926			7,762,506
Distributions declared per common share (in usd per share) | $ / shares												$ 0.29	$ 0.29	$ 0.86	$ 0.96	$ 1.15
Common Stock | Listed Offering
Subsidiary, Sales of Stock [Line Items]
Shares sold in offering (in shares) | shares										40,000	40,000
Sale of stock, price per share (in usd per share) | $ / shares										$ 25.00	$ 25.00
Proceeds from listed offering of common stock, net | $										$ 114,500
Unamortized discount | $										$ 70,000
Common Stock | Prospectus Supplement
Subsidiary, Sales of Stock [Line Items]
Prospectus supplement, common stock offering | $							$ 50,000,000
Common Stock | ATM Offering
Subsidiary, Sales of Stock [Line Items]
Common stock, shares issued (in shares) | shares												0		0

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RELATED PARTY TRANSACTIONS - Board of Directors Compensation (Details) - Director - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Board of Directors Compensation
Related Party Transaction [Line Items]
Total	$ 127,500	$ 150,000	$ 427,500	$ 450,000
Number of shares issued for services rendered (in shares)	4,194	5,651	17,455	14,916
Payments for services rendered
Related Party Transaction [Line Items]
Total	$ 57,500	$ 67,500	$ 192,500	$ 202,500
Value of shares issued for services rendered
Related Party Transaction [Line Items]
Total	$ 70,000	$ 82,500	$ 235,000	$ 247,500

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RELATED PARTY TRANSACTIONS - Narrative (Details)	Jan. 31, 2022 USD ($)
Kalera, Saint Paul, MN | Related Party
Related Party Transaction [Line Items]
Asset acquisition, consideration transferred	$ 8,079,000

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RELATED PARTY TRANSACTIONS - Related Party Transactions with Unconsolidated Investment in a Real Estate Property (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
TIC Interest management fee
Related Party Transaction [Line Items]
Total	$ 65,993	$ 65,993	$ 197,979	$ 197,979
Company's share in the management fee
Related Party Transaction [Line Items]
Total	$ 47,984	$ 47,984	$ 143,951	$ 143,951

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COMMITMENTS AND CONTINGENCIES (Details)		9 Months Ended
	Apr. 04, 2023 USD ($) subcontractor	Sep. 30, 2023 USD ($)	Sep. 30, 2022 USD ($)	Oct. 31, 2023 USD ($)	Dec. 31, 2022 USD ($)
Loss Contingencies [Line Items]
Tenant reimbursements		$ 2,595,468			$ 1,789,027
Accrued real estate improvements		$ 2,350,000	$ 512,908
Subsequent Event | Kalera Bankruptcy Proceeding
Loss Contingencies [Line Items]
Face amount of settlement				$ 3,110,443
Mechanics Lien
Loss Contingencies [Line Items]
Direct costs of leased and rented property or equipment	$ 3,548,003
Kalera, Saint Paul, MN
Loss Contingencies [Line Items]
Number of subcontractors | subcontractor	9

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OPERATING PARTNERSHIP UNITS - Narrative (Details)				3 Months Ended			9 Months Ended		12 Months Ended
	Apr. 13, 2023 $ / shares shares	Jan. 18, 2022 $ / shares shares	Jan. 25, 2021 $ / shares shares	Mar. 31, 2024 USD ($)	Sep. 30, 2023 USD ($) $ / shares shares	Sep. 30, 2022 USD ($)	Sep. 30, 2023 USD ($) $ / shares shares	Sep. 30, 2022 USD ($)	Dec. 31, 2022 shares	Dec. 31, 2019 USD ($) $ / shares shares	Sep. 29, 2023 $ / shares
Business Acquisition [Line Items]
Anniversary of completion of the self-management transaction					4 years		4 years			1 year
Net asset value (in usd per share) | $ / shares										$ 30.48
Stock compensation expense | $					$ 8,469,867	$ 549,240	$ 9,790,206	$ 1,740,852
Fiscal Year 2023
Business Acquisition [Line Items]
Early conversion ratio							0.70
Fiscal Year 2024
Business Acquisition [Line Items]
Early conversion ratio							1
KIA/Trophy of Carson
Business Acquisition [Line Items]
Consecutive trading days							10 days
KIA Dealership in Carson, California | KIA/Trophy of Carson | KIA Dealership in Carson, California
Business Acquisition [Line Items]
Shares received, percent of property value		47.00%
Summit Steel and Manufacturing, Inc. | Summit Steel and Manufacturing, Inc. | Summit Steel and Manufacturing, Inc.
Business Acquisition [Line Items]
Shares received, percent of property value	46.00%
Class C and Class S
Business Acquisition [Line Items]
Net asset value (in usd per share) | $ / shares											$ 16.69
Class C common stock
Business Acquisition [Line Items]
Conversion ratio							1
Stock compensation expense | $					$ 70,000	82,500	$ 235,000	247,500
Class C common stock | KIA Dealership in Carson, California | KIA/Trophy of Carson
Business Acquisition [Line Items]
Equity interest issued and issuable, number of shares (in shares)		1,312,382
Equity interest issued and issuable (in usd per share) | $ / shares		$ 25.00
Class C common stock | Summit Steel and Manufacturing, Inc. | Summit Steel and Manufacturing, Inc.
Business Acquisition [Line Items]
Equity interest issued and issuable, number of shares (in shares)	287,516
Equity interest issued and issuable (in usd per share) | $ / shares	$ 18.00
Class M OP Units
Business Acquisition [Line Items]
Conversion ratio										1
Net asset value (in usd per share) | $ / shares					$ 27.82		$ 27.82
Operating Partnership Units - Class C
Business Acquisition [Line Items]
Conversion ratio							1.6667			1.6667
Class P OP Units
Business Acquisition [Line Items]
Other ownership interests, units issued (in shares)										56,029
Stock compensation expense | $					$ 88,783	88,783	$ 266,350	266,350
Class P OP Units | Messrs. Halfacre and Pacini
Business Acquisition [Line Items]
Other ownership interests, units issued (in shares)										29,711
Other ownership interests, capital account | $					$ 177,567		$ 177,567			$ 1,509,319
Other ownership interests, amortization period										51 months
Class M OP Units and Class P OP Units | Operating Partnership
Business Acquisition [Line Items]
Noncontrolling interest (as a percent)					10.70%		10.70%			13.00%
Class R OP Units
Business Acquisition [Line Items]
Conversion ratio			1
Potential future conversion ratio			0.4000
Other ownership interests, capital account | $					$ 2,444,441		$ 2,444,441
Stock compensation expense | $					$ 8,311,084		$ 9,288,856
Other ownership interests, units outstanding (in shares)					360,000		360,000
Other ownership interests, earnings per share, diluted, threshold (in usd per share) | $ / shares			$ 1.05
Cumulative units forfeited (in shares)					0		0		43,657
Class R OP Units | Time Vesting Units
Business Acquisition [Line Items]
Stock compensation expense | $					$ 488,887	377,957	$ 1,466,659	1,227,002
Class R OP Units | Performance Units
Business Acquisition [Line Items]
Other ownership interests, units issued (in shares)					474,515		474,515
Stock compensation expense | $					$ 7,822,197	$ 0	$ 7,822,197	$ 0
Other ownership interests units grant date fair value (in usd per share) | $ / shares							$ 19.58
Class R OP Units | Forecast
Business Acquisition [Line Items]
Stock compensation expense | $				$ 733,331
Class R OP Units | Mr. Halfacre
Business Acquisition [Line Items]
Other ownership interests, units issued (in shares)			40,000
Other ownership interests, units issued, period			3 years
Class R OP Units | Mr. Pacini
Business Acquisition [Line Items]
Other ownership interests, units issued, period			3 years
Class R OP Units | Employees of Company
Business Acquisition [Line Items]
Other ownership interests, units issued (in shares)			116,000
Class R OP Units, Future Compensation | Mr. Halfacre
Business Acquisition [Line Items]
Other ownership interests, units issued (in shares)			170,667
Class R OP Units, Future Compensation | Mr. Pacini
Business Acquisition [Line Items]
Other ownership interests, units issued (in shares)			33,333
BrixInvest
Business Acquisition [Line Items]
Contribution of class M OP units and class P OP units | $										$ 50,603,000
BrixInvest | Class M OP Units
Business Acquisition [Line Items]
Other ownership interests, units issued (in shares)										657,949.5
BrixInvest | Class P OP Units
Business Acquisition [Line Items]
Other ownership interests, units issued (in shares)										26,318
BrixInvest | Class R OP Units
Business Acquisition [Line Items]
Other ownership interests, units issued (in shares)					790,858		790,858
BrixInvest | Class R OP Units | Time Vesting Units
Business Acquisition [Line Items]
Other ownership interests, units issued (in shares)					316,343		316,343

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OPERATING PARTNERSHIP UNITS - Schedule of Total Stock Compensation Expense (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Business Acquisition [Line Items]
Stock compensation expense	$ 8,469,867	$ 549,240	$ 9,790,206	$ 1,740,852
Common Stock
Business Acquisition [Line Items]
Stock compensation expense	70,000	82,500	235,000	247,500
Class P OP Units
Business Acquisition [Line Items]
Stock compensation expense	88,783	88,783	266,350	266,350
Class R OP Units
Business Acquisition [Line Items]
Stock compensation expense	8,311,084		9,288,856
Class R OP Units | Time Vesting Units
Business Acquisition [Line Items]
Stock compensation expense	488,887	377,957	1,466,659	1,227,002
Class R OP Units | Performance Units
Business Acquisition [Line Items]
Stock compensation expense	$ 7,822,197	$ 0	$ 7,822,197	$ 0

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OPERATING PARTNERSHIP UNITS - Schedule of Distributions and Allocations of Net (Loss) Gain (Details) - KIA/Trophy of Carson - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Business Acquisition, Equity Interests Issued or Issuable [Line Items]
Class C OP Units distributions	$ 459,955	$ 377,298	$ 1,269,653	$ 1,006,136
Class C OP Units net (loss) income allocation	$ (1,368,896)	$ 528,540	$ (1,535,452)	$ (1,180,275)

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EARNINGS (LOSS) PER SHARE - Schedule of Computation of EPS (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Numerator - Basic:
Net (loss) income	$ (6,905,242)	$ 4,450,767	$ (6,854,210)	$ (5,232,053)
Net loss (income) attributable to noncontrolling interest in Operating Partnership	1,368,896	(528,540)	1,535,452	1,180,275
Preferred stock dividends	(921,875)	(921,875)	(2,765,625)	(2,765,625)
Net (loss) income attributable to common stockholders	(6,458,221)	3,000,352	(8,084,383)	(6,817,403)
Numerator - Diluted
Net (loss) income	(6,905,242)	4,450,767	(6,854,210)	(5,232,053)
Preferred stock dividends	(921,875)	(921,875)	(2,765,625)	(2,765,625)
Net (loss) income attributable to common stockholders	$ (7,827,117)	$ 3,528,892	$ (9,619,835)	$ (7,997,678)
Denominator:
Weighted average shares outstanding - basic (in shares)	7,548,052	7,449,968	7,537,505	7,486,945
Weighted average shares outstanding - diluted (in shares)	7,548,052	10,180,543	7,537,505	7,486,945
Earnings (loss) per share attributable to common stockholders , basic (in usd per share)	$ (0.86)	$ 0.40	$ (1.07)	$ (0.91)
Earnings (loss) per share attributable to common stockholders, diluted (in usd per share)	$ (0.86)	$ 0.35	$ (1.07)	$ (0.91)
Operating Partnership Units - Class C
Denominator:
Operating Partnership Units (in shares)	0	1,312,382	0	0
Operating Partnership Units - Classes M, P and R
Denominator:
Operating Partnership Units (in shares)	0	1,418,193	0	0

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EARNINGS (LOSS) PER SHARE - Narrative (Details) - shares	3 Months Ended	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2023	Sep. 30, 2022
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Securities excluded from the computation of earnings per share (in shares)	3,580,720	3,484,881	2,730,416
Share-Based Payment Arrangement
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Securities excluded from the computation of earnings per share (in shares)		474,515

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Subsequent Events (Details) - USD ($)									9 Months Ended
	Oct. 16, 2023	Aug. 07, 2023	Jun. 15, 2023	Mar. 09, 2023	Nov. 07, 2022	Aug. 18, 2022	Jun. 15, 2022	Mar. 18, 2022	Sep. 30, 2023	Sep. 30, 2022	Nov. 06, 2023	Oct. 31, 2023	Oct. 10, 2023	Dec. 31, 2022
Subsequent Event [Line Items]
Accrued distributions and dividends									$ 1,801,856					$ 1,768,068
Accrued real estate improvements									$ 2,350,000	$ 512,908
Subsequent Event
Subsequent Event [Line Items]
Dividends payable, amount per share per month (in usd per share)											$ 0.095833		$ 0.095833
Annualized distribution rate (in usd per share)													$ 1.15
Subsequent Event | Kalera Bankruptcy Proceeding
Subsequent Event [Line Items]
Face amount of settlement												$ 3,110,443
Series A Preferred Stock
Subsequent Event [Line Items]
Dividends, preferred stock		$ 921,875	$ 921,875	$ 921,875	$ 921,875	$ 921,875	$ 921,875	$ 921,875
Series A Preferred Stock | Subsequent Event
Subsequent Event [Line Items]
Dividends, preferred stock	$ 921,875
Accrued distributions and dividends											$ 921,875