The Company acquires, owns, and manages primarily single-tenant, investment-grade net-leased real estate. The Company owned 353 properties in 34 states as of September 30, 2024. As of September 30, 2024, the Company’s portfolio was 98.5% leased and is occupied by 37 different primarily national investment-grade necessity-based retail tenants, and is additionally diversified by industry, geographic region, and lease term.


Cost
Balance - beginning of year	$	1,102,298,000
Acquisition		9,782,000
Improvements		564,000
Land condemnation		(53,000	)
Provision for impairment		(250,000	)
Balance - end of period	$	1,112,341,000

Accumulated depreciation
Balance - beginning of year	$	(62,243,000	)
Depreciation expense		(21,677,000	)
Balance - end of period	$	(83,920,000	)

Net book value - end of period	$	1,028,421,000

On May 30, 2024, the Company acquired a property for cash from an unaffiliated entity for a total purchase price, including acquisitions costs, of $10.2 million. Per the asset management agreement, the Company paid a 1.0% acquisition fee on this property acquisition totaling $0.1 million to ExchangeRight at the time of the acquisition (see Note 10. Related and Affiliated Party Transactions for further details).

An allocation of the purchase price, including acquisition costs, for this acquisition is as follows:


Land	$	2,288,000
Building		6,915,000
Building and site improvements		579,000
Lease in-place intangible assets		993,000
		10,775,000
Liabilities assumed:
Lease below-market intangible liabilities		(557,000	)
Purchase price (including acquisition costs)	$	10,218,000

Substantially all of the Company’s tenants are subject to net-lease agreements where the tenant is generally responsible for minimum monthly rent and actual property operating expenses incurred, including property taxes, insurance and maintenance. In addition, certain of the Company’s tenants are subject to future rent increases based on fixed amounts or, in limited cases, increases in the consumer price index. In addition, certain leases provide for additional rent calculated as a percentage of the tenants’ gross sales above a specified level. The Company recorded no percentage rent revenue for the three and nine months ended September 30, 2024 and 2023. Certain of the Company’s properties are subject to leases under which it retains responsibility for specific costs and expenses of the property. The Company’s leases typically provide the tenant one or more multi-year renewal options to extend their leases, subject to generally the same terms and conditions, including rent increases.

All lease-related income is reported as a single line item, rental revenue, in the condensed consolidated statements of operations and comprehensive income (loss). Rental revenue is comprised of the following:


	Three months ended September 30,				Nine months ended September 30,
	2024		2023		2024		2023
Base rents	$	17,117,000	$	16,410,000	$	51,177,000	$	48,503,000
Tenant reimbursables		1,990,000		2,101,000		6,720,000		6,387,000
Straight-line rent adjustments		197,000		221,000		614,000		711,000
Above/below market lease amortization, net		625,000		604,000		1,950,000		1,782,000
Lease termination income		-		73,000		-		513,000
	$	19,929,000	$	19,409,000	$	60,461,000	$	57,896,000

As of September 30, 2024, the Company’s portfolio is occupied by 37 different primarily national investment-grade necessity-based retail tenants, and is additionally diversified by industry, geographic region, and lease term. The following tenants contributed more than 10% of contractual base rents during the nine months ended September 30, 2024: